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Citation Nr: 1202501
Decision Date: 01/23/12 Archive Date: 02/07/12
DOCKET NO. 09-39 335 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Winston-Salem, North Carolina
THE ISSUE
Entitlement to an evaluation in excess of 10 percent for residuals of a chip fracture of the proximal end of the right fifth metacarpal with periarticular osteopenia (right hand disability).
REPRESENTATION
Appellant represented by: The American Legion
ATTORNEY FOR THE BOARD
Bridgid D. Cleary, Associate Counsel
INTRODUCTION
The Veteran had active service from November 1950 to September 1954.
This matter has come before the Board of Veterans' Appeals (Board) on appeal from a November 2008 rating decision of the Cleveland, Ohio, Department of Veterans Affairs (VA) Regional Office (RO). The file was later transferred to the RO in Winston-Salem, North Carolina.
In a July 2011 decision, the Board denied the Veteran's claim for an increased evaluation. Additional evidence had been received by the Winston-Salem RO in May 2011 that was not considered in conjunction with this decision. The Veteran submitted this additional evidence with a waiver of initial RO consideration. See 38 C.F.R. § 20.1304(c).
Please note this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2010). 38 U.S.C.A. § 7107(a)(2) (West 2002).
The issue of entitlement to an evaluation in excess of 10 percent for residuals of a chip fracture of the proximal end of the right fifth metacarpal with periarticular osteopenia is addressed in the REMAND portion of the decision below and is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, DC.
FINDINGS OF FACT
1. On July 25, 2011, the Board issued a decision denying the Veteran's claim of entitlement to an increased rating in excess of 10 percent for residuals of a chip fracture of the proximal end of the right fifth metacarpal with periarticular osteopenia.
2. On August 16, 2011, the Board received notice that evidence relevant to the appeal had not been considered in the July 25, 2011 decision.
CONCLUSION OF LAW
The July 2011 Board decision denying the issue of an evaluation in excess of 10 percent for residuals of a chip fracture of the proximal end of the right fifth metacarpal with periarticular osteopenia is vacated. 38 U.S.C.A. § 7104(a) (West 2002); 38 C.F.R. § 20.904 (2011).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Order to Vacate
The Board of Veterans' Appeals (Board) may vacate an appellate decision at any time upon request of the appellant or his or her representative, or on the Board's own motion, when an appellant has been denied due process of law or when benefits were allowed based on false or fraudulent evidence. 38 U.S.C.A. § 7104(a); 38 C.F.R. § 20.904.
A Board decision was issued on July 25, 2011, which denied the Veteran's claim of entitlement to an evaluation in excess of 10 percent for residuals of a chip fracture of the proximal end of the right fifth metacarpal with periarticular osteopenia.
The Veteran, through his representative, notified the Board in an August 2011 motion for reconsideration that the July 25, 2011, decision had not considered evidence submitted in May 2011. Such evidence included a statement from the Veteran's employer attorney. A review of the record indicates that the evidence had been submitted prior to the promulgation of the Board decision, even though it was not physically associated with the claims file at that time.
In this case, issuance of a decision without consideration of the additional evidence constitutes a denial of due process. Accordingly, the Board vacates its July 25, 2011, decision in this matter. See 38 U.S.C.A. § 7104(a); 38 C.F.R. § 20.904.
In view of the order vacating the July 25, 2011, Board decision addressing the issue of entitlement to an evaluation in excess of 10 percent for residuals of a chip fracture of the proximal end of the right fifth metacarpal with periarticular osteopenia, a remand is being simultaneously rendered on this matter. This remand will be entered as if the July 25, 2011, Board decision had never been issued.
ORDER
The July 25, 2011, Board decision denying the issue of entitlement to an evaluation in excess of 10 percent for residuals of a chip fracture of the proximal end of the right fifth metacarpal with periarticular osteopenia is vacated.
REMAND
While the Veteran submitted a waiver of initial RO consideration with respect to the statement written by his former employer, a review of the Virtual VA claims folder reveals additional evidence, specifically a November 2011 VA examination report, that was not contemplated by the waiver. As such, the case must be remanded so that the agency of original jurisdiction can first adjudicate the claim in light of this additional evidence. It is unclear why an additional examination was undertaken in the case. Therefore, to the extent that this additional development may suggest the existence of a temporary file that has not been associated with this claims folder reviewed by the Board, the RO/AMC is asked to search for any temporary file that may exist for this Veteran. If such a file exists, it should be associated with this claims file.
Furthermore, in Rice v. Shinseki, 22 Vet. App. 447 (2009), the United States Court of Appeals for Veterans Claims (Court) held that a total rating based on individual unemployability, due to service-connected disability (TDIU) claim is part of a claim for a higher rating when such claim is raised by the record or asserted by the Veteran. In this case, the Veteran has submitted a letter from his former employer stating that he had to terminate the Veteran's employment because his disability prevented him from completing the necessary tasks of the job. Thus, the issue of TDIU has been raised.
Currently, the Veteran does not meet the combined rating requirement of 70 percent or more for consideration of a TDIU. 38 C.F.R. § 4.16(a). As the increased rating claim is still viable, this may change and TDIU may be considered under 38 C.F.R. § 4.16(a). Even if the underlying increased rating claim does not result in an increased evaluation, the claim may still be referred to the Director, Compensation and Pension Service for an extraschedular rating, if the evidence of record shows that the Veteran is "unable to secure and follow a substantially gainful occupation by reason of service-connected disabilities." 38 C.F.R. § 4.16(b).
In this case, the record is unclear as to whether the Veteran is able to secure and follow a substantially gainful occupation by reason of service-connected disabilities. The current evidence of record relates only to the loss of his recent job and does not address the issue of his employability more generally. As such, an opinion is necessary in this regard. Additionally, the Veteran is also service connected for bilateral hearing loss and tinnitus. Therefore, any opinion should necessarily consider the effect of all three service connected disabilities on his employability.
Accordingly, the case is REMANDED for the following action:
(Please note, this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2011). Expedited handling is requested.)
1. The RO should associate any temporary folders in its possession with the remainder of the record on appeal. If no additional records exist, or if all additional records are contained in the shared virtual claims folder, the RO should so state.
2. Upon completion of the above, afford the Veteran an examination to determine if it is at least as likely as not that his service-connected disabilities (chip fracture residuals, tinnitus, and bilateral hearing loss), irrespective of any nonservice-connected disabilities, prevents the Veteran from securing and following a substantially gainful occupation.
3. After completion of paragraphs 1 and 2 above, determine whether the Veteran meets the combined rating requirements for schedular consideration of TDIU.
a. If the Veteran's combined disability evaluation is increased to 70 percent or more, then proceed to paragraph 4.
b. If the Veteran's combined disability rating remains below 70 percent and the examiner finds that the Veteran is unemployable by reason of his service connected disabilities, or if any other evidence added to the record so shows, then refer the Veteran's claim for TDIU to the Director of Compensation and Pension Service for extraschedular consideration pursuant to the provisions of 38 C.F.R. § 4.16 (b).
4. Thereafter, the RO/AMC should readjudicate the claim, in light of the additional evidence obtained. If the benefits sought on appeal remain denied, the Veteran and his representative should be provided a supplemental statement of the case. An appropriate period of time should then be allowed for a response, 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 Supp. 2011).
______________________________________________
ERIC S. LEBOFF
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
Case 1:19-cv-01517-JKB Document 36 Filed 08/23/19 Page 1 of 8
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
Northern Division
BROADCAST MUSIC, INC., et al. |
Plaintiffs
Vv. Civil Action No.: 1:19-cv-01517-JKB
CARRIE BELL, INC., d/b/a CAFE 611, et al.
Defendants |
AFFIDAVIT OF MAX S. STADFELD
I, Max S. Stadfeld, hereby declare and affirm, under the penalty of perjury, as follows:
1, | am employed by the law firm of Wright, Constable & Skeen, LLP (“WCS”).
2. I have been personally responsible for the filing of the Complaint in the is civil
action and for the conduct of the civil action through all of the proceedings before this Court.
3. I am a graduate of the University of Maryland School of Law, having received a
Degree of Juris Doctor, with honors, in 1974.
4. In August 1974, I became an associate with the firm of Blum Yumkas, Mailman,
Gutman & Denick, P.A. (then known as Blum, Yumkas, Mailman & Gutman) (“Blum Yumkas”).
Ultimately, I became a shareholder of Blum Yumkas and then, in October, 1998 I was elected the
Managing Directing. Blum Yumkas dissolved in November 2001; and I began working at Offit
Kurman, P.A. (“OK”) on November 26, 2001.
5. 1 worked at OK from November 26, 2001 until April 17, 2017, when I began
[email protected].
6. I have a long-standing relationship with Broadcast Music, Inc. (“BMI”), which dates
back to the mid-1980’s. This relationship has resulted in my handling approximately 50 copyright
EXHIBIT
{00394877v. (15456.00008)} j
Case 1:19-cv-01517-JKB Document 36 Filed 08/23/19 Page 2 of 8
infringement cases for BMI.
7, All of the costs and fees in connection with this litigation have been or will be billed
to BMI and have been or will be paid by BMI.
8. All of the work that I do for our clients is based upon an hourly charge. The time
spent is recorded on a time sheet, with the entries on the time sheets being made by me concurrently
with doing the work. The time sheets contain the date the work is done, my name, the name and
number of the client, the matter involved, the type of work done, and the time spent performing the
work. The entries from the time sheets are entered into the firm’s computerized billing system
within forty-eight hours from when they are recorded. When statements are generated for any
particular client and any particular matter, they are automatically generated by the firm’s
computerized billing system.
9. All of the work done in connection with this civil action was performed during the
period from May 15, 2019 forward. During the time period from May 15, 2019 through August 21,
2019, my work was billed to BMI at an hourly rate of $325.00. This rate is consistent with the
hourly rates that were charged to all of the other clients which I represented during the relevant time
period.
10. My foregoing hourly rate is believed to be in accordance with the customary
attorney hourly rates in Maryland for litigation involving issues under the Copyright Act, such as
the issues involved in the present case.
11. Pursuant to an agreement with BMI, however, my and our firm’s fees in this case for
work performed up through the filing of a Motion for Default Judgment are a flat fee of $6,000.00,
plus all costs.
12. Attached hereto as Exhibit A is a redacted copy of WCS’ August 22, 2019 Draft
{00394877v. (15456.00008)} 2
Case 1:19-cv-01517-JKB Document 36 Filed 08/23/19 Page 3 of 8
Statement for this case which reflects the costs expended and the fees for services rendered in this
case (on an hourly basis) from its inception through August 21, 2019. Although the hourly fees
incurred through August 21, 2019 total $7,215.00, WCS will charge BMI, and BMI will pay,
$6,000.00 for services performed through August 21, 2019 (and, thereafter, through the filing of the
Motion for Default Judgment), plus the costs of $930.00.
13. I believe that the total counsel fees in this case of $6,000.00 (plus costs of $930.00)
for the amount of work done (and to be done) are fair and reasonably charged.
14. BMI therefore requests that it be awarded counsel fees of $6,000.00 and costs of
$930.00 for a total of $6,930.00 in the Order of Judgment.
! DECLARE UNDER PENALTY OF PERJURY that the foregoing is true and correct ot
the best of my knowledge, information, and belief.
Date: August 23, 2019 L, # ?
Max 8. Stadféld
{00394877v. (15456.00008)} 3
Case 1:19-cv-01517-JKB Document 36 Filed 08/23/19 Page 4 of 8
\ \ (eS Wright, Constable & Skeen, L.L.P. | Attorneys at Law
7 Saint Paul Street, 18" Floor - Baltimore, Maryland 21202 - Phone: 405.857.2426 - Fax: 405.857.2426
Federal ID Number XX-XXXXXXX
Broadcast Music, Inc.
7 World Trade Center
250 Greenwich Street
New York NY 10007
Att: SERRE GT
Carrie Bell, Inc., et al.
05/15/2019
05/16/2019
05/17/2019
05/20/2019
05/21/2019
05/22/2019
05/23/2019
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
Professional Services through 08/22/2019
Briefly review some of the documents received from
client; review and revise Complaint; prepare Civil
Cover Sheet; prepare Summones in a Civil Action for
all Defendants; prepare Disclosure of Corporate
Interest and correspondence to Court in connection
therewith; obtain information about Carrie Bell, Inc.
from SDAT website; view Cafe 611 internet
advertising
Continue review of numerous documents received
from client
Review BMI correspondence !og and brief review of
correspondence to Defendants
Revise and edit Complaint
Revise and finalize Complaint and all initial pleadings
E-mail to @ENNN Esq. and
regarding Complaint to be filed
Check Maryiand Judiciary Case Search regarding all
five Defendants; e-mail to (NR Esq.
regarding resuits of search
Finalize Complaint and all other initial pleadings for
filing
Exchange e-mails with G(R Esq.
regarding Carrie Bell, Inc.
Review notifications from Court; e-mails to
GQ Esq. regarding filing of Complaint and
notification to Register of Copyrights
Review notifications and Summones received from
Court; correspondence to@iiiiiifi® regarding
Account No:
Statement No:
Rate
325.00
325.00
325.00
325.00
325.00
325.00
325.00
325.00
325.00
325.00
Page: 1
08/22/2019
113589
Draft Statement
Hours
2.30 747.50
0.40 130.00
0.70 227.50
0.30 97.50
0.50 162.50
0.20 65.00
0.50 162.50
0.30 97.50
0.10 32.50
0.40 130.00
EXHIBIT
A
10
Broadcast Music, Inc.
Carrie Bell, Inc., et al.
06/05/2019
06/14/2019
06/19/2019
06/20/2019
06/21/2019
06/24/2019
06/25/2019
06/26/2019
07/10/2019
07/11/2019
07/12/2019
07/17/2019
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
serving process upon all five Defendants
Review notification from Court; e-mail to @ag®
regarding service of process upon
Renell Jones
Telephone call with QB regarding status of
his efforts to serve process upon Defendants,
serving corporation by serving SDAT, other
Defendants avoiding service, necessary affidavits
Prepare Request for Entry of Default Against
Defendant Renell Jones
Review notifications and Order from Court
Review several documents received from private
process server; prepare Summons in a Civil Action
for Carrie Bell, Inc.
E-mail to GD Esq. regarding detailed
status report on pending litigation; review
notifications from Court
Review notification from Court; prepare documents
for service upon Carrie Bell, Inc. cio SDAT
Review notification from Court
Review notification from Court; letter to Renell Jones
regarding Court's June 25, 2019 Notice of Default
Review notifications from Court; email to Gm
Esq. regarding status, default as to Renell
Jones and service upon Carrie Bell, Inc.
Conference with CRS \ficavit of
Avoidance
Continue work on Affidavit of Avoidance
Brief legal research regarding service of process by
alternative means; begin drafting Motion for Order
Allowing Service of Process Upon Defendants Karen
Jones, Randall Jones, and Randy Jones by
Alternative Means
Review Order of Court and notification from Court
Work on Motion for Service Process by Alternative
Means
Brief legal research in preparation for writing report
required by Order of July 16, 2019
Case 1:19-cv-01517-JKB Document 36 Filed 08/23/19 Page 5 of 8
Account No:
Statement No:
Rate Hours
325.00 0.60
325.00 0.20
325.00 0.20
325.00 0.30
325.00 0.20
325.00 0.50
325.00 0.50
325.00 0.20
325.00 0.10
325.00 0.30
325.00 0.30
325.00 0.70
325.00 0.20
325.00 0.70
325.00 0.10
325.00 0.20
325.00 0.40
Page: 2
08/22/2019
113589
195.00
65.00
65.00
97.50
65.00
162.50
162.50
65.00
32.50
97.50
97.50
227.50
65.00
227.50
32.50
65.00
130.00
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Broadcast Music, Inc.
Carrie Bell, Inc., et al.
07/18/2019
07/19/2019
07/20/2019
07/22/2019
08/01/2019
08/02/2019
08/05/2019
08/07/2019
08/08/2019
08/09/2019
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
MSS
Draft proposed Order regarding Motion to Allow
Service ... by Alternative Means
Review document received from SDAT regarding
service of process upon Carrie Bell, tnc.
Prepare status report/correspondence to Judge
Bredar
Meeting with QB regarding his efforts to serve
process upon Defendants, Affidavit of Avoidance
Review notification from Court; finalize Motion to
Allow Service of Process by Alternative Means for
filing with the Court
E-mail to (ER Esq. and Gi,
regarding Motion to Allow Service of Process By
Alternative Means
Edit status report to Judge Bredar
Finish status report to Judge Bredar
Review notification from Court and several
Orders/rulings
Draft Request for Entry of Default Against Defendant
Carrie Bell, Inc., d/b/a Cafe 611
Draft Request for Reissuance of Summonses;
prepare Summonses in a Civil Action for Karen
Jones, Randall Jones and Randy Jones
Exchange e-mails with @® Esq.
regarding status of case, (TD
(Sith Tae
Review notifications from Court; e-mail to Gili}
Esq. regarding latest court filings
Review notification from Court; letter to Karen Jones
regarding service of process by mail; prepare
documents for private process server to serve on K.
Jones, Randail Jones and Randy Jones by delivery
to them at Cafe 611
Letters to Randy Jones and Randall Jones regarding
serving them with process by regular mail
Prepare Proofs of Service regarding Karen Jones,
Randall Jones and Randy Jones
Review multiple notifications from Court; e-mail to
regardin
Case 1:19-cv-01517-JKB Document 36 Filed 08/23/19 Page 6 of 8
Account No:
Statement No:
Rate Hours
325.00 0.30
325.00 0.10
325.00 0.90
325.00 0.30
325.00 0.30
325.00 0.20
325.00 0.20
325.00 0.20
325.00 0.40
325.00 0.30
325.00 0.40
325.00 0.50
325.00 0.30
325.00 0.50
325.00 0.30
325.00 0.30
325.00 0.50
Page: 3
08/22/2019
113589
97.50
32.50
292.50
97.50
97.50
65.00
65.00
65.00
130.00
97.50
130.00
162.50
97.50
162.50
97.50
97.50
162.50
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
Broadcast Music, Inc.
Carrie Bell, Inc., et ai.
MSS
MSS
MSS
08/12/2019 MSS
08/16/2019 MSS
08/20/2019 MSS
08/21/2019 MSS
Timekeeper
Max S. Stadfeld
06/24/2019
05/22/2019
05/24/2019
06/18/2019
06/25/2019
08/06/2019
Letter to Carrie Bell, Inc. and Randall Jones
regarding Notice of Default to Carrie Bell, Inc.
Telephone and conference with QR regarding
service of process upon Karen Jones, Randall
Jones, and Randy Jones
Detailed review Coe:
Review multiple notifications from Court; e-mail to
QUE Esq. regarding status of case as to
each of the five defendants
Exchange e-mails with QED Esq.
regarding status of pending litigation
Begin working on Motion for Default Judgment
Against Defendants Carrie Bell, Inc, d/b/a Cafe 611
and Renell Jones, Declaration of Victoria
Dutschmann, Declaration of Brian Mullaney,
proposed Order, Memorandum in Support of Motion
for Default Judgment, and Affidavit of M. Stadfeld
Complete drafts of Motion for Default Judgment and
all related pleadings; e-mails to and
GEE e92'<ing
For Current Services Rendered
Timekeeper Summary
Hours
22.20
Advances
SDAT Costs
SDAT Costs
Court Costs - E-filing Fee
Court Costs
Service of Process -
Service of Process -
Service of Process -
Service of Process -
Service of Process
Total Advances Thru 08/22/2019
Case 1:19-cv-01517-JKB Document 36 Filed 08/23/19 Page 7 of 8
Page: 4
08/22/2019
Account No:
Statement No: 113589
Rate Hours
325.00 0.20 65.00
325.00 0.40 130.00
325.00 0.50 i=
325.00 0.50 162.50
325.00 0.10 32.50
325.00 2.30 747.50
325.00 0.80 260.00
22.20 7,215.00
Rate Total
$325.00 $7,215.00
50.00
50.00
400.00
400.00
120.00
100.00
50.00
210.00
480.00
930.00
45
46
47
48
49
OAD =
Case 1:19-cv-01517-JKB Document 36 Filed 08/23/19 Page 8 of 8
Page: 5
Broadcast Music, Inc. 08/22/2019
Account No:
Statement No: 113589
Carrie Bell, Inc., et al.
Total Current Work 8,145.00
Balance Due $8,145.00
Please Remit $8,145.00
This statement may not include disbursements and other charges incurred during the
period shown but not yet reflected on our accounting records.
|
Citation Nr: 9931461
Decision Date: 11/05/99 Archive Date: 11/17/99
DOCKET NO. 98-06 800 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in
Indianapolis, Indiana
THE ISSUE
What evaluation is warranted for post-traumatic stress
disorder (PTSD) from December 7, 1995?
REPRESENTATION
Appellant represented by: The American Legion
ATTORNEY FOR THE BOARD
Carole R. Kammel, Associate Counsel
INTRODUCTION
The veteran served on active duty from September 1966 to June
1968, and from March 1974 to May 1982. The veteran served in
combat in Vietnam, and he was twice wounded in action.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal from a June 1997 rating decision of the
Department of Veterans Affairs (VA) Regional Office (RO) in
Indianapolis, Indiana, which granted service connection for
PTSD and assigned a 10 percent disability evaluation,
effective December 7, 1995, the date the veteran filed his
claim for service connection for PTSD. In an August 1998
rating decision, the RO assigned a 30 percent disability
evaluation, effective June 13, 1998, the date of a VA
examination which showed an increased in the severity of the
service-connected PTSD.
FINDINGS OF FACT
1. For the period from December 7, 1995 to June 12, 1998,
the veteran's PTSD was productive of mild social and
industrial impairment; and by occupational and social
impairment due to mild or transient symptoms which decreased
work efficiency and an ability to perform occupational tasks
only during periods of significant stress, or symptoms
controlled by continuous medication.
2. During the period since June 13, 1998, the veteran's PTSD
has been productive of occupational and social impairment
with reduced reliability and productivity.
CONCLUSIONS OF LAW
1. The criteria for an evaluation in excess of 10 percent
for the veteran's PTSD from the period from December 7, 1995
to June 12, 1998 have not been met. 38 U.S.C.A. §§ 1155,
5107 (West 1991); 38 C.F.R. §§ 4.1, 4.7, 4.130, Diagnostic
Code 9411 (1999); 38 C.F.R. § 4.132, Diagnostic Code 9411
(1996).
2. The criteria for an evaluation of 50 percent for the
veteran's PTSD for the period on and after June 13, 1998 have
been met. 38 U.S.C.A. §§ 1155, 5107; 38 C.F.R. §§ 4.1, 4.7,
4.130, Diagnostic Code 9411 (1999).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
I. General Laws and Regulations
The veteran's claim is well grounded, meaning it is
plausible. The Board finds that all relevant evidence has
been obtained with regard to the claim and that no further
assistance to the veteran is required to comply with VA's
duty to assist him. 38 U.S.C.A. § 5107(a).
In general, disability evaluations are assigned by applying a
schedule of ratings which represent, as far as can
practicably be determined, the average impairment of earning
capacity. 38 U.S.C.A. § 1155. Also, 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. An evaluation of the level of disability
present must also include consideration of the functional
impairment of the veteran's ability to engage in ordinary
activities, including employment.
In a June 1997 rating decision, the RO granted service
connection for PTSD and assigned a 10 percent disability
evaluation effective December 7, 1995, the date the veteran
filed a claim for service connection for PTSD. In an October
1997 statement submitted by the veteran, he argued that his
PTSD was more severely disabling than the current 10 percent
evaluation reflects. Subsequently, in an August 1998 rating
decision, the RO awarded a 30 percent evaluation for the
service-connected PTSD, effective June 13, 1998, the date of
a recent VA examination.
The Court recently held that, in a claim of disagreement with
the initial rating assigned following a grant of service
connection, separate ratings can be assigned for separate
periods of time since the initial effective date based on the
facts found. Fenderson v. West, 12 Vet. App. 119 (1999). As
the 30 percent evaluation is less than the maximum available
under the applicable diagnostic criteria, the veteran's claim
remains viable on appeal. See AB v. Brown, 6 Vet. App. 35,
38 (1993).
Disability evaluations are assigned by applying a schedule of
ratings that represents, as far as can practicably be
determined, the average impairment of earning capacity. In
determining the current level of impairment, the disability
must be viewed in relation to its history. 38 U.S.C.A. §
1155; 38 C.F.R. § 4.1. 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.
In reaching its decision, the Board has considered the
complete history of the disability at issue as well as the
current clinical manifestations and the effect the disability
may have on the earning capacity of the veteran. 38 C.F.R.
§§ 4.1, 4.2 (1999).
New rating criteria for psychiatric disabilities have been in
effect since November 7, 1996. The Board has interpreted the
claim liberally employing the decision by the United States
Court of Appeals for Veterans Claims (the Court), in Karnas
v. Derwinski, 1 Vet. App. 308 (1991), which held that where a
law or regulation changes after a claim has been filed, but
before the administrative or judicial appeal process has been
concluded, the version most favorable to the veteran will
apply. This Board will apply the version most favorable to
the veteran. However, in Rhodan v. West, 12 Vet. App. 55
(1998), the United States Court of Appeals for Veterans
Claims (Court) noted that, where compensation is awarded or
increased "'pursuant to any Act or administrative issue, the
effective date of such an award or increase ... shall not be
earlier than the effective date of the Act or administrative
issue.'" Id. at 57. See 38 U.S.C.A. § 5110(g) (West 1991).
As such, the Court reasoned that this rule prevents the
application of a later, liberalizing law to a claim prior to
the effective date of the liberalizing law.
The veteran's PTSD was originally assigned a 10 percent
disability rating in accordance with the "old" criteria, in
effect prior to November 7, 1996, pursuant to 38 C.F.R.
§ 4.132, Diagnostic Code 9400. Under the "old" criteria, a
10 percent rating was warranted in cases of emotional tension
or other evidence of anxiety productive of mild social and
industrial impairment, albeit less than that for a 30 percent
evaluation. A 30 percent rating would be assigned when there
was a definite impairment in the ability to establish or
maintain effective and wholesome relationships with people,
or when psychoneurotic symptoms resulted in such reduction in
initiative, flexibility, efficiency and reliability levels as
to produce definite industrial impairment. When the ability
to establish and maintain effective or favorable
relationships with people was considerably impaired and by
reason of psychoneurotic symptoms the reliability,
flexibility and efficiency levels were so reduced as to
result in considerable industrial impairment, a 50 percent
rating was warranted. 38 C.F.R. § 4.132, Diagnostic Code
9411.
In Hood v. Brown, 4 Vet. App. 301 (1993), the Court stated
that the term "definite" in 38 C.F.R. § 4.132 was
"qualitative" in character, whereas the other terms were
"quantitative" in character, and invited the Board to
"construe" the term "definite" in a manner that would
quantify the degree of impairment for purposes of meeting the
statutory requirement that the Board articulate "reasons or
bases" for its decision. 38 U.S.C.A. § 7104(d)(1) (West
1991). In a precedent opinion, dated November 9, 1993, the
General Counsel of the VA concluded that "definite" is to be
construed as "distinct, unambiguous, and moderately large in
degree." It represents a degree of social and industrial
inadaptability that is "more than moderate but less than
rather large." VAOGCPREC 9-93 (O.G.C. Prec. 9-93); 59
Fed.Reg. 4752 (1994). The Board is bound by this
interpretation of the term "definite." 38 U.S.C.A. § 7104(c).
In an August 1998 rating decision, the RO assigned a 30
percent evaluation to the service-connected PTSD in
accordance with the "new" diagnostic criteria for
psychiatric disorders, effective after November 7, 1996
pursuant to 38 C.F.R. § 4.130, Diagnostic Code 9411. Under
the "new" criteria, a 30 percent evaluation will be
assigned when there is 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 normal conversation), 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 evaluation is warranted when there is
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 evaluation is warranted for
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; intermittently illogical, obscure, or irrelevant
speech; 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 worklike setting); inability to establish and
maintain effective relationships. 38 C.F.R. § 4.130,
Diagnostic Codes 9411.
II. Factual Background
In a December 1995 statement, submitted by Donna M. Lindsey,
it was reported that the veteran experienced flashbacks and
became violent and depressed when he filled out his
application for VA benefits.
During a November 1996 VA PTSD examination, the examiner
reported in detail the veteran's extensive in-service history
with respect to his PTSD. The veteran reported having
difficulty with flashbacks, nightmares, avoidance thoughts,
hypervigilance, insomnia, increased startle response, and
some mild concentration problems. The veteran denied having
any problems with other anxiety disorders, depression,
psychosis, or obsessive compulsive disorder symptoms. The
examiner reported that the veteran had some detachment and a
mildly restricted affect. With regards to the veteran's
social history the examiner noted that the appellant lived
with his girlfriend. The veteran reported that the longest
job that he had held was with a construction company. He
denied having a history of drug abuse and related that he
would drink on the average a couple of beers every few days,
but that he did not have any problems with alcohol.
Mental status examination revealed that the veteran was
"moderately groomed," agreeable, and cooperative. His
speech and behavior were normal. The veteran indicated that
his mood was "okay." The veteran's affect was slightly
constricted but was euthymic and appropriate to content. His
thoughts were logical and sequential and were negative for
suicidal or homicidal ideation, hallucinations, paranoia or
delusions. The veteran was awake, alert, and oriented in all
spheres. The examiner indicated that the veteran had average
intelligence, intact judgment, and good insight. The
veteran's memory was noted by the examiner to have been
intact for immediate, short and long-term recall. Axis One
diagnoses of PTSD and rule out alcohol abuse were entered. A
Global Assessment Functioning (GAF) score of 65 was assigned.
The examiner noted that the veteran was mildly to moderately
impaired by his PTSD symptoms.
During a June 1998 mental disorders examination, the
veteran's in-service history was reported in detail by the
examiner. The veteran reported a social history similar to
that noted during the November 1996 VA examination. The
veteran complained of nightmares once or twice a week, daily
intrusive thoughts, and that he had problems with avoidance,
detachment, and anhedonia. The examiner noted that the
veteran had significant problems with anger, which was
demonstrated during the interview, as well as trouble with
decreased sleep and concentration, increased startle response
and hypervigilance. The veteran indicated that he had never
been treated for any general psychiatric reasons other than
alcohol abuse during service and that he never been an
inpatient or placed on medication.
Mental status examination noted that the veteran displayed
moderate to poor grooming. He was found by the examiner to
have been agreeable and cooperative at times, but at other
times he was irritable and hostile. The veteran's speech and
behavior were unremarkable. His mood was irritated, and his
affect was anxious, mildly constricted, and irritated. The
veteran's thoughts were logical, sequential, and were
unremarkable for suicidal or homicidal ideation,
hallucinations, paranoia, delusions or obsessions. The
veteran was oriented in all spheres and his memory was intact
for immediate, short and long term recall. His attention and
concentration were slightly decreased, his insight was
limited, and his judgment was intact. Axis One diagnoses of
PTSD and a history of alcohol abuse were entered. A GAF
score of 45 was entered. The examiner concluded that the
veteran had moderate to severe impairment in his ability to
relate to others, and in his ability to maintain and obtain
gainful employment on a persistent and regular basis as a
result of his PTSD related symptoms. The examiner further
indicated that his evaluation was consistent with the fact
that the veteran was much more agreeable, easy going and
stable prior to service as indicated by histories provided by
both the veteran and former spouse.
III Analysis
Upon reviewing the veteran's recent medical records, the
Board finds that the degree of industrial and social
impairment resulting from his PTSD has varied to such an
extent during the pendency of this appeal that "staged"
ratings, in accordance with Fenderson, are warranted.
The Board initially takes this opportunity to recognize that
the veteran received the Air Medal, as well as the Purple
Heart with oak leaf cluster during his combat service in
Vietnam. As service connection has been granted for PTSD,
however, the only question before the Board is what
evaluation is warranted for the period from December 7, 1995.
In this regard, following a review of the evidence of record,
the Board finds that a 50 percent rating for the veteran's
PTSD is warranted on and after June 13, 1998.
In reaching the foregoing conclusion, all of the evidence
reveals that the veteran continues to suffer from PTSD
related symptoms such as nightmares, flashbacks, and
avoidance behavior. In addition, during the June 1998 VA
examination, the examiner concluded that the veteran had
moderate to severe social and industrial impairment.
Finally, during the June 1998 VA examination, the veteran was
assigned a GAF score of 45. The GAF is a scale reflecting
the "psychological, social, and occupational functioning on
a hypothetical continuum of mental health illness." Richard
v. Brown, 9 Vet. App. 266, 267 (1996). A GAF of 45 reflects
serious impairment or serious impairment in social,
occupational or school functioning. DIAGNOSTIC AND STATISTICAL
MANUAL OF MENTAL DISORDERS 32 (4th ed. 1994).
Overall, the Board is of the opinion that the most recent
clinical evidence reflects that the veteran's PTSD symptoms
cause occupational and social impairment with reduced
reliability and productivity effective from June 13, 1998,
the date of the recent VA examination reflecting an increase
in the severity of the PTSD. However, inasmuch as neither
severe social and industrial impairment, nor occupational and
social impairment, with deficiencies in most areas, such as
work, school, family relations, judgment, thinking or mood is
shown, a rating in excess of 50 percent is not warranted
under the "old" or "new" criteria for rating psychiatric
disorders has not been demonstrated. In this regard, the
veteran is able to work periodically, he is able to maintain
a relationship with his girlfriend with whom he shares a
living arrangement, and he shows intact judgment, and good to
limited insight. Thus, a rating in excess of 50 percent is
not warranted for any period of time on or after June 13,
1998. Simply put, there is neither evidence of severe social
and industrial impairment, nor evidence of occupational and
social impairment with deficiencies in areas such as work,
school, family relations, judgment, thinking or mood to
warrant an evaluation in excess of 50 percent on or after
June 13, 1998.
Accordingly, to the extent that a 50 percent evaluation is
assigned, the benefit sought on appeal is allowed.
ORDER
For the period from December 7, 1995 to June 12, 1998, the
criteria for an evaluation in excess of 10 percent is denied.
For the period from June 13, 1998, to the present a 50
percent evaluation is granted subject to the law and
regulations governing the payment of monetary benefits.
DEREK R. BROWN
Member, Board of Veterans' Appeals
|
Citation Nr: 9930915
Decision Date: 10/29/99 Archive Date: 11/04/99
DOCKET NO. 97-24 706 ) DATE
)
)
On appeal from the
Department of Veterans Affairs (VA) Regional Office (RO) in
Albuquerque, New Mexico
THE ISSUE
Entitlement to service connection for post-traumatic stress
disorder (PTSD).
REPRESENTATION
Appellant represented by: Disabled American Veterans
WITNESSES AT HEARING ON APPEAL
Appellant and his son
ATTORNEY FOR THE BOARD
Kathleen Reardon Fletcher, Associate Counsel
INTRODUCTION
The veteran served on active duty from July 1969 to March
1971. This matter comes before the Board of Veterans'
Appeals (Board) on appeal from a December 1995 rating
decision by the Albuquerque, New Mexico RO that denied
service connection for PTSD.
In June 1999, a hearing was held at the RO before the
undersigned, who is the member of the Board rendering the
final determination in this claim and was designated by the
Chairman of the Board to conduct that hearing, pursuant to
38 U.S.C.A. § 7102(b) (West 1991).
FINDING OF FACT
VA medical personnel have diagnosed the veteran to have PTSD
related to his military duties in Vietnam.
CONCLUSION OF LAW
The claim of entitlement to service connection for PTSD is
well grounded. 38 U.S.C.A. § 5107(a) (West 1991).
REASONS AND BASES FOR FINDING AND CONCLUSION
In Epps v. Gober, 126 F.3d 1464 (Fed. Cir. 1997), the United
States Court of Appeals for the Federal Circuit held that,
under 38 U.S.C. § 5107(a), VA has a duty to assist only those
claimants who have established well grounded (i.e.,
plausible) claims. More recently, the United States Court of
Appeals for Veterans Claims issued a decision holding that VA
cannot assist a claimant in developing a claim that is not
well grounded. Morton v. West, 12 Vet. App. 477 (July 14,
1999).
Once a claimant has submitted evidence sufficient to justify
a belief by a fair and impartial individual that a claim is
well-grounded, the claimant's initial burden has been met,
and VA is obligated under 38 U.S.C. § 5107(a) to assist the
claimant in developing the facts pertinent to the claim.
Accordingly, the threshold question that must be resolved in
this appeal is whether the appellant has presented evidence
that the claim is well grounded; that is, whether the
appellant has presented evidence that the claim is plausible.
In order for a claim for service connection for PTSD to be
well grounded, the appellant must submit medical evidence of
a current disability, lay evidence (presumed to be credible
at this stage of the claim) of an in-service stressor, and
medical evidence of a nexus between service and the current
PTSD disability. Cohen v. Brown, 10 Vet. App. 128 (1997).
In the case at hand, the evidence includes several documents
from VA medical personnel, including VA treatment records
dated in 1995 and 1996, that reflect that the veteran has
been diagnosed to have PTSD related to his military duties in
Vietnam. The stressful events the veteran has described from
his Vietnam service, as noted in a statement received by the
RO in August 1995 and during a June 1999 Travel Board
hearing, include: serving the medical needs of POWs, North
Vietnam Regulars, and Vietcong; assisting the Medical
Corpsman with the wounded and dead; driving an ambulance;
fracturing his right hand in a fight with a Vietcong in a POW
compound; encountering small arms fire and mortar attacks;
and exchanging small arms fire with three Vietcong.
Because there is medical evidence of the claimed disability,
evidence of in-service stressors (i.e., the veteran's
accounts, which are presumed credible at this stage), and
medical evidence of a nexus between the veteran's service and
PTSD, the veteran has submitted a well-grounded claim of
service connection for PTSD.
ORDER
The claim of entitlement to service connection for PTSD is
well grounded. To this extent only, the appeal is granted.
REMAND
Because the claim of entitlement to service connection for
PTSD is well grounded, VA has a duty to assist the appellant
in developing facts pertinent to the claim. 38 U.S.C.A.
§ 5107(a) (West 1991); 38 C.F.R. § 3.159 (1999); Murphy v.
Derwinski, 1 Vet. App. 78 (1990).
The veteran contends that the RO erred by failing to grant
service connection for PTSD. As noted above, the veteran has
described stressful events from his Vietnam service in a
statement received by the RO in August 1995 and during a June
1999 Travel Board hearing. These events, in part, include:
serving the medical needs of POWs, North Vietnam Regulars,
and Vietcong; assisting the Medical Corpsman with the wounded
and dead; driving an ambulance; fracturing his right hand in
a fight with a Vietcong in a POW compound; encountering small
arms fire and mortar attacks; and exchanging small arms fire
with three Vietcong. Service connection for PTSD requires
medical evidence establishing a clear diagnosis of the
condition, credible supporting evidence that the claimed in-
service stressor actually occurred, and a link, established
by medical evidence, between current symptomatology and the
claimed in- service stressor. 38 C.F.R. § 3.304(f) (1999).
As set forth above, the veteran has been diagnosed to have
PTSD; the records on which this diagnosis is reflected show
that it is considered to be due primarily to the veteran's
experiences in Vietnam. Significantly, however, the current
medical evidence does not include a description of the causal
nexus between current symptomatology and any specific claimed
in-service stressor.
The statutory duty to assist includes the conduct of a
contemporaneous and thorough medical examination, one which
takes into account the records of prior treatment, so that
the evaluation of the claimed disability will be a fully
informed one. Green v. Derwinski, 1 Vet. App. 121 (1991).
In this case, the veteran has not been afforded a VA
compensation examination to ascertain the nature of his
psychiatric disorder. Pursuant to 38 C.F.R. § 4.125, a
diagnosis of PTSD must conform to the criteria of DSM-IV. In
the judgment of the Board, the veteran should undergo a VA
psychiatric examination to ascertain if there is a clear
diagnosis of PTSD under DSM-IV, and if so, to set forth the
causal nexus between current symptomatology and specific
claimed in-service stressors. Cohen, supra.
Under the circumstances described above, the veteran's case
is REMANDED to the RO for the following actions:
1. The RO should contact the VA Medical
Center in Albuquerque, as well as the
facilities in Amarillo and Waco, Texas,
and request photocopies of all previously
unobtained treatment records pertaining
to the appellant's treatment at those
facilities. All medical records
obtained, including those which may have
been prepared in 1971 as noted by the
veteran during a 1999 Travel Board
hearing, should be associated with the
claims folder.
2. Thereafter, the veteran should be
scheduled for a special VA psychiatric
examination. The claims folder and a
copy of this Remand must be made
available to the examiner prior to the
examination so that the pertinent aspects
of the veteran's military and medical
history may be reviewed. The purpose of
this examination will be to determine
whether the complete record supports a
clear diagnosis of PTSD. Such tests as
the examiner deems necessary should be
performed, to include psychological
testing. The examiner should be directed
to the veteran's description of stressful
events from his Vietnam service as noted
in a statement received by the RO in
August 1995 and during a June 1999 Travel
Board hearing. If the veteran is found
to have PTSD, the examiner should express
an opinion for the record as to whether
the veteran's claimed stressor(s) from
his military service are etiologically
related to any current PTSD. The
examining physician should specifically
identify which stressor(s) are linked to
any diagnosed PTSD, with reference to the
stressor(s) determined by the RO to be
established by the record. The clinical
findings and reasons upon which the
opinion is based should be clearly set
forth. In the event the examiner finds
that the veteran does not have PTSD, he
or she should reconcile that conclusion
with that of other physicians who may
have differed with it.
3. Following completion of the
foregoing, the RO must review the claims
folder and ensure that the requested
development has been completed. If any
development is incomplete, appropriate
corrective action should be implemented.
Thereafter, the RO should readjudicate
the veteran's claim and provide the
veteran and his representative with a
supplemental statement of the case. They
should be afforded the applicable time to
respond if the decision remains adverse
to the veteran.
Thereafter, the case should be returned to the Board, if in
order. The appellant has the right to submit additional
evidence and argument on the matter the Board has remanded to
the regional office. Kutscherousky v. West, 12 Vet. App. 369
(1999).
This claim must be afforded expeditious treatment by the RO.
The law requires that all claims that are remanded by the
Board of Veterans' Appeals or by the United States Court of
Appeals for Veterans Claims for additional development or
other appropriate action must be handled in an expeditious
manner. See The Veterans' Benefits Improvements Act of 1994,
Pub. L. No. 103-446, § 302, 108 Stat. 4645, 4658 (1994),
38 U.S.C.A. § 5101 (West Supp. 1999) (Historical and
Statutory Notes). In addition, VBA's Adjudication Procedure
Manual, M21-1, Part IV, directs the ROs to provide
expeditious handling of all cases that have been remanded by
the Board and the Court. See M21-1, Part IV, paras. 8.44-
8.45 and 38.02-38.03.
D. C. Spickler
Member, Board of Veterans' Appeals
|
The Attorney General of Florida, joined by the States Attorney in and for the Thirteenth Judicial Circuit of Florida, has filed a petition in this Court praying interpretation or clarification of our opinion filed herein July 1st, 1937, and reported in175 So. 515.
The information under which the defendants were placed on trial was in four counts.
The first count charged that the defendants, "on the 30th day of November, in the year of Our Lord, one thousand nine hundred thirty-five, with force and arms at and in the County of Hillsborough aforesaid, did unlawfully agree, conspire, combine and confederate among themselves, to without lawful authority, forcibly and secretly confine and imprison Eugene F. Poulnot, with intent to cause him to be confined and imprisoned in the County of Hillsborough, State of Florida, against his will, against the form of the Statute in such case made and provided, to the evil example of all others in the like case offending, and against the peace and dignity of the State of Florida;".
The second count charged that the defendants, "on the 30th day of November, in the year of Our Lord, one thousand nine hundred and thirty-five, with force and arms at and in the County of Hillsborough aforesaid, without lawful authority, did forcibly and secretly confine and imprison Eugene F. Pulnot, with intent to cause him to be confined and imprisoned in the County of Hillsborough, State of Florida, against his will, and R.G. TITTSWORTH, whose Christian name is to the Solicitor unknown, late of the County of Hillsborough aforesaid, in the State aforesaid, not standing in relation of husband or wife, parent or grandparent, child or grandchild, brother or sister by consanguinity or affinity to the said C.A. Brown, Jr., Sam E. Crosby, John P. Bridges, Robert Chappell, F.W. Switzer, *Page 481
Arlie Gilliam, Edward Spivey, James Dean and C.W. Carlisle, or either of them, did then and there on the 30th day of November, in the year of our Lord one thousand nine hundred thirty-five, with force and arms at and in the County of Hillsborough aforesaid, unlawfully and feloniously and with intent that the said C.A. Brown, Jr., Sam E. Crosby, John P. Bridges, Robert Chappell, F.W. Switzer, Arlie Gilliam, Edward Spivey, James Dean and C.W. Carlisle, should avoid and escape detection, arrest, trial and punishment, then and there well knowing what the said C.A. Brown, Jr., Sam E. Crosby, John P. Bridges, Robert Chappell, F.W. Switzer, Arlie Gilliam, Edward Spivey, James Dean and C.W. Carlisle had committed the aforesaid felony, did then and there maintain, assist and otherwise aid the said C.A. Brown, Jr., Sam E. Crosby, John P. Bridges, Robert Chappell, F.W. Switzer, Arlie Gilliam, Edward Spivey, James Dean and C.W. Carlisle, against the form and Statute in such case made and provided, to the evil example of all others in the like case offending, and against the peace and dignity of the State of Florida;"
The third count charged that the defendants, "on the 30th day of November in the year of our Lord, one thousand nine hundred and thirty-five, with force and arms at and in the County of Hillsborough aforesaid, did unlawfully agree, conspire, combine and confederate among themselves to, without lawful authority, confine, inveigle and kidnap Eugene F. Poulnot with intent to cause him to be secretly confined and imprisoned in the County of Hillsborough, State of Florida, against his will, against the form of the Statute in such case made and provided, to the evil example of all others in the like case offending, and against the peace and dignity of the State of Florida;"
And the fourth count charged that the defendants, "on *Page 482
the 30th day of November in the year of Our Lord, one thousand nine hundred and thirty-five, with force and arms at and in the County of Hillsborough aforesaid, without lawful authority, did confine, inveigle and kidnap Eugene F. Poulnot with intent to cause him to be secretly confined and imprisoned in the County of Hillsborough, State of Florida, against his will, and R.C. TITTSWORTH, whose Christian name is to the Solicitor unknown, late of the County of Hillsborough aforesaid, in the State aforesaid, not standing in relation of husband or wife, parent or grandparent, child or grandchild, brother or sister by consanguinity or affinity to the said C.A. Brown, Jr., Sam E. Crosby, John P. Bridges, Robert Chappell, F.W. Switzer, Arlie Gilliam, Edward Spivey, James Dean and C.W. Carlisle, or either of them, did then and there on the 30th day of November, in the year of our Lord, one thousand nine hundred thirty-five with force and arms at and in the County of Hillsborough aforesaid, unlawfully and feloniously and with intent that the said C.A. Brown, Jr., Sam E. Crosby, John P. Bridges, Robert Chappell, F.W. Switzer, Arlie Gilliam, Edward Spivey, James Dean and C.W. Carlisle should avoid and escape detection, arrest, trial and punishment, then and there well knowing that the said C.A. Brown, Jr., Sam E. Crosby, John P. Bridges, Robert Chappell, F.W. Switzer, Arlie Gilliam, Edward Spivey, James Dean and C.W. Carlisle had committed the aforesaid felony, did then and there maintain, assist and otherwise aid the said C.A. Brown, Jr., Sam E. Crosby, John P. Bridges, Robert Chappell, F.W. Switzer, Arlie Gilliam, Edward Spivey, James Dean and C.W. Carlisle, against the form of the Statute in such case made and provided, to the evil example of all others in the like case offending, and against the peace and dignity of the State of Florida;". *Page 483
Motions to quash each count of the information were presented and overruled and the defendants went to trial on the plea of not guilty to each count of the information. At the close of the State's testimony motion was made for a directed verdict in favor of the defendants upon the ground that the State had failed to produce sufficient evidence to warrant conviction under either count and also to withdraw each of the counts of the information from consideration of the jury upon the ground that each count failed to charge any offense under the laws of the State of Florida. After considering the motion and hearing argument of counsel the court withdrew from consideration of the jury the first, second and third counts of the information upon the ground, as was stated, that "the information do not sufficiently allege the statutory crime of kidnaping."
When these facts are considered in connection with what appears in our opinion, supra, it appears that but little, if any, elucidation should be necessary to understand exactly what is meant by what is said in that opinion.
The motion before us is an extraordinary one, the like of which has not heretofore been presented to this Court. The fact that it is presented by the chief law officer of the State is its chief claim upon our consideration. The opinion, supra, promulgated by this Court became the expression of the law of this case by which the lower court must be guided in a re-trial of the defendants under the fourth count of the information, if and when they are to be tried again. Therefore, justice demands that there be no misunderstanding of the enunciation of this Court in that regard and, for this reason, we will say that the opinion, supra, means (1) that when the State elected to charge a conspiracy to kidnap as well as the substantive offense of kidnaping in one information it elected to separate and deal with the conspiracy *Page 484
allegations and the substantive offense allegations in such a manner that the defendants could be convicted of the offense of conspiracy or of the offense of kidnaping, or could be convicted of both, or be acquitted of either or both. Had the State merely charged the offense of kidnaping, then evidence would have been admissible to prove a conspiracy to commit the offense on the theory that the principal crime charged may be in part, at least, established by proving formation and execution of pre-existing conspiracy out of which the offense charged was accomplished. But, when the State elected to prosecute for both offenses and the defendants were acquitted on the charge of conspiracy, the State is then precluded from introducing evidence only tending to prove that offense of which the defendants have been found not guilty in the effort to establish the guilt of the defendants as to another substantive offense.
We examined the three counts of the information and reached the conclusion that neither count entirely failed to charge an offense under the laws of the State of Florida. Neither count was so defective that a conviction under it would have been held void on petition in habeas corpus. Therefore, it must follow that when the defendants went on trial under the charges contained in those counts of the information and evidence was introduced tending to prove the defendants guilty of the violations charged in those counts the defendants were put in jeopardy and when the Court withdrew from the jury consideration of the charges made in those counts of the information, it was in effect an acquittal of the charge of conspiracy. That was not an acquittal, however, of the charge of kidnaping attempted to be charged under the second count of the information because the fourth count of the information charged the same offense which was sought to be charged in the second *Page 485
count of the information and the trial was continued under the fourth count of the information. The result was the same as if the second and fourth counts had remained before the jury and the jury had returned a verdict of not guilty under the second count and a verdict of guilty under the fourth count.
This is also true because as both the second and fourth counts of the information attempted to charge the identical offense the State could have at any time elected, or could have been required to elect, which of these counts it would proceed to prosecute under and the abandonment of one of the counts would not have affected the right to continue the prosecution under the other. So, the action of the Court was equivalent to instructing the jury to find a verdict of not guilty on the conspiracy charge and to leave it up to the jury to determine what the verdict should be under the fourth count of the information.
The State having elected to prosecute under two counts of the information for conspiracy and under the other two counts for kidnaping, the result in the eyes of the law is that the defendants were acquitted of the conspiracy charge and the State is precluded on a subsequent trial from introducing evidence only
tending to prove that charge of which the defendants have in law been acquitted.
We cannot assume to say what evidence may be admitted on a subsequent trial and what evidence should be excluded. In this matter the trial court must be governed by the rules of evidence as established by the precedents of the past. It is sufficient to say what was said in the original opinion, that the failure of the trial judge "to exclude from the jury's consideration a great mass of damaging evidence that, if admissible at all, was only
admissible after a conspiracy on the part of those particular defendants had been *Page 486
established in the evidence at the trial, had the tendency to unduly prejudice the rights of the accused by allowing the jury to consider and base its verdict of guilty in whole or in part on proof of a supposed conspiracy affirmatively charged and relied on by the prosecution," when that charge had been eliminated from further consideration by the jury.
It is well established that a single conspiracy may have for its object the violation of two or more criminal laws or two or more substantive offenses. The conspiracy is one offense and a single offense, no matter how many repeated violations of the law may have been the object of the conspiracy. And so one may not be convicted or acquitted of a conspiracy to accomplish a certain criminal act and again be put in jeopardy for the trial for the offense of the same conspiracy to commit a different criminal act. See Brill Ency. of Criminal Law, Vol. 1, 828; Frohwerk v. United States, 63 Law Ed. 565; United States v. Rabinowich,59 Law Ed. 1214; Jopkin Mercantile Co. v. United States,59 Law Ed. 707; United States v. Owen, et al., 21 Fed. (2nd Series) 868; United States v. Weiss, et al., 263 Fed. 992. See also Greene v. State, 17 Fla. 670.
We hope this explanatory memorandum sufficiently clarifies the former opinion of this Court to leave no doubt in the minds of counsel, or of the trial court, as to what we meant by our original opinion.
ELLIS, C.J., and WHITFIELD, TERRELL, BUFORD and CHAPMAN, J.J., concur.
BROWN, J., concurs specially. |
981 F.2d 25
37 Fed. R. Serv. 813
Benjamin HARRISON and Rosalind Harrison, Plaintiffs, Appellants,v.SEARS, ROEBUCK AND COMPANY and Emerson Electric Company,Defendants, Appellees.
No. 92-1055.
United States Court of Appeals,First Circuit.
Heard Sept. 15, 1992.Decided Dec. 9, 1992.
1
Leonard Glazer with whom Frank E. Glazer and the Law Offices of Leonard Glazer, P.C., Boston, Mass., were on brief, for plaintiffs, appellants.
2
David A. Barry with whom Regina E. Roman, Barbara L. Siegel, and Sugarman, Rogers, Barshak & Cohen, P.C., Boston, Mass., were on brief, for defendants, appellees.
3
Before TORRUELLA and BOUDIN, Circuit Judges, and BRODY,* District Judge.
4
BRODY, District Judge.
5
Plaintiffs, Benjamin and Rosalind Harrison, appeal from a judgment entered after a jury verdict denying them relief in a personal injury suit against Sears, Roebuck & Company and Emerson Electric Company. Plaintiffs appeal several evidentiary rulings of the trial court including: the admission of an x-ray as evidence, an instruction to the jury on the significance of the x-ray, the exclusion of certain expert testimony, and the exclusion of evidence of subsequent remedial measures to the product which allegedly caused the injury in question. Because we are satisfied that the trial judge did not abuse his discretion in the challenged evidentiary rulings, WE AFFIRM.
I. BACKGROUND
6
Appellants' decedent, Benjamin Harrison, allegedly sustained injuries to two fingers while using a Craftsman 6 1/8 inch Jointer-Planer ("jointer"). Benjamin Harrison was a 70 year old man who was using the jointer to do carpentry work on kitchen cabinets for his home. The jointer was purchased from Sears, Roebuck & Company ("Sears") and was designed, manufactured and distributed by Emerson Electric Company ("Emerson").
7
The complaint was filed on February 26, 1986, by Appellants, Benjamin and Rosalind Harrison, against Appellee, Sears. The complaint alleged negligence and breach of warranty with respect to the jointer, resulting in personal injuries to Benjamin Harrison and loss of consortium to Rosalind. An answer was filed by Sears on March 27, 1986. Subsequently, on June 21, 1987, the Harrisons filed an amendment to the complaint, adding Emerson as a defendant and alleging that Emerson engaged in the design development, testing, manufacturing, marketing and sale of the jointer.
8
Benjamin Harrison died on June 20, 1990 from an illness unrelated to his injuries. Frederick Harrison, Benjamin's son, was appointed executor of his father's estate, and he was substituted in this action.
9
The trial began on November 18, 1991. On November 25, 1991 the jury returned a verdict for the defendants. Plaintiffs' theory at trial was that the accident occurred when Benjamin Harrison's left hand entered an unguarded aperture near the on-off switch and came into contact with the jointer's blade. In response to the first special interrogatory posed, "Was plaintiff injured as a result of unintentionally inserting his fingers into the aperture?," the jury responded "no". Therefore, the jury did not respond to the interrogatories regarding negligence and breach of warranty. Judgment was entered on November 27, 1991. Plaintiffs moved for a new trial on December 9, 1991, and the motion was denied on December 11, 1991. This appeal followed.
10
The precise way in which the accident occurred was heavily [email protected]. The deposition testimony of the Appellants' decedent stated that while Benjamin Harrison was in the process of shutting off the jointer, his left hand slipped from the on-off switch and entered into an opening allowing his fourth and fifth fingers to make contact with moving cutter blades. Appellants allege that this contact resulted in the partial amputation of the decedent's left ring finger and injury to his left fifth finger.
11
Appellants' engineering expert, Bradford Schofield, testified that the opening represented an unreasonably hazardous design that violated accepted industry standards and resulted in the accident. Mr. Schofield testified that the opening could have been eliminated at negligible cost.
12
Appellants' medical expert, Dr. Stephen Meagher, testified with regard to the permanent injury suffered by Benjamin Harrison as a result of the incident. During cross-examination, Dr. Meagher testified that in his opinion, the accident occurred as a result of the entry of Benjamin Harrison's fingers into the opening. Appellants sought to introduce Dr. Meagher's assessment of an x-ray of Mr. Harrison's hand. Although Appellants never listed Dr. Meagher as a liability expert during pre-trial discovery, they sought to have his testimony admitted during their case-in-chief to rebut the anticipated testimony of Appellees' expert, Jack Hyde, with regard to the significance of the x-ray in determining the cause of the accident. Appellants argued that this testimony was proper because they had not been notified prior to trial that the x-ray would be relied on. The trial judge ruled that Meagher could not offer an opinion regarding how the accident occurred on direct examination because Appellants had never disclosed prior to trial that Meagher would testify as to causation.
13
Appellees then presented their engineering expert, Jack Hyde, who testified that the accident could not have occurred as Benjamin Harrison claimed. Hyde gave two reasons for his opinion. First, Hyde testified that because of the design of the jointer, it would be difficult to get one's fingers into the opening unintentionally. In addition, Hyde opined that the injury could not have occurred as Harrison alleged because the angle and location of the cuts on Harrison's fingers, as depicted in the x-ray, were inconsistent with his testimony as to how the fingers were cut. Hyde was permitted to use the x-ray in conjunction with his testimony over Appellants' objection that he lacked qualification as an expert with respect to x-ray interpretation. Appellants also objected on the grounds that Appellees failed to give adequate notice regarding Hyde's anticipated testimony with respect to the x-ray. Appellants' further objected to the court's instruction to the jurors that "they may conclude, to some extent, what [they] think an x-ray means." Trial Tr. at 61, reprinted in, Appellants' App. at 270.
14
Hyde was also permitted to testify that there had never been a similar complaint to Emerson despite Appellants' objection to the use of this negative evidence.
15
Finally, Appellants contend that the trial court's denial of their motion for a new trial should be reversed because the court sustained Appellees' objection when Appellants sought to cross-examine Hyde with regard to a subsequent design change which eliminated the opening in the jointer. Appellants argue that this cross-examination should have been permitted because Hyde testified during direct examination that there had been "no hazardous area left exposed next to the switch where you [could] unintentionally get your hand," even though he contributed to a subsequent design change which eliminated the opening in question. Trial Tr. at 40, reprinted in Appellants' App. at 249. Further, Appellants argue that this cross-examination was proper because Appellees opened the door to this type of evidence when they touted Hyde's qualifications as an expert which included his work on the design of jointers.
II. DISCUSSION
A. Use of the x-ray as evidence
16
The district court allowed Appellees' engineering expert, Jack Hyde, to utilize an x-ray of Harrison's hand while testifying regarding the cause of Harrison's injuries. Appellants contend that Hyde was not a medical expert and thus not qualified to interpret x-rays. Appellants assert that the allowance of the use of the x-ray was an abuse of discretion. Appellees argue in response that in this context the x-ray is equivalent to a picture and, therefore, requires no specialized knowledge to view in order to determine the angle of the break in a bone. Appellees further contend that there is no merit to Appellants' position because, as an accident reconstructionist, Hyde had extensive experience with x-rays.
17
The admission of expert testimony under Fed.R.Evid. 702 is within the trial court's discretion and will be reversed only for an abuse of discretion. Navarro de Cosme v. Hospital Pavia, 922 F.2d 926, 931 (1st Cir.1991). Specifically, the trial judge has discretion in determining: (1) whether Hyde was sufficiently qualified to testify regarding the x-ray of Harrison's hand, and (2) whether Hyde's testimony would, in fact, assist the trier of fact to understand the evidence or to determine a fact in issue. Raymond v. Raymond Corp., 938 F.2d 1518, 1526 (1st Cir.1991).
18
There was evidence that Hyde had extensive formal education in safety engineering, human factors engineering and product safety. Also, the record demonstrates that Hyde had over ten years of experience reconstructing accidents involving power tools and hand injuries. Moreover, Hyde had read x-rays of hand and body parts involved in accidents on numerous occasions, had consulted with doctors concerning his interpretation of x-rays, and he testified that x-rays were often interpreted and relied upon by experts in his field.
19
The record demonstrates that the trial judge was well within his discretion in determining that Hyde possessed sufficient knowledge, skill, experience and training to utilize the x-ray to support his testimony. The record also indicates that Hyde used the x-ray to determine the location and angle of the cuts to Harrison's fingers and not for a medical diagnosis. Allowing Hyde to make use of all the information available to him, including the x-ray, was not an abuse of discretion. See, e.g. Gray v. General Motors Corp., 434 F.2d 110, 113 (8th Cir.1970).
B. The jury instruction regarding the x-ray
20
The trial judge permitted the jury to see the preoperative x-ray of Harrison's hand in conjunction with Jack Hyde's testimony. In addition, the trial judge instructed the jury:
21
... you may conclude to some extent what you think [the x-ray] means.
22
Now, this x-ray shows some bone. If the witness says something about the bone, and what they mean to him, you will be free to reject it, if it doesn't meet with your approval. You will be able to accept it, if it does.
23
Trial Tr. at 61, reprinted in Appellants' App. at 270.
24
While case law exists in which courts have found it improper to allow the jury to see x-rays, these cases all involved complex medical issues. See, e.g. Broderick v. Gibbs, 1 Mass.App.Ct. 822, 296 N.E.2d 708 (1973). In this case, the jury was permitted to use the x-ray as a photograph would be used, to depict the location and angle of the cuts to Harrison's fingers. Because laypersons are capable of understanding x-rays insofar as they depict the location of a missing section of a bone, it was not improper for the district court to allow the jury to view the x-rays for this purpose.
25
Further, the challenged jury instruction did not tell the jurors they could use their unbridled discretion in interpreting the x-ray as Appellants suggest. Rather, the instruction indicated that the jurors could conclude whether they believed the x-ray showed what the witness purported it revealed. For these reasons we find that the admission of the x-ray with the challenged instruction was not an abuse of discretion.
C. The scope of Dr. Meagher's testimony
26
Appellants assert that during the Defendants' opening statement they learned for the first time that Defendants' expert, Jack Hyde, would use the x-ray to support his opinion. The scope of Hyde's expected testimony was reflected in the Defendants' Supplemental Answers to Interrogatories. These interrogatories stated that, "Mr. Hyde will testify that the plaintiff Benjamin Harrison's description of how the accident occurred is inconsistent with the nature and location of his injury and the design of the product." Interrog. of Def. Emerson pp. 7-8, reprinted in Appellants' App. at 52-53. Because Appellees did not expressly state that the x-ray would be used until their opening statement to the jury, Appellants assert that they had a right to rebut the interpretation of the x-ray.
27
Appellants sought to rebut Hyde's anticipated use of the x-ray with the testimony of their medical expert, Dr. Meagher. It was not until a bench conference during the direct examination of Meagher, that Appellants' counsel expressed his intention to ask Meagher for his opinion regarding the significance of the x-ray in determining whether the injury could have been produced by the insertion of fingers into the opening.
28
Appellees objected to this testimony asserting that it would be unfairly prejudicial because they had been given no notice that Dr. Meagher would testify to anything other than his physical examination of Harrison. Specifically, Appellees objected to Dr. Meagher's testimony as to causation issues because he was never listed as a liability expert in Plaintiffs' Supplemental Answers to Interrogatories.
29
The scope of Dr. Meagher's expected testimony, as described in the Plaintiffs' Supplemental Answers to Interrogatories and Trial Brief, was limited to his diagnosis and prognosis of the Plaintiff's injuries based on his post-injury examination of the Plaintiff. Appellants' counsel conceded at a bench conference that there was nothing in Meagher's report dated April 13, 1989 which related to the precise manner in which the accident occurred and that, prior to trial, Appellants never intended to have him testify regarding the cause of the accident. Nevertheless, Appellants contend that they had a right to question Dr. Meagher on the causation issue and to solicit his opinion about the significance of the x-ray to "rebut" the expected testimony of Jack Hyde.
30
During direct examination, the district court initially refused to allow Dr. Meagher to offer an opinion regarding the cause of the Appellant's injury because Appellants had not disclosed that he would so testify prior to trial. The district judge did not address the issue of whether this was proper rebuttal evidence when he excluded the testimony in question. Ultimately, however, as discussed below, the district court allowed Dr. Meagher to testify to some extent about causation, but the court did not allow Dr. Meagher to testify that the x-ray was consistent with Appellants' version of the events.
31
Assuming arguendo that it was error for the trial judge to exclude Meagher's causation testimony, the standard for reviewing a district court's nonconstitutional error in a civil suit requires that we find such error harmless if it is highly probable that the error did not affect the outcome of the case. See, e.g. United States v. Garcia-Rosa, 876 F.2d 209, 222 (1st Cir.1989), vacated on other grounds sub nom. Rivera-Feliciano v. United States, --- U.S. ----, 111 S. Ct. 377, 112 L. Ed. 2d 391 (1990). The record indicates that Dr. Meagher unequivocally testified a number of times that the accident could not have happened in any way other than as Harrison described.1 Allowing Dr. Meagher to testify that the x-ray showed an injury which was consistent with Harrison's allegations would have added little to the evidence before the jury. Although Dr. Meagher was prevented from testifying directly about his opinion regarding the accident's cause, he did in fact tell the jury that he believed the cause of the accident could only have been as Harrison described. Any additional testimony by Dr. Meagher regarding causation would have been cumulative. We find that the failure of the trial court to admit such cumulative evidence, as rebuttal or otherwise, was harmless. Coy v. Simpson Marine Safety Equipment, Inc., 787 F.2d 19, 24-25 (1st Cir.1986) (harmless error where substance of excluded testimony could be inferred from other trial testimony).
32
On this appeal, Appellants seem to suggest that Dr. Meagher was prepared to offer a detailed refutation of Hyde's analysis of the x-ray to show in specific terms why Hyde's interpretation of the x-ray was wrong and why the x-ray in fact supported Appellants' theory of causation. If so, it is at least arguable that such testimony could have been properly characterized as "rebuttal" and that it would have been more than merely cumulative. It is impossible to determine, however, whether Dr. Meagher was prepared to give detailed testimony of this nature--or whether he was merely going to state that the x-ray was consistent with Appellants' version of causation--because Appellants never presented the district court with a proffer of the substance of Dr. Meagher's testimony. Federal Rule of Evidence 103(a)(2) places the burden of making a proffer on the proponent of the excluded evidence, precisely in order to resolve this uncertainty and to ensure that the trial judge and the appellate court can evaluate the matter fully. Because Appellants failed to make such a proffer, we conclude that they cannot argue on appeal that Dr. Meagher was prepared to present a detailed refutation of Hyde's x-ray testimony.
33
D. The allowance of the use of negative evidence
34
Hyde was permitted to testify over Appellants' objection that, other than Harrison's, no complaints of similar injuries while using the jointer were ever made to Emerson. Appellants contend this was improper because it was irrelevant, not supported by a proper foundation and misleading because only the name Sears appeared on the jointer.
35
Although Appellants claim that the negative evidence is irrelevant and inadmissible to prove causation, they offer no authority to support that position and such evidence has been admitted in past cases. See, e.g., Borrelli v. Top Value Enterprises, Inc., 356 Mass. 110, 113, 248 N.E.2d 510 (1969). Since Hyde's testimony was explicitly limited to complaints to Emerson, and because there was evidence that Hyde would know of any complaints regarding the jointers Emerson sold (approximately 390,000), the foundational requirements for such testimony were adequately met.
36
Appellants' remaining objection to the testimony is based upon their contention that, in fact, customer complaints may have been made to Sears, the retailer, which were not relayed to Emerson and, therefore, Hyde's testimony concerning Emerson was misleading to the jury. Because Appellants were free to cross-examine Hyde about his knowledge of similar complaints (or the lack thereof) made to Sears, their challenge to the admission of this evidence as misleading is not persuasive. Hyde's knowledge of similar complaints made to Sears was not a foundational prerequisite to his testimony regarding complaints to Emerson. For these reasons we find it was not an abuse of discretion for the district court to admit this testimony.
37
E. The exclusion of evidence of subsequent remedial measures to negate the expert's qualifications and to impeach Hyde's testimony
38
The Court did not permit Appellants to question Appellees' expert, Hyde, regarding subsequent remedial measures made to the jointer. Appellants contend that this was reversible error because Appellees bolstered Hyde's qualifications by allowing him to state that he worked on design changes to the jointer. Appellants assert that they should have been able to bring out on cross-examination that one of Hyde's contributions led to the subsequent removal of the opening which allegedly injured Appellant.
39
Appellants sought to have the evidence of the subsequent removal of the opening in the jointer admitted to impeach Hyde's testimony as well as to diminish his qualifications. Hyde testified on direct examination that, "there [was] no hazardous area left exposed next to the switch where you are going to unintentionally get your hand in there and contact the cutter head." Trial Tr. at 40, reprinted in Appellant's App. at 249. However, after Appellants' claim arose, Hyde participated in designing a new jointer without the opening which allegedly injured Harrison.
40
In rejecting the use of subsequent remedial measure evidence, it is not clear from the record whether the district court was made aware of the impeachment aspect of Appellants' objection. In any event, the use to undercut qualifications and the use to impeach Hyde's testimony are closely related--in substance Appellants wanted to argue that "you can't trust this witness"--and we will assume that both uses were adequately raised before the trial court. In light of the close connection between these two proposed uses, we will refer to both as impeachment.
41
Federal Rule of Evidence 407 does not require the exclusion of evidence of subsequent measures when such evidence is being offered exclusively for impeachment purposes.2 Reversible error has been found when subsequent remedial evidence has been excluded when offered for impeachment purposes. See, e.g. Petree v. Victor Fluid Power Inc., 887 F.2d 34, 38 (3rd Cir.1989). However, cases which have admitted subsequent remedial measure evidence for impeachment purposes tend to involve a greater nexus between the statement sought to be impeached and the remedial measure than the [email protected]. For example, in Anderson v. Malloy, subsequent remedial measure evidence was admitted to impeach statements that defendants had checked the area prior to the alleged accident and done everything possible to make it safe. 700 F.2d 1208, 1212-14 (8th Cir.1983) (emphasis added). A more direct impeachment use of subsequent remedial measure evidence would exist if Appellees' witness stated that he did not change the product after the alleged accident was brought to his employer's attention. See, e.g. Garshon v. Aaron, 330 Ill.App. 540, 71 N.E.2d 799 (1947). Rule 407's impeachment exception must not be used as a subterfuge to prove negligence or culpability. See Hardy v. Chemetron Corp., 870 F.2d 1007, 1010-12 (5th Cir.1989) (trial court properly excluded evidence of subsequent rewiring proffered to impeach defendant's testimony that negligent wiring had not caused the plaintiff's injury).
42
The leading commentators have noted the difficulty associated with applying the impeachment exception to Rule 407. Professor Wright voices a strong concern that the "exception" has the capacity to engulf the "rule". 23 Wright & Graham, Federal Practice and Procedure § 5289, at 145 (1980) (footnote omitted). To guard against the impeachment exception being used as a loophole for bringing in evidence to prove negligence under Rule 407, the commentators advise that trial judges should not abandon their discretionary authority under Federal Rule of Evidence 4033 to exclude the use of such evidence. Wright & Graham, supra, at 148.
43
In this case the trial judge invoked his discretionary power to exclude testimony concerning the subsequent design change to the jointer. It is beyond question that the proffered testimony would have been extremely prejudicial to the Appellees. As impeachment evidence the only available basis for admission of the subsequent design change would have been to impeach Hyde's contention that the accident could not have happened in the manner described by Appellant. To allow Appellants to impeach this statement would in effect enable them to impeach Hyde's claim that the product was not defective and that Appellees were not negligent. If the evidence was admitted to impeach Hyde, Appellants' argument to the jury could have closely paralleled an argument that the subsequent measure could be seen as proof that Appellees were negligent.
44
It was within the trial judge's discretion under Rule 403 to determine whether this evidence would have prejudiced Appellees contrary to the intent of Rule 407, and to exclude such evidence due to the risk that the jury might improperly infer negligence from it. See, e.g., Probus v. K-Mart, Inc., 794 F.2d 1207, 1209 (7th Cir.1986); Public Service Co. v. Bath Iron Works Corp., 773 F.2d 783, 792 (7th Cir.1985). Because Hyde's statement and qualifications could only have been indirectly impeached by the subsequent remedial measure evidence and because the nature of the evidence was highly prejudicial, the trial judge did not abuse his considerable discretion in excluding such evidence.
45
For these reasons, the judgment of the district court is affirmed.
*
Of the District of Maine, sitting by designation
1
After Dr. Meagher reported his record of the plaintiff's medical history, which reiterated the plaintiff's contention that he was injured when his hand unintentionally slipped into the opening by the on-off switch, the trial judge asked, "And your opinion was that the injury that he received, the damages that he received, was consistent with that history?" Meagher responded, "Absolutely. Absolutely. It couldn't have happened any other way." The trial judge then repeated his question, "He couldn't have cut himself some other way?" Meagher replied, "No. Absolutely. The middle finger and index were most at risk on the top of the table...." Trial Tr. at 33-34, reprinted in Appellants' App. at 171-72
2
Fed.R.Evid. 407 provides:
When after an event, measures are taken which, if taken previously, would have made the event less likely to occur, evidence of the subsequent [remedial] measures is not admissible to prove negligence or culpable conduct in connection with the event. This rule does not require the exclusion of evidence of subsequent measures when offered for another purpose, such as proving ownership, control, or feasibility of precautionary measures, if controverted, or impeachment.
3
Fed.R.Evid. 403 provides:
Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.
|
810 F.2d 194
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Arthur Lee HUNTER, Petitioner-Appellant,v.R.M. MUNCY, Mary Sue Terry, Attorney General of Virginia,Respondents- Appellees.
No. 86-7688.
United States Court of Appeals, Fourth Circuit.
Submitted Nov. 28, 1986.Decided Jan. 20, 1987.
Before PHILLIPS, SPROUSE and WILKINS, Circuit Judges.
Arthur Lee Hunter, appellant pro se.
Frank S. Ferguson, Office of the Attorney General, for appellees.
PER CURIAM:
1
A review of the record and the magistrate's opinion discloses that an appeal from his order refusing habeas corpus relief pursuant to 28 U.S.C. § 2254 would be without merit. Because the dispositive issues recently have been decided authoritatively, we deny a certificate of probable cause to appeal, dispense with oral argument, and dismiss the appeal on the reasoning of the magistrate. 28 U.S.C. § 636(c)(1). Hunter v. Muncy, C/A No. 86-561-R (E.D.Va., Oct. 21, 1986).
2
DISMISSED.
|
People v Rojas (2020 NY Slip Op 06293)
People v Rojas
2020 NY Slip Op 06293
Decided on November 4, 2020
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on November 4, 2020
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department
MARK C. DILLON, J.P.
LEONARD B. AUSTIN
SHERI S. ROMAN
SYLVIA O. HINDS-RADIX
LINDA CHRISTOPHER, JJ.
2019-01807 ON MOTION
(Ind. No. 17-01272)
[*1]The People of the State of New York, respondent,
vDavid Rojas, appellant.
Andrew W. Sayegh, Yonkers, NY, for appellant.
Anthony A. Scarpino, Jr., District Attorney, White Plains, NY (Raffaelina Gianfrancesco of counsel), for respondent (no brief filed).
DECISION & ORDER
Appeal by the defendant from a judgment of the County Court, Westchester County (Susan M. Capeci, J.), rendered July 30, 2018, convicting him of attempted murder in the second degree, upon his plea of guilty, and imposing sentence. Assigned counsel has submitted a brief in accordance with Anders v California (386 U.S. 738), in which he moves for leave to withdraw as counsel for the appellant.
ORDERED that the motion of Andrew W. Sayegh for leave to withdraw as counsel for the appellant is granted, and he is directed to turn over all papers in his possession to new counsel assigned herein; and it is further,
ORDERED that Bruce R. Bekritsky, 1551 Kellum Place, Mineola, NY, 11501, is assigned as counsel to perfect the appeal; and it is further,
ORDERED that the respondent is directed to furnish a copy of the certified transcript of the proceedings to the new assigned counsel; and it is further,
ORDERED that new counsel shall serve and file a brief on behalf of the appellant within 90 days of the date of this decision and order on motion, and the respondent shall serve and file its brief within 30 days after the brief on behalf of the appellant is served and filed. By prior decision and order on motion of this Court dated April 11, 2019, the appellant was granted leave to prosecute the appeal as a poor person, with the appeal to be heard on the original papers (including a certified transcript of the proceedings) and on the briefs of the parties. The parties are directed to file one original and five duplicate hard copies, and one digital copy, of their respective briefs, and to serve one hard copy on each other (see 22 NYCRR 1250.9[a][4]; [c][1]).
In reviewing an attorney's motion to be relieved pursuant to Anders v California (386 U.S. 738), this Court must first "'satisfy itself that the attorney has provided the client with a diligent and thorough search of the record for any arguable claim that might support the client's appeal'" (Matter of Giovanni S. [Jasmin A.], 89 AD3d 252, 255, quoting Penson v Ohio, 488 U.S. 75, 83 [internal quotation marks omitted]). As this Court explained in Matter of Giovanni S., "counsel [*2]must, at a minimum, draw the Court's attention to the relevant evidence, with specific references to the record; identify and assess the efficacy of any significant objections, applications, or motions; and identify possible issues for appeal, with reference to the facts of the case and relevant legal authority" (Matter of Giovanni S. [Jasmin A.], 89 AD3d at 258).
The brief submitted by the appellant's counsel pursuant to Anders is deficient because it fails to analyze potential appellate issues or highlight facts in the record that might arguably support the appeal (see People v McDowell, 181 AD3d 716; People v Polk, 161 AD3d 1012, 1013; People v McNair, 110 AD3d 742; Matter of Giovanni S. [Jasmin A.], 89 AD3d at 256). After reciting the facts related to the defendant's plea and sentence, the brief analyzes the same based upon a conclusory statement that the defendant's waiver of his right to appeal was valid, and that the defendant's sentence could not be challenged because the defendant was bound by a negotiated plea agreement (see People v Corley, 186 AD3d 1239; Matter of Giovanni S. [Jasmin A.], 89 AD3d at 258). Since the brief does not demonstrate that assigned counsel fulfilled his obligations under Anders, we must assign new counsel to represent the appellant (see People v Rivera, 142 AD3d 512, 513; People v Parker, 135 AD3d 966, 968; Matter of Giovanni S. [Jasmin A.], 89 AD3d at 258).
Accordingly, assignment of new counsel is warranted (see People v Stokes, 95 NY2d 633, 638; Matter of Giovanni S. [Jasmin A.], 89 AD3d 252).
DILLON, J.P., AUSTIN, ROMAN, HINDS-RADIX and CHRISTOPHER, JJ., concur.
ENTER:
Aprilanne Agostino
Clerk of the Court
|
655 S.E.2d 714 (2007)
STATE
v.
Ryan Gabriel GARCELL.
No. 465A06.
Supreme Court of North Carolina.
November 15, 2007.
Thomas Maher, for Ryan Gabriel Garcell.
Charlie C. Walker, Asheville, William Hart, Senior Deputy Attorney General, Robert C. Montgomery, Special Deputy Attorney General, Jeff Hunt, District Attorney, for State of NC.
The following order has been entered on the motion filed on the 14th day of November 2007 by Defendant for Extension of Time to File Brief:
"Motion Allowed. Defendant (Garcell) shall have up to and including the 7th day of December 2007 to file and serve his/her brief with this Court. By order of the Court in conference this the 15th day of November 2007."
|
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]
MEMORANDUM OF DECISION ON MOTION TO STRIKE (102)
This action for damages arising out of termination of employment has been brought against the corporate employer and Harry Moore president of defendant corporation. The third count of the complaint is brought under the provisions of General Statutes 92-110a, et seq., the Connecticut Unfair Trade Practices Act (CUTPA). Defendant Moore has moved to strike the third count claiming that it fails to state a claim under the law since CUTPA does not apply to the employment relationship.
A motion to strike is the means for contesting the sufficiency of a complaint. Conn. Practice Bk. 152; v. CBS, Inc., 196 Conn. 91, 108 (1985). It tests whether a court that already has subject matter jurisdiction over an action can properly grant relief. Progressive Casualty Ins. Co. v. DiGangi, 4 Conn. app. 137, 139 (1985). The motion to strike "admits all facts well pleaded;" Mingachos, 196 Conn. at 108; and the court, when considering the motion, construes the pleading "in the manner most favorable to the pleader. " D'Ulisse-Cupo v. Board of Directors of Notre Dame High School,202 Conn. 206, 208 (1986). The court takes as true the facts alleged in the pleading sought to be stricken; D'Ulisse-Cupo,202 Conn. at 208; and if provable factual allegations in the challenged pleading "should support a defense or cause of action, the . . . [motion to strike] must fail." Alarm CT Page 28 Applications Co. v. Simsbury Volunteer Fire Co., 179 Conn. 541 , 545 (1980).
A plaintiff who seeks to prevail on a CUPTA claim must establish that the defendant engaged in "unfair or deceptive acts or practices in the conduct of trade or commerce." General Statutes 42-110b (emphasis added). The statute defines "trade or commerce" as "the advertising, the sale or rent or lease, the offering for sale or rent or lease, or the distribution of any services and any property . . . and any other article, commodity or thing of value in this state." General Statutes 42-220a. Banerjee v. Roberts, 641 F. Sup. 1093, 1108 (D. Conn. 1986).
Although the supreme court of this state has not yet addressed the issue presented here, the federal courts which have addressed the issue have held that the employment relationship is not itself trade or commerce for purposes of CUTPA. Ibid. See also Kintner v. NIDEC-TORIN Corp.,662 F. Sup. 112, 113 (D. Conn. 1987).
Plaintiff urges a different result stressing the remedial purpose of CUTPA and the three pronged test of Mead v. Burns,199 Conn. 651 (1986). Before these matters may be considered, however, plaintiff must allege sufficient facts so as to bring his cause of action under the "trade or commerce provision." Here he has not done this.
Accordingly, the motion to strike is granted.
PURTILL, J. |
Exhibit 10.2
EXECUTION COPY
WAREHOUSE COLLATERAL ADMINISTRATION AGREEMENT
This WAREHOUSE COLLATERAL ADMINISTRATION AGREEMENT (such agreement as amended,
modified, waived, supplemented or restated from time to time, the “Agreement”)
dated as of March 28, 2016 is made by and among Arch Street CLO, Ltd. (the
“Issuer”), NewStar Capital LLC (“NewStar”), as portfolio manager (the “Portfolio
Manager”), Credit Suisse AG, Cayman Islands Branch (“CSAG”), in its capacity as
Senior Commitment Party (as defined in the Note Purchase Agreement (as defined
below)) and U.S. Bank National Association (the “Bank”), as Warehouse Collateral
Administrator (the “Warehouse Collateral Administrator”) and Trustee (the
“Trustee”).
Capitalized terms not otherwise defined in this Agreement shall have the
meanings set forth in the Note Purchase Agreement.
W I T N E S S E T H:
WHEREAS, the Issuer intends to acquire, from time to time, Collateral Debt
Obligations selected by the Portfolio Manager and approved by the Senior
Commitment Party with financing provided by the Senior Commitment Party and
Junior Noteholder pursuant to the Note Purchase Agreement, dated as of March 28,
2016, among the Issuer, the Portfolio Manager, each Junior Noteholder identified
in the Note Register, the Bank and CSAG, in its capacities as Senior Commitment
Party and the Senior Noteholder, Credit Suisse Securities (USA) LLC, in its
capacity as Arranger, and U.S. Bank National Association, in its capacities as
Trustee and Warehouse Collateral Administrator (such agreement, as amended,
modified, waived, supplemented or restated from time to time, the “Note Purchase
Agreement”); and
WHEREAS, the Warehouse Collateral Administrator shall receive, hold in
safekeeping and release Collateral Debt Obligations purchased by the Issuer and
all interest (including paid and unpaid accrued interest, premiums and fees,
without duplication) amounts, principal amounts and other amounts received on
account of the Collateral Debt Obligations (collectively, the “Warehouse
Assets”) in accordance with the terms of this Agreement and the Note Purchase
Agreement, and perform certain administrative functions relating to the
Collateral Debt Obligations:
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows.
1. The Warehouse Collateral Administrator hereby agrees to accept (a) the
Collateral Debt Obligations from time to time presented to the Warehouse
Collateral Administrator by the Issuer (or the Portfolio Manager on its behalf),
(b) any proceeds of such Collateral Debt Obligations and (c) any financing
amounts from time to time presented to the Warehouse Collateral Administrator by
the Senior Commitment Party or the Junior Noteholder, and agrees to hold,
release and transfer the same in accordance with the provisions of this
Agreement and the Note Purchase Agreement.
2. The Warehouse Collateral Administrator shall, on or prior to the date of this
Agreement, establish three segregated, non-interest bearing trust accounts in
the name of “Arch Street CLO, Ltd., subject to the lien in favor of U.S. Bank
National Association, as Trustee” for the benefit of the Secured Parties, which
shall be designated as (a) an interest account with the account number
183715-201 (the “Interest Account”), (b) a principal account with the account
number 183715-202 ( the “Principal Account”) and a custodial account with the
account number 183715-700 (the “Custody Account,” and together with the
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Interest Account and the Principal Account, the “Warehouse Accounts”). Any
interest, premiums and fees accrued on and other income on the Collateral Debt
Obligations shall be held in the Interest Account until applied in accordance
with the Note Purchase Agreement. Any principal payments, sale proceeds or
redemption amounts with respect to the Collateral Debt Obligations shall be held
in the Principal Account until applied in accordance with the Note Purchase
Agreement. Any financing amounts received from the Senior Commitment Party or
the Junior Noteholder shall be credited to the Principal Account until applied
in accordance with the Note Purchase Agreement. Any Collateral Debt Obligations
purchased by the Issuer shall be held in the Custody Account. Any cash received
with respect to the Collateral Debt Obligations shall be invested by the
Warehouse Collateral Administrator in the Bank’s “US Bank EuroDollar Deposits”
unless otherwise directed in writing jointly by the Portfolio Manager and the
Senior Commitment Party. The Warehouse Collateral Administrator shall not be
liable for losses on any investments made by it pursuant to and in compliance
with such instructions. Wire instructions with respect to the Warehouse
Collateral Administrator are listed in Section II of Exhibit A to the Note
Purchase Agreement.
3. (a) The Warehouse Collateral Administrator represents and warrants
that:
(i) it is a bank or trust company that in the ordinary course of business
maintains securities accounts for others and in that capacity has established
the Warehouse Accounts and will maintain such accounts in the manner set forth
herein and in the Note Purchase Agreement until the termination of this
Agreement;
(ii) it qualifies as a “bank” within the meaning of Section 9-102(a)(8) of the
Uniform Commercial Code, as in effect from time to time in the State of New York
(the “UCC”);
(iii) it will maintain the Warehouse Accounts as “securities accounts” as
defined in Section 8-501(a) of the UCC;
(iv) this Agreement is the legal, valid and binding obligation of the Warehouse
Collateral Administrator, subject to (A) the effect of bankruptcy, insolvency or
similar laws and (B) general equitable principles (whether enforceability of
such principles is considered in a proceeding at law or in equity); and
(v) all governmental and other consents that are required to have been obtained
by it with respect to this Agreement have been obtained and are in full force
and effect and all conditions of any such consents have been complied with.
(b) The Warehouse Collateral Administrator agrees that:
(i) (A) except as expressly set forth in clause (B) below, the Warehouse
Collateral Administrator will act on entitlement orders or other instructions
with respect to the Warehouse Accounts originated by the Issuer (or the
Portfolio Manager on its behalf) without further consent of the Trustee or any
other person and will act on entitlement orders or other instructions with
respect to such Warehouse Accounts originated by the Trustee without further
consent of the Issuer or any other person; provided that, if any entitlement
order or other instruction with respect to a Warehouse Account given by the
Issuer (or the Portfolio Manager on its behalf) conflicts with an entitlement
order or other instruction with respect to such Warehouse Account given by the
Trustee, the entitlement order or other instruction given by the Trustee shall
govern, (B) on and after a Liquidation Event or a Gross Loss Event, the
Warehouse Collateral Administrator will act solely on entitlement orders or
other instructions with respect to the Warehouse Accounts originated by the
Trustee without the consent of the Issuer or any other person and will not act
on
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any entitlement order or instruction from the Issuer or the Portfolio Manager,
(C) the Warehouse Collateral Administrator will treat all property credited to
any Warehouse Account (whether investment property, security, instrument or
other financial asset or cash) as a “financial asset” for purposes of Article 8
of the UCC, and (D) the Warehouse Collateral Administrator has no notice of any
adverse claim with respect to any “financial asset” credited to any Warehouse
Account;
(ii) any security interest or right of set off in favor of the Warehouse
Collateral Administrator with respect to any Warehouse Account will be
subordinate to the Priority of Payments except that the Warehouse Collateral
Administrator may set off (y) the face amount of any checks that have been
credited to any Warehouse Account but are subsequently returned unpaid because
of uncollected or insufficient funds and (z) reversals or cancellations of
payment orders and other electronic fund transfers;
(iii) the Warehouse Collateral Administrator shall not change the name or
account number of any Warehouse Account or any component account or sub-account
thereof without the prior written consent of the Senior Noteholder;
(iv) all securities or other property underlying any financial assets credited
to the Warehouse Accounts shall be registered in the name of the Warehouse
Collateral Administrator, indorsed to the Warehouse Collateral Administrator or
in blank or credited to another securities account maintained in the name of the
Warehouse Collateral Administrator and in no case shall any financial asset
credited to the Warehouse Accounts be registered in the name of the Issuer,
payable to the order of the Issuer or specially indorsed to the Issuer except to
the extent the foregoing have been specially indorsed to the Warehouse
Collateral Administrator or in blank;
(v) the Warehouse Collateral Administrator shall promptly deliver copies of all
statements, confirmations and other correspondence concerning the Warehouse
Accounts and/or any financial assets credited thereto simultaneously to each of
the Issuer and the Senior Noteholder at the address for each set forth in the
Note Purchase Agreement; and
(vi) the Warehouse Collateral Administrator has not entered into, and until the
termination of this Agreement will not enter into, any agreement with any other
person relating to the Warehouse Accounts and/or any financial assets credited
thereto pursuant to which it has agreed to comply with entitlement orders or any
other instructions of such other person.
(c) The parties hereto agree that “securities intermediary’s jurisdiction”
for the purposes of Section 8 110 of the UCC shall be the State of New York. To
the extent that any Warehouse Account (into which cash is credited as set forth
herein) is re-characterized as a “deposit account” (within the meaning of
Section 9-102(a)(29) of the UCC), New York shall be deemed to be the “bank’s
jurisdiction” (within the meaning of Section 9-304(b) of the UCC). The parties
hereto further agree that with respect to any Warehouse Account the law
applicable to all the issues in Article 2(1) of The Hague Convention on the Law
Applicable to Certain Rights in Respect of Securities Held with an Intermediary
shall be the law of the State of New York.
4. The Warehouse Collateral Administrator shall hold the Warehouse Assets in
safekeeping as custodian and shall release and transfer the Warehouse Assets
only in accordance with the provisions of the Note Purchase Agreement and this
Agreement. If the Closing Date of the CLO Transaction occurs, on the Closing
Date Collateral Debt Obligations held in the Custody Account and any remaining
proceeds to be retained by the Issuer after application of the Priority of
Payments shall be released and transferred in accordance with the CLO
Transaction closing flow of funds.
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5. The Warehouse Collateral Administrator shall be obligated only for the
performance of such duties as are specifically set forth in this Agreement and
the Note Purchase Agreement and may rely and shall be protected in acting or
refraining from acting on any written notice, request, waiver, consent or
instrument reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties. The Warehouse Collateral Administrator
shall have no duty to determine or inquire into the happening or occurrence of
any event or contingency. The Warehouse Collateral Administrator shall not be
deemed to have actual, constructive, direct or indirect notice or knowledge of
the occurrence of any Liquidation Event, Gross Loss Event or other related
matter unless and until (and except to the extent) such matter is actually known
by a Trust Officer or unless (and then only to the extent received) received in
writing by the Warehouse Collateral Administrator at the notice address
specified in the Note Purchase Agreement. The Warehouse Collateral Administrator
may consult with and obtain advice from legal counsel as to any provision hereof
or its duties hereunder. The Warehouse Collateral Administrator shall not be
liable for any action taken or omitted by it, except for gross negligence or
willful misconduct, in good faith and reasonably believed by it to be authorized
hereby, nor for action taken or omitted by it in accordance with the advice of
its counsel. Anything in this Agreement notwithstanding, in no event shall the
Warehouse Collateral Administrator be liable for special, punitive, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Warehouse Collateral Administrator has been
advised of such loss or damage and regardless of the form of action. Permissive
rights and powers granted to the Warehouse Collateral Administrator shall not be
construed to be mandatory duties to act. In performing its duties hereunder and
under the Note Purchase Agreement, the Warehouse Collateral Administrator may
request further instructions from the Issuer, Portfolio Manager or the Senior
Commitment Party. It is the intention of the parties hereto that the Warehouse
Collateral Administrator shall never be required to use, advance or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties or the exercise of any of its rights and powers hereunder. The Issuer (or
Portfolio Manager on its behalf) shall be responsible for assuring that agent
banks, obligors and other third parties provide to the Warehouse Collateral
Administrator all the necessary information that it may need to perform its
duties under this Agreement. The Warehouse Collateral Administrator shall not be
liable with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Senior Commitment Party, the
Arranger, the Portfolio Manager or the Issuer. The Warehouse Collateral
Administrator shall not have any duty to monitor, ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
this Agreement or the Note Purchase Agreement on the part of the Issuer or the
Portfolio Manager and shall not be responsible to any Secured Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency,
perfection, or value of any Collateral Debt Obligation. The Warehouse Collateral
Administrator may execute any of the powers granted under this Agreement or the
Note Purchase Agreement and perform any duty hereunder or thereunder either
directly or by or through agents or attorneys-in-fact, and shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it in good faith without gross negligence or willful misconduct.
Notwithstanding the foregoing, the Warehouse Collateral Administrator cannot
appoint a third party to act as custodian. The Warehouse Collateral
Administrator shall have no obligation to determine the Market Value of any
Warehouse Assets; provided, however, that it shall report the Market Value of
any Warehouse Asset pursuant to Section 7(c).
6. If the Warehouse Collateral Administrator receives funds from the Senior
Commitment Party or the Junior Noteholder to purchase Collateral Debt
Obligations on behalf of the Issuer, the Warehouse Collateral Administrator
shall remit those funds to the sellers of such Collateral Debt Obligations upon
the written direction of the Portfolio Manager.
7. The Warehouse Collateral Administrator shall perform the following functions
with respect to the Warehouse Assets and the Available Funds:
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(a) enter information (as mutually agreed by the Warehouse Collateral
Administrator, the Portfolio Manager and the Senior Commitment Party) regarding
each acquired Collateral Debt Obligation into the Warehouse Collateral
Administrator’s loan tracking system;
(b) make adjustments on a daily basis to the loan tracking system to account for
principal and interest payments received on the Collateral Debt Obligations;
(c) every day, report the Market Value pursuant to the definition of such term
in the Note Purchase Agreement and, if it cannot obtain a reported price of any
Collateral Debt Obligation pursuant thereto, notify the Senior Commitment Party
and the Portfolio Manager, in each case, not later than 5:00 p.m. New York City
time;
(d) calculate the amounts payable pursuant to the Priority of Payments and
distribute such amounts in accordance therewith;
(e) provide the Arranger, the Senior Commitment Party and the Portfolio Manager
electronic access to all documents, information, notices, requests and any other
correspondence received from the agent banks with respect to the Collateral Debt
Obligations;
(f) prepare and deliver the Collateral Reports and any other information
relating to the Collateral Debt Obligations as required by the Note Purchase
Agreement;
(g) keep full and accurate books and records relating to the Collateral Debt
Obligations and stamp or otherwise mark such books and records in such manner as
the Arranger may reasonably require;
(h) act as Note Registrar in accordance with Section 2.1 of the Note Purchase
Agreement; and
(i) take such other actions with respect to the Warehouse Assets as may be
reasonably required by the Note Purchase Agreement as the Warehouse Collateral
Administrator and the Senior Commitment Party shall reasonably agree.
8. The Warehouse Collateral Administrator may at any time resign hereunder by
giving written notice of its resignation to the Issuer, the Senior Commitment
Party and the Portfolio Manager at least thirty (30) days prior to the date
specified for such resignation to take effect, and upon the effective date of
such resignation, the Warehouse Assets hereunder shall be delivered by it to
such person as may be designated in writing by the Senior Commitment Party and
consented to by the Portfolio Manager, whereupon all the Warehouse Collateral
Administrator’s obligations hereunder shall cease and terminate. If no such
person shall have been designated by such date and an instrument of acceptance
by a successor Warehouse Collateral Administrator shall not have been delivered
to the Warehouse Collateral Administrator, the Issuer, the Senior Commitment
Party and the Portfolio Manager within thirty (30) days after giving such notice
of resignation, the Warehouse Collateral Administrator may petition any court of
competent jurisdiction for the appointment of a successor Warehouse Collateral
Administrator. The Warehouse Collateral Administrator’s sole responsibility
thereafter shall be to keep safely all Warehouse Assets then held by it and to
deliver the same to a person designated in writing by the Senior Commitment
Party or in accordance with the direction of a final order or judgment of a
court of competent jurisdiction.
9. Subject always to the provisions of Section 17, the Issuer (the “indemnifying
party”) agrees to indemnify, defend and hold the Bank, its officers, directors,
employees and agents (each, an “indemnified
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party”) harmless from and against any and all losses, claims, damages, demands,
expenses and costs, causes of action, judgments or liabilities that may be
incurred by the Bank, its officers, directors, employees and agents arising
directly or indirectly out of or in connection with the Bank’s acceptance or
appointment as Warehouse Collateral Administrator hereunder and its other
capacities under the Note Purchase Agreement, including the reasonable
out-of-pocket legal costs and expenses as such expenses are incurred (including,
without limitation, the expenses of any experts, counsel or agents) of
investigating, preparing for or defending itself against any action, claim or
liability in connection with its performance hereunder or under the Note
Purchase Agreement. In no event, however, shall the Issuer be (i) obligated to
indemnify the Bank and save the Bank harmless from any fees, expenses, charges
and/or liabilities incurred by the Bank as a result of its own willful
misconduct or gross negligence or (ii) be responsible for indirect, special,
punitive or consequential damages.
Promptly after receipt by an indemnified party under this paragraph 9 of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing of the commencement thereof. In case any such
action shall be brought against an indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and to assume the defense thereof, with counsel
reasonably satisfactory to the indemnified party who may, subject to the
following sentence, be counsel to the indemnifying party. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnified party shall have the right to participate in
such action and to retain its own counsel, but the indemnifying party shall not
be liable to such indemnified party hereunder for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof, unless (i) the
indemnifying party has agreed in writing to pay such fees and expenses or
(ii) the indemnifying party shall have failed to employ counsel reasonably
satisfactory to the indemnified party in a timely manner or (iii) the
indemnified party shall have been advised by counsel that representation of the
indemnified party by counsel provided by the indemnifying party pursuant to the
foregoing would be inappropriate due to an actual or potential conflicting
interest between the indemnifying party and the indemnified party, including
situations in which there are one or more legal defenses available to the
indemnified party that are different from or additional to those available to
the indemnifying party; provided, however, that the indemnifying party shall
not, in connection with any one such action or proceeding or separate but
substantially similar actions or proceedings arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all indemnified parties, except to the extent that
local counsel, in addition to its regular counsel, is required in order to
effectively defend against such action or proceeding. No indemnified party may
consent to the terms of any compromise or settlement of any action without the
prior consent of the indemnifying party. If the indemnifying party does not
notify the indemnified party in writing, within 45 days (or such shorter period
within which a timely answer or response must be filed) after the receipt of
notice of the commencement of any action, that the indemnifying party elects to
undertake the defense thereof, then such indemnified party shall have the right
to contest the claim or (with the prior written consent of the indemnifying
party, which consent shall not be withheld unreasonably) settle or compromise
the claim and the indemnifying party will pay the indemnified party in
immediately available funds for all out-of-pocket expenses (including the
reasonable fees and expenses of counsel and other experts and agents) and all
other losses, claims, damages, demands, costs, judgments or liabilities actually
paid by such indemnified party, all as aforesaid.
10. The Issuer warrants and represents to the Warehouse Collateral Administrator
that the Warehouse Collateral Administrator has no duty to withhold any federal
or state income tax, local or state property tax, local or state sales or use
taxes, or any other tax by any taxing authority arising from its custody of the
Warehouse Assets. The Issuer agrees to indemnify the Warehouse Collateral
Administrator fully for any tax liability, penalties or interest incurred by the
Warehouse Collateral Administrator arising
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hereunder and agrees to pay in full any such tax liability together with penalty
and interest if any tax liability is ultimately assessed against the Warehouse
Collateral Administrator for any reason as a result of its actions hereunder
(except for the Warehouse Collateral Administrator’s individual income tax
liability arising from the income from its fees).
11. The Issuer agrees to pay the Bank for the services rendered by it pursuant
to the provisions of this Agreement and the Note Purchase Agreement as set forth
in a separate fee letter between the Bank and the Issuer. The Issuer’s
obligation to pay the Bank’s indemnities, fees and expenses shall survive the
termination of this Agreement and the resignation or removal of the Warehouse
Collateral Administrator.
12. The Warehouse Collateral Administrator shall have no liability for losses
arising from any cause beyond its control; any delay, error, omission or default
of any mail, telegraph, cable or wireless agency or operator; the acts or edicts
of any government or governmental agency or other group or entity exercising
governmental powers; or interruptions, loss or malfunctions of utilities,
communications or computer (software or hardware) services. However, the
Warehouse Collateral Administrator shall take all reasonable actions to mitigate
any losses due to the occurrence of any of the events in the preceding sentence
and shall perform all duties and actions required of them to the extent possible
and should the Warehouse Collateral Administrator fail to be able to perform as
required, the Warehouse Collateral Administrator shall notify the Portfolio
Manager as soon as practicable of such occurrence.
13. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
14. This Agreement shall remain in full force and effect until the earliest to
occur of (a) the transfer of all of the Warehouse Assets in accordance with
Paragraph 4 above, (b) a court of competent jurisdiction finally disposing of
the rights and obligations of the parties pursuant to the provisions hereof; and
(c) the Final Settlement Date. The parties hereto shall not be bound by any
modification, amendment, termination, cancellation, rescission or supersession
of this Agreement unless the same shall be in writing and signed by each of the
parties hereto.
15. This Agreement may be executed in two or more counterparts, each of which
may be sent via facsimile or electronic mail and may be in pdf format, each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
16. Any corporation or association into which the Warehouse Collateral
Administrator may be merged or converted or with which it may be consolidated,
or any corporation or association resulting from any merger, conversion or
consolidation to which the Warehouse Collateral Administrator shall be a party,
or any corporation or association to which all or substantially all of the
corporate trust business of the Warehouse Collateral Administrator may be sold
or otherwise transferred, shall be the successor Warehouse Collateral
Administrator hereunder without any further act.
17. Notwithstanding any other provision of this Agreement, the parties hereto
may not, prior to the date that is one year (or, if longer, the then applicable
preference period) plus one day after termination of this Agreement or, in the
event securities of the Issuer are issued pursuant to the CLO Transaction, the
payment in full of all such securities institute against, or join any other
individual or entity in instituting against the Issuer, any bankruptcy,
reorganization, arrangement, insolvency, winding-up, moratorium or liquidation
proceedings, or other proceedings under Cayman Islands bankruptcy laws, United
States federal or state bankruptcy laws, or any similar laws.
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None of the directors, officers, incorporators, shareholders, partners, agents
or employees of the Issuer shall be personally liable for any of the obligations
of the Issuer under this Agreement. Notwithstanding anything to the contrary
contained herein, the Issuer’s sole source of funds for payment of all amounts
due hereunder from time to time and at any time shall be the Warehouse
Collateral, and, following application of the proceeds of the Warehouse
Collateral in accordance with the Priority of Payments, no recourse shall be had
against the Issuer for any amounts still outstanding by the Issuer and all
obligations of, and any claims against, the Issuer arising from this Agreement
or any transactions contemplated hereby shall be extinguished and shall not
thereafter revive.
The provisions of this Paragraph 17 shall survive the termination of this
Agreement and resignation of the Warehouse Collateral Administrator.
18. THE PARTIES HERETO VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR THE NOTE PURCHASE
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF ANY OF THE PARTIES HERETO AND THERETO. THE PARTIES
HERETO HEREBY AGREE THAT THEY WILL NOT SEEK TO CONSOLIDATE ANY SUCH LITIGATION
WITH ANY OTHER LITIGATION IN WHICH A JURY TRIAL HAS NOT OR CANNOT BE WAIVED. THE
PROVISIONS OF THIS SECTION 18 HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO
AND SHALL BE SUBJECT TO NO EXCEPTIONS. EACH PARTY ACKNOWLEDGES AND AGREES THAT
IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH PARTY ENTERING INTO THIS
AGREEMENT AND THE NOTE PURCHASE AGREEMENT.
19. The Warehouse Collateral Administrator agrees to accept and act upon
instructions or directions pursuant to this Agreement sent by unsecured email,
facsimile transmission or other similar unsecured electronic methods. If any
party hereto elects to give the Warehouse Collateral Administrator email or
facsimile instructions (or instructions by a similar electronic method) and the
Warehouse Collateral Administrator in its discretion elects to act upon such
instructions, the Warehouse Collateral Administrator’s reasonable understanding
of such instructions shall be deemed controlling. The Warehouse Collateral
Administrator shall not be liable for any losses, costs or expenses arising
directly or indirectly from the Warehouse Collateral Administrator’s reliance
upon and compliance with such instructions notwithstanding such instructions
conflicting with or being inconsistent with a subsequent written instruction.
Each party hereto agrees to assume all risks arising out of the use of such
electronic methods to submit instructions and directions to the Warehouse
Collateral Administrator, including without limitation the risk of the Warehouse
Collateral Administrator acting on unauthorized instructions, and the risk of
interruption and misuse by third parties. Any person providing such instructions
acknowledges and agrees that there may be more secure methods of transmitting
such instructions than the method(s) selected by it and agrees that the security
procedures (if any) to be followed in connection with its transmission of such
instructions provide to it a commercially reasonable degree of protection in
light of its particular needs and circumstances.
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IN WITNESS WHEREOF, the parties hereto have hereunto caused this Warehouse
Collateral Administration Agreement to be executed as of the day and year first
hereinabove written.
ARCH STREET CLO, LTD., as Issuer By: /s/ Karen Perkins Name: Karen Perkins
Title: Director
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Senior Commitment Party By: /s/
Brad Larson Name: Brad Larson Title: Authorized Signatory
By: /s/ Mak Pitke Name: Mak Pitke Title: Authorized Signatory
NEWSTAR CAPITAL LLC, as Portfolio Manager By: /s/ Scott D’Orsi Name: Scott
D’Orsi Title: Portfolio Manager
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U.S. BANK NATIONAL ASSOCIATION, as Warehouse Collateral Administrator and
Trustee By: /s/ Ralph J. Creasia Jr. Name: Ralph J. Creasia Jr. Title: Senior
Vice President
10 |
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
STEVE W. BOSWELL, Plaintiff/Appellant,
v.
ROBERT FINTELMANN, et al., Defendants/Appellees.
No. 1 CA-CV 15-0859
FILED 3-9-2017
Appeal from the Superior Court in Maricopa County
No. CV2014-009402
The Honorable J. Richard Gama, Judge (Retired)
AFFIRMED AS MODIFIED
COUNSEL
Steve W. Boswell, Phoenix, In propria persona
Plaintiff/Appellant
Broening Oberg Woods & Wilson, PC, Phoenix
By James R. Broening, Megan E. Gailey, Kevin R. Myer
Counsel for Defendants/Appellees
OPINION
Judge Jon W. Thompson delivered the opinion of the Court, in which
Presiding Judge Randall M. Howe and Judge Lawrence F. Winthrop joined.
BOSWELL v. FINTELMANN
Opinion of the Court
T H O M P S O N, Judge:
¶1 Steve W. Boswell (Boswell) appeals from the dismissal with
prejudice of his medical malpractice action based on his failure to serve a
preliminary expert opinion affidavit. For the following reasons, we affirm
the judgment as modified to reflect that the dismissal is without prejudice.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 In July 2014, Boswell filed a complaint in superior court
alleging medical malpractice against Robert Fintelmann, M.D., Robert
Pinkert, O.D., Thomas R. Wolf, Barnet Dulaney Surgery Center, LLC,
Barnet Dulaney Perkins Eye Center, PLLC and others (appellees). Boswell
certified pursuant to Arizona Revised Statutes (A.R.S.) section 12-2603
(2016)1 that medical expert testimony was necessary to prove his claims. If
a claimant certifies that expert opinion is necessary, A.R.S. § 12-2603(B)
(2016) requires a claimant to serve a preliminary expert opinion affidavit at
the same time as initial disclosures.
¶3 Boswell did not provide an initial disclosure statement and a
preliminary expert opinion affidavit, and appellees moved for an order
compelling him to do so. The superior court granted appellees’ motion and
ordered Boswell to serve his initial disclosure statement within twenty days
and his preliminary expert opinion affidavit within thirty days.
¶4 Boswell did not comply with the court order, and appellees
moved for dismissal. Boswell cross-moved for a ruling that A.R.S. § 12-2603
is unconstitutional. The superior court granted appellees’ motion to
dismiss, denied Boswell’s cross-motion, and dismissed Boswell’s claim
with prejudice. We have jurisdiction over Boswell’s timely appeal pursuant
to A.R.S. § 12-2101(A)(1) (2016).
DISCUSSION
¶5 We review de novo a dismissal for failure to serve a
preliminary expert opinion affidavit required by A.R.S. § 12-2603, Romero v.
Hasan, __ Ariz. __, __, ¶ 6, 388 P.3d 22, 23 (App. 2017) (citing Coleman v. City
of Mesa, 230 Ariz. 352, 355-56, ¶ 7, 284 P.3d 863, 866-67 (2012)), because a
claimant’s failure to properly certify the non-frivolous nature of the
complaint pursuant to A.R.S. § 12-2603 is a pleading failure. Dismissal for
1 We cite the current versions of the applicable statutes and rules unless
revisions material to this opinion have occurred since the events in
question.
2
BOSWELL v. FINTELMANN
Opinion of the Court
failure to serve the expert affidavit is not tantamount to dismissal for failure
to prosecute, which operates as an adjudication on the merits. See Ariz. R.
Civ. P. 41(b). Nor is it a dismissal as a sanction for a discovery violation,
because the affidavit requirement is “meant to certify that the action . . . is
not meritless,” and it is not required “that the expert giving the preliminary
affidavit serve as the [email protected].” Jilly v. Rayes, 221 Ariz. 40, 42-43, ¶ 6,
209 P.3d 176, 178-79 (App. 2009) (citation omitted). See also Gorney v.
Meaney, 214 Ariz. 226, 228, ¶ 4, 150 P.3d 799, 801 (App. 2007) (court of
appeals reviewed de novo trial court’s grant of summary judgment to
defendant on the basis that plaintiff’s expert opinion affidavit did not
conform with A.R.S. § 12-2603(B)).
¶6 Although Boswell argues the superior court erred by
dismissing his complaint because the court erroneously concluded that he
failed to serve his initial disclosure statement, we reject this argument
because the court properly dismissed based on Boswell’s failure to serve
the preliminary expert affidavit required by A.R.S. § 12-2603.2
¶7 Section 12-2603(F) requires the superior court to dismiss
without prejudice a claim when the claimant fails to file and serve a
preliminary expert opinion affidavit after certifying an affidavit is
necessary or the court has ordered compliance.3 Because Boswell failed to
comply with the order to serve the affidavit, the court appropriately
dismissed his claim.
¶8 However, the statute does not authorize dismissals with
prejudice. Sanchez v. Old Pueblo Anesthesia, P.C., 218 Ariz. 317, 323–24, ¶¶
20, 22, 25, 183 P.3d 1285, 1291–92 (App. 2008). Although appellees correctly
2 Appellees acknowledged in their motion to dismiss that Boswell had
provided his initial disclosure statement prior to the deadline ordered by
the court.
3 Because Boswell fails to develop and support his conclusory arguments
that A.R.S. § 12-2603 and related statutes are unconstitutional and that the
superior court improperly sealed an “investigative report,” he waives them.
See ARCAP 13(a)(7); Polanco v. Indus. Comm'n of Ariz., 214 Ariz. 489, 491 n.2,
¶ 6, 154 P.3d 391, 393 n.2 (App. 2007). Additionally, to the extent Boswell
argues he cannot afford to hire an expert to make an affidavit, he offers no
evidence that any qualified expert would have provided the information
required by A.R.S. § 12-2603. See Romero, __ Ariz. at __ n.4, ¶ 9, 388 P.3d at
23 n.4.
3
BOSWELL v. FINTELMANN
Opinion of the Court
assert that the superior court referred to Arizona Rule of Civil Procedure
37(b)(2)4 in its ruling dismissing Boswell’s claim, that rule also does not
authorize dismissals with prejudice for the failure to comply with A.R.S. §
12-2603. Thus, the court erred by dismissing Boswell’s claim with
prejudice.
CONCLUSION
¶9 For the foregoing reasons, we affirm the judgment as
modified to reflect that dismissal is without prejudice.
AMY M. WOOD • Clerk of the Court
FILED: AA
4 Rule 37(b)(2)(A)(v) provides that if a party fails to obey an order to
provide or permit discovery, the court may dismiss the action.
4
|
*230OPINION.
Smith :
The principal issue in this proceeding is whether the gifts made by the decedent within two years prior to the date of his death, which were valued by the respondent at the date of death at $1,951,-800.50, were made in contemplation of death and are therefore to be included in the gross estate for estate tax purposes.
The deficiency involved herein was determined under the provisions of section 302 of the Revenue Act of 1926, which, so far as pertinent to the question at issue, read? as follows:
*231Seo. 3,02. The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated—
* * * * *■ * 1 *
(c) To the extent of any interest therein of which the déeedent has at any time made a transfer, by trust or otherwise, in contemplation of or intended to' take effect in possession or enjoyment at or after his death, except in case of a bona fide sale for an adequate and full consideration in' money or money’s worth. Where roithin two years prior to Ms death but after'the enactment of tMs Act and without such a consideration the decedent has made a transfer or transfers, by trust or otherwise, of any of 7Us property; or an interest therein, not admitted or shown to have been made in contemplation of or intended to take effect in possession or enjoyment at or after his death, and the value or aggregate value, at the time of such death, of the property or interest so transferred to any one person is m excess of $5,000, then, to the extent of such excess, such transfer or transfers shall be deemed and held to have been made in contemplation of death ^oitMn the meaning of tMs title. Any transfer of a material part of his property in the nature of a final disposition or distribution thereof, made by the decedent Within two years prior to his death but prior to the enactment of this Act, without such consideration, shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this title. [Italics supplied.]
The second sentence of subdivision (c) italicized above was held unconstitutional in Heiner v. Donnan, 285 U.S. 312. Thereafter section 302 (c) of the Eevenue Act of 1926 was amended by an act approved March 3, 1931, and by section 803 (a) of the Eevenue Act of 1932, by which amendment the conclusive termination was eliminated. The amendments were not, however, declared to be retroactive. The respondent has determined, however, that the gifts in question were made in contemplation of death and his determination is prima facie correct. Whether the gifts Under consideration in this proceeding were made in contemplation of death is a question of fact which must be determined from the evidence before us, and the burden of proving that they were not so made rests upon the petitioners.
In United States v. Wells, 283 U.S. 102, it was stated with regard to the meaning of the phrase “ in contemplation of death ”:
* * * It is recognized that tbe reference is not to tbe general expectation of death which all entertain. It must be a particular concern, giving rise to a definite motive; The provision is not confined to gifts causa' mortis, which are made in anticipation of impending death, are revocable, and are defeated if the donor survives the apprehended peril. * * * The statutory description embraces gifts inter vivos, despite the fact that they are fully executed, are irrevocable and indefeasible. * * * The dominant purpose is to reach substitutes for testamentary dispositions and thus to prevent the evasion of the estate tax. * * * As the transfer may otherwise have all the indicia of a valid gift inter vivos, the differentiating factor must be found in the trans-feror’s motive. Death must be “ contemplated,” that is,, the motive which induces the transfer must be of the sort which leads to testamentary disposition. * * *
*232As the test, despite varying circumstances, is always to be found in motive, it cannot be said that the determinative motive is lacking merely because of the absence of a consciousness that death is imminent. It is contemplation of death, not necessarily contemplation of imminent death, to which the statute refers. It is conceivable that the idea of death may possess the mind so as to furnish a controlling motive for the disposition of property, although death is not thought to be [email protected]. Old age may give premonitions and promptings independent of mortal disease. Yet age in itself cannot be regarded as furnishing a decisive test, for sound health and purposes associated with, life, rather than with death, may motivate the transfer. The words “ in contemplation of death ” mean that the thought of death is the impelling cause of the transfer, and while the belief in the imminence of death may afford convincing evidence, the statute is not to be limited, and its purpose thwarted, by a rule of construction which in place of contemplation of death makes the final criterion to be an apprehension that death is “ [email protected].”
If it is the thought of death, as a controlling motive prompting the disposition of property, that affords the test, it follows that the statute does not embrace gifts inter vivos which spring from a different motive. * * * It is common knowledge that a frequent inducement is not only the desire to be relieved of responsibilities, but to have children or others who may be the appropriate objects of the donor’s bounty, independently established with competencies of their own, without being compelled to await the death of the donor and without particular consideration of that event. There may be the desire to recognize special needs or exigencies or to discharge moral obligations. The gratification of such desires may be a more compelling motive than any thought of death.
* * * There is no escape from the necessity of carefully scrutinizing the circumstances of each case to detect the dominant motive of the donor in the light of his bodily and mental condition, and thus to give effect to the manifest purpose of the statute.
A careful weighing of the' evidence in this proceeding leads us to the conclusion that the gifts were not made in contemplation of death. It is quite apparent that the reorganization of the Harnischfeger Corporation in 1929 was not prompted by any thought of death on the part of the decedent. The time was propitious for the selling of stock in the corporation to the public. The corporation was heavily in debt to the banks. It needed additional funds. The decedent also owed an estate $150,000 for assets purchased from it.
By the sale of shares of stock to the public the decedent temporarily lost control of the corporation. His attorneys suggested to him the organization of Harnischfeger Investment Co. for the purpose of regaining control of the corporation in the manner pointed out by the attorneys. This was done.
The decedent’s only daughtér and his son-in-law were ill and they were going to move to Germany to reside there permanently. The decedent wished them to have independent incomes.
It was pointed out to the decedent that after the reorganization of the Harnischfeger Corporation he would be subject to heavy in*233come taxes upon, his income, and also how these income taxes could be minimized by making gifts of the stock to his wife and children. This appears to us to have been the predominant motive of the decedent in making the gifts of stock of Harnischfeger Investment Co. to his wife and children. Consonant with the thought the decedent discovered that the income tax liabilities of each member of his family would be further minimized by making donations of stock to the Harnischfeger Foundation, Inc. It was the decedent’s thought that his own income tax liability and that of his wife and two children might be minimized ea<jh year for a perod of four years by donations of a portion of the stock of the Harnischfeger Corporation, which he proposed should be given ultimately to the Foundation. The gifts of the Harnischfeger Corporation common stock to the amount of 10,330 shares were therefore made to the decedent’s wife and his two children with this sole purpose in view. It was not the decedent’s intention that the donees of this stock should retain it permanently. '
Where the dominant motive for making gifts is to escape income tax liability, such gifts are not includable in the gross estate. Emily J. Pratt et al., Executrices, 18 B.T.A. 377; R. B. White, Executor. 21 B.T.A. 500; Safe Deposit & Trust Co. of Baltimore v. Tait, 3 Fed. Supp. 51; American Security & Trust Co. et al., Executors, 24 B.T.A. 334.
As a further motive for making the gifts the decedent wished to insure financial independence for his wife and children. Such gifts have been held not includable in the gross estate for tax purposes. Philip T. Starch, Executor, 3 B.T.A. 514; Rochester H. Rogers, Executor, 21 B.T.A. 1124; Willard Foster et al., Executors, 25 B.T.A. 414; Delaware Trust Co. v. Handy, 53 Fed. (2d) 1042; affd., 285 U.S. 352.
The facts here are similar to those in Commissioner v. Nevin, 47 Fed. (2d) 478; certiorari denied, 283 U.S. 834. Up to within a short time of his death the decedent in this proceeding took an active interest in the management of his business, was mentally and physically alert, was cheerful and optimistic, and was still planning for the future. The decedent there was 83 years of age at the date of death and was not in as good health comparatively as the decedent in this proceeding at the time of his death at the age of 75 years. The court held, affirming the Board, 16 B.T.A. 15, that the gifts of approximately one half of his large estate to his son were not made in contemplation of death.
We have set forth above the detailed facts concerning the decedent’s state of health and mind for a period of years preceding his *234death, during which the gifts in dispute were made. All of the evidence indicates that the decedent was in the best of health and spirits at the time the gifts were made and that he had given very little thought to the eventuality of death. On the contrary he continued up to the very day of his death to take an active part in his business and to plan for its future expansion and development. His death came very suddenly from an unexpected cause. While it is true that in reorganizing his business and dividing the interests among the other members of his family he was “ putting his house in order ”, as the respondent contends, there is no indication whatever that what he was doing was in contemplation of death. The things done are all quite as reasonably to be associated with pur- ■ poses relating to life as those relating to the eventuality of death. United States v. Wells, supra.
The respondent relies strongly in his contention in this case upon the holding of the Supreme Court of Wisconsin in In re Harnischfeger’s Will, 208 Wis. 317; 242 N.W. 153. In that case it was held that gifts and transfers here under consideration were taxable in the decedent’s gross estate for purposes of the estate tax levied by the State of Wisconsin. After, a lengthy discussion of the meaning of the phrase “ in contemplation of death ” with reference to the case of United States v. Wells, supra, the court stated in conclusion as follows:
It is earnestly contended that, since the deceased apparently enjoyed good health up to the time of his death, was cheerful and optimistic, was actively engaged in conducting a large industry, was making plans for industrial developments which involved new undertakings and enterprises, the presumption to which the statute gives rise was clearly overcome, and that it was affirmatively shown that the gifts were not in fact made in contemplation of death. This argument would be quite persuasive did it not appear that in the fall of 1929, and continuing into February of 1930, the deceased was engaged in carrying out extensive plans looking to the putting of his house in order. He was then nearly seventy-four years of age. He reorganized the Harnischfeger Corporation so that stock might be listed on the Chicago Stock Exchange and so that some of it might be sold to provide funds to liquidate his indebtedness. He organized the Harnischfeger Investment Company so that he and the trustees under his will might have unquestioned control of the corporation. He organized the Harnischfeger Foundation for the benefit of the employees of his company and provided for its permanent endowment out of his properties. He gave large gifts to his wife, who was then about seventy-six years of age, and also large gifts to his son and daughter, as well as substantial gifts to some of his faithful employees and to some of his other relatives.' ■ He made arrangements ■ for giving $50,000 to his native village of Salmuenster for the purpose of founding a school, and finally, on February 9, he executed his will, which consisted of twenty typewritten pages, evidenced much thought and planning, but by which nothing was bequeathed directly to his son or daughter, and by which the residue of his estate, worth only about $440,000, was given to his wife.
*235While there is no testimony tending to show that the deceased had any premonition or promptings of death as distinguished from that ordinary expectation of death which every one entertains, or that he was conscious or had knowledge of any disease or other affliction, there is abundant evidence, as it seems to us, to support the inference that the gifts were made in contemplation of death. While the enjoyment of health, actively engaging in business, and the making of plans for the future may at times, and in certain eases, be very persuasive, they are not in any sense conclusive. Impelling motives or inducing causes, being subjective in nature, are not always easily discoverable. Without further discussion, it is our opinion that, under all of the circumstances, the conclusion of the county court may not be disturbed.
We have given careful consideration to the well considered opinion of the Supreme Court of Wisconsin. It is to be noted, however, that the decision of that court was under a state statute which provided in part as follows:
* * * Every transfer by deed, grant, bargain, sale or gift, made within two years prior to the death of the grantor, vendor or donor, of a material part of his estate, or in the nature of a final disposition or distribution thereof, and without an adequate valuable consideration, shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this section.
The decision of the Probate Court of Milwaukee County, which was affirmed by the Supreme Court of the State of Wisconsin, was made upon an entirely different record from that which is before us. The court apparently stresses the fact that- in February 1930 the decedent made his will and bequeathed nothing thereby directly to his son or daughter. Apparently, as contended by counsel for the petitioners, that court was not in possession of -the facts that the decedent had theretofore in prior years made wills and that the will executed in 1980 was necessitated by changes made in the ownership of his property. The decision of the state court has no binding effect on the Board. Joseph Edward Phillips, Executor, 7 B.T.A. 1054; Commissioner v. Nevin, supra.
Upon the evidence we are constrained to hold that the gifts made by the decedent in 1929 and 1930 were not -made in contemplation of death. Having reached this conclusion, it is not necessary to pass upon the alternative contentions of petitioners.
Reviewed by the Board.
Judgment will be entered under Rule 50.
Goodrich concurs in the result.
|
Citation Nr: 1023576
Decision Date: 06/24/10 Archive Date: 07/01/10
DOCKET NO. 08-27 437 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in
Philadelphia, Pennsylvania
THE ISSUES
1. Entitlement to service connection for residuals of cold
injuries of extremities (claimed as frostbite of feet, hands,
and body).
2. Entitlement to service connection for an acquired
psychiatric disorder, to include posttraumatic stress
disorder (PTSD).
REPRESENTATION
Appellant represented by: NACVSO
WITNESS AT HEARING ON APPEAL
Veteran
ATTORNEY FOR THE BOARD
H.J. Baucom
INTRODUCTION
The Veteran had active service from December 1953 to December
1955.
These matters come before the Board of Veterans' Appeals (BVA
or Board) from two rating decisions of the Department of
Veterans Affairs (VA), Regional Office (RO) in Philadelphia,
Pennsylvania. A November 2007 rating decision denied service
connection for frostbite of the hands, feet and whole body.
An August 2008 rating decision denied service connection for
PTSD.
In April 2010 a Board hearing was held by the undersigned.
The transcript is of record. While the transcript indicates
the Veteran has attorney representation, he is represented by
NACVSO. During the hearing the Veteran signed a waiver for
RO review of additionally submitted evidence.
The claim of service connection for residuals of cold injury
of extremities is REMANDED to the RO via the Appeals
Management Center in Washington, DC.
This appeal has been advanced on the Board's docket pursuant
to 38 C.F.R. § 20.900(c) (2009). 38 U.S.C.A. § 7107(a)(2)
(West 2002).
FINDINGS OF FACT
1. There is no independent verification of a stressor in
service to support a diagnosis of PTSD.
2. The preponderance of the evidence is against a finding
that the Veteran has PTSD as a result of his service in the
military.
3. The preponderance of the evidence is against a finding
that the Veteran has an acquired psychiatric disorder which
was manifested in service or is otherwise related to any
disease or injury in service.
CONCLUSION OF LAW
The criteria for service connection for an acquired
psychiatric disorder, to include posttraumatic stress
disorder have not been met. 38 U.S.C.A. §§ 1110, 5102, 5103,
5103A, 5107 (West 2002 & Supp. 2009); 38 C.F.R. §§ 3.303,
3.304 (2009).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Notice and Assistance
Upon receipt of a complete or substantially complete
application, VA must notify the claimant of the information
and evidence not of record that is necessary to substantiate
a claim, which information and evidence VA will obtain, and
which information and evidence the claimant is expected to
provide.
38 U.S.C.A. § 5103(a).
The notice requirements apply to all five elements of a
service connection claim: 1) veteran status; 2) existence of
a disability; (3) a connection between the veteran's service
and the disability; 4) degree of disability; and 5) effective
date of the disability. Dingess v. Nicholson, 19 Vet. App.
473 (2006).
The notice must be provided to a claimant before the initial
unfavorable adjudication by the RO. Pelegrini v. Principi,
18 Vet. App.112 (2004).
The notice requirements may be satisfied if any errors in the
timing or content of such notice are not prejudicial to the
claimant. Mayfield v. Nicholson, 19 Vet. App. 103 (2005),
rev'd on other grounds, 444 F.3d 1328 (Fed. Cir. 2006).
The RO provided the appellant pre-adjudication notice by
letters dated in May 2007 and May 2008.
The notification substantially complied with the specificity
requirements of Dingess v. Nicholson, 19 Vet. App. 473 (2006)
identifying the five elements of a service connection claim;
and Quartuccio v. Principi, 16 Vet. App. 183 (2002),
identifying the evidence necessary to substantiate a claim
and the relative duties of VA and the claimant to obtain
evidence.
The service treatment records are not available. The
National Personnel Records Center has certified that service
treatment and personnel records were destroyed in the 1973
fire at its St. Louis, Missouri, storage center. Some of the
personnel records were obtained through alternative record
sources.
VA has assisted the Veteran in obtaining evidence and
afforded the Veteran the opportunity to give testimony before
the Board. All known and available records relevant to the
issue on appeal have been obtained and associated with the
Veteran's claims file; and the Veteran has not contended
otherwise.
The record does not indicate that the current psychiatric
disorder, to include posttraumatic stress disorder may be
associated with the Veteran's service as there is no credible
evidence of recurrent symptoms or continuity of
symptomatology since service or other possible association
with service and there is no verifiable service stressor to
support the diagnosis of posttraumatic stress disorder. For
these reasons, a VA medical opinion is not necessary to
decide the claim. 38 U.S.C.A. § 5103A(d)(2); 38 C.F.R.
§ 3.159(c)(4)(i)(C). McLendon v. Nicholson, 20 Vet. App. 79
(2006).
VA has substantially complied with the notice and assistance
requirements and the Veteran is not prejudiced by a decision
on the claim at this time.
Analysis
Service connection may be established for disability
resulting from injury or disease incurred in service. 38
U.S.C.A. § 1110. Service connection connotes many factors,
but basically, it means that the facts, as shown by evidence,
establish that a particular injury or disease resulting in
disability was incurred coincident with service. A
determination of 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
in service. See Pond v. West, 12 Vet. App. 341 (1999).
The standard of proof to be applied in decisions on claims
for veterans' benefits is set forth in 38 U.S.C.A. § 5107. A
veteran is entitled to the benefit of the doubt when there is
an approximate balance of positive and negative evidence.
See also, 38 C.F.R. § 3.102. 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 preponderance of the evidence must be against the claim
for benefits to be denied. See Alemany v. Brown, 9 Vet. App.
518 (1996).
PTSD
Service connection for PTSD, in particular, requires medical
evidence diagnosing the condition in accordance with 38
C.F.R. § 4.125(a); a link, established by competent evidence,
between current symptoms and an in-service stressor; and
credible supporting evidence that the claimed in-service
stressor occurred. See 38 C.F.R. § 3.304(f); Cohen v. Brown,
10 Vet. App. 128, 138 (1997). The diagnosis of PTSD must
comply with the criteria set forth in the American
Psychiatric Association's Diagnostic and Statistical Manual
of Mental Disorders, Fourth Edition (DSM- IV). See,
generally, Cohen, supra; 38 C.F.R. § 4.125.
The evidence necessary to establish that the claimed stressor
actually occurred varies depending on whether the veteran
"engaged in combat with the enemy," as established by
recognized military combat citations or other official
records. 38 U.S.C.A. § 1154(b); 38 C.F.R. § 3.304(d); see
Collette v. Brown, 82 F.3d 389 (Fed Cir. 1996).
Participation in combat, a determination that is to be made
on a case-by-case basis, requires that the veteran have
personally participated in events constituting an actual
fight or encounter with a military foe or hostile unit or
instrumentality. See VAOPGCPREC 12-99 (Oct. 18, 1999). If
VA determines the Veteran engaged in combat with the enemy
and his alleged stressor is combat-related, then his lay
testimony or statement is accepted as conclusive evidence of
the stressor's occurrence and no further development or
corroborative evidence is required-provided that such
testimony is found to be "satisfactory," i.e., credible, and
"consistent with the circumstances, conditions, or hardships
of service." See 38 U.S.C.A. § 1154(b); 38 C.F.R. 3.304(d).
If, however, VA determines either that the Veteran did not
engage in combat with the enemy or that he did engage in
combat, but that the alleged stressor is not combat related,
then his lay testimony, in and of itself, is not sufficient
to establish the occurrence of the alleged stressor.
Instead, the record must contain other objective information
that corroborates his testimony or statements.
The Veteran served in Korea, however the evidence does not
show he engaged in combat and any claimed stressors must be
independently verified or corroborated. The Veteran
testified that he was an aviation engineer in service. Vet
Center records in April 2008 show the Veteran reported combat
experience in the Korean War, however the records indicate
his military occupational specialty was aidman, corpsman and
construction engineer. The available personnel records show
he had medical training in service. VA records in February
2009 report that the Veteran had noncombat related trauma,
was shot at but never returned fire.
The Veteran testified that his in service stressors included
being exposed to decaying bodies as he unearthed them as part
of his duties, being fired upon while walking guard duty in a
motor pool, seeing a country demolished, and the living
conditions he experienced. No additional information or
evidence, such as lay statements, to support these
contentions has been submitted.
The Board has determined that these events - where the
Veteran could not provide the names of the participants;
where there are no corroborating witnesses and where any
other credible supporting evidence was not available - could
not service as a basis for the "stressor" element of a
claim for service connection for PTSD. Objective information
in addition to the Veteran's testimony is needed to
corroborate his statements. No such additional information
has been received.
None of the Veteran's claimed "stressors" are capable of
being independently verified, nor has any objective
information been submitted to corroborate the claimed
"stressors."
The VA records from 2008 to 2009 show the Veteran was
diagnosed with PTSD.
Although the Veteran has been diagnosed with PTSD, his
diagnosis is based on his uncorroborated history of a non-
combat stressor. To warrant service connection for PTSD, 38
C.F.R. § 3.304(f) provides that the diagnosis must conform to
38 C.F.R. § 4.125(a), and must be based either on a claim or
account of events during demonstrated combat, or on verified
stressors. No probative weight may be assigned to a
diagnosis of PTSD based on the Veteran's non-credible account
of unverified stressors.
The Veteran has argued that he has PTSD and that it is
related to service, however, as a layperson, lacking in
medical training and expertise, the Veteran cannot provide a
competent opinion on a matter as complex as the diagnosis of
his claimed PTSD disability, and his views are of no
probative value. And, even if his opinion was entitled to be
accorded some probative value, it is far outweighed by the
fact that no probative weight may be assigned to a diagnosis
of PTSD based on the Veteran's account of unverified
stressors.
The Board finds that there is no medical evidence of a
confirmed diagnosis of PTSD which is based on a verified
stressor. The preponderance of the evidence is against the
claim, and the benefit-of-the-doubt standard of proof does
not apply.
38 U.S.C.A. § 5107(b).
Acquired Psychiatric Disorder
The Veteran contends that he has an acquired psychiatric
condition as a result of his service. The Veteran is
diagnosed with dysthymia, documented in VA records from 2008
to 2009; however there is no evidence that his disorder is
related to service.
Although the service treatment records are not available the
Veteran informed the VA mental health intake in March 2008
that he did not seek treatment for any psychiatric conditions
in service despite having problems in service. The Veteran
also informed the VA mental health unit in March 2008 that he
had experienced trouble since Korea but was doing well until
he retired in May 2007. The VA mental health note in March
2008 shows the Veteran was receiving outpatient treatment for
several months.
The Veteran contends he has had mental health problems since
service. However there is no evidence of any depression in
service, within one year of service, or at any time prior to
2007, over fifty years after service. Such a lapse of time
is a factor for consideration in deciding a service
connection claim. Maxson v. Gober, 230 F.3rd 1330, 1333 (Fed.
Cir. 2000). Further, there is no evidence that his current
condition is related to service.
The Board acknowledges that the Veteran is competent to
report his symptomatology, and while the Veteran has had some
medical training in service, he does not have specific
expertise in psychiatric disorder and is not competent to
offer a medical opinion as to the etiology of an acquired
psychiatric disorder. While the Veteran's lay assertions
have been considered, they do not outweigh the absence of
evidence of psychiatric disorder for over fifty years since
service. See Jandreau v. Nicholson, 492 F.3d 1372 (Fed. Cir.
2007).
The preponderance of the evidence is against the claim of
service connection for an acquired psychiatric disorder, and
the benefit-of-the-doubt standard of proof does not apply.
38 U.S.C.A. § 5107(b).
ORDER
Entitlement to service connection for an acquired psychiatric
disorder, to include posttraumatic stress disorder (PTSD) is
denied.
REMAND
On the claim of service connection for residuals of cold
injuries of extremities claimed as frostbites, the Veteran
testified that he was in Korea as an aviation engineer and
experienced frostbite due to the temperature in service.
The Veteran's service treatment records and complete
personnel record are not available as his records were
destroyed by the fire at the National Personnel Records
Center. The available records show that the Veteran arrived
in Korea in May 1954. The record also shows that the Veteran
began a 12 month tour of the zone of the interior in April
1955 and was separated from service in December 1955.
The service treatment records are not available and deference
is made to the Veteran's allegations. The medical evidence
of record is a February 2007 note from Dr. J.S. who stated
that the Veteran has frostbite. There is no opinion in the
record as to the etiology of the Veteran's frostbites. Under
the duty to assist, a VA examination is necessary to
determine whether the Veteran has residuals of cold injuries
related to service.
Accordingly, the claim is REMANDED for the following action:
(Please note, this appeal has been advanced on the Board's
docket pursuant to 38 C.F.R. § 20.900(c) (2009). Expedited
handling is requested.)
1. Afford the Veteran a VA examination to
determine whether it is at least as likely
as not that any residuals of cold injuries
of extremities (claimed as frostbites of
feet, hand, and body) are related to
service, to include the Veteran's
contentions that he was exposed to cold
temperatures in Korea.
In formulating the opinion, the examiner
is asked to consider that the term "at
least as likely as not" does not mean
"within the realm of possibility."
Rather, it means that the weight of the
medical evidence both for and against the
conclusion is so evenly divided that it is
medically sound to find in favor of
causation as it is to find against
causation.
The claims folder should be made available
to the examiner for review in conjunction
with the examination and the examiner
should provide a rationale for the opinion
rendered.
2. After the development has been
completed, adjudicate the claim. If the
benefit sought remains denied, furnish the
Veteran and his representative a
supplemental statement of the case and
return the case to the Board.
The Veteran has right to submit additional evidence and
argument on the matters the Board has remanded.
Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law
requires that all claims that are remanded by the Board of
Veterans' Appeals or by the United States Court
of Appeals for Veterans Claims for additional development or
other appropriate action must be handled in an expeditious
manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2009).
____________________________________________
Motrya Mac
Acting Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
ROANE COUNTY, TENNESSEE, )
THE CITY OF KINGSTON, )
TENNESSEE, and THE CITY OF )
HARRIMAN, TENNESSEE, )
)
Plaintiffs, )
)
v. ) No.: 3:19-cv-206-TAV-HBG
)
JACOBS ENGINEERING )
GROUP, INC., and )
THE TENNESSEE VALLEY )
AUTHORITY, )
)
Defendants. )
MEMORANDUM OPINION AND ORDER
This civil case is before the Court on Plaintiffs’ Motion for Extension of Briefing
Schedule Deadlines with Respect to Pending Motions to Dismiss [Doc. 73]. Plaintiffs
move pursuant to Rule 6(b) of the Federal Rules of Civil Procedure for a forty-five-day
extension (to May 1, 2020) of the deadline to respond to defendants’ motions to dismiss
and an extension of defendants’ deadline to reply to their response (to May 28, 2020). Rule
6(b) provides that the Court may grant plaintiffs’ request for such extensions “for good
cause.” Fed. R. Civ. P. 6(b). Plaintiffs offer two reasons for their request. First, they claim
that defendant’s motion to dismiss was converted to a motion for summary judgment by
the addition of matters outside the pleadings; thus, they argue, good cause exists to extend
the deadline so that plaintiffs may take discovery before responding. Second, plaintiffs
Case 3:19-cv-00206-TAV-HBG Document 79 Filed 04/27/20 Page 1 of 11 PageID #: 4121
state that the COVID-19 pandemic has affected counsel’s schedule and obligations and
constitutes good cause for the requested extension.
Defendants do not object to the requested forty-five-day extension and agree that
the COVID-19 pandemic provides good cause for the extension [Docs. 74, 76]. In light of
this agreement, and for good cause shown with respect to the impact of the COVID-19
pandemic on counsel’s schedule and obligations, the Court will GRANT in part plaintiffs’
motion [Doc. 73] to the extent that the deadline for plaintiffs to respond to defendants’
motions to dismiss is extended to May 1, 2020, and defendants’ replies are due May 28,
2020.
Defendants do, however, oppose plaintiffs’ effort to seek discovery during the
agreed-upon forty-five-day extension, arguing that discovery is not necessary to respond
to a motion to dismiss. Thus, remaining before the Court is the issue of whether plaintiffs
may pursue discovery during the forty-five-day extension. Because the matters submitted
by defendants do not require that the Court convert their Rule 12 motions to Rule 56
motions, the Court concludes that plaintiffs are not entitled to the requested discovery at
this stage. Thus, plaintiffs’ request for discovery to respond to defendants’ motions is
DENIED.
Plaintiffs appear to argue that an extension to pursue discovery is warranted
pursuant to Rule 56(d)(2) of the Federal Rules of Civil Procedure [Doc. 73 p. 2–3; Doc.
73-1], which provides: “If a nonmovant shows by affidavit or declaration that, for specified
reasons, it cannot present facts essential to justify its opposition, the court may . . . allow
2
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time to obtain affidavits or declarations or to take discovery . . . .” Fed. R. Civ. P. 56(d).
But, Rule 56 governs motions for summary judgment, and the instant request is for an
extension to respond to motions to dismiss pursuant to Rule 12(b). Thus, plaintiffs’ request
for discovery is predicated on their argument that defendants have, pursuant to Rule 12(d),
converted their intended Rule 12 motions into motions for summary judgment pursuant to
Rule 56 by supplying matters outside the pleadings.
Rule 12(d) provides that “[i]f, on a motion under Rule 12(b)(6) or 12(c), matters
outside the pleadings are presented to and not excluded by the court, the motion must be
treated as one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d). The Sixth
Circuit has taken a “liberal view” of matters falling within the pleadings for purposes of
Rule 12(d), Armengau v. Cline, 7 F. App’x 336, 334 (6th Cir. 2001). The Court may
consider “the Complaint and any exhibits attached thereto, public records, items appearing
in the record of the case and exhibits attached to defendant’s motion to dismiss so long as
they are referred to in the Complaint and are central to the claims contained therein.”
Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir. 2008) (citing Amini
v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001)). Additionally, the Court may consider
“matters of which a court may take judicial notice, and letter decisions of governmental
agencies.” Armengau, 7 F. App’x at 334 (citing Jackson v. City of Columbus, 194 F.3d
737, 745 (6th Cir. 1999)). Further, extrinsic materials that “‘fill in the contours and details’
of a complaint,” too, may be considered without converting the motion to one for summary
3
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judgment. Id. (quoting Yeary v. Goodwill Indus.-Knoxville, Inc., 107 F.3d 443, 445 (6th
Cir. 1997)).
Here, defendants have submitted numerous documents along with their motions to
dismiss [Docs. 63-1 through -5; Docs. 67-1 through -17]. The Court will discuss defendant
TVA’s attachments before turning to defendant Jacobs’.
Defendant TVA’s attachment of documents to its motion to dismiss does not convert
the motion to one for summary judgment. Defendant TVA submitted (1) copies of the
proposed amended complaint in this case [Doc. 59-1] that are “redlined” to show how it
compares to other complaints [Docs. 63-1 (comparing it to the class action complaint in
Delozier v. Jacobs Engineering Group, Inc., No. 3:19-cv-451), 63-2 (comparing it to
plaintiffs’ previous proposed amended complaint, Doc. 32-1)] and (2) excerpts [Docs. 63-
3, 63-5], as well as a complete copy [Doc. 63-4], of the “Kingston Fly Ash Recovery
Project Non-Time-Critical Removal Action Embayment/River System Action
Memorandum,” a memo prepared by TVA in which the EPA approved one of three
proposed actions to address potential ecological risks associated with ash deposits in
certain areas.
First, the copies of the proposed amended complaint that have been redlined [Docs.
63-1, 63-2] are referenced only in connection with defendant TVA’s argument that
plaintiffs lack standing, which go to this Court’s jurisdiction and are therefore made
pursuant to Rule 12(b)(1) [Doc. 63 p. 7–11]. Thus, Rule 12(d), which applies only to Rule
4
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12(b)(6) and 12(c) motions, is not implicated with respect to the redlined complaints. See
Fed. R. Civ. P. 12(d).
However, Rule 12(d) is implicated with respect to the “Kingston Fly Ash
Recovery Project Non-Time-Critical Removal Action Embayment/River System Action
Memorandum” [Docs. 63-3, 63-4, 63-5]. Defendant TVA’s motion pursuant to Rule
12(b)(6) argues, in part, that all of plaintiffs’ claims (except for their temporary public
nuisance claim) should be dismissed because they are time-barred [Doc. 63 p. 14–18].
Defendant TVA attaches the Memo [Doc. 63-4] and the excerpts [Docs. 63-3, -5] in support
of this argument. Specifically, defendant TVA argues that plaintiffs knew or should have
known of the potential harms posed by coal ash constituents—and thus their complained-
of injuries—at least as early as August 2012, when, as evidenced by documents in the
Memo [Doc. 63-5], plaintiff Roane County’s Environmental Review Board was “actively
participating in the CERCLA public comment process on the [issue of potential ecological
risks associated with ash deposits in certain areas]” [Doc. 63 p. 17]. Thus, because the
Memo is attached in support of defendant TVA’s Rule 12(b)(6) motion, Rule 12(d) is
implicated with respect to the Memo [Doc. 63-4] and the excerpts [Doc. 63-3, -5].
The attachment of the Memo does not, however, convert defendant TVA’s motion
to one for summary judgment because the existence and contents of the Memo are matters
of which a court may take judicial notice. “The court may judicially notice a fact that is
not subject to reasonable dispute because it: (1) is generally known within the trial court’s
territorial jurisdiction; or (2) can be accurately and readily determined from sources whose
5
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accuracy cannot reasonably be questioned.” Fed. R. Civ. P. 201. The Court finds that the
existence and contents of the Memo are not subject to reasonable dispute. As defendant
TVA notes, the Memo “is published to TVA’s government website for the Kingston
Recovery Project” [Doc. 63 p. 16 n.7]. And “the Court may take judicial notice of public
records and government documents available from reliable sources on the Internet.”
Mitchell v. Tenn. Valley Auth., No. 3:14-CV-360-TAV-HBG, 2015 WL 1962203, at *4 n.2
(E.D. Tenn. Apr. 30, 2015) (citing U.S. ex rel. Dingle v. BioPort Corp., 270 F. Supp. 2d
968, 972 (W.D. Mich. 2003); Paralyzed Veterans of Am. v. McPherson, No. C06–4670
SBA, 2008 WL 4183981, at *5 (N.D. Cal. Sept. 9, 2008)). The Court therefore finds that
the Memo does not convert defendant TVA’s Rule 12(b)(6) motion to a Rule 56 motion.
See Jones v. City of Cincinnati, 521 F.3d 555, 561–62 (6th Cir. 2008) (“A court may
consider public records without converting a Rule 12(b)(6) motion into a Rule 56 motion.”
(citing Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir. 1999)).
Next, the Court need not convert defendant Jacobs’ motion to dismiss to a motion
for summary judgment. Defendant Jacobs has submitted various new articles, press
releases, and similar sources [Docs. 67-1, -2, -8, -9, -15, -16], records of various
governmental bodies [Docs. 67-3, -4, -5, -6, -7, -14], various court filings [Docs. 67-10, -
11, -12, -13], and a document referred to in plaintiffs’ complaint [Doc. 67-17].
Each of these documents is cited in support of defendant Jacob’s motion to dismiss
pursuant to Rule 12(b)(6), which, like defendant TVA’s 12(b)(6) motion, argues, in part,
that plaintiffs’ claims (except for their temporary public nuisance claim) is barred by the
6
Case 3:19-cv-00206-TAV-HBG Document 79 Filed 04/27/20 Page 6 of 11 PageID #: 4126
statute of limitations because plaintiffs knew or should have known of their claims more
than three (3) years before filing this action [Doc. 65 p. 10 (citing Tenn. Code Ann. § 28-
3-105(1))]. The attachment of these documents therefore, like those attached in support of
defendant TVA’s Rule 12(b)(6) motion, implicates Rule 12(d).
First, the attachment of the Site Wide Safety and Health Plan (“SWSHP”) [Doc. 67-
17] does not convert the motion to one for summary judgment because it is “referred to in
the Complaint and [is] central to the claims contained therein.” Bassett, 528 F.3d at 430
(citing Amini, 259 F.3d at 502). Specifically, the complaint repeatedly references the
SWSHP, a plan to manage the site cleanup that was developed by defendant Jacobs and
approved by defendant TVA and was to be mandatorily followed. And, plaintiffs allege
defendants failed to comply with the SWSHP in connection with their claims for fraudulent
concealment [Doc. 59-1 ¶ 257], negligence [Id. ¶ 290], and offensive non-mutual collateral
estoppel [Id. ¶ 372]. Thus, the Court concludes that he attachment of this document to
defendant Jacobs’ motion to dismiss does not require conversion to a motion for summary
judgment. See Greenberg v. Life Ins. Co. of Va., 177 F.3d 507, 514 (6th Cir. 1999).
Next, the attachment of various court filings and court orders from other cases
arising out of the ash spill do not require that the Court convert defendant Jacobs’ motion
pursuant to Rule 12(d) because these documents are public records subject to judicial
notice. The complaints in Blanchard v. Tennessee Valley Authority, No. 3:09-cv-09, [Doc.
67-10] and Adkisson v. Jacobs Engineering Group, Inc., No. 3:13-cv-505, [Doc. 67-12],
the order dismissing the claims in light of the parties’ settlement in In re TVA Ash Spill
7
Case 3:19-cv-00206-TAV-HBG Document 79 Filed 04/27/20 Page 7 of 11 PageID #: 4127
Litigation [Doc. 67-11], and the jury trial transcript in Adkisson [Doc. 67-13] are public
court records. Commercial Money Ctr., Inc. v. Ill. Ins. Co., 508 F.3d327, 336 (6th Cir.
2007) (holding that the attachment of an amicus brief filed in a different case did not
compel the conversion of a Rule 12(c) motion to a Rule 56 motion); Lynch v. Leis, 382
F.3d 642, 647 n.5 (6th Cir. 2004) (taking judicial notice of municipal court records). “[A]s
they are court records, this court may take judicial notice of them.” Lynch, 382 F.3d at 647
n.5 (citation omitted); see also Platt v. Bd. of Comm’rs on Grievs. & Discipline, 894 F.3d
235, 245 (6th Cir. 2018); Winget v. JP Morgan Chase Bank, N.A., 537 F.3d 565, 576 (6th
Cir. 2008) (“[O]n a motion to dismiss, we may take judicial notice of another court’s
opinion not for the truth of the facts recited therein, but for the existence of the opinion,
which is not subject to reasonable dispute over its authenticity.”). Because these
documents are matters of which the Court may take judicial notice, their attachment to
defendant Jacobs’ motion to dismiss does not convert the motion to one for summary
judgment. See Buck v. Thomas M. Cooley Law Sch., 597 F.3d 812, 816 (6th Cir. 2010)
(“[A] court may take judicial notice of other court proceedings without converting the
motion into one for summary judgment.”).
Similarly, the records of various governmental bodies before the Court [Docs. 67-
3, -4, -5, -6, -7, -14] are also public records, the existence and contents of which are not
subject to reasonable dispute, and thus, defendant Jacobs’ attachment of these records does
not require conversion of the motion pursuant to Rule 12(d). Specifically, the Roane
County Commission and Roane County Environmental Review Board documents [Docs.
8
Case 3:19-cv-00206-TAV-HBG Document 79 Filed 04/27/20 Page 8 of 11 PageID #: 4128
67-4 through -7] are minutes of a government agency’s board meetings, which are public
records, and as such, they are subject to judicial notice. See McBride v. McLean Cty., 397
F. Supp. 3d 1198, 1206 (C.D. Ill. 2019); Webb v. Cty. of El Dorado, No. 2:15-cv-1189,
2016 WL 4001922, at *2 (E.D. Cal. July 25, 2016) (“Minutes of a government agency’s
board meeting may be judicially noticed as public records.” (citing Sumner Peck Ranch,
Inc. v. Bureau of Reclamation, 823 F. Supp. 715, 724 (E.D. Cal. 1993)). The On-Scene
Coordinator Report [Doc. 67-3] and the Completion Report [Doc. 67-14] are also public
records subject to judicial notice, because like the Memo attached to TVA’s motion [Doc.
63-4], which the Court discussed supra, these reports are published to TVA’s government
website [Doc. 67 ¶¶ 4, 15], and the Court may “take judicial notice of public records and
government documents available from reliable sources on the Internet.” Mitchell, 2015
WL 1962203, at *4 n.2. In sum, these documents are subject to judicial notice as public
records and therefore do not require that the Court convert defendant Jacobs’ motion to
one for summary judgment. See Jones, 521 F.3d at 561–62.
Finally, the Court finds that the fact of the existence of various new articles, press
releases, and related sources attached to defendant Jacobs’ motion [Docs. 67-1, -2, -8, -9,
-15, -16] as an indication of what information was in the public realm are subject to judicial
notice. Generally, news reports and similar source cannot be judicially noticed for the truth
of their contents. Platt, 894 [email protected]. But such sources can be judicially noticed for
facts such that a fact was printed or “that a collection of numerous articles to show that a
fact was widely known.” Bradacs v. Haley, 58 F. Supp. 3d 499, 511 (D.S.C. 2014) (citing
9
Case 3:19-cv-00206-TAV-HBG Document 79 Filed 04/27/20 Page 9 of 11 PageID #: 4129
Shahar v. Bowers, 120 F.3d 211, 214 n.5 (11th Cir. 1997); In re Cree, Inc. Secs. Litig., 333
F. Supp. 2d 461, 470 (M.D.N.C. 2004); Caner v. Autry, 16 F. Supp. 3d 689, 696 n.11 (W.D.
Va. 2014)); see also In re Am. Apparel, Inc. Shareholder Litig., 855 F. Supp. 2d 1043, 1062
(C.D. Cal. 2012) (“Taking judicial notice of news reports and press releases is appropriate
for show ‘that the market was aware of the information contained in news articles . . . .’”
(quoting Heliotrope Gen., Inc. v. Ford Motor Co., 189 F.3d 971, 981 n.18 (9th Cir.1999)).
Thus, for the limited purpose of establishing what information was within the public realm,
the Court concludes that the Tennessean article [Doc. 67-1], the press release by Randy
Ellis [Doc. 67-2], the “collection of numerous articles,” Bradacs, 58 F. Supp. 3d at 511,
from the Knoxville News-Sentinel [Doc. 67-8] as well as the two specific Knoxville News-
Sentinel articles attached [Docs. 67-15, -16], and the letter from the District Attorney
General serving Roane County to the Commissioner of TDEC [Doc. 67-9], which was
circulated to various media outlets [Doc. 67 ¶ 10] are subject to judicial notice.
Accordingly, these documents do not require that the Court convert defendant Jacobs’
motion pursuant to Rule 12(d).
In conclusion, given the parties’ agreement, and for good cause shown, the Court
will GRANT in part plaintiffs’ motion [Doc. 73] to the extent that the deadline for
plaintiffs to respond to defendants’ motions to dismiss is extended to May 1, 2020, and
defendants’ replies are due May 28, 2020. However, given this Circuit’s “liberal view” of
matters which the Court may consider in ruling on a Rule 12 motion, Armengau, 7 F. App’x
at 334, the Court finds that the documents attached to defendants’ motions do not require
10
Case 3:19-cv-00206-TAV-HBG Document 79 Filed 04/27/20 Page 10 of 11 PageID #: 4130
conversion of their Rule 12 motions. Accordingly, the motion [Doc. 73] is DENIED in
part to the extent that the Court finds that plaintiffs are not entitled to the requested
discovery pursuant to Rule 56.
IT IS SO ORDERED.
s/ Thomas A. Varlan
UNITED STATES DISTRICT JUDGE
11
Case 3:19-cv-00206-TAV-HBG Document 79 Filed 04/27/20 Page 11 of 11 PageID #: 4131
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Case 2:19-cv-09373-JAK-KES Document 24 Filed 10/27/20 Page 1 of 1 Page ID #:958
1
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3 JS-6
4
5
6
7
8 UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA
10
11 NORA G. D., Case No. 2:19-CV-09373 JAK (KES)
12 Plaintiff,
13 v. JUDGMENT
14 ANDREW M. SAUL, Commissioner
of Social Security,
15
Defendant.
16
17
18 IT IS HEREBY ADJUDGED that, pursuant to the Order Accepting Report
19 and Recommendation of U.S. Magistrate Judge, the decision of the Commissioner
20 of the Social Security Administration is affirmed and this action is dismissed with
21 prejudice.
22
23 DATED: October 27, 2020
24 ____________________________________
JOHN A. KRONSTADT
25 UNITED STATES DISTRICT JUDGE
26
27
28
|
Case 5:19-cv-00166-MTT Document 1 Filed 04/27/19 Page 1 of 11
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF GEORGIA
MACON DIVISION
STEPHANIE COOK, )
)
Plaintiff, )
) Case No.:
v. )
)
MIDLAND FUNDING LLC, AND )
MIDLAND CREDIT ) JURY TRIAL DEMANDED
MANAGEMENT INC., )
)
Defendants. )
Complaint for Damages
Plaintiff Stephanie Cook (“Plaintiff”) files her Complaint for Damages against
the Defendants Midland Funding, LLC and Midland Credit Management, Inc.
(“Defendants”) for their willful, intentional, and/or negligent violations of the Fair
Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”) and the
Georgia Fair Business Practices Act, O.C.G.A. §§ 10-1-390 et seq. (“GFBPA.”)
Jurisdiction
1. Jurisdiction of this Court arises under 28 U.S.C. § 1331.
2. This Court has subject matter jurisdiction of claims arising under the
FDCPA which invokes federal question jurisdiction pursuant to 28 U.S.C. § 1331.
3. Venue is proper in this Court pursuant to 28 U.S.C. § 1391(b)(1) & (2).
Page 1 of 11
02395-0005
Case 5:19-cv-00166-MTT Document 1 Filed 04/27/19 Page 2 of 11
4. This Court also has supplemental jurisdiction with respect to Plaintiff’s
claims under the Georgia Fair Business Practices Act (“GFBPA”) pursuant to 28
U.S.C. § 1367.
5. Venue is proper in this Court because the communications giving rise
to this action (and which violated the FDCPA) were sent to Plaintiff while she
resided within the Macon Division of the United States District Court for the Middle
District of Georgia.
Parties
6. Plaintiff is a natural person residing in Byron, Georgia and is a
“consumer” as that term is defined by 15 U.S.C. § 1692a(3), and/or a person affected
by a violation of the FDCPA with standing to bring this claim under 15 U.S.C. §§
1692k(a).
7. Plaintiff is a “consumer” as that term is defined by O.G.C.A. § 10-1-
392(a)(6).
8. Defendant Midland Funding, LLC (“Midland”) is a junk debt buyer and
a debt collection company operating within, and actively collecting consumer debts
in, the State of Georgia and is a “debt collector” as that term is defined by 15 U.S.C.
§ 1692a(6).
9. Summons and Complaint may be served on Midland by service on its
registered agent for service of process in Georgia, Corporation Service Company,
Page 2 of 11
02395-0005
Case 5:19-cv-00166-MTT Document 1 Filed 04/27/19 Page 3 of 11
located at Midland’s registered address in this state, 40 Technology Parkway South,
Suite 300, Norcross, GA 30092, or wherever they may be found.
10. Defendant Midland Credit Management, Inc. (“MCM”) is a debt
collection company operating within, and actively collecting consumer debts in, the
State of Georgia and is a “debt collector” as that term is defined by 15 U.S.C. §
1692a(6).
11. Summons and Complaint may be served on MCM by service on its
registered agent for service of process in Georgia, Corporation Service Company,
located at MCM’s registered address in this state, 40 Technology Parkway South,
Suite 300, Norcross, GA 30092, or wherever they may be found.
12. Midland and MCM are both in the business of debt collection and have
no other purpose than the collection of debts.
13. Midland and MCM both primarily collect consumer debts.
14. Thus, both Midland and MCM’s principle purpose is the collection of
consumer debt.
15. Midland and MCM directed communications to Plaintiff using means
of interstate commerce while Plaintiff resided in Georgia. These communications
were received by Plaintiff in this judicial district.
16. Midland and MCM use the mails and interstate commerce in the
collection of consumer debts regularly.
Page 3 of 11
02395-0005
Case 5:19-cv-00166-MTT Document 1 Filed 04/27/19 Page 4 of 11
17. Midland and MCM regularly contact consumers and attempt to collect
debts from consumers residing in this judicial district and throughout Georgia.
The Fair Debt Collection Practices Act
18. Congress enacted the FDCPA to “eliminate abusive debt collection
practices by debt collectors, to ensure that those debt collectors who refrain from
using abusive debt collection practices are not competitively disadvantaged and to
promote consistent State action to protect consumers against debt collection abuses.”
15 U.S.C. § 1692(e); see also Jerman v. Carlisle, McNellie, Rini, Kramer. & Ulrich
L.P.A., 559 U.S. 573, 576 (2010).
Facts
19. Sometime prior to January 1, 2017, Plaintiff incurred a financial
obligation (“the Debt”) with Synchrony Bank for a Walmart branded credit card.
20. Plaintiff tendered payment to Synchrony Bank on May 18, 2017 in the
form of a check, which satisfied the outstanding balance remaining on the Debt.
21. The Debt was incurred for personal, family, or household purposes and
not for a business or commercial purpose.
22. For reasons unknown to Plaintiff, Synchrony Bank did not apply her
May 18, 2017 payment toward her account despite negotiating the check from
Plaintiff.
23. Plaintiff disputed Synchrony Bank’s reporting of her account,
providing copies of the cancelled check.
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24. Each of the major consumer reporting agencies noted Plaintiff’s
Synchrony Bank account was “disputed.”
25. Synchrony Bank subsequently sold the Debt to Midland.
26. At the time Synchrony Bank sold the Debt to Midland, Plaintiff did not
owe any amount to Synchrony Bank for the Debt.
27. Midland regularly purchases thousands of accounts from creditors like
Synchrony Bank.
28. Midland purchases these accounts “as is” and expressly acknowledges
the creditor is not providing any warranty to the accuracy of the information
provided to Midland.
29. Synchrony Bank disclaimed all warranties as to the accuracy of
Synchrony Bank’s information regarding Plaintiff’s account when Midland
purchased the Debt (along with thousands of other accounts from Synchrony Bank.)
30. Midland doesn’t have any procedure in place to verify the account
information given to Midland when it purchases accounts from original creditor.
31. Instead, Midland blindly relies on the information given by the original
creditor despite knowing the information is frequently incomplete, inaccurate, or
wholly incorrect.
32. Midland placed the Debt with MCM for collection.
33. Midland treated the Debt as being in default when it placed the Debt to
MCM for collection.
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34. MCM has no policies or procedures to verify the information regarding
an account given to MCM by Midland.
35. All of MCM’s attempts to collect the Debt were at the direction of, for
the benefit of, and with the approval of Midland.
36. Midland and MCM (collectively “Defendants”) work in tandem to
collect consumer debts like the Debt in this case.
37. Defendants rely on automated processes to “load” data and information
from original creditors into their collection systems.
38. There is little or no oversight by anyone working for Defendants prior
to a dunning letter being sent to a consumer.
39. Defendants sent Plaintiff an initial dunning letter on May 30, 2018 for
the Debt.
40. A true and accurate copy of the May 30, 2018 dunning letter is attached
hereto as Exhibit “A.”
41. The May 30, 2018 dunning letter alleged the Debt was $977.39.
42. Plaintiff did not owe either Defendant any amount on May 30, 2018.
43. Plaintiff did not owe Synchrony Bank any amount for the Debt on May
30, 2018.
44. Defendants knew the information given to it regarding the Debt was
inaccurate, incomplete, or incorrect because Defendants obtained copies of
Plaintiff’s Trans Union credit report on April 5, 2018 and April 25, 2018.
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45. At the very least, Defendants knew there was a dispute as to the
amounts allegedly owed by Plaintiff for the Debt.
46. Defendants ignored this information and instead attempted to collect
the Debt.
47. Defendants sent a second dunning letter on June 8, 2018, informing
Plaintiff the Defendants made “numerous attempts to contact [Plaintiff] regarding”
her account and boldly displaying a statement the dunning letter is her “FINAL
NOTICE.”
48. A true and accurate copy of the June 8, 2018 dunning letter is attached
hereto as Exhibit “B.”
49. The statements made in the June 8, 2018 dunning letter contradict or
obfuscate Plaintiff’s rights enumerated in 1692g and by the May 30, 2018 dunning
letter.
50. The June 8, 2018 dunning letter was sent in such close proximity as the
June 8, 2018 dunning letter to cause Plaintiff to act to contact Defendants and forego
her rights under 1692g.
Causes of Action
Count I – Violations of the Fair Debt Collection Practices Act
15 U.S.C. §§ 1692 et seq.
51. Plaintiff is a “consumer” as defined by as that term is defined by 15
U.S.C. § 1692a(3).
52. The Debt is a “debt” as that term is defined by 15 U.S.C.
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53. Defendants are both a “debt collector” as that term is defined by 15
U.S.C. § 1692a(6).
54. The May 30, 2018 and June 8, 2018 dunning letters are both a
“communication” as that term is defined by 15 U.S.C. § 1692a(2).
55. Defendants’ use of the use of the written communication in the form
attached as Exhibit “A” and Exhibit “B” violated the FDCPA in one or more of the
following ways :
i. Using false, deceptive, or misleading representations and/or
means in connection with the collection of any debt, which
constitutes a violation of 15 U.S.C. § 1692e, by using false,
deceptive, or misleading information in connection with the
collection of a consumer debt by creating the false sense of
urgency in the June 8, 2018 dunning letter and contradicting
Plaintiff’s rights as enumerated in 1692g and the May 30,
2018 dunning letter;
ii. Seeking to collect an amount greater than what could legally
be collected from Plaintiff and, thus, making a false,
deceptive, or misleading representation regarding the amount
of the alleged debt in violation of 15 U.S.C. §§ 1692e(2)(A)
1692f(1);
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iii. By “overshadowing” Plaintiff’s rights under 1692g by
sending the June 8, 2018 dunning letter which was likely to
confuse and did confuse the Plaintiff of her rights under 15
U.S.C. § 1692g; and,
iv. Using unfair and unconfinable means in connection with the
collection of a debt by seeking to collect an amount not
authorized by agreement or statute in violation of 15 U.S.C.
§1692f(1) by attempting to collect Defendants were not
authorized to collect from Plaintiff.
56. Defendants’ actions were intended to cause Plaintiff harm (or were
negligently carried out without regard to their consequence) and succeeded in so
doing.
57. As result of each Defendants’ violations of the FDCPA, Plaintiff is
entitled to actual damages pursuant to 15 U.S.C. § 1692k(a)(1); statutory damages
in an amount up to $1,000.00 pursuant to 15 U.S.C. § 1692k(a)(2)(A); and,
reasonable attorney’s fees and costs pursuant to 15 U.S.C. § 1692k(a)(3).
Count II – Georgia Fair Business Practices Act
O.C.G.A. §§ 10-1-390 et seq.
58. The GFBPA directs liberal interpretation and application, as well as
harmony with the Federal Trade Commission Act. 15 U.S.C. § 45(a)(1).
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59. A violation of the FDCPA is a violation of the GFBPA. See e.g. 1st
Nationwide Collection Agency Inc v Werner, 288 Ga. App. 457 (2007).
60. Plaintiff submitted a pre-suit demand to Defendants, which Defendants
rejected.
61. Defendants’ violations of the FDCPA were done intentionally and
willfully, were not the result of error, and were not in conformity with any law,
regulation, consent order, or other promulgation of rules.
62. Defendants’ violations of the FDCPA caused Plaintiff to suffer actual
damages in the form of stress, anxiety, and emotional distress.
63. Plaintiff is entitled to the trebling of any actual and statutory damages
she sustained as a result of the Defendants’ intentional and/or willful violations of
the FDCPA pursuant to O.C.G.A. § 10-1-399(c) and, reasonable attorney’s fees and
costs pursuant to O.C.G.A. § 10-1-399(d) from each Defendant.
Demand for a Jury Trial
64. Trial by jury is hereby demanded.
WHEREFORE, Plaintiff prays for the following:
a) Actual and statutory damages in an amount in excess of $1,000.00;
b) The trebling of damages as contemplated by the GFBPA;
c) The award of costs and reasonable attorneys’ fees pursuant to the FDCPA
in an amount to be proven at trial but in excess of $5,000.00;
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d) Damages in an amount to offset any tax consequences incurred by Plaintiff
for any award of attorneys’ fees or costs received by Plaintiff while acting
as a private attorney general to enforce the provisions of 15 U.S.C. § 1692
et seq.;
e) Pre- and post-judgment interest, if applicable;
f) Such other and further relief as the Court may deem just, necessary, or
appropriate.
Submitted April 27, 2019.
DANIELS LAW LLC
/s/Ronald Edward Daniels
RONALD EDWARD DANIELS
Georgia Bar No.: 540854
Counsel for Plaintiff
P.O. BOX 4939
Eastman, GA 31023
4045694997 (t)
4045694997 (f)
[email protected]
rondanielslaw.com
/s/ Clifford Carlson
Clifford Carlson
Georgia Bar No. 227503
Cliff Carlson Law, P.C.
1114-C1 Highway 96 #347
Kathleen, Georgia 31047
Tel. 4045694997
[email protected]
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|
983 P.2d 369 (1999)
1999 MT 170
Richard M. JOYCE, Plaintiff and Appellant,
v.
H.L. GARNAAS, Defendant and Respondent.
No. 98-179.
Supreme Court of Montana.
Submitted on Briefs December 17, 1998.
Decided July 15, 1999.
Gene R. Jarussi, Jarussi & Bishop; Billings, Montana, For Appellant.
Gary L. Graham; Garlington, Lohn & Robinson, PLLP; Missoula, Montana, For Respondent.
Justice JIM REGNIER delivered the opinion of the Court.
¶ 1 On October 24, 1995, Richard Joyce filed this action in the Thirteenth Judicial District Court, Yellowstone County, against H.L. Garnaas to recover damages for professional negligence. The case was subsequently moved to the Fourth Judicial District Court, Missoula County, following a stipulation for a change of venue. Garnaas thereafter moved for summary judgment on the grounds that Joyce's suit was barred by the ten-year statute of repose applicable to actions for legal malpractice. The District *370 Court granted Garnaas's motion on December 2, 1997, and Joyce appeals. We affirm.
¶ 2 The sole issue on appeal is whether the District Court erred when it granted Garnaas's motion for summary judgment.
FACTUAL AND PROCEDURAL BACKGROUND
¶ 3 On July 4, 1978, Joyce was involved in a traffic accident in which the motorcycle he was driving collided with a vehicle driven by Edward John Glenn. Joyce's attorney, H.L. Garnaas, filed a negligence action against Glenn on Joyce's behalf on July 2, 1981, just prior to the expiration of the applicable three-year statute of limitations. The District Court issued a summons on July 2, 1981, the same day that Garnaas filed the complaint. It is undisputed that Garnaas never served the summons and complaint upon the defendant, and thereby failed to comply with the provisions of Rule 41(e), M.R.Civ.P., which mandate that a defendant be served with a summons within three years of its issuance. On January 13, 1993, the District Court issued an order advising that Joyce's action would "be dismissed without prejudice twenty (20) days from the date of this Order unless further pleadings are filed with the Clerk of Court." Garnaas filed no further pleadings in this case.
¶ 4 Joyce filed the present suit on October 24, 1995, alleging professional negligence on Garnaas's part in connection with the dismissal of his personal injury action against Glenn. In his complaint, Joyce asserted that Garnaas never told him "of his failure to serve the defendant," and instead "represented to Joyce that the case was proceeding and was being defended by the Garlington firm of Missoula, Montana." Joyce alleged he was damaged because Garnaas's negligence in the underlying suit has "forever precluded" him "from recovering damages for the injuries [he] suffered in the July 4, 1978 wreck."
¶ 5 Garnaas filed his answer on September 10, 1996. He later moved for permission to file an amended answer, asking that he be permitted to plead "as affirmative defenses the statute of limitations and the statute of repose applicable to allegations of attorney negligence." The District Court granted Garnaas's motion, and Garnaas filed an amended answer on March 18, 1997.
¶ 6 On March 24, 1997, Garnaas filed a motion for summary judgment on the grounds that the ten-year statute of repose for legal malpractice actions, codified at § 27-2-206, MCA, barred Joyce's suit. On December 2, 1997, the District Court issued an order granting Garnaas's motion for summary judgment. The District Court entered a judgment in Garnaas's favor on December 16, 1997, and ordered that Joyce's action be dismissed. Joyce filed his notice of appeal on December 31, 1997.
STANDARD OF REVIEW
¶ 7 This Court's standard of review in appeals from summary judgment rulings is de novo. See Treichel v. State Farm Mut. Auto. Ins. Co. (1997), 280 Mont. 443, 446, 930 P.2d 661, 663. (citing Motarie v. Northern Montana Joint Refuse Disposal Dist. (1995), 274 Mont. 239, 242, 907 P.2d 154, 156; Mead v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785). This Court reviews a summary judgment order entered pursuant to Rule 56, M.R.Civ.P., based on the same criteria applied by the district court. See Treichel, 280 Mont. at 446, 930 P.2d at 663 (citing Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903).
In proving that summary judgment is appropriate:
The movant must demonstrate that no genuine issues of material fact exist. Once this has been accomplished, the burden then shifts to the non-moving party to prove, by more than mere denial and speculation, that a genuine issue does exist. Having determined that genuine issues of material fact do not exist, the court must then determine whether the moving party is entitled to judgment as a matter of law. [This Court] reviews the legal determinations made by the district court as to whether the court erred.
Bruner, 272 Mont. at 264-65, 900 [email protected].
¶ 8 The "moving party has the burden of showing a complete absence of any genuine issue as to all facts considered material in *371 light of the substantive principles that entitle the moving party to judgment as a matter of law and all reasonable inferences are to be drawn in favor of the party opposing summary judgment." Kolar v. Bergo (1996), 280 Mont. 262, 266, 929 P.2d 867, 869.
DISCUSSION
¶ 9 The sole issue raised on appeal is whether the District Court erred when it granted Garnaas's motion for summary judgment. Joyce assigns error to the District Court based on two theories. First, that the District Court erred when it concluded that the statute of repose for legal malpractice requires a dismissal of this action. Second, that the District Court erred when it determined that equity does not act to extend the statute of repose. We will address each theory accordingly.
Did the District Court err when it concluded that the statute of repose for legal malpractice requires a dismissal of this action?
¶ 10 On December 2, 1997, the District Court granted summary judgment in Garnaas's favor on the grounds that the ten-year statute of repose which governs actions for legal malpractice bars his action. The court recognized that Rule 41(e), M.R.Civ.P., requires that a summons be served upon a defendant within three years of the date the summons was issued, and observed that a summons had been issued in Joyce's personal injury suit on July 2, 1981. The court noted that Garnaas had failed to serve the summons upon Glenn within that three-year time period. Because Garnaas failed to serve the summons on or before July 2, 1984, the court reasoned, it was then that Joyce lost his cause of action against Glenn and "the statutes of limitation and repose, as set forth in MCA § 27-2-206, began to accrue as of July 3, 1984." The District Court determined that "[t]he present legal malpractice action was filed on October 24, 1995, which was eleven and one[-]third years after the legal malpractice action accrued based on the failure to timely serve the summons." The court thus concluded that Joyce's legal malpractice action had accrued on July 3, 1984, more than eleven years before he filed his complaint on October 24, 1995. Because more than ten years had passed between the time Joyce's cause of action had accrued and the filing of his complaint, the District Court concluded that the absolute bar imposed by the ten-year statute of repose contained in § 27-2-206, MCA, precluded Joyce from maintaining an action against Garnaas.
¶ 11 On appeal, Joyce argues that the District Court erred when it granted Garnaas's motion for summary judgment because he claims he acquired a second cause of action against Garnaas on July 4, 1994. Because of this second cause of action against Garnaas, Joyce claims that the District Court erred when it concluded that he failed to initiate his malpractice suit within the periods of limitation set forth in § 27-2-206, MCA. More specifically, Joyce asserts that he lost his personal injury cause of action against Glenn on July 2, 1984, and that his original cause of action against Garnaas for malpractice thus accrued on July 3, 1984. From that point forward, Joyce argues, Garnaas had a further duty, based on their fiduciary relationship, to inform Joyce that his cause of action against Glenn had been lost. Joyce contends that Garnaas breached that duty, however, and never told him of his failure to serve the summons. Joyce maintains that Garnaas affirmatively concealed his own negligence from Joyce because he "inquired of Garnaas on numerous occasions as to the progress of his lawsuit against Glenn," but Garnaas simply assured him his suit was ongoing and that further proceedings were pending. In short, Joyce claims that he has three distinct causes of action in his favor; one against Glenn and two against Garnaas.
¶ 12 The time within which an action for professional negligence against an attorney must be brought is set forth in § 27-2-206, MCA. That statute provides:
An action against an attorney licensed to practice law in Montana or a paralegal assistant or a legal intern employed by an attorney based upon the person's alleged professional negligent act or for error or omission in the person's practice must be commenced within 3 years after the plaintiff *372 discovers or through the use of reasonable diligence should have discovered the act, error, or omission, whichever occurs last, but in no case may the action be commenced after 10 years from the date of the act, error, or omission.
The last phrase of the statute articulates the unconditional ten-year statute of repose. The act, error, or omission of which Joyce complains is that which "precluded [Joyce] from recovering damages for the injuries suffered in the July 4, 1978 wreck." The only act, error, or omission by Garnaas which could be said to have precluded Joyce from recovering damages was the failure to serve the summons and complaint within the three years allowed by Rule 41(e), M.R.Civ.P., on or before July 2, 1984. Therefore, we agree with the District Court that the statutes of limitations and of repose began to run on July 3, 1984. The ten years allowed by the statute of repose expired on July 3, 1994, over a year before the action was filed. Because the statute of repose provides "in no case may the action be commenced after 10 years," the time bar is absolute. Moreover, a failure to discover the alleged negligent act until after the statute of repose had run would not toll the statute.
¶ 13 As we stated in Blackburn v. Blue Mountain Women's Clinic (1997), 286 Mont. 60, 951 P.2d 1, after considering the statute of repose, § 27-2-205(1), MCA, applicable in medical malpractice cases:
In the absence of specific statutory language to the contrary, a statute of repose such as the one codified in § 27-2-205(1), MCA, is not subject to tolling. See First United Methodist Church of Hyattsville v. United States Gypsum Co. (4th Cir.1989), 882 F.2d 862, 866, cert. denied (1990), 493 U.S. 1070, 110 S. Ct. 1113, 107 L. Ed. 2d 1020.
Blackburn, 286 Mont. at 73, 951 P.2d at 9. Because § 27-2-206, MCA, has no tolling provision related to the statute of repose it, unlike the statute of repose applicable to medical malpractice cases, is not subject to tolling. See Blackburn, 286 Mont. at 73, 951 P.2d at 9.
¶ 14 In Blackburn, we relied upon the Fourth Circuit case of First United Methodist Church of Hyattsville v. United States Gypsum Co. (4th Cir.1989), 882 F.2d 862, 866, cert. denied (1990), 493 U.S. 1070, 110 S. Ct. 1113, 107 L. Ed. 2d 1020. The court in First United Methodist Church discussed the rationale behind statutes of repose. After noting that a statute of limitations is a procedural device which operates as a defense to limit the remedy available from an existing cause of action, the court described statutes of repose as follows:
A statute of repose creates a substantive right in those protected to be free from liability after a legislatively-determined period of time. Statutes of limitations are motivated by considerations of fairness to defendants and are intended to encourage prompt resolution of disputes by providing a simple procedural mechanism to dispose of stale claims. Statutes of repose are based on considerations of the economic best interests of the public as a whole and are substantive grants of immunity based on a legislative balance of the respective rights of potential plaintiffs and defendants struck by determining a time limit beyond which liability no longer exists. Thus, as a general rule, a statute of limitations is tolled by a defendant's fraudulent concealment of a plaintiff's injury because it would be inequitable to allow a defendant to use a statute intended as a device of fairness to perpetrate a fraud. Conversely, a statute of repose is typically an absolute time limit beyond which liability no longer exists and is not tolled for any reason because to do so would upset the economic balance struck by the legislative body.
First United Methodist Church, 882 F.2d at 866 (citations omitted; emphasis added).
¶ 15 The three-year statute of limitations for legal malpractice actions contains a built-in tolling mechanism for a defendant's fraudulent concealment of a plaintiff's injury. That is, a statute of limitations does not begin to run until the plaintiff discovers, or with reasonable diligence should have discovered, the act, error, or omission. As the court in First United Methodist Church noted, not to provide some tolling for a statute of limitations in those circumstances would *373 inequitably allow the defendant to use the statute, intended as a device of fairness, to perpetrate a fraud. On the other hand, the ten-year statute of repose is the "absolute time limit beyond which liability no longer exists." First United Methodist Church, 882 [email protected]. Not even fraudulent concealment can toll the statute of repose.
¶ 16 We have examined statutes of repose in different contexts in Montana. In Association of Unit Owners v. Big Sky of Montana, Inc. (1990), 245 Mont. 64, 80, 798 P.2d 1018, 1027, we considered § 27-2-208, MCA, which deals with commencement of actions for improvements to real property and the applicable ten-year statute of repose. We stated that even if late discovery of the facts caused an extension of the time for commencement of the action, "in no event" could the action be commenced longer than ten years after the date of the injury. See Association of Unit Owners, 245 Mont. at 80, 798 [email protected].
¶ 17 In apparent recognition of the clear mandatory nature of the statute of repose in this case, Joyce seeks to avoid its strictures by asserting a basis for recovery apart from Garnaas's failure to timely serve the summons in the underlying action. Originally, Joyce asserted that Garnaas did not tell him of his failure to serve the defendant and represented to Joyce that the case was proceeding. Joyce now describes a second cause of action against Garnaas as being for the subsequent failure of Garnaas to inform Joyce of the true status of his injury case and, therefore, depriving him of recovery against Garnaas for malpractice. The essence of Joyce's "second cause of action" theory is that if an attorney conceals a potential claim against him for some negligent act, a second action arises for breach of a duty to disclose.
¶ 18 However, as the District Court correctly found, the omission giving rise to the claim of legal malpractice against Garnaas was the failure to have the summons served within the three-year limitation. It is from this "omission" that both the statute of limitations and the statute of repose are measured. The statute of limitations does not commence until the plaintiff discovers or through the use of reasonable diligence should have discovered the "omission." We agree with Garnaas that the "discovery" aspect of this statute thus takes into account the precise circumstances which extend the time for filing that Joyce relies upon in his "second cause of action"; the failure to inform or concealment from Joyce that the summons was not served. Joyce argues that the concealment of a claim is a separate tort which resets the start date for purposes of the statutes of limitations and repose, rather than being a circumstance in itself which tolls the statute of limitations. However, to accept Joyce's argument concerning when the statute starts to run in these kinds of cases would mean that the statutes of limitations and repose would be essentially eliminated. A claimant would simply have to claim that he or she was not told of the negligence of the attorney in order to overcome the untimeliness of his or her action.
¶ 19 Garnaas's breach of his responsibility to tell Joyce of the failure to serve the summons occurred at the time the underlying action was lost for failure to serve the summons, and not years later. Therefore, the accrual of any action for failure to notify Joyce that his legal malpractice claim had accrued was July 3, 1984. There is no separate claim for the failure to disclose the effect of not serving the summons within three years which is in addition to the claim for the alleged malpractice; any such claim is subsumed within the initial malpractice. Accordingly, we conclude that because of the passing of the statute of repose, Joyce's claim against Garnaas has been lost.
Did the District Court err when it determined that equity does not act to extend the statute of repose?
¶ 20 Joyce alternatively argues that an attorney who intentionally misleads a client about the status of that client's case is not entitled to the protection afforded by the statute of repose, and asks this Court to afford him equitable relief from the otherwise absolute ten-year statute of repose codified at § 27-2-206, MCA. Asserting that Garnaas purposely misled him regarding the status of his personal injury suit against *374 Glenn, Joyce urges this Court to consider two possible equitable remedies. First, Joyce suggests that an attorney who intentionally misleads his or her client about the true status of the case is not entitled to claim the benefit of the statute of repose because "no one can take advantage of his wrong" according to § 1-3-208, MCA. Second, Joyce suggests that we should rule that Garnaas is equitably estopped from asserting the statute of repose. Joyce cites Billings Post No. 1634 v. Department of Revenue (1997), 284 Mont. 84, 90, 943 P.2d 517, 520, to support his proposition that equitable estoppel is invoked to "promote justice, honesty, and fair dealing; the purpose of the doctrine ... is to prevent a party from taking unconscionable advantage of his or her wrong while asserting a strict legal right." Joyce urges us to apply the statute of limitations fraudulent concealment doctrine found at § 27-2-102(3)(b), MCA, to toll the ten-year statute of repose so that Garnaas cannot take advantage of his wrong (concealment) while asserting a strict legal right (statute of repose).
¶ 21 The District Court considered this equitable argument and concluded that it must fail because the ten-year statute of repose is absolute. Joyce suggests that § 27-2-102(3)(b), MCA, which allows for a tolling of the statute of limitations for fraudulent concealment should apply to this case to toll the statutes of limitations and repose because of Garnaas's alleged fraudulent concealment of the facts of Joyce's second cause of action against him. Joyce urges us to conclude that a defendant cannot fraudulently conceal a matter for a sufficient time to exceed the statute of repose and thereby take advantage of his or her own wrong. However, § 27-2-102(3)(b), MCA, does not apply to legal malpractice actions. Actions for legal malpractice are covered in part two of the statute of limitations chapter of the Montana Code Annotated, and are governed by § 27-2-206, MCA. Section 27-2-206, MCA, incorporates the tolling principle that an action for legal malpractice must be commenced within three years after the plaintiff discovers or through the use of reasonable diligence should have discovered the act, error, or omission, regardless of whether it was actually concealed. But in no case does the statute allow an action to commence after ten years from the date of the act, error, or omission.
¶ 22 As we discussed previously, there is no provision in § 27-2-206, MCA, which allows fraudulent concealment to be a cause for the tolling of the statutes of limitations or repose. As we stated in Blackburn, 286 Mont. at 73, 951 P.2d at 9, a statute of repose is not tolled without the presence of modifying or limiting language. There is no such language in § 27-2-206, MCA. Although the Legislature specifically adopted the fraudulent concealment tolling provision with regard to the statute of repose in medical malpractice cases (see § 27-2-205, MCA), it specifically did not adopt that provision with regard to the statute of repose for legal malpractice. Aside from incorporating a tolling provision for discovery by reasonable diligence of the act, error, or omission, the Legislature specifically stated that "in no case may the action be commenced after ten years from the date of the act, error, or omission." Section § 27-2-206, MCA.
¶ 23 We agree with the District Court that the omission in this case which gives rise to a claim for legal malpractice was Garnaas's failure to have the summons served within the three-year time limitation. Even Joyce's allegations of continuing fraudulent concealment on the part of Garnaas cannot be remedied by the statutory language of § 27-2-206, MCA. Moreover, we have previously rejected a similar argument in Schneider v. Leaphart(1987), 228 Mont. 483, 743 P.2d 613. Joyce's argument that Garnaas's acts of concealment continued as late as January 13, 1993, must fail because Joyce's claims for damages against Garnaas for not informing him of the legal malpractice relate back to the date the summons was not served. Accordingly, we agree with the District Court that principles of equity do not extend the statute of repose because Joyce cannot claim any actual damages separate and apart from Garnaas's original omission.
¶ 24 The judgment of the District Court is affirmed.
*375 J.A. TURNAGE, C.J., KARLA M. GRAY, WILLIAM E. HUNT, SR., WILLIAM LEAPHART, and JAMES C. NELSON, JJ., concur.
Justice TERRY N. TRIEWEILER dissents.
¶ 25 I dissent from the majority opinion.
¶ 26 The basis for my disagreement with the majority is its conclusion in ¶ 12 of its opinion that:
The only act, error, or omission by Garnaas which could be said to have precluded Joyce from recovering damages was the failure to serve the summons and complaint within the three years allowed by Rule 41(2)(e), M.R.Civ.P., on or before July 2, 1984.
¶ 27 If the Joyce and Garnaas attorney-client relationship had ended on July 2, 1984, I would agree with the majority's conclusion that Garnaas' failure to advise Joyce of his negligent omission did not give rise to a separate cause of action, but was simply a basis for tolling the three-year statute of limitations for up to ten years pursuant to § 27-2-106, MCA. However, the attorney-client relationship at issue did not end on July 2, 1984. Garnaas continued to represent Joyce and according to Joyce's testimony, not only withheld information from him regarding the true status of his case, but made actual representations to him regarding that case. This course of conduct was a breach of Garnaas' fiduciary duty to Joyce which was, itself, actionable and caused Joyce damage by concealing from him the need or basis for filing a malpractice action against Garnaas until more than ten years after Garnaas' original act of negligence.
¶ 28 First, I must point out that I am assuming those facts to be true which are most favorable to Joyce, because he is the party against whom summary judgment was entered. Furthermore, while Joyce's deposition has not been filed with this Court, a summary of his testimony with references to page numbers is provided in the appellant's brief, and I assume that summary to be correct because it is not controverted in the respondent's brief. In fact, the respondent concedes in his brief that there is a factual dispute about what was said by Garnaas to Joyce and what information was withheld by Garnaas from Joyce during the years following Garnaas' failure to serve Joyce's summons and complaint on the defendant in the underlying action.
¶ 29 The facts I assume to be true for purposes of the summary judgment proceeding are: that Garnaas continued to represent Joyce following his failure to serve the summons and complaint; over the years Joyce asked Garnaas about the progress of his lawsuit against Glenn and was repeatedly assured by Garnaas that the suit was ongoing and that further proceedings were pending; and that these misrepresentations continued into 1993. In fact, it is Joyce's contention that Garnaas failed to tell him about the January 13, 1993 order which finally dismissed his lawsuit for failure to prosecute.
¶ 30 In Morse v. Espeland (1984), 215 Mont. 148, 696 P.2d 428, we held that:
Unquestionably, an attorney has a fiduciary relationship with a client on most matters pertaining to the representation. In the Matter of Bretz(1975), 168 Mont. 23, 56, 542 P.2d 1227, 1245.
....
Likewise, as an attorney, respondent owed his client the obligation to deal fairly and in good faith when negotiating a fee and when ultimately charging and collecting the fee.... If the facts alleged by appellant are true, the fact-finder could determine there was a breach of the obligation owed to deal fairly and in good faith.
Morse, 215 Mont. at 151-52, 696 [email protected].
¶ 31 While Montana case law provides no extensive discussion of breach of the fiduciary duty as the basis for a professional liability claim or the exact conduct for which recovery is permitted based upon breach of that duty, a thorough discussion is provided in the Utah case of Kilpatrick v. Wiley, Rein, & Fielding (Utah App.1996), 909 P.2d 1283. In that case, the plaintiffs alleged that the defendant law firm had committed professional malpractice by failing to disclose a conflict of interest from which plaintiffs allege *376 they were ultimately damaged. In discussing the potential forms in which a malpractice action can be presented that court explained as follows:
Legal malpractice is a generic term for at least three distinct causes of action available to clients who suffer damages because of their lawyers' misbehavior. Clients wronged by their lawyers may sue for damages based on breach of contract, breach of fiduciary duty, or negligence. See Roy R. Anderson and Walter W. Steele, Jr., Fiduciary Duty, Tort & Contract: A Primer on the Legal Malpractice Puzzle, 47 SMU L.Rev. 235 (1994) (arguing for careful distinctions between contract, tort, and fiduciary duty causes of action for legal malpractice); ... Regardless of whether the cause of action is based on negligence, breach of contract, or breach of fiduciary duty, the central purpose of the law of legal malpractice is to guard against and to remedy exploitation of the power lawyers possess over their clients' lives and property. See Anderson & Steele, supra, at 236.
Kilpatrick, 909 [email protected].
¶ 32 In Kilpatrick the Utah court distinguished claims based on breach of fiduciary duty from those based on negligence as follows:
While legal malpractice actions based on breach of contract are conceptually distinct, legal malpractice actions based on negligence and breach of fiduciary duty are more difficult to differentiate. As fiduciaries, attorneys have a legal duty "to represent the client with undivided loyalty, to preserve the client's confidences, and to disclose any material matters bearing upon the representation [of the client]." 1 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 11.1, at 631 (3d ed.1989).
Kilpatrick, 909 P.2d at 1290 (emphasis added).
Legal malpractice based on negligence concerns violations of a standard of care; whereas, legal malpractice based on breach of fiduciary duty concerns violations of a standard of conduct. See id. at 249.
Kilpatrick, 909 [email protected].
¶ 33 Quoting from Smoot v. Lund, 13 Utah 2d 168, 172, 369 P.2d 933, 936(1962), the court described the obligations owed to a client based on the fiduciary relationship as follows:
It is also true that because of his professional responsibility and the confidence and trust which his client may legitimately repose in him, he must adhere to a high standard of honesty, integrity[,] and good faith in dealing with his client. He is not permitted to take advantage of his position or superior knowledge to impose upon the client; nor to conceal facts or law, nor in any way deceive him without being held responsible therefor.
Kilpatrick, 909 [email protected].
¶ 34 Finally, the Utah court described the elements of legal malpractice based on fiduciary duty as: (1) an attorney-client relationship; (2) breach of the fiduciary duty to the client; and (3) causation of damages. Kilpatrick, 909 [email protected].
¶ 35 In this case, Joyce alleged two claims against Garnaas: (1) he alleged that Garnaas was negligent by failing to serve the defendant in the underlying personal injury action with the summons that had been issued; and(2) he alleged that Garnaas breached his duty of disclosing to him, honestly, the status of his case. I conclude that the alleged failure to disclose gave rise to a second cause of action for breach of fiduciary duty; and that all elements of the second cause of action accrued on or about July 3, 1994 when Joyce was barred by the statute of repose found at § 27-2-206, MCA, from bringing an action against Garnaas to recover compensation for his original act of professional negligence. Because Joyce's action for breach of that fiduciary duty was filed on October 24, 1995, it was filed within three years from the date on which the action accrued and was timely. Therefore, I conclude that the District Court erred when it dismissed Joyce's claim for breach of fiduciary duty by summary judgment.
*377 ¶ 36 Nor do I agree with the majority's conclusion that to acknowledge a second cause of action for breach of the fiduciary duty would eliminate statutes of repose. As set forth previously, the elements of the action for breach of fiduciary duty require an ongoing attorney-client relationship and a further affirmative act or omission such as a misrepresentation, or concealment, or failure to inform regarding the subject of the representation. This does not represent the typical situation in claims of professional negligence. In the most common situation, when an act of negligence occurs, the client's rights are somehow affected and the attorney-client relationship ends. Under those circumstances, there may be an ethical obligation on the part of the attorney to advise his former client of his negligent act or omission, but there is no fiduciary obligation which would give rise to a civil action.
¶ 37 For these reasons, I dissent from the majority opinion. I would reverse the District Court and remand for further proceedings related to Joyce's claim that during his attorney-client relationship with H.L. Garnaas, that Garnaas breached his fiduciary duty to Joyce by failing to disclose to him the true status of his claim against Edward John Glenn.
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IN THE SUPREME COURT OF THE STATE OF MONTANA 09/14/2020
Supreme Court No. DA 19-0648
Case Number: DA 19-0648
STATE OF MONTANA,
Plaintiff and Appellee,
v.
ANDREW PIERCE LAKE,
Defendant and Appellant.
ORDER
Pursuant to authority granted under Mont. R. App. P. 26(1), the Appellant is
given an extension of time until October 14, 2020 to prepare, file and serve the
Appellant’s opening brief.
Electronically signed by:
Mike McGrath
Chief Justice, Montana Supreme Court
September 14 2020
|
DeGolyer and MacNaughton 5001 Spring Valley Road Suite 800 East Dallas, Texas75244 Exhibit 99.1 January 18, 2011 Vanguard Natural Resources 5847 San Felipe, Suite 3000 Houston, Texas 77057 Gentlemen: Pursuant to your request, we have prepared estimates of the extent and value of the net proved crude oil, condensate, natural gas liquids (NGL), and natural gas reserves, as of December 31, 2010, of certain properties owned by Vanguard Natural Resources (Vanguard). Vanguard has represented that these properties account for 100 percent on a net equivalent barrel basis of Vanguard’s net proved reserves as of December 31, 2010. The net proved reserves estimates prepared by us have been prepared in accordance with the reserves definitions of Rules 4–10(a) (1)–(32) of Regulation S–X of the Securities and Exchange Commission (SEC) of the United States. Reserves included herein are expressed as net reserves. Gross reserves are defined as the total estimated petroleum to be produced from these properties after December 31, 2010. Net reserves are defined as that portion of the gross reserves attributable to the interests owned by Vanguard after deducting all interests owned by others. Gas quantities estimated herein are expressed as sales gas. Sales gas is defined as that portion of the total gas to be delivered into a gas pipeline for sale after separation, processing, fuel use, and flare. Gas reserves are expressed at a temperature base of 60 degrees Fahrenheit (°F) and at a pressure base of 14.65pounds per square inch absolute (psia). Condensate reserves estimated herein are those to be recovered by conventional lease separation. Values shown herein are expressed in terms of future gross revenue, future net revenue, and present worth. Future gross revenue is that revenue which will accrue to the appraised interests from the production and sale of the estimated netreserves. Future net revenue is calculated by deducting estimated production taxes, ad valorem taxes, operating expenses, and capital costs from the future gross revenue. Operating expenses include field operating expenses, transportation expenses, compression charges, and an allocation of overhead that directly relates to production activities. Future income tax expenses were not taken into account in the preparation of these estimates. Present worth is defined as future net revenue discounted at a specified arbitrary discount rate compounded monthly over the expected period of realization. Estimates of oil, condensate, NGL, and natural gas should be regarded only as estimates that may change as further production history and additional information become available. Not only are such reserves estimates based on that information which is currently available, but such estimates are also subject to the uncertainties inherent in the application of judgmental factors in interpreting such information. Data used in this evaluation were obtained from reviews with Vanguard personnel, Vanguard files, from records on file with the appropriate regulatory agencies, and from public sources. Additionally, this information includes data supplied by Petroleum Information/Dwights LLC; Copyright 2010 Petroleum Information/Dwights LLC. In the preparation of this report we have relied, without independent verification, upon such information furnished by Vanguard with respect to property interests, production from such properties, current costs of operation and development, current prices for production, agreements relating to current and future operations and sale of production, and various other information and data that were accepted as represented. A field examination of the properties was not considered necessary for the purposes of this report. Methodology and Procedures Estimates of reserves were prepared by the use of appropriate geologic, petroleum engineering, and evaluation principals and techniques that are in accordance with practices generally recognized by the petroleum industry as presented in the publication of the Society of Petroleum Engineers entitled “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information (Revision as of February 19, 2007).” The method or combination of methods used in the analysis of each reservoir was tempered by experience with similar reservoirs, stage of development, quality and completeness of basic data, and production history. When applicable, the volumetric method was used to estimate the original oil in place (OOIP) and the original gas in place (OGIP). Structure and isopach maps were constructed to estimate reservoir volume. Electrical logs, radioactivity logs, core analyses, and other available data were used to prepare these maps as well as to estimate representative values for porosity and water saturation. When adequate data were available and when circumstances justified, material balance and other engineering methods were used to estimate OOIP or OGIP. Estimates of ultimate recovery were obtained after applying recovery factors to OOIP or OGIP. These recovery factors were based on consideration of the type of energy inherent in the reservoirs, analyses of the petroleum, the structural positions of the properties, and the production histories. When applicable, material balance and other engineering methods were used to estimate recovery factors. An analysis of reservoir performance, including production rate, reservoir pressure, and gas-oil ratio behavior, was used in the estimation of reserves. For depletion-type reservoirs or those whose performance disclosed a reliable decline in producing-rate trends or other diagnostic characteristics, reserves were estimated by the application of appropriate decline curves or other performance relationships. In the analyses of production-decline curves, reserves were estimated only to the limits of economic production or to the limit of the production licenses as appropriate. Definition of Reserves Petroleum reserves estimated by us included in this report are classified as proved. Only proved reserves have been evaluated for this report. Reserves classifications used by us in this report are in accordance with the reserves definitions of Rules 4–10(a) (1)–(32) of Regulation S–X of the SEC. Reserves are judged to be economically producible in future years from known reservoirs under existing economic and operating conditions and assuming continuation of current regulatory practices using conventional production methods and equipment. In the analyses of production-decline curves, reserves were estimated only to the limit of economic rates of production under existing economic and operating conditions using prices and costs consistent with the effective date of this report, including consideration of changes in existing prices provided only by contractual arrangements but not including escalations based upon future conditions. The petroleum reserves are classified as follows: Proved oil and gas reserves – Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. (i) The area of the reservoir considered as proved includes: (A) The area identified by drilling and limited by fluid contacts, if any, and (B) Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data. (ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty. (iii) Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty. (iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when: (A) Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (B) The project has been approved for development by all necessary parties and entities, including governmental entities. (v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. Developed oil and gas reserves – Developed oil and gas reserves are reserves of any category that can be expected to be recovered: (i) Through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and (ii) Through installed extraction equipment andinfrastructure operational atthe time of the reserves estimate if the extraction is by means not involving a well. Undeveloped oil and gas reserves – Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. (i) Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances. (ii) Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances justify a longer time. (iii) Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, as defined in [section 210.4–10 (a) Definitions], or by other evidence using reliable technology establishing reasonable certainty. Primary Economic Assumptions The following economic assumptions were used for estimating existing and future prices and costs: Oil and Condensate Prices Vanguard has represented that the oil and condensate prices were based on a 12-month average price (reference price), calculated as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period, unless prices are defined by contractual arrangements. Vanguard supplied differentials by field to a West Texas Intermediate reference price of $79.40 per barrel and the prices were held constant thereafter. The volume-weighted average oil price was $72.04 per barrel. NGL Prices Vanguard has represented that the NGL prices were based on a 12-month average price (reference price), calculated as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period, unless prices are defined by contractual arrangements. Vanguard supplied differentials by field to a West Texas Intermediate reference price of $79.40 per barrel and the prices were held constant thereafter. The volume-weighted average NGL price was $45.35 per barrel. Natural Gas Prices Vanguard has represented that the natural gas prices were based on a reference price, calculated as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period, unless prices are defined by contractual arrangements. The gas prices were calculated for each property using differentials to the reference price of $4.38 per Mcf furnished by Vanguard and held constant thereafter. The volume-weighted average price was $5.324 per Mcf. Operating Expenses and Capital Costs Operating expenses and capital costs, based on information provided by Vanguard, were used in estimating future costs required to operate the properties. In certain cases, future costs, either higher or lower than existing costs, may have been used because of anticipated changes in operating conditions. These costs were not escalated for inflation. While the oil and gas industry may be subject to regulatory changes from time to time that could affect an industry participant’s ability to recover its oil and gas reserves, we are not aware of any such governmental actions which would restrict the recovery of the December 31, 2010, estimated oil and gas volumes. The reserves estimated in this report can be produced under current regulatory guidelines. Our estimates of Vanguard’s net proved reserves attributable to the reviewed properties are based on the definitions of proved reserves of the SEC and are as follows, expressed in thousands of barrels (Mbbl), millions of cubic feet (MMcf), and thousands of barrels of oil equivalent (Mboe): Net Proved Reserves as of December31, 2010 Oil and Condensate (Mbbl) NGL (Mbbl) Sales Gas (MMcf) Oil Equivalent (Mboe) Appalachia Proved Developed 0 Proved Undeveloped 0 0 Total Proved Appalachia 0 Mississippi Proved Developed 0 Proved Undeveloped 0 0 Total Proved Mississippi 0 Permian Proved Developed Proved Undeveloped Total Proved Permian South Texas Proved Developed 76 Proved Undeveloped 71 Total Proved South Texas Total Proved Note: Gas is converted to oil equivalent using a factor of 6,000 cubic feet of gas per 1barrel of oil equivalent. The estimated future revenue attributable to Vanguard’s interests in the proved reserves, as of December 31, 2010, of the properties appraised is summarized as follows, expressed in thousands of dollars (M$): Developed Producing Developed Nonproducing Undeveloped Total Future Gross Revenue, M$ Production and Ad Valorem Taxes, M$ Operating Expenses, M$ Capital Costs, M$ Future Net Revenue*, M$ Present Worth at 10 Percent*, M$ * Future income tax expenses were not taken into account in the preparation of these estimates. In our opinion, the information relating to estimated proved reserves, estimated future net revenue from proved reserves, and present worth of estimated future net revenue from proved reserves of oil, condensate, natural gas liquids, and gas contained in this report has been prepared in accordance with Paragraphs 932-235-50-4, 932-235-50-6, 932-235-50-7, 932-235-50-9,932-235-50-30, and 932-235-50-31(a), (b), and (e) of the Accounting Standards Update 932-235-50, Extractive Industries – Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures (January 2010) of the Financial Accounting Standards Board and Rules 4–10(a) (1)–(32) of Regulation S–X and Rules 302(b), 1201, 1202(a) (1), (2), (3), (4), (8), and 1203(a) of Regulation S–K of the Securities and Exchange Commission;provided, however, future income tax expenses have not been taken into account in estimating the future net revenue and present worth values set forth herein. To the extent the above-enumerated rules, regulations, and statements require determinations of an accounting or legal nature, we, as engineers, are necessarily unable to express an opinion as to whether the above-described information is in accordance therewith or sufficient therefor. DeGolyer and MacNaughton is an independent petroleum engineering consulting firm that has been providing petroleum consulting services throughout the world for over 70 years. DeGolyer and MacNaughton does not have any financial interest, including stock ownership, in Vanguard. Our fees were not contingent on the results of our evaluation. This letter report has been prepared at the request of Vanguard. DeGolyer and MacNaughton has used all assumptions, data, procedures, and methods that it considers necessary and appropriate to prepare this report. Submitted, /s/ DeGolyer and MacNaughton DeGOLYER and MacNAUGHTON Texas Registered Engineering Firm F-716 CERTIFICATE of QUALIFICATION I, Paul J. Szatkowski, Petroleum Engineer with DeGolyer and MacNaughton, 5001 Spring Valley Road, Suite 800 East, Dallas, Texas, 75244 U.S.A., hereby certify: 1. That I am a Senior Vice President with DeGolyer and MacNaughton, which company did prepare the letter report addressed to Vanguard dated January18, 2011, and that I, as Senior Vice President, was responsible for the preparation of this report. 2. That I attended Texas A&M University, and that I graduated with a Bachelor of Science degree in Petroleum Engineering in 1974; that I am a Registered Professional Engineer in the State of Texas;that I am a member of the International Society of Petroleum Engineers and the American Association of Petroleum Geologists; and that I have in excess of 36years of experience in oil and gas reservoir studies and reserves evaluations. /s/ Paul J. Szatkowski, P.E. Paul J. Szatkowski, P.E. Senior Vice President DeGolyer and MacNaughton
|
384 F. Supp. 846 (1974)
Nancy Anne SPANGLER et al., Plaintiffs,
and
United States of America, Plaintiff-Intervenor,
v.
PASADENA CITY BOARD OF EDUCATION et al., Defendants.
Civ. No. 68-1438-R.
United States District Court, C. D. California.
August 12, 1974.
*847 ACLU Foundation of Southern California, Los Angeles, Cal., A. L. Wirin, Fred Okrand, John D. O'Loughlin and Jill Jakes, for plaintiffs.
James Stotter, II, Asst. U. S. Atty., Los Angeles, Cal., for plaintiff-intervenor United States of America.
Paul, Hastings, Janofsky & Walker, Los Angeles, Cal., Jerome D. Meier, Pasadena, Cal., for defendants.
Charles B. Johnson, Pasadena, Cal., for petitioner to Show Cause.
JUDGMENT, OPINION AND ORDER
REAL, District Judge.
Petitioner, Charles Johnson, the father of two school age children in attendance at the Pasadena Unified School District, has moved the court for an order to show cause why the respondent Pasadena City Board of Education (hereinafter Board)[1] should not be held in civil contempt for its failure to comply with the provisions of the order of this court concerning the desegregation of that school system in general and the hiring of administrative personnel in particular. Accordingly, the moving party objects to the appointments of Willard A. Craft as Acting Assistant Superintendent of Elementary and Secondary Education, John F. McHale as Acting Assistant Superintendent for Personnel and Supportive Service, Mrs. Anna Mary Hession as Acting Administrative Director of Elementary Curriculum, Ms. Louise Coover as Principal of Wilson Junior High School, and Dr. John Mike Kellner as Principal of the "Fundamental School." He requests this court to declare said appointments void ab initio, to order the respondents to institute hiring procedures in conformity with this court's original order of January 22, 1970 (hereinafter known as the Pasadena Plan), and to level such sanctions, including reasonable attorneys fees, as this court feels appropriate to punish the Board's failure to comply with the original hiring procedures set forth in the Pasadena Plan. See, Spangler v. Pasadena City Board of Education, 311 F. Supp. 501 (C.D.Cal. 1970).
In connection with the hiring of Administrative personnel, the Pasadena Plan provides for "[a] positive recruitment program paralleling the teacher recruitment program [which] will actively seek out minority group administrators, supervisors, and counselors who are interested in employment with the Pasadena Unified School District."[2] Nevertheless, *848 in contravention of these established procedures, the Board appointed Messrs. Craft and McHale, and Mrs. Hession on July 10, 1973 to their respective positions by a vote of three to two, with Messrs. Sheats and Marcheschi, and Superintendent Cortines, the non-voting Board member, dissenting in the face of the alleged illegality of the action. Thereafter, the Board appointed Dr. Kellner and Ms. Coover to their respective principalships; but, on the occasion of these latter two appointments, only Mr. Sheats dissented, with Mr. Marcheschi and Superintendent Cortines, relying on the advice which they had solicited from Los Angeles County Counsel, being then satisfied of the legality of the Board's actions.
It is beyond question that, if the Board had been acting upon permanent administrative appointments, such appointments would have been illegal in light of the Board's failure to advertise such positions, to submit ensuing applications to a committee for its evaluation and determination to act upon recommendations stemming from that committee and from the Superintendent, and finally, to take affirmative steps to ensure minority applications for these positions. It is the Board's current contention relative to these appointments that their "temporary" nature precluded application of the normally prescribed appointment procedures and further justified the reliance of the Board upon the advice of Los Angeles County Counsel to the effect that said appointments were, in fact, legally within the purview of the Pasadena Plan. (See, Marcheschi Affidavit, p. 3)
The Standing of Petitioner
Initially, it is incumbent upon the court to determine whether the petitioner has the requisite standing to bring the instant order to show cause regarding civil contempt to the court's attention; for the petitioner is neither the named representative of the class of school aged children affected by the original Pasadena Plan nor counsel of record for that class.
Relying on Williams v. Iberville Parish School Board, 273 F. Supp. 542 (E.D.La.1967), the defendants maintain that, where, as here, representation of the class is adequate and compatible with the interests of the entire class, no individual member of the class may appear in propria persona to vindicate an alleged violation of class rights. However, the court in Williams, supra, merely indicated that civil contempt proceedings may be instituted only by "parties primarily in interest" in the litigation or by parties who ". . . have in any way been damaged by the alleged disobedience of which they complain." Id. 273 F. Supp. at 545. In addition, as the Ninth Circuit has pointed out in Gregory v. Litton Systems, Inc., 472 F.2d 631 (1972), "broad power [has been] given to the district court to make various orders for the protection of a class. Fed. R.Civ.P. 23(d)." It appears axiomatic, therefore, that the father of two school age children, who is acting, in essence, as a guardian ad litem and whose children are affected by an order of this court, has a "primary interest" in ensuring that the orders of the court relative to his childrens' educational opportunities are dutifully enforced. As a parent, petitioner *849 has standing and is permitted to make an appearance in this action to apprise the court of any non-compliance with said order.[3]Compare, Federal Trade Commission v. A. McLean & Sons, 94 F.2d 802 (7th Cir. 1938) [where the court noted that "the protection of private rights" is cardinal to a civil contempt proceeding] with McCrone v. U. S. A., 307 U.S. 61, 63 n. 4, 59 S. Ct. 685, 83 L. Ed. 1108 (1939); See also, Kaplan, 1966 Amendments of the Federal Rules of Civil Procedure (I), 81 Harv.L.Rev. 356, 392 n. 137 (1967); Practicing Law Institute, Class Actions at p. 178 (1973).
The Violation
Turning then to the merits of the case, the court notes that the Pasadena Plan, relative to the filling of administrative positions, embraced a ". . . total of 133 non-teaching certified assignments [which] include all school administrators, directors, supervisors, consultants, counselors, school psychologists and others . . ." (emphasis supplied). The administrative posts, which the respondents summarily filled in alleged violation of the broad mandates of the Pasadena Plan and which form the focal point of the instant inquiry, clearly fall within the parameters of the court's directives concerning the hiring of administrative personnel. Yet the Board, mainly through the protestations of its President, Mr. Marcheschi, indicates that "none of the past or present Board members, with one exception [i. e., Mr. Sheats,] has ever suggested that the Board was required to follow the procedures set forth in the Recruitment and Selection of Administrators Section of the Pasadena Plan when making or approving temporary appointments of persons to acting administrative positions or permanent appointments of persons reporting directly to the Superintendent." (Marcheschi Affidavit, p. 2). In essence, then, it is the Board's position that its lack of intent in failing to comply with the court's order, coupled with its reliance on the advice of counsel and the insufficiency of the evidence necessary to prove a violation, precludes the possibility of a contempt citation in the instant matter.
In general, the lack of malicious intent or the presence of a good faith belief in the rectitude of one's position cannot serve to "sterilize conduct otherwise contemptuous." Babee-Tenda Corp. v. Scharco Manufacturing Co., 156 F. Supp. 582, 587 (S.D.N.Y.1957); See also, Land v. Dollar, 190 F.2d 623 (D.C. Cir. 1951), cert. dism. per mot. of petitioner 344 U.S. 806, 73 S. Ct. 7, 97 L. Ed. 628 (1952); Sucrs. De A Mayal & Co. v. Mitchell, 280 F.2d 477 (1st Cir. 1960), cert. den. 364 U.S. 902, 81 S. Ct. 235, 5 L. Ed. 2d 195; Folk v. Standard Business Forms, Inc., 270 F. Supp. 147 (D.C.N.C. 1967); Rosenstiel v. Rosenstiel, 278 F. Supp. 794 (D.C.N.Y.1967); Landman v. Royster, 354 F. Supp. 1292 (D.C.Va. 1973). Likewise, the Board's reliance on the advice of the Los Angeles County Counsel, who in a rather cryptically worded letter dated July 31, 1973 erroneously concluded that the Board's appointments did no offense to the Pasadena Plan, may not serve to immunize the Board from acts which are contemptuous in and of themselves.[4] Land v. *850 Dollar, supra; U. S. v. Seavers, 472 F.2d 607 (6th Cir. 1973); Heyman v. Kline, 344 F. Supp. 1088 (D.C.Conn. 1970), aff'd in part and rev'd in part 456 F.2d 123 (2d Cir. 1972), cert. den. 409 U.S. 847 (1972); Theriault v. Carlson, 353 F. Supp. 1061 (D.C.Ga.1973); U. S. v. Wefers, 314 F. Supp. 137 (D.C. N.H.1970) vacated 435 F.2d 826 (1st Cir. 1970). It should be noted, however, that both the presence of a bona fide belief in the rectitude of one's actions and the reliance upon the advice of counsel may operate to mitigate the severity of the contempt sanction. U. S. v. Johnson, 52 F. Supp. 382 (N.D.N.Y.1943).
Yet, the Board's effort to circumvent the thrust of the Pasadena Plan by making "temporary" appointments which, under their stated terms, conceivably could have been renewed on a yearly basis, actually operates as a two-pronged assault upon the Board's present position; for not only does this conduct comprise acts in contempt of this court's order but also, in light of a majority of the Board's expressed opposition to the Pasadena Plan, appears to preclude any element of good faith in connection with it. See, Spangler v. Pasadena City Board of Education, 375 F. Supp. 1304 (C.D.Cal.1974). Thus, under the guise of making "temporary" administrative appointments of a continuing nature, the Board could "permanently" frustrate the aims of the Plan relative to the hiring of minority administrators. Constitutionally, this court cannot and will not abide the transparency of such an action.
The Board maintains, however, that the evidence adduced by the petitioner is not of a "clear and convincing" nature and is incapable, therefore, of supporting a civil contempt citation. While it is generally believed that the burden of proof necessary to support a claimed civil contempt citation must be of a "clear and convincing" nature [Washington v. Central of Georgia Ry. Co., 174 F. Supp. 33 (M.D.Ga.1958), aff'd. sub. nom. Marshall v. Central of Georgia Ry. Co., 268 F.2d 445 (5th Cir. 1959), cert. den. 361 U.S. 943, 80 S. Ct. 407, 4 L. Ed. 363 (1959); Hart Schaffner & Marx v. Alexander's Dept. Stores, Inc., 341 F.2d 101 (2d Cir. 1965); Stringfellow v. Haines, 309 F.2d 910 (2d Cir. 1962); N. L. R. B. v. Alamo Express, Inc., 395 F.2d 481 (5th Cir. 1968); American Optical Co. v. Rayex Corp., 291 F. Supp. 502 (S.D.N.Y.1967), aff'd. 394 F.2d 155 (2d Cir. 1968), cert. den. 393 U.S. 835, 89 S. Ct. 109, 21 L. Ed. 2d 106 (1968); Rosenstiel v. Rosenstiel, supra; Benner v. Philadelphia Musical Soc., Local 77, of the American Federation of Musicians, 233 F. Supp. 108 (E.D.Pa. 1964)], the evidence adduced in the course of the instant hearing was uncontroverted to the effect that the acts of which the petitioner currently complains actually occurred. Since the Board admits to having made the appointments now under scrutiny and since the defenses asserted by the Board can avail it little, there only remains for the court to appraise the legal effect of the appointments in light of the concepts envisioned in the Pasadena Plan.
Proposal to Purge
Notwithstanding all the foregoing, the Board informs the court and quite rightly that the purpose of a civil contempt proceeding is actually to secure compliance with a lawful court order and not to punish its initial violation. Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 31 S. Ct. 492, 55 L. Ed. 797 (1911); Brotherhood of Locomotive Firemen & Engineermen v. Bangor & A. R. R., 127 U.S.App.D.C. 23, 380 F.2d 570, 581 (1967), cert. den., 389 U.S. 327, 88 S. Ct. 437, 19 L. Ed. 2d 560 (1967); De Parcq v. U. S. District Court, 235 F.2d *851 692 (8th Cir. 1956); N. L. R. B. v. Rath Packing Co., 130 F.2d 540 (8th Cir. 1942). Accordingly, the Board reasons that its instructions to the Superintendent on May 7, 1974 to forthwith bring the school district relative to the disputed administrative appointments into full compliance with the provisions of the Pasadena Plan, coupled with the actual advertising of these positions as specified by the Plan, serve to purge the contempt of this court's order, if any contempt there were.[5] Yet, it was not merely the Board's failure to advertise the administrative positions under scrutiny which comprises its contemptuous behavior but rather its making of the appointments, absent the procedures specified in the Plan. Thus, the purportedly purgative actions of the Board unaccompanied, as they are, by a vacating of the unlawful appointments really are tantamount to nothing more than a proposal to purge the contempt and, as such, do not serve as an effective defense to the Board's initial (and continuing) contempt of the court's order as enunciated in the Pasadena Plan.
The Purgation
As the preceding analysis readily reveals, this court has determined that the Pasadena City Board of Education is in contempt of the mandates of the Pasadena Plan.[6] As a consequence, the Board shall within 5 days of the filing of this opinion vacate the disputed appointments and otherwise bring itself into conformity with the Pasadena Plan as more fully specified herein or, in lieu thereof, to pay $500.00 per day until such time as the Board complies with the orders of this court as they relate to the hiring of administrative personnel.
Petitioner has, by his actions herein, brought to the attention of the court what could conceivably be a hiatus in the administrative functions of the Pasadena Unified School District. Since no suggestion for modification has been forthcoming from the Board to obviate any future misunderstanding as to the parameters of the Pasadena Plan as it pertains to "temporary" or "acting" appointments of all administrative vacancies, the Pasadena Plan is now modified by the Court in the following respects:
Modifications in Procedures for the Selection of Temporary Administrative Personnel
1. All administrative vacancies may be filled by temporary appointment by the Superintendent of Schools, but such appointments shall terminate 30 days subsequent thereto unless such appointment shall be extended for 30 additional days by action of the Pasadena City Board of Education. After this time, the position shall be filled according the the Personnel Selection Procedure enunciated in the Pasadena Plan.
2. All such "acting" or "temporary" administrative appointments shall be approved by a majority of an Administrative Appointments Board, comprised of 3 members selected by a vote at large of the entire faculty and administration of the Pasadena Unified School District and one member appointed by the Superintendent of Schools of the Pasadena Unified School District and one member appointed by a majority of the members of the Pasadena City Board of Education.
3. Notwithstanding the provisions of paragraph 2 of this Section, any extension of the 30 day termination period relative to temporary or acting administrative personnel, attempted to be undertaken by the Pasadena City Board of Education, shall be approved by the Administrative Appointments Board in order to be effective.
4. Under the guidelines set forth in this Section, no temporary or acting *852 administrative personnel may serve in that capacity for more than 60 days except upon unanimous concurrence of the Administrative Appointments Board which shall in no event be given for a period to exceed an additional 90 days.
5. The district maintains a policy of no discrimination in employment because of race, creed, color, age, sex, marital status, national origin or political beliefs.
Attorney's Fees and Conclusion
While it is true that the petitioner has performed a valuable public service by calling the Board's peccadilloes to the attention of this court, it does not seem equitable that he, as an attorney at law impregnated with the public trust, should receive payment for his vindication of both a private and a public right. His actions comport with the highest mandates of the legal profession, and he should, therefore, take solace in the knowledge that he has contributed to the continuation of equal educational opportunities in Pasadena.
Except as to attorney fees, the petitioner's motion is hereby granted.
NOTES
[1] The Board is currently composed of Henry Marcheschi, President, Drs. Henry S. Myers, Jr. and Richard Vetterli, and Messrs. Wyman W. Newton and Samuel Sheats. This order to show cause is only directed to the first four Board members just enumerated since Mr. Sheats took no part in the activities which allegedly amount to contempt of this court's order.
[2] In its pertinent part, the Recruitment and Selection of Administrators Plan stipulated that ". . . bulletins concerning job opportunities will be sent to college and university placement offices and other professional organization offices. In these bulletins, minority candidates will be especially encouraged to apply . . .
"Vacancies in these positions are filled from eligible lists established by examination. At the present time the examination consists of an oral interview, evaluation of training and evaluation of experience by a committee appointed for this purpose. Announcements for these positions are distributed to all school personnel, to college and university placement offices in Southern California and to a mailing list recommended by the Department of Intergroup Education . . .. The announcement contains the title of the position, the minimum requirements for entrance, desirable qualifications, job duty statement and the salary . . .
"When vacancies occur, the top five names on the eligible list are referred to the appointing authority for consideration. All appointments must be approved by the Superintendent."
[3] For the record it should be noted that the plaintiff-representatives of the class joined the petitioner's motion to hold respondents in civil contempt of this court's 1970 ruling. Thus, even if the petitioner were deemed to have insufficient standing to prosecute this contempt proceeding, the court could nonetheless consider the matter in light of the plaintiff's participation herein.
[4] The Board seems to have taken further, albeit unwarranted, comfort in the assurances proferred by the Department of Health, Education and Welfare that federal funding would continue to flow to the Pasadena schools if the Board honored certain commitments to H.E.W. concerning the continued desegregation of the school system. The Board's agreement with H.E.W. differs from the provisions set forth in the Pasadena Plan in a number of instances, most of which concern the mailing lists to be obtained from the Department of Intergroup Education, the "minimum" as opposed to the "main" requirements under the plan; the elimination of the need to "positively seek out" minority employees, and the number of individuals who are to sit on the administrative review board. It should go without saying that neither H.E.W.'s understanding of this court's orders, nor its representations to the Board in regard thereto, can serve to permit the Board to act with impunity in contravention of those orders. Neither the Pasadena City School Board nor the Department of Health, Education and Welfare are the final arbiters of the intendment of this court's orders.
[5] Once again acting upon the advice of the Los Angeles County Counsel, the Board did not vacate the illegal appointments in question since it felt that an initiation of the prescribed procedures was all that was minimally required to purge the contempt.
[6] See, n. 1, supra.
|
240 A.2d 733 (1968)
Lillie May ROBERTS
v.
YELLOW CAB CO. and Forindoe E. Fantasia.
Supreme Judicial Court of Maine.
April 18, 1968.
*734 Kenneth R. Murphy, South Portland, for plaintiff.
Lawrence P. Mahoney, Portland, for defendants.
Before WILLIAMSON, C. J., and WEBBER, TAPLEY, MARDEN, DUFRESNE and WEATHERBEE, JJ.
MARDEN, Justice.
On appeal from the direction of a defendant's verdict at the close of plaintiff's case, which was premised, except in minor degree, upon plaintiff's testimony.
A finding of the following facts is justified. Plaintiff, a woman 72 years of age, but gainfully employed, on the early morning of February 10, 1966 telephoned the office of the defendant company, which she had called "ever since 1942," for transportation *735 at 6:00 a. m. A taxi cab driven by defendant Fantasia, who had responded to plaintiff's call on several previous occasions, arrived a few minutes after the appointed time. Plaintiff left her home using a "walkway" from her front door to the curb of the street, which walkway had been shoveled free of snow and sanded. The weather was clear, but the sidewalk in front of plaintiff's home was icy and the surface of the highway was "part * * * dry and part * * * snow covered," according to a police officer who was called to the scene, and "plenty" of snow and ice on the ground according to plaintiff. The hours of darkness prevailed at the time and place in question.
When plaintiff reached the curb line of the street, the taxi cab had stopped in the middle of the street "above" an opening through the snow bank leading from the sidewalk to the street. As plaintiff passed through this opening the back window of the taxi cab was before her, as a result of which the plaintiff had to move laterally from the opening to reach the right hand door of the taxi cab, which the defendant driver had opened. As the plaintiff approached the defendant's vehicle, the driver did not dismount to assist her. As plaintiff "reached up taking hold of the top of the cab door" both feet went out from under her on ice unseen by her and she was injured. She complains in negligence against the company and the defendant driver.
To the defendant's motion for a directed verdict, grounded upon insufficiency both of proof of negligence on the part of the defendant and her own freedom from due care, a verdict for the defendant was directed.
The jury would have been justified in finding that the defendant company was operating public motor transportation for hire in a manner which was categorized in Chaput v. Lussier, 132 Me. 48, 165 A. 573 as "common carriage" and, as such, its duty to a passenger, based upon its contract for carriage, required "the exercise of the highest degree of care compatible with the practical operation of the machine in which the conveyance was undertaken." Chaput, supra, at page 52, 165 A. at page 575. This decision follows the weight of authority. 14 Am.Jur.2d Carriers § 1005; 37 Am.Jur., Motor Transportation § 154; and Annot. 7 A.L.R. 2d 549, § 6 at page 562. The responsibility for the exercise of such duty rests as well, upon the operators of the taxi cabs.
If the jury found that defendant company were a public carrier for hire, with its concomitant duty pronounced in Chaput, the issues then become a) whether the passenger-carrier relationship had been created between plaintiff and defendants and, if so, b) whether defendants fulfilled that duty. The filfillment of defendants' duty to plaintiff involved the defendant-driver's conduct at the place he proposed to pick up his passenger, which included existing street and traffic conditions, which he actually or constructively knew, the place of stopping and whether he had reason to believe the passenger needed assistance in entering the cab. Coexisting was plaintiff's duty to herself, affected by the then recent statute on comparative negligence, 14 M.R.S.A. § 156.
In plaintiff's complaint she alleged that the defendant company had served her "for three years," that it knew that she was an elderly woman, that the taxi driver violated his duty in stopping where he did and opening the right door of his vehicle thus indicating where plaintiff was to enter, without ascertaining the safety of her route of approach and entry to the cab, and failing to dismount to assist her.
The determination of the plaintiff's status with the defendants determines the degree of care owed to her by the defendants. If the carrier-passenger relationship had not been established "the carrier owes only the same duty to such person as it does to the public generally; namely, the duty of *736 exercising reasonable care and diligence in the operation of its conveyances." 14 Am.Jur.2d Carriers § 1005.
It is realized that unlike most rail transportation facilities which have designated places for taking on and discharging passengers, and which designated places are many times owned or under control of the carrier, the taxi cab has no definite route of travel, usually no designated stopping places and the point where and when the relationship of carrier and passenger arises depends upon the circumstances. One rule, which recommends itself, was established in Sanchez v. Pacific Auto Stages et al., 116 Cal. App. 392, 2 P.2d 845 (1931 in which hearing was denied by the Supreme Court of California) where the court said at [8-12] page 847:
"The relationship of carrier and passenger arises when the passenger enters with intent to pay or pays for entrance into the vehicle or carriage. * * *. It is not necessary, in order to create the relation of carrier and passenger, that the passenger should have actually entered the vehicle. The relation is in force when one, intending in good faith to become a passenger, goes to the place designated as the site of departure at the appropriate time and the carrier takes some action indicating acceptance of the passenger as a traveler."
Our case of Murray v. Cumberland County Power and Light Company, 117 Me. 165, 103 A. 66 is cited to us in support of defendant's contention that, in facts not dissimilar to those at hand, the court held that the carrier-passenger relationship had not arisen. In Murray because of snow-banks on either side of a street car track the plaintiff "for her own convenience" was passing around the front end of the car, in so doing placed her hand and arm against the front door of the car, which door was an exit and not an entrance, and in the opening of the door to permit passengers to dismount plaintiff's arm was injured. The court said at page 167, 103 A. at page 67:
"It is therefore difficult to conceive of any occasion upon which a prospective passenger, or other person, should approach the front door of this car from the outside. But only for the approach to this door of such persons as might be expected to come to it for some legitimate purpose, can the defendant be held responsible."
This comment does not exclude the creation of the relationship before actual entry of the traveler into the conveyance.
It is essential to the creation of the passenger-carrier relationship that a contract of carriage, express or implied, be formed, and "is commonly to be implied from the attendant circumstances" 14 Am. Jur.2d, Carriers § 739. This means "an undertaking on the part of the person to travel in the conveyance provided by the carrier, and an acceptance by the carrier of the person as a passenger." Id. § 740.
Cases hold that the mere signal to a conveyance to stop at a regular stopping place does not create the relationship, Vaughn v. Healy, 120 Conn. 589, 182 A. 166 (1944) but where some response is made to the signal by the carrier, the passenger-carrier status may arise. Karr v. Milwaukee Light, Heat & Traction Co., 132 Wis. 662, 113 N.W. 62, 13 L.R.A.,N.S., 283 (1907). It was held that the relationship had arisen in Fowler v. Randle, 284 Ky. 164, 143 S.W.2d 1049 (1940) and other cases therein cited. Here plaintiff requested the transportation by telephone and reasonably the cab arrived at the time and place assigned. But for considerations discussed later, it was for the jury to determine under appropriate instructions whether a contract for carriage had been made,whether plaintiff had undertaken to travel by this cab and the defendant had accepted her as a passenger.
Should the existence of a contract for carriage have been found, the standard of *737 care fixed by Chaput, supra, applied and the place where the taxi cab stopped for plaintiff to enter, and the conduct of the driver at that point, would be measured by the Chaput imposed duty.
In cases where the carrier-passenger duty has been expressed as in Chaput, it has been held that this duty required the carrier-defendant to stop at a reasonably safe place for the passenger to enter. Fowler, supra, [1] at page 1050 (taxi cab); Publix Cab Company v. Fessler, 138 Colo. 547, 335 P.2d 865, [1-6] 867, 75 A.L.R. 2d 979 (1959, taxi cab); Herron v. Rose City Transit Company, 243 Or. 64, 411 P.2d 445, 446 (1966, motor bus);[1] Annot, re motor buses, 56 A.L.R. 2d 237, § 8(b) 252; Vasele v. Grant Street Electric Ry. Co., 16 Wash. 602, 48 P. 249, 250 (1897, trolley car); and Annot. 7 A.L.R. 2d 549, § 19 at page 589 as to public carriage generally. Schickel v. Yellow Cab Co. of Philadelphia, 369 Pa. 356, 85 A.2d 138 (1952, taxi cab) recognizes this rule, with contra result on the facts of the case.
Whether the opening of a certain door of the cab by the operator was an implied invitation or direction to the plaintiff to enter the vehicle at that place and by that opening, and whether such conduct was negligent would turn upon actual or constructive knowledge on the part of the defendant of the street conditions there existing, of which, proof is lacking. "Ordinarily, and in the absence of any special circumstance, there is no duty resting on a common carrier to assist a passenger in boarding * * * its conveyance." 14 Am. Jur.2d Carriers § 1008. Knowledge on the part of the defendant of special circumstances such as health, age or infirmity on the part of its passenger is relevant to the carrier's duty in such case and the rendering of reasonably necessary assistance, Id. § 1011, and Sullivan v. Yellow Cab Company, 212 A.2d 616, [4-8] 618 (D.C.Court of Appeals 1965). No such knowledge is traced to the defendant driver. The reason, if any, for previous assistance to the plaintiff is not disclosed.
Assuming that the jury would have been justified in finding that the passenger-carrier relationship had been created and the Chaput imposed duty thereupon came into play, plaintiff is nevertheless burdened with proof of negligence. The carrier is not an insurer of plaintiff's safety, Chaput at page 50 of 132 Me., 165 A. 573, and as stated in Schickel, supra, [2, 3] at page 139 of 85 A.2d:
"The only duty of cab drivers as to stopping on these streets is not to stop at a place where it is obviously unsafe or where a reasonably prudent person would believe that it contained manifest characteristics of potential harm under the circumstances. * * * There were no such characteristics of potential harm in the case before us. There is no testimony that the driver even knew that there was water in the gutter, and the driver had no reason to believe that he had stopped his cab in a place of danger to plaintiff."
By substituting the word "ice" for the word "water" in line eight of the quotation, the declaration could have been written for the present case. The record does not warrant the submission of defendant's alleged negligence to a jury.
Appeal denied.
DUFRESNE, J., set at argument, but did not participate in the decision.
NOTES
[1] Judgment on verdict for defendant on retrial affirmed 431 P.2d 831 (1967).
|
In the Matter of Roy E. ROTH COMPANYandUNITED FARM EQUIPMENTAND METAL WORKERS OF AMERICA, C. I. O.CaseNo.13-R-20110.-Decided January 6,19444Mr. Ben T. Reidy,of Rock Island, Ill., for the Company.Meyers & Meyers, by Mr. H. E. Baker,of Chicago, Ill., for the Union.Mr. Louis Cokin,of counsel to the Board.'DECISIONANDDIRECTION OF ELECTIONSTATEMENT OF THE CASEUpon petition duly filed by United Farm Equipment and MetalWorkers of America, C. I. 0., herein called the Union, alleging that aquestion affecting commerce had arisen concerning the representationof employees of Roy E. Roth Company, Rock Island, Illinois, hereincalled the Company, the National Labor Relations Board providedfor an appropriate hearing upon due notice before John R. Hill,Trial Examiner.Said hearing was held at Rock Island, Illinois, onNovember 29, 1943.The Company and the Union appeared at andparticipated in the hearing.'All parties, were afforded full oppor-tunity to be heard, to examine and cross-examine witnesses, and tointroduce evidence bearing on the issues.The Trial Examiner'srulings made at the hearing are free from prejudicial error and arehereby affirmed.All parties were afforded opportunity to file briefswith the Board.Upon the entire record in the case, the Board makes the following :FINDINGS OF FACTI.THE BUSINESS OF THECOMPANYRoy E. Roth Company is an Illinois corporation with its principalplace of business at Rock Island, Illinois, where it is engaged in themanufacture of machine parts.During 1942 the Company purchased'AlthoughInternationalAssociationof Machinists was servedwith Noticeof Hearing,it did notappear.54 N. L. R. B., No. 53.380 ROY E.ROTHCOMPANY381raw materials valued in excess of $50,000, over 50 percent of whichwas shipped to it from points outside the State of Illinois.During thesameperiod the Company manufactured products valued in excessof $100,000, about 37 percent of which was shipped to points outsidethe State of Illinois.The Company admits that it is engaged incommerce within the meaning of the National Labor Relations Act.H. THE ORGANIZATION INVOLVEDUnited Farm Equipment and Metal Workers of America is a labororganization affiliated with the Congress of Industrial Organizations,admitting to membership employees of the Company.III.THE QUESTION CONCERNING REPRESENTATIONOn October 12, 1943, the Union requested the Company to recog-nize it as the exclusive collective bargaining representative of theCompany's employees.The Company refused this request,A statement of the Regional Director, introduced into evidence atthe hearing, indicates that the Union represents a substantial numberof employees in the unit hereinafter found to be appropriate.2We find that a question affecting commerce has arisen concerningthe representation of employees of the Company within the meaningof Section 9 (c) and Section 2 (6) and (7) of the Act.IV. THE APPROPRIATE UNITThe Union urges that all production and maintenance, employeesof the Company, including assistant foremen, the millwright boss,inspectors, the shipping clerk, and the receiving clerk, but excludingforemen, the chief inspector, supervisory employees, office clericalemployees, -engineering staff, and guards, constitute an appropriateunit.The only controversy with respect to the unit concerns assistantforemen, the millwright boss, and the shipping clerk.The Unionwould include such employees in the unit, while the Company wouldexclude them.The Company employs three persons classified by it as assistantforemen.They have the authority to effectively recommend the hir-ing and discharging of their subordinates.We find that the assistantforemen are supervisory employees and as such we shall exclude themfrom the unit.The millwright boss is in charge of- a crew of three to four men.The millwright boss receives about 25 percent more compensation than'The Regional Director reported that the Union presented 37 applicationmembershipcards bearing apparently genuine signatures of persons whose names appear on theOctober 24, 1943, pay roll of the Company. There are approximately 107 employees inthe appropriate unit. 382DECISIONS OF NATIONAL LABOR RELATIONS BOARDhis subordinates and assigns work to various employees. In addition,he recommends the discipline of his subordinates.Under the cir-cumstances, we shall exclude the millwright boss from the unit.The shipping clerk spends between 40 and 50 percent of his timeperforming clerical duties and in addition directs and supervises thework of one or more employees.He is directly responsible to thesuperintendent for the accuracy of shipping records, the arrangementof transportation facilities, tools, and small items of raw materials.The shipping clerk also recommends the hiring of temporary em-ployees.Inasmuch as the duties of the shipping clerk are clericaland supervisory in nature, we shall exclude him from the unit.We find that all production and maintenance employees of theCompany, including inspectors and the receiving clerk, but excludingthe engineering staff, office clerical employees, guards, assistant fore-men, the millwright boss, the shipping clerk, foremen, the chief in-spector, and any other supervisory employees with authority to hire,promote, discharge, discipline, or otherwise effect changes in thestatus of employees, or effectively recommend such action, constitutea unit appropriate for the purposes of collective bargaining, withinthe meaning of Section 9 (b) of the Act:V.THE DETERMINATION OF REPRESENTATIVESWe shall direct that the question concerning representation whichhas arisen be resolved by means of an election by secret ballot amongthe employees in the appropriate unit who were employed during thepay-roll period immediately preceding the date of the Direction ofElection herein, subject to the limitations and additions set forth inthe Direction.DIRECTION OF ELECTIONBy virtue of and pursuant to the power vested in the NationalLabor Relations Board by Section 9 (c) of the National Labor Rela-tions Act, and pursuant to Article III, Section 9, of National LaborRelations Board Rules and Regulations-Series 3, it is herebyDIRECTED that, as part of the investigation to ascertain representa-tives for the purposes of collective bargaining with Roy E. RothCompany, Rock Island,Illinois, an election by secret ballot shall beconducted as early as possible,but not later than thirty(30) daysfrom the date of this Direction,under the direction and supervisionof the Regional Director for the Thirteenth Region, acting in thismatteras agent for the National Labor Relations Board,and subjectto Article III, Sections 10 and 11, of said Rules and Regulations,among the employees in the unit found appropriate in Section IV,above,who were employed during the pay-roll period immediately ROY E.ROTH COMPANY383preceding the date of this Direction, including employees who didnot work during said pay-roll period because they were ill or onvacation or temporarily laid off, and including employees in thearmed forces of the United States who present themselves in personat the polls, but excluding any who have since quit or been dischargedfor cause and have not been rehired or reinstated prior to the date ofthe election, to determine whether or not they desire to be representedby United Farm Equipment and Metal Workers of America, C. I. 0.,for the purposes of collective bargaining. |
Citation Nr: 0321901
Decision Date: 08/29/03 Archive Date: 09/04/03
DOCKET NO. 02-08 127 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Louisville,
Kentucky
THE ISSUE
Entitlement to a compensable evaluation for the service
connected bilateral hearing loss.
ATTORNEY FOR THE BOARD
Jeffrey Pisaro, Counsel
INTRODUCTION
The veteran had active service from June 1982 to June 1985.
This appeal arises from an April 2002 rating decision of the
Louisville, Kentucky Regional Office (RO).
REMAND
The veteran contends that the RO erred by failing to assign a
compensation evaluation for his service connected bilateral
hearing loss.
The Veterans Claims Assistance Act of 2000 (VCAA) is
applicable to all claims filed on or after the date of
enactment of the VCAA - November 9, 2000. 38 U.S.C.A. §§
5100, 5102, 5103, 5103A, 5106, 5107, 5126 (West 2002). The
VCAA applies to the current claim as it was filed after
November 2000. As the record reflects that the veteran has
not been informed about the VCAA relative to the claim for a
higher evaluation, (notice in this regard was only made for
the service connection claim), the Board must remand this
case to ensure that there is compliance with the notice and
duty-to-assist provisions contained in this law.
Accordingly, the veteran's claim is REMANDED for the
following:
1. The claims folder should be reviewed
to ensure that all notification and
development required by the Veterans
Claims Assistance Act of 2000 is
completed. In particular, it should be
ensured that the new notification
requirements and development procedures
found at 38 U.S.C.A. §§ 5102, 5103,
5103A, 5107 (West 2002) are satisfied to
the extent required by law. In this
regard, the veteran should receive
specific notice as to the type of
evidence necessary to substantiate his
claim and the division of
responsibilities between the veteran and
VA in obtaining that evidence. As part
of the notice required under the new
law, the veteran should be asked to
provide information regarding all
medical treatment for the disability at
issue that has not already been made
part of the record. Assistance should
be provided consistent with the
procedures set forth in 38 C.F.R.
§ 3.159 (2002). Once obtained, all
records must be permanently associated
with the claims folder.
2. When the above has been completed,
the claim should be re-adjudicated. If
any benefit sought remains denied, a
supplemental statement of the case
(SSOC) should be issued, and the veteran
should be afforded an opportunity to
respond before the case is returned to
the Board for further appellate review.
The SSOC must contain notice of all
relevant actions taken on the claim,
including a summary of the evidence and
applicable law and regulations
considered pertinent to the issue
currently on appeal, including 38
U.S.C.A. §§ 5102, 5103, 5103A, 5107
(West 2002).
Thereafter, the case should be returned to the Board for
further appellate review, if in order. By this remand, the
Board intimates no opinion as to any final outcome warranted.
No action is required of the veteran until he is notified.
The veteran has the right to submit additional evidence and
argument on the matters the Board has remanded.
Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law
requires that all claims that are remanded by the Board of
Veterans' Appeals or by the United States Court of Appeals
for Veterans Claims for additional development or other
appropriate action must be handled in an expeditious manner.
See The Veterans' Benefits Improvements Act of 1994, Pub. L.
No. 103-446, § 302, 108 Stat. 4645, 4658 (1994), 38 U.S.C.A.
§ 5101 (West 2002) (Historical and Statutory Notes). In
addition, VBA's Adjudication Procedure Manual, M21-1, Part
IV, directs expeditious handling of all cases that have been
remanded by the Board and the Court. See M21-1, Part IV,
paras. 8.44-8.45 and 38.02-38.03.
_________________________________________________
MICHAEL E. KILCOYNE
Acting 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) (2002).
|
Citation Nr: 1219618
Decision Date: 06/05/12 Archive Date: 06/13/12
DOCKET NO. 08-36 445 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Waco, Texas
THE ISSUES
1. Entitlement to service connection for erectile dysfunction, to include as secondary to prostatitis.
2. Entitlement to special monthly compensation for loss of use of a creative organ.
3. Entitlement to service connection for sinusitis.
4. Whether new and material evidence has been submitted to reopen claim of service connection for gastro esophageal reflux disorder (GERD).
5. Entitlement to service connection for GERD.
6. Whether new and material evidence has been submitted to reopen claim for service connection for prostatitis.
7. Entitlement to service connection for prostatitis.
8. Whether new and material evidence has been presented to reopen claim for service connection for cancer of the larynx, to include as secondary to GERD.
9. Entitlement to service connection for cancer of the larynx, to include as secondary to GERD.
10. Entitlement to an earlier effective date than July 22, 2010, for a 20 percent disability rating for degenerative changes of lumbar spine, L2-L3.
11. Entitlement to an initial compensable disability rating for degenerative changes of L2-L3 and greater than 20 percent from July 22, 2010.
REPRESENTATION
Appellant represented by: Disabled American Veterans
WITNESSES AT HEARING ON APPEAL
The Veteran and his wife
ATTORNEY FOR THE BOARD
Tabitha G. Macko, Associate Counsel
INTRODUCTION
The Veteran had active service from September 1982 to December 1984.
This matter came before the Board of Veterans' Appeals (Board) on appeal from decisions by the Department of Veterans Affairs (VA) Regional Office (RO) in Waco, Texas.
The Veteran and his wife testified in February 2012 before the undersigned Veterans Law Judge (VLJ), via video teleconference. The record was kept open for 30 days for the submission of additional evidence; however no additional evidence was received. A transcript from this hearing has been made and is included in the claims file.
The issues of service connection for erectile dysfunction, to include as secondary to prostatitis, sinusitis, GERD, prostatitis, and cancer of the larynx and the issue of entitlement to special monthly compensation for loss of a creative organ are addressed in the REMAND portion of the decision below and are REMANDED to the RO via the Appeals Management Center (AMC) in Washington, DC.
FINDINGS OF FACT
1. Entitlement to service connection for GERD, prostatitis, and cancer of the larynx, were most recently denied in a May 2005 rating decisions which was not appealed, nor was there new and material evidence submitted during the appeal period.
2. Evidence added to the record since the May 2005 rating decision is new, relates to an unestablished fact necessary for the claim to be granted, and raises a reasonable possibility of substantiating claims for service connection for GERD, prostatitis, and cancer of the larynx, to include as secondary to GERD.
3. The Veteran withdrew his appeal for an increased rating greater than 20 percent for degenerative changes, L2-L3, on the record at hearing in February 2012.
CONCLUSIONS OF LAW
1. The May 2005 rating decision, in which the RO denied service connection for GERD, is final. 38 U.S.C.A. § 7105(c) (West 2002), 38 C.F.R. §§ 3.104, 20.302, 20.1103 (2005); currently, 38 U.S.C.A. § 7105(c) (West 2002), 38 C.F.R. §§ 3.104, 20.302, 20.1103 (2011).
2. New and material evidence having been submitted since the May 2005 rating decision, the criteria to reopen the claim for service connection for GERD have been met. 38 U.S.C.A. § 5108 (West 2002); 38 C.F.R. § 3.156 (2011).
3. The May 2005 rating decision, in which the RO denied service connection for prostatitis, is final. 38 U.S.C.A. § 7105(c) (West 2002), 38 C.F.R. §§ 3.104, 20.302, 20.1103 (2005); currently, 38 U.S.C.A. § 7105(c) (West 2002), 38 C.F.R. §§ 3.104, 20.302, 20.1103 (2011).
4. New and material evidence having been submitted since the May 2005 rating decision, the criteria to reopen the claim for service connection for prostatitis have been met. 38 U.S.C.A. § 5108 (West 2002); 38 C.F.R. § 3.156 (2011).
5. The May 2005 rating decision, in which the RO denied service connection for cancer of the larynx, is final. 38 U.S.C.A. § 7105(c) (West 2002), 38 C.F.R. §§ 3.104, 20.302, 20.1103 (2005); currently, 38 U.S.C.A. § 7105(c) (West 2002), 38 C.F.R. §§ 3.104, 20.302, 20.1103 (2011).
6. New and material evidence having been submitted since the May 2005 rating decision, the criteria to reopen the claim for service connection for cancer of the larynx have been met. 38 U.S.C.A. § 5108 (West 2002); 38 C.F.R. § 3.156 (2011).
7. The criteria for withdrawal of a Substantive Appeal by the appellant with respect to the issue of an increased rating for degenerative changes of L2-L3 have been met. 38 U.S.C.A. § 7105(b)(2), (d)(5) (West 2002); 38 C.F.R. §§ 20.202, 20.204 (2011).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
With respect to the Veterans Claims Assistance Act of 2000 (VCAA), 38 U.S.C.A. §§ 5103, 5103A (West Supp. 2011), and the pertinent implementing regulation, 38 C.F.R. § 3.159 (2011), without deciding whether the notice and development requirements have been satisfied in the present case, the Board is not precluded from adjudicating this portion of the Veteran's claim. The Board is taking action favorable to the Veteran by reopening the claims of service connection for GERD, prostatitis, and cancer of the larynx. A decision at this point poses no risk of prejudice to him. See, e.g., Bernard v. Brown, 4 Vet. App. 384 (1993); VAOPGCPREC 16-92, 57 Fed. Reg. 49,747 (1992).
Withdrawal of Appeal
A Substantive Appeal may be withdrawn in writing at any time before the Board promulgates a decision. 38 C.F.R. § 20.202. Withdrawal may be made by the appellant or by his or her authorized representative. 38 C.F.R. § 20.204.
During the February 2012 hearing before the undersigned, and on the record, the Veteran expressed his desire to withdraw his appeal of the issue of entitlement to an increased rating greater than 20 percent for degenerative changes of L2-L3. Hence, there remain no allegations of errors of fact or law for appellate consideration with respect to this issue and it must be dismissed.
Legal Criteria - New and Material Evidence
Generally, a claim which has been denied in an unappealed RO decision may not thereafter be reopened and allowed. 38 U.S.C.A. § 7105(c) (West 2002). The exception to this rule of not reviewing the merits of a finally denied claim is 38 U.S.C.A. § 5108, which provides that if new and material evidence is presented or secured with respect to a claim which has been disallowed, the Secretary shall reopen the claim and review the former disposition of the claim.
New and material evidence means evidence not previously submitted to agency decision makers which is neither cumulative nor redundant, and which by itself or when considered with previous evidence of record, relates to an unestablished fact necessary to substantiate the claim, and which raises a reasonable possibility of substantiating the claim. 38 C.F.R. § 3.156(a) (2011).
In determining whether evidence is "new and material," the credibility of the evidence in question must be presumed. Justus v. Principi, 3 Vet. App. 510, 513 (1992).
Factual Background and Analysis
In a May 2005 rating decision, the RO denied service connection for GERD, prostatitis, and for cancer of the larynx. The May 2005 rating decision denied service connection for GERD, prostatitis, and cancer of the larynx because there were no such assessments in service, no nexus to service, and for the claim regarding prostatitis, no current assessment. The Veteran did not appeal to this decision. The Veteran also did not submit any new evidence during the one year after May 2005 that could be considered new and material and thus render the May 2005 rating decision not final. 38 C.F.R. § 3.156(b) (2011). Therefore, the May 2005 rating decision is final. 38 U.S.C.A. § 7105(c) (West 2002), 38 C.F.R.
§§ 3.104, 20.302, 20.1103 (2005); currently, 38 U.S.C.A. § 7105(c) (West 2002), 38 C.F.R. §§ 3.104 (2011), 20.302, 20.1103 (2011). The Veteran subsequently requested that his claims be reopened in June 2007.
The evidence of record at the time of the May 2005 rating decision included service treatment records and private treatment records. The private treatment records included assessments of GERD and cancer of the larynx.
The evidence received since the May 2005 rating decision includes multiple copies of an April 2007 letter from Dr. N (later copies of the same letter have different dates). This service clinician, assigned to a service hospital where the Veteran has been treated recently as a VA beneficiary, noted the Veteran was diagnosed with larynx cancer in the fall of 2004 and subsequently treated with radiation until December 2004. The service clinician listed the risk factors for cancer of the larynx as including GERD. Dr. N then noted the Veteran had an established history of GERD from his service treatment records, but not an established history of the other risk factors. Thus, this statement from Dr. N is not only evidence that the Veteran incurred GERD in service, but is evidence of a relationship between the cancer of the larynx and a disorder linked to service. The Board observes in this regard that, in Shade v. Shinseki, 24 Vet. App. 110 (2010), the Court recently held that the phrase "raises a reasonable possibility of substantiating the claim" found in the post-VCAA version of 38 C.F.R. § 3.156(a) must be viewed as "enabling" reopening of a previously denied claim rather than "precluding" it. All of the newly submitted evidence is presumed credible for the limited purpose of reopening the previously denied claim. See Justus, 3 Vet. App. at 513. Thus, the Board finds that this April 2007 statement signed by Dr. N is evidence that is new, in that it was not previously submitted, and is material, in that it bears directly and substantially on the questions before the Board, that is, whether the Veteran has GERD and cancer of the larynx that is related to service. Additionally, this evidence, by itself or in connection with evidence previously assembled, raises a reasonable possibility of substantiating the claim. Therefore the claims regarding GERD and cancer of the larynx must be reopened.
As well, the evidence received since the May 2005 rating decision includes an August 2007 private treatment report in which Dr. V indicated the Veteran had a prostatitis. Thus, this private treatment report is evidence of a current assessment of the disorder. The Board observes in this regard that, in Shade v. Shinseki, 24 Vet. App. 110 (2010), the Court recently held that the phrase "raises a reasonable possibility of substantiating the claim" found in the post-VCAA version of 38 C.F.R. § 3.156(a) must be viewed as "enabling" reopening of a previously denied claim rather than "precluding" it. All of the newly submitted evidence is presumed credible for the limited purpose of reopening the previously denied claim. See Justus, 3 Vet. App. at 513. Thus, the Board finds that the August 2007 private treatment report by Dr. V is evidence that is new, in that it was not previously submitted, and is material, in that it bears directly and substantially on the question before the Board, that is, whether the Veteran has prostatitis that is related to service. Additionally, this evidence, by itself or in connection with evidence previously assembled, raises a reasonable possibility of substantiating the claim. Therefore the claim regarding prostatitis must be reopened.
ORDER
New and material evidence having been submitted, the claim of entitlement to service connection for GERD is reopened, and to this extent the appeal is granted.
New and material evidence having been submitted, the claim of entitlement to service connection for prostatitis is reopened, and to this extent the appeal is granted.
New and material evidence having been submitted, the claim of entitlement to service connection for cancer of the larynx is reopened, and to this extent the appeal is granted.
The appeal of the claim of increased rating for degenerative changes of L2-L3 is dismissed.
REMAND
As well, the service treatment reports of record do not contain any entrance Report of Physical Examination or a separation Report of Physical Examination, though the March 2005 acknowledgement from NPRC indicated the Veteran's complete service treatment reports were mailed. References in the service treatment reports of record suggest the Veteran was administratively discharged; therefore, the RO/AMC should request the Veteran's complete personnel records, as a discharge or separation Report of Physical Examination may have been included in the discharge proceedings.
Other treatment reports may also be requested. At hearing in February 2012, the Veteran testified that he received treatment from VA for his sinusitis, and had very recently received an inhaler for this disorder. As a current diagnosis for sinusitis has been difficult to find in the record, current VA treatment reports, from September 2011 to present, in particular any that pertains to sinusitis, must be obtained and included in the records. As well, in a January 2011 VA nursing note, the Veteran reported he had been treated for a sinus infection at "SMC." No treatment report of record bears that acronym. Any private treatment report pertaining to sinusitis should be requested and included in the record.
Also at hearing, when discussing his recurring treatment for the residuals of larynx cancer, the Veteran referred to a very recent visit to Dr. Raphael Garcia, who was part of an ear, nose, and throat practice. Any such private treatment records pertaining to the cancer of the larynx and its residuals may be relevant to the Veteran's claim.
Finally, the Board finds that the Veteran should be afforded VA examinations for the digestive system and for the genitourinary system. The service treatment records contain a variety of complaints, assessments, and medical testing that pertained to the Veteran's digestive and urological systems. The Veteran has testified that he has continued to experience symptoms pertaining to erectile dysfunction, prostatitis, and GERD since service and the Veteran has contended that his current assessment of erectile dysfunction is secondary to prostatitis.
Accordingly, the case is REMANDED for the following action:
1. Request from the appropriate agency the Veteran's complete personnel file, as the service treatment reports of record do not contain either an entrance Report of Physical Examination or a separation or discharge Report of Physical Examination. Document any negative searches for the record.
2. Ask the Veteran to provide an authorization form for any medical treatment he received regarding his larynx cancer from Dr. Raphael Garcia, as he referenced in his February 2012 testimony.
Ask the Veteran to provide an authorization form for any medical treatment he has received pertaining to his sinuses or a sinus infection near the month of January 2011 from a facility referred to as SMC. The RO/AMC should thereafter obtain the identified medical evidence and associate it with the claims file.
Include in the claims file all VA treatment records dated September 2011 to present that pertain to erectile dysfunction, sinusitis, GERD, prostatitis, and larynx cancer.
If requests for any treatment records are not successful, the AMC/RO should inform the Veteran and his representative of this so that they will have an opportunity to obtain and submit the records themselves.
3. After the entrance and discharge Reports of Physical Examination have been obtained and included in the record, or otherwise accounted for, then afford the Veteran should a VA digestive systems examination to determine the nature and etiology of any GERD and larynx cancer residuals. The claims folder and a copy of this remand should be made available to the examiner for review of pertinent documents therein in connection with the examination.
a. The examiner should opine as to whether it is at least as likely as not (50 percent probability or more) that the Veteran presently has a digestive system disorder, in particular GERD or cancer of the larynx related to service or to an in-service injury.
The Board observes that service treatment reports contain various complaints by the Veteran dated from March 1983to February 1984 pertaining to his digestive and genitourinary systems. A December 1983 assessment ruled out PUD (peptic ulcer disease) and a January 1984 assessment noted the UPGI was within normal limits. The record also contains the treatment reports of Dr. Zayas dated in 1997, that include an abdominal ultrasound taken in April 1997.
The Board requests that the examiner comment upon an April 2007 letter statement, found at various points in the claims file, signed by a service physician from William Beaumont Army Medical Center in which the service physician concluded the Veteran had GERD in service and that GERD was a "risk factor" for cancer of the larynx, in addition to tobacco and alcohol use. A November 2004 radiology consultation from the El Paso Cancer Treatment Center also provides medical history for the Veteran.
The examiner is advised that the term "as likely as not" does not mean within the realm of possibility. Rather, it means that the weight of medical evidence both for and against a conclusion is so evenly divided that it is medically sound to find in favor of causation as to find against causation. More likely and as likely support the contended causal relationship; less likely weighs against the claim.
4. The Veteran should be afforded a VA genitourinary examination to determine the nature and etiology of any erectile dysfunction and prostatitis disorders. The claims folder and a copy of this remand should be made available to the examiner for review of pertinent documents therein in connection with the examination. The examiner should indicate whether or not the claims folder was reviewed.
a. The examiner should opine as to whether it is at least as likely as not (50 percent probability or more) that the Veteran presently has an erectile disorder disability or a prostatitis disorder related to service or to an in-service injury.
The Board observes that service treatment reports contain various complaints by the Veteran dated from March 1983 to February 1984 pertaining to his digestive and genitourinary systems. He sought emergency room treatment in March 1983. There appears to be a prostatitis assessment in September 1983, though on the reverse side is an October 1983 assessment that appears to question that assessment. Also in October 1983 he was referred to the urology clinic. By late October 1983, he was assessed with "physiological prostatitis secretions", which the Board requests that the examiner elaborate upon. A December 1983 assessment ruled out PUD (peptic ulcer disease) and a January 1984 assessment noted the UPGI was within normal limits. The Veteran complained about recurrent urethral discharge in February 1984. The record also contains the post-service treatment reports of Dr. Zayas dated in 1997, that include an abdominal ultrasound taken in April 1997.
b. The examiner is advised that the term "as likely as not" does not mean within the realm of possibility. Rather, it means that the weight of medical evidence both for and against a conclusion is so evenly divided that it is medically sound to find in favor of causation as to find against causation. More likely and as likely support the contended causal relationship; less likely weighs against the claim.
c. The examiner is asked to opine as to whether there is a relationship between any prostatitis and the erectile dysfunction disorders, specifically whether it is at least as likely as not (50 percent probability or more) that the prostatitis disorder has caused or aggravated the erectile dysfunction disorder.
In providing answers to the above questions, the examiner is advised that the term aggravation means a chronic worsening of the underlying condition, as opposed to a temporary flare-up of symptoms.
5. Following any other indicated development, the RO/AMC should readjudicate the claims. If any benefit is not granted, the Veteran and his representative should be furnished with a supplemental statement of the case and afforded an opportunity to respond before the file is returned to the Board for further appellate consideration.
The Veteran has the right to submit additional evidence and argument on the matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board 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. 2011).
______________________________________________
ROBERT C. SCHARNBERGER
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
220 P.3d 1015 (2009)
The PEOPLE of the State of Colorado, Plaintiff-Appellee,
v.
Edrien Renard HANCOCK, Defendant-Appellant.
No. 06CA2206.
Colorado Court of Appeals, Div. VI.
October 15, 2009.
*1016 John W. Suthers, Attorney General, Jennifer L. Ward, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
Douglas K. Wilson, Colorado State Public Defender, Stephen Arvin, Deputy State Public Defender, Denver, Colorado, for Defendant-Appellant.
Opinion by Judge LOEB.
Defendant, Edrien Renard Hancock, appeals the judgment of conviction entered on jury verdicts finding him guilty of second degree burglary and criminal mischief. We reverse and remand for a new trial.
Defendant contends the trial court committed reversible error when it denied his challenge for cause to a prospective juror, because the juror refused to hold the prosecution to its burden of proof. We agree.
I. Standard of Review and Applicable Law
A defendant in a criminal proceeding has a fundamental right to a trial by fair and impartial jurors. Nailor v. People, 200 Colo. 30, 32, 612 P.2d 79, 80 (1980); People v. Luman, 994 P.2d 432, 434 (Colo.App.1999). The right to challenge a juror for cause is an integral part of a fair trial. Carrillo v. People, 974 P.2d 478, 486 (Colo.1999).
To ensure that the right to a fair trial is protected, the trial court must excuse prejudiced or biased persons from the jury. Nailor, 200 Colo. at 32, 612 P.2d at 80; see § 16-10-103(1)(j), C.R.S.2009 (requiring court to sustain challenge for cause based on the "existence of a state of mind in the juror evincing enmity or bias toward the defendant or the state").
A trial court must grant a challenge for cause if a prospective juror is unwilling or unable to accept the basic principles of criminal law and to render a fair and impartial verdict based on the evidence admitted at trial and the court's instructions. Morrison v. People, 19 P.3d 668, 672 (Colo.2000). If the court has genuine doubt about the juror's ability to be impartial under the circumstances, it should resolve the doubt by sustaining the challenge. Id.; Luman, 994 [email protected].
Where a trial court erroneously denies a challenge for cause and the defendant exhausts his or her peremptory challenges, reversal is required without any further showing of prejudice. People v. Macrander, 828 P.2d 234, 244 (Colo.1992); People v. Merrow, 181 P.3d 319, 322 (Colo.App.2007); see Morrison, 19 P.3d at 671 (defendant who exhausts peremptory challenges is not required to have used a peremptory challenge to remove the objectionable juror in order to preserve a claim of improper denial of challenge for cause to that juror).
We review a trial court's denial of a challenge for cause for an abuse of discretion. Carrillo, 974 [email protected]. To determine whether the trial court abused its discretion, we must review the entire voir dire of the prospective juror. Id. at 486.
Reviewing courts give considerable deference to the trial court's ruling on a challenge for cause, particularly when the ruling is based on the prospective juror's credibility, demeanor, and sincerity in explaining his or her state of mind. See People v. Young, 16 P.3d 821, 824 (Colo.2001); Carrillo, 974 [email protected]. Reversals on juror challenges are thus infrequent, largely because it is recognized that, where a juror's recorded responses are unclear or ambiguous, "only the trial court can assess accurately the juror's intent from the juror's tone of voice, facial expressions, and general demeanor." Young, 16 [email protected].
However, notwithstanding the wide discretion accorded trial courts and the deferential standard of review applicable to rulings on challenges for cause, appellate courts may not abdicate their responsibility to ensure that the requirements of fairness are fulfilled. Morgan v. People, 624 P.2d 1331, 1332 (Colo.1981); Luman, 994 [email protected].
Thus, denials of challenges for cause have been reversed where prospective jurors have made statements demonstrating bias and there are no other statements in the record that would permit the reviewing court to affirm based on deference to the trial court's assessment of unclear or ambiguous responses. See People v. Gurule, 628 P.2d 99, 103 (Colo.1981)(reversal required where juror's responses "did not manifest that type of uncertainty or ambivalence that, of necessity, *1017 would have required the court to assess her credibility and general demeanor in ruling on the defendant's challenge for cause"); Morgan, 624 P.2d at 1332 (reversal required where, although juror indicated he could "go along" with principles of law regarding presumption of innocence and right to remain silent, he repeatedly indicated that he would have difficulty applying the principle that the burden of proof rests solely on the prosecution); Nailor, 200 Colo. at 31, 612 P.2d at 80 (error to deny challenge for cause where juror's "final position was that there was a serious doubt in her own mind about her ability to be fair and impartial"); Merrow, 181 P.3d at 321 (when potential juror's statements "compel the inference that he or she cannot decide crucial issues fairly, a challenge for cause must be granted in the absence of rehabilitative questioning or other counterbalancing information"); People v. Wilson, 114 P.3d 19, 22-23 (Colo.App.2004) (error to deny challenge for cause where juror stated that defendant had "a strike against him" because of his alcohol abuse); Luman, 994 P.2d at 435-36 (where juror's responses indicated that her history would make it problematic for her to be fair in case involving sexual assault on a child, and she finally agreed only reluctantly and equivocally that her empathy for the victim would not work against defendant, division could not "say that the demeanor of the juror, however compelling, could overcome the clear implications of her responses and significant concerns over her inability to be fair"); People v. Blackmer, 888 P.2d 343, 344-45 (Colo.App. 1994) (error to deny challenge for cause where juror indicated she would have difficulty applying principles of law unless she heard defendant testify); People v. Zurenko, 833 P.2d 794, 797 (Colo.App.1991)(where juror's responses to defendant's voir dire questions indicated significant bias in favor of prosecution witness, and no attempt was made thereafter to determine whether she would nevertheless be capable of rendering a verdict based on the law and evidence, reviewing court could "not assume" that juror would render an impartial verdict).
II. Voir Dire
Here, the trial court began voir dire by explaining briefly, among others, the laws regarding the presumption of innocence and the prosecution's burden of proof:
The defendant is presumed to be innocent; therefore, the prosecution has the burden of proving the charges beyond a reasonable doubt. The jury will decide whether the prosecution has proven beyond a reasonable doubt that the defendant has done the things that are contained in the Information.
After exploring the prospective jurors' qualifications for jury service, the court explained in more detail the presumption of innocence and the prosecution's burden of proof:
[E]very person charged with a crime is presumed innocent. This presumption of innocence remains with the defendant throughout the trial and should be given effect by you unless, after considering all the evidence, you are then convinced that the defendant is guilty beyond a reasonable doubt.
The burden of proof is upon the prosecution to prove to the satisfaction of the jury beyond a reasonable doubt the existence of all of the elements necessary to constitute the crime charged. . . . If you find from the evidence that each and every element has been proven beyond a reasonable doubt, you will find the defendant guilty. If you find from the evidence that the prosecution has failed to prove any one or more of the elements beyond a reasonable doubt, you will find the defendant not guilty.
During the prosecution's voir dire, several prospective jurors, including prospective juror N., were asked the general question whether they would be willing to follow the law as it was given to them by the court. Each prospective juror, including prospective juror N., responded affirmatively. The prosecutor then inquired generally whether everyone understood that the defendant was presumed innocent, and that it was the prosecutor's burden to prove each element of the alleged offenses beyond a reasonable doubt. There were no verbal responses given.
Subsequently, when defense counsel asked prospective juror N. specifically whether she thought it was defense counsel's job to "create the reasonable doubt" or whether it was the prosecutor's job to show "there is no *1018 reasonable doubt," the following exchange occurred.
PROSPECTIVE JUROR N.: Well, I think your job is to prove that your client's not guilty, and it's [the prosecutor's] job to show that there's [no] reasonable doubt.
DEFENSE COUNSEL: So you think I do have to prove something.
PROSPECTIVE JUROR N.: Absolutely.
DEFENSE COUNSEL: What if okay. So do you think that if you're not sure at the end of the trial, you're just really not sure, do you think that or say you think maybe he did something, you're still really not sure, do you think that you would have to find him guilty because I haven't proven it otherwise?
PROSPECTIVE JUROR N.: Probably.
DEFENSE COUNSEL: Okay. And if I tell you that the law says that it's [the prosecutor's] burden and I don't have a burden at all, and if she doesn't prove it to you, do you think you're still going to maybe kind of think, ["]Well, you haven't proven anything to me, he's probably guilty?["]
PROSPECTIVE JUROR N.: I don't know. Sort of on the fence.
DEFENSE COUNSEL: It's kind of what?
PROSPECTIVE JUROR N.: I'm kind of on the fence. I'd be [on] the fence.
DEFENSE COUNSEL: Do you think it's maybe wrong that the law says that the burden is entirely on the district attorney, and I could just sit there and do nothing?
PROSPECTIVE JUROR N.: I don't think your job is not to do nothing, but I think your job is to prove to us that your victim [sic] is circumstances of, you know
DEFENSE COUNSEL: Okay.
PROSPECTIVE JUROR N.: of not guilty. . . . .
DEFENSE COUNSEL: If the Judge tells you that I don't have to prove anything, that it's only the district attorney who has to prove something, do you doubt whether you can hold [the prosecutor] to that burden?
PROSPECTIVE JUROR N.: Well, I would question why you weren't representing your client.
DEFENSE COUNSEL: Okay. And any but what result does that have for [defendant]? If you think that I mean, I'd agree, I'm a bad lawyer if I don't say anything but what does that mean for [defendant] for whether he's guilty or innocent, guilty or not guilty?
PROSPECTIVE JUROR N.: There would be no evidence. It wouldn't be a balance of evidence.
DEFENSE COUNSEL: Okay. And do you think it needs to be a balance of evidence?
PROSPECTIVE JUROR N.: Absolutely.. . .
DEFENSE COUNSEL: Okay. And so correct me if I'm putting words in your mouth. Ms. [N.], I think, thinks that it's sort of a balancing of the evidence, and one side has to prove one thing and the other side has to prove one thing, that you sort of do a weighing test at the end, and we both have a[n] equal burden. Would you say that?
PROSPECTIVE JUROR N.: Absolutely.
Later, after prospective juror N. stated that she believed witnesses sometimes lie on the witness stand, she and defense counsel had the following exchange.
DEFENSE COUNSEL: . . . Ms. [N.], what happens if you come in here and you hear the district attorney's evidence and you think it's not physically possible, but you hear a few witnesses saying, I saw it. What if I can't give you a reason why they're not telling the truth? What if you think that's completely inconsistent, I think it couldn't happen? What if I can't give you a reason why? What do you think about that?
PROSPECTIVE JUROR N.: It would be hard. It would be really hard.
DEFENSE COUNSEL: Be hard to make a decision or it would be hard to hold [the prosecutor] to her burden of proof or what would be
PROSPECTIVE JUROR N.: I think it would be an inconsistency on both sides.
DEFENSE COUNSEL: Okay. And what do you think you'd do with an inconsistency on both sides?
*1019 PROSPECTIVE JUROR N.: Not be able to make a fair decision.
DEFENSE COUNSEL: You don't think you could make a fair decision then?
PROSPECTIVE JUROR N.: I wouldn't want to punish someone for something that they didn't do, or not punish them for something that they did without the evidence.
No further questions were asked of juror N. by either counsel or the trial court.
Defense counsel challenged prospective juror N. for cause, and the trial court denied the challenge without explanation. Counsel then removed prospective juror N. with a peremptory challenge and exhausted all of defendant's remaining peremptory challenges. This appeal followed.
III. Analysis
Notwithstanding the deference we must accord to a trial court's ruling on a challenge for cause, we conclude that the trial court's denial of this particular challenge cannot be upheld.
Although prospective juror N. initially told the prosecutor that she was willing to follow the law, later, when defense counsel asked her to apply the laws concerning the presumption of innocence and the prosecution's burden of proof to specific hypothetical situations, she was either unwilling or unable to do so. When asked if she would find defendant guilty if she was "really not sure," but the defense had not proved otherwise, prospective juror N. answered, "Probably." After defense counsel reminded prospective juror N. that the burden of proof was entirely on the prosecution and that the defense did not have to prove anything, prospective juror N. continued to express her belief that each side had something to prove that there needed to be "a balance of the evidence," and that each party had an "equal burden." Prospective juror N. never wavered from this position, even in her final response, where she indicated that she would not be able to make "a fair decision" if the prosecution presented conflicting evidence and the defense was unable to resolve the inconsistency.
This is not a case in which there was "rehabilitative questioning or other counter-balancing information," Merrow, 181 P.3d at 321, that would provide a basis for upholding the denial of the challenge for cause. Cf. People v. Zamora, 220 P.3d 996, 1001-02 (Colo.App. No. 08CA0219, Sept. 3, 2009). Nor did the trial court make any credibility findings or assessments of prospective juror N.'s demeanor to which we must defer. Id. at 1017.
Under these circumstances, we conclude that the trial court abused its discretion in denying defendant's challenge for cause to prospective juror N., and that defendant's conviction must therefore be reversed. See Macrander, 828 P.2d at 244; Merrow, 181 [email protected].
In so concluding, we are not persuaded by the People's reliance on People v. O'Neal, 32 P.3d 533 (Colo.App.2000), to support their argument that the trial court's ruling should be affirmed. There, a division of this court upheld the trial court's denial of a challenge for cause because nothing during the voir dire demonstrated the prospective juror would refuse to follow the court's instructions. See O'Neal, 32 [email protected]. Here, there was ample evidence that prospective juror N. was either unwilling or unable to follow the court's instructions regarding the presumption of innocence and the prosecution's burden of proof.
We are mindful of the difficulties that trial courts encounter in empanelling juries, Wilson, 114 P.3d at 24; the costs exacted by retrial in cases such as this, Merrow, 181 P.3d at 322 (Webb, J., specially concurring); and the need to strike in favor of an accused the balance between these difficulties and costs, on the one hand, and the defendant's right to an impartial jury, on the other hand. Wilson, 114 [email protected].
However, we do not perceive that some level of rehabilitative questioning or a need to make express credibility findings, where appropriate, would increase the difficulty in empanelling a jury or reduce the certainty of convictions. Indeed, the trial court here could have done at least one of three things to provide a clearer record on appeal: (1) recognize that prospective juror N. was deeply conflicted and dismiss her for cause; (2) follow-up prospective juror N.'s consistent expressions of doubt in her ability or willingness to follow the law as to the presumption *1020 of innocence and the prosecution's burden of proof with effective rehabilitative questioning prior to denying the challenge for cause; or (3) explain on the record why prospective juror N.'s clear statements of doubt in her willingness or ability to follow the law should be disregarded in favor of an earlier general and seemingly inconsistent statement. In our view, none of these options is particularly time consuming or difficult, especially when viewed in relation to a defendant's fundamental right to an impartial jury.
The judgment of conviction is reversed, and the case is remanded for a new trial.
Judge HAWTHORNE and Judge RICHMAN concur.
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14C INFORMATION Information Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934 Check the appropriate box: o Preliminary Information Statement o Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)) x Definitive Information Statement DE ACQUISITION 3, INC. (Name of Registrant as Specified In Its Charter) Payment of Filing Fee (Check the appropriate box) x No fee required. o Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: o Fee paid previously with preliminary materials. o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: 1 DE ACQUISITION 3, INC. c/o New Asia Partners LLC US Bancorp Center, Suite 2690 800 Nicollet Mall Minneapolis, MN 55402 June 17, 2011 To our stockholders: On June 6, 2011, our board of directors (the “Board”) and stockholders holding 100% of the voting power of DE Acquisition 3, Inc., a Delaware corporation (the “Company”), took the following actions pursuant to unanimous written consents in lieu of a meeting in accordance with the Delaware General Corporation Law and the Company’s bylaws: approved an amendment and restatement to our Certificate of Incorporation to, among other things: (a) decrease our authorized capital stock from 500,000,000 shares of common stock, par value $0.0001(“Common Stock”) per share and 20,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”) to 75,000,000 shares of Common Stock and 4,000,000 shares of Preferred Stock; and (b) provide the Board with the authority to amend and restate the Company’s bylaws; and (c) limit the personal liability of the Company’s directors to the Company or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director; except that any director may be liable to the extent provided by applicable law for (i) breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or(iv) for any transaction from which the director derived an improper personal benefit; and (d) provide that the Company shall indemnify, to the fullest extent permissible by Section 145 of the Delaware General Corporation Law, as amended from time to time, each person that such section grants the Company the power to indemnify; and approved an amendment and restatement of the Company’s bylaws. Enclosed you will find an information statement providing information to you regarding these corporate actions. Your vote is not required to approve the action, and the enclosed information statement is not a request for your vote or a proxy statement.This information statement is being provided only to inform you of the action that has been taken. Very truly yours, DE ACQUISITION 3, INC. By: /s/ Dennis Nguyen Dennis Nguyen President 2 INFORMATION STATEMENT OF DE ACQUISITION 3, INC. c/o New Asia Partners LLC US Bancorp Center, Suite 2690 800 Nicollet Mall Minneapolis, MN 55402 WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY This Information Statement is first being furnished on or about June 17, 2011 to the holders of record as of the close of business on June 6, 2011(the “Record Date”) of the common stock, par value $0.0001 per share (the “Common Stock”) of DE Acquisition 3, Inc., a Delaware corporation (the “Company”). The Board of Directors has approved and stockholders owning 100% of the Company’s Common Stock have approved the corporate actions described herein.Section 228 of the Delaware General Corporation Law (“DGCL”) provides that the written consent of the holders of outstanding shares of voting capital stock, having not less than the minimum number of votes which would be necessary to authorize to take such action at a meeting at which all shares entitled to vote thereon were present and voted, may be substituted for a meeting. The Company’s bylaws provide that any action that may be taken by shareholder vote may be taken pursuant to the unanimous written consent of the Company’s shareholders. As of the close of business on the Record date, we had 5,000,000 shares of Common Stock outstanding and entitled to vote on the matters acted upon in the written consent.Each share of Common Stock outstanding as of the close of business on the Record Date was entitled to one vote.On the record date, stockholders owning 100% of our Common Stock, approved the actions described herein.This Information Statement is being furnished to stockholders of record on the Record Date to provide them with certain information concerning the action in accordance with the Delaware General Corporation Law and the requirements of the Securities Exchange Act of 1934 and the regulations promulgated thereunder, including Regulation 14C. ACTION BY BOARD OF DIRECTORS AND CONSENTING STOCKHOLDERS GENERAL The Company will pay all costs associated with the distribution of this Information Statement, including the costs of printing and mailing. The Company will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending this Information Statement to the record owners of the Company’s outstanding capital stock. The Company will only deliver one Information Statement to multiple security holders sharing an address unless the Company has received contrary instructions from one or more of the security holders. Upon written or oral request, the Company will promptly deliver a separate copy of this Information Statement and any future annual reports and information statements to any security holder at a shared address to which a single copy of this Information Statement was delivered, or deliver a single copy of this Information Statement and any future annual reports and information statements to any security holder or holders sharing an address to which multiple copies are now delivered. You should direct any such requests to the following address: DE ACQUISITION 3, INC. c/o New Asia Partners LLC US Bancorp Center, Suite 2690 800 Nicollet Mall Minneapolis, MN 55402 Facsimile No: 5038197494 3 DESCRIPTION OF THE COMPANY’S CAPITAL STOCK The Company’s authorized capital consists of 500,000,000 shares of common stock, par value $0.0001 per share (the “Common Stock”) and 20,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”). As of the Record Date, the Company had 5,000,000 shares of Common Stock outstanding and zero shares of Preferred Stock outstanding. Holders of the Company’s Common Stock: (i) have equal ratable rights to dividends from funds legally available therefore, when, as and if declared by the Board of Directors (the “Board”); (ii) are entitled to share ratably in all of the Company’s assets available for distribution to stockholders upon liquidation, dissolution or winding up of the Company’s affairs; (iii) do not have preemptive, subscription or conversion rights, nor are there any redemption or sinking fund provisions applicable thereto; and (iv) are entitled to one vote per share on all matters on which stockholders may vote at all stockholder meetings. The Common Stock does not have cumulative voting rights. INFORMATION ON CONSENTING STOCKHOLDERS Section 228 of the Delaware General Corporation Law (“DGCL”) provides that the written consent of the holders of outstanding shares of voting capital stock, having not less than the minimum number of votes which would be necessary to authorize to take such action at a meeting at which all shares entitled to vote thereon were present and voted, may be substituted for a meeting. Pursuant to the Company’s bylaws, any action that may be taken by vote of the stockholders of the Company may be taken by the unanimous written consents of all of the Company’s issued and outstanding Common Stock.As of the record date, the Company had the equivalent of 5,000,000 shares of common stock (“Voting Shares”) issued and outstanding and no shares of preferred stock issued and outstanding.Five stockholders of record owning all of the Voting Shares on the Record Date, representing 100% of the issued and outstanding Common Stock of the Company, voted in favor of the actions described herein in a written consent dated June 6, 2011, attached hereto as Exhibit 1.No consideration was paid for the consent of the stockholders.The consenting stockholders’ names, affiliation with the Company and beneficial holdings are as follows: Name Affiliation Voting Shares Percentage New Asia Partners LLC (1) Stockholder % Wyncrest Capital, Inc. Stockholder % Pinnacle Investment Group, LLC Stockholder % Northland Directions, Inc. Stockholder % Robert Castle Stockholder % Total % (1)Dennis Nguyen, the Company’s sole director, President and Treasurer also serves as the Chairman of New Asia Partners LLC (“NAP”) and is the sole member of Newport Capital LLC, a limited liability company that ownsapproximately 90% of the outstanding membership interests of NAP and therefore Mr. Nguyen may be deemed to own approximately 90% of the shares of Common Stock of the Company owned by NAP.In addition, Todd Vollmers, the Company’s Vice-President and Secretary also serves as the sole member of Wildwood Capital LLC, a limited liability company that owns approximately 10% of the issued and outstanding membership interests of NAP and therefore, Mr. Vollmers may be deemed to own approximately 10% of the issued and outstanding shares of Common Stock of the Company owned by NAP. INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED UPON None. PROPOSALS BY SECURITY HOLDERS None. DISSENTERS’ RIGHT OF APPRAISAL None. CHANGE OF CONTROL On March 1, 2011, the Company experienced a change of control in connection with the consummation of the transactions contemplated by a Securities Purchase Agreement (the “Purchase Agreement”) and Repurchase Agreement (the “Repurchase Agreement”) dated as of such date. Pursuant to the terms of the Purchase Agreement the Company issued and sold an aggregate of 5,000,000 shares of Common Stock (the “Shares”) for an aggregate purchase price equal to $37,500 (the “Purchase Price”).In addition, Ruth Shepley, the Company’s sole officer, director and shareholder resigned from all positions held with the Company and Dennis Nguyen was appointed to serve as the Company’s President, Treasurer and sole director and Todd Vollmers was appointed to serve as Vice President and Secretary of the Company.The Company used the Purchase Price to repurchase an aggregate of 10,000 shares of Common Stock from Ms. Shepley, representing all of the Company’s issued and outstanding Common Stock prior to the transaction. 4 An aggregate of 4,325,000 of the Shares sold were issued to NAP for an aggregate purchase price equal to $32,437.50. Mr. Nguyen, our President, Secretary and sole Director, is the Chairman of NAP, with voting and investment control over approximately 90% of the shares of Common Stock owned by NAP and therefore may be deemed to beneficially own 3,892,500 of the NAP Shares, representing 77.85% of the issued and outstanding Common Stock of the Company as of March 1, 2011. Mr. Vollmers serves as General Counsel to NAP with voting and investment control over approximately 10% of the shares of Common Stock owned of record by NAP and therefore, may be deemed to beneficially own 432,500 of the NAP shares, representing 8.65% of the issued and outstanding shares of Common Stock of the Company. The descriptions of the Purchase Agreement and Repurchase Agreement herein are intended to be a summary only and are qualified in their entirety by the terms and conditions of the Purchase Agreement and Repurchase Agreement filed as Exhibit 10.1 and 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on March 7, 2011 and is incorporated herein by reference. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of the Record Date by (i) each named executive officer, (ii) each member of our board of directors, (iii) each person deemed to be the beneficial owner of more than 5% of our Common stock and (iv) all of our executive officers and directors as a group. Unless otherwise indicated, each person named in the following table is assumed to have sole voting power and investment power with respect to all shares of our Common Stock listed as owned by such person. The address of each person is deemed to be the address of the issuer unless otherwise noted.The percentage of Common Stock held by each listed person is based on 5,000,000shares of Common Stock issued and outstanding as of the date of this Information Statement. Pursuant to Rule 13d-3 promulgated under the Exchange Act, any securities not outstanding which are subject to warrants, rights or conversion privileges exercisable within 60 days are deemed to be outstanding for purposes of computing the percentage of outstanding securities of the class owned by such person but are not deemed to be outstanding for the purposes of computing the percentage of any other person. Shareholders Shares ofCommon Stock Percentage New Asia Partners, LLC US Bancorp Center, Suite 2690 800 Nicollet Mall Minneapolis, MN 55402 4,325,000 % Newport Capital LLC 2740 West Lake of the Isles Parkway Minneapolis, MN 55416 % Wildwood Capital LLC 2461 Wildwood Dr. Shakopee, MN 55379 % Dennis Nguyen (3) US Bancorp Center, Suite 2690 800 Nicollet Mall Minneapolis, MN 55402 % Todd Vollmers(5) US Bancorp Center, Suite 2690 800 Nicollet Mall Minneapolis, MN 55402 % Wyncrest Capital, Inc. 800 Nicollet Mall Suite 2690 Minneapolis, MN 55402 % Ronald E. Eibensteiner US Bancorp Center, Suite 2690 800 Nicollet Mall Minneapolis, MN 55402 % All Directors and Officers as a Group (2 individuals) % 5 Represents 3,892,500 of the 4,325,000 shares of common stock owned of record by New Asia Partners, LLC (“NAP”). Newport Capital LLC (“Newport Capital”) owns approximately 90% of the outstanding interests of NAP and therefore may be deemed to beneficially own 90% of the shares of Common Stock owned of record by NAP. Represents 432,500 of the 4,325,000 shares of common stock owned of record by NAP. Wildwood Capital LLC (“Wildwood Capital”) owns approximately 10% of the outstanding interests of NAP and therefore may be deemed to beneficially own 10% of the shares of Common Stock owned of record by NAP. Dennis Nguyen has served as President, Treasurer and sole Director of the Company since March 1, 2011. Represents 3,892,500 of the 4,325,000 shares of common stock owned of record by NAP and beneficially by Newport Capital. Mr. Nguyen is the Chairman of NAP and has investment and voting control over any securities of the Company beneficially owned by Newport Capital, therefore, Mr. Nguyen may be deemed to beneficially own the securities of the Company owned of record by NAP and beneficially by Newport Capital. Mr. Vollmers has served as Vice President and Corporate Secretary of the Company since March 1, 2011. Represents 432,500 of the 4,325,000 shares of common stock owned of record by NAP and beneficially by Wildwood Capital. Mr. Vollmers is the General Counsel to NAP and has investment and voting power over 10% of the shares of common stock owned by NAP. Therefore, Mr. Vollmers may be deemed to beneficially own 432,500 of the shares owned by NAP, representing 8.65% of the shares of the Company. Represents the shares of Common Stock owned of record by Wyncrest Capital, Inc. (“Wyncrest”).Mr. Eibensteiner is the President and CEO of Wyncrest, owns 100% of the outstanding common stock of Wyncrest and has sole voting and investment control over the shares of Common Stock owned of record by Wyncrest and therefore may be deemed to beneficially own the shares of Common Stock of the Company owned of record by Wyncrest. NOTICE TO STOCKHOLDERS OF ACTION APPROVED BY CONSENTING STOCKHOLDERS Pursuant to Section 228 of the DGCL, we are required to provide notice of taking a corporate action by written consent to the Company’s stockholders who have not consented in writing to such action. This Information Statement serves as the notice required by Section 228.The Board and all of the Corporation’s stockholders have approved resolutions giving the Board discretionary authority, at any time during the next twelve months or prior to the next annual meeting ofstockholders, whichever occurs first, to: (1) amend and restate the Company’s Articles of Incorporation to, among other things: (a) decrease the authorized capital stock of the Company to 75,000,000 shares of Common Stock and 4,000,000 shares of Preferred Stock (“Authorized Capital Change”); and (b) provide the Board with the authority to adopt, amend or repeal the Company’s bylaws; and (c) limit the personal liability of the Company’s directors to the Company or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director; except that any director may be liable to the extent provided by applicable law for (i) breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or(iv) for any transaction from which the director derived an improper personal benefit; and (d) provide that the Company shall indemnify, to the fullest extent permissible by Section 145 of the Delaware General Corporation Law, as amended from time to time, each person that such section grants the Company the power to indemnify. (2)amend and restate the Company’s bylaws (“Bylaws Amendment”). The amendments to the Certificate of Incorporation and bylaws identified above will be referred to in this Information Statement as the “Amended and Restated Certificate” and “Amended and Restated Bylaws”, respectively. The proposed form of the Amended and Restated Certificate and Amended and Restated Bylaws are attached to this Information Statement as Exhibit A and Exhibit B to the shareholder resolutions approving the Amended and Restated Certificate and Amended and Restated Bylaws, which resolutions are attached to this Information Statement as Exhibit 1.The Amended and Restated Certificate will become effective on the date that the Amended and Restated Certificate is filed with the Secretary of State of Delaware, which date shall be selected by the Company and shall be no earlier than 20 days after the mailing of this Information Statement, as required pursuant to Federal securities laws.The Amended and Restated Bylaws will automatically be effective on the date that is 20 days from the date of the filing and mailing of this Information Statement. The Board reserves the right to forego or postpone filing the Amended and Restated Certificate and effecting the Amended and Restated Bylaws if such actions are not determined to be in the best interests of the Company and its stockholders anytime prior to the filing of the Amended and Restated Certificate with the State of Delaware or the effectiveness of the Amended and Restated Bylaws. 6 ACTION 1 AMENDED AND RESTATED CERTIFICATE The Board believes it is in the Company’s best interest to amend and restate its Certificate of Incorporation for the purposes of effecting the changes described herein. Authorized Capital Change The Authorized Capital Change shall automatically be effected upon filing the Amended and Restated Certificate with the Secretary of State of Delaware, the Company’s authorized capital will be reduced from 520,000,000 shares to 79,000,000 shares, divided 75,000,000 common shares, par value $0.0001 per share (“Common Stock”) and 4,000,000 preferred shares, par value $0.0001 (“Preferred Stock”) per share. The authorized but unissued shares of capital stock will be available for issuance from time to time as may be deemed advisable by the Board of Directors for various purposes including, but not limited to, the issuance of Common Stock or Preferred Stock in connection with the exercise of outstanding warrants or other convertible or derivative securities that may be issued by the Company, the issuance of Common Stock or Preferred Stock in financing or acquisition transactions and the issuance of Common Stock or Preferred Stock to consultants, contractors or employees. The decrease in the authorized shares of our capital stock will not have any immediate effect on the rights of existing stockholders, however, the Company’s Board will be able to authorize the issuance of Common Stock and/or Preferred Stock for these transactions without the necessity, and related costs and delays, of either calling a special stockholders’ meeting or waiting for the regularly scheduled annual meeting of stockholders in order to increase the authorized capital. Board Authority to Adopt, Amend or Repeal the Company’s Bylaws The Amended and Restated Certificate provides the Company with the authority to adopt, amend or repeal the Company’s Bylaws without requiring a shareholder vote.The Company’s Bylaws currently provide that its bylaws may only be amended by a vote of no less than a majority of the issued and outstanding shares of Common Stock of the Company.The Company believes that granting the Board with the authority to adopt, amend or repeal its Bylaws without the need to obtain shareholder approval will result in greater flexibility, less expense in permitting the Company to complete and carry out certain corporate actions in a more timely and efficient manner with board approval, where shareholder approval is not required by the Delaware General Corporation Law or other State and Federal securities laws.The Company believes that a potential target company may be dissuaded from entering into a business combination with us if such costly and time consuming actions cannot be avoided. While the Board currently does not intend to amend the Company’s bylaws in anyway that will have any immediate effect on the rights of existing stockholders, the Board will now have the authority to amend its bylaws in ways that may effect the rights of its stockholders without obtaining the approval of its stockholders unless such approval is otherwise required by the Delaware General Corporation Law. Limited Director Personal Liability and Indemnification The Amended and Restated Certificate limits the personal liability of the Company’s directors to the Company or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director; except that any director may be liable to the extent provided by applicable law for (i) breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or(iv) for any transaction from which the director derived an improper personal benefit. In addition, the Amended and Restated Certificate provides that the Company shall indemnify, to the fullest extent permissible by Section 145 of the Delaware General Corporation Law, as amended from time to time, each person that such section grants the Company the power to indemnify. The Company believes the addition of such director and officer protections are beneficial to the Company in seeking a potential target Company and completing a business combination transaction. 7 Action 2 AMENDED AND RESTATED BYLAWS The Board believes it is in the Company’s best interest to amend and restate its Bylaws primarily for the purposes of effecting the changes described below. The Company is authorized to amend its bylaws with the consent of the holders of a majority of the Company’s voting power.The Company’s bylaws permit any action required to be approved by the Company’s stockholders to be taken with the unanimous written consent of all of the holders of the Company’s issued and outstanding capital stock. As of the Record Date there were 5 record holders of 5,000,000 shares of Common Stock issued and outstanding.The Company believes that the amendment and restatement to the Company’s bylaws, in substantially the form attached as Exhibit B to the resolutions attached as Exhibit 1 to this Information Statement will result in greater flexibility in permitting management to complete and carry out certain corporate actions with board approval and without the need to seek shareholder approval, where such approval is not required by the Delaware General Corporation Law, the Company’s Certificate of Incorporation, Bylaws or other State and Federal securities laws.An advantage to the adoption of the amended and restated bylaws is that time and expense associated with seeking shareholder approval by a public reporting company that results from the need to prepare and file a proxy statement prior to carrying out certain corporate actions can be avoided. The board and its current shareholders believe that it is beneficial to the Company to be able to avoid such fees and expenses, and accomplish certain corporation actions quickly and efficiently, in that a potential target company may be dissuaded from entering into a business combination with us if such costly and time consuming actions cannot be avoided.A disadvantage resulting from the adoption of the amended and restated bylaws is that the board of directors will now have the authority and flexibility of carrying out certain corporate actions without seeking stockholder approval, even if such actions may be considered undesirable by the stockholder. AVAILABLE INFORMATION For more detailed information regarding the Company, including financial statements, you may refer to our most recent Form 10-K for the period ended February 28, 2011 and all amendment thereto, as well as our recent quarterly and periodic filings with the Securities and Exchange Commission ("SEC"). This information may be found free of charge on the SEC's EDGAR database at http://www.sec.gov. 8 EXHIBIT 1 UNANIMOUS WRITTEN CONSENT OF THE STOCKHOLDERS OF DE ACQUISITION 3, INC. a Delaware corporation IN LIEU OF A SPECIAL MEETING OF SHAREHOLDERS The undersigned, constituting the holders of one hundred percent (100%) of the outstanding common stock, $0.0001 par value per share (the “Common Stock”) of DE Acquisition 3, Inc., a Delaware corporation (the “Corporation”), acting pursuant to the authority granted by the Delaware General Corporation Law and the Bylaws of the Corporation, do hereby adopt the following resolutions by written consent as of June 6, 2011: APPROVAL OF AN AMENDMENT AND RESTATEMENT OF THE CERTIFICATE OF INCORPORATION AND BYLAWS WHEREAS, the Board of Directors of the Corporation (the “Board”) has considered and unanimously approved a change in the authorized capital stock of the Corporation, so that the Corporation shall have 75 million shares of Common Stock and 4 million shares of preferred stock of the Corporation, par value $0.0001, which change in authorized capital shall be effected, as the Board deems prudent and advisable, at any time during the next twelve months or prior to the next Annual Meeting of Stockholders, whichever comes first (“Authorized Capital Change”); and WHEREAS, the Board has considered and unanimously approved the proposed Certificate of Amendment to the Certificate of Incorporation substantially in the form attached hereto as Exhibit A (the “Certificate Amendment”); and WHEREAS, the Board has considered and unanimously approved the proposed amended and restated bylaws substantially in the form attached hereto as Exhibit B (the “Amended Bylaws”); and WHEREAS, the Board has determined that approval of the Authorized Capital Change, the form of Amended Bylaws and the form of Certificate Amendment are advisable and in the best interests of the Corporation and its stockholders and has asked the undersigned, as the holders of all of the Corporation’s common stock, to approve the Certificate Amendment and the Amended Bylaws. NOW, THEREFORE, BE IT VOTED BY THE UNDERSIGNED, that the Certificate Amendment, the Authorized Capital Change and the Amended Bylaws are hereby ratified, adopted and approved by the undersigned and the undersigned further affirms, ratifies and approves the filing of the Certificate Amendment and adoption of the Amended Bylaws at any time during the next twelve months or prior to the next Annual Meeting of Stockholders, whichever comes first. This Written Consent shall be added to the corporate records of the Corporation and made a part thereof, and the votes set forth below shall have the same force and effect as if adopted at a meeting duly noticed and held. This Written Consent may be executed in counterparts and with facsimile signatures with the effect as if all parties hereto had executed the same document.All counterparts shall be construed together and shall constitute a single Written Consent as of the date of the final signature hereto. This Written Consent may be revoked by the undersigned at any time prior to the time upon which written consents of the number of shares required to authorize the above proposed actions have been filed with the Secretary of the Corporation. 9 STOCKHOLDERS: NEW ASIA PARTNERS, LLC By: /s/Dennis Nguyen Dennis Nguyen, Chairman No. of Shares:4,325,000 PINNACLE INVESTMENT GROUP, LLC By: /s/Jeffrey Peterson Jeffrey Peterson, Managing Partner No. of Shares:125,000 WYNCREST CAPITAL, INC. By: /s/Ronald E. Eibensteiner Ronald E. Eibensteiner,President No. of Shares: 500,000 NORTHLAND DIRECTIONS, INC. By: /s/Thomas Bartzan Thomas Bartzan, Executive Vice President No. of Shares: 37,500 ROBERT CASTLE By: Robert Castle No. of Shares: 12,5000 10 EXHIBIT A TO SHAREHOLDER RESOLUTIONS STATE OF DELAWARE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF DE ACQUISITION 3, INC. The undersigned being the President of DE Acquisition 3, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (“DGCL”), does hereby certify: FIRST: This Amended and Restated Certificate of Incorporation of the Corporation herein, was duly adopted, pursuant to the provisions of Section 242 of the DGCL and the Corporation’s bylaws, by the unanimous written consent of the sole director of the Corporation and shareholders holding 100% of the issued and outstanding shares of the Corporation’s common stock. SECOND: Theregistered office in the State of Delaware is to be located at 160 Greentree Drive, Suite 101, in the City of Dover, County of Kent, Zip Code 19904.The registered agent in charge thereof is National Registered Agents, Inc. THIRD: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware (the "DGCL"). FOURTH: The Corporation is to have perpetual existence. FIFTH: The total number of shares of capital stock the Corporation shall have authority to issue is: seventy-nine million (79,000,000).These shares shall be divided into two classes with seventy-five million (75,000,000) shares designated as common stock at, $0.0001 par value (the “Common Stock”) and four million (4,000,000) shares designated as preferred stock at $0.0001 par value (“Preferred Stock”). Holders of shares of Common Stock shall be entitled to cast one vote for each share held at all stockholders' meetings for all purposes, including the election of directors.The Common Stock does not have cumulative voting rights. The Preferred Stock of the Corporation shall be issued by the Board of Directors of the Corporation in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors of the Corporation may determine, from time to time. SIXTH: The Board of Directors shall have the power to adopt, amend or repeal the by-laws of the Corporation. SEVENTH: No director shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law, (i) for breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL hereafter is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended DGCL. No amendment to or repeal of this Article 7 shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment. EIGHTH: The Corporation shall indemnify, to the fullest extent permitted by Section 145 of the DGCL, as amended from time to time, each person that such section grants the Corporation the power to indemnify. NINTH: The name and mailing address of the incorporator is as follows: Name: Ruth Shepley Mailing Address: 6, Suite 619 Spring, Texas Zip Code: IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed this th day of June, 2011. Authorized Officer 11 EXHIBIT B TO SHAREHOLDER RESOLUTIONS AMENDED AND RESTATED BYLAWS OF DE ACQUISITION 3, INC. June 6, 2011 ARTICLE I STOCKHOLDERS Section 1.Certificates Representing Stock.(a) Certificates representing stock in the corporation shall be signed by, or in the name of, the corporation by the Chairman or Vice-Chairman of the Board of Directors, if any, or by the President or a Vice-President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the corporation.Any or all the signatures on any such certificate may be a facsimile.In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue. (b)Whenever the corporation shall be authorized to issue more than one class of stock or more than one series of any class of stock, and whenever the corporation shall issue any shares of its stock as partly paid stock, the certificates representing shares of any such class or series or of any such partly paid stock shall set forth thereon the statements prescribed by the General Corporation Law.Any restrictions on the transfer or registration of transfer of any shares of stock of any class or series shall be noted conspicuously on the certificate representing such shares. (c)The corporation may issue a new certificate of stock or uncertificated shares in place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Board of Directors may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the Corporation a bond sufficient to indemnify the corporation against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate or uncertificated shares. Section 2.Uncertificated Shares.Subject to any conditions imposed by the General Corporation Law, the Board of Directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of the stock of the corporation shall be uncertificated shares.Within a reasonable time after the issuance or transfer of any uncertificated shares, the corporation shall send to the registered owner thereof any written notice prescribed by the General Corporation Law. Section 3. Fractional Share Interests.The corporation may, but shall not be required to, issue fractions of a share.If the Corporation does not issue fractions of a share, it shall (1) arrange for the disposition of fractional interests by those entitled thereto, (2) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined, or (3) issue scrip or warrants in registered form (either represented by a certificate or uncertificated) or bearer form (represented by a certificate) which shall entitle the holder to receive a full share upon the surrender of such scrip or warrants aggregating a full share.A certificate for a fractional share or an uncertificated fractional share shall, but scrip or warrants shall not unless otherwise provided therein, entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the Corporation in the event of liquidation.The Board of Directors may cause scrip or warrants to be issued subject to the conditions that they shall become void if not exchanged for certificates representing the full shares or uncertificated full shares before a specified date, or subject to the conditions that the shares for which scrip or warrants are exchangeable may be sold by the corporation and the proceeds thereof distributed to the holders of scrip or warrants, or subject to any other conditions which the Board of Directors may impose. Section 4. Stock Transfers.Upon compliance with provisions restricting the transfer or registration of transfer of shares of stock, if any, transfers or registration of transfers of shares of stock of the corporation shall be made only on the stock ledger of the corporation by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation or with a transfer agent or a registrar, if any, and, in the case of shares represented by certificates, on surrender of the certificate or certificates for such shares of stock properly endorsed and the payment of all taxes due thereon. 12 Section 5. Record Date For Stockholders.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting.If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors.If no record date has been fixed by the Board of Directors, the record date for determining the stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by the General Corporation Law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meeting of stockholders are recorded.Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested.If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the General Corporation Law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion, or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action.If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. Section 6.Meaning of Certain Terms.As used herein in respect of the right to notice of a meeting of stockholders or a waiver thereof or to participate or vote thereat or to consent or dissent in writing in lieu of meeting, as the case may be, the term "share" or "shares" or "share of stock" or "shares of stock" or "stockholder" or "stockholders" refers to an outstanding share or shares of stock and to a holder or holders of record of outstanding shares of stock when the corporation is authorized to issue only one class of shares of stock, and said reference is also intended to include any outstanding share or shares of stock and any holder or holders of record of outstanding shares of stock of any class upon which or upon whom the certificate of incorporation confers such rights where there are two or more classes or series of shares of stock or upon which or upon whom the General Corporation Law confers such rights notwithstanding that the certificate of incorporation may provide for more than one class or series of shares of stock, one or more of which are limited or denied such rights thereunder; provided, however, that no such right shall vest in the event of an increase or a decrease in the authorized number of shares of stock of any class or series which is otherwise denied voting rights under the provisions of the certificate of incorporation, except as any provision of law may otherwise require. Section 7.Stockholder Meetings. -Time.The annual meeting shall be held on the date and at the time fixed, from time to time, by the directors, provided that the first annual meeting shall be held on a date within thirteen months after the organization of the corporation, and each successive annual meeting shall be held on a date within thirteen months after the date of the preceding annual meeting.A special meeting shall be held on the date and at the time fixed by the directors. -Place.Annual meetings and special meetings shall be held at such place, within or without the State of Delaware, as the directors may, from time to time, fix.Whenever the directors shall fail to fix such place, the meeting shall be held at the registered office of the corporation in the State of Delaware. -Call.Annual meetings and special meetings may be called by the directors or by any officer instructed by the directors to call the meeting. 13 -Notice or Waiver of Notice.Written notice of all meetings shall be given, stating the place, date, hour of the meeting and stating the place within the city or other municipality or community at which the list of stockholders of the corporation may be examined.The notice of an annual meeting shall state that the meeting is called for the election of directors and for the transaction of other business which may properly come before the meeting, and shall (if any other action which could be taken at a special meeting is to be taken at such annual meeting) state the purpose or purposes.The notice of a special meeting shall in all instances state the purpose or purposes for which the meeting is called.The notice of any meeting shall also include, or be accompanied by, any additional statements, information, or documents prescribed by the General Corporation Law.Except as otherwise provided by the General Corporation Law, a copy of the notice of any meeting shall be given, personally or by mail, not less than ten days nor more than sixty days before the date of the meeting, unless the lapse of the prescribed period of time shall have been waived, and directed to each stockholder at his record address or at such other address which he may have furnished by request in writing to the Secretary of the corporation.Notice by mail shall be deemed to be given when deposited, with postage thereon prepaid, in the United States Mail.If a meeting is adjourned to another time, not more than thirty days hence, and/or place is made at the meeting, it shall not be necessary to give notice of the adjourned meeting unless the directors, after adjournment, fix a new record date for the adjourned meeting.Notice need not be given to any stockholder who submits a written waiver of notice signed by him before or after the time stated therein.Attendance of a stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.Neither the business to be transacted at, not the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice. -Stockholder List.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city or other municipality or community where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held.The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this section or the books of the corporation, or to vote at any meeting of stockholders. -Conduct of Meeting.Meetings of the stockholders shall be presided over by one of the following officers in the order of seniority and if present and acting-the Chairman of the Board, if any, the Vice-Chairman of the Board, if any, the President, a Vice-President, or, if none of the foregoing is in office and present and acting, by a chairman to be chosen by the stockholders.The Secretary of the corporation, or in his absence, an Assistant Secretary, shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present the Chairman of the meeting shall appoint a secretary of the meeting. -Proxy Representation.Every stockholder may authorize another person or persons to act for him by proxy in all matters in which a stockholder is entitled to participate, whether by waiving notice of any meeting, voting or participating at a meeting, or expressing consent or dissent without a meeting.Every proxy must be signed by the stockholder or by his attorney-in-fact.No proxy shall be voted or acted upon after three years from its date unless such proxy provides for a longer period.A duly executed proxy shall be irrevocable if it states that is irrevocable and, if, and only as long as it is coupled with an interest sufficient in law to support an irrevocable power.A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. -Inspectors.The directors, in advance of any meeting, may, but need not, appoint one or more inspectors of election to act at the meeting or any adjournment thereof.If any inspector or inspectors are not appointed, the person presiding at the meeting may, but need not appoint one or more inspectors.In case any person who may be appointed as an inspector fails to appear or act, the vacancy may be filled by appointment made by the directors in advance of the meeting or at the meeting by the person presiding thereat.Each inspector, if any, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspectors at such meeting with strict impartiality and according to the best of his ability.The inspectors, if any, shall determine the number of shares of stock outstanding and the voting power of each, the shares of stock represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots, or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots, or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the person presiding at the meeting, the inspector or inspectors, if any, shall make a report in writing of any challenge, question, or matter determined by him or them and execute a certificate of any fact found by him or them.Except as otherwise required by subsection (e) of Section 231 of the General Corporation Law, the provisions of that Section shall not apply to the corporation. 14 -Quorum.The holders of a majority of the outstanding shares of stock shall constitute a quorum at a meeting of stockholders for the transaction of any business.The stockholders presents may adjourn the meeting despite the absence of a quorum. -Voting.Each share of stock shall entitle the holder thereof to one vote.Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.Any other action shall be authorized by a majority of the votes cast except where the General Corporation Law prescribes a different percentage of votes and/or a different exercise of voting power, and except as may be otherwise prescribed by the provisions of the certificate of incorporation and these Bylaws.In the election of directors, and for any other action, voting need not be by ballot. Section 8.Stockholder Action Without Meetings.Any action required by the General Corporation Law to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.Action taken pursuant to this paragraph shall be subject to the provisions of Section 228 of the General Corporation Law. ARTICLE II DIRECTORS Section 1. Functions and Definition.The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors of the corporation.The Board of Directors shall have the authority to fix the compensation of the members thereof.The use of the phrase "whole board" herein refers to the total number of directors which the corporation would have if there were no vacancies. Section 2.Qualifications and Number.A director need not be a stockholder, a citizen of the United States, or a resident of the State of Delaware.The initial Board of Directors shall consist of one (1) person.Thereafter, the number of directors may be increased or decreased from time to time by action of the stockholders or of the directors, or, if the number is not fixed, the number shall be one (1). Section 3.Election and Term.The first Board of Directors, unless the members thereof shall have been named in the certificate of incorporation, shall be elected by the incorporator or incorporators and shall hold office until first annual meeting of stockholders and until their successors are elected and qualified or until their earlier resignation or removal.Any director may resign at any time upon written notice to the corporation.Thereafter, directors who are elected at an annual meeting of stockholders, and directors who are elected in the interim to fill vacancies and newly created directorships, shall hold office until the next annual meeting resignation or removal.Except as the General Corporation Law may otherwise require, in the interim between annual meetings of stockholders or of special meetings of stockholders called for the election of directors and/or for the removal of one or more directors and for the filling of any vacancy in that connection, newly created directorships and any vacancies in the Board of Directors, including unfilled vacancies resulting from the removal of directors for cause or without cause, may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum, or by the sole remaining director. Section 4.Meetings. -Time.Meetings shall be held at such time as the Board shall fix, except that the first meeting of a newly elected Board shall be held as soon after its election as the directors may conveniently assemble. -Place.Meetings shall be held at such place within or without the State of Delaware as shall be fixed by the Board. 15 -Call.No call shall be required for regular meetings for which the time and place have been fixed.Special meetings may be called by or at the direction of the Chairman of the Board, if any, the Vice-Chairman of the Board, if any, of the President, or of a majority of the directors in office. -Notice or Actual or Constructive Waiver.No notice shall be required for regular meetings for which the time and place have been fixed.Written, oral, or any other mode of notice of the time and place shall be given for special meetings in sufficient time for the convenient assembly of the directors thereat.Notice need not be given to any director or to any member of a committee of directors who submits a written waiver of notice signed by him before or after the time stated therein.Attendance of any such person at a meeting shall constitute a waiver of notice of such meeting, except when he attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors need be specified in any written waiver of notice. -Quorum and Action.A majority of the whole Board shall constitute a quorum except when a vacancy or vacancies prevents such majority, whereupon a majority of the directors in office shall constitute a quorum, provided, that such majority shall constitute at least one-third of the whole Board.A majority of the directors present, whether or not a quorum is present, may adjourn a meeting to another time and place.Except as herein otherwise provided, and except as otherwise provided by the General Corporation Law, the vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board.The quorum and voting provisions herein stated shall not be construed as conflicting with any provisions of the General Corporation Law and these Bylaws which govern a meeting of the directors held to fill vacancies and newly created directorships in the Board or action of disinterested directors. Any member or members of the Board of Directors or of any committee designated by the Board, may participate in a meeting of the Board, or any such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. -Chairman of the Meeting.The Chairman of the Board, if any and if present and acting, shall preside at all meetings.Otherwise, the Vice-Chairman of the Board, if any and if present and acting, or the President, if present and acting, or any other director chosen by the Board, shall preside. Section 5. Removal of Directors.Except as may otherwise be provided by the General Corporation Law, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Section 6. Committees.The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the corporation.The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.In the absence or disqualification of any member of any such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the corporation with the exception of any authority the delegation of which is prohibited by Section 141 of the General Corporation Law, and may authorize the seal of the corporation to be affixed to all papers which may require it. Section 7.Written Action.Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Section 8.Board of Advisors.The Board of Directors, in its discretion, may establish a Board of Advisors, consisting of individuals who may or may not be stockholders or directors of the Corporation. The purpose of the Board of Advisors would be to advise the officers and directors of the Corporation with respect to such matters as such officers and directors shall choose, and any other matters which the members of such Board of Advisors deem appropriate in furtherance of the best interest of the Corporation.The Board of Advisors shall meet on such basis as the members thereof may determine.The Board of Directors may eliminate the Board of Advisors at any time.No member of the Board of Advisors, nor the Board of Advisors itself, shall have any authority of the Board of Directors or any decision-making power and shall be merely advisory in nature. Unless the Board of Directors determines another method of appointment, the President shall recommend possible members of the Board of Advisors to the Board of Directors, who shall approve such appointments or reject them. 16 ARTICLE III OFFICERS The officers of the corporation shall consist of a President and a Secretary, and, if deemed necessary, expedient, or desirable by the Board of Directors, a Treasurer, a Chairman of the Board, a Vice-Chairman of the Board, an Executive Vice- President, one or more other Vice-Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers with such title as the resolution of the Board of Directors choosing them shall designate. Except as may otherwise be provided in the resolution of the Board of Directors choosing him, no officer other than the Chairman or Vice-Chairman of the Board, if any, need be a director.Any number of offices may be held by the same person, as the directors may determine. Unless otherwise provided in the resolution choosing him, each officer shall be chosen for a term which shall continue until the meeting of the Board of Directors following the next annual meeting of stockholders and until his successor shall have been chosen and qualified. All officers of the corporation shall have such authority and perform such duties in the management and operation of the corporation as shall be prescribed in the resolutions of the Board of Directors designating and choosing such officers and prescribing their authority and duties, and shall have such additional authority and duties as are incident to their office except to the extent that such resolutions may be inconsistent therewith.The Secretary or an Assistant Secretary of the corporation shall record all of the proceedings of all meetings and actions in writing of stockholders, directors, and committees of directors, and shall exercise such additional authority and perform such additional duties as the Board shall assign to him.Any officer may be removed, with or without cause, by the Board of Directors.Any vacancy in any office may be filled by the Board of Directors. ARTICLE IV CORPORATE SEAL The corporate seal shall be in such form as the Board of Directors shall prescribe. ARTICLE V FISCAL YEAR The fiscal year of the corporation shall be fixed, and shall be subject to change, by the Board of Directors. ARTICLE VI AMENDMENT These Bylaws may be adopted, amended or repealed at any time by the unanimous written consent of the Board of Directors. 17
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382 F.3d 313
Sandra BARKER, Petitioner,v.John ASHCROFT, Attorney General of the United States, Respondent.
No. 02-3927.
United States Court of Appeals, Third Circuit.
Submitted Under Third Circuit LAR 34.1(a) December 16, 2003.
Decided December 24, 2003.
Alan M. Strauss, Law Office of Stanley H. Wallenstein, New York, NY, for Petitioner.
David V. Bernal, William C. Minick, Anthony C. Payne, United States Department of Justice, Washington, DC, for Respondent.
Before ROTH, MCKEE, and ROSENN, Circuit Judges.
OPINION OF THE COURT
ROSENN, Circuit Judge.
1
The petitioner-appellant, Sandra Barker, appeals from a final order by the Board of Immigration Appeals ("Board") denying her motion to reopen her deportation proceedings. The Board denied Barker's motion to reopen its decision, dismissing her appeal from an immigration court's order of deportation, because of her failure to depart voluntarily from this country as ordered. We affirm.
I.
2
Barker, a native and citizen of Jamaica, entered the United States on January 1, 1989, with a fiance visa, with permission to remain in this country until April 14, 1989. She did not marry her fiance and remained in the United States longer than permitted. On June 26, 1996, the Immigration and Naturalization Service (INS), the predecessor to the Bureau of Citizenship and Immigration Services, commenced deportation proceedings against her with the filing of an Order to Show Cause why she should not be deported.
3
Barker appeared before an immigration judge (IJ) in September 1996. She admitted the allegations contained in the Order to Show Cause. Based on the admissions, the IJ found her deportable as charged. She requested relief and protection from deportation in the form of political asylum, withholding of deportation, and suspension of deportation. In the alternative, she sought the privilege of voluntary departure.
4
Barker offered testimony and documentary evidence in support of her applications for relief and protection from deportation. She sought asylum and withholding of deportation based on her claim of having been persecuted, and having a fear of persecution, in Jamaica on account of her political opinion and her family's alleged involvement with the Jamaica National Party. She sought suspension of deportation based on a claim of extreme hardship if deported from the United States.
5
Upon a hearing, the IJ denied Barker's application for asylum in all of its aspects. The IJ, however, granted Barker's alternative request for voluntary departure until October 4, 1997. In granting voluntary departure, the immigration judge informed Barker orally:
6
I have granted you voluntary departure for a period of six months. If you do not appeal your case, or if you appeal your case and lose, then you will have to leave the United States. Okay. It may be possible to get more time beyond October 4th, but you would have to ask the Immigration Service for that not me, I have no authority to extend that time.... If you remain beyond the departure date without a very good excuse, for example, if you get seriously sick or injured, then there will be penalties, you'll be ordered deported back to Jamaica and you'll also lose the right to apply for certain kinds of important immigration benefits for a period of five years. I'm giving you forms in English and in Spanish, that describes those penalties and I'm also giving you a copy of the order that I'm entering today denying the asylum and withholding, and suspension and granting you voluntary departure for six months. Ms. Barker, do you have any questions?
7
As noted by the IJ, he provided Barker with written notice of the limitations on discretionary relief if she failed to depart voluntarily by October 4, 1997.
8
Written notice was provided to Barker in English and Spanish and that "[o]ral notice of the contents of this notice was given to the alien in his/her native language, or in a language he/she understands."
9
Barker appealed the IJ's decision to the Board. The Board dismissed the appeal on October 29, 2001. The Board's dismissal decision, however, "permitted [Barker] to depart from the United States voluntarily within 30 days from the [date of the Board's decision] or any extension beyond that time as may be granted by the district director; and in the event of failure so to depart, [Barker] shall be deported as provided in the Immigration Judge's order."1
10
Barker did not depart but filed a motion to reopen her deportation proceedings with the Board. The motion requested reconsideration of her eligibility for suspension of deportation in light of new evidence unavailable at the time of the IJ's decision. Barker acknowledged in the motion that her "previous period of voluntary departure has expired." The motion, therefore, alternatively requested that "the Board extend her voluntary departure until a day 30 days following adjudication of the instant Motion, including any judicial review thereof." Barker subsequently supplemented her motion, indicating that she would be seeking to adjust her immigration statute based on her recent marriage to a United States citizen. The motion, as supplemented, did not indicate that she had not received oral and written notice of the consequences for failing to voluntarily depart. Nor did she explain why she remained in the United States beyond her voluntary departure period.
11
The Board denied Barker's motion to reopen on two grounds. First, the Board concluded that the motion was filed untimely. Second, the Board concluded that Barker was statutorily barred, under § 240B(d) of the Immigration and Nationality Act, 8 U.S.C. § 1229c(d), from applying for certain forms of discretionary relief, absent a showing of exceptional circumstances for failing to depart voluntarily. Specifically, the Board noted, contrary to Barker's assertion, that she may otherwise qualify for an adjustment of status "[was] not sufficient to establish exceptional circumstances," "such as serious illness of the alien or death of an immediate relative of the alien, but not including less compelling circumstances beyond the control of the alien." (Brackets omitted.) The Board noted that Barker had received both oral and written notice of the consequences of failure to depart voluntarily and she had failed to depart voluntarily as ordered. The Board therefore concluded that Barker was statutorily barred from applying for suspension of deportation and adjustment of status. This appeal followed.
II.
12
This Court has appellate jurisdiction to review the Board's denial of a motion to reopen. Sevoian v. Ashcroft, 290 F.3d 166, 169 (3d Cir.2002). This Court reviews the Board's denial of a motion to reopen on grounds of failure to make out a prima facie case for abuse of discretion, and the Board's findings of fact for substantial evidence. Id. at 173. Under the abuse of discretionary standard, the Board's decision is reversible only if it is "arbitrary, irrational, or contrary to law." Tipu v. INS, 20 F.3d 580, 582 (3d Cir.1994). In reviewing the Board's findings of fact under the substantial evidence standard, this Court's scope of review is narrow. Sevoian, at 171. An alien seeking judicial reversal of findings of facts by the Board must show that the evidence was "so compelling that no reasonable factfinder could fail to find" in her favor. INS v. Elias-Zacarias, 502 U.S. 478, 483-84, 112 S. Ct. 812, 117 L. Ed. 2d 38 (1992).
13
The Supreme Court has identified three independent grounds for the denial of a motion to reopen immigration proceedings: (1) the movant's failure to establish a prima facie case for the relief sought; (2) the movant's failure to introduce previously available, material evidence that justifies reopening; or (3) a determination that even if the above two requirements were met, the movant would not be entitled to the discretionary grant of relief sought. INS v. Abudu, 485 U.S. 94, 105, 108 S. Ct. 904, 99 L. Ed. 2d 90 (1988); Sevoian, at 169-70. "Motions for reopening of immigration proceedings are disfavored.... This is especially true in a deportation proceeding, where, as a general matter, every delay works to the disadvantage of the deportable alien who wishes merely to remain in the United States." INS v. Doherty, 502 U.S. 314, 323, 112 S. Ct. 719, 116 L. Ed. 2d 823 (1992).
A.
14
On appeal, Barker argues first that the Board erred in denying her motion to reopen because the IJ failed to provide her with proper notice of the consequences for failing to depart voluntarily.2 Specifically, she argues that the IJ failed to provide the requisite oral notice to her of each of the consequences of failing to depart voluntarily, specifically the consequences of losing the benefits of suspension of deportation or adjustment of status.3 She argues that the IJ's general warning that she would "lose the right to apply for certain kinds of important immigration benefits for a period of five years" is insufficient. In addition, she argues that the IJ's oral warning of a failure to depart voluntarily "without a very good excuse, for example, if you get seriously sick or injured" is insufficient explanation of the statutory requirement of "exceptional circumstances" because the judge's words were "vague." Barker argues next that the Board erred in holding that she was ineligible for filing a motion to reopen.
B.
15
Contrary to Barker's second argument, the Board never held in its decision denying her motion to reopen that she was ineligible for filing a motion to reopen. The Board's decision was based on her statutory ineligibility to apply for suspension of deportation or adjustment of status, absent a showing of "exceptional circumstances," for her failure to depart voluntarily as ordered. The Board concluded that she showed no statutorily defined "exceptional circumstances." Barker has not disputed this conclusion on appeal. Barker's extensive second argument is, therefore, misguided.4
16
As correctly noted by the appellee, Barker failed to raise in her previous motion to reopen that she did not receive adequate or sufficient oral notice of the consequences of failing to depart voluntarily. Her failure to raise this issue before the Board bars this Court's consideration of this claim now. Alleyne v. INS, 879 F.2d 1177, 1182 (3d Cir.1989) (citing Campos-Guardado v. INS, 809 F.2d 285, 291 (5th Cir.), cert. denied, 484 U.S. 826, 108 S. Ct. 92, 98 L. Ed. 2d 53 (1987)); Florez-De Solis v. INS, 796 F.2d 330, 335 (9th Cir. 1986). This Court will not, therefore, review Barker's first argument; it was not raised before the Board.5
III.
17
In conclusion, we emphasize that what bars the reopening of Barker's deportation proceedings is her unexcused failure to comply with the Order of Voluntary Departure. It was granted to her as a privilege in response to her request. "A grant of voluntary departure allows a deportable alien to leave the country without suffering the consequences of a formal deportation order. A deported alien is excludable from the country for five years, 8 U.S.C. § 1182(a)(17) (1982), and commits a felony if he or she ever returns without permission. 8 U.S.C. §§ 1252(f), 1326 (1982)." Cunanan v. INS, 856 F.2d 1373, 1374 n. 1 (9th Cir.1988). Unfortunately, Barker did not avail herself of the privilege of voluntary departure. The penalty for her unexcused failure may appear to be harsh in view of her recent marriage, but this Court notes that her failure to depart voluntarily has also caused INS to "[become] involved in further and more costly procedures" by expending additional resources in removing her that could have been avoided had she complied with the original order requested by herself. See Zazueta-Carrillo v. Ashcroft, 322 F.3d 1166, 1173 (9th Cir.2003) (quoting Ballenilla-Gonzalez v. INS, 546 F.2d 515, 521 (2d Cir.1976)). We do not have the discretionary power to lift the statutory bar against reopening her deportation proceedings because of her failure to abide by the Order of Voluntary Departure. See Fiallo v. Bell, 430 U.S. 787, 792, 97 S. Ct. 1473, 52 L. Ed. 2d 50 (1977) (immigration legislation is "subject only to narrow judicial review"); United States v. Pollard, 326 F.3d 397, 405-406 (3d Cir.2003).
18
Accordingly, the Board's decision of denying Barker's motion to reopen her deportation proceedings will be affirmed. Costs taxed against the appellant.
Notes:
1
Barker never sought a judicial review of the Board's dismissal decision
2
Barker also argues on appeal that her motion to reopen was timely filed. The respondent-appellee, John D. Ashcroft, Attorney General of the United States, agrees with her argument in this regard, conceding that the Board erred in concluding that Barker's motion to reopen was untimely filed
3
Section 242B(e)(2), 8 U.S.C. § 1252b(e)(2) (1994) provides:
(A) In General
Subject to subparagraph (B), any alien allowed to depart voluntarily under section 1254(e)(1) of this title or who has agreed to depart voluntarily at his own expense under section 1252(b)(1) of this title who remains in the United States after the scheduled date of departure, other than because of exceptional circumstances, shall not be eligible for relief described in paragraph (5) for a period of 5 years after the scheduled date of departure or the date of unlawful reentry, respectively.
(B) Written and oral notice required
Subparagraph (A) shall not apply to an alien allowed to depart voluntarily unless, before such departure, the Attorney General has provided written notice to the alien in English and Spanish and oral notice either in the alien's native language or in another language the alien understands of the consequences under subparagraph (A) of the alien's remaining in the United States after the scheduled date of departure, other than because of exceptional circumstances.
4
Because Barker misinterprets the basis of the Board's denial of her motion to reopen, this Court will not consider another argument of hers on appeal that the Board's construction of §§ 242B(e)(2)(A) of the Immigration and Nationality Act violates the Equal Protection Clause of the United States Constitution, which is based on such misinterpretation
5
We note here, however, that Barker's first argument has no merit because the record clearly shows that the IJ provided both adequate oral and written notice as statutorily required
|
NUMBER 13-18-00672-CR
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
____________________________________________________________
JORGE ARELLANO, Appellant,
v.
THE STATE OF TEXAS, Appellee.
____________________________________________________________
On Appeal from the 357th District Court
of Cameron County, Texas.
____________________________________________________________
MEMORANDUM OPINION
Before Chief Justice Contreras and Justices Longoria and Hinojosa
Memorandum Opinion by Justice Longoria
Appellant Jorge Arellano, proceeding pro se, filed a notice of appeal from trial
cause number 06-CR-770-E in the 357th District Court of Cameron County, Texas. In
his notice of appeal, appellant did not identify a specific judgment or order subject to
appeal, but instead contended that the judge of the trial court was “indifferent” to his
request for DNA testing under Article 64 of the Texas Code of Criminal Procedure. See
TEX. CODE CRIM. PROC. ANN. art. 64.01–.05 (West, Westlaw through 2017 1st C.S.). On
December 11, 2018, the Clerk of this Court notified appellant that it appeared that there
was not a final, appealable judgment in this case and requested correction of this defect
if it could be done. The Clerk notified appellant that the appeal would be dismissed if the
defect was not cured. Appellant has not corrected the defect.
In Texas, appeals in criminal cases are permitted only when they are specifically
authorized by statute. State ex rel. Lykos, 330 S.W.3d 904, 915 (Tex. Crim. App. 2011);
see TEX. CODE CRIM. PROC. ANN. art. 44.02 (West, Westlaw through 2017 1st C.S.).
Generally, a state appellate court only has jurisdiction to consider an appeal by a criminal
defendant where there has been a final judgment of conviction. Workman v. State, 343
S.W.2d 446, 447 (Tex. Crim. App. 1961); Ex parte Ragston, 402 S.W.3d 472, 477 (Tex.
App.—Houston [14th Dist.] 2013), aff'd sub nom. Ragston v. State, 424 S.W.3d 49 (Tex.
Crim. App. 2014); McKown v. State, 915 S.W.2d 160, 161 (Tex. App.—Fort Worth 1996,
no pet.). The courts of appeals do not have jurisdiction to review interlocutory orders in
a criminal appeal absent express statutory authority. Apolinar v. State, 820 S.W.2d 792,
794 (Tex. Crim. App. 1991); Bridle v. State, 16 S.W.3d 906, 907 (Tex. App.—Fort Worth
2000, no pet.). Exceptions to the general rule include: (1) certain appeals while on
deferred adjudication community supervision, Kirk v. State, 942 S.W.2d 624, 625 (Tex.
Crim. App. 1997); (2) appeals from the denial of a motion to reduce bond, TEX. R. APP. P.
31.1; McKown, 915 S.W.2d at 161; and (3) certain appeals from the denial of habeas
corpus relief, Wright v. State, 969 S.W.2d 588, 589 (Tex. App.—Dallas 1998, no pet.);
McKown, 915 S.W.2d at 161; see also Bridle, 16 S.W.3d at 908 n.1.
The Court, having examined and fully considered the notice of appeal and the
2
matters before the Court, is of the opinion that there is not an appealable order and this
Court lacks jurisdiction over the matters here. Because there is no appealable order, we
DISMISS the appeal for want of jurisdiction. All pending motions, if any, are likewise
DISMISSED.
NORA L. LONGORIA
Justice
Do not publish.
See TEX. R. APP. P. 47.2(b).
Delivered and filed the
24th day of January, 2019.
3
|
EXHIBIT 31.1 Certification of CEO and CFO Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Buddy Young, certify that: 1.I have reviewed this quarterly report on Form 10-Q of Futura Pictures, Inc.; 2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities,particularly during the period in which this quarterly report is being prepared; b)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and c)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a)all significant deficiencies and material weaknesses in the design or operation of internalcontrols over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Dated: July 5, 2011 By: /s/Buddy Young Buddy Young Chief Executive Officer and Chief Financial Officer
|
Citation Nr: 0017061
Decision Date: 06/28/00 Archive Date: 07/05/00
DOCKET NO. 95-41 270 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Jackson,
Mississippi
THE ISSUES
1. Entitlement to an increased evaluation for the residuals
of a stab wound to the right chest, status post pneumothorax,
with recurrent musculosketal chest pain and pleural
thickening at the right costophrenic angle, currently
evaluated as 20 percent disabling.
2. Entitlement to an increased evaluation for post traumatic
stress disorder (PTSD), currently evaluated as 10 percent
disabling.
REPRESENTATION
Appellant represented by: The American Legion
WITNESSES AT HEARING ON APPEAL
Appellant and Spouse
ATTORNEY FOR THE BOARD
Bernie Gallagher, Counsel
INTRODUCTION
The appellant had active service from April 1961 to February
1965.
This appeal comes before the Board of Veterans' Appeals (the
Board) on appeal as a result of a rating decision in June
1995 by the Department of Veterans Affairs (VA) regional
office (RO) in St. Petersburg, Florida. The case is now
under the jurisdiction of the RO in Jackson, Mississippi.
The veteran testified at a hearing at the RO in April 1996.
A transcript of that hearing is in the claims folder.
This case was remanded by the Board in July 1997 for further
development. The case was returned to the Board in February
1999. In October 1999, the Board notified the veteran's
representative of its intention to rely on evidence developed
or obtained subsequent to the issuance of the most recent
supplemental statement of the case. See Thurber v. Brown, 5
Vet. App. 119, 126 (1993). The representative was given 60
days to submit additional evidence, argument, or comment. No
response has been received, and the Board proceeds with its
review on appeal.
The issue of entitlement to an increased rating for residuals
of a stab wound to the right chest, status post pneumothorax,
with recurrent musculosketal chest pain and pleural
thickening at the right costophrenic angle, will be the
subject of a remand at the end of this decision.
FINDINGS OF FACT
1. The veteran is not a credible witness.
2. The veteran's service-connected post traumatic stress
disorder is manifested by slight occupational and social
impairment and mild or transient symptoms.
CONCLUSION OF LAW
The criteria for a rating in excess of 10 percent for the
appellant's service-connected post traumatic stress disorder
have not been met. 38 U.S.C.A. §§ 1155, 5107 (West 1991);
38 C.F.R. §§ 4.132, Diagnostic Code 9411 (1996); 38 C.F.R.
§ 4.130, Diagnostic Code 9411 (1999).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
I. Factual Background.
Service records show the veteran to have attained the rank of
E-4/QM3. No combat injuries or awards are shown. He was
transferred to inactive Naval Reserve from the U.S.S. Mauna
Kea (AE-22) at Alameda, California, on February 5, 1965. His
last duty assignment was "general." Service medical
records show an abstract indicating that, from October 6,
1961, to April 17, 1963; from May 25, 1963, to June 27, 1963;
and from August 16, 1963, to February 2, 1965, he was
assigned to the U.S.S. Mauna Kea (AE-22). His only award or
decoration is the Armed Forces Expeditionary Medal. In June
1963, the veteran received a stab wound in the right chest by
a thief while in Manila, Republic of the Philippines, while
not engaged in assigned duties. Service clinical records
reflect that he was hospitalized in a private hospital for
two days and then transferred to Clark Air Force Base
Hospital, where he spent 34 days, being released on August 2,
1963.
According to the Dictionary of American Naval Fighting Ships,
Vol IV, (Navy Department 1969), p. 276, the U.S.S. Mauna Kea
rotated between duty with ServRon 1 (Eastern Pacific) and
ServRon 3 (Western Pacific) from 1957 to 1965. While on duty
with ServRon 3, she distributed supplies to ships of the 7th
Fleet. On February 28, 1965, the ship began the process of
being converted to allow greater versatility in servicing the
fleet with the addition of a heliopad. On December 28, 1966,
the U.S.S. Mauna Kea began her ninth WestPac deployment,
arriving in the Philippines in January 1967 to join ServRon
7. In January 1967, she departed Subic Bay for her first
trip to the line off Vietnam, spending the next six months
rearming carrier groups on Yankee Station and cruisers and
destroyers off South Vietnam.
On a VA psychiatric examination in October 1981, the veteran
reported that he was in Vietnam three times but that he had
little combat while there. He had a problem being nervous on
a constant basis. He described this as feeling uptight and
tense most of the time. He reported dreams concerning a
knife wound of the chest that he received in Manila while in
the service. He told the examiner that he spent 180 days in
the hospital following this stab wound. He said that he had
worked as a manufacturer's representative for ten years
following service and was now doing specialty advertising.
On mental status evaluation he looked tense and apprehensive.
His mood was one of mild depression. The diagnosis was
chronic anxiety with mild depression.
The veteran received a VA psychiatric examination in May
1990. He reported that shortly after the mugging incident
and his Vietnam tour of duty, he developed a nervous
condition and depression. He reported that his first
marriage was at the age of 23, and he was divorced eight
years later. He had two children from that marriage. He
reported that he had been married to his current wife for 8
years and there were no children. He reported that he had
been "considerably into drinking" years ago, and he thought
that had contributed to the breakdown of his first marriage.
He had been working in a furniture business and had just
finished a job as a manufacturing representative. He was now
looking for another job. His wife said that she had noticed
erratic behavior over the course of the marriage. He was
suspicious of people around him and had clinical depression
and drinking of alcohol. She reported that he related to
people rather poorly and that he had had 10 jobs since their
arrival in Florida three years earlier. She reported that he
avoided topics related to Vietnam, constantly watched people
around him, and was uneasy if someone was behind him or if he
heard a foreign language spoken. During mental status
evaluation, he maintained good social poise and was alert and
cooperative. His affect was appropriate and he claimed he
was occasionally depressed and had not slept well since
military service. He had depressing recollections of events
experienced during combat and avoided thoughts or feelings
associated with those events. He experienced startle
response and was nervous and irritable if someone sat behind
him. The examiner diagnosed PTSD.
A rating action by the RO in June 1990 granted service
connection for PTSD, secondary to the stab injury while in
service, and evaluated as 10 percent disabling under
Diagnostic Code 9411, from April 1990. After the rating
granting service connection was issued, the veteran submitted
a stressor statement previously requested by the RO. In it,
he recounted as his stressor the stabbing incident in Manila.
He appealed the rating assigned for his PTSD.
In a personal hearing in February 1991, he recounted having
nightmares involving the stabbing, and of having rare
flashbacks. He said he got along well with his co-workers
and he was not subject to angry outbursts, because he tried
to control it. He said he startled easily, and that he
always had. He said crowds made him nervous, and he did not
like being around people speaking foreign languages, but he
did not feel they were plotting against him.
On VA examination in June 1991, the veteran reported to the
examiner that he was hospitalized for 100 days in service
following his stab wound. In July 1991, the veteran was
evaluated at the VA mental health clinic. He reported that
he had served three tours of duty in Vietnam and that he was
involved in reconnaissance missions and saw a lot of his
buddies injured and killed. He complained of nightmares
related to Vietnam, intrusive recollections, startle
responses, and fear of crowds. He said he had quit drinking
three months previously and denied a history of alcohol
problems. He said he had been married two times, with two
children from his first marriage. He said he had been
married to his current spouse for 12 years. He reported that
he had a law degree from the University of Mississippi and
had been in furniture sales for over 20 years. He quit his
last job because he did not like the schedule. On mental
status examination, he was alert and oriented. His speech
was coherent and his affect was anxious. Sleep was
reportedly decreased, but appetite was OK. He reported being
agoraphobic and with decreased energy level. He reported
intrusive recollections and nightmares. He had an anxious
mood. No delusions were noted. The diagnosis was PTSD.
An August 1991 mental health clinic note showed that the
veteran reported feeling calmer and sleeping better since
being on medication. Psychiatric status was stable.
In June 1992, the Board adjudicated the veteran's claims for
increased disability ratings for the residuals of the chest
stab wound and PTSD. The report of the VA psychiatric
examination in May 1990 was reviewed. The Board also
reviewed the veteran's testimony at a hearing on appeal in
February 1991 and VA outpatient records during 1991. The
Board found that the PTSD was manifested by symptoms which
were indicative of no more than mild impairment of his social
and industrial adaptability. The Board concluded that the
schedular criteria for an evaluation in excess of 10 percent
had not been met.
In July 1992, the veteran submitted a Declaration of Status
of Dependents. In it, he listed his current marriage, dating
from 1981, and two previous marriages. The two previous
marriages are dated from 1968 to 1976, and from 1976 to 1981.
No other previous marriages are listed.
In August 1992, the veteran's spouse submitted a statement in
which she stated that the veteran had had almost 20 jobs
within six years. She maintained that this indicated that
something was wrong. She claimed the veteran was unable to
face the reality that something was wrong.
VA outpatient records disclose the veteran was seen in June
and July 1992 in the mental hygiene clinic. He said he found
it difficult to understand the Board decision in view of his
job history and five marriages since Vietnam (six
altogether). The examiner reported that such history would
seem to indicate a substantial degree of impairment in his
social and occupational functioning. The veteran advised
that he was recently terminated from his last job. In July
1992, he complained of insomnia, a lack of pleasurable
experiences, and decreased motivation recently. He was
described as more depressed. In August 1992, he came in for
a refill of his medication and reported that his mood had
been fairly good since his last visit, and his psychiatric
status was stable. In September 1992, his mood had been
satisfactory since his previous visit, with the exception of
one day. He was to begin a new job the following week at an
appliance store. Psychiatric status was stable. Medication
was continued.
A rating decision in November 1992 denied entitlement to an
increased rating for PTSD. The veteran and his
representative were advised of the denial in December 1992
and he did not initiate an appeal.
VA outpatient records disclose that the veteran was seen on
numerous occasions from September 1992 to May 1995 in the VA
mental hygiene clinic for treatment of his service-connected
PTSD. A mental health clinic chart review dictated in
September 1992 shows that the veteran reported having 45 jobs
since returning from Vietnam in 1964. He had reported six
marriages. He was seen in the mental health clinic on a
monthly basis since July 1991. Results of treatment had been
favorable in terms of preventing psychiatric hospitalization
and in alleviating his anxiety symptoms.
In November 1992, the veteran reported that he was working at
a chain of appliance stores and was pleased to be working.
He reported nightmares twice a week. Overall, sleep had
improved significantly since he had been on his current
medication. In December 1992, the veteran reported he had
been working for the appliance store six days and 50 hours a
week and had not been doing well with sales. He was not
satisfied working late hours. He reported nightmares one to
two times a month, and his affect was within normal limits.
Medication was continued.
In January 1993, the veteran reported feeling irritable and
short-tempered recently. He reported that he had had such
episodes periodically for years. His affect was more
irritable on that visit. In view of the foregoing, the
unstable job history, and marital history, the examiner
stated that the veteran may have a bipolar mood disorder. He
was seen by a doctor, who agreed that he probably had a mood
disorder, and his medication was adjusted (adding Lithium).
In February 1993, the veteran reported that he had been
feeling more relaxed since taking Lithium. Sleep had
improved, and he was still working for the appliance store.
His psychiatric status was somewhat improved.
In March 1993, the veteran reported that he had been
transferred to another appliance store, and he had mixed
feelings about the transfer. He had not been feeling well
because of the flu. His mood had been somewhat irritable.
He had not been able to come in to have his Lithium level
checked. Psychiatric status was stable. In April 1993, the
veteran reported that his mood had been satisfactory for the
most part since his last visit. He reported feeling drowsy
at times, particularly in the evening after watching
television, which the examiner felt was probably of no
particular significance. Work had been going well. Affect
was within normal limits.
In June 1993, the veteran reported he had been feeling drowsy
during the day for the past several months. He had been
transferred to another store, and work had been somewhat
stressful. His medication was adjusted. Psychiatric status
was stable. In July 1993, the veteran reported feeling
irritable in the evenings. His medications were discussed.
Psychiatric status was generally stable.
In August 1993, the veteran reported feeling more tense and
irritable recently. He had run out of some of his
medication. Work was somewhat stressful. He was seen again
at the end of August and reported he had had a stressful
month due to long [email protected]. He was to be transferred to
another store, where he felt he would be more comfortable.
He had been more irritable due to long [email protected]. His
affect was within normal limits. In October 1993, he
continued working, and affect was within normal limits, and
he was psychiatrically stable. In November 1993, it was
noted that he continued to work 10 hours a day, six days a
week, at the appliance store.
In December 1993, the veteran reported he had been feeling
somewhat depressed. He seemed to get depressed every June
and December for no apparent reason. He continued to work
long hours at the appliance store. He had not been taking
one of his medications for several months and was advised to
start taking it again. His affect was within normal limits.
In March 1994, the veteran reported he had been arrested for
driving under the influence since his last mental health
clinic appointment. He pleaded "no contest." He continued
to work full time at the appliance store, and his sleep had
been satisfactory. He had been more irritable because of the
stressful legal situation. In May 1994, he was going through
a stressful period because of his mother's terminal illness.
He had begun working at another appliance store for the same
company since having a personality conflict with the manager
of the store in which he had been working. His psychiatric
status had been somewhat worse because of his mother's
illness. In August 1994, the veteran's mood had improved
somewhat from his previous visit. He continued to work for
the appliance store. His affect was slightly depressed. In
September 1994, he reported he had been working too many
hours for the appliance store. Sleep had been satisfactory,
and mood had been fairly stable. In November 1994, he
reported generally satisfactory mood, and he was working at
another appliance store in the same chain. Sleep had been
OK, and affect was cheerful. Psychiatric status was stable.
In December 1994, the veteran reported that he had quit his
job about two weeks before because of the long hours, low
pay, and high stress. Psychiatric status was stable. A note
by his clinical psychologist in December 1994 indicated that
the veteran was psychiatrically stable to enable him to
pursue VA vocational rehabilitation.
In February 1995, a brief treatment note indicates the
veteran's mood was satisfactory and he was psychiatrically
stable. In April 1995, the veteran reported a history of
depressive episodes lasting six months or more. He denied
having ever taken anti-depressants. He denied crying spells,
but said he felt like crying sometimes. In May 1995, the
veteran reported that he had felt somewhat depressed since
his last visit. A doctor was consulted about modifications
to the veteran's medication.
The veteran received a PTSD examination in April 1995. It
was reported that he had been married six times. He claimed
three tours of duty in Vietnam while in the Navy. He
conducted reconnaissance and saw many men maimed and killed
while he was engaged in running small arms and ammunition to
bases upriver in the Mekong Delta. His clinical record was
reviewed. He continued in regular treatment with a
psychologist with a goal of stabilizing his mood. For the
last six months he had suffered from depression. He took
several medications. He continued to reside with his wife of
16 years and had not been employed since December 1994. For
most of his working life he had been in sales, typically
furniture, and he was a successful sales representative for
some time. Five years ago, he had stopped consuming alcohol,
a habit he had practiced since college. Following discharge
from service, he had completed a pre-law degree at the
University of Mississippi. He reported no problems
maintaining his sobriety. His relationship with his wife was
excellent. He spent most of his time at home carrying out
repairs and getting it ready for sale. He had recently
purchased some property in North Carolina and planned to
build a home.
The veteran claimed that he had been depressed for several
months. About three months ago, it had been probably worse
but there had been some gradual improvement lately. A
considerable amount of depression had been related to his
work. He also reported that around Christmas time of 1993,
he had been apprehended by police and wrongfully charged with
driving while intoxicated. He had a prolonged period of
legal entanglements and five [email protected]. He was quite
traumatized by the incident, especially because he had to
spend a night in jail. He had a growing belief that personal
freedoms and control over his life were becoming more and
more out of his hands, and this seemed a major factor in his
depression. Additional complaints included flashbacks of his
stabbing in Manila. These continued to occur from time to
time, with considerable distress. Occasional nightmares were
also noted. Since coming to Florida 8-9 years ago, he had
eight different jobs. He saw himself much more sensitive to
stress and pressure and feelings of suspiciousness,
apprehension, and worry about loss of control had ebbed and
flowed. He never had any attempts to take his life. He
admitted problems with anger but prided himself in
maintaining control except for the incident at Christmas two
years ago.
The veteran was described as neatly dressed and groomed. He
made good eye contact. His walk had a shuffling quality and
he was stooped over somewhat. Aside from this, there were no
other unusual physical characteristics or mannerisms. He was
especially well-groomed, carefully dressed, and manicured.
His speech was fluent in well-formed sentences, which were
logical and coherent. His volume was low. He tended to
ramble and when speaking became increasingly introspective
and analytic. Qualities of perfectionistic standards,
strongly controlled tension, and chronic dissatisfaction were
communicated. He seemed chronically suspicious and
exquisitely sensitive to things that were not done properly.
Cognitive functioning was intact although he did have
difficulty concentrating on mental problems and he had to
struggle to recall dates. An amnestic disorder did not seem
to exist although he had become aware of worsening problems
with memory, especially for recent events. There were times
when he seemed to go about in a daze and failed to note the
passage of time. He continued to show depressive features of
a chronic evolving nature. These seemed related to PTSD but
also to advancing age and a variety of situational factors
which added stress to his life. It was recommended that he
continue in treatment at the Mental Health Center. The Axis
I diagnosis was PTSD, chronic. Alcohol dependence, in
remission 5 years, was also noted.
A report of a psychological evaluation of Ann B. Hall, Ed.
D., dated in September 1995 is of record. The veteran
arrived promptly and was accompanied by his wife. He was
described as neat looking and appropriately groomed. He was
able to be engaged in the interview and responded to all
questions posed. He was soft spoken and reluctant to speak
about his feelings and mood. His wife clarified some things
he said and reported concern about his depression. He
reported having two years of college. He said he served in
the Navy from 1960 to 1964 and was in combat in Vietnam. The
veteran provided a history which indicated that he was
involved in combat and required surgery for shrapnel wounds.
He said he was honorably discharged with a rank of
Lieutenant. He reported three marriages with two children in
the first marriage. He had worked in sales over the years
and had difficulty working for and with other people. He
claimed 20 jobs in the last nine years. He had little
tolerance for stupidity and tended to work himself too hard.
He reported working 60 hours a week at his last job, in
November 1994. He reported being treated in the VA
outpatient clinic for PTSD. He spent his days taking classes
at the community college and doing chores.
The veteran reported a current depressed mood. He felt
irritable and anxious. He reported depressive symptoms
involving appetite, sleep, and thinking. He denied suicidal
ideation or intention. His affect was sad with tearfulness,
and anxiety was noted. There was no evidence of flight of
ideas. He was not tangential or circumstantial. There were
no neologisms or any other evidence of a formal thought
disorder. His thinking was characterized by concerns about
his life and future. He reported problems with
concentration. He was distracted by his concerns and he
could not enjoy life. He made two errors on serial 3's. He
knew the day of the week, the month and year, the President,
and he was able to cite a recent newsworthy event. He
claimed difficulties with short term memory, noting that he
forgot everything. He was having more difficulty with his
school work than he thought he would. He reported
flashbacks, nightmares, and depersonalization. Diagnostic
impressions included PTSD, major depressive disorder,
moderate, and bipolar disorder.
VA outpatient records from August 1995 to April 1996 were
associated with the file. In October 1995, the veteran was
seen with his wife, who reported that he had been drinking
every afternoon. He said he had two fingers of scotch every
afternoon after getting home from college. He said he
believed he drank to relieve stress. His wife reported that
he tends to become depressed every September, and it lasts
until New Year's. They had been together for 14 years. The
veteran was advised to discontinue alcohol and to engage in a
regular exercise program. It was recommended that he drop
whatever course was causing him the most stress. In December
1995, the veteran reported that he had discontinued alcohol
since his last visit. He mood had been satisfactory. He was
in the process of preparing for and taking final exams in
college. Psychiatric status was stable.
In February 1996, the veteran reported increased irritability
recently. He was still going to college and taking four
courses. He got 2 Bs and 2 Cs the previous semester. He
denied alcohol use. He said he had occasional flashbacks.
In March 1996, he reported being involved in a motor vehicle
accident 10 days before. He continued to attend college. In
April 1996, on scheduled appointment, the veteran said he
planned to relocate in a few weeks. A VA medical center had
been located at which he could continue treatment. He said
he went off his medications about ten days before, because of
a stressful home situation.
The veteran testified at a hearing at the RO in April 1996.
He maintained that he was not currently working. He had been
advised by his psychiatrist to work for himself. He
complained of a lot anxiety and depression. He claimed 11
different jobs in a ten year period. He stated that he had a
good relationship with his wife. When they went out to a
restaurant he had to sit in the back and he did not like to
have people around him. He complained of a recurrent dream
with flashbacks which woke him up. At this time he was
attending computer school.
A report prepared by the veteran, dated in April 1996, listed
his work history from 1985 through 1995. He reported he had
been married five times and had had eleven jobs in the past
10 years. He reported that the doctor in the VA outpatient
clinic indicated he would do better working for himself
rather than someone else. He was not currently working and
was attending school, but only taking one course. The
evaluation by the private psychologist which indicated that
the veteran did not appear emotionally capable of gainful
employment was cited. A typical day of the veteran was
described as one during which he essentially read the paper
and watched television. He used to love to cook, but he
never cooked now.
The veteran received a VA PTSD examination in March 1998. It
was reported that he served in the Navy as a quartermaster
and was wounded in combat. He stated he had flashbacks while
in the military "in 1960" and that he had been treated by a
psychiatrist at Clark Air Force Base for two months. He said
he was followed at various VA hospitals from 1965 to 1997.
In May or June 1997, he was treated for one month at the
Jackson VA Hospital psychiatric ward. He stated, "I just
come here to go through the 28 day alcohol program and get
detoxed from Valium." He had been followed by the VA mental
hygiene clinic since. Current medications included three
kinds of psychiatric medication.
The veteran's current status was described as "Not good,
flashbacks, see things out of the corner of my eye." He
ruminated about combat several times a month. He experienced
a bona fide combat flashback as recently as yesterday,
described as, "Hearing and seeing things from combat."
These occurred two or three times a month and were triggered
by loud noises. He became upset if he heard oriental people
talking. The sound of a helicopter increased the frequency
of combat dreams which occurred generally three or four times
a month. He avoided combat movies and discussing combat with
other veterans. The smell of diesel caused him to ruminate
about combat. He suffered a head injury at the age of five
with a loss of consciousness of about one month. He could
identify no significant sequelae. He admitted to a remote
history of homicidal and suicidal thoughts. He denied
attempts to harm himself or others. He consumed four or five
beers a week but denied a history of alcohol abuse. Sleep
was impaired by recurrent thoughts of combat. He also
experienced occasional initial insomnia. He had three years
of pre-law credit and one year of computer course credit. He
had been married to his fifth wife for 16 years and had
fathered two children. He was last employed three years ago
as a furniture salesman. He left because of emotional
problems. He now was receiving 100 percent Social Security
disability. He spent his days assisting his invalid father
with whom he lived on 100 acres of land. He claimed he was
in combat from April 1960 to April 1964 on the U.S.S. Monica
[sic] AE 22. He claimed he received the Vietnam Medal and
the Operation Medal.
In Vietnam, the veteran stated he was in the Mekong Delta, on
the rivers, anchored off the coast and that he ran boats into
Vietnam on the rivers. A typical day was described as, " We
had small arms ammo and small arms on deck and put them into
landing craft and ran them into areas that needed them." He
estimated he was involved in four fire fights during which he
used an M-16 and an AK 47. The longest period spent away
from the ship was one week.
On mental status evaluation, the veteran was described as
appropriately dressed and adequately groomed. He exhibited
no unusual motor activity. His speech was fluent without
flight of ideas or looseness of associations. His mood was
mildly anxious as was his affect. He denied hallucinations.
He expressed no identifiable delusions. He denied homicidal
or suicidal thoughts. He was oriented to person, place,
situation, and time. Remote, recent and immediate recall
were good. His judgment to avoid common danger was adequate.
His abstracting ability was adequate and his insight was
fair. The examiner stated that the veteran gave a history
consistent with PTSD and that the claims file was examined.
The GAF score was 55.
In June 1998, the RO obtained copies of 94 pages of records
from the Social Security Administration. These records
consisted of VA outpatient records which were already of
record.
VA outpatient records disclose the veteran was seen on
numerous occasions from March to August 1998. In March, he
stated he continued to have insomnia. His nightmares and
flashbacks had not improved. He only managed to get 3-4
hours of restless sleep. He had episodes of depression. He
reported seeing things out of the corner of his eyes
peripherally. He also reported seeing things out of the
window of his home. He reported occasional thoughts of
suicide but none today. To relieve these urges he either got
busy or played with his dog. He denied homicidal thoughts.
He admitted he did drink beer occasionally and was reminded
by the examiner of the danger of interaction between drugs
and alcohol. He was described as oriented and in no acute
distress. He was clean and appropriate in mood and behavior.
He did not demonstrate any deficit in though or judgment
processes. He did not demonstrate looseness of associations
or flight of ideas. The clinical assessment was PTSD
symptoms and depression. There were similar complaints in
May and June.
In August, he reported that he was doing well. He was taking
his medication without side effects. He continued to have
legal problems concerning his driver's license. His mother
remained in a nursing home and he became sad discussing her.
He denied homicidal or suicidal ideation and delusions and
hallucinations. He did not have looseness of associations or
flight of ideas. There were no deficits in thought or
judgment processes. The assessment was PTSD, depression, and
anxiety.
The RO searched for a Chapter 31 file and determined there
was no evidence of such a file.
II. Legal Analysis.
The first responsibility of a claimant is to present a well-
grounded claim. 38 U.S.C.A. § 5107(a) (West 1991). A claim
for an increased disability rating is well grounded if the
claimant alleges that a service-connected condition has
worsened. Proscelle v. Derwinski, 2 Vet. App. 629, 632
(1992). In this case, the veteran has complained of
increased psychiatric problems, and therefore, he has
satisfied the initial burden of presenting a well-grounded
claim.
VA has a duty to assist the veteran in the development of
facts pertinent to his claim. 38 U.S.C.A. § 5107(a) (West
1991); 38 C.F.R. § 3.103 (1999). The duty to assist
includes, when appropriate, the duty to conduct a thorough
and contemporaneous examination of the veteran. Green v.
Derwinski, 1 Vet. App. 121 (1991).
In this case, the RO provided the veteran VA examinations and
a personal hearing in accordance with his request. There is
no indication of additional medical records that the RO
failed to obtain. Therefore, VA has satisfied its duty to
assist the veteran mandated by 38 U.S.C.A. § 5107(a).
In considering the severity of a disability it is essential
to trace the medical history of the veteran. 38 C.F.R.
§§ 4.1, 4.2 (1999). Consideration of the whole recorded
history is necessary so that a rating may accurately reflect
the elements of disability present. 38 C.F.R. § 4.2 (1999);
Peyton v. Derwinski, 1 Vet. App. 282 (1991). While the
regulations require review of the recorded history of a
disability by the adjudicator to ensure a more accurate
evaluation, the regulations do not give past medical reports
precedence over the current medical findings. Where an
increase in the disability rating is at issue, the present
level of the veteran's disability is the primary concern.
Francisco v. Brown, 7 Vet. App. 55, 58 (1994).
For the purpose of determining whether a claim is well
grounded, the truth of evidence submitted, including
testimony, is presumed, unless the assertion is inherently
incredible or is beyond the competence of the person making
the assertion. Robinette v. Brown, 8 Vet. App. 75-76 (1995)
(citations omitted). Having determined that the veteran's
claim is at least plausible and that the duty to assist has
been fulfilled, the Board must assess the credibility and
weight of the evidence. Wilson v. Derwinski, 2 Vet. App. 614
(1992). Credibility is no longer presumed.
In assessing the credibility of the veteran, the Board has
considered the veteran's service department records; his
statements in claims, on examinations, and at hearings; and
evidence showing where and when the ship on which the veteran
served was deployed. The veteran, through his
representative, has been provided notice of this last
evidence and has had no comment or argument to present with
respect to it. He has asserted increasing combat flashbacks
through the years, from his initial examination on which he
reported little combat. He has reported very different
numbers of marriages, from two to six. He has reported
inconsistent and vastly different numbers of jobs. He has
reported to examiners that he attained a rank that his
service records do not show him to have achieved. He has
reported that his ship served in Vietnam, which it clearly
did not do while he was in service. He has reported having
received the Vietnam Service Medal and Operation Medal,
neither of which is shown on his service records.
The Board finds the appellant's credibility to be so
compromised that it finds incredible much that he attributes
to his PTSD. PTSD was established as service connected on
the basis of the verified stressor of a stab wound incurred
in a robbery attempt. The veteran originally reported
occasional distressing recollections of that event and
nightmares concerning it. However, in recent years, he has
reported flashbacks and nightmares relating to combat
experiences and having been wounded in combat. The Board
finds that the veteran is not a veteran of combat. He has
presented no credible evidence that he is, and the service
records do not show or support any combat role for the
veteran. He served on a ship that did not go to Vietnam or
the waters off Vietnam until some two years after he left the
service. He was in the Quartermaster Corps. He was not
wounded by shrapnel in combat, as he reported to one
examiner. He was not a Lieutenant.
With respect to even the stab wound, he has inflated the time
he was hospitalized from the 34 days shown in his service
medical records to a span varying from 100 to 180 days. He
has asserted a two-month hospitalization for psychiatric
treatment during service that is not shown in his service
medical records.
With respect to his adjustment since service, he has reported
varying numbers of jobs, and varying numbers of marriages.
He most recently has been reporting six marriages, but he
reported, under penalty of perjury, only three marriages in
July 1992, and he is apparently still married to the same
person he was married to in 1992.
His outpatient treatment records in 1995 and 1996 show that
he was attending college and taking four courses, yet, in
1996, he said he was taking only one course.
Service connection for PTSD was granted on the basis of the
stressor of having been wounded in an attack during an
attempted robbery while the veteran was on leave. It was not
granted for any combat experiences, combat not being shown by
the veteran's records. Accordingly, the Board finds
unconvincing the veteran's assertions to examiners that he
has nightmares of combat or flashbacks to combat experiences.
In short, the Board finds that the veteran is not a credible
witness, and it must look to other evidence to evaluate his
service connected PTSD.
The diagnostic codes and provisions relating to psychiatric
disorders were revised effective November 7, 1996.
38 C.F.R. §§ 4.13, 4.16, 4.125, 4.126, 4.127, 4.128, 4.129,
4.130, 4.131, 4.132 (1996); 61 Fed.Reg. +1-951-245-3761 (Oct. 8,
1996). When a law or regulation changes after a claim has
been filed but before the administrative appeal process has
been concluded, VA must apply the regulatory version that is
more favorable to the veteran. Karnas v. Derwinski, 1 Vet.
App. 308, 312-13 (1991). However, where the amended
regulations expressly provide an effective date and do not
allow for retroactive application, the veteran is not
entitled to consideration of the amended regulations prior to
the established effective date. Green v. Brown, 10 Vet. App.
111, 116-119 (1997); see also 38 U.S.C.A. § 5110(g) (West
1991) (where compensation is awarded pursuant to any Act or
administrative issue, the effective date of such award or
increase shall be fixed in accordance with the facts found,
but shall not be earlier than the effective date of the Act
or administrative issue). Therefore, the Board must evaluate
the veteran's claim for an increased rating from the
effective date of the new criteria under both the old
criteria in the VA Schedule for Rating Disabilities and the
current regulations in order to ascertain which version is
most favorable to the veteran, if indeed one is more
favorable than the other.
Under the criteria for rating post traumatic stress disorder
in effect prior to that revision, 38 C.F.R. § 4.132,
Diagnostic Code 9411 (1996), provided a 10 percent rating for
manifestations that were less than those required for a 30
percent rating with emotional tension or other evidence of
anxiety productive of mild social and industrial impairment.
A 30 percent rating was assigned for "definite" impairment
in the ability to establish or maintain effective and
wholesome relationships with people when the psychoneurotic
symptoms resulted in such reduction in initiative,
flexibility, efficiency and reliability levels as to produce
"definite" industrial impairment. When there was
"considerable" impairment in the ability to establish or
maintain effective or favorable relationships with people and
when reliability, flexibility, and efficiency levels were so
reduced as to result in "considerable" industrial
impairment, a 50 percent evaluation was assigned. Id.
A 70 percent rating was provided when the ability to
maintain effective or favorable relationships was
"severely" impaired and when the psychoneurotic symptoms
were of such severity and persistence that there was severe
impairment in the ability to obtain and retain employment.
Id. A 100 percent rating was warranted when the attitudes of
all contacts except the most intimate were so adversely
affected as to result in virtual isolation in the community,
or when there were totally incapacitating psychoneurotic,
symptoms bordering on gross repudiation of reality with
disturbed thought or behavioral processes associated with
almost all daily activities such as fantasy, confusion, panic
and explosions of aggressive energy resulting in profound
retreat from mature behavior, or when the veteran was
demonstrably unable to obtain or retain employment. Id.
In Hood v. Brown, the Court stated that the term "definite"
in 38 C.F.R. § 4.132 was qualitative in nature, whereas the
other terms, e.g., "considerable" and "severe," were
quantitative. Hood v. Brown, 4 Vet. App. 301, 303 (1993).
The Court remanded the case in Hood to the Board for a
statement of reasons or bases that would reflect how the term
"definite" could be applied in a quantitative manner. Id.
at 304; 38 U.S.C.A. § 7104(d)(1) (West 1991). In the wake of
Hood, the VA General Counsel issued a precedent opinion
concluding that "definite" was to be construed as
"distinct, unambiguous, and moderately large in degree."
It represented a degree of social and industrial
inadaptability that was "more than moderate but less than
rather large." VAOPGCPREC 9-93. The Board is bound by this
interpretation of the term "definite." 38 U.S.C.A.
§ 7104(c) (West 1991).
The Court also held that the VA Schedule for Rating
Disabilities "does not present a clear basis for describing
the degree of impairment" for psychoneurotic disorders.
Massey v. Brown, 7 Vet. App. 204, 207 (1994); 38 C.F.R.
§ 4.132, Diagnostic Codes 9400-9411 (1996). The purpose in
amending or revising the rating criteria for mental disorders
"was to remove terminology in former 38 C.F.R. § 4.132,
which was considered non-specific and subject to differing
interpretations, and to provide objective criteria for
determining entitlement to the various percentage ratings for
mental disorders." VAOPGCPREC 11-97 at 2, citing 60 Fed.
Reg. 54,825, 54,829 (1995).
The revised criteria provides a 10 percent rating for
occupational and social impairment due to mild or transient
symptoms which decrease work efficiency and ability to
perform occupational tasks only during periods of significant
stress, or; symptoms controlled by continuous medication. 38
C.F.R. § 4.130, Diagnostic Code 9411. A 30 percent rating
may be 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).
Id.
The next higher or 50 percent evaluation may 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. Id. A 70 percent rating may be assigned
where 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; obsessive 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 worklike setting); inability to establish and
maintain effective work relationships. Id.
A 100 percent schedular rating may be assigned in cases where
there is 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); disorientations to time or place; memory loss for
names of close relatives, own occupation, or own name. Id.
Prior to evaluating the PTSD, the Board will address some
pertinent contentions. It has been contended that on the
March 1998 VA psychiatric examination, the examiner did not
review the claims folder prior to the examination. However,
in the examination report, the examiner explicitly stated
that he had reviewed the claims file. In addition, it has
been contended that records received from the Social Security
Administration should be analyzed, their credibility and
probative value determined, and adequate reasons and basis
given for their rejection. However, the evidence of record
received from the Social Security Administration consisted of
VA outpatient records already in the claims file. This
evidence had already been considered by the RO and therefore,
this evidence was not rejected.
In evaluating the service-connected PTSD, consideration has
been given to the entire clinical record with emphasis upon
the more recent examinations and outpatients records. The
evidence in this case reflects that complaints of frequent
nightmares, sleep problems, anxiety, depression,
suspiciousness of others, problems with dealing with people
in employment and multiple jobs have been attributed to PTSD,
either by the veteran or by his care providers. However,
evaluating the veteran's PTSD is complicated by the fact that
the veteran is demonstrably incredible in his reported
history, and his assertions of combat, service in Vietnam,
and even his rank have undergone considerable escalation and
elaboration over the years. Service connection for PTSD was
established based upon the verified in-service stressor of
having been wounded while off duty in a robbery attempt. The
veteran originally reported experiencing nightmares involving
that incident and occasional flashbacks.
In more recent years, the veteran reports very little having
to do with that experience. Instead, he reports an entirely
incredible and manufactured history of combat and river
patrols in Vietnam, three tours of duty in Vietnam, and
having achieved a rank of Lieutenant. None of this is shown
in his service records, and, in fact, the overwhelming weight
of credible evidence is that, with the exception of the stab
wound incurred in a reported robbery attempt while off duty,
the veteran's history becomes more unbelievable and unfounded
as time passes. The veteran was not a Lieutenant; he was an
enlisted man. His only ship-board assignments were to the
U.S.S. Mauna Kea, which never served off Vietnam until two
years after the veteran was discharged from the service.
Therefore, the veteran could not have served in Vietnam, been
wounded by shrapnel while in Vietnam, or have seen combat in
Vietnam. The Board concludes that, either the veteran does
not have the combat-related nightmares and flashbacks he
reports to treatment providers, or, if he has them, they are
unrelated to his PTSD, which derives from an entirely
different experience.
The veteran has been assigned a score on the Global
Assessment of Functioning (GAF) Scale of 55 on his most
recent VA examination. This was, however, an examination on
which the veteran reported significant combat-related
flashbacks and nightmares, which the Board finds
unbelievable. The range from 60-51 is for moderate symptoms
(e.g., flat affect and circumstantial speech, occasional
panic attacks) or moderate difficulty in social,
occupational, or school functioning(e. g., few friends,
conflicts with peers or co-workers). Quick Reference to the
Diagnostic Criteria from DSM-IV, (1994).
Under the old criteria, the veteran has no more than mild
symptoms attributable to his service-connected disorder,
warranting no more than a 10 percent evaluation. He has
bipolar mood disorder, for which he takes medication, but he
is not service connected for that disorder. He has been
married since 1981, apparently to the same spouse. He worked
until going back to college.
Under the new criteria, 10 percent is warranted when symptoms
are mild or transient which decrease work efficiency and
ability to perform occupational tasks only during periods of
significant stress or when symptoms are controlled by
continuous medication. The veteran is on medication, and his
symptoms do appear to be under control when he stays on the
medication. Furthermore, his outpatient treatment records
reflect that he does undergo increase in symptomatology when
under stress, but it does not prevent him from working or
engaging in educational course work.
Under the old rating criteria, a rating of 30 percent
contemplated definite social and industrial impairment.
Under the new criteria a 30 percent rating may be 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). The veteran's
service-connected PTSD does not meet the criteria for a 30
percent evaluation under either the old or the new criteria.
Because the veteran attributes his anxiety and sleep
impairment to combat nightmares and combat flashbacks, they
are not attributable, if they occur, to his service-connected
condition. His intermittently depressed mood has been
attributed to bipolar mood disorder, for which he is not
service connected. His primary psychiatric symptomatology,
therefore, is not related to his service-connected disorder,
and the preponderance of the evidence is against finding
definite social and industrial impairment as a result of his
service connected PTSD.
The GAF score of 55, reported on the VA examination in March
1998, contemplates no more than moderate difficulty in
social, occupational, or school functioning, and that
difficulty, as noted above, appears to be attributable more
to the non-service connected psychiatric problems than to
PTSD. In addition, the veteran does not have symptoms such
as flattened affect; circumstantial, circumlocutory, or
stereotyped speech; difficulty understanding commands;
deficiencies in most areas, including family relations; near
continuous depression; etc. It is significant that on the
most recent VA examination, the veteran's speech was fluent
without evidence of flight of ideas or loose associations.
There were no hallucinations or delusions and his remote,
recent, and immediate memory was described as good. His
judgment and abstracting ability were good. He denied
homicidal or suicidal thoughts. There was no evidence of
auditory or visual hallucinations. His insight was good.
Although he has had several marriages, his current marriage
has been very stable and has lasted for many years. He is
able to go out to places although he always sits in the back
of a restaurant. Furthermore, when last seen in the VA
outpatient clinic in August 1998, it was reported that he was
doing well on medication. Accordingly, the preponderance of
the evidence is against a rating of 30 percent or higher in
this case.
The RO has considered whether referral is warranted for
extra-schedular consideration and has determined that it is
not. In exceptional cases where the schedular evaluations
are found to be inadequate, an extraschedular evaluation
commensurate with the average earning capacity impairment due
exclusively to the service-connected disability may be
approved, provided the case presents such an exceptional or
unusual disability picture with such related factors as
marked interference with employment or frequent periods of
hospitalization as to render impractical the application of
the regular schedular standards. 38 C.F.R. § 3.321(b)
(1999). In this case, there is no evidence that the PTSD has
in any way interfered with employment in a way not
contemplated in the rating schedule, or that it has resulted
in frequent hospitalizations. The veteran has not shown that
the PTSD interfered with his employment in a way not
contemplated by the regular schedular standards, which are
designed to compensate the average impairment in earning
capacity attributable to such conditions. In short, the 10
percent rating now assigned for the service-connected
disability at issue fully compensates the veteran for the
loss in earning capacity attributable solely to that
disability, as opposed to other, non-service connected
disorders.
ORDER
Entitlement to a disability evaluation in excess of 10
percent for service-connected PTSD is denied.
REMAND
In the remand in July 1997, the Board noted that the
applicable rating criteria for diseases of the respiratory
system, 38 C.F.R. § 4.96 et seq., were amended in October
1996. Under the amended criteria, more objective factors
such as the results of pulmonary function testing of forced
expiratory capacity were determinative of the disability
rating assigned. The Board observed the respiratory disorder
should be evaluated under the criteria most favorable to the
veteran, particularly in view of the fact that the schedular
rating assigned to the appellant's lung disorder under the
old criteria (6818) had been deleted under the revised
criteria.
As contended by the representative, after the remand the
veteran was again supplied the old criteria under Diagnostic
Code 6818 in the supplemental statements of the case
furnished in June 1998 and October 1998, and the issue was
adjudicated solely under the old criteria. In addition, as
contended, the United States Court of Appeals for Veterans
Claims (Court) has mandated that if the development is
incomplete, appropriate corrective action is to be
implemented. See Stegall v. West, 11 Vet. App. 268 (1998).
Accordingly, the case is hereby REMANDED to the RO for the
following actions:
1. The RO should readjudicate the
veteran's claim for an increased rating
for the residuals of a stab wound of the
chest, with application of all
appropriate laws and regulations. From
the effective date of the revised rating
criteria for respiratory disorders, the
appellant's residuals of the chest wound
are to be evaluated under both the old
and new rating criteria, and the version
more favorable to the veteran is to be
applied. If neither is more favorable,
apply the new criteria.
2. If the decision with respect to the
claims remains adverse to the appellant,
he and his representative should be
furnished a supplemental statement of the
case and afforded a reasonable period of
time within which to respond thereto.
The appellant has the right to submit additional evidence and
argument on the matter or matters the Board has remanded to
the regional office. Kutscherousky v. West, 12 Vet. App. 369
(1999).
This claim must be afforded expeditious treatment by the RO.
The law requires that all claims that are remanded by the
Board of Veterans' Appeals or by the United States Court of
Appeals for Veterans Claims for additional development or
other appropriate action must be handled in an expeditious
manner. See The Veterans' Benefits Improvements Act of 1994,
Pub. L. No. 103-446, § 302, 108 Stat. 4645, 4658 (1994),
38 U.S.C.A. § 5101 (West Supp. 2000) (Historical and
Statutory Notes). In addition, VBA's Adjudication Procedure
Manual, M21-1, Part IV, directs the ROs to provide
expeditious handling of all cases that have been remanded by
the Board and the Court. See M21-1, Part IV, paras. 8.44-
8.45 and 38.02-38.03.
J. SHERMAN ROBERTS
Member, Board of Veterans' Appeals
|
-_
THE YTORNEY GENERAL
OFTEXAS
Ausx-uu I~.TEXAS
W’ILL. WILSON
AlTORNEY GENERAL
July 20, 1960
Mr. Raymond W. Vowel1
Executive Director
Board fo,rTexas State Hospitala
& Special Schools
Austin, Texas
Opinion No. WW-888
Re: Whether
- _- the..Board
- for Texas
state nospltals and Special
Schools, acting under Article
666b, Vernon's Civil Statutes,
and through the Board of Con-
trol, may rent housing for
the business manager of the
Dear Mr. Vowell: Denton State School.
You have requested our opinion as to whether the
Board for Texas State Hospitals and Special Schools, act-
ing in compliance with Article 666b of Vernon's Civil
Statutes, through the Board of Control, may furnish rent
housing for the business manager at Denton State School.
Denton State School was established by the Board for
Texas State Hospitals and Special Schools under the author-
ity of Article 3871~ of Vernon's Civil Statutes. Acting
pursuant to Article 3871.~and Section 10 of Article 317&b,
the Board has employed a business manager for Denton State
School.
You state in your letter that the available funds for
the construction of buildings at Denton State School is
limited and for this reason, no living quarters for the
school personnel have been constructed at this time.
Providing rent housing for the business manager of
the school Involves an expenditure of state funds and con-
sequently legislative authority must exist in order that
such an expenditure be valid.
Mr. Raymond W. Vowell, Page 2 (WW-888)
Section 44 of Article III of the Constitution of
the State of Texas authorizes the Legislature to fix
the salaries of State employees. Said section provides:
"The Legislature shall provide by law
for the compensation of all officers, ser-
vants, agents and public contractors, not
provided for in this constitution. D ~ .'
Senate Bill 43, Acts 56th Legislature, 1959, Regu-
lar Session, Chapter 85, Page 144, provides as follows:
"Section 1. The salaries of all state
officers and all state employees, except the
salaries of the District Judges and other
compensation of District Judges, shall be
for the period beginning September 1, 1959,
and ending August 31, 1961, in such sums or
amounts as may be provided for by the Legis-
latura in the general appropriations Act.
. . .
In the General Appropriations Act, House Bill 4,
Acts 56th Legislature, 1959, Third Called Session, Chap-
ter 23, Page 467, the following appropriations have been
made for the Denton State School:
"For the Years Ending
August 31, August 31,
!I
a 0 0 1960 1961
"2. Business Mana-
ger (with house and
utilities).............. $1,725 8 6,900
1,
. 0 e
"8. General operat-
ing expense (excluding
salaries and other wages)
including other operating
expenses, maintenance, re-
pairs, capital outlay, and
travel expense for transfer
of patients Including cost
of travel of employees es-
corting such patients and
all other activities for
which no other provisions
are made................ $42,614 $141,920"
,.--.
Mr. Raymond W. Vowell, Page 3 (WW-888)
Line Item 2 clearly evidences the Intention of the
Legislature to provide housing and utilities for the busi-
ness manager of Denton State School at the expense of the
State. Since there are no state owned housing facilities
available for the business manager at Denton State School,
the only method whereby the Board can, at this time, carry
out the intent of the Legislature is by renting such hous-
ing facilities.
No specific appropriation has been made for the pay-
ment of rental for housing facilities for a business man-
ager at Denton State School. In our opinion none is
required.
The house and utilities to be furnished the business
manager are not a part of his salary. They are something
in addition thereto, an emolument or perquisite of his
employment. That Is to say, they are incident to the
position of business manager, something gained from the
employment above and beyond the salary or wage for ser-
vices rendered. Therefore, the rental payments are a
eneral operating expense properly payable from Line'Item
8 of the appropriation to the Denton State School.
We have previously held in Attorney General's Opinion
~11-760 (December 15, 1959) that the Texas Youth Council,
under circumstances similar to those presented here, was
authorized to rent housing for the business manager at
Crockett State School for Girls.
Therefore, in our opinion, the Board for Texas State
Hospitals and Special Schools is authorized to rent hous-
ing facllltles for the business manager of Denton State
School and may do so through the Board of Control In com-
pliance with Article 666b, Vernon's Civil Statutes.
SUMMARY
The Board for Texas State Hospitals
and Special Schools has authority
to rent housing for the business man-
ager of Denton State School and may
. -- _.
-.
Mr. Raymond W. Vowell, Page 4 (WW-888)
do so by acting through the Board of
Control in compliance with Article
666b, Vernon's Civil Statutes.
Yours very truly,
WILL WILSON
Attorney General of Texas
wos:lmn
APPROVED:
OPINION COMMITTEE
W. V. Geppert, Chairman
J. Arthur Sandlin
John C. Phillips
John L. Estes
Wallace Finfrock
REVIEWED FOR THE ATTORNEY GENERAL
BY: Leonard Passmore
|
BANK ONE AUTO SECURITIZATION TRUST 2003-1
ASSET BACKED NOTES
TERMS AGREEMENT
Dated: October 1, 2003
To:
BANK ONE AUTO SECURITIZATION LLC
BANK ONE, NATIONAL ASSOCIATION
Re:
Underwriting Agreement dated October 1, 2003
Underwriters:
The Underwriters named on Schedule I attached hereto are the “Underwriters” for
the purpose of this Agreement and for the purposes of the above referenced
Underwriting Agreement as such Underwriting Agreement is incorporated herein and
made a part hereof.
Trust: Bank One Auto Securitization Trust 2003-1.
Terms of the Notes:
Initial Principal
Class
Amount
Interest Rate
Price to Public
Class A-1
$149,000,000
1.10%
100.000000%
Class A-2
$245,000,000
1.29%
99.988585%
Class A-3
$151,000,000
1.82%
99.995965%
Class A-4
$160,670,000
2.43%
99.971635%
Class B
$18,329,000
2.10%
99.992338%
Total
$723,999,000
$723,917,961.99
Cutoff Date: August 29, 2003.
Closing Date: October 14, 2003.
Distribution Dates: On the 20th of each month, or if the 20th day is not a
Business Day, the next Business Day, commencing in October 2003.
--------------------------------------------------------------------------------
Note Ratings:
Class
Moody’s
Standard & Poor’s
Class A-1
Prime-1
A-1+
Class A-2
Aaa
AAA
Class A-3
Aaa
AAA
Class A-4
Aaa
AAA
Class B
A3
A+
Indenture: The Indenture, dated as of August 29, 2003, between the Trust and
JPMorgan Chase Bank, as Indenture Trustee.
Trust Agreement: The Trust Agreement, dated as of August 29, 2003, between Bank
One Auto Securitization LLC, as Depositor, and Wilmington Trust Company, as
Owner Trustee.
Sale and Servicing Agreement: The Sale and Servicing Agreement, dated as of
August 29, 2003, among the Trust, Bank One Auto Securitization LLC, as Seller,
Bank One, National Association, as Servicer and JPMorgan Chase Bank, as
Indenture Trustee.
Administration Agreement: The Administration Agreement, dated as of August 29,
2003, among the Trust, Bank One, National Association, as Administrator, and
JPMorgan Chase Bank, as Indenture Trustee.
Purchase Agreement: The Purchase Agreement, dated as of August 29, 2003,
between Bank One, National Association, as Transferor, and Bank One Auto
Securitization LLC, as Purchaser.
Purchase Price:
The purchase price payable by the Underwriters for the Notes covered by this
Agreement will be as set forth below:
Class
Purchase Price Percentage
Dollar Amount
Class A-1
99.910%
$148,865,900.00
Class A-2
99.870%
$244,681,500.00
Class A-3
99.815%
$150,720,650.00
Class A-4
99.765%
$160,292,425.50
Class B
99.720%
$18,277,678.80
Total Purchase Price:
$722,838,154.30
--------------------------------------------------------------------------------
Registration Statement Number: 333-107580.
Underwriter’s Information:
The information furnished by the Underwriters through the Representative for
purposes of Section 9(b) of the Underwriting Agreement consists of the
information set forth in the third, fourth and fifth paragraphs under the
heading “Underwriting” in the Prospectus Supplement.
Location of Closing: McKee Nelson LLP, 5 Times Square, 35th Floor, New York,
New York 10036.
Payment for the Notes:
The Underwriters agree, severally and not jointly, subject to the terms and
provisions of the above-referenced Underwriting Agreement which is incorporated
herein in its entirety and made a part hereof, to purchase the respective
principal amounts of the above-referenced Notes set forth opposite their names
on Schedule I hereto.
The Underwriters agree, severally and not jointly, subject to the terms and
provisions of the above referenced Underwriting Agreement which is incorporated
herein in its entirety and made a part hereof, to purchase the respective
principal amounts of the above referenced Notes set forth opposite their names
on Schedule I hereto.
--------------------------------------------------------------------------------
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicate hereof, whereupon it will
become a binding agreement among the Bank, the Seller and the Underwriters in
accordance with its terms.
BANC ONE CAPITAL MARKETS, INC.
As Representative of the
Underwriters named in Schedule I hereto
By:
/s/ Jeffrey J. Orr
Name: Jeffrey J. Orr
Title: Managing Director
Accepted:
BANK ONE AUTO SECURITIZATION LLC
By:
/s/ Stephen Etherington
Name: Stephen Etherington
Title: Vice President
BANK ONE, NATIONAL ASSOCIATION
By:
/s/ Stephen Etherington
Name: Stephen Etherington
Title: Senior Vice President
--------------------------------------------------------------------------------
SCHEDULE I
UNDERWRITERS
Class A-1
Class A-2
Class A-3
Class A-4
Class B
Principal
Principal
Principal
Principal
Principal
Underwriters
Amount
Amount
Amount
Amount
Amount
Banc One Capital Markets, Inc.
$77,480,000
$127,400,000
$78,520,000
$83,548,400
$18,329,000
Citigroup Global Markets Inc.
$23,840,000
$39,200,000
$24,160,000
$25,707,200
$0
Credit Suisse First Boston LLC
$23,840,000
$39,200,000
$24,160,000
$25,707,200
$0
J.P. Morgan Securities Inc.
$23,840,000
$39,200,000
$24,160,000
$25,707,200
$0
Total:
$149,000,000
$245,000,000
$151,000,000
$160,670,000
$18,329,000
|
382 So. 2d 78 (1980)
Alva RAMEY and Wanda L. Ramey, Appellants,
v.
Peter B. THOMAS and Alice M. Thomas, His Wife, Appellees.
No. KK-465/T1-4.
District Court of Appeal of Florida, Fifth District.
March 12, 1980.
Rehearing Denied April 11, 1980.
*79 Donald C. Jacobson, Daytona Beach, for appellants.
Isham W. Adams, Daytona Beach, for appellees.
SHARP, Judge.
The appellants appeal from an order denying their Motion to Vacate a Final Judgment of adoption of Hope Thomas. For the reasons stated in this opinion, the order is vacated and reversed, and this matter is remanded to the lower court with directions to conduct a full hearing concerning the adoption of this child, require formal notice to the appellants, and the consolidation of all of the various proceedings and reports concerning her.
*80 This case is a classic example of parties warring over a child to such an extent that the primary issue the welfare and best interest of the child got lost in the gunsmoke. In May of 1974, Hope Thomas lost her parents in an airplane crash. She was then only two years old and had been left in the care of her maternal grandparents, who often took care of her when her parents were traveling. An aunt, Marjorie Miller, and an uncle, Michael Thomas, the daughter and son respectively of the appellees, the paternal grandparents, picked Hope up for a visit with her paternal relatives at the time of the funeral. The paternal grandparents then refused to return the child to the maternal grandparents and denied them visitation with the child. The paternal grandfather filed a Petition for Appointment of himself as guardian of Hope Thomas, on May 13, 1974. The maternal grandparents seized the child and took her back to their home; and filed a counter-petition to be appointed her guardian. The paternal grandparents assured the maternal grandparents that both families would be able to spend an equal amount of time with their granddaughter, and all agreed to a court order appointing the paternal grandfather as guardian.
The battle escalated when the paternal grandparents failed to allow the maternal grandparents visitation with Hope and the paternal aunt, Marjorie Miller, petitioned to adopt her. The maternal grandparents counter-petitioned to adopt the child and sought visitation rights. The Division of Family Services did an investigative study and recommended against the adoption because the child needed and deserved a continuing, good relationship with both sets of grandparents. It also recommended that custody be given to the maternal grandparents because they had more capacity to promote meaningful and consistent relationships between the child and her other relatives than did the paternal grandparents. The lower court awarded custody of Hope to the paternal grandparents, but did order visitation for the maternal grandparents every other weekend; and it denied the petition to adopt. As a part of the judgment the court stated:
... it would appear reasonable that, prior to the initiation of any future adoption proceedings, that these parties confer and comprehensively discuss the best interests of the minor child unencumbered by the pendency or imminence of adversarial litigation. (Emphasis supplied).
The court's hope that the parties would concern themselves with Hope's "best interest" was dashed by the paternal grandparents' stingy observance of and denial of the court ordered visitation with Hope for appellants and by the appellants' equally wrongful flight in 1975 to another state with Hope. The maternal grandparents were arrested on July 3, 1977 and the child was returned to Florida, in the custody of the appellees. The state attorney did not prosecute the appellants and they also returned to live in Florida.
The final act in this sad drama began September 9, 1977 when the paternal grandparents filed a petition to adopt Hope Thomas. The proceeding was assigned to a different trial judge, and was given a different case number. The pleadings indicate no mention was made to the judge about the prior adoption proceedings, the existence of the maternal grandparents, or the prior Home Study Report filed by the Division of Family Services. No notice was given nor mention made to the maternal grandparents about the adoption proceeding. The Final Judgment of Adoption was entered on October 28, 1977. Upon learning of the adoption, the maternal grandparents filed motions to vacate the final judgment, and to consolidate the various cases and proceedings concerning Hope Thomas. Still another trial judge heard these motions and denied the relief requested. This appeal was then taken to this Court.
In an adoption proceeding, as well as any other kind of proceeding regarding the custody of a child, the primary issue is the best-interest and welfare of the child. Harden v. Thomas, 329 So. 2d 389 (Fla. 1st DCA 1976); In re Adoption By Cooper, 242 So. 2d 196 *81 (Fla. 1st DCA 1970); In re Vincent's Adoption, 219 So. 2d 454 (Fla. 1st DCA 1969). Section 63.022 of the Florida Statutes (1979) provides:
(1) It is the intent of the legislature to protect and promote the well-being of persons being adopted .. .
(2) The basic safeguards intended to be provided by this act are that:
... (c) The required social studies are completed and the court considers the reports of these studies prior to judgment on adoption petitions . .
At the time the appellees filed their petition for the adoption of Hope Thomas, they and their attorney were well aware of the prior adoption proceedings, the Division of Family Services Report which recommended against any adoption of this child, and the trial court's order stating that all of the prior parties to the prior adoption proceeding should be consulted before any other proceedings were filed. As guardian of Hope Thomas, the paternal grandfather owed a fiduciary duty to reveal to the court all matters which might have a bearing on whether the adoption was in the child's best interest. The failure to disclose such material facts was tantamount to fraud.[1] See Reaves v. Hembree, 330 So. 2d 747 (Fla. 1st DCA 1976); Harrell v. Branson, 344 So. 2d 604 (Fla. 1st DCA 1977) cert. den 353 So. 2d 675 (Fla. 1977).
We regret the necessity to observe that the attorney for the appellees was less than frank with the court in allowing the adoption to be handled essentially ex parte. He represented the child's interests as well as the appellee's, because the grandfather was Hope's legal guardian as well as adopting parent. An attorney is first an officer of the court, bound to serve the ends of justice with openness, candor, and fairness to all. This duty must be served even when it appears in conflict with a client's interests.[2] However, no compromise of the appellee's legal rights would have resulted from the attorney's candor and openness in this case. Rather, its absence created the necessity for more litigation and the continued disruption of Hope's life.
Had the trial court been informed about the prior adoption proceedings, the report of the Division of Family Services, and the interest and relationship of the maternal grandparents, it may well have taken various steps to insure that Hope's best interest and welfare were served: appoint a guardian ad litem to represent her, since the appellee-grandfather had assumed the role of a litigant;[3] require that notice of the adoption proceedings be given to the maternal grandparents,[4] pursuant to the court's prior judgment which entitled them to temporary custody of the child and consultation prior to the filing of a new adoption proceeding; and order a new report from the Department of Health and Rehabilitative Services,[5] in view of the prior adverse one. Here the lower court was deprived of essential information necessary to enable it to determine whether the proposed adoption was in the child's best interest.
The appellees urge that the appellants have no standing to attack this *82 adoption, since they were not parties thereto. The family relationship of grandparent to grandchild is significant and meaningful, even if it were not given legal recognition and status. Matter of Adoption of Noble, 349 So. 2d 1215 (Fla. 4th DCA 1977). But the law of Florida recognizes substantial rights between grandparent and grandchild.[6] The adoption of Hope Thomas by appellees severs and cuts off any relationship with the appellants.[7] The appellants have a sufficient interest to seek equitable relief from the judgment of adoption, where such judgment was obtained through concealment of material facts.[8]
REVERSED AND REMANDED for proceedings consistent with this opinion.
DAUKSCH, C.J., concurs.
UPCHURCH, J., concurs specially with opinion.
UPCHURCH, Judge, specially concurring:
While I concur in all respects with Judge Sharp's opinion, this case illustrates a serious problem with our adoption statute. Section 63.122(4), Florida Statute (1977), requires notice of adoption be given only to:
4. (a) The [D]epartment or any agency placing the minor.
(b) The intermediary.
(c) Any person whose consent to the adoption is required by this act who has not consented unless such person's consent is excused by the court.
Although an investigation by the Department of Health and Rehabilitative Services is usually required, it is not required when the petitioner is a stepparent or when the child is related to one of the adoptive parents within the third degree.
It would be inconceivable to most normal grandparents to learn that they could be summarily denied access to their orphaned grandchild without receiving notice of any kind.
In the case before us, the child was the owner of a sizable personal estate. As a result of the adoption judgment, the paternal grandparents were accorded the right to inherit by intestacy from the child; on the other hand, the maternal grandparents were deprived of that right. The child also lost the right to inherit by intestacy from the maternal grandparents.[1] While I do not believe, and the record does not reflect, that this was a motivating factor in the litigation between these parties, it illustrates that substantial property rights may be lost without protection or notice to those affected. Whether the statute meets the requirements of due process as to those property rights is not a question before us at this time. U.S.Const. amend. XIV; Fla. Const. Art. 1, § 9. See Fuentes v. Shevin, 407 U.S. 67, 92 S. Ct. 1983, 32 L. Ed. 2d 556 (1972). In a case involving such property rights, the trial judge should anticipate a possible conflict between a petitioner's interest as a potential beneficiary and his duty as a guardian of the minor, and should act in the minor's best interest by appointing a guardian ad litem.[2]
In any case involving an orphaned minor, when the protection of the investigation of the Department of Health and Rehabilitative Services is not available, inquiry should be made by the court as to the whereabouts of the next of kin and consideration given to a requirement of notice to such person or persons. Such notice is required, in most instances, for the appointment of the *83 guardian of a minor or incompetent.[3] It is incongruous that there is no such requirement for an adoption in which the relationship and effects are permanent.
NOTES
[1] Although not directly applicable to adoption proceedings, Florida's new Uniform Child Custody Jurisdiction Act (Ch. 61.1302 et seq.) makes it clear that the public policy of this state requires parties seeking orders regarding the custody of a child, is to require them to fully disclose to the court making such a determination all prior custody proceedings concerning the child and the identity of all persons who have or claim any rights of custody or visitation with the child.
[2] Fla.Bar Code Prof.Resp., EC 8-5. Fraudulent, deceptive or otherwise illegal conduct by a participant in a proceeding before a tribunal or legislative body is inconsistent with fair administration of justice, and it should never be participated in or condoned by lawyers. Unless constrained by his obligation to preserve the confidence and secrets of his client, a lawyer should reveal to appropriate authorities any knowledge he may have of such improper conduct.
[3] § 744.391 Fla. Stat. (1979).
[4] § 62.062(2)(a) Fla. Stat. (1979).
[5] § 63.092(2) Fla. Stat. (1979).
[6] § 732.103 Fla. Stat. (1979) (inheritance) and § 61.13(2)(b) Fla. Stat. (1979) (visitation rights of grandparents in dissolution proceedings).
[7] § 63.172 Fla. Stat. (1979).
[8] Rule 1.540(b), Fla.Rules of Civil Procedure; Milgram v. Lee, 200 So. 2d 238 (Fla. 3d DCA 1977). Appellants technically should have filed a new proceeding attaching the final judgment rather than a motion under Rule 1.540(b). However, this court will treat this proceeding as though it had been property filed, to avoid further delay and promote the best interests of the child.
[1] § 63.172, Florida Statutes (1977).
[2] § 744.391, Florida Statutes (1977).
[3] § 744.337, Fla. Stat. (1979).
|
Citation Nr: 0841844
Decision Date: 12/05/08 Archive Date: 12/17/08
DOCKET NO. 06-07 290 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in St. Louis,
Missouri
THE ISSUES
1. Entitlement to an initial rating in excess of 10 percent
for service-connected chronic low back pain (herniated
nucleus pulposus with spinal stenosis).
2. Entitlement to an initial compensable rating for service-
connected residuals of fracture of the right small finger.
3. Entitlement to service connection for residuals of a right
knee injury.
4. Entitlement to service connection for residuals of a left
knee injury.
REPRESENTATION
Veteran represented by: Veterans of Foreign Wars of
the United States
ATTORNEY FOR THE BOARD
K. M. Schaefer, Associate Counsel
INTRODUCTION
The veteran served on active duty from November 2000 to
November 2004.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal from a rating decision issued in April 2005
by the Department of Veterans Affairs (VA) Regional Office
(RO) in St. Louis, Missouri. With regard to the veteran's
low back disability, this rating decision granted service
connection and assigned an initial noncompensable rating,
effective November 9, 2004. Thereafter, the veteran appealed
with respect to the initially assigned rating. While his
appeal was pending, a rating decision issued in January 2006
assigned a 10 percent evaluation, effective November 9, 2004.
However, as this rating is still less than the maximum
benefit available, the appeal is still pending. AB v. Brown,
6 Vet. App. 35, 38 (1993).
The Board notes that the April 2005 rating decision also
granted service connection for right lower extremity
claudication, including intermittent radicular symptoms, and
assigned an initial noncompensable rating, effective November
9, 2004. The veteran's May 2005 notice of disagreement
specifically states that he disagrees with the decisions with
regard to his lower back pain, right hand, left knee, and
right knee. He does not indicate any disagreement with the
rating assigned for the right lower extremity claudication,
which includes the intermittent radiculopathy, and no further
adjudication by VA has occurred with regard to this rating.
Although the intermittent radiculopathy is associated with
the veteran's service-connected low back disability, it was
rated as a separate disability in the April 2005 rating
decision; therefore, for VA rating purposes, disagreement
with the initial rating for the veteran's low back disability
does not encompass the rating for right lower extremity
claudication, including the intermittent radiculopathy.
Therefore, the Board determines that the initial rating
evaluation for this disability is not on appeal at this time.
However, in the October 2008 informal hearing presentation,
the veteran, through his representative, argued that another
examination is necessary to determine the extent of the nerve
damage involved in the intermittent radiculopathy. The Board
views this statement as a new claim for a compensable rating
for service-connected right lower extremity claudication,
including intermittent radicular symptoms, and it is REFERRED
to the RO for appropriate action.
FINDINGS OF FACT
1. Service-connected chronic low back pain (herniated nucleus
pulposus with spinal stenosis) is manifested by range of
motion of flexion to 80 degrees, extension to 15 degrees,
lateral flexion to 30 degrees bilaterally, and lateral
rotation to 25 degrees bilaterally; flexion, extension, and
rotation limited by discomfort in the back, but with no
fatigability upon repetition.
2. Service-connected chronic low back pain (herniated
nucleus pulposus with spinal stenosis) is not productive of
paraspinous muscle spasm, abnormal gait, or postural
abnormalities.
3. Service-connected residuals of a fracture of a right small
finger is manifested by a 15 degree flexion deformity over
the MIP joint, difficulty with apposition between the thumb
and fifth finger, and the ability to bring the tip of the
fifth finger to within 1/4 inch of the palm.
4. The medical evidence of record does not demonstrate that
the veteran has a current diagnosis of residuals of a right
knee injury.
5. The medical evidence of record does not demonstrate that
the veteran has a current diagnosis of residuals of a left
knee injury.
CONCLUSIONS OF LAW
1. The criteria for an initial rating in excess of 10 percent
or service-connected chronic low back pain have not been met.
38 U.S.C.A. § 1155 (West 2002); 38 C.F.R. § 4.71a, Diagnostic
Code 5243 (2008).
2. The criteria for an initial compensable rating for
service-connected residuals of a fracture of the right small
finger have not been met. 38 U.S.C.A. § 1155 (West 2002);
38 C.F.R. § 4.71a, Diagnostic Code 5227 (2008).
3. Residuals of a right knee injury were not incurred in or
aggravated by the veteran's active duty military service. 38
U.S.C.A. § 1110 (West 2002); 38 C.F.R. § 3.303 (2008).
4. Residuals of a left knee injury were not incurred in or
aggravated by the veteran's active duty military service. 38
U.S.C.A. § 1110 (West 2002); 38 C.F.R. § 3.303 (2008).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
I. VA's Duties to Notify and Assist
The Veterans Claims Assistance Act of 2000 (VCAA) imposes
certain duties upon VA to notify the claimant of the shared
obligations of the claimant and VA in developing his or her
claim and to assist the claimant by making reasonable efforts
to obtain relevant evidence in support of the claim. 38
U.S.C.A. §§ 5102, 5103, 5103A, 5107 (West 2002 & Supp. 2008);
38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2007).
VA must inform a claimant about the information and evidence
not of record that is necessary to substantiate the claims,
the information and evidence that VA will seek to provide,
and the information and evidence that the claimant is
expected to provide. 38 C.F.R. § 3.159(b)(1) (revised 73
Fed. Reg. 23353-23356, April 30, 2008); Quartuccio v.
Principi, 16 Vet. App. 183 (2002). Additionally, in the
consolidated appeal of Dingess/Hartman v. Nicholson, 19 Vet.
App. 473 (2006), the Court of Appeals for Veterans Claims
(Court) held that VCAA notice requirements also apply to the
evidence considered in determinations of the degree of
disability and effective date of the disability once service
connection has been established.
The Board notes that, in Pelegrini, the Court held that VA
must request that the claimant provide any evidence in his
possession that pertains to the claim based upon 38 C.F.R.
§ 3.159(b). Nevertheless, during the course of the appeal,
38 C.F.R. § 3.159(b) was revised to eliminate the requirement
of requesting that the claimant provide any evidence in his
or her possession that pertains to the claim. See 73 Fed.
Reg. 23353 (final rule revising 38 C.F.R. § 3.159(b) to
rescind fourth element notice as required under Pelegrini,
effective May 30, 2008). Thus, any defect in notice as to
this element is considered harmless.
VCAA notice must be provided before the initial unfavorable
agency of original jurisdiction (AOJ) decision on the claims
for VA benefits. Pelegrini v. Principi, 18 Vet. App. 112
(2004). In this case, the veteran was provided with a VCAA
notification letter in January 2005 with regard to his
service connection claims, prior to the initial unfavorable
AOJ decision issued in April 2005.
In reviewing the claims file, the Board observes that the
pre-adjudicatory VCAA notice issued in January 2005 informed
the veteran of the type of evidence necessary to establish
service connection, how VA would assist him in developing his
claims, and his and VA's obligations in providing such
evidence for consideration. With regard to the initial
rating claims, such claims are generally considered to be
"downstream" issues from the original grant of benefits.
VA's General Counsel issued an advisory opinion holding that
separate notice of VA's duty to assist the veteran and of his
concomitant responsibilities in the development of his claim
involving such downstream issues is not required when the
veteran was provided adequate VCAA notice following receipt
of the original claim. See VAOPGCPREC 8-2003. Further,
where a claim has been substantiated after the enactment of
the VCAA, the appellant bears the burden of demonstrating any
prejudice from defective VCAA notice with respect to the
downstream elements. See Goodwin v. Peake, 22 Vet. App. 128
(2008), citing Dunlap v. Nicholson, 21 Vet. App. 112, 119
(2007). In this case, the veteran has not alleged that he
has suffered any prejudice as to the lack of pre-adjudicatory
notice as to disability ratings and effective dates.
Moreover, the Board notes that no duty to assist arises upon
receipt of a Notice of Disagreement. 38 C.F.R. §
3.159(b)(3); see 73 Fed. Reg. 23353 (adding paragraph (3)
under § 3.159(b). However, generally, failure to provide
pre-adjudicative notice of any elements of claim the veteran
must substantiate is presumed to create prejudicial error.
See Sanders v. Nicholson, 487 F.3d 881 (Fed. Cir. 2007);
Simmons v. Nicholson, 487 F.3d 892 (Fed. Cir. 2007). The
Secretary has the burden to show that this error was not
prejudicial to the veteran. Lack of prejudicial harm may be
shown in three ways: (1) that any defect was cured by actual
knowledge on the part of the claimant, (2) that a reasonable
person could be expected to understand from the notice what
was needed, or (3) that a benefit could not have been awarded
as a matter of law. Sanders; see also Mayfield v. Nicholson,
19 Vet. App. 103, (2005), rev'd on other grounds, Mayfield v.
Nicholson, 444 F.3d 1328 (Fed. Cir. 2006).
In the present case, the veteran was not sent a VCAA letter
with regard to either of his initial rating claims.
Nevertheless, in a March 2006 statement submitted by the
veteran's representative, the veteran argues that his
service-connected back and right middle finger disabilities
were more severe and that therefore, they warranted higher
evaluations. Thus, the Board concludes the veteran had
knowledge that he must show that his service-connected
disabilities had increased in severity so as to support
higher rating evaluations.
As for the lack of notice with regard to effective dates, the
Board finds their prejudice in the veteran as a result of
this omission. See Bernard v. Brown, 4 Vet. App. 384, 394
(1993) (where the Board addresses a question that has not
been addressed by the agency of original jurisdiction, the
Board must consider whether the veteran has been prejudiced
thereby). As the Board herein denies the veteran's initial
rating and service connection claims, any questions as to the
appropriate effective dates to be assigned are rendered moot.
The Board acknowledges that a recent Court decision held that
there are specific requirements for VCAA notices in increased
rating claims. Vazquez-Flores v. Peake, 22 Vet. App. 37
(2008). However, the Board determines that these
requirements do not apply to initial rating claims, such as
those now before the Board. Initially, the Board notes that
Vazquez-Flores was an appeal of an increased rating claim,
not an initial rating claim. More importantly, the Court's
decision distinguishes the notice requirements therein
defined from the notice required for initial rating claims.
Specifically, the Court, after outlining the notice
requirements for increased rating claims, states that the
notice in an increased rating claim must also provide
examples of the medical and lay evidence that are relevant to
establishing entitlement to increased compensation, "[a]s
with proper notice for an initial disability rating." Id.
at 43. Thus, the Board concludes that the Court intended the
requirements outlined in its decision to apply only to
increased rating claims, and therefore, that they are not
applicable to the instant claims. Based on the above
analysis, the notice requirements for initial rating claims
have been met.
Accordingly, the Board determines that the content
requirements of VCAA notice have been met and the purpose of
such notice, to promote proper development of the claim, has
been satisfied. See Vazquez-Flores at 41, citing Mayfield v.
Nicholson, 444 F.3d 1328, 1333 (Fed. Cir. 2006). Based on
the above, the Board finds that further VCAA notice is not
necessary prior to the Board issuing a decision.
VA has also fulfilled its duty to assist the veteran in
making reasonable efforts to identify and obtain relevant
records in support of the veteran's claims and providing him
with a VA examination. The veteran's service treatment
records, VA medical records, and the report of a December
2005 VA examination were reviewed by both the AOJ and the
Board in connection with adjudication of his claims. The
veteran has not identified any additional, relevant records
that VA needs to obtain for an equitable disposition of the
claims.
In light of the above, the Board concludes that the medical
evidence of record is sufficient to adjudicate the veteran's
claims without further development and additional efforts to
assist or notify the veteran in accordance with VCAA would
serve no useful purpose. See Soyini v. Derwinski, 1 Vet.
App. 540, 546 (1991) (strict adherence to requirements of the
law does not dictate an unquestioning, blind adherence in the
face of overwhelming evidence in support of the result in a
particular case; such adherence would result in unnecessarily
imposing additional burdens on VA with no benefit flowing to
the veteran). Therefore, the Board determines that the
veteran will not be prejudiced by the Board proceeding to the
merits of the claims.
II. Statutes and regulations
Law of initial ratings
Disability evaluations are determined by the application of
VA's Schedule for Rating Disabilities (Rating Schedule),
38 C.F.R. Part 4 (2008). The percentage ratings contained in
the Rating Schedule represent, as far as can be practicably
determined, the average impairment in earning capacity
resulting from diseases and injuries incurred or aggravated
during military service and their residual conditions in
civil occupations. 38 U.S.C.A. § 1155; 38 C.F.R. § 4.1. The
basis of disability evaluation is the ability of the body as
a whole, or of the psyche, or of a system or organ of the
body to function under the ordinary conditions of daily life
including employment. 38 C.F.R. § 4.10.
Where there is a question as to which of two evaluations
shall be applied, the higher evaluation will be assigned if
the disability picture more nearly approximates the criteria
for that rating. Otherwise the lower rating will be
assigned. 38 C.F.R. § 4.7. All benefit of the doubt will be
resolved in the veteran's favor. 38 C.F.R. § 4.3.
In general, all disabilities, including those arising from a
single disease entity, are rated separately, and all
disability ratings are then combined in accordance with
38 C.F.R. § 4.25. Pyramiding, the evaluation of the same
disability, or the same manifestation of a disability, under
different diagnostic codes, is to be avoided when rating a
veteran's service-connected disabilities. 38 C.F.R. § 4.14.
In rating musculoskeletal disabilities, the provisions of 38
C.F.R. §§ 4.10, 4.40, and 4.45 are for consideration. See
DeLuca v. Brown, 8 Vet. App. 202 (1995).
The basis of disability evaluation is the ability of the body
as a whole, or of the psyche, or of a system or organ of the
body to function under the ordinary conditions of daily life
including employment. 38 C.F.R. § 4.10.
Disability of the musculoskeletal system is primarily the
inability, due to damage or infection in parts of the system,
to perform the normal working movements of the body with
normal excursion, strength, speed, coordination, and
endurance. Functional loss may be due to the absence or
deformity of structures or other pathology, or it may be due
to pain, supported by adequate pathology and evidenced by the
visible behavior in undertaking the motion. Weakness is as
important as limitation of motion, and a part that becomes
painful on use must be regarded as seriously disabled. 38
C.F.R. § 4.40.
With respect to joints, in particular, the factors of
disability reside in reductions of normal excursion of
movements in different planes. Inquiry will be directed to
more or less than normal movement, weakened movement, excess
fatigability, incoordination, pain on movement, swelling,
deformity or atrophy of disuse.
38 C.F.R. § 4.45.
The applicable regulations for rating spine disabilities
became effective on September 26, 2003. See 38 C.F.R. §
4.71a, Diagnostic Code 5235-5243 (2008).
As relevant to the lumbar spine, under the General Rating
Formula for Diseases and Injuries of the Spine, with or
without symptoms such as pain (whether or not it radiates),
stiffness, or aching in the area of the spine affected by
residuals of injury or disease, unfavorable ankylosis of the
entire spine warrants a 100 percent rating. Unfavorable
ankylosis of the entire thoracolumbar spine warrants a 50
percent rating. Forward flexion of the thoracolumbar spine
30 degrees or less; or, favorable ankylosis of the entire
thoracolumbar spine warrants a 40 percent rating. Forward
flexion of the thoracolumbar spine greater than 30 degrees
but not greater than 60 degrees or, the combined range of
motion of the thoracolumbar spine not greater than 120
degrees; or, muscle spasm or guarding severe enough to result
in an abnormal gait or abnormal spine contour such as
scoliosis, reversed lordosis, or abnormal kyphosis warrants a
20 percent rating. Forward flexion of the thoracolumbar
spine greater than 60 degrees but not greater than 85 degrees
or combined range of motion of the thoracolumbar spine
greater than 120 degrees but not greater than 235 degrees; or
muscle spasm, guarding, or localized tenderness not resulting
in an abnormal gait or abnormal spinal contour; or, for
vertebral body fracture and loss of 50 percent or more of the
height warrants a 10 percent rating evaluation.
The notes applicable to the General Formula are as follows:
Note (1): Evaluate any associated objective
neurological abnormalities, including, but not
limited to, bowel or bladder impairment,
separately, under an appropriate diagnostic code.
Note (2): (See also Plate V.) For VA compensation
purposes, normal forward flexion of the cervical
spine is zero to 45 degrees, extension is zero to
45 degrees, left and right lateral flexion are
zero to 45 degrees, and left and right lateral
rotation are zero to 80 degrees. Normal forward
flexion of the thoracolumbar spine is zero to 90
degrees, extension is zero to 30 degrees, and left
and right lateral rotation are zero to 30 degrees.
The combined range of motion refers to the sum of
the range of forward flexion, extension, left and
right lateral flexion, and left and right
rotation. The normal combined range of motion of
the cervical spine is 340 degrees and of the
thoracolumbar spine is 240 degrees. The normal
ranges of motion for each component of spinal
motion provided in this note are the maximum that
can be used for calculation of the combined range
of motion.
Note (3): In exceptional cases, an examiner may
state that because of age, body habitus,
neurologic disease, or other factors not the
result of disease or injury of the spine, the
range of motion of the spine in a particular
individual should be considered normal for that
individual, even though it does not conform to the
normal range of motion stated in Note (2).
Provided that the examiner supplies an
explanation, the examiner's assessment that the
range of motion is normal for that individual will
be accepted.
Note (4): Round each range of motion measurement
to the nearest five degrees.
Note (5): For VA compensation purposes,
unfavorable ankylosis is a condition in which the
entire cervical spine, the entire thoracolumbar
spine, or the entire spine is fixed in flexion or
extension, and the ankylosis results in one or
more of the following: difficulty walking because
of a limited line of vision; restricted opening of
the mouth and chewing; breathing limited to
diaphragmatic respiration; gastrointestinal
symptoms due to pressure of the costal margin on
the abdomen; dyspnea or dysphagia; atlantoaxial or
cervical subluxation or dislocation; or neurologic
symptoms due to nerve root stretching. Fixation
of a spinal segment in neutral position (zero
degrees) always represents favorable ankylosis.
Note (6): Separately evaluate disability of the
thoracolumbar and cervical spine segments, except
when there is unfavorable ankylosis of both
segments, which will be rated as a single
disability.
Under Diagnostic Code 5003, degenerative arthritis
established by X-ray findings will be rated on the basis of
limitation of motion under the appropriate diagnostic code(s)
for the specific joint(s) involved. When, however, the
limitation of motion of the specific joint(s) involved is
noncompensable under the appropriate diagnostic code(s), a 10
percent rating is for application for each such major joint
or group of minor joints affected by limitation of motion, to
be combined, not added under Diagnostic Code 5003.
Limitation of motion must be objectively confirmed by
findings such as swelling, muscle spasm, or satisfactory
evidence of painful motion.
Under Diagnostic Code 5243, intervertebral disc syndrome may
be rated under either the General Formula or under the
Formula for Rating Intervertebral Disc Syndrome (IVDS) Based
on Incapacitating Episodes. Under the Formula for Rating
Intervertebral Disc Syndrome, incapacitating episodes having
a total duration of at least one week but less than 2 weeks
during the past 12 months warrants a rating of 10 percent.
Incapacitating episodes having a total duration of at least 2
weeks but less than 4 weeks during the past 12 months
warrants a rating of 20 percent. Incapacitating episodes
having a total duration of at least 4 weeks but less than 6
weeks during the past 12 months warrants a rating of 30
percent. Incapacitating episodes having a total duration of
at least 6 weeks during the past 12 months warrants a rating
of 60 percent.
Note (1): For purposes of evaluating under
diagnostic code 5243, an incapacitating episode is
a period of acute signs and symptoms due to
intervertebral disk syndrome that requires bed
rest prescribed by a physician and treatment by a
physician.
Note (2): If intervertebral disk syndrome is
present in more than one spinal segment, provided
that the effects in each spinal segment are
clearly distinct, evaluate each segment on the
basis of incapacitating episodes or under the
General Rating Formula for Diseases and Injuries
of the Spine, whichever method results in a higher
evaluation for that segment.
Rating evaluations for hand disabilities are dependent on
whether the arm involved is the major or minor joint, i.e.,
whether it is related to the dominant or nondominant hand.
Handedness for the purpose of a dominant rating will be
determined by the evidence of record, or by testing on VA
examination. Only one hand shall be considered dominant. 38
C.F.R. § 4.69. In this case, the Board observes that the
December 2005 VA examination report states that the veteran
is right hand dominant.
The veteran's right small finger disability has been rated
under Diagnostic Code 5227, which contemplates ankylosis of
the ring or little finger. Under Diagnostic Code 5227, a
noncompensable evaluation is warranted for unfavorable or
favorable ankylosis of the little finger. The Rating
Schedule also indicates that where the ring finger is
ankylosed, VA may consider whether the disability is
analogous to amputation, or whether the disability results in
the limitation of motion of other digits, or otherwise
interferes with the overall function of the hand. 38 C.F.R.
§ 4.71a, Diagnostic Code 5227. In this regard, amputation of
the little finger warrants a 10 percent evaluation without
metacarpal resection at the proximal interphalangeal joint,
or proximal thereto. A 20 percent evaluation is warranted
with amputation of the little finger with more than one half
of the bone lost.
38 C.F.R. § 4.71a, Diagnostic Code 5155.
Diagnostic Code 5230 contemplates limitation of motion of the
ring or little finger. 38 C.F.R. § 4.71a, Diagnostic Code
5230. Under Diagnostic Code 5230, a noncompensable
evaluation is warranted for any limitation of motion of the
little finger. Accordingly, Diagnostic Code 5230 cannot
serve as a basis for an increased rating in this case.
Law of service connection
Service connection may be granted for disability arising from
disease or injury incurred in or aggravated by service. 38
U.S.C.A. § 1110 (West 2002); 38 C.F.R.
§ 3.303(a). Service connection may also be granted for any
disease diagnosed after discharge when all the evidence,
including that pertinent to service, establishes that the
disease was incurred in service. 38 C.F.R. § 3.303(d).
A finding of direct service connection requires medical
evidence of a current disability; medical or, in certain
circumstances, lay evidence of in-service incurrence or
aggravation of a disease or injury; and medical evidence of a
nexus between the claimed in-service disease or injury and
the present disease or injury. 38 U.S.C.A. § 1112; 38 C.F.R.
§ 3.304. See also Caluza v. Brown, 7 Vet. App. 498, 506
(1995) aff'd, 78 F.3d 604 (Fed. Cir. 1996) (table)].
Alternatively, service connection may be established under 38
C.F.R. § 3.303(b) by (a) evidence of (i) the existence of a
chronic disease in service or during an applicable
presumption period under 38 C.F.R. § 3.307 and (ii) present
manifestations of the same chronic disease, or (b) when a
chronic disease is not present during service, evidence of
continuity of symptomatology.
In evaluating a claim for aggravation of a preexisting
disorder during service, the Board must first determine that
the disorder preexisted service. When no preexisting
disorder is noted upon entry into service, the veteran is
presumed to have been sound upon entry and the presumption of
soundness arises. 38 U.S.C.A. § 1111; Wagner v. Principi,
370 F.3d 1089 (Fed. Cir. 2004). However, if a preexisting
disorder is noted upon entry into service, the veteran cannot
claim service connection for that disorder, but the veteran
may bring a claim for service-connected aggravation of that
disorder. See Jensen v. Brown, 19 F.3d 1413, 1417 (Fed. Cir.
1994). The pertinent VA regulation provides expressly that
the term "noted" denotes "[o]nly such conditions as are
recorded in examination reports." 38 C.F.R. § 3.304(b).
If a veteran is found to have had a preexisting disability
and there is an increase in that disability during service,
38 U.S.C.A. § 1153 provides that a preexisting injury or
disease will be presumed to have been aggravated during
service, unless there is a specific finding that the increase
in disability is due to the natural progress of the disease.
However, aggravation will not be conceded where there was no
increase in severity of the disability during service, based
on all the evidence of record pertaining to the
manifestations of the disability prior to, during, and
subsequent to service.
The veteran has the responsibility to establish an increase
in severity. See Jensen v. Brown, 19 F.3d 1413, 1417 (Fed.
Cir. 1994). Such increase must be shown through independent
medical evidence. See Paulson v. Brown, 7 Vet. App. 466,
470-471 (1995); Crowe v. Brown, 7 Vet. App. 238, 246 (1994).
If there is no evidence of injury, complaints, or treatment
of the preexisting disability in service, an increase in
severity has not been shown. However, should such increase
be established, aggravation is presumed to be the result of
service, unless rebutted by clear and unmistakable evidence.
38 U.S.C.A. § 1111; Wagner; see also VAOPGCPREC 3-03 (July
16, 2003); 38 U.S.C.A. § 1153; 38 C.F.R. § 3.306(b). A
claimant is not required to show that the disease or injury
increased in severity during service before VA's duty under
the rebuttal standard attaches. Cotant v. Principi, 17 Vet.
App. 116 (2003); see also VAOPGCPREC 3-03 (July 16, 2003).
Any increase in severity must also be permanent. Recurrence
or temporary flare-ups of symptoms do not constitute an
increase in severity. Davis v. Principi, 273 F.3d 1341, 1345
(Fed. Cir. 2002); see Jensen v. Brown, 4 Vet. App. 304, 306-
307 (1993); Hunt v. Derwinski, 1 Vet. App. 292 (1991).
III. Analysis
Increased rating: chronic low back pain
The veteran's service connected chronic low back pain is
currently assigned a 10 percent disability rating, pursuant
to Diagnostic Code 5243. He argues that his disability
warrants a higher rating than that assigned.
The veteran was afforded a VA examination in December 2005.
At the examination, the veteran reported that he experienced
pain after walking for a mile and that he wears a brace when
his back is bothering him, but not on a daily basis. The
examiner noted that the veteran was fully independent in his
activities of daily living.
Upon physical examination, the examiner observed range of
motion of forward flexion to 80 degrees, extension to 15
degrees, lateral flexion to 30 degrees bilaterally, and
lateral rotation to 25 degrees bilaterally. Forward flexion,
extension, and rotation were limited by discomfort in the
back; however, there was no fatigability noted upon
repetition. The examiner also observed no paraspinous muscle
spasm, abnormal gait, or postural abnormalities.
This examination report is the only medical evidence
demonstrating the severity of the veteran's low back
disability. The VA treatment records associated with the
claims file, to the extent they are relevant the veteran's
back disability, do not provide any information that is
inconsistent or additional to the findings upon examination.
Based on this evidence, a rating in excess of 10 percent for
the veteran's service-connected chronic low back pain is not
warranted. The 10 percent rating assigned contemplates his
limitation of motion, and there is no additional limitation
noted due to pain, weakness, fatigability, lack of endurance,
or incoordination noted. There is also no medical evidence
of paraspinal muscle spasm, or abnormal gait or posture.
Without evidence of flexion to less than 60 degrees, combined
range of motion of the thoracolumbar spine not greater than
120 degrees, or muscle spasm, or guarding resulting in an
abnormal gait or abnormal spine contour such as scoliosis,
reversed lordosis, or abnormal kyphosis, there is no basis
for a rating in excess of 10 percent.
Additionally, as the veteran does not experience
incapacitating episodes, there is no support for a rating
under the Formula for IVDS. Further, the medical evidence
does not show that the veteran has arthritis of his back, and
regardless, his limitation of motion is contemplated under
the 10 percent rating evaluation assigned. Consequently, a
rating under Diagnostic Code 5003 is not for consideration.
Accordingly, the Board finds that there is no basis for a
rating in excess of 10 percent for service-connected chronic
low back pain.
Increased rating: residuals of fracture of the right small
finger
Residuals of a fracture of the right small finger are
currently assigned a noncompensable rating under Diagnostic
Code 5227. The veteran disagrees with the assigned rating.
However, the Board observes that a noncompensable rating is
the only rating evaluation available under Diagnostic Code
5227 for either the major or minor small finger. At the
December 2005 VA examination, the examiner noted a 15 degree
flexion deformity over the MIP joint of the right fifth
finger, difficulty with apposition between the thumb and
fifth finger, and that the veteran could bring the tip of his
fifth finger to within 1/4 inch of his palm. Grip strength was
5/5, and sensation was intact. The veteran reported no
interference with his activities of daily living or his work
as a pipe fitter. X-rays showed no osteoarthritic changes.
Thus, the evidence does not suggest that the veteran has lost
use of his right small finger to an extent analogous to
amputation of that finger to warrant a rating under
Diagnostic Code 5155. Based on the above, an initial
compensable rating for service-connected residuals of
fracture of the right small finger is denied.
Service connection: Right and left knee
The veteran contends that he continues to suffer from
residuals of injuries to his right and left knee that
occurred in service. Specific to his left knee, he states
that a skiing accident in service aggravated a preexisting
disorder. Thus, he contends that service connection is
warranted for disorders of the right and left knee.
Initially, with regard to the left knee, the Board observes
that the record reflects that the veteran underwent left knee
arthroscopic surgery in 1997. However, at his October 2000
enlistment examination, the veteran did not report any
medical history or current problem with his left knee. His
clinical examination at that time was normal. Thus, a
preexisting left knee disability was not noted at entrance
into service, and the veteran is presumed to have been in
sound condition upon entry into service. 38 U.S.C.A. § 1111;
Wagner.
Nevertheless, clear and unmistakable evidence that the injury
or disease preexisted service may rebut this presumption. In
this case, the only evidence that the veteran suffered
preexisting disability of the left knee are his reports of
the 1997 surgical procedure. There is no medical evidence
that the surgery resulted in a chronic disability or that the
veteran had any disorder of the left knee upon entry into
service. The Court has held that lay statements by a veteran
concerning a preexisting condition are not sufficient to
rebut the presumption of soundness. Paulson (a lay person's
account of what a physician may or may not have diagnosed is
insufficient to support a conclusion that a disability
preexisted service); Crowe (supporting medical evidence is
needed to establish the presence of a preexisting condition).
With no competent evidence to the contrary, the veteran's
medical condition upon entrance to service is presumed to
have been sound. Consequently, there can be no claim for
service connection for aggravation of a left knee disability.
Therefore, the Board's analysis turns to the question of
whether the veteran currently suffers from a right or left
knee disorder, and, if so, whether either disorder began in
or is otherwise a result of his military service.
Service treatment records reflect that the veteran was
diagnosed with patellar bursitis of the right knee while in
service. They also reveal that the veteran complained of a
left knee injury while skiing in December 2001, but there is
no medical evidence of a diagnosis of a left knee disorder at
that time, and X-rays were negative. There is also no
indication that the veteran developed a chronic disorder of
either knee from these events, and the Board notes that the
veteran's clinical examination at separation was normal.
Moreover, there is no competent evidence that the veteran
currently suffers from a right or left knee disorder. At the
December 2005 VA examination, the examiner found no current
disorder of either knee, stating that the right knee patellar
bursitis and left knee injury treated in service had both
resolved. X-rays at the examination showed normal knees. VA
treatment records also provide no evidence that the veteran
has a current diagnosis of either a right or left knee
disorder.
Thus, the Board concludes that the veteran does not have a
current disorder of either the right or left knee. Where
there is no disability, there can be no entitlement to
compensation. See Degmetich v. Brown, 104 F.3d 1328 (1997);
Brammer v. Derwinski, 3 Vet. App. 223, 225 (1992). Thus,
service connection for residuals of a right knee injury and
residuals of a left knee injury must be denied.
IV. Other considerations
The Board acknowledges the veteran's statements with regard
to the severity of his low back and right finger
disabilities, as well as with regard to his right and left
knee symptomatology. Laypersons are competent to speak to
symptomology when the symptoms are readily observable. Layno
v. Brown, 6 Vet. App. 465, 469 (1994). However, only those
with specialized medical knowledge, training, or experience
are competent to provide evidence on the question of
diagnosis, causation, and severity. See Jones v. Brown, 7
Vet. App. 134, 137 (1994); Espiritu v. Derwinski, 2 Vet.
App. 492, 494 (1992). In the present case, the competent
medical evidence does not support the claims.
The Board has contemplated whether staged ratings are
appropriate in evaluating the veteran's service-connected low
back and right small finger disabilities. See Fenderson v.
West, 12 Vet. App. 119, 126-28 (1999) (in an initial rating
claim, a veteran may be awarded separate percentage
evaluations for separate periods based on the facts found
during the appeal period. However, the evidence does not
reflect that the veteran's service-connected disabilities
were more severe at any time during the appeal period so as
to warrant consideration of the staging of ratings.
The Board recognizes that the question of an extraschedular
rating is a component of a claim for an increased rating.
Barringer v. Peake, 22 Vet. App. 242 (2008); see Bagwell v.
Brown, 9 Vet. App. 337, 338-39 (1996). An extra-schedular
disability rating is warranted if the case presents such an
exceptional or unusual disability picture with such related
factors as marked interference with employment or frequent
periods of hospitalization that application of the regular
schedular standards would be impracticable. 38 C.F.R. §
3.321(b)(1) (2007). The Board finds no evidence that the
veteran's service-connected back or finger disabilities
present such an unusual or exceptional disability picture at
any time so as to require consideration of an extra-schedular
evaluation pursuant to the provisions of 38 C.F.R. §
3.321(b)(1). The medical evidence reflects no impairment of
the veteran's activities of daily living, interference with
his employment, or incapacitation due to these disabilities
to suggest that they are more severe than addressed by VA's
Rating Schedule. The schedular rating criteria are designed
to compensate for average impairments in earning capacity
resulting from service-connected disability in civil
occupations. 38 U.S.C.A. § 1155 (West 2002). Generally, the
degrees of disability specified in the rating schedule are
considered adequate to compensate for considerable loss of
working time from exacerbations or illnesses proportionate to
the severity of the several grades of disability. 38 C.F.R.
§ 4.1. Consequently, the Board concludes that referral of
this case for consideration of an extra-schedular rating is
not warranted. Bagwell; Floyd v. Brown, 9 Vet. App. 88, 96
(1996).
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 2002); see also
Gilbert v. Derwinski, 1 Vet. App. 49, 53 (1990). However, in
the present case, the preponderance of the evidence is
against the veteran's claims for a rating in excess of 10
percent for his service-connected back disability, a
compensable rating for his service-connected right small
finger disability and service connection for his claimed
right and left knee disorders. Therefore, his claims must be
denied.
ORDER
An initial rating in excess of 10 percent for service-
connected chronic low back pain (herniated nucleus pulposus
with spinal stenosis) is denied.
An initial compensable rating for service-connected residuals
of fracture of the right small finger is denied.
Service connection for residuals of a right knee injury is
denied.
Service connection for residuals of a left knee injury is
denied.
____________________________________________
MILO H. HAWLEY
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT November 16, 2005
Charles R. Fulbruge III
Clerk
No. 04-60980
Summary Calendar
MAZEN JABER MAHMOUD AHMAD;
SUHAIR SAADO BANAT;
RAMI MAZEN JABER AHMED;
RAWAN MAZEN JABER AHMAD;
RUBA MAZEN JABER AHMAD,
Petitioners,
versus
ALBERTO R. GONZALES, U.S.
ATTORNEY GENERAL,
Respondent.
Petition for Review of an Order of the
Board of Immigration Appeals
BIA No. A79 556 494
BIA No. A79 556 495
BIA No. A79 556 496
BIA No. A79 556 497
BIA No. A79 556 498
Before GARWOOD, JONES and SMITH, Circuit Judges.
PER CURIAM:*
Mazen Jaber Mahmoud Ahmad, his wife Suhair Saado Banat, and
their children (collectively, the Ahmads) petition this court for
*
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.
review of the Board of Immigration Appeals’ (BIA) order denying
their motion to reconsider a final order of removal. The Ahmads
contend that the immigration judge (IJ) abused his discretion in
denying a motion for a continuance because the Ahmads established
that their visa application should have been approved, rendering
visas “immediately available” to them as required by 8 U.S.C. §
1255(a)(3).
As an initial matter, the respondent asserts that we do not
have jurisdiction over the Ahmads’ petition for review under 8
U.S.C. § 1252(a)(2)(B)(ii). This argument is foreclosed by this
court’s opinions in Zhao v. Gonzales, 404 F.3d 295, 302-03 (5th
Cir. 2005), and Manzano-Garcia v. Gonzales, 413 F.3d 462, 466-70
(5th Cir. 2005).
This court reviews the BIA’s denial of a motion to reconsider
under a highly deferential abuse-of-discretion standard. Lara v.
Trominski, 216 F.3d 487, 496 (5th Cir. 2000); Osucukwu v. INS, 744
F.2d 1136, 1141-42 (5th Cir. 1984). The Ahmads have not met this
standard. An alien is entitled to an adjustment of status at the
Attorney General’s discretion “if (1) the alien makes an
application for such adjustment, (2) the alien is eligible to
receive an immigration visa and is admissible to the United States
for permanent residence, and (3) an immigrant visa is immediately
available to [the alien] at the time his application is filed.” 8
U.S.C. § 1255(a). Even if it is assumed that the Ahmads’ visa
2
application was approved, rendering them eligible to receive visas,
they have not established that immigrant visas are immediately
available to them as third preference visa holders. See 8 U.S.C.
§ 1153(a)(3). See also 8 U.S.C. § 1101(b)(1). The IJ therefore
did not abuse his discretion in denying a motion for continuance,
because the Ahmads have not shown good cause. See Witter v. INS,
113 F.3d 549, 555 (5th Cir. 1997); Diarra v. Gonzales, 137 F.
App’x. 627, 632 n.5 (5th Cir. June 2, 2005) (No. 04-60097)
(unpublished). Consequently, the Ahmads’ petition for review is
DENIED.
3
|
Court of Appeals
of the State of Georgia
ATLANTA, August 24, 2018
The Court of Appeals hereby passes the following order
A19D0023. MICHELLE SMITH v. GARY LESHAW et al. .
Upon consideration of the Application for Discretionary Appeal, it is ordered that it be
hereby DENIED.
LC NUMBERS:
17CV11256 17D15843
Court of Appeals of the State of Georgia
Clerk's Office, Atlanta, August 24, 2018.
I certify that the above is a true extract from the minutes
of the Court of Appeals of Georgia.
Witness my signature and the seal of said court hereto
affixed the day and year last above written.
, Clerk.
|
Exhibit 10.4
HERCULES OFFSHORE, INC.
2004 LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED)
First Amendment
Hercules Offshore, Inc. (the “Company”) has previously established the
Hercules Offshore, Inc. 2004 Long-Term Incentive Plan, as amended and restated
effective as of July 11, 2007 (the “Plan”). The Company hereby amends the Plan
effective as of February 14, 2008, as follows:
1. The definition of Fair Market Value in Section 2 of the Plan is replaced
in its entirety as follows:
“Fair Market Value” of a share of Common Stock, as of a particular date, is
equal to (a) if shares of Common Stock are listed on a national securities
exchange, the closing price per share of Common Stock on the consolidated
transaction reporting system for the principal national securities exchange on
which shares of Common Stock are listed on that date or, if there has been no
such sale so reported on that date, on the last preceding date on which such a
sale was so reported; or (b) if (a) is not applicable, then such amount as may
be determined by the Committee or the Board by the reasonable application of a
reasonable valuation methodology taking into consideration in applying its
methodology all available information material to the value of the Company.
HERCULES OFFSHORE, INC.
|
355 N.W.2d 470 (1984)
Richard HUBBS, Appellant,
v.
Juanita LEACH, et al., Respondents,
Conservative Mortgage Company, Defendant.
Nos. C6-84-948, C5-84-1055.
Court of Appeals of Minnesota.
October 2, 1984.
*471 Vance B. Grannis, Thomas L. Grundhoefer, Grannis, Campbell, Farrell & Knutson, South St. Paul, for appellant.
Edmund C. Meisinger, Jr., West St. Paul, for respondents.
Heard, considered and decided by WOZNIAK, P.J., and FORSBERG and LESLIE, JJ.
OPINION
LESLIE, Judge.
Following trial of an action brought by the appellant to enforce a mechanic's lien, the district court determined that the appellant was entitled to recover the reasonable value of his services. In a post-trial motion, the respondents moved for amended findings, and the trial court granted the respondents' motion, finding that the appellant's services were performed pursuant to a written contract entered into by the parties. We affirm the trial court's amended findings.
FACTS
In 1979 the respondents, Charles and Juanita Leach, hired the appellant, Richard Hubbs, to do the carpentry work and a small amount of concrete work on a house which they had decided to build in West St. Paul. Although the respondents acted as their own general contractor, their mortgage company required proof that they had hired a professional general contractor. Therefore, in two contracts dated June 10, 1980, executed by the appellant and the respondent, the appellant characterized his position as Vice President of H.H. & R. Development Corp., which was a general contracting company owned by one of his *472 friends. The parties agree that the name of the corporation and the addition of "V.P." to appellant's name were included in the contracts solely for the purpose of satisfying the mortgage company's requirements.
One contract was submitted to the mortgage company as evidence of a general contractor on the respondent's project. That contract indicated payment to be $30,000.00, and a specification sheet was submitted along with the contract listing the work to be performed, which included services in addition to the carpentry and concrete work for which the appellant had been hired.
The second contract called for payment of $18,978.00 and bears the signatures of two witnesses in addition to the signatures of the parties. At trial the respondents contended that this contract evidenced the actual intent of the parties, and that the first June 10 contract was not enforceable because it provided for additional work which was never performed and had been drawn up simply to satisfy the mortgage company. The appellant agrees that the first June 10 contract was unenforceable, but argues that the second June 10 contract was also invalid. His position at trial was that he signed two blank contracts on June 10, believing that they would both be submitted to the mortgage company. The appellant also contended that neither witness to the second contract actually witnessed the signing of the contract.
The appellant began work on July 2, 1980. It is his contention that the parties at that point had not finally agreed upon the terms and scope of his contract, and that a third contract was therefore entered into on July 18, 1980. This contract, which the appellant produced at trial, included a contract price of $28,800.00. Although respondent Charles Leach's signature appears at the bottom of this contract, the respondents contended at trial that Charles Leach never in fact signed the July 18 contract. This factual dispute is complicated by the fact that Charles Leach suffered a heart attack in August, 1980, and sustained brain damage; thus he was unable to [email protected]. The respondents did, however, provide a handwriting expert who testified that the July 18 contract was not signed by Charles Leach.
Following the trial of this matter, the court issued its findings of fact, conclusions of law and order for judgment, determining that the appellant's services were worth $20,078.00, that the respondents were entitled to a setoff in the amount of $1,900.00 for defective work included in those services, and that the respondents should pay $500.00 in attorneys fees to the appellant. The respondents moved for an order amending the court's findings and conclusions, and requesting, inter alia, findings concerning the June 10 and July 18 contracts. Pursuant to this motion and following a hearing, the court issued its amended findings of fact, conclusions of law and order for judgment, determining that the June 10, 1980 contract for $18,978.00 evidenced the intent of the parties, that $10,000.00 had been paid, and that the respondents were entitled to a $1,900.00 setoff for defective work. The court also specifically found "[t]hat the purported contract dated July 18, 1980 was not executed by Defendant Charles Leach nor entered into by the parties."
The appellant moved to reinstate the court's original findings, although arguing that the court should have found the July 18 contract valid instead of determining the reasonable value of his services. When that motion was denied, he appealed.
ISSUES
1. Whether the appellant is liable under the June 10 contract which he signed "Richard Hubbs, V.P."
2. Whether the trial court erroneously determined that the second June 10 contract reduced to writing the intent of the parties and that the July 18 contract was invalid.
ANALYSIS
1. The appellant argues that "[t]he court cannot pass upon the rights of a *473 corporation which is not a party to the action." The district court, however, never determined the rights of the H.H.R. Development Corporation rather, it found that Richard Hubbs should be individually bound by his signature on the second June 10 contract.
All parties agree that the corporation, although named in the second June 10 contract, was never intended to be a party thereto. Therefore, the issue before the trial court was whether the appellant could be liable on the second June 10 contract, even though he apparently signed as "Richard Hubbs, V.P." (It should be noted that the appellant testified at trial that he did not add the V.P.) This issue has been answered as follows:
If an officer of a corporation executes a contract in its behalf by merely signing his name thereto with the suffix Pres., Sec., Mgr., or like word, the contract is presumptively his individual contract, but extrinsic evidence is admissible to show that the parties understood it to be the contract of the corporation.
4 Dunnell Minn. Digest 2d Corporations § 14.09 (3d ed. 1977) (footnote omitted; citations in footnote). Here the undisputed evidence indicated that the parties understood the contract not to be that of the corporation, demonstrating even more clearly the appellant's individual liability on the contract.
2. The appellant claims also that the respondents misrepresented the nature of the second June 10 contract, that the July 18 contract was on its face more reasonable and probable, and that the trial court erred by finding the June 10 contract valid and by finding that the July 18 contract was never entered into by the parties. Appellate review is limited to determining whether the district court's findings of fact are clearly erroneous, with "due regard being given to the opportunity of the trial court to judge the credibility of the witnesses," In re Trust Known as Great Northern Iron Ore Properties, 308 Minn. 221, 225, 243 N.W.2d 302, 305 (1976), cert. den. sub. nom. Arms v. Watson, 429 U.S. 1001, 97 S. Ct. 530, 50 L. Ed. 2d 612 (1976). "[T]he trial court's findings may be held clearly erroneous, notwithstanding evidence to support such findings, if the reviewing court is left with the definite and firm conviction that a mistake has been made." Id. at 225, 243 [email protected]. Where documentary evidence is disputed, the rule has been stated as follows:
"* * * Where a trial judge sits without a jury, the rule varies with the character of the evidence: (a) If he decides a fact issue on written evidence alone, we are as able as he to determine credibility, and so we may disregard his finding. (b) Where the evidence is partly oral and the balance is written or deals with undisputed facts, then we may ignore the trial judge's finding and substitute our own, (1) if the written evidence or some undisputed fact renders the credibility of the oral testimony extremely doubtful, or (2) if the trial judge's finding must rest exclusively on the written evidence or the undisputed facts, so that his evaluation of credibility has no significance. (c) But where the evidence supporting his findings as to any fact issue is entirely oral testimony, we may disturb that finding only in the most unusual circumstances."
Id., at 225-226, 243 N.W.2d at 305, quoting Orvis v. Higgins, 180 F.2d 537, 539 (2d Cir.1950).
In the present situation there is ample evidence to support the trial court's finding that the July 18 contract was never executed and that the June 10 contract represented the intentions of the parties. Specifically, there was testimony by a handwriting expert that respondent Charles Leach's signature on the July 18 contract was forged. Further, respondent Juanita Leach testified that the second June 10 contract was not signed in blank but was intended as a binding contract. Of note also is the fact that the appellant began work prior to July 18, indicating that the parties had already reached a final agreement concerning the appellant's services. The trial court had an opportunity to observe the witnesses and judge their *474 credibility, and we are of the view that the trial court's amended findings should not be overturned.
DECISION
There is substantial evidence in the record supporting the trial court's conclusion that the June 10 contract was valid and that the July 18 contract was forged.
Affirmed.
|
990 S.W.2d 486 (1999)
VAREL MANUFACTURING COMPANY, Appellant,
v.
ACETYLENE OXYGEN COMPANY, Appellee.
No. 13-97-731-CV.
Court of Appeals of Texas, Corpus Christi.
April 15, 1999.
*490 Melissa A. Ostermann, Attorney at Law, Dallas, Stephen B. Schulte, Houston, for Appellant.
Daniel G. Gurwitz, Atlas & Hall, Attorneys at Law, Tina VanDalsem Snelling, Hirsch, Sheiness & Garcia, Houston, for Appellee.
Before Chief Justice SEERDEN and Justices DORSEY and CHAVEZ.
OPINION
Opinion by Justice DORSEY.
Varel Manufacturing Company appeals from a judgment rendered against it, and in favor of Acetylene Oxygen Company, for the conversion of gas cylinders and denying Varel's counterclaims. Varel raises eighteen points of error complaining that it was entitled to usury damages and that Acetylene should not have prevailed on its claim for conversion. Acetylene raises two cross-points complaining of a minor usury penalty actually awarded against it by the trial court. We reverse and remand.
Varel operates a manufacturing plant in Matamoros, Mexico. Varel purchased various industrial gases from Acetylene from the 1960's until 1992. These gases were contained in pressurized cylinders that were regularly delivered by Acetylene to Varel. When the full ones were delivered, the depleted cylinders would be picked up to be refilled. Acetylene charged daily rental on each cylinder used. When Varel stopped purchasing gas from Acetylene in 1992, Acetylene continued to charge rental on 115 cylinders that it claimed had not been returned. When Varel ceased making rental payments, Acetylene demanded the cylinders be returned. When they were not, Acetylene sued for past rental value and conversion of the cylinders. Varel denied retention of the cylinders and counterclaimed for overpayments and for usurious interest.
At trial, Bert Wolf, president of Acetylene, testified that Varel owed Acetylene $45,181.25 in unpaid rental for cylinders and for the market value of those cylinders, based on the invoices and monthly statements that Acetylene maintained showing that Varel had retained some 115 cylinders since it stopped purchasing gas from Acetylene in 1992. Varel admitted that, due to a mistake in its own accounting procedures, it had continued to pay for the 115 cylinders until October 1995, when it discovered that it no longer had those cylinders. Two of Varel's employees testified that they conducted inventories and determined that all of Acetylene's cylinders had been returned to it. Varel additionally sought to prove its counterclaim for usury by showing that the invoices and statements by Acetylene contained a provision for a service charge, in spite of the fact that they had agreed that no interest would be charged on the account.
The trial court rendered judgment against Varel for conversion of the cylinders in the amount of $28,096, for cylinder rent of $12,276.25, and for reasonable attorney's fees, but off-set the award by a $355.55 usury penalty against Acetylene for charging excessive interest on the amounts it billed to Varel.
USURY
By its first three points of error, Varel complains that the evidence conclusively established its claim that Acetylene charged usurious interest on Varel's account for the entire amount that Acetylene claimed for rental of the cylinders and that the trial court erred in awarding a lesser penalty only on the amount for which Varel was actually billed a service charge. *491 Varel also complains by its fourth point of error that the trial court erred in failing to award its attorney's fees for prosecution of the usury claim.
Acetylene contends that its charges for the rental of cylinders are not subject to the usury statute, and that, even if subject, its notice of the service charge and pleadings for interest do not amount to charging interest under the statute. In addition, Acetylene complains by two cross-points that the trial court erred in assessing the penalty that it did for usurious interest and in denying Acetylene leave to file a trial amendment raising various affirmative defenses to Varel's claim for usury.
We conclude that the bulk of Varel's claims do not amount to a violation of the usury statute, and that the one instance which does amount to such a violation should have been denied as having been brought beyond the statute of limitations. Varel is thus not entitled to attorney's fees for the prosecution of its usury claims.
A person who contracts for, charges, or receives interest that is greater than the amount authorized by law is liable to the obligor for the penalties set forth in the usury statute. See TEX.REV.CIV. STAT. ANN. art. 5069-1.06 (Vernon 1987) (repealed).[1] For purposes of the usury statute, "interest" is defined as "compensation allowed by law for the use or forbearance or detention of money." TEX.REV.CIV. STAT. ANN. art. 5069-1.01(a) (Vernon 1987) (repealed).[2]
Accordingly, the essential elements of a usurious transaction are: (1) a loan of money, (2) an absolute obligation that the principal be repaid, and (3) the exaction of a greater compensation than allowed by law for the use of the money by the borrower. Holley v. Watts, 629 S.W.2d 694, 696 (Tex.1982); Pentico v. Mad-Wayler, Inc., 964 S.W.2d 708, 714 (Tex.App.Corpus Christi 1998, pet. denied). Moreover, since usury statutes are penal in nature, they must be strictly construed. Steves Sash & Door Co., Inc. v. Ceco Corp., 751 S.W.2d 473, 476 (Tex. 1988); Pentico, 964 [email protected].
In the present case, Varel complains that Acetylene charged it usurious interest in spite of the fact that the parties had agreed that no interest would be charged on Varel's account. Specifically, Varel alleged that usurious interest was charged, first, by virtue of the terms printed on the invoices and statements, specifying that, "Your Finance Charge is computed by a single periodic rate of 1.50% per month, which is an annual percentage rate of 18% and will be added if not paid by the 20th of the month." In all but one instance, however, no interest was ever added to the balance that Acetylene claimed due from Varel. Second, Varel alleged a usurious charging of interest by the allegations in Acetylene's original petition of an agreement to pay interest at 18% on the delinquent amounts and its prayer for a judgment against Varel for such interest.
Acetylene argues that its transactions with Varel amount to rentals rather than loan transactions, and thus are not subject to the usury statute.
Several courts of appeals have held that, because a rental or lease agreement is not a "lending transaction," the usury statute does not apply to late charges assessed on overdue rental payments. Potomac Leasing Co. v. Housing Authority of City of El Paso, 743 S.W.2d 712, 713 (Tex.App.El Paso 1987, writ denied); Brokers Leasing Corp. v. Standard Pipeline Coating Co., 602 S.W.2d 278, 281 (Tex.Civ.App.Dallas 1980, writ ref'd n.r.e); Apparel Mfg. Co., Inc. v. Vantage Properties, Inc., 597 S.W.2d 447, 448-49 (Tex.Civ.App.Dallas 1980, writ ref'd n.r.e.); Southwest Park Outpatient Surgery, Ltd. v. Chandler Leasing Division, 572 S.W.2d 53, 55 (Tex. Civ.App.Houston [1st Dist.] 1978, no writ); Maloney v. Andrews, 483 S.W.2d *492 703 (Tex.Civ.App.Eastland 1972, writ ref'd n.r.e.).
However, we need not determine whether these cases were correctly decided, since the invoices and statements in the present case charge Varel not only for rental of the cylinders but also for the gas products that Acetylene sold to Varel. At least to the extent the balances and service charges applied to sales of gas, they were not rental transactions and were subject to the usury statute.
A "service charge" or "finance charge" assessed on an open account is generally considered "interest" within the meaning of the usury statute. Windhorst v. Adcock Pipe and Supply, 547 S.W.2d 260, 260-61 (Tex.1977); Flato Elec. Supply Co. v. Grant, 620 S.W.2d 915, 917 (Tex.Civ. App.Corpus Christi 1981, writ ref'd n.r.e.). The statute covers late charges of this nature because the definition of "interest" includes compensation for the obligor's detention of money past the date it is due and payable. Pentico, 964 S.W.2d at 715-16; Veytia v. Seiter, 740 S.W.2d 64, 65 (Tex.App.San Antonio 1987), aff'd, 756 S.W.2d 303 (Tex.1988); Dixon v. Brooks, 604 S.W.2d 330 (Tex.Civ.App.Houston [14th Dist.] 1980, writ ref'd n.r.e.). Under the open account transaction, credit is extended from the date of purchase to the date of payment, and thus becomes a debt or detention of money on which usurious interest may not be charged. See Potomac Leasing, 743 [email protected].
Accordingly, the usury laws do apply to the present transactions and would prevent Acetylene from charging usurious interest to Varel on its past due accounts for the sale of gases on open account. Nevertheless, Acetylene further argues that, even if the usury statute applies generally to the present transactions, neither the invoices nor its pleadings amounted to a "charging" of interest in violation of that statute. We agree.
Under the usury statute, interest may be "charged" by any act of the lender constituting a demand for payment from the debtor. See Pentico, 964 [email protected]. Accordingly, a usurious charge may be contained in an invoice, a letter, a ledger sheet or other book or document, and the vehicle for the claim or demand is immaterial except as an evidentiary fact. Danziger v. San Jacinto Sav. Ass'n, 732 S.W.2d 300, 304 (Tex.1987) (pay-off quote reflecting a charge of usurious interest); Pentico, 964 S.W.2d at 715-16 (amortization schedule which accompanied demand letter constituted a "charge" of interest); Williams v. Back, 624 S.W.2d 272, 276-77 (Tex.App.Austin 1981, no writ).
However, not every mention of interest or a service charge amounts to a charge or demand. When the creditor places terms on its invoice stating that a usurious interest charge will be added to any payments later than a certain specified period, but takes no further action to charge or collect from the debtor any amount of usurious interest, this does not amount to a "charge" or present demand for payment of the usurious rate of interest, and therefore does not violate the usury statute. White v. Groco Corp., 783 S.W.2d 24, 26 (Tex.App.Eastland 1990, writ denied); Thomas Conveyor Co., Inc. v. Portec, Inc., 572 S.W.2d 361, 363 (Tex. Civ.App.Waco 1978, no writ); Killebrew v. Bartlett, 568 S.W.2d 915, 917 (Tex.Civ. App.Amarillo 1978, no writ); see also Butler v. Holt Machinery Co., 741 S.W.2d 169, 174 (Tex.App.San Antonio 1987, writ denied) (listing late fees on payment coupons for installments which had not accrued does not constitute interest).
Only when, and to the extent that, the threatened interest is actually charged or assessed against the debtor has the usury statute been violated. See Windhorst v. Adcock, 547 S.W.2d 260 (Tex.1977); Watson v. Cargill, Inc., Nutrena Division, 573 S.W.2d 35, 42 (Tex.Civ.App.Waco 1978, writ ref'd n.r.e.); see also Williams v. Back, 624 S.W.2d 272, 276-77 (Tex.App. Austin 1981, no writ) (statement of account *493 claimed a balance due which included an allegedly usurious interest charge).
Accordingly, the printed notations on Acetylene's invoices did not in themselves amount to a charging of usurious interest. Similarly, Acetylene's petition pleading for the recovery of interest of this action did not amount to a usurious charging of interest.
A pleading by itself, even if it contains a claim for usurious interest, does not constitute a "charge" of usurious interest for purposes of the Texas usury statute. Sage Street Associates v. Northdale Const. Co., 863 S.W.2d 438, 440 (Tex.1993); George A. Fuller Co. of Texas, Inc. v. Carpet Services, Inc., 823 S.W.2d 603 (Tex. 1992); see also D & S Kingsway Ventures v. Texas Capital Bank-Richmond, N.A., 882 S.W.2d 573, 575 (Tex.App.Houston [14th Dist.] 1994, no writ); Resolution Trust Corp. v. Ammons, 836 S.W.2d 705, 711 (Tex.App.Houston [1st Dist.] 1992, no writ). Noting the lack of legislative intent that the usury statute apply to pleadings, the Texas Supreme Court distinguished between the nature of a pleading as a demand to the court, and the nature of consumer and commercial credit transactions in which demand is made of the opposing party for payment. George A. Fuller Co., 823 [email protected].
We overrule Varel's first three points of error.
By its two cross-points, Acetylene complains that the trial court erred in failing to allow it to file a trial amendment asserting various affirmative defenses with regard to the one instance in which Acetylene did calculate the amount of a service charge and demand payment thereon. The April 30, 1991, monthly statements sent by Acetylene to Varel assesses a service charge of $28.09 on the balance of $1777.75 listed as more than 30 days overdue. The trial court considered this a usurious charge of interest and assessed a penalty against Acetylene of $355.55. See TEX.REV.CIV. STAT. ANN. art. 5069-1.06(1) (Vernon 1987) (repealed).
The trial was conducted on April 3 & 4, 1997. On April 11, 1997, Acetylene filed its motion for leave to amend its petition to include the requested affirmative defenses to conform to the evidence [email protected]. The trial court, however, denied leave to amend.
Even after the trial has been concluded, the trial court has no discretion to refuse an amendment unless the opposing party presents evidence of surprise or the amendment asserts a new cause of action, and thus is prejudicial on its face, and the opposing party objects to it. Chapin & Chapin, Inc. v. Texas Sand & Gravel Co., 844 S.W.2d 664, 665 (Tex.1993); Greenhalgh v. Service Lloyds Ins. Co., 787 S.W.2d 938, 939 (Tex.1990). Accordingly, the party opposing the amendment must timely object to its filing and the objection must be evidenced in the record. See Smith Detective Agency & Nightwatch Service, Inc. v. Stanley Smith Sec., Inc., 938 S.W.2d 743, 748 (Tex.App.Dallas 1996, writ denied).
In the present case, the appellate record shows that Varel never objected to the motion for leave to amend. Varel did file a response to Acetylene's trial brief arguing that judgment should be granted in its favor, but Varel did not even in that response object specifically to the requested amendment or any of the affirmative defenses raised therein. Accordingly, the trial court had no basis to deny the motion and should have allowed leave to amend.
Acetylene further complains by its cross-points that its defense of limitations conclusively barred Varel's claim for usurious interest. Acetylene's amended answer to Varel's counterclaim for usurious interest raises, among other things, the defense of limitations. The usury statute provides that such claims must be brought within four years from the date when the usurious charge was received or collected. TEX. REV.CIV. STAT. ANN. art. 5069-1.06(3) (Vernon *494 1987) (repealed).[3] In the present case, the testimony at trial and the invoices and monthly statements conclusively show that Acetylene charged Varel the $28.09 finance charge on its April 30, 1991, statement, and that the full amount of the April bill was paid and credited to Varel's account by the time Acetylene sent to Varel the May 31, 1991, statement of account. Accordingly, the statute of limitations for a usury claim expired on May 31, 1995, more than a year before the present lawsuit was filed. We conclude that Acetylene was thus entitled to prevail on all of the usury claims, including the one on which the trial court incorrectly granted a judgment for Varel. We sustain Acetylene's two cross-points.
By its fourth point of error, Varel complains that it was entitled to reasonable attorney's fees under article 5069-1.06(2) for the prosecution of its usury claims against Acetylene. However, because we have determined that Varel was not entitled to prevail on any of its usury claims, we conclude that it was not entitled to attorney's fees for its prosecution of such claims. We overrule Varel's fourth point of error.
POSSESSION OF THE CYLINDERS
By its fifth point of error, Varel challenges the legal and factual sufficiency of the evidence to show its possession of the 115 cylinders that Acetylene complains Varel converted. Specifically, Varel complains that Acetylene offered no direct evidence to show that it delivered the 115 cylinders in question to Varel or that Varel had not returned the cylinders.
In considering a "no evidence," "insufficient evidence" or "against the great weight and preponderance of the evidence" point of error, we follow the well-established test set forth in Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986). See also Calvert, No Evidence and Insufficient Evidence Points of Error, 38 TEX. L.REV. 361 (1960).
In order to prove possession, Acetylene showed through its president, Bert Wolf, the method by which it accounted for cylinders, and introduced statements and invoices from January 1992 to the end of 1995, when Varel stopped paying its monthly bill. Though the invoices and statements did not show when in the continuing course of business Acetylene had delivered the particular cylinders at issue, they did show a monthly balance of cylinders that had been delivered to Varel and remained in its possession. Acetylene offered these as business records, and Varel made no objection except to their use to prove the value of the individual cylinders. Wolf explained that over the years it had recorded the number of cylinders delivered to Varel and the number of empty cylinders picked up, and that the balance of cylinders remaining in Varel's possession was listed on the invoices and statements. Moreover, Wolf testified that, in addition to the driver's count of cylinders, Acetylene inventories its cylinders as they are delivered back and catches any mistakes its drivers make in the number of cylinders returned.
In addition, the invoices themselves contained the following warning to Varel:
PLEASE CHECK YOUR CYLINDER BALANCES TO SEE IF THEY AGREE WITH YOUR RECORDS. IF WE DON'T HEAR FROM YOU WITHIN 10 DAYS WE WILL ASSUME THIS COUNT IS CORRECT. NO REFUNDS AFTER 6 MONTHS FROM INVOICE DATE.
Varel complains that Acetylene produced no eyewitness to the cylinders delivered to Varel and those returned by Varel to Acetylene, nor did it produce the specific invoices or delivery tickets showing delivery of those particular cylinders. However, we conclude that the continuing balances reflected in the invoices and statements that were admitted into evidence *495 sufficiently supplied this information.
When admitted as business records, invoices and statements of account of this nature are an acceptable means of showing that the particular transactions reflected therein actually did take place. See Texon Energy Corp. v. Dow Chemical Co., 733 S.W.2d 328, 330 (Tex.App.Houston [14th Dist.] 1987, writ ref'd n.r.e.) (monthly invoices showing party's share of drilling expenses); Hercules Exploration, Inc. v. Halliburton Co., 658 S.W.2d 716, 721-22 (Tex.App.Corpus Christi 1983, writ ref'd n.r.e.) (invoices and work tickets describing materials and services furnished and the labor performed were competent evidence to prove the order and delivery of such materials, services, and labor). The business record substitutes for the personal knowledge of a testifying witness, especially when it would be impossible or impractical to gather together all of the employees in the corporation who had personal knowledge of a complex and/or extended transaction involving many different employees separated by time and geography. Id.
Accordingly, the invoices and statements in the present case were some evidence that the 115 cylinders represented therein had been delivered to Varel and not returned to Acetylene. In addition, Varel's own payment and acquiescence also showed that the cylinders were in its possession.
It is well settled that any statement or conduct of a party which is inconsistent with the position taken by him at the trial may be given in evidence against him. Wenk v. City Nat. Bank, 613 S.W.2d 345, 349 (Tex.Civ.App.Tyler 1981, no writ); 1A, RAY, TEXAS LAW OF EVIDENCE § 1121 (Texas Practice 3d ed.1980). Such statements and acts are not conclusive, but form a part of the evidence, and their weight and probative force are matters for the trier of the facts. Wenk, 613 S.W.2d at 349; Esteve Cotton Co. v. Hancock, 539 S.W.2d 145, 157 (Tex. Civ.App.Amarillo 1976, writ ref'd n.r.e.); RAY at §§ 1127-29. In Wenk, for instance, the Tyler Court held that an account holder's silence regarding monthly statements sent to him reflecting the current status of his account amounted to a tacit admission of the correctness of the statements. Id. at 349; See RAY at § 1153.
Similarly, in the present case, Varel continued to pay rent on the cylinders for some three years beyond the date that Varel claims it had returned those cylinders. Payment was not made under protest, nor did Varel challenge the admonitions in Acetylene's statements regarding cylinder balances. We conclude, therefore, that Varel's own conduct in continuing to pay the amounts billed amounted to a tacit admission that it had possession of the 115 cylinders in question. Accordingly, there was legally sufficient evidence to show that Varel had possession of the 115 cylinders that Acetylene claimed it had.
In addition, we conclude that there was factually sufficient evidence to show that Varel possessed the cylinders in question. Varel argued that it was able to discredit the invoices and statements by showing that the balances that Wolf claimed were always carried forward from the end of one month to the beginning of the next month did not always match. Varel also offered the testimony of its vice-president and two of its employees that it paid the invoices amounts billed by mistake, that it had returned all of Acetylene's cylinders, and that its employees had searched for and found only two cylinders with Acetylene's markings.
However, Acetylene also showed by its president and other witnesses that the alleged discrepancies could be accounted for in terms of its own accounting procedures that would conditionally credit a delivery and then later erase it if it did not go through. Such discrepancies, while they may go to the weight of the evidence, do not entirely discredit it. In addition, the trier of fact was entitled to weigh and *496 discredit testimony by Varel's officers and employees that they did not have the cylinders and that the rentals had been paid as a mistake.
We conclude that there remained factually sufficient evidence to show that Varel did not return 115 cylinders that had been delivered by Acetylene. We overrule Varel's fifth point of error.
By its seventeenth and eighteenth points of error, Varel complains that it was entitled to recover payments made on those cylinders and attorney's fees because the evidence showed that it did not have possession of the cylinders. In view of our conclusion that the evidence was sufficient to show that Varel did retain the 115 cylinders in question, we overrule its seventeenth and eighteenth points of error as well.
DAMAGES
By its sixth and seventh points of error, Varel challenges the sufficiency of the evidence to support the damages awarded by the trial court for rental and conversion of the 115 cylinders. Specifically, Varel complains that the trial court's judgment inconsistently awarded rental value for all 115 cylinders, but with regard to the conversion claim allowed a credit of 21 cylinders that Varel claims it had disproved that it possessed. Varel further alleges that even the credit for the 21 cylinders was incorrectly calculated.
The trial court filed a letter briefly indicating its findings, among other things, that Acetylene was entitled to recovery "For cylinders not returned $32,905; For cylinder rent $12,276.25; For attorney's fees $14,900," "Less: 21 cylinders $4,809 [and] Usury Penalty $355.55." The trial court's letter findings, however, did not reveal why the twenty-one cylinders in question had been eliminated from the award for conversion but not for rentals. Varel assumes the trial court found that these cylinders were returned to Acetylene and thus should have been deducted from the rental damages as well. However, the deduction was just as consistent with the trial court's implied finding that Acetylene had not proven the value of the 14 CO2 cylinders and 6 mix cylinders,[4] and was thus not entitled to conversion damages on those cylinders, though it would still be entitled to rental.
Whatever the trial court's reason for deducting twenty-one cylinders from its damage award for conversion, there was sufficient evidence to show that all 115 cylinders had been retained by Varel and to support an award of damages based on the retention of all 115 cylinders. We overrule Varel's sixth and seventh points of error.
By its eighth point of error, Varel complains that Acetylene was not entitled to recover conversion damages both for loss of use and fair market value. We agree that the trial court erroneously awarded to Acetylene both the rental value of the cylinders up through the date of trial and the fair market value of those cylinders. The problem in the present case arises from the uncertainty as to the date on which the conversion took place for purposes of valuation and assessment of damages.
Conversion is any distinct act of dominion wrongfully exerted over another person's personal property in denial of, or inconsistent with, that other person's right in the property, either permanently or for indefinite time. Soto v. Sea-Road Intern., Inc., 942 S.W.2d 67, 72 (Tex. App.Corpus Christi 1997, writ denied); Dolenz v. National Bank of Texas at Fort Worth, 649 S.W.2d 368, 370 (Tex.App. Fort Worth 1983, writ ref'd n.r.e.). Specifically, the failure to return bailment property at the end of the bailment period constitutes, in law, a conversion of the *497 bailment entitling the bailor to recover its value. Soto, 942 S.W.2d at 72; Kirkland v. Mission Pipe & Supply Co., 182 S.W.2d 854, 855 (Tex.Civ.App.Austin 1944, writ ref'd w.o.m.).
A plaintiff who establishes conversion is entitled to either the return of the property and damages for loss of use during the tort-feasor's detention, or the value of the property. Winkle Chevy-Olds-Pontiac, Inc. v. Condon, 830 S.W.2d 740, 746 (Tex.App.Corpus Christi 1992, writ dism'd); Southwind Aviation, Inc. v. Avendano, 776 S.W.2d 734, 737 (Tex. App.Corpus Christi 1989, writ denied). However, the plaintiff may not generally recover in conversion both for the market value of the property and for loss of use. See First Nat. Bank of Missouri City v. Gittelman, 788 S.W.2d 165, 169 (Tex. App.Houston [14th Dist.] 1990, writ denied); Southwind Aviation, 776 [email protected].
If the plaintiff elects to recover the value of the property, actual damages are determined by the fair market value at the place and time of conversion together with legal interest thereon. United Mobile Networks, L.P. v. Deaton, 939 S.W.2d 146, 147-48 (Tex.1997); Imperial Sugar Co. v. Torrans, 604 S.W.2d 73, 74 (Tex. 1980); Soto, 942 S.W.2d at 74; Taiwan Shrimp Farm Village Ass'n, Inc. v. U.S.A. Shrimp Farm Development, Inc., 915 S.W.2d 61, 71 (Tex.App.Corpus Christi 1996, writ denied).
Nevertheless, when the property is a bailment under lease, it stands to reason that, up until the date of conversion by the bailee, the property remains under lease and the bailor is entitled to recover rents on that property. Jalco, Inc. v. Tool Traders, Inc., 535 S.W.2d 898, 902 (Tex. Civ.App.Houston [1st Dist.] 1976, no writ); see also Smith-Hamm, Inc. v. Equipment Connection, 946 S.W.2d 458, 461 (Tex.App.Houston [14th Dist.] 1997, no writ) (rents continued to accrue until certain stolen property had been paid for by the lessee).
In the present case, Acetylene was entitled to recover rental on the cylinders up until the date on which they were converted by Varel; thereafter, prejudgment interest compensates Acetylene for the time-value of the lost asset. See Imperial Sugar Co., 604 [email protected]. We must, therefore, determine when Varel's conduct amounted to a conversion of the cylinders rather than merely a continuation of the bailment lease.
Because bailed property has been lawfully acquired by the bailee, the bailor must generally demand return of the property, and the bailee must refuse to redeliver, before a conversion takes place. Presley v. Cooper, 155 Tex. 168, 284 S.W.2d 138, 141 (1955); Bures v. First Nat. Bank, Port Lavaca, 806 S.W.2d 935, 938 (Tex.App.Corpus Christi 1991, no writ). However, demand and refusal are not necessary if other evidence establishes an act of conversion, i.e., any act of dominion by a bailee over the property inconsistent with, or adverse to, the bailor's right to the property. Presley, 284 [email protected]. Accordingly, demand for return is not required if it would have been useless or if the possessor's acts amount to a clear repudiation of the owner's rights. Bures, 806 S.W.2d at 938; McVea v. Verkins, 587 S.W.2d 526, 531 (Tex.Civ.App.Corpus Christi 1979, no writ); Loomis v. Sharp, 519 S.W.2d 955, 958 (Tex.Civ.App.Texarkana 1975, writ dism'd w.o.j.). In Jalco, for instance, when rented equipment was lost by the bailee, the court considered a conversion to have taken place on the date that the bailor was notified of the loss. Jalco, 535 [email protected].
In the present case, Varel stopped paying rent on the cylinders in October 1995. Wolf testified that Acetylene then called Varel to ask why it was late on the payment, and Varel then informed Acetylene that it did not have the cylinders and would not pay the bills. This amounted to *498 a repudiation of Acetylene's right to those cylinders in the same manner as the loss in Jalco deprived the rightful owner of possession and amounted to a conversion. The trial court, however, continued to allow Acetylene to claim rent on those cylinders to the date of trial. Acetylene would then claim the option to treat the cylinders as having been under rent until the date of trial, at which point it would establish a conversion. We disagree.
One exception to the general measure of conversion damages is instructive in the present case. The exception allows the plaintiff an option, when conversion was attended with fraud, willful wrong, or gross negligence, to determine fair market value at its highest rate over the period between the date of conversion and the date of filing suit. Imperial Sugar Co., 604 S.W.2d at 74; Miller v. Kendall, 804 S.W.2d 933, 942 (Tex.App.Houston [1st Dist.] 1990, no writ). Such an option gives an advantage to the plaintiff to maximize his damage award in order to punish especially egregious acts of conversion. Naturally, the plaintiff will calculate when he may secure the highest award based on a fluctuating market value and the rate of interest to be added from the chosen date until the time of trial.
However, where conversion is unmixed with fraud or other egregious conduct by the defendant, conversion damages are not subject to the whim of the plaintiff, and the courts are admonished not to unjustly enrich either the wrongdoer or the complaining party. Deaton, 939 [email protected]. Therefore, the bailor should not be allowed unilaterally to declare the date of conversion in order to maximize his own gain, where there is a date on which an act of conversion may be certainly fixed and there is no indication of fraud or egregious conduct by the bailee.
In the present case, we conclude that the act of conversion occurred when Varel stopped paying rent and denied possession of the cylinders in October 1995. Acetylene was entitled to the rents collected before that date, but was not entitled to rents thereafter. Rather, Acetylene was entitled to the fair market value of the cylinders as of October 1995. Accordingly, we sustain Varel's eighth point of error.
Because we sustain Varel's eighth point of error and reverse the award of damages for rentals, we need not address its tenth point of error complaining of the sufficiency of the evidence to support the award. See TEX.R.App. P. 47.1.
We also summarily dispose of Varel's thirteenth point of error complaining that the statute of limitations bars Acetylene's claim for conversion. The statute of limitations for causes of action in conversion of personal property is two years. TEX. CIV. PRAC. & REM.CODE ANN. § 16.003(a) (Vernon Supp.1999). When possession is initially lawful and there is no demand and unqualified refusal, a cause of action for conversion accrues upon the discovery of facts supporting the cause of action, or upon demand and refusal, whichever occurs first. Nelson v. American Nat. Bank of Gonzales, 921 S.W.2d 411, 415 (Tex.App.Corpus Christi 1996, no writ); Hofland v. Elgin-Butler Brick Co., 834 S.W.2d 409, 414 (Tex.App.Corpus Christi 1992, no writ). Varel argues that the conversion occurred when Acetylene failed to recover its cylinders thirty days after delivery, as was its right under the terms on the invoices. However, the conversion in this case occurred when Varel stopped paying rent on the cylinders and denied possession in October 1995. Acetylene timely filed suit in June 1996 for conversion of the cylinders, well within the two-year statute of limitation. We overrule Varel's thirteenth point of error.
By its eleventh point of error, Varel complains that the evidence offered to prove conversion damages should have been automatically excluded as not having been properly disclosed in response to discovery requests. See TEX.R. CIV. P. 215(5). Specifically, Varel complains that the testimony *499 by Acetylene's president, Bert Wolf, concerning the fair market value of the cylinders should have been excluded because he had not been listed as an expert on such value.
At trial, Varel objected to a question asked during direct examination of Wolf concerning the value of the cylinders represented on the invoices. The objection was overruled, but Wolf did not thereafter during direct examination express his opinion concerning the value of the individual cylinders. Rather, the only testimony concerning value of the individual cylinders was elicited when Varel cross-examined Wolf, specifically asking for his opinion as to the value of each type of cylinder.
A party on appeal should not be heard to complain of the admission of improper evidence offered by the other side, when he, himself, introduced the same evidence or evidence of a similar character. Southwestern Elec. Power Co. v. Burlington Northern Railroad Co., 966 S.W.2d 467, 473 (Tex.1998); McInnes v. Yamaha Motor Corp., U.S.A., 673 S.W.2d 185, 188 (Tex.1984).
Similarly, when a party elicits testimony from a witness, that party should not later be allowed to complain of the admission of an unfavorable answer. Birchfield v. Texarkana Memorial Hosp., 747 S.W.2d 361, 365 (Tex.1987); Blount v. Bordens, Inc., 892 S.W.2d 932, 945 (Tex. App.Houston [1st Dist.] 1994), rev'd on other grounds, 910 S.W.2d 931 (Tex.1995). Accordingly, a party is not entitled to complain of responsive answers to questions that party asked the witness on cross-examination. Cherry v. State, 546 S.W.2d 922, 923 (Tex.Civ.App.Dallas 1977, writ refused); West v. Barnes, 351 S.W.2d 615, 620 (Tex.Civ.App.Austin 1961, writ ref'd n.r.e.); see also Snavely v. Snavely, 445 S.W.2d 531, 532 (Tex.Civ.App.Fort Worth 1969, no writ) (no error shown when testimony given in response to questions by appellant's attorney).
We conclude that Varel waived any complaint about Wolf's testimony concerning the value of the cylinders. We overrule Varel's eleventh point of error.
By its ninth point of error, Varel challenges the legal and factual sufficiency of the evidence to prove the fair market value of the cylinders at the time and place of conversion. As we explained earlier, conversion damages are determined by the fair market value at the place and time of conversion together with legal interest thereon. United Mobile Networks, 939 S.W.2d at 147-48; Imperial Sugar Co., 604 [email protected].
In the present case, Wolf testified to the value of each cylinder at the time of trial at $306 for the acetylene cylinders, $270 for the argon cylinders, and $229 for the hydrogen cylinders. Wolf also stated that the value of the cylinders had gone up since 1995. The only other testimony concerning the fair market value of the cylinders came from Acetylene vice-president Ernie Villarreal, who stated that the 80 acetylene cylinders are worth $300 each. The evidence offered was consistent with Acetylene's theory that the cylinders remained rented until trial, at which time they would be treated as having been converted.
However, this method of valuation is not consistent with this Court's understanding of conversion as we explained in regard to Varel's prior points complaining of double recovery. Because we conclude that the conversion occurred at the time that Varel stopped paying rent and denied possession of the cylinders, we hold that market value of the cylinders should have been shown as of that time. Wolf's own testimony shows that the value he placed on the cylinders at the time of trial was higher than their value in 1995, when the conversion occurred. Accordingly, there was no evidence of market value at the time of conversion and Varel is entitled to prevail on its no evidence point. We sustain Varel's ninth point of error.
*500 Having sustained a no-evidence point of error on a necessary element of Acetylene's conversion claim, we would ordinarily render judgment against Acetylene. However, the appellate courts have broad discretion to remand for a new trial in the interest of justice where it appears that a party may have proceeded under the wrong legal theory. TEX.R.App. P. 43.3(b); see also Boyles v. Kerr, 855 S.W.2d 593, 603 (Tex.1993) (applying prior Texas Rule of Appellate Procedure 180 specifically allowing only the Texas Supreme Court to remand in the interest of justice). In particular, we may remand for new trial when damages were improperly calculated by the plaintiff and the interest of justice requires that the plaintiff be given an opportunity to show the proper measure of his damages. See Williams v. Gaines, 943 S.W.2d 185, 193-94 (Tex. App.Amarillo 1997, writ denied); A.B.F. Freight Systems, Inc. v. Austrian Import Service, Inc., 798 S.W.2d 606, 616 (Tex. App.Dallas 1990, writ denied); Zion Missionary Baptist Church v. Pearson, 695 S.W.2d 609, 613 (Tex.App.Dallas 1985, writ ref'd n.r.e.).
In the present case, we conclude that the interest of justice would best be served by allowing Acetylene the opportunity to present evidence of the value of the cylinders at the time of the conversion in October 1995. Moreover, because liability on the conversion claim was contested, we may not order a new trial on damages alone, but must remand for a new trial on the conversion claim generally. See TEX. R.App. P. 44.1(b).
We do not address Varel's remaining points of error concerning damages and attorney's fees, as they are not dispositive. See TEX.R.App. P. 47.1.
We REVERSE the judgment of the trial court and REMAND this cause for a new trial consistent with this opinion.
NOTES
[1] Now [email protected]. FIN.CODE ANN. § 305.001 (Vernon 1998).
[2] Now [email protected]. FIN.CODE ANN. § 301.002(a) (Vernon 1998).
[3] Now [email protected]. FIN.CODE ANN. § 305.004 (Vernon 1998).
[4] By this calculation, the trial court would then be off by one cylinder. However, neither party complains in this regard.
|
Case 2:20-mj-00003-DM Document 1-1 Filed 01/07/20 Page 1 of 10
FILED
UNITED STATES DISTRICT COURT ZOISNOV 26 PM 2:09
MIDDLE DISTRICT OF FLORIDA CLERK US nistaicy caus
TAMPA DIVISION MOOLE GlSTRICT eee,
E TOP
TAMPA FLOS"34
UNITED STATES OF AMERICA
0, BAA ee ms T 3° Te
21 U.S.C. § 846
AHMAD RASHAD WESTON, 21 USS.C. § 841
a/k/a “Blood,”
CHARLESTON SHELLIE LONG, a
a/k/a “Shellie,” I Ay Y A y
SHYRON DEONTA GIVENS, we
a/k/a “Ron,”
CHARLIE JAMES MCDUFFY, JR.,
TEDDY TERRELL STRACHAN,
CEVEGHNTA BILLVON GUYDEN,
a/k/a “Chop,”
QUINCY ALFONZO TURNER,
a/k/a “Chico,”
JUSTICE DESHONNA MCLAURIN,
a/k/a “Jussy,”
WILLIE CARL MCLAURIN,
a/k/a “Baldy,”
JA’VONTA WILLIE MCLAURIN,
a/k/a “Tay Tay,” and
WILLIE CARL MCLAURIN, JR.
INDICTMENT
The Grand Jury charges:
COUNT ONE
Beginning on an unknown date, but no later than in or around August
v. CASE N
2018, and continuing through on or about the date of this indictment, in the
Middle District of Florida and els€whgye, whe defendants,
For investigative Purposes Only
U.S. MARSHAL
MIDDLE DISTRICT OF FLORIDA
HOLDS ORIGINAL WARRANT
OFFICE: TAMPA, FL
Case 2:20-mj-00003-DM Document 1-1 Filed 01/07/20 Page 2 of 10
AHMAD RASHAD WESTON,
a/k/a “Blood,”
CHARLESTON SHELLIE LONG,
a/k/a “Shellie,”
SHYRON DEONTA GIVENS,
a/k/a “Ron,”
CHARLIE JAMES MCDUFFY, JR.,
TEDDY TERRELL STRACHAN,
CEVEGHNTA BILLVON GUYDEN,
a/k/a “Chop,”
QUINCY ALFONZO TURNER,
a/k/a “Chico,”
JUSTICE DESHONNA MCLAURIN,
a/k/a “Jussy,”
WILLIE CARL MCLAURIN,
a/k/a “Baldy,”
JA’VONTA WILLIE MCLAURIN,
a/k/a “Tay Tay,” and
WILLIE CARL MCLAURIN, JR.
did knowingly and willfully conspire and agree with each other and other
persons, both known and unknown to the Grand Jury, to distribute a
controlled substance.
With respect to all defendants, the violation involved 100 grams or
more of a mixture and substance containing a detectable amount of heroin, a
Schedule I controlled substance, and N-phenyl-N-[1-(2-phenylethy])-4
piperidinyl] propanamide (“fentanyl”), a Schedule I controlled substance, and
500 grams or more of a mixture and substance containing a detectable amount
- of cocaine, a Schedule II controlled substance.
In violation of 21 U.S.C. § 84 ,841(b)(1)(B).
For Investigative Purposes Only
U.S. MARSHAL
MIDDLE DISTRICT OF FLORIDA
HOLDS ORIGINAL WARRANT
OFFICE: TAMPA, FL
Case 2:20-mj-00003-DM Document 1-1 Filed 01/07/20 Page 3 of 10
COUNT TWO
On or about February 27, 2019, in the Middle District of Florida,
defendants
AHMAD RASHAD WESTON,
a/k/a “Blood,” and
QUINCY ALFONZO TURNER,
a/k/a “Chico,”
aiding and abetting each other, did knowingly and intentionally distribute a
controlied substance, which violation involved a mixture and substance
containing a detectable amount of heroin, a Schedule I controlled substance,
and N-phenyl-N-(1-(2-phenylethy!)-4 piperidinyl] propanamide (“fentanyl”), a
Schedule II controlled substance.
In violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(C) and 18 U.S.C. § 2.
COUNT THREE
On or about March 25, 2019, in the Middle District of Florida,
defendant
QUINCY ALFONZO TURNER,
a/k/a “Chico,”
did knowingly and intentionally distribute a controlled substance, which
violation involved a mixture and substance containing a detectable amount of
heroin, a Schedule I controlled substance.
In violation of EBS 841(a)(1) and 841(bX(1)(C).
For Investigative Purposes Only
U.S. MARSHAL
MIDDLE DISTRICT OF FLORIDA
HOLDS ORIGINAL WARRANT
OFFICE: TAMPA, FL
Case 2:20-mj-0O0003-DM Document 1-1 Filed 01/07/20 Page 4 of 10
COUNT FOUR,
On or about April 24, 2019, in the Middle District of Florida, defendant
QUINCY ALFONZO TURNER,
a/k/a “Chico,”
did knowingly and intentionally distribute a controlled substance, which
violation involved a mixture and substance containing a detectable amount of ©
heroin, a Schedule I controlled substance.
In violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(C).
COUNT FIVE
On or about May 13, 2019, in the Middle District of Florida,
defendants
AHMAD RASHAD WESTON,
a/k/a “Blood,” and
QUINCY ALFONZO TURNER,
a/k/a “Chico,”
aiding and abetting each other, did knowingly and intentionally distribute a
controlled substance, which violation involved a mixture and substance
containing a detectable amount of heroin, a Schedule I controlled substance.
In violation of 21 U.S.C. §§ 841(a)(1) and 841(6)(1)(C) and 18 U.S.C. § 2.
COUNT SIX
On or about June 18, 2019, in the Middle District of Florida,
defendants For investigative Purposes Only
U.S. MARSHAL
MIDDLE DISTRICT OF FLORIDA
HOLDS ORIGINAL WARRANT
OFFICE: TAMPA, FL
Case 2:20-mj-00003-DM Document 1-1 Filed 01/07/20 Page 5 of 10
AHMAD RASHAD WESTON,
a/k/a “Blood,” and
QUINCY ALFONZO TURNER,
a/k/a “Chico,”
aiding and abetting each other, did knowingly and intentionally distribute a
controlled substance, which violation involved a mixture and substance
containing a detectable amount of heroin, a Schedule I controlled substance,
and N-pheny!-N-[1-(2-phenylethyl)-4 piperidinyl] propanamide (“fentanyl”), a
- Schedule II controlled substance. |
In violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(C) and 18 U.S.C. § 2.
COUNT SEVEN
On or about July 2, 2019, in the Middle District of Florida, defendant
QUINCY ALFONZO TURNER,
a/k/a “Chico,”
did knowingly and intentionally distribute a controlled substance, which
violation involved a mixture and substance containing a detectable amount of
heroin, a Schedule I controlled substance.
In violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(C).
FORFEITURE
1. The allegations contained in Counts One to Seven are
incorporated by reference for the purpose of alleging forfeiture pursuant to the
provisions of 21 U.S.c.§853. COPY
For Investigative Purposes Only
U.S. MARSHAL
MIDDLE DISTRICT OF FLORIDA
HOLDS ORIGINAL WARRANT |
OFFICE: TAMPA, FL
Case 2:20-mj-00003-DM Document 1-1 Filed 01/07/20 Page 6 of 10
2. Upon conviction of a violation of 21 U.S.C. §§ 846 or 841, the
defendants shall forfeit to the United States, pursuant to 21 U.S.C. § 853(a)(1)
and (2), any property constituting, or derived from, any proceeds the
defendants obtained, directly or indirectly, as a result of such violation, and
any property used, or intended to be used, in any manner or part, to commit,
or to facilitate the commission of, such violation.
3. _Ifany of the property described above, as a result of any acts or
omissions of the defendants:
a. _ cannot be located upon the exercise of due diligence;
b. has been transferred or sold to, or deposited with, a third
party;
C. has been placed beyond the jurisdiction of the Court;
d. has been substantially diminished in value; or
€. has been commingled with other property, which cannot
be divided without difficulty,
For Investigative Purposes Only
U.S. MARSHAL
MIDDLE DISTRICT OF FLORIDA
HOLDS ORIGINAL WARRANT
OFFICE: TAMPA, FL
6
Case 2:20-mj-00003-DM Document 1-1 Filed 01/07/20 Page 7 of 10
the United States shall be entitled to forfeiture of substitute property pursuant
to 21 U.S.C. § 853(p).
A TRUE BILL,
Cx oc FT
Foreperson
MARIA CHAPA LOPEZ
United States Attorney
David C. Waterman
Assistant United States Attorney |
py: (Bride hoor Muna
Christopher F. Murray
Assistant United States Attorney
Chief, Violent Crimes and Narcotics Section
COPY
For Investigative Purposes Only
U.S. MARSHAL
MIDDLE DISTRICT OF FLORIDA
HOLDS ORIGINAL WARRANT
OFFICE: TAMPA, FL
7
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U.S. MARSHAL
MIDDLE DISTRICT OF FLOR)
HOLDS ORIGINAL WARRANT
OFFICE: TAMPA, FL
Case 2:20-mj-00003-DM Document 1-1 Filed 01/07/20 Page 8 of 10
For Investigative Purposes O
Case 2:20-mj-0O0003-DM Document 1-1 Filed 01/07/20 Page 9 of 10
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION q
HA A a AY i }
UNITED STATES OF AMERICA
CASE NO. BAGS SAS T30 Tew
Vv.
AHMAD RASHAD WESTON,
a/k/a “Blood,”
CHARLESTON SHELLIE LONG,
a/k/a “Shellie,”
SHYRON DEONTA GIVENS,
a/k/a “Ron,”
CHARLIE JAMES MCDUFFY, JR.,
TEDDY TERRELL STRACHAN,
CEVEGHNTA BILLVON GUYDEN,
a/k/a “Chop,”
QUINCY ALFONZO TURNER,
a/k/a “Chico,”
JUSTICE DESHONNA MCLAURIN,
a/k/a “Jussy,”
WILLIE CARL MCLAURIN,
a/k/a “Baldy,”
JA’VONTA WILLIE MCLAURIN,
a/k/a “Tay Tay,” and
WILLIE CARL MCLAURIN, JR.
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ORDER
The Motion to Seal Indictment and Related Documents filed by the
United States is hereby GRANTED, and the Clerk of Court is so directed.
The Clerk is further directed to seal the Indictment in this cause except
e Indictment to the United
when necessary to provide certified op
States Attomey's Office; For investigative Purposes Only
U.S. MARSHAL
MIDDLE DISTRICT OF FLORIDA
HOLDS ORIGINAL WARRANT
OFFICE: TAMPA, FL
Case 2:20-mj-00003-DM Document 1-1 Filed 01/07/20 Page 10 of 10
It is further ordered that upon verbal request from the United States
Attorney's Office that the United States Marshals Service is to release a
certified copy of the arrest warrant to the case agent or other appropriate law
enforcement and/or to the United States Attorney's Office without further
order of the Court. It is further ordered that the United States Marshals
Service or other appropriate law enforcement agency may enter the arrest
warrant into the National Crime Information Center (NCIC) database or
other appropriate law enforcement database without further order of the
Court.
It is further ordered that the United States may disclose the existence of
the Indictment in any search and seizure warrants to be executed in
conjunction with the arrest of the defendant(s).
The Clerk is further ordered to unseal all documents relating to the
Indictment without any further Order of the Court when any named
defendant is taken into custody.
DONE AND ORDERED at Tampa, Florida, this__# day of
November, 2019.
COPY Unsere 2 dts
For investigative Purposes Only “FHOMGAS-G-WHLSON- Cras & Ww
U.S. MARSHAL United States Magistrate Judge
MIDDLE DISTRICT OF FLORIDA 9
HOLDS ORIGINAL WARRANT
mE
OFFICE: TAMPA, FL
|
898 So. 2d 132 (2005)
Abdelhafid RAHMANI, Appellant,
v.
STATE of Florida, Appellee.
No. 5D03-3469.
District Court of Appeal of Florida, Fifth District.
March 4, 2005.
Rehearing Denied April 7, 2005.
Landon P. Miller, Naples, for Appellant.
Charles J. Crist, Jr., Attorney General, Tallahassee, and Bonnie Jean Parrish, Assistant Attorney General, Daytona Beach, for Appellee.
SHARP, W., J.
After a jury trial, Rahmani, a citizen of Morocco, appeals from a judgment convicting him of two counts of murder and one count of burglary of a dwelling with an assault or battery with a firearm.[1] He was sentenced to three concurrent life sentences. We affirm.
*133 Rahmani argues the trial court erred in denying his motion to suppress statements he made to a newspaper reporter, Schouten, and to a private citizen, Ahmed, after he had been arrested and placed in the back of a police vehicle.[2] Jaynes, a Seminole County major crimes investigator, arrived at the scene shortly after Rahmani had been detained by Orange County deputies, in Orange County, pursuant to an arrest warrant issued by the Seminole County Sheriff's Department.
Jaynes testified that Rahmani told him he wanted to tell his story to the reporter, but he needed a French interpreter to properly express himself. Jaynes observed the conversation between the reporter and Rahmani, but could not hear what they said. He testified he had not spoken with the reporter about the conversation with Rahmani before it took place, and he gave the reporter no instructions about interviewing him or any questions to ask. He did request that a tape recorder be placed in the police vehicle, which was done. The reporter also testified he had not spoken with any police officers before interviewing Rahmani.
After his conversation with the reporter, Rahmani indicated he wanted to speak with Jaynes further, but he needed a French interpreter. He asked Jaynes to speak to Ahmed, an employee at Value Rent A Car where the arrest took place. She agreed to speak with Rahmani after Jaynes asked her to, and she told him she would record the conversation with a tape recorder provided by Jaynes.
The trial judge correctly found that Schouten and Ahmed were not acting under the authority of law enforcement and neither attained the status of a police agent. Accordingly, the statements were voluntary on Rahmani's part and no Miranda[3] warnings had to have been given to make them admissible in court.[4]
We also find that the affidavit for the search warrant of Rahmani's vehicle contained sufficient facts to establish probable cause to search it. Accordingly, evidence seized pursuant to the search warrant (live shotgun shells and plastic gloves) was admissible in evidence at Rahmani's trial.
As an additional ground to bolster his argument that the statements made to the reporter and Ahmed should have been suppressed, Rahmani contends law enforcement failed to advise the Moroccan Consulate of his arrest and failed to advise him of his right to have contact with the Moroccan Consulate under the Vienna Convention on Consular Relations. Further, he asserts that after his confinement in jail and pre-trial, police authorities denied his requests to contact the Moroccan Consulate.
Pursuant to Article 36 of the Vienna Convention, law enforcement is required to advise the Consulates of participating nations, including Morocco, of the arrest and incarceration of one of their citizens and to inform the citizen of his or her right to have contact with the Consulate. This is for the purpose of allowing a foreign national's consular office to visit with him or her in custody or detention, to converse *134 and correspond with him or her, and to arrange for legal representation.
Rahmani reasons that after his arrest and prior to being interviewed, he should have been advised of his right to speak to consular officials under the Vienna Convention. He contends that he should have been advised of these rights prior to or in conjunction with being given his Miranda rights. Had this been accomplished, he asserts that he would not have spoken with the reporter or Ahmed and thus he was prejudiced.
In this context, we reject Rahmani's argument. We do not determine at what point in time a duty arises under the Treaty to inform a foreign national of his right to contact the consulate and visa-versa, except to say it does not arise on the point of arrest and prior to custodial interrogation accompanied by Miranda warnings. If voluntary statements are made by an arrested foreign national, immediately after an arrest, compliance with the Treaty is not a relevant consideration in determining whether consensual statements made to private persons are [email protected]. See United States v. Ademaj, 170 F.3d 58 (1st Cir.1999). Further, no prejudice in this regard was established. See Maharaj v. State, 778 So. 2d 944 (Fla.2001).
AFFIRMED.
SAWAYA, C.J., and PLEUS, J., concur.
NOTES
[1] See §§ 782.04(1)(a), 812.13(1), 812.13(2)(a), Fla. Stat. (1996).
[2] Rahmani made incriminating statements to the reporter and what amounted to an admission of having committed the murders to the private citizen.
[3] Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966).
[4] Coolidge v. New Hampshire, 403 U.S. 443, 487, 91 S. Ct. 2022, 29 L. Ed. 2d 564 (1971). See also State v. Smith, 641 So. 2d 849 (Fla.1994) (no reasonable expectation of privacy in police vehicle).
|
This is an appeal from a final judgment for defendant rendered by the trial court after giving an instruction offered by defendant in the nature of a demurrer to plaintiff's evidence, and *Page 112
after plaintiff had taken an involuntary nonsuit with leave to move to set the same aside.
The petition bases the action upon an insurance policy issued by defendant to plaintiff insuring against loss or damage to plaintiff's automobile occasioned by fire, and sought the recovery of damages to the automobile when it was burned.
The answer admits the issuance of the policy to plaintiff by which the company insured the car as alleged, but denies liability or any indebtedness to plaintiff because the loss was not covered, but was excluded from coverage, by the terms of the policy and in particular by the exclusion provision reading as follows:
"This policy does not apply: (b) Under any of the coverages while the automobile is subject to any bailment lease, conditional sale, mortgage, or other encumbrance not specifically declared and described in this policy."
The answer further alleged that after the issuance, delivery and acceptance of the policy and while the same was in force plaintiff, without any agreement on the part of defendant endorsed or added to said policy, made, executed and delivered his certain chattel mortgage dated December 8, 1941, by the terms and conditions of which he conveyed the property described in the policy to the Sun Money Company of St. Joseph, Missouri, to secure the payment of a debt to said corporation in the sum of $57.50, and that said mortgage was in full force and effect on the date of the fire mentioned in plaintiff's petition.
The reply was a general denial of the allegations in defendant's answer.
The policy and other documentary evidence, including the mortgage and note of plaintiff to the Sun Money Company, a letter in behalf of the company denying liability on account of said mortgage, and other letters and documents which have no bearing in reference to the points raised on appeal were all received in evidence at the request of plaintiff.
From the foregoing it appears that the policy was issued November 28, 1941. A debt to the General Credit Corporation was mentioned in the policy and the evidence shows that said debt was secured by a mortgage then existing upon the car. There is no claim by defendant that said mortgage was not declared in the policy. The exclusion provision pleaded in the answer is contained in the policy as alleged, together with other exclusion provisions. On December 8, 1941, plaintiff signed a note by the terms of which he agreed to pay the Sun Money Company the sum of $57.50, due January 8, 1942, and at the same time executed and acknowledged a mortgage pledging said automobile as security for the payment of the amount of the note, which sum was acknowledged to be justly due the mortgagee. It appears that the note and mortgage were both contained in the same instrument. *Page 113
The car was burned January 24, 1942, and was practically a total loss. Upon learning of the second mortgage defendant declined liability on account thereof, February 18, 1942.
Plaintiff testified to his ownership of the automobile, its value, its loss by fire, and over the objection and exception of defendant was permitted to testify in reference to "the circumstances" attending the execution of his note and mortgage to the Sun Money Company. In response to the objection to such evidence that it was immaterial and that plaintiff could not impeach the mortgage in this proceeding, the court stated: "We will admit the testimony because it will be a matter of law anyway. We will admit it subject to the objection and go into that a little later." Plaintiff then gave testimony as follows:
"Q. How much money did you borrow of them? A. Fifty dollars.
"Q. How much of a note did they require you to sign? A. Fifty-seven dollars and fifty cents, payable thirty days later.
"Q. How much money did they let you have — actually pay you? A. Fifty dollars.
. . .
"Q. Did they require you to sign a mortgage there? A. No, I understood they made second mortgages on automobiles. I understood that but they required nothing from me in regard to that.
"Q. But did you sign that mortgage? A. Yes.
"Q. That is your signature? A. Yes.
"Q. Do you know whether that was filled in at the time? A. No, I do not, sir.
. . .
"Q. Did you make any payment on this mortgage? A. No, sir.
"Q. Did you renew it? A. Yes, sir.
"Q. When? A. The latter part of December.
"Q. How much did you renew it for? A. I renewed it for the full amount.
"Q. How much did you pay them? A. Seven dollars and fifty cents.
"Q. Seven dollars and fifty cents per month? A. Yes, sir.
"Q. That is what you were paying them, and that is what they required you to pay as interest? A. Yes, sir.
. . .
"Q. What was the $7,50? A. Evidently it was interest." On cross-examination:
"Q. How much is still due and owing on this mortgage? A. Fifty dollars.
"Q. Did you sign anything besides this note and mortgage when you borrowed that money? A. Not that I remember of.
"Q. Are you sure? A. I might have signed a card, but not that I remember of. *Page 114
"Q. Do you know how they arrived at the computation of $57.50? A. No, sir, I was not interested.
"Q. You don't know how they arrived at that? A. No.
"Q. You don't know how much is hazard charge and how much is interest? A. No, sir.
"Q. Do you know how much of that is an investigating fee? A. No, sir."
At the conclusion of plaintiff's testimony the court gave defendant's tendered Instruction A, reading as follows:
"The court instructs the jury that under the pleadings, the law and the evidence your verdict must be for the defendant."
Plaintiff objected and excepted and then took an involuntary nonsuit with leave, which was granted. Thereafter the court entered judgment for defendant. In due time, plaintiff filed his motion to set aside the involuntary nonsuit and to grant him a new trial on the alleged grounds that the court erred in giving defendant's Instruction A, for the reason that there were facts in evidence justifying submission of the case. The motion was overruled and upon proper steps an appeal was allowed to this court.
The appeal was first heard and determined here during the March term, with the result that the judgment was affirmed. A rehearing was granted and the case is now presented upon the same abstract and briefs heretofore furnished with the citation of additional authorities.
Appellant's first contention is that there was error in giving defendant's Instruction A because in so doing the court held in effect that the exclusion provision in the policy was broad enough to include any encumbrance placed on the insured property after the issuance of the policy; that the provision of the policy applied only to mortgages existing at the time of the issuance of the policy, but not declared; and that the policy is a contract prepared by the company and cannot be broadened beyond its specific terms by judicial construction
Such contention is not well founded. The policy provides that there should be no coverage while the automobile is subject to any mortgage not specifically declared and described in the policy. The provision is not ambiguous and is not subject to any construction other than its plain meaning. The word "while," as used in the policy, is an adverbial modifier expressing duration. It means "as long as," and is not limited to the date of the issuance of the policy but refers as well to time thereafter.
In the case of Bridgewater v. General Exchange Ins. Corporation, 131 S.W.2d 220, 234 Mo. App. 335, an exclusion provision in an automobile fire insurance policy was under consideration. It provided that "unless otherwise provided by agreement in writing added hereto, and except as to any lien, mortgage or other incumbrance specifically set forth and described in the Schedule of Warranties on Page 1 of this policy, this company shall not be liable for loss or damage to *Page 115
any property insured hereunder while subject to any lien, mortgage or other incumbrance." The effect of the holding in that case, in reference to the defense of a violation of said provision, was that under such a provision the placing of a mortgage on the automobile subsequent to the issuance of the policy without the knowledge or consent of the defendant would relieve the insurer of liability for any loss or damage which might occur during the existence of such mortgage, and that the policy was suspended during such time.
Appellant argues that the exclusion provision in the Bridgewater case is wholly unlike the provision in plaintiff's policy, and that the ruling in said case is not applicable to this case. Appellant is in error. While the wording of the exclusion provisions in the two policies is not alike the meaning and effect are the same, and the ruling made in the case cited is applicable here.
It is next contended by appellant that even though the provision of the oicy includes a subsequent encumbrance the evidence shows that the Sun Money Company mortgage was void because usurious, and insists that plaintiff "made a submissible case to the jury on the question of whether or not there was a valid lien on the insured property not declared in the policy."
In answer to the foregoing point respondent urges that the issue of usury was not available to appellant because not specifically pleaded, the reply being a general denial.
Upon consideration of the question of pleading thus raised the conclusion has been reached that, in a case of this character, the reply to the particular defense of an existing mortgage raised by the answer must be sufficiently definite and specific in its allegation of facts to appraise defendant that plaintiff proposes to prove that the mortgage was infected with usury, and therefore void, in order to inject the issue of usury into the case. The reply in this case is sought to be used as a defensive pleading and its sole office in that respect is to interpose a defense to new matter pleaded in the answer. [Neal v. Building Company, 228 Mo. App. 536, 70 S.W.2d 136.] There was no special defense interposed but merely a general denial of the allegations of the answer which contained a plea of provisions of the policy and a plea of the existence of a mortgage which under said provisions relieved the defendant from liability. The rules by which the sufficiency of pleadings is to be determined are prescribed by the Code, and the object of pleading is to form specific and definite issues of fact. Under the reply in this case the defendant was left entirely in the dark as to what defense plaintiff might urge in opposition to the new matter pleaded in the answer. Section 928, Revised Statutes Missouri, 1939, provides specific requirements for an answer; and Section 931, in similar manner, provides how plaintiff may reply and allege new matter as a defense to the new matter in the answer. "So that both these pleadings must be governed in their *Page 116
framing by cognate rules." [Young v. Schofield, 132 Mo. 650, 661, 34 S.W. 497.] If defendant had answered in this case merely by a general denial of the petition, it certainly could not have defended upon the ground that there was an existing mortgage which under the terms of the policy relieved defendant from liability. New matter being set forth in the answer, a defensive reply thereto should be as specific as that required of the answer to plaintiff's petition. Plaintiff should have alleged sufficient facts to show usury in order to avail himself of that defense.
The infirmity of usury does not appear upon the face of the mortgage or note in this case and usury will not be presumed. The position of plaintiff in this case is controlled by the general rule that one asserting usury in order to void his contract must specifically plead and prove it. [27 R.C.L., p. 266, sec. 70; 66 C.J., p. 296, sec. 287, et seq.; Sec. 3230, R.S. Mo. 1939; Fischman v. Schultz, 55 S.W.2d 313, 318; St. Paul Fire
Marine Ins. Co. v. American Trust Co. (Mo.), 222 S.W. 137, 142; Bond v. Worley, 26 Mo. 253; C.I.T. Corp. v. Byrnes, 38 S.W.2d 750, 752; Bahl v. Miles, 6 S.W.2d 661, 663; General Motors Acceptance Corp. v. Weinrich, 218 Mo. App. 68, 83; Missouri Discount Corp. v. Mitchell, 216 Mo. App. 100.]
Rulings in cases cited by appellant to sustain his position that he was not required to plead usury in this case are far afield, because the nature of the actions in those cases in which the plea of usury was not required distinguishes them from the nature of the action in this case. In the case of Smith v. Mohr,64 Mo. App. 39, replevin was sought on the basis of a mortgage which was shown to be void for usury. There was no question of pleading in the case. In the case of Smith v. Becker,192 Mo. App. 597, the plea of usury was made in the petition. In Holmes v. Schmeltz, 161 Mo. App. 470, the action was based on conversion and plaintiff recovered damages on account of usurious interest on debts secured by a pledge. The pleadings are not shown and there was no question of pleading determined. In Milholen v. Meyer, 161 Mo. App. 491, the action was for damages for the wrongful taking of plaintiff's horse by the defendant under a mortgage shown to be void for usury. The mortgage was the basis upon which defendant claimed the horse. Usury was not pleaded. Judgment for plaintiff was affirmed. What the court said upon consideration of the motion for rehearing in reference to the necessity to plead usury is confined to cases of like character to the one then under consideration; that is, that when there is an action pending between the mortgagor and the mortgagee, or the mortgagee's assignee, and the mortgage is the basis of defendant's claim to the right of possession of the property, plaintiff need not plead usury in the mortgage. This ruling was based upon what was said in Davis v. Tandy, 107 Mo. App. 437, 447, as follows: *Page 117
"The mortgage is the foundation of plaintiffs' title to the property charged to have been converted by defendant. It is therefore the foundation of the cause of action they claim to have. It has been especially set out in the petition as the basis of their right. The mortgage being void, we must hold that the cause of action as alleged never existed. In such case, a general denial is sufficient to admit evidence to show that fact."
Section 3231, Revised Statutes Missouri 1939, properly construed, does not afford support to appellant's position that usury was not required to be pleaded in this case. The clause, "or in any other case when the validity of such lien is drawn in question," does not relieve a party to the action of the necessity to put in issue the validity of the lien by proper pleading. The rule to be deduced from the foregoing cases and the statute may be stated as follows: In any action between a mortgagor and mortgagee, or between parties standing in legal privity with said parties, where the mortgage is the basis of the claim of either such party, usury may be shown without a special plea to invalidate the mortgage. Such rule is applied to particular classes of cases like possessory actions or actions for damages for wrongful conversion by a mortgagee.
The pending case is not of the character above described. This is an action on an insurance policy. The defendant was not a party to the mortgage in question, nor in legal privity with the mortgagee and had no claim to the property mortgaged, and was not asserting any such claim by virtue of the mortgage.
Appellant further stresses the ruling of this court in the case of Saffran v. Rhode Island Ins. Co., 141 S.W.2d 298, to the effect that a void mortgage made subsequent to the issuance of an insurance policy on plaintiff's car was no defense to the policy which excluded liability for loss occurring while the automobile was subject to a mortgage. The uncontradicted evidence showed that the alleged mortgage was not a lien on the automobile because there was no delivery of the instrument and no debt existed which could have been enforced against the automobile. It does not appear what issues were raised by the pleadings and there was no question or issue concerning the propriety of pleadings raised on appeal.
Due to the state of the pleadings in the pending case the question of the invalidity of the mortgage because of usury was not properly brought in issue, and plaintiff had no right to a determination of that question in avoidance of the exclusion provision of the insurance policy. The ruling of the learned trial judge was correct and the judgment should be affirmed. The Commissioner so recommends. Sperry, C., concurs. |
Exhibit 10.1
To
Fineldo S.p.A.
Via della Scrofa, 64
00186 Roma
Ms. Franca Carloni
Mr. Andrea Merloni
Mr. Aristide Merloni
Ms. Maria Paola Merloni
Ms. Antonella Merloni
Milan, July 10, 2014
by hand
Dear Sirs:
Further to our discussions, we hereby propose the following agreement to you:
“Share Purchase Agreement
This Share Purchase Agreement (the “Agreement”) is entered into in Milan, by and
between
Fineldo S.p.A., a company incorporated under the laws of Italy and having its
registered office at Via della Scrofa, no. 64, Rome, Italy, registered in the
Register of Enterprises of Rome under no., and Tax code no., 01549810420,
represented herein by Mr. Gian Oddone Merli, duly authorized to execute this
Agreement pursuant to the resolution of the board of directors a copy of which
is attached hereto as Annex A (“Fineldo” or the “Seller”);
and
Whirlpool Corporation, a company incorporated under the laws of Delaware and
having its principal place of business at 2000 N. M-63 Benton Harbor, MI 49085
(USA), represented herein by Mr. Marc Bitzer, duly authorized to execute this
Agreement pursuant to the Secretary's Certificate attached hereto as Annex B
(the “Purchaser”).
(Fineldo and the Purchaser are also defined, collectively, as the “Parties” and
each of them, individually, as a “Party”).
WHEREAS
a)
Indesit Company S.p.A. is a joint stock company (società per azioni)
incorporated under the laws of Italy, with registered office at Viale Aristide
Merloni no. 47, 60044 - Fabriano - Ancona, Italy, VAT code and registration in
the Register of Enterprises of Ancona no. 00693740425 (having an authorized,
issued, and fully paid-in share capital of Euro 102,759,269.40, divided into
114,176,966 ordinary shares having a par value of Euro 0.90 each), the shares of
which are listed on the stock market organized and regulated by Borsa Italiana
S.p.A. (the “Target” or the “Company”);
b)
Fineldo is a holding company, controlled by Mr. Vittorio Merloni, born in
Fabriano (Ancona), on April 30, 1933, which owns no. 48,810,000 ordinary shares
of the Target, representing 42.749% of the authorized, issued and fully paid-in
share capital of the Target (the “Fineldo Shares”);
c)
the voting rights pertaining to Mr. Vittorio Merloni, as Controlling shareholder
of Fineldo, are currently exercised in his name and on his behalf by his son Mr.
Aristide Merloni, in his capacity as legal guardian (tutore legale) of Mr.
Vittorio Merloni;
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d)
the Company owns directly or indirectly the participations listed in Annex C in
the subsidiaries therein indicated (collectively, the “Existing Subsidiaries”)
and has full power and authority over the same;
e)
in addition to and simultaneously with the purchase of the Fineldo Shares set
forth hereunder, the Purchaser intends to purchase, in accordance with the
provisions of this Agreement:
(i)
no. 1,338,300 ordinary shares of the Target, representing 1.172% of the
authorized, issued, and fully paid-in share capital of the Target, which are all
of the shares owned directly and/or indirectly by Mr. Vittorio Merloni (the
“Vittorio Merloni Shares”);
(ii)
no. 254,840 ordinary shares of the Target, representing 0.223% of the
authorized, issued, and fully paid-in share capital of the Target, which are all
of the shares owned directly and/or indirectly by Ms. Franca Carloni, born in
Cagli (Pesaro), on May 31, 1933 (the “Franca Carloni Shares”);
(iii)
no. 250,840 ordinary shares of the Target, representing 0.220% of the
authorized, issued, and fully paid-in share capital of the Target, which are all
of the shares owned directly and/or indirectly by Mr. Aristide Merloni, born in
Rome, on September 4, 1967 (the “Aristide Merloni Shares”);
(iv)
no. 265,840 ordinary shares of the Target, representing 0.233% of the
authorized, issued, and fully paid-in share capital of the Target, which are all
of the shares owned directly and/or indirectly by Mr. Andrea Merloni, born in
Rome, on September 4, 1967 (the “Andrea Merloni Shares”);
(v)
no. 242,900 ordinary shares of the Target, representing 0.213% of the
authorized, issued, and fully paid-in share capital of the Target, which are all
of the shares owned directly and/or indirectly by Ms. Maria Paola Merloni, born
in Rome, on October 13, 1963 (the “Maria Paola Merloni Shares”);
(vi)
no. 276,030 ordinary shares of the Target, representing 0.242% of the
authorized, issued, and fully paid-in share capital of the Target, which are all
of the shares owned directly and/or indirectly by Ms. Antonella Merloni, born in
Rome, on July 31, 1965, (the “Antonella Merloni Shares”);
(vii)
no. 12,457,590 shares of the Target, representing 10.911% of the authorized,
issued, and fully paid-in share capital of the Target (the “Ester Merloni
Shares”, which are all of the shares owned by Ms. Ester Merloni, born in
Fabriano (Ancona), on July 30, 1922, and Fines S.p.A., a joint stock company
(società per azioni) incorporated under the laws of Italy, with registered
office at Viale Aristide Merloni, 47 - 60044 Fabriano (Ancona), VAT code and
registration in the Register of Enterprises of Ancona 01549820429) (“Fines”),
which, in turn, is Controlled by Ms. Ester Merloni).
For this purpose, on the date hereof, simultaneously with the execution of this
Agreement, the Purchaser has entered into a share purchase agreement (the
“Family SPA (A)”) with Ms. Franca Carloni, Mr. Aristide Merloni, Mr. Andrea
Merloni, Ms. Maria Paola Merloni, Ms. Antonella Merloni, Ms. Ester Merloni, and
Fines (all of such Persons and Mr. Vittorio Merloni are jointly referred to as
the “Family Sellers”), for the sale to the Purchaser of the Franca Carloni
Shares, the Aristide Merloni Shares, the Andrea Merloni Shares, the Maria Paola
Merloni Shares, the Antonella Merloni Shares and the Ester Merloni Shares
(collectively, together with the Vittorio Merloni Shares, the “Family Shares”).
It is currently contemplated that, immediately after the issuance of the Court
Authorization in accordance with Section 4.2(i), Mr. Vittorio Merloni will
adhere and become a party to the Family SPA (A) alongside the other Family
Sellers and will therefore sell to the Purchaser the Vittorio Merloni Shares
effective as of the closing thereunder;
f)
in addition to the purchase of the Fineldo Shares set forth hereunder and the
simultaneous purchase of the Family Shares set forth under the Family SPA (A) as
contemplated in recital e) preceding, the Purchaser intends to purchase, in
accordance with the provisions of this Agreement, also no. 5,027,731 shares of
the Target, representing 4.403% of the authorized, issued, and fully paid-in
share capital of the Target, which are all of the shares owned directly and/or
indirectly by Ms. Claudia Merloni, born in Rome, on February 20, 1965 (the
“Claudia Merloni Shares”). For this purpose, on the date hereof, the Purchaser
has entered into a share purchase agreement with Ms. Claudia Merloni with
respect to the Claudia Merloni Shares (the “Family SPA (B)”);
g)
Fineldo, as well as the Family Sellers and Ms. Claudia Merloni, have been long
standing shareholders of the Company, and have an extensive knowledge of its
business and its economic and financial conditions;
h)
the execution of this Agreement is contemplated by, and may only be made in
concert with, the Family (A) SPA and the Family (B) SPA executed on the date
hereof; and
i)
the Purchaser and the Seller - each on the basis of its own analysis,
evaluations and projections - are, respectively, willing to purchase, and
willing to sell, the Fineldo Shares pursuant to the terms and conditions
provided for in this Agreement.
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NOW, THEREFORE, in consideration of the foregoing, which represent a substantial
part of this Agreement, the Parties agree as follows.
Article 1
Certain Definitions
1.1 Certain Definitions. In this Agreement, and in the Recitals, Annexes, and
Schedules hereto, capitalized terms shall have the meanings ascribed to them
below or in other Sections of this Agreement.
“Accounting Principles”: means: (i) as for the Financial Statements other than
the Half-Year Financial Statements (both as defined below), the International
Financial Reporting Standards (IFRS) issued by the International Accounting
Standards Board (IASB) as interpreted by the International Financial Reporting
Interpretations Committee (IFRIC) and endorsed by the European Union
(collectively, the “IFRS”); and (ii) as for the Half-Year Financial Statements
(as defined below), the International Accounting Standard applicable to interim
financial reporting (IAS 34), as adopted by the European Union, in each case, as
in effect as of the time of approval by the Target’s board of directors of the
relevant Financial Statements.
“Affiliate”: means, with respect to any Person, any other Person that is
Controlled by, Controlling or under common Control with, the first Person.
“Agreement”: means this Agreement, including its Recitals herein and the Annexes
and Schedules hereto.
“Anticorruption Laws”: means the United States Foreign Corrupt Practices Act of
1977, as amended, the United Kingdom Bribery Act 2010, as amended, and any other
anticorruption or anti-bribery laws or regulations applicable to or with respect
to any Group Company.
“Annual Financial Statements”: means the Consolidated Financial Statements and
the Stand-alone Financial Statements (both as defined below).
“Antitrust Authorities”: means the European Commission, the Federal Antimonopoly
Service of Russia (Ôåäåðàëüíàÿ àíòèìîíîïîëüíàÿ ñëóæáà Ðîññèè), the Turkish
Competition Authority (Rekabet Kurumu), the Antimonopoly Committee of Ukraine
(Àíòèìîíîïîëüíèé êîì³òåò Óêðà¿íè) and any other antitrust authority with which
the Purchaser deems that a filing is required under applicable Law.
“Antitrust Filings”: means the merger control notifications to be filed with the
Antitrust Authorities.
“Average Net Financial Debt” means, with reference to any given date, the daily
average consolidated Net Financial Debt over the one-year period ending on such
date, determined in accordance with the Calculation Rules set forth in Schedule
1.1(a)(i).
“Average Net Working Capital” means, with reference to any given date, the
average of the 12 Net Working Capital amounts as of the last day of each of the
12 calendar months preceding such date, determined in accordance with the
Calculation Rules set forth in Schedule 1.1(a)(i).
“Business Day”: means any calendar day other than Saturday, Sunday, and any
other day on which credit institutions are authorized or required to close in
Milan (Italy) or New York City (U.S.A.).
“Calculation Rules”: means the principles, definitions, criteria, and rules set
forth in Schedule 1.1(a)(i) for the determination and calculation of (i) the Net
Financial Debt and (ii) the Net Working Capital.
“Clearance”: has the meaning set forth under Section 4.2(iv).
“Closing”: means the carrying out of the activities necessary, under applicable
Law, for the purchase and sale of the Fineldo Shares, free and clear of any
Encumbrance, the payment of the Purchase Price and, in general, the execution
and exchange of all documents and agreements and the performance and
consummation of all the obligations and transactions required to be executed,
exchanged, performed or consummated pursuant to Article 5 of this Agreement.
“Closing Average Net Financial Debt”: means the Average Net Financial Debt as at
the date falling 10 Business Days prior to the expected Closing Date, as
determined and calculated in accordance with the relevant Calculation Rules set
forth in Schedule 1.1(a)(i) and the provisions of Section 2.3.
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“Closing Average Net Working Capital”: means the Average Net Working Capital as
at the date falling 10 Business Days prior to the expected Closing Date, as
determined and calculated in accordance with the relevant Calculation Rules set
forth in Schedule 1.1(a)(i) and the provisions of Section 2.3.
“Closing Date”: shall mean the date when the Closing actually occurs pursuant to
Section 5.1.
“Consolidated Financial Statements”: means the consolidated annual financial
statements of the Company as of December 31, 2013, comprising the statement of
financial position, the income statement, the statement of comprehensive income,
the cash flow statement, the statement of changes in equity and the explanatory
notes, audited by Reconta Ernst & Young S.p.A. and approved by the board of
directors of the Company on March 21, 2014.
“Contracts, Undertakings, and Instruments”: means any contract, agreement,
arrangement, obligation, commitment, undertaking, understanding, transaction,
covenant, promise, note, indenture, deed, instrument or other act, of any kind
or nature whatsoever, whether oral or written.
“Data Room Documents”: means the documents listed in Schedule 1.1(a)(ii)
(including the questions raised in writing by the Purchaser during the due
diligence process and the relevant written answers provided by the Seller, the
Company or their advisors) and reproduced in full in the read-only DVDs attached
hereto as Schedule 1.1(a)(iii) which have been made available for on-screen
review to the Purchaser and its advisors in the period from April 18 to June 27,
2014, in the “PJ LAB” virtual data room set up by RR Donnelley Venue on behalf
of the Seller.
“EHS Laws”: means any Laws relating to (i) the control of any actual and/or
potential pollution and/or the protection of the Environment, (ii) the
generation, handling, treatment, storage, disposal, release, remediation and/or
transportation of Hazardous Materials, (iii) the exposure to Hazardous
Materials, and/or (iv) any health and safety matters.
“Encumbrance”: means any security interest, pledge, mortgage, lien, charge,
encumbrance or restriction on the use, voting or transfer, usufruct, security or
enjoyment right (diritto di garanzia o di godimento), sequestration, deed of
trust, assignment, freeze, privilege, expropriation, seizure, attachment, claim,
opposition, covenant, obligation (including propter rem), burden, limitation,
restriction, reservation of title, option, right of first refusal, right of
pre-emption, right of set off, right to acquire, other similar restriction or
any other third-party right (including in-rem right “diritto reale”, in-rem
burden “onere reale”, and contractual rights) or interest, statutory or
otherwise, of any kind or nature whatsoever, however created or arising,
including by any Contracts, Undertakings, and Instruments, or any other
Contracts, Undertakings, and Instruments having, or aimed at creating, the same
or similar effects, as the context may require.
“Environment”: means fauna and flora, natural resources and wildlife, any
organisms (including individuals), ecosystems, health and safety, and any of the
media of air, water and land, whether above or below ground, indoor or outdoor,
and wherever occurring, and any other meaning given to “Environment” under any
EHS Law.
“Escrow Account”: means the account in the name of the Purchaser to be opened
with the Escrow Agent prior to the Closing Date in accordance with the
provisions of the Escrow Agreement for the purposes set forth in Section 3.5.
“Escrow Agent”, “Escrow Agreement”, and “Escrow Amount”: have the meaning set
forth under Section 3.5.
“EU Pre-notification Phase”: means the contacts with the European Commission
aimed at discussing the scope of the information to be provided in the merger
control notification to be filed with the European Commission.
“Financial Statements”: means the Annual Financial Statements, the Half-Year
Financial Statements, the Q1 Interim Report and the Q3 Interim Report.
“Government Official”: means any: (i) employee or official of a Governmental
Authority or instrumentality of a Governmental Authority and/or a state-owned or
controlled enterprise or public international organization (e.g., the World
Bank); (ii) political party or party official; or (iii) candidate for political
office.
“Governmental Authority”: means any (international, foreign, national, European,
federal, state, regional, provincial or local) legislative, judicial, executive,
administrative, governmental, regulatory entity or any department, commission,
board, agency, bureau, official thereof or any other regulatory or stock
exchange authority (including Consob and Borsa Italiana S.p.A.).
“Group Companies”: means, collectively, the Target and the Subsidiaries.
4
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“Half-year Financial Statements”: means the interim condensed consolidated
financial statements of the Company as of June 30, 2014, including the income
statement, the statement of comprehensive income, the balance sheet, the cash
flow statement, the consolidated statement of changes in equity and the
explanatory notes, to be approved by the board of directors of the Company, and
subjected to a limited audit by Reconta Ernst & Young S.p.A.
“Hazardous Material”: means (i) any hazardous or toxic substances, materials,
chemicals, wastes or constituents and any pollutants or contaminants (including
petroleum or petroleum-derived substances or materials and asbestos or
asbestos-containing substances or materials) and (ii) any other substance or
material, in whatever form (including liquids, solids, gases, ions, living
organisms, heat, vibration, noise, and other radiation), which, whether alone or
in combination with other substances or materials, (x) may be toxic, hazardous,
harmful or damaging to human health or the Environment, or (y) is defined,
listed, identified or regulated as hazardous, toxic or dangerous, or as
pollutant or contaminant, under any EHS Law.
“ICC”: means the Italian civil code, as approved by Royal Decree no. 262 of
March 16, 1942, as subsequently amended and supplemented.
“Interim Period”: has the meaning set forth under Section 6.1.
“Law”: means any international, national, federal, state, regional, provincial
or local law, statute, ordinance, rule, regulation, code, order, judgment,
injunction or decree.
“Liabilities”: means any liabilities, obligations, covenants, undertakings,
indebtedness, responsibilities, and any other balance sheet, off balance sheet
or other liability of any kind or nature (whether absolute, accrued, current,
actual, deferred, due or reasonable likely to become due, potential, contingent,
quantified, disputed, asserted or unasserted, known or unknown, required or not
to be reflected in the financial statements or in the footnotes thereto, or
otherwise).
“Litigations and Claims”: means any civil, administrative, criminal, judicial,
governmental, Tax, labor or other suit, litigation, arbitration, action, cause
of action, demand, petition, notice, claim, dispute, complaint, opposition,
investigation, inspection, prosecution, access order, information request,
verification, audit, assessment, inquiry, hearing or proceedings of any kind or
nature whatsoever (whether by or before any Governmental Authority, judicial
authority, court or arbitrators or otherwise), including any extrajudicial
Litigations and Claims.
“Loss”: means any and all losses (including losses of or shortfall in profits,
earnings, income or revenues), decreases in the value of the shares of the
Target or any of the Company and the Subsidiaries, damages, Liabilities,
Litigations and Claims, orders, injunctions, assessments, judgments, writs,
rulings, binding arbitrations, arbitral or other awards, measures, decisions,
fines, prejudices, interests, penalties, deficiencies, write-offs, write-downs,
shortfalls, including for the avoidance of doubt any “sopravvenienze passive”,
“plusvalenze passive”, “insussistenze”, and “minusvalenze d'attivo”, payments,
costs or expenses of whatever nature or kind (including out-of-pocket expenses,
and accountants’, consultants’, experts’ and attorney’s fees, cost or expenses
for the defense of, or otherwise deriving or resulting from, arising out of, in
connection with, with respect to or relating to, any Litigations and Claims,
orders, injunctions, assessments, judgments, writs, rulings, binding
arbitrations, arbitral or other awards, measures or decisions incident to any of
the foregoing).
“Material Adverse Effect”: means any material adverse change or effect on, in or
with respect to any of the business, operations, conditions (financial,
economic, trading or otherwise), assets, liabilities, permits, authorizations,
Contracts, Undertakings and Instruments, rights, properties, net worth, cash
flow or result of operations or prospects of the Target and the Subsidiaries
taken as a whole, other than any change or effect directly resulting from (i) a
downturn/disruption of the global economy generally or of the global financial,
banking or securities markets or of the industry in which the Target and the
Purchaser carry out their business; (ii) the enactment of any provision of Law
of general application by any competent Governmental Authority, after the date
of execution of this Agreement (to the extent that any such downturn/disruption
under (i) above or enactment under (ii) above does not disproportionately
adversely affect the Target or its Subsidiaries as compared to similarly
situated competitors of the Target); or (iii) the public announcement of the
transactions contemplated in this Agreement.
“Merloni Directors”: means Ms. Franca Carloni, Mr. Aristide Merloni, Mr. Andrea
Merloni, Ms. Maria Paola Merloni, and Ms. Antonella Merloni.
“Mutual Closing Conditions”: means the Closing conditions set forth in Section
4.2.
“Person”: means any individual, corporation, partnership, firm, association,
unincorporated organization or other entity.
5
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“Provisional Purchase Price”: has the meaning set forth under Section 2.2.
“Purchase Price”: has the meaning set forth under Section 2.2.
“Purchaser’s Closing Conditions”: has the meaning set forth under Section
4.1(a).
“Q1 Interim Report”: means the unaudited interim report on operations of the
Company and the Subsidiaries as of March 31, 2014, including the income
statement, the statement of comprehensive income, the balance sheet, the cash
flow statement and the consolidated statement of changes in equity, approved by
the board of directors of the Company and disclosed to the public on May 7,
2014.
“Q3 Interim Report”: means the unaudited interim report on operations of the
Company and the Subsidiaries as of September 30, 2014, including the income
statement, the statement of comprehensive income, the balance sheet, the cash
flow statement and the consolidated statement of changes in equity, to be
approved by the board of directors of the Company.
“Reference Average Net Working Capital”: means, with reference to any given
date, the Average Net Working Capital as at the date falling 1 (one) year before
such date, as determined and calculated in accordance with the relevant
Calculation Rules set forth in Schedule 1.1(a)(i) and the provisions of Section
2.3.
“Reference Closing Average Net Financial Debt”; has the meaning set forth under
Section 2.2.
“Reference Closing Average Net Working Capital”: means the Average Net Working
Capital as at the date falling 1 (one) year before the date falling 10 Business
Days prior to the expected Closing Date, as determined and calculated in
accordance with the relevant Calculation Rules set forth in Schedule 1.1(a)(i)
and the provisions of Section 2.3.
“Related Party”: means (i) the Persons identified as such, with respect to the
Company and/or any of the Subsidiaries, pursuant to Consob Regulation, no.
17221/2010, as amended; and (ii) to the extent they are not already included in
item (i), any of the Seller, the Family Sellers, their respective spouses,
relatives and in-laws (parenti e affini), their and their respective spouses’
and relatives’ and in-laws’ (parenti e affini) Affiliates, as applicable.
“Relevant Percentage”: means 48%.
“Relevant Proceedings”: means the investigation conducted by the French
Competition Authority in the white and brown goods’ sector, which resulted in a
dawnraid of a Group Company in France on October 17, 2013, including any
decision that may be adopted by the French Competition Authority in the context
of this investigation or by any competent court or other Governmental Authority
in connection therewith (including any appeal) and any damage claim which may be
brought before commercial courts by third parties in connection therewith, as
well as any investigation, activity or action arising out of, or in connection
with, similar allegations, in any jurisdiction.
“Securities”: means (i) all shares, quotas, and equity securities of any class
or other stock or interest representing or relating to a company’s capital,
instruments as defined at article 1, paragraph 6-bis, of the Unified Financial
Act, any financial participating interests (strumenti finanziari partecipativi,
including those issued pursuant to articles 2346 or 2349 of the ICC) or other
interests or securities of any nature or kind whatsoever issued by a company or
separate assets, having an equity or hybrid nature, special rights to
shareholders or quotaholders (including pursuant to article 2468, paragraph 3,
of the ICC) or any similar rights even if not represented by a certificate or
instrument; (ii) all underwriting rights, option or subscription or conversion
or exchange rights, stock options, warrants, convertible bonds or debentures,
and any other right or financial instruments or securities (equity, debt or
otherwise) that may be converted into, exchanged or exercisable for, or give any
other right (immediately or in the future, conditionally or otherwise) to
underwrite, subscribe for, purchase, acquire or hold, or acquire any right on,
or enabling potential access to, or giving any rights generally inuring to, the
instruments and rights enumerated under this point or point (i) above; and (iii)
any right or entitlement on, deriving or resulting from, arising out of, in
connection with, with respect to or relating to, the instruments and rights
enumerated under (i) or (ii) above, including voting, governance, pre-emption
rights or any other similar rights.
“Social Shock Absorbers Decrees”: means the formal decrees/authorizations of the
competent Governmental Authority approving all the social shock absorbers
(”ammortizzatori sociali”) requested and to be requested by the Company as
reflected in the Data Room Documents (including the CIGS “Cassa integrazione
straordinaria” due to termination of business and reorganization, the CIGD
“Cassa integrazione in deroga,” and the CDS “Contratti di solidarietà”).
“Special Indemnity”: means the Relevant Proceedings Special Indemnity.
6
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“Stand-alone Financial Statements”: means the separate annual financial
statements of the Company as of December 31, 2013, comprising the statement of
financial position, the income statement, the statement of comprehensive income,
the cash flow statement, the statement of changes in equity and the explanatory
notes, audited by Reconta Ernst & Young S.p.A. and approved in draft form by the
board of directors of the Company on March 21, 2014, and in final form by the
shareholders of the Company at the shareholders’ meeting held on May 7, 2014.
“Subsidiaries”: means the companies Controlled by the Target either directly or
through one or more other Controlled companies, including the Existing
Subsidiaries listed in Annex C.
“Tax”: means any international, national, federal, state, regional, provincial,
or local income, gross receipts, levies, license, payroll, employments, excise,
severance, stamp, occupation, customs duties, capital stock, franchise,
termination indemnities, profits, withholding, social security, health
insurance, welfare, unemployment, disability, real property, personal property,
sales, use transfer, registration, value added, estimated, or other tax or
charges of similar nature imposed by any Governmental Authority or, in any
event, due under any applicable Law and any additions to tax, fines or penalties
payable in connection therewith.
“Tax Return” means any report, return, filing, declaration, claim for refund, or
information return or statement related to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
“Trademark”: means all trademarks, trade, business or company names, trademark
applications, corporate names, service marks, service names, brand names, logos,
designs, domain names, phrases and other identifications (in each case whether
registered or unregistered, capable of registration or not, and including any
applications to register any of the foregoing or right to apply for the same and
any re-examinations, re-issues, renewals, extensions, and continuations thereof,
related contractual rights, enjoyed pursuant to the Law or to registration
and/or resulting from the use).
“Unified Financial Act”: means the Italian legislative decree dated February 24,
1998, no. 58, as amended and supplemented.
1.2 Interpretative Rules. Unless otherwise expressly provided, for the purposes
of this Agreement the following rules of interpretation shall apply.
(a) Interpretation. The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favouring or
disfavouring any Party by virtue of the authorship of any provisions of this
Agreement.
(b) Gender and number. Any reference in this Agreement to a gender shall include
all genders, and defined words imparting the singular number only shall include
the plural and vice versa.
(c) Headings. The division of this Agreement into Articles, Section and other
subsections and the insertion of headings are for convenience of reference only
and shall not affect or be utilized in construing this Agreement.
(d) Sections and Articles. All references in this Agreement to any “Section”
and/or any “Article” are to the corresponding Section and/or Article,
respectively, of this Agreement, unless otherwise specified.
(e) Control. The term “Control” has the meaning ascribed to it in article 93 of
the Unified Financial Act, and the words “Controlling” and “Controlled” shall be
construed accordingly.
(f) Annexes and Schedules. The Annexes and Schedules attached to this Agreement
shall be, and shall be construed as an integral part of this Agreement.
(g) Including. The word “including” or any variation thereof means “including,
without limitation” and shall not be construed to limit any general statement to
the specific or similar items or matters immediately following it.
1.3 Annexes. The following Annexes are attached to, and incorporated in, and
form part of, this Agreement:
•
Annex A: Fineldo’s representative powers;
•
Annex B: Purchaser’s representative powers;
•
Annex C: List of Existing Subsidiaries.
7
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1.4 Schedules. The following Schedules are attached to, and incorporated in, and
form part of, this Agreement:
•
Schedule 1.1(a)(i): Calculation Rules;
•
Schedule 1.1(a)(ii): Index of Data Room Documents;
•
Schedule 1.1(a)(iii): DVDs containing copy of Data Room Documents;
•
Schedule 3.3(a)(i): Form of resignation of director;
•
Schedule 3.3(a)(ii): Form of resignation of statutory auditor;
•
Schedule 3.5: Form of Escrow Agreement;
•
Schedule 5.2(a)(iii)(3): Form of resignation of director;
•
Schedule 3.3(a)(iii)(4): Form of resignation of statutory auditor;
•
Schedule 7.5.2(c): Average net debt statement
•
Schedule 7.5.5(e): Group Company NOLs
Article 2
Sale and Purchase of the Fineldo Shares; Calculation of the Purchase Price
2.1 Sale and purchase of the Fineldo Shares. Upon the terms and subject to the
conditions of this Agreement, the Seller hereby undertakes to sell and transfer
to the Purchaser the Fineldo Shares, free and clear from any Encumbrance, and
the Purchaser hereby undertakes to purchase and acquire from the Seller,
effective as of the Closing Date and upon the consummation of the Closing, the
Fineldo Shares, free and clear from any Encumbrance, in consideration of the
Purchase Price.
2.2 Purchase Price. Subject to the last paragraph of this Section 2.2, the
purchase price for all of the Fineldo Shares has been agreed by the Parties to
be Euro 536,910,000 (five-hundred and thirty-six million and nine-hundred and
ten thousand) (the “Provisional Purchase Price”). The Parties mutually
acknowledge and agree that the Provisional Purchase Price has been determined on
the assumptions that (x) the Closing Average Net Financial Debt will be equal to
Euro 627 million (the “Reference Closing Average Net Financial Debt”) and (y)
the Closing Average Net Working Capital will be equal to the Reference Closing
Average Net Working Capital. The Provisional Purchase Price, which is based on
the above-mentioned assumptions and shall be subject to the adjustment set forth
in Section 2.3, would entail a price per each of the Fineldo Shares equal to
Euro 11 (eleven).
The Provisional Purchase Price shall be adjusted, downwards or upwards, prior to
the Closing in accordance with Section 2.3 based on the Closing Average Net
Financial Debt, the Reference Closing Average Net Working Capital and the
Closing Average Net Working Capital (the Provisional Purchase Price as
subsequently so adjusted, the “Purchase Price”).
2.3 Calculation of Purchase Price.
(a) For the purpose of determining the Closing Average Net Financial Debt, the
Closing Average Net Working Capital, the Reference Closing Average Net Working
Capital and, as a result thereof, the amount of the Purchase Price (to be
calculated in accordance with Section 2.3(b)):
(i)
the Parties shall, within 30 days of the date hereof, instruct the Target’s
auditing firm, i.e., Reconta Ernst & Young S.p.A. (the “Auditor”), by way of an
engagement letter on behalf and in the interest of both the Parties, to carry
out the following activities, with the relevant fees and expenses of the Auditor
being borne equally by the Parties:
a.
upon written request of either of the Parties, calculate in accordance with the
applicable Calculation Rules set forth in Schedule 1.1(a)(i), the Average Net
Financial Debt, the Average Net Working Capital and the Reference Average Net
Working Capital as at a reference date indicated by the relevant Party and
deliver to the Parties, within 15 Business Days of such request, a statement
setting forth the results of such calculation (such statement, the “Auditor
Report”);
b.
be available to discuss with the Parties and/or their respective advisors the
contents of the Auditor Report and provide any clarifications and explanations
reasonably requested by the Parties and their respective advisors in relation
thereto;
c.
following the Auditor’s receipt of a written notice by either Party informing
the Auditor of the contemplated Closing Date, calculate, as of a date falling 10
Business Days prior to such Closing Date, the Closing Average Net Financial
Debt, the Closing Average Net Working Capital and the Reference Closing Average
Net Working Capital in accordance with the Calculation Rules set forth in
Schedule 1.1(a)(i) and timely prepare, issue and deliver to the Parties on the
date falling 5 Business Days before the Closing Date, a written certificate (the
“Closing Certificate”) setting forth the Auditor’s determination of (w) the
Closing Average Net Financial Debt calculated in accordance
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with the Calculation Rules set forth in Schedule 1.1(a)(i), (x) the Closing
Average Net Working Capital, calculated in accordance with the Calculation Rules
set forth in Schedule 1.1(a)(i), (y) the Reference Closing Average Net Working
Capital, calculated in accordance with the Calculation Rules set forth in
Schedule 1.1(a)(i), and (z) the resulting amount of the Purchase Price
calculated in accordance with Section 2.3(b). The Auditor shall act as a
technical expert (perito contrattuale) but not as an arbitrator (arbitratore)
and shall make a determination of the three above items based on its technical
expertise, strictly based on the Calculation Rules set forth in Schedule
1.1.(a)(i) and, as for the Purchase Price, the provisions of Section 2.3(b). The
determinations by the Auditor set forth in the Closing Certificate shall be
final, conclusive and binding upon the Seller and the Purchaser, except in the
event of a mathematical error;
(ii)
the Seller shall (A) procure that the Auditor is provided with all relevant
information and is granted regular access to all relevant books, records, and
other relevant documentation of the Group Companies and to the relevant
personnel of the Group Companies as necessary for the Auditor in order to carry
out its tasks as contemplated in the preceding clauses and (B) cooperate with
the Auditor in connection with all of the above and comply with all reasonable
requests made by the Auditor in connection with the carrying out of its duties
in accordance with the terms of the Auditor’s instructions;
(iii)
the Seller shall keep the Purchaser and its advisors regularly informed of the
activities of the Auditor and procure that the Purchaser and its advisors, upon
reasonable request, are granted access to any relevant information and
documentation necessary for them to be able to examine and review the contents
of the Periodic Reports and discuss the same with the Auditor and the Purchaser,
as the case may be.
(b) The Purchase Price payable by the Purchaser to the Seller at the Closing
pursuant to Section 5.2(b)(i) shall be equal to the Provisional Purchase Price
plus the Adjustment Amount (it being understood, for the avoidance of doubt,
that if the Adjustment Amount is a negative number, such number shall be
deducted from the Provisional Purchase Price). “Adjustment Amount” means the
result of the following calculation:
(i) the Reference Closing Average Net Financial Debt; minus
(ii) the Closing Average Net Financial Debt; minus
(iii) the Reference Closing Average Net Working Capital; plus
(iv) the Closing Average Net Working Capital,
provided, however, that:
(A)
in case the result of the above calculation (whether a positive or negative
amount) is lower than or equal to €10 million, such result shall be disregarded
and the Purchase Price hereunder shall remain equal to the Provisional Purchase
Price; whereas
(B)
in case the result of the above calculation (whether a positive or negative
amount) is higher than €10 million, the Adjustment Amount hereunder shall be
equal to the excess over €10 million.
Article 3
Pre - Closing Actions
3.1 Antitrust Filings. (a) Subject to compliance by Fineldo with the obligations
set forth under Section 3.1(c) below, (i) the Purchaser shall start the EU
Pre-Notification Phase as soon as practicable after the date of this Agreement,
and subsequently file the formal merger control notification with the European
Commission as soon as practicable thereafter, and (ii) no later than 15 Business
Days after the execution of this Agreement, the Purchaser shall file the merger
control notifications with the other Antitrust Authorities.
(b) The Purchaser shall submit to Fineldo a draft of the Antitrust Filings at
least 4 (four) Business Days prior to making any such filing (it being
understood that business secrets, competitively sensitive information and other
privileged or confidential information may be deleted and not be disclosed to
Fineldo). Fineldo will promptly review the aforesaid document(s) and may provide
its comments, if any, to the Purchaser, which shall take any reasonable comments
into due account.
(c) Fineldo shall, and shall cause the Company and the Subsidiaries to, (i)
assist in good faith the Purchaser in the preparation of the Antitrust Filings
and provide any reasonable assistance requested by the Purchaser in order to
satisfy requests for information
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made by the Antitrust Authorities, and (ii) promptly furnish the Purchaser with
all information, documents, and data, reasonably required or useful in
connection with the above Antitrust Filings. After the making of the Antitrust
Filings with the Antitrust Authorities, the Purchaser shall keep Fineldo
informed about any material development in the processing of the Antitrust
Filings, provided however that the Purchaser shall have no obligation to
disclose any business secrets, competitively sensitive information or other
privileged or confidential information in connection therewith.
3.2 Cooperation. In addition to any other obligation set forth under this
Agreement, the Parties shall use their best efforts to take any other reasonable
action necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement).
3.3 Resignation of Directors and Statutory Auditors and Shareholders’ Meeting.
Upon written request of the Purchaser, the Seller shall:
(a) (i) procure that the directors of the Company included in the slate of
candidates filed or voted by, or appointed with the
favorable vote of, any of Fineldo and/or the Family Sellers, other than the
current chairman and chief executive officer of the Company, resign from their
office effective as of the Closing and waive any right or claim, for
compensation, or any other ground, against the Company, by way of resignation
letters in the form of Schedule 3.3(a)(i); and (ii) use its best effort to cause
the effective and alternate statutory auditors of the Company included in the
slate of candidates filed or voted by, or appointed with the favorable vote of,
any of Fineldo and/or the Family Sellers to resign from their office effective
as of the Closing and waive any right or claim, for compensation, or any other
ground, against the Company, by way of resignation letters in the form of
Schedule 3.3(a)(ii);
(b) procure that on the third Business Day following the day on which the later
of the Clearance and the Court Authorization has been issued (unless waived in
accordance with the terms of this Agreement), the board of directors of the
Company publish a notice of call of an ordinary shareholders’ meeting of the
Company, to be held within 40 days of such notice of call, for the appointment
of a new board of directors of the Company and, to the extent any statutory
auditor resigned, new statutory auditors (the “Shareholders’ Meeting”);
(c) in accordance with the instructions of the Purchaser, timely submit slates
of candidate directors and, to the extent any statutory auditor resigned,
statutory auditors to be appointed at the Shareholders’ Meeting (such candidates
designated by the Purchaser, respectively, the “New Directors” and the “New
Statutory Auditors”).
3.4 Court Authorization. The Parties acknowledge that it is the Purchaser’s
expectation and assumption and the Purchaser is relying on the fact that (i) the
application for Court Authorization (as defined below) be submitted to the Court
of Ancona by July 14, 2014, (ii) it is reasonably expected that the Court
Authorization be obtained by July 31, 2014, (iii) the Seller diligently,
efficiently, and carefully manage the relevant proceeding (including by timely
providing the Court of Ancona with requested data and information, if any). The
Seller undertakes to keep the Purchaser abreast of such proceeding and, within
the limits provided for by applicable law (if any), to carry out good faith
discussions with the Purchaser with respect to the management of such proceeding
(including with respect to any issue that may have an impact on the timing
and/or the positive outcome of such proceeding.
3.5 Escrow Agreement. At least 5 (five) Business Days before the Closing Date,
Fineldo and the Purchaser shall enter into an escrow agreement with Intesa
Sanpaolo S.p.A. or, if such first bank is not available, with Banca Nazionale
del Lavoro S.p.A. or, if such second bank is not available, with UniCredit
S.p.A. or, if such third bank is not available, with a bank of international
standing as may be agreed upon by the Parties, or in case of disagreement of the
Parties, as selected by the President of the Court of Milan upon request of
either of the Parties (the “Escrow Agent”) substantially in the form set out in
Schedule 3.5, subject to any amendments that may be agreed upon in writing by
the Parties and the Escrow Agent in light of reasonable comments of the Escrow
Agent (the “Escrow Agreement”), contemplating that a portion of the Purchase
Price equal to Euro 53,691,000 (fifty-three million and six hundred and
ninety-one thousand) (the “Escrow Amount”) shall be put in escrow in the Escrow
Account with the Escrow Agent on the Closing Date and shall be kept by the
Escrow Agent thereafter in accordance with the terms of the Escrow Agreement in
order to secure Fineldo’s payment obligations to the Purchaser hereunder in
respect of Sections 9.1 and 9.7.
3.6 Social Shock Absorbers Decrees. The Seller shall, and shall procure that the
Company shall, keep the Purchaser informed with respect to the request and
issuance of the Social Shock Absorbers Decrees, and any related proceedings.
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Article 4
Conditions Precedent to the Closing
4.1 Conditions precedent in favor of the Purchaser. (a) In addition to the
Mutual Closing Conditions, the obligation of the Purchaser to proceed with the
Closing is subject to the satisfaction, unless waived in writing by the
Purchaser (at its sole and absolute discretion) in whole or in part, of the
conditions precedent provided below (the “Purchaser’s Closing Conditions”):
(i) Truthfulness of the representations and warranties. The representations
and warranties of the Seller (set forth under Article 7 below), shall be true,
correct, and accurate in any and all respects, as of the date of this Agreement
and on any date thereafter up to and including the Closing Date, except for such
untruthfulness, incorrectness or inaccuracy that would not, individually or in
the aggregate, give rise to indemnification obligations of the Seller in light
of the limitations set forth in Section 9.2(b).
(ii) Compliance with covenants and obligations. The Seller shall have
complied in any and all respects with its covenants and obligations under
Sections 2.3(a)(ii) and 6.1 and shall have complied in all material respects
with its other covenants and obligations under this Agreement, provided that the
Purchaser has complied in all material respects with its covenants and
obligations under this Agreement.
(iii) Absence of a Material Adverse Effect. No fact, event, act, omission or
circumstance shall have occurred, or may reasonably be expected to occur, which,
either individually or in the aggregate, has resulted, or may reasonably be
expected to result in, a Material Adverse Effect.
(iv) Family Shares. The closing of the sale and transfer of all of the
Family Shares in favor of the Purchaser pursuant to the Family SPA (A) shall
occur on the Closing Date simultaneously with the Closing.
(v) Claudia Merloni Shares. The closing of the sale and transfer of all of
the Claudia Merloni Shares in favor of the Purchaser pursuant to the Family SPA
(B) shall have occurred on or before the Closing Date.
(vi) Interim Period. The Target and the Subsidiaries shall have acted in
accordance with the contents of the provisions of Section 6.1(c) and none of the
Target and the Subsidiaries shall have approved, carried out, undertaken or
agreed to carry out any of the actions or transactions set forth in Section
6.1(d), except for any such actions or transactions that, individually or in the
aggregate (a) do not have a value (including for the avoidance of doubt the
value of the assets or properties that are the subject matter of Encumbrances)
in excess of Euro 10 (ten) million, and (b) would not result, into a Loss to the
Purchaser and/or any Group Company in excess of Euro 10 (ten) million.
(vii) No default under financing agreements. As of the Closing Date no event
or circumstance shall be outstanding which constitutes (or, with the expiry of a
grace period, the giving of notice, the making of any determination or any
combination of any of the foregoing, would constitute) a default, acceleration
or termination event (however described) under any financing or derivative
agreement or instrument which is binding on the Target and/or any of the
Subsidiaries or to which its (and/or any of the Subsidiaries’) assets are
subject (including any agreement or instrument relating to: (a) the USD
330,000,000 bond issued in September 2004 by Indesit Company Luxembourg S.à
r.l., guaranteed by the Company; (b) the Euro 300,000,000 fixed-rate Eurobond
issued by the Company, listed on the Luxembourg Stock Exchange, guaranteed by
Indesit Company Luxembourg S.à r.l.; (c) the multicurrency revolving loan
agreement entered into by certain Group Companies for an aggregate amount of
Euro 400,000,000 and guaranteed by the Company; (d) the loan agreement executed
in December 2010 by the Company and Indesit Company Luxembourg S.à r.l. Lux, as
co-borrowers, with the European Investment Bank for an amount of Euro
75,000,000; and (e) the securitization program implemented by the Company and
Indesit Company France S.A.); and Fineldo shall have delivered to the Purchaser
at the Closing a written statement executed by the Chief Financial Officer or
the auditing firm of the Target certifying the above;
(b) Failure of Purchaser’s Closing Conditions. Without prejudice to article
1359 of the ICC, if any of the Purchaser’s Closing Conditions is not satisfied
at any of the relevant reference dates, then the Purchaser shall have the right,
in addition to any other applicable rights, powers and remedies: (i) to
terminate this Agreement by providing written notice to the Seller, in which
case the Parties shall have no further rights or obligations under this
Agreement, except those that may have arisen in connection with or by virtue of
any breach of the terms and conditions of this Agreement; or (ii) to waive in
writing any of the Purchaser’s Closing Conditions at or prior to the Closing
Date and proceed to the Closing.
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4.2 Conditions precedent in favor of the Purchaser and Fineldo. The obligation
of the Purchaser and the Seller to proceed with the Closing is subject to the
satisfaction, unless waived in writing by both the Purchaser and the Seller, of
the conditions precedent provided herein below:
(i) Guardianship approvals. The Court of Ancona shall have authorized Mr.
Aristide Merloni, in his capacity as legal guardian (tutore legale) of Mr.
Vittorio Merloni (Controlling shareholder of the Seller), to: (x) attend a
shareholders’ meeting of the Seller called to approve the sale of the Fineldo
Shares to the Purchaser, pursuant to Article 23 of the Fineldo’s by-laws; and
(y) vote in favor of the sale of the Fineldo Shares to the Purchaser and the
consummation of the transactions contemplated by this Agreement, according to
the terms and conditions set forth under this Agreement (the “Court
Authorization”).
(ii) Adverse Law. No applicable Law shall have been enacted that would
make illegal or invalid or otherwise prevent the consummation of the transaction
contemplated by this Agreement.
(iii) Adverse Proceedings. No preliminary or permanent injunction or other
order, decree or ruling shall have been issued by a court of competent
jurisdiction or other Governmental Authority that would make illegal or invalid
or otherwise prevent the consummation of the transaction described in this
Agreement.
(iv) Antitrust approvals. The transactions contemplated by this Agreement
shall have been authorized, approved, cleared, or exempted (as the case may be),
or any applicable waiting periods (or any extension thereof) shall have expired
or been terminated, thereby authorizing the concentration and the sale and
purchase of the Fineldo Shares and the other transactions contemplated by this
Agreement, in any case without any conditions, orders, undertakings,
commitments, obligations, prescriptions, measures, requirements, remedies or any
other provisions being indicated or imposed on any of the Purchaser, the
Company, the Subsidiaries or their respective Affiliates (except for those that
the Purchaser may accept in writing) (each such authorizations, approvals,
clearances, exemptions, expiration or termination of such waiting period is
herein referred to as the “Clearance”) by any Antitrust Authority in accordance
with applicable Law.
Notwithstanding anything to the contrary in this Agreement, the Purchaser (and
its Affiliates) shall in good faith take into consideration, but shall have no
obligation to offer negotiate, accept and/or agree with any Antitrust
Authorities, any conditions, orders, undertakings, commitments, obligations,
prescriptions, measures, requirements, remedies or any other provisions
indicated, requested, imposed or suggested (also informally) by any Antitrust
Authority.
Article 5
The Closing
5.1 Date and place of Closing. Subject to the conditions precedent set forth in
Article 4 above, the Closing shall take place at the offices of Cleary Gottlieb
Steen & Hamilton LLP, Via San Paolo n. 7, Milan, Italy, at 10:00 am (CET), on
(i) the date of the Shareholders’ Meeting to be called pursuant to Section 3.3
(b), or, if so requested by the Purchaser, (ii) the 12th Business Day following
the day on which the later of the Clearance and the Court Authorization has been
granted, or such other date as may be agreed in writing by the Seller and the
Purchaser.
5.2 [email protected]. In addition to any other action to be taken pursuant to
this Agreement, on the Closing Date:
(a)
Actions by Seller.
Fineldo shall:
(i)
simultaneously with the irrevocable instructions of the Purchaser pursuant to
Section 5.2(b)(i), (A) transfer the Fineldo Shares, free and clear of any
Encumbrance, to the Purchaser on the Purchaser’s account that the Purchaser
shall have communicated to the Seller in writing at least 4 (four) Business Days
before the Closing (the “Purchaser Account”) (including by giving irrevocable
instructions to the respective “intermediary” with whom Fineldo holds the
account where the Fineldo Shares are registered, to: (x) transfer the Fineldo
Shares to the Purchaser Account; and (y) communicate to Monte Titoli S.p.A. the
transfer of the Fineldo Shares to the aforesaid Purchaser Account) and (B)
deliver to the Purchaser a communication of an “intermediary”, as defined at
article 79-quater of the Unified Financial Act, evidencing receipt by the
intermediary of the irrevocable instructions mentioned under (A) above;
(ii)
should the Closing take place on the date of the Shareholders’ Meeting, attend
the Shareholders’ Meeting and vote in favor of the appointment of the New
Directors and the New Statutory Auditors;
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(iii)
should the Closing take place prior to the date of the Shareholders’ Meeting,
(1) procure that the directors of the Company, other than the current
chairman and chief executive officer of the Company and the Merloni Directors,
included in the slate of candidates filed or voted by, or appointed with the
favorable vote of, any of Fineldo and/or the Family Sellers, resign from their
office on the Closing Date, effective as of the Closing, and waive any right or
claim, for compensation, or any other ground, against the Company, by way of
resignation letters in the form of Schedule 5.2(a)(iii);
(2) procure that the board of directors of the Company appoint as directors
of the Company, pursuant to article 2386 of the ICC, the persons designated by
the Purchaser (and communicated to the Seller at least 4 (four) Business Days
before the Closing Date) in lieu of the directors that resigned pursuant to
point (1) above;
(3) procure that, further to completion of the actions and transactions set
forth under points (1), and (2), above, the other directors of the Company
included in the slate of candidates filed or voted by, or appointed with the
favorable vote of, any of Fineldo and/or the Family Sellers (including the
Merloni Directors, but excluding the current chairman and chief executive
officer of the Company), which did not resign pursuant to point (1), resign from
their office, on the Closing Date, effective as of date of the Shareholders’
Meeting called pursuant to Section 3.3(b) or the shareholders’ meeting to be
called pursuant to point (5), as the case may be, and waive any right or claim,
for compensation, or any other ground, against the Company, by way of
resignation letters in the form of Schedule 5.2(a)(iii)(3);
(4) use its best effort to cause the effective and alternate statutory
auditors of the Company included in the slate of candidates filed or voted by,
or appointed with the favorable vote of, any of Fineldo and/or the Family
Sellers to resign from their office on the Closing Date, effective as of date of
the Shareholders’ Meeting called pursuant to Section 3.3(b) or the shareholders’
meeting to be called pursuant to point (5), as the case may be, and waive any
right or claim, for compensation, or any other ground, against the Company, by
way of resignation letters in the form of Schedule 5.2(a)(iii)(4);
(5) if the Shareholders’ Meeting has not been already called pursuant to
Section 3.3(b), procure that the directors of the Company included in the slate
of candidates filed or voted by, or appointed with the favorable vote or, any of
Fineldo and/or the Family Sellers vote in favor of the call of a shareholders’
meeting of the Company for the appointment of a new board of directors, and, to
the extent any statutory auditor resigned, new statutory auditors, to be held
within 41 days of the Closing Date;
(iv)
execute and deliver, or cause to be executed and delivered, to the Purchaser,
such documents or other instruments as may be necessary, under applicable Law,
to effect the transactions contemplated in this Agreement in accordance with any
applicable Law.
(b)
Actions by the Purchaser.
The Purchaser shall:
(i)
simultaneously with the irrevocable instructions of the Seller pursuant to
Section 5.2(a)(i), (A) give irrevocable instructions to a bank/credit
institution to pay the Purchase Price, in immediately available funds with value
date (i.e., “data valuta”) on the Closing Date, by wire transfer: (x) as for an
amount equal to the Escrow Amount, to the Escrow Account held at the Escrow
Agent, and (y) as for the balance of the Purchase Price, to the bank account to
be communicated by the Seller to the Purchaser at least 4 (four) Business Days
prior to the Closing Date; and (B) deliver to the Seller a communication of such
bank/credit institution evidencing receipt by such bank/credit institution of
the irrevocable instructions mentioned under (A) above.
(ii)
execute and deliver, or cause to be executed and delivered, to the Seller such
documents or other instruments as may be necessary, under applicable Law, to
effect the transactions contemplated in this Agreement in accordance with any
applicable Law.
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5.3 One Transaction and No Novation.
(a) The Purchaser shall have no obligation to complete the purchase of the
Fineldo Shares (or any portion of the Fineldo Shares) or pay the Purchase Price
(or any portion of the Purchase Price) unless and until the sales and transfers
of all of the Fineldo Shares, the Family Shares and the Claudia Merloni Shares
are completed at the Closing (or, with respect to the Claudia Merloni Shares, on
or before the Closing) in accordance with the provisions of this Agreement, the
Family SPA (A), and the Family SPA (B).
(b) Without prejudice to the provisions of Section 5.3(a), all actions and
transactions constituting the Closing pursuant to Section 5.2 shall be regarded
as one single transaction so that, at the option of the Party having interest in
the performance of the relevant specific action or transaction, no action or
transaction constituting the Closing shall be deemed to have taken place if and
until all other actions and transactions constituting the Closing have been
properly performed in accordance with the provisions of this Agreement.
(c) No document executed or activity carried out on the Closing Date shall have
the effect of amending, superseding, affecting or novating any provision of this
Agreement, which shall survive and continue to be binding upon the Parties in
accordance with their terms.
5.4 Failure to attend the Closing or to perform [email protected].
(a) Should the closing conditions under Article 4 (i.e., the Purchaser’s Closing
Conditions and/or the Mutual Closing Conditions) have been satisfied (or waived
where legally possible) and, in spite of this, either Party fails to attend the
Closing, without prejudice to other rights, powers or remedies available
pursuant to applicable Law, such Party shall pay to the other Party, upon
termination of this Agreement by the latter, a forfeit amount equal to Euro
40,000,000.00 (forty million) (“Forfeit Amount”) as liquidated damages
(“penale”) and partial reimbursement for all expenses and costs directly or
indirectly borne by the latter Party in the interest of, also, the other Party,
in respect of all preparatory activities carried out before and during the
negotiation of this Agreement. For the avoidance of doubt, payment of the
liquidated damages (“penale”) under this Section 5.4 shall not prevent the
non-defaulting Party to seek compensation for any further damage suffered. The
Parties expressly acknowledge and declare that the amount of the reimbursement
set forth under this Section 5.4 is fair and adequate in all respects.
(b) In addition to the provision under Section 5.4(a): (x) the Seller shall pay
to the Purchaser the Forfeit Amount if it attends the Closing but does not
perform the actions under Section 5.2(a)(i) above and (y) the Purchaser shall
pay to the Seller the Forfeit Amount if it attends the Closing but does not
perform the actions under Section 5.2(b)(i) above.
Article 6
Covenants of the Parties
6.1 Interim Period. At all times during the period between the execution of this
Agreement and the Closing (both included) (the “Interim Period”):
(a) except with the Purchaser’s prior written consent (which shall be considered
to be denied if not granted by the Purchaser in writing within 5 (five) Business
Days of receipt of a request in writing from the Seller), the Seller shall vote
against (i) any extraordinary shareholders’ meeting resolution of Target,
including those pertaining to extraordinary transactions (such as, inter alia,
mergers, demergers, capital increases or decreases), (ii) any shareholders’
meeting resolution relating to (x) the distribution of dividends or reserves or
other distributions, (y) transactions on shares of the Company and/or Treasury
Shares (as defined below), (z) appointment of directors or statutory auditors;
(b) the Seller shall not sell, assign, transfer, dispose of at any title, lease,
create any Encumbrance, or allow to arise or be created, suffer or permit to
exist any Encumbrance, over any Fineldo Shares or carry out, omit to carry out,
and/or undertake to carry out any other actions or transactions that result or
could be expected to result in any of the representations and warranties set
forth in Article 7 to be untrue, incorrect or inaccurate in any respect at any
time during the Interim Period;
(c) it is the Purchaser’s expectation and assumption, acknowledged and accepted
by the Seller, that the Target and the Subsidiaries will (and the Seller shall
use its best efforts to cause the Target and the Subsidiaries to) (i) conduct
their business and operations in the normal and ordinary course, consistent with
past practice (including carrying out capex in accordance with the current
business plan), and in accordance with the best standards of due diligence,
care, and efficiency and in compliance with and all applicable Laws and
Contracts, Undertakings and Instruments, (ii) take all reasonable steps to
preserve their assets, organization and business, goodwill and relations with
customers, suppliers and other Persons with whom they have significant business
relationships, and (iii) not carry out, omit to carry out, and/or undertake to
carry out any action or transaction that results or could
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be reasonably expected to result in any of the representations and warranties of
the Seller set forth in Article 7 to be untrue, incorrect or inaccurate in any
respects at any time during the Interim Period;
(d) without limiting the generality of the foregoing, it is the Purchaser’s
expectation and assumption, acknowledged and accepted by the Seller, that the
Target and the Subsidiaries will not (and the Seller shall use its best efforts
to cause the Target and the Subsidiaries not to), except with the Purchaser’s
prior written consent (which shall be considered to be denied if not granted by
the Purchaser in writing within 5 (five) Business Days of receipt of a request
in writing from the Seller):
(i) amend their respective certificate of incorporation or by-laws (or other
organizational and corporate documents) and approve, authorize, resolve upon or
carry out any extraordinary transaction (including mergers, demergers, or
capital increases);
(ii) declare, pay or set aside funds in relation to any distribution of
dividends, profits or reserves (whether in cash, shares or property or
otherwise, or whether through capital decreases, or redemptions, purchases or
other acquisitions of any Securities representing their corporate capital,
distribution of interim dividends, or otherwise);
(iii) sell, assign, transfer, dispose of at any title, license, lease, create
any Encumbrance, or allow to arise or be created, suffer or permit to exist any
Encumbrance, over (x) any properties or other (tangible or intangible) assets
having a value in excess of Euro 4,000,000 in the aggregate, or (y) regardless
of their value, any Trademark, plant, business as a going concern or any portion
thereof (azienda or ramo d’azienda), or the Securities of any Subsidiary;
(iv) sell, transfer, dispose of at any title, create any Encumbrance, or allow
to arise or be created, suffer or permit to exist any Encumbrance, over any
Treasury Shares (as defined below) or purchase or acquire at any title any
shares of the Target;
(v) incur any Liability other than in the normal and ordinary course of
business;
(vi) make loans or other payments to or in favor of any Related Party (other
than the Company and the Subsidiaries), or enter into, amend, renew, withdraw
from, waive any rights under or terminate any Contracts, Undertakings and
Instruments with, or discharge any Liabilities of, any of any Related Party
(other than the Company and the Subsidiaries);
(vii) enter into, amend, renew, withdraw from, waive any rights and/or undertake
any obligations under, or terminate any (i) agreement with the trade unions or
collective bargaining agreement and/or (ii) agreement with any Governmental
Authority in connection with redundancy or social shok absorber (including cassa
integrazione and contratti di solidarietà) and/or (iii) agreement with any
officers of the Company having a material effect;
(viii) cease making payments required under their pension plans; and
(ix) approve at any corporate level or enter into any Contracts, Undertakings
and Instruments with respect to, any of the foregoing.
6.2 Access to the Company and the Subsidiaries. At all times during the Interim
Period the Seller shall and shall procure that the Company and the Subsidiaries
shall grant the Purchaser and its advisors, during normal business hours and
upon reasonable advance notice, reasonable access to, and the cooperation of,
the management of the Company and the Subsidiaries for purposes of assessing and
discussing, and exchanging documents and information with respect to,
post-Closing integration and transition plans and procedures with respect to
communication (alignment of communication to external stakeholders and employees
of the groups of the Purchaser and the Target, to ensure consistency and reduce
business disruption), procurement (achievement of planned synergies on variable
costs), manufacturing (sharing of best practice on production systems, through
site visits and scorecard discussions), cross-selling (development of OEM
agreements on product/platforms that are note in common), product platforms
(sharing of best practice on product platforms to be re-design), HR
(implementation completion of labor agreements), in any case within the limits
permitted by applicable Law (including any antitrust and competition Law);
without prejudice to the foregoing, (i) access (if any) to competitively
sensitive documents or information will be granted only to “clean team” members
consisting of external advisors of the Purchaser and its Affiliates, as
identified in accordance with sound antitrust compliance practices and in
accordance with applicable Law; and (ii) should the Closing not occur, the
Purchaser shall, upon request of the Seller, return to the Company or destroy
any such documents received from the Company, in compliance with the
Confidentiality Agreement executed on May 8, 2014 by and between the Purchaser
and the Company.
Article 7
Representations and Warranties of the Seller
(A) In addition to any other representation or warranty however provided under
the Law or otherwise, the Seller hereby makes to the Purchaser the
representations and warranties set forth in Sections 7.1 to 7.5, each of which
shall be true, correct and accurate as of the date hereof and any date up to,
and including, the Closing Date with reference to the facts, events,
circumstances and/or situations existing as of any such date (including the
Closing Date) according to the provisions below.
(B) The Seller acknowledges that the Purchaser enters into this Agreement upon
the basis of, and in full reliance upon, the representations and warranties made
and given by the Seller under Article 7. Without prejudice to the provisions of
Section 7.5(A), the rights, powers, and remedies of the Purchaser arising under
this Agreement or the Law in connection with, or by virtue of, any breach,
untruthfulness, incorrectness or inaccuracy (in whole or in part) of the
representations and warranties of the Seller under this Agreement or the Law
shall not be excluded, limited, reduced, affected, impaired, altered or
modified, in any manner whatsoever, (i) by any investigation, report, inquiry or
review of any of the Seller and the Family Sellers, the Company and the
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Subsidiaries (including their conditions (financial, economic, trading or
otherwise), assets, Liabilities, business, activities, permits, authorizations,
Contracts, Undertakings, and Instruments, other relationships or matters)
conducted by or on behalf of the Purchaser, its Affiliates or their respective
representatives or advisors prior to the date of this Agreement or the Closing
Date (including any due diligence review), nor (ii) as a consequence of any
information or actual, effective, implied, inferred, imputed or alleged
knowledge of any breach, untruthfulness, incorrectness or inaccuracy (in whole
or in part) of such representations and warranties which the Purchaser, its
Affiliates or their respective representatives or advisors may have prior to or
as at the Execution Date or the Closing. The representations and warranties of
the Seller made or undertaken pursuant to this Agreement or the Law shall
consequently only be limited or qualified by the terms of this Agreement in
accordance with the provisions below.
7.1 Representations and warranties relating to the Seller
The Seller represents and warrants to the Purchaser as follows:
7.1.1 Organization and standing. Fineldo is a company duly organized, validly
existing and in good standing under the Laws of Italy, is not subject to any
reorganization, liquidation, insolvency, bankruptcy or other similar proceedings
under any applicable Laws, has not stopped payment of its debts as they fall due
nor is it insolvent or unable to pay its debts as they fall due, is not in a
capital loss situation, and has the full power and authority to conduct its
business as presently conducted and to own the Fineldo Shares.
7.1.2 Authorization.
(a) All corporate actions and formalities and other internal proceedings
required to be taken by or on behalf of Fineldo to enter into and to implement
this Agreement have been duly and properly taken; Fineldo has the power to duly
execute and deliver this Agreement which constitutes the valid and binding
obligation of Fineldo enforceable against it in accordance with its terms and
conditions.
(b) Save for the Court Authorization, no application to, or filing with, or
consent, authorization or permit, registration, declaration or exemption by any
Governmental Authority or other Person is required by Fineldo in connection with
the execution and performance of this Agreement or any of the transactions
contemplated hereby.
7.1.3 No conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with, or
result in the breach of, or constitute a default under, require any notice
under, or violate any Law or Contracts, Undertakings and Instruments applicable
to or binding on Fineldo and/or the by-laws of Fineldo.
7.1.4 No Brokers. No banker, broker, finder or other intermediary retained to
act on behalf of Fineldo, or otherwise involved in the negotiation, preparation
or consummation of the transactions contemplated hereby, might be entitled to
any fee or commission from the Purchaser, its Affiliates or from the Target or
the Subsidiaries in connection with the transactions contemplated by this
Agreement.
7.2 Representations and warranties relating to the Fineldo Shares
Fineldo represents and warrants to the Purchaser as follows:
7.2.1 Ownership and transfer of title. Fineldo has full and exclusive
beneficial ownership of, is the sole record holder of, and has good, full and
exclusive title (proprietà) to, the Fineldo Shares, free and clear of any
Encumbrance, has full, exclusive, rightful, legitimate right, power, and
authority to sell and transfer such ownership and title in accordance with the
terms of this Agreement, and, upon consummation of the actions constituting the
Closing, the Purchaser will acquire full and exclusive beneficial ownership of,
and become the sole record holders of, and acquire good, full and exclusive
title (proprietà) to, the Fineldo Shares free and clear of any Encumbrances.
7.2.2 Fineldo Shares. The Fineldo Shares represent 42.749% of the
authorized, issued, and fully paid in share capital of the Company and 48% of
the outstanding share capital of the Company, and are entitled to 48% of the
economic, governance, and voting rights of the Company.
7.3 Representations and warranties relating to the Target
The Seller represents and warrants to the Purchaser as follows:
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7.3.1 Organization and standing. The Target is a corporation (società per
azioni) duly organized, validly existing and in good standing under the Laws of
Italy, whose shares are listed in the Italian stock market organized and
regulated by Borsa Italiana S.p.A. The Target has the full power and authority
to conduct its business as presently conducted and to own its assets and
properties as presently owned. The Target is not subject to any reorganization,
liquidation, insolvency, bankruptcy or other similar proceedings under any
applicable Laws and has not stopped payment of its debts as they fall due nor is
it insolvent or unable to pay its debts as they fall due. The Target is not in a
capital loss situation.
7.3.2 Capital and Treasury Shares.
(a) The authorized, issued, and fully paid in share capital of the Company is
equal to Euro 102,759,269.40, the outstanding share capital of the Company is
equal to Euro 92,851,835.4; such share capital is duly authorized validly issued
and fully paid-in in cash; the issued share capital of the Company consists
solely of no. 114,176,966 ordinary shares, having a par value of Euro 0.90 each,
duly authorized, validly issued, and fully paid-in in cash, each of which is
entitled to 1 vote. The Company has full and exclusive beneficial ownership of,
is the sole record holder of, and has, good, full and exclusive title
(proprietà), to no. 11,008,260 treasury shares of the Company (the “Treasury
Shares”), free and clear of any Encumbrance. The Treasury Shares represent
9.641% of the authorized and issued and fully paid in share capital of the
Company.
(b) Except as resolved upon at the shareholders’ meeting of the Company on
May 7, 2014, since December 31, 2013 the Company has not approved, declared or
paid any (distribution of) dividends, profits or reserves (whether in cash,
shares or property or otherwise, and whether through capital decreases,
redemption, purchases or other acquisitions of any Securities representing their
corporate capital, interim dividends, or otherwise).
(c) No Person is entitled, now or in the future, contingently or otherwise,
to (i) acquire, at any title, (x) the Treasury Shares, or (y) economic,
governance or voting rights of the Company (except as a consequence of a
purchase of shares of the Company other than the Fineldo Shares, the Family
Shares or the Claudia Merloni Shares, pursuant to this Agreement, the Family(A)
SPA or the Family(B) SPA, respectively), (ii) to subscribe to any Securities of
the Company.
7.3.3 No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with, or
result in the breach of, constitute a default under, require any notice under or
violate the by-laws of the Target or any Law or Contracts, Undertakings and
Instruments applicable to or binding on the Target.
7.4 Representations and warranties relating to the Subsidiaries
Fineldo represents and warrants to the Purchaser as follows:
7.4.1 Organization and standing. The Subsidiaries are corporations duly
organized, validly existing and in good standing under the relevant applicable
Laws and have the full power and authority to conduct their business as
presently conducted. None of the Company and the Subsidiaries is subject to any
reorganization, liquidation, insolvency, bankruptcy or other similar proceedings
under any applicable Laws and has not stopped payment of its debts as they fall
due nor is it insolvent or unable to pay its debts as they fall due. None of the
Subsidiaries is in a capital loss situation.
7.4.2 Capital. The authorized, issued, and outstanding corporate capital of
each Existing Subsidiary is as described in Annex C, and it is duly authorized,
validly issued, and fully paid-in in cash. Annex C sets forth the equity
interests in the authorized, issued, and outstanding corporate capital of each
Existing Subsidiary owned by the Target (directly or through other Existing
Subsidiaries) which is entitled to the percentages of the economic, voting, and
governance rights of the Existing Subsidiaries as indicated in Annex C. No
Person is entitled, now or in the future, contingently or otherwise, to acquire,
at any title, economic, governance or voting rights of the Subsidiaries, or to
subscribe or acquire, at any title, any Securities of the Subsidiaries.
7.4.3 No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with, or
result in the breach of, or constitute a default under, require any notice under
or violate the by-laws of the Subsidiaries or any Law or Contracts, Undertakings
and Instruments applicable to or binding on the Subsidiaries.
7.5 Other representations and warranties relating to the Target and the
Subsidiaries
(A) Except as fairly and specifically disclosed in the Data Room Documents,
Fineldo represents and warrants to the Purchaser as follows:
7.5.1 Related Party Transactions. None of the Company and the Subsidiaries
has entered into or is a party or subject to any Contracts, Undertakings and
Instruments with, towards or vis-à-vis any of the Seller, the Family Sellers,
any Affiliates or other
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Related Parties of the Seller and/or any Family Seller (other than the Company
and the Subsidiaries). There are no guarantees (real, personal or otherwise),
counter-guarantees, sureties, indemnities, warranties, comfort letters, letters
of patronage, other Encumbrances and related Contracts, Undertakings and
Instruments of any kind and form whatsoever granted, given or issued by any of
the Company and the Subsidiaries, or on their request or behalf, or to which any
of the Company and the Subsidiaries is a party or subject to, in respect of, in
favor of, in the interest of or for the benefit of any of the Seller, the Family
Sellers, and/or any Affiliates or other Related Parties of the Seller and/or any
Family Seller (other than the Company and the Subsidiaries).
7.5.2 Financial Statements; books and records
(a) Each of the Financial Statements (other than the Half-Year Financial
Statements and the Q3 Interim Report) have been prepared in accordance with
applicable Law and their respective Accounting Principles, using bases,
practices, methods, and estimation techniques consistent with those used in the
preceding 3 accounting periods. The Stand-alone Financial Statements and the
Consolidated Financial Statements are true, complete and correct and give a
clear, true and fair view of the assets, liabilities, economic and financial
conditions, state of affairs and shareholders’ equity of, respectively, the
Company and the Group Companies as of December 31, 2013, and of the profits and
losses, cash flow and results of operations of, respectively, the Company and
the Group Companies for the one-year period ended on December 31, 2013. The Q1
Interim Report has been prepared, in accordance with applicable Law and the
relevant Accounting Principles and give a fair view of the assets, liabilities
and economic and financial conditions of the Group Companies as of March 31,
2014, and of the profits and losses, cash flow and results of operations of the
Group Companies for the three-month period ended on March 31, 2014. The
Half-Year Financial Statements and the Q3 Interim Report, will be prepared in
accordance with applicable Law and their respective Accounting Principles, using
bases, practices, methods, and estimation techniques consistent with those used
in the preceding 3 accounting periods. The Half-Year Financial Statements will
be true, complete and correct and give a clear, true and fair view of the
assets, liabilities, economic and financial conditions, state of affairs and
shareholders’ equity of the Group Companies as of June 30, 2014, and of the
profits and losses, cash flow and results of operations of the Group Companies
for the six-month period ending on June 30, 2014. The Q3 Interim Report will
give a fair view of the assets, liabilities and economic and financial
conditions of the Group Companies as of September 30, 2014, and on the profits
and losses, cash flow and results of operations of the Group Companies for the
nine-month period ending on September 30, 2014. If approved by the board of
directors of the Company prior to the Closing Date, the consolidated annual
financial statements of the Company as of December 31, 2014 will be prepared in
accordance with applicable Law and their respective Accounting Principles, using
bases, practices, methods, and estimation techniques consistent with those used
in the preceding 3 accounting periods, will be true, complete, and correct and
will give a clear, true, and fair view of the assets, liabilities, economic and
financial conditions, state of affairs and shareholders’ equity of,
respectively, the Company and the Group Companies as of December 31, 2014, and
of the profits and losses, cash flow and results of operations of, respectively,
the Company and the Group Companies for the one-year period ended on December
31, 2014.
(b) The books and other financial records of the Group Companies represent
all of the books and financial records required by applicable Laws, have been
maintained in accordance with applicable Laws and in a manner that, in
reasonable detail, accurately and fairly reflects the transactions of the Group
Companies. The Group Companies maintain a system of internal accounting controls
sufficient to provide reasonable assurances that: (i) transactions are executed
and access to assets is given only in accordance with applicable corporate
authorization; (ii) transactions are recorded as necessary to permit preparation
of periodic financial statements and to maintain accountability of corporate
assets; and (iii) recorded assets are compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
discrepancies between recorded and actual assets.
(c) The document attached hereto as Schedule 7.5.2(c) is true and correct in
any and all respects.
7.5.3 Absence of material changes since reference date of Annual Financial
Statements. In the period between January 1, 2014, and the date of this
Agreement: (i) the business of the Group Companies has been operated in the
normal and ordinary course, consistent with past practice in accordance with the
best standards of due diligence, care, and efficiency and in compliance with all
applicable Laws and all Contracts, Undertakings and Instruments that are binding
on the Group Companies; (ii) the Group Companies have taken all reasonable steps
to preserve their assets, organization and business, goodwill and relations with
customers, suppliers and other Persons with whom they have significant business
relationships; (iii) there has been no Material Adverse Effect; and (iv) no
Group Company has taken or carried out any action or transaction contemplated in
Section 6.1(d).
7.5.4 No undisclosed liabilities. The Group Companies have no Liabilities
except for those (i) fully disclosed or provided for in the Annual Financial
Statements and not theretofore discharged, and/or (ii) incurred in the normal
and ordinary course, consistent with past practice (as provided in Section 7.5.3
above) since January 1, 2014.
7.5.5 Tax matters
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(a) Each Group Company complies and has complied with any Law relating to
Taxes and has duly and timely filed with the competent Governmental Authorities
all Tax Returns that are required to be filed with any Governmental Authority by
any applicable Law. All such Tax Returns are true, correct, and complete in all
respects. No Group Company has requested an extension of time within which to
file any Tax Return which has not since been filed.
(b) All Taxes owed by any Group Company (whether or not shown on any Tax
Return) have been timely paid in full or, if not yet due and payable, full and
complete provisions or withholdings have been posted or made in the Financial
Statements in accordance with the Law and the relevant Accounting Principles.
Any and all deferred Tax assets and Tax receivables reported in the Financial
Statements have been determined and accrued in complete accordance with
applicable Tax law and are therefore true and valid.
(c) No Litigations and Claims are pending or being asserted, or have been
threatened or announced in writing, by any Governmental Authority with respect
to any Taxes or Tax Return of any Group Company. There are no Encumbrances on
any of the assets of any Group Company that arose in connection with any failure
(or alleged failure) to pay any Tax. No Group Company has waived any statute of
limitations with respect to Taxes or agreed to an extension of time with respect
to any Tax assessment or deficiency.
(d) Without prejudice to clause (c) preceding, no claim has ever been made by
a Governmental Authority in a jurisdiction where any Group Company does not file
a Tax Return that it is or may be subject to taxation by that jurisdiction.
(e) Each Group Company has an amount of loss carryforwards (the “Group
Company NOLs”) as listed on Schedule 7.5.5(e). None of the Group Company NOLs
are subject to restriction of use under any applicable Law or accounting
standards.
(f) The information provided in the Vendor Due Diligence Report prepared by
Ernst & Young is correct and complete in all material respects and has not
materially changed as of the Closing date.
(g) No Group Company is a party to or bound by any Tax sharing agreement, Tax
indemnity obligation or similar contract or practice with respect to Taxes. No
Group Company is or has been a member of an affiliated group, other than a group
of which the Target is the common parent, and no Group Company has any Liability
for Taxes of any other Person as a transferee or successor, by contract or
otherwise.
(h) No Group Company will be required to include amounts in income, or
exclude items of deduction, in a taxable period beginning after the Closing Date
as a result of (i) a change in method of accounting occurring prior to the
Closing Date; (ii) an installment sale arising in a taxable period ending on or
before the Closing Date; deferred gains (intercompany or otherwise) arising
prior to the Closing Date; any material prepaid amount received on or prior to
the Closing Date; or (iii) any agreement with an appropriate authority executed
on or prior to the Closing Date.
(i) Since January 1, 2014, no action, event or circumstance has taken place
or occurred that materially changes the Tax rates, structure or position of any
Group Company compared to the ones disclosed in the Data Room Documents.
7.5.6 Environmental, health and safety matters
(a) Each Group Company complies and has complied in all respects with - and
its businesses, operations, properties, facilities, plants and equipment,
without limitation, are and have been in compliance in all respects with - all
applicable EHS Laws and all EHS Permits (as defined below). No Litigations and
Claims are pending or being asserted, or have been threatened or announced in
writing, against any Group Company: (i) that it has not complied in any respect
with any HSE Law and/or any provisions, conditions and/or limitations attaching
to any EHS Permit it holds; (ii) failure to comply with which would constitute a
violation of EHS Law or compliance with which could be secured by further
proceedings under EHS Law in relation to the carrying on of its business; and/or
(iii) concerning any matter which may give rise to Liabilities of the Group
Companies under EHS Laws, including, without limitation, liabilities arising
from clean up and/or removal obligations relating to Hazardous Materials in
general.
(b) Each Group Company has all permits, licenses, certificates, consents,
approvals, registrations and/or authorizations required under EHS Laws in
relation to the carrying on of its business and the ownership and/or use of its
properties, facilities, plants and equipment (collectively, the “EHS Permits”)
and all such EHS Permits held by the Group Companies are in full force and
effect. No Group Company has received any written notification that it has not
obtained any EHS Permit or that any EHS Permit obtained or held is not in full
force and effect or of any reason why any such EHS Permit should be revoked,
suspended, cancelled or not renewed upon its expiration.
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(c) No current or past activities of any Group Company and no real
properties, land, buildings, plants, machineries or equipment owned, possessed,
held, leased, licensed, exploited and/or used (now or in the past) by any Group
Company (collectively, the “Assets”) are or have ever been the source of any
pollution or any damage to human health or the Environment that may cause any
Loss for any Group Company under any EHS Law and/or require any Environmental
Remediation by and/or at the expenses of any Group Company. No Assets are
contaminated by any pollution or any Hazardous Materials. No Hazardous Materials
are currently or in the past have ever been stored or treated on any Assets. For
the purposes hereof, “Environmental Remediation” means any activity or action to
(x) contain, abate, clean up or remove Hazardous Materials from the Environment
or carry out any other activity for the purpose of decontaminating any pollution
of the Environment, (y) prevent, minimize or mitigate the release (or threatened
release) of Hazardous Materials into the Environment or the injury or damage
from such release through ring-fencing or otherwise, and (z) comply with the
requirements of any EHS Laws, EHS Permits, and settlements or other Contracts,
Undertakings, and Instruments with any Governmental Authority with respect to
the Environment.
7.5.7 Litigations and Claims. There are no Litigations and Claims pending or
being asserted, or threatened or announced in writing against the Company and/or
any Subsidiary. The Litigations and Claims disclosed in the Data Room Documents
(or any future Litigations and Claims arising out of the same or related set of
facts or circumstances) will not (irrespective of the amount of the relevant
claim specified in the Data Room Documents) cause Losses for any Group Company
exceeding, in the aggregate, Euro 10,000,000 (ten million). There is no
outstanding judgment, order, decree, arbitral award or decision of a court,
tribunal, arbitrator or other Governmental Authority against the Company or any
Subsidiary.
7.5.8 Compliance with Laws and Permits
(a) Each Group Company complies and has complied in all respects with all
applicable Laws (including data protection and privacy, labor, social security,
pension and welfare, anti-money laundering, anti-corruption, antitrust,
competition, export restrictions, anti-boycott and embargo Laws).
(b) Each Group Company: (i) has all permits, licenses, certificates,
consents, approvals, registrations and/or authorizations (the “Permits”)
(including those relating to zoning, building, and/or data protection) that are
required for the lawful conduct, use, maintenance operation of its businesses or
of any of its assets or properties and all such Permits held by the Group
Companies are in full force and effect; (ii) complies and has complied in all
respects with the provisions of all Permits it holds, and has not carried out
any action that may in any way cause the termination, modification, suspension
or invalidity thereof; and (iii) has not received any notice aimed at obtaining
the amendment, suspension, revocation, withdrawal, invalidity, termination,
cancellation or non-renewal of any of the Permits it holds.
(c) Without limiting the generality of the representations and warranties
under clauses (a) and (b) preceding:
(i) no director, officer, employee, agent or representative of any Group
Company has taken or carried out any act, action or transaction (including any
practice, agreement, arrangement or concerted practice, whether or not
formalized in writing), or committed any omission, that (x) would cause the
Purchaser to be in violation, upon consummation of the transaction contemplated
by this Agreement, of any Law applicable to it; and/or (y) infringes (or could
reasonably be expected to infringe), or would cause any Group Company to be
liable pursuant to, (á) Italian Legislative Decree no. 231 of June 8, 2001,
Anticorruption Laws, and/or any similar or other analogous Laws applicable to
any Group Company in any relevant jurisdiction; and/or (â) any competition,
antitrust, merger control, fair trading, consumer information and protection or
any other similar or analogous applicable Law in any jurisdiction where the
Group Companies have conducted or conduct any business or have any assets or on
which the effects of its activities or practices might be felt (except for any
matter that would give rise to the indemnification obligations of Fineldo
pursuant to the Relevant Proceedings Special Indemnity set forth under Section
9.6);
(ii) no Group Company has taken any act in furtherance of a payment, offer,
promise to pay, or authorization or ratification of a payment of any gift, money
or anything of value to: (x) a Government Official, or (y) any person or entity
while knowing or having reasonable grounds to believe that all or a portion of
that payment will be passed on to a Government Official, to obtain or retain
business or to secure an improper advantage;
(iii) there is no Litigation and Claim pending or being asserted, or
threatened or announced in writing involving any Group Company regarding a
violation or potential violation of any Anticorruption Law; and
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(iv) each Group Company has established and continues to maintain reasonable
internal controls and procedures intended to ensure compliance with the
Anticorruption Laws.
(d) all of the requests for the issuance of the Social Shock Absorbers
Decrees that had to be made have been duly, timely and properly made in
accordance with the Law and best practice.
7.5.9 Product Liability. The products designed, manufactured, distributed,
supplied or sold by the Group Companies meet and comply with and have met and
complied with all contractual (and pre-contractual) specifications,
requirements, warranties and representations, and all requirements imposed or
required by applicable Law (including in the countries in which the products
were and are manufactured, distributed or sold). No products were designed,
manufactured, distributed, supplied and/or sold by any of the Group Companies
which are, were or will become in any respect faulty, defective or dangerous.
There is no Litigations or Claim against any of the Group Companies with respect
to product liability or product warranty or that any of the products
manufactured, distributed, supplied or sold by the Group Companies is faulty,
defective, dangerous or not suitable for this purpose nor, to the knowledge of
the Seller, do there exist circumstances that would permit any Person to bring
valid claims of such nature or stating that the products sold by it are
defective, are not suitable for its purpose or have caused or contributed to
damage or personal injury. No product designed, manufactured, distributed or
sold by any Group Company has been recalled and no Group Company has received
any notice of recall (written or oral) or inquiry that could lead to a recall of
any such product from any Person or Governmental Authority. No event has
occurred or circumstance exists that (with or without notice or lapse of time)
could result in any such recall. None of the Group Companies anticipates
proceeding with a spontaneous recall campaign for any of the products designed,
manufactured, distributed, supplied or sold by the Group Companies.
7.5.10 Change of control. The Purchaser’s acquisition of Control over the
Company and/or, more in general, the execution and consummation of the
transactions contemplated in this Agreement will not constitute an event or
circumstance which gives to any of the other parties to any Contracts,
Undertakings, and Instruments which any Group Company is a party to the right to
terminate, withdraw from, exercise an option under, amend or refuse to perform
the relevant Contract, Undertaking or Instrument, or accelerate any payment
obligation of the Group Companies thereunder.
Article 8
Representations and Warranties of the Purchaser
8.1 Representations and Warranties of the Purchaser. The Purchaser hereby makes
the following representations and warranties to the Seller, each of which shall
be true and correct as of the date hereof and as of the Closing Date.
8.1.1 Organization and Standing. The Purchaser is a corporation duly
organized, validly existing under its Laws of incorporation and has full power
and authority to conduct its business as presently conducted and to own its
assets and properties as presently owned.
8.1.2 Authorization. (a) All corporate actions and formalities and other
internal proceedings required to be taken by or on behalf of the Purchaser to
authorize the same to enter into and to carry out this Agreement have been duly
and properly taken; the Purchaser has the power to duly execute and deliver this
Agreement which constitutes the valid and binding obligation of the Purchaser
enforceable against it in accordance with its terms and conditions.
(b) Except for the Clearance to be obtained in accordance with Section
4.2(iv), no application to, or filing with, or consent, authorization or permit,
registration, declaration or exemption by, any Governmental Authority or
authority or other Person is required by the Purchaser in connection with the
execution and performance of this Agreement or any of the transactions
contemplated hereby.
8.1.3 No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with, or
result in a breach of, or constitute a default under the by-laws of the
Purchaser or violate any Law applicable to the Purchaser.
8.1.4. No Broker. No banker, broker, finder or other intermediary retained to
act on behalf of the Purchaser, or otherwise involved by the Purchaser in the
negotiation, preparation or consummation of the transactions contemplated hereby
might be entitled to any fee or commission from the Seller in connection with
the transactions contemplated by this Agreement.
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Article 9
Indemnification obligations in respect of representations and warranties and
Special Indemnity
9.1 Fineldo’s obligations. Fineldo shall indemnify and hold the Purchaser
(and/or, upon the Purchaser’s request, at the Purchaser’s sole and absolute
discretion, the Company and the Subsidiaries) harmless from, against, and with
respect to, and shall pay to the Purchaser (and/or, upon the Purchaser’s
request, at the Purchaser’s sole and absolute discretion, the Company and the
Subsidiaries) an amount equal to, the Losses of, or suffered or incurred by, the
Purchaser, the Company and/or any of the Subsidiaries arising out of, in
connection with, or relating to (i) any breach, or untruthfulness, incorrectness
or inaccuracy (in whole or in part) of, any representation or warranty of the
Seller set forth Article 7, and (ii) any act or omission, fact, event or
circumstance that is not consistent (in whole or in part) with any
representation or warranty of the Seller set forth in Article 7 (each of the
items under (i) and (ii), a “Breach of Representations and Warranties”). Any
payment due by Fineldo pursuant to this Section 9.1 shall be made by Fineldo to
the Purchaser or, at the Purchaser’s sole and absolute discretion, to the
Company or the relevant Subsidiary; provided however that the amount of any such
payment to be made by Fineldo shall be equal to 100% of the Loss of, or suffered
or incurred by, the Purchaser, or the Relevant Percentage of the Loss of, or
suffered or incurred by, the Company or any Subsidiary.
9.2 Exclusions and limitations to certain obligations of Fineldo.
(a) Fineldo shall not be liable to the Purchaser under Section 9.1 in
respect of any actual, potential, contingent or alleged Breach of
Representations and Warranties that is notified by the Purchaser to Fineldo
pursuant to Section 9.8 following the expiration of a period of, respectively:
(i) as for the representations and warranties set forth in Sections 7.1, 7.2,
7.3 and 7.4, 10 years after the Closing; (ii) as for the representations and
warranties set forth in Sections 7.5.5, 7.5.6, 7.5.8 and 7.5.9, 60 (sixty)
Business Days after the expiration of the statute of limitations applicable to
the events constituting the subject matter of each such representation and
warranty; and (iii) as for the representations and warranties set forth in
Sections 7.5.1 to 7.5.4, 7.5.7 and 7.5.10, 24 months after the Closing;
provided, however, for the avoidance of doubt, that the representations and
warranties of the Seller and the Purchaser’s rights and Fineldo’s obligations
under Section 9.1 shall survive the expiration of the time limits set out above
and continue to be valid and enforceable in respect of any actual, potential,
contingent or alleged Breach of Representations and Warranties referred to
therein for which notice has been sent by the Purchaser in accordance with
Section 9.8 on or before the expiry of the above applicable terms, until actual
payment of the amount due pursuant to this Agreement.
(b) Fineldo shall not be liable to the Purchaser under Sections 9.1 and 9.7:
(i) if the amount of the Loss in connection with or relating to any single
occurrence or matter (or series of occurrences or matters of the same or similar
kind or nature or arising out of the same set of facts in aggregate) giving rise
to the liability of Fineldo pursuant to Section 9.1 and/or 9.7 does not exceed
Euro 500,000 (five hundred thousand) (regardless of the percentage thereof
payable under Section 9.1); and/or
(ii) if the aggregate amount of all Losses in connection with or relating to any
occurrence or matter giving rise to the liability of Fineldo pursuant to
Sections 9.1 and 9.7 (regardless of the percentage thereof payable under Section
9.1) does not exceed Euro 10,000,000 (ten million), provided that: (x) all sums
in respect of which Fineldo’s liability shall be excluded pursuant to clause (i)
of this Section 9.2(b) shall not be taken into account for the purposes of the
Euro 10,000,000 (ten million) threshold set out under this clause (ii); and (y)
in case such Euro 10,000,000 (ten million) threshold is exceeded, Fineldo shall
be liable in respect of the excess amount only.
(c) Fineldo’s maximum aggregate liability under Sections 9.1 and 9.7 (after
having taken into account the relevant limitations and exclusions set forth in
the other paragraphs of this Section 9.2, as applicable) shall not exceed an
amount equal to 10% (ten percent) of the Purchase Price (the “Cap”).
(d) Notwithstanding anything to the contrary contained in this Agreement or
applicable Law, the provisions of Sections 9.2 (b) and (c) and (e) shall not
apply and the Purchaser’s rights hereunder shall not be subject to any
limitation or restriction: (i) in respect of any Breach of Representations and
Warranties concerning the Seller’s representations and warranties set forth in
Sections 7.1, 7.2, 7.3 and 7.4; and (ii) in the event of fraud, willful
misconduct or gross negligence of the Seller including in rendering the relevant
representation or warranty.
(e) The amount of the Losses to be indemnified or paid by Fineldo pursuant
to Section 9.1 shall be reduced by:
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(i) any amount actually recovered by the Purchaser or the Relevant Percentage of
any amount actually recovered by the relevant Group Company pursuant to any
insurance policy of the Purchaser and/or the Group Companies, as the case may
be, for the Loss giving rise to indemnification, in each case net of recovery
costs, including legal fees, litigation costs and increase in the insurance
premium applicable as a consequence thereof; and
(ii) the Relevant Percentage of the amount of any specific provision or reserve
(riserva specifica) accounted for and specifically identifiable in the
Consolidated Financial Statements for the Loss and the event giving rise to
Fineldo’s liability, only to the extent of the amount of such specific provision
or reserve.
9.3 Purchaser’s notice. The Purchaser shall serve on Fineldo a written notice of
claim for Breach of Representations and Warranties, within 90 days of the date
of Purchaser’s actual and complete knowledge of such breach, untruthfulness,
incorrectness or inaccuracy, it being understood that no forfeiture will occur
in case of delay.
9.4 Purchaser’s indemnification obligations. The Purchaser shall indemnify and
hold the Seller harmless from, against, and with respect to, and shall pay to
the Seller an amount equal to, the Losses of, or suffered or incurred by, the
Seller arising out of, in connection with, or relating to any breach, or
untruthfulness, incorrectness or inaccuracy (in whole or in part) of, any
representation or warranty of the Purchaser set forth in Article 8.
9.5 Limitations to Purchaser’s indemnification obligations. The Purchaser shall
not be liable to the Seller under Section 9.4 in respect of any actual,
potential, contingent or alleged breach, or untruthfulness, incorrectness or
inaccuracy (in whole or in part) of, any representation or warranty of the
Purchaser set forth in Article 8 that is notified by the Seller to the Purchaser
following the expiration of a period of 10 years after the Closing; provided,
however, for the avoidance of doubt, that the representations and warranties of
the Purchaser and the Seller’s rights and the Purchaser’s obligations under
Section 9.4 shall survive the expiration of the time limit set out above and
continue to be valid and enforceable in respect of any actual, potential,
contingent or alleged breach or untruthfulness, incorrectness or inaccuracy (in
whole or in part) of any representations or warranties of the Purchaser referred
to therein for which notice has been sent by the Seller on or before the expiry
of the above terms, until actual payment of the amount due pursuant to this
Agreement.
9.6 Ad hoc contractual arrangements. The representations and warranties of the
Seller contained in Article 7 (other than those set forth in Section 7.2) and
the related indemnification obligations of Fineldo under Article 9.1 are ad hoc
contractual arrangements absolutely independent of those provided for by the ICC
concerning the sale of goods and, therefore, shall be independent
representations, warranties, indemnities and indemnification obligations and not
warranties as to promised qualities or to lack of defects. Accordingly, the
Parties hereby acknowledge and agree that: (a) those representations and
warranties, in consideration of their nature of purely contractual arrangements
that the Parties intended and agreed to be independent of any provision of the
ICC relating to the sale of goods, are not subject to the provisions set forth
in articles 1490 (Garanzia per i vizi della cosa venduta) through 1495 (Termini
e condizioni per l’azione) and article 1497 (Mancanza di qualità) of the ICC
(the “ICC Provisions”), which shall not apply to the representations and
warranties under Article 7 and the indemnification obligations under Article 9
of this Agreement; (b) any claim that the Purchaser may raise on the basis of,
or in connection with, those independent contractual arrangements will be
subject only to the exclusions and limitations expressly specified in this
Article 9, those of the ICC Provisions being expressly deemed inapplicable; and
(c) payments to be made by Fineldo under this Article 9 shall be due as a mere
consequence of the occurrence of any of the circumstances indicated herein,
irrespective of whether the Seller will be found to be or have been in bad faith
or negligent.
9.7 Special Indemnity. Fineldo shall indemnify and hold the Purchaser (and/or,
upon the Purchaser’s request, at the Purchaser’s sole and absolute discretion,
any Group Company) harmless from, against, and with respect to, and shall pay to
the Purchaser (and/or, upon the Purchaser’s request, at the Purchaser’s sole and
absolute discretion, any Group Company) an amount equal to the Relevant
Percentage of any Losses of, or suffered or incurred by, any Group Company
arising out of, in connection with, or relating to the Relevant Proceedings (the
“Relevant Proceeding Special Indemnity”).
Fineldo shall not be liable to the Purchaser under this Section 9.7 following
the expiration of a period of 60 (sixty) Business Days after the expiration of
the statute of limitations or forfeiture terms applicable to any and whatever
claims, investigation, action by any party (including a Governmental Authority)
or other initiative arising from, relating to, or in connection with the subject
matter of the Relevant Proceeding Special Indemnity; provided, however, that,
the Purchaser’s rights and Fineldo’s obligations under Section 9.7 shall survive
the expiration of the time limit set out above and continue to be valid and
enforceable if a notice has been sent by the Purchaser in accordance with
Section 9.8 on or before the expiry of the above applicable term, until actual
payment of the amount due pursuant to this Agreement.
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9.8 Indemnification Procedure
(a) In the event that a Party (the “Claimant”) becomes aware of any claim,
proceeding or other matter (including, as to the Purchaser, a Breach of
Representations and Warranties) (an “Indemnification Event”) in respect of which
the other Party (the “Indemnifying Party”) has assumed the obligation to
indemnify the Claimant pursuant to this Article 9, the Claimant shall give
written notice thereof (the “Notice of Claim”) to the Indemnifying Party within
the term provided for in Section 9.3, it being understood that no forfeiture
will occur in case of delay. The Notice of Claim shall specify whether the
Indemnification Event arises as a result of a claim by a third Person against
the Claimant or any Group Company (a “Third Party Claim”) or whether the
Indemnification Event does not so arise (a “Direct Claim”), and shall also
specify in reasonable details (to the extent that the information and
documentation are available) the factual basis of the Indemnification Event and
the amount of the Losses claimed in connection therewith, if known or
quantifiable.
(b) With respect to any Direct Claim, during the 20 (twenty) Business Days
following receipt of the Notice of Claim, the Indemnifying Party shall be
entitled to carry out such investigation of the Indemnification Event as it
considers necessary or appropriate. If the Claimant and the Indemnifying Party
agree upon the right to indemnification of the Claimant and the amount of Losses
to be paid by the Indemnifying Party, the same Indemnifying Party shall
immediately pay to the Claimant the full agreed amount of such Losses. Should no
such agreement be reached between the Claimant and the Indemnifying Party within
60 (sixty) Business Days following the expiration of the above 20 (twenty)
Business Days period, the Direct Claim can be referred to arbitration in
accordance with Section 10.11.
(c) With respect to any Third Party Claim, the Claimant shall direct, through
counsel of its own choosing, the defense or settlement of any Third Party Claim.
The Indemnifying Party may participate in such defense at its own expense and
the Claimant shall use its best efforts to ensure that the Indemnifying Party
and its counsels are kept fully informed of the defense of such Third Party
Claim and that any their suggestions with respect to such defense are taken into
account to the extent reasonable. The Claimant shall not (and shall cause the
relevant Group Company not to) settle any Third Party Claim without the
Indemnifying Party’s prior written consent (which shall not be unreasonably
withheld or delayed); provided, however, that the Indemnifying Party can validly
withhold such consent only if it irrevocably and unconditionally accepts and
undertakes to fully indemnify any Loss relating to such Third Party Claim
(including with respect to any amount exceeding the Cap); and provided further
that, if the Indemnifying Party withholds its consent, the amount of the actual
Loss relating to such Third Party Claim that exceeds the proposed settlement
amount shall not be taken into account in the calculation of Fineldo’s liability
for purposes of the limitation to Fineldo’s maximum aggregate liability set
forth in Section 9.2(c).
(d) Any indemnification amount due by the Indemnifying Party to the Claimant
under this Article 9 in relation to a Third Party Claim shall be paid by the
Indemnifying Party to the Claimant without delay (and in any event within 5
(five) Business Days) of the date of occurrence of the Loss, and in any event at
least 5 (five) Business Days before the relevant payment to the third party has
to be made (even provisionally - including as a result of the issuance of an
enforceable first-degree judicial judgment on merits or an arbitration award
deciding on the Third Party Claim, or the execution of a settlement agreement on
the Third Party Claim (provided that such settlement agreement is entered into
in compliance with the above provisions)) by the Claimant (and/or, in case the
Claimant is the Purchaser, by the relevant Group Company, as applicable). If,
after the payment of the relevant indemnification amount made by the
Indemnifying Party to the Claimant in accordance with the above provisions, it
is finally ascertained that such indemnification amount is not due or is lower
than the amount advanced by the Indemnifying Party, then the Claimant shall,
within the following 5 (five) Business Days, return to the Indemnifying Party
such amount, or, as applicable, the difference between the amount advanced by
the Indemnifying Party and the amount to be actually paid.
9.9 No double counting. Notwithstanding anything to the contrary in this
Agreement, if the Purchaser is entitled to indemnification from Fineldo for a
Loss under more than one provision of this Agreement, the Purchaser shall be
entitled to indemnification only up to the entire amount of the Loss.
Article 10
Miscellaneous Provisions
10.1 Assignment. No third party beneficiaries. Designated Subsidiary.
(a) This Agreement and all of the terms and conditions hereof shall be binding
upon and inure to the benefit of each of the Parties hereto and their respective
successors.
(b) Neither Party may assign any of its rights, interests or obligations
hereunder without the prior written consent of the other Party and any attempt
to assign this Agreement without such consent shall have no effect, except that
the Purchaser may, at any time, assign any of its rights, interests or
obligations hereunder to any of its Affiliates.
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(c) Except as otherwise expressly provided for herein, nothing in this
Agreement shall confer any rights upon any Person which is not a Party or a
successor of any Party to this Agreement.
(d) Pursuant to article 1401 of the ICC, the Purchaser shall have the right
to designate a Person to become a Party (or an additional Party) to this
Agreement (the “Designated Subsidiary”) and to purchase, and pay for, all or
part of the Fineldo Shares in accordance with the terms hereof, provided that
such designation is made in compliance with the following provisions: (i)
anything in articles 1402 and 1403 of the ICC to the contrary notwithstanding,
any designation pursuant hereto shall be made and communicated to the Seller not
later than five (5) Business Days prior to the Closing Date together with the
written unconditional acceptance of the Designated Subsidiary of the designation
and of all the terms and conditions of this Agreement, including the express
acceptance of the arbitration agreement contained in Section 10.11; (ii) the
Designated Subsidiary shall be a company fully-owned, directly or indirectly, by
the Purchaser; (iii) the Purchaser shall remain jointly and severally obligated
to the Seller in respect of all the Purchaser’s obligation under this Agreement;
and (iv) following the designation to become a Party to this Agreement in lieu
of the Purchaser, any reference made to the Purchaser under this Agreement shall
be deemed to be made to the Designated Subsidiary. Notwithstanding the
designation of the Designated Subsidiary hereunder, the arbitration agreement
contained in Section 10.11 shall continue to apply also to the original
Purchaser.
10.2 Notices. All notices, request, demands or other communications required or
permitted under this Agreement shall be given in writing and delivered
personally or by courier, registered or certified mail, or sent by facsimile, as
follows:
if to the Purchaser:
Whirlpool Corporation
2000 North. M-63
Benton Harbor, MI 49022
U.S.A.
Fax: (587)271-8181
Attention: Kirsten Hewitt, General Counsel
with copy (which shall not constitute notice) to:
Cleary Gottlieb Steen & Hamilton LLP
Via San Paolo 7
20121 Milan
Fax: (587)271-8181
Attention: Mr. Roberto Casati and Mr. Roberto Bonsignore
if to the Seller:
Fineldo S.p.A.
Via della Scrofa, 64
00186 Roma
Fax: (587)271-8181
Pec: [email protected]
with a copy (which shall not constitute notice) to :
Gianni, Origoni, Grippo, Cappelli & Partners
Via delle Quattro Fontane, 20
00184 Roma
Fax: (587)271-8181
Attention: Mr. Francesco Gianni and Mr. Andrea Aiello
or at such other address and/or telefax number as either Party may hereafter
furnish to the other by written notice, as herein provided.
If personally delivered, such communication shall be deemed delivered upon
actual receipt; if sent by facsimile transmission, such communication shall be
deemed delivered the day of the transmission, or if the transmission is not made
on a Business Day, the first Business Day after transmission (and sender shall
bear the burden of proof of delivery); if sent by courier, such communication
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shall be deemed delivered upon receipt; and if sent by registered or certified
mail, such communication shall be deemed delivered as of the date of delivery
indicated on the receipt issued by the relevant postal service or, if the
addressee fails or refuses to accept delivery, as of the date of such failure or
refusal.
10.3 Fees and other expenses. Irrespective of whether the Closing shall have
occurred, each of the Purchaser and the Seller shall pay its own Taxes
(including withholding Taxes, which will be borne by the payee), fees, expenses
and disbursements incurred, and/or due, by it in connection with the
negotiation, preparation and implementation of this Agreement, including
(without limitation) any fees and disbursements owing to such Party’s respective
auditors, advisors and legal counsel.
10.4 Entire Agreement. This Agreement constitutes the entire agreement between
the Parties hereto in respect of the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, between the
Parties in respect of the subject matter hereof. For the avoidance of doubt,
this Agreement supersedes the Confidentiality Agreement executed on February 10,
2014 by and between the Purchaser and Fineldo, which is hereby terminated
effective as of the date hereof.
10.5 Confidentiality - Public announcements. The Seller shall keep, and shall
cause its Affiliates, officers, directors, managers, employees and advisors to
keep, secret and confidential this Agreement, and all transactions contemplated
herein, and all of the documents exchanged in accordance with this Agreement,
provided that the Seller shall not be in breach of this undertaking by virtue of
any disclosure required by Law or by any Governmental Authorities (provided that
the Seller shall provide the Purchaser with, to the extent legally and
practically feasible, prompt advance notice of any such requirement and
disclosure), made pursuant to arbitration proceedings hereunder, or if necessary
to enforce performance of this Agreement or any disclosure to the Seller’s
auditors. To the extent legally permissible and practically feasible, Fineldo
shall use its reasonable efforts to procure that advance notice is given to the
Purchaser of any press release, announcement or other disclosure concerning the
execution or delivery of this Agreement, any of the provisions contained herein
and/or the transactions contemplated hereby, which the Target must or intends to
make of which Fineldo is aware. The press release issued upon execution of this
Agreement shall be agreed between the Parties, which shall cooperate as to the
timing and contents of any such press release. Nothing in this Agreement shall
prevent the Purchaser from disclosing this Agreement or its content.
10.6 Amendments in Writing. Waivers. No changes, amendment of, or waiver of any
rights under, this Agreement shall be effective unless made in writing and
signed by the Parties hereto. Except for the cases of forfeiture (decadenza)
expressly provided for by this Agreement, the failure to exercise or any delay
in exercising a right, power or remedy provided by this Agreement or applicable
Law does not impair or constitute a waiver of such right, power or remedy. No
single or partial exercise of any right, power or remedy provided by this
Agreement or by applicable Law shall prevent any further exercise of the same or
of any other right, power or remedy. Any waiver of any right, power or remedy
may be granted subject to such conditions as the grantor may in its sole and
absolute discretion decide. Any such waiver (unless otherwise specified in
writing) shall only be a waiver for the particular purpose for which it was
given. No such waiver shall be deemed to constitute a waiver of the same right,
power or remedy at a future time or as a waiver of any other right, power or
remedy under this Agreement or the Law or a waiver applicable either to other
circumstances involving the same right, power or remedy or to any other term or
condition of this Agreement or the Law.
10.7 Severability. If any non essential provisions of this Agreement is or
becomes invalid, illegal or unenforceable under the Laws of any jurisdiction,
the validity, legality or enforceability of the remaining provisions shall not
in any way be affected or impaired. The Parties shall nevertheless negotiate in
good faith in order to agree the terms of mutually satisfactory provisions,
achieving as closely as possible the same commercial effect, to be substituted
for the provisions so found to be void or unenforceable.
10.8 Further Assurances. The Parties agree to take all actions and execute all
documents as may be reasonably required, necessary, appropriate or advisable in
order to properly and expeditiously carry out this Agreement.
10.9 Long Stop Dates.
(a) Without prejudice to Section 4.1, should the condition precedent set forth
under Section 4.2(i) not have been fulfilled (or waived, to the extent
contemplated herein) for whatever reason on or prior to September 30, 2014, the
Purchaser shall have the right to terminate this Agreement, in which case the
Parties shall be released from all obligations hereunder, and neither Party
shall have any right or claim of any nature whatsoever against the other Parties
as a result thereof, except for any rights and obligations already arisen in
connection with or by virtue of any breach of the terms and conditions of this
Agreement.
(b) Without prejudice to Sections 4.1 and 10.9(A), should the conditions
precedent set forth under Section 4.2 not have been fulfilled (or waived, to the
extent contemplated herein) for whatever reason on or prior to July 31, 2015,
each Party shall have the right to terminate this Agreement, in which case the
Parties shall be released from all obligations hereunder, and neither Party
shall have any right or claim of any nature whatsoever against the other Parties
as a result thereof, except for any rights and obligations already arisen in
connection with or by virtue of any breach of the terms and conditions of this
Agreement.
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10.10 Applicable Law. This Agreement and the agreements, documents, and
instruments executed hereunder (including the arbitration agreement set forth in
Section 10.11), as well as any pre-contractual liability arising out of or in
connection with this Agreement and its negotiations, shall be governed by, and
construed and interpreted exclusively in accordance with, the substantive Laws
of the Republic of Italy with the exclusion of any conflict-of-laws rules.
10.11 Arbitration.
(a) Any dispute arising, in whole or in part out of, related to, based upon, or
in connection with this Agreement and/or its subject matter, as well as any
pre-contractual liability arising out of or in connection with this Agreement
and its negotiations, shall be finally settled by arbitration under the Rules of
Arbitration of the International Chamber of Commerce (hereinafter, the “Rules”).
There shall be three arbitrators, appointed in accordance with the Rules. The
President of the arbitral tribunal shall be nominated by the co-arbitrators
nominated by the Parties within 30 days from the confirmation or appointment of
the co-arbitrators. Unless otherwise agreed in writing by the Parties, the seat
of the arbitration shall be in Geneva (Switzerland). The proceedings and award
shall be in the English language. The cost of the arbitration, including
attorneys’ fees, shall be assessed by the arbitral tribunal, which will be
required to make such cost allocation with respect to any award issued. Each of
the Parties irrevocably submits to the jurisdiction of the arbitral tribunal and
waives any objection to proceedings with the arbitral tribunal on the ground of
venue or on the ground that proceedings have been brought in an inconvenient
forum. All procedural matters, including the arbitration proceedings, shall be
governed by Italian law.
(b) Without prejudice to the provisions of Section 10.11(a) and to the
jurisdiction of the arbitrators contemplated thereby, the Seller and the
Purchaser hereby submit to the exclusive jurisdiction of any competent court in
Milan (Italy) any legal suit, action or proceeding arising out of or in
connection with this Agreement which may, as a matter of any applicable Law, not
be settled or resolved by arbitration. For the avoidance of doubt, either Party
may seek an interim injunction or ask for urgent relief (misure cautelari) in
any court of competent jurisdiction, it being understood that the Emergency
Arbitrator Provisions of the ICC Rules shall apply.
10.12 Undertakings of the Purchaser with respect to the Claudia Merloni Shares.
In the event that the Purchaser completes the purchase of any of the Claudia
Merloni Shares before the Closing pursuant to the Family SPA (B): (i) the
Purchaser shall not exercise the voting rights attached to any such Claudia
Merloni Shares, nor file any slate of candidates for the appointment of the
board of directors and/or the board of statutory auditors, unless and until the
Closing has occurred; and (ii) should the Closing not occur for whatever reason
by July 31, 2015, or such other long stop date as agreed between the Purchaser
and Fineldo, the Purchaser shall sell such Claudia Merloni Shares within 24
(twenty four) months of July 31, 2015, or such other long stop date.
10.13 Undertakings of the Merloni Directors. The Seller shall procure that the
Merloni Directors shall, and the Merloni Directors shall, (i) comply with the
provisions of Sections 3.3(a)(i) and 3.3(b) and Section 5.2(a)(iii), as the case
may be, which shall apply to them as directors of the Company; and (ii) act, as
directors of the Company, in a manner that is consistent with the contents of
the provisions of Section 6.1(c) and Section 6.1(d) from the date of this
Agreement until (a) the Closing Date, if the Closing takes place on the date of
the Shareholders’ Meeting to be called pursuant to Section 3.3(b), or (b) the
date of the Shareholders’ Meeting to be called pursuant to Section 3.3(b) or of
the shareholders’ meeting to be called pursuant to section 5.2(a)(iii)(5), as
the case may be, if the Closing takes place before the Shareholders’ Meeting to
be called pursuant to Section 3.3(b).”
********
If you agree with the foregoing please return to us a duly executed copy of this
Agreement (including its Annexes and Schedules) initialed on all pages and
signed at the end for your acceptance (as to Ms. Franca Carloni, Mr. Andrea
Merloni, Mr. Aristide Merloni, Ms. Maria Paola Merloni and Ms. Antonella
Merloni, only for the purposes of Sections 3.3(a)(i), 3.3(b), 5.2(a)(iii),
6.1(c), 6.1(d), 10.11 and 10.13 of the Agreement).
/s/ Marc Bitzer____________________
Whirlpool Corporation
/s/ Gian Oddone Merli_____________
Fineldo S.p.A.
/s/ Franca Carloni
27
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/s/ Antonella Merloni
/s/ Andrea Merloni
/s/ Maria Paola Merloni
/s/ Aristide Merloni
28
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Schedule 1.1(a)(i)
Calculation Rules
Capitalized terms not otherwise defined herein shall have the same meaning as in
the Share Purchase Agreement between Whirlpool Corporation and Fineldo S.p.A.
(the “Agreement”), to which this Schedule is attached. All amounts stated in
this Schedule are stated in Euro.
1.
Calculation of Net Financial Debt
The “Net Financial Debt” shall be equal to the result of the following
calculation:
Banks and other short-term loans and borrowings (+)
Medium and long-term loans and borrowings (+)
Total debt
Cash and cash equivalents (-)
Net Financial Debt
Each of the 3 balance sheet accounts listed above shall be calculated on a
consolidated basis for the Group Companies and shall be defined and calculated
consistently with the accounts bearing the same name in (x) the consolidated
statement of financial position at December 31, 2013 included in the
Consolidated Financial Statements and (y) the consolidated balance sheet for the
period ended March 31, 2014 included in the Q1 Interim Report.
2.
Calculation of Net Working Capital
The “Net Working Capital” shall be equal to the result of the following
calculation:
Trade receivables (+)
Inventories (+)
Trade payables (-)
Net Working Capital
Each of the 3 balance sheet accounts listed above shall be calculated on a
consolidated basis for the Group Companies and shall be defined and calculated
consistently with the accounts bearing the same name in (x) the consolidated
statement of financial position at December 31, 2013 included in the
Consolidated Financial Statements and (y) the consolidated balance sheet for the
period ended March 31, 2014 included in the Q1 Interim Report.
3.
Sample calculation of Adjustment Amount
Below is - for illustrative purposes only - a calculation of the Adjustment
Amount pursuant to Section 2.3(b) of the Agreement, prepared on the basis of the
Reference Closing Average Net Financial Debt and examples of the Closing Average
Net Financial Debt, the Reference Closing Average Net Working Capital and the
Closing Average Net Working Capital.
29
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Amounts in EUR millions
Reference Closing Average Net Financial Debt
(A)
Closing Average Net Financial Debt (Example)
(B)
Impact on Provisional Purchase Price
Banks and other short-term loans and borrowings (+)
424.0
Medium and long-term loans and borrowings (+)
304.0
Total debt
728.0
Cash and cash equivalents (-)
101.0
Net Financial Debt
627.0
650.0 (example)
-23.0 (example)
Reference Closing Average Net Working Capital (Example)
(C)
Closing Average Net Working Capital (Example)
(D)
Impact on Provisional Purchase Price
Trade receivables (+)
Inventories (+)
Trade payables (-)
Net Working Capital
60.0 (example)
71.7 (example)
+11.7 (example)
Adjustment Amount (gross) = (A) - (B) - (C) + (D)
-11.3 (example)
Deductible
+ / - 10.0
Adjustment Amount (net)
- 1.3
30
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Schedule 1.1(a)(ii)
Index of Data Room Documents
31
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Schedule 1.1(a)(iii)
DVD containing copy of the Data Room Documents
32
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Schedule 3.3(a)(i)
Form of resignation of director
To:
Indesit Company S.p.A.
Viale Aristide Merloni 47
60044 Fabriano
(Ancona)
To the attention of the Board of Directors
To the attention of the Chairman of the Board of Statutory Auditors
By registered letter sent in advance via e-mail
[place], [date]
Re: Resignation from the office of director of Indesit Company S.p.A.
Dear Sirs,
I hereby irrevocably and unconditionally resign from the office of member of the
board of directors of Indesit Company S.p.A. (the “Company”), effective as of
the date of closing of the acquisition, by Whirlpool Corporation or one of its
subsidiaries, of the shareholding in the Company held by Fineldo S.p.A.
I hereby confirm that the Company does not owe me any compensation or
indemnification or any other sum in connection with the exercise or termination
of my office or for any other reason, and I hereby irrevocably and
unconditionally waive any rights or claims vis-à-vis the Company for the
termination of my office or any other reason.
Yours faithfully,
_______________________
[]
33
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Schedule 3.3(a)(ii)
Form of resignation of statutory auditor
To:
Indesit Company S.p.A.
Viale Aristide Merloni 47
60044 Fabriano
(Ancona)
To the attention of the Board of Statutory Auditors
To the attention of the Board of Directors
By registered letter sent in advance via e-mail
[place], [date]
Re: Resignation from the office of [alternate / standing] statutory auditor of
Indesit Company S.p.A.
Dear Sirs,
I hereby irrevocably and unconditionally resign from the office of [alternate /
standing] member of the board of Statutory Auditors of Indesit Company S.p.A.
(the “Company”), effective as of the date of closing of the acquisition, by
Whirlpool Corporation or one of its subsidiaries, of the shareholding in the
Company held by Fineldo S.p.A.
I hereby confirm that the Company does not owe me any compensation or
indemnification or any other sum in connection with the exercise or termination
of my office or for any other reason, and I hereby irrevocably and
unconditionally waive any rights or claims vis-à-vis the Company for the
termination of my office or any other reason.
Yours faithfully,
_______________________
[]
34
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Schedule 3.5
Form of Escrow Agreement
ESCROW AGREEMENT
This Escrow Agreement (this “Agreement”), is made on [], 2014, by and among:
1)
FINELDO S.P.A., a company incorporated under the laws of Italy and having its
registered office at Via della Scrofa, no. 64, Rome, Italy, registered in the
Register of Enterprises of Rome under no., and Tax code no., 01549810420
(“Fineldo”), represented herein by Mr. [•], duly authorized to execute this
Agreement pursuant to [•];
2)
[PURCHASER], a company incorporated under the laws of [•] and having its
registered office at [•], registered in the Register of Enterprises of [•] under
no., and [•] Tax code no., [•] (the “Purchaser”), represented herein by Mr. [•],
duly authorized to execute this Agreement pursuant to [•]; and
3)
[BANK ACTING AS ESCROW AGENT], a company incorporated under the laws of [Italy]
and having its registered office at [•], registered in the Register of
Enterprises of [•] under no., and [•] Tax code no., [•] (the “Escrow Agent”),
represented herein by Mr. [•], duly authorized to execute this Agreement
pursuant to [•].
(Fineldo, the Purchaser, and the Escrow Agent are herein, collectively, referred
to also as the “Parties” and, individually, as a “Party.”)
WHEREAS
A.
On July [•], 2014, [the Purchaser] / [Whirlpool Corporation, a company
incorporated under the laws of Delaware and having its principal place of
business at 2000 N. M-63 Benton Harbor, MI 49085 (USA) (“Whirlpool”)] and
Fineldo entered into a share purchase agreement (the “SPA”), pursuant to which,
subject to the terms and conditions set forth in the SPA, Fineldo undertook to
sell to the Purchaser, and the Purchaser undertook to purchase from Fineldo, on
the Closing Date, no. 48,810,000 ordinary shares of the Target.
B.
[On [date], 2014, [Whirlpool], pursuant to Section 10.1(d) of the SPA,
designated the Purchaser as the purchaser of the Target Shares under the SPA and
by virtue of such designation (and the Purchaser’s acceptance thereof) the
Purchaser acquired all rights and assumed all duties and obligations of
[Whirlpool] arising under or in connection with the SPA.]
C.
Under Section 3.5 of the SPA, Fineldo and the Purchaser have undertaken to enter
into an escrow agreement with the Escrow Agent, pursuant to which on the Closing
Date a portion of the Purchase Price amounting to Euro 53,691,000 (fifty-three
million and six hundred and ninety-one thousand) (the “Escrow Amount”) shall be
put in escrow with the Escrow Agent in order to secure Fineldo’s payment
obligations to the Purchaser under Sections 9.1 and 9.7of the SPA.
D.
The Escrow Amount shall be held in the Escrow Account (as defined below) by the
Escrow Agent in accordance with the terms of this Agreement from the Closing
Date until the release of the Escrow Fund (as defined below) in accordance with
this Agreement.
E.
The Escrow Agent is aware of the terms and conditions of the SPA, a copy of
which has been delivered to it prior to the execution of this Agreement, and is
willing to act as escrow agent upon the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, which form substantial part of this Agreement, the Parties
agree as follows:
1.Definitions. In this Agreement, the following terms shall have the following
meanings:
a.
“Business Day” means any calendar day other than Saturday, Sunday and any other
day on which credit institutions are authorized or required to close in Milan
(Italy) or New York City (U.S.A.);
b.
“Cash Equivalents”: means: (i) certificates of deposit maturing within 3 months
after the relevant date of calculation and issued by a bank of international
standing having a Standard & Poor's rating of BBB or higher; (ii) any investment
in marketable debt obligations issued or guaranteed by the governments of any
member of the European Community with a credit rating by Standard & Poor's of
BBB or higher or by an instrumentality
35
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or agency of any of them having an equivalent credit rating, maturing within 3
months after the relevant date of calculation and not convertible into or
exchangeable for any other security; (iii) any investment in money market funds
that (a) have a Standard & Poor's credit rating of A or higher, (b) invest
substantially all their assets in securities of the types described in clauses
(i) and/or (ii) above, and (c) can be turned into cash on not more than 30 days'
notice; in each case, denominated in Euros; and
c.
“Escrow Fund” means, at any time, all funds in the Escrow Account at such time.
Capitalized terms used in this Agreement (including in the preamble) without
being otherwise defined herein shall have the respective meanings assigned to
them in the SPA.
2.Appointment. The Escrow Agent is hereby appointed by Fineldo and the Purchaser
as escrow agent for the Escrow Amount and hereby accepts its appointment and
agrees to act as such pursuant to this Agreement for both Fineldo and the
Purchaser.
3.Escrow Account. Prior to the Closing Date, the Purchaser shall open an escrow
account at the Escrow Agent in the name of the Purchaser (the “Escrow Account”).
[email protected]. On the Closing Date, as part of the Closing, the Purchaser
shall deposit the Escrow Amount in the Escrow Account, subject to and in
accordance with the terms and conditions of the SPA. Immediately thereafter, the
Escrow Agent shall acknowledge receipt and deposit of the Escrow Amount by
delivering to each of the Purchaser and Fineldo a notice in the form attached
hereto as Schedule 4.
5.Escrow Fund. The Escrow Fund shall be the sole property of the Purchaser
subject to the terms and conditions of this Agreement. The Escrow Fund shall
remain in the Escrow Account and may be released or transferred from it only in
accordance with the provisions of this Agreement.
6.Release of Escrow Fund. The Escrow Fund shall be released by the Escrow Agent,
in all or in part and in one or more instances, only in accordance with the
following provisions:
a.
On the second Business Day following the receipt by the Escrow Agent of:
i.
joint written instructions from Fineldo and the Purchaser in the form of
Schedule 6.a.i (the “Joint Instructions”); or
ii.
a release and payment request from the Purchaser in the form of Schedule 6.a.ii
(the “Release Request”) enclosing the copy of (x) a final award issued by an
arbitral tribunal pursuant to Section 10.11(a) of the SPA or (y) a provisionally
enforceable or final court decision issued by a court pursuant to Section
10.11(b) of the SPA, in each case ordering an amount to be paid by Fineldo to
the Purchaser (or any Group Company) pursuant to Article 9 of the SPA (it being
understood and agreed that the Escrow Agent shall adhere to, and accept, any
such arbitral award or court decision as if the Escrow Agent were a party to the
relevant arbitral or judicial proceedings and such award or decision were issued
also towards the Escrow Agent), the Escrow Agent shall release and transfer to
the Purchaser (or a Group Company) and/or Fineldo, as applicable, (the relevant
portion of) the Escrow Fund as respectively indicated in the Joint Instructions
or the Release Request.
b.
On the second Business Day following the Final Release Date (as defined below),
the Escrow Agent shall release and transfer to Fineldo an amount equal to the
entire Escrow Fund, unless as of such date one or more Notices of Claim
delivered by the Purchaser to Fineldo - which Notices of Claim shall be
delivered in copy also to the Escrow Agent - pursuant to Section 9.3 and/or
9.8(a) of the SPA requesting indemnification or payment from Fineldo pursuant to
Article 9 of the SPA are still pending, in which case (and only in such case)
the amount to be released and transferred to Fineldo from the Escrow Account
shall be equal to the difference, if positive, between (i) the Escrow Fund as of
the Final Release Date and (ii) the aggregate amount of such Losses for which
the Purchaser requested indemnification pursuant to Article 9 of the SPA in the
relevant pending Notice(s) of Claim (the “Disputed Amount”). The Disputed Amount
shall be calculated by the Purchaser and notified to Fineldo and the Escrow
Agent by adding the relevant amounts of all such Notices of Claim.
c.
For the purposes hereof, the “Final Release Date” shall mean the 5th anniversary
of the Closing Date, provided, however, that in case the Purchaser notifies the
Escrow Agent that, as of a date falling not more than 15 (fifteen) Business Days
before the Final Release Date, one or more Litigations and Claims involving any
Group Company
36
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is still pending that may give rise to an indemnification obligation of Fineldo
pursuant to the Relevant Proceeding Special Indemnity set forth in Section 9.7
of the SPA, the Final Release Date shall be postponed until the 60th Business
Day following the date of final resolution of such Litigations and Claims, as
notified by the Purchaser to the Escrow Agent.
d.
For the avoidance of doubt, for the purposes of this Clause 6 a Notice of Claim
delivered by the Purchaser under the SPA shall be deemed pending until the claim
set forth therein is resolved either by way of written agreement between the
Purchaser and Fineldo or through a final arbitration award or court decision
rendered pursuant to Section 10.11 of the SPA.
7.Investment of Escrow Amount. Immediately after the deposit by the Purchaser of
the Escrow Amount in the Escrow Account pursuant to Clause 4 hereof, the Escrow
Agent shall invest the Escrow Amount in Cash Equivalents, pursuant to the
indications communicated in writing by the Purchaser.
The investments shall be subject to prompt liquidation whenever necessary in
order to release in whole or in part payments from the Escrow Account pursuant
to Clause 6 hereof. Returns earned in respect of the Escrow Fund shall accrue to
the Escrow Fund.
8.Escrow Agent’s fee. The Escrow Agent’s fee for its services as escrow agent
pursuant to this Agreement shall be equal to a total amount of [] per annum
(starting from the Closing Date) to be paid for the entire duration of this
Agreement (it being agreed and understood that, for any non-full year of
duration of this Agreement, such yearly amount shall be calculated or on a
pro-rata basis in relation to such non-full year). Such fee shall be payable to
the Escrow Agent as follows: [] and shall be borne and paid on equal basis
(50-50) by the Purchaser and Fineldo, which shall be severally and not jointly
liable therefor.
9.Certain duties and rights of Escrow Agent. The Escrow Agent:
a.
shall execute all payments from the Escrow Account contemplated by this
Agreement by wire transfer in immediately available funds to the bank accounts
designated by or on behalf of the receiving party on the date specifically set
forth in this Agreement or, if not indicated, as soon as practically possible;
b.
shall not follow, or otherwise take any action in compliance with notices,
instructions, claims or demands from any other Party that conflict with any of
the provisions of this Agreement;
c.
shall be under the duty to give the Escrow Fund held by it hereunder the same
degree of care that it gives to its own property. The Escrow Agent does not have
any interest in the Escrow Amount but is serving as escrow holder only and
having only possession or detention of the Escrow Fund;
d.
shall send statements containing details of the Escrow Fund to each of Fineldo
and the Purchaser on a bi-monthly basis or otherwise as Fineldo and the
Purchaser may agree and jointly communicate in writing to the Escrow Agent;
e.
shall not make any deductions from the Escrow Account by virtue of any right of
set-off or claim which it may have against Fineldo or the Purchaser;
f.
shall not be responsible or liable for any Losses suffered by Fineldo or the
Purchaser as a result of any breach by Fineldo or the Purchaser of its
respective obligations under this Agreement; and
g.
may rely on any notice or other document or information believed by it to be
genuine and correct and to have been signed or communicated by the person by
whom it purports to be signed or communicated and the Escrow Agent shall not be
liable for the consequences of such reliance and shall have no obligation to
verify that the facts or matters stated therein are true and correct. All
releases of any part or parts of the Escrow Fund or any payments by the Escrow
Agent made in response to any Joint Instructions or Release Request which on its
face appears to be made in accordance with the terms of this Agreement shall be
deemed a valid payment for all purposes of this Agreement and shall discharge
the Escrow Agent from its liability under this Agreement to the extent of such
payment and the Escrow Agent shall not be concerned (x) to enquire or verify
whether the persons by whom such Joint Instructions or Release Request are given
are entitled or authorized to give such instructions or request or are in fact
the persons who such persons purport to be or (y) to see the application of any
such payment.
37
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10.Resignation or removal of Escrow Agent. The Escrow Agent shall have the right
to resign from its appointment hereunder upon a []-day notice delivered to
Fineldo and the Purchaser. During such []-day period:
a.
Fineldo and the Purchaser shall negotiate in order to appoint a successor escrow
agent; and
b.
the Escrow Agent shall continue holding the Escrow Fund in the Escrow Account
until a new escrow agent has been appointed.
If a successor escrow agent is not appointed by the end of the above []-day
period, then the most diligent party between Fineldo and the Purchaser may apply
to the President of the Court of Milan for the appointment of a successor escrow
agent (in which case the Escrow Agent shall continue holding the Escrow Fund
also after expiration of the above []-day period until a new escrow agent has
been appointed).
Fineldo and the Purchaser may remove the Escrow Agent, according to article 1726
of the Italian Civil Code, solely by giving to the Escrow Agent joint written
instructions thereof. Such removal shall be effective upon delivery of the
Escrow Fund to the successor escrow agent designated in writing by Fineldo and
the Purchaser, the Escrow Agent being thereupon discharged from all obligations
under this Agreement.
The Escrow Agent shall deliver the Escrow Amount to the successor escrow agent
without unreasonable delay after receiving the notice from Fineldo and the
Purchaser of designation of such successor escrow agent.
11.Notices. Any notice, communication or instruction required or permitted to be
given under this Agreement to any of the Parties shall be made in writing, in
the English language or shall be accompanied by a certified English translation
and shall be delivered in person against acknowledgement of receipt, by
facsimile, by PDF file attached to an email or by mail, registered mail, return
receipt requested addressed to:
•
If to Fineldo:
[]
with a copy (which shall not constitute notice) to:
[]
•
If to the Purchaser:
[]
with a copy (which shall not constitute notice) to:
[]
•
If to the Escrow Agent:
[]
or any other address of which written notice has been given to the other Parties
in accordance with this Clause.
If personally delivered, such communication shall be deemed delivered upon
actual receipt; if sent by facsimile transmission, such communication shall be
deemed delivered the day of the transmission or, if the transmission is not made
on a Business Day, the first Business Day after transmission (and sender shall
bear the burden of proof of delivery); if sent by overnight courier, such
communication shall be deemed delivered upon receipt; if sent by email, upon
confirmation of delivery; and if sent by registered or certified mail, such
communication shall be deemed delivered as of the date of delivery indicated on
the receipt issued by the relevant postal service or, if the addressee fails or
refuses to accept delivery, as of the date of such failure or refusal.
12.Confidentiality. The Parties shall not disclose, and shall cause their
respective directors, officers, employees, affiliates and other representatives
not to disclose, the contents of this Agreement and the SPA, the transactions
contemplated thereby, or any negotiations or possible proceedings in relation
thereto, to any third party and shall not use, and shall cause their respective
directors, officers, employees, affiliates and other representatives not to use,
such contents, transactions, negotiations or proceedings
38
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for any purpose other than the implementation and consummation of this
Agreement, except as required by any mandatory laws, administrative processes or
applicable stock exchange rules.
13.Assignment. This Agreement shall be binding upon and inure solely to the
benefit of the Parties and their respective successors and permitted assigns,
heirs, administrators and representatives, and shall not be enforceable by or
inure to the benefit of any third party. Except as expressly provided herein, no
Party may assign any of its rights or obligations under this Agreement without
the prior written consent of the other parties, and any purported assignment
without such consent shall be void, except that the Purchaser may, at any time,
assign any of its rights, interests or obligations hereunder to any of its
Affiliates.
14.Termination. This Agreement shall terminate automatically on the due release
of the whole Escrow Fund pursuant to the provisions of this Agreement.
Notwithstanding the aforesaid, this Clause 14 and Clauses 12, 15, and 16 hereof
shall survive the termination of this Agreement.
15.Governing law. This Escrow Agreement, and the documents and instruments
executed hereunder, shall be governed by, and implemented, construed and
interpreted in accordance with the substantive laws of Italy (with the exclusion
of any conflict-of-laws rules).
16.Jurisdiction. Any dispute between the Parties hereto, arising out of or in
connection with this Agreement, including its validity, implementation,
interpretation, termination or enforcement, shall be submitted to the exclusive
jurisdiction of any competent court in Milan (Italy).
17.Amendments. Any modification of or amendment to this Agreement shall be valid
only if made in a writing signed by the Parties referring specifically to this
Agreement and stating the Parties’ intention to modify or amend the same.
18.Schedules. The following Schedules are an integral part of this Agreement:
a.
Schedule 4: Form of Notice from Escrow Agent at Closing;
b.
Schedule 6.a.i: Form of Joint Written Instructions;
c.
Schedule 6.a.ii.: Form of Release Request.
[IN WITNESS WHEREOF, the Parties have executed this Agreement, in [] original
counterparts, as of the day and year first above written.
PURCHASER
_________________
FINELDO
__________________
ESCROW AGENT
_________________ ]
39
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Schedule 4
Form of notice from the Escrow Agent
pursuant to Clause 4 of the Agreement
[LETTERHEAD OF ESCROW AGENT]
[Date]
Fineldo S.p.A.
[]
Attention: []
Fax: []
[Purchaser]
[]
Attention: []
Fax: []
ESCROW AGREEMENT DATED [•]
Dear Sirs:
In accordance with Clause 4 of the Escrow Agreement dated [•], among Fineldo
S.p.A., [Purchaser], and [Escrow Agent] (the “Agreement”), we hereby acknowledge
and confirm that, on the date hereof, the Purchaser has deposited the entire
Escrow Amount in the Escrow Account with us.
Capitalized terms used herein have the respective meanings assigned to them in
the Agreement.
Yours sincerely,
[ESCROW AGENT]
By: _______________________
Name:
Title:
40
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Schedule 6.a.i.
Form of Joint Instructions
pursuant to Clause 6.a.i. of the Escrow Agreement
[Date]
[Name and address of Escrow Agent]
Attention: [•]
Facsimile: [•]
ESCROW AGREEMENT DATED [•]
JOINT INSTRUCTIONS FOR RELEASE AND PAYMENT
Dear Sirs:
In accordance with Clause 6.a.i. of the Escrow Agreement dated [•] among Fineldo
S.p.A., [Purchaser], and [Escrow Agent] (the “Agreement”), we hereby jointly
instruct you to release and transfer to [•] as soon as practically possible, and
in any event within [two] Business Days, the amount of € [•] ([•]) from the
Escrow Fund currently deposited into the Escrow Account by wire transfer for
same day value and in immediately available funds to the bank account no. [•] in
the name of [•] at [Bank], IBAN [•].
Capitalized terms used herein have the respective meanings assigned to them in
the Agreement.
Yours sincerely,
Fineldo S.p.A. [Purchaser]
By: _______________________ By: _______________________
Name: Name:
Title: Title:
41
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Schedule 6.a.ii.
Form of Release Request
pursuant to Clause 6.a.ii. of the Escrow Agreement
[LETTERHEAD OF PURCHASER]
[Date]
[Name and address of Escrow Agent]
Attention: [•]
Facsimile: [•]
Copy to:
Fineldo
[Name and address]
Attention: [•]
Facsimile: [•]
ESCROW AGREEMENT DATED [•]
RELEASE REQUEST
Dear Sirs:
Pursuant to Clause 6.a.ii. of the Escrow Agreement dated [•] among Fineldo
S.p.A., [Purchaser], and [Escrow Agent] (the “Agreement”), we hereby instruct
you to release and transfer to [Purchaser] / [Group Company] as soon as
practically possible, and in any event within [two] Business Days, the amount of
€ [•] ([•]) from the Escrow Fund currently deposited into the Escrow Account by
wire transfer for same day value and in immediately available funds to the bank
account no. [•] in the name of [•] at [Bank], IBAN [•].
In accordance with Clause 6.a.ii. of the Escrow Agreement, we hereby enclose
copy of the [arbitral award] / [court decision] issued by [•] on [•] ordering
the amount of Euro [] to be paid by Fineldo to [Purchaser] / [Group Company]
pursuant to Article [9] of the SPA.
Capitalized terms used herein have the respective meanings assigned to them in
the Agreement.
Yours sincerely,
[Purchaser]
By: _______________________
Name:
Title:
Enc./
42
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Schedule 5.2(a)(iii)(3)
Form of resignation of director
To:
Indesit Company S.p.A.
Viale Aristide Merloni 47
60044 Fabriano
(Ancona)
To the attention of the Board of Directors
To the attention of the Chairman of the Board of Statutory Auditors
By registered letter sent in advance via e-mail
[place], [date]
Re: Resignation from the office of director of Indesit Company S.p.A.
Dear Sirs,
I hereby irrevocably and unconditionally resign from the office of member of the
board of directors of Indesit Company S.p.A. (the “Company”), effective as of
the date of the shareholders’ meeting of the Company that [has been / will be]
called on the date hereof for the replacement of the board of directors [and the
board of statutory auditors] of the Company.
I hereby confirm that the Company does not owe me any compensation or
indemnification or any other sum in connection with the exercise or termination
of my office or for any other reason, and I hereby irrevocably and
unconditionally waive any rights or claims vis-à-vis the Company for the
termination of my office or any other reason.
Yours faithfully,
_______________________
[]
43
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Schedule 5.2(a)(iii)(4)
Form of resignation of statutory auditor
To:
Indesit Company S.p.A.
Viale Aristide Merloni 47
60044 Fabriano
(Ancona)
To the attention of the Board of Statutory Auditors
To the attention of the Board of Directors
By registered letter sent in advance via e-mail
[place], [date]
Re: Resignation from the office of [alternate / standing] statutory auditor of
Indesit Company S.p.A.
Dear Sirs,
I hereby irrevocably and unconditionally resign from the office of [alternate /
standing] member of the board of Statutory Auditors of Indesit Company S.p.A.
(the “Company”), effective as of the date of the shareholders’ meeting of the
Company that [has been / will be] called on the date hereof for the replacement
of the board of directors [and the board of statutory auditors] of the Company.
I hereby confirm that the Company does not owe me any compensation or
indemnification or any other sum in connection with the exercise or termination
of my office or for any other reason, and I hereby irrevocably and
unconditionally waive any rights or claims vis-à-vis the Company for the
termination of my office or any other reason.
Yours faithfully,
_______________________
[]
44
--------------------------------------------------------------------------------
Schedule 7.5.2(c)
Average Net Debt Statement
Please refer to document no. 4.1.51 contained in the Data Room Documents.
45 |
OPINION
{¶ 1} The plaintiff-appellant, Earl H. Bilow ("Bilow"), appeals the judgment of the Henry County Common Pleas Court denying his motion for partial summary judgment and granting the motion for summary judgment filed on behalf of the defendant-appellee, Wayne Mutual Insurance Company ("Wayne Mutual").
{¶ 2} Our recitation of the facts is based on the parties' stipulations, which were filed on March 9, 2005. On June 15, 2003, Bilow's eight year old granddaughter was killed in an automobile accident in Henry County. The accident and the child's death were caused by the negligence of Dolores L. Kiger, an underinsured motorist. On the date of the accident, Bilow had in effect a personal automobile insurance policy with Wayne Mutual, which included uninsured/underinsured motorist coverage in the amount of $250,000.00 per person. Bilow filed a claim with Wayne Mutual seeking coverage for the emotional damages he suffered as a result of his granddaughter's death. Wayne Mutual denied Bilow's claim, and this litigation resulted.
{¶ 3} In his complaint, Bilow sought declaratory judgment, compensatory judgment for breach of contract, and compensatory and punitive damages for bad faith. The parties stipulated that Bilow suffered damages as the result of his granddaughter's death, but they have not agreed on an amount. Bilow filed a motion for partial summary judgment, and Wayne Mutual filed a motion for summary judgment. Bilow responded to Wayne Mutual's motion, and Wayne Mutual filed a late reply with leave of court. On September 19, 2005, the trial court filed its judgment entry denying Bilow's motion and granting summary judgment in favor of Wayne Mutual. Bilow appeals from the trial court's judgment and asserts the following assignments of error:
The trial court erred in granting summary judgment to WayneMutual Insurance Company on the basis of distinguishing (becauseof a comma). [sic] [t]he policy language from the language of[sic] the Ohio Supreme Court found ambiguous in Moore v. [sic]State Auto. Mut. Ins. Co. (2000), 88 Ohio St. 3d 27, 31. * * *
The trial court erred in failing to grant Earl H. Bilowsummary judgment as the policy language in the Wayne Mutualpolicy was ambiguous as that found to be ambiguous in Moore v.State Auto. Mut. Ins. Co. (2000), 88 Ohio St. 3d 27, 31 and infailing to apply King v. Nationwide Ins. Co. (1988),35 Ohio St. 3d 208. [sic].
{¶ 4} A trial court's grant of summary judgment is reviewed de novo on appeal. Lorain Nat'l Bank v. Saratoga Apts. (9th Dist. 1989), 61 Ohio App. 3d 127, 129, 572 N.E.2d 198. Therefore, summary judgment will be affirmed only when there is no genuine issue as to any material fact, the moving party is entitled to judgment as a matter of law, and "reasonable minds can come to but one conclusion and that conclusion is adverse to the party against whom the motion for summary judgment is made, such party being entitled to have the evidence or stipulation construed most strongly in his favor." Civ.R. 56(C).
{¶ 5} The moving party may file its motion for summary judgment "with or without supporting affidavits[.]" Civ.R. 56(A). However, "[a] party seeking summary judgment must specifically delineate the basis upon which summary judgment is sought in order to allow the opposing party a meaningful opportunity to respond." Mitseff v. Wheeler (1988), 38 Ohio St. 3d 112,526 N.E.2d 798, syllabus. Once the moving party demonstrates it is entitled to summary judgment, the burden shifts to the non-moving party to show why summary judgment is inappropriate. See Civ.R. 56(E). If the non-movant fails to respond, or fails to support its response with evidence of the kind required by Civ.R. 56(C), the court may enter summary judgment in favor of the moving party. Id. Otherwise, summary judgment should be granted with caution, with a court construing all evidence and deciding any doubt in favor of the non-movant. Murphy v. Reynoldsburg,65 Ohio St. 3d 356, 360, 1992-Ohio-95, 604 N.E.2d 138.
{¶ 6} In this case, the relevant policy language states, "[w]e will pay damages which a covered person is legally entitled to recover from an uninsured motorist because of bodily injury sustained by a covered person and caused by a motor vehicle accident." Compl., Jan. 19, 2005, at Ex. A (emphasis deleted). In his brief, Bilow acknowledges that an insurer may preclude coverage through unambiguous language; however, he contends that the policy language is ambiguous and should be strictly construed against the insurer. Bilow contends that the phrase "sustained by a covered person" is a double reference modifier that modifies both "damages" and "bodily injury". Bilow argues that the policy language is similar to the language of former R.C. 3937.18, which included a comma, and which the Ohio Supreme Court found to be ambiguous.1 In response, Wayne Mutual contends that coverage was intended only for a covered person who sustains bodily injury, and Bilow's granddaughter was not a "covered person" as defined by the policy. Wayne Mutual argues that the last antecedent rule is the law in Ohio and must be applied, and therefore, the policy language is clear and unambiguous.
{¶ 7} "Insurance coverage is determined by reasonably construing the insurance contract `in conformity with the intention of the parties as gathered from the ordinary and commonly understood meaning of the language employed.'" Brooksv. All American Ins. Co., 3rd Dist. No. 17-02-25, 2002-Ohio-6617, at ¶ 10 (quoting Dealers Dairy Prod. Co. v.Royal Ins. Co. (1960), 170 Ohio St. 336, 164 N.E.2d 745, paragraph one of the syllabus). If the terms of the policy are clear and unambiguous, a court must enforce the contract.Cincinnati Indemn. Co. v. Martin, 85 Ohio St. 3d 604,1999-Ohio-322, 710 N.E.2d 677. However, if the language is ambiguous, it "will be construed liberally in favor of the insured and strictly against the insurer." Brooks, supra at ¶ 10 (citing Faruque v. Provident Life Acc. Ins. Co. (1987),31 Ohio St. 3d 34, 508 N.E.2d 949, syllabus).
{¶ 8} "In determining the meaning of [insurance policy language], a court must read words and phrases in context and apply the rules of grammar and common usage." Keller v. FosterWheel Energy Corp., 163 Ohio App. 3d 325, 2005-Ohio-4821,837 N.E.2d 859, at ¶ 14 (citing R.C. 1.42). The rules of grammar require "dependent clauses [to] modify some part of the main clause." Id. (citing Bryan Chamber of Commerce v. Bd. of TaxAppeals (1966), 5 Ohio App. 2d 195, 214 N.E.2d 812). See alsoCarter v. Youngstown (1946), 146 Ohio St. 203, 209,65 N.E.2d 63 ("referential and qualifying words and phrases, where no contrary intention appears, refer solely to the last antecedent."). An independent clause2 "can stand alone as a sentence", while a dependent clause cannot because "it is introduced by a subordinating conjunction or relative pronoun." See OATES, LAUREL CURRIE ET AL., THE LEGAL WRITING HANDBOOK: ANALYSIS, RESEARCH, AND WRITING § 27.1.4 (3rd ed. 2002).
{¶ 9} As quoted above, the relevant policy language states: "[w]e will pay damages which a covered person is legally entitled to recover from an uninsured motorist because of bodily injury sustained by a covered person and caused by a motor vehicle accident." Compl., at Ex. A (original emphasis deleted) (emphasis added). The word "which" is a relative pronoun, and the word "because" is a subordinating conjunction. OATES, supra at § 27.1.4. In this case, there are two dependent clauses: 1) "which a covered person is legally entitled to recover from an uninsured motorist"; and 2) "because of bodily injury sustained by a covered person and caused by a motor vehicle accident". No rule of grammar allows for a dependent clause to modify another dependent clause, and because each dependent clause must modify some part of an independent clause, we hold that each dependent clause in this case modifies the term "damages", as part of the main clause. See id.; Keller, supra at ¶ 14.
{¶ 10} The parties make a particular issue about whether "sustained by a covered person" modifies "bodily injury", "damages", or both. We find that the phrase does not modify either term. As stated above, the phrase "because of bodily injury sustained by a covered person and caused by a motor vehicle accident", is a single dependent clause because it cannot stand alone as a sentence, despite containing a subject and two verbs. The subject noun ("injury") is modified by one adjective ("bodily"), thereby creating the term "bodily injury", which is defined in the policy. The phrase contains two verbs ("sustained" and "caused"). Each verb relates back to the subject, "injury", and each verb is followed by a prepositional phrase ("by a covered person" and "by a motor vehicle accident"). Prepositional phrases expand a basic sentence structure. OATES, supra at § 27.1.3. "By" is a preposition, and "a covered" modifies the object of the prepositional phrase, "person". Id. Likewise, in the second prepositional phrase, "by" is the preposition, and "a motor vehicle" modifies "accident". Id. Therefore, "sustained by a covered person" does not modify "bodily injury". The phrase is merely a subject-verb agreement with a prepositional phrase and is part of the larger dependent clause, which modifies "damages", as discussed above. The policy language is clear and unambiguous. Therefore, the first assignment of error is overruled, and the second assignment of error is rendered moot.
{¶ 11} Having found no genuine issue as to any material fact, the moving party, Wayne Mutual, is entitled to judgment as a matter of law, and reasonable minds can come to but one conclusion, which is adverse to the party against whom the motion for summary judgment is made. The trial court appropriately granted summary judgment in favor of Wayne Mutual and denied partial summary judgment to Bilow.
{¶ 12} The judgment of the Henry County Common Pleas Court is affirmed.
Judgment Affirmed.
Shaw and Cupp, J.J., concur.
1 See Moore v. State Auto. Mut. Ins. Co., 88 Ohio St. 3d 27,2000-Ohio-264, 723 N.E.2d 97 (superseded by Section 3, Am.S.B. No. 97, 2001 Ohio Laws 44).
2 Also referred to as a "main clause". |
This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-0423
State of Minnesota,
Respondent,
vs.
David Lee Clifton,
Appellant.
Filed November 23, 2015
Affirmed
Larkin, Judge
Beltrami County District Court
File No. 04-CR-14-1590
Lori Swanson, Attorney General, St. Paul, Minnesota; and
Annie Claesson-Huseby, Beltrami County Attorney, Wyatt T. Arneson, Assistant County
Attorney, Bemidji, Minnesota (for respondent)
Cathryn Middlebrook, Chief Appellate Public Defender, Rochelle R. Winn, Assistant
Public Defender, St. Paul, Minnesota (for appellant)
Considered and decided by Worke, Presiding Judge; Larkin, Judge; and Bjorkman,
Judge.
UNPUBLISHED OPINION
LARKIN, Judge
Appellant challenges his conviction of third-degree driving while impaired (test
refusal), arguing that Minnesota’s criminal test-refusal statute is unconstitutional. We
affirm.
FACTS
In May 2014, respondent State of Minnesota charged appellant David Lee Clifton
with third-degree driving while impaired (test refusal). Clifton requested an omnibus
hearing but later withdrew that request and decided to plead guilty. When Clifton
informed the district court of his plea decision, the district court mentioned that the
Minnesota Supreme Court had recently heard arguments regarding whether the criminal
test-refusal statute is unconstitutional. The district court suggested that Clifton proceed
with a stipulated trial so he could preserve the constitutional issue for appeal. Clifton
agreed to do so.
The district court conducted a bench trial under Minn. R. Crim. P. 26.01, subd. 3,
based on stipulated facts including the following:
Based on [field sobriety] tests and on multiple indicia
of intoxication, Deputy [Josh] Cook arrested [Clifton] for
driving while impaired.
Once at the Beltrami County jail, [Clifton] was taken
to the Intoxilyzer room, where Deputy Cook read the implied
consent advisory to him. [Clifton] was hostile and aggressive
throughout, calling the deputy racist and telling him to go to
hell.
2
Deputy Cook advised [Clifton] of his right to talk with
an attorney and that a phone book would be made available to
him. Defendant replied that he wasn’t going to call anyone.
When Deputy Cook asked [Clifton] if he would submit
to a breath test, [Clifton] remained silent.
The district court found Clifton guilty of third-degree refusal, sentenced him to
one year in jail, and stayed execution of all but 15 days. The district court never
considered or decided whether Minnesota’s criminal test-refusal statute is
unconstitutional. Clifton appeals, attempting to challenge the constitutionality of the test-
refusal statute.
DECISION
Clifton contends that Minnesota’s test-refusal statute, Minn. Stat. § 169A.20,
subd. 2 (2012), “violates the state and federal constitutional rights to due process of law
and the doctrine of unconstitutional conditions by criminalizing a driver’s refusal to
consent to a presumptively unreasonable, warrantless search.”
Clifton states that he “waived his right to a jury trial and submitted his case to the
district court pursuant to Minn. R. Crim. P. 26.01, subd. 3, in order to preserve his right
to challenge the constitutionality of the test-refusal statute.” However, the
constitutionality of the test-refusal statute was not considered or decided in the district
court. In fact, Clifton withdrew his request for an omnibus hearing, where he could have
raised that issue. See Minn. R. Crim. P. 11.02 (providing that on demand, the district
court must conduct an omnibus hearing and hear all motions relating to constitutional
issues). Clifton does not cite any authority supporting his suggestion that proceeding
3
with a stipulated facts trial under Minn. R. Crim. P. 26.01, subd. 3, preserves a
constitutional challenge for appeal when the district court does not decide the merits of
the constitutional challenge. Although Minn. R. Crim. P. 26.01, subd. 4, sets forth a
procedure under which a defendant may stipulate to the prosecution’s case to obtain
review of a pretrial ruling, that rule was not used here, and there is no pretrial ruling for
this court to review.
An appellate court will not consider matters not argued to and considered by the
district court. Roby v. State, 547 N.W.2d 354, 357 (Minn. 1996). We therefore hold that
Clifton’s constitutional challenge to the criminal test-refusal statute is not properly before
this court.
Even if Clifton’s constitutional challenge were properly before this court, we
would reject it on the merits. This court reviews questions of law, including
constitutional challenges, de novo. State v. Ness, 834 N.W.2d 177, 181 (Minn. 2013).
However, “[t]his court, as an error correcting court, is without authority to change the
law.” Lake George Park, L.L.C. v. IBM Mid-Am. Emps. Fed. Credit Union, 576 N.W.2d
463, 466 (Minn. App. 1998), review denied (Minn. June 17, 1998).
Clifton acknowledges that this court is “plainly bound by the Minnesota Supreme
Court” and its recent decision in State v. Bernard, 859 N.W.2d 762 (Minn. 2015),
regarding the constitutionality of the test-refusal statute as applied to breath tests. In
Bernard, the supreme court held that breath tests of persons lawfully arrested on
suspicion of drunk driving are constitutional under the search-incident-to-arrest exception
to the warrant requirement. Bernard, 859 [email protected]. The supreme court concluded
4
that there is no fundamental right to refuse such a constitutional search and therefore
reviewed the test-refusal statute, as applied to breath tests, under the rational-basis test.
Id. at 773-74. The court held that because the test-refusal statute “is a reasonable means
to a permissive object, it does not violate [a driver’s] right to due process under the
United States or Minnesota Constitutions.” Id. at 763. Clifton’s due-process argument
fails under Bernard.
Clifton also contends that Minnesota’s criminal test-refusal statute violates the
doctrine of unconstitutional conditions because “it compels the surrender of the
constitutional right to withhold consent to a Fourth Amendment search as a condition of
driving.” This court recently held that the test-refusal statute, as applied to breath tests,
does not violate the unconstitutional-conditions doctrine because breath tests given
pursuant to the implied-consent statute are valid searches incident to arrest under
Bernard. State v. Bennett, 867 N.W.2d 539, 542-43 (Minn. App. 2015), review denied
(Minn. Oct. 28, 2015). Clifton’s unconstitutional-conditions argument therefore fails
under Bennett.
Affirmed.
5
|
- sixteen RE: Please Vote AGAINST the Say - on-Pay Proposal at Tenet Healthcare Corp. (NYSE: THC) on May 4, 2017 Dear Fellow Tenet Shareholder: We urge you to Vote No on the advisory vote to Approve Executive Compensation ( Say- on-Pay ) at Tenet's annual shareholder meeting on May 4, 2017, due to troubling, regressive developments in the company s pay practices that undermine recent, purported reforms. Among other things: Pay levels primed to rise again: A center piece of this year s CD&A, a reduction in targeted compensation, is set to be walked back in fiscal 2017 with Long-term Incentive (LTI) awards returning to prior, elevated levels. New flawed, LTI award undercuts pay-for-performance reform: Despite significant market volatility, driven in part by the uncertainty over health care policy, the company has issued a new performance-based stock option award with a price hurdle that is less than 5% higher than where the stock was trading just two days earlier. Tenet s stock price is down roughly 40% over the past year underperforming all but one of its direct publicly traded competitors. 1 And despite claims of meaningful reforms to executive pay practices after a significant number of shares were cast against say-on-pay in 2015, recent compensation decisions by the board suggest notable backsliding. With leading compensation research firm, Equilar, ranking the company s current three -year pay-for -performance profile in the 4th percentile of the Russell 3000, pay levels should be continuing to moderate, rather than rebounding to prior levels. These changes also send the wrong message to shareholders about executive accountability; the company recently paid $513 million far more than the $20 million the company originally projected to settle criminal and civil claims accusing the chain of paying kickbacks to a pre-natal clinic for steering pregnant Medicaid patients to Tenet hospitals. This of course, unfortunately, marks just the latest in a string of costly fraud cases at Tenet, with the company having recorded more than $2.1 billion in legal settlement and investigative costs since 2003. Teamster affiliated pension and benefit funds have more than $100 billion invested in the capital markets and have substantial holdings in Tenet. 1 As of April 4, 2017, Tenet shares were down 41% over the past year compared to an 11% gain for HCA Holdings, and declines of 2%, 8% and 54% at Universal Health Services, LifePoint Health and Community Health Systems, respectively collectively the company s direct peers, according to the proxy statement. This is not a solicitation of authority to vote your proxy. Pleast DO NOT send us your proxy card as it will not be accepted. April 2017 Page 2 Pay levels primed to rise again The touted reduction in the target value of CEO Trevor Fetter s 2016 LTI award, $7.2 million, looks to be a one -time gesture, with fiscal 2017 grants set to again total around $ 9 million the target level in fiscal 2015. Following criticism over its long-time practice of targeting above -median compensation for CEO Fetter and the company s pay-for -performance practices more generally, we note the Compensation Committee determined to set CEO Fetter s fiscal 2016 compensation opportunities at the 25 th percentile of the company s peer median. The reduction was largely accounted for by a smaller LTI award, which the proxy reports was also in response to Tenet s poor share performance in the second half of 2015 and first several months of 2016. Despite a further 40% decline in the stock price over the intervening 12 months, however, CEO Fetter s fiscal 2017 LTI grants based on an analysis of Form 4 filings appear to be targeting an award opportunity of $9 million. We note that in a March 1, 2017, SEC filing, the company disclosed it had granted 157,978 restricted share units to CEO Fetter carrying a grant date value of just over $3 million. The award, as noted on page 32 of the proxy statement, represents one -third of his total fiscal 2017 LTI opportunity, suggesting a total LTI opportunity of at least $9 million. New flawed, LTI award undercuts pay -for- performance reform Critically, in rationalizing the increased LTI opportunity in 2017, the Compensation Committee refers to a greater emphasis on performance -based pay elements in 2017. What the committee appears to be referencing here is a new grant of performance -based stock options that supplements the existing use of performance -vesting and time -vesting restricted share units. Unfortunately, the fiscal 2017 option grant represents a far from robust pay-for -performance incentive vehicle. According to the proxy statement, the new option award is contingent on the achievement of a 25% increase in the stock price anytime over a three -year period. For a stock that has given up more than 70% since September 2014, and has suffered significant volatility amid the uncertainty over health care reform, it is not clear this award is a particularly efficient or effective means of incentivizing and rewarding executive decision-making. Even more concerning is the fact that the award represents less than a 5% price hurdle to where the stock was trading just two days prior to the award. Conclusion In this year s proxy, the company touts a substantial redesign of its executive pay program and reductions in executive pay. Investors, however, have reason to be skeptical that this will address the company s poor pay-for -performance profile, given the size and structure of LTI awards granted in fiscal 2017. Accordingly, we urge shareholders to Vote No on Say-on -Pay on May 4. For more information, please contact Carin Zelenko, Teamsters Capital Strategies at: +1-639-564-1671 or by email at: [email protected]. org . Ken Hall General Secretary-Treasurer KH/cz This is not a solicitation of authority to vote your proxy. Please DO NOT send us your proxy as it will not be accepted.
|
Citation Nr: 0905810
Decision Date: 02/18/09 Archive Date: 02/24/09
DOCKET NO. 05-17 176 ) DATE
)
)
On appeal from the
Department of Veterans Affairs (VA) Regional Office in
Houston, Texas
THE ISSUE
Entitlement to compensation benefits pursuant to the
provisions of 38 U.S.C.A. § 1151, for right eye disability
resulting from VA surgeries in February 1998 and August 1998.
REPRESENTATION
Appellant represented by: Texas Veterans Commission
WITNESS AT HEARING ON APPEAL
Veteran
ATTORNEY FOR THE BOARD
Suzie S. Gaston, Counsel
INTRODUCTION
The Veteran served on active duty from April 1955 to November
1962.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal from a September 2003 rating decision of
the Department of Veterans Affairs (VA), Regional Office (RO)
in Houston, Texas.
In May 2008, the Veteran appeared at the Houston RO and
testified at a videoconference hearing before the
undersigned, sitting in Washington, D.C. A transcript of the
hearing has been associated with the claims folder.
In August 2008, the Board requested a medical opinion from
the Veterans Health Administration (VHA) in accordance with
38 C.F.R. § 20.901(a) (2008). The requested opinion was
provided and has been associated with the Veteran's VA claims
folder. In December 2008, a copy of this opinion was sent to
the Veteran and his representative. See 38 C.F.R.
§ 20.903(a) (2008). This case is now ready for further
appellate review.
Please note this appeal has been advanced on the Board's
docket pursuant to 38 C.F.R. § 20.900(c) (2008). 38 U.S.C.A.
§ 7107(a) (2) (West 2002).
FINDING OF FACT
The Veteran did not suffer additional right eye disability
that was proximately due to carelessness, negligence, lack of
proper skill, error in judgment, or similar instance of fault
on the part of VA in performing surgical procedures in
February 1998 and August 1998, or as the result of an event
that was not reasonably foreseeable.
CONCLUSION OF LAW
The criteria for compensation under the provisions of 38
U.S.C.A. § 1151, for right eye disability resulting from VA
surgeries performed in February 1998 and August 1998 have not
been met. 38 U.S.C.A. §§ 1151, 5103, 5103A, 5107(b) (West
2002 & Supp. 2008); 38 C.F.R. §§ 3.102, 3.159, 3.361 (2008).
REASONS AND BASES FOR FINDING AND CONCLUSION
I. Duty to Notify and Assist
The Veterans Claims Assistance Act of 2000 (VCAA) enhanced
VA's duty to notify and assist claimants in substantiating
their claims for VA benefits, as codified in pertinent part
at 38 U.S.C.A. §§ 5103, 5103A (West 2002 & Supp. 2008); 38
C.F.R. §§ 3.159, 3.326(a) (2008).
Upon receipt of a complete or substantially complete
application for benefits, VA is required to notify the
claimant of the information and evidence not of record that
is necessary to substantiate the claim; and to indicate which
information and evidence VA will obtain and which information
and evidence the claimant is expected to provide. 38
U.S.C.A. § 5103(a); 38 C.F.R. § 3.159(b). The U.S. Court of
Appeals for Veterans Claims has held that VCAA notice should
be provided to a claimant before the initial RO decision on a
claim. Pelegrini v. Principi, 18 Vet. App. 112 (2004).
However, if VCAA notice is provided after the initial
decision, such a timing error can be cured by subsequent
readjudication of the claim, as in a statement of the case
(SOC )or supplemental SOC (SSOC). Mayfield v. Nicholson, 20
Vet. App. 537, 543 (2006); Prickett v. Nicholson, 20 Vet.
App. 370, 376 (2006).
The U.S. Court of Appeals for the Federal Circuit has held
that any error in a VCAA notice should be presumed
prejudicial. VA bears the burden of rebutting the
presumption, by showing that the essential fairness of the
adjudication has not been affected because, for example,
actual knowledge by the claimant cured the notice defect, a
reasonable person would have understood what was needed, or
the benefits sought cannot be granted as a matter of law.
Sanders v. Nicholson, 487 F.3d 881 (Fed. Cir. 2007).
In this case, VA satisfied its duty to notify by means of
letters dated in February 2003 and July 2003 from the RO to
the Veteran which were issued prior to the RO decision in
September 2003. Those letters informed the Veteran of what
evidence was required to substantiate the claim and of his
and VA's respective duties for obtaining evidence.
Accordingly, the requirements the Court set out in Pelegrini
have been satisfied.
The Board finds that the content of the above-noted letters
provided to the Veteran complied with the requirements of 38
U.S.C.A. § 5103(a) and 38 C.F.R. § 3.159(b) regarding VA's
duty to notify and assist. He was provided an opportunity at
that time to submit additional evidence. Subsequently, the
February 2005 SOC and February 2007 SSOC were issued which
provided the Veteran with an additional 60 days to submit
additional evidence. Thus, the Board finds that the purpose
behind the notice requirement has been satisfied because the
Veteran has been afforded a meaningful opportunity to
participate effectively in the processing of his claim. It
also appears that all obtainable evidence identified by the
Veteran relative to his claim has been obtained and
associated with the claims file, and that neither he nor his
representative has identified any other pertinent evidence,
not already of record, which would need to be obtained for a
fair disposition of this appeal. It is therefore the Board's
conclusion that the Veteran has been provided with every
opportunity to submit evidence and argument in support of his
claim, and to respond to VA notice.
Despite initial inadequate notice provided to the Veteran on
the disability rating or effective date elements of his
claims, the Board finds no prejudice to the Veteran in
proceeding with the issuance of a final decision. See
Bernard v. Brown, 4 Vet. App. 384, 394 (1993) (where the
Board addresses a question that has not been addressed by the
agency of original jurisdiction, the Board must consider
whether the Veteran has been prejudiced thereby). The Boards
no prejudice to the Veteran in proceeding with the issuance
of a final decision because any timing error was cured by the
readjudication of the claim in the December 2007 supplemental
statement of the case. Mayfield v. Nicholson, 444 F.3d 1328
(Fed. Cir. 2006). To whatever extent the decision in Dingess
v. Nicholson, 19 Vet. App. 473, 484 (2006), requires more
extensive notice in claims for compensation, e.g., as to
potential downstream issues such as effective date, as the
preponderance of the evidence is against the claim, any
questions as to the appropriate disability rating or
effective date to be assigned are rendered moot.
Accordingly, the Board finds that VA has satisfied its duty
to assist the Veteran in apprising him as to the evidence
needed, and in obtaining evidence pertinent to his claim
under the VCAA. Therefore, no useful purpose would be served
in remanding this matter for yet more development. Such a
remand would result in unnecessarily imposing additional
burdens on VA, with no additional benefit flowing to the
Veteran. The Court of Appeals for Veterans Claims has held
that such remands are to be avoided. Sabonis v. Brown, 6
Vet. App. 426, 430 (1994).
Given the ample communications regarding the evidence
necessary to establish entitlement to compensation under the
provisions of 38 U.S.C.A. § 1151 for right eye disability,
given that the Veteran has offered testimony at a hearing
before the Board, and given that he has been provided all the
criteria necessary for establishing compensation under 38
U.S.C.A. § 1151, the Board finds that there has been
fundamental fairness in the processing of this appeal.
II. Factual background
The Veteran's claim for compensation benefits under the
provisions of 38 U.S.C.A. § 1151 was received in January
2003. Submitted in support of the Veteran's claim were
treatment reports from the eye clinic dated from February
1997 to January 2001. These records show treatment primarily
for a left eye disorder. During a clinical visit in March
1997, it was noted that the Veteran had a stroke
approximately 6 years previously; he reported seeing a "dark
spot" centrally which did not move and a "shaded area"
across the left eye. Visual acuity in the right eye was
20/25. On November 26, 1997, it was noted that the Veteran
had visually significant cataracts in both eyes.
The medical records indicate that the Veteran was admitted to
a VA hospital on February 2, 1998 with a diagnosis of
cataract in the right eye. After informed consent was
verified, the veteran was brought to the operating room where
he underwent corneotemporal cataract extraction and
intraocular lens placement of the right eye. During the
course of the surgery, a small hole was seen in the posterior
capsule; however, no vitreous was seen coming into the
anterior chamber. Helon was blown into the hole to push back
any vitreous that may be present; at that point, the hole was
enlarged slightly. Prior to the surgery, on January 22,
1998, the Veteran signed a consent form, which listed the
possible complications of the cataract extraction, including:
partial or total loss of vision, need for further surgery,
bleeding, pain, infection, ptosis, retinal detachment, and
increased pressure (glaucoma). A treatment note, dated
February 2, 1998, reported visual acuity of 20/200, vitreous
to wound. On February 10, 1998, visual acuity in the right
eye was 20/200; he had two strands of vitreous to wound. On
February 18, 1998, it was noted that vision improved to 20/40
without correction. On February 26, 1998, visual acuity in
the right eye was 20/50 without correction; no cystoid
macular edema was noted. In April 1998, visual acuity in the
right eye was 20/25; the assessment was visual acuity
improved.
On August 7, 1998, the Veteran was readmitted to a VA
hospital with a diagnosis of cataract in the right eye.
After informed consent was verified, the veteran was brought
to the operating room where he underwent cataract extraction
and intraocular lens placement of the right eye. During the
course of the surgery, a small hole was seen in the posterior
capsule; however, no vitreous was seen coming into the
anterior chamber. Helon was blown into the hole to push back
any vitreous that may be present; at that point, the hole was
enlarged slightly.
The veteran was next seen on November 30, 1998 with
complaints of blurred vision with distorted vision in the
right eye; best corrected visual acuity was 20/25+. No
afferent pupilary defect. Vitreous in anterior chamber was
present, but not to wound. On March 1, 1999, visual acuity
was 20/20. The impression was posterior capsule opacity with
vitreous in anterior chamber. When seen in April 1999, the
Veteran reported an occasional large floater in the right eye
which blocked his vision. The impression was YAG posterior
capsule opacity with vitreous in anterior chamber. In April
2000, the veteran complained of seeing floaters in the right
eye; visual acuity was 20/20 in both eyes. The assessment
was pseudophakia in both eyes. A similar diagnosis was
reported in January 2001.
The Veteran was afforded a VA examination in January 2006.
At that time, he reported having a hole in the right eye due
to surgery at a VA facility; he also stated that he had
visual impairment due to the hole in the right eye.
Following an evaluation of the right eye, the examiner
reported a diagnosis of pseudophakia in both eyes with best
corrected visual acuity of 20/80-2 in the right eye,
secondary glaucoma in the right eye, which was likely a
result of the cataract surgery. In an addendum to the above
examination, dated in November 2007, the VA examiner stated
that the Veteran's residuals of cataract surgery, diagnosed
as right eye glaucoma and vitreous loss, were considered to
be ordinary risks of the cataract surgery treatment provided
by VA.
At his personal hearing in May 2008, the Veteran indicated
that he went to VA for the surgery because he was having
difficulty seeing; he described his eyes as being smoky at
that time. The Veteran stated that VA determined that the
lens in his right eye needed to be removed and replaced. The
Veteran testified that he was told that, after the surgical
procedures, he would see just as well as he did when he was
16 years old. The Veteran related that the same procedure
worked well with a different doctor on the left eye; however,
ever since the surgery on his right eye, the eye had
deteriorated. The Veteran stated that everything was blurry;
he also stated that the right eye was almost useless at
night. The Veteran indicated that the right eye felt as if a
foreign object was present. The Veteran reported that,
before the surgery, he recalled the surgeon being in a hurry;
he specifically recalled hearing the surgeon say "let's get
him in the operating room and get this over with." The
Veteran also reported that during the course of the surgery,
he heard the surgeon say "uh-oh! I got a hole of the
posterior capsule; I hope it doesn't cause any damage. The
Veteran maintained that the doctor was negligent by making
the hole in his eye, and leaving a piece of the old lens in
his right eye. The Veteran indicated that he was currently
having problems with floaters, which appear as human hair.
As noted previously, in August 2008 the Board obtained a VHA
medical opinion. Following a review of the Veteran's claims
folder, a VA ophthalmologist explained that the Veteran had
floaters after cataract surgery which could happen with or
without rupture of the posterior capsule. The physician
noted that the veteran had best corrected visual acuity of
20/20 for many years after the cataract surgery; he stated
that this eliminates the possibility of cystoid macular edema
after cataract surgery (Irvine-Gass syndrome), causing
decreased vision in 2006. The examiner observed that there
was no evidence of glaucoma in the medical records. The
physician expressed the opinion that the right eye disability
was not a result of carelessness, negligence, lack of proper
skill, error in judgment, or similar instance of fault on
part of the VA medical professionals in performing the
cataract surgeries in 1998.
III. Legal Analysis
The law provides that compensation may be paid for a
qualifying additional disability or qualifying death, not the
result of the Veteran's willful misconduct, caused by
hospital care, medical or surgical treatment, or examination
furnished the Veteran when the proximate cause of the
disability or death was: (A) carelessness, negligence, lack
of proper skill, error in judgment, or similar instance of
fault on the part of VA in furnishing the hospital care,
medical or surgical treatment, or examination; or (B) an
event not recently foreseeable. 38 U.S.C.A. § 1151.
VA regulations codifying the requirements for claims
requesting benefits under 38 U.S.C.A. § 1151 (a) filed on or
after October 1, 1997, became effective September 2, 2004.
69 Fed. Reg. 46,426 (2004). A review of the record reveals
that the Veteran's claim for compensation benefits was
received in January 2003.
The regulations provide that benefits under 38 U.S.C.A.
§ 1151(a) for claims received by VA on or after October 1,
1997, as in this case, for additional disability or death due
to hospital care, medical or surgical treatment, examination,
training and rehabilitation services, or compensated work
therapy program, require actual causation not the result of
continuance or natural progress of a disease or injury for
which the care, treatment, or examination was furnished,
unless VA's failure to timely diagnose and properly treat the
disease or injury proximately caused the continuance or
natural progress. The additional disability or death must
not have been due to the Veteran's failure to follow medical
instructions. 38 C.F.R. § 3.361 (2008).
It must be shown that the hospital care, medical or surgical
treatment, or examination caused the Veteran's additional
disability or death, and that (i) VA failed to exercise the
degree of care that would be expected of a reasonable health-
care provider or that (ii) VA furnished the hospital care,
medical or surgical treatment, or examination without the
Veteran's or, in appropriate cases, the Veteran's
representative's informed consent. To establish the
proximate cause of an additional disability or death, it must
be shown that there was carelessness, negligence, lack of
proper skill, error in judgment, or similar instance of fault
on VA's part in furnishing hospital care, medical or surgical
treatment, or examination that caused the additional
disability. Whether the proximate cause of a Veteran's
additional disability or death was an event not recently
foreseeable is in each claim to be determined based on what a
reasonable health-care provider would have foreseen. The
event need not be completely unforeseeable or unimaginable
but must be one that a reasonable health-care provider would
not have considered to be an ordinary risk of the treatment
provided. In determining whether an event was reasonably
foreseeable, VA will consider whether the risk of that event
was the type of risk that a reasonable health-care provider
would have disclosed in connection with the informed consent
procedures of 38 C.F.R. § 17.32. 38 C.F.R. § 3.361(d)
(2008).
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; see also 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 has claimed entitlement to compensation under the
provisions of 38 U.S.C.A. § 1151 for right eye disability,
which he claims resulted from surgeries performed by VA for
cataract extraction in the right eye.
Upon careful consideration of the evidence of record, the
Board finds that the preponderance of the evidence is against
the Veteran's claim.
With regard to additional disability as a residual of right
eye surgery, as set forth above, VA law and regulation
require that the evidence show that such additional
disability is the result of VA hospital care, medical or
surgical treatment and that the proximate cause of the
additional disability must be either carelessness,
negligence, lack of proper skill, error in judgment, or
similar instance of fault on the part of VA in furnishing the
hospital care, medical or surgical treatment, or examination;
or an event not reasonably foreseeable.
In this regard, the Veteran's VA surgical and postoperative
records were reviewed by a VA examiner in January 2006. The
examiner concluded that the veteran had pseudophakia in both
eyes with best corrected visual acuity of 20/80-2 in the
right eye, secondary glaucoma in the right eye, which was
likely a result of the cataract surgery. However, in an
addendum to the above examination, dated in November 2007,
the VA examiner stated that the Veteran's right eye glaucoma
and vitreous loss were considered to be ordinary risks of the
cataract surgery treatment provided by VA.
Moreover, in the VHA opinion obtained by the Board in
November 2008, the ophthalmologist observed that the Veteran
had floaters after the cataract surgery, which can happen
with or without rupture of the posterior capsule. He noted
that the Veteran had best corrected visual acuity of 20/20
for many years after the cataract surgery, which eliminates
the possibility of cystic macular edema after cataract
surgery, causing decreased vision in 2006. He further noted
that there was no evidence of glaucoma in the medical record.
The ophthalmologist concluded that the right eye disability
was not a result of carelessness, negligence, lack of proper
skill, error in judgment, or similar instance of fault on
part of the VA medical professionals in performing the
cataract surgeries in 1998. Accordingly, the probative
medical evidence reveals that there was no careless,
negligence, lack of proper skill, error in judgment, or
similar instance of fault on VA's part in furnishing VA
medical care.
Additionally, there is no evidence indicating that the
complications experienced by the Veteran following the
cataract surgery resulted from an event which was not
reasonably foreseeable. As noted above, in November 2007,
the examiner specifically stated that right eye glaucoma and
vitreous loss were ordinary risks of cataract surgery;
consequently, the surgical complications experienced by the
Veteran were reasonably foreseeable consequences of the
surgery and such risks were addressed in the preoperative
informed consent. The record indicates that the risks were
ones that the health care provider disclosed. Consequently,
the requirements are not met for compensation under 38
U.S.C.A. § 1151 for a right eye disability claimed as due to
VA surgeries in February 1998 and August 1998.
The Board further notes that the record contains a consent
form signed by the Veteran in February 1998, which advised
him of the risks and complications associated with the
cataract extraction; the signed consent form indicates that
the Veteran understood the nature of the proposed procedure,
attendant risks involved, and expected results of removal of
cataract lens with placement of intraocular lens implant of
the right eye.
Although the veteran may sincerely feel that he has a right
eye disability due to VA surgeries in February 1998 and
August 1998 for removal of cataracts, he does not have the
medical expertise to provide such an assessment. See
Espiritu v. Derwinski, 2 Vet. App. 492, 494- 95 (1992) (lay
persons are not competent to offer evidence that requires
medical knowledge). The veteran is competent to state that
he had problems with his vision. Lay statements may serve to
support claims by supporting the occurrence of lay-observable
events or the presence of disability or symptoms of
disability subject to lay observation. 38 C.F.R. § 3.303(a);
Jandreau v. Nicholson, 492 F.3d 1372 (Fed. Cir. 2007); see
Buchanan v. Nicholson, 451 F.3d 1331, 1336 (Fed. Cir. 2006)
(addressing lay evidence as potentially competent to support
presence of disability even where not corroborated by
contemporaneous medical evidence). However, the issue in
this case is a complex matter which requires specialized
training for a determination as to causation, standard of
care, foreseeability, etc., and it is therefore not
susceptible of resolution by lay opinions. In contrast, the
Board finds the VHA opinion to be probative evidence because
it was based on a comprehensive review of the record by a
qualified physician. See Prejean v. West, 13 Vet. App. 444,
448-9 (2000).
Thus, the probative competent medical evidence establishes
that VA was not careless or negligent, that VA lacked proper
skill or made an error in judgment, or that there was similar
instance of fault on the part of VA; or that the Veteran has
a right eye disability due to an event not reasonably
foreseeable. Accordingly, the Board concludes that the
criteria for entitlement to compensation under 38 U.S.C.A.
§ 1151 for a right eye disability claimed to be caused by
surgical treatment provided by the VA, are not met. 38
U.S.C.A. § 1151 (West 2002); 38 C.F.R. § 3.361 (2008). In
reaching this decision, the Board has considered the doctrine
of doubt, however, as the preponderance of the evidence is
against the Veteran's claim, the doctrine is not for
application. Gilbert v. Derwinski, 1 Vet. App. 49 (1990).
ORDER
Compensation pursuant to the provisions of 38 U.S.C.A. § 1151
for right eye disability resulting from VA surgeries in
February 1998 and August 1998 is denied.
____________________________________________
Thomas H. O'Shay
Acting Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
Citation Nr: 0600739
Decision Date: 01/10/06 Archive Date: 01/19/06
DOCKET NO. 96-34 408 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Waco, Texas
THE ISSUES
1. Entitlement to service connection for emphysema.
2. Entitlement to service connection for colon polyps.
3. Entitlement to service connection for hepatitis.
REPRESENTATION
Appellant represented by: Texas Veterans Commission
WITNESS AT HEARINGS ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
W. Sampson, Counsel
INTRODUCTION
The veteran had active duty from February 1966 to July 1970.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal from an April 1996 rating decision by the
Department of Veterans Affairs (VA) Regional Office (RO) in
Waco, Texas, which denied service connection for emphysema,
colon polyps, hepatitis and diabetes mellitus. In an August
2002 rating decision, the RO granted service connection for
diabetes mellitus, thereby ending that appeal. See Holland
v. Gober, 10 Vet. App. 433 (1997) (per curiam); Grantham v.
Brown, 114 F.3d 1156 (Fed. Cir. 1997); Barrera v. Gober, 122
F.3d 1030 (Fed. Cir. 1997).
The issue of entitlement to service connection for hepatitis
is being remanded to the RO via the Appeals Management Center
(AMC), in Washington, DC. VA will notify you if further
action is required on your part
FINDINGS OF FACT
1. The RO has satisfied its duty to notify and assist the
veteran, and has obtained all relevant evidence necessary for
the equitable disposition of the veteran's appeal.
2. Emphysema, and colon polyps are not shown during service.
3. Emphysema is not currently diagnosed.
4. The competent medical evidence does not relate emphysema
or colon polyps to the veteran's service.
CONCLUSION OF LAW
Emphysema and colon polyps were not incurred in or aggravated
by service. 38 U.S.C.A. §§ 1101, 1110, 1131, 5107 (West
2002); 38 C.F.R. §§ 3.303, 3.304 (2005).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Factual Background
The service medical records are negative for any notation
regarding emphysema or colon polyps. On his retirement
examination in May 1990, examination of the veteran's lungs
and chest was noted as normal and X-ray examination of the
chest was within normal limits. Examination of the anus and
rectum was normal. He denied any history of asthma,
shortness of breath or chronic cough as well as piles or
rectal disease.
In August 1990, the veteran submitted a claim for service
connection for several disabilities. The veteran was
provided a VA examination in October 1990, at which time
neither emphysema or any colon problem was listed as a
disability for which he was claiming service connection and
there was no emphysema or colon disorder noted on clinical
examination.
The veteran underwent the first of several colonoscopies in
January 1994, following a history of rectal bleeding.
Multiple polyps were removed in April 1994, none shown as
tumorous on pathology examination.
In a June 1996 statement, the veteran claimed that he had
been told that he had emphysema on VA examination in October
1990, and he reported blood in his stool to a doctor in 1992.
In a July 1996 statement, the veteran explained that these
conditions had been masked by medication given by the
military and he was unable to remember being told about the
emphysema during his outprocessing from the military.
During a September 1996 hearing, the veteran testified that
he had been told by the examiner during his separation
examination that he had some slight evidence or a slight
indication of emphysema, and that this was probably related
to exposure to diesel fuel since he had had stopped smoking
about seven years earlier. He added that this was the first
time he had ever been told that he might have emphysema. He
denied any diagnosis of emphysema, stating that this was his
"self-diagnosis." Finally, he testified that he noticed
blood in his stool prior to separation, but was too busy to
seek treatment.
In an April 2005 hearing, the veteran testified that he had
not been diagnosed with emphysema and was not currently being
treated for a lung condition, but had always had upper
respiratory infections. He added that he had never been told
that by a physician that his colon polyps were related to
service. The veteran indicated that all of his treatment
following service had been through VA facilities.
VA treatment records through 2005 do not show treatment for
either emphysema or colon polyps.
VCAA - The Duty to Inform and Assist
The Board notes that the Veterans Claims Assistance Act of
2000 (VCAA) applies in this case. 38 U.S.C.A. § 5100 et seq.
(West 2002). VCAA applies to any claim for benefits received
by VA on or after November 9, 2000, as well as to any claim
filed before that date but not decided by the VA as of that
date. The VCAA enhanced VA's duty to assist a claimant in
developing facts pertinent to his claim, and expanded VA's
duty to notify the claimant and his representative, if any,
concerning certain aspects of claim development. VA
promulgated regulations that implement these statutory
changes. See 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a)
(2005).
In this case, VA's duties have been fulfilled to the extent
possible or practicable. First, VA must notify the veteran
of evidence and information necessary to substantiate his
claims. 38 U.S.C.A. § 5103(a) (West 2002); 38 C.F.R.
§ 3.159(b) (2005). The veteran was notified of the
information and evidence necessary to substantiate his claims
for service connection in the April 1996 rating decision, a
June 1996 statement of the case (SOC), supplemental
statements of the case (SSOC) issued in September 1996,
August 2002 and September 2005, and a VCAA compliance letter
sent to the veteran in June 2005.
Second, VA must inform the veteran of which information and
evidence he is to provide to VA and which information and
evidence VA will attempt to obtain on his behalf. Quartuccio
v. Principi, 16 Vet. App. 183 (2002). June 2005 letter, as
well as the August 2002 SSOC, VA informed the veteran that VA
must make reasonable efforts to assist a veteran in obtaining
all evidence necessary to substantiate a claim, such as
medical records, employment records, or records from other
Federal agencies. VA further informed the veteran that as
long as he provided enough information about these records,
VA would assist in obtaining them, but noted that he had the
ultimate responsibility to make sure that these records were
received by VA. VA also told him that it would assist him by
providing a medical examination or obtaining a medical
opinion if it decided that such was necessary to make a
decision on his claim. Third, VA must request or tell the
claimant to provide any evidence in the claimant's possession
that pertains to the claim. 38 C.F.R. § 3.159(b)(1). This
was substantially accomplished in the June 2004 letter to the
veteran.
While full VCAA notice in this case was not provided to the
appellant prior to the initial adjudication by the Agency of
Original Jurisdiction (AOJ) denying the claim on appeal,
notice was provided by the AOJ as stated above, prior to
issuance of a supplemental statement of the case in September
2005, and prior to transfer and certification of the
appellant's case to the Board, and as described above the
content of the notice complied or substantially complied with
the requirements of 38 U.S.C. § 5103(a) and 38 C.F.R. §
3.159(b). The appellant has been provided with every
opportunity to submit evidence and argument in support of his
claims, and to respond to VA notices. Therefore, to decide
the appeal would not constitute prejudicial error, as the
notification requirements of the VCAA have been satisfied and
the veteran has been provided a meaningful opportunity to
participate in development of his claim. See Mayfield v.
Nicholson, 19 Vet. App. 103, 120-21 (2005).
Finally, VCAA requires that VA must make reasonable efforts
to assist the claimant in obtaining evidence necessary to
substantiate the claim for the benefits sought, unless no
reasonable possibility exists that such assistance would aid
in substantiating the claim. 38 U.S.C.A. § 5103A(a) (West
2002); 38 C.F.R. §§ 3.159(c), (d) (2005). The RO has
obtained the service medical records and they appear to be
complete. VA has obtained all relevant postservice private
records of the veteran's treatment consisting exclusively of
VA records of treatment. The veteran has been given the
opportunity to present argument and evidence in personal
hearings before hearing officers at the RO, which were
conducted in September 1996 and April 2005. He was also
provided the opportunity to present argument and evidence in
a hearing before a Veterans Law Judge, however he declined.
Although the VA did not provide an examination as to the
claims for service connection, the Board finds that the
medical evidence is sufficient to decide the claims. See
38 U.S.C.A. § 5103A(d). The Board concludes that all
reasonable efforts were made by the VA to obtain evidence
necessary to substantiate the appellant's claims.
Therefore, no further assistance to the appellant with the
development of evidence is required.
Legal Criteria and Analysis
Establishing service connection generally requires (1)
medical evidence of a current disability; (2) medical or, in
certain circumstances, lay evidence of inservice incurrence
or aggravation of a disease or injury; and (3) medical
evidence of a nexus between the claimed inservice disease or
injury and the present disability. See Hickson v. West, 12
Vet. App. 247, 253 (1999). 38 C.F.R. § 3.303; 38 U.S.C.A.
§§ 101(16), 1110.
There is no evidence of emphysema or colon polyps during
service or during the first postservice year. 38 U.S.C.A.
§§ 1101, 1110; 38 C.F.R. §§ 3.307, 3.309 (2005). Although
the veteran testified that he had blood in his stool during
service, there is no notation in the service medical records
of blood in the stool, and he denied any history of rectal
disease on [email protected]. Examination of the
anus and rectum were normal. With regard to the claim for
emphysema, he also denied any shortness of breath or chronic
cough. While he testified that he had been told during his
separation examination that he had some slight evidence of
emphysema, this was not noted on the examination with his
lungs and chest noted as normal by the examiner.
Significantly, on VA examination shortly after service, the
veteran did not claim either emphysema or any colon disorder,
and neither was noted on examination of the veteran, which
included an examination of the veterans respiratory and
digestive systems.
The earliest evidence of colon polyps is from the January
1994 colonoscopy, more than three years following service and
there is no medical evidence linking this to service, and the
veteran specifically indicated during his April 2005 hearing
that he had never been told by a doctor that his colon polyps
were related to service.
As for his claim for emphysema, the veteran has never been
diagnosed with emphysema, a fact he admitted to in his
personal hearing where he testified that his emphysema was
"self-diagnosed." Without evidence of a current
disability, there is nothing to service connect. The
existence of a current disability is the cornerstone of a
claim for VA disability compensation. 38 U.S.C.A. § 1110,
1131 (West 2002); see Degmetich v. Brown, 104 F. 3d 1328
(1997) (holding that Secretary's and Court's interpretation
of sections 1110 and 1131 of the statute as requiring the
existence of a present disability for VA compensation
purposes cannot be considered arbitrary and therefore the
decision based on that interpretation must be affirmed); see
also Caluza v. Brown, 7 Vet. App. 498, 505 (1995); Brammer v.
Derwinski, 3 Vet. App. 223, 225 (1992); Rabideau v Derwinski,
2 Vet. App. 141, 143 (1992).
The Board has considered the veteran's statements regarding
the etiology and diagnosis of his disorders; however, this is
not competent evidence to show that his disorders are related
to service. Competent lay evidence is defined as any
evidence not requiring that the proponent have specialized
education, training or experience. Lay evidence is competent
if it is provided by a person who has knowledge of the facts
or circumstances and conveys matters that can be observed and
described by a layperson. 38 C.F.R § 3.159(a)(1) (2005).
Further, competent medical evidence is defined as evidence
provided by a person who is qualified through education,
training or experience to offer medical diagnoses, statements
or opinions. 38 C.F.R § 3.159(a)(2) (2005). See also
Espiritu v. Derwinski, 2 Vet. App. 492, 494-95 (1992). It is
not shown, or alleged that the veteran has the necessary
medical training or knowledge to comment on the etiology of
his medical disorders.
It is the Board's duty to determine the credibility and
weight of evidence. Wood v. Derwinski, 1 Vet. App. 190
(1991). In this case, the preponderance of the evidence is
against the claims for service connection for colon polyps
and emphysema. Here, the determinative issues involve
medical causation or a medical diagnosis, and consequently
competent medical evidence is required to support the claim.
Grottveit v. Brown, 5 Vet. App. 91, 93 (1993). Because there
is no approximate balance of positive and negative evidence,
the rule affording the veteran the benefit of the doubt does
not apply. 38 U.S.C.A. § 5107(b) (West 2002). See Dela Cruz
v. Principi, 15 Vet. App. 143 (2001). See also 38 C.F.R.
§ 3.102 (2005).
ORDER
Service connection for emphysema is denied.
Service connection for colon polyps is denied.
REMAND
The service medical records are negative for any notation
regarding hepatitis with the exception of a June 1968
notation of negative hepatitis on his dental records. On his
retirement examination in May 1990, the veteran denied any
history of jaundice or hepatitis, and blood work revealed
only elevated cholesterol.
In August 1990, the veteran submitted a claim for service
connection for several disabilities, including hepatitis
which was listed as a "[k]nown potential disability". The
veteran was provided a VA examination in October 1990.
Hepatitis was listed as one of the veteran's complaints,
although there was no diagnosis of hepatitis on examination.
In a June 1996 statement, the veteran claimed that he had
been diagnosed with hepatitis during a blood drive in 1976
through 1978. In September 1996, he stated that he had
reported his hepatitis during service in his dental records.
During a September 1996 hearing, the veteran testified that
his hepatitis was noted during a Red Cross blood drive
between 1976 and 1978, when he was told it was "dormant"
hepatitis and he could not give blood. He denied any
problems with his liver during service, but again stated that
he reported his hepatitis on a cover sheet prior to dental
treatment during service.
VA treatment records show that in April 1999, the veteran was
noted to have high liver enzymes on testing, but there was no
evidence of hepatitis. Laboratory testing in October showed
that he was positive for hepatitis B and negative for
hepatitis. In September 2001, the veteran was diagnosed with
non-alcoholic steatohepatitis (NASH). In October, following
laboratory testing, a flare-up of hepatitis B was noted after
a longstanding asymptomatic carrier state.
In a March 2003 VA outpatient treatment record, the veteran
was noted to have NASH with focal bridging fibrosis by liver
biopsy. He asked the examiner how long he had hepatitis B.
The examiner noted that it was not clear without laboratory
data in the remote past but judging by his liver biopsy, he
would assume around 30 years. This would place the onset
during the veteran's period of active service; however, the
Board is unable to determine from this statement if the
veteran's hepatitis began during service based on the
tentative nature of the statement. A medical opinion should
be obtained and the examiner requested to provide an opinion
on whether it is at least as likely as not that the veteran's
diagnosed hepatitis is related to service.
Accordingly, this case is REMANDED for the following action:
1. The veteran should be provided an
examination to determine whether his
hepatitis is related to service. The
examiner should review the claims file
and the medical evidence, and following
any necessary examination of the veteran
including diagnostic testing, provide an
opinion on whether it is at least as
likely as not that the veteran's
hepatitis began during his active
service. The examiner must indicate that
the claims file was reviewed in the
report of examination.
2. Thereafter, the RO should
readjudicate the issue of entitlement to
service connection for hepatitis. If the
benefits requested on appeal are not
granted to the appellant's satisfaction,
the RO should issue a supplemental
statement of the case (SSOC), which must
contain notice of all relevant action
taken on the claim, to include a summary
of all of the evidence added to the
record since the September 2005 SSOC. A
reasonable period of time for a response
should be afforded.
Thereafter, subject to current appellate procedure, the case
should be returned to the Board for further consideration, if
otherwise in order. No action is required of the veteran
until he is otherwise notified by the RO. By this action,
the Board intimates no opinion, legal or factual, as to any
ultimate disposition warranted in this case.
The appellant has the right to submit additional evidence and
argument on the matter or matters the Board has remanded to
the regional office. Kutscherousky v. West, 12 Vet. App. 369
(1999).
This claim must be afforded expeditious treatment by the RO.
The law requires that all claims that are remanded by the
Board of Veterans' Appeals or by the United States Court of
Appeals for Veterans Claims for additional development or
other appropriate action must be handled in an expeditious
manner. See The Veterans' Benefits Improvements Act of 1994,
Pub. L. No. 103-446, § 302, 108 Stat. 4645, 4658 (1994),
38 U.S.C.A. § 5101 (West 2002) (Historical and Statutory
Notes). In addition, VBA's Adjudication Procedure Manual,
M21-1, Part IV, directs the ROs to provide expeditious
handling of all cases that have been remanded by the Board
and the Court. See M21-1, Part IV, paras. 8.44-8.45 and
38.02-38.03.
____________________________________________
JEFF MARTIN
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
|
444 Pa. Super. 86 (1995)
663 A.2d 229
COMMONWEALTH of Pennsylvania
v.
Robert BYRD, Appellant (at 3592).
COMMONWEALTH of Pennsylvania
v.
Shawn BENDER, Appellant (at 3836).
Superior Court of Pennsylvania.
Submitted May 22, 1995.
Filed August 10, 1995.
*88 John W. Packel, Asst. Public Defender, Philadelphia, for appellants.
Kathy L. Echternach, Asst. Dist. Atty., Philadelphia, for Com., appellee.
Before BECK, KELLY and FORD ELLIOTT, JJ.
BECK, Judge.
In these consolidated appeals we determine whether, upon sentencing a defendant following revocation of probation, a trial court is limited to sentencing that defendant to a period of incarceration that is less than or equal to the previously imposed period of probation. We find that no such limitation exists. We therefore affirm.
Robert Byrd pled nolo contendere to possession of cocaine with intent to deliver,[1] possession of cocaine,[2] and conspiracy.[3] Byrd was granted a section 17 disposition pursuant to 35 P.S. § 780-117 and was sentenced to probation without verdict for a period of three years. Byrd subsequently violated the terms of his probation. Following a hearing his section 17 probation was revoked and he was sentenced to ten to twenty three months' incarceration to be followed by a two year period of probation. While in this second period of probation Byrd was arrested for various drug and firearm offenses and for otherwise violating the terms of his probation. After a hearing Byrd's second probation was revoked and he was sentenced to two to seven years' imprisonment.
Shawn Bender pled nolo contendere to one count of possession of cocaine with intent to deliver.[4] Bender was granted a section 17 disposition pursuant to 35 P.S. § 780-117 and was sentenced to probation without verdict for a period of two years. During his period of probation, Bender was arrested and convicted on unrelated drug charges. Following a hearing *89 Bender's section 17 probation was revoked and the trial court sentenced him to three to six years' imprisonment.
Both appellants now challenge the legality of their sentences, arguing that under this court's opinion in Commonwealth v. Anderson, 434 Pa.Super. 309, 643 A.2d 109 (1994), a sentencing court cannot impose a term of imprisonment greater than the term of probation that was revoked. As both appellants raise identical questions for our review, we have consolidated these appeals for disposition. Pa.R.App.P. 513.[5]
Upon revocation of probation a sentencing court possesses the same sentencing alternatives that it had at the time of initial sentencing. 42 Pa.C.S.A. § 9771(b); Commonwealth v. Pierce, 497 Pa. 437, 441 A.2d 1218 (1982); Anderson, 434 Pa.Super. at 317, 643 A.2d at 113; Commonwealth v. Miller, 358 Pa.Super. 219, 516 A.2d 1263 (1986), appeal denied, 515 Pa. 599, 528 A.2d 956 (1987). Additionally, "the setting of the term of probation is not a term of sentence, and may not act as a limitation on the court to impose a sentence for a term of years greater than the probationary period, not in excess of the maximum penalty fixed by law for the particular offense." Commonwealth v. White, 264 Pa.Super. 495, 400 A.2d 194 (1979) (en banc) (quoting Commonwealth v. Cole, 222 Pa.Super. 229, 294 A.2d 824 (1972)); see also Commonwealth v. Fleeger, 292 Pa.Super. 310, 437 A.2d 60 (1981) (violation of probation may result in more severe sentence).
The question is whether Anderson changed the law and limited the trial court's power to sentence after revocation of probation. We find that in the absence of circumstances unique to Anderson, no such limitation was imposed on the sentencing judge. In Anderson, the defendant pled guilty to two counts of burglary and was sentenced to a period of *90 incarceration to be followed by a five year period of probation. Two months later, the defendant entered a negotiated guilty plea to one count of theft by unlawful taking or disposition, and one count of receiving stolen property. Pursuant to the negotiated plea agreement, the court sentenced the defendant to five years' probation to run concurrently with the defendant's sentence for the burglary convictions. The defendant subsequently violated the terms of her probation and, following a hearing, the trial court revoked the probation and imposed a sentence of two to five years' incarceration for the burglary convictions and two to four years' incarceration for the theft convictions. Contrary to the express terms of the negotiated plea agreement, the sentencing court ordered that the sentences run consecutively rather than concurrently, thereby substantially increasing the defendant's term of incarceration.
A panel of this court held that where a trial court accepts and enforces a negotiated plea bargain in which the parties agree that the sentences shall run concurrently, the court, upon resentencing following probation revocation, may not alter the terms of the agreement by sentencing the defendant to consecutive rather than concurrent prison sentences. This is so because "by accepting the plea agreement, which included a negotiated sentence, the trial court, in effect, circumscribed its sentencing alternatives, the parameters of which were described in the plea agreement." Anderson, 434 Pa.Super. at 316, 643 [email protected]. Therefore, because the sentencing court limited the sentencing alternatives available to it at the time of initial sentencing, it was bound by the same restrictions upon resentencing following revocation of probation.
The holding in Anderson is not applicable to the instant case. Neither appellant entered his plea pursuant to a negotiated plea agreement, nor was the sentencing court's discretion otherwise limited. Neither appellant suggests that the sentences at issue would have been unavailable to the court at the initial sentencing, and the sentences in fact fall *91 well within the statutory limitations for the crimes charged.[6] The sentencing court was fully within its authority in imposing the judgments of sentence at issue in these cases and we reject an interpretation of Anderson that would hold otherwise.
Judgments of sentence affirmed.
NOTES
[1] 35 P.S. § 780-113(a)(30).
[2] 35 P.S. § 780-113(a)(16).
[3] 18 Pa.C.S.A. § 903.
[4] 35 P.S. § 780-113(a)(30).
[5] Our scope of review in an appeal from the judgment of sentence entered following a probation revocation is limited to determining the validity of the revocation proceedings and the legality of the final judgment of sentence. Commonwealth v. Gilmore, 465 Pa. 202, 348 A.2d 425 (1975); Anderson, 434 Pa.Super. at 312, 643 [email protected]. In the instant cases, neither appellant takes issue with the revocation proceedings. They challenge only the legality of their sentences based solely on this court's opinion in Anderson, supra.
[6] Possession of cocaine with intent to deliver carries a statutory maximum penalty of 10 years' imprisonment and a fine of $100,000. 35 P.S. § 780-113(a)(30), (f)(1.1).
|
This action was instituted by the plaintiff to cancel an insurance policy in the sum of *Page 486
three thousand dollars, issued by it on the life of defendant Wesley Campbell, with Muriel E. Campbell, his wife, named as beneficiary. The policy contained a provision for the monthly payment to the insured of the sum of ten dollars per one thousand dollars of its face amount, in case of permanent disability. By their cross-complaint, the defendants sought to recover disability benefits alleged to have accrued under the terms of the policy, and further, to compel a waiver of all future premium payments thereon. The cause came on for trial before the court, sitting with a jury, and resulted in a verdict for the defendants in the sum of $480, being the total of sixteen months' disability benefits. On motion of plaintiff, the court granted it a judgment notwithstanding the verdict of the jury in favor of defendants, and decreed that the policy be cancelled. The defendants have appealed from the judgment and decree.
In its judgment, the court found, as a matter of law, "that the written misrepresentations made by the said Wesley Campbell in his application for insurance were made with an intent to deceive" and further found that the motion for judgment notwithstanding the verdict was well taken. The question involved in this appeal is the correctness or incorrectness of the action of the court in entering its judgment and decree based upon the findings therein contained.
On September 29, 1929, Wesley Campbell, who will hereinafter be referred to as though he were the sole appellant, applied to, and subsequently obtained from, respondent a policy, in all respects similar to the one here in question, except that its face amount was in the sum of two thousand dollars. That policy contained the usual incontestability clause, and more than one year having elapsed since its issuance, the respondent could not, and did not, take any action with reference thereto, *Page 487
and, as a matter of fact, full disability benefits are now being paid thereunder.
On January 28, 1930, appellant applied for the policy here in question, making written application therefor. The application contained, among other things, the following preamble:
"ALL QUESTIONS TO BE ANSWERED BY THE PERSON TO BE INSURED.
"This application is made to the Mutual Life Insurance Company of New York herein called the Company. All the following statements and answers and all those that the insured makes to the Company's Medical Examiner, in continuation of this application, are true, and are offered to the Company as an inducement to issue the proposed policy. . . ."
and also the following questions and answers:
"(16) What illness, diseases, injuries and surgical operations have you had since childhood? None.
"(17) State every physician or practitioner who has prescribed for or treated you, or whom you have consulted in the past five years for any ailment, serious or not serious. None.
"(18) Have you stated in answer to question 16 all illnesses, diseases, injuries and surgical operations which you have had since childhood? Yes.
"(19) Have you stated in answer to question 17 every physician and practitioner consulted during the past five years and dates of consultation? Yes.
"(20) (a) Are you in good health? Yes. . . .
"(25) (a) Is there any impairment of vision in the right eye? No.
"(b) Or in the left eye? No. . . .
"I certify that each and all of the foregoing statements and answers were read by me and are fully and correctly recorded by the Medical Examiner. (Signed) Wesley Campbell."
A copy of the application was attached to the policy when delivered to appellant.
The company's solicitor who sold and delivered both of the policies to the appellant was a cousin of Mrs. *Page 488
Campbell. At the time that the application for the first policy was made, and at various times before the one for the second was made, discussions were had between the solicitor and the appellant relative to increasing the amount of the insurance; appellant's finances, however, stood in the way of any increase prior to February 3, 1930. The expected arrival of a baby in the family, however, ultimately furnished the incentive to the appellant to apply for the second policy.
Appellant's testimony disclosed the following facts: In 1918, he joined the United States army, and was in the service for a period of four years and ten days. In 1924, prior to his marriage, he became afflicted with gonorrhea, for which he was treated over a period of about two months, the treatment resulting in a full recovery. After his marriage, he was employed as a steel-worker for a while, then worked for a powder company, and finally became a watchman, or detective, for the Great Northern Railway. In the meantime, that is, in 1929, the first policy had been applied for and obtained.
In January, 1930, appellant was having trouble with his eyes, and on January 28 of that year consulted Dr. McCoy, an eye specialist in Seattle. An examination disclosed that his eyes were in bad shape. Dr. McCoy asked him if he had ever had syphilis, but, according to the appellant, he did not then know what syphilis was, and had never heard of it before. Dr. McCoy then sent him to the Swedish Hospital, where a Wasserman's spinal fluid test was made upon him. When the report on the test was made to Dr. McCoy the next morning, the doctor told the appellant that he had very serious trouble with his eyes, and that he was going blind and would not see any more. The doctor then gave the appellant a sealed envelope containing the *Page 489
Wasserman report, and directed him to Dr. Whitty, who was a specialist in urology.
Five days later, but before going to see Dr. Whitty, appellant called at the insurance solicitor's office and, after discussing the subject of increasing his insurance, was taken over to the company's medical examiner, where an examination was made and the application containing the questions and answers outlined above was signed. The company's doctor did not make any test for syphilis or gonorrhea, nor did he examine the appellant's eyes. In this connection, it may be said that there was nothing about appellant's physical appearance that indicated or suggested that he had any eye trouble, or was suffering from any effects of either of the above diseases.
Following the examination by the company's doctor, appellant went to see Dr. Whitty the same afternoon, tendering to him the sealed envelope which Dr. McCoy had given him several days before. Dr. Whitty examined the appellant, but did not then in so many words tell him that he had syphilis. Appellant's testimony, however, in that respect is suggestive:
"Q. Dr. Whitty told you about some serious trouble, did he not? A. Yes. Q. He told you you had syphilis, did he not? A. No. He thought McCoy had told me. Q. He said he thought McCoy had told you? A. Yes."
The appellant testified that he took a course of treatment from Dr. Whitty lasting from February 3 until some time in July. He further testified that he did not know that he had syphilis until he began to take this treatment.
Appellant's entire evidence to rebut any inference of intent to deceive is contained in two questions and answers: *Page 490
"Q. Mr. Campbell, I want to ask you if, when you signed this application for the $3,000 policy that is involved in this case, whether you intended to deceive the company at the time you signed it? A. No, sir. Q. Did you say `No, sir?' A. No, sir, I didn't intend that."
From February 3, 1930, appellant's trouble with his eyes progressed very rapidly, and by June of that year he had become totally blind. It was for this disability that he seeks recovery on his cross-complaint, under the second policy.
Respondent's evidence was to the effect that appellant knew that he had had syphilis in 1924, and that he had taken a course of treatment at the time for that disease. But since the motion for judgment notwithstanding the verdict must be tested by the evidence most favorable to the appellant, we do not take into consideration the adverse testimony. Nor do we even discount appellant's testimony by the equivocal manner in which, according to the record, it appears to have been given.
[1] If, in the exercise of an overweening credulity, we accept appellant's statement that he never knew that he had the disease of syphilis until he started his course of treatment under Dr. Whitty, which was on the very day that he signed the application, and if we take him at his word when he says that he did not know what syphilis was and had never heard of it at that time, still the uncontradicted fact stands admitted by him that he knew; before he signed the application, that his vision was then seriously impaired, and that he was then told by an eye specialist that he was going blind.
It profits him nothing to say that he did not by his representations intend to deceive. A statement that is *Page 491
obviously factitious cannot be accepted as being true on its face.
"We have gone far in maintaining, as a question of fact, the intent accompanying false and fraudulent representations, and have allowed to be submitted to the jury for its determination the question of intent where there has been very slight proof that the applicant for insurance might have had no idea of procuring the policy by misrepresentations, but the rule should not be so far extended as to include a case such as this and allow insurance to be enforced which was not procurable had the truth been told, where it was issued relying upon fraudulent statements and the proof of honest intent consists merely in the applicant's bare affirmation that his intent was honest. The proof of the making of false and fraudulent representations raises a presumption of dishonest motive, which must be overcome by evidence establishing an honest motive." Day v. St. Paul Fire Marine Ins. Co., 111 Wash. 49, 189 P. 95.
See, also, Quinn v. Mutual Life Ins. Co., 91 Wash. 543,158 P. 82; Hayes v. Automobile Ins. Exchange, 126 Wash. 487,218 P. 252; reargued En Banc, 129 Wash. 202, 224 P. 594;Walker v. Metropolitan Life Ins. Co., 132 Wash. 615,232 P. 694.
That the respondent would not have issued the policy had it known that appellant's representations in the application were false, is amply established by the evidence. The Wasserman test made on the appellant showed a four-plus spinal fluid, which is the strongest reaction for syphilis. Appellant's condition is an extremely regrettable and unfortunate one, but that alone does not create a liability under the policy. We have here the case of a conscious and deliberate statement of material facts known to be untrue by the party making them, and made for the purpose of inducing another to enter into a contract involving a liability that was certain to accrue thereunder. We believe *Page 492
that the lower court was right in finding, as a matter of law, that the misrepresentation was made with intent to deceive.
[2] There is another reason underlying the judgment that is equally fatal to appellant's contention. The application contained the following provision:
"The proposed policy shall not take effect unless and until delivered to and received by the Insured, the Beneficiary or by the person who herein agrees to pay the premiums, during the Insured's continuance in good health and unless and until the first premium shall have been paid during the Insured's continuance in good health; except in case a conditional receipt shall have been issued as hereinafter provided."
Under the evidence in this case, considered most favorably for the appellant, the policy of insurance never became effective. When the policy was delivered to appellant on February 11, 1930, his physical condition had become manifest, even to the appellant himself. Not only did he know that his vision was impaired to such an extent that he was going blind, but he himself testified that he knew that he had syphilis when he began the course of treatment under Dr. Whitty. The treatments began before the policy was delivered. That the disease was the cause of the failing eyesight, there can be no doubt. Under the state of the evidence, there was nothing on which the verdict of the jury could be legally predicated. Logan v. New York Life Ins. Co.,107 Wash. 253, 181 P. 906; Guarascio v. Prudential Ins. Co. ofAmerica, 110 Wash. 1, 187 P. 405.
[3] The appellant contends that this latter question is not properly before us, because the judgment of the trial court does not specifically recite that the appellant was ill at the time the policy was delivered, nor that the policy, for that reason, did not become effective. Counsel's proposition is that the judgment *Page 493
recited only one ground or reason for the court's decision, and that, since none other was specified, none other can be considered on this appeal. In advancing this proposition, counsel reasons by analogy from the rule pertaining to orders granting or denying new trial. With reference to such orders, the rule is now definitely settled in this state that, unless it appears on the face of the order that it was intended to be limited to a specific ground, it will not be considered that the ground stated is a limiting or exclusive one. In Morehouse v. Everett,136 Wash. 112, 238 P. 897, we said on page 115:
"Any such limitation and exclusiveness of the court's ground for the granting or denial of a motion for new trial must appear in the formal final order disposing of the motion, before this court can so view the trial court's disposition of the motion." (Italics ours.)
The rule was approved in Bone v. Yellow Cab Co., 137 Wash. 472,242 P. 1093.
In the judgment and decree, the court not only found that there was an intention to deceive, but also that the motion for judgment notwithstanding the verdict was well taken. At the conclusion of the evidence, respondent had moved for a directed verdict on two grounds: (1) that an intention to deceive had been shown; and (2) that the policy had never become effective. The court overruled the motion, but at the same time stated that it would be considered on a motion for judgment notwithstanding the verdict. The latter motion was subsequently sustained, the judgment reciting that it had been well taken. The formal judgment, therefore, does not indicate that the basis of the court's ruling was limited to a sole and exclusive ground; rather does it indicate a dual reason.
The judgment is affirmed.
TOLMAN, C.J., MAIN, and BEALS, JJ., concur. *Page 494 |
936 F.2d 568Unpublished Disposition
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.UNITED STATES of America, Plaintiff-Appellee,v.Tina JEFFERSON, Defendant-Appellant.
No. 90-5696.
United States Court of Appeals, Fourth Circuit.
Submitted March 15, 1991.Decided July 2, 1991.
Appeal from the United States District Court for the Northern District of West Virginia, at Elkins. Robert R. Merhige, Jr., Senior District Judge. (CR-89-84)
Brent E. Bevridge, Morgantown, W.Va., for appellant.
William A. Kolibash, United States Attorney, Robert H. McWilliams, Assistant United States Attorney, Wheeling, W.Va., for appellee.
N.D.W.Va.
AFFIRMED.
Before SPROUSE and WILKINSON, Circuit Judges, and CHAPMAN, Senior Circuit Judge.
OPINION
PER CURIAM:
1
Tina Jefferson appeals her conviction of distribution of cocaine within 1,000 feet of a university (21 U.S.C. Secs. 841 and 845a(a)) and the sentence she received. We affirm.
2
Using money supplied by Leonard Lenhart, a friend who was acting as a confidential informant, Jefferson bought cocaine from another friend who worked as a nurse at the West Virginia University Hospital and gave it to the confidential informant in the hospital parking lot. Their recorded conversation disclosed that Jefferson brought some cocaine out of the hospital and told Lenhart that more was available if he wanted it. When he said he did, she went in again and made another buy. She also told him that she could get more for him by Saturday and commented that she thought the price was a little high.
3
In her trial testimony, Jefferson admitted her action, but claimed that her only motive was to introduce Lenhart, who had asked her several times if she could get him some cocaine, to her dealer friend, so they could deal directly with each other. She requested a jury instruction on entrapment, but the district court refused to give it. On appeal, she contends that the judge erred in refusing the instruction.
4
A defendant is entitled to an instruction on any defense for which there is sufficient evidence to find in his favor. United States v. Mathews, 485 U.S. 58, 63 (1987). The principal element in the defense of entrapment is predisposition, which focuses on whether the defendant was an unwary innocent or an unwary criminal. Id. The government or its agents may provide an opportunity for a predisposed person to commit a crime, but entrapment occurs where the crime is actually the government's creation. Sherman v. United States, 356 U.S. 369, 372 (1958). Before the issue of entrapment can be submitted to the jury, the defendant must show evidence of "overreaching inducive conduct on the part of the government." United States v. DeVore, 423 F.2d 1069, 1071 (4th Cir.1970). Merely soliciting the participation of the defendant, without more, is not inducement. United States v. Velasquez, 802 F.2d 104 (4th Cir.1986).
5
Jefferson's admission that she had previously accepted marijuana from Lenhart and used it with him, and that she had purchased both marijuana and cocaine from her nurse friend for her own use in the past provided evidence of predisposition to commit this crime, even though it was her first distribution. In spite of her insistence that she wanted only to introduce Lenhart to her dealer friend, she never told Lenhart that she did not want to be involved in the transaction, she did not give Lenhart the friend's phone number, and Lenhart never met the friend. As the district court noted, after making the first buy she volunteered to Lenhart that more was available if he wanted it, and went back a second time for more cocaine.
6
Although Jefferson argues that she felt coerced by her "longstanding personal relationship" with Lenhart, the evidence revealed only a casual, if longstanding, acquaintance. She did not return the romantic interest Lenhart apparently took in her.
7
Because there was no evidence of overreaching by the government agent and there was evidence of Jefferson's predisposition to commit the offense, we find no error in the district court's decision not to give the entrapment instruction.
8
Jefferson also claims that she was entitled to a reduction in offense level for acceptance of responsibility under U.S.S.G. Sec. 3E1.1. The district court, however, found that although she had admitted her actions, she had not accepted responsibility for her actions. In order for Sec. 3E1.1 to apply, a defendant must accept responsibility for all his criminal conduct. United States v. Gordon, 895 F.2d 932, 936-37 (4th Cir.), cert. denied, 59 U.S.L.W. 3247 (U.S.1990). This is a factual question reviewed under the clearly erroneous standard. United States v. White, 875 F.2d 427, 432 (4th Cir.1989). When given the opportunity to speak on her own behalf at the sentencing hearing, Jefferson insisted that she had not dealt drugs and had not intended to be involved with drugs, even though her friends were. On these facts, we find that the denial of the reduction was not clearly erroneous.
9
Finally, Jefferson argues that the district court improperly refused to depart downward on the ground of duress under U.S.S.G. Sec. 5K2.12. A decision not to depart is not reviewable on appeal. United States v. Bayerle, 898 F.2d 28 (4th Cir.), cert. denied, 59 U.S.L.W. 3244 (U.S.1990). Therefore, this issue is not properly raised.
10
The conviction and sentence are therefore affirmed. We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the Court and argument would not aid the decisional process.
11
AFFIRMED.
|
666 N.W.2d 231 (2003)
PEOPLE of the State of Michigan, Plaintiff-Appellant,
v.
Gerald Lee BABCOCK, Defendant-Appellee.
Docket No. 121310, Calendar No. 6.
Supreme Court of Michigan.
Argued January 14, 2003.
Decided July 31, 2003.
*234 Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, John G. McBain, Prosecuting Attorney, and Jerrold Schrotenboer, Chief Appellate Attorney, Jackson, MI, for the people.
Bruce A. Barton, Jackson, MI, for the defendant-appellee.
Jacqueline J. McCann, Detroit, MI, for the Criminal Defense Attorneys of Michigan. *232
*233 Opinion
MARKMAN, J.
We granted leave to appeal in this case to consider whether the trial court articulated a substantial and compelling reason, as required under M.C.L. § 769.34(3), to justify its downward departure from the statutory sentencing guidelines. The Court of Appeals concluded that the trial court did not abuse its discretion in departing from the guidelines and, thus, affirmed defendant's sentence. The Court of Appeals concluded that some of the trial court's reasons for departing from the statutory sentencing guidelines were not objective and verifiable and, therefore, not substantial and compelling. Because the Court of Appeals did not determine whether the trial court would have departed, and would have departed to the same degree, had it not relied on these improper factors, we reverse the judgment of the Court of Appeals and remand this case to the Court of Appeals for further consideration pursuant to this opinion.
I. FACTS AND PROCEDURAL HISTORY
Defendant pleaded guilty to two counts of second-degree criminal sexual conduct and, in exchange, the prosecutor dismissed the single original charge of first-degree criminal sexual conduct. Although the statutory sentencing guidelines called for a minimum range of thirty-six to seventyone months, the trial court sentenced defendant to three years' probation and one year in jail; however, all but sixty days of defendant's jail term were suspended. The trial court's reasons for departing from the guidelines consisted of the following: (1) defendant had no prior criminal record, (2) the crime involved a family member, (3) a three-year minimum was too "harsh," and (4) treatment outside a prison environment was more likely to rehabilitate defendant. In a published decision (Babcock I,) the Court of Appeals vacated defendant's sentence, having concluded that the trial court's reasons for the departure were not substantial and compelling.[1]
*235 On remand, the trial court again sentenced defendant to probation and a suspended jail term. The trial court articulated additional reasons for the downward departure, including the following: (1) the probation officer recommended probation, rather than a prison term; (2) defendant's trial counsel, in an affidavit, recommended against a prison term; (3) a great portion of the victim's emotional harm was caused by defendant's uncle who abused her and from separation from defendant's grandmother; (4) letters from defendant's brother's special-education teacher and attorney indicated that defendant's brother is severely disabled because of cerebral palsy and mental retardation and that defendant is his brother's primary caregiver; (5) a letter from defendant's physician indicated that defendant suffers from herniated discs; and, finally, (6) the fact that defendant's uncle, who has a normal intelligence level, played a much greater role in harming the victim than did defendant, who has a "borderline-to-normal" intelligence level. After remand, in a published decision (Babcock II), the Court of Appeals affirmed the sentence, having concluded that, although some factors cited by the trial court were not objective and verifiable, the trial court did not abuse its discretion in departing from the guidelines.[2] We granted the prosecutor's application for leave to appeal.[3]
II. STANDARD OF REVIEW
This case presents an issue of statutory interpretation, i.e., the interpretation of the statutory sentencing guidelines, M.C.L. § 769.34, which we review de novo. Veenstra v. Washtenaw Country Club, 466 Mich. 155, 159, 645 N.W.2d 643 (2002).
III. ANALYSIS
A. HISTORY OF SENTENCING GUIDELINES
In 1983, this Court concluded that an appellate court has the authority to review a trial court's exercise of discretion in sentencing. People v. Coles, 417 Mich. 523, 550, 339 N.W.2d 440 (1983). At the time Coles was decided, there were no sentencing guidelines; instead, there were merely statutory minimums and maximums for certain offenses, and a trial court could sentence a convicted person to any period within this statutory range.[4] In Coles, this Court concluded that the appellate court could review a trial court's selection of a sentence within the statutory minimum and maximum; however, the appellate court could "afford relief to the defendant only if the appellate court finds that the trial court, in imposing the sentence, abused its discretion to the extent that it shocks the conscience of the appellate court." Id.
In 1983, this Court crafted judicial sentencing guidelines and promulgated these guidelines by administrative order.[5] As this Court explained in People v. Hegwood, 465 Mich. 432, 438, 636 N.W.2d 127 (2001):
This Court's sentencing guidelines were "mandatory" only in the sense that the sentencing court was obliged to follow the procedure of "scoring" a case on the basis of the circumstances of the *236 offense and the offender, and articulate the basis for any departure from the recommended sentence range yielded by this scoring. However, because the recommended ranges found in the judicial guidelines were not the product of legislative action, a sentencing judge was not necessarily obliged to impose a sentence within those ranges.
In 1990, this Court overruled the Coles "shocks the conscience" test and adopted in its place the "principle of proportionality" test, "which requires sentences imposed by the trial court to be proportionate to the seriousness of the circumstances surrounding the offense and the offender." People v. Milbourn, 435 Mich. 630, 636, 461 N.W.2d 1 (1990). More specifically, the Court stated that "the Legislature, in setting a range of allowable punishments for a single felony, intended persons whose conduct is more harmful and who have more serious prior criminal records to receive greater punishment than those whose criminal behavior and prior record are less threatening to society." Id. at 651, 461 N.W.2d 1.
In 1998, the Legislature enacted statutory sentencing guidelines, M.C.L. § 777.1 et seq.[6] As this Court in Hegwood, supra at 439, 636 N.W.2d 127, explained:
Because the new guidelines are the product of legislative enactment, a judge's discretion to depart from the range stated in the legislative guidelines is limited to those circumstances in which such a departure is allowed by the Legislature.
Under the statutory sentencing guidelines, a departure is only allowed by the Legislature if there is a "substantial and compelling reason" for doing so.[7] MCL 769.34(3).[8] Accordingly, since the enactment of the statutory sentencing guidelines, the role of the trial court has necessarily been altered. Before the enactment of these guidelines, the trial court was required to choose a sentence within the statutory minimum and maximum that was "proportionate to the seriousness of the circumstances surrounding the offense and the offender." Milbourn, supra at 636, 461 N.W.2d 1. Following the enactment of these guidelines, the trial court is required to choose a sentence within the guidelines range, unless there is a "substantial and compelling" reason for departing from this range.[9] Consequently, and as discussed *237 more fully below, the role of the Court of Appeals has also changed from reviewing the trial court's sentencing decision for "proportionality" to reviewing the trial court's sentencing decision to determine, first, whether it is within the appropriate guidelines range and, second, if it is not, whether the trial court has articulated a "substantial and compelling" reason for departing from such range.[10]
B. "SUBSTANTIAL AND COMPELLING REASON"
The statutory sentencing guidelines, provide in pertinent part:
A court may depart from the appropriate sentence range established under the sentencing guidelines set forth in [MCL 777.1 et seq.] if the court has a substantial and compelling reason for that departure and states on the record the reasons for departure. [MCL 769.34(3).]
In People v. Fields, 448 Mich. 58, 528 N.W.2d 176 (1995), this Court defined "substantial and compelling reasons" in the context of departures from mandatory minimum sentences in controlled-substance cases.[11] This Court stated that "only those factors that are objective and verifiable may be used to judge whether substantial and compelling reasons exist...." Id. at 62, 528 N.W.2d 176. We further stated that "the reasons justifying departure should `keenly' or `irresistibly' grab our attention, and we should recognize them as being `of considerable worth' in deciding the length of a sentence." Id. at 67, 528 N.W.2d 176. Lastly, we stated, "the Legislature intended `substantial and compelling reasons' to exist only in exceptional cases." Id. at 68, 528 N.W.2d 176.
"A legal term of art is a technical word or phrase that has acquired a particular and appropriate meaning in the law. It is, in a statute, to be construed and understood according to such meaning." People v. Law, 459 Mich. 419, 425 n. 8, 591 N.W.2d 20 (1999), citing M.C.L. § 8.3a, which provides, "technical words and phrases, and such as may have acquired a peculiar and appropriate meaning in the law, shall be construed and understood according to such peculiar and appropriate meaning." The phrase "substantial and compelling reason" has, in our judgment, acquired a peculiar and appropriate meaning in the law and, thus, it must be construed according to such meaning. That is, a "substantial and compelling reason" must be construed to mean an "objective and verifiable" reason that "`keenly' or `irresistibly' grabs our attention"; is "of `considerable worth' in deciding the length of a sentence"; and "exists only in exceptional cases." Fields, supra at 62, 67-68, 528 N.W.2d 176.[12]
*238 C. "STATES ON THE RECORD"
The statutory sentencing guidelines, M.C.L. § 769.34(3), require the trial court to "state[ ] on the record the reasons for departure." Therefore, it is not enough that there exists some potentially substantial and compelling reason to depart from the guidelines range. Rather, this reason must be articulated by the trial court on the record. Accordingly, on review of the trial court's sentencing decision, the Court of Appeals cannot affirm a sentence on the basis that, even though the trial court did not articulate a substantial and compelling reason for departure, one exists in the judgment of the panel on appeal. Instead, in such a situation, the Court of Appeals must remand the case to the trial court for resentencing or rearticulation. The obligation is on the trial court to articulate a substantial and compelling reason for any departure. As discussed below, the obligation of the Court of Appeals is to review the trial court's determination that a substantial and compelling reason exists for departure.[13]
Further, the trial court must go beyond articulating a substantial and compelling reason for some departure. Rather, the trial court can depart from the guidelines range only "if the court has a substantial and compelling reason for that departure...." M.C.L. § 769.34(3) (emphasis added). As we explained in Hegwood, supra at 437 n. 10, 636 N.W.2d 127:
In light of such language, we do not believe that the Legislature intended, in every case in which a minimal upward or downward departure is justified by "substantial and compelling" circumstances, to allow unreviewable discretion to depart as far below or as far above the guideline range as the sentencing court chooses. Rather, the "substantial and compelling" circumstances articulated by the court must justify the particular departure in a case, i.e., "that departure." [Emphasis in original.]
Thus, the trial court must articulate on the record a substantial and compelling reason to justify the particular departure imposed.[14]
*239 Because the trial court must articulate on the record a substantial and compelling reason to justify the particular departure, if the trial court articulates multiple reasons, and the Court of Appeals determines that some of these reasons are substantial and compelling and some are not, the panel must determine the trial court's intentions. That is, it must determine whether the trial court would have departed and would have departed to the same degree on the basis of the substantial and compelling reasons alone.[15] If the Court of Appeals is unable to determine whether the trial court would have departed to the same degree on the basis of the substantial and compelling reasons, or determines that the trial court would not have departed to the same degree on the basis of the substantial and compelling reasons, the Court of Appeals must remand the case to the trial court for resentencing or rearticulation of its substantial and compelling reasons to justify its departure.[16] For instance, if the trial court departs from the guidelines range by twelve months and articulates reasons A, B, and C to justify this departure, and if the Court of Appeals determines that reasons A and B are not substantial and compelling reasons,[17] but that C is, the Court of Appeals must determine whether the trial court would have departed from the guidelines range by twelve months on the basis of reason C alone.
D. PROPORTIONALITY
If the trial court's sentence is within the appropriate guidelines range, the Court of Appeals must affirm the sentence unless the trial court erred in scoring the guidelines or relied on inaccurate information in determining the defendant's sentence. MCL 769.34(10).[18] However, if the sentence is not within the guidelines range, the Court of Appeals must determine whether the trial court articulated a substantial and compelling reason to justify its departure from that range. MCL *240 769.34(11).[19]
In determining whether a sufficient basis exists to justify a departure, the principle of proportionalitythat is, whether the sentence is proportionate to the seriousness of the defendant's conduct and to the defendant in light of his criminal recorddefines the standard against which the allegedly substantial and compelling reasons in support of departure are to be assessed.[20] The relevancy of proportionality is obvious. As in any civilized society, punishment should be made to fit the crime and the criminal. BMW of North America, Inc., v. Gore, 517 U.S. 559, 576 n. 24, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996)("The principle that punishment should fit the crime `is deeply rooted and frequently repeated....'") (citation omitted); Weems v. United States, 217 U.S. 349, 367, 30 S. Ct. 544, 54 L. Ed. 793 (1910)("It is a precept of justice that punishment for crime should be graduated and proportioned to the offense."); Thomas Jefferson, A Bill for Proportioning Crimes & Punishment in Virginia, 1779 ("[G]overnment would be defective in its principal purpose [were it not] a duty in the legislature to arrange in a proper scale the crimes which it may be necessary for them to repress, and to adjust thereto a corresponding gradation of punishments"); Beccaria, On Crimes and Punishments (1764)("Therefore, the means made use of by the legislature to prevent crimes should be more powerful in proportion as they are destructive of the public safety and happiness, and as the inducements to commit them are stronger. Therefore there ought to be a fixed proportion between crimes and punishments."); Note, Mandatory life sentence without parole found constitutionally permissible For cocaine possession-Harmelin v. Michigan, 67 Wash. L. R. 713, 714 (1992) ("The belief that the punishment should fit the crime is deeply rooted in Western civilization. The proportionality concept appears in fundamental social documents such as the Bible and the Magna Carta.") Accordingly, jaywalking is not punishable by life imprisonment, first-degree murder is not punishable by thirty days in jail, and a person convicted of robbery for the fourth time generally faces a more severe punishment than a person convicted of robbery for the first time. The premise of our system of criminal justice is that, everything else being equal, the more egregious the offense, and the more recidivist the criminal, the greater the punishment.
The Legislature has subscribed to this principle of proportionality in establishing mandatory sentences as well as minimum and maximum sentences for certain offenses. See Milbourn, supra at 635-636, 461 N.W.2d 1. It has also subscribed to this principle of proportionality in establishing the statutory sentencing guidelines. Under the guidelines, offense and prior record variables are scored to determine the appropriate sentence range. Offense variables take into account the severity of the criminal offense, while prior record variables take into account the offender's criminal history. Therefore, the appropriate sentence range is determined *241 by reference to the principle of proportionality; it is a function of the seriousness of the crime and of the defendant's criminal history.
Accordingly, in considering whether to depart from the guidelines, the trial court must ascertain whether taking into account an allegedly substantial and compelling reason would contribute to a more proportionate criminal sentence than is available within the guidelines range. In other words, if there are substantial and compelling reasons that lead the trial court to believe that a sentence within the guidelines range is not proportionate to the seriousness of the defendant's conduct and to the seriousness of his criminal history, the trial court should depart from the guidelines. Additionally, in departing from the guidelines range, the trial court must consider whether its sentence is proportionate to the seriousness of the defendant's conduct and his criminal history because, if it is not, the trial court's departure is necessarily not justified by a substantial and compelling reason.
E. STANDARD OF REVIEW OF SENTENCES OUTSIDE GUIDELINES
In Babcock I, supra at 75-76, the Court of Appeals, quoting Fields, supra at 77-78, 528 N.W.2d 176, concluded that
"the existence or nonexistence of a particular factor is a factual determination for the sentencing court to determine, and should therefore be reviewed by an appellate court for clear error. The determination that a particular factor is objective and verifiable should be reviewed by the appellate court as a matter of law. A trial court's determination that the objective and verifiable factors present in a particular case constitute substantial and compelling reasons to depart from the statutory minimum sentence shall be reviewed for abuse of discretion."
We agree.
In Babcock II, supra at 467 n. 3, 648 N.W.2d 221, the Court of Appeals concluded that, although it was bound by the above language, it "question[ed] the Babcock I holding regarding the abuse of discretion standard of review in light of the language in M.C.L. § 769.34(11), which appears to suggest that our review is de novo." MCL 769.34(11) provides:
If, upon a review of the record, the court of appeals finds the trial court did not have a substantial and compelling reason for departing from the appropriate sentence range, the court shall remand the matter to the sentencing judge or another trial court judge for resentencing under this chapter.
Defendant contends that the trial court's decision that there is a substantial and compelling reason to depart from the guidelines range should be reviewed for an abuse of discretion. On the other hand, the prosecutor contends that such a decision should be reviewed de novo. Although we agree with Babcock I's articulation of the applicable standards of reviewwhether a factor exists is reviewed for clear error, whether a factor is objective and verifiable is reviewed de novo, and whether a reason is substantial and compelling is reviewed for abuse of discretionwe take this opportunity to clarify the meaning of an abuse of discretion with regard to the Court of Appeals review of a trial court's decision that there is a substantial and compelling reason that justifies a sentencing departure.
In Babcock I, the Court of Appeals quoted the abuse of discretion test taken from Spalding v. Spalding, 355 Mich. 382, 384-385, 94 N.W.2d 810 (1959), *242 which is that an abuse of discretion occurs when the lower court's decision is "so palpably and grossly violative of fact and logic that it evidences not the exercise of will but perversity of will, not the exercise of judgment but defiance thereof, not the exercise of reason but rather of passion or bias."
The Spalding abuse of discretion standard is one that entitles the trial court the utmost level of deference. In our judgment, while the Legislature intended to accord deference to the trial court's departure from the sentencing-guidelines range, it did not intend this determination to be entitled to Spalding's extremely high level of deference.
MCL 769.34(11) clearly states that if "the court of appeals finds the trial court did not have a substantial and compelling reason for departing from the appropriate sentence range, the court shall remand the matter to the sentencing judge or another trial court judge for resentencing...." "Find" is defined as: "to discover or perceive after consideration...." Random House Webster's College Dictionary (1991). Therefore, if, after consideration, the Court of Appeals discovers or perceives that the trial court did not have a substantial and compelling reason to justify its departure, the Court must remand the case for resentencing. This statute clearly does not require the Court of Appeals, in accord with Spalding, to affirm "unless the result [is] so palpably and grossly violative of fact and logic that it evidences not the exercise of will but the perversity of will, not the exercise of judgment but defiance thereof, not the exercise of reason but rather of passion or bias."[21]Spalding, supra at 384-385, 94 N.W.2d 810.
That said, some degree of deference is nevertheless owed the trial court's finding, and thus a review de novo would be inappropriate. The structure and content of the sentencing guidelines, as well as the organization of the appellate system itself, plainly reveal the Legislature's recognition that the trial court is optimally situated to understand a criminal case and to craft an appropriate sentence for one convicted in such a case. For example, the trial court "may depart from the appropriate sentence range established under the sentencing guidelines ... if the court has a substantial and compelling reason for that departure...." M.C.L. § 769.34(3). Additionally, the trial court may even "base a departure on an offense characteristic or offender characteristic already taken into account in determining the appropriate sentence range" if "the court finds ... that the characteristic has been given inadequate or disproportionate weight." MCL 769.34(3)(b). Finally, the Court of *243 Appeals must affirm the trial court's sentence if it is within the appropriate guidelines range, unless the trial court made an error in scoring the sentencing guidelines or relied on inaccurate information in determining the sentence. MCL 769.34(10).
It is clear that the Legislature has imposed on the trial court the responsibility of making difficult decisions concerning criminal sentencing, largely on the basis of what has taken place in its direct observation. Review de novo is a form of review primarily reserved for questions of law, the determination of which is not hindered by the appellate court's distance and separation from the testimony and evidence [email protected]. The application of the statutory sentencing guidelines to the facts is
not a generally recurring, purely legal matter, such as interpreting a set of legal words, say, those of an individual guideline, in order to determine their basic intent. Nor is that question readily resolved by reference to general legal principles and standards alone. Rather, the question at issue grows out of, and is bounded by, case-specific detailed factual circumstances. [Buford v. United States, 532 U.S. 59, 65, 121 S. Ct. 1276, 149 L. Ed. 2d 197 (2001).]
Because of the trial court's familiarity with the facts and its experience in sentencing, the trial court is better situated than the appellate court to determine whether a departure is warranted in a particular case. Accordingly, review de novo, in which a panel of appellate judges could substitute its own judgment for that of the trial court, is surely not the appropriate standard by which to review the determination that a substantial and compelling reason exists to justify a departure from the guidelines range. Instead, the appellate court must accord this determination some degree of deference.
Therefore, the appropriate standard of review must be one that is more deferential than de novo, but less deferential than the Spalding abuse of discretion standard. At its core, an abuse of discretion standard acknowledges that there will be circumstances in which there will be no single correct outcome; rather, there will be more than one reasonable and principled outcome. See People v. Talley, 410 Mich. 378, 398, 301 N.W.2d 809 (1981) (LEVIN, J., concurring), quoting Langnes v. Green, 282 U.S. 531, 541, 51 S. Ct. 243, 75 L. Ed. 520 (1931)("`The term "discretion" denotes the absence of a hard and fast rule.'"). When the trial court selects one of these principled outcomes, the trial court has not abused its discretion and, thus, it is proper for the reviewing court to defer to the trial court's judgment. An abuse of discretion occurs, however, when the trial court chooses an outcome falling outside this principled range of outcomes. See Conoco, Inc., v. JM Huber Corp., 289 F.3d 819, 826 (C.A.Fed., 2002)("Under an abuse of discretion review, a range of reasonable determinations would survive review."); United States v. Penny, 60 F.3d 1257, 1265 (C.A.7, 1995)("a court does not abuse its discretion when its decision `is within the range of options from which one would expect a reasonable trial judge to select'") (citation omitted). We believe that this test more accurately describes the appropriate range of the trial court's discretion with regard to determining whether a substantial and compelling reason exists to justify its departure from the appropriate sentence range. Further, we believe that this test will contribute significantly to more consistent sentencing, both by enabling the Court of Appeals to more effectively constrain departures from the appropriate range of discretion by trial courts and by imposing a more consistent *244 standard of review upon the Court of Appeals itself.
Accordingly, the Court of Appeals must determine, upon a review of the record, whether the trial court had a substantial and compelling reason to depart from the guidelines, recognizing that the trial court was in the better position to make such a determination and giving this determination appropriate deference. The deference that is due is an acknowledgment of the trial court's extensive knowledge of the facts and that court's direct familiarity with the circumstances of the offender. The Court of Appeals is to conduct the thorough review required by M.C.L. § 769.34(11), honoring the prohibition against departures not grounded in a substantial and compelling reason. MCL 769.34(3). In doing so, however, the Court must proceed with a caution grounded in the inherent limitations of the appellate perspective.
IV. APPLICATION
In this case, the Court of Appeals concluded that some of the reasons articulated by the trial court were not objective and verifiable. As explained above, if a reason is not objective and verifiable, it cannot constitute a substantial and compelling reason.[22] As also explained above, if the trial court articulates multiple reasons, and the Court of Appeals, as in this case, determines that some of these reasons are substantial and compelling and some are not, and the Court of Appeals is unable to determine whether the trial court would have departed to the same degree on the basis of the substantial and compelling reasons, the Court must remand the case to the trial court for resentencing or rearticulation. Because the Court of Appeals in this case did not determine whether the trial court would have departed, and would have departed to the same degree, absent consideration of the reasons that the Court of Appeals found to be not objective and verifiable, we reverse its judgment and remand this case to the Court of Appeals for further consideration.
V. CONCLUSION
For the above reasons, we reverse the judgment of the Court of Appeals and remand this case to the Court of Appeals for further consideration pursuant to this opinion.
MARILYN J. KELLY and TAYLOR, JJ., concur.
CORRIGAN, C.J.
I concur in all except parts IIIC and IV.
MICHAEL F. CAVANAGH, J.
I concur in all except part IIIB.
APPENDIX
In order to assist the bench and bar, the following is a summary of the responsibilities of the trial court and Court of Appeals under the statutory sentencing guidelines:
1. A trial court is required to choose a minimum sentence within the guidelines range, unless there is a substantial and compelling reason for departing from this range. MCL 769.34(2), (3).
2. If a trial court's sentence is within the guidelines range, the Court of Appeals must affirm the sentence unless the trial court erred in scoring the guidelines or relied on inaccurate information in determining the defendant's sentence. MCL 769.34(10).
*245 3. A substantial and compelling reason must be "objective and verifiable"; must "`keenly' or `irresistibly' grab our attention"; and must be "of `considerable worth' in deciding the length of a sentence." Fields, supra at 62, 67, 528 N.W.2d 176.
4. A trial court must articulate on the record a substantial and compelling reason for its particular departure, and explain why this reason justifies that departure. MCL 769.34(3); People v. Daniel, 462 Mich. 1, 9, 609 N.W.2d 557 (2000).
5. A trial court "shall not base a departure on an offense characteristic or offender characteristic already taken into account in determining the appropriate sentence range unless the court finds ... that the characteristic has been given inadequate or disproportionate weight." MCL 769.34(3)(b).
6. In considering whether, and to what extent, to depart from the guidelines range, a trial court must ascertain whether taking into account an allegedly substantial and compelling reason would contribute to a more proportionate criminal sentence than is available within the guidelines range. MCL 769.34(3).
7. In reviewing sentencing decisions, the Court of Appeals may not affirm a sentence on the basis that, although the trial court did not articulate a substantial and compelling reason for a departure, one nonetheless exists in the judgment of the Court of Appeals. Instead, in such a situation, the Court of Appeals must remand the case to the trial court for resentencing. MCL 769.34(3); MCL 769.34(11).
8. If a trial court articulates multiple "substantial and compelling" reasons for a departure from the guidelines, and the Court of Appeals determines that some of these reasons are substantial and compelling and others are not, the panel must determine whether the trial court would have departed, and would have departed to the same degree, on the basis of the substantial and compelling reasons alone. MCL 769.34(3).
9. If a trial court departs from the guidelines range, and its sentence is not based on a substantial and compelling reason to justify the particular departure, i.e., the sentence is not proportionate to the seriousness of the defendant's conduct and his criminal history, the Court of Appeals must remand to the trial court for resentencing. MCL 769.34(11).
10. "`[T]he existence or nonexistence of a particular [sentencing] factor is a factual determination for the sentencing court to determine, and should therefore be reviewed by an appellate court for clear error.' " Babcock I, supra at 75-76, 624 N.W.2d 479, quoting Fields, supra at 77, 528 N.W.2d 176.
11. "`The determination that a particular [sentencing] factor is objective and verifiable should be reviewed by the appellate court as a matter of law.'" Babcock I, supra at 76, 624 N.W.2d 479, quoting Fields, supra at 78, 528 N.W.2d 176.
12. "`A trial court's determination that the objective and verifiable factors present in a particular case constitute substantial and compelling reasons to depart from the statutory minimum sentence shall be reviewed for abuse of discretion.'" Babcock I, supra at 76, 624 N.W.2d 479, quoting Fields, supra at 78, 528 N.W.2d 176. An abuse of discretion occurs when the trial court chooses an outcome falling outside the permissible principled range of outcomes.
CORRIGAN, C.J., concurring in part and dissenting in part.
Although I concur with much of the majority's analysis and its result, I cannot agree with the majority's analysis of the *246 remand requirement. Accordingly, I respectfully dissent in part.
I would limit the requirement of a reviewing court to remand for resentencing or rearticulation to that explicitly provided by the Legislature in M.C.L. § 769.34(11). Rather than interpret the statutory text, the majority creates a new remand requirement out of whole cloth. The majority concludes that "if the trial court articulates multiple reasons [for departure], and the appellate court ... determines that some of these reasons are substantial and compelling and some are not, and the Court of Appeals is unable to determine whether the trial court would have departed to the same degree on the basis of the substantial and compelling reasons, the Court must remand the case to the trial court for resentencing or rearticulation." [email protected]. This formulation is found nowhere in the text of the sentencing guidelines and imposes an unnecessary burden on both sentencing and reviewing courts.
MCL 769.34(11) provides:
If, upon a review of the record, the court of appeals finds the trial court did not have a substantial and compelling reason for departing from the appropriate sentence range, the court shall remand the matter to the sentencing judge or another trial court judge for resentencing under this chapter. [Emphasis added.]
The Legislature only requires the reviewing court to determine whether the trial court had "a substantial and compelling reason" for departing from the sentencing range. Therefore, under the statute, the Court of Appeals may only remand for resentencing or rearticulation if it finds that the trial court did not articulate a single substantial and compelling reason for the departure.
In determining whether a trial court articulated a substantial and compelling reason for departing from the appropriate sentence range, the Court of Appeals must necessarily determine whether the trial court met the requirements of M.C.L. § 769.34(3):(1) did the trial court articulate a substantial and compelling reason for that particular departure, and (2) did the trial court state that substantial and compelling reason on the record. Provided the trial court complied with the requirements of M.C.L. § 769.34(3), with the result that the Court of Appeals finds at least one substantial and compelling reason for the departure imposed by the trial court, then M.C.L. § 769.34(11) does not require a remand.
Using the hypothetical example proposed by the majority, even if a trial court provides multiple reasons for a departure and some of those reasons are later determined not to be substantial and compelling, the statute only requires a remand if the Court of Appeals finds that the trial court did not provide a single substantial and compelling reason for that departure from the statutory sentence range. There is no textual support for the majority's requirement that the Court of Appeals must remand any time any reason is determined not to be substantial and compelling, no matter how many substantial and compelling reasons remain, unless it is clear to the reviewing court that the trial court would have imposed the same departure on the basis of the remaining reasons.
Not only is the majority's analysis without textual support, it also renders M.C.L. § 769.34(11) superfluous. It is a cardinal rule of statutory interpretation that "effect shall be given to every word, phrase, or clause of a statute." Robertson v. DaimlerChrysler Corp., 465 Mich. 732, 757, 641 N.W.2d 567 (2002). The majority's interpretation, however, gives no meaning to *247 the Legislature's explicit provision regarding appellate review; rather, it simply collapses the appellate inquiry into the initial determination to depart under M.C.L. § 769.34(3). In doing so, the majority ignores the Legislature's decision to specify the scope and purpose of review by the Court of Appeals in subsection 11.
Had the Legislature intended to require the Court of Appeals to read the mind of the trial court in conducting its review, it would have been sufficient to set forth the trial court requirements in subsection 3 and omit subsection 11. Instead, the Legislature provided for a specific standard of review by the Court of Appeals in subsection 11: the Court of Appeals shall only remand "[i]f, upon a review of the record, the court of appeals finds the trial court did not have a substantial and compelling reason for departing from the appropriate sentence range." If the majority's analysis is correct and the Court of Appeals must remand every time it is unable to discern whether the trial court would have made the same departure under the existing substantial and compelling reasons, this language has no meaning.
The plain language of subsection 11 requires the Court of Appeals to conduct its own inquiry regarding whether the trial court articulated a substantial and compelling reason for departing from the guidelines. Random House Webster's College Dictionary (2d ed., 1997), defines "find" as "to discover or perceive after consideration," "to ascertain by study or calculation," and "to determine after a judicial inquiry." Therefore, subsection 11 requires the Court of Appeals, upon reviewing the record provided by the trial court, to "discover," "ascertain," or "determine" whether the trial court had a substantial and compelling reason for departing from the guidelines. This is the entire scope and function of the Court of Appeals inquiry. Nothing in the statutory text requires the Court of Appeals to "find" that the trial court would have departed and departed to the same degree on the basis of a substantial and compelling reason, as the majority would require. The Legislature provided only that the Court of Appeals must determine for itself whether the trial court articulated at least one substantial and compelling reason for departing from the guidelines, and we are bound by that legislative provision. The majority's creation of an extratextual remand inquiry renders subsection 11 superfluous and usurps legislative authority.
Further, as a practical matter, the majority's approach will force the Court of Appeals to remand innumerable cases to the trial courts for resentencing or rearticulation. In any case in which the Court of Appeals is not comfortable with its ability to divine the workings of the mind of the sentencing judge, it will be forced to remand even though it finds that a substantial and compelling reason justifies the departure. This extreme level of inefficiency is not required by the statutory text and will create needless additional work for an already overburdened trial bench. To mitigate the effect of the majority's extratextual requirement, I strongly suggest that every trial judge add the following disclaimer to the end of every judgment of sentence:
I am persuaded that the defendant should serve the sentence I have rendered and it is my intention that this sentence be sustained if an appellate court determines that any of my rationales for departure survive review.
Although this disclaimer is not required by the statutory text, it is now functionally required by the majority's creation of a new remand inquiry.
Because I believe we are bound by the statutory language, I would hold that a *248 remand is only required under M.C.L. § 769.34(11) if the Court of Appeals, after reviewing the record provided by the trial court, determines that there is not a single substantial and compelling reason for departing from the guidelines, as defined in M.C.L. § 769.34(3).
Accordingly, I respectfully dissent in part from the majority's decision.
YOUNG, J., concurs.
MICHAEL F. CAVANAGH, J., concurring in part and dissenting in part.
I agree with the majority except to the extent it continues to utilize the definition of "substantial and compelling reasons" from People v. Fields, 448 Mich. 58, 528 N.W.2d 176 (1995). [email protected]. I remain committed to the Fields dissent and would not improperly impose limitations on the types of factors a sentencing court may consider.
In Fields, this Court addressed "substantial and compelling reasons" necessary for departure under the controlled substance act, then in effect, and stated that "only those factors that are objective and verifiable may be used to judge whether substantial and compelling reasons exist." Fields at 62, 528 N.W.2d 176. The Fields dissent conducted an exhaustive review of the case law interpreting "substantial and compelling," as used in the statute at issue, and the Legislature's intent in enacting the statute. The dissent also examined the plain language of the statute at issue and pointed out that the Legislature did not specify any limit on the types of factors the sentencing court may consider. Fields at 99, 528 N.W.2d 176 (CAVANAGH, J., dissenting). The Legislature only specified that the reasons for a sentencing departure must meet the substantial and compelling threshold. Id. There is nothing in the language of the statute or the legislative history limiting a sentencing judge's consideration to only "objective and verifiable" factors. Therefore, a sentencing court should consider all the factors and circumstances surrounding an individual case.
Additionally, what rises to the level of substantial and compelling is clearly subjective. "It relates to this defendant and to this sentencing judge, who is examining this individual and this offense." Id. at 104, 528 N.W.2d 176 (emphasis in original). Thus, the weighing of all the factors and circumstances before the sentencing court includes inherently subjective inquiries.
Further, as was discussed at length in the Fields dissent, the "objective" limitation is unworkable. See, e.g., Id. at 95-96, 101-102, 103-104, 105-106, 528 N.W.2d 176. There are certain factors, such as a defendant's remorse or a defendant's family support, that may be considered objective by one sentencing judge and subjective by another. The dissent in Fields stated, "[t]he better test is whether the sentencing judge is satisfied that the nature and extent of the defendant's remorse [or family support] are substantial and compelling reasons to support a sentencing departure." Id. at 105, 528 N.W.2d 176. I remain committed to the position that the "objective" criteria utilized by this Court is unworkable.
Therefore, while I agree with the remainder of the majority opinion, I must dissent to the extent this Court continues to employ the Fields "objective" definition of "substantial and compelling reasons."
WEAVER, J., dissenting in part and concurring in part.
I dissent from the majority's result and opinion and would affirm the Court of Appeals decision. I dissent because (1) I continue to believe that the phrase "a substantial and compelling reason" does not *249 limit the trial court to considering only factors that are "objective and verifiable" and (2) I agree with the standard for remand articulated by the Chief Justice in her partial dissent rather than with the majority's remand analysis. I concur only in (1) the majority's basic recognition that the language of M.C.L. § 769.34(3) requires the court to state on the record a substantial and compelling reason for departing from the guidelines and (2) the majority's refinement of the abuse of discretion standard.
First, pursuant to the legislative sentencing guidelines,
A court may depart from the appropriate sentence range established under the sentencing guidelines set forth in [MCL 777.1 et seq.] if the court has a substantial and compelling reason for that departure and states on the record the reasons for that departure. All of the following apply to a departure:
(a) The court shall not use an individual's gender, race, ethnicity, alienage, national origin, legal occupation, lack of employment, representation by appointed legal counsel, appearance in propria persona, or religion to depart from the appropriate sentence range.
(b) The court shall not base a departure on an offense characteristic or offender characteristic already taken into account in determining the appropriate sentence range unless the court finds from the facts contained in the court record, including the presentence investigation report, that the characteristic has been given inadequate or disproportionate weight. [MCL 769.34(3).]
While I concur in the majority's basic recognition that the language of the statute requires the trial court to state on the record "a substantial and compelling reason" for its departure from the sentencing guidelines, I dissent from the rest of the majority's analysis. The language of the statute is plain and unambiguous, and the majority's excessive interpretation of this language, which is clear on its face, is unnecessary.
Second, I agree with the standard for remand articulated by the Chief Justice in her partial concurrence and partial dissent, rather than with the majority's remand analysis. MCL 769.34(11) provides:
If, upon a review of the record, the court of appeals finds the trial court did not have a substantial and compelling reason for departing from the appropriate sentencing range, the court shall remand the matter to the sentencing judge or another trial court judge for resentencing under this chapter.
Pursuant to this language, a remand to the trial court is only required "if the Court of Appeals, after reviewing the record provided by the trial court, determines that there is not a single substantial and compelling reason for departing from the guidelines, as defined in M.C.L. § 769.34(3)." [email protected]. Further, as the Chief Justice notes, the majority's approach will, as a practical matter, "force the Court of Appeals to remand innumerable cases to the trial courts for resentencing or rearticulation" and "will create needless additional work for an already overburdened trial bench." [email protected]. Consequently, I agree with the Chief Justice that the majority's opinion functionally requires at the end of every judgment of sentence the disclaimer she articulates.
Third, I continue to believe that a "substantial and compelling reason" does not limit the trial court to considering only factors that are "objective and verifiable." Rather, I continue to subscribe to the position articulated in my dissent in People v. Daniel, 462 Mich. 1, 22-23, 609 N.W.2d 557 (2000), that all relevant factors, not *250 only those that are objective and verifiable, should be considered when determining whether there is a substantial and compelling reason to depart from the sentencing guidelines.
Fourth, I concur with the majority's refinement of the abuse of discretion standard. [email protected]. The abuse of discretion standard, as previously articulated in Spalding v. Spalding, 355 Mich. 382, 384-385, 94 N.W.2d 810 (1959), was so exaggerated that it unreasonably limited appellate court review.
Sentencing a defendant for the crime committed is a discretionary act. As recognized by the majority, "the trial court is optimally situated to understand a criminal case and to craft an appropriate sentence for one convicted in such a case." [email protected]. Consequently, a considerable degree of deference should be afforded the trial court. Today, the majority provides a reasonable definition of that deferential standard:
At its core, an abuse of discretion standard acknowledges that there will be circumstances in which there will be no single correct outcome; rather, there will be more than one reasonable and principled outcome. When the trial court selects one of these principled outcomes, the trial court has not abused its discretion and, thus, it is proper for the reviewing court to defer to the trial court's judgment. An abuse of discretion occurs, however, when the trial court chooses an outcome falling outside this principled range of outcomes. [Ante at 243 (citations omitted).]
I emphasize that according to this standard, the trial court does not abuse its discretion if it selects a different principled outcome than the reviewing court would have chosen from the range of principled outcomes.
Applying the principles discussed herein to the facts of this case and considering all relevant factors, I would conclude that the trial court did not abuse its discretion in departing downward from the sentencing guidelines. The trial court offered the following reasons for its departure: (1) the probation agent recommended probation, (2) abuse of the victim by her uncle and separation from her grandmother caused a great part of the harm suffered by the victim, (3) defendant's original attorney recommended probation, (4) correspondence from defendant's brother's special-education teacher and from defendant's brother's attorney indicated that defendant was the caregiver for his brother, who suffers severe disability because of cerebral palsy and mental retardation, and (5) a letter from defendant's physician indicated that defendant has a herniated disc in his back. The articulation of these factors satisfies the requirement that the trial court articulate a substantial and compelling reason on the record for its downward departure. Moreover, the trial court's decision did not venture beyond the range of principled outcomes under the circumstances. Therefore, the trial court did not abuse its discretion, and the judgment of the Court of Appeals should be affirmed.
NOTES
[1] 244 Mich.App. 64, 624 N.W.2d 479 (2000).
[2] 250 Mich.App. 463, 648 N.W.2d 221 (2002).
[3] 467 Mich. 872, 651 N.W.2d 921 (2002).
[4] At the time, there were also, as there continue to be, mandatory sentences for certain offenses. For example, a first-degree murder conviction mandates a sentence of imprisonment for life, M.C.L. § 750.316, and a conviction for possession of a firearm during the commission of a felony mandates a sentence of imprisonment for two years, M.C.L. § 750.227b. Neither the judicial nor the statutory sentencing guidelines would supersede a mandatory sentence.
[5] Administrative Order No. 1983-3, 417 Mich. cxxi (1983).
[6] The statutory sentencing guidelines are applicable to enumerated felonies committed on or after January 1, 1999. MCL 769.34(2).
[7] It is only the minimum sentence that must presumptively be within the appropriate sentence range. MCL 769.34(2). The maximum sentence is either set by statute, e.g., the maximum sentence for extortion is twenty years, M.C.L. § 750.213, or it falls within the judge's discretion. In exercising this judicial discretion, the trial court cannot impose a minimum sentence that exceeds two-thirds of the maximum sentence. People v. Tanner, 387 Mich. 683, 690, 199 N.W.2d 202 (1972); MCL 769.34(2)(b).
[8] As explained in Hegwood, supra at 440 n. 16, 636 N.W.2d 127: "In M.C.L. § 769.34(3), the Legislature states a rule that makes no apparent distinctions between `upward departures,' that increase the sentence beyond the length stated in the guidelines, and `downward departures,' that decrease the sentence below the length stated in the guidelines."
[9] In at least one circumstance, a sentence may constitute a departure, and thus require the articulation of a substantial and compelling reason, even though the sentence is within the appropriate sentence range. People v. Stauffer, 465 Mich. 633, 636, 640 N.W.2d 869 (2002). MCL 769.34(4)(a) provides:
If the upper limit of the recommended minimum sentence range for a defendant determined under the sentencing guidelines set forth in [MCL 777.1 et seq.] is 18 months or less, the court shall impose an intermediate sanction unless the court states on the record a substantial and compelling reason to sentence the individual to the jurisdiction of the department of corrections....
Accordingly, if the upper limit of the appropriate sentence range is less than eighteen months, the sentencing court cannot impose a prison sentence absent a finding of a substantial and compelling reason.
[10] This is not to say, however, that proportionality is irrelevant under the statutory sentencing guidelines. See part 3(D).
[11] At the time Fields was decided, the controlled-substances act, M.C.L. § 333.7401(4), provided in relevant part:
The court may depart from the minimum term of imprisonment ... if the court finds on the record that there are substantial and compelling reasons to do so.
[12] Although the trial court may depart from the guidelines range on the basis that a substantial and compelling reason to do so exists, the trial court "shall not base a departure on an offense characteristic or offender characteristic already taken into account in determining the appropriate sentence range unless the court finds ... that the characteristic has been given inadequate or disproportionate weight." MCL 769.34(3)(b). Therefore, if the seriousness of the defendant's conduct and his criminal history have already been taken into account in determining the guidelines range, they cannot be used to justify the trial court's departure, unless the trial court finds that these factors have been given inadequate or disproportionate weight.
For instance, if a defendant convicted of armed robbery is scored 25 points under offense variable one because he stabbed his victim, see M.C.L. § 777.31, that the defendant stabbed his victim probably could not constitute a substantial and compelling reason to justify a departure because the Legislature has already determined what effect should be given to the fact that a defendant has stabbed his victim and the courts must abide by this determination. However, if the defendant stabbed his victim multiple times, or in a manner designed to inflict maximum harm, that might constitute a substantial and compelling reason for a departure because these characteristics may have been given inadequate weight in determining the guidelines range.
[13] Although the trial court must articulate a substantial and compelling reason to justify its departure, the trial court is not required to use any formulaic or "magic" words in doing so. Although the better practice may be for the trial court to specifically state that "[t]he substantial and compelling reason that justifies my twelve-month departure here is...," something short of this may well suffice as long as the trial court has articulated a substantial and compelling reason that justifies its departure. In any event, however it is articulated, the quality of the trial court's statement must be sufficient to allow for effective appellate review.
[14] However, this is not to say that the trial court must explain why it chose a twelve-month departure as opposed to an eleven-month departure (or indeed as opposed to any one of countless other potential departures). Rather, the trial court must simply explain why the actual departure that it imposed is justified by the substantial and compelling reasons articulated.
[15] When the trial court articulates multiple reasons for its departure and possesses doubts regarding whether one of these reasons is a substantial and compelling reason, but would sentence the defendant the same regardless of this reason, the best practice would be for the trial court to explicitly state, if it is true, that "I would impose the same sentence regardless of this reason." However, something short of such an explicit statement may well suffice as long as it is clear from the record that the trial court would not have sentenced defendant differently if it had not relied on this improper reason.
[16] On remand, the trial court does not necessarily have to impose a different sentence. It may impose the same sentence as long as it articulates a substantial and compelling reason that justifies this sentence.
[17] There are several reasons the Court of Appeals may determine that a reason is not a substantial and compelling reason, such as that it is not "objective and verifiable"; it does not "`keenly' or `irresistibly' grab our attention"; or it is not of "`considerable worth' in deciding the length of a sentence." Fields, supra at 62, 67, 528 N.W.2d 176. Additionally, it may be concluded that an offense or offender characteristic has already been taken into account in determining the guidelines range, and that the trial court has not found that the characteristic has been given inadequate or disproportionate weight. MCL 769.34(3)(b).
[18] MCL 769.34(10) provides in relevant part:
If a minimum sentence is within the appropriate guidelines sentence range, the court of appeals shall affirm that sentence and shall not remand for resentencing absent an error in scoring the sentencing guidelines or inaccurate information relied upon in determining the defendant's sentence....
[19] MCL 769.34(11) provides:
If, upon review of the record, the court of appeals finds the trial court did not have a substantial and compelling reason for departing from the appropriate sentence range, the court shall remand the matter to the sentencing judge or another trial court judge for resentencing under this chapter.
[20] In other words, while "substantial and compelling" sets forth the quality of the reasons that must be set forth in support of a departure from the guidelines, the principle of "proportionality" defines the standard against which the decision to depart, and the particular departure imposed, must be assessed.
[21] Further, application of Spalding's abuse of discretion standard to the trial court's finding of a substantial and compelling reason to justify its departure from the guidelines range would not further the manifest purpose of the statutory sentencing guidelines. The Legislature adopted these guidelines intending to reduce unjustified disparities in sentencing. See 1994 PA 445, § 33(1)(e)(iv)(stating that sentencing guidelines shall, "Reduce sentencing disparities based on factors other than offense characteristics and offender characteristics and ensure that offenders with similar offense and offender characteristics receive substantially similar sentences.")(repealed March 7, 2002). "Thus, the very premise of the guidelines is that judicial discretion will be restricted to a certain degree." Hegwood, supra at 438, 636 N.W.2d 127. However, if the trial court is allowed to depart from the guidelines unless its decision to do so is "so palpably and grossly violative of fact and logic that it evidences not the exercise of will but the perversity of will, not the exercise of judgment but defiance thereof, not the exercise of reason but rather of passion or bias," Spalding, supra, the Legislature's intent to reduce unjustified disparities in sentencing will be significantly thwarted.
[22] While a reason cannot be a substantial and compelling reason unless it is objective and verifiable, the opposite is not always true. A reason can be objective and verifiable without being substantial and compelling.
|
Exhibit 99.1 HOME PROPERTIES, INC. SUPPLEMENTAL FINANCIAL INFORMATION FOURTH QUARTER TABLE OF CONTENTS 4Q 2007 Supplemental Reports Page 1. Earnings Release 1-8 2. Owned Community Results, Quarterly and Year-to-Date 9-14 3. Physical Occupancy Comparison by Region 15 4. Net Operating Results 16 5. Resident Statistics 17 6. Net Operating Income Detail and SeasonalityFactor for NAV Calculation 18 7. Operating Expense Detail 19 8. Discontinued Operations 20 9. Summary of Recent Acquisitions 21 10. Summary of Recent Sales 22 11. Breakdown of Owned Units by Market 23 12. Debt Summary Schedule 24-25 13. Recurring Capital Expenditure and Adjusted NOI Summary 26-28 14. Development Communities 29 15. 2008 Earnings Guidance 30-33 FOURTH QUARTER 2007 4Q '07 versus 4Q '06 % Growth # of Date 4Q '07 4Q '07 Year Ago Rental Total Total Total 4Q '07 Units Acquired Rent/Mo. Occup. Occup. Rates Revenue Expense NOI % Co. NOI Baltimore Region Bonnie Ridge 960 7/1/1999 $ 1,029 95.6 % 91.4 % -1.7 % 4.8 % 10.5 % 1.4 % Canterbury Apartments 618 7/16/1999 $ 925 93.2 % 95.5 % 4.0 % -0.1 % -2.7 % 1.5 % Country Village 344 4/30/1998 $ 878 95.0 % 91.5 % 4.0 % 5.3 % 4.0 % 6.3 % Dunfield Townhomes 312 11/1/2007 $ 1,029 94.3 % n/a n/a n/a n/a n/a Falcon Crest 396 7/16/1999 $ 971 91.1 % 92.3 % 2.2 % -4.4 % 10.8 % -11.9 % Fox Hall Apartments 720 3/29/2007 $ 846 96.0 % n/a n/a n/a n/a n/a Gateway Village 132 7/16/1999 $ 1,261 97.2 % 96.9 % 3.3 % 4.3 % 0.8 % 6.1 % Heritage Woods 164 10/4/2006 $ 985 96.8 % n/a n/a n/a n/a n/a Mill Towne Village Apts 384 5/31/2001 $ 853 93.3 % 95.1 % 3.8 % 0.1 % 12.7 % -7.5 % Morningside Heights 1,050 4/30/1998 $ 860 93.3 % 94.4 % 2.5 % 0.1 % 8.1 % -4.0 % Owings Run 504 7/16/1999 $ 1,155 94.3 % 93.3 % 3.8 % 4.6 % 3.8 % 5.1 % Ridgeview at Wakefield Valley 204 1/13/2005 $ 1,116 95.1 % 93.3 % 7.6 % 8.0 % 23.3 % -0.8 % Selford Townhomes 102 7/16/1999 $ 1,286 94.8 % 97.7 % 3.3 % 0.4 % 8.4 % -3.0 % The Coves at Chesapeake 469 11/20/2006 $ 1,171 92.8 % n/a n/a n/a n/a n/a Timbercroft Townhomes 284 7/16/1999 $ 836 98.1 % 98.1 % 3.8 % 6.5 % -13.7 % 21.0 % Top Field 156 10/4/2006 $ 1,114 97.6 % n/a n/a n/a n/a n/a Village Square Townhomes 370 7/16/1999 $ 1,125 96.3 % 95.4 % 2.3 % 3.0 % 8.0 % 0.9 % Woodholme Manor 177 3/31/2001 $ 827 95.9 % 96.3 % 1.8 % -0.3 % 9.2 % -7.5 % Total Baltimore Region 7,346 $ 978 94.6 % 93.9 % 2.4 % 2.3 % 6.4 % 0.0 % 18.2 % Boston Region Gardencrest 696 6/28/2002 $ 1,437 96.1 % 95.0 % 2.5 % 4.6 % 6.2 % 3.5 % Highland House 172 5/31/2006 $ 1,134 95.5 % 95.4 % 3.5 % 4.8 % 3.5 % 5.9 % Liberty Place 107 6/6/2006 $ 1,415 92.5 % 94.9 % 2.6 % -2.4 % 2.5 % -5.8 % Stone Ends 280 2/12/2003 $ 1,219 95.2 % 94.6 % -0.7 % 1.0 % 11.3 % -5.1 % The Heights at Marlborough 348 9/7/2006 $ 1,168 95.5 % 92.4 % 1.4 % 7.3 % 11.4 % 4.2 % The Meadows at Marlborough 264 9/7/2006 $ 1,140 96.9 % 90.2 % -0.1 % 7.7 % 13.2 % 3.8 % The Townhomes of Beverly 204 2/15/2007 $ 1,434 93.4 % n/a n/a n/a n/a n/a The Village at Marshfield 276 3/17/2004 $ 1,150 95.9 % 95.3 % 1.1 % 4.2 % -5.3 % 10.1 % Westwoods 35 4/30/2007 $ 1,223 90.3 % n/a n/a n/a n/a n/a Total Boston Region 2,382 $ 1,280 95.4 % 94.1 % 1.6 % 4.5 % 6.7 % 2.9 % 7.1 % Chicago Region Blackhawk 371 10/20/2000 $ 876 96.8 % 94.0 % 2.7 % 8.1 % -20.5 % 47.1 % Courtyards Village 224 8/29/2001 $ 811 98.5 % 97.4 % 4.3 % 6.3 % -16.2 % 34.7 % Cypress Place 192 12/27/2000 $ 934 96.9 % 97.6 % 3.0 % 4.1 % -15.5 % 28.1 % The Colony 783 9/1/1999 $ 880 97.9 % 96.8 % 6.3 % 9.8 % -40.0 % 62.3 % The New Colonies 672 6/23/1998 $ 722 94.8 % 95.6 % 3.0 % 3.1 % 3.1 % 3.0 % Total Chicago Region 2,242 $ 830 96.8 % 96.1 % 4.3 % 6.8 % -20.3 % 37.6 % 4.9 % Florida Region The Hamptons 668 7/7/2004 $ 1,043 93.3 % 94.7 % 2.8 % 0.1 % 17.1 % -12.6 % Vinings at Hampton Village 168 7/7/2004 $ 1,140 94.4 % 92.8 % 2.8 % 4.0 % 11.3 % -2.3 % Total Florida Region 836 $ 1,062 93.5 % 94.3 % 2.8 % 0.9 % 15.8 % -10.5 % 1.8 % Hudson Valley Region Carriage Hill 140 7/17/1996 $ 1,230 96.7 % 95.3 % 2.7 % 4.4 % 8.2 % 0.6 % Lakeshore Villas 152 7/17/1996 $ 1,055 92.6 % 92.6 % 1.7 % 4.5 % -2.9 % 13.5 % Patricia 100 7/7/1998 $ 1,435 94.7 % 95.8 % 3.4 % -0.8 % 3.9 % -4.8 % Sherwood Consolidation 224 10/11/2002 $ 1,276 97.3 % 95.5 % 4.8 % 9.2 % 13.1 % 5.1 % Sunset Gardens 217 7/17/1996 $ 927 94.5 % 95.1 % 0.8 % 4.7 % 6.7 % 2.7 % Total Hudson Valley Region 833 $ 1,156 95.4 % 94.9 % 2.8 % 5.1 % 6.8 % 3.4 % 1.9 % Page 9 Table of Contents FOURTH QUARTER 2007 4Q '07 versus 4Q '06 % Growth # of Date 4Q '07 4Q '07 Year Ago Rental Total Total Total 4Q '07 Units Acquired Rent/Mo. Occup. Occup. Rates Revenue Expense NOI % Co. NOI Long Island, NY Region Bayview / Colonial 160 11/1/2000 $ 1,208 93.3 % 93.7 % 0.4 % 3.4 % 27.4 % -17.3 % Cambridge Village 82 3/1/2002 $ 1,618 93.6 % 97.6 % 4.2 % 1.9 % 9.6 % -4.3 % Coventry Village 94 7/31/1998 $ 1,390 94.5 % 97.3 % 2.8 % 1.0 % 3.8 % -2.2 % Devonshire Hills 297 7/16/2001 $ 1,707 95.0 % 95.4 % -1.4 % -3.7 % -2.5 % -4.4 % East Winds 96 11/1/2000 $ 1,166 95.6 % 93.7 % 1.1 % 8.1 % 8.8 % 7.4 % Hawthorne Court 434 4/4/2002 $ 1,392 94.0 % 93.3 % 2.5 % 5.5 % 9.9 % 1.2 % Heritage Square 80 4/4/2002 $ 1,630 97.0 % 98.0 % 4.5 % 2.4 % -0.4 % 4.9 % Holiday Square 144 5/31/2002 $ 1,132 96.7 % 96.7 % 3.0 % 4.7 % -0.6 % 8.5 % Lake Grove Apartments 368 2/3/1997 $ 1,397 95.4 % 94.4 % 0.5 % 5.5 % 4.2 % 6.3 % Maple Tree 84 11/1/2000 $ 1,131 92.3 % 97.4 % -2.6 % -7.3 % 7.4 % -20.2 % Mid- Island Estates 232 7/1/1997 $ 1,308 97.0 % 94.8 % 2.4 % 4.1 % -2.9 % 10.4 % Rider Terrace 24 11/1/2000 $ 1,273 93.7 % 97.8 % 2.4 % 4.3 % 26.2 % -10.7 % Sayville Commons 342 7/15/2005 $ 1,488 97.1 % 98.0 % 4.1 % 4.0 % 2.1 % 5.4 % South Bay Manor 61 9/11/2000 $ 1,608 93.8 % 88.4 % 5.2 % 13.7 % 21.6 % 7.3 % Southern Meadows 452 6/29/2001 $ 1,338 97.4 % 95.3 % -1.0 % 3.1 % 8.5 % -0.8 % Stratford Greens 359 3/1/2002 $ 1,428 96.4 % 97.2 % 3.1 % 5.6 % 15.2 % -0.7 % Terry Apartments 65 11/1/2000 $ 1,141 83.6 % 92.8 % -1.9 % -10.7 % 10.3 % -34.1 % Westwood Village Apts 242 3/1/2002 $ 2,260 94.5 % 95.3 % 4.0 % 6.6 % 6.7 % 6.6 % Woodmont Village Apts 96 3/1/2002 $ 1,330 94.5 % 96.2 % 2.3 % 3.4 % 6.7 % 1.6 % Yorkshire Village Apts 40 3/1/2002 $ 1,671 96.9 % 99.2 % 5.4 % 7.3 % 11.7 % 3.1 % Total Long Island Region 3,752 $ 1,454 95.3 % 95.5 % 1.8 % 3.5 % 7.0 % 0.9 % 12.7 % Maine Region Liberty Commons 120 8/30/2006 $ 1,161 95.5 % 97.5 % 3.8 % 2.6 % 0.7 % 3.7 % Mill Co. Gardens 95 7/7/1998 $ 773 96.3 % 94.1 % 1.0 % 3.5 % 14.3 % -5.8 % Redbank Village 500 7/7/1998 $ 827 95.9 % 92.9 % 2.4 % 7.1 % 4.1 % 9.4 % Total Maine Region 715 $ 876 95.9 % 94.1 % 2.6 % 5.7 % 4.8 % 6.2 % 1.5 % New Jersey Region Barrington Gardens 148 3/1/2005 $ 1,006 93.9 % 98.2 % 13.4 % 7.8 % 33.0 % -8.5 % Chatham Hill Apartments 308 1/30/2004 $ 1,674 96.3 % 95.4 % 5.2 % 7.7 % -2.5 % 13.8 % East Hill Gardens 33 7/7/1998 $ 1,511 91.4 % 96.9 % 2.7 % -2.3 % 5.3 % -6.4 % Hackensack Gardens 198 3/1/2005 $ 974 94.0 % 96.9 % 9.9 % 9.8 % 29.0 % -13.1 % Jacob Ford Village 270 2/15/2007 $ 1,064 95.1 % n/a n/a n/a n/a n/a Lakeview 106 7/7/1998 $ 1,336 96.3 % 96.5 % 5.0 % 5.2 % -0.1 % 9.5 % Northwood Apartments 134 1/30/2004 $ 1,286 94.3 % 93.4 % 5.2 % 7.6 % 15.2 % -1.0 % Oak Manor 77 7/7/1998 $ 1,779 90.7 % 99.3 % 3.1 % -0.6 % 6.1 % -4.3 % Pleasant View 1,142 7/7/1998 $ 1,143 94.1 % 94.3 % 5.4 % 7.7 % 5.8 % 9.2 % Pleasure Bay 270 7/7/1998 $ 1,087 91.1 % 94.4 % 2.2 % -5.2 % 18.0 % -23.5 % Regency Club 372 9/24/2004 $ 1,118 96.8 % 91.4 % 0.5 % 10.3 % -0.2 % 21.3 % Royal Gardens Apartments 550 5/28/1997 $ 1,212 95.5 % 90.6 % 4.8 % 13.2 % 2.4 % 23.8 % Wayne Village 275 7/7/1998 $ 1,366 97.1 % 96.3 % 4.8 % 7.4 % 0.3 % 12.5 % Windsor Realty 67 7/7/1998 $ 1,178 97.0 % 93.2 % 3.2 % 12.8 % -26.1 % 47.3 % Total New Jersey Region 3,950 $ 1,210 94.9 % 94.2 % 4.8 % 7.5 % 5.8 % 8.9 % 11.0 % Philadelphia Region Beechwood Gardens 160 7/7/1998 $ 826 95.9 % 96.5 % -0.8 % 0.3 % 0.3 % 0.4 % Castle Club 158 3/15/2000 $ 931 90.0 % 94.9 % -0.2 % -5.0 % 2.9 % -12.5 % Chesterfield 247 9/23/1997 $ 894 96.6 % 96.6 % -1.7 % -1.8 % 19.3 % -17.7 % Curren Terrace 318 9/23/1997 $ 920 91.7 % 96.0 % 1.2 % -3.6 % 4.5 % -10.6 % Glen Brook 174 7/28/1999 $ 814 90.6 % 92.3 % -0.3 % -6.7 % 6.7 % -23.6 % Glen Manor 174 9/23/1997 $ 800 96.5 % 95.7 % 4.4 % 5.0 % 5.7 % 4.2 % Golf Club 399 3/15/2000 $ 1,027 94.8 % 92.4 % 1.2 % 6.1 % 1.7 % 9.4 % Hill Brook Place 274 7/28/1999 $ 891 89.7 % 94.8 % 0.9 % -5.8 % 10.7 % -23.2 % Home Properties of Bryn Mawr 316 3/15/2000 $ 1,041 93.6 % 94.8 % -0.9 % 0.5 % -0.2 % 1.1 % Home Properties of Devon 631 3/15/2000 $ 1,098 94.2 % 93.5 % 1.0 % 1.8 % 7.0 % -1.8 % Home Properties of Newark 432 7/16/1999 $ 861 94.0 % 94.6 % 1.7 % 5.9 % 8.6 % 3.7 % New Orleans Park 442 7/28/1999 $ 860 93.2 % 95.6 % 3.3 % 0.4 % 5.3 % -4.6 % Racquet Club 466 7/7/1998 $ 1,022 96.0 % 93.9 % -0.4 % 3.1 % 14.6 % -4.8 % Racquet Club South 103 5/27/1999 $ 873 95.3 % 93.9 % -0.1 % 2.5 % 0.9 % 4.2 % Ridley Brook 244 7/28/1999 $ 897 91.6 % 93.6 % 1.4 % 4.0 % 10.8 % -3.7 % Sherry Lake 298 7/23/1998 $ 1,170 90.7 % 94.2 % 0.9 % -2.6 % 6.4 % -7.8 % The Brooke at Peachtree Village 146 8/15/2005 $ 1,091 95.5 % 97.4 % 5.3 % 6.2 % 4.1 % 7.6 % The Landings 384 11/25/1996 $ 975 94.9 % 96.7 % 2.8 % 1.8 % -6.8 % 8.9 % Trexler Park 250 3/15/2000 $ 1,037 91.2 % 91.7 % -0.7 % -3.4 % 3.1 % -8.4 % Trexler Park West 168 Under Construction $ 1,261 80.6 % n/a n/a n/a n/a n/a Valley View 177 9/23/1997 $ 825 91.1 % 88.7 % -1.7 % 5.6 % 5.8 % 5.3 % Village Square 128 9/23/1997 $ 937 93.8 % 97.7 % 2.3 % -1.9 % 12.6 % -12.0 % William Henry 363 3/15/2000 $ 1,102 95.0 % 94.7 % 3.1 % 7.4 % 4.3 % 9.8 % Total Philadelphia Region 6,452 $ 970 93.6 % 94.4 % 1.1 % 1.3 % 5.8 % -2.4 % 14.4 % Page 10 Table of Contents FOURTH QUARTER 2007 4Q '07 versus 4Q '06 % Growth # of Date 4Q '07 4Q '07 Year Ago Rental Total Total Total 4Q '07 Units Acquired Rent/Mo. Occup. Occup. Rates Revenue Expense NOI % Co. NOI Washington DC Region Braddock Lee 255 3/16/1998 $ 1,247 97.1 % 98.0 % 3.5 % 4.6 % 7.1 % 2.9 % Cider Mill 864 9/27/2002 $ 1,074 95.1 % 92.3 % 1.3 % 5.0 % 2.1 % 7.3 % Cinnamon Run 511 12/28/2005 $ 1,160 97.1 % 96.8 % 4.8 % 6.7 % 7.0 % 6.5 % East Meadow 150 8/1/2000 $ 1,317 96.4 % 97.1 % 1.8 % 1.9 % -1.0 % 3.7 % Elmwood Terrace 504 6/30/2000 $ 896 92.8 % 93.8 % 3.9 % 1.2 % 6.1 % -3.1 % Falkland Chase 450 9/10/2003 $ 1,322 93.1 % 95.7 % 5.3 % 2.3 % 11.6 % -2.7 % Mount Vernon Square 1,387 12/27/2006 $ 1,146 94.9 % n/a n/a n/a n/a n/a Orleans Village 851 11/16/2000 $ 1,286 94.2 % 92.2 % 1.0 % 3.3 % 8.7 % -0.1 % Park Shirlington 294 3/16/1998 $ 1,222 96.5 % 96.7 % 2.5 % 5.2 % 2.9 % 7.0 % Peppertree Farm 880 12/28/2005 $ 1,128 89.4 % 90.8 % 3.2 % 7.1 % 1.0 % 12.0 % Seminary Hill 296 7/1/1999 $ 1,212 90.6 % 90.9 % 1.4 % 3.0 % 2.5 % 3.6 % Seminary Towers 540 7/1/1999 $ 1,251 93.5 % 93.0 % 2.2 % 2.8 % 6.8 % -0.4 % Tamarron Apartments 132 7/16/1999 $ 1,414 96.6 % 95.6 % 3.8 % 4.4 % 2.4 % 5.3 % The Apts at Wellington Trace 240 3/2/2004 $ 1,259 94.2 % 92.1 % 2.5 % 4.0 % 6.7 % 2.9 % The Manor - MD 435 8/31/2001 $ 1,140 92.2 % 96.4 % 1.4 % -1.1 % 2.9 % -4.0 % The Manor - VA 198 2/19/1999 $ 1,005 95.8 % 93.0 % 3.2 % 8.0 % 11.1 % 5.6 % The Sycamores 185 12/16/2002 $ 1,345 97.8 % 95.4 % 1.1 % 3.9 % 8.6 % 1.6 % Virginia Village 344 5/31/2001 $ 1,220 93.6 % 95.4 % 0.7 % 0.7 % 8.6 % -5.4 % West Springfield 244 11/18/2002 $ 1,407 94.6 % 94.4 % 3.6 % 4.0 % 8.8 % 1.8 % Woodleaf Apartments 228 3/19/2004 $ 1,114 95.5 % 93.3 % 2.8 % 4.2 % -4.0 % 9.5 % Total Washington DC Region 8,988 $ 1,180 94.1 % 93.8 % 2.5 % 3.8 % 5.2 % 2.8 % 26.5 % TOTAL OWNED PORTFOLIO 37,496 $ 1,113 94.6 % n/a n/a n/a n/a n/a 100.0 % TOTAL CORE PORTFOLIO 32,600 $ 1,114 94.6 % 94.4 % 2.5 % 3.7 % 4.5 % 3.1 % Page 11 Table of Contents December YTD YTD '07 versus YTD '06 % Growth # of Date YTD '07 YTD '07 Year Ago Rental Total Total Total YTD '07 Units Acquired Rent/Mo. Occup. Occup. Rates Revenue Expense NOI % Co. NOI Baltimore Region Bonnie Ridge 960 7/1/1999 $ 1,032 93.8 % 92.9 % 2.3 % 7.0 % 4.6 % 8.6 % Canterbury Apartments 618 7/16/1999 $ 904 95.4 % 95.5 % 4.0 % 3.1 % -0.8 % 5.6 % Country Village 344 4/30/1998 $ 859 95.3 % 93.0 % 2.6 % 6.7 % 3.7 % 9.2 % Dunfield Townhomes 312 11/1/2007 $ 1,029 94.3 % n/a n/a n/a n/a n/a Falcon Crest 396 7/16/1999 $ 961 91.6 % 91.7 % 3.4 % 1.7 % 7.8 % -1.7 % Fox Hall Apartments 720 3/29/2007 $ 827 95.1 % n/a n/a n/a n/a n/a Gateway Village 132 7/16/1999 $ 1,238 96.7 % 93.3 % 2.7 % 7.0 % -0.1 % 11.0 % Heritage Woods 164 10/4/2006 $ 951 97.2 % n/a n/a n/a n/a n/a Mill Towne Village Apts 384 5/31/2001 $ 841 94.5 % 94.6 % 3.1 % 4.0 % 6.1 % 2.7 % Morningside Heights 1,050 4/30/1998 $ 852 94.2 % 94.4 % 2.7 % 4.1 % 3.9 % 4.3 % Owings Run 504 7/16/1999 $ 1,143 95.1 % 94.3 % 5.8 % 6.7 % 8.7 % 5.7 % Ridgeview at Wakefield Valley 204 1/13/2005 $ 1,080 95.8 % 94.5 % 6.6 % 7.6 % 14.3 % 3.4 % Selford Townhomes 102 7/16/1999 $ 1,267 95.5 % 95.3 % 3.1 % 3.4 % 6.6 % 2.0 % The Coves at Chesapeake 469 11/20/2006 $ 1,153 92.0 % n/a n/a n/a n/a n/a Timbercroft Townhomes 284 7/16/1999 $ 823 98.9 % 98.9 % 3.3 % 3.6 % -2.5 % 7.3 % Top Field 156 10/4/2006 $ 1,083 96.9 % n/a n/a n/a n/a n/a Village Square Townhomes 370 7/16/1999 $ 1,113 95.9 % 96.0 % 2.5 % 3.3 % 5.7 % 2.2 % Woodholme Manor 177 3/31/2001 $ 818 95.1 % 94.7 % 3.8 % 3.5 % 3.7 % 3.3 % Total Baltimore Region 7,346 $ 980 94.6 % 94.3 % 3.4 % 4.9 % 4.5 % 5.1 % 17.4 % Boston Region Gardencrest 696 6/28/2002 $ 1,419 95.9 % 96.2 % 2.9 % 2.5 % -0.7 % 5.0 % Highland House 172 5/31/2006 $ 1,118 95.7 % n/a n/a n/a n/a n/a Liberty Place 107 6/6/2006 $ 1,397 93.4 % n/a n/a n/a n/a n/a Stone Ends 280 2/12/2003 $ 1,228 95.3 % 96.4 % 1.3 % -0.9 % 1.2 % -2.2 % The Heights at Marlborough 348 9/7/2006 $ 1,175 94.9 % n/a n/a n/a n/a n/a The Meadows at Marlborough 264 9/7/2006 $ 1,144 94.6 % n/a n/a n/a n/a n/a The Townhomes of Beverly 204 2/15/2007 $ 1,423 93.4 % n/a n/a n/a n/a n/a The Village at Marshfield 276 3/17/2004 $ 1,140 95.9 % 95.5 % 1.1 % 2.7 % -1.1 % 5.0 % Westwoods 35 4/30/2007 $ 1,189 92.8 % n/a n/a n/a n/a n/a Total Boston Region 2,382 $ 1,259 95.4 % 96.1 % 2.2 % 1.8 % -0.4 % 3.4 % 7.1 % Chicago Region Blackhawk 371 10/20/2000 $ 862 96.2 % 93.6 % 1.9 % 7.5 % -4.8 % 24.6 % Courtyards Village 224 8/29/2001 $ 796 97.8 % 96.7 % 3.2 % 7.6 % -4.5 % 22.3 % Cypress Place 192 12/27/2000 $ 918 97.9 % 96.4 % 1.5 % 3.9 % -1.8 % 11.0 % The Colony 783 9/1/1999 $ 854 97.8 % 96.4 % 4.6 % 7.1 % -7.1 % 22.4 % The New Colonies 672 6/23/1998 $ 711 95.8 % 94.5 % 1.4 % 5.1 % -1.1 % 11.1 % Total Chicago Region 2,242 $ 812 97.0 % 95.4 % 2.9 % 6.4 % -4.4 % 18.4 % 4.2 % Florida Region The Hamptons 668 7/7/2004 $ 1,035 95.0 % 95.4 % 5.8 % 5.8 % 4.9 % 6.7 % Vinings at Hampton Village 168 7/7/2004 $ 1,129 95.7 % 95.1 % 6.5 % 8.1 % 8.1 % 8.2 % Total Florida Region 836 $ 1,054 95.1 % 95.3 % 5.9 % 6.3 % 5.6 % 7.0 % 1.9 % Hudson Valley Region Carriage Hill 140 7/17/1996 $ 1,225 95.7 % 95.1 % 2.4 % 2.6 % 7.7 % -2.3 % Lakeshore Villas 152 7/17/1996 $ 1,042 95.6 % 92.1 % -1.3 % 3.5 % -1.3 % 8.7 % Patricia 100 7/7/1998 $ 1,411 97.3 % 94.7 % 2.5 % 5.7 % -1.6 % 12.2 % Sherwood Consolidation 224 10/11/2002 $ 1,241 97.0 % 95.8 % 4.3 % 6.2 % 4.4 % 8.3 % Sunset Gardens 217 7/17/1996 $ 911 97.0 % 95.0 % -1.6 % 3.3 % 0.2 % 6.2 % Total Hudson Valley Region 833 $ 1,136 96.6 % 94.7 % 1.5 % 4.4 % 2.3 % 6.6 % 2.0 % Page 12 Table of Contents December YTD YTD '07 versus YTD '06 % Growth # of Date YTD '07 YTD '07 Year Ago Rental Total Total Total YTD '07 Units Acquired Rent/Mo. Occup. Occup. Rates Revenue Expense NOI % Co. NOI Long Island, NY Region Bayview / Colonial 160 11/1/2000 $ 1,202 94.5 % 94.9 % 1.3 % 1.8 % 8.5 % -3.7 % Cambridge Village 82 3/1/2002 $ 1,604 95.6 % 96.3 % 4.4 % 3.6 % 1.3 % 5.7 % Coventry Village 94 7/31/1998 $ 1,382 95.1 % 96.1 % 1.8 % 1.7 % 4.1 % -0.9 % Devonshire Hills 297 7/16/2001 $ 1,713 95.7 % 95.5 % -0.4 % -4.2 % -5.9 % -3.3 % East Winds 96 11/1/2000 $ 1,171 93.8 % 95.6 % 2.3 % 0.0 % 7.5 % -6.0 % Hawthorne Court 434 4/4/2002 $ 1,374 94.2 % 93.9 % 1.0 % 2.3 % 7.9 % -2.6 % Heritage Square 80 4/4/2002 $ 1,601 96.6 % 97.8 % 4.7 % 2.8 % 4.8 % 1.0 % Holiday Square 144 5/31/2002 $ 1,131 95.8 % 96.0 % 4.0 % 4.1 % -0.9 % 7.7 % Lake Grove Apartments 368 2/3/1997 $ 1,384 94.9 % 94.5 % -0.5 % 2.0 % 4.3 % 0.6 % Maple Tree 84 11/1/2000 $ 1,151 92.1 % 95.8 % -0.2 % -5.1 % 10.3 % -17.0 % Mid- Island Estates 232 7/1/1997 $ 1,299 95.8 % 93.6 % 3.3 % 5.4 % 2.7 % 7.6 % Rider Terrace 24 11/1/2000 $ 1,253 96.1 % 93.1 % 0.6 % 2.0 % 8.8 % -3.1 % Sayville Commons 342 7/15/2005 $ 1,464 97.5 % 98.4 % 5.0 % 4.2 % 5.9 % 3.0 % South Bay Manor 61 9/11/2000 $ 1,573 95.2 % 90.9 % 2.4 % 6.2 % 10.8 % 2.7 % Southern Meadows 452 6/29/2001 $ 1,337 95.1 % 95.7 % -1.2 % -1.4 % 10.4 % -9.2 % Stratford Greens 359 3/1/2002 $ 1,414 95.6 % 96.0 % 1.1 % 2.8 % 6.7 % 0.1 % Terry Apartments 65 11/1/2000 $ 1,161 87.5 % 95.6 % 0.9 % -8.3 % -0.2 % -15.3 % Westwood Village Apts 242 3/1/2002 $ 2,227 95.9 % 95.6 % 3.4 % 6.3 % 9.2 % 4.3 % Woodmont Village Apts 96 3/1/2002 $ 1,311 94.6 % 95.6 % 2.2 % 2.6 % -2.3 % 5.6 % Yorkshire Village Apts 40 3/1/2002 $ 1,630 96.6 % 97.2 % 4.5 % 4.6 % 7.1 % 2.3 % Total Long Island Region 3,752 $ 1,443 95.3 % 95.5 % 1.6 % 1.8 % 5.4 % -0.8 % 12.8 % Maine Region Liberty Commons 120 8/30/2006 $ 1,139 96.7 % 47.3 % n/a n/a n/a n/a Mill Co. Gardens 95 7/7/1998 $ 773 95.9 % 95.0 % 2.0 % 2.7 % 10.0 % -3.7 % Redbank Village 500 7/7/1998 $ 822 95.8 % 94.4 % 2.1 % 5.2 % 12.6 % 0.5 % Total Maine Region 715 $ 869 96.0 % 94.5 % 2.1 % 4.8 % 12.1 % -0.1 % 1.5 % New Jersey Region Barrington Gardens 148 3/1/2005 $ 957 94.6 % 97.1 % 12.1 % 11.9 % 13.4 % 10.7 % Chatham Hill Apartments 308 1/30/2004 $ 1,639 94.1 % 95.8 % 4.1 % 4.0 % 7.7 % 2.4 % East Hill Gardens 33 7/7/1998 $ 1,498 93.7 % 98.0 % 4.0 % 0.3 % 15.1 % -6.9 % Hackensack Gardens 198 3/1/2005 $ 945 96.7 % 97.8 % 9.2 % 9.5 % 11.0 % 7.8 % Jacob Ford Village 270 2/15/2007 $ 1,025 91.8 % n/a n/a n/a n/a n/a Lakeview 106 7/7/1998 $ 1,312 96.2 % 97.5 % 5.2 % 4.2 % 0.2 % 7.0 % Northwood Apartments 134 1/30/2004 $ 1,257 94.4 % 94.4 % 5.3 % 5.3 % 11.7 % -1.0 % Oak Manor 77 7/7/1998 $ 1,749 95.4 % 98.1 % 2.1 % 2.0 % 3.3 % 1.3 % Pleasant View 1,142 7/7/1998 $ 1,125 94.1 % 94.8 % 6.1 % 6.7 % -0.1 % 12.0 % Pleasure Bay 270 7/7/1998 $ 1,078 93.2 % 95.0 % 2.3 % 3.8 % 7.9 % 0.3 % Regency Club 372 9/24/2004 $ 1,119 95.6 % 93.1 % 1.3 % 6.4 % 3.8 % 8.7 % Royal Gardens Apartments 550 5/28/1997 $ 1,192 93.7 % 93.7 % 5.7 % 7.1 % -0.9 % 13.8 % Wayne Village 275 7/7/1998 $ 1,339 95.9 % 97.3 % 4.5 % 3.5 % 3.0 % 3.9 % Windsor Realty 67 7/7/1998 $ 1,153 95.5 % 94.4 % 1.5 % 6.8 % -3.9 % 15.5 % Total New Jersey Region 3,950 $ 1,201 94.5 % 95.2 % 5.0 % 5.9 % 3.4 % 7.8 % 11.2 % Philadelphia Region Beechwood Gardens 160 7/7/1998 $ 830 95.2 % 95.4 % 0.1 % 2.9 % 2.4 % 3.5 % Castle Club 158 3/15/2000 $ 929 92.9 % 94.3 % -0.2 % 1.6 % 1.9 % 1.4 % Chesterfield 247 9/23/1997 $ 903 94.7 % 96.9 % 0.2 % 2.2 % 8.7 % -3.2 % Curren Terrace 318 9/23/1997 $ 914 94.2 % 94.8 % 0.7 % 4.2 % 3.7 % 4.6 % Glen Brook 174 7/28/1999 $ 817 93.1 % 93.2 % 0.5 % 4.2 % -7.7 % 22.0 % Glen Manor 174 9/23/1997 $ 788 95.6 % 93.5 % 3.3 % 7.6 % 2.6 % 13.7 % Golf Club 399 3/15/2000 $ 1,015 94.6 % 93.2 % 0.5 % 5.5 % 2.3 % 7.9 % Hill Brook Place 274 7/28/1999 $ 881 93.6 % 95.0 % 0.7 % 2.3 % 2.2 % 2.3 % Home Properties of Bryn Mawr 316 3/15/2000 $ 1,037 93.0 % 92.6 % -1.3 % 2.0 % -1.3 % 4.8 % Home Properties of Devon 631 3/15/2000 $ 1,088 95.4 % 93.1 % 0.0 % 5.2 % 1.4 % 7.9 % Home Properties of Newark 432 7/16/1999 $ 858 94.0 % 94.9 % 0.7 % 1.6 % 6.1 % -1.8 % New Orleans Park 442 7/28/1999 $ 849 94.1 % 95.7 % 3.9 % 6.7 % 3.4 % 10.1 % Racquet Club 466 7/7/1998 $ 1,014 95.8 % 94.4 % -0.8 % 5.5 % 5.4 % 5.6 % Racquet Club South 103 5/27/1999 $ 867 95.4 % 95.0 % -1.1 % 5.0 % 1.0 % 8.9 % Ridley Brook 244 7/28/1999 $ 888 94.4 % 95.7 % 1.3 % 4.6 % 5.2 % 4.1 % Sherry Lake 298 7/23/1998 $ 1,164 91.6 % 93.8 % 0.4 % 0.5 % 3.4 % -1.2 % The Brooke at Peachtree Village 146 8/15/2005 $ 1,065 97.1 % 97.3 % 5.0 % 5.7 % 5.7 % 5.7 % The Landings 384 11/25/1996 $ 964 95.7 % 95.1 % 0.4 % 3.0 % -3.3 % 7.9 % Trexler Park 250 3/15/2000 $ 1,038 91.6 % 90.6 % -0.8 % -2.0 % -2.0 % -2.0 % Trexler Park West 168 Under Construction $ 1,255 84.5 % n/a n/a n/a n/a n/a Valley View 177 9/23/1997 $ 826 88.6 % 90.0 % -0.8 % 7.1 % 7.9 % 6.0 % Village Square 128 9/23/1997 $ 933 93.5 % 94.9 % 2.6 % 1.6 % 1.7 % 1.5 % William Henry 363 3/15/2000 $ 1,081 94.6 % 92.4 % -1.3 % 5.6 % 6.5 % 4.9 % Total Philadelphia Region 6,452 $ 962 94.2 % 94.0 % 0.4 % 3.8 % 2.6 % 4.9 % 15.0 % Page 13 Table of Contents December YTD YTD '07 versus YTD '06 % Growth # of Date YTD '07 YTD '07 Year Ago Rental Total Total Total YTD '07 Units Acquired Rent/Mo. Occup. Occup. Rates Revenue Expense NOI % Co. NOI Washington DC Region Braddock Lee 255 3/16/1998 $ 1,231 96.0 % 96.9 % 2.6 % 5.4 % 4.5 % 6.0 % Cider Mill 864 9/27/2002 $ 1,065 95.1 % 94.3 % 0.9 % 3.8 % -0.8 % 7.3 % Cinnamon Run 511 12/28/2005 $ 1,143 96.5 % 95.9 % 2.8 % 4.4 % -1.4 % 7.1 % East Meadow 150 8/1/2000 $ 1,315 95.3 % 96.1 % 4.2 % 5.1 % -2.9 % 10.5 % Elmwood Terrace 504 6/30/2000 $ 880 92.9 % 93.3 % 3.7 % 1.0 % 2.3 % -0.2 % Falkland Chase 450 9/10/2003 $ 1,294 94.0 % 95.5 % 6.1 % 3.6 % 5.2 % 2.8 % Mount Vernon Square 1,387 12/27/2006 $ 1,131 94.9 % n/a n/a n/a n/a n/a Orleans Village 851 11/16/2000 $ 1,277 92.8 % 93.9 % 1.9 % 3.4 % 0.4 % 5.5 % Park Shirlington 294 3/16/1998 $ 1,206 96.2 % 96.2 % 1.7 % 4.8 % -0.9 % 9.0 % Peppertree Farm 880 12/28/2005 $ 1,108 90.4 % 89.1 % 1.1 % 5.3 % -1.9 % 10.6 % Seminary Hill 296 7/1/1999 $ 1,200 92.7 % 93.8 % 1.2 % 3.5 % -1.8 % 8.9 % Seminary Towers 540 7/1/1999 $ 1,242 93.8 % 94.6 % 2.7 % 4.4 % 4.2 % 4.6 % Tamarron Apartments 132 7/16/1999 $ 1,397 95.4 % 95.8 % 5.4 % 4.5 % 4.9 % 4.3 % The Apts at Wellington Trace 240 3/2/2004 $ 1,247 93.7 % 96.2 % 3.8 % 0.0 % 8.1 % -3.4 % The Manor - MD 435 8/31/2001 $ 1,125 93.3 % 94.9 % 0.2 % 1.2 % 5.0 % -1.3 % The Manor - VA 198 2/19/1999 $ 989 93.8 % 95.1 % 0.9 % 2.6 % 5.4 % 0.5 % The Sycamores 185 12/16/2002 $ 1,353 96.3 % 96.5 % 5.3 % 7.0 % 8.7 % 6.2 % Virginia Village 344 5/31/2001 $ 1,218 94.9 % 95.6 % 0.7 % 4.1 % 2.4 % 5.5 % West Springfield 244 11/18/2002 $ 1,388 96.3 % 95.1 % 3.9 % 4.3 % 5.7 % 3.7 % Woodleaf Apartments 228 3/19/2004 $ 1,096 94.6 % 94.1 % 4.4 % 4.8 % 7.7 % 3.2 % Total Washington DC Region 8,988 $ 1,166 94.1 % 94.3 % 2.4 % 3.8 % 1.8 % 5.2 % 26.9 % TOTAL OWNED PORTFOLIO 37,496 $ 1,101 94.7 % n/a n/a n/a n/a n/a 100.0 % TOTAL CORE PORTFOLIO 32,600 $ 1,101 94.8 % 94.7 % 2.5 % 4.0 % 2.8 % 5.0 % Page 14 Table of Contents Physical Occupancy Comparison By Region - Core Properties Sequential Comparison Fourth Quarter 2007 vs. Third Quarter 2007 Region % Units 4Q '07 3Q '07 Variance New Jersey, Long Island, Hudson Valley 25.4 % 95.2 % 95.3 % -0.1 % Washington 23.3 % 94.0 % 94.4 % -0.4 % Philadelphia 19.3 % 93.6 % 94.3 % -0.7 % Baltimore 16.9 % 94.5 % 94.7 % -0.2 % Chicago 6.9 % 96.9 % 96.5 % 0.4 % Boston 3.8 % 95.9 % 96.9 % -1.0 % Florida 2.6 % 93.5 % 94.4 % -0.9 % Other 1.8 % 96.0 % 97.2 % -1.2 % Total Core 100.0 % 94.6 % 95.0 % -0.4 % Year over Year Comparison Fourth Quarter 2007 vs. Fourth Quarter 2006 Region % Units 4Q '07 4Q '06 Variance New Jersey, Long Island, Hudson Valley 25.4 % 95.2 % 94.9 % 0.3 % Washington 23.3 % 94.0 % 93.8 % 0.2 % Philadelphia 19.3 % 93.6 % 94.4 % -0.8 % Baltimore 16.9 % 94.5 % 94.0 % 0.5 % Chicago 6.9 % 96.9 % 96.1 % 0.8 % Boston 3.8 % 95.9 % 95.0 % 0.9 % Florida 2.6 % 93.5 % 94.3 % -0.8 % Other 1.8 % 96.0 % 93.1 % 2.9 % Total Core 100.0 % 94.6 % 94.4 % 0.2 % December vs. Quarter Comparison Region % Units Dec '07 4Q '07 Variance New Jersey, Long Island, Hudson Valley 25.4 % 94.9 % 95.2 % -0.3 % Washington 23.3 % 94.1 % 94.0 % 0.1 % Philadelphia 19.3 % 93.5 % 93.6 % -0.1 % Baltimore 16.9 % 94.3 % 94.5 % -0.2 % Chicago 6.9 % 96.9 % 96.9 % 0.0 % Boston 3.8 % 94.8 % 95.9 % -1.1 % Florida 2.6 % 93.1 % 93.5 % -0.4 % Other 1.8 % 94.7 % 96.0 % -1.3 % Total Core 100.0 % 94.5 % 94.6 % -0.1 % Page 15 Table of Contents Net Operating Results – Core Properties Sequential Results Fourth Quarter 2007 vs. Third Quarter 2007 Region % Units Revenues Expenses NOI New Jersey, Long Island, Hudson Valley 25.4 % 1.6 % 16.9 % -8.2 % Washington 23.3 % 1.4 % 8.3 % -2.9 % Philadelphia 19.3 % 1.7 % 11.8 % -5.8 % Baltimore 16.9 % 1.5 % 3.8 % 0.2 % Chicago 6.9 % 4.6 % -17.3 % 26.8 % Boston 3.8 % -0.5 % 15.3 % -9.0 % Florida 2.6 % -0.9 % 6.1 % -7.0 % Other 1.8 % -0.9 % 5.1 % -4.9 % Total Core 100.0 % 1.5 % 9.4 % -3.6 % Year Over Year Results Fourth Quarter 2007 vs. Fourth Quarter 2006 Region % Units Revenues Expenses NOI New Jersey, Long Island, Hudson Valley 25.4 % 5.3 % 6.5 % 4.3 % Washington 23.3 % 3.8 % 5.2 % 2.8 % Philadelphia 19.3 % 1.3 % 5.8 % -2.4 % Baltimore 16.9 % 2.3 % 6.4 % 0.0 % Chicago 6.9 % 6.8 % -20.3 % 37.6 % Boston 3.8 % 3.8 % 5.1 % 2.9 % Florida 2.6 % 0.9 % 15.8 % -10.5 % Other 1.8 % 6.6 % 5.8 % 7.1 % Total Core 100.0 % 3.7 % 4.5 % 3.1 % Page 16 Table of Contents Resident Statistics Top Six Reasons for Moveouts - Owned Communities 4Q '07 3Q '07 2Q '07 1Q '07 4Q '06 3Q '06 2Q '06 1Q '06 Year '07 Year '06 Year '05 Year '04 Eviction/skip 16.20 % 12.80 % 12.70 % 16.70 % 17.00 % 12.60 % 12.30 % 14.70 % 14.60 % 14.20 % 13.10 % 12.30 % Employment related 16.00 % 17.40 % 15.70 % 15.20 % 14.60 % 15.70 % 15.70 % 16.40 % 16.10 % 15.60 % 15.60 % 15.50 % Home purchase 13.70 % 14.90 % 16.60 % 16.70 % 18.60 % 19.10 % 18.70 % 17.60 % 15.50 % 18.50 % 19.40 % 19.50 % Location convenience/ apartment size 13.00 % 14.10 % 13.90 % 13.80 % 12.70 % 13.60 % 11.70 % 11.50 % 13.70 % 12.40 % 12.80 % 12.30 % Transfer w/in HP 10.50 % 6.10 % 8.10 % 8.60 % 8.10 % 7.80 % 8.20 % 8.80 % 8.30 % 8.20 % 9.10 % 9.50 % Rent Level 7.40 % 7.40 % 8.60 % 8.60 % 8.40 % 7.20 % 8.70 % 9.10 % 8.00 % 8.40 % 9.20 % 9.60 % Traffic - Core Turnover - Core Signed Signed Traffic Traffic Leases Leases 4Q '07 Year '07 4Q '07 Year '07 vs. To vs. To 4Q '06 Year '06 4Q '06 Year '06 4Q '07 4Q '06 Year '07 Year '06 Region Baltimore 13 % 12 % 30 % 16 % 9 % 9 % 41 % 43 % Boston 27 % 23 % -20 % 13 % 5 % 8 % 37 % 37 % Chicago 2 % -1 % 18 % -5 % 7 % 10 % 41 % 50 % Florida 22 % 8 % 17 % 13 % 10 % 14 % 45 % 50 % Hudson Valley -24 % -9 % -51 % -31 % 10 % 11 % 43 % 46 % Long Island -5 % -8 % -8 % -7 % 7 % 9 % 36 % 37 % Maine 4 % 2 % -21 % -2 % 10 % 10 % 43 % 45 % New Jersey 5 % 11 % 0 % 12 % 7 % 8 % 39 % 35 % Philadelphia 14 % 1 % 10 % -5 % 10 % 11 % 46 % 48 % Washington 11 % 4 % 29 % 5 % 10 % 10 % 41 % 42 % Total Core 9 % 4 % 12 % 2 % 9 % 10 % 41 % 43 % Bad Debt as % of Rent - Core 4Q '07 4Q '06 Year '07 Year '06 1.04 % 0.88 % 0.88 % 0.76 % Page
|
The action is brought by the plaintiff, a Virginia corporation, as the assignee of the Safety Fund Insurance Society, a New York corporation, to foreclose a mortgage executed by the two appellants, husband and wife, to said last named corporation to secure the payment of a joint *Page 363
and several bond executed and delivered to the same party at the same time. The defendants pleaded as a defense and set-off a claim held by the defendant Joseph Damon against the plaintiff's assignor on two participation certificates issued by that corporation, the nature of which certificates is not material to this discussion. On the trial it appeared that the plaintiff and its assignor had entered into what is called a consolidation agreement by which the plaintiff was to acquire all the assets of its assignor and to administer those assets in discharge of its assignor's obligation, but the debts of the assignor were in no degree to be assumed by the plaintiff. The Special Term found the maturity of the participation certificates before the assignment of the mortgage in suit to the plaintiff and the liability thereon of the plaintiff's assignor to the defendant Joseph. It made a decree in favor of the defendants canceling the bond and mortgage and awarding them judgment against the plaintiff for the excess of the amount due on the certificates over that due on the bond and mortgage. The Appellate Division reversed this judgment and ordered a new trial. The unanimous order entered upon this decision reversed the judgment on questions of law only, and affirmatively declared in the body of the order that the facts had been examined and no error found therein. From the order of the Appellate Division the defendants have appealed to this court, giving the requisite stipulation.
Under the form of the order of the Appellate Division the facts found by the trial court are conclusive on this court. The only question before us is whether those facts justified or required a reversal of the judgment rendered thereon by the Special Term. That the plaintiff, under its agreement with its assignor, was not liable personally for the debts of the latter corporation is entirely clear. Therefore, the Appellate Division was doubtless correct in reversing so much of the judgment as awarded a recovery against the plaintiff for the excess of the sum due on the certificates over that due on the bond and mortgage, unless, as the appellants' counsel contends, the plaintiff was foreclosed by its failure to serve a reply to the defendants' *Page 364
answer. This position of counsel cannot be upheld. In the answer the certificates are pleaded as a set-off and defense, and in the prayer for judgment, where the only mention of counterclaim is found, it is asked that they be allowed as a counterclaim, defense and set-off, and that the bond and mortgage be canceled. No recovery against the plaintiff for the amount of the certificate is asked. It is the settled law in this state that for a defendant to preclude a plaintiff from contesting a counterclaim because of a failure to serve a reply, the counterclaim must be distinctly named as such in the answer. (Acer v. Hotchkiss, 97 N.Y. 395; Equitable Life AssuranceSociety v. Cuyler, 75 id. 511.) But though the judgment was properly reversed in this respect, it not being possible on another trial to vary the proof as to the liability of the plaintiff, a new trial should not have been ordered, but the judgment merely modified, unless as a matter of law the certificates were not a valid set-off to the bond and mortgage. (Freel v. County of Queens, 154 N.Y. 661; Heerwagen v.Crosstown Street Ry. Co., 179 id. 99.)
This brings us to the principal question in the case, which is, whether the claim on the certificates which was held by only one of the defendants was a good set-off against the plaintiff's claim. Under sections 502 and 1909 of the Code of Civil Procedure the assignment to the plaintiff was subject not only to every defense but to every counterclaim that might be set up against its assignor. Therefore, the question presented here is the same as that which would arise had the action been brought by the original mortgagee, and may be examined and considered from that point of view. At common law and under the Revised Statutes in an action against more than one defendant there could be interposed only a set-off due to all the defendants jointly. (2 R.S. p. 354, sec. 18.) That rule still obtains in this state, where the suit is on the joint obligation or liability of the defendants. Where, however, the liability of the defendants is several, under the express provisions of section 501 of the present Code, which in this respect is but a re-enactment of section *Page 365
150 of the former Code, as amended in 1852, a defendant against whom a several judgment may be rendered can interpose a counterclaim existing in his own favor. In Parsons v. Nash (8 How. Pr. 454), which was an action against the maker and sureties on a promissory note, it was held that as a several judgment might be rendered against either defendant, each could plead a counterclaim held by himself. In Briggs v. Briggs (20 Barb. 477) it was held that in an action against several defendants jointly and severally liable, either of them might set off individual debts due to him by the plaintiff or might avail himself thereof by way of counterclaim. (See, also, Newell v.Salmons, 22 Barb. 644.) The authority of these earlier decisions has never been impunged, and Newell v. Salmons is cited with approval in Bathgate v. Haskin (59 N.Y. 533). In the present case, as already said, the bond of the defendants is joint and several, and, therefore, a several judgment could have been had against either defendant. The fact that the action was in form joint does not affect the principle involved. When the defendants "In an action are jointly and severally liable, although sued jointly, a counterclaim, consisting of a demand in favor of one or some of them, may, if otherwise without objection, be interposed." (Pomeroy's Remedies and Remedial Rights, sec. 761; Dunn v. West, 5 B. Monroe, 376, 381.) Therefore, had the defendants been sued on the bond in an action at law the defendant Joseph could, under the authorities and the rule obtaining in this state, have interposed as a counterclaim the amount due him on the participation certificates. In such case it is plain that the counterclaim so interposed would necessarily have inured to the benefit of all the defendants. The plaintiff had but one claim and but one cause of action. Payment by a stranger to the obligation would not discharge it, but payment by anybody liable thereon, whether jointly or severally, would necessarily satisfy it. (Cockcroft v. Muller, 71 N.Y. 367. ) Any other rule would permit a creditor to recover his claim as many times over as he had parties severally liable for the debt. We are *Page 366
not considering a case where the creditor has released one of his debtors, either without consideration or for less than the debt, reserving his right to proceed against the others. Such settlements are authorized by our statutes. But where a debt has been paid in full by one debtor, it is satisfied as to all. (Coonley v. Wood, 36 Hun, 559.) The same rule must obtain in the case of a counterclaim as in that of payment. It is in fact a payment by the set-off of an outstanding claim against the creditor. Had the bond not been assigned and the plaintiff's assignor brought an action upon it, the defendant Joseph interposing his counterclaim, the judgment in the action would extinguish pro tanto the claim of that defendant against the plaintiff. If it were allowed to recover against the other defendant it would be recovering twice over; first by the extinguishment of its debt, and second by the amount recovered against the other defendant. Whenever in a suit on a money obligation a counterclaim is allowed in favor of one of several defendants it must, from the nature of the case, necessarily inure to the benefit of all the defendants liable on that obligation. A several defendant need not interpose such a counterclaim and give his co-defendants the benefit thereof; but whether he shall do so or not is solely his concern.
It is urged that the plaintiff might have proceeded against the other defendant, the wife, alone, in which case the counterclaim would be inadmissible. We may assume that this position is correct, but the plaintiff must take the consequences of the form of action it has elected to bring. The case is not singular. Where a creditor sues the principal debtor and surety in the same action, either can interpose a counterclaim which inures in favor of both. If, however, he sues the surety separately the surety cannot interpose a counterclaim in favor of his principal (Gillespie v. Torrance, 25 N.Y. 306), though if the principal be insolvent the surety may have relief in equity. The form of the action brought by the creditor may, therefore, substantially affect his rights, but that is a matter for him to consider. *Page 367
We think that the rule which would apply in the case of a common-law action on the bond controls the disposition of the present action, which is not only to foreclose the mortgage, but to recover a money judgment against each defendant for any deficiency that may arise on the sale of the mortgaged property. It was said in National Fire Insurance Company v. McKay
(21 N.Y. 191) by Chief Judge COMSTOCK: "In a foreclosure suit a defendant who is personally liable for the debt, or whose land is bound by the lien, may probably introduce a set-off to reduce or extinguish the claim." In that case the remark of the learned judge was obiter, but in Hunt v. Chapman (51 N.Y. 555) the proposition was decided. Bathgate v. Haskin (59 N.Y. 534) is to the same effect, though much of the discussion in that case is not germane to this. There the bond to the plaintiff was the joint bond of the owner of the mortgaged premises and another person, and to bring the case within the general rule it was necessary to show that the co-obligor was merely a surety. On the trial of this action the plaintiff put in evidence a deed to the defendant Phebe tending to prove that the title to the mortgaged premises was solely in her. We do not see that this fact affects the question before us. There is nothing in the case to show that the loan was not made to both defendants, and on the face of the bond and mortgage the debt appears to be that of both. However that may be, the plaintiff has sought to recover on a personal claim against the defendant Joseph and by seeking such relief it subjected its whole cause of action to any valid counterclaim that Joseph might have.
We are of the opinion that the counterclaim in favor of the husband extinguished the liability on the bond and mortgage, and that both instruments were properly held by the trial court to be discharged. The Appellate Division, therefore, instead of ordering a new trial, should have modified the judgment by striking out the recovery against the plaintiff of the excess due on the certificates.
The order of the Appellate Division should be reversed *Page 368
and the judgment of the Special Term modified so as to strike out the award of a money judgment against the plaintiff, except for costs, and as thus modified affirmed, without costs to either party in this court or in the Appellate Division.
HAIGHT, VANN, WERNER and WILLARD BARTLETT, JJ., concur; GRAY, J., absent; HISCOCK, J., not sitting.
Ordered accordingly. |
Order entered August 1, 2014
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-13-01437-CR
STEPHEN GLEN LIMBAUGH, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the Criminal District Court No. 2
Dallas County, Texas
Trial Court Cause No. F12-21347-I
ORDER
On April 28, 2014, this Court adopted the trial court’s findings that appellant desires to
pursue the appeal and that he is indigent and represented by court-appointed counsel David Pire.
We ordered appellant to file his brief by May 27, 2014. When the brief was not filed by July 9,
2014, we ordered appellate counsel David Pire to file the brief within fifteen days. We warned
Mr. Pire that if he did not file appellant’s brief within that time, we would order that he be
removed as appellant’s appointed attorney. To date, we have not received appellant’s brief, nor
has Mr. Pire communicated with the Court regarding the status of the brief.
Accordingly, we ORDER David Pire removed as appellant’s appointed attorney of
record.
We ORDER the trial court to appoint new counsel to represent appellant in this appeal
and to transmit the order appointing new counsel to this Court within FIFTEEN DAYS of the
date of this order.
We DIRECT the Clerk to send copies of this order, by electronic transmission, to the
Honorable Don Adams, Presiding Judge, Criminal District Court No. 2; David Pire; and Michael
Casillas.
We ABATE the appeal to allow the trial court to comply with the order. We will
reinstate the appeal fifteen days from the date of this order or when the order appointing new
counsel is received.
/s/ DAVID EVANS
JUSTICE
|
Case 17-32186 Document 1226 Filed in TXSB on 08/01/19 Page 1 of 2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: CASE NO.: 17-32186
UPLIFT RX, LLC 1 CHAPTER 11
Debtor(s). Jointly Administered
SUPPLEMENTAL PROPOSED AGENDA FOR HEARING
SCHEDULED FOR AUGUST 5, 2019 at 2:00 P.M. (CST)
Time and August 5, 2019 at 2:00 p.m. (CST)
Date of Hearing
Location of Hearing: The Honorable Marvin Isgur
United States Bankruptcy Judge
515 Rusk Avenue
Courtroom 404
Houston, Texas 77002
Copies of Pleadings: A copy of each pleading can be viewed (a) for a fee on the Court’s
[email protected]. Copies of the pleadings were
served on all parties requesting notice and all registered ECF users in
the case.
1
The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, as
applicable, are: Uplift Rx, LLC (9306); Belle Pharmacy, LLC (0143); Alliance Medical Holdings, LLC (5945); Geneva
Pharmacy, LLC (1929); Ohana Rx, LLC (1722); Benson Pharmacy, Inc. (6606); Kendall Pharmacy, Inc. (0825); Richardson
Pharmacy, LLC (9566); Innovative Rx, LLC (9986); Charleston Rx, LLC (5852); On Track Rx, LLC (9021); Uinta Rx, LLC
(7157); Goodman Pharmacy, LLC (9373); BrooksideRx, LLC (5927); Osceola Clinic Pharmacy, LLC (4886); Oak Creek Rx,
LLC (9722); Waverly Pharmacy, LLC (7342); Newton Rx, LLC (9510); Lone Peak Rx, LLC (5973); Improve Rx, LLC (9120);
New Jersey Rx, LLC (0035); Berkshire Pharmacy, LLC (9197); Health Saver Rx, LLC (7810); Best Rx, LLC (0346); Delaney
Pharmacy, LLC (7497); New Life Pharmacy, LLC (8292); Skyline Health Services, LLC (6876); Stonybrook Pharmacy, LLC
(7700); Woodward Drugs, LLC (2385); Bridgestone Pharmacy, LLC (5294); Brookhill Pharmacy, LLC (5296); Burbank
Pharmacy, LLC (5227); Canyons Pharmacy, LLC (1744); Cheshire Pharmacy, LLC (6370); Conoly Pharmacy, LLC (0367);
Cottonwood Pharmacy, LLC (5131); Galena Pharmacy, LLC (0672); Garnett Pharmacy, LLC (6505); Hawthorne Pharmacy,
LLC (5345); Hazelwood Pharmacy, LLC (1088); Medina Pharmacy, LLC (8987); Raven Pharmacy, LLC (5671); Glendale
Square Rx, Inc. (1022); Lockeford Rx, Inc. (1853); Pinnacle Pharmacy Solutions, LLC (9760); Riverfront Rx, LLC (7152);
Riverbend Prescription Services, LLC (1862); Raven Pharmacy Holdings, LLC (2464); Bridgestone Pharmacy Holdings, LLC
(2840); Crestwell Pharmacy Holdings, LLC (1503); Galena Pharmacy Holdings, LLC (8609); Geneva Rx Holdings, LLC (8247);
Hawthorne Rx Holdings, LLC (9531); Woodward Rx Holdings, LLC (2173); Philadelphia Pharmacy Holdings, LLC (8526);
Health Rx Holdings, LLC (0909); Canyon Medical, LLC (4915); Alliance Medical Administration, Inc. (2899); Ollin
Pharmaceutical, LLC (9815); Alta Distributors, LLC (7407); Eat Great Café, LLC (2314); Alliance Health Networks, LLC
(1815) . The Debtors’ mailing address is Uplift Rx, LLC, 15462 FM 529, Houston, TX 77095.
Case 17-32186 Document 1226 Filed in TXSB on 08/01/19 Page 2 of 2
A. ADDITIONAL MOTION TO BE HEARD (MAIN CASE)
24. Debtors’ Motion Pursuant to Federal Rule of Bankruptcy Procedure 9019 for
Entry of Order Approving Stipulation with BluPax Pharma, Inc. (Doc. No. 1217)
Dated: August 1, 2019 /s/ Elizabeth A. Green
Elizabeth A. Green, Esq.
So. Dist. Fed. ID. 903144
[email protected]
BAKER & HOSTETLER LLP
200 South Orange Avenue, Suite 2300
Orlando, Florida 32801-3432
Telephone: (775)705-2406
Counsel for the Debtors
4828-0434-2430.1
|
1:19-cv-01044-MGL-PJG Date Filed 04/09/19 Entry Number 1 Page 1 of 4
UNITED STATES DISTRICT COURT
STATE OF SOUTH CAROLINA
AIKEN DIVISION
John D. Darien, )
) C/A No.: 1:19-1044-MGL-PJG
Plaintiff, )
)
Vs. ) COMPLAINT
) (JURY TRIAL DEMANDED)
Allendale Police Department John R. )
Sullivan, Individually and as Chief of )
Allendale Police Department, )
)
Allendale Police Department Ervin Ford, Jr., )
Individually and as an Officer of the )
Allendale Police Department, )
)
Town of Allendale, South Carolina, )
Allendale County, a Municipality of the )
the State of South Carolina, )
)
John Doe and Richard Roe, an Unknown )
Number of Unidentified Officers and )
Employees of the Allendale Police )
Police Department, Individually and as )
As Employees of the Allendale Police )
Department, )
)
Defendants. )
____________________________________)
Plaintiff complaining of the above-named Defendants would respectfully show unto this
Honorable Court:
JURISDICTION
1. This action arises under the Fourth Amendment and, if applicable, the Fourteenth
Amendment to the Constitution of the United States of America, 42 USC § 1983, and the Laws
and Constitution of the State of South Carolina.
1
1:19-cv-01044-MGL-PJG Date Filed 04/09/19 Entry Number 1 Page 2 of 4
2 Subject matter is conferred upon this Court by 28 USC § 1331 and § 1343.
Plaintiff invokes the pendant jurisdiction of this Court over all state causes of action.
PARTIES
3. Plaintiff is a citizen of the United States of America and a resident of the County
of Allendale, State of South Carolina.
4. Plaintiff is informed and believes that the Defendants are either entities and/or
citizens of the United States of America and the State of South Carolina. Plaintiff is informed
and believes that the entities are located and perform their duties in the Town of Allendale,
County of Allendale, South Carolina. Plaintiff is without sufficient knowledge to know whether
all of the non-entities Defendants reside in Allendale County.
5. Defendants were all times herein relevant acting under the color and pretext their
authority as police officers and/or employees of the Allendale Police Department. At all relevant
times herein the aforesaid Defendants were acting in their individual as their official capacity.
FACTUAL ALLEGATION(S)
6. That on or about April 9, 2016, Officer Dustin Creel of the Town of Hardeeville
Police Department arrested Plaintiff for Driving Suspension within the town limits. Additionally,
Officer Creel indicated to Plaintiff that there was an outstanding bench warrant from the Town of
Allendale Police Department in reference to an Open Container ticket from 2012/ 2013.
Subsequent to arrest, Plaintiff had an available bondsman for Driving Under Suspension charge.
However, the outstanding bench warrant from the Town of Allendale Police Department
prevented Plaintiff from exercising bail on the Driving Under Suspension charge. The Town of
Hardeeville Municipal Court eventually dismissed the Driving Under Suspension charge on the
Plaintiff on or before May 2, 2016 because of a discrepancy with the South Carolina Department
2
1:19-cv-01044-MGL-PJG Date Filed 04/09/19 Entry Number 1 Page 3 of 4
of Motor Vehicles (SCDMV). Plaintiff’s mother paid outstanding bench warrant amount on
April 11, 2016. Consequently, Jasper County Detention Center released Plaintiff on April 11,
2016.
7. That in 2012/2013, soon thereafter the issuance of the Open Container ticket,
Plaintiff went to pay the fine associated with the Open Container ticket. At first, Plaintiff went to
the Allendale County Magistrate Office to pay the ticket. They could not find the ticket.
Subsequently, Plaintiff went to the Defendants to pay the ticket. Defendants could not find the
ticket and, thus, Plaintiff went back to Allendale County Magistrate Office for further inquiry.
Again, they could not locate the ticket. Plaintiff went back to Defendants with no avail.
Defendants did not contact Plaintiff about the ticket from that point and Plaintiff became aware
of the bench warrant when he was arrested on April 9, 2016. Additionally, this ticket was not
reflected on the Public Index and/or reported to the SCDMV as to be placed on the driving
record of Plaintiff.
FOR A FIRST CAUSE OF ACTION
(Violation of Fourth and/or Fourteenth Amendment Rights)
42USC § 1983
(Malicious Prosecution, Abuse of Process, False Imprisonment)
8. Plaintiff herein repeats and reiterates each and every allegation contained in the
preceding paragraphs as if verbatim.
9. That Defendants did violate Plaintiff’s rights under the the Fourth Amendment
and, if applicable, the Fourteenth Amendment to the United States Constitution, by maliciously
prosecuting and continuing the proceedings against Plaintiff after attempts by Plaintiff to pay
ticket in which the Defendants could not locate in 2012/2013 which eventually resulted into three
(3) days of false imprisonment in the Jasper County Detention Center from April 9, 2016 to
April 11, 2016 through the issuance of a bench warrant by the Defendants. Further, that
3
1:19-cv-01044-MGL-PJG Date Filed 04/09/19 Entry Number 1 Page 4 of 4
Defendants did have an ulterior purpose and committed a willful act in the use of process not
proper in the regular conduct of the proceeding by procuring a bench warrant after the ticket
could not be located by the Defendants and not sending the unpaid status of the ticket to the
SCDMV. This act resulted in the SCDMV not being able to place the unpaid status of the ticket
on the driving record of Plaintiff. This action would have alerted Plaintiff of the unpaid status of
the ticket and give Plaintiff an opportunity to rectify the situation before the issuance of a bench
warrant. Thus, the issuance of the bench warrant led to the violation of the Fourth and/or
Fourteenth Amendments by Defendants and resulted into the false imprisonment of Plaintiff for
three (3) days from April 9, 2016 to April 11, 2016. Finally, as indicated in the above-referenced
portions of this Complaint, Defendants restrained Plaintiff through the issuance of the bench
warrant, the restraint was intentional and it was unlawful.
10. Plaintiff has suffered mental pain and suffering, fright, nervousness, indignity,
humiliation, embarrassment, insults, injury to reputation and person, damages for discomfort or
injury to Plaintiff’s health, loss of time, deprivation of the society of family, reasonable attorney
fees, specific financial loss, as in present or prospective employment.
WHEREFORE, Plaintiff prays for judgment against Defendants for his actual and/or
compensatory damages, special and punitive damages, costs of this action, attorney ‘s fees, and
further relief as this Court may deem just, proper and equitable.
THE LAW OFFICES OF JOSHUA KOGER, JR.
s/Joshua Koger, Jr.
Barnwell, SC Joshua Koger, Jr., Esq. (#6431)
April 9, 2019 Attorney for Plaintiff
P.O. Box 393
33 Franklin Street
Barnwell, SC 29812
779-841-4585 (Phone);779-841-4585 (Facsimile)
4
|
Case 16-26107 Doc 53 Filed 12/11/18 Entered 12/11/18 08:58:14 Desc Main
Document Page 1 of 3
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
In re: Case No. 16-26107
RONNIE HOLMES
Debtor(s)
CHAPTER 13 STANDING TRUSTEE’S FINAL REPORT AND ACCOUNT
Tom Vaughn, chapter 13 trustee, submits the following Final Report and Account of the
administration of the estate pursuant to 11 U.S.C. § 1302(b)(1). The trustee declares as follows:
1) The case was filed on 08/15/2016.
2) The plan was confirmed on 02/08/2017.
3) The plan was modified by order after confirmation pursuant to 11 U.S.C. § 1329 on
06/21/2017, 03/09/2018.
4) The trustee filed action to remedy default by the debtor in performance under the plan
on NA .
5) The case was dismissed on 11/07/2018.
6) Number of months from filing to last payment: 26.
7) Number of months case was pending: 28.
8) Total value of assets abandoned by court order: NA .
9) Total value of assets exempted: NA .
10) Amount of unsecured claims discharged without payment: $0.00.
11) All checks distributed by the trustee relating to this case have cleared the bank .
UST Form 101-13-FR-S (09/01/2009)
Case 16-26107 Doc 53 Filed 12/11/18 Entered 12/11/18 08:58:14 Desc Main
Document Page 2 of 3
Receipts:
Total paid by or on behalf of the debtor $1,900.00
Less amount refunded to debtor $0.00
NET RECEIPTS: $1,900.00
Expenses of Administration:
Attorney’s Fees Paid Through the Plan $1,810.10
Court Costs $0.00
Trustee Expenses & Compensation $89.90
Other $0.00
TOTAL EXPENSES OF ADMINISTRATION: $1,900.00
Attorney fees paid and disclosed by debtor: $128.24
Scheduled Creditors:
Creditor Claim Claim Claim Principal Int.
Name Class Scheduled Asserted Allowed Paid Paid
ATG CREDIT Unsecured 22,036.00 NA NA 0.00 0.00
ATG CREDIT Unsecured 120.00 NA NA 0.00 0.00
CITY OF CHICAGO DEPT OF REVENU Unsecured 7,088.00 7,896.80 7,896.80 0.00 0.00
CITY OF KANKAKEE Unsecured 100.00 NA NA 0.00 0.00
ECMC Unsecured 9,484.00 37,887.08 37,887.08 0.00 0.00
METRO SOUTH MED CTR Unsecured 300.00 NA NA 0.00 0.00
NORTHWEST COLLECTORS Unsecured 160.00 NA NA 0.00 0.00
ST IL TOLLWAY AUTHORITY Unsecured 0.00 NA NA 0.00 0.00
U S Dept Of Ed/gsl/atl Unsecured 9,161.00 NA NA 0.00 0.00
U S Dept Of Ed/gsl/atl Unsecured 6,212.00 NA NA 0.00 0.00
U S Dept Of Ed/gsl/atl Unsecured 4,831.00 NA NA 0.00 0.00
US CELLULAR Unsecured 800.00 NA NA 0.00 0.00
UST Form 101-13-FR-S (09/01/2009)
Case 16-26107 Doc 53 Filed 12/11/18 Entered 12/11/18 08:58:14 Desc Main
Document Page 3 of 3
Summary of Disbursements to Creditors:
Claim Principal Interest
Allowed Paid Paid
Secured Payments:
Mortgage Ongoing $0.00 $0.00 $0.00
Mortgage Arrearage $0.00 $0.00 $0.00
Debt Secured by Vehicle $0.00 $0.00 $0.00
All Other Secured $0.00 $0.00 $0.00
TOTAL SECURED: $0.00 $0.00 $0.00
Priority Unsecured Payments:
Domestic Support Arrearage $0.00 $0.00 $0.00
Domestic Support Ongoing $0.00 $0.00 $0.00
All Other Priority $0.00 $0.00 $0.00
TOTAL PRIORITY: $0.00 $0.00 $0.00
GENERAL UNSECURED PAYMENTS: $45,783.88 $0.00 $0.00
Disbursements:
Expenses of Administration $1,900.00
Disbursements to Creditors $0.00
TOTAL DISBURSEMENTS : $1,900.00
12) The trustee certifies that, pursuant to Federal Rule of Bankruptcy Procedure 5009,
the estate has been fully administered, the foregoing summary is true and complete, and all
administrative matters for which the trustee is responsible have been completed . The trustee
requests a final decree be entered that discharges the trustee and grants such other relief as may
be just and proper.
Dated: 12/11/2018 By:/s/ Tom Vaughn
Trustee
STATEMENT: This Unified Form is associated with an open bankruptcy case, therefore, Paperwork Reduction
Act exemption 5 C.F.R. § 1320.4(a)(2) applies.
UST Form 101-13-FR-S (09/01/2009)
|
Case 3:20-cv-00242-RS Document 16 Filed 03/16/20 Page 1 of 3
1 DENNIS J. HERRERA, State Bar #139669
City Attorney
2 WAYNE SNODGRASS, State Bar #148137
AILEEN M. McGRATH, State Bar # 280846
3 Deputy City Attorneys
City Hall, Room 234
4 1 Dr. Carlton B. Goodlett Place
San Francisco, California 94102-4682
5 Telephone: 431.908.4513
Facsimile: 431.908.4513
6 E-Mail: [email protected]
7 Attorneys for Defendants
CITY AND COUNTY OF SAN FRANCISCO; and
8 DR. GRANT COLFAX, an individual, in his official capacity as
Director of the San Francisco Department of Public Health
9
10 UNITED STATES DISTRICT COURT
11 NORTHERN DISTRICT OF CALIFORNIA
12 INTERNATIONAL FUR TRADE Case No. 3:20-cv-00242-RS
FEDERATION, an unincorporated association,
13 REQUEST FOR JUDICIAL NOTICE IN
Plaintiff, SUPPORT OF DEFENDANTS’ MOTION TO
14 DISMISS COMPLAINT FOR DECLARATORY
vs. AND INJUNCTIVE RELIEF
15
CITY AND COUNTY OF SAN
16 FRANCISCO; and DR. GRANT COLFAX, an Hearing Date: May 7, 2020
individual, in his official capacity as Director Time: 1:30 p.m.
17 of the San Francisco Department of Public Place: Honorable Judge Richard Seeborg
Health, United States District Court
18 Courtroom 3 – 17th Floor
Defendants. 450 Golden Gate Avenue
19 San Francisco, CA 94102
20 Action Filed: January 13, 2020
Trial Date: None set.
21
Attached documents: Exhibits A - B
22
23
THE HUMANE SOCIETY OF THE UNITED
24 STATES and ANIMAL LEGAL DEFENSE
FUND,
25
[Proposed] Defendant-Intervenors.
26
27
28
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CASE NO. 3:20-cv-00242-RS
Case 3:20-cv-00242-RS Document 16 Filed 03/16/20 Page 2 of 3
1 Defendants City and County of San Francisco, et al., hereby respectfully request, pursuant to
2 Federal Rule of Evidence 201, that this Court take judicial notice of the following materials in support
3 of their Motion to Dismiss the Complaint.
4 1. Attached hereto as Exhibit A is a true and correct copy of Article 1D of the San
5 Francisco Health Code, entitled “Animal Fur Products.” As of March 16, 2020, the San Francisco
6 Health Code is available in full on the American Legal Website,
7 https://codelibrary.amlegal.com/codes/san_francisco/latest/sf_health/0-0-0-2.
8 2. Attached hereto as Exhibit B is a true and correct copy of the publicly available
9 webpage maintained by the San Francisco Department of Public Health entitled “Animal Fur Products
10 Frequently Asked Questions.” As of March 16, 2020, this webpage is available at
11 https://www.sfdph.org/dph/EH/AnimalFur/faq.asp.
12 Each of these exhibits is a matter of public record and is therefore subject to judicial notice.
13 Fed. R. Evid. 201(b); Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (a court may
14 judicially notice matters of public record unless the matter is a fact subject to reasonable dispute).
15 Exhibit A is judicially noticeable because it is a portion of the San Francisco Health Code, and
16 it reflects changes to city law enacted by ordinance. Portions of the municipal code are proper
17 subjects of judicial notice under Rule 201. San Francisco Baykeeper v. West Bay Sanitary Dist., 791
18 F. Supp. 2d 719, 731-32 (N.D. Cal. 2011). In addition, “[m]unicipal ordinances are proper subjects for
19 judicial notice.” Tollis, Inc. v. Cty. of San Diego, 505 F.3d 935, 938 n. 1 (9th Cir. 2007); Santa
20 Monica Food Not Bombs v. City of Santa Monica, 450 F.3d 1022, 1052 n. 2 (9th Cir. 2006); see also
21 Rabkin v. Dean, 856 F. Supp. 543, 546 (N.D. Cal. 1994) (“The Court may take judicial notice of city
22 charters, city ordinances and resolutions, and the contents and legislative history of a proposed city
23 ordinance or resolution.”).
24 Exhibit B is judicially noticeable because government memoranda and statements like this are
25 matters of public record appropriate for judicial notice. See Brown v. Valoff, 422 F.3d 926, 933 n.9
26 (9th Cir. 2005) (taking judicial notice of administrative bulletin); Calif. Sportfishing Prot. All. v. Chico
27 Scrap Metal, Inc., 124 F. Supp. 3d 1007, 1016 (E.D. Cal. 2015) (“Government records are susceptible
28 to judicial notice when ‘relevant to an[] issue’ before the court.”) (quoting Flick v. Liberty Mut. Fire
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CASE NO. 3:20-cv-00242-RS
Case 3:20-cv-00242-RS Document 16 Filed 03/16/20 Page 3 of 3
1 Ins. Co., 205 F.3d 386, 392 n. 7 (9th Cir. 2000)). Courts have taken judicial notice of similar official
2 “Frequently Asked Questions” documents regarding local government ordinances. See Calop
3 Business Sys., Inc. v. City of Los Angeles, 984 F. Supp. 2d 981, 992-93 (C.D. Cal. 2013) (taking
4 judicial notice of “Frequently Asked Questions” document regarding city ordinance); Helicopters for
5 Agric. v. Cty. of Napa, No. C 18-06124 WHA, 2019 WL 6250907, *3 (N.D. Cal. Nov. 22, 2019)
6 (taking judicial notice of “Frequently Asked Questions” document regarding local initiative measure).
7 This exhibit is also judicially noticeable because it has been posted to an official government website.
8 See Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998-99 (9th Cir. 2010) (judicially noticing
9 information contained on a government website); Paralyzed Veterans of Am. v. McPherson, No. C 06-
10 4670 SBA, 2008 WL 4183981, at *5 (N.D. Cal. Sept. 9, 2008) (finding that courts commonly take
11 judicial notice of information and documents on government websites, and citing cases from various
12 jurisdictions).
13
14 Dated: March 16, 2020
15 DENNIS J. HERRERA
City Attorney
16 WAYNE SNODGRASS
AILEEN M. MCGRATH
17 Deputy City Attorneys
18
19 By: /s/Aileen M. McGrath
AILEEN M. MCGRATH
20 Attorneys for Defendants
21 CITY AND COUNTY OF SAN FRANCISCO; and
DR. GRANT COLFAX, an individual, in his official
22 capacity as Director of the San Francisco Department of
Public Health
23
24
25
26
27
28
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CASE NO. 3:20-cv-00242-RS
|
Title: [California] Drinking ticket while on probation
Question:Hello,
Asking for a friend! If this is too detailed for a reddit answer, let me know and I apologize.
My friend got a DUI and is on 2 years of probation. Over the weekend she got caught with an open bottle of alcohol in the back seat of a car. She received a ticket for this. Does anyone have any insight whether this is just like a parking ticket fine? Or will this be passed along to her probation person. They ran her ID, and I personally think if there was a bigger problem in regards to her probation, they would have said something. The police didn't even mention a DUI, probation, or record.
Neither of us have much experience with the police at all, if any at all, she was just careless in these two situations.
Does anyone have experience with this? Will this be told to her probation officer? Is it just a fine she pays and gets over with?
Thank you!
Answer #1: > Or will this be passed along to her probation person.
Probation will find out. Probation would find out even if she wasn't ticketed.
Your friend needs to:
1. Stop fucking up.
2. Stop trying to hide things from her PO.
A reported ticket *might* not be a big deal. One she hid? Always a big deal. |
Case 1:20-cr-02030-SMJ ECF No. 98 filed 01/04/21 PageID.346 Page 1 of 8
1 FILED IN THE
U.S. DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON
2
Jan 04, 2021
3 UNITED STATES DISTRICT COURT SEAN F. MCAVOY, CLERK
EASTERN DISTRICT OF WASHINGTON
4
UNITED STATES OF AMERICA, No. 1:20-cr-02030-SMJ-3
5
Plaintiff,
6
v. ORDER DENYING DEFENDANT
7 JESSE LEE JOHNSON’S (03)
JESSE LEE JOHNSON (03), MOTION TO QUASH SEARCH
8 WARRANT
9 Defendant.
10
11 Before the Court is Defendant Jesse Lee Johnson’s (03) Motion to Quash
12 Search Warrant, ECF No. 70. Johnson seeks to quash a search warrant, authorizing
13 the seizure of his DNA to compare with swabs taken from a firearm allegedly used
14 during a carjacking. The Court has determined oral argument unnecessary and
15 denies the motion.
16 BACKGROUND
17 A grand jury indicted Johnson with carjacking under 18 U.S.C. §§ 2119 and
18 2 on November 17, 2020. ECF No. 10. The relevant allegations are as follows. In
19 July 2020, co-Defendant Derek Levi Martinez (02) lured the victim into a parking
20 lot in downtown Yakima. ECF No. 70-1 at 5. Johnson’s vehicle pulled up behind
ORDER DENYING DEFENDANT JESSE LEE JOHNSON’S (03) MOTION TO
QUASH SEARCH WARRANT – 1
Case 1:20-cr-02030-SMJ ECF No. 98 filed 01/04/21 PageID.347 Page 2 of 8
1 the victim’s car so that he could not leave. Id. Johnson remained in the driver’s seat
2 while two co-Defendants—Orlando Raul Rodriguez (01) and Cherrish Irean Jensen
3 (04)—got out of the vehicle. Id. Rodriguez pointed a short-barreled rifle at the
4 victim and ordered him out of his vehicle and to walk away. Id. Jensen drove the
5 victim’s vehicle away and eventually abandoned it in the parking lot of a housing
6 complex. Id. at 8–9. After that, the victim, who was talking to police, saw the car
7 driving back toward downtown, and police pulled them over and arrested Johnson
8 and his three co-Defendants. Id. at 6.
9 On December 1, 2020, the Government sought a warrant for Defendant
10 Johnson’s DNA.1 See ECF No. 70-1. The warrant was supported by an affidavit by
11 Yakima Police Department criminal investigator Ilifonso Garcia. Id. The affidavit
12 detailed the carjacking as described by the victim and corroborating evidence
13 (including the seizure of the victim’s property from Johnson’s vehicle, statements,
14 surveillance footage). Id. It noted that “[p]olice later recovered a sawed-off rifle
15 from the backseat of [Johnson’s] vehicle . . . located in a seat different from
16 Rodriguez’s, leading the affiant to believe that the rifle seized from [Johnson’s]
17 vehicle had changed hands on at least on occasion.” Id. at 4–5.
18
19
1
Magistrate Judge Dimke also issued search warrants authorizing the collection of
20 the three co-Defendants’ DNA. See ECF No. 82. The co-Defendants do not
challenge those warrants.
ORDER DENYING DEFENDANT JESSE LEE JOHNSON’S (03) MOTION TO
QUASH SEARCH WARRANT – 2
Case 1:20-cr-02030-SMJ ECF No. 98 filed 01/04/21 PageID.348 Page 3 of 8
1 Garcia, “based on [his] training and experience, [] know[s] that DNA can be
2 deposited by a suspect by merely touching an object with a bare hand.” Id. at 10.
3 “A Y[akima ]P[olice]D[epartment] Forensic Technician . . . took swabs from the
4 trigger, forearm, action and of rifle” as well as the magazine. Id. at 9. The
5 Government seeks to compare a sample of Johnson’s DNA with the swabs taken
6 from the firearm. Id. at 11.
7 Johnson’s defense counsel learned of the proceeding only after Magistrate
8 Judge Dimke issued the warrant. See ECF No. 71 at 3. About two weeks later, on
9 December 14, 2020, Johnson moved to quash. ECF No. 70.
10 On December 15, 2020, the Court granted a stay of execution of the warrant
11 until it ruled on the motion to quash. ECF No. 73. But because the warrant required
12 that Johnson submit his DNA by 10:00 P.M. on December 15, 2020, the
13 Government’s agent had already collected his DNA sample by the time the
14 Government received the order. See ECF No. 70-1 at 14; ECF No. 74 at 2. To
15 comply with the Court’s Order to the extent possible, the Government instructed
16 the laboratory not to test the DNA until the Court’s ruling. Id.
17 LEGAL STANDARD
18 The Fourth Amendment protects “[t]he right of the people to be secure in
19 their persons, houses, papers, and effects, against unreasonable searches and
20 seizures.” U.S. Const. amend. IV. That right “shall not be violated, and no Warrants
ORDER DENYING DEFENDANT JESSE LEE JOHNSON’S (03) MOTION TO
QUASH SEARCH WARRANT – 3
Case 1:20-cr-02030-SMJ ECF No. 98 filed 01/04/21 PageID.349 Page 4 of 8
1 shall issue, but upon probable cause, supported by Oath or affirmation, and
2 particularly describing the place to be searched, and the persons or things to be
3 seized.” Id. “The manifest purpose of this particularity requirement was to prevent
4 general searches.” Maryland v. Garrison, 480 U.S. 79, 84 (1987).
5 By limiting the authorization to search to the specific areas and things
for which there is probable cause to search, the requirement ensures that
6 the search will be carefully tailored to its justifications, and will not
take on the character of the wide-ranging exploratory searches the
7 Framers intended to prohibit.
8 Id.
9 This Court may not disturb the magistrate’s finding of probable cause and
10 must uphold the valid of the search warrant so long as she had any “‘substantial
11 basis for concluding’ that a search would uncover evidence of wrongdoing.” Illinois
12 v. Gates, 462 U.S. 213 (1983) (quoting Jones v. United States, 362 U.S. 257, 271
13 (1960)) (internal alterations omitted).
14 Courts must consider the totality of the facts and circumstances of the
15 individual case presented. See Gates, 462 U.S. at 230. “In dealing with probable
16 cause, as the very name implies, we deal with probabilities. These are not technical;
17 they are the factual and practical considerations of everyday life on which
18 reasonable and prudent men, not legal technicians, act.” Id. at 231 (quoting
19 Brinegar v. United States, 338 U.S. 160, 176 (1949)) (internal quotations and
20 alterations omitted). The question before a magistrate judge in considering an
ORDER DENYING DEFENDANT JESSE LEE JOHNSON’S (03) MOTION TO
QUASH SEARCH WARRANT – 4
Case 1:20-cr-02030-SMJ ECF No. 98 filed 01/04/21 PageID.350 Page 5 of 8
1 application for a search warrant is whether “given all the circumstances set forth in
2 the affidavit before [her] . . . there is a fair probability that contraband or evidence
3 of a crime will be found in a particular place.” Gates, 462 U.S. at 238. “Whether
4 there is a fair probability depends upon the totality of the circumstances, including
5 reasonable inferences, and is a ‘commonsense, practical question.’” United States
6 v. Kelley, 482 F.3d 1047, 1050 (9th Cir. 2007) (quoting United States v. Gourde,
7 440 F.3d 1065, 1069 (9th Cir. 2006) (en banc)). “The magistrate need only conclude
8 that it would be reasonable to seek the evidence in the place indicated in the
9 affidavit.” United States v. Peacock, 761 F.2d 1313, 1315 (9th Cir. 1985),
10 abrogated on other grounds by Gomez v. United States, 490 U.S. 858 (1989)
11 (internal citations omitted).
12 DISCUSSION
13 Magistrate Judge Dimke had a substantial basis to issue the search warrant.
14 Johnson argues that the affidavit is not sufficient to support probable cause that his
15 DNA will provide evidence of the alleged carjacking. See ECF No. 71 at 2. And
16 while the Government has taken swabs from the firearm allegedly used in the
17 carjacking, no testing has confirmed the presence of DNA on the firearm. The
18 Government counters that evidence supporting that the firearm changed hands
19 during the crime is sufficient to meet the “fair probability” requirement. This Court
20 agrees. There is a fair probability that DNA will be found on the firearm, and there
ORDER DENYING DEFENDANT JESSE LEE JOHNSON’S (03) MOTION TO
QUASH SEARCH WARRANT – 5
Case 1:20-cr-02030-SMJ ECF No. 98 filed 01/04/21 PageID.351 Page 6 of 8
1 is a fair probability that such DNA could belong to Johnson. So, “given all the
2 circumstances set forth in the affidavit[,] . . . there is a fair probability that
3 contraband or evidence of a crime will be found” on Johnson’s person through the
4 collection of his DNA. See Illinois v. Gates, 462 U.S. 213, 236 (1983).
5 Taking a common-sense look at the totality of the circumstances, Magistrate
6 Judge Dimke had a substantial basis for her finding of probable cause. See United
7 States v. Kelley, 482 F.3d 1047, 1050 (9th Cir. 2007). Garcia, in his experience as
8 a law enforcement officer, knows that DNA can be transferred by simply touching
9 an object. ECF No. [email protected]. The evidence shows that police found the firearm in
10 Johnson’s vehicle following the carjacking. Id. at 4–5. The victim identified
11 Johnson as a participant in the carjacking. This Court agrees that the presence or
12 absence of Johnson’s DNA on the firearm is relevant to establish his role in the
13 alleged offense. The Court finds persuasive decisions in other Circuits that have
14 considered DNA on a firearm relevant evidence in a carjacking. See, e.g., United
15 States v. Lee, 758 F. App’x 80, 82 (2d Cir. 2018); United States v. Garcon, 349 F.
16 App’x 377, 379 (11th Cir. 2009).
17 True, testing may reveal a lack of DNA on the firearm. And although there
18 is evidence that the firearm changed hands, there is no direct evidence that Johnson
19 himself possessed the firearm. But “[n]either certainty nor a preponderance of the
20 evidence is required” to support probable cause. Kelley, 482 [email protected]. The
ORDER DENYING DEFENDANT JESSE LEE JOHNSON’S (03) MOTION TO
QUASH SEARCH WARRANT – 6
Case 1:20-cr-02030-SMJ ECF No. 98 filed 01/04/21 PageID.352 Page 7 of 8
1 police found the firearm in Johnson’s car after they arrested him for a carjacking
2 during which that firearm was allegedly used. This constitutes a substantial basis
3 for Magistrate Judge Dimke’s probable cause finding.
4 Johnson also argues that the presence of absence of his DNA on the firearm
5 is irrelevant to his carjacking charge. ECF No. 71 at 6. Instead, he asserts that the
6 Government is fishing for evidence of other crimes (e.g., unlawful possession of a
7 firearm). Id. This Court agrees that were the warrant merely a fishing expedition,
8 the Government would overstep Defendant’s Fourth Amendment rights. But as
9 discussed above, there was sufficient evidence for Magistrate Judge Dimke’s
10 finding that there was probable cause that Johnson’s DNA will provide evidence of
11 the crime charged. Namely, it will provide insight into the Johnson’s role in the
12 carjacking. Any hypothetical tangential results of the search do not impact the
13 Court’s probable cause inquiry.
14 This is not a “wide-ranging exploratory searches the Framers intended to
15 prohibit.” See Garrison, 480 U.S. at 84. Giving Magistrate Judge Dimke’s finding
16 the appropriate deference, this Court cannot disturb her finding of probable cause.2
17
2
Johnson also briefly argues that the ex parte warrant proceeding violated his Sixth
18 Amendment right to counsel. See ECF No. 71 at 1. But Johnson provided little
support for this argument. And ex parte warrant application proceedings are
19 common. See, e.g., United States v. Harris, 403 U.S. 573, 584 (1971); United States
v. Shipley, No. CR-16-01061-001-TUC-RM (JR), 2017 U.S. Dist. LEXIS 127412,
20 at *10–*11 (D. Ariz. Aug. 10, 2017) (holding issuance of a search warrant is not a
critical stage of the prosecution under the Sixth Amendment).
ORDER DENYING DEFENDANT JESSE LEE JOHNSON’S (03) MOTION TO
QUASH SEARCH WARRANT – 7
Case 1:20-cr-02030-SMJ ECF No. 98 filed 01/04/21 PageID.353 Page 8 of 8
1 Accordingly, IT IS HEREBY ORDERED:
2 1. Defendant Jesse Lee Johnson’s (03) Motion to Quash Search Warrant,
3 ECF No. 70, is DENIED.
4 2. The stay of execution of the search warrant, ECF No. 73, is LIFTED.
5 IT IS SO ORDERED. The Clerk’s Office is directed to enter this Order and
6 provide copies to all counsel, the U.S. Probation Office, and the U.S. Marshals
7 Service.
8 DATED this 4th day of January 2021.
9
10 _________________________
SALVADOR MENDOZA, JR.
11 United States District Judge
12
13
14
15
16
17
18
19
20
ORDER DENYING DEFENDANT JESSE LEE JOHNSON’S (03) MOTION TO
QUASH SEARCH WARRANT – 8
|
524 U.S. 184 (1998)
BRYAN
v.
UNITED STATES
No. 96-8422.
United States Supreme Court.
Argued March 31, 1998.
Decided June 15, 1998.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
*185 Stevens, J., delivered the opinion of the Court, in which O'Connor, Kennedy, Souter, Thomas, and Breyer, JJ., joined. Souter, J., filed a concurring opinion, post, p. 200. Scalia, J., filed a dissenting opinion, in which Rehnquist, C. J., and Ginsburg, J., joined, post, p. 200.
Roger Bennet Adler argued the cause for petitioner. With him on the briefs was Martin B. Adelman.
*186 Kent L. Jones argued the cause for the United States. With him on the brief were Solicitor General Waxman, Acting Assistant Attorney General Keeney, Deputy Solicitor General Dreeben, and John F. De Pue.[*]
Justice Stevens, delivered the opinion of the Court.
Petitioner was convicted of "willfully" dealing in firearms without a federal license. The question presented is whether the term "willfully" in 18 U.S. C. § 924(a)(1)(D) requires proof that the defendant knew that his conduct was unlawful, or whether it also requires proof that he knew of the federal licensing requirement.
I
In 1968 Congress enacted the Omnibus Crime Control and Safe Streets Act. 82 Stat. 197-239. In Title IV of that Act Congress made findings concerning the impact of the traffic in firearms on the prevalence of lawlessness and violent crime in the United States[1] and amended the Criminal Code *187 to include detailed provisions regulating the use and sale of firearms. As amended, 18 U.S. C. § 922 defined a number of "unlawful acts"; subsection (a)(1) made it unlawful for any person except a licensed dealer to engage in the business of dealing in firearms.[2] Section 923 established the federal licensing program and repeated the prohibition against dealing in firearms without a license, and § 924 specified the penalties for violating "any provision of this chapter." Read literally, § 924 authorized the imposition of a fine of up to $5,000 or a prison sentence of not more than five years, "or both," on any person who dealt in firearms without a license even if that person believed that he or she was acting lawfully.[3] As enacted in 1968, §§ 922(a)(1) and 924 omitted an express scienter requirement and therefore arguably imposed strict criminal liability on every unlicensed dealer in firearms. The 1968 Act also omitted any definition of the term "engaged in the business" even though that conduct was an element of the unlawful act prohibited by § 922(a)(1).
In 1986 Congress enacted the Firearms Owners' Protection Act (FOPA), in part, to cure these omissions. The findings in that statute explained that additional legislation was necessary to protect law-abiding citizens with respect to the acquisition, possession, or use of firearms for lawful purposes.[4]*188 FOPA therefore amended § 921 to include a definition of the term "engaged in the business,"[5] and amended § 924 to add a scienter requirement as a condition to the imposition of penalties for most of the unlawful acts defined in § 922. For three categories of offenses the intent required is that the defendant acted "knowingly"; for the fourth category, which includes "any other provision of this chapter," the required intent is that the defendant acted "willfully."[6]*189 The § 922(a)(1)(A)[7]offense at issue in this case is an "other provision" in the "willfully" category.
II
The jury having found petitioner guilty, we accept the Government's version of the evidence. That evidence proved that petitioner did not have a federal license to deal in firearms; that he used so-called "straw purchasers" in Ohio to acquire pistols that he could not have purchased himself; that the straw purchasers made false statements when purchasing the guns; that petitioner assured the straw purchasers that he would file the serial numbers off the guns; and that he resold the guns on Brooklyn street corners known for drug dealing. The evidence was unquestionably adequate to prove that petitioner was dealing in firearms, and that he knew that his conduct was unlawful.[8] There was, however, no evidence that he was aware of the federal law that prohibits dealing in firearms without a federal license.
Petitioner was charged with a conspiracy to violate 18 U.S. C. § 922(a)(1)(A), by willfully engaging in the business of dealing in firearms, and with a substantive violation of that provision.[9] After the close of evidence, petitioner requested that the trial judge instruct the jury that petitioner could be convicted only if he knew of the federal *190 licensing requirement,[10] but the judge rejected this request. Instead, the trial judge gave this explanation of the term "willfully":
"A person acts willfully if he acts intentionally and purposely and with the intent to do something the law forbids, that is, with the bad purpose to disobey or to disregard the law. Now, the person need not be aware of the specific law or rule that his conduct may be violating. But he must act with the intent to do something that the law forbids."[11]
Petitioner was found guilty on both counts. On appeal he argued that the evidence was insufficient because there was no proof that he had knowledge of the federal licensing requirement, and that the trial judge had erred by failing to instruct the jury that such knowledge was an essential element of the offense. The Court of Appeals affirmed. 122 F.3d 90 (CA2 1997). It concluded that the instructions were proper and that the Government had elicited "ample proof" that petitioner had acted willfully. App. 22.
Because the Eleventh Circuit has held that it is necessary for the Government to prove that the defendant acted with knowledge of the licensing requirement, United States v. Sanchez-Corcino, 85 F.3d 549, 553-554 (1996), we granted certiorari to resolve the conflict. 522 U.S. 1024 (1997).
*191 III
The word "willfully" is sometimes said to be "a word of many meanings" whose construction is often dependent on the context in which it appears. See, e. g., Spies v. United States, 317 U.S. 492, 497 (1943). Most obviously it differentiates between deliberate and unwitting conduct, but in the criminal law it also typically refers to a culpable state of mind. As we explained in United States v. Murdock, 290 U.S. 389 (1933), a variety of phrases have been used to describe that concept.[12] As a general matter, when used in the criminal context, a "willful" act is one undertaken with a "bad purpose."[13] In other words, in order to establish a *192 "willful" violation of a statute, "the Government must prove that the defendant acted with knowledge that his conduct was unlawful." Ratzlaf v. United States, 510 U.S. 135, 137 (1994).
Petitioner argues that a more particularized showing is required in this case for two principal reasons. First, he argues that the fact that Congress used the adverb "knowingly" to authorize punishment of three categories of acts made unlawful by § 922 and the word "willfully" when it referred to unlicensed dealing in firearms demonstrates that the Government must shoulder a special burden in cases like this. This argument is not persuasive because the term "knowingly" does not necessarily have any reference to a culpable state of mind or to knowledge of the law. As Justice Jackson correctly observed, "the knowledge requisite to knowing violation of a statute is factual knowledge as distinguished from knowledge of the law."[14] Thus, in United *193 States v. Bailey, 444 U.S. 394 (1980), we held that the prosecution fulfills its burden of proving a knowing violation of the escape statute "if it demonstrates that an escapee knew his actions would result in his leaving physical confinement without permission." Id., at 408. And in Staples v. United States, 511 U.S. 600 (1994), we held that a charge that the defendant's possession of an unregistered machine gun was unlawful required proof "that he knew the weapon he possessed had the characteristics that brought it within the statutory definition of a machine gun." Id., at 602. It was not, however, necessary to prove that the defendant knew that his possession was unlawful. See Rogers v. United States, 522 U.S. 252, 254-255 (1998) (plurality opinion). Thus, unless the text of the statute dictates a different result,[15] the term "knowingly" merely requires proof of knowledge of the facts that constitute the offense.
With respect to the three categories of conduct that are made punishable by § 924 if performed "knowingly," the background presumption that every citizen knows the law makes it unnecessary to adduce specific evidence to prove that "an evil-meaning mind" directed the "evil-doing hand."[16] More is required, however, with respect to the conduct in the fourth category that is only criminal when done "willfully." The jury must find that the defendant acted with an evil-meaning mind, that is to say, that he acted with knowledge that his conduct was unlawful.
Petitioner next argues that we must read § 924(a)(1)(D) to require knowledge of the law because of our interpretation *194 of "willfully" in two other contexts. In certain cases involving willful violations of the tax laws, we have concluded that the jury must find that the defendant was aware of the specific provision of the tax code that he was charged with violating. See, e. g., Cheek v. United States, 498 U.S. 192, 201 (1991).[17] Similarly, in order to satisfy a willful violation in Ratzlaf, we concluded that the jury had to find that the defendant knew that his structuring of cash transactions to avoid a reporting requirement was unlawful. See 510 U.S., at 138, 149. Those cases, however, are readily distinguishable. Both the tax cases[18] and Ratzlaf [19] involved highly technical statutes that presented the danger of ensnaring individuals engaged in apparently innocent conduct.[20] As a result, we held that these statutes *195 "carv[e] out an exception to the traditional rule" that ignorance of the law is no excuse[21] and require that the defendant have knowledge of the law.[22] The danger of convicting individuals engaged in apparently innocent activity that motivated our decisions in the tax cases and Ratzlaf is not present here because the jury found that this petitioner knew that his conduct was unlawful.[23]
*196 Thus, the willfulness requirement of § 924(a)(1)(D) does not carve out an exception to the traditional rule that ignorance of the law is no excuse; knowledge that the conduct is unlawful is all that is required.
IV
Petitioner advances a number of additional arguments based on his reading of congressional intent. Petitioner first points to the legislative history of FOPA, but that history is too ambiguous to offer petitioner much assistance. Petitioner's main support lies in statements made by opponents of the bill.[24] As we have stated, however, "[t]he fears and doubts of the opposition are no authoritative guide to the construction of legislation." Schwegmann Brothers v. Calvert Distillers Corp., 341 U.S. 384, 394 (1951). "In their zeal to defeat a bill, they understandably tend to overstate its reach." NLRB v. Fruit Packers, 377 U.S. 58, 66 (1964).[25]
Petitioner next argues that, at the time FOPA was passed, the "willfulness" requirements in other subsections of the statute§§ 923(d)(1)(C)(D)had uniformly been interpreted by lower courts to require knowledge of the law; petitioner argues that Congress intended that "willfully" should have the same meaning in § 924(a)(1)(D). As an initial matter, the lower courts had come to no such agreement. While some courts had stated that willfulness in § 923(d)(1) is satisfied *197 by a disregard of a known legal obligation,[26] willful was also interpreted variously to refer to "purposeful, intentional conduct,"[27] "indifferen[ce] to the requirements of the law,"[28] or merely a "conscious, intentional, deliberate, voluntary decision." [29] Moreover, in each of the cases in which disregard of a known legal obligation was held to be sufficient to establish willfulness, it was perfectly clear from the record that the licensee had knowledge of the law;[30] thus, while these *198 cases support the notion that disregard of a known legal obligation is sufficient to establish a willful violation, they in no way stand for the proposition that it is required.[31]
Finally, petitioner argues that § 922(b)(3), which is governed by § 924(a)(1)(D)'s willfulness standard, indicates that Congress intended "willfully" to include knowledge of the law. Section 922(b)(3) prohibits licensees from selling firearms to any person who the licensee knows or has reasonable cause to believe does not reside in the licensee's State, except where, inter alia, the transaction fully complies with the laws of both the seller's and buyer's State. The subsection further states that the licensee "shall be presumed, . . . in the absence of evidence to the contrary, to have had actual knowledge of the State laws and published ordinances of both States."[32] Although petitioner argues that the presumption in § 922(b)(3) indicates that Congress intended willfulness to require knowledge of the law for all offenses covered by § 924(a)(1)(D), petitioner is mistaken. As noted above, while disregard of a known legal obligation is certainly *199 sufficient to establish a willful violation, it is not necessaryand nothing in § 922(b)(3) contradicts this basic distinction.[33]
V
One sentence in the trial court's instructions to the jury, read by itself, contained a misstatement of the law. In a portion of the instructions that were given after the correct statement that we have already quoted, the judge stated: "In this case, the government is not required to prove that the defendant knew that a license was required, nor is the government required to prove that he had knowledge that he was breaking the law. " App. 19 (emphasis added). If the judge had added the words "that required a license," the sentence would have been accurate, but as given it was not.
Nevertheless, that error does not provide a basis for reversal for four reasons. First, petitioner did not object to that sentence, except insofar as he had argued that the jury should have been instructed that the Government had the burden of proving that he had knowledge of the federal licensing requirement. Second, in the context of the entire instructions, it seems unlikely that the jury was misled. See, e. g., United States v. Park, 421 U.S. 658, 674-675 (1975). Third, petitioner failed to raise this argument in the Court of Appeals. Finally, our grant of certiorari was limited to *200 the narrow legal question whether knowledge of the licensing requirement is an essential element of the offense.
Accordingly, the judgment of the Court of Appeals is affirmed.
It is so ordered.
Justice Souter, concurring.
I join in the Court's opinion with the caveat that if petitioner had raised and preserved a specific objection to the erroneous statement in the jury instructions, see Part V, ante, at 199 and this page, I would vote to vacate the conviction.
Justice Scalia, with whom The Chief Justice and Justice Ginsburg join, dissenting.
Petitioner Sillasse Bryan was convicted of "willfully" violating the federal licensing requirement for firearms dealers. The jury apparently found, and the evidence clearly shows, that Bryan was aware in a general way that some aspect of his conduct was unlawful. See ante, at 189, and n. 8. The issue is whether that general knowledge of illegality is enough to sustain the conviction, or whether a "willful" violation of the licensing provision requires proof that the defendant knew that his conduct was unlawful specifically because he lacked the necessary license. On that point the statute is, in my view, genuinely ambiguous. Most of the Court's opinion is devoted to confirming half of that ambiguity by refuting Bryan's various arguments that the statute clearly requires specific knowledge of the licensing requirement. Ante, at 192-199. The Court offers no real justification for its implicit conclusion that either (1) the statute unambiguously requires only general knowledge of illegality, or (2) ambiguously requiring only general knowledge is enough. Instead, the Court curiously falls back on "the traditional rule that ignorance of the law is no excuse" to conclude that "knowledge that the conduct is unlawful is all that is required." Ante, at 196. In my view, this case calls for the application of a different canon"the familiar rule that, `where there is *201 ambiguity in a criminal statute, doubts are resolved in favor of the defendant.' " Adamo Wrecking Co. v. United States, 434 U.S. 275, 284-285 (1978), quoting United States v. Bass, 404 U.S. 336, 348 (1971).
Title 18 U.S. C. § 922(a)(1)(A) makes it unlawful for any person to engage in the business of dealing in firearms without a federal license. That provision is enforced criminally through § 924(a)(1)(D), which imposes criminal penalties on whoever "willfully violates any other provision of this chapter." The word "willfully" has a wide range of meanings, and "`its construction [is] often . . . influenced by its context.' " Ratzlaf v. United States, 510 U.S. 135, 141 (1994), quoting Spies v. United States, 317 U.S. 492, 497 (1943). In some contexts it connotes nothing more than "an act which is intentional, or knowing, or voluntary, as distinguished from accidental." United States v. Murdock, 290 U.S. 389, 394 (1933). In the present context, however, inasmuch as the preceding three subparagraphs of § 924 specify a mens rea of "knowingly" for other firearms offenses, see §§ 924(a)(1)(A)(C), a "willful" violation under § 924(a)(1)(D) must require some mental state more culpable than mere intent to perform the forbidden act. The United States concedes (and the Court apparently agrees) that the violation is not "willful" unless the defendant knows in a general way that his conduct is unlawful. Brief for United States 7-9; ante, at 193 ("The jury must find that the defendant acted with an evil-meaning mind, that is to say, that he acted with knowledge that his conduct was unlawful").
That concession takes this case beyond any useful application of the maxim that ignorance of the law is no excuse. Everyone agrees that § 924(a)(1)(D) requires some knowledge of the law; the only real question is which law? The Court's answer is that knowledge of any law is enoughor, put another way, that the defendant must be ignorant of every law violated by his course of conduct to be innocent of willfully violating the licensing requirement. The Court points to no *202 textual basis for that conclusion other than the notoriously malleable word "willfully" itself. Instead, it seems to fall back on a presumption (apparently derived from the rule that ignorance of the law is no excuse) that even where ignorance of the law is an excuse, that excuse should be construed as narrowly as the statutory language permits.
I do not believe that the Court's approach makes sense of the statute that Congress enacted. I have no quarrel with the Court's assertion that "willfully" in § 924(a)(1)(D) requires only "general" knowledge of illegalityin the sense that the defendant need not be able to recite chapter and verse from Title 18 of the United States Code. It is enough, in my view, if the defendant is generally aware that the actus reus punished by the statutedealing in firearms without a licenseis illegal. But the Court is willing to accept a mens rea so "general" that it is entirely divorced from the actus reus this statute was enacted to punish. That approach turns § 924(a)(1)(D) into a strange and unlikely creature. Bryan would be guilty of "willfully" dealing in firearms without a federal license even if, for example, he had never heard of the licensing requirement but was aware that he had violated the law by using straw purchasers or filing the serial numbers off the pistols. Ante, at 189, n. 8. The Court does not even limit (for there is no rational basis to limit) the universe of relevant laws to federal firearms statutes. Bryan would also be "act[ing] with an evil-meaning mind," and hence presumably be guilty of "willfully" dealing in firearms without a license, if he knew that his streetcorner transactions violated New York City's business licensing or sales tax ordinances. (For that matter, it ought to suffice if Bryan knew that the car out of which he sold the guns was illegally double-parked, or if, in order to meet the appointed time for the sale, he intentionally violated Pennsylvania's speed limit on the drive back from the gun purchase in Ohio.) Once we stop focusing on the conduct the defendant is actually charged with (i. e., selling guns without *203 a license), I see no principled way to determine what law the defendant must be conscious of violating. See, e. g., Lewis v. United States, 523 U.S. 155, 174-175 (1998) (Scalia, J., concurring in judgment) (pointing out a similar interpretive problem potentially raised by the Assimilative Crimes Act).
Congress is free, of course, to make criminal liability under one statute turn on knowledge of another, to use its firearms dealer statutes to encourage compliance with New York City's tax collection efforts, and to put judges and juries through the kind of mental gymnastics described above. But these are strange results, and I would not lightly assume that Congress intended to make liability under a federal criminal statute depend so heavily upon the vagaries of local lawparticularly local law dealing with completely unrelated subjects. If we must have a presumption in cases like this one, I think it would be more reasonable to presume that, when Congress makes ignorance of the law a defense to a criminal prohibition, it ordinarily means ignorance of the unlawfulness of the specific conduct punished by that criminal prohibition.
That is the meaning we have given the word "willfully" in other contexts where we have concluded it requires knowledge of the law. See, e. g., Ratzlaf, supra, at 149 ("To convict Ratzlaf of the crime with which he was charged, . . . the jury had to find he knew the structuring in which he engaged was unlawful"); Cheek v. United States, 498 U.S. 192, 201 (1991) ("[T]he standard for the statutory willfulness requirement is the `voluntary, intentional violation of a known legal duty.' . . . [T]he issue is whether the defendant knew of the duty purportedly imposed by the provision of the statute or regulation he is accused of violating"). The Court explains these cases on the ground that they involved "highly technical statutes that presented the danger of ensnaring individuals engaged in apparently innocent conduct." Ante, at 194. That is no [email protected]. The complexity of the tax and currency laws may explain why the Court interpreted *204 "willful" to require some awareness of illegality, as opposed to merely "an act which is intentional, or knowing, or voluntary, as distinguished from accidental." Murdock, 290 U. S., at 394. But it in no way justifies the distinction the Court seeks to draw today between knowledge of the law the defendant is actually charged with violating and knowledge of any law the defendant could conceivably be charged with violating. To protect the pure of heart, it is not necessary to forgive someone whose surreptitious laundering of drug money violates, unbeknownst to him, a technical currency statute. There, as here, regardless of how "complex" the violated statute may be, the defendant would have acted "with an evil-meaning mind."
It seems to me likely that Congress had a presumption of offense-specific knowledge of illegality in mind when it enacted the provision [email protected]. Another section of the Firearms Owners' Protection Act, Pub. L. 99-308, 100 Stat. 449, prohibits licensed dealers from selling firearms to outof-state residents unless they fully comply with the laws of both States. 18 U.S. C. § 922(b)(3). The provision goes on to state that all licensed dealers "shall be presumed, for purposes of this subparagraph, in the absence of evidence to the contrary, to have had actual knowledge of the State laws and published ordinances of both States." Ibid. Like the dealer-licensing provision at issue here, a violation of § 922(b)(3) is a criminal offense only if committed "willfully" within the meaning of § 924(a)(1)(D). The Court is quite correct that this provision does not establish beyond doubt that "willfully" requires knowledge of the particular prohibitions violated: the fact that knowledge (attributed knowledge) of those prohibitions will be sufficient does not demonstrate conclusively that knowledge of other prohibitions will not be sufficient. Ante, at 198-199. But though it does not demonstrate, it certainly suggests. To say that only willful violation of a certain law is criminal, but that knowledge of the existence of that law is presumed, fairly reflects, I think, a *205 presumption that willful violation requires knowledge of the law violated.
If one had to choose, therefore, I think a presumption of statutory intent that is the opposite of the one the Court applies would be more reasonable. I would not, however, decide this case on the basis of any [email protected]. It is common ground that the statutory context here requires some awareness of the law for a § 924(a)(1)(D) conviction, but the statute is simply ambiguous, or silent, as to the precise contours of that mens rea requirement. In the face of that ambiguity, I would invoke the rule that "`ambiguity concerning the ambit of criminal statutes should be resolved in favor of lenity,' " United States v. Bass, 404 U. S., at 347, quoting Rewis v. United States, 401 U.S. 808, 812 (1971).
"The rule that penal laws are to be construed strictly, is, perhaps, not much less old than construction itself. It is founded on the tenderness of the law for the rights of individuals; and on the plain principle that the power of punishment is vested in the legislative, not in the judicial department." United States v. Wiltberger, 5 Wheat. 76, 95 (1820).
In our era of multiplying new federal crimes, there is more reason than ever to give this ancient canon of construction consistent application: by fostering uniformity in the interpretation of criminal statutes, it will reduce the occasions on which this Court will have to produce judicial havoc by resolving in defendants' favor a Circuit conflict regarding the substantive elements of a federal crime, see, e. g., Bousley v. United States, 523 U.S. 614 (1998).
I respectfully dissent.
NOTES
[*] Briefs of amici curiae urging reversal were filed for the Gun Owners Foundation by James H. Jeffries III and James H. Wentzel; and for the National Association of Criminal Defense Lawyers by Barbara Bergman and Stephen P. Halbrook.
[1] "Sec. 901. (a) The Congress hereby finds and declares
"(1) that there is a widespread traffic in firearms moving in or otherwise affecting interstate or foreign commerce, and that the existing Federal controls over such traffic do not adequately enable the States to control this traffic within their own borders through the exercise of their police power;
"(2) that the ease with which any person can acquire firearms other than a rifle or shotgun (including criminals, juveniles without the knowledge or consent of their parents or guardians, narcotics addicts, mental defectives, armed groups who would supplant the functions of duly constituted public authorities, and others whose possession of such weapons is similarly contrary to the public interest) is a significant factor in the prevalence of lawlessness and violent crime in the United States;
"(3) that only through adequate Federal control over interstate and foreign commerce in these weapons, and over all persons engaging in the businesses of importing, manufacturing, or dealing in them, can this grave problem be properly dealt with, and effective State and local regulation of this traffic be made possible . . . ."82 Stat. 225.
[2] 82 Stat. 228. The current version of this provision, which is substantially the same as the 1968 version, is codified at 18 U.S. C. § 922(a)(1)(A). It states:
"(a) It shall be unlawful
"(1) for any person
"(A) except a licensed importer, licensed manufacturer, or licensed dealer, to engage in the business of importing, manufacturing, or dealing in firearms, or in the course of such business to ship, transport, or receive any firearm in interstate or foreign commerce."
[3] "§ 924.Penalties
"(a) Whoever violates any provision of this chapter .. .shall be fined not more than $5,000 or imprisoned not more than five years, or both." 82 Stat. 233.
[4] "The Congress finds that
. . . . .
"(b)(2) additional legislation is required to reaffirm the intent of the Congress, as expressed in section 101 of the Gun Control Act of 1968, that `it is not the purpose of this title to place any undue or unnecessary Federal restrictions or burdens on law-abiding citizens with respect to the acquisition, possession, or use of firearms appropriate to the purpose of hunting, trapshooting, target shooting, personal protection, or any other lawful activity, and that this title is not intended to discourage or eliminate the private ownership or use of firearms by law-abiding citizens for lawful purposes.' " 100 Stat. 449.
[5] "Section 921 of title 18, United States Code, is amended
. . . . .
"(21) The term `engaged in the business' means
. . . . .
"(C) as applied to a dealer in firearms, as defined in section 921 (a)(11)(A), a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms . . . ." 100 Stat. 449-450.
[6] Title 18 U.S. C. § 924(a)(1) currently provides:
"Except as otherwise provided in this subsection, subsection (b), (c), or (f) of this section, or in section 929, whoever
"(A) knowingly makes any false statement or representation with respect to the information required by this chapter to be kept in the records of a person licensed under this chapter or in applying for any license or exemption or relief from disability under the provisions of this chapter;
"(B) knowingly violates subsection (a)(4), (f), (k), (r), (v), or (w) of section 922;
"(C) knowingly imports or brings into the United States or any possession there of any firearm or ammunition inviolation of section 922(l );or
"(D) willfully violates any other provision of this chapter, "shall be fined under this title,imprisoned not more than five years, or both."
[7] See n. 2, supra.
[8] Why else would he make use of straw purchasers and assure them that he would shave the serial numbers off the guns? Moreover, the street corner sales are not consistent with a good-faith belief in the legality of the enterprise.
[9] Although the prohibition against unlicensed dealing in firearms is set forth in § 922,see n. 2,supra, the criminal sanction is set forth in § 924(a)(1), see n. 6, supra.
[10] "KNOWLEDGE OF THE LAW
"The Federal Firearms Statute which the Defendant is charged with, conspiracy to violate and with allegedly violated [sic], is a specific intent statute. You must accordingly find, beyond a reasonable doubt, that Defendant at all relevant times charged, acted with the knowledge that it was unlawful to engage in the business of firearms distribution lawfully purchased by a legally permissible transferee or gun purchaser.
. . . . .
"[Y]ou must be persuaded that with the actual knowledge of the federal firearms licensing laws Defendant acted in knowing and intentional violation of them." App. 17 (citing Ratzlaf v. United States, 510 U.S. 135 (1994)).
[11] App. 18-19.
[12] "The word often denotes an act which is intentional, or knowing, or voluntary, as distinguished from accidental. But when used in a criminal statute it generally means an act done with a bad purpose (Felton v. United States, 96 U.S. 699; Potter v. United States, 155 U.S. 438; Spurr v. United States, 174 U.S. 728); without justifiable excuse (Felton v. United States, supra; Williams v. People, 26 Colo. 272; 57 P. 701; People v. Jewell, 138 Mich. 620; 101 N.W. 835; St. Louis, I. M. & S. Ry. Co. v. Batesville & W. Tel. Co., 80 Ark. 499; 97 S.W. 660; Clay v. State, 52 Tex. Cr. 555; 107 S.W. 1129); stubbornly, obstinately, perversely, Wales v. Miner, 89 Ind. 118, 127; Lynch v. Commonwealth, 131 Va. 762; 109 S.E. 427; Claus v. Chicago Gt. W. Ry. Co., 136 Iowa 7; 111 N.W. 15; State v. Harwell, 129 N. C. 550; 40 S.E. 48. The word is also employed to characterize a thing done without ground for believing it is lawful (Roby v. Newton, 121 Ga. 679; 49 S.E. 694), or conduct marked by careless disregard whether or not one has the right so to act, United States v. Philadelphia & R. Ry. Co., 223 Fed. 207, 210; State v. Savre, 129 Iowa 122; 105 N.W. 387; State v. Morgan, 136 N. C. 628; 48 S.E. 670." 290 U. S., at 394-395.
[13] See, e. g., Heikkinen v. United States, 355 U.S. 273, 279 (1958) ("There can be no willful failure by a deportee, in the sense of § 20(c), to apply to, and identify, a country willing to receive him in the absence of evidence . . . of a `bad purpose' or `[non-]justifiable excuse,' or the like. . . . [I]t cannot be said that he acted `willfully'i. e., with a `bad purpose' or without `justifiable excuse' "); United States v. Murdock, 290 U.S. 389, 394 (1933) ("[W]hen used in a criminal statute [willfully] generally means an act done with a bad purpose"); Felton v. United States, 96 U.S. 699, 702 (1878) ("Doing or omitting to do a thing knowingly and wilfully, implies not only a knowledge of the thing, but a determination with a bad intent to do it or to omit doing it. `The word "wilfully,"` says Chief Justice Shaw, `in the ordinary sense in which it is used in statutes, means not merely "voluntarily," but with a bad purpose.' 20 Pick. (Mass.) 220. `It is frequently understood,' says Bishop, `as signifying an evil intent without justifiable excuse.' Crim. Law, vol. i. sect. 428"); 1 L. Sand, J. Siffert, W. Loughlin, & S. Reiss, Modern Federal Jury Instructions ¶ 3A.01, p. 3A-18 (1997) ("`Willfully' means to act with knowledge that one's conduct is unlawful and with the intent to do something the law forbids, that is to say with the bad purpose to disobey or to disregard the law").
[14] In his opinion dissenting from the Court's decision upholding the constitutionality of a statute authorizing punishment for the knowing violation of an Interstate Commerce regulation, Justice Jackson wrote:
"It is further suggested that a defendant is protected against indefiniteness because conviction is authorized only for knowing violations. The argument seems to be that the jury can find that defendant knowingly violated the regulation only if it finds that it knew the meaning of the regulation he was accused of violating. With the exception of Screws v. United States, 325 U.S. 91, which rests on a very particularized basis, the knowledge requisite to knowing violation of a statute is factual knowledge as distinguished from knowledge of the law. I do not suppose the Court intends to suggest that if petitioner knew nothing of the existence of such a regulation its ignorance would constitute a defense." Boyce Motor Lines, Inc. v. United States, 342 U.S. 337, 345 (1952).
[15] Liparota v. United States, 471 U.S. 419 (1985), was such a case. We there concluded that both the term "knowing" in 7 U.S. C. § 2024(c) and the term "knowingly" in § 2024(b)(1) literally referred to knowledge of the law as well as knowledge of the relevant facts. See id., at 428-430.
[16] Justice Jackson's translation of the terms mens rea and actus reus is found in his opinion for the Court in Morissette v. United States, 342 U.S. 246, 251 (1952).
[17] Even in tax cases, we have not always required this heightened mens rea. In United States v. Pomponio, 429 U.S. 10 (1976) (per curiam), for example, the jury was instructed that a willful act is one done "with [the] bad purpose either to disobey or to disregard the law." Id., at 11. We approved of this instruction, concluding that "[t]he trial judge . . . adequately instructed the jury on willfulness." Id., at 13.
[18] As we stated in Cheek v. United States, 498 U.S. 192, 199-200 (1991):
"The proliferation of statutes and regulations has sometimes made it difficult for the average citizen to know and comprehend the extent of the duties and obligations imposed by the tax laws. Congress has accordingly softened the impact of the common-law presumption by making specific intent to violate the law an element of certain federal criminal tax offenses. Thus, the Court almost 60 years ago interpreted the statutory term `willfully' as used in the federal criminal tax statutes as carving out an exception to the traditional rule [that every person is presumed to know the law]. This special treatment of criminal tax offenses is largely due to the complexity of the tax laws."
[19] See Bates v. United States, 522 U.S. 23, 31, n. 6 (1997) (noting that Ratzlaf `s holding was based on the "particular statutory context of currency structuring"); Ratzlaf, 510 U. S., at 149 (Court's holding based on "particular contex[t]" of currency structuring statute).
[20] Id., at 144-145 ("[C]urrency structuring is not inevitably nefarious. . . . Nor is a person who structures a currency transaction invariably motivated by a desire to keep the Government in the dark"; Government's construction of the statute would criminalize apparently innocent activity); Cheek, 498 U. S., at 205 ("[I]n `our complex tax system, uncertainty often arises even among taxpayers who earnestly wish to follow the law,' and ` "[i]t is not the purpose of the law to penalize frank difference of opinion or innocent errors made despite the exercise of reasonable care."` United States v. Bishop, 412 U.S. 346, 360-361 (1973) (quoting Spies v. United States, 317 U.S. 492, 496 (1943))"); Murdock, 290 U. S., at 396 ("Congress did not intend that a person, by reason of a bona fide misunderstanding as to his liability for the tax, as to his duty to make a return, or as to the adequacy of the records he maintained, should become a criminal by his mere failure to measure up to the prescribed standard of conduct").
[21] Cheek, 498 U. S., at 200; see also Ratzlaf, 510 U. S., at 149 (noting the "venerable principle that ignorance of the law generally is no defense to a criminal charge," but concluding that Congress intended otherwise in the "particular contex[t]" of the currency structuring statute).
[22] Even before Ratzlaf was decided, then-Chief Judge Breyer explained why there was a need for specificity under those statutes that is inapplicable when there is no danger of conviction of a defendant with an innocent state of mind. He wrote:
"I believe that criminal prosecutions for `currency law' violations, of the sort at issue here, very much resemble criminal prosecutions for tax law violations. Compare 26 U.S. C. §§ 6050I, 7203 with 31 U.S. C. §§ 5322, 5324. Both sets of laws are technical; and both sets of laws sometimes criminalize conduct that would not strike an ordinary citizen as immoral or likely unlawful. Thus, both sets of laws may lead to the unfair result of criminally prosecuting individuals who subjectively and honestly believe they have not acted criminally. Cheek v. United States, 498 U.S. 192 . . . (1991), sets forth a legal standard that, by requiring proof that the defendant was subjectively aware of the duty at issue, would avoid such unfair results." United States v. Aversa, 984 F.2d 493, 502 (CA1 1993) (concurring opinion). He therefore concluded that the "same standards should apply in both" the tax cases and in cases such as Ratzlaf. 984 F. 2d, at 503.
[23] Moreover, requiring only knowledge that the conduct is unlawful is fully consistent with the purpose of FOPA, as FOPA was enacted to protect law-abiding citizens who might inadvertently violate the law. See n. 4, supra; see also United States v. Andrade, 135 F.3d 104, 108-109 (CA1 1998).
[24] For example, Representative Hughes, a staunch opponent of the bill, stated that the willfulness requirement would "make it next to impossible to convict dealers, particularly those who engage in business without acquiring a license, because the prosecution would have to show that the dealer was personally aware of every detail of the law, and that he made a conscious decision to violate the law." 132 Cong. Rec. 6875 (1986). Even petitioner's amicus acknowledges that this statement was "undoubtedly an exaggeration." Brief for National Association of Criminal Defense Lawyers as Amicus Curiae 14.
[25] See also Andrade, 135 F. 3d, at 108-109.
[26] See, e. g., Perri v. Department of the Treasury, 637 F.2d 1332, 1336 (CA9 1981); Stein's Inc. v. Blumenthal, 649 F.2d 463, 467-468 (CA7 1980).
[27] Rich v. United States, 383 F. Supp. 797, 800 (SD Ohio 1974).
[28] Lewin v. Blumenthal, 590 F.2d 268, 269 (CA8 1979); Fin & Feather Sport Shop v. United States Treasury Department, 481 F. Supp. 800, 807 (Neb. 1979).
[29] Prino v. Simon, 606 F.2d 449, 451 (CA4 1979) (internal quotation marks omitted); see also Stein's, 649 F. 2d, at 467 ("[I]f a person 1) intentionally does an act which is prohibited, irrespective of evil motive or reliance on erroneous advice, or 2) acts with careless disregard of statutory requirements, the violation is willful" (internal quotation marks omitted)).
[30] Perri, 637 F. 2d, at 1336 ("The district court found Perri knew a strawman transaction would violate the Act"); Stein's, 649 F. 2d, at 468 ("The record shows that the plaintiff's agents were instructed on the requirements of the law and acknowledged an understanding of the Secretary's regulations. Nevertheless, and despite repeated warnings from the Secretary, violations continued to occur" (footnote omitted)); Powers v. Bureau of Alcohol, Tobacco and Firearms, 505 F. Supp. 695, 698 (ND Fla. 1980) ("Bureau representatives inspected Powers August 31, 1976. They pointed out his many violations, gave him a copy of the regulations, thoroughly explained his obligations, and gave him a pamphlet explaining his obligations. As of that date Powers knew his obligations"); Shyda v. Director, Bureau of Alcohol, Tobacco and Firearms, 448 F. Supp. 409, 415 (MD Pa. 1977) ("[A]t the formal administrative hearing petitioner admitted on the stand under oath that he was aware of the specific legal obligation at issue"); Mayesh v. Schultz, 58 F. R. D. 537, 540 (SD Ill. 1973) ("The uncontroverted evidence shows clearly that plaintiff was aware of the above holding period requirements. Mr. Mayesh had been previously advised on the requirements under Illinois law, and he clearly acknowledged that he was aware of them"); McLemore v. United States Treasury Department, 317 F. Supp. 1077, 1078 (ND Fla. 1970) (finding that both the owner of the pawnshop, as well as his employees, had knowledge of the law).
[31] In Mayesh, for example, the court stated:
"The uncontroverted evidence shows clearly that plaintiff was aware of the above holding period requirements. Mr. Mayesh had been previously advised on the requirements under Illinois law, and he clearly acknowledged that he was aware of them. . . . Since the material facts are undisputed, as a matter of law the plaintiff clearly and knowingly violated the Illinois holding provisions . . . , andhence, 18 U.S. C. § 922(b)(2). This court can only consider such action to have been `wilful' as a matter of law. There is no basis for trial of any disputed facts in this connection. This is sufficient to justify refusal of license renewal." 58 F. R. D., at 540. See also, e. g., Perri, 637 F. 2d, at 1336 (stating that when a dealer understands the requirements of the law, but knowingly fails to follow them or is indifferent to them, willfulness "is established," i. e., is satisfied); Stein's, 649 F. 2d, at 468 ("Evidence of repeated violations with knowledge of the law's requirements has been held sufficient to establish willfulness" (emphasis added)); McLemore, 317 F. Supp., at 1078-1079.
[32] 18 U.S. C. § 922(b)(3).
[33] Petitioner also argues that the statutory language"willfully violates any other provision of this chapter"indicates a congressional intent to attach liability only when a defendant possesses specific knowledge of the "provision[s] of [the] chapter." We rejected a similar argument in United States v. International Minerals & Chemical Corp., 402 U.S. 558 (1971). Although that case involved the word "knowingly" (in the phrase "knowingly violates any such regulation"), the response is the same:
"We . . . see no reason why the word `regulations' [or the phrase `any other provision of this chapter'] should not be construed as a shorthand designation for specific acts or omissions which violate the Act. The Act, so viewed, does not signal an exception to the rule that ignorance of the law is no excuse . . . ." Id., at 562.
|
Citation Nr: 0324454
Decision Date: 09/18/03 Archive Date: 09/30/03
DOCKET NO. 02-11 600 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Roanoke,
Virginia
THE ISSUE
Entitlement to service connection for post traumatic stress
disorder (PTSD).
REPRESENTATION
Appellant represented by: California Department of
Veterans Affairs
ATTORNEY FOR THE BOARD
Darryl M. Springer, Law Clerk
INTRODUCTION
The veteran had verified active service from October 1972 to
February 1975. It is noted that there was a 6 month period
of prior active service that has not been verified. That
will be accomplished below.
This appeal comes before the Board of Veterans' Appeals
(Board) from a rating decision from the Department of
Veterans Affairs (VA) Roanoke, Virginia Regional Office (RO).
REMAND
With regard to the claim of service connection for PTSD, the
veteran has reported combat in Vietnam and has been diagnosed
as having a history of PTSD. It is noted that the veteran's
service records include that he served during the Vietnam Era
from October 1972 to February 1975 as a Combat Engineer.
There is, however, no showing in the service personnel
records of record that the veteran served in Vietnam or even
had overseas service. As noted above, it is noted that there
are 6 months of earlier active service that are not verified.
Therefore, any additional service personnel records for the
veteran should be obtained.
The veteran in a VA medical report of March 1996 stated that
he had experienced auditory/visual hallucinations during his
period of service in the United States Marine Corps and was
hospitalized for them when he was stationed on Okinawa in
about 1971. It is noted again that there is no evidence of
that date being a period of service. Moreover, those records
have not been specifically requested. An additional attempt
to obtain service medical records from that period will be
needed.
In a February 2000 VA medical report, the veteran reported
post traumatic stress disorder (PTSD) and that he went
through the PTSD program at UCLA and attended groups in Los
Angeles. A record from UCLA or the group sessions in Los
Angeles have not been included in the claims file.
Therefore, to fully assist the veteran, an additional attempt
to obtain any treatment records for the veteran should be
made.
The veteran should be afforded a thorough and contemporaneous
VA examination by a psychiatrist that takes into account the
records of prior treatment for PTSD. Additionally, the
veteran should be provided the opportunity to submit
additional information regarding stressors, if he so wishes.
Further, during the pendency of this appeal, the Veterans
Claim Assistance Act of 2000, Pub. L. No. 106-475, 114 Stat.
2096 (2000) (VCAA), was signed into law. 38 U.S.C.A. § 5100
et. seq. (West 2002). To implement the provisions of the
law, VA promulgated regulations published at 66 Fed. Reg. 45,
620 (Aug. 29, 2001) (codified at 38 C.F.R. §§ 3.102,
3.156(a), 3.159, 3.326(a) (2002)). While the new law and
regulations have been provided to the veteran in the April
2002 Statement of the Case, in order to continue to comply
with the VCAA, on Remand, the RO must assure that the
provisions of this new Act are complied with, including the
notification requirement set forth in the new law. See
Quartuccio v. Principi, 16 Vet. App. 183 (2002).
Finally, it is noted that the veteran has been represented by
the California Department of Veterans Affairs (CDVA). He has
moved to Virginia. While the RO seems to have forwarded most
documents to the CDVA that organization would not have
offices in Virginia. While there could still be written
presentation from that organization, if fact there has not
been. It is not clear that the current appellant, the
veteran's wife acting as spouse-payee is aware that there is
currently not effective representation. She is so informed
by this document.
Based on the foregoing, this case is REMANDED to the RO for
the following actions:
1. The RO should send a letter to the
veteran, the appellant, and the
representative informing them of the
pertinent provisions of the VCAA.
Specifically, it should also be
indicated which of the parties is
responsible for obtaining which
evidence. See Quartuccio, supra. In
addition, the appellant is notified
that the current representative, CDVA,
does not have offices in Virginia, and
that if she desires to appoint a
different service organization as a
representative, she should do so by
contacting the RO.
2. The RO should locate and include in
the claims folder the veteran's
service personal records and any
service medical records from a
hospital in Okinawa, where the veteran
reported he was hospitalized,
including contacting the veteran for
more information, if needed. The
earlier period of service should also
be verified. The veteran should
provide, as needed, more specific
information concerning the name and
location of the reported 1971
hospitalization.
3. The RO should obtain treatment records
for the veteran from the PTSD program
at UCLA and groups sessions in Los
Angeles. The appellant and the
veteran should provide release forms
as needed, and be requested to provide
addresses and approximate dates of
treatment as needed. To the extent
that an attempt to obtain records is
unsuccessful, the claims folder should
contain documentation of the attempts
made. The veteran and his
representative should also be informed
of the negative results. 38 C.F.R.
§ 3.159.
4. The veteran should be scheduled for a
psychiatric examination regarding the
nature and etiology of a psychiatric
disorder. The claims folder should be
made available to the examiner for
review prior to the examination.
After reviewing the claims file and
examining the veteran, the examiner
should describe all diagnoses of a
psychiatric disorder. All necessary
diagnostic testing should be done to
determine the full extent of any
disability present.
The psychiatrist should render an
opinion as to whether the veteran
currently suffers from PTSD pursuant
to the diagnostic criteria set forth
in Diagnostic And Statistical Manual
of Mental Disorders (DSM-IV); and, if
so, is the diagnosis linked to a
specific corroborated stressor event
experienced while in service or to any
verified combat service. If other
psychiatric pathology is present an
opinion as to the approximate date of
onset should be provided. It should
be opined whether it is as least as
likely as not that any psychiatric
disorder present was related to
service.
5. After completion of the requested
development, the RO should review the
veteran's claim on the basis of all
the evidence of record. If the action
taken remains adverse to the veteran
in any way, he, the appellant, and his
representative should be furnished an
appropriate supplemental statement of
the case (SSOC).
The SSOC should include consideration
and a discussion of 38 C.F.R. § 3.655
if the veteran fails to appear for a
scheduled examination. In such case,
the RO should include a copy of the
notification letter in the claims file
as to the date the examination was
scheduled and the address to which
notification was sent. If such letter
is not available, personnel at the
medical center should certify the
address to which the letter was sent,
and certify that it was not returned
as undeliverable.
The SSOC should additionally include a
discussion of all evidence received
since the last statement of the case
was issued. The veteran, the
appellant and the representative
should then be afforded an opportunity
to respond.
Thereafter, the case should be returned to the Board, if in
order. The appellant has the right to submit additional
evidence and argument on the matter or matters the Board has
remanded to the regional office. Kutscherousky v. West, 12
Vet. App. 369 (1999).
This claim must be afforded expeditious treatment by the RO.
The law requires that all claims that are remanded by the
Board of Veterans' Appeals or by the United States Court of
Appeals for Veterans Claims for additional development or
other appropriate action must be handled in an expeditious
manner. See The Veterans' Benefits Improvements Act of 1994,
Pub. L. No. 103-446, § 302, 108 Stat. 4645, 4658 (1994),
38 U.S.C.A. § 5101 (West 2002) (Historical and Statutory
Notes). In addition, VBA's Adjudication Procedure Manual,
M21-1, Part IV, directs the ROs to provide expeditious
handling of all cases that have been remanded by the Board
and the Court. See M21-1, Part IV, paras. 8.43 and 38.02.
_________________________________________________
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) (2002).
|
Title: Rolling stop traffic ticket
Question:I got a traffic ticket for rolling the stop sign here in California, I already extended it and I have to pay on the January 19, two days from now. I have the options to pay it ($238), go to traffic school, or go to court date reservation for arraignment only, if I pick the court date can I talk to the judge try to fight it? And if I lose will I get a fee for fighting? And also can I still do traffic school if I lose?
Answer #1: >I have the options to pay it ($238), go to traffic school,
Your option is really to pay AND go to traffic school or not. If you choose to pay you pay either way. Going to traffic school doesn't excuse the fine; in fact, there's an additional fee for it.
>if I pick the court date can I talk to the judge try to fight it?
No, not on that day. It's arraignment. You plead guilty or not guilty. You can plead guilty and beg for a reduction in the fine, but don't count on it. You can also request a payment plan.
If you plead not guilty, you come back on a different date for trial. Do not assume the officer will not appear. They are required to. If you go to trial, you'd really better have something to say.
>And if I lose will I get a fee for fighting?
No.
>And also can I still do traffic school if I lose?
It's at the judge's discretion. If you show up for trial with no tenable defense, don't count on it. |
Citation Nr: 9927886
Decision Date: 09/28/99 Archive Date: 10/05/99
DOCKET NO. 97-33 153 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in White River
Junction, Vermont
THE ISSUES
1. Entitlement to an increased rating for post-traumatic
stress disorder (PTSD), currently evaluated as 50 percent
disabling.
2. Whether new and material evidence has been submitted to
reopen a claim of service connection for hypertension.
3. Whether new and material evidence has been submitted to
reopen a claim of service connection for diabetes mellitus.
REPRESENTATION
Appellant represented by: The American Legion
WITNESS AT HEARING ON APPEAL
The veteran
ATTORNEY FOR THE BOARD
D. M. Casula, Associate Counsel
INTRODUCTION
The veteran had active service from April 1942 to November
1945.
This matter comes before the Board of Veterans' Appeals
(Board) from a May 1997 rating decision of the White River
Junction, Vermont Regional Office (RO) of the Department of
Veterans Affairs (VA) which denied a rating in excess of 10
percent for the veteran's PTSD, and found that new and
material evidence had not been submitted to reopen the claims
of service connection for hypertension and diabetes. By
rating action in September 1998 the RO assigned a 50 percent
rating for the veteran's PTSD. The veteran has continued his
appeal.
The Board also notes that in the May 1999 Statement of
Accredited Representation in Appealed Case, the veteran's
representative claimed several issues had not been addressed
that were part of the original claim, and that it was "clear
and unmistakable error". Specifically, the representative
cited the claim pertaining to a left great toe disability and
a claim pertaining to scars. As these matters have not been
addressed by the RO, they are referred to the RO for
appropriate action.
FINDINGS OF FACT
1. The veteran's PTSD is currently productive of no more
than occupational or social impairment with reduced
reliability and productivity due to such symptoms as:
Flattened affect; impairment of short- and long-term memory
(e.g., retention of only highly learned materials, forgetting
to complete tasks); disturbances of motivation and mood;
difficulty in establishing and maintaining effective work or
social relationships.
2. By June 1992 rating decision, the RO denied service
connection for hypertension, finding that there was no
evidence that such disability was incurred in or aggravated
by service; the veteran did not appeal that decision and it
became final.
3. Additional evidence submitted since the June 1992 rating
decision includes evidence which is more than merely
cumulative, and is probative of the issue of service
connection for hypertension.
4. By June 1992 rating decision, the RO denied service
connection for diabetes mellitus, finding that there was no
evidence that such disability was incurred in or aggravated
by service; the veteran did not appeal that decision and it
became final.
5. Additional evidence submitted since the June 1992 rating
decision includes evidence which is more than merely
cumulative, and is probative of the issue of service
connection for diabetes mellitus.
6. The claims for service connection for hypertension and
diabetes mellitus are accompanied by objective evidence in
support thereof; the claims are plausible.
CONCLUSIONS OF LAW
1. The criteria for a rating in excess of 50 percent for the
veteran's service-connected PTSD have not been met. 38
U.S.C.A. §§ 1155, 5107 (West 1991 & Supp. 1999); 38 C.F.R.
§§ 4.1, 4.2, 4.7, 4.130, Code 9411 (1998).
2. New and material evidence has been submitted since the
June 1992 RO decision to reopen the claim for entitlement to
service connection for hypertension. 38 U.S.C.A. §§ 5108,
7105 (West 1991 & Supp. 1999); 38 C.F.R. § 3.156(a) (1998).
3. The claim for service connection for hypertension is well
grounded. 38 U.S.C.A. § 5107.
4. New and material evidence has been submitted since the
June 1992 RO decision to reopen the claim for entitlement to
service connection for diabetes mellitus. 38 U.S.C.A.
§§ 5108, 7105 (West 1991 & Supp. 1999); 38 C.F.R. § 3.156(a)
(1998).
5. The claim for service connection for diabetes mellitus is
well grounded. 38 U.S.C.A. § 5107.
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Entitlement to an increased rating for PTSD
Factual Background
The veteran's service records show he served as a navigator
during World War II and flew several combat missions over
enemy-occupied Europe. On January 30, 1994 he was shot down
over Germany and was held as a prisoner of war (POW) by the
Germans for 16 months. He received the Purple Heart Award
and a European Theater ribbon with one star.
By rating action in June 1992 the RO granted service
connection and a 10 percent rating for the veteran's PTSD.
In February 1997 the veteran filed a claim for an increased
rating for his PTSD.
On VA examination in March 1997 the veteran reported that
there had been little change in his life circumstances or his
symptomatology since his last VA examination in 1992. He
worked 2 1/2 days a week at Southern Vermont Women's Health
Center as an obstetrician/gynecologist. He had been married
to his wife for 12 years. He reported that there were some
marital problems because of their "commuter marriage". He
indicated that his wife lived and worked in Rhode Island, and
that they saw each other every weekend and on vacations. He
reported that during the week, in addition to his work, he
spent time stacking wood in the winter and working outdoors
and in his gardens during the summer. He reported having
nightmares of being in the POW camp and in combat. He
claimed that he was talking about it more with people, and
that people had been asking him about it, but he still did
not like to talk about it. He had tried all his life to not
talk about what happened to him during the war. He was proud
of what he did, but did not wear it on his sleeve. He
reported that he had an explosive temper which would get him
into trouble, and he had been reported to the medical board.
Three years prior, he made a comment to some picketers
outside his office, somebody filed a complaint, and he had to
go explain himself. He had problems with making male
friends, and only had a few. He indicated that one of his
friends had died a couple of weeks ago and another was dying
of lung cancer. He was sad about it a lot, and it had always
been hard for him to be close to people.
On VA examination in March 1997, objective examination showed
that the veteran was alert and oriented to person, place, and
time. He reported his mood to be sad and his affect was
varied, but restricted. His behavior was noted to be
appropriate, and he denied auditory and visual
hallucinations. There was no evidence of paranoia or
delusions, and he denied suicidal ideations or thoughts of
death, and denied homicidal ideations. He was cognitively
intact. He met the criteria for PTSD by virtue of his
experience in a WWII POW camp. He reported recurrent,
intrusive, and distressing recollections of the event, as
well as recurrent nightmares. He attempted to avoid
thoughts, feelings and activities associated with the trauma.
He wanted to share WWII history with his son and grandson,
but avoided any anniversary activities which had happened
over the last several years because it aroused unpleasant
feelings. He reported having psychogenic amnesia and could
not remember his time in solitary confinement in the POW
camp, despite having records showing he had been placed
there. He reported a long history of feeling detached from
others, and described a restricted range of affect. He
reported having difficulty staying asleep and continual
trouble with irritability and outbursts of anger. The
assessment was the veteran had a long history of PTSD and
continued to meet the criteria for a diagnosis. The examiner
noted that the prime impact of the PTSD on the veteran's life
had been in terms of relationships, both because of his
irritability and his feelings of estrangement from others.
The Axis I diagnosis was PTSD, the Axis IV diagnosis was
moderate, marital difficulties, and the Global Assessment of
Functioning (GAF) was 60, representing moderate symptoms,
including chronic difficulty falling asleep, chronic
outbursts of anger, as well as multiple avoidant symptoms.
By rating action in May 1997 the RO denied a rating in excess
of 10 percent for PTSD.
In April 1998 the veteran testified at a hearing at the RO
that he was a POW for 16 months during World War II and was
held by the Germans. He was Jewish and reported that his
experience as a POW was much like any other prisoner, until
the Battle of the Bulge when the Germans announced that he
was to be moved. It was a frightening experience because he
was woke up in the night and was told this screaming, but was
not told where or under what conditions he was to be moved.
He reported that the Germans created "ghetto barracks" in
another part of the camp
where the Jewish and black prisoners were placed. It was a
frightening experience because he never knew if action would
be taken against them because of their religious affiliation.
His POW experiences recurred in his dreams, or he would dream
that he was flying, was shot down, and was parachuting. He
tried to be active in his life, and thought that if he was
not as active as he had been, his PTSD would have caused more
problems. He prided himself on his agility of his mind. He
had a very successful obstetrical and gynecological practice
for many years. He indicated that it was a demanding
profession; he enjoyed dealing with the healthy population
and did not like taking care of very sick people. During his
training he found that he could not deal psychologically with
people he could not help and felt depressed.
In April 1998 he further testified that he was unemployed at
that time and did not do any volunteer work. He had worked,
up until July 1997, as the medical director for Southern
Vermont Women's Center. He was married and lived with his
wife in Rhode Island. He described his day as involving
getting up, making breakfast, doing the dishes, reading the
paper, maybe going to the library, and trying to help his
wife's son who had been embarking on a new business venture.
He tried to keep himself busy. He had a good relationship
with his wife, but his stepson was a problem. Although his
stepson did not live with them, he caused them stress. He
testified that he did not get angry and blow-up at the
stepson, but did vent his anger and frustration at his wife.
He indicated that it could be an explosive type anger or
almost a rage, and that he could even have it with strangers,
patients, or staff. He reported that he had eight to twelve
friends in Rhode Island and was pretty close with them. He
mostly got along with his neighbors except for one. He
sometimes had to isolate himself and would go into a dark
room and sleep. He did not belong to any clubs or social
groups, but did belong to the American Legion. He testified
that he was not a "joiner", and never belonged to the AMA.
He liked to stand on the periphery and observe people, but he
did not join in. He testified that he was more forgetful
than he was before, and his mind was not as sharp as before.
Analysis
The veteran's claim for an increased rating for PTSD is well
grounded within the meaning of 38 U.S.C.A. § 5107(a). That
is, the Board finds that the veteran has presented a claim
which is plausible. The Board is also satisfied that all
relevant evidence has been properly developed and that no
further assistance is required to comply with the duty to
assist under 38 U.S.C.A. § 5107(a).
Under the applicable criteria, disability evaluations are
determined by the application of a schedule of ratings which
is based on average impairment of earning capacity. 38
U.S.C.A. § 1155; 38 C.F.R. Part 4. Separate diagnostic codes
identify the various disabilities. VA has a duty to
acknowledge and consider all regulations which are
potentially applicable through the assertions and issues
raised in the record, and to explain the reasons and bases
for its conclusions. Schafrath v. Derwinski, 1 Vet. App. 589
(1991). These regulations include, but are not limited to,
38 C.F.R. §§ 4.1 and 4.2. 38 C.F.R. § 4.1 requires that each
disability be viewed in relation to its history and that
there be emphasis upon the limitation of activity imposed by
the disabling condition. 38 C.F.R. § 4.2 requires that
medical reports be interpreted in light of the whole recorded
history, and that each disability must be considered from the
point of view of the veteran working or seeking work. These
requirements for evaluation of the complete medical history
of the claimant's condition operate to protect claimants
against adverse decisions based on a single, incomplete or
inaccurate report and enable VA to make a more precise
evaluation of the level of the disability and of any changes
in the condition.
When 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.
Under the rating criteria for PTSD, 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 warranted 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 adapting to
stressful circumstances (including work or a work-like
setting); inability to establish and maintain effective
relationships. 38 C.F.R. § 4.130, Diagnostic Code 9411
(1998).
Additionally, under the rating criteria for PTSD, a 100
percent rating is warranted where there is 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 (1998).
When evaluating a mental disorder, the rating agency shall
consider the frequency, severity, and duration of psychiatric
symptoms, the length of remissions and the veteran's capacity
for adjustment during periods of remission. The rating
agency shall assign an evaluation based on all the evidence
of record that bears on occupational and social impairment
rather than solely on the examiner's assessment of the level
of disability at the moment of the examination. When
evaluating the level of disability from a mental disorder,
the rating agency shall consider the extent of social
impairment, but shall not assign an evaluation solely on the
basis of social impairment. 38 C.F.R. § 4.126.
The veteran contends that his PTSD is more disabling than
currently evaluated. The evidence of record consists of the
VA examination in March 1997 and the veteran's testimony in
April 1998. This evidence essentially shows that the veteran
has some persistent PTSD symptoms. He has reported recurrent
nightmares and recollections of his WW II experiences as POW.
Additionally, in 1997 he reported that he had an explosive
temper which would get him into trouble. He had problems
with making male friends, and only had a few, and it had
always been hard for him to be close to people. He reported
his mood to be sad and his affect was varied, but restricted.
He attempted to avoid thoughts, feelings and activities
associated with his WWII trauma. He reported a long history
of feeling detached from others, and described a restricted
range of affect. He had difficulty sleeping and continual
trouble with irritability and outbursts of anger. On VA
examination n 1997 the examiner noted that the prime impact
of the PTSD on the veteran's life had been in terms of
relationships, both because of his irritability and his
feelings of estrangement from others. His GAF score was
noted to be 60, representing moderate symptoms. Applying the
rating criteria, the Board finds that there is no persuasive
evidence showing that the veteran's psychiatric disorder
produces more impairment than that contemplated in the rating
criteria associated with a 50 percent rating.
On VA examination in 1997 the veteran reported that he worked
21/2 days a week at a women's health venter as an
obstetrician/gynecologist. He had been married to his wife
for 12 years. He reported some marital problems because of
their "commuter marriage"; his wife lived and worked in
Rhode Island and they saw each other every weekend and on
vacations. In 1998 he testified he tried to be active in his
life, and thought that if he was not as active as he had
been, his PTSD would have caused more problems. He prided
himself on his agility of his mind. He had a very successful
obstetrical and gynecological practice for many years, and
indicated that it was a demanding profession. Although he
testified that he was unemployed, he did not attribute this
to his PTSD. Additionally, he indicated that he was, at that
time, living with his wife in Rhode Island, and had a good
relationship with her. He reported that he had eight to
twelve friends in Rhode Island and was pretty close with
them. He mostly got along with his neighbors except for one.
Accordingly, there is no evidence showing occupational and
social impairment 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 adapting to
stressful circumstances (including work or a work-like
setting); inability to establish and maintain effective
relationships. The Board also finds that the veteran's PTSD
does not approximate the criteria required for a 70 percent
rating.
In conclusion, the Board finds that the weight of the
evidence establishes that the veteran's service-connected
PTSD is no more than 50 percent disabling under the rating
criteria for psychiatric disorders. As the preponderance of
the evidence is against the claim, the benefit of the doubt
doctrine does not apply, and the claim for an increased
rating must be denied. 38 U.S.C.A. § 5107(b); Gilbert v.
Derwinski, 1 Vet. App 49 (1990).
New and material evidence to reopen claims of
service connection for hypertension and diabetes mellitus
By rating action dated in June 1992, the RO denied the claims
for service connection for hypertension and diabetes
mellitus, essentially finding that there was no evidence of a
current disability. That determination is final and is not
subject to revision on the same factual basis. 38 U.S.C.A.
§ 7105.
The evidence which was of record when the RO considered the
claim in June 1992 included service medical records which
showed no treatment for or findings of hypertension or
diabetes. On VA examination in December 1947 there were no
complaints of or findings of hypertension or diabetes.
On VA examination in April 1992 it was noted that the veteran
had diabetes which was controlled by his diet, and had
hypertension which was controlled by medication. On a VA
prisoner of war examination it was noted that the veteran had
hypertension, well controlled. On VA examination in May 1992
it was noted that the veteran had hypertension, which was
well controlled, and the examiner opined that the veteran's
hypertension was not related to his POW experience.
By rating decision in June 1992, the RO denied service
connection for hypertension and diabetes mellitus. The RO
found that the evidence did not show that either claimed
disability was incurred in or aggravated by service. The RO
also noted that there was no evidence showing that either
disability was manifested to a compensable degree within the
first post-service year, nor was either disability specific
to prisoners of war. As noted above, that determination is
final and is not subject to revision on the same factual
basis. 38 U.S.C.A. § 7105. In order to reopen such a claim,
the veteran must present new and material evidence with
respect to the claims which have been disallowed.
38 U.S.C.A. § 5108. New and material evidence means evidence
not previously submitted to agency decision makers which
bears directly and substantially upon the specific matter
under consideration, which is neither cumulative nor
redundant, and which by itself or in connection with evidence
previously assembled is so significant that it must be
considered in order to fairly decide the merits of the claim.
38 C.F.R. § 3.156(a).
The additional evidence submitted since the June 1992 RO
decision consists of several statements from the veteran's
private physicians, a VA examination dated in March 1997, as
well as the veteran's contentions and testimony.
In a statement dated in February 1997, the veteran indicated
that he wanted to reopen claims for service connection for
hypertension and diabetes mellitus, as being based on his
experiences as a POW for 18 months.
On VA examination in March 1997, the diagnoses included
hypertension and type II diabetes mellitus.
In his substantive appeal (VA Form 9) dated in November 1997,
the veteran requested that hypertension and diabetes be
considered as an "adjunct disability" to his service-
connected PTSD.
Received in December 1997 was a letter from Philip R. Lapp,
M.D. In the letter, Dr. Lapp indicated that the veteran was
a patient from October 1996 to April 1997 for management of
type 2 diabetes. It was noted that the veteran had
hypertension, which was reasonably well-controlled on Vasotec
therapy, and diabetes mellitus, which was well-controlled
with diet, exercise, and Glucophage therapy. Dr. Lapp
reported that they never discussed the veteran's PTSD while
the veteran was under his care. Dr. Lapp opined that
psychological stress of any type would tend to worsen blood
sugar control and blood pressure control. Dr. Lapp indicated
that he was not in a position to sate whether the veteran had
PTSD or not, nor was he qualified to determine how much of a
factor it might be in the veteran, in terms of affecting his
diabetes and hypertension.
In April 1998 the veteran testified that he had hypertension
for 25 years and diabetes for 20 years. He reported that his
hypertension had been held in check with medication, and that
the medication he took was supposed to help the diabetes as
well. He testified that he did not take insulin, and that
his diabetes was controlled by diet and medication.
Received at the hearing was a letter from Jerome S.
Berkowitz, M.D. dated in April 1998. Dr. Berkowitz indicated
that the veteran had been under his care for cataracts and
had undergone cataract surgery, and noted that the presence
of diabetes mellitus did increase the frequency and severity
of cataracts.
In its October 1998 determination that new and material
evidence had not been submitted to reopen the veteran's
claims of entitlement to service connection for hypertension
and diabetes mellitus, the RO applied the standard set forth
in Colvin v. Derwinski, 1 Vet. App. 171 (1991). This test
required that, in order to reopen a previously denied claim,
"there must be a reasonable possibility that the new
evidence, when viewed in the context of all the evidence,
both new and old, would change the outcome." [email protected].
The Board notes that in a recent case, the United States
Court of Appeals for the Federal Circuit determined that in
imposing the requirement that there be a reasonable
possibility of a changed outcome, the U.S. Court of Appeals
for Veterans Claims (Court) in the Colvin case impermissibly
ignored the definition of material evidence adopted by VA.
Thus, that part of the Colvin test was overruled. Hodge v.
West, 155 F.3d. 1356 (Fed. Cir. 1998). In view of the Hodge
decision, the veteran's application to reopen the previously
denied claim for service connection must be analyzed under
the definition of new and material evidence provided at 38
C.F.R. § 3.156(a), rather than the standard set forth in
Colvin. The Hodge decision provides for a reopening standard
which calls for judgments as to whether the new evidence (1)
bears directly or substantially on the specific matter, and
(2) is so significant that it must be considered to fairly
decide the merits of the claim. Hodge, supra.
Subsequent to Hodge, the Court issued two additional
decisions bearing on the issue of reopening claims for
veterans' benefits: Elkins v. West, 12 Vet. App. 209 (1999)
(en banc) and Winters v. West, 12 Vet. App. 203 (1999) (en
banc). In these cases, the Court stated that there is now a
three step test to apply when a veteran seeks to reopen a
final decision based on new and material evidence. Elkins at
218-219; [email protected]. Under Elkins, VA must first
determine whether the veteran has presented new and material
evidence under 38 C.F.R. § 3.156(a) in order to have a
finally denied claim reopened under 38 U.S.C.A. § 5108.
Second, if new and material evidence has been presented,
immediately upon reopening the claim, VA must determine
whether based upon all the evidence of record in support of
the claim, presuming its credibility, the claim as reopened
is well grounded pursuant to 38 U.S.C.A. § 5107(a). Third,
if the claim is well grounded, the decisionmakers may then
proceed to evaluate the merits of the claim but only after
ensuring that the duty to assist under 38 U.S.C.A. § 5107(a)
has been fulfilled.
In reviewing the evidence of record, the Board finds that
additional evidence submitted since the June 1992 RO decision
is new and material. Specifically, in the November 1997
letter, Dr. Lapp opined that psychological stress of any type
would tend to worsen blood sugar control and blood pressure
control. The Board finds that the additional evidence is not
only new, as it has not been previously considered by the RO,
but also material as it is relevant to and probative of the
underlying issues of whether the veteran has hypertension and
diabetes that is related to service. The Board notes that
this evidence tends to show that the veteran's hypertension
and diabetes may be related to his service-connected PTSD.
38 U.S.C.A. § 5108; 38 C.F.R. § 3.156.
The Board also notes that the additional evidence meets the
more flexible standard set forth in 38 C.F.R. § 3.156(a) and
Hodge, and finds that the November 1997 letter from Dr. Lapp
is so significant that it must be considered in order to
fairly decide the merits of the claim. Accordingly, the
claim is reopened.
According to Elkins, the Board must now determine whether
based upon all the evidence of record in support of the
claim, presuming its credibility, the claims as reopened are
well grounded pursuant to 38 U.S.C.A. § 5107(a). In order
for a claim for service connection to be well grounded, there
must be competent evidence of a current disability (a medical
diagnosis), of incurrence or aggravation of a disease or
injury in service (lay or medical evidence), and of a nexus
between the inservice injury or disease and the current
disability (medical evidence). Caluza v. Brown, 7 Vet. App.
498 (1995). Evidentiary assertions by the veteran must be
accepted as true for the purposes of determining whether a
claim is well-grounded, except where the evidentiary
assertion is inherently incredible or when the fact asserted
is beyond the competence of the veteran. King v. Brown, 5
Vet. App. 19 (1993).
Taking into consideration all of the evidence of record, the
Board finds that the veteran's claims for service connection
for hypertension and diabetes are well grounded. There is
evidence showing that he currently has hypertension and
diabetes, and that there may be a relationship between his
service-connected PTSD and his hypertension and diabetes.
Hence, the Board finds the veteran's claims for service
connection for hypertension and diabetes to be well-grounded.
ORDER
Entitlement to a rating in excess of 50 percent for the
veteran's PTSD is denied.
The claims for entitlement to service connection for
hypertension and diabetes mellitus are reopened and the
claims are found to be well grounded; to this extent the
appeals are granted.
REMAND
After a determination of well-groundedness has been made, the
third step in the Elkins case requires that the Board
evaluate the merits of the claims, but only after ensuring
that the duty to assist under 38 U.S.C.A. § 5107(a) has been
fulfilled. The VA has a duty to assist the veteran in the
development of facts pertaining to his claim. 38 U.S.C.A.
§ 5107(a) (West 1991 & Supp. 1999); 38 C.F.R. § 3.103(a)
(1998). The Court has held that the duty to assist the
veteran in obtaining and developing available facts and
evidence to support his claim includes obtaining medical
records to which he has referred and obtaining adequate VA
examinations. The Court also stated that the Board must make
a determination as to the adequacy of the record. Littke v.
Derwinski, 1 Vet. App. 90 (1990).
As was noted above, the evidence on which the claim was
reopened consists of a November 1997 letter in which Dr. Lapp
opined that psychological stress of any type would tend to
worsen blood sugar control and blood pressure control. The
Board notes that while Dr. Lapp has provided his analysis and
opinion, the rationale for the opinion is not given.
Moreover, there are no clinical records from Dr. Lapp in the
claims folder.
The veteran essentially contends that service connection is
warranted for hypertension and diabetes as secondary to the
service-connected PTSD. The law provides that disability
which is proximately due to or the result of a service-
connected disability shall be service-connected. 38 C.F.R. §
3.310. Service connection may also be established on a
secondary basis when it is shown that the veteran's service-
connected disability aggravates a non-service-connected
disability. Allen v. Brown, 7 Vet. App. 439, 449 (1995).
The Board notes that Dr. Lapp has indicated that he was not
qualified to determine how much of a factor psychological
stress might be in terms of affecting the veteran's diabetes
and hypertension. Also, there is no medical opinion that
specifically addresses the issue as to whether any service-
connected disorder "aggravated" any low back disability.
The Board therefore finds that VA examinations and opinions
by appropriate specialists are necessary.
Accordingly, the case is REMANDED to the RO for the following
actions:
1. The RO should contact the veteran and
obtain the names and addresses of all
health care providers (VA and private)
from which he has received treatment for
hypertension or diabetes since service.
After receiving this information and any
necessary releases, the RO should contact
the named medical providers and request
copies of all records of treatment, which
have not already been obtained, and
associate them with the claims folder.
This should specifically include complete
treatment records from Dr. Lapp.
2. Thereafter, the veteran should be
afforded appropriate VA examinations in
order to ascertain the nature and
etiology of his hypertension and his
diabetes. The claims folder must be
reviewed by the examiner(s) prior to
conducting the examination so that
pertinent aspects of the veteran's
military and medical record may be
reviewed. All indicated special tests
and studies should be conducted. After
review of the record and examination of
the veteran, the examiner(s) should
express opinions relative to the
following questions: (a) is it at least
as likely as not that the service-
connected PTSD is the cause of the
hypertension or diabetes; and (b) is it
at least as likely as not that the
service-connected PTSD aggravated either
the veteran's hypertension or his
diabetes mellitus. The examiner(s)
should explain the rationale for any
opinions expressed.
3. Following completion of the
foregoing, the RO must review the claims
folder and ensure that the foregoing
development has been completed.
Thereafter, the RO should readjudicate
the veteran's claims for service
connection for hypertension and diabetes
on a de novo basis. If action taken
remains adverse to the veteran, he and
his representative should be provided a
supplemental statement of the case and a
reasonable period for response thereto.
Thereafter, subject to current appellate procedures, the case
should be returned to the Board for further appellate
consideration, if appropriate. The appellant need take no
action until otherwise notified. Quarles v. Derwinski, 3
Vet. App. 129, 141 (1992); Booth v. Brown, 8 Vet. App. 109
(1995). The appellant has the right to submit additional
evidence and argument on the matter or matters the Board has
remanded to the regional office. Kutscherousky v. West, 12
Vet. App. 369 (1999). The purpose of this REMAND is to
obtain additional information and to ensure due process of
law. No inference should be drawn regarding the final
disposition of the claim as a result of this action.
This claim must be afforded expeditious treatment by the RO.
The law requires that all claims that are remanded by the
Board of Veterans' Appeals or by the United States Court of
Appeals for Veterans Claims for additional development or
other appropriate action must be handled in an expeditious
manner. See The Veterans' Benefits Improvements Act of 1994,
Pub. L. No. 103-446, § 302, 108 Stat. 4645, 4658 (1994),
38 U.S.C.A. § 5101 (West Supp. 1999) (Historical and
Statutory Notes). In addition, VBA's Adjudication Procedure
Manual, M21-1, Part IV, directs the ROs to provide
expeditious handling of all cases that have been remanded by
the Board and the Court. See M21-1, Part IV, paras. 8.44-
8.45 and 38.02-38.03.
C. W. SYMANSKI
Member, Board of Veterans' Appeals
|
Case 8:19-cr-00009-TPB-SPF Document 144 Filed 08/02/21 Page 1 of 2 PageID 521
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
UNITED STATES OF AMERICA
v. Case No. 8:18-cr-9-TPB-SPF
GLENN FRANCIS,
Defendant.
/
ORDER ADOPTING REPORT AND RECOMMENDATION
This matter is before the Court on the report and recommendation of Sean P.
Flynn, United States Magistrate Judge, entered on June 15, 2021. (Doc. 138). After a
competency hearing and the review of stipulated reports, Judge Flynn recommends
that the Court find Defendant to be presently suffering from a mental disease or defect
rendering him incompetent to stand trial. Judge Flynn further recommends that the
Court finds that there is not a substantial probability that in the foreseeable future,
Defendant will attain the capacity to permit the proceedings to go forward. No
objections were filed, and the time to object has expired. Upon review of the report
and recommendation, court file, and record, the Court finds as follows:
Under the Federal Magistrates Act, Congress vests Article III judges with the
power to “designate a magistrate judge to hear and determine any pretrial matter
pending before the court,” subject to various exceptions. 28 U.S.C. § 636(b)(1)(A). The
Act further vests magistrate judges with authority to submit proposed findings of fact
and recommendations for disposition by an Article III judge. 28 U.S.C. § 636(b)(1)(B).
After conducting a careful and complete review of the findings and recommendations,
Page 1 of 2
Case 8:19-cr-00009-TPB-SPF Document 144 Filed 08/02/21 Page 2 of 2 PageID 522
a district judge may accept, reject, or modify the magistrate judge’s report and
recommendation. 28 U.S.C. § 636(b)(1); Williams v. Wainwright, 681 F.2d 732 (11th
Cir. 1982).
After careful consideration of the record, including Judge Flynn’s report and
recommendation, the Court adopts the report and recommendation. The Court agrees
with Judge Flynn’s well-reasoned findings and conclusions.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1) Judge Flynn’s report and recommendation (Doc. 138) is AFFIRMED and
ADOPTED and INCORPORATED BY REFERENCE into this Order for all
purposes, including appellate review.
(2) The Court finds Defendant is presently suffering from a mental disease or
defect rendering him incompetent to stand trial. The Court further finds that
there is not a substantial probability that in the foreseeable future, Defendant
will attain the capacity to permit the proceedings to go forward.
DONE and ORDERED in Chambers in Tampa, Florida, this 2nd day of
August, 2021.
TOM BARBER
UNITED STATES DISTRICT JUDGE
Page 2 of 2
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Case 2:20-cv-04266 Document 3 Filed 05/11/20 Page 1 of 2 Page ID #:43
AO 440 (Rev. 06/12) Summons in a Civil Action
UNITED STATES DISTRICT COURT
for the
Central District
__________ of California
District of __________
Vanessa Long, individually and on behalf of all others )
similarly situated, )
)
)
Plaintiff(s) )
)
v. Civil Action No.
)
SK ENERGY AMERICAS, INC.; SK TRADING )
INTERNATIONAL CO. LTD; and VITOL INC. )
)
)
Defendant(s) )
SUMMONS IN A CIVIL ACTION
To: (Defendant’s name and address) 1) SK ENERGY AMERICAS INC., c/o CSC-Lawyers Incorporating Service
2710 Gateway Oaks Drive, Suite 150N, Sacramento, CA 95833
2) SK TRADING INTERNATIONAL CO. LTD.
26, Jong-ro Jongno-gu Seoul 03188, Republic of South Korea
3) VITOL INC., c/o CT Corporation System
818 West Seventh Street, Suite 930, Los Angeles, CA 90017
A lawsuit has been filed against you.
Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if you
are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiff’s attorney,
whose name and address are: Joseph W. Cotchett, Adam J. Zapala
Elizabeth T. Castillo, Reid W. Gaa
COTCHETT, PITRE & McCARTHY, LLP
840 Malcolm Road, Suite 200, Burlingame, CA 94010
600-775-2405
If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.
You also must file your answer or motion with the court.
CLERK OF COURT
Date:
Signature of Clerk or Deputy Clerk
Case 2:20-cv-04266 Document 3 Filed 05/11/20 Page 2 of 2 Page ID #:44
AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)
Civil Action No.
PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))
This summons for (name of individual and title, if any)
was received by me on (date) .
’ I personally served the summons on the individual at (place)
on (date) ; or
’ I left the summons at the individual’s residence or usual place of abode with (name)
, a person of suitable age and discretion who resides there,
on (date) , and mailed a copy to the individual’s last known address; or
’ I served the summons on (name of individual) , who is
designated by law to accept service of process on behalf of (name of organization)
on (date) ; or
’ I returned the summons unexecuted because ; or
’ Other (specify):
.
My fees are $ for travel and $ for services, for a total of $ 0.00 .
I declare under penalty of perjury that this information is true.
Date:
Server’s signature
Printed name and title
Server’s address
Additional information regarding attempted service, etc:
Print Save As... Reset
|
Slip Op. 16 - 83
UNITED STATES COURT OF INTERNATIONAL TRADE
UNITED STATES, Before: Donald C. Pogue,
Senior Judge
Plaintiff,
Court No. 15-00111
v.
NYCC 1959 INC.,
Defendant.
OPINION
[granting plaintiff’s motion for default judgment]
Dated: September 7, 2016
Zachary J. Sullivan, Trial Attorney, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice,
of Washington, DC, for the Plaintiff. Also on the brief were
Benjamin C. Mizer, Principal Deputy Assistant Attorney General,
Jeanne E. Davidson, Director, and Franklin E. White, Jr.,
Assistant Director. Of counsel was Karen Hiyama, Senior
Attorney, U.S. Customs and Border Protection, of Detroit, MI.
Pogue, Senior Judge: The United States brings this
action to recover unpaid duties and a civil penalty, as
permitted by Section 592 of the Tariff Act of 1930, as amended,
19 U.S.C. § 1592 (2012) (“Section 1592”).1 Compl., ECF No. 3,
at ¶ 1. Plaintiff claims that Defendant NYCC 1959 Inc.
(“NYCC”), an importer of candles from the People’s Republic of
1 Further citations to the Tariff Act of 1930, as amended, are to
the relevant provisions of Title 19 of the U.S. Code, 2012
edition.
Court No. 15-00111 Page 2
China (“China”), negligently entered merchandise into the
commerce of the United States by means of materially false
information, in violation of 19 U.S.C. § 1592(a)(1)(A)(i). Id.
at ¶¶ 3-8, 14. Because NYCC failed to timely appear, plead, or
otherwise defend, default was entered. Entry of Default, ECF No.
9. The Government now moves for default judgment pursuant to
USCIT Rule 55(b). Pl.’s Mot. for Default J., ECF No. 12.
The court has jurisdiction pursuant to 28 U.S.C.
§ 1582(1) (2012).
As further explained below, because the Government’s
well-pleaded complaint and supporting evidence adequately
establish the defaulting Defendant’s liability for negligent
violations of Section 1592 as a matter of law, Plaintiff’s
motion for a default judgment is granted. Judgment shall be
entered against the Defendant for the unpaid duties owed as a
result of these violations. In addition, because the
Government’s adequately documented, certain claim for a civil
penalty against NYCC is in an amount that is within the
statutory limit for such violations, judgment shall also be
entered for the Plaintiff on its penalty claim.
DISCUSSION
Because a defendant who defaults thereby admits all
well-plead factual allegations contained in the complaint, e.g.,
Court No. 15-00111 Page 3
City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137
(2d Cir. 2011) (“It is an ancient common law axiom that a
defendant who defaults thereby admits all well-pleaded factual
allegations contained in the complaint.”) (quotation marks and
citation omitted), the court must enter judgment against NYCC if
(1) Plaintiff’s allegations establish NYCC’s liability as a
matter of law, see id.,2 and (2) “the plaintiff’s claim is for a
sum certain or for a sum that can be made certain by
computation.” USCIT R. 55(b).3
I. Admitted as True, the Government’s Factual Allegations
Establish NYCC’s Liability as a Matter of Law.
Section 1592 prohibits the entry of merchandise into
the commerce of the United States by means of “any document or
electronically transmitted data or information, written or oral
statement, or act which is material and false,” if the
2 See also, e.g., United States v. Freight Forwarder Int’l, Inc.,
__ CIT __, 44 F. Supp. 3d 1359, 1362 (2015) (relying on Mickalis
Pawn Shop, 645 F.3d at 137).
3 USCIT Rule 55(b) provides that “[w]hen the plaintiff’s claim is
for a sum certain or for a sum that can be made certain by
computation, the court – on the plaintiff’s request with an
affidavit showing the amount due – must enter judgment for that
amount and costs against a defendant who has been defaulted for
not appearing and who is neither a minor nor an incompetent
person.” Plaintiff’s complaint alleges that NYCC is a
corporation, not a minor or an incompetent person. See Compl.,
ECF No. 3, at ¶ 3 (averring that, “[u]pon information and
belief,” Defendant NYCC is “a New York corporation . . . engaged
in the importation of candles”).
Court No. 15-00111 Page 4
responsible person acted with “fraud, gross negligence, or
negligence.” 19 U.S.C. § 1592(a)(1)(A)(i). Here, the Government
adequately alleges that NYCC entered merchandise into the
commerce of the United States using entry documents that falsely
indicated to U.S. Customs and Border Protection (“Customs”) that
the merchandise in question was not subject to any antidumping
duties. Compl., ECF No. 3, at ¶¶ 4-7 & Ex. A. In fact
(accepting, as necessary in cases of default, the truth of the
Plaintiff’s factual allegations, Mickalis Pawn Shop, 645 F.3d at
137), the merchandise – candles from China containing petroleum
wax – was covered by an antidumping duty order. Compl.,
ECF No. 3, at ¶¶ 4-5 (citing Petroleum Wax Candles from [China],
51 Fed. Reg. 30,686 (Dep’t Commerce Aug. 28, 1986) (antidumping
duty order)).
The false entry information was material to Customs’
evaluation of NYCC’s duty liability for these entries because it
affected Defendant’s antidumping duties, see Compl., ECF No. 3,
at ¶¶ 6, 8; United States v. Rockwell Int’l Corp., 10 CIT 38,
42, 628 F. Supp. 206, 210 (1986) (“[T]he measurement of the
materiality of the false statement is its potential impact upon
Customs’ determination of the correct duty for the imported
merchandise.”) (citations omitted). Therefore, the Government’s
factual allegations, deemed admitted by the defaulting
Defendant, establish that NYCC entered merchandise into the
Court No. 15-00111 Page 5
commerce of the United States by means of information that was
both material and false. Accordingly, admitted as true, the
Government’s factual allegations establish NYCC’s liability
under Section 1592 as a matter of law. See 19 U.S.C.
§ 1592(a)(1)(A)(i). Judgment must therefore be entered against
NYCC for the underpayment of duties that resulted from these
violations. See Compl., ECF No. 3, at ¶¶ 8-11.
Moreover, in the absence of any defense by the
Defendant, the Government’s uncontested factual allegations are
also sufficient to establish NYCC’s liability under Section 1592
for a monetary penalty based on negligence. See 19 U.S.C.
§ 1592(e)(4) (“Notwithstanding any other provision of law, in
any proceeding commenced by the United States in the Court of
International Trade for the recovery of any monetary penalty
claimed under [Section 1592] . . . if the monetary penalty is
based on negligence, the United States shall have the burden of
proof to establish the act or omission constituting the
violation, and the alleged violator shall have the burden of
proof that the act or omission did not occur as a result of
negligence.”). Accordingly, the next question before the court
is the claimed penalty amount.
II. The Penalty Amount
Section 1592 provides a maximum civil penalty amount
Court No. 15-00111 Page 6
for penalties based on negligent violations. 19 U.S.C.
§ 1592(c)(3). Where (as here) the material misrepresentation
that forms the basis of the negligent violation concerned the
assessment of duties, the amount of the penalty may not exceed
the lesser of “the domestic value of the merchandise” or “two
times the lawful duties, taxes, and fees of which the United
States is or may be deprived.” See id. at § 1592(c)(3)(A).
Here the Government alleges, providing supporting
evidence, that the total domestic value of the entries in
question was $270,611.26. See Compl., ECF No. 3, at ¶ 15 n.1
& Ex. A; Decl. of Elena Pietron, ECF No. 12-1 (“Pietron Decl.”),
at ¶¶ 4-6, 9 & Ex. 5. The Government also provides evidence
that the potential antidumping duty loss was $138,509.21.
See Pietron Decl., ECF No. 12-1, at ¶ 7.4 Two times this amount
is $277,018.42. Accordingly, the maximum allowable penalty
amount for NYCC’s negligent violation of Section 1592 with
respect to these entries is $270,611.26, which is the lesser of
the two amounts. See 19 U.S.C. § 1592(c)(3)(A).
4 $138,509.21 is the sum of the duties owed on each of the three
entries at issue – $49,574.33 plus $46,127.14 plus $42,807.74.
See Pietron Decl., ECF No. 12-1, at ¶ 7. Although $49,574.33 of
this amount was paid by NYCC’s surety, Compl., ECF No. 3,
at ¶ 8, such that only $88,934.88 remains in actual lost
revenue, the statute contemplates the full amount of the
potential duty loss. See 19 U.S.C. § 1592(c)(3)(A)(ii) (“two
times the lawful duties, taxes, and fees of which the United
States is or may be deprived”) (emphasis added).
Court No. 15-00111 Page 7
After taking appropriate preliminary steps, see Decl.
of Wanda Vela, ECF No. 12-2 (“Vela Decl.”), at ¶¶ 3-4, 8,
Customs ultimately issued to NYCC a formal demand for payment of
the $88,934.88 in unpaid antidumping duties and a penalty of
$266,671.78, both of which remain unpaid. Compl. ECF No. 3,
at ¶¶ 9-11. Because the amount of the claimed penalty falls
within the statutory cap set by the lesser of the merchandise’s
domestic value and two times the potential duty loss, the
Government’s assessed penalty amount in this case is within the
scope of authority provided by 19 U.S.C. § 1592(c)(3)(A).
Because Defendant has defaulted, it raises no equitable claim,
argument, or factual allegations supportive of a lesser penalty
amount. Judgment shall therefore be entered for the unpaid
antidumping duties and the penalty as claimed, plus post-
judgment interest, see 28 U.S.C. § 1961(a), and pre-judgment
interest on the unpaid duties,5 see United States v. Nat’l
5 Pre-judgment interest on the outstanding duty amount shall be
computed pursuant to 26 U.S.C. § 6621, see 19 U.S.C. § 1677g(b),
from April 14, 2015 – the date of the summons in this action,
Summons, ECF No. 1 – rather than the last formal demand for
payment, see Vela Decl., ECF No. 12-2, at ¶ 8 & Ex. 3, in
recognition of the Government’s continued consideration of the
matter in exchange for NYCC’s waiver of the statute of
limitations, see id. at ¶ 11 & Ex. 5 (Statute of Limitations
Waiver Form) (stating that NYCC waived the statute of
limitations, after Customs’ formal demand for payment, to
“obtain the benefits of the orderly continuation and conclusion”
(footnote continued)
Court No. 15-00111 Page 8
Semiconductor Corp., 547 F.3d 1364, 1369-70 (Fed. Cir. 2008)
(pre-judgment interest not available for penalties pursuant to
19 U.S.C. § 1592(c)); United States v. Horizon Prods. Int’l
Inc., __ CIT __, 82 F. Supp. 3d 1350, 1355 (2015) (awarding pre-
judgment interest solely on outstanding duty amount in a penalty
action), plus costs. See USCIT Rule 55(b) (requiring the entry
of judgment for the plaintiff, plus costs, when the plaintiff’s
claim is for a sum certain against a competent defendant who has
been defaulted for not appearing); supra note 3 (providing
relevant text of USCIT Rule 55(b)).
CONCLUSION
For all of the foregoing reasons, the Government’s
motion for default judgment against NYCC for a negligent
violation of 19 U.S.C. § 1592(a) is granted. Judgment shall be
entered in the amount of $355,606.66 ($88,934.88 in unpaid
antidumping duties plus $266,671.78 in penalty), plus
post-judgment interest, computed in accordance with 28 U.S.C.
§§ 1961(a)-(b), as well as pre-judgment interest solely on
$88,934.88 (the outstanding duty amount), computed pursuant to
of the agency’s continued review of the entries in question).
As the evidence presented does not establish any other date for
the conclusion of this additional review (and hence the true
finalization of the demand for payment), the summons provides
the earliest equitable date from which to compute pre-judgment
interest.
Court No. 15-00111 Page 9
26 U.S.C. § 6621, from April 14, 2015 (the date of the
unanswered summons), until the date of judgment, plus costs.
_______/s/ Donald C. Pogue___
Donald C. Pogue, Senior Judge
Dated: September 7, 2016
New York, NY
|
884 F.2d 1566
1989 A.M.C. 2880
In re McLEAN INDUSTRIES, INC., et al., Debtors.John E. BRITTAIN, Hamood Ahmed Gazali, Julian Garcia andAbdo Nadeesh, Appellants,v.UNITED STATES LINES, INC., Bank of America National Trustand Savings Association and Citibank, N.A., das Co-Managersfor Bank of America National Trust and Savings Association,Citibank, N.A., Chemical Bank, Bankers Trust Company,Continental Illinois National Bank and Trust Company ofChicago, Marine Midland Bank and Security Pacific NationalBank, Appellees.
No. 1268, Docket 88-5006.
United States Court of Appeals,Second Circuit.
Submitted March 23, 1989.Decided Sept. 12, 1989.
Alan H. Buchsbaum, Leon Stand, Semel, Patrusky & Buchsbaum, New York City, submitted a brief for appellants.
Deborah A. Skakel, Alan W. Kornberg, Milbank, Tweed, Hadley & McCloy, New York City, submitted a brief for appellee, U.S. Lines, Inc.
(Amy R. Wolf, Scott K. Charles, Theodore A. Ulrich, William S. Busch, Wachtell, Lipton, Rosen & Katz, Cadwalader Wickersham & Taft, New York City, submitted a brief for remaining appellees.)
Before NEWMAN, KEARSE and CARDAMONE, Circuit Judges.
JON O. NEWMAN, Circuit Judge:
1
On this bankruptcy appeal, we consider whether four seamen, injured on ships of the debtor, have any valid complaint against rulings that permitted creditor banks to obtain funds resulting from the sale of the ships pursuant to proceedings in the High Court of Singapore. The matter is before us on a reinstated appeal from a judgment of the District Court for the Southern District of New York (Richard J. Daronco, Judge) affirming orders of the Bankruptcy Court (Howard C. Buschmann, III, Judge) in Chapter 11 proceedings of the debtor, United States Lines, Inc. Those orders granted relief from the automatic stay, approved post-petition financing, and denied a request to compel the banks to subject to the jurisdiction of the Bankruptcy Court the funds they obtained in the proceedings in Singapore. We affirm.
Facts
2
The seamen were injured while aboard three different vessels of the debtor. They have asserted claims for $1,000,000, $800,000, $600,000, and $22,000. The injuries are covered by insurance policies of the debtor containing a $100,000 per case deductible clause. The policies specify that the insurer is not liable if the debtor is unable to satisfy the deductible. The seamen contend that they cannot recover under the policies unless they are paid the amount of their claims up to the first $100,000. In their view, success in the pending litigation is vital to their opportunity to collect under the policies. The debtor disputes this contention, arguing that a provision in the proposed plan of reorganization involving the distribution to the seamen of stock in the reorganized company and payments from an escrow fund will suffice to obligate the insurers to pay the seamen's claims once those claims are liquidated. We express no views on this aspect of the dispute.
3
The creditor banks, appellees here, had issued letters of credit to enable United States Lines to purchase twelve container ships. As security for the letters of credit, the banks received a first preferred ship mortgage on each vessel. In November 1986 the debtor filed its Chapter 11 petition.
4
One month later the vessels on which the seamen had been injured and on which the banks held mortgages were arrested in Singapore on writs issued by the High Court of Singapore upon complaints of local creditors who had supplied goods and services. Thereafter, the banks requested and received from the Bankruptcy Court in New York partial relief from the automatic stay, 11 U.S.C. Sec. 362(f) (1982 & Supp. V 1987), permitting them to protect their rights in the proceeding in Singapore. On July 27, 1987, in an order challenged on this appeal, the Bankruptcy Court granted the banks complete relief from the stay with respect to the arrested vessels in exchange for the banks' agreement to provide post-petition financing to the debtor. In accordance with the terms of the banks' ship mortgages, the order provided that funds advanced by the banks would be secured by the existing mortgages; the banks advanced $3,500,000. The order also permitted any party claiming rights in the arrested vessels to pursue its remedies in the Singapore proceeding. Notice of the motion seeking entry of the July 27 order had been given to the creditors' committee, the United States Trustee, and all parties who had requested notice pursuant to Bankruptcy Rule 2002. The seamen had not made such requests and did not receive notice.
5
The banks litigated the validity of their mortgages in Singapore and won judgments totaling $170 million. The vessels were then sold under the jurisdiction of the Singapore Court to corporate subsidiaries of the banks for 8 million Singapore dollars each (approximately 4 million U.S. dollars). Thereafter the banks filed with the Singapore court motions for determination of the priority of their liens and for payment of the sale proceeds. The seamen intervened and asserted in rem claims for the $322,000 they sought from the debtor to trigger insurance coverage for their injuries. The Singapore court then distributed to the banks the proceeds of the sales, but retained $320,000 (which the Court thought was the amount of the seamen's claims) pending resolution of the dispute between the seamen and the banks. Central to that dispute is the fact that Singapore law generally gives a priority to a first preferred ship mortgage over the maritime lien arising from a personal injury aboard the ship whereas United States law gives the priority to the "preferred maritime liens" of the personal injury claimants, 46 U.S.C. Sec. 953(b) (1982).
6
Rather than reduce their claims to judgment in Singapore, the seamen filed in the Bankruptcy Court a motion to "clarify" the July 27 order by amending it to require the banks to deposit the proceeds from the sale of the vessels with the Bankruptcy Court. When that relief was denied on October 7, they sought an order staying the denial ruling and also staying the banks' right to distribute the proceeds they had received. Upon denial of that request on October 15, the seamen appealed to the District Court, and upon affirmance there, to this Court. On our first encounter with this appeal, we dismissed the appeal without prejudice to reinstatement in order to afford the Singapore court an opportunity to make rulings with respect to the seamen's claims that might have mooted the issues before us. Brittain v. United States Lines, Inc. (In re McLean Industries, Inc.), 857 F.2d 88 (2d Cir.1988).
7
On March 3, 1989, in an unreported order, we granted the motion of the seamen to reinstate the appeal after the Singapore court indicated that it was about to distribute the remaining $320,000 to the banks. We also ordered the banks to deposit with the District Court the $320,000 upon distribution in Singapore, pending the outcome of this appeal. Having been informed by counsel for the seamen that the Singapore court preferred that United States courts adjudicate the relative rights of the seamen and the banks to the disputed funds, we also invited the Singapore court, if its views had been correctly reported, to state that preference in its final order of distribution. On March 10, 1989, the Singapore court ordered the $320,000 distributed to the banks. In doing so, the High Court announced, according to the uncontroverted affidavit of the banks' Singapore counsel, that the report of its views as conveyed to this Court had been "wholly inaccurate." The High Court denied the seamen's request that the distribution order be entered without prejudice to proceedings in the United States courts.
Discussion
8
Initially, the parties dispute what is before us, a dispute that implicates the standard of review. The seamen contend that we should review the July 27 order of the Bankruptcy Court, which, they assert, was given plenary consideration by the District Court. The banks reply that the seamen filed notices of appeal to the District Court only from the October 7 and October 15 orders of the Bankruptcy Court. They urge us to consider only the lawfulness of these orders and to affirm summarily since the Bankruptcy Court did not exceed its discretion in declining to amend the July 27 order nor in declining to stay the October 7 order. Technically, we have before us for review the District Court's judgment affirming the October 7 and October 15 orders appealed to that Court. Though we could inquire only whether the District Court was correct in ruling that those two orders were within the discretion of the Bankruptcy Court, we prefer to accept for review the underlying issues concerning the July 27 order.
9
To whatever extent the seamen are continuing to press the claim, advanced in the Bankruptcy Court, that the banks somehow precipitated the arrest of the vessels in a jurisdiction where their liens would have priority over the seamen's liens, that claim must be rejected. As the Bankruptcy Court properly ruled, there is no factual support for this allegation.
10
The seamen's basic claim is that the July 27 order is invalid as to them because they were given no notice of the request for its entry. They have no valid complaint on this score, however, because the lack of notice, even if notice was due the seamen despite their failure to request it pursuant to Rule 2002, did not have any adverse consequence. See In re Photo Promotion Associates, Inc., 53 B.R. 759 (Bankr.S.D.N.Y.1985). There was no valid objection available to the order granting all parties relief from the automatic stay to pursue their remedies in the Singapore court. Had there been no bankruptcy proceeding, the seamen would have been obliged to enforce their liens before the forum exercising in rem jurisdiction over the vessels. Nor can the seamen complain that they were not heard in opposition to the request to permit post-petition financing secured by the existing ship's mortgages. Since the amount of the banks' liens, even prior to the post-petition financing, far exceeded the proceeds from the sale of the vessels, the inclusion of the post-petition advances under the banks' liens did not deprive the seamen of any proceeds that the Singapore court would have awarded them.
11
The seamen are understandably distressed that Singapore law accords the banks' lien a priority higher than their own, whereas the reverse situation would have applied to assets subject to the jurisdiction of the Bankruptcy Court. But that consequence results from a combination of the arrest of the vessels in Singapore, the law of that jurisdiction, and the general rule that the law of the forum administering the res governs the priority of liens. See Gulf Oil Trading Co. v. Creole Supply, 596 F.2d 515, 521 (2d Cir.1979).
12
Victrix Steamship Co. v. Salen Dry Cargo A.B., 825 F.2d 709 (2d Cir.1987), does not aid the seamen. We there deferred to a foreign bankruptcy proceeding that could acquire for the estate the equity in a ship arrested here. In the pending case, the debtor had no equity in the vessels arrested in Singapore. In any event, even if the facts of Victrix were comparable to this case, our decision to defer in Victrix would not be binding upon the Singapore court, which was fully entitled to distribute the proceeds as it did. Its judgment extinguished the seamen's liens against the arrested vessels, and the distribution order of that court placed the funds in the hands of the bank free and clear of the seamen's claims. See Gulf Oil Trading Co. v. Creole Supply, supra. Though we exercised jurisdiction over those funds by requiring their deposit in order to have an opportunity to consider appellants' claims, we have no authority to award them to the seamen.
13
We have considered the seamen's remaining claims and conclude that they are without merit. Accordingly, the judgment of the District Court is affirmed, and the deposited funds shall be returned to the banks with all interest earned to the date of withdrawal from the registry of the District Court. No costs.
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Case 1:19-mc-00054-LJO-EPG Document 12 Filed 09/21/21 Page 1 of 2
1
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8 IN THE UNITED STATES DISTRICT COURT
9 EASTERN DISTRICT OF CALIFORNIA
10
UNITED STATES OF AMERICA, Case No. 1:19-mc-00054-LJO-EPG
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Plaintiff, ORDER RE: THE UNITED STATES’
12 APPLICATION TO DISMISS WRIT OF
v. GARNISHMENT
13
RONALD JOHN SALADO, et al.,
14
Defendant. (ECF No. 11)
15
16 SHELLEY JO HESTER,
17 Garnishee.
18
19
20
21 On July 19, 2019, the United States filed an application for a writ of garnishment against
22 rent/lease payments Defendant and Judgment Debtor Ronald John Salado’s family trust received from
23 investment property. (ECF No. 1.) On September 17, 2021, the United States filed an application
24 seeking to dismiss the July 19, 2019 application for a writ of garnishment. (ECF No. 11.) The Clerk of
25 Court has not yet issued a writ of garnishment and no other parties have appeared in the case. (See id.)
26 The United States requests that the Court dismiss the application for writ of garnishment and close the
27 case. (Id.)
28 ///
1
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1 The Court construes the United States’ application as a notice of voluntary dismissal pursuant to
2 Federal Rule of Civil Procedure 41(a)(1)(A)(i). Therefore, this action has been dismissed without
3 prejudice. Fed. R. Civ. P. 41(a)(1)(A)(i); Wilson v. City of San Jose, 111 F.3d 688, 692 (9th Cir. 1997).
4 Accordingly, the Clerk of Court is respectfully directed to close this case.
5
IT IS SO ORDERED.
6
7 Dated: September 21, 2021 /s/
UNITED STATES MAGISTRATE JUDGE
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OSL Holdings Inc. 1710 First Avenue New York, NY 10028 March 5, 2012 Justin Dobbie Legal Branch Chief, U.S. Securities and Exchange Commission Division of Corporation Finance treet, N.E. Washington, D.C. 20549 Re: OSL Holdings Inc. Amendment No. 1 toForm 8-K Filed January 13, 2012 File No. 001-32658 Dear Mr. Dobbie: We are in receipt of your letter dated February 3, 2012 to Mr. Eli Feder, our President and Chief Executive Officer, in regard to the above-referenced Amendment No. 1 to Current Report on Form 8-K (the “Comment Letter”). We are in the process of responding to the comments of the staff of the Division of Corporation Finance contained in the Comment Letter.However, we are unable to provide a complete response on or before March 5, 2012 (the “Due Date”).Please accept this correspondence as our request for an extension of the Due Date to March 19, 2012. Thank you for your attention to this matter. Sincerely, OSL Holdings, Inc. /s/ Eli Feder Eli Feder Chief Executive Officer
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187 F.2d 217
SLYDERv.DISTRICT OF COLUMBIA.
No. 10716.
United States Court of Appeals District of Columbia Circuit.
Argued November 9, 1950.
Decided February 1, 1951.
Godfrey L. Munter, Washington, D. C., for petitioner.
Harry L. Walker, Asst. Corporation Counsel, Washington, D. C., with whom Messrs. Vernon E. West, Corporation Counsel, Chester H. Gray, Principal Asst. Corporation Counsel, and George F. Lynch, Asst. Corporation Counsel, all of Washington D. C., were on the brief, for respondent.
Before EDGERTON, PROCTOR, and BAZELON, Circuit Judges.
EDGERTON, Circuit Judge.
1
Petitioner, who was ill, orally agreed with Josephine Mathy that if she would give up her boarding-house business and take care of him he would give her the money to buy a house, title would be taken in her name, and when either died the house would belong to the other. The parties carried out their agreement. He paid for a house and title was taken in her name. She willed him her residuary estate, including the house, and cared for him until she died. He petitions for review of a ruling of the Board of Tax Appeals for the District of Columbia that the transfer of the house is taxable under D.C.Code (1940) § 47-1601(a), 50 Stat. 683, which taxes all property "transferred from any person who may die seized or possessed thereof, either by will or by law, or by right of survivorship * * *."
2
Petitioner contends that in equity and good conscience he inherited nothing that was not already his and therefore no tax is due. But the fact is that he had no legal or equitable right to dispose of the house during the lifetime of Josephine Mathy. In other words, while she lived she had not only legal title but also a beneficial interest. We need not consider whether she had the whole beneficial interest or whether petitioner had a share in it. In either case, when she died he acquired not only her legal title but her beneficial interest. It is immaterial whether he is thought to have acquired it by her will or by the right of survivorship that the oral agreement sought to create, for the tax law expressly covers transfers "by will * * * or by right of survivorship". Accordingly there is no occasion to consider whether the purchase of the house, and the oral agreement, created a trust in petitioner's favor. Cf. D.C. Code (1940) § 12-303, 31 Stat. 1367-1368.
3
Statutes sometimes exempt from taxation transfers by will when they are made pursuant to contract, but Congress chose not to exempt such transfers. The choice appears to have been deliberate. In the same sentence by which Congress taxed all transfers from a decedent "by will or by law, or by right of survivorship", it proceeded to exempt from taxation transfers by deed intended to take effect after the death of the decedent "in cases of a bona fide purchase for full consideration in money or money's worth". Cf. In re Howell's Estate, 255 N.Y. 211, 174 N.E. 457; Jacob v. Commissioner of Internal Revenue, 9 B.T.A. 636, affirmed 8 Cir., 34 F.2d 233. We need not decide whether this exemption would have covered a deed from Josephine to the petitioner. No deed was made. As the Board said in effect, the tax law applies to what was done, not what might have been done.
4
No question regarding the amount of the tax is before us, for none was raised before the Board or in petitioner's brief.
5
Affirmed.
|
63 Wis. 2d 585 (1974)
218 N.W.2d 129
TERPSTRA, Appellant,
v.
SOILTEST, INC., and another, Respondents.
No. 291.
Supreme Court of Wisconsin.
Argued April 3, 1974.
Decided May 20, 1974.
*588 For the appellant there was a brief by Conway & Conway of Baraboo, and oral argument by Georgia A. Felger of Milwaukee.
For respondent Brittingham & Hixon Lumber Company there was a brief by Conrad H. Johnson and Schlotthauer, Johnson & Mohs, all of Madison, and oral argument by Conrad H. Johnson.
For respondent Soiltest, Inc., there was a brief by Cross, Karch, Langer & Wagner of Baraboo, and oral argument by John M. Langer.
HEFFERNAN, J.
On this appeal, Terpstra argues that the jury erred in finding that he was a trespasser rather than a licensee.
Terpstra contends that, on the day of the accident, he heard the sounds of construction and walked the half mile from his home to where the building was going up. He said he saw a "no trespassing" sign on the property, but when he talked to Soiltest's general manager and asked if he could walk around, he was told, "Ya, help yourself. You can walk around all you want to." Terpstra stayed on the premises until noon, when he returned home for lunch. When he returned to the construction site, only the carpenter, Herr, was present. He claims that he helped Herr in steadying a ladder and handing him pieces of lumber.
Terpstra testified that during the afternoon, while sitting on a sawhorse within the frame of the building, he suddenly saw the frame start to "lean." He dropped to the floor and did not remember anything until he regained consciousness shortly thereafter. A portion of the building frame had collapsed upon him. At trial, he said that he recalled no wind or gusts prior to the collapse. The carpenter, on the other hand, testified that just *589 before the collapse of the building, there was a sudden "whirlwind" and he saw leaves and branches fall from the trees and, after the collapse of the building, he saw a four-inch diameter branch upon the ground.
A statement was given by Terpstra prior to trial in which he stated that his first warning of danger was when he saw Herr's cap blown off by a strong gust of wind. This statement was introduced into evidence.
Herr denied that he received any assistance from Terpstra. He also testified that the building was specially braced to protect against whirlwinds, which were apparently common in the immediate area. A structural engineer testified after seeing photographs and reviewing testimony in respect to the type of bracing that, "If all of it [the bracing] was there as described and it was properly secured, the building should not have fallen down."
This review of the evidence reveals that it is immaterial whether the jury found that Terpstra was a trespasser or found that he was a licensee. Our review of the evidence, however, indicates that the jury improperly found that Terpstra was a trespasser. The jury was properly instructed by the trial judge that to find Terpstra a licensee it had to:
"[F]ind that the Plaintiff was upon the premises of the Defendant with the latter's permission or consent, either express or implied. . . . An implied consent or implied permission is equivalent to an implied invitation and is one given by an owner or occupant when a custom acquiesced in by him is, or when his acts or conduct are, such as would warrant a reasonable man, having knowledge thereof, in believing that the owner had given his consent or permission to another to come upon the premises."
The undisputed testimony shows that there was at least an implied permission given. Under the facts, the *590 jury should have found that Terpstra was a licensee. The evidence was undisputed that Terpstra was allowed to roam around the property with the full knowledge of the occupiers of the premises. This court has said:
"Where a person is upon the property of another with the other's knowledge, that is sufficient to establish the relationship [of licensor-licensee]." Hensel v. Hensel Yellow Cab Co. (1932), 209 Wis. 489, 500, 245 N.W. 159.
Accordingly, there was no jury question in respect to Terpstra's status. The trial judge could have ruled as a matter of law that Terpstra was on the premises with the knowledge of the occupierand in fact with at least implied consentand hence was a licensee as a matter of law. However, plaintiff's attorney never asked for such finding, and instead accepted the instructions in respect thereto without objection.
While we consider the jury's finding that Terpstra was a trespasser to be contrary to the undisputed evidence, that error is immaterial. Even though we were to hold, as a matter of law, that Terpstra was a licensee, the facts, given the interpretation most favorable to the plaintiff, would not support his cause of action.
In Szafranski v. Radetzky (1966), 31 Wis. 2d 119, 126, 141 N.W.2d 902, we said that a possessor or occupier of land may be liable to a licensee in but two situationsa trap on the premises or active negligence by the licensor. Here, there was no evidence of a trap. A trap exists only when the land occupier fails to disclose to the licensee a known but concealed danger. Szafranski, supra, page 126.
Nor was there the slightest evidence of "active negligence" that would expose the licensor to liability. The negligence of the defendants, if any, was the unsafe condition of the building's frame. We said in Kaslo v. Hahn (1967), 36 Wis. 2d 87, 153 N.W.2d 33:
*591 "The term `active negligence,' then, as used in licensor-licensee cases, connotes the carrying on of some operation or activity in a negligent manner." (P. 92)
"A condition of the premises whether created through an affirmative act of a defendant or through natural causes is not an activity. An act, then, which creates a dangerous `condition of the premises' is not an `activity,' nor is it `active conduct,' `operational conduct' or `active intervention.' Consequently, a licensor cannot be held liable for an act which creates a dangerous `condition of the premises.'" (P. 93)
Examples of conduct the court has determined to be active negligence are found in Szafranski, supra (where the defendants stored and handled explosives in their house and an explosion injured the plaintiff guests); Cermak v. Milwaukee Air Power Pump Co. (1927), 192 Wis. 44, 211 N.W. 354 (where the licensee was negligently hit on the head by a pipe wielded by the licensor's employee); and Taylor v. Northern Coal & Dock Co. (1915), 161 Wis. 223, 152 N.W. 465 (where the licensee was struck by a coal hoist operated by defendant's agents). Examples of situations where the court determined the owner or occupier was not guilty of active negligence are Kaslo, supra (where the licensee tripped over a shoescraper installed ten years previously by the owner), and Brady v. Chicago & N. W. R. Co. (1954), 265 Wis. 618, 625, 62 N.W.2d 415 (where the deceased child had fallen from a catwalk along the railroad's bridge and "[t]he danger arose solely from the manner in which defendant constructed and maintained its premises and it was open and apparent").
Prosser, Law of Torts (4th ed. 1971), p. 376, sec. 60, states that the licensee takes the premises the way he finds them and has no right to demand the licensor to change his conduct. Prosser, pages 378-380. However, in active operations the licensor must exercise reasonable care for the protection of the licensee. Prosser, page *592 379. As to passive conditions on the land, the licensor is under no obligation to the licensee for conditions of which he does not know. Prosser, page 380.
While there were allegations in the complaint that the defendants were negligent in their conduct while Terpstra was on the premises, there is no proof in the record of any negligent conduct. All that was arguably shown was a negligently constructed building. Even if such negligence were conceded, the building as constructed did not constitute a trap, for no danger was apprehended or known by the defendants. The negligence, if any, was preexisting in time and did not constitute active negligence in current operations.
Accordingly, the requested res ipsa instruction is irrelevant to liability in this case. Under the instruction[1] requested by the plaintiff, only an inference of ordinary negligence would be permissible. Under the law of this state governing the obligation of owners and occupiers of land to those who come upon it, there is no liability imposed as the result of a land occupier's ordinary negligence that causes harm to either a trespasser or licensee.
Under the facts, the plaintiff is not entitled to a verdict on either the trespasser or licensee theory.
The plaintiff now recognizes that current law prevents his recovery, for on this appeal for the first time he urges that we abandon our present law and hold that the rule of ordinary negligencethe reasonable man ruleshall *593 apply in all cases where the dispute is between the owner or occupier of land and one who comes upon the land.
We decline to do so. Terpstra never raised the question in the trial court, and all the requested instructions were directed toward securing a verdict under the accepted law. The practice of this court is not to consider an issue raised for the first time on appeal.
In Cappon v. O'Day (1917), 165 Wis. 486, 490, 162 N.W. 655, this court pointed out:
"The reason for the rule is plain. If the question had been raised below, the situation might have been met by the opposite party by way of amendment or of additional proof."
The adoption of a new rule of law on appeal when the question was not raised at trial might well work hardship on the adversary. It would also deprive this court of the informed thinking of the trial judge on the matter.
It is true that we may in a proper case consider new issues for the first time on appeal. The question is one of judicial administration and policy, and not one of power. State ex rel. General Motors Corp. v. Oak Creek (1971), 49 Wis. 2d 299, 319, 182 N.W.2d 481; Cappon, supra, page 491.
We are aware of the recent trend in other states toward the abolition of the common law distinctions between trespasser, licensee, and invitee in terms of the land owner's obligations, e.g., Smith, v. Arbaugh's Restaurant, Inc. (D. C. Cir. 1972), 469 Fed. 2d 97; Mile High Fence v. Radovich (1971), 175 Colo. 537, 489 P.2d 308; and Pickard v. City and County of Honolulu (1969), 51 Haw. 134, 452 P.2d 445; Mounsey v. Ellard (Mass. 1973), 297 N.E.2d 43, 51; Peterson v. Balach (1972), 294 Minn. 161, 164, 199 N.W.2d 639.
We choose, however, not to consider the abandonment of the traditional rule in this case. If a change is to be considered, it should be on the basis of a record made at *594 trial, where appropriate motions are made and instructions requested that will trigger the exercise of the trial judge's decision on the question as it may apply to a particular case.
The judgment dismissing the complaint must be sustained because the evidence presented to the jury was insufficient to hold the landowner liable to Terpstra, whether he be considered a trespasser or a licensee.
There are, however, collateral practice issues raised which should be clarified.
Plaintiff objects to the form of the verdict submitted to the jury. Questions 1, 4, and 7, respectively, inquire of the jury whether Terpstra was an invitee, a licensee, or a trespasser "on the day in question" and at the time he came upon the premises. The appellant is correct in his objection. The questions should have inquired of Terpstra's status at the very time of the injury, not his status at the time he came upon the premises nor his status on the day of the injury. McNally v. Goodenough (1958), 5 Wis. 2d 293, 300, 92 N.W.2d 890.
Again, however, the objection comes too late. While Terpstra requested the questions that he now insists are correct, he did not object to the form of the questions actually submitted, and no specific objections were voiced in motions after verdict or for a new trial. The general objection made by plaintiff on motions after verdict "because of error in instructing the jury" does not have sufficient particularity to preserve a specific objection. Kobelinski v. Milwaukee & Suburban Transport Corp. (1972), 56 Wis. 2d 504, 517, 202 N.W.2d 415; Wells v. Dairyland Mut. Ins. Co. (1957), 274 Wis. 505, 515, 80 N.W.2d 380.
The burden is upon the party alleging error to establish by reference to the record that an error was specifically called to the attention of the trial court.
*595 We repeat that, under the facts, this error could not have been prejudicial, for the evidence clearly showed that at the time of the injury, Terpstra, if either a trespasser or licensee, could not recover. There is no contention or evidence that he was an invitee.
We also believe that the court erred in failing to give the authorization to inspect medical records the same effect that would have been given were the inspection ordered under sec. 269.57, Stats.[2]
The authorization given by Terpstra provided:
"My attorneys, Conway & Conway, Conway Building, Ash at Tenth, Baraboo, Wisconsin, 53913, are to receive a copy of any and all records inspected or copied without expense to them."
Although the defendants secured the medical records, they refused to furnish Terpstra's attorney with copies. It was apparent during trial that some medical testimony had its genesis in the authorization given by plaintiff. Relying on the provisions of sec. 269.57, Stats., plaintiff's attorney moved to strike the testimony because he was not given copies as provided in the authorization. We believe that the principle espoused by plaintiff's attorney *596 is an appropriate one, and, in the face of a timely exercise, a motion to strike should have been granted.
The medical authorization provided the same remedy to the defendants as they would be afforded under sec. 269.57, Stats. The authorization, however, obviated the necessity of securing a court order. In order to encourage the use of such authorizations and to avoid the consumption of unnecessary trial court time, the sanctions afforded by sec. 269.57 may be invoked when there is a failure to comply with conditions of the authorization that are consistent with the statutory remedies.
In the instant case, the plaintiff is not entitled to relief. He permitted the defendants' medical witness, Dr. James Huffer, to complete his testimony before moving to strike. The failure to make a timely objection constitutes a waiver of the objection. The objection must be made as soon as the objectionable nature of the testimony is reasonably apparent. McCormick, Law of Evidence (2d ed. hornbook series, 1972), p. 113, sec. 52. The motion here comes too late. Again, the testimony was not prejudicial. The evidence was in regard to physical injuries, but damages are not disputed on this appeal. The appeal is directed to the question of liability, and on that question the defendants must prevail.
By the Court.Judgment affirmed.
NOTES
[1] "If you find that the defendants, Soiltest, Inc. and Brittingham & Hixon Lumber Company, had a right of control of the premises and the building being erected thereon that was involved in the accident, and if you further find that the accident claimed is of a type or kind that ordinarily would not have occurred had the defendants exercised ordinary care, then you may infer from the accident itself and the surrounding circumstances that there was negligence on the part of the defendants, unless the defendants have offered an explanation of the accident which is satisfactory to you."
[2] Sec. 269.57, Stats. 1971, provides in part:
"(3) No evidence obtained by an adverse party by a court-ordered physical examination or inspection under sub. (2) shall be admitted upon the trial or by reference or otherwise unless true copies of all reports, photographs, records, papers and writings made as a result of such examination or inspection and received by such adverse party have been delivered to the party claiming damages or his attorney not later than 15 days after the said reports, photographs, records, papers or writings from any such court-ordered physical examination are received by the said adverse party, provided that in an action for recovery of personal injuries, the party claiming damages shall in return deliver to the adverse party against whom the action is brought a true and correct copy of all reports of each physician who has examined or treated such person with respect to the injuries for which damages are claimed."
|
Reversed and Remanded; Opinion Filed December 21, 2018.
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-18-00038-CV
GREENVILLE SNF, LLC D/B/A GREENVILLE HEALTH AND REHABILITATION
CENTER, Appellant
V.
CHARLES WEBSTER, AS REPRESENTATIVE OF THE ESTATE OF FRANCES
ROBINSON, DECEASED, Appellee
On Appeal from the 196th Judicial District Court
Hunt County, Texas
Trial Court Cause No. 85194
MEMORANDUM OPINION
Before Justices Lang, Fillmore, and Schenck
Opinion by Justice Fillmore
Greenville SNF, LLC d/b/a Greenville Health and Rehabilitation Center (Greenville) filed
this interlocutory appeal challenging the trial court’s order denying its motion to dismiss healthcare
liability claims brought against it by Charles Webster, as representative of the estate of Frances
Robinson, Deceased, and overruling its objections to an expert report provided by Webster in
support of his health care liability claims. On appeal, Greenville argues the trial court abused its
discretion by overruling Greenville’s objections and denying its motion to dismiss, because the
expert report failed to sufficiently describe how Greenville breached the standard of care and did
not adequately link the breach of the standard of care to Robinson’s injuries or death. For the
reasons that follow, we conclude the expert report did not satisfy the statutory requirements of
chapter 74 of the Texas Civil Practice and Remedies Code because it is deficient with regard to
the statutory element of causation, and the trial court abused its discretion by overruling
Greenville’s objections to the expert report. We reverse the trial court’s order overruling
Greenville’s objections to the expert report and remand the case to the trial court to consider
granting a thirty-day extension of time to allow Webster to attempt to cure the deficiency in Dr.
Rushing’s expert report regarding the statutory element of causation.
Background
Factual Allegations
Robinson was a [email protected]. Webster, as representative of Robinson’s estate,
filed this lawsuit against Greenville following Robinson’s death. The petition asserted that on
December 6, 2015, a Greenville employee discovered Robinson in a non-responsive state with a
significantly diminished oxygen saturation level of seventy-two percent, but waited forty-five
minutes before contacting 911 to transfer Robinson to a hospital for emergency care. At Hunt
Regional Medical Center, an MRI revealed that Robinson had sustained acute brain infracts, which
allegedly resulted in irreversible damage. Robinson was discharged for palliative care and died
on January 17, 2016.
The petition alleged Greenville was negligent and grossly negligent in fulfilling its
responsibilities in accordance with acceptable standards of medical practice by failing to timely
call 911 when a Greenville employee found Robinson non-responsive with a diminished oxygen
saturation level, and by failing to properly train and supervise its employees. The petition alleged
that Greenville’s negligence and gross negligence directly and proximately caused Robinson’s
“injuries and damages,” and sought damages for past medical expenses, funeral and burial
expenses, loss of earnings, physical pain and suffering in the past, mental anguish in the past, costs
of court, and exemplary damages.
–2–
Procedural History
Webster filed the petition on September 14, 2017. Because this lawsuit involved a health
care liability claim, it was subject to the requirements of chapter 74 of the Texas Civil Practice and
Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 74.001–.507. In accordance with
chapter 74, Webster served on Greenville an expert report and curriculum vitae of Dr. Lige B.
Rushing, Jr.1 On November 9, 2017, Greenville filed objections to Webster’s chapter 74 expert
report, and a motion to dismiss and motion for attorney’s fees, for failure to file an adequate expert
report. By order dated December 27, 2017, the trial court overruled Greenville’s objections and
denied its motion to dismiss and motion for attorney’s fees. Greenville filed notice of interlocutory
appeal on January 11, 2018.
Applicable Law
Chapter 74 of the civil practice and remedies code requires a claimant pursuing a health
care liability claim to serve one or more expert reports on each physician or health care provider
against whom a health care liability claim is asserted no later than 120 days after the date each
defendant’s original answer is filed. Id. § 74.351(a). A report meets the requirements of chapter
74 if it represents “an objective good faith effort to comply with the definition of an expert
report.” Id. § 74.351(l). “Expert report” is defined as:
[A] written report by an expert that provides a fair summary of the expert’s
opinions as of the date of the report regarding applicable standards of care,
the manner in which the care rendered by the physician or health care
provider failed to meet the standards, and the causal relationship between that
failure and the injury, harm, or damages claimed.
Id. § 74.351(r)(6).
1
The clerk’s record reflects that Dr. Rushing’s expert report and curriculum vitae were filed with the trial court on the same date the petition
was filed. Greenville’s objections to Webster’s chapter 74 expert report, motion to dismiss and motion for attorney’s fees states Greenville was
served with Dr. Rushing’s expert report and curriculum vitae on or about October 20, 2017.
–3–
The trial court may grant a motion challenging the adequacy of an expert report under the
provisions of chapter 74 only if the report does not represent an objective good faith effort to
comply with section 74.351(r)(6) by informing the defendant of the specific conduct that is the
subject of the plaintiff’s claim, and providing a basis for the trial court to conclude the plaintiff’s
claim has merit. Id. at § 74.351(l); Hebner v. Reddy, 498 S.W.3d 37, 41 (Tex. 2016); Loaisiga v.
Cerda, 379 S.W.3d 248, 260 (Tex. 2012). The expert report need not marshal all of the plaintiff's
proof, Am. Transitional Care Ctrs. of Tex., Inc. v. Palacios, 46 S.W.3d 873, 878 (Tex. 2001), but
it must include a fair summary of the expert’s opinion as of the date of the report on each of the
three elements required by chapter 74: the applicable standards of care, the manner in which the
care rendered by the physician or health care provider failed to meet the standards, and the causal
relationship between that failure and the injury, harm, or damages claimed. TEX. CIV. PRAC. &
REM. CODE ANN. § 74.351(r)(6); Bowie Mem’l Hosp. v. Wright, 79 S.W.3d 48, 52 (Tex. 2002) (per
curiam).
In determining whether the expert report represents an objective good faith effort to comply
with the statutory requirements, the court’s inquiry is limited to the four corners of the report.
Jelinek v. Casas, 328 S.W.3d 526, 539 (Tex. 2010). The report cannot merely state the expert’s
conclusions but must explain the basis of his statements and link his conclusions to the facts. Id.
The purpose of the expert report requirement is to “deter baseless claims, not to block earnest
ones.” Certified EMS, Inc. v. Potts, 392 S.W.3d 625, 631 (Tex. 2013); see also Scoresby v.
Santillan, 346 S.W.3d 546, 554 (Tex. 2011); Nexion Health at Garland, Inc. v. Townsend, No. 05-
15-00153-CV, 2015 WL 3646773, at *3 (Tex. App.—Dallas June 12, 2015, pet. denied) (mem.
op.). Thus, the expert report must link its conclusions to the facts, but no “magical words” are
required. Bowie Mem. Hosp., 79 [email protected]. Because the expert report requirement “is a
threshold mechanism to dispose of claims lacking merit,” Potts, 392 S.W.3d at 631, it may be
–4–
informal and the information presented need not meet the same requirements as evidence offered
in summary judgment proceedings or in a trial. Godat v. Springs, No. 05-08-00791-CV, 2009 WL
2385569, at *3 (Tex. App.—Dallas Aug. 5, 2009, no pet.) (mem. op.). “Further, the report is not
required to address every alleged liability theory to make the defendant aware of the conduct at
issue.” Nexion Health at Garland, 2015 WL 3646773, at *3. “If a health care liability claim
contains at least one viable liability theory, as evidenced by an expert report meeting the statutory
requirements, the claim cannot be frivolous.” Id. (quoting Potts, 392 S.W.3d at 631).
To establish a causal relationship between the injury and the defendant’s negligent act or
omission, the expert report must show the defendant’s conduct was a substantial factor in bringing
about the harm, and, absent this act or omission, the harm would not have occurred. Mitchell v.
Satyu, No. 05-14-00479-CV, 2015 WL 3765771, at *4 (Tex. App.—Dallas June 17, 2015, no
pet.) (mem. op.). Causation is generally established through evidence of a “reasonable medical
probability” that the injury was caused by the negligence of one or more of the defendants,
meaning that it is more likely than not that the ultimate harm or condition resulted from such
negligence. See Jelinek, 328 S.W.3d at 532–33. We may not “fill gaps” in an expert report by
drawing inferences or guessing what the expert likely meant or intended. Patterson v. Ortiz, 412
S.W.3d 833, 835–36 (Tex. App.—Dallas 2013, no pet.). An expert’s conclusion that in reasonable
medical probability one event caused another, without explanation and without linking conclusions
to the facts, differs little from an ipse dixit, which the supreme court has consistently criticized.
Jelinek. 328 [email protected]. “[T]he expert must go further and explain, to a reasonable degree,
how and why the breach caused the injury based on the facts presented.” Id. at 539–40. “An
expert may show causation by explaining a chain of events that begins with [the defendant’s]
negligence and ends in injury to the plaintiff.” Mitchell, 2015 WL 3765771, at *4. “We determine
–5–
whether a causation opinion is sufficient by considering it in the context of the entire report.” Id.
(quoting Ortiz v. Patterson, 378 S.W.3d 667, 671 (Tex. App.—Dallas 2012, no pet.)).
Standard of Review
We review a trial court’s ruling on the sufficiency of an expert’s report for abuse of
discretion. Van Ness v. ETMC First Physicians, 461 S.W.3d 140, 142 (Tex. 2015); Nexion Health
at Terrell Manor v. Taylor, 294 S.W.3d 787, 791 (Tex. App.—Dallas 2009, no pet.). A trial court
abuses its discretion if it acts arbitrarily, unreasonably, or without reference to any guiding rules
or principles. Jelinek, 328 [email protected]. The trial court has no discretion in determining what the
law is or applying the law to the facts. Sanchez v. Martin, 378 S.W.3d 581, 587 (Tex. App.—
Dallas 2012, no pet.). A clear failure by the trial court to analyze or apply the law correctly will
constitute an abuse of discretion. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig.
proceeding).
The Expert Report
In two issues, Greenville contends the trial court abused its discretion by: (1) overruling
its objections to Dr. Rushing’s expert report because the report failed to sufficiently describe how
Greenville purportedly breached the standard of care and was conclusory as to causation because
it did not adequately link the alleged breach in the standard of care to Robinson’s injuries and
death, and (2) and denying its motion to dismiss Webster’s claims.
In his expert report, Dr. Rushing provided his qualifications and identified the records he
reviewed in forming his conclusions. Dr. Rushing stated the opinions expressed in the expert
report were based on his review of the pertinent medical records; reasonable medical probability;
his education, training, and experience; and his knowledge of the accepted medical and nursing
standards of care for diagnoses, care, and treatment of the relevant illnesses, injuries, and
conditions. In his expert report, Dr. Rushing purported to: compare Greenville’s care and
–6–
treatment of Robinson’s illnesses, injuries, and conditions, as revealed in the records, to the
accepted standards of care in order to determine whether Greenville’s conduct met or fell below
those standards of care; and evaluate whether breaches in the standards of care resulted in in any
injury to Robinson. Dr. Rushing stated, “[t]his is the method employed by every physician who is
asked to evaluate the quality of another professional caregiver’s care and treatment of a patient,
whether in the context of a lawsuit or a hospital’s or a nursing home’s Peer Review setting. In
other words, this method is the generally accepted method for evaluating whether or not a hospital
and/or a physician’s care and treatment of a patient met or fell below the accepted standards of
care.”
Dr. Rushing provided his understanding of the underlying facts based on the records he
reviewed. The expert report stated Robinson had a history of “hypothyroidism chronic leg
swelling, recurrent infection of both legs,” “ventral hernia,” and “cirrhosis of the liver”; and also
had a “partial small bowel obstruction” and was “anticoagulated with Coumadin because of
pulmonary embolism.” According to Dr. Rushing, Robinson was admitted to the Hunt Regional
Medical Center on October 10, 2015, and discharged on November 13, 2015, when she was
admitted to Greenville. She was discharged from Greenville on December 6, 2015, following
Greenville’s call for 911 medical response. Dr. Rushing provided a summary of a “nurses progress
note” dated December 5, 2015:
In the [Greenville] nurses progress note . . . dated 12/6/15 and timed at 0335
hours there’s an entry “send to ER HR MC.[”] There are three choices i.e.
boxes to be checked. 1. Transfer to the hospital (nonemergency) (send a
copy of this form). 2. Call for 911. 3. Emergency medical transport. The
number one choice box is checked. The narrative nurse note reads as follows
“resident unresponsive to verbal stimuli during rounds, O2 sat 72% at 0250
hours with nail bed cyanotic. DON notified at 0307 instructed to send out,
M.D. was called with no answer unable to leave message, nephew Charles
called but no answer message left.[”] There is an illegible signature followed
by the suffix LVN. The date is 12/6/15. Time (AM/PM) there are two time
entries the first 0329 – left message the second is simply 0730.
–7–
Dr. Rushing continued,
I have reviewed the DARS investigative report. This report reflects that
[Robinson] indeed did have a pulse oxygen saturation level of 72%, cyanotic
nail beds, and was unresponsive to verbal stimuli. Her vital signs were: blood
pressure 107/84, 122 [sic] and respiratory rate 24. The record reflects that
the family member was called but no answer at 3:29 [a.m.] and at 7:30 a.m.
and that the doctor was called at 3:35 [a.m.]. The DARS record reflects that
the nurse waited 45 minutes before calling 911 when Ms. Robinson
experienced a change of condition characterized by an oxygen saturation of
72%, cyanosis of hands and unresponsiveness.
The expert reported noted, “the sequential causes of death on her death certificate are urinary tract
infection, cerebrovascular accident, bowel obstruction due to ventral hernia, congestive heart
failure.”
With respect to the applicable standard of care Greenville owed to Robinson, the expert
report stated, “In this case the standard of care required that Frances Robinson be transferred
immediately by calling 911 when she was initially discovered to be unresponsive and to have an
oxygen saturation of 72%. In a case like this there should be no delay in transferring Ms. Robinson
to the hospital just in order to notify the attending physician, the DON or family” who should be
notified “only after calling 911 for emergent transportation to the hospital. There was a delay of
approximately 45 minutes from the time Robinson was found unresponsive cyanotic and with an
oxygen saturation of 72% before 911 was called.” The expert report concluded,
[T]he standard of care was breached when the nurse caring for M[s.]
Robinson failed to transfer her immediately via 911 ambulance when she was
discovered to be unresponsive, cyanotic, and to have an oxygen saturation of
72%.
The harm/injury that resulted from the breach of the standard of care as
described in the preceding paragraph, more likely than not, based on
reasonable medical probability was that due to her low oxygen saturation she
developed multiple brain infarcts which proximately caused M[s.]
Robinson’s death.
....
If M[s.] Robinson’s critical clinical status i.e. her oxygen desaturation and
cyanosis and her unresponsiveness had been recognized, understood and
–8–
properly assessed and acted on by immediately transferring M[s.] Robinson
to the hospital then more likely than not the multiple ischemic infarcts i.e.
anoxic injury to the brain would not have occurred.
Analysis
On appeal, Greenville does not contend the expert report did not address the applicable
standard of care. Rather, in its first issue, Greenville argues Dr. Rushing did not adequately
describe how Greenville breached the standard of care. Greenville further avers Dr. Rushing’s
expert report was conclusory as to causation, and did not sufficiently link Greenville’s purported
breach of the applicable standard of care to Robinson’s injuries and/or death. Specifically with
respect to causation, Greenville contends Dr. Rushing’s expert report failed to:
• explain “how a delay in transferring [Robinson] via an ambulance to the
hospital for emergency medical attention caused multiple ischemic brain
infarcts, which could have pre-existed and caused the emergency situation”;
• explain “how Greenville’s alleged breach of the standard of care caused
[Robinson] any injury, much less caused her death, one month later”;
• explain “how he ruled out other probable causes of [Robinson’s] injuries
and/or death”; and
• establish “that Greenville’s alleged negligence was the cause in fact of
[Robinson’s] low oxygen saturation level and multiple ischemic brain
infarcts, rather than one of her multiple existing comorbidities.”
In response, Webster claims Dr. Rushing’s expert report adequately explained how
Greenville’s delay in calling 911 breached the applicable standard of care and caused Robinson’s
death “due to infarct.” Webster also responds that Greenville waived its right to object to Dr.
Rushing’s expert report by issuing and responding to discovery. Webster’s argument Greenville
waived its right to move to dismiss Webster’s claims by participating in discovery is without merit.
“Attempting to learn more about the case through discovery does not demonstrate an intent to
waive the right to dismiss[.]” Seifert v. Price, No. 05-08-00655-CV, 2008 WL 5341045, at *2
(Tex. App.––Dallas Dec. 23, 2008, pet. denied) (mem. op.); see also Iasis Healthcare Corp. v.
Pean, No. 01-17-00638-CV, 2018 WL 3059789, at *6 (Tex. App.—Houston [1st Dist.] June 21,
–9–
2018, no pet.).
Greenville’s complaint that the expert report failed to describe how Greenville breached
the standard of care lacks merit. The expert report stated the applicable standard of care required
Greenville and its staff to recognize Robinson’s critical clinical status and immediately call 911
for timely transport to the hospital. Dr. Rushing opined,
In a case like this there should be no delay in transferring Ms. Robinson to
the hospital just in order to notify the attending physician, the DON or family.
....
In this case the standard of care was breached when the nurse caring for [Ms.]
Robinson failed to transfer her immediately via 911 ambulance when she was
discovered to be unresponsive, cyanotic, and to have an oxygen saturation of
72%.
We conclude the expert report sufficiently described how Greenville breached the applicable
standard of care by providing “specific information about what [Greenville] should have done
differently.” Palacios, 46 [email protected].
While Dr. Rushing’s expert report provided a fair summary of the bases of his opinions
concerning the standard of care and the manner in which Greenville failed to meet the standard of
care, his report failed to provide a fair summary of the basis of his opinion on the statutory element
of causation. With respect to causation, Dr. Rushing merely opined in a conclusory manner that,
based on reasonable medical probability, as a result of Greenville’s forty-five minute delay in
calling 911 after discovering Robinson unresponsive and with an oxygen saturation level of
seventy-two percent, Robinson more likely than not developed multiple brain infarcts which
proximately caused her death. Given Robinson’s complicated medical condition,2 Dr. Rushing
failed to explain how an oxygen saturation level of seventy-two percent could cause brain infarcts,
how brain infarcts could have proximately caused Robinson’s death, how or why a forty-five
2
Dr. Rushing indicated in his expert report that “[t]he sequential causes of death on [Robinson’s] death certificate are urinary tract infection,
cerebrovascular accident, bowel obstruction due to ventral hernia, [and] congestive heart failure.”
–10–
minute delay in calling for 911 medical response resulted in brain infarcts, or what medical
treatment could have been provided to prevent Robinson’s brain infarcts and ultimate death had
emergency medical care been summoned immediately. See Covey v. Lucero, No. 05-16-00164-
CV, 2016 WL 7163835, at *6 (Tex. App.—Dallas Nov. 17, 2016, no pet.) (mem. op.) (expert
opinion that negligent acts and omissions were “major contributing factors” to patient’s death,
without explaining the link between the breach in standards of care and subsequent consequences,
presents only speculative and conclusory possibility of causation). In short, Dr. Rushing failed to
explain how and why Greenville’s forty-five minute delay in calling for 911 medical response was
the proximate cause of Robinson’s death. We may not “fill gaps” in Dr. Rushing’s expert report
by drawing inferences or guessing what he likely meant or intended. Patterson, 412 S.W.3d at
835–36.
Webster points to the Texas Supreme Court’s recent opinion in Abshire v. Christus Health
Southeast Texas, No. 17-0386, 2018 WL 6005220 (Tex. Nov. 16, 2018) (per curiam), in support
of his argument that Dr. Rushing’s expert report satisfied the statutory element of causation. In
that case, Abshire visited the emergency room of Christus Hospital five times in a two-week period
for chest pain, shortness of breath, and back pain. Id. at *1. Abshire was released by Christus
Hospital and transferred to HealthSouth Rehabilitation Hospital, where she was treated for two
days and then sent back to Christus Hospital for further evaluation. Christus Hospital attempted
to transfer Abshire back to HealthSouth Rehabilitation Hospital, but a rehabilitation physician
intervened and transferred Abshire to another hospital, Baptist Beaumont. Baptist Beaumont
physicians ordered an MRI that revealed Abshire had suffered a spinal compression fracture of her
T-5 vertebrae that ultimately rendered her a paraplegic and incontinent. Id. at *2. In her lawsuit
against Christus Hospital, Abshire alleged that nurses failed to recognize and document her
longstanding osteogenesis imperfect (OI), commonly referred to as brittle bone disease, that
–11–
predisposed her to fractures, and failed to recognize the signs and symptoms of a spinal
compression fracture, which caused a delay in treatment. Id. at *1–3. In support of her allegations,
Abshire served an expert report and a supplemental expert report prepared by Dr. Rushing. The
hospital objected to and moved to dismiss Dr. Rushing’s expert report on several grounds,
including that the expert report did not sufficiently establish the causal link between its conduct
and Abshire’s injuries. The trial court agreed with the hospital’s objections and granted Abshire
a thirty-day extension to address the report’s deficiencies. Abshire filed a supplemental expert
report from Dr. Rushing and an additional expert report from a registered nurse. Id. at *2. The
trial court concluded Dr. Rushing’s supplemental expert report satisfied chapter 74’s requirements.
Id.
The court of appeals reversed and dismissed Abshire’s claims against the hospital,
concluding there was an “analytical gap” in Dr. Rushing’s opinion that the nurses’ failure to chart
Abshire’s history of OI caused Abshire’s injury, because Dr. Rushing did not “explain how the
nurses’ alleged failure to document OI was a substantial factor in causing or exacerbating
Abshire’s injuries, or that had such been known then the physicians would have changed the course
of treatment, or that it would have changed the outcome.” HealthSouth Rehab. Hosp. of Beaumont,
LLC v. Abshire, No. 09-16-00107-CV, 2017 WL 1181380, at *18 (Tex. App.—Beaumont Mar.
30, 2017) (mem. op.), rev’d, Abshire, No. 17-0386, 2018 WL 6005220. Consequently, the court
of appeals concluded Dr. Rushing’s supplemental report was deficient. Id.
The supreme court reversed the court of appeals’ judgment, Abshire, 2018 WL 6005220,
at *1, concluding Dr. Rushing’s supplemental report “explained how the nurses’ breach—failing
to consistently document Abshire’s OI, particularly in light of her continued complaints of back
pain—caused a delay in diagnosis and proper treatment and why that delay caused the issues that
led to Abshire’s paraplegia.” Id. at *5. The supreme court explained, “the report draws a line
–12–
directly from the nurses’ failure to properly document Abshire’s OI and back pain, to a delay in
diagnosis and proper treatment (imaging of her back and spinal fusion), to the ultimate injury
(paraplegia).” Id. The supreme court concluded, “[t]hus, the report adequately explained the links
in the causal chain.” Id.
Webster contends that, as in Abshire, Dr. Rushing’s expert report adequately explained
how the nurse’s failure to immediately call 911 caused Robinson’s injury. However, unlike in
Abshire, Dr. Rushing’s expert report in this case did not draw a line directly from the forty-five
minute delay in summoning emergency care to the cause of Robinson’s death, about one month
after Greenville last provided care, from multiple brain infarcts. In this case, the expert report did
not describe the “proper treatment” that an immediate call to 911 would have permitted that would
have changed the outcome with regard to the cause of Robinson’s death. See id.
Greenville also complains that Dr. Rushing’s expert report failed to: (1) “rul[e] out other
probable causes” of Robinson’s death, and (2) establish that Greenville’s actions and not “one of
[Robinson’s] multiple existing comorbidities” caused her low oxygen saturation level and multiple
ischemic brain infarcts. However, these complaints are without merit because “[n]othing in section
74.351 suggests the preliminary report is required to rule out every possible cause of the injury,
harm, or damages claimed, especially given that section 74.351(s) limits discovery before a
medical expert’s report is filed.” Jones v. Ashford Hall, No. 05-16-01402-CV, 2018 WL 2315960,
at *10 (Tex. App.—Dallas May 22, 2018, pet. denied) (mem. op.) (internal citations omitted)
(chapter 74 expert report sufficiently described causation although it did not rule out “old age” as
cause of decedent’s death when death certificate listed cause of death as “advanced age years”).
Because Dr. Rushing’s expert report did not satisfy the statutory element of causation by
setting out a fair summary of the basis of his opinion as to the causal relationship between the
purported breach of the standard of care and Robinson’s injuries and death, the report is deficient
–13–
under chapter 74. See TEX. CIV. PRAC. & REM. CODE ANN. § 74.351(r)(6). Accordingly, we
conclude the trial court abused its discretion in concluding Dr. Rushing’s expert report sufficiently
addressed the statutory element of causation and overruling Greenville’s objections to the expert
report. We resolve Greenville’s first issue in its favor insofar as it relates to the deficiency in Dr.
Rushing’s expert report regarding the statutory element of causation.
Remand for Opportunity to Cure
Chapter 74 provides that if the elements of an expert report are found deficient, the court
may grant one thirty-day extension of time to the claimant to cure the deficiency, unless it is
objectively shown that the report was not filed in good faith, at which point, dismissal is required.
Id. § 74.351(c); Gonzalez v. Padilla, 485 S.W.3d 236, 242 (Tex. App.—El Paso 2016, no pet.).
“The purpose of the expert report requirement is to deter frivolous claims, not to dispose of claims
regardless of their merits.” Scoresby, 346 [email protected]. That purpose is served by allowing a
claimant to cure deficiencies to the extent allowed by the Legislature. Id. at 556 (“An inadequate
expert report does not indicate a frivolous claim if the report’s deficiencies are readily curable.”).
Trial courts “should be lenient in granting thirty-day extensions and must do so if deficiencies in
an expert report can be cured within the thirty-day period.” Id. at 554. This Court may remand
for consideration of an extension under section 74.341(c) if we find deficient an expert report the
trial court considered adequate. See Leland v. Brandal, 257 S.W.3d 204, 207 (Tex. 2008); Tenet
Hosps., Ltd. v. De La Riva, 351 S.W.3d 398, 407–08 (Tex. App.—El Paso 2011, no pet.) (upon
finding trial court abused its discretion in denying defendant physician’s motion to dismiss, proper
course of action was to remand the cause to trial court to consider whether the deficiencies could
be cured).
In response to Greenville’s objections to Dr. Rushing’s expert report and motion to dismiss,
Webster asserted Dr. Rushing’s report satisfied the requirements of chapter 74 but requested that
–14–
if the report was found to be deficient, the trial court grant a thirty-day extension of time under
section 74.351(c) of the civil practice and remedies code to cure any deficiency. We have
concluded Dr. Rushing’s expert report was deficient because it did not contain a fair summary of
the basis of his opinion concerning the statutory element of causation. Because Webster has not
been given an opportunity to cure the deficiency regarding causation in Dr. Rushing’s report, and
because Dr. Rushing’s report is not so deficient as to constitute no report at all, see Scoresby, 346
S.W.3d at 551, 556, we remand for the trial court to consider granting a thirty-day extension of
time to allow Webster to attempt to cure the deficiency in the expert report regarding the statutory
element of causation.3
Conclusion
We conclude the trial court abused its discretion in overruling Greenville’s objection to Dr.
Rushing’s expert report on the issue of causation. We remand the case to the trial court to consider
granting a thirty-day extension of time to allow Webster to attempt to cure the deficiency in Dr.
Rushing’s expert report regarding the statutory element of causation.
/Robert M. Fillmore/
ROBERT M. FILLMORE
JUSTICE
180038F.P05
3
Based upon our resolution of Greenville’s first issue and our remand of the case to the trial court to consider whether to grant a thirty-day
extension of time to allow Webster to attempt to cure the deficiency in the expert report, we need not address Greenville’s second issue in which it
asserts the trial court abused its discretion by denying its motion to dismiss Webster’s healthcare liability claims against it. TEX. R. APP. P. 47.1.
–15–
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
GREENVILLE SNF, LLC D/B/A On Appeal from the 196th Judicial District
GREENVILLE HEALTH AND Court, Hunt County, Texas,
REHABILITATION CENTER, Appellant Trial Court Cause No. 85194.
Opinion delivered by Justice Fillmore,
No. 05-18-00038-CV V. Justices Lang and Schenck participating.
CHARLES WEBSTER, AS
REPRESENTATIVE OF THE ESTATE
OF FRANCES ROBINSON, DECEASED,
Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial court is
REVERSED and this cause is REMANDED to the trial court for proceedings consistent with
this opinion.
It is ORDERED that appellant Greenville SNF, LLC d/b/a Greenville Health and
Rehabilitation Center recover its costs of this appeal from appellee Charles Webster, as
Representative of the Estate of Frances Robinson, Deceased.
Judgment entered this 21st day of December, 2018.
–16–
|
85 Cal. App. 2d 261 (1948)
THE PEOPLE, Respondent,
v.
T. G. THOMPSON, Appellant.
Crim. No. 2065.
California Court of Appeals. Third Dist.
Apr. 29, 1948.
Hardin Barry for Appellant.
Fred N. Howser, Attorney General, and Doris H. Maier, Deputy Attorney General, for Respondent.
ADAMS, P. J.
Appellant, who was a justice of the peace in Westwood Township in Lassen County, was charged in an indictment as follows: In count one with a violation of subdivision 3 of section 424 of the Penal Code, in that he had kept false accounts relating to the receipt, etc., of public moneys; and in counts two, three, four and five with violations of section 504 of the Penal Code, in that on four different dates he had embezzled moneys which had come into his possession as such justice of the peace. He demurred to the indictment, but the demurrer was overruled. He entered a plea of not guilty and was thereafter tried by a jury, which returned verdicts of guilty on all counts. He was sentenced to the state prison for the term prescribed by law, on each count, the sentences to run concurrently. No motion for a new trial was made. This appeal is taken from the judgment.
Grounds for appeal urged are (1) that the trial court erred in overruling his demurrer to the first count of the indictment; (2) and (3) that the court erred in admitting certain evidence; and (4) that said court erred in the giving of a certain instruction.
[1] The charge contained in the first count of the indictment was in substance that defendant, on or about August 28, 1947, did wilfully, unlawfully, feloniously and knowingly keep false accounts relating to the receipt, safekeeping, transfer and disbursement of public moneys, he then being the duly elected *263 and qualified justice of the peace of Westwood Township, and, as such, charged by law with the receipt, safekeeping, transfer and disbursement of public moneys of the said justice's court.
This charge, it is asserted, does not comply substantially with the requirements of sections 950, 951 and 952 of the Penal Code, in that it does not use ordinary or concise language in such a manner as to enable a person of common understanding to know what was intended, or to enable defendant to plead the judgment as a bar to further prosecution; that it does not reveal the nature of the accounts, or in what manner they were kept falsely; and that, though it employs the language of section 424 of the Penal Code, it is, nevertheless, insufficient. Appellant cites several cases, which, with one exception, were decided prior to the amendment of section 952 of the Penal Code in 1927 and 1929, which section as amended liberalized the rules of pleading in criminal cases, and provides that in charging an offense, each count shall be sufficient if it contains in substance a statement that the accused has committed some public offense therein specified; and that it may be in the words of the enactment describing the offense or declaring the matter to be a public offense, or in any words sufficient to give the accused notice of the offense of which he is accused. The sufficiency of an indictment is not now to be tested by the rigorous rules of the common law nor by the rules existent prior to the 1927 and 1929 amendments to our statutes governing pleadings in criminal cases. See People v. Codina, 30 Cal. 2d 356, 359 [181 P.2d 881]; People v. Curtis, 36 Cal. App. 2d 306, 317 [98 P.2d 228].
[2] Also, section 4 1/2 of article VI of the Constitution, adopted in 1911 and amended in 1914, provides that no judgment shall be set aside in any case on the ground of misdirection of the jury, or of the improper admission or rejection of evidence, or for any error as to any matter of pleading, unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice. Also see sections 960 and 1404 of the Penal Code, amended in 1927.
Appellant was entitled to, and presumably received, a copy of the transcript of the proceedings before the grand jury (Pen. Code, 925), and was thereby informed of the basis of the charges against him. See People v. Gilbert, 26 Cal. App. 2d 1, 7 [78 P.2d 770]; People v. Gordon, 71 Cal. App. 2d 606, 610-611 [163 P.2d 110]; People v. Jones, 61 Cal. App. 2d 608, 615-616 [143 P.2d 726]; People v. Curtis, supra; and since it is *264 conceded by him that the charge against him is in the words of section 424 of the Penal Code, we are satisfied that he had sufficient notice of the offense of which he was accused, and that any deficiency in the language of the indictment, if such there was, did not mislead him nor result in a miscarriage of justice, particularly since the sentences on the various counts in the indictment run concurrently.
[3] The second ground for reversal urged by appellant is that the trial court erred in permitting the witness Faulkner to testify regarding the Motor Vehicle Docket kept by appellant as justice of the peace, because of subdivision 3 of section 1855 of the Code of Civil Procedure. There was proof in the case that the original docket was lost, and section 1855 provides that under such circumstances the contents of a writing may be proven either by a copy or by oral evidence. Faulkner, who was an accountant who had been employed for several years to audit the books of Lassen County, and who had examined the books pertaining to defendant's justice's court, testified that he made photostatic copies of the pertinent portions of appellant's Motor Vehicle Docket, and they were introduced in evidence after testimony was adduced showing that the originals were lost. We find no error in this behalf. See Code of Civil Procedure, section 1937; People v. Mitchell, 74 Cal. App. 164, 168 [240 P. 36]; 16 Cal.Jur. 697-698, 702.
[4] Appellant's third asserted ground for reversal is that the trial court permitted evidence of acts of embezzlement committed by him, other than those charged in the indictment, and particularly one act subsequent to the ones charged. It appears from the record that this evidence was adduced by the prosecution in rebuttal and after defendant had testified that he did not intentionally fail to turn over to the county auditor moneys which he had received. Evidence of these other embezzlements was thus given to show a course of action pursued by appellant, and his fraudulent intent. For such purpose evidence of similar acts, both before and after those charged, is admissible. See People v. Hatch, 163 Cal. 368, 378-380 [125 P. 907]; People v. Talbot, 220 Cal. 3, 17-18 [28 P.2d 1057]; People v. Kendall, 65 Cal. App. 2d 569, 570 [151 P.2d 39].
[5] The final alleged error asserted by appellant is that the court instructed the jury that they might consider evidence of other acts of embezzlement on the issue of intent, but failed to caution them that any such act committed subsequent to the date of the embezzlement charged in any one count *265 could not be considered as evidence of intent as to that count. No authority for this contention is cited, and in view of the rule stated in the cases above cited, it has no merit. The court by its instruction advised the jury that evidence of other similar embezzlements was to be considered only for such bearing as they might find it to have on issues relating to defendant's state of mind. This was proper and it was enough. See People v. Kay, 34 Cal. App. 2d 691, 696-697 [94 P.2d 361].
The judgment is affirmed.
Peek, J., and Thompson, J., concurred.
|
AGREEMENT
This agreement is made and entered into as of January 29, 2010, by and between
Xfone, Inc., whose principal executive offices are at 5307 W Loop 289, Lubbock,
TX 79414, U.S. (“Xfone”), and Abraham Keinan, whose address is at 4 Wycombe
Gardens, London NW11 8AL, UK (“Abraham”).
RECITALS
WHEREAS, on March 28, 2007, Xfone and Abraham entered into a consulting
agreement (the “Consulting Agreement”) pursuant to which, among others, Abraham
is entitled to receive from Xfone monthly fees and an appropriate severance
package; and
WHEREAS, on January 29, 2010, Xfone, Abraham and AMIT K LTD (a company owned and
controlled by Abraham) (“AMIT”) entered into an agreement (the “Purchase
Agreement”) pursuant to which Abraham, through AMIT, shall purchase from Xfone
the UK Subsidiaries (as that term is defined in the Purchase Agreement) (the
“Transaction”); and
WHEREAS, subject to and upon the consummation of the Transaction, Xfone and
Abraham wish to terminate the Consulting Agreement.
NOW, THEREFORE, in consideration of the above premises and the respective
representations, warranties, agreements and conditions herein set forth, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement (each, a “Party” and
collectively the “Parties”), intending to be legally bound, hereby agree as
follows:
1.
Termination of the Consulting Agreement. Subject to and upon the consummation
of the Transaction:
a.
The Consulting Agreement, including Abraham’s right to enter into a severance
agreement, shall be terminated.
b.
Abraham waives the monthly fees and the appropriate severance package due to
Abraham pursuant to the Consulting Agreement.
c.
Xfone shall pay to Abraham two months' fees which are unpaid and due to Abraham
as of the date of this Agreement pursuant to the Consulting Agreement, in an
aggregate amount of £32,000, as well as any additional monthly fees due to
Abraham and unpaid as of the consummation of the Transaction under the
Consulting Agreement.
2.
Abraham's Directorship. Upon the consummation of the Transaction and for as
long as Abraham remains a director of Xfone, Abraham shall be deemed a
non-independent director and shall not be entitled to any compensation in
connection with his directorship.
3.
Release and Discharge of Actions and Claims. Unless otherwise agreed upon in
this Agreement, each Party releases and discharges the other Party, including
its subsidiaries, directors, officers, affiliates, employees, attorneys,
successors and assigns, of and from any and all manner of action and actions,
causes and causes of action, claims, controversies, contracts, torts, debts,
damages or demands whatsoever, that it has had, now has, or may in the future
have, arising out of or related to the Consulting Agreement.
-1-
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
/s/ Guy Nissenson
Xfone, Inc.
/s/ Abraham Keinan
Abraham Keinan
-2-
--------------------------------------------------------------------------------
|
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 1 of 13 PageID #: 2126
Date: September 09, 2019
To: Rebecca Dauparas
Arthur J. Gallagher
300 South Riverside Plaza
Chicago, IL 60606
Re: Akorn, Inc.
47-EPC-308703-01
September 01, 2019 – September 01, 2021
Excess Follow Form Policy (D&O)
Dear Rebecca:
Attached please find the Excess Follow Form Policy for Akorn, Inc. This policy has been placed with
Berkshire Hathaway Specialty Insurance Company. Please review this contract at your earliest
convenience and let me know if you have any questions or concerns.
For your added convenience, a claims reporting information sheet is attached detailing the various
ways to contact us in the event of a claim.
Thank you for placing your business with us. We value our relationship with you and Arthur J.
Gallagher and look forward to working with you on future accounts.
If we can be of any additional assistance, please do not hesitate to call.
Sincerely,
James Houlihan
305-392-8478
[email protected]
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 2 of 13 PageID #: 2127
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 3 of 13 PageID #: 2128
Berkshire Hathaway Specialty Insurance Company
(a Stock Insurance Company)
1314 Douglas Street, Suite 1400
Omaha, NE 68102-1944
Excess Policy
Common Policy Declarations
THE PAYMENT OF DEFENSE COSTS WILL REDUCE THE LIMIT OF LIABILITY UNDER THIS POLICY.
This Declarations Page is attached to and forms part of the Policy
Policy No.: 47-EPC-308703-01 Renewal of: New
Item 1. Named Insured: Akorn, Inc.
Mailing Address: 1925 West Field Court, Suite 300
Lake Forest, IL 60045
Item 2. Policy Period
From: September 01, 2019 To: September 01, 2021
Effective:
Both days at 12:01 a.m. local standard time at Mailing Address listed in Item 1, above.
Item 3. Limits of Per Claim Limit: $5,000,000
Insurance
(including Aggregate Policy Limit: $5,000,000
Defense Costs) Total Underlying Limit of Liability: $5,000,000
Item 4. Premiums: Policy Premium: $2,000,000
Terrorism Coverage Premium: $0
Total Premium: $2,000,000
Item 5. Schedule of (A) Followed Policy:
Underlying Carrier XL Specialty IGR
Insurance: Policy Number US00075683DO19A
Limit of Liability $5,000,000
(B) See attached Schedule of Underlying Excess Policies
Page 1 | EP-LX-DEC-05/2017
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 4 of 13 PageID #: 2129
Item 6. Notices to For claims, loss or potential claims All other notices
Insurer:
By 24-hour toll free number: By Email:
305-392-8478 [email protected]
By Email: [email protected] By Fax: 305-392-8478
By Fax: 305-392-8478 By Mail: Log on to
By Mail: Log on to www.bhspecialty.com/claims-
www.bhspecialty.com/claims- reporting.html for mailing address
reporting.html for mailing address
Item 7. Forms and
Endorsements: See attached Schedule
This policy is comprised of this Declarations page, the policy form and the schedules and endorsements, if any,
attached at the inception or issued during the Policy Period.
Signatures:
______________________________________ ______________________________________
Ralph Tortorella, Secretary Peter Eastwood, President
September 09, 2019
Dated
Page 2 | EP-LX-DEC-05/2017
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 5 of 13 PageID #: 2130
Policy No.: 47-EPC-308703-01
Issued to: Akorn, Inc.
FORMS SCHEDULE
The contents of the Policy is comprised of the following forms:
Form Number Endorsement Title
EP-LX-DEC-05/2017 Excess Policy Common Policy Declarations
EP-FORMS-SCH-02/2015 Forms Schedule
EP-AX-NLF-001-02/2014 Excess Insurance Policy
EP-XS-SCH-01/2015 Schedule Of Underlying
EP-XS-005-10/2013 OFAC/Economic Sanctions
EP-XS-013-01/2015 Cap On Losses From Certified Acts Of Terrorism
EP-XS-014-11/2013 Premium Fully Earned At Inception
EP-XS-074-10/2016 Pending And Prior Litigation Exclusion
EP-XS-088-10/2016 Specific Event Exclusion
Page 1 | EP-FORMS-SCH-02/2015
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 6 of 13 PageID #: 2131
Berkshire Hathaway Specialty Insurance Company
1314 Douglas Street,Suite 1400,
Omaha, NE 68102-1944
(Hereinafter referred to as the Insurer)
EXCESS INSURANCE POLICY
UNLESS OTHERWISE PROVIDED BY THE UNDERLYING INSURANCE, THIS POLICY APPLIES TO CLAIMS
FIRST MADE AND REPORTED DURING THE POLICY PERIOD SET FORTH IN ITEM 2. OF THE
DECLARATIONS.
In consideration of the premium payment and in reliance on any provision(s) in the Followed Policy,
the Insurer has also issued this policy in reliance upon all materials and written statements, which shall
be deemed attached hereto and made a part hereof, submitted by or on behalf of the Insured(s) or
Named Insured to the Insurer or any insurer of Underlying Insurance in connection with the
underwriting of this policy.
I. INSURING AGREEMENT
This policy shall provide coverage in accordance with the same terms, conditions and
limitations of the Followed Policy, or any more restrictive provisions of the Underlying Excess
Policies, except as otherwise set forth in this policy. The coverage obligations under this policy
shall attach to the Insurer only after all Underlying Insurance has in fact been exhausted by
payment, in legal currency, of loss by or on behalf of the insurers of the Underlying Insurance,
or by or on behalf of the Insured(s). The risk of uncollectability of any Underlying Insurance (in
whole or in part) for any reason is expressly retained by the Insured(s), and is not insured under
this policy or assumed by the Insurer.
II. DEFINITIONS
a. Insurer means Berkshire Hathaway Specialty Insurance Company.
b. Insured(s) has the meaning set forth in the Followed Policy.
c. Named Insured has the meaning set forth in Item 1. of the Declarations.
d. Followed Policy means the policy identified in Item 5. (A) of the Declarations.
e. Underlying Excess Policies means all policies scheduled in Item 5. (B) of the
Declarations.
f. Underlying Insurance means the Followed Policy and all of the Underlying Excess
Policies.
g. Underlying Limits means an amount equal to the total of all of the aggregate Limits of
Liability, as set forth in Item 5 of the Declarations, for all Underlying Insurance.
III. LIMITS OF LIABILITY
The amount set forth in Item 3. of the Declarations shall be the maximum aggregate Limit of
EP-AX-NLF-001-02/2014 Page 1
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 7 of 13 PageID #: 2132
Liability of the Insurer for all loss under this policy for any reason. If the aggregate Limit of
Liability under this policy is exhausted by payment of loss, the Insurer’s obligations under this
policy shall be deemed completely fulfilled and extinguished. If any Underlying Insurance
grants coverage subject to a liability sublimit, this policy shall not afford such coverage. The
policy, however, shall recognize any reduction or exhaustion of the Underlying Limits by any
payment under such coverage.
IV. UNDERLYING INSURANCE CHANGE
If, during the Policy Period as stated in Item 2. of the Declarations, there is a change to any
Underlying Insurance which expands coverage, then this policy shall become subject to such
change only if the Insurer agrees thereto by written agreement or by written endorsement to
this policy and any additional premium is paid.
V. SEVERABILITY OF INTERESTS
In addition to any other clauses set forth herein, this policy shall follow any provisions in the
Followed Policy regarding the severability and non-imputation of the statements,
representations, or warranties of any Insured(s) and the limitations and restrictions in
rescission or voidance of the Followed Policy.
VI. INSURER RIGHTS
The Insurer has the same rights, privileges and protections afforded to the insurer of the
Followed Policy. The Insurer has the right, but not the obligation, at its sole discretion, to
effectively associate with the Insured(s) in the defense and settlement of any claim which may
attach to and be covered under this policy or any Underlying Insurance.
VII. NOTICE
Any notice provided to the Underlying Insurance shall also be provided to the Insurer under
this policy, except that such notice shall be provided to the Insurer at either the physical or
email address, both identified in Item 6. of the Declarations.
VIII. CANCELLATION AND NONRENEWAL
This policy shall follow, and specifically incorporates herein by reference, the conditions in the
Followed Policy with respect to cancellation and nonrenewal, and shall comply with all of the
requirements of any applicable state laws and regulations regarding cancellation and
nonrenewal.
EP-AX-NLF-001-02/2014 Page 2
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 8 of 13 PageID #: 2133
Policy No.: 47-EPC-308703-01
Issued to: Akorn, Inc.
SCHEDULE OF UNDERLYING
Followed Policy(ies)
Insurer Policy Number Limits Attachment
XL Specialty IGR US00075683DO19A $5,000,000 Primary
EP-XS-SCH-01/2015 Page 1
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 9 of 13 PageID #: 2134
ENDORSEMENT 1
This endorsement, effective 12:01 AM: September 01, 2019
Forms a part of Policy No.: 47-EPC-308703-01
Issued to: Akorn, Inc.
By: Berkshire Hathaway Specialty Insurance Company
OFAC/ECONOMIC SANCTIONS
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
This endorsement modifies insurance provided under the following:
EXCESS POLICY FORM
In consideration of the payment of the premium for this policy it is hereby understood and agreed that this
policy does not provide coverage that would be in violation of the laws or regulations of the United States
of America concerning trade or economic sanctions, including, but not limited to, those administered and
enforced by the U.S. Treasury’s Office of Foreign Asset Control (OFAC).
Payment of loss under this policy shall only be made in full and complete compliance with all United
States of America economic or trade sanction laws or regulations, including, but not limited to, sanctions,
laws and regulations administered and enforced by OFAC.
All other terms and conditions of this policy remain unchanged.
EP-XS-005-10/2013 Page 1
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 10 of 13 PageID #: 2135
ENDORSEMENT 2
This endorsement, effective 12:01 AM: September 01, 2019
Forms a part of Policy No.: 47-EPC-308703-01
Issued to: Akorn, Inc.
By: Berkshire Hathaway Specialty Insurance Company
CAP ON LOSSES FROM CERTIFIED ACTS OF TERRORISM
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
This endorsement modifies insurance provided under the following:
EXCESS POLICY FORM
If aggregate insured losses attributable to terrorist acts certified under the federal Terrorism Risk
Insurance Act exceed $100 billion in a Calendar Year (January 1 through December 31) and we have met
our insurer deductible under the Terrorism Risk Insurance Act, we shall not be liable for the payment of
any portion of the amount of such losses that exceeds $100 billion, and in such case insured losses up to
that amount are subject to pro rata allocation in accordance with procedures established by the Secretary
of the Treasury.
"Certified act of terrorism" means an act that is certified by the Secretary of the Treasury, in consultation
with the Secretary of Homeland Security and the Attorney General of the United States, to be an act of
terrorism pursuant to the federal Terrorism Risk Insurance Act. The criteria contained in the Terrorism
Risk Insurance Act for a "certified act of terrorism" include the following:
1. The act resulted in insured losses in excess of $5 million in the aggregate, attributable to all types of
insurance subject to the Terrorism Risk Insurance Act; and
2. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is
committed by an individual or individuals as part of an effort to coerce the civilian population of the
United States or to influence the policy or affect the conduct of the United States Government by
coercion.
All other terms and conditions of this policy remain unchanged.
EP-XS-013-01/2015 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 1
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 11 of 13 PageID #: 2136
ENDORSEMENT 3
This endorsement, effective 12:01 AM: September 01, 2019
Forms a part of Policy No.: 47-EPC-308703-01
Issued to: Akorn, Inc.
By: Berkshire Hathaway Specialty Insurance Company
PREMIUM FULLY EARNED AT INCEPTION
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
This endorsement modifies insurance provided under the following:
EXCESS POLICY FORM
In consideration of the payment of the premium for this policy it is hereby understood and agreed that the
premium set forth in Item 4 of the Declarations shall be deemed fully earned as of the earliest date of the
Policy Period Effective dates set forth in Item 2 of the Declarations.
All other terms and conditions of this policy remain unchanged.
EP-XS-014-11/2013 Page 1
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 12 of 13 PageID #: 2137
ENDORSEMENT 4
This endorsement, effective 12:01AM: September 01, 2019
Forms a part of Policy No.: 47-EPC-308703-01
Issued to: Akorn, Inc.
By: Berkshire Hathaway Specialty Insurance Company
PENDING AND PRIOR LITIGATION EXCLUSION
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
This endorsement modifies insurance provided under the following:
EXCESS INSURANCE POLICY
In consideration of the payment of the premium for this policy, it is hereby understood and agreed that, notwithstanding
anything to the contrary contained within this policy or the Followed Policy, the Insurer shall not be liable to make any
payment for Loss (as that term is defined in the Followed Policy) in connection with any Claim (as that term is defined in
the Followed Policy) based upon, arising out of or attributable to essentially the same facts, circumstances, situations,
transactions or events underlying or alleged in any litigation, any administrative or regulatory proceeding, any
investigation or any alternative dispute resolution proceeding that was pending on or prior to June 01, 2018.
All other terms and conditions of this policy remain unchanged.
Page 1 | EP-XS-074-10/2016
Case 1:20-cv-01254-MN Document 5-39 Filed 10/02/20 Page 13 of 13 PageID #: 2138
ENDORSEMENT 5
This endorsement, effective 12:01AM: September 01, 2019
Forms a part of Policy No.: 47-EPC-308703-01
Issued to: Akorn, Inc.
By: Berkshire Hathaway Specialty Insurance Company
SPECIFIC EVENT EXCLUSION
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
This endorsement modifies insurance provided under the following:
EXCESS INSURANCE POLICY
In consideration of the payment of the premium for this policy, it is hereby understood and agreed that, notwithstanding
anything to the contrary contained within this policy or the Followed Policy, the Insurer shall not be liable to make any
payment for Loss (as that term is defined in the Followed Policy) in connection with any Claim (as that term is defined in
the Followed Policy) made against any Insured based upon, arising out of, directly or indirectly resulting from, in
consequence of, or in any way involving, the EVENT(S) described below, or Wrongful Acts (as that term is defined in the
Followed Policy) that are logically or causally connected by any fact, circumstance, situation, event, transaction, cause or
series of related facts, circumstances, situations, events, transactions or causes as alleged or contained the EVENT(S)
described below:
EVENTS
Matters involving the Fresenius Acquisition of Akorn
All other terms and conditions of this policy remain unchanged.
Page 1 | EP-XS-088-10/2016
|
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 06a0313p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
-
INTERNATIONAL BROTHERHOOD OF ELECTRICAL
Plaintiff-Appellee, -
WORKERS, LOCAL 71,
-
-
No. 05-4392
,
v. >
-
-
Defendant-Appellant. -
TRAFFTECH, INC.,
-
N
Appeal from the United States District Court
for the Northern District of [email protected].
No. 03-01213—Lesley Brooks Wells, District Judge.
Argued: July 21, 2006
Decided and Filed: August 23, 2006
Before: MARTIN and SUTTON, Circuit Judges; JORDAN, District Judge.*
_________________
COUNSEL
ARGUED: Alan G. Ross, ROSS, BRITTAIN & SCHONBERG, Cleveland, Ohio, for Appellant.
Frederick G. Cloppert, Jr., CLOPPERT, LATANICK, SAUTER & WASHBURN, Columbus, Ohio,
for Appellee. ON BRIEF: Alan G. Ross, ROSS, BRITTAIN & SCHONBERG, Cleveland, Ohio,
for Appellant. Frederick G. Cloppert, Jr., CLOPPERT, LATANICK, SAUTER & WASHBURN,
Columbus, Ohio, for Appellee.
_________________
OPINION
_________________
SUTTON, Circuit Judge. Trafftech entered into collective bargaining agreements with two
different unions and, according to one version of events, promised each of them the same work on
an exclusive basis. The International Brotherhood of Workers, Local 71 objected to sharing the
work (as apparently did the other union, but its objection is not before us) and filed a grievance with
the company. When the parties failed to resolve the grievance, the union sued, asking the district
court to enforce an arbitration clause in the collective bargaining agreement. The district court
granted summary judgment to the union, permitting it to enforce the arbitration clause.
*
The Honorable R. Leon Jordan, United States District Judge for the Eastern District of Tennessee, sitting by
designation.
1
No. 05-4392 Int’l Brotherhood v. Trafftech, Inc. Page 2
Characterizing the dispute as a representational matter outside the jurisdiction of the federal
courts, Trafftech appeals. By the express terms of the collective bargaining agreement, however,
Trafftech and Local 71 committed grievances of this sort to resolution by arbitration. The fact that
Trafftech may have entered into another collective bargaining agreement regarding some of the same
work does not necessarily make the dispute a representational one committed exclusively to the
National Labor Relations Board. Because § 301 of the Labor Management Relations Act gives the
federal courts concurrent jurisdiction to enforce an arbitration clause like this one, we affirm.
I.
Trafftech is a road and highway construction contractor. Under § 8(f) of the National Labor
Relations Act, a company in the building and construction industry may enter into a collective
bargaining agreement with a union to provide a pool of employees for the company. 29 U.S.C.
§ 158(f).
Consistent with this provision, Trafftech entered into collective bargaining agreements under
§ 8(f) with two different unions. In 1990 (and most recently in 2001 through a renewal of the
agreement), Trafftech agreed with the Laborers District Council of Ohio of the Laborers
International Union of North America, Local 860 to provide its members with certain work,
including “the construction of all . . . highway lighting [and] signal lighting.” D. Ct. Op. at 3 n.2.
Due to an insufficient supply of workers, Trafftech in 1998 (and most recently in 2001) entered into
a second § 8(f) collective bargaining agreement with the International Brotherhood of Electrical
Workers, Local 71. That agreement, according to Local 71, guaranteed “work within the jurisdiction
of the Union” to its members. Id. According to the union, that guarantee covers “electrical or
electrical related traffic signal and/or highway street lighting work.” Id. at 5.
On May 12, 2003, Local 71 filed 11 grievances with Trafftech under the collective
bargaining agreement and sought arbitration to resolve the dispute. With respect to each violation,
Local 71 identified the grievance and the section of the collective bargaining agreement that it
violated. The 11 grievances covered the waterfront of labor-management disputes, though the
parties agree that most of the disputes stem in one way or another from Trafftech’s practice of giving
some electrical-related work on traffic signals and highway lighting to Local 860 members rather
than to Local 71 members. In response, Trafftech filed a representation petition with the National
Labor Relations Board, maintaining that the grievances should be interpreted as a claim by Local
71 that it is the majority representative of all of Trafftech’s electrical workers, a claim that “called
for an election to be conducted by the Board.” Trafftech Br. at 6. Soon thereafter, Local 71 also
filed a charge with the Board, arguing that Trafftech had violated §§ 8(a)(1), (2) and (5) of the
National Labor Relations Act by (in the words of the Board) “refus[ing] to process grievances, . .
. reassign[ing] bargaining unit work, and . . . fail[ing] to follow the exclusive hiring hall procedures
as set forth in the parties’ contract.” JA 178.
On June 16, 2003, Local 71 filed this action, seeking to compel arbitration of its grievances
under § 301(a) of the Labor Management Relations Act. On April 15, 2004, the district court, with
the agreement of the parties, chose to place the case in abeyance and to defer to the Board’s
preferences in resolving the complaints already before it. On November 30, 2004, the Board
informed the parties that it would “administratively defer[] in light of [the district court’s] concurrent
jurisdiction of cases involving breaches of collective bargaining agreements under [§] 301 of the
Labor [M]anagement Relations Act.” D. Ct. Op. at 8–9 (internal quotation marks omitted). At that
point, Trafftech moved the district court to dismiss the case on the ground that the district court did
not have subject matter jurisdiction to consider Local 71’s complaint or in the alternative to re-defer
to the Board.
No. 05-4392 Int’l Brotherhood v. Trafftech, Inc. Page 3
The district court rejected Trafftech’s motion. Because the federal-court complaint turned
on alleged “violations of contracts between [an] employer[] and [a] labor organization[],” the court
concluded that § 301 gave it concurrent jurisdiction over the matter and permitted it to grant the
motion to compel arbitration. Id. at 12. “There is simply no evidence in the record,” the court
noted, “that [Local 71] seeks to represent the employees of [Local 860]”; to the contrary, “Local 71
is seeking an interpretation of the Agreement which may, or may not, be understood as providing
the plaintiff with the contractually bargained for hiring and work assignment exclusivity it alleges.”
Id. at 14. As a result, the district court granted summary judgment for Local 71 on its § 301 claim,
compelling arbitration of the grievances.
II.
Section 301(a) of the Labor Management Relations Act empowers district courts to hear
“[s]uits for violation of contracts between an employer and a labor organization.” 29 U.S.C.
§ 185(a). As a component of that authority, a district court may “grant the union specific
enforcement of an arbitration clause in a collective-bargaining agreement.” Buffalo Forge Co. v.
United Steelworkers, 428 U.S. 397, 420 (1976). When reviewing a claim for arbitration, “a court’s
role is limited to deciding if ‘the party seeking arbitration is making a claim which on its face is
governed by the contract.’” Gen. Drivers, Local Union No. 984 v. Malone & Hyde, 23 F.3d 1039,
1043 (6th Cir. 1994) (quoting United Steelworkers v. Am. Mfg. Co., 363 U.S. 564, 568 (1960)).
Like the district court, we believe that this arbitration claim “is governed by the contract.”
Local 71 filed 11 grievances with the union. In doing so, it identified the section of the collective
bargaining agreement that each grievance violated, and when the company refused to address the
grievances, the union invoked its rights under Article I, §§ 5–8 of the collective bargaining
agreement. Those sections say that if the parties cannot resolve grievances on their own, “the parties
shall jointly request Federal Mediation & Conciliation Service to . . . . hear the grievance.” D. Ct.
Op. at 4. Local 71 followed the procedures required by the collective bargaining agreement to
arbitrate the grievances. Trafftech refused to arbitrate, and Local 71 therefore permissibly filed this
claim under § 301(a) seeking an order compelling Trafftech “to participate in the arbitration
procedure of these grievances.” JA 8.
In one sense, Trafftech does not disagree with any of the premises of this analysis. It
concedes that the district court may compel arbitration if it has jurisdiction over the case. And it
does not dispute that the traditional requirements for jurisdiction exist here, namely that the
collective bargaining agreement governs these grievances and permits arbitration of them.
Trafftech resists the conclusion that normally flows from these premises on the ground that
Garmon preemption applies, giving the Board exclusive jurisdiction over this dispute. See San
Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959). As Trafftech sees things, once a
dispute implicates § 7 or § 8 of the National Labor Relations Act (concerning representational
disputes), federal courts (and state courts) must defer to the Board’s exclusive initial jurisdiction
over the dispute. See id. at 244–45 (holding that “courts are not primary tribunals to adjudicate such
[representational] issues. It is essential to the administration of the Act that these determinations
be left in the first instance to the National Labor Relations Board”). Because Local 71 signed a
collective bargaining agreement under § 8(f) of the Act, Trafftech argues that all of the grievances
necessarily arise under that provision.
Of course, unlike a traditional Garmon preemption claim, Local 71 did not invoke its rights
under these provisions of the National Labor Relations Act in bringing this claim; it raised violations
only of the collective bargaining agreement and sought relief only under § 301 of the Labor
Management Relations Act. Trafftech responds that it has asserted a claim with the Board under
§ 8(f) to test Local 71’s majority status, and, having done so, argues that the federal courts must
No. 05-4392 Int’l Brotherhood v. Trafftech, Inc. Page 4
defer jurisdiction over these grievances until the Board has resolved the representational dispute.
We disagree.
Carey v. Westinghouse Electric Corp., 375 U.S. 261 (1964), involved dueling jurisdictional
claims not unlike the ones presented here. Two rival unions represented different bargaining units
in a Westinghouse plant. One of the unions filed grievances, contending that members of the other
union’s bargaining unit were performing the work of its unit’s members. Id. at 262. Regardless of
whether the dispute was over work assignment (and thus covered by the collective bargaining
agreement) or over representation of particular employees (and thus subject to the Board’s exclusive
jurisdiction), the Court concluded that the district court could order arbitration under the auspices
of enforcing the collective bargaining agreement. Id. at 268–69. “If this is truly a representation
case,” the Court noted, “either [the union] or [the employer] can move to have the [issue resolved
by the Board]. But the existence of a remedy before the Board for an unfair labor practice does not
bar individual employees from seeking damages for breach of a collective bargaining agreement in
a state court.” Id. at 268. In concluding that “a suit . . . in the federal courts, as provided by § 301(a)
of the Labor Management Relations Act . . . is proper, even though an alternative remedy before the
Board is available,” id., the Court reasoned that the issues resolved by the two methods of dispute
resolution will not overlap entirely and that arbitration may well resolve some issues that the
Board’s proceedings cannot. See, e.g., id. at 269 (“[T]he Board’s unit finding does not per se
preclude the employer from adding to, or subtracting from, the employees’ work assignments.”)
(internal quotation marks omitted). In the end, “[h]owever the dispute be considered—whether one
involving work assignment or one concerning representation”—the Court saw “no barrier to use of
the arbitration procedure.” Id. at 272.
The employer in Carey, it is true, had not taken the step of filing a representational matter
before the Board—as Trafftech has done. But that happenstance does not make a difference: As
Carey acknowledged, either party could apply for a remedy before the Board and the federal court
action could proceed even if one of them did pursue this route of relief. Id. at 268. “Arbitral awards
construing a seniority provision or awards concerning unfair labor practices,” the Court
acknowledged, “may later end up in conflict with Board rulings. Yet . . . the possibility of conflict
is no barrier to resort to a tribunal other than the Board.” Id. at 272 (citations omitted).
Since Carey, this court has drawn the following dichotomy between disputes implicating the
exclusive initial jurisdiction of the Board under Garmon and those implicating the concurrent
jurisdiction of the federal courts under § 301. When a dispute is “primarily representational” under
§ 7 or § 8 of the National Labor Relations Act, “simply referring to the claim as a ‘breach of
contract’ [is] insufficient for the purposes of § 301 federal courts’ jurisdiction,” but “matter[s]
primarily of contract interpretation, whi[ch] potentially implicat[e] representational issues,” remain
within the federal courts’ § 301 jurisdiction. Paper Workers Int’l Union v. Air Prods. & Chems.,
Inc., 300 F.3d 667, 672, 675 (6th Cir. 2002).
Our sister circuits have embraced a similar jurisdictional division between primarily
representational and collaterally representational labor-management disputes. See Pace v. Honolulu
Disposal Serv., Inc., 227 F.3d 1150, 1157 (9th Cir. 2000) (“[W]e have drawn the jurisdictional line
by asking whether the major issues to be decided can be characterized as primarily representational
or primarily contractual.”) (internal quotation marks and ellipses omitted); Kansas City S. Transp.
Co. v. Teamsters Local Union #41, 126 F.3d 1059, 1064 (8th Cir. 1997) (“The district court’s
jurisdiction under § 301 is determined by examining whether the major issues to be decided can be
characterized as primarily representational or primarily contractual.”) (internal quotation marks
omitted); United Food & Commercial Workers Union, Local 400 v. Shoppers Food Warehouse
Corp., 35 F.3d 958, 961 (4th Cir. 1994) (“[C]ourts generally have allowed arbitration to proceed
unless a dispute is so ‘primarily representational,’ that it falls solely within the Board’s
jurisdiction.”); Trustees of Colo. Statewide Iron Workers Trust Fund v. A & P Steel, Inc., 812 F.2d
No. 05-4392 Int’l Brotherhood v. Trafftech, Inc. Page 5
1518, 1526 (10th Cir. 1987) (“We find that the representational issue before us attaches to a genuine
section 301 contract dispute as a collateral issue and that the case is not so primarily representational
as to preclude section 301 jurisdiction.”) (internal quotation marks omitted); see also Hotel & Rest.
Employees Union Local 217 v. J.P. Morgan Hotel, 996 F.2d 561, 565 (2d Cir. 1993) (“[I]t is wrong
to say, as the hotel does, that the NLRB has exclusive jurisdiction over representation issues.
Rather, § 301(a) grants courts concurrent jurisdiction over representation issues arising under a
contract.”).
Trafftech’s arguments fall on the wrong side of this line. Local 71 permissibly characterized
its action as a dispute arising under the collective bargaining agreement. And while Trafftech’s
filings with the Board raised representational issues under § 7 and § 8 of the National Labor
Relations Act, they did not convert Local 71’s complaint into one that is primarily representational
in nature.
Nor do Trafftech’s arguments implicate two types of situations in which a dispute will be
treated as primarily representational: where the Board has already exercised jurisdiction over a
matter and is either considering it or has already decided the matter, see, e.g., Int’l Bhd. of Elec.
Workers v. Iowa Elec. Light & Power Co., 668 F.2d 413, 420 (8th Cir. 1982), or where the issue is
an “initial decision[] in the representation area,” J.P. Morgan Hotel, 996 F.2d at 565; see, e.g.,
Amalgamated Clothing & Textile Workers Union v. Facetglas, Inc., 845 F.2d 1250, 1253 (4th Cir.
1988) (noting that where “the court could not possibly determine whether there has been a violation
of the collective bargaining agreement without first deciding whether the union was elected as the
employees’ bargaining representative,” the district court should not exercise jurisdiction) (internal
quotation marks omitted). Neither of these situations exists here because the Board chose to defer
exercising jurisdiction over the dispute and because the arbiter need not resolve the representational
dispute to determine whether Trafftech has violated its collective bargaining agreement.
Trafftech persists that we said otherwise in International Brotherhood of Boilermakers v.
Olympic Plating Industries, Inc., 870 F.2d 1085 (6th Cir. 1989). But that case directly implicated
both of these forbidden “primarily representational” areas. In Olympic Plating, the action filed in
the district court was “an injunction against Olympic . . . to enjoin it from recognizing Local 63 . . .
as the authorized representative of Olympic’s unionized employees.” Id. at 1086. We did, indeed,
dismiss the case and defer to ongoing proceedings before the Board, but that was because the claim
was “based upon the same facts and issues of law” at issue before the Board, id. at 1087, and
ultimately was “virtually identical to the pending unfair labor practice charge before the board,” id.
at 1089. In both proceedings in that case, the clear issue was whether “the [union] is the proper
bargaining representative of Olympic’s employees,” even though one of the parties “styled” the
claim as a “breach of contract” action. Id.
This case presents a poor analogy to that situation. While the § 301 claim presented to us
relates to 11 alleged breaches of the collective bargaining agreement, which turn on an interpretation
of that contract as well as on the particular facts of each alleged violation, the representational matter
before the Board merely queries whether a majority of the employees working on electrical work
for traffic-signal and highway-lighting construction support Local 71. While the question before
the Board is clearly representational, the issues presented to us are more akin to what the Supreme
Court called “a controversy as to whether certain work should be performed by workers in one
bargaining unit or those in another.” Carey, 375 U.S. at 263. While the representational matter
conceivably could resolve some of Local 71’s grievances, the same is true in reverse: The
arbitration might very well resolve the representational dispute, so the possibility of a
comprehensive solution alone is not a reason to defer. See id. at 272 (“If it is a representation
matter, resort to arbitration may have a pervasive, curative effect even though one union is not a
party.”); see also id. at 268.
No. 05-4392 Int’l Brotherhood v. Trafftech, Inc. Page 6
As far as our precedents are concerned, Paper Workers International Union v. Air Products
& Chemicals, Inc., 300 F.3d 667 (6th Cir. 2002), presents the better analogy. The union, there,
asserted grievances under the collective bargaining agreement and asked the court to enforce the
arbitration clause through an action filed under § 301. The employer responded that the dispute was
a representational matter implicating the exclusive jurisdiction of the National Labor Relations
Board. Because the questions before us were “undeniably governed by the existing collective
bargaining agreement,” we concluded that “[e]ven if th[e] matter does implicate a collateral
representational issue, the matter is, first and foremost, a genuine Section 301 contract dispute” that
permits the federal courts to retain jurisdiction over the dispute and enforce the arbitration clause.
Id. at 675–76.
Trafftech’s preferred rule—that the federal courts should stay their jurisdictional hand
whenever a party files a petition with the Board asserting that an issue implicates representational
issues—either would be unmanageable or would too readily undermine Congress’s creation of
concurrent jurisdiction under § 301. By simply characterizing its dispute as representational,
regardless of the Board’s interest in the dispute and regardless of the Board’s decision itself to defer
jurisdiction (as here), a party to a collective bargaining agreement could avoid (or at least delay)
having to answer for alleged violations of that contract in federal court. No precedent supports this
end run around § 301.
Trafftech, lastly, complains that because Local 860 has filed complementary grievances that
have gone to arbitration, it is possible that enforcement of the arbitration clause on behalf of Local
71 may result in contradictory federal-court rulings. This consideration seems to go to the heart of
Trafftech’s concerns but not of ours. Carey, for one, acknowledged in a similar situation that even
if the arbitration did not bind both unions, it still had the potential to resolve the dispute—and that
remained a benefit of permitting arbitration to proceed. See 375 U.S. at 272 (“If it is a representation
matter, resort to arbitration may have a pervasive, curative effect even though one union is not a
party.”). For another, it remains highly speculative that the rulings from the two arbitration panels,
if indeed both disputes go to arbitration, would be contradictory as a matter of legal enforcement as
opposed merely to being financially detrimental to Trafftech. If both arbitrations favor the unions,
Trafftech may have to hire workers from both unions to staff the jobs in question (i.e., some workers
might handle the job while others might get paid to watch), but that may well be because Trafftech
committed to that very outcome as a matter of contract. Either way, the fact remains that the Board
does not lose jurisdiction solely because we enforce the arbitration clause in this case. Id. at 271
(“There is no question that the Board is not precluded from adjudicating unfair labor practice
charges even though they might have been the subject of an arbitration proceeding and award.”).
If for some reason Trafftech does find itself subject to irreconcilable orders, there is no reason it
could not seek further remedy from the Board. But that remote possibility does not divest the
federal courts of jurisdiction over this dispute.
III.
For these reasons, we affirm.
|
Citation Nr: 0919767
Decision Date: 05/27/09 Archive Date: 06/02/09
DOCKET NO. 05-07 057 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in New
Orleans, Louisiana
THE ISSUE
Entitlement to a total disability rating based on individual
unemployability (TDIU).
REPRESENTATION
Appellant represented by: Veterans of Foreign Wars of
the United States
WITNESS AT HEARING ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
K. J. Kunz, Counsel
INTRODUCTION
The Veteran served on active duty from September 1963 to June
1983.
This appeal comes before the Board of Veterans' Appeals
(Board) from an August 2003 rating decision by the New
Orleans, Louisiana Regional Office (RO) of the United States
Department of Veterans Affairs (VA). In that decision, the
RO denied entitlement to a TDIU. In January 2007, and again
in April 2008, the Board remanded the case to the RO for
additional action.
The appeal is again 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's service-connected disabilities are a right
ankle disability, rated as 20 percent disabling, and a
seizure disorder, rated as 20 percent disabling. The
combined rating for those disabilities is 40 percent. The
Veteran contends that his right ankle disability makes him
unable to work.
VA regulations allow for the assignment of a total disability
rating based on individual unemployability (TDIU) when a
veteran is unable to secure or follow a substantially gainful
occupation as a result of service-connected disabilities, and
the veteran has certain combinations of ratings for service-
connected disabilities. If there is only one such
disability, that disability must be ratable at 60 percent or
more. If there are two or more disabilities, there must be
at least one disability ratable at 40 percent or more, and
sufficient additional disability to bring the combined rating
to 70 percent or more. 38 C.F.R. § 4.16(a) (2008).
Even if service-connected disabilities fail to meet the
percentage standards set forth in 38 C.F.R. § 4.16(a), it is
the established policy of VA that all veterans who are
unable to secure and follow a substantially gainful
occupation by reason of service-connected disabilities shall
be rated totally disabled. Rating boards should submit such
cases to the Director of the VA Compensation and Pension
Service for extraschedular consideration of a TDIU.
38 C.F.R. § 4.16(b). The Board does not have the authority
to assign, in the first instance, higher ratings on an
extraschedular basis. When an extraschedular rating may be
warranted, the Board must refer the case to designated VA
officials. Bagwell v. Brown, 9 Vet. App. 377 (1996).
The Veteran underwent right ankle replacement surgery, total
ankle arthroplasty, in January 2002. He underwent additional
surgeries on that ankle before and after the 2002 surgery.
In April 2003, the Veteran was medically retired from his
work as a shipboard inspector for the United States Navy.
The United States Social Security Administration determined
that the Veteran was disabled as of April 2003, due to his
right ankle disability.
In January 2007, the Board remanded the case to the RO via
the AMC. The Board instructed that the case be referred to
the Compensation and Pension Service for consideration of a
TDIU on an extraschedular basis. The AMC referred the case
to the Compensation and Pension service in January 2007. In
February 2007, the Director of the Compensation Service
determined that the Veteran was not entitled to a TDIU on an
extraschedular basis under 38 C.F.R. § 4.16(b).
The case was returned to the Board, and additional evidence
was received, including a private medical opinion supporting
the TDIU claim. In August 2008, the Board again remanded the
case to the RO via the AMC. The Board instructed that the
Veteran be afforded a VA orthopedic examination, with the
examiner to provide a specific opinion as to the extent to
which the Veteran's right ankle disability renders him
unemployable. The Board also instructed that the AMC/RO
again refer the case to the Director of the Compensation and
Pension service for consideration of a TDIU on an
extraschedular basis.
The Veteran had a VA orthopedic examination in October 2008.
The examiner provided indicated that the Veteran's right
ankle disability had significant occupational effects, but
did not state whether, or to what extent, the ankle
disability made the Veteran unable to work.
In February 2009, the AMC requested a determination from the
Director of Compensation and Pension Service as to whether an
extraschedular evaluation was warranted. The case was
returned to the Board without any response from the
Compensation and Pension Service to the February 2009
request.
The Veteran has submitted additional evidence and argument in
the case, including a VA orthopedist's statement supporting
the claim.
The Board has a duty under law to ensure that the RO complies
with remand orders of the Board or the Court. Stegall v.
West, 11 Vet. App. 268 (1998). The instructions of the
Board's August 2008 remand have not been fulfilled. The
Board will remand the case for an addendum to the VA
examination report to provide the requested opinion, and for
a determination from the Compensation and Pension Service,
with consideration of all the evidence.
Accordingly, the case is REMANDED for the following action:
1. The VA physician who examined the
Veteran in October 2008 should be provided
the Veteran's claims file for review, and
should provide an opinion as to whether
the Veteran's right ankle disability makes
him unable to secure and follow a
substantially gainful occupation. If that
examiner is unavailable, or the examiner
determines that the requested opinion
cannot be provided without an examination,
the Veteran should be scheduled for an
appropriate VA examination after which the
examiner must provide an opinion as to the
extent to which the Veteran's right ankle
disorder renders him unemployable.
2. The Veteran's claims file, including
the evidence submitted through April 2009,
must be provided to the Director of the
Compensation and Pension Service for
review. Obtain from the Director a
determination as to whether a TDIU is
warranted on an extraschedular basis.
3. After completion of the above, review
the expanded record and determine if the
Veteran's TDIU claim can be granted. If
the claim remains denied, issue a
supplemental statement of the case and
afford the Veteran and his representative
an opportunity to respond before the case
is returned to the Board.
The Board intimates no opinion as to the ultimate outcome of
this case. The Veteran has the right to submit additional
evidence and argument on the matter that 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. 2008).
_________________________________________________
M. E. LARKIN
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) (2008).
|
Filed 9/11/20 Banks v. Wells Fargo Bank, N.A. CA1/1
Opinion on rehearing
NOT TO BE PUBLISHED IN 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
FIRST APPELLATE DISTRICT
DIVISION ONE
JAMES D. BANKS,
Plaintiff and Appellant,
A156501
v.
WELLS FARGO BANK, N.A. et al., (San Francisco City & County
Super. Ct. No. CGC18564504)
Defendants and Respondents.
Plaintiff James D. Banks appeals from a judgment of dismissal
following the sustaining of demurrers to his second amended complaint
without leave to amend. This case arises from the confluence of several
events—the death of Banks’ mother which triggered the right of Wells Fargo
Bank to foreclose on the “reverse mortgage” she had obtained and secured
through a deed of trust on the property in dispute, and Banks’ subsequent
quiet title action against his siblings based on his claim that he once jointly
owned the property with his mother and, at the time she obtained the reverse
mortgage, she promised to leave the property to him in her will (a claim on
which he was eventually successful).
After issuing an opinion affirming the judgment, we granted Banks’
petition for rehearing as to his “wrongful foreclosure” and quiet title causes of
action. Wells Fargo and Courthouse Ventures, in accordance with this
1
Court’s order, filed supplemental briefs, as did Banks.1 We again affirm the
judgment as to Wells Fargo. We reverse the judgment as to the remaining
defendants to allow Banks an opportunity to amend.
BACKGROUND2
Prior Lawsuit
In 1974, Banks and his mother purchased the San Francisco property
at issue, taking title as joint tenants. Banks then moved out of the area. On
retiring, he returned in 2003, moving in with his mother to be her caretaker.
The following year, he and his mother looked into a “reverse mortgage.”
Wells Fargo advised that, given Banks’ age (then less than 62 years old), if he
remained on the title, it could not provide such a mortgage. Banks
transferred his interest to his mother. She, in turn, orally promised to
bequeath the property to him by will.
Wells Fargo and his mother then entered into a reverse mortgage
agreement in early 2005, and over the years she borrowed slightly more than
$200,000. His mother, however, failed to prepare the anticipated will prior to
her death in 2014 and died intestate.
Under the deed of trust securing the loan, payoff was required when
the borrower died and the property securing the loan was not the principal
1Respondents also filed requests for judicial notice, which we hereby
grant. We deny Banks’s third request for judicial notice.
2
Given that this is an appeal from a dismissal following the sustaining
of a demurrer without leave to amend, we summarize the facts alleged in the
operative complaint and matters properly subject to judicial notice. (See
Sims v. Kernan (2018) 30 Cal. App. 5th 105, 109–110 (Sims) [“ ‘ “When
reviewing an order sustaining a demurrer without leave to amend, this court
must treat the demurrer as admitting all properly pleaded facts, but not
contentions, deductions or conclusions of fact or law.” ’ ”]; Scott v. JPMorgan
Chase Bank, N.A. (2013) 214 Cal. App. 4th 743, 751 [“a demurrer may be
sustained where judicially noticeable facts render the pleading defective”].)
2
residence of at least one surviving borrower. On the occurrence of such event,
the deed of trust authorized the lender to invoke the power of sale and hold a
foreclosure sale. Wells Fargo contacted Banks about the mortgage loan and
allegedly advised Banks he could request an extension to repay the loan and
if his mother’s estate was in probate, the bank could request an extension
from the Department of Housing and Development (HUD) before foreclosure
commenced.
Banks submitted the documentation Wells Fargo requested and asked
for forbearance of acceleration and foreclosure. He advised the bank he
intended to gain full ownership of the property through the probate court and
thereafter would refinance the property and pay off the Wells Fargo loan.
Wells Fargo allegedly told him HUD had approved an extension through mid-
September 2015, and that subsequent extension requests would be
considered on submission of additional documentation.
Rather than working with Banks to obtain a further delay of
foreclosure, Wells Fargo, in mid-September, proceeded to exercise its right to
foreclose and referred the loan to First American Title for commencement of
foreclosure proceedings. Banks appealed through the Wells Fargo internal
review process but was told no further extensions were possible and his only
alternative was to pay off the loan. He did not do so, and a notice of trustee’s
sale was recorded in January 2016.
In the meantime, instead of prosecuting his claim of ownership of the
property through the probate court, Banks filed a quiet title action against
his siblings, claiming to be the sole owner of the property. Following the
recording of the notice of trustee’s sale, Banks filed a complaint against First
American seeking injunctive relief to prevent the foreclosure sale until his
quiet title claims against his siblings were resolved. The trial court issued a
3
temporary restraining order, but shortly denied his request for a preliminary
injunction.
Several months later, Banks filed an amended complaint, adding Wells
Fargo as a defendant. Banks claimed Wells Fargo had entered into an
“implied contract” to postpone foreclosure pending requests to HUD for
extensions. The trial court again issued a temporary restraining order, but
denied preliminary injunctive relief, ruling Banks had not shown likelihood
of success on the merits.
Banks and Wells Fargo then engaged in settlement discussions over
the course of about three months, during which Wells Fargo was excused
from filing a responsive pleading and refrained from moving forward with a
foreclosure sale. During these discussions, in a “third and final” settlement
offer, Wells Fargo offered to postpone the sale until mid-December. The
parties did not settle. Banks refused to do so because he was concerned the
quiet title trial, set for mid-November, might be continued and because he
was not comfortable with some of the terms Wells Fargo required in a
release.
Settlement discussions having failed, Wells Fargo demurred to the first
amended complaint. It maintained Banks lacked standing to interfere with
the foreclosure sale and further maintained it had made no promise to Banks
to further delay the sale. Banks moved to strike the demurrer on numerous
grounds, including because it was “a sham” as the parties had reached a
“[c]onditional” settlement.
The trial court denied Banks’ motion to strike, the court’s minutes
stating Wells Fargo had properly interposed a demurrer in light of the
parties “failed settlement negotiations.” (Capitalization omitted.) The court
ordered the prevailing party, i.e., Wells Fargo, to prepare a written order in
4
accordance with California Rules of Court, rule 3.1312(b). Banks maintains
Wells Fargo failed to prepare the order “prior to the deadline set by the
court.”
As for Wells Fargo’s demurrer, the court continued the hearing for a
month, until December, observing that it “appears that [Banks] is
considering a dismissal” and authorizing Banks to “file a dismissal in lieu of
opposition” to the demurrer.
Banks choose to file a dismissal with prejudice. At this point, the quiet
title claims against his siblings were set for trial in mid-December and the
foreclosure sale was set for early January 2017.
Trial on his quiet title claims was continued again, to early February.
In February, after a quarter day of trial, Banks obtained judgment on his
claims.3
In the meantime, the foreclosure sale proceeded, and the property was
sold on January 31 to Courthouse Ventures Inc.
The Present Lawsuit
A year later, in February 2018, Banks filed the instant case against
Wells Fargo and Courthouse Ventures Inc. Each interposed a demurrer,
which the trial court sustained with leave to amend.
In June, Banks filed a first amended complaint, adding four new
defendants who allegedly had an interest in the property.4 He alleged the
same causes of action asserted in his original complaint. All defendants filed
3 The judgment in the quiet title case reflects Banks had seven
siblings. Only the personal representative of one, who was deceased,
appeared for trial.
4 Two of these individuals purchased the property from Courthouse
Ventures Inc. The remaining two individual defendants provided a loan to
the purchasers.
5
demurrers, which the court again sustained with a final opportunity to
amend.
Banks filed a second amended complaint in September. He again re-
alleged the causes of action in his original complaint—for “breach of implied
contract,” “breach of implied promise,” “unjust enrichment,” “wrongful
foreclosure,” and “quiet title.” The quiet title cause of action was asserted
only against Courthouse Ventures Inc. and the individual defendants.
All defendants again interposed demurrers, which the trial court
sustained, this time without leave to amend. The court subsequently entered
a judgment of dismissal.
DISCUSSION5
All of Banks’ causes of action are ultimately grounded on the claim
Wells Fargo, by allegedly failing to timely prepare the court-requested
written order denying his motion to strike in the prior lawsuit, and by virtue
of its postponement of the foreclosure sale during settlement negotiations and
its continued postponement during the motion to strike and demurrer
proceedings in the prior lawsuit, made an “implied” settlement offer to
further postpone the foreclosure sale until resolution of his quiet title action
against his siblings, which he “accepted” by filing the dismissal.
As we explain, these allegations do not suffice to support any of Banks’
five causes of action.
5
We review a dismissal following the sustaining of a demurrer de
novo, treating the demurrer as admitting all properly pleaded facts, and
reading the complaint as a whole and giving it a reasonable interpretation.
(Sims, supra, 30 [email protected]. 109–110.) Regardless of the label
attached to a cause of action, we examine the well-pleaded factual allegations
to determine whether they state a cause of action on any available legal
theory. (Id. at p. 110.) We will affirm the sustaining of a demurrer if it is
correct on any ground, regardless of the trial court’s reasoning. (Ibid.)
6
Breach of “Implied” Contract
Banks’ first cause of action is entitled, “Breach of Implied Contract.”
For there to be an enforceable contract, whether express or implied-in-fact,
there must, among other things, be a mutual meeting of the minds. (See
Division of Labor Law Enforcement v. Transpacific Transportation Co. (1977)
69 Cal. App. 3d 268, 275 [a “vital element[] of a cause of action based on
contract [is] mutual assent (usually accomplished through the medium of an
offer and acceptance)” and is a requisite element of both express and implied-
in-fact contracts].)
“ ‘Mutual assent is determined under an objective standard applied to
the outward manifestations or expressions of the parties, i.e., the reasonable
meaning of their words and acts, and not their unexpressed intentions or
understandings.’ ” (Bustamante v. Intuit, Inc. (2006) 141 Cal. App. 4th 199,
208, quoting Alexander v. Codemasters Group Limited (2002) 104 Cal. App. 4th
129, 141, disapproved on another ground in Reid v Google (2010) 50 Cal. 4th
512, 524; see Meyer v. Benko (1976) 55 Cal. App. 3d 937, 942–943 [existence of
mutual consent “is determined by objective rather than subjective criteria,
the test being what the outward manifestations of consent would lead a
reasonable person to believe”].)
Banks has not alleged conduct by Wells Fargo that can, under an
objective standard, reasonably be understood as manifesting an intent to
enter into a settlement agreement consisting of a promise by it to further
postpone the foreclosure sale until the conclusion of Banks’s quiet title action
against his siblings, upon Banks’ filing a dismissal.
As we have recited, Banks alleged he and Wells Fargo entered into
settlement negotiations and during that period of time, Wells Fargo refrained
from proceeding with the foreclosure sale and was excused from filing a
7
response to Banks’ complaint. During these negotiations, Wells Fargo offered
to postpone the sale until mid-December. Banks further alleged, however,
that the parties did not reach a settlement, because he feared his quiet title
case against his siblings would be continued past December and because he
would not agree to Wells Fargo’s required release language. Wells Fargo
therefore filed a responsive pleading, demurring to the complaint. Banks
responded with a motion to strike the demurrer, claiming he and Wells Fargo
had reached a “[c]onditional” settlement. Wells Fargo disputed this
assertion, and the trial court denied Banks’s motion, with the court’s minutes
stating Wells Fargo had properly interposed a demurrer given the parties
“failed settlement negotiations.” (Capitalization omitted.) The court then
gave Banks the option of dismissing Wells Fargo or responding to its
demurrer. The court also asked Wells Fargo to prepare a written order for
the court’s signature, memorializing the court’s ruling.
Banks’ “implied” settlement theory is predicated entirely on Wells
Fargo’s alleged failure to timely submit the requested written order, which
conduct he claims constituted an “offer” by Wells Fargo to further postpone
the foreclosure sale until after the conclusion of his quiet title action against
his siblings. This simply is not a “reasonable meaning” that can be ascribed
to Wells Fargo’s alleged failure to prepare a written order at the trial court’s
directive and pursuant to the California Rules of Court. And while Banks
alleges he believed Wells Fargo’s alleged failure to timely prepare the written
order was such an offer in light of its postponement of the foreclosure sale
during the parties’ settlement negotiations and during the motion and
demurrer proceedings, his subjective belief does not substitute for statements
or conduct by Wells Fargo that could reasonably be understood to manifest
assent to the “implied” settlement agreement Banks alleged. (See Stewart v.
8
Preston Pipeline Inc. (2005) 134 Cal. App. 4th 1565, 1587 [“[m]utual assent to
contract is based upon objective and outward manifestations of the parties; a
party’s ‘subjective intent, or subjective consent, therefore is irrelevant,’ ”
italics added].)
For this reason, alone, Banks failed to sufficiently allege the requisite
elements of a cause of action for breach of implied contract, and Wells Fargo’s
demurrer to this cause of action was properly sustained.6
Breach of “Implied Promise”
To the extent Banks’ second cause of action entitled “Breach of Implied
Promise” is a recycling of his breach of implied contract theory, his
allegations are insufficient for the reason we have discussed above.
To the extent this cause of action is one for “promissory estoppel,” as
Banks suggests in his appellate briefing, his allegations are likewise deficient
for the reason we have discussed in connection with his breach of implied
contract cause action. “[E]xcept for its equitable nature and the lack of a
necessity for consideration, promissory estoppel claims are akin to contract
actions.” (US Ecology, Inc. v. State of California (2005) 129 Cal. App. 4th 887,
903.) Promissory estoppel substitutes reliance on a promise as a substitute
for bargained-for consideration. (Fleet v. Bank of America N.A. (2014) 229
Cal. App. 4th 1403, 1412–1413 (Fleet).) Thus, just as a breach of contract
claim must be based on an express promise, or on conduct that reasonably is
understood to convey such a promise, so too must an equitable estoppel claim
seeking to enforce the asserted promise. (See US Ecology, at p. 904
[“promissory estoppel claims are aimed solely at allowing recovery in equity
where a contractual claim fails for a lack of consideration, and in all other
6We therefore need not, and do not, reach any of the other grounds
Wells Fargo urges in support of affirmance.
9
respects the claim is akin to one for breach of contract”].) As we have
discussed above, Banks has not alleged conduct by Wells Fargo that
reasonably could be understood as evidencing a promise to further postpone
the foreclosure sale until resolution of Banks’s quiet title action against his
siblings on Banks’s filing of a dismissal.
Additionally, “a cause of action for promissory estoppel is inconsistent
with a cause of action for breach of contract based on the same facts.” (Fleet,
supra, 229 Cal.App.4th at p. 1413.) Only “ ‘[w]hen a pleader is in doubt about
what actually occurred or what can be established by the evidence, the
modern practice allows that party to plead in the alternative and make
inconsistent allegations.’ ” (Ibid.; accord, Newport Harbor Ventures, LLC v.
Morris Cerullo World Evangelism (2016) 6 Cal. App. 5th 1207, 1224–1225.)
Here, Banks’ original and amended complaints reflected no “doubt” as to the
conduct he claims gave rise to an implied settlement agreement. On the
contrary, he consistently, and specifically, identified the conduct by Wells
Fargo on which he based his breach of implied contract claim. Accordingly,
for this reason as well, he failed to allege a viable promissory estoppel cause
of action.7
Unjust Enrichment
As for Banks’ third cause of action for “Unjust Enrichment,” there is no
independent cause of cause of action in California for unjust enrichment.
“ ‘The phrase “Unjust Enrichment” does not describe a theory of recovery, but
an effect: the result of a failure to make restitution under circumstances
where it is equitable to do so.’ (Lauriedale Associates, Ltd. v. Wilson (1992)
7 Cal. App. 4th 1439, 1448. . . .) Unjust enrichment is ‘ “a general principle,
7Thus, we need not, and do not, reach any of the other grounds Wells
Fargo urges in support of affirmance.
10
underlying various legal doctrines and remedies,” ’ rather than a remedy
itself. (Dinosaur Development, Inc. v. White (1989) 216 Cal. App. 3d 1310,
1315 . . . .) It is synonymous with restitution. (Id. at p. 1314.)” (Melchior v.
New Line Productions, Inc. (2003) 106 Cal. App. 4th 779, 793 (Melchior).)
Banks correctly points out that in a recent opinion issued by a different
division of this Court, the court commented “this Appellate District appears
split” on whether unjust enrichment stands as an independent cause of
action. (O’Grady v. Merchant Exchange Productions, Inc. (2019)
41 Cal. App. 5th 771, 791.) The court went on to explain, however, that the
nomenclature is essentially irrelevant, as this district, as does every other,
equates a claim for “unjust enrichment” as a claim for “restitution.” (Ibid.;
see, e.g., Prakashpalan v. Engstrom, Lipscomb & Lack (2014)
223 Cal. App. 4th 1105, 1132; Melchior, supra, 106 Cal.App.4th at p. 793.)
And regardless of whether a separate “claim” can be made for
restitution, “restitution is a remedy and not a freestanding cause of action”
(Reid v. City of San Diego (2018) 24 Cal. App. 5th 343, 362, italics added;
McBride v. Boughton (2004) 123 Cal. App. 4th 379, 387 (McBride)), and must
be sought in connection with a legally cognizable theory that can support
restitutionary relief. (McBride, at p. 387 [whether amended complaint
claiming unjust enrichment and seeking restitutionary relief “was properly
sustained depends . . . not on the nature of the damages [the plaintiff] seeks,
but rather on the viability of the causes of action he has attempted to plead].)
McBride, decided by the same division of our court that decided
O’Grady, explained, “[t]here are several potential bases for a cause of action
seeking restitution. For example, restitution may be awarded in lieu of
breach of contract damages when the parties had an express contract, but it
was procured by fraud or is unenforceable or ineffective for some reason. (See
11
generally 3 Witkin, Cal. Procedure (4th ed. 1996) Actions, §§ 148–150,
pp. 218–220; 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts,
§§ 112, 118, pp. 137–138, 142–144.) Alternatively, restitution may be
awarded where the defendant obtained a benefit from the plaintiff by fraud,
duress, conversion, or similar conduct. In such cases, the plaintiff may
choose not to sue in tort, but instead to seek restitution on a quasi-contract
theory (an election referred to at common law as ‘waiving the tort and suing
in assumpsit’). (See, e.g., Murrish v. Industrial Indemnity Co. (1986)
178 Cal. App. 3d 1206, 1209 . . . [election to waive tort and sue in assumpsit is
a fiction that broadens remedies available to plaintiff, but does not create a
contract where none existed]; see generally 55 Cal.Jur.3d (May 2004)
Restitution and Constructive Contracts, § 21.) In such cases, where
appropriate, the law will imply a contract (or rather, a quasi-
contract), without regard to the parties’ intent, in order to avoid unjust
enrichment. (See generally 1 Witkin, Summary of Cal. Law, supra,
Contracts, §§ 91, 95–96, 99–110, 116, pp. 122–123, 125–126, 128–136, 140–
141; 3 Witkin, Cal. Procedure, supra, Actions, § 160, pp. 229–230; see also
4 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 517, pp. 607–608
[discussing use of common count to seek quasi-contractual restitution in lieu
of tort damages].)” (McBride, supra, 123 Cal.App.4th at p. 388.)
In McBride, the court pointed out the plaintiff had “abandoned” any
contract claim, and therefore examined his allegations to determine whether
any supported a quasi-contractual or assumpsit theory of recovery based on
the defendant’s allegedly tortious conduct. (McBride, supra, 123 Cal. App. 4th
[email protected]. 388–389) and concluded, largely for public policy reasons, that they did
not.8 (Id. at pp. 389–395.)
Here, in contrast, Banks never “abandoned” his contract claim. On the
contrary, he consistently pleaded that he and Wells Fargo entered into an
implied agreement. Nor did he ever allege this implied agreement “is
unenforceable or ineffective for some reason” (McBride, supra,
123 Cal.App.4th at p. 388), necessitating recovery through a quasi-
contractual claim and restitution.
Furthermore, Banks’ allegations do not support quasi-contractual
recovery for “fraud, duress, conversion, or similar conduct” such that
restitution would be warranted to avoid “unjust enrichment.” As we have
discussed, he has not alleged any conduct by Wells Fargo that could
reasonably constitute a promise to further postpone the foreclosure sale on
which Banks could reasonably rely. In short, Banks’ allegations do not allege
a circumstance where Wells Fargo’s conduct, by any reasonable measure,
induced an injustice. (See McBride, supra, 123 Cal.App.4th at p. 389
[restitution is available only if “ ‘the circumstances are such that, as between
the two individuals, it is unjust for the person to retain it.’ ”]; see also Tindell
8 The plaintiff in McBride had been told by the defendant he was the
father of her child, and he therefore returned to the United States from South
America, found employment and began supporting defendant and the child.
Eventually, the plaintiff and the defendant switched roles; defendant
returned to work and plaintiff stayed at home caring for the child. The
defendant subsequently decided to move, took the child with her, and limited
the plaintiff’s visitation. The plaintiff sued to establish paternity and for
custody. When testing showed he was not the biological father, he sued the
defendant for misrepresentation and unjust enrichment, seeking return of
sums he had paid for support. The trial court sustained the defendant’s
demurrer; the Court of Appeal affirmed. (McBride, supra, 123 [email protected]. 382–384.)
13
v. Murphy (2018) 22 Cal. App. 5th 1239, 1250 [causes of action for “unjust
enrichment, rescission, or restitution” properly dismissed where they were
simply “ ‘derivative . . . [of] other causes of action’ ” as to which no sufficient
factual bases were alleged].)9
Wrongful Foreclosure
In his second amended complaint, Banks alleged that his fourth cause
of action, for “wrongful foreclosure,” was “derivative” of his first three causes
of action, and in his opening brief on appeal he asserts the same. Because we
have concluded Banks’ first three causes of action fail to sufficiently allege a
claim, his fourth, derivative cause of action, also necessarily fails. (See
Krantz v. BT Visual Images (2001) 89 Cal. App. 4th 164, 178 [where remaining
causes of action are “incidental to and depend upon the validity (or invalidity)
of the preceding claims for relief,” their viability “depend[s] on the fate of the
antecedent substantive causes of action”].)10
Quiet Title
Banks’ fifth cause for “quiet title” is asserted against Courthouse
Ventures Inc., which purchased the property in 2017 at the foreclosure sale,
and the two individuals who subsequently purchased the property in 2018
from Courthouse and the two individuals who funded that purchase.
A quiet title cause of action generally has two elements: (1) “the
plaintiff is the owner and in possession of the land,” and (2) “the
defendant claims an interest therein adverse to [the plaintiff].”11 (South
9We therefore need not, and do not, address the other grounds
advanced by Wells Fargo and the other defendants for affirmance.
10Accordingly, we do not address the additional grounds advanced by
Wells Fargo for affirmance.
The courts have recognized an exception to the plaintiff as title
11
owner where there has been a “void” foreclosure sale. In that context, the
14
Shore Land Co. v. Petersen (1964) 226 Cal. App. 2d 725, 740; see West v.
JPMorgan Chase Bank, N.A. (2013) 214 Cal. App. 4th 780, 802–803; Code Civ.
Proc., § 761.020.)
Moreover, it is the general rule that the holder of equitable title cannot
maintain a quiet title action against a legal owner. (See G.R. Holcomb Estate
Co. v. Burke (1935) 4 Cal. 2d 289, 297 [“[i]t has been repeatedly held in this
state that an action to quiet title will not lie in favor of the holder of an
equitable title as against the holder of a legal title”].) The limited exception
permitting the holder of an equitable interest to maintain a quiet title action
against a legal owner is relatively narrow and has been recognized primarily
in cases involving fraud or breach of fiduciary duty by the holder of legal title.
(See, e.g., Strong v. Strong (1943) 22 Cal. 2d 540, 545–546 [equitable rights
could not be established in quiet title action absent finding of fraud]; Warren
v. Merrill (2006) 143 Cal. App. 4th 96, 110–112 [quieting title in condominium
purchaser where real estate agent breached fiduciary duty to purchaser by
fraudulent procuring title to property]; see generally, 5 Witkin, Cal.
Procedure (2020) Pleading, § 667 [“plaintiff who attacks the legal title on
equitable grounds is in effect contending that the defendant obtained legal
title by fraud or similar inequitable conduct, and must specifically allege the
facts constituting that conduct”].)
At all relevant times—that is, after Banks conveyed his interest in the
property to his mother until after the foreclosure sale—Banks could make no
claim of holding legal title. Rather legal title was first held by his mother,
former homeowner may be able to bring a quiet title against the foreclosing
entity and regain ownership of the property. (See Yvanova v. New Century
Mortgage Corp. (2016) 62 Cal. 4th 919, 929–934.) While Banks alleged a
“wrongful” foreclosure, he never alleged the foreclosure sale was “void” as
that term has been defined by the courts. (See ibid.)
15
and after the foreclosure sale, by Courthouse Ventures Inc., and later, by the
two individuals who purchased the property from Courthouse. That Banks
ultimately prevailed on his quiet title claims against his siblings, did not
alter the fact that, by then, Courthouse Ventures Inc. held title to the
property. Accordingly, he could not then claim more than a beneficial
ownership interest in the property.
Thus, to sufficiently allege a quiet title claim against Courthouse
Ventures Inc. and its transferees, Banks was required to allege the kind of
egregious conduct by the holders of legal title necessary to bring his quiet
title cause of action within the limited exception discussed above. He did not
so, and his allegations are therefore insufficient to support his cause of action
for quiet title.
Banks maintains he alleged an alternative quiet title “theory” based on
his “claim of an oral agreement between [Banks] and his mother dating to
December 2004.” Such agreement “pre-dated the Deed of Trust” and Banks
thus alleged his claim “therefore was superior to it” and “therefore was not
foreclosed by the trustee sale.” Banks further alleged Courthouse Ventures
Inc. had “constructive notice” of his “pre-Deed of Trust unrecorded ownership
claim [i.e., the claim based on the oral agreement with his mother] by the lis
pendens” he recorded at the outset of his quiet title action. According to
Banks, Courthouse thus “took its trustee deed subject to the judgment”
subsequently entered in his quiet title action. Banks further alleged that
because the sale to Courthouse “extinguished” the Deed of Trust securing the
reverse mortgage, the language of the quiet title judgment expressly making
his newly confirmed title subject to the Deed of Trust, was rendered “a legal
nullity.” Banks thus alleged the trustee deed conveying the property to
Courthouse Ventures Inc. was “void.”
16
This “theory” is unavailing for at least two reasons. First, Banks’
assertion that the oral promise by his mother was first in time and therefore
superior to the Wells Fargo deed of trust is incorrect. The first in time
priority rule applies only to properly recorded interests in real property. (See
generally Thaler v. Household Finance Corp. (2000) 80 Cal. App. 4th 1093,
1099.) The alleged oral promise by his mother to bequeath the property to
him is not an ownership interest. At most, Banks had an expectancy of an
ownership interest in the future.
Second, because the Wells Fargo deed of trust was properly recorded, it
secured the priority of not only its ownership interest, but also the priority of
its successor’s ownership interest. As the court explained in Dover Mobile
Estates v. Fiber Form Products, Inc. (1990) 220 Cal. App. 3d 1494, 1498: “Title
conveyed by a trustee’s deed relates back to the date when the deed of trust
was executed. (Bank of America v. Hirsch Merc. Co. (1944) 64 Cal. App. 2d
175, 184 . . . .) The trustee’s deed therefore passes the title held by the
trustor at the time of execution. (Hohn v. Riverside County Flood Control etc.
Dist. (1964) 228 Cal. App. 2d 605, 612, [superseded by statute on another
ground as stated in Miller v Provost (1994) 26 Cal. App. 4th 1703, 1707–
1708]. . . .).” Accordingly, Courthouse Ventures took the title held by Wells
Fargo at the time Banks’ mother executed the deed of trust—title that was
unencumbered by any subsequent ownership claim by Banks. The same goes
for the title Courthouse conveyed to individual defendants.
Leave to Amend
In his petition for rehearing, Banks asserted he could amend to state a
“wrongful foreclosure” claim against Wells Fargo and quiet title claims
against Courthouse Ventures and the subsequent purchasers and their
lenders. In his supplemental briefing, Banks maintains he can amend to
17
assert both “wrongful foreclosure” and quiet title claims against all
respondents.
Wrongful Foreclosure
After considering the parties’ supplemental briefing and respondents’
requests for judicial notice, we conclude Banks has failed to show that he can
amend to allege a viable “wrongful foreclosure” claim against Wells Fargo.
The matters which we have judicially noticed show the following: After
purchasing the house formerly owned by Banks’ mother at the foreclosure
sale, Courthouse Ventures instituted an unlawful detainer action against
Banks. Banks subsequently sought leave to amend his answer to add an “
‘unclean hands’ ” defense, alleging Courthouse Ventures “is supported by
tainted profits” because its principal, Mohammed Rezaian, has funded the
company through his “participation in an illegal bid-rigging scheme.” More
specifically, he alleged Rezaian participated in such a scheme between 2008
and 2011 and used the illegal profits to support Courthouse Ventures’
“activities.” Banks’ affirmative defense did not allege bid-rigging in
connection with the purchase of his mother’s house. Nor did it allege that
Wells Fargo had anything whatsoever to do with Rezaian’s conduct. Banks’
memorandum in support of amending his answer was to the same effect—
that his new defense was based on Rezaian’s prior bid-rigging scheme and his
alleged use of profits derived therefrom to purchase the [email protected].
After Courthouse Ventures sold the property to Xiaowen Li and Yong
Liang, they substituted in as plaintiffs in the unlawful detainer action, and
Banks filed a second amended answer, re-alleging his “unclean hands”
defense.
According to the counter proposed statement Banks submitted in
connection with the subsequent appeal (to the superior court appellate
18
division) in the unlawful detainer case, he testified at the unlawful detainer
trial as follows: He “became aware by internet research and newspaper
accounts of Courthouse Ventures’ involvement though Mohammed Rezaian in
a bid-rigging conspiracy scandal that was [then] currently under prosecution
in San Francisco federal court.” His “understanding” of this conspiracy,
based on his online research and court documents, was that “investors at
foreclosure sales in San Francisco some time ago had banded together to
conspire to keep auction prices at foreclosure sales from being bid up to levels
they felt would prevent them from making acceptable profits on their
purchase, fix-up and resale of foreclosed properties.” “[T]he party [that the
conspiracy] selected to be the winning bidder paid off the other bidders to
stop bidding at a certain point.” Because three of the individuals involved in
the conspiracy were also involved in the purchase of the property at issue,
Banks “developed a strong belief that bidding” on his mother’s house also
“had been rigged.”
The verdict form asked the unlawful detainer jury to answer two
questions: (1) Did the plaintiffs establish Banks no longer had any right to
occupy the premises? and (2) Did Banks prove Courthouse Ventures acquired
title by engaging in illegal bid-rigging or by using funds obtained from illegal
bid-rigging? The jury answered “yes” to both questions.
The unlawful detainer plaintiffs (Courthouse Ventures and the new
individual owners) filed post-trial motions challenging the validity of Banks’
“unclean hands” defense. Banks maintained the defense was viable, pointing
out that Rezaian’s two co-conspirators had been convicted of engaging in
buyer side bid-rigging. Rezaian entered a plea deal whereby he testified
against these two individuals in exchange for immunity from prosecution.
19
During the hearing on the post-trial motions, the trial court stated it
believed the use of funds from a criminal enterprise could provide a legal
basis for an unclean hands defense and that Banks’ evidence was sufficient to
suggest Courthouse Ventures had in fact used such funds to purchase the
property in question. The court also stated, several times, Banks had not
presented “substantial evidence that there was bid rigging as to this
property.” Nevertheless (and inexplicably), the court signed a written order
prepared by Banks that states “there was substantial evidentiary support for
both aspects” of Banks’ affirmative defense.
Suffice it to say, the unlawful detainer appeal, which remains pending,
focuses on whether either prong of Banks’ “unclean hands” defense is legally
viable, and, if so, whether there is any substantial evidence supporting either
the use of ill-gotten profits or buyer side bid-rigging in connection with
Courthouse Ventures’ purchase of the property in question.
As Wells Fargo points out, Banks never alleged in the unlawful
detainer action that the bank had anything to do with the buyer’s side bid-
rigging for which Rezaian and his cohorts were prosecuted. Likewise, none of
the judicially noticed materials so much as mention Wells Fargo. In short,
none of these documents suggest in any way that Wells Fargo was not
entitled to proceed with a foreclosure sale to satisfy what was owed under the
reverse mortgage or that it engaged in any sort of impropriety in connection
with the sale. Accordingly, Banks has failed to demonstrate that he can
amend his cause of action for “wrongful foreclosure” to state a viable claim
against the bank.
Indeed, as Wells Fargo points out, Lo v. Jensen (2001) 88 Cal. App. 4th
1093 (Lo), confirms that Banks can pursue a remedy for any alleged buyer
side bid-rigging against the malfeasing buyer and need not involve Wells
20
Fargo. In that case, a condominium owner’s association foreclosed on one of
the condominiums. Two buyers, who were “experienced competitors,” agreed
to purchase the condominium together, rather than bid against each other, in
order to hold down the purchase price. (Id. at pp. 1095-1096.) “At the sale,
all statutory notice requirements were fulfilled and the sale itself was
regularly conducted.” (Id. at p. 1096.) But because the buyers unlawfully
conspired not to bid against each other to depress the price, the trial court
concluded the former owners should be able to reclaim title from the
conspiring buyers. (Id. at p. 1097.) The trial court thus ordered the buyers to
deliver a quitclaim deed to the former owners, contingent on the former
owners’ tender of the amount of the debt. (Id. at p. 1099.) This relief was
ordered without any involvement on the part of the foreclosing condominium
owners association. (See id. at pp. 1096, 1099.) The Court of Appeal
affirmed. (Id. at p. 1099.)
Accordingly, whatever rights Banks might otherwise have in
connection with his claim of buyer side bid-rigging, he does not have any
right to proceed against Wells Fargo Bank for “wrongful foreclosure.”
In urging that we should disregard Lo, Banks relies on two “wrongful
foreclosure” cases. The first is Washington Mutual Bank v. Blechman (2007)
157 Cal. App. 4th 662. In that case, after Blechman acquired title to the
property at issue, he took out a loan on which he subsequently defaulted. (Id.
at p. 665.) After he connived to delay the nonjudicial foreclosure sale nine
times, the property was finally sold to an entity, Gladmac. (Ibid.) Blechman
then sued the bank, the trustee and Gladmac to set aside the sale. Before the
court ruled on demurrers by the bank and trustee, Blechman dismissed them.
He then procured a default judgment against Gladmac invalidating the sale
and proceeded to re-encumber the property. (Id. at pp. 665-666.)
21
Washington Mutual and the trustee, in turn, sued for declaratory relief that
the trustee’s sale was valid. (Id. at p. 666.) The trial court granted
declaratory relief, and Blechman appealed, claiming the default judgment
precluded re-litigation of the validity of the sale. (Id. at pp. 666-667.) The
Court of Appeal affirmed, explaining the bank and trustee were
indispensable parties to the prior case challenging the foreclosure sale, and
Blechman’s dismissal in that case rendered the default judgment a nullity.
(Id. at pp. 668-669.)
The second case is Majd v. Bank of America, N.A. (2015)
243 Cal. App. 4th 1293. The plaintiff in that case also challenged a foreclosure
sale, asserting “irregularities” in the securitization process and “ ‘dual
tracking’ ” (i.e., that the foreclosure sale occurred while his loan modification
application was still under review). (Id. at pp. 1297-1298.) The trial court
sustained demurrers without leave to amend. (Id. at p. 1300.) The Court of
Appeal reversed, rejecting the plaintiff’s securitization theory but concluding
he had adequately alleged a variety of claims based on “dual tracking.” (Id.
at pp. 1302-1304, 1306-1307.) As to the plaintiff’s cause of action for
cancellation of the trustee’s deed, the court concluded his claim was deficient
for failure to join the purchaser, but this was a matter that could be remedied
by amendment. (Id. at pp. 1308-1309.)
In short, the circumstances in Washington Mutual and Majd are not
similar to those in Lo, and neither case detracts from the equitable remedy
that Lo recognized may lie in a case where there has been unilateral
malfeasance on the part of the purchaser at a foreclosure sale. Indeed, Banks
does not dispute in his response to Wells Fargo’s supplemental brief that Lo
sets forth a viable remedy for buyer side collusion at a foreclosure sale. He
maintains, however, that the bank should be compelled to remain as a
22
defendant because he wants to “erase” the trustee’s deed from the “chain of
title” going back to the point at which he obtained a quiet title judgment
against his siblings. However, we see no reason why Lo would not provide an
adequate remedy.
For the first time in his reply to the supplemental brief filed by
Courthouse Ventures, and the subsequent purchasers Xiaowen Li and Yong
Liang and their lenders Joseph and Beverly Giraudo, Banks maintains he
can allege an “alternative theory” of “lender liability” against Wells Fargo.
(Capitalization and boldface omitted.) This theory is predicated on a claim
the bank “knew or should have known of widely reported announcements of
federal investigations of alleged bid-rigging conspiracies operating in San
Francisco and nearby areas at or about the time of the trustee sale” of the
property in question. He cites no authority, however, supporting such a
“duty” owed to the title owner of a property, let alone, to someone, as was
Banks, with, at best, an equitable interest in the property.
Although Banks’ “wrongful foreclosure” cause of action, as pled in each
of his complaints, was directed against Wells Fargo (“derivative,” as it was, of
his breach of implied contract and breach of implied promise causes of
action), he now maintains he can also allege such a claim against Courthouse
Ventures, and the subsequent purchasers Xiaowen Li and Yong Liang and
their lenders Joseph and Beverly Giraudo based on bid-rigging allegations.
However, absent any allegations that implicate the foreclosing lender, we are
unaware of any authority under which Banks can pursue a “wrongful
foreclosure” claim solely against the buyer.
Quiet Title
As to Courthouse Ventures, and the subsequent purchasers Xiaowen Li
and Yong Liang and their lenders Joseph and Beverly Giraudo, we conclude
23
the matters which we have judicially noticed suggest Banks should be
allowed an opportunity to amend his complaint.
As Lo indicates, a court sitting in equity is empowered to provide a
remedy where there has been buyer side collusion to suppress the bidding at
a foreclosure sale. (Lo, supra, 88 [email protected]. 1097-1099; see South
Bay Building Enterprises, Inc. v. Riviera Lend-Lease, Inc. (1999)
72 Cal. App. 4th 1111, 1114, 1122 (South Bay) [reversing denial of leave to
amend to conform to proof where evidence indicated defaulting owner and
first priority lender colluded to deter other bidders so lender could purchase
at foreclosure sale].) We emphasize we are concluding only that Banks is
entitled to an opportunity to amend. We are making no pronouncement as to
whether any such amendment will withstand further challenge.
Pointing to the jury’s verdict in the unlawful detainer action—that Li
and Liang “prove[d] all four elements” of their unlawful detainer claim
(which included that they are the owners of the property) and Banks “no
longer has any right to occupy” the property—Courthouse Ventures, Li and
Liang, and the Giraudos maintain, at one point in their supplemental brief,
that this verdict prevents Banks from alleging a viable quiet title action
against them. However, elsewhere in their brief, they acknowledge the
unlawful detainer judgment is on appeal to the superior court appellate
division and therefore has no arguable preclusive effect at this juncture.12
Furthermore, even if the unlawful detainer judgment were not on
appeal, there is a serious question whether that verdict—rendered in a
proceeding of limited scope and heard by a court of limited jurisdiction—
12 To the extent Courthouse Ventures, Li and Liang, and the Giraudos
rely on the arguments they are advancing in their appeal of the unlawful
detainer judgment, these efforts are wholly misdirected. We also decline
their invitation to ask that that appeal be transferred to this court.
24
should be given any such preclusive effect. There are also serious questions
as to whether, or how, the two jury verdicts—on the one hand, that Li and
Lang proved up their claim for unlawful detainer, and, on the other hand,
that Courthouse Ventures engaged in bid-rigging or used ill-gotten gains
therefrom—can be harmonized and/or implemented. And finally, as Lo and
South Bay make clear, regardless of how such a claim is labeled, an action
will lie for buyer-side bid-rigging. (Lo, supra, 88 [email protected]. 1097-
1099 [equitable relief granted]; see South Bay, supra, 72 [email protected]. 1121-1123 [damages recoverable].)
DISPOSITION
As to Wells Fargo Bank, the judgment of dismissal is affirmed. As to
Courthouse Ventures, and the subsequent purchasers Xiaowen Li and Yong
Liang and their lenders Joseph and Beverly Giraudo, the judgment is
reversed to allow Banks an opportunity to amend. Parties to bear their own
costs on appeal.
25
_________________________
Banke, J.
We concur:
_________________________
Margulies, Acting P.J.
_________________________
Sanchez, J.
A156501, Banks v. Wells Fargo Bank
26
|
86 F.3d 1149
NOTICE: Fourth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Kimberly S. CLARK, Plaintiff-Appellant,v.E.I. DUPONT DE NEMOURS AND COMPANY, INCORPORATED, Defendant-Appellee.
No. 95-2607.
United States Court of Appeals, Fourth Circuit.
Submitted May 16, 1996.Decided May 30, 1996.
Kerry Dane Armentrout, GREEN & O'DONNELL, Harrisonburg, Virginia, for Appellant. Eva S. Tashjian-Brown, MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P., Richmond, Virginia; Bruce M. Steen, MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P., Charlottesville, Virginia, for Appellee.
Before RUSSELL, LUTTIG, and WILLIAMS, Circuit Judges.
OPINION
PER CURIAM:
1
Kimberly Clark appeals from the district court's order dismissing her employment discrimination suit, 42 U.S.C.A § 2000e (West 1994), for failure to serve the Defendant within 120 days as required by Fed.R.Civ.P. 4(m). Clark filed her complaint on September 20, 1994. However, the Defendant was not served until February 15, 1995, approximately 150 days later. Clark did not file a motion to extend the time for effecting service until after the Defendant filed a motion to dismiss the complaint for failure to timely serve under Rule 4(m). The district court denied Clark's motion for an extension and granted the Defendant's motion to dismiss. We affirm.
2
Rule 4(m) requires that if the complaint is not served within 120 days after it is filed, the complaint must be dismissed absent a showing of good cause. Mendez v. Elliot, 45 F.3d 75, 78 (4th Cir.1995). "Both Rule 4(m) and Rule 6(b) allow the district court discretion to extend the time for service." Id. at 79. If the request is made after the expiration of the 120-day period, the moving party must show that the failure to act "was the result of excusable neglect." Fed.R.Civ.P. 6(b).
3
Clark's only excuse for her failure to timely serve the Defendant was that she relied on a commercial process server "but for reasons unknown to [her], service was not made." (Brief of Appellant, p. 6). Moreover, Clark's motion for enlargement of time was not filed until five months after the expiration of the 120-day limit. We agree with the district court's conclusion that Clark failed to establish either good cause for her failure to comply with Rule 4(m) or excusable neglect entitling her to an extension under Rule 6(b). Accordingly, we affirm. We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the court and argument would not aid the decisional process.
4
AFFIRMED.
|
HR 2147 ENR: Veterans Treatment Court Improvement Act of 2018
U.S. House of Representatives
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.
IB
One Hundred Fifteenth Congress of the United States of AmericaAt the Second SessionBegun and held at the City of Washington on Wednesday, the third day of January, two thousand and eighteen
H. R. 2147
AN ACT
To require the Secretary of Veterans Affairs to hire additional Veterans Justice Outreach Specialists to provide treatment court services to justice-involved veterans, and for other purposes.
1.Short titleThis Act may be cited as the Veterans Treatment Court Improvement Act of 2018. 2.Hiring by Department of Veterans Affairs of additional Veterans Justice Outreach Specialists (a)Hiring of additional Veterans Justice Outreach Specialists (1)In generalNot later than 1 year after the date of the enactment of this Act, the Secretary of Veterans Affairs shall hire not fewer than 50 Veterans Justice Outreach Specialists and place each such Veterans Justice Outreach Specialist at an eligible Department of Veterans Affairs medical center in accordance with this section.
(2)RequirementsThe Secretary shall ensure that each Veterans Justice Outreach Specialist employed under paragraph (1)— (A)serves, either exclusively or in addition to other duties, as part of a justice team in a veterans treatment court or other veteran-focused court; and
(B)otherwise meets Department hiring guidelines for Veterans Justice Outreach Specialists. (b)Eligible Department of Veterans Affairs medical centersFor purposes of this section, an eligible Department of Veterans Affairs medical center is any Department of Veterans Affairs medical center that—
(1)complies with all Department guidelines and regulations for placement of a Veterans Justice Outreach Specialist; (2)works within a local criminal justice system with justice-involved veterans;
(3)maintains an affiliation with one or more veterans treatment courts or other veteran-focused courts; and (4)either—
(A)routinely provides Veterans Justice Outreach Specialists to serve as part of a justice team in a veterans treatment court or other veteran-focused court; or (B)establishes a plan that is approved by the Secretary to provide Veterans Justice Outreach Specialists employed under subsection (a)(1) to serve as part of a justice team in a veterans treatment court or other veteran-focused court.
(c)Placement priorityThe Secretary shall prioritize the placement of Veterans Justice Outreach Specialists employed under subsection (a)(1) at eligible Department of Veterans Affairs medical centers that have or intend to establish an affiliation, for the purpose of carrying out the Veterans Justice Outreach Program, with a veterans treatment court, or other veteran-focused court, that— (1)was established on or after the date of the enactment of this Act; or
(2)
(A)was established before the date of the enactment of this Act; and (B)is not fully staffed with Veterans Justice Outreach Specialists.
(d)Reports
(1)Report by Secretary of Veterans Affairs
(A)In generalNot later than 1 year after the date of the enactment of this Act, the Secretary of Veterans Affairs shall submit to Congress a report on the implementation of this section and its effect on the Veterans Justice Outreach Program. (B)ContentsThe report submitted under paragraph (1) shall include the following:
(i)The status of the efforts of the Secretary to hire Veterans Justice Outreach Specialists pursuant to subsection (a)(1), including the total number of Veterans Justice Outreach Specialists hired by the Secretary pursuant to such subsection and the number that the Secretary expects to hire pursuant to such subsection. (ii)The total number of Veterans Justice Outreach Specialists assigned to each Department of Veterans Affairs medical center that participates in the Veterans Justice Outreach Program, including the number of Veterans Justice Outreach Specialists hired under subsection (a)(1) disaggregated by Department of Veterans Affairs medical center.
(iii)The total number of eligible Department of Veterans Affairs medical centers that sought placement of a Veterans Justice Outreach Specialist under subsection (a)(1), how many Veterans Justice Outreach Specialists each such center sought, and how many of such medical centers received no placement of a Veterans Justice Outreach Specialist under subsection (a)(1). (iv)For each eligible Department of Veterans Affairs medical center—
(I)the number of justice-involved veterans who were served or are expected to be served by a Veterans Justice Outreach Specialist hired under subsection (a)(1); and (II)the number of justice-involved veterans who do not have access to a Veterans Justice Outreach Specialist.
(2)Report by Comptroller General of the United States
(A)In generalNot later than 3 years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on the implementation of this section and the effectiveness of the Veterans Justice Outreach Program. (B)ContentsThe report required by subparagraph (A) shall include the following:
(i)An assessment of whether the Secretary has fulfilled the Secretary's obligations under this section. (ii)The number of veterans who are served by Veterans Justice Outreach Specialists hired under subsection (a)(1), disaggregated by demographics (including discharge status).
(iii)An identification of any subgroups of veterans who underutilize services provided under laws administered by the Secretary, including an assessment of whether these veterans have access to Veterans Justice Outreach Specialists under the Veterans Justice Outreach Program. (iv)Such recommendations as the Comptroller General may have for the Secretary to improve the effectiveness of the Veterans Justice Outreach Program.
(e)DefinitionsIn this section: (1)Justice teamThe term justice team means the group of individuals, which may include a judge, court coordinator, prosecutor, public defender, treatment provider, probation or other law enforcement officer, program mentor, and Veterans Justice Outreach Specialist, who assist justice-involved veterans in a veterans treatment court or other veteran-focused court.
(2)Justice-involved veteranThe term justice-involved veteran means a veteran with active, ongoing, or recent contact with some component of a local criminal justice system. (3)Local criminal justice systemThe term local criminal justice system means law enforcement, jails, prisons, and Federal, State, and local courts.
(4)Veterans Justice Outreach ProgramThe term Veterans Justice Outreach Program means the program through which the Department of Veterans Affairs identifies justice-involved veterans and provides such veterans with access to Department services. (5)Veterans Justice Outreach SpecialistThe term Veterans Justice Outreach Specialist means an employee of the Department of Veterans Affairs who serves as a liaison between the Department and the local criminal justice system on behalf of a justice-involved veteran.
(6)Veterans treatment courtThe term veterans treatment court means a State or local court that is participating in the veterans treatment court program (as defined in section 2991(i)(1) of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3797aa(i)(1))). Speaker of the House of Representatives.Vice President of the United States and President of the Senate. |
Exhibit 10.1
CHITTENDEN CORPORATION
DEFERRED COMPENSATION PLAN
Effective January 1, 2007
--------------------------------------------------------------------------------
CHITTENDEN CORPORATION
DEFERRED COMPENSATION PLAN
PREAMBLE
Chittenden Corporation (the “Employer”) previously established the Chittenden
Corporation, Chittenden Trust Company and Subsidiaries Directors’ Deferred
Compensation Plan (the “Plan”) to provide a vehicle whereby members of the Board
of Directors of the Employer or any duly elected member of the Board of
Directors of any other Participating Employer may elect to defer all the
retainers and fees payable by the Participating Employer to such Directors for
services as such.
The Plan is hereby amended and restated to comply with Internal Revenue Code
Section 409A, added by the American Jobs Creation Act of 2004, effective
January 1, 2005 and to allow certain executive Employees to participate in the
Plan and make other changes effective January 1, 2007. The Plan is also hereby
renamed the Chittenden Corporation Deferred Compensation Plan. As provided
herein, Plan provisions in effect as of December 31, 2004, shall continue to
apply with respect to a Participant’s Account balance attributable to amounts
deferred prior to January 1, 2005 and shall continue to apply with respect to
any vested terminated Participant or Participant who is in pay status as of such
date. Accordingly, such Account balances will not be subject to the requirements
of Code Section 409A. Thus, any changes hereunder which have been made in order
to comply with Code Section 409A shall apply only to deferred compensation
earned on and after January 1, 2005. The plan is intended to be a “plan” which
is unfunded and is maintained by an Employer primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees within the meaning of sections 201(2), 301(a)(3), and
401(a)(1) of ERISA, and shall be interpreted and administered to the extent
possible in a manner consistent with that intent.
1
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page PREAMBLE ARTICLE I DEFINITIONS 1.1
“Account” 4 1.2 “Affiliated Employer 4 1.3 “Beneficiary” 4
1.4 “Board” 4 1.5 “Code” 4 1.6 “Committee” 4 1.7
“Disability” 4 1.8 “Election Form” 5 1.9 “Eligible
Director” 5 1.10 “Eligible Executive” 5 1.11 “Employer” 5
1.12 “Participant” 5 1.13 “Participating Employer” 5 1.14
“Plan” 5 1.15 “Plan Year” 5 ARTICLE II ELIGIBILITY AND
PARTICIPATION 6 2.1 Eligibility to Participate 6 2.2
Commencement and Termination of Participation 6 ARTICLE III VOLUNTARY
DEFERRALS OF COMPENSATION 7 3.1 Voluntary Deferrals 7 3.2
Election Procedures 7 ARTICLE IV PARTICIPANT ACCOUNTS AND VESTING 9
4.1 Participant Accounts 9 4.2 Vesting 9 ARTICLE V INVESTMENT
ELECTIONS 10 5.1 Cash With Interest and Chittenden Stock Equivalent
Accounts 10 5.2 Investment Credits for Amounts Transferred From VFSC
Plan 12
2
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page ARTICLE VI DISTRIBUTION OF BENEFITS 13 6.1
Distribution of Benefits 13 6.2 Change in Election 14 6.3
Certain Other Distributions 15 6.4 Delay in Distributions 16 6.5
Compliance with Code Section 409A 16 ARTICLE VII DEATH OR DISABILITY OF
PLAN PARTICIPANT 17 7.1 Distribution Upon Death 17 7.2
Distribution Upon Disability 18 ARTICLE VIII PLAN ADMINISTRATION AND
MISCELLANEOUS 19 8.1 Plan Administration 19 8.2 Distribution
Upon a Change in Control Event 19 8.3 Assignment 20 8.4
Amendment and Termination 21 8.5 No Contract 21 8.6 Rights to
Participation 21 8.7 Payments to Minors and Incompetents 21 8.8
Income Tax Withholding 22 8.9 Creation of Trust 22 8.10
Captions 22
3
--------------------------------------------------------------------------------
ARTICLE I
DEFINITIONS
1.1 “Account” shall mean a notional account of all sums allocated to a
Participant under the Plan represented by his or her deferrals and interest
and/or earnings credited thereon as described in Section 4.1.
1.2 “Affiliated Employer” shall mean any corporation which is included with the
Employer in a controlled group of corporations, as determined in accordance with
Code Section 414(b), any unincorporated trade or business which, as determined
under regulations of the Secretary of the Treasury, is under common control of
the Employer under Code Section 414(c), any organization that includes the
Employer, which is a member of an affiliated service group, as defined in Code
Section 414(m), and any other entity required to be aggregated with the Employer
pursuant to regulations under Code Section 414(o).
1.3 “Beneficiary” means the individual designated by the Participant on his or
her Election Form in accordance with Section 7.1 who shall be entitled to
benefits hereunder attributable to the Participant’s Account in the event of the
Participant’s death.
1.4 “Board” means the Board of Directors of the Employer.
1.5 “Code” means the Internal Revenue Code of 1986, as amended from time to time
and any regulations issued thereunder. Reference to any Code Section shall
include any successor provision thereto.
1.6 “Committee” means the Executive Committee appointed by the Board to
administer the Plan pursuant to Section 8.1.
1.7 “Disability” means a condition that (a) renders a Participant unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of at least 12 months,
or (b) entitles the Participant, by reason of such medical or physical
impairment, to income replacement benefits for a period of at least 3 months
under the long term disability plan sponsored by the Participating Employer.
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1.8 “Election Form” shall mean the form developed by the Committee for a
Participant to elect to defer compensation, select the investment option, to
designate a Beneficiary, and to elect the timing and form of payment of his or
her Account in accordance with the provisions of the Plan, such procedures as
adopted by the Committee, and Code Section 409A. The Election Form shall allow
for separate elections in the event of termination of employment, death,
Disability, and upon a Change in Control Event.
1.9 “Eligible Director” means a non-employee member of the Board or non-employee
member of the Board of Directors of another Participating Employer.
1.10 “Eligible Executive” means an employee of the Employer or a Participating
Employer who is considered an “executive officer” under Section 215.2(e) of
Federal Reserve Board Regulation O, title 12, chapter II, of the Code of Federal
Regulations (12 CFR 201).
1.11 “Employer” means the Chittenden Corporation.
1.12 “Participant” means an Eligible Director or Eligible Executive who is
actively participating in the Plan in accordance with Article II or who has an
Account under the Plan under Section 4.1.
1.13 “Participating Employer” means the Employer and any Affiliated Employer
that is selected by the Committee which participates in the Plan with the
permission of the Employer.
1.14 “Plan” means the Chittenden Corporation Deferred Compensation Plan, as set
forth herein and as may be amended from time to time.
1.15 “Plan Year” means the 12-month period beginning on January 1 and ending on
the following December 31.
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ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.1 Eligibility to Participate. Each Eligible Director shall be eligible to
participate in the Plan as provided in Section 2.2. Effective January 1, 2007,
each Eligible Executive shall be eligible to participate in the Plan as provided
in Section 2.2.
2.2 Commencement and Termination of Participation. An Eligible Director or
Eligible Executive shall commence participation in the Plan on the first date
that a voluntary deferral of compensation is made in accordance with the
election procedures set forth in Article III. A Participant’s active
participation in this plan will end upon the termination of his service as an
Eligible Director or Eligible Executive because of death or any other reason, or
upon his transfer to or reclassification as an employee who is not eligible to
participate in the plan. Upon the termination of a Participant’s active
participation in this Plan in accordance with this section, there will be no
additional voluntary deferrals credited to such Participant’s Account under
Section 3.1. However, the Participant’s Account will continue to be credited
with investment credits as described in Section 5.1 until his or her Account is
fully distributed, and the Participant will be entitled to receive distribution
of his or her Account as specified on the Participant’s Election Form and in
accordance with Article VI.
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ARTICLE III
VOLUNTARY DEFERRALS OF COMPENSATION
3.1 Voluntary Deferrals. An Eligible Director may elect to defer all of the
retainer and fees to be earned for his service for a calendar year as an
Eligible Director. An Eligible Executive may make voluntary deferrals under the
plan from his or her base salary in any whole percentage of his base salary from
a minimum of 5% to a maximum of 100% of base salary by electing to reduce his or
her base salary by such amount. In addition, each such Eligible Executive may
make voluntary deferrals under the plan from his or her cash bonus in any whole
percentage of his bonus from a minimum of 5% to a maximum of 100% by electing to
reduce his or her bonus by such amount. However, in no event shall voluntary
deferrals for a period exceed 100% of the individual’s “base salary” or “bonus”
as reduced to reflect all other tax withholdings, salary reductions or
deductions under the various benefit plans including but not limited to
contributions under Code Section 401(k), 125, or 132(f), or under the
Supplemental Executive Savings Plan. Elections will be in accordance with the
requirements of Section 3.2.
3.2 Election Procedures. An Eligible Director or Eligible Executive who wishes
to reduce his or her compensation to be earned during a particular Plan Year in
order to make voluntary deferrals under Section 3.1 must complete an Election
Form specifying the amount of voluntary deferrals, agreeing to reduce his or her
retainer and fees, base salary and/or bonus (as applicable) by the amount(s)
desired, specifying the form and timing of the distribution of his or her
Account, and providing such other information as the Committee may require.
A Participant’s Election Form electing voluntary deferrals for any Plan Year
must be filed with the Committee by such deadline as the Committee specifies,
but in any event not later than December 31 of the preceding Plan Year.
Notwithstanding the foregoing, the following special rules shall apply: (a) in
the case of an Eligible Executive who first becomes eligible to participate
hereunder as of January 1, 2007 or any other Eligible Executive or Eligible
Director who first becomes eligible to participate in the Plan during a Plan
Year, the individual’s initial election to defer compensation may be made within
30 days after becoming eligible hereunder, provided that such election only
relates to future earnings; (b) elections to defer “performance based”
compensation (as defined
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under Code Section 409A, and regulations thereunder) such as payments under the
Employer’s Performance Share Plan, must be made at least 6 months prior to the
end of the performance period (so long as such compensation has not become
certain to be paid and ascertainable). Such elections shall be made in
accordance with such procedures as the Committee shall adopt, provided such
deferrals are made with respect to compensation for services performed after the
election.
A Participant must elect the amount of his or her voluntary deferrals with
respect to any subsequent Plan Year by filing a new Election Form before the
start of such subsequent Plan Year, and the change will become effective as of
the first day of such subsequent Plan Year. Once a Participant has elected to
defer compensation, his or her enrollment form will remain in effect for future
Plan Years unless the Participant changes or terminates his or her prior
elections by filing a new enrollment form in accordance with the preceding
sentence.
After a Plan Year has begun, a Participant may not change the amount of
voluntary deferrals (if any) he or she had elected for such Plan Year. However,
if during a Plan Year a Participant either (i) has an unforeseeable emergency as
defined under Code Section 409A(a)(2)(B)(ii) and regulations thereunder or
(ii) has a financial hardship (as defined in the Chittenden Corporation
Incentive Savings and Profit Sharing Plan) and receives a financial hardship
withdrawal from such plan, the Participant may elect to cancel his or her
deferral election for the balance of that Plan Year.
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ARTICLE IV
PARTICIPANT ACCOUNTS AND VESTING
4.1 Participant Accounts. An Account will be established on behalf of each
Participant to which will be credited all amounts deferred by the Participant.
Accounts are maintained strictly for accounting purposes and do not represent a
separate funding of the benefits under the Plan. Accounts shall be maintained as
part of the general liabilities of the Employer, and Participants and
beneficiaries hereunder shall have the same rights with respect to such Accounts
as a general, unsecured creditor of the Employer.
Amounts deferred hereunder by the Participant and any dividends payable under
the Chittenden Stock Equivalent Account (described in Article V) shall be
credited to his Account at such time as they would otherwise have been payable
to the Participant. Such amounts shall be credited to the Cash With Interest
Account (described in Article V) or the Chittenden Stock Equivalent Account
(described in Article V) as designated by the Participant on his or her Election
Form.
Each Participant will indicate with his or her initial Election Form the
investment election he wishes to designate for this purpose. Thereafter, a
Participant may change his or her investment election as provided in Section 5.1
and in accordance with such procedures as established by the Committee.
Following a Participant’s death and before the payment of any amount due to the
Participant’s Beneficiary hereunder has been completed, the Beneficiary will
exercise the Participant’s investment election powers under this Section.
4.2 Vesting. A Participant shall have a fully vested interest in his or her
Account at all times.
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ARTICLE V
INVESTMENT ELECTIONS
5.1 Cash With Interest Account and Chittenden Stock Equivalent Accounts
Subject to the provisions of this Article, at the time a Participant elects to
participate in the Plan, the Participant shall designate on his or her Election
Form the notional investment of his or her deferred amounts. A Participant must
elect to invest either 100% of his or her deferrals for a Plan Year in the
Chittenden Stock Equivalent Account or 50% of his or her deferrals for the
calendar year in the Cash With Interest Account and 50% in the Chittenden Stock
Equivalent Account. Investment changes may only be made at the beginning of any
calendar year with respect to future deferrals only, by completing an Election
Form at least 30 days prior to the beginning of such year or such lesser notice
as may be permitted by the Committee in a uniform and nondiscriminatory basis.
A Participant shall not be permitted to change the investment of his or her
existing Account at any time.
(a) Cash With Interest Account
In the event that a Participant has elected to credit a portion of his or her
deferrals to the Cash With Interest Account, investment credits related to all
such amounts shall be credited to such Account at the end of each month based on
the Employer’s average annual yield on earning assets for the previous calendar
quarter, converted to a monthly-equivalent yield.
Investment credits on any portion of the Participant’s Account added during a
Plan Year shall be prorated to reflect the period of time during which such
added portion was credited to the Participant’s Account.
(b) Chittenden Stock Equivalent Account
(i) In the event that a Participant has elected to credit all or a portion of
his or her deferrals to the Chittenden Stock Equivalent Account, investment
credits related to all such amounts shall be credited to such Account as earned.
The Participant’s Chittenden Stock Equivalent Account shall be
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credited with the number of shares (including fractional interests in shares) of
Employer Stock which could be purchased with such deferred amount at the
Crediting Price (described in (iii) below as of the date of the deferral (i.e.
the date such deferred compensation would have otherwise been paid)).
(ii) As of each date of payment of dividends on the Employer Stock there shall
be credited, with respect to the equivalent shares of Employer Stock credited
pursuant to this paragraph (b) on the record date of such dividend, the
equivalent of such additional shares (including fractional interests therein) of
Employer Stock as follows:
(A) In the case of cash dividends, the number of shares that could be
purchased at the Crediting Price as of such payment date with the dividends
which would have been payable on the credited shares as if they had been
outstanding.
(B) In the case of dividends payable in Employer Stock, the equivalent number
of shares that would have been payable on the equivalent shares as if they had
been outstanding.
(iii) Crediting Price. The Crediting Price at the time any credit is to be
made pursuant to paragraph (b)(i) shall be the fair market value of the Employer
Stock on the date the compensation would otherwise have been paid to Eligible
Executives and on the date the fees and retainer would otherwise have been paid
to Eligible Directors and, pursuant to paragraph (b)(ii), shall be the fair
market value of the Employer Stock on the date of the dividend payment.
For purposes of this subparagraph (iii), fair market value on any day shall mean
the closing price on a national securities exchange on the date the compensation
and fees would otherwise have been paid or on the date of dividend payment. If
there were no sale on said dates, then the fair market value shall be the
closing price on the previous business day.
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(iv) The total number of equivalent shares of Employer Stock held in Treasury
for purposes of this paragraph (b) shall be proportionately adjusted from time
to time, as determined by the Committee, for any increase or decrease in the
number of outstanding shares of Employer Stock resulting from a subdivision or
combination of shares of Employer Stock, a dividend payable in Employer Stock
(to the extent that credits have not otherwise been made with respect thereto
pursuant to subparagraph (ii)(B)), a reorganization or recapitalization or
similar change in the Employer Stock or for any other change in the capital
structure of Employer Stock.
5.2. Investment Credits for Amounts Transferred From VFSC Plan
Notwithstanding Section 5.1, with respect to an Eligible Director who had an
Account which was transferred to the Plan from the Vermont National Bank
Deferred Compensation Plan for Directors (the “VFSC Plan”) effective June 1,
1999 as a result of the acquisition of Vermont Financial Services Corporation,
and whose benefits were in pay status as of such date, the Participant’s Account
shall be credited with interest each quarter. The rate of interest shall be the
five-year Treasury Note rate (as published by the U.S. Federal Reserve Board) as
in effect as of the beginning of such quarter plus 300 basis points. However, in
the event the Participant had terminated his or her service as a Director as of
June 1, 1999 prior to attainment of age 60, the rate of interest to be credited
to such Participant’s account for the period following such termination until
the last payment from his or her Account shall be the three-month Treasury Bill
rate (as published by the U.S. Federal Reserve Board) in effect as of the
beginning of each quarter.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
6.1. Distribution of Benefits.
(a) Time of Payment.
Benefits hereunder shall be paid to a Participant or his Beneficiary on one of
the following dates, as specified by the Participant on his or her Election
Form:
(i) in the case of an Eligible Executive, the first of the month following six
(6) months after his or her separation from service of the Participating
Employer (or, if earlier, the date of death of the Participant);
(ii) in the case of an Eligible Director, first of the month following
termination of duties as an Eligible Director;
(iii) the later of the time specified in (i) or (ii) above, as applicable, and
January 1 of the calendar year following the calendar year in which the time
specified in (i) or (ii) above occurred; or
(iv) at his or her attainment of the age specified on his or her Election
Form.
(v) In addition, the Participant may elect to have distribution made upon a
Change in Control Event as defined in Section 8.2.
(b) Form of Payment.
A Participant shall designate on his Election Form the form of payment in which
his benefits hereunder shall be paid. Participants with a Cash With Interest
Account shall have their Accounts paid in cash. Participants with a Stock
Equivalent Account shall receive payment in shares of Employer Stock. The
Participant may elect to have his benefits payable in one of the following forms
of payment:
(i) a single lump sum; or
(ii) annual installments over a period not to exceed eleven years.
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In the event that a Participant with a Cash With Interest Account elects an
installment form of payment, the funds to be distributed on the initial annual
payment date shall be a proportionate share of the total amount credited to his
Account as of the initial payment date specified on his Election Form and then
shall be recalculated annually. Interest shall continue to accrue, pursuant to
Section 5.1(a) on the balance of the unpaid Account.
In the event that a Participant with a Stock Equivalent Account elects an
installment form of payment, the number of shares of Employer Stock to be
distributed on the initial annual payment date shall be a proportionate share of
the total number of equivalent shares credited to his Account as of the initial
payment date specified on his Election Form and then shall be recalculated
annually. Dividends shall continue to accrue, pursuant to Section 5.1(b)(ii) on
any equivalent shares of Stock remaining in the Participant’s Account.
Payment of benefits shall commence as soon as administratively practicable
following the date elected pursuant to paragraph (a) above.
(c) Small Accounts. Notwithstanding subsection (b) above, in the event a
Participant elects installments and the value of the Participant’s Account is
$10,000 or less as of the date the installments were scheduled to begin, the
Participant’s Account shall be automatically payable in a single lump sum
payment.
6.2. Change in Election. Notwithstanding Sections 6.1, 7.1 or 7.2, subject to
subsections (a) and (b) below, a Participant who is an Eligible Executive or
Eligible Director may change his or her distribution election by executing an
amended Election Form and elect to defer the time when his or her Account would
otherwise be payable (or installment payments would otherwise begin) to a
subsequent date specified by him or her, or the Participant may elect another
form of payment or a different number of installments, subject in all cases to
the requirements of subsections (a) and (b) below and other provisions of this
Article. If such election becomes effective as provided below, then the
Participant’s Account will be payable at the time and in the form specified in
his subsequent election.
(a) Accounts Attributable to Deferrals on and after January 1, 2005. The
Participant’s subsequent election under this Section will become effective only
if the following criteria are satisfied: (i) the election does not take effect
until one year after the
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date of the election and the participant remains an Eligible Executive or
Eligible Director during such one year period, (ii) except in the event of the
Participant’s death or Disability, the election extends the date for payment, or
the start date for installment payments, by at least five years from the
previously elected date, and (iii) in the case of an election to defer a
previously elected distribution upon attainment of a certain age (under
Section 6.1(a)(iv) above), the change election is made at least 12 months before
the date the amount would have otherwise been distributed.
No election under the preceding paragraph may operate to accelerate any payment
or distribution hereunder or violate any requirement of Code Section 409A or the
regulations and rulings thereunder. Installment payments to a participant will
be deemed a single payment for purposes of the anti-acceleration rule under Code
Section 409A(a)(3) and the rules governing the timing of changes in elections
with respect to time and form of payment hereunder pursuant to Code
Section 409A(a)(4).
Notwithstanding the foregoing, an Eligible Director who has previously made a
distribution election may change such election without regard to these
restrictions in accordance with procedures adopted by the Committee provided
such election change is made prior to December 31, 2007 or such later date as
permitted under Department of Treasury regulations under Code Section 409A, and
further provided that such election does not apply to amounts that the
Participant would otherwise have received in 2007 or cause a payment to be
accelerated to 2007.
(b) Accounts Attributable to Deferrals Prior to January 1, 2005. With respect
to a Participant’s Account attributable to deferrals made by an Eligible
Director prior to January 1, 2005, the Participant may change his or her
election provided such subsequent election is made at least one year prior to
the payment date. In addition, the Participant may only extend the date of
payment and may not select an earlier payment date.
6.3. Certain Other Distributions. In addition to the distributions provided for
in the preceding sections of this Article, the Committee may provide for a
distribution from a Participant’s account(s) under the following circumstance:
In the event that, notwithstanding the intent
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that this Plan satisfy in form and operation the requirements of Code
Section 409A, it is determined that the requirements of Code Section 409A have
been violated with respect to any Participant or group of Participants,
distribution of the amount determined to be includable in taxable income of such
Participant or Participants as a result of such a violation of Code Section 409.
6.4. Delay in Distributions. Notwithstanding the provisions of any of the
foregoing sections in this Article VI, the Committee may delay the making of any
payment to a subsequent date, provided that the delayed payment is made not
later than the end of the calendar year in which the payment was due, or within
2 1/2 months after the date the payment was due, if later, pursuant to the
requirements of Code Section 409A and the regulations and rulings thereunder.
6.5. Compliance with Code Section 409A. Notwithstanding any other provision of
this Plan, distributions and elections respecting distributions of amounts
deferred after 2004 are intended to be and will be administered in accordance
with the provisions of Code Section 409A and the regulations and rulings
thereunder (including the provisions prohibiting acceleration of payment unless
specifically permitted by such regulations and rulings).
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ARTICLE VII
DEATH OR DISABILITY OF PLAN PARTICIPANT
7.1. Distribution Upon Death. Subject to Section 6.1(c), in the event of the
death of a Participant before commencement of payment or before the complete
distribution of his or her Account hereunder, the Participant’s Beneficiary
designated pursuant to subsection (c) below will receive the total amount
remaining in the Participant’s Account in accordance with this Section.
(a) Death Before Complete Distribution of Payment. Each Participant may, at
the time of filing his or her initial Election Form (or, if applicable, in a
subsequent election in accordance with Section 6.2), elect the form of payment
to the Participant’s Beneficiary in the event the Participant dies before
commencing payment of his or her benefits as follows:
(i) A number of annual installment payments over a period not to exceed eleven
years or
(ii) A single lump sum payment.
The Participant may also elect the time of payment to the Beneficiary to be
either as soon as practicable following the Participant’s death or the beginning
of the following calendar year.
(b) Death After Commencement But Before Complete Distribution. Each
Participant may at the time of filing his or her initial Election Form (or, if
applicable, in a subsequent election in accordance with Section 6.2), elect that
in the event the Participant dies after commencement of installments but prior
to the complete distribution of his or her benefit hereunder, the remaining
unpaid installments shall (i) continue to be paid to his or her Beneficiary, or
(ii) be paid to his or her Beneficiary in a single lump sum payment.
(c) Beneficiary Designation. Each Participant may designate a Beneficiary to
receive a distribution payable under subsection (a) or (b) above and may revoke
or change such a designation at any time in accordance with such procedures or
in such form as the Committee may prescribe or deem acceptable.
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(d) Death of Beneficiary. If a Participant’s designated Beneficiary is
receiving installment payments and dies before receiving payment of all the
annual installments, the designated Beneficiary’s estate will receive a lump sum
payment of the amount remaining to be distributed to such deceased Beneficiary.
Such payment will be made on the first day of the month next following the
Committee’s receipt of satisfactory evidence of the death of the designated
Beneficiary and the appointment of a personal representative.
(e) No Valid Beneficiary Designation. If the Participant has not designated a
Beneficiary or if the Participant’s Beneficiary has predeceased him or her, the
balance of the Participant’s Account shall be paid in a single lump sum to the
Participant’s estate as soon as practicable following the Participant’s death.
7.2. Distribution Upon Disability. Each Participant may, at the time of filing
his or her initial Election Form (or, if applicable, in a subsequent election in
accordance with Section 6.2), elect the form and timing of payment of his or her
Account in the event the Participant suffers a Disability. The time and form of
payment available to the Participant shall be the same form and timing of
payment available upon separation from service as described in Section 6.1
except that the Participant would not be required to wait for six (6) months
before the benefit is paid as set forth in Section 6.1(a)(i).
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ARTICLE VIII
PLAN ADMINISTRATION AND MISCELLANEOUS
8.1 Plan Administration
(a) This Plan shall be administered by the Committee appointed by the Board to
serve at their pleasure. The Committee shall have full discretion to interpret
and administer this Plan and its decision in any matter involving the
interpretation and application of this Plan shall be final and binding on all
parties.
(b) Unless otherwise determined by the Employer, the members of the Committee
shall serve without compensation for services as such, but all expenses of the
Committee shall be borne by the Employer. Neither the Employer nor any member of
the Committee shall be liable for any loss or damage or depreciation which may
result in connection with the execution of his duties or the exercise of his
discretion or from any other act or omission hereunder, except when due to his
negligence or willful misconduct.
(c) All claims for benefits under this Plan shall be made in writing to the
Committee. The Committee shall establish a procedure for resolving any dispute
relating to a claim for benefits in accordance with requirements under the
Employee Retirement Income Security Act of 1974, as amended, and regulations
thereunder.
(d) The members of the Committee may authorize one or more of their number to
execute or deliver any instrument, make any payment or perform any other act
which the Plan authorizes or requires the Committee to do.
8.2 Distribution Upon a Change in Control Event.
A Participant shall be permitted to make a one-time election on the
Participant’s initial Election Form (or effective as of December 31, 1999, if
later) to have his or her Account distributed immediately in a form of payment
permitted under Section 6.1 upon a Change in Control Event. For purposes of this
Plan, with respect to a Participant’s Account attributable to deferrals made on
and after January 1, 2005, a “Change in Control Event” shall mean a “change in
the ownership”, a “change in the effective
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control”, or a “change in the ownership of a substantial portion of the assets”
of the Participant’s Participating Employer as such terms are defined under Code
Section 409A and regulations issued thereunder. In accordance with Section 409A,
to constitute a Change in Control Event as to the Participant, the Change in
Control Event must relate to (a) the Participating Employer for whom the
Participant is performing services at the time of the Change in Control Event,
(b) the Participating Employer that is liable for the payment of the deferred
compensation (or all corporations liable for the payment if more than one
corporation is liable), or (c) the Participating Employer that is a majority
shareholder of a Participating Employer identified in (a) or (b), or any
corporation in a chain of corporations in which each corporation is a majority
shareholder of another corporation in the chain, ending in a corporation
identified in (a) or (b). With respect to a Participant’s Account attributable
to deferrals made prior to January 1, 2005 a “Change in Control Event” shall
mean the sale of at least 25% of the assets and/or stock of the Employer, or a
change in the majority of the membership of the Employer’s Board of Directors
(as determined by the Committee) over a two-year period, unless such change of
membership is approved by the then incumbent Board of Directors.
8.3 Assignment
Except to the extent otherwise required by applicable law, no credits made to
the Account of a Participant of this Plan shall be subject in any way to
anticipation, alienation, sale, transfer, pledge, attachment or encumbrance of
any kind; and any attempts to anticipate, alienate, sell, transfer, assign,
pledge or otherwise encumber any such credit, whether presently or thereafter
payable, shall be void. Nor shall any such credit be in any way liable for or
subject to the debts or liabilities of any person entitled to the credit.
Any election to defer compensation under this Plan shall not reduce benefits
payable under any other benefit plan the Employer may provide for its Eligible
Directors or Eligible Executives. Such benefits will be calculated as if the
election had not been made. An Eligible Director or Eligible Executive may
participate in this Plan at the same time as they participate in any other
deferred compensation plan or agreement with the Participating Employer.
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8.4 Amendment and Termination
The Plan may be amended at any time and from time to time by the Board and may
be terminated at any time by action of the Board; provided, however, that no
such amendment or termination shall cause or permit any amount, or, in the case
of the Stock Equivalent Account, the number of shares of equivalent stock
already credited to a Participant’s Account, to be reduced or diminished.
Notwithstanding the foregoing, the Board may amend the plan as it deems
appropriate in order to comply with the final regulations to be issued under
section 409A and any other subsequent similar guidance.
The Board may authorize the Committee to amend the plan with respect to
administrative practices and procedures provided that any such amendment shall
not increase the Employer’s financial obligations hereunder with respect to any
existing participant.
8.5 No Contract
This Plan shall not be deemed a contract of employment with any Participant, nor
a guarantee of continued service as a director, nor shall any provision hereof
affect the right of the Participating Employer to terminate a Participant’s
employment.
8.6 Rights to Participation
The Employer’s sole obligation to Participants and their Beneficiary shall be to
make payment as provided hereunder. All payments shall be made from the general
assets of the Employer and no Participant shall have any vested rights hereunder
nor any right hereunder to any specific assets of the Employer.
8.7 Payments to Minors and Incompetents
If any Participant or Beneficiary entitled to receive any benefits hereunder is
a minor or is deemed by the Committee or is adjudged to be legally incapable of
giving valid receipt and discharge for such benefits, they will be paid to such
person or institution as the Committee may designate or to the duly appointed
guardian. Such payment shall, to the extent made, be deemed a complete discharge
of any such payment under the Plan.
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8.8 Income Tax Withholding
The Employer may withhold from any payments hereunder such amount as it may be
required to withhold under applicable Federal, state, or other law, and transmit
such withheld amounts to the appropriate taxing authority.
8.9 Creation of Trust
In its sole discretion, the Committee may otherwise use creation of trust or
other arrangements to meet the Employer’s obligations to deliver Employer Stock
or make payments hereunder.
8.10 Captions
The captions contained in the Plan are inserted only as a matter of convenience
and for reference and in no way define, limit, enlarge, or describe the scope or
intent of the Plan, nor in any way affect the construction of any provision of
the plan.
IN WITNESS WHEREOF, the Chittenden Corporation has caused this instrument to be
executed and attested on its behalf by its officer hereunto duly authorized, as
of this day of , 2006.
CHITTENDEN CORPORATION By:
ATTEST:
Corporate Secretary
22 |
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ARGYLE ENERGY, INC.
10777 Westheimer
Suite 170
Houston, Terms 77042
Phone.- +1-925-713-8270
Fax: +1-925-713-8270
September 1, 2005
Mike Piazza
Ignis Petroleum Corporation
100 Crescent Court
7th floor
Dallas Texas 75201
Bayou City Exploration, Inc. f/k/a Blue Ridge Energy, Inc.
10777 Westheimer
Suite 170
Houston, Texas 77024
RE:
Amendment to Letter Agreement, North Wright Prospect Area, Acadia Parish,
Louisiana
Gentlemen:
Reference is made to that certain letter agreement (the "Agreement") dated March
31, 2005, executed by and between Argyle Energy, Inc. ("Argyle"), Newton
Properties, Inc. {"Newton"), and Bayou City Exploration, Inc. f/k/a Blue Ridge
Energy, Inc. ("BCE"), pertaining to the North Wright Prospect Area, Acadia
Parish, Louisiana, as more particularly set forth in the Agreement.
Unless otherwise noted herein, all capitalized terms used herein shall have the
meanings given such terms in the Agreement and the Joint Operating Agreement
("JOA") attached as Exhibit B to the Agreement.
For good and adequate consideration exchanged between the parties, the receipt
and sufficiency of which is hereby acknowledged and confessed by the parties,
the Agreement is amended as follows:
·
Ignis Petroleum Corporation (“Ignis”) represents that is has acquired all of the
right, title and. interest, and obligations of Newton in and under the Agreement
and is the current owner of such right, title and interest, and obligations free
and clear of all liens, security interests, and encumbrances created by, through
and under Ignis.
·
Ignis shall have until March 31, 2006, to spud the Initial Well on the Prospect.
In the event the Initial Well is not spud on or before March 31, 2006, Ignis
shall reassign all of the right, title and interest acquired under the Agreement
to Argyle. The "second payment" as referenced and described in the Agreement
shall be paid to Argyle on or before September 30, 2005.
--------------------------------------------------------------------------------
·
Under no circumstance, and notwithstanding anything contrary in the JOA, BCE
shall have no obligation to propose the Initial Well, determine its location,
determine its depth, or determine by which date it will be commenced.
·
BCE shall have no obligation to perform any operations on the Prospect Area time
as Ignis has fully satisfied its escrow obligations as provided in the
Agreement.
·
It is acknowledged and agreed that BCE commenced its obligations under paragraph
12 of the Agreement on September 1, 2005, and therefore Ignis's payment
obligations of $10,000.00 per month and per well, as described in paragraph 12
of the Agreement, arose on September 1, 2005.
This amendment to the Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.
If the foregoing corresponds to your understanding of the amendment to the
Agreement, please indicate your acceptance in the space provided below and
return a fully executed copy hereof to me for my files.
Sincerely,
/s/ Harry Peters
Harry Peters
Argyle Energy, Inc.
AGREED AND ACCEPTED THIS 1ST DAY OF SEPTEMBER, 2005.
IGNIS PETROLEUM CORPORATION
By:
/s/ Michael P. Piazza
Title: President & CEO 9/29/05
BAYOU CITY EXPLORATION F/K/A/ BLUE RIDGE ENERGY, INC.
By:
/s/ Harry Peters
Title: SR VP/ COO
-------------------------------------------------------------------------------- |
475 Pa. 108 (1977)
379 A.2d 1305
In re ESTATE of Henry W. BREYER.
Appeal of Catharine Breyer VAN BOMEL in Nos. 557 & 558.
In re ESTATE of Edith S. BREYER.
Appeal of Charlotte Breyer RODGERS in Nos. 559, 560 & 561.
Supreme Court of Pennsylvania.
Argued October 13, 1976.
Decided October 28, 1977.
*109 *110 *111 H. Peter Somers, Raymond T. Cullen, Philadelphia, for appellants.
Arthur C. Dorrance, Jr., Philadelphia, for appellee, First Pennsylvania Bank.
Before JONES, C.J., and EAGEN, O'BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.
OPINION OF THE COURT
ROBERTS, Justice.
Appellant Catharine Breyer Van Bomel is the income beneficiary of two inter vivos trusts established by Henry Breyer in August, 1934. Appellant Charlotte Breyer Rodgers is the income beneficiary of three inter vivos trust established by Edith Breyer, two of which were settled in November, 1954, the third in November, 1958. All five trusts are still active. In July, 1974, appellee First Pennsylvania Bank (First Pennsylvania), the trustee of the five trusts, filed accounts in the Orphans' Court Division of the Court of Common Pleas of Montgomery County, seeking compensation from the principal of the five trusts. Appellants challenge the final decrees of the orphans' court awarding $28,850 in interim commissions from principal. Appellants claim that, upon settlement of the trusts, First Pennsylvania entered into fee agreements barring interim commissions. We conclude that a fee agreement bars First Pennsylvania from collecting interim commissions from the principal of the Henry Breyer trusts but that no such agreement bars First Pennsylvania from collecting interim commissions from the principal of the Edith Breyer trusts. *112 Accordingly, we reverse the decrees affecting the Henry Breyer trust and affirm the decrees affecting the Edith Breyer trusts.[1]
I
Upon the creation of the two Henry Breyer trusts in 1934, William David, vice-president of First Pennsylvania, wrote to Henry Breyer concerning the establishment of the trust. In the letter, Mr. David stated:
"This is to advise you in accepting these trusts that our charge for commissions will be 2% on the income as received and 1% on the principal at the termination of the trusts."
Appellant Catharine Breyer Van Bomel argues that this letter constitutes an agreement barring interim commissions from principal.
Appellant Charlotte Breyer Rodgers challenges the decree affecting the 1954 and 1958 trusts. She argues that notations entered upon First Pennsylvania's "docket cards," internal informational forms summarizing the basic characteristics of each of First Pennsylvania's trust accounts, evidence fee agreements barring payment of interim commissions from principal. The docket cards for the 1954 trusts contain the following with regard to commissions:
"COMMISSIONS Principal to be determined upon termination. Income 5%."
The following entry was made on First Pennsylvania's docket card for the 1958 trust:
"COMMISSIONS Income 5%. [email protected]."
The orphans' court rejected appellants' contentions that the letter and the entries on the docket cards each evidenced fee agreements proscribing the payment of interim commissions from the principal of the respective trusts. The court found that the letter written by First Pennsylvania's vice-president concerning the two Henry Breyer trusts only *113 evidences an agreement limiting the amount of commissions from principal to one per cent; the court held it did not bar the payment of interim commissions. The court concluded that the docket cards relating to the three Edith Breyer trusts do not indicate that the parties intended to limit either the amount or the timing of commissions from principal. Because the court found no agreement barring interim commissions from the principal of either the Henry Breyer or the Edith Breyer trusts, and because it determined that First Pennsylvania was not fully compensated for its services, it approved payment to First Pennsylvania of interim commissions.
II
Since 1953 the Legislature has allowed courts to award compensation to a trustee out of principal, even while the trust is still active, upon a showing that the trustee has not been fully compensated for services rendered. 20 Pa.C.S.A. § 7185 (1975).[2] This legislation also applies in the case of trusts established before 1953, Ehret Estate, 427 Pa. 584, 235 A.2d 414 (1967).[3]
*114 However, express limitations on the time for payments from principal imposed by the settlor were not disturbed. 20 Pa.C.S.A. § 7185(c) provides:
* * *
"(c) Compensation prescribed by will or other instrument Where the compensation of a fiduciary is expressly prescribed either by provisions of a will or deed of trust or other instrument under which he is acting or by provisions of an agreement between him and the creator of a trust, nothing in this section shall change in any way the rights of any party in interest or of the fiduciary."
* * *
Likewise, this Court in Ehret Estate, supra, stated that the settlor could control the timing of such commissions so as to preclude their payment in the interim.[4]
Express limitations on the time for payments from principal may be imposed either in the trust instrument, In re Reed, 467 Pa. 371, 376, 357 A.2d 138, 141 (1976); Restatement (Second) of Trusts § 242 Comment f (1959); III Scott on Trusts § 242.4 (3d ed. 1967), or in compensation agreements, Patterson Trust, 8 D. & C.2d 149 (1956); Restatement (Second) of Trusts § 242 Comment h (1959); III Scott on Trusts § 242.6 (3d ed. 1967). Appellants contend that the 1934 letter and the docket cards evidence compensation agreements by which the settlors and First Pennsylvania *115 intended to limit the timing of commissions from principal to payment at termination of the respective trusts.
A. The Henry Breyer Trusts.
Appellant Catharine Breyer Van Bomel argues that the orphans' court misinterpreted the letter written by the vice-president of First Pennsylvania to Henry Breyer. We agree.
According to the uncontradicted testimony of William Hord, vice-president of the trust division of First Pennsylvania, the 1934 letter memorialized a special fee agreement between Henry Breyer and First Pennsylvania one in which First Pennsylvania agreed to accept a rate of commissions for its services in handling the Henry Breyer trusts which was lower than the court rates it would have received absent this special agreement. Thus the writing evidences a contract between the parties. We are faced with the task of interpreting that contract.
When the parties to an agreement reduce their understanding to a writing which uses clear and unambiguous terms, a court need look no further than writing itself when asked to give effect to that understanding. Robert F. Felte, Inc. v. White, 451 Pa. 137, 144, 302 A.2d 347, 351 (1973); East Crossroads Center, Inc. v. Mellon-Stuart Co., 416 Pa. 229, 205 A.2d 865 (1965); but see 3 Corbin on Contracts § 535 (rev. ed. 1960).[5]
The 1934 letter unambiguously states that First Pennsylvania's "charge for commissions will be 2% on income as received" (emphasis added). Thus, the parties expressly provided for both the amount and timing of commissions *116 from income; that is, that commissions of 2% from income should be paid First Pennsylvania during the life of the trust.
In contrast, the letter states that the charge for commissions from principal shall be "1% on the principal at the termination of the trusts" (emphasis added). The orphans' court interpreted this language to mean only that the ultimate amount of principal commissions was to be 1% of the principal at the termination of the trust, but that it did not fix the timing of payments so as to bar interim commissions. We cannot agree. The court's interpretation might be possible, if not entirely plausible, if the provision were read in isolation. However, when read in context it is clear that, with regard to both income and principal commissions, the parties intended to fix the amount and the timing of payments. Income commissions were to be paid "as received" and the principal commission paid "at the termination of the trust." This express agreement bars payment of interim commissions from principal.
Even if we were to find that the letter is not unambiguous and thus in need of extrinsic evidence for the purpose of clarification, the extrinsic evidence presented compels the same conclusion. Mr. Hord testified that fee agreements entered into by First Pennsylvania at the time of the creation of the 1934 trusts made no charges on principal during the lives of the trusts. From this uncontradicted testimony, it is fair to say that when Mr. David wrote "at the termination of the trusts," he meant that charges on principal would be made in conformity with First Pennsylvania's then-current policy.
Further assuming an ambiguity in the 1934 letter, an application of the rule of construction which construes such doubtful language most strongly against the drafter of the instrument, see Burns Mfg. Co. v. Boehm, 467 Pa. 307, 313, 356 A.2d 763, 766 (1976); Restatement (Second) of Contracts § 232 (Ten. Draft No. 5, 1970), would lead us to the same result.
*117 Appellee urges that such a construction of the 1934 letter presumes a "clairvoyant waiver" of the benefits of 20 Pa.C.S.A. § 7185. We do not agree. The law at the time the agreement was entered into may have influenced the terms agreed upon. Nevertheless, the statute was not designed to alter an existing agreement fixing the time of commissions from principal. Here, there was a compensation agreement barring interim commissions from principal. Thus the orphans' court erred in awarding interim commissions.
B. The Edith Breyer Trusts.
Appellant Charlotte Breyer Rodgers argues that the entries made on the docket cards for the Edith Breyer trusts evidence an agreement barring payment of commissions from principal before the termination of the trusts. We do not agree.
Appellant Charlotte Breyer Rodgers contends that entries made on the docket cards for the Edith Breyer trusts should be read in the same manner as the terms of the 1934 letter. She would have us hold that the notation "principal to be determined upon termination" on the 1954 docket cards and the notation "principal at termination" on the 1958 docket card indicate, like the 1934 letter, an agreement to postpone the payment of commissions from principal until the termination of the trust.
However, unlike the 1934 letter to the settlor of the trusts, the docket cards were designed only to provide First Pennsylvania with an internal summary of the relevant features of the trust account. They were not designed or used as a contract with the settlor setting forth the rights and obligations of First Pennsylvania. Thus the docket cards, the contents of which were never communicated to the settlor, must be treated differently from a writing between the parties such as the 1934 letter.
Entries on the docket cards describing the commissions First Pennsylvania would take could reflect an oral agreement. On the other hand, the entries merely could indicate *118 the commissions First Pennsylvania contemplated when no compensation agreements have been entered into. We conclude that the entries on the docket cards in this case reflect the latter situation.
William Hord gave uncontradicted testimony about what these notations meant. In 1949, according to Mr. Hord, First Pennsylvania instituted an optional system for collecting commissions known as the "pay-as-you-go" fee schedule. Under this schedule, commissions were charged either to income or to principal during the life of the trust, based on periodic principal evaluations. If this optional method for calculating commissions met with a customer's approval, it would be indicated as such on the customer's docket card.
If, however, the pay-as-you-go formula was not agreed upon, then, according to Mr. Hord, notations of the kind found on the docket cards for the Edith Breyer trusts would be made. These notes "Principal to be determined upon termination; income 5%" and "income 5%; principal at termination" signified that First Pennsylvania did not enter into an agreement and that it was willing to accept then-current court commissions for its services.[6] In light of this uncontradicted testimony, we conclude that the entries did not reflect an agreement on the part of First Pennsylvania to abandon the opportunity to obtain interim commissions from principal as allowed by statute.[7]
*119 III
Appellant Charlotte Breyer Rodgers contends in the alternative that First Pennsylvania has not met its burden of showing that it has not been fully compensated within the meaning of 20 Pa.C.S.A. § 7185. We do not agree.
"A fiduciary's compensation depends upon the extent and character of the labor and the responsibility involved. Supervision of the amount of compensation is peculiarly within the discretion of the [orphans' court]. Unless such discretion is clearly abused the judgment will not be disturbed on appeal." Faust Estate, 364 Pa. 529, 530, 73 A.2d 369, 370 (1950); Browarsky Estate, 437 Pa. 282, 285-86, 263 A.2d 365, 366 (1970). First Pennsylvania introduced into evidence a table of fees which suggest that its current commissions from the trusts are less than it would receive if current, competitive rates were charged. No countervailing evidence suggesting First Pennsylvania has not performed services commensurate with the proposed commissions has been introduced by appellant Charlotte Breyer Rodgers. In these circumstances, we find no such abuse and therefore affirm the award of interim commissions from the principal of the Edith Breyer trusts.[8]
Decrees in Nos. 557 and 558 reversed; decrees in Nos. 559, 560 and 561 affirmed. Each party pay own costs.
JONES, former C.J., did not participate in the decision of this case.
NOTES
[1] We hear this appeal pursuant to the Appellate Court Jurisdiction Act of 1970, Act of July 31, 1970, P.L. 673, art. II, § 202(3), 17 P.S. § 211.202(3) (Supp. 1977).
[2] This section provides in part:
Compensation
(a) When allowed. The court shall allow such compensation to the trustee as shall in the circumstances be reasonable and just, and may take into account the market value of the trust at the time of the allowance, and calculate such compensation on a graduated percentage.
(b) Allowed out of principal or income. Neither the fact that a fiduciary's service has not ended nor the fact that the trust has not ended shall be a bar to the fiduciary's receiving compensation for his services out of the principal of the trust. Whenever it shall appear either during the continuance of a trust or at its end, that a fiduciary has rendered services for which he has not been fully compensated, the court having jurisdiction over his accounts, shall allow him such original or additional compensation out of the trust income or the trust principal or both, as may be necessary to compensate him for the services theretofore rendered by him. The provisions of this section shall apply to ordinary and extraordinary services alike.
* * *
[3] Before the enactment of this statute, a trustee could not, absent a showing of unusual or extraordinary circumstances, take interim commissions from the principal of a trust. E.g., Williamson Estate, 368 Pa. 343, 82 A.2d 49 (1951); Bosler's Estate, 161 Pa. 457, 29 A. 57 (1894). This rule was based on two considerations: (1) that any other practice would lead to a depletion of the principal of trusts, see Ehret Estate, 427 Pa. 584, 596, 235 A.2d 414, 421 (1969); and (2) that the trustee has not fully performed its duties until the termination of its relationship to the trust, Penn-Gaskell's Estate (No. 1), 208 Pa. 342, 344, 57 A. 714, 714 (1904).
The rule was not popular, see Williamson Estate, supra, 378 Pa. at 357-58, 82 A.2d at 56-57 (concurring and dissenting opinion of Justice Bell); Comment, The Constitutionality of Retroactive Trustee Compensation Statutes in Pennsylvania, 114 U.Pa.L.Rev. 530, 531 (1966), and was changed by the Legislature with the 1953 enactment.
[4] "[A]bsent a statute or a controlling provision by a testator or a settlor, there is no vested right in a beneficiary in the time of payment of a commission." 427 Pa. at 597, 235 A.2d at 421 (emphasis added).
[5] We are not unmindful of the dangers of focusing only upon the words of the writing in interpreting an agreement. A court must be careful not to "retire into that lawyer's Paradise where all words have a fixed, precisely ascertained meaning; where men may express their purposes, not only with accuracy, but with fulness; and where, if the writer has been careful, a lawyer, having a document referred to him, may sit in his chair inspect the text, and answer all questions without raising his eyes." Thayer, Preliminary Treatise on Evidence 428, quoted in 3 Corbin on Contracts § 535 n.16 (1960).
[6] Pennsylvania, unlike some jurisdictions, has no statute fixing the amount of compensation for trustees. See Comment, The Computation of Trustee Compensation in Pennsylvania, 13 Vill.L.Rev. 622 (1968); III Scott on Trusts § 242 (3d. ed. 1967). The record indicates that at the time of the settlement of the 1954 and 1958 trusts, orphans' courts were awarding commissions from income in the amount of five per cent.
[7] Appellant Charlotte Breyer Rodgers contends that First Pennsylvania's failure to seek interim commissions before this accounting evidences an agreement. We find this argument unconvincing. First Pennsylvania's failure to seek interim commissions from principal before these accounts were filed cannot be said to constitute evidence of an agreement not to seek such commissions. Nothing in the statute requires a trustee to make regular demands on the principal; indeed this state does not provide for commissions from principal unless the trustee can demonstrate that he has not been fully compensated for services. See 20 Pa.C.S.A. § 7185(b) (1975). First Pennsylvania's failure to seek interim commissions from these trusts at an earlier date may simply indicate that previously, commissions from income were sufficient.
[8] Appellant Charlotte Breyer Rodgers also contends that the testimony of Randolph McKean, C.P.A., was improperly excluded. Mr. McKean would have testified that the payment of interim commissions from principal would diminish the amount of principal and thus reduce the income of the beneficiaries. We agree with the orphans' court that this evidence is irrelevant. The Legislature presumably has considered this problem and has authorized interim commissions nevertheless.
|
In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 19-3111
TODD KURTZHALS,
Plaintiff-Appellant,
v.
COUNTY OF DUNN,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Western District of Wisconsin.
No. 18 C 247 — James D. Peterson, Chief Judge.
____________________
ARGUED MAY 28, 2020 — DECIDED AUGUST 10, 2020
____________________
Before MANION, KANNE, and WOOD, Circuit Judges.
WOOD, Circuit Judge. Sergeant Todd Kurtzhals worked for
the Sheriff’s Office of Dunn County, Wisconsin. After he
threatened physical violence against one of his fellow officers,
Deputy Dennis Rhead, the Office put him on temporary paid
administrative leave and ordered him to undergo a fitness-
for-duty evaluation. Kurtzhals was convinced that his super-
visors took this course of action because they knew that
Kurtzhals has a history of Post-Traumatic Stress Disorder
2 No. 19-3111
(PTSD), not because his conduct violated the County’s Work-
place Violence Policy and implicated public safety.
Acting on that conviction, Kurtzhals sued Dunn County
for employment discrimination in violation of the Americans
with Disabilities Act (ADA), 42 U.S.C. § 12112. The district
court concluded that no reasonable jury could find that
Kurtzhals’s PTSD was the “but for” cause of the County’s ac-
tion or that it was plainly unreasonable for Kurtzhals’s supe-
riors to believe that a fitness-for-duty examination was war-
ranted, and so it granted summary judgment to the County.
We agree with that assessment and affirm.
I
We assess the district court’s grant of summary judgment
de novo. Hackett v. City of South Bend, 956 F.3d 504, 507 (7th Cir.
2020). Summary judgment is appropriate where “the movant
shows that 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). “In reviewing a grant of summary judg-
ment, we construe all facts, and draw all reasonable infer-
ences from those facts, in favor of the nonmoving party,” in
this case Kurtzhals. Hackett, 956 F.3d at 507 (internal quotation
marks omitted). We do not “make credibility determinations,
weigh the evidence, or decide which inferences to draw from
the facts.” Id. We will “affirm the district court only when no
reasonable jury could have found for the plaintiffs.” Id. at 507–
08.
The account of the facts that follows adopts that well-es-
tablished perspective. On April 1, 2016, Kurtzhals was sitting
at his desk when Rhead entered his office, aggressively
moved towards Kurtzhals, yelled at him, and called him a liar.
No. 19-3111 3
Kurtzhals ordered Rhead to get out of his office. When Rhead
did not leave immediately, Kurtzhals said something to the
effect of, “if you call me a liar again, we are going to take it
outside,” implying a possible physical altercation. Several
witnesses in the workplace at the time corroborated
Kurtzhals’s words. This implied threat violated the Dunn
County Workplace Violence Policy.
Following the incident, Sheriff Dennis Smith decided to
put Kurtzhals on paid administrative leave and ordered him
to undergo a fitness-for-duty evaluation. Smith made this de-
cision after consulting with Chief Deputy Marshall Multhauf,
the Corporation Counsel, the Human Resources Manager, the
County Manager, and Dr. Thomas Campion, a psychologist
who specializes in law-enforcement psychological evalua-
tions and has worked with the Dunn County Sheriff’s Office
in the past. Sheriff Smith also hired an outside employment-
law attorney, Mindy Dale, to conduct an investigation and
provide recommendations. Dale did so and concluded that
Kurtzhals had violated the Workplace Violence Policy and
should receive some sort of reprimand. She nonetheless of-
fered the opinion that a fitness-for-duty evaluation was pre-
mature and an overreaction to the single incident. Smith chose
to order the evaluation anyway. In contrast, Smith did not
place Rhead on leave, require him to submit to a fitness-for-
duty evaluation, or otherwise punish him for his role in the
altercation with Kurtzhals.
Kurtzhals has a history of PTSD stemming from his service
in the military. When Kurtzhals returned to the Sheriff’s Of-
fice in 2014 following a combat deployment, he informed two
of his supervisors, then-Chief Deputy Paul Gunness and then-
Captain Kevin Bygd, that he had been diagnosed with PTSD
4 No. 19-3111
and received counseling. Gunness and Bygd told Kurtzhals
that they would pass that information on to Sheriff Smith. The
record does not reveal whether they ever did so. After the in-
cident with Rhead, when Smith and Multhauf told Kurtzhals
that they were placing him on administrative leave and order-
ing a fitness-for-duty evaluation, Kurtzhals asked if their de-
cision had anything to do with his PTSD. Smith and Multhauf
said nothing in response. They both deny that they knew
about Kurtzhals’s PTSD diagnosis prior to deciding how to
address his misconduct. We return to this question below.
II
Kurtzhals asserts two claims under the ADA: first, he al-
leges that the County discriminated against him on the basis
of a disability, in violation of 42 U.S.C. § 12112(a), when it
placed him on paid administrative leave; and second, he con-
tends that the County required him to take a fitness-for-duty
examination that was not “job-related and consistent with
business necessity,” in violation of 42 U.S.C. § 12112(d)(4)(A).
A
Section 12112(a) of the ADA prohibits employers from dis-
criminating “against a qualified individual on the basis of dis-
ability in regard to job application procedures, the hiring, ad-
vancement, or discharge of employees, employee compensa-
tion, job training, and other terms, conditions, and privileges
of employment.” 42 U.S.C. § 12112(a). Subsection (b) outlines
various ways in which an employer might discriminate
against an employee, including by “limiting, segregating, or
classifying … [an] employee in a way that adversely affects
the opportunities or status of such … employee because of the
disability of such … employee,” and by “utilizing standards,
No. 19-3111 5
criteria, or methods of administration … that have the effect
of discrimination on the basis of disability.” Id. §§ 12112(b)(1),
(3)(A).
To prove a violation of section 12112(a), a plaintiff must
show that: 1) he is disabled; 2) he is otherwise qualified to per-
form the essential functions of the job with or without reason-
able accommodation; 3) he suffered an adverse employment
action; and 4) the adverse action was caused by his disability.
Roberts v. City of Chicago, 817 F.3d 561, 565 (7th Cir. 2016). It is
essential for the plaintiff to link the adverse action with his
disability. In order to do so, we have held that “a plaintiff
must show a genuine issue of material fact exists regarding
whether his disability was the but for’ reason for the adverse
action.” Monroe v. Ind. Dep’t of Transp., 871 F.3d 495, 504 (7th
Cir. 2017). We note for completeness that the ADA Amend-
ments Act of 2008 changed the language of the statute from
prohibiting discrimination “because of” a disability to prohib-
iting discrimination “on the basis of” a disability. See Pub. L.
No. 110-325, § 5(a)(1) (Sept. 25, 2008). Nearly 12 years later, it
remains an open question in this circuit whether that change
affects the “but for” causation standard we apply in these
cases. Monroe, 871 F.3d at 504 (citing Serwatka v. Rockwell Au-
tomation, Inc., 591 F.3d 957, 961 n.1 (7th Cir. 2010); Roberts, 817
F.3d at 565 n.1; Hooper v. Proctor Health Care, Inc., 804 F.3d 846,
853 n.2 (7th Cir. 2015)). Kurtzhals has not complained about
the use of the “but for” standard, however, and so we will ap-
ply it here.
Our de novo review of the record satisfies us that a trier of
fact could find that Kurtzhals has a history of PTSD, and that
his symptoms, when they flare up, include insomnia, flash-
backs, and loss of appetite. He does not need to establish that
6 No. 19-3111
his symptoms interfered with his ability to work; it is enough
that they substantially interfered with any major life activity,
and we can accept that they did. Second, there is little dispute
that Kurtzhals is qualified to perform the essential functions
of his job as a police officer. He fulfilled his duties seemingly
without incident from the time he returned from active mili-
tary duty in 2014 through March 2016 and was given the po-
sition of investigation sergeant in 2015. Although his behavior
on April 1, 2016, did not meet his employer’s legitimate ex-
pectations for employee conduct, that does not render him
unqualified for his job. There is no suggestion that his PTSD
made him unable to control his behavior or caused him to lash
[email protected].
That brings us to the question whether Kurtzhals’s evi-
dence, if believed by the trier of fact, suffices to show that he
suffered an adverse employment action. Kurtzhals was placed
on paid administrative leave for approximately three months.
During that time, he received his base salary plus pay for 27
hours of overtime. The County calculated the overtime figure
by counting the number of extra shifts he might have been
able to take during his leave period. Kurtzhals returned to
work in the same position he had before, and he faced no fur-
ther consequence other than an oral reprimand. This was not
enough, however, in his view: he asserts that he was harmed
by not being able to earn even more overtime pay for which
he would have been eligible by coming in early or leaving late
on his regular shifts.
A plaintiff must show that he suffered a “materially ad-
verse employment action,” not merely a minor or even trivial
one. O’Neal v. City of Chicago, 392 F.3d 909, 911 (7th Cir. 2004).
“While adverse employment actions extend beyond readily
No. 19-3111 7
quantifiable losses, not everything that makes an employee
unhappy is an actionable adverse action.” Id. (quoting Conley
v. Vill. of Bedford Park, 215 F.3d 703, 712 (7th Cir. 2000)). Mate-
rially adverse employment actions include “cases in which
the employee’s compensation, fringe benefits, or other finan-
cial terms of employment are diminished.” Id. “When over-
time pay or premium pay is a significant and expected part of
an employee’s annual earnings, denial of such pay may con-
stitute an adverse employment action.” Formella v. Brennan,
817 F.3d 503, 511 (7th Cir. 2016).
Because Kurtzhals received his full base pay and some
overtime pay, the question here is whether the loss of poten-
tial additional overtime pay for which he was eligible was ma-
terially adverse. The policy on his eligibility for overtime re-
mained consistent, i.e. if he worked the overtime, he would be
paid for it. His ability to earn overtime was not speculative or
conditional. Kurtzhals provided evidence that during 2015
and 2016 (when he was not on administrative leave) he aver-
aged between 4.7 and 6.3 hours per week of overtime. Apply-
ing that average to the 11.5 weeks he was on administrative
leave, Kurtzhals could have expected to work between 54 and
72 hours of overtime—twice as much or more as the 27 hours
for which the County paid him. This is enough at the sum-
mary judgment stage to show that he suffered from an ad-
verse employment action.
That leaves causation, often the most difficult element.
And here Kurtzhals has not met his burden to raise a genuine
dispute over the question whether unlawful discrimination
on the basis of his PTSD was the “but for” cause of the adverse
employment action. In other words, could a reasonable juror
conclude that he would not have suffered the same adverse
8 No. 19-3111
employment action if he were not disabled and everything
else had remained the same? Graham v. Arctic Zone Iceplex,
LLC, 930 F.3d 926, 929 (7th Cir. 2019) (quoting Ortiz v. Werner
Enters., Inc., 834 F.3d 760, 764 (7th Cir. 2016)).
Sheriff Smith’s stated reasons for placing Kurtzhals on ad-
ministrative leave and ordering a fitness-for-duty evaluation
were that Kurtzhals violated the County’s Workplace Vio-
lence Policy when he threatened Rhead with physical vio-
lence; that Kurtzhals previously had reacted angrily to being
passed over for a promotion; and that Kurtzhals might pose a
threat to his colleagues or members of the public. None of
these reasons explicitly mentions PTSD. Instead, the focus is
on Kurtzhals’s unprofessional conduct.
Kurtzhals asserts that these reasons are all pretextual and
are intended to hide Smith’s true motivation for ordering the
fitness-for-duty evaluation: Kurtzhals’s PTSD. “In evaluating
pretext, the question is not whether the employer’s stated rea-
son was inaccurate or unfair, but whether the employer hon-
estly believed the reason it has offered to explain the [action].”
Graham, 930 F.3d at 929 (internal quotation marks omitted).
Kurtzhals says that Smith and Multhauf are lying when they
deny that they knew about Kurtzhals’s PTSD when they de-
cided to put him on administrative leave. Further, he finds it
telling that they were silent when he asked if his PTSD was a
motivating factor (they dispute that he asked this). He also ar-
gues that their decision not to discipline Rhead shows that
they did not truly think a mild violation of the Workplace Vi-
olence Policy necessitated a fitness-for-duty evaluation.
The problem for Kurtzhals is that he did not offer any evi-
dence to support his claim of pretext. There is no competent
evidence that Smith and Multhauf knew about Kurtzhals’s
No. 19-3111 9
PTSD; we have only Kurtzhals’s statement that two other of-
ficers, Gunness and Bygd, told him that they would tell Smith
about his condition. This is too remote. In addition, assuming
for summary judgment purposes that Kurtzhals did ask Smith
and Multhauf if their decision was based in part on his PTSD,
their silence falls well short of an affirmative “yes.” And even
if we infer from their silence that they both knew about
Kurtzhals’s PTSD and took it into account, Kurtzhals still does
not meet the “but for” causation standard. Contrary to
Kurtzhals’s argument that he and Rhead acted in a compara-
ble fashion and should have been treated similarly, the record
reflects that only Kurtzhals explicitly threatened physical vio-
lence. Rhead may have behaved in an intimidating fashion to-
wards Kurtzhals, but their behavior was not identical. There
is no evidence to suggest that Smith did not genuinely and
reasonably see a difference between the two.
In sum, Kurtzhals has not provided enough evidence to
allow a reasonable juror to conclude that his PTSD was the
“but for” cause of Smith’s decision to put him on administra-
tive leave and order a fitness-for-duty evaluation. The district
court thus correctly granted summary judgment to the
County on this count.
B
Section 12112(d)(4)(A) of the ADA says that an employer
“shall not require a medical examination and shall not make
inquiries of an employee as to whether such employee is an
individual with a disability or as to the nature or severity of
the disability, unless such examination or inquiry is shown to
be job-related and consistent with business necessity.”
42 U.S.C. § 12112(d)(4)(A). This provision applies to all em-
ployees, with or without an actual or perceived disability.
10 No. 19-3111
An “examination is job-related and consistent with busi-
ness necessity when an employer has a reasonable belief
based on objective evidence that a medical condition will im-
pair an employee’s ability to perform essential job functions
or that the employee will pose a threat due to a medical con-
dition.” Coffman v. Indianapolis Fire Dep’t, 578 F.3d 559, 565
(7th Cir. 2009). “[I]nquiries into an employee’s psychiatric
health may be permissible when they reflect concern for the
safety of employees and the [email protected].” Id. (internal quo-
tation marks omitted).
Because Kurtzhals was a police officer and responsible for
public safety, his “well-being was essential not only to [his]
safety but to the public at large; thus, the Department had a
particularly compelling interest in assuring that [he] was both
physically and mentally fit to perform [his] duties.” Id. This
“special work environment” necessitates greater leeway for
supervisors to order job-related fitness-for-duty evaluations.
Id.; see also Krocka v. City of Chicago, 203 F.3d 507, 515 (7th Cir.
2000) (“It was entirely reasonable, and even responsible, for
[the police department] to evaluate [the officer’s] fitness for
duty once it learned that he was experiencing difficulties with
his mental health.”); Watson v. City of Miami Beach, 177 F.3d
932, 935 (11th Cir. 1999) (“In any case where a police depart-
ment reasonably perceives an officer to be even mildly para-
noid, hostile, or oppositional, a fitness for duty examination
is job related and consistent with business necessity.”).
Kurtzhals argues that a fitness-for-duty evaluation was
not consistent with business necessity in his case because
“heated exchanges with voices raised and the use of swear
words were not unusual in the department,” and other em-
ployees had committed worse misconduct in the past and not
No. 19-3111 11
been ordered to get an evaluation. The Office did not have a
normal practice of ordering fitness-for-duty evaluations for
current employees and, in Kurtzhals’s view, his conduct was
far from egregious enough to warrant one. He also empha-
sizes that Smith did not order Rhead to get an evaluation and
that Dale, the outside attorney, thought a fitness-for-duty
evaluation for Kurtzhals was an overreaction. But there was
no one right answer in this situation. Kurtzhals has no way of
showing that Sheriff Smith did not genuinely believe that
Kurtzhals’s conduct was more problematic than Rhead’s. And
Dale’s recommendations were just that—advice that the Sher-
iff was not obliged to accept. Further, the Office’s past practice
of not asking for psychological evaluations when they might
have been warranted did not preclude Smith from ordering
an evaluation in Kurtzhals’s case. There is no dispute that
Kurtzhals threatened Rhead and in so doing violated the
Workplace Violence Policy. A reasonable person could see
this as evidence that Kurtzhals had a short fuse and might lash
out again at a colleague or a member of the public.
Sheriff Smith was responsible for addressing the fallout
from the altercation between Kurtzhals and Rhead. He might
have chosen to let well enough alone, and that too might have
been a reasonable response. But he chose to draw a line be-
tween physical threats and verbal abuse and to call for a fit-
ness examination only for the former. Nothing in the ADA
forbids this line, and so summary judgment was proper on
this count as well.
III
Kurtzhals implicitly threatened physical violence against
a colleague in violation of Dunn County’s Workplace Vio-
lence Policy. There is no evidence that his PTSD, rather than
12 No. 19-3111
his inappropriate conduct, was the “but for” cause of Sheriff
Smith’s decision to place him on administrative leave and or-
der a fitness-for-duty evaluation. This decision was reasona-
ble and consistent with business necessity. We therefore
AFFIRM the district court’s grant of summary judgment to the
County.
|
IN THE UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEWMEXICO
In RE: DIANE FOSTER § Case Number: 19-10420-DTT-7
§
Debtor(s) § Chapter: 7
REQUEST FOR NOTICE UNDER BANKRUPTCY RULE 2002
PLEASE TAKE NOTICE THAT Capital One Auto Finance, a division of Capital One, N.A. hereby gives notice as follows:
Pursuant to 11 U.S.C. §342(f)(1), AIS Portfolio Services, LP hereby requests that:
(i) all notices given or required to be given in the case; and
(ii) all pleadings and correspondence served or required to be served in this case,
regarding Capital One Auto Finance, a division of Capital One, N.A. should be directed to AIS Portfolio Services, LP
at the following mailing address effective immediately:
Attn: Capital One Auto Finance, a division of Capital One, N.A. Department
AIS Portfolio Services, LP
Account: XXXXXXXXX0444
4515 N Santa Fe Ave. Dept. APS
Oklahoma City, OK 73118
This request encompasses all notices, copies and pleadings referred to in Rules 2002, 9007 or 9008 of the
Bankruptcy Rules, including, without limitation, notices of any Orders, Motions, Demands, Complaints, Petitions,
Pleadings, Requests, Applications, Schedules, Statements, Plans, and any other documents brought before this court
in this case, whether formal or informal, written or oral, or transmitted or conveyed by mail, delivery, telephone,
telecopier, telex, or otherwise which affects or seeks to affect the above case.
Respectfully submitted,
/s/ REJOY NALKARA
REJOY NALKARA
Claims Processor
Bankruptcy Servicer for Capital One Auto Finance, a division of
Capital One, N.A.
AIS Portfolio Services, LP
4515 N Santa Fe Ave. Dept. APS
Oklahoma City, OK 73118
770-239-7224, Fax 770-239-7224
[email protected]
File # 1240899
Case 19-10420-t7 Doc 10 Filed 03/05/19 Entered 03/05/19 04:07:24 Page 1 of 1
|
412 Pa. 156 (1963)
Hosfeld Estate.
Supreme Court of Pennsylvania.
Argued April 23, 1963.
October 9, 1963.
*157 Before BELL, C.J., MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.
Donald F. Spang, with him R. Solomon Bear, for appellant.
Allan L. Cutshall, with him Ralph J. Althouse, Jr., for appellees.
*158 OPINION BY MR. JUSTICE BENJAMIN R. JONES, October 9, 1963:
Sallie R. Hosfeld (decedent), a resident of Berks County, died July 8, 1959. By the terms of her will, her estate was given to her son Clyde L. Hosfeld (Hosfeld) and her daughter, Effie Herber, share and share alike, and Hosfeld was appointed executor.
When Hosfeld filed his first and final account in the Orphans' Court of Berks County he failed to include among the assets of decedent's estate three bank accounts: (1) a savings account in the Hamburg Savings and Trust Company, held in the name of "Hosfeld's General Store, Sallie Hosfeld, Proprietor", wherein there was a balance of $11,591.91 on the date of decedent's death [Hamburg Account];[1] (2) a savings account in the Fogelsville National Bank, held in the names of "Hosfeld, Mrs. Sallie R., or Clyde L. Hosfeld or Mrs. Effie Herber", wherein there was a balance on the date of decedent's death of $6,679.88 [Fogelsville Account];[2] (3) a savings account in the Farmers Bank of Kutztown, held in the names of "Mrs. Sallie R. Hosfeld, or Mr. Clyde L. Hosfeld or Mrs. Effie Herber", wherein there was a balance on the date of decedent's death of $6,298.82 (Kutztown account).
Because of Hosfeld's failure to list these bank accounts as estate assets, Mrs. Herber filed exceptions to the account and, after hearing, the Orphans' Court of Berks County held that all three bank accounts were decedent's sole property and surcharged Hosfeld in the amounts of the balances of these accounts.[3] From that decree this appeal was taken.
*159 Hamburg Account
For many years subsequent to the death of her husband, the decedent continued the operation of a general store in Stoney Run, Berks County, wherein her son, Hosfeld, was employed. On November 14, 1958, while ill in a hospital, decedent executed a bill of sale which was witnessed by her minister and Mrs. Herber and which purported to convey to Hosfeld for $7,500 the store business. This bill of sale recited the sale by decedent to Hosfeld of: (a) "The entire inventory, furniture, fixtures, business assets and goodwill as a going concern of the general store business" including "all book accounts and accounts receivable, outstanding contracts, and all assets and property of any kind or nature whatsoever belonging or appertaining to said business"; (b) a certain described truck; (c) 22 shares of the capital stock of Lehigh Wholesale Grocery Company. Hosfeld now claims that the Hamburg account was included among the assets of the general store transferred to him by this bill of sale.
After a review of the testimony, an examination of the provisions of the bill of sale and the applicable law, we are in agreement with the court below wherein it states: "[Hosfeld] presumably contends that the words `book accounts and accounts receivable, outstanding contracts and all assets and property of any kind or nature whatsoever belonging or appertaining to said business' include the bank account of the vendor, Sallie R. Hosfeld, the decedent, even though the consideration for the contract is only $7,500.00 whereas the bank account deposit at the time of its withdrawal by [Hosfeld] was $11,591.91. The intention of the parties to this contract must be ascertained not only from the actual words contained in the agreement or bill of sale but all the surrounding circumstances. Applying the rule of construction known as ejusdem generis, we find that it was the intent of the parties that the words `all *160 book accounts and accounts receivable, outstanding contracts, and all assets and property of any kind or nature whatsoever' are limited to book accounts, contracts, and assets `belonging or appertaining to said business' and do not include other property or assets of the vendor, Sallie R. Hosfeld, the decedent. We are the more persuaded of the correctness of this interpretation when the disparity between the consideration for the contract and the amount of the bank deposit are recalled. Accordingly, we conclude that [Hosfeld] did not purchase the bank account of the decedent in the Hamburg Savings & Trust Company. . . ."
Insofar as the decree of the court below finds that the Hamburg account was at the time of death decedent's sole property and that the executor should be surcharged in the amount of the balance of said account, the decree is affirmed.
Fogelsville Account
This account was opened on May 9, 1958 in the names of "Hosfeld, Mrs. Sallie R., or Clyde L. Hosfeld or Mrs. Effie Herber" with an initial deposit therein of $5,246.55. On June 30, 1958 there was an additional deposit of $1,318.04. In connection with this account there was no signature card. Subsequent to decedent's death, Hosfeld withdrew the entire balance of $6,679.88 from the account.
In connection with this account the court below correctly stated: "It will appear from the foregoing, therefore, that the determination of the ownership of a joint bank account with right of survivorship depends upon (a) the contract entered into by the depositors, and (b) whether a completed gift inter vivos has been made." The court then went on to say: "In the face of the absence of any evidence of the intent of the parties when the account was opened and in the absence further of any evidence of a gift by the decedent to *161 her children, we find that the said account . . . was and is the property of Sallie R. Hosfeld and her estate.. . ."
An examination of this record reveals an error in the court's findings: the insufficiency of the evidence as to the initial or original ownership of the moneys deposited in this account. With one exception, the record is silent in proof that the money originally deposited in this account was decedent's money and, by the same token, there is absolutely no evidence whatsoever that the money deposited was that of Hosfeld. There was evidence that the decedent had requested Mrs. Herber to "check on it [the bank account] to see if he [Hosfeld] put it in the bank like he had told her", and that "the $5,000 came from the Walter Wessner sheriff's sale". Appellee also urges that "Paragraph 6(a) of the Statement of Fact filed by the Objector to the Account" reveals that the initial deposit in this account represented the "proceeds of Sheriff's Sale as of No. 2 April Term, 1958, E.D. payment having been made by the Sheriff of Berks County to Sallie R. Hosfeld, Judgment Lien Creditor, in full of Judgment to No. 161 August Term, 1954, J.D." Such a "Statement of Fact" does not appear on the record presented to us. In Commonwealth v. One 1941 Plymouth Sedan, 160 Pa. Super. 575, 577, 52 A.2d 240, Judge (later Justice) ARNOLD, in remanding the record to the court below, stated: "The trial judge knew the facts but unfortunately they were not placed upon the record."[4] If the facts are as stated in this so-called "Statement of Fact" and, if decedent received from this sheriff's sale the money which she later caused to be deposited in this account, such facts must be proved of record.
*162 In its opinion, the court below stated: "Five thousand dollars of the deposit in the Fogelsville bank were the proceeds of a sheriff sale in which Walter Wessner was the defendant" and "Of the balance of $6,679.88 which was withdrawn by [Hosfeld] $5,000 thereof were the proceeds of a sheriff sale which the decedent had requested her son [Hosfeld], to obtain from the Sheriff of Berks County and deposit in the said account."
It is hornbook law that findings by a court must be based on proved facts or inferences therefrom (Macchia v. Megow, 355 Pa. 565, 50 A.2d 314; U.S. Gypsum Co. v. Birdsboro Steel Foundry, 160 Pa. Super. 548, 52 A.2d 344) and possess some evidentiary support. The difficulty we encounter in the case at bar lies in the fact that our research of this record reveals only a scintilla of evidentiary support for the findings of the court that decedent received from a sheriff's sale proceeding money which allegedly she caused to be deposited in this account when it was opened. Upon such basis a finding of initial or original ownership by decedent of the money which went into this account cannot be sustained. Whether the moneys deposited in this account were deposited by decedent, by Hosfeld or by Mrs. Herber is simply a matter of conjecture. It is essential before any conclusion can be reached as to the existence or nonexistence of a gift inter vivos that the identity of the donor, if there be a donor, be established by proof as to the original ownership of the moneys in this account.
From the facts and inferences therefrom which do appear of record, we are convinced that equity and justice require that further opportunity be given to the parties to prove, if possible, the initial or original ownership of the moneys deposited in this account. Therefore, it is imperative that the record be remanded to the court below for the purpose of ascertaining, if possible, the source of the moneys deposited in this account. *163 If it be established that the decedent originally owned the moneys deposited in this account, then the court below is correct in concluding that there was no gift inter vivos under the applicable law. Absent such proof of original ownership of the moneys deposited in this account, we fail to see how any finding of the existence or nonexistence of a gift inter vivos can be made.
Decree affirmed as to the Hamburg account and decree vacated as to the Fogelsville account and the record remanded to the court below to enable the parties to establish, if they can, the initial or original ownership of the moneys deposited in this account. Costs to abide the event.
NOTES
[1] Although not listed as an estate asset, the existence of this account was noted in the executor's account.
[2] This bank account was neither listed as an estate asset or noted in the executor's account.
[3] The Kutztown account is no longer in litigation; settlement thereof has been made.
[4] Cf: Com. ex rel. Branch v. Branch, 175 Pa. Super. 373, 104 A.2d 183.
|
UNITED STATES COURT OF APPEAL FOR THE FEDERAL CIRCUIT
August 10, 2009
ERRATA
Appeal No. 2008-5034 WEEKS MARINE V US
Decided: August 10, 2009 Precedential Opinion
Please make the following change:
On page 15, line 19, the word “an” immediately after “contemplates” should be
deleted.
|
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]
MEMORANDUM OF DECISION ON MOTION FOR SUMMARY JUDGMENT
Nicholas Cirillo, the Plaintiffs' decedent (Decedent), died from injuries sustained while he was working for the Defendant Peabody (Employer). Mr. Cirillo was struck from behind by a car while riding on the rear of a vehicle which was driven by the Defendant Sardo and leased by the Defendant DL Peterson Trust. Because Decedent was injured in the course of employment, compensation benefits were paid pursuant to the Workers' CT Page 7089 Compensation Act. Plaintiffs claim that the Employer is also liable under a common law tort action. The Employer moves for summary judgment, claiming that Connecticut General Statutes 31-284(a), the "exclusivity" provision of the Act, bars such negligence actions against the Employer. In addition, the Employer contends that Connecticut General Statutes 31-293(a) does not support Plaintiffs' claim because the exclusivity provision controls.
The issue before the court is whether the Workers' Compensation Act bars the Plaintiffs from bringing this negligence lawsuit against the Employer, or whether the exception to the exclusivity provision of the Workers' Compensation Act applies.
In order to bypass the exclusive recovery protection under the Workers' Compensation Act, it is necessary for an employee to prove that the employer's alleged intentional act or conduct was designed to cause the injury that resulted. In other words, the employer must deliberately plan the act that produces the injury as well as intend for the injurious consequences to occur Because the Plaintiffs have failed to show any evidence by Counter Affidavit that the Defendant Employer intended to cause the Decedent's injury and death, summary judgment is granted in favor of the Defendant employer.
Connecticut General Statutes 31-284(a), known as the "exclusivity" provision, states in relevant part:
"An employer shall not be liable in any action for damages on account of personal injury sustained by an employee arising out of and in the course of his employment or on account of death resulting from personal injury so sustained, but an employer shall secure compensation for his employees as provided under this chapter. . ."
31-293(a) of the Statutes enables an employee to sue a fellow employee if the wrong was "wilful or malicious or the action is based on the fellow employee's negligence in the operation of a motor vehicle. . ." However, 31-293(a) does not apply to employers. See Velardi v. Ryder Truck Rental, Inc., 178 Conn. 371 (1979).
The Workers' Compensation Act generally acts as a total bar to actions by employees against their employers regarding work related injuries. See Suarez v. Dickmont Plastics Corporation, 30 Conn. App. 630, CT Page 7090 633 (1993). However, the Connecticut Supreme Court created an exception to the exclusivity provision in Jett v. Dunlap, 179 Conn. 215 (1979). In that case, an employee, who had sustained injuries from an assault by another employee at his workplace, sought to recover further damages from the employer in a tort action, even though he had been compensated under the Workers' Compensation Act. Id., 215-16. The Court ruled against the plaintiff because the employer did not intentionally direct the defendant employee or authorize the assault. Id., 219. In dicta, the Court stated, however, that "[w]here such wilful or serious misconduct is engaged in by an employer, as identified by the standard we set forth today, then a plaintiff may pursue common-law remedies." Id., 221. The Court limited this exception to the exclusivity provision only to instances when an employer commits an intentional tort. Id., 218-21. See Suarez, supra, 636.
The Court set out a test for the Jett exception in Mingachos v. CBS, Inc., 196 Conn. 91 (1985). In accordance with the Restatement 2d of Torts, the Court said an employer's "intentional or deliberate act or conduct alleged must have been designed to cause the injury that resulted." Id., 102. Intent is broader than a desire to bring about certain consequences; it extends to consequences "which the actor believes are substantially certain to follow" from his actions. Id., 101.
In that case, the plaintiff sought to extend the narrow Jett exception to include recklessness. Id., 100. The Court distinguished "reckless" from "intentional" misconduct. While intent is a motivating factor behind a reckless act, the actor does not necessarily intend the harm or consequences that ensue. Id., 103. In finding that the plaintiff failed to demonstrate intentional injury, the Court stated in relevant part:
"[T]he common-law liability of the employer cannot . . . be stretched to include accidental injuries caused by gross, wanton, wilful, deliberate, intentional, reckless, culpable, or malicious negligence . . . or other misconduct of the employer short of genuine intentional injury." (Citation omitted.) Mingachos, Id., 108.
In order to meet the exception, it is necessary to prove that the intentional or deliberate act or conduct alleged was designed to cause the injury that resulted. Id., 102. It is the CT Page 7091 nonaccidental nature of the injury that ultimately triggers the Jett exception. Id., 108. See Suarez, supra, at 636.
The present facts are similar to those in Mingachos. While the Plaintiffs may claim that because the Defendant Employer knew the risks involved in highway construction and, consequently, did not provide either police escorts or warning lights, that the Employer committed an intentional act, the Plaintiffs have not satisfied the Mingachos standard, namely that the employer intended to cause the decedent's fatal injury or death or that the decedent's death was substantially certain to follow its choice to allow such operations without the escort or lights.1
In its analysis of the Jett exception, the Court in Mingachos discussed policy reasons for the Workers' Compensation Act. Because the Act was enacted to compensate an employee for injuries sustained on the job, regardless of the employer's fault, construing the Jett exception broadly would diminish the Act's objectives. Id., 97.
To determine whether a party meets the Mingachos test, the defendant must intend: (a) the act producing the injury: and (b) the resulting injury. (Emphasis added.) Nolan v. Borkowski, 206 Conn. 495,501 (1988), citing Rogers v. Doody, 119 Conn. 532, 534 (1935).2
The plaintiffs have not claimed, by counteraffidavit, that the Employer intentionally refrained from providing safety precautions, or that the Employer wanted to fatally harm the Decedent. To defeat Summary Judgment there would have to be some issue of fact created by counteraffidavit as to whether the employer's conduct fell within the Jett/Mingachos exception to the exclusivity provision of the Workers' Compensation Act, General Statutes 31-275 et seq. Reckless conduct is not enough because the narrow Jett/Mingachos exception to exclusivity of the Workers' Compensation remedy requires pleading and evidence that the employer believed fatal injury to Mr. Cirillo was substantially certain to follow from the defendant employer's failure to provide a police escort or warning lights. See DiNicola v. Bayer Cadillac Oldsmobile, Inc., 12 C.L.T. 8 (1985).
For all these reasons, the Defendant Employer's motion for summary judgment is granted.
FLYNN, J. |
25 Cal. 2d 264 (1944)
ROY S. STOCKTON, Respondent,
v.
DEPARTMENT OF EMPLOYMENT OF THE STATE OF CALIFORNIA, et al., Appellants.
Sac. No. 5639.
Supreme Court of California. In Bank.
Nov. 24, 1944.
Earl Warren, Attorney General, Robert W. Kenny, Attorney General, and John J. Dailey, Deputy Attorney General, for Appellants.
Anthony J. Kennedy and Carl Kuchman for Respondent. *267
TRAYNOR, J.
From December 13, 1934, until June 14, 1940, petitioner held the position of Chief of the Division of State Employment Agencies, in the classified civil service of the state, with permanent civil service status. This division was originally in the Department of Industrial Relations, but was transferred on July 1, 1936, to the Department of Employment. On June 14, 1940, the California Employment Commission passed a resolution abolishing the division, combining its functions with those of the Director of the Department of Employment, and ordering the lay-off of petitioner. Petitioner's name was retained on the payroll until July 23, 1940, to enable him to receive compensation for his accumulated earned vacation time, and was placed on the lay-off list as of July 23, 1940. The State Personnel Board, on petitioner's appeal to it under section 172(k) of the State Civil Service Act (Stats. 1937, p. 2085, as amended; Deering's Gen. Laws, 1941 Supp., p. 1918, Act 1404) held that the lay-off was improper on the ground that respondents failed to comply with section 172, and ordered petitioner's reinstatement with back salary. Respondents' petition for rehearing was denied. They made no attempt to test the validity of the Personnel Board's order in a judicial proceeding but refused to comply with it. A petition for a writ of mandamus was then filed with the Superior Court of Sacramento County to compel compliance with the board's order. Respondents demurred to this petition on the grounds that it did not state a cause of action and that there was a misjoinder of parties. The demurrer was overruled; the respondents answered; and upon the trial the court made findings in favor of petitioner and entered its judgment that a peremptory writ of mandamus issue directing the reinstatement of the petitioner in accord with the order of the Personnel Board. While the case was pending in the superior court, the Division of Employment Agencies and all employees therein were inducted into the employment of the federal government with civil service status. The Director of the Department of Employment refused to perform the acts necessary to effect petitioner's induction. The superior court's judgment included provisions that the director perform such acts. Respondents appeal from the judgment.
[1] Once the decision of the State Personnel Board becomes final because the aggrieved party has failed either to *268 ezhaust his administrative remedies or to seek judicial redress, the courts will not review the merits of the controversy, if the board acted within its jurisdiction, for the decision is then immune from objections in a collateral proceeding. (Alexander v. State Personnel Board, 22 Cal. 2d 198 [137 P.2d 433]; Menzel Estate Co. v. City of Redding, 178 Cal. 474, 481 [174 P. 48]; Gurtz v. City of San Bruno, 8 Cal. App. 2d 399, 401 [48 P.2d 142]; Ingraham v. Union Stockyards Co., 64 F.2d 390, 392.) The question on this appeal therefore is whether the Personnel Board acted within its jurisdiction.
[2] Section 172(a) of the State Civil Service Act provides: "Whenever it is necessary because of lack of work or lack of funds or whenever it is advisable in the interests of economy to reduce the staff of any State agency, the appointing power may lay off employees according to the procedure set forth in this act and the rules of the board." Section 172 and rule 16, sections 1-14, of the "Rules and Regulations of the State Personnel Board" adopted pursuant to section 35 of the State Civil Service Act and article XXIV of the California Constitution, prescribe the procedure for the lay-off of employees. Section 172(k) of the State Civil Service Act provides: "Any employee may appeal to the board within 30 days of receiving notice of lay-off on the grounds that the procedure herein prescribed has not been complied with or that the lay-off has not been made in good faith or was otherwise improper. The board shall within 30 days of such appeal hold such hearing or investigation as it may deem necessary. The board may also conduct such hearing or investigation within 30 days of receiving notice of lay-off on its own motion. In rendering a decision as a result of any hearing or investigation held pursuant to this subdivision the board may order the reinstatement of the employee with or without pay if it appears that the proper procedure has not been followed or that the lay-off was not made in good faith or was otherwise improper." Under these provisions the State Personnel Board clearly had jurisdiction to determine whether petitioner's lay-off was improper.
[3] Respondents contend, however, that the abolition of the Division of Employment Agencies by the California Employment Commission entailed the abolition of petitioner's position, that his lay-off followed of necessity, and that the *269 State Personnel Board had no jurisdiction to order his reinstatement to a position that no longer existed. Section 93 of the California Unemployment Insurance Act (Stats. 1935, ch. 352; Deering's Gen. Laws, 1937, Act 8780d) provides: "On July 1, 1946, the Division of State Employment Agencies of the Department of Industrial Relations shall become and remain the Division of State Employment Agencies in the Department of Employment. All persons employed in such division and the records and property thereof shall, upon such change, become the employees, records and property of the Department of Employment. All persons employed in any capacity in such division, shall continue and remain in such capacity in such division after the change, subject to the power of the commission as the governing body of the department to abolish such division, change old divisions or create new divisions, change duties and powers of such division, or impose upon it new and additional powers and duties." The resolution adopted by the California Employment Commission on June 14, 1940, provided in part: "The existing Division of State Employment agencies, as such, (otherwise known as the Division of Employment Service) of the Department of Employment is hereby abolished; and it is hereby ordered that lay-offs shall be made forthwith from the positions of offices of Chief and Associate Chief of said Division. The aforementioned lay-offs are hereby expressly declared to be for the purpose of economy and increased efficiency of operations." It is clear that the California Employment Commission had authority under section 93 of the Unemployment Insurance Act to create, abolish, or recreate divisions from time to time. There is nothing exceptional about such a power, for most state statutes creating departments contain provisions similar to section 93. Moreover, section 350 of the Political Code, a general provision applicable to all departments, authorizes the head of each department, with the consent of the Governor, to consolidate, abolish, or create divisions within the department. The State Personnel Board has no jurisdiction to determine when or under what conditions divisions may be abolished, for the State Civil Service Act contains no provision authorizing it to review the action of a state department in abolishing divisions in the department.
[4] The abolition of a division or position, however, does not automatically separate the employees in the division or *270 the employee in the position from the state service. The power of a department head to abolish a position is distinct from his power to lay off an employee, just as the creation of a position is distinct from the employment of a person to fill the position. The creation and abolition of divisions or positions within a department are matters of departmental organization. The employment or lay-off of employees relates to the tenure of employees, the classes of positions in the department, the duties to be performed by the individual employees, and the appropriate division of work between classes. The employment of persons to fill positions and their classification are governed by articles 4 and 7 of the State Civil Service Act. The separation of employees from the state service, including their lay-off, is governed by article 9 ( 170-173). Section 170 provides that the tenure of a permanent employee holding a position shall be during good behavior and that the employee can be separated from the state service by lay-off, leave of absence, suspension, resignation, removal or retirement. Section 172 covers lay-offs, including lay-offs resulting from the abolition of positions. Subdivision (a) of that section specifically provides for the lay-off of employees whenever it is necessary because of lack of work or funds or whenever it is advisable in the interest of economy to reduce the staff of any state agency "according to the procedure set forth in the Act and the rules of the Board." Subdivision (b) provides that the duties performed by the employee or employees so laid off may be assigned to any other employee or employees in the state agency holding positions in appropriate classes. Subdivision (d) provides that the lay-off shall be made in accordance with the relative efficiency and seniority of the employee or employees of the class in which the lay-off is to be made as determined by seniority and by performance reports on file with the board. Subdivision (e) provides that in the case of abolition of position the employee or employees in the class under consideration having the lowest combined scores for efficiency and seniority shall be laid off up to the number of positions to be abolished. Subdivision (f) provides that when an employee has previously served the state with permanent status in any class below that of the class under consideration or its equivalent in any previous classification, the employee shall be afforded the option of being demoted to the lower *271 class, in lieu of being laid off, to replace the employee in the lower class having the lowest score for efficiency and seniority if that score is lower than that of the employee being demoted. Subdivision (g) provides that any employee replaced by such demotion who has previously served the state with permanent status in the class or its equivalent in any previous classification below that in which he was serving at the time of replacement shall have the same option of demotion as though his position were abolished. Subdivision (k), quoted above, provides for the appeal by the employee to the personnel board in the event of his lay-off.
[5] It is plain from the foregoing provisions that the abolition of a position does not automatically result in the lay-off of the employee holding the position. If he is in the appropriate class of employees to which his duties would be assigned upon the abolition of his position, his efficiency and seniority ratings might be such that not he but some other employee in that class would be laid off. (Section 172(b) (e).) He may elect demotion pursuant to section 172(f), and in any event he is entitled to an appeal to the State Personnel Board to determine whether the prescribed procedure for his lay-off was followed and whether his lay-off was made in good faith and was otherwise proper.
In support of their contention that the abolition of petitioner's position effected his separation from the state service as a matter of law, respondents rely on Livingstone v. MacGillivray, 1 Cal. 2d 546 [36 P.2d 622]; O'Neill v. Williams, 53 Cal. App. 1 [199 P. 870]; Foley v. City of Oakland, 33 Cal. App. 128 [164 P. 419]; State v. City of Seattle, 74 Wash. 199 [133 P. 11]; and People v. Hayes, 119 N.Y.S. 808. None of those cases, however, involved the application of the State Civil Service Act. They all relate to statutes or city charters providing that no employee shall be removed except for cause, which shall be investigated, and that the employee shall be given the reasons for his suspension and an opportunity to answer them. They do not involve statutes or charter provisions, which, like the State Civil Service Act, prescribe a procedure in the case of separations from the service for reasons of economy. (See 111 A.L.R. 438 and cases there cited including Kabisius v. Board of Playground & Recreation, 4 Cal. 2d 488 [50 P.2d 1040]; Hrabak v. Los Angeles, 10 Cal. App. 2d 383 [51 P.2d 1136].) In contrast to such *272 provisions, the State Civil Service Act has broadened the protection to state employees by including in the statutory plan, distinct from any procedure concerning discipline, a special lay-off procedure in the event the separation of the employee from the service is occasioned by the abolition of positions or other economy measures.
Section 172(k) of the State Civil Service Act provides that "in rendering a decision as a result of any hearing or investigation held pursuant to this subdivision the board may order the reinstatement of the employee with or without pay, if it appears that the proper procedure has not been followed or that the lay-off was not made in good faith or was otherwise improper." [6a] The abolition of a position by the respondents does not affect the State Personnel Board's power to order the reinstatement of the former holder of the position where the duties of his position are still performed but by persons who, according to the classifications made by the board under the State Civil Service Act, are not entitled to perform those duties. [7] The State Personnel Board has exclusive jurisdiction to classify positions in the state civil service. (Cal. Const., art. XXIV, 2(c); State Civil Service Act, 60-63.) [8] When specifications of a class are adopted, the employee within that class may perform the duties of that class; he may not perform the duties of a different class; nor may an employee who is not in that class perform those duties. (State Civil Service Act, 114.) In the memorandum of points and authorities filed by the board as amicus curiae at the request of the trial court, the board has set forth that petitioner's position was in a class that required the performance of certain specified duties listed in the complaint. The board takes the position that no other employee could perform those duties and that after the abolition of petitioner's position the duties were illegally performed by other persons, making it necessary for the board to order the reinstatement of petitioner. [6b] Whatever the merits of the board's decision, which we do not pass upon in this attack upon its order, it is clear that the abolition of the position did not deprive the board of jurisdiction to order petitioner's reinstatement under section 172(k) of the State Civil Service Act. The board has determined that petitioner's lay-off was improper and that his employment in the state service was *273 not terminated. [9] Since the branch of the service in which he was employed has meanwhile become part of the federal service, petitioner is entitled under the board's order to be certified to the federal government for induction into the federal service on the basis of his former position.
[10] Respondents contend that petitioner cannot have relief by mandamus against the Department of Employment, its executive director, and the other respondents, on the ground that the California Employment Commission, which abolished petitioner's position and instructed the Director of the Department of Employment to order the lay-off, is an indispensable party to the action. Pursuant to section 88 of the Unemployment Act of the Employment Commission appointed a Director of the Department of Employment and authorized him "to perform or supervise the performance of all duties required under the Civil Service Act and the rules and regulations of the State Personnel Board with the assistance of the departmental personnel officer." Such an authorization is recoginzed for the purposes of the Civil Service Act by section 234 thereof providing: "Whenever, by the provisions of this act, a power is granted or a duty imposed upon an appointing power, the power may be exercised or the duty performed by a deputy of the appointing power or by a person authorized pursuant to law by him, unless it is expressly otherwise provided." Under the appointment of the Employment Commission, the director was the head of the Department of Employment vested with all duties relating to the state civil service and was therefore the only necessary party defendant to carry out the order of the State Personnel Board and the order of the court. (See Barber v. Mulford, 117 Cal. 356 [49 P. 206]; City and County of San Francisco v. Linares, 16 Cal. 2d 441 [106 P.2d 639]; Taylor v. Burks, 6 Cal. App. 225 [91 P. 814]; Tape v. Hurley, 66 Cal. 473 [6 P. 129]; see, also, California Securities Co. v. State, 111 Cal. App. 258, 261 [295 P. 583].)
The trial court ordered the allowance of petitioner's full salary from July 20, 1940, with no deduction of remuneration from private or public employment that he may have received since that date. [11] It is settled that a civil service employee who has been unlawfully deprived of his position is entitled to recover the amount of his accrued salary during *274 the period he is prevented from performing his duties, less the amount he has received from private or public employment during that period. (State Board of Equalization v. Superior Court, 20 Cal. 2d 467, 474 [127 P.2d 4]; Wiles v. State Personnel Board, 19 Cal. 2d 344 [121 P.2d 673]; Kelly v. State Personnel Board, 31 Cal. App. 2d 443 [88 P.2d 264].) The order of the State Personnel Board that petitioner "be granted his salary" from and after July 20, 1940, must be interpreted in the light of this rule. That part of the judgment of the trial court determining the amount of salary due petitioner for the period since July 20, 1940, is reversed, and the trial court is directed to take evidence as to the remuneration received by petitioner from private or public employment after July 20, 1940, and to deduct any amount so received from the monthly salary for the period covered by such employment, and to enter judgment for petitioner for any balance. In all other respects the judgment is affirmed.
Gibson, C.J., Shenk, J., Curtis, J., Carter, J., and Schauer, J., concurred.
|
518 F. Supp. 1082 (1981)
UNITED STATES of America
v.
Cazmis KOZERSKI.
Crim. No. 81-00023-01-D.
United States District Court, D. New Hampshire.
July 20, 1981.
*1083 *1084 *1085 Helen J. Forsyth, Esq., Asst. U.S. Atty., Concord, N. H., for plaintiff.
Cazmis Kozerski, pro se.
OPINION AND ORDERS
DEVINE, Chief Judge.
Pursuant to the Court's previous Order of June 24, 1981, a hearing on various pretrial motions filed by defendant was held on July 14, 1981.[1] The Court has reviewed the evidence, exhibits, legal memos, pleadings, and other documents on file, and now proceeds to resolution of the issues raised by said motions. For the purposes only of such decision, the factual background of the litigation appears to be as follows.
In May of 1969, defendant Kozerski was convicted in the state courts in Massachusetts for felony offenses committed in violation of the laws of that jurisdiction.[2] Following a period of confinement and parole, defendant was discharged, and in the summer of 1976 he was removed to Swanzey, New Hampshire, where, inter alia, he met Ralph Rines, the Chief of Police. Rines made inquiry of defendant as to whether he had a police record, and, upon receiving a negative answer, persuaded defendant to become a member of the Swanzey police force. Rines neither made nor caused to be made an independent record check of defendant's possible criminal record. Kozerski entered service as a Swanzey police officer in August of 1976, and on the 28th day of that month, he purchased from Bowers Remodeling Co., Inc., of Troy, New Hampshire, a federally-licensed firearms dealer, a certain caliber 38 Colt revolver. Subsequently, at a date unclear, defendant won in the course of a law enforcement officers' raffle a 38 caliber Smith & Wesson revolver.
On or about August 1, 1980, the Cheshire County Sheriff's Department received a complaint to the effect that defendant had been involved in actions which if proven would constitute a felony under New Hampshire laws.[3] In the course thereof a *1086 record check run with the assistance of the New Hampshire State Police revealed defendant's previous felony record in Massachusetts. Accordingly, on August 6, 1980, Sheriff Lysitt telephoned Chief Rines at the latter's place of employment and requested that he contact defendant and that both of them attend a meeting that evening in the Sheriff's office. When defendant arrived at the Sheriff's office at approximately 7:30 p. m. on August 6, 1980, Lysitt made inquiry as to his identity, and then read to him his Miranda warnings. Defendant acknowledged his understanding of these rights, claiming he was familiar with them from his duties as a police officer. Defendant executed a "Consent To Search", and was advised by the Sheriff that he was to be arrested for violation of the state law (N.H. RSA 159:3) prohibiting the possession of a firearm by a convicted felon. Chief Rines advised defendant that he was to be suspended from police duty until further notice, and Sheriff Lysitt advised him to remove the blue flashing lights and police radio from his vehicle. Lysitt also advised defendant that his firearms were to be confiscated and that $5,000 cash bail would be required for his court appearance.
Upon announcement of the amount of cash bail, defendant for the first time requested the opportunity to contact counsel, and then telephoned his attorney. The attorney shortly arrived, conferred privately with defendant for ten to fifteen minutes, and then conferred with Sheriff Lysitt and persuaded the latter to reduce the bail requirement to $5,000 personal recognizance.
Although advised of his client's execution of the Consent To Search, neither the attorney nor defendant gave any indication nor made any request of those present to withdraw such. The attorney having left, Lysitt, his deputy, and defendant proceeded to the latter's residence where defendant opened the door and admitted the two sheriffs to what appeared to be the living room. Defendant then went to another part of the residence and returned with the two firearms hereinabove described and gave them to the sheriffs.
Within two weeks of the August 1980 incidents above described, the Cheshire County Sheriff's Department made contact with the Alcohol, Tobacco & Firearms (ATF) Division of the federal government, which conducted a subsequent investigation.[4] The state offenses with which defendant was charged resulted in dismissal by the Keene District Court in September 1980.
1. The Motion to Suppress
Defendant's initial argument is that his Massachusetts convictions were constitutionally invalid, primarily because he received ineffective assistance of counsel. This argument has previously been rejected following hearing (on January 23, 1970, and November 23, 1971, before the Massachusetts Superior Court, and appeal to the Massachusetts Appeals Court, Commonwealth v. Kozerski, 1 Mass.App. 106, 294 N.E.2d 460 [1973], and the Massachusetts Supreme Judicial Court, Commonwealth v. Kozerski, 364 Mass. 833, 305 N.E.2d 830 [1974]). Under such circumstances, the defendant's current reliance on the selected portions of the trial record and appellate counsel's characterization of trial counsel as set forth in the brief filed in his behalf with the Supreme Judicial Court of Massachusetts (Defendant's Exhibit H) is misplaced.
More importantly, this constitutional avenue which defendant seeks to traverse is barricaded to him. In Lewis v. United States, 445 U.S. 55, 100 S. Ct. 915, 63 L. Ed. 2d 198 (1980), the defendant was charged with the knowing receipt and possession *1087 of a firearm in violation of 18 U.S.C. App. § 1202(a)(1).[5] Defendant urged that he had been without counsel when he entered his plea of guilty to the predicate conviction in state court, and this claim was rejected, the Supreme Court holding flatly
that § 1202(a)(1) prohibits a felon from possessing a firearm despite the fact that the predicate felony may be subject to collateral attack on constitutional grounds.
Lewis v. United States, 445 U.S. 55, 65, 100 S. Ct. 915, 921, 63 L. Ed. 2d 198 (1980).
Additionally, the weight of, and what the Court considers to be the better-reasoned, authority is to the effect that 18 U.S.C. § 922(a)(6)[6] is violated by a denial of conviction of a felony, even though the conviction is later claimed or shown to have been unconstitutional. United States v. Johnson, 612 F.2d 305, 306 (7th Cir.1980); United States v. Graves, 554 F.2d 65, 70-72, 75-76, 79-80 (3d Cir.1977) (en banc); United States v. Allen, 556 F.2d 720 (4th Cir. 1977); United States v. Ransom, 545 F.2d 481 (5th Cir.), cert. denied, 434 U.S. 908, 98 S. Ct. 310, 54 L. Ed. 2d 196 (1977); Cassity v. United States, 521 F.2d 1320 (6th Cir.1975); United States v. Edwards, 568 F.2d 68 (8th Cir.1977).
Defendant's second contention is that his arrest on August 6, 1980, was illegal, and that accordingly all evidence procured as a result thereof, including the firearms, the form he executed in the course of purchase of one of such firearms, and all statements given to any law enforcement officers and identification obtained in the course of the initial investigation must be suppressed. This contention is similarly without legal merit. Here, as the Court finds and rules, the Sheriffs had discovered in the course of their investigation of the initial complaint that defendant was possessed of a Massachusetts felony record and, having been given his proper warnings, defendant discussed, although denying its validity, the fact of the conviction, and did admit that he had served time in a Massachusetts prison. More importantly, the defendant was possessed of considerable knowledge of the criminal process (see Defendant's Exhibit I).[7]
The original state criminal complaint filed against defendant concerned an incident on July 4, 1980, when he was observed to be wearing a firearm while engaged in the course of a criminal investigation with a State Police officer and with the complainant, Deputy Sheriff Simmons. Thus, on the evening of August 6, 1980, the Cheshire County Sheriff's Department before commencing any interrogation of defendant was aware that he had a felony conviction record and that he had been wearing a firearm in public despite such record. Plaintiff seeks to urge that, taken out of context, certain language in the recent New Hampshire Supreme Court decision of Kozerski v. Steere (No. 80-454, decided June 10, 1981), demonstrates that his arrest on August 6, 1980, was illegal, and therefore any evidence procured thereafter must be suppressed. At the outset, we point out that Kozerski v. Steere was a civil action wherein defendant, subsequent to dismissal of the State's criminal charges, sought renewal of his license to carry a firearm pursuant to *1088 the State statute, RSA 159. Fairly read, the language upon which defendant relies (contained on page 3 of the slip opinion, and hereinafter emphasized) does not serve the purpose which he urges. As relevant, the language is as follows:
We reject the plaintiff's argument that his prior felony conviction cannot be considered by the selectmen or the district court because it occurred outside of this State. The fact that the conviction was in another state does not prevent its use for otherwise proper purposes.
We also reject the plaintiff's attempt to invoke the exclusionary rule. The plaintiff was arrested and charged with being a convicted felon in possession of a firearm in violation of RSA 159:3 even though he was exempt as a police officer under RSA 159:5. The charges were dismissed in September 1980 by the district court. The plaintiff alleges that the information regarding his felony conviction came to the selectmen after his arrest under RSA 159:3. We fail to see how this brings into play the exclusionary rule, however, even assuming it applies to an administrative decision. The sheriff's department, obviously, obtained the information in question prior to the allegedly illegal arrest, not as the result of it. The receipt of the information by the selectmen was not the consequence of any illegal conduct on the part of the police, and the exclusionary rule is therefore not applicable to the case before us.
Moreover, even were defendant's arrest by the Cheshire County Sheriffs found to have been illegal, that would not end the Court's inquiry. It is well established that
The validity of the arrest does not depend on whether the suspect actually committed a crime; the mere fact that the suspect is later acquitted of the offense for which he is arrested is irrelevant to the validity of the arrest.
Michigan v. DeFillippo, 443 U.S. 31 at 36, 99 S. Ct. 2627, 2631, 61 L. Ed. 2d 343 (1979).
Similarly, under the law of New Hampshire, the evidence required to constitute probable cause to arrest is more than that required to constitute reasonable suspicion, but less than that required to convict. State v. White, 119 N.H. 567, 572, 406 A.2d 291, 294 (1979); State v. Hutton, 108 N.H. 279, 287, 235 A.2d 117, 122 (1967). See also N.H. RSA 594. If "the facts and circumstances within the officers' knowledge and of which they had reasonably trustworthy information are sufficient in themselves to warrant a man of reasonable caution in the belief that an offense has been committed" by the suspect, then probable cause to arrest exists. State v. White, supra, 119 N.H. at 572, 406 A.2d at 294 (and authorities therein cited). Here, as above indicated, the Sheriffs had more than sufficient knowledge of facts and circumstances based on reasonably trustworthy information to warrant them as persons of reasonable caution in the belief that an offense (possession of firearm by a convicted felon) had been committed. Probable cause for the arrest of defendant existing, he may not complain that the fruits thereof must be suppressed.
Additionally, defendant, despite his demonstrated knowledge of the criminal process, herewith executed a Consent To Search, and although granted the opportunity to consult with counsel before any attempt at such search was made, neither he nor his counsel sought, despite their knowledge thereof, to withdraw such consent. The existence of consent and the voluntariness thereof are questions of fact to be determined from all the circumstances surrounding the search. Schneckloth v. Bustamonte, 412 U.S. 218, 246-47, 93 S. Ct. 2041, 2057-58, 36 L. Ed. 2d 854 (1973); United States v. Miller, 589 F.2d 1117, 1130 (1st Cir. 1978), cert. denied, 440 U.S. 958, 99 S. Ct. 1499, 59 L. Ed. 2d 771 (1979). The Court herewith finds and rules that defendant's consent to search herein was freely and voluntarily given, and it accordingly follows that his motion to suppress must be denied.[8]
*1089 2. The Motion to Dismiss
A. The Grand Jury Testimony
Inasmuch as we have ruled that defendant was not the victim of an unconstitutional search and seizure, this aspect of his argument boils down to a contention that the indictment herein returned was based on hearsay (to wit, the testimony of an ATF agent) before the grand jury. While this agent appeared and was examined by defendant in the course of the motion hearing, the totality of circumstances make clear that his testimony before the grand jury was of sufficient validity to warrant the finding of probable cause to charge defendant with the offenses outlined in the indictment. The law is clear that an indictment based exclusively on hearsay evidence is not constitutionally invalid. Costello v. United States, 350 U.S. 359, 76 S. Ct. 406, 100 L. Ed. 397 (1956); United States v. Brown, 574 F.2d 1274 (5th Cir.), cert. denied, 439 U.S. 1046, 99 S. Ct. 720, 58 L. Ed. 2d 704 (1978). The reasoning behind the foregoing rules is clear. The grand jury process is not an adversary proceeding, its function being merely to determine if there is probable cause which warrants the defendant's being bound over for trial, and the defendant is to be considered protected from such presentation when he is accorded full constitutional rights at trial on the merits. United States v. Brown, supra, 574 [email protected]. Accordingly, there is no merit to the claim that the indictment is somehow defective because based on hearsay testimony.
B. The Claim of Pardon
New Hampshire Revised Statutes Annotated, Chapter 607-A (Uniform Act on Status of Convicted Persons) provides in pertinent part (RSA 607-A:5) that persons sentenced on conviction of felonies in New Hampshire's state courts upon completion of service of sentence or after service under probation or parole are entitled to have included in any order, certificate, or other instrument of discharge statements
that the defendant's rights to vote and to hold any future public office, of which he was deprived by this chapter are thereby restored and that he suffers no other disability by virtue of his conviction and sentence except as otherwise provided by this chapter. A copy of the order or other instrument of discharge shall be filed with the clerk of the court of conviction.
N.H. RSA 607-A:5 I.
Where, as here, the sentence is in another state or in a federal court and the convicted person has similarly been discharged by the appropriate authority
the governor of this state, upon application and proof of the discharge in such form as the governor may require, shall issue a certificate stating that such rights have been restored to him under the laws of this state.
N.H. RSA 607-A:5 II. Totally apart from the fact that defendant has failed to furnish the Court with any evidence that a certificate of discharge or other order was ever furnished him in accordance with the provisions of the foregoing statute,[9] the statute would not be applicable to his offenses. For example, in his argument (p. 8, Defendant's Memo in Support of Motion) defendant cites the Wisconsin statute, § 57.078, as being similar to New Hampshire relative to the restoration of rights automatically upon completion of prison sentence, probation, or parole. However, interpretation of that statute has held in the context of offenses similar to those here at issue that the specific Wisconsin statute cited granting restoration of civil rights did *1090 not remove the defendant's felony convictions for purposes of the federal firearms statute. United States v. Ziegenhagen, 420 F. Supp. 72 (E.D.Wis.1976). See also United States v. Bergeman, 592 F.2d 533 (9th Cir. 1979); United States v. Mostad, 485 F.2d 199 (8th Cir.1973), cert. denied, 415 U.S. 947, 94 S. Ct. 1468, 39 L. Ed. 2d 563 (1974). The Court finds that (1) there is no evidence that defendant is within the ambit of the provisions of RSA 607-A and (2) even if defendant were within the terms of said statute, it would not serve to bar his prosecution on the offenses outlined in the instant indictment.[10]
C. The Second Amendment
Defendant analogizes himself as a rural police officer to the militia described in the Second Amendment,[11] emphasizing that he was required to purchase and have available his own firearm. It is well established that the Second Amendment is not a grant of a right but a limitation upon the power of Congress and the national government, United States v. Miller, 307 U.S. 174, 59 S. Ct. 816, 83 L. Ed. 1206 (1939); State v. Sanne, 116 N.H. 583, 364 A.2d 630 (1976), and it is further held that the right guaranteed by the Second Amendment is a collective right to bear arms rather than an individual right, and has application only to the right of the state to maintain a militia and not to the individual's right to bear arms. United States v. Warin, 530 F.2d 103 (6th Cir.), cert. denied, 426 U.S. 948, 96 S. Ct. 3168, 49 L. Ed. 2d 1185 (1976). See also Annot. 37 A.L.R.Fed. 696. The Court finds and rules that the defendant's argument that somehow the Second Amendment bars the instant prosecution is totally without legal merit.
D. The Application of 18 U.S.C. § 925(a)(1)
In the course of oral argument, defendant brought the Court's attention to the recent decision of Hyland v. Fukuda, 580 F.2d 977 (9th Cir.1978), urging that the decision in that case supported his claim that he was exempt from prosecution pursuant to the provisions of 18 U.S.C. § 925(a)(1). The latter statute provides
The provisions of this chapter shall not apply with respect to the transportation, shipment, receipt, or importation of any firearm or ammunition imported for, sold or shipped to, or issued for the use of the United States or any department or agency thereof or any State or any department, agency, or political subdivision thereof.
It follows, defendant contends, that inasmuch as he was employed by Swanzey, a political subdivision of the State of New Hampshire, he is exempt herein from prosecution. However, a reading of the Hyland case does not support his position. Therein Mr. Hyland brought a civil rights action (42 U.S.C. § 1983) on facts which indicate that he had applied for the position of Adult Corrections Officer in the Hawaii prison system, stating on his application that he had been previously convicted of armed robbery, for which conviction he served three years. His application was accepted, and he was allowed to take the civil service examination for the ACO position, but, concerned as to his right to be so employed and to carry a firearm, the State suspended his eligibility for employment pending the opinion of its Attorney General. When such opinion was issued, it indicated that one in the position of Mr. Hyland required a governor's pardon with respect to his conviction before he could be considered for employment in the position of ACO. Accordingly, the State suspended Hyland's further eligibility for employment until he presented evidence that he had been pardoned *1091 by the Governor of California (the state of predicate conviction). The district court granted relief, but was reversed on appeal. The appellate court did uphold the district court relative to alleged violation of 18 U.S.C. § 922(h)[12] on the ground that
it is undisputed that any firearm Hyland might be permitted to carry in the position he seeks would be owned by, and used exclusively for, the state.
580 F.2d at 979 (emphasis added).[13]
The Court of Appeals, however, went on to hold that 18 U.S.C.App. § 1202(a) required that absent the specific pardon provided by § 1203 (pardon by President, Governor, with express authorization to carry firearm), the district court was wrong in creating a judicial exception for an Adult Corrections Officer. The Court also ruled (which disposes of defendant's suggestion that exemption under the New Hampshire statute here somehow applies) that there was no problem with preemption of the state statute by the federal firearms laws. The reason for this is that "no conflict" exists between such statutes
[a]lthough the expunction statute could determine the status of the conviction for purposes of state law, it could not `rewrite history' for the purposes of `the administration of the federal criminal law or the interpretation of federal criminal statutes'.
Hyland v. Fukuda, supra, 580 F.2d 977 at 980-81 (citing United States v. Potts, 528 F.2d 883, 887 (9th Cir.1975)) (Sneed, J., concurring in en banc result).
From the foregoing, it follows that neither 18 U.S.C. § 925(a)(1) nor any purported application of state statutes here exempted defendant from the application of the federal firearms laws the violation of which forms the basis of the instant indictment.
E. The Applicability of 18 U.S.C. § 922(a)(6)
The Gun Control Act of 1968 (P.L. 90-618) amended Title IV of the Omnibus Crime Control and Safe Streets Act of 1968 (P.L. 90-351), which repealed the Federal Firearms Act of 1938. It is codified in 18 U.S.C. § 921, et seq.
Count I of the indictment herein alleges that in the course of the purchase of his firearm from Bowers Remodeling Company, Inc., on August 28, 1976, the defendant "knowingly did make a false and fictitious written statement" to the firearms dealer in that he indicated on the Form 4473, Firearms Transaction Record, that he had never been convicted of a felony. Revised in 1973, and as here pertinent, the Form 4473 (Defendant's Exhibit B) executed by defendant on August 28, 1976, contained the following printed question, to which defendant gave a negative answer:
8(b). Have you been convicted in any court of a crime punishable by imprisonment for a term exceeding one year? (Note: The actual sentence given by the judge does not matter a yes answer is necessary if the judge could have given a sentence of more than one year.)
18 U.S.C. § 922(a)(6) provides in pertinent part that it is unlawful
for any person in connection with the acquisition ... of any firearm ... from a ... licensed ... dealer ... knowingly to make any false or fictitious oral or written statement ... intended or likely to deceive such ... dealer ... with respect to any fact material to the lawfulness of the sale ... of such firearm ... under the provisions of this chapter.
18 U.S.C. § 922(d)(1), which must be read in conjunction with 18 U.S.C. § 922(a)(6), makes it unlawful for any licensed dealer to sell firearms or ammunition to any person *1092 knowing or having reasonable cause to believe that such person
(1) is under indictment for, or has been convicted in any court of, a crime punishable by imprisonment for a term exceeding one year ....
It is from the above-quoted provisions of 18 U.S.C. § 922(d)(1) that question 8(b) of Form 4473 (similarly above quoted) is derived. Huddleston v. United States, 415 U.S. 814, 816, 94 S. Ct. 1262, 1264-65, 39 L. Ed. 2d 782 (1974). Suggesting that the term "any court" as contained in the statute and in question 8(b) must of necessity be read as "any federal court" or "any court of the United States", the defendant urges that strict statutory construction bars his prosecution under 18 U.S.C. § 922(a)(6). Pointing to the provisions of 18 U.S.C.App. § 1202(a)(1),[14] which require a predicate felony conviction "by a court of the United States or of a State or any political subdivision thereof" and the absence of any such language in § 922(d)(1), defendant suggests that the lack of such specificity in § 922(d)(1) makes that statute ambiguous and that interpretation favorable to him bars prosecution because he was not convicted in a federal court.
Such argument overlooks the extensive definition of "crime punishable by imprisonment for a term exceeding one year" set forth in 18 U.S.C. § 921(a)(20), which specifically excludes from its terms certain Federal and State offenses, including "any State offense [other than one involving a firearm or explosive] classified by the laws of the State as a misdemeanor".
Finding as it does that the obvious intent of the Legislature in the Gun Control Act, 18 U.S.C. § 921, et seq., is clear, the Court rules that the statute is "not to be construed so strictly as to defeat" this obvious intent, Barrett v. United States, 423 U.S. 212, 218, 96 S. Ct. 498, 502, 46 L. Ed. 2d 450 (1976), and denies dismissal on this ground.[15]
F. The Constitutionality of 18 U.S.C. App. § 1201
Defendant contends that 18 U.S.C. App. § 1201, et seq., is unconstitutional. As we have previously noted (n.5; n.14, supra), Counts II and III of the instant indictment charge defendant with violations of 18 U.S. C.App. § 1202(a)(1), which provides
(a) Any person who
(1) has been convicted by a court of the United States or of a State or any political subdivision thereof of a felony ... and who receives, possesses, or transports in commerce or affecting commerce ... any firearm shall be fined not more than $10,000 or imprisoned for not more than two years, or both.
The aforegoing statutory language is sweeping, and its plain meaning is that the fact of a felony conviction imposes a firearm disability until the conviction is vacated or the felon is relieved of his disability by some affirmative action, such as a qualifying pardon or a consent from the Secretary of the Treasury. The obvious breadth of the language may well reflect the expansive legislative approach revealed by Congress's express findings and declarations, in 18 U.S.C.App. § 1201, concerning the problem of firearm abuse by felons and certain specifically described persons.
Lewis v. United States, 445 U.S. 55, 60-61, 100 S. Ct. 915, 918-19, 63 L. Ed. 2d 198 (1980).
Contrary to defendant's assertions, there is no denial of equal protection or due process or indeed constitutional infirmity of any kind to be found in 18 U.S.C.App. § 1202(a)(1). Lewis v. United States, supra. There is no legal merit to the constitutional argument herein.
G. The Claim of Lack of Scienter
The defendant's argument that 18 U.S.C. § 921, et seq., does not apply to *1093 crimes committed against the law of any state but rather only to predicate convictions in federal courts has already been disposed of, but defendant argues that inasmuch as he believed that the statute applied only in this regard, his alleged offense lacks the "knowledge" necessary for conviction pursuant to 18 U.S.C. § 922(a)(6). But it is clear that the scienter requirement of that statute can be met when there is a reckless disregard as to the truth of the statements to which one subscribes and when there is a conscious purpose to avoid learning the truth. United States v. Wright, 537 F.2d 1144, 1145 (1st Cir.), cert. denied, 429 U.S. 924, 97 S. Ct. 325, 50 L. Ed. 2d 292 (1976). In United States v. Wright, supra, the defendant had possession of a "Firearms Identification Card" issued by the Commonwealth of Massachusetts, and urged that having possessed such document for nearly three years, he was under a "misapprehension" constituting both "a mistake of fact and a mistake of law". Id., 537 [email protected]. The response of the Court was to the point, and bears on defendant's argument herein.
Even if [the defendant] could be found to think that the state permit allowed him to purchase guns, he could not think that it permitted him to make `false and fictitious statements' to the federal government, the offense with which he is charged. There could be no merit in the claim that he made a mistake of law. The most that could be said is that a belief on appellant's part that he had a right to purchase the gun bore on the recklessness vel non with which he signed the federal form. This issue of fact the court resolved against him. Any belief that he may have entertained as to the state permit is not of such great weight as to change our previously expressed opinion that the court's finding of recklessness was not plainly wrong.
United States v. Wright, supra, 537 [email protected].
And as to the allegations that defendant violated 18 U.S.C.App. § 1202(a)(1) (Counts II and III of the indictment), the only scienter required under that statute is that defendant knowingly possessed a firearm, as the prosecution need not prove that defendant knew it was unlawful to possess the firearm or that he knew the firearm had traveled in interstate commerce. United States v. Goodie, 524 F.2d 515, 517-18 (5th Cir.1975), cert. denied, 425 U.S. 905, 96 S. Ct. 1497, 47 L. Ed. 2d 755 (1976).
For the reasons hereinabove set forth, defendant is not entitled to dismissal on the ground that the prosecution has failed to allege scienter. On the basis of the evidence presented at the hearing on defendant's motion, a jury could (although it would not necessarily be required to) find beyond a reasonable doubt that the elements of scienter required to establish a violation of the respective statutes had been presented.
H. Additional Constitutional Claims
At the inception of the instant litigation, the Court offered, but defendant rejected, the appointment of counsel within the district, insisting that unless a nonmember of the bar of the district whom he wished to have represent him were appointed, he desired to proceed with his own defense. His complaints of lack of due process and equal protection in being required to proceed to trial within the limitations of the Speedy Trial Act, 18 U.S.C. § 3161, et seq., in this context are specious.[16]
As the Court has had occasion to point out previously to defendant, the Speedy Trial Act, in addition to setting up the strictures and requirements of research, planning, and statistic compilation, introduced the innovative concept of the right to a speedy trial by the public, independent of the defendant's rights or wishes. Annot. 46 A.L.R.Fed. [email protected]. Rejecting appointed counsel, defendant was not entitled to *1094 "have it both ways" and to delay the trial (as initially requested) to a period well beyond the limitations imposed by the statute. No denial of equal protection or due process can be recognized under such circumstances.[17]
I. The Adverse Publicity
As is common practice and undoubtedly known to defendant, at least from his experience as a police officer, indictments, unless sealed, become matters of public record and are available to the media on a daily basis. Additionally, it is not unusual for prosecutors to issue brief statements outlining the substance of such indictment. Apparently there was publicity of this nature in the instant case, and (without presenting any of such to the Court) defendant argues that he could not be afforded a fair trial in this district.
In the course of the argument of the motions, the Court read to defendant the questions it ordinarily asks jurors on criminal voir dire and advised him that he could supplement same with any additional questions he wished, but that it appeared to the Court from prior experience that most jurors who are drawn from throughout the district (which comprises the entire state of New Hampshire) have little knowledge of specific defendants and that the claim of adverse publicity therefore had little merit.
J. Prosecutorial Delay
From what the Court has previously outlined as to the facts and legal rules applicable to the instant proceeding, it is clear that there is no basis whatsoever for defendant's claim that some sort of prosecutorial delay caused him harm herein. Replacing a previously ill agent, the ATF Agent assigned to this investigation proceeded with alacrity (see n.4, p. 1086, supra), and the Court finds it somehow ironic that its attempts to proceed with speedy disposition of the action have been frustrated by defendant's vacillations over the issue of whether he desired to represent himself or proceed with counsel. The motion to dismiss grounded on any allegation of prosecutorial delay is herewith denied.
3. The Motion to Transfer Venue
Relying upon the provisions of Rule 21, Federal Rules of Criminal Procedure,[18] defendant seeks transfer of trial to the District of Massachusetts on the dual grounds that he could not obtain a fair and impartial trial in this district because of the alleged prejudicial pretrial publicity and because his requested counsel, resident in Massachusetts, could then be appointed. As the Massachusetts counsel whom defendant sought unsuccessfully to have appointed to represent him in this district has now agreed to appear here to defend the accused, the latter argument is mooted. Additionally, it is well established that the request for transfer grounded upon inability to procure a fair trial because of adverse pretrial publicity need not, indeed, should not, be decided until voir dire. Murphy v. Florida, 421 U.S. 794, 95 S. Ct. 2031, 44 L. Ed. 2d 589 (1975). It follows that the *1095 motion for transfer must be and it is herewith denied.
4. Conclusion
The foregoing shall constitute the findings and rulings of this Court on the motions previously filed and heard by it. Defendant's requested findings and rulings Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 are herewith denied. New counsel having just appeared, rendering necessary a continuance, the trial herein is rescheduled to commence as the number one jury trial on Monday, August 17, 1981, at 9:30 a. m.
SO ORDERED.
NOTES
[1] Shortly prior to the time scheduled for commencement of such hearing the Government filed a motion to quash or otherwise modify defendant's varied subpoenas duces tecum which had been issued to certain proposed witnesses. Pursuant to applicable provisions of Rule 17(c), Fed.R.Cr.P., the Court conducted an in camera investigation of the documents in question and then issued its order quashing the subpoena in whole as to the file of the witness Kendrick K. Sawyer and modifying the subpoena as to the witness Kenneth L. Lysitt, noting defendant's objections to its rulings in this regard. In arriving at its decision relative to these subpoenas, the Court generally followed the guidelines outlined in United States v. Nixon, 418 U.S. 683, 698-700, 94 S. Ct. 3090, 3102-03, 41 L. Ed. 2d 1039 (1974). The Court further instructed the Government to maintain the files of the respective witnesses together in a safe place without removing therefrom any items in the event of further appellate challenge to its rulings.
[2] Defendant's argument that such convictions were constitutionally invalid will be addressed by the Court in a subsequent portion of this Opinion.
[3] At the commencement of hearing on the motions, defendant moved to the Court to strike any allegations or to bar any evidence surrounding the nature of this complaint on the ground that it was irrelevant. The Court denied this motion, as defendant's claims of prosecutorial delay (hereinafter discussed) required the admission of evidence with reference to this complaint, but did rule, and herewith orders, that all exhibits and other evidence bearing on the nature of said complaint be herewith sealed until further order of the Court.
[4] The agent originally assigned to such investigation was taken ill, and the matter was reassigned to Agent Sawyer between March and April of 1981, with presentation before the grand jury on April 15th and return of the indictment herein on May 20.
[5] Counts II and III of the instant indictment similarly allege violations by this defendant of 18 U.S.C. App. § 1202(a)(1).
[6] Count I of the instant indictment is based in material part on an allegation that defendant violated 18 U.S.C. § 922(a)(6).
[7] Defendant originally offered Exhibit I, representing it to be a clipping (undated) from the Boston Globe, as evidence of public knowledge of his previous criminal record. The Government objected to the admission of the exhibit on the ground of relevancy, as there was no evidence that the article had been brought to the attention of the Swanzey police authorities before defendant was retained as a police officer. At the time of offer, the Court therefore ruled that the exhibit should be marked for identification, stating it would render final ruling on admissibility in the course of Opinion. The Court herewith strikes the identification, finding that the article was obviously published before defendant was retained as a Swanzey police officer, and while not relevant to the knowledge of the Swanzey police officials as to his criminal record, it is relevant to the defendant's knowledge of criminal law and procedure.
[8] Having decided, as we do, that the items which defendant seeks suppressed were obtained by means which would purge them from any primary taint, Wong Sun v. United States, 371 U.S. 471, 488, 83 S. Ct. 407, 417, 9 L. Ed. 2d 441 (1963), we need not reach the issue of "inevitable discovery". See United States v. Melvin, 596 F.2d 492, 500 (1st Cir.), cert. denied, 444 U.S. 837, 100 S. Ct. 73, 62 L. Ed. 2d 48 (1979). Parenthetically, however, we note that once ATF was advised of the observation of defendant's publicly being in possession of a firearm and his felony record, its own investigation would probably have led to production of the same evidence of which defendant here complains.
[9] For the possible effect of such pardon, see United States v. One Lot of Eighteen Firearms, 325 F. Supp. 1326 (D.N.H.1971) (full gubernatorial pardon sufficient to prevent forfeiture of firearms).
[10] It should be noted that a portion of Government Exhibit 1 is a certified statement (of July 9, 1981) from counsel to the Advisory Board of Pardons of the Commonwealth of Massachusetts advising that his search of the files of such agency showed no record of a petition for pardon filed by defendant in Massachusetts.
[11] The Second Amendment provides
A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms shall not be infringed.
[12] 18 U.S.C. § 922(h)(1) barred receipt of any firearm or ammunition shipped or transported in interstate or foreign commerce by a convicted felon.
[13] As we have previously indicated, the evidence here is that Kozerski purchased one firearm with his own funds and won the other in a law enforcement officers' raffle. Additionally, the Chief of the Swanzey Police testified that as his officers owned their own weapons, they could use them for private purposes, such as target practice. This marked distinction from the factual situation in Hyland v. Fukuda is sufficient to make that decision inapplicable.
[14] As we have previously noted (p. 5, n.5, supra), alleged violations of 18 U.S.C.App. 1202(a)(1) are set forth in Counts II and III of the instant indictment.
[15] Indeed there is respectable authority that without further definition the term "any court" would more probably refer to a state court rather than a federal court, which is a court of rather limited jurisdiction. See Freudenberg v. Harvey, 364 F. Supp. 1087, 1090 (E.D.Pa.1973).
[16] The claims are also largely mooted by the late appearance (requiring continuance of the scheduled trial) of the counsel whom defendant wished appointed when first before the Court. This counsel is to appear pro bono, apparently because of a prior employment relation with defendant.
[17] The hearings on defendant's motions concluded on the afternoon of July 14, 1981. At that point, the Court advised defendant orally that although he wished to review defendant's (that day filed) legal memorandum (of 34 pages), it appeared to the Court that probably the motions would be denied, and he should therefore be prepared to proceed to trial as then scheduled on the morning on Monday, July 20, 1981. The Court then commenced its review of defendant's authorities, interrupted by the requirement that it conduct (nearly simultaneously) on July 15, 16, and 17, two trials dealing with the issuance of injunctive relief. On the morning of Thursday, July 16, 1981, the Court's preliminary research satisfied it that, although it had not as yet been able to complete the preparation of its formal Opinion, the motions should be denied. Defendant was advised immediately by telephone from the Office of the Clerk of this Court, and later that day for the first time advised that he had been able to procure counsel.
[18] As here pertinent, Rule 21(a) Fed.R.Cr.P., provides for transfer to another district
if the court is satisfied that there exists in the district where the prosecution is pending so great a prejudice against the defendant that he cannot obtain a fair and impartial trial at any place fixed by law for holding court in that district.
|
117 SRES 310 ATS: Expressing solidarity with Cuban citizens demonstrating peacefully for fundamental freedoms, condemning the Cuban regime’s acts of repression, and calling for the immediate release of arbitrarily detained Cuban citizens.
U.S. Senate
2021-07-21
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.
III117th CONGRESS1st SessionS. RES. 310IN THE SENATE OF THE UNITED STATESJuly 21, 2021Mr. Menendez (for himself, Mr. Rubio, Mr. Durbin, Mr. Risch, Mr. Kaine, Mr. Cruz, Mr. Schatz, Mr. Coons, Mr. Booker, Ms. Cortez Masto, Mr. Brown, Mr. Padilla, Mr. Warner, Mr. Cardin, Ms. Rosen, Mr. Warnock, Mr. Luján, Mr. Romney, Mr. Hagerty, and Ms. Hassan) submitted the following resolution; which was referred to the Committee on Foreign RelationsJuly 28, 2021Reported by Mr. Menendez, with an amendmentAugust 3, 2021Considered, amended, and agreed toRESOLUTIONExpressing solidarity with Cuban citizens demonstrating peacefully for fundamental freedoms, condemning the Cuban regime’s acts of repression, and calling for the immediate release of arbitrarily detained Cuban citizens.Whereas, on July 11, 2021, thousands of Cuban citizens took to the streets to peacefully protest and to call for respect for basic human rights and fundamental freedoms, and the end of the dictatorship in Cuba;Whereas the demonstrations were the largest protests witnessed on the island in 25 years, with courageous Cuban men, women, and youth taking to the streets in at least 50 different cities and towns across every province to affirm a deep aspiration for democratic change and to denounce the regime’s corruption;Whereas the nationwide protests represent the full diversity of Cuban society, with demonstrators proudly proclaiming Patria y Vida! (Homeland and Life!) and calling for libertad (liberty);Whereas the demonstrations in Cuba follow months of severe shortages of food and basic medicine, frequent power outages, record high rates of transmission of COVID–19, and the Cuban regime’s ineffective response, in addition to the Cuban regime’s continued repression and arbitrary imprisonment of citizens, peaceful activists, and artists;Whereas, despite the authoritarian regime’s blocking of internet service to prevent the spread of information about the demonstrations, Cubans witnessed examples of their compatriots demanding change in their country and courageously joined the growing protests;Whereas, despite the peaceful nature of the demonstrations, Miguel Díaz-Canel incited violence among Cubans and encouraged his supporters to attack peaceful protestors, declaring in a televised address, the order to fight has been given—into the streets and pledged his supporters’ lives: Over our dead bodies. We are prepared to do anything;Whereas Díaz-Canel has sought to delegitimize peaceful protesters, crudely stating they constitute a small group of vulgar criminals that are paid to be disruptive;Whereas Díaz-Canel sought to blame the endemic problems causing so much human suffering by the Cuban people on outside forces instead of on the Cuban regime’s long-standing corruption, mismanagement, and theft of public resources;Whereas the Cuban regime’s domestic security apparatus, including military and police, were recorded on video violently repressing peaceful Cuban citizens, including by using live ammunition and attacking journalists;Whereas numerous reports indicate deaths of and injuries to Cuban protestors at the hands of the regime’s security forces, including instances of police firing live ammunition into crowds and at least one documented police beating that led to a civilian death;Whereas independent Cuban civil society groups have reported that hundreds of individuals have been arrested, detained, or are missing; Whereas defying regime repression, continued internet shutdowns, and illegal searches of the homes of activists and protestors, Cuban men, women, and youth continued to peacefully protest throughout the island on Monday, July 12, using social media to organize themselves and document acts of regime repression;Whereas international human rights groups, including Human Rights Watch, Amnesty International, the United Nations Office of the High Commissioner for Human Rights, and the Inter-American Commission on Human Rights, have long condemned the Cuban regime for violating human rights and fundamental freedoms; andWhereas for years the Cuban regime has exported its authoritarian methods to Venezuela, sending intelligence personnel to assist Venezuelan security forces as they repressed similar peaceful protests calling for democratic change: Now, therefore, be itThat the Senate—(1)expresses its strong solidarity with the people of Cuba in their desire to live in a free and democratic country with uncensored access to information, justice, and economic prosperity;(2)condemns the violence ordered by Miguel Díaz-Canel against peaceful protesters as violations of internationally recognized human rights that does nothing to address Cuba’s challenges;(3)calls on Cuban forces—(A)to respect the Cuban people’s exercise of freedom of assembly, freedom of expression, and other universal human rights;(B)to refrain from restricting internet access and connectivity in the country; and (C)to permit Cuban citizens to freely communicate on digital platforms, as is their fundamental right;(4)calls for the immediate and unconditional release of all arbitrarily detained Cuban citizens and all Cuban political prisoners;(5)calls on members of the Cuban Revolutionary Armed Forces, the Cuban Ministry of the Interior, and Cuba’s National Revolutionary Police Force to refrain from violently repressing peaceful protesters and committing other human rights violations;(6)urges foreign governments, including authoritarian regimes, to halt the provision of technology, equipment, and other forms of assistance that are increasing the capability of the Cuban Revolutionary Armed Forces, the Cuban Ministry of the Interior, and Cuba’s National Revolutionary Police Force to violently repress peaceful protestors, curtail freedom of expression through censorship of the internet, and commit other human rights abuses; and(7)urges democratic governments and legislatures in Europe, Latin America, and the Caribbean—(A)to pledge their support for freedom and democracy in Cuba; and (B)to speak out against the repression of demonstrators in Cuba. |
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-50425
Summary Calendar
SULEMA C. ESTRELLA;
JOSE ESTRELLA, III,
Plaintiffs-Appellants,
versus
UNITED STATES OF AMERICA,
Defendant-Appellee.
--------------------
Appeal from the United States District Court
for the Western District of Texas
USDC No. SA-99-CV-1000-FB
--------------------
December 13, 2000
Before SMITH, BENAVIDES, and DENNIS, Circuit Judges.
PER CURIAM:*
The Estrellas appeal the district court’s grant of summary
judgment to the defendants in this Federal Tort Claims Act (FTCA)
case. They first argue that the district court erred in
determining that their claim was barred by the statute of
limitations. The district court’s determination on this issue was
not erroneous, as the Estrellas failed to timely present their
administrative claim to the appropriate agency. See 28 U.S.C. §
2401(b).
*
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.
No. 00-50425
-2-
The Estrellas next argue that the district court erred in
determining that Dr. Washington was a Government employee for FTCA
purposes. The district court did not err, as Washington falls
under the provisions of 42 U.S.C. § 233(g). The Estrellas’ final
argument is that the case should have been remanded. This
contention is not meritorious. The case was properly removed
pursuant to 28 U.S.C. § 2679(d)(2). The Estrellas have failed to
show that the district court erred in denying their motion to
remand and granting the defendants’ motion for summary judgment.
Consequently, the judgment of the lower court is AFFIRMED.
|
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 15, 2014 Electronic Cigarettes International Group, Ltd. (Exact name of registrant as specified in its charter) Nevada 000-52029-90-8821859 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 11335 Apple Drive, Nunica, Michigan 49448 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 309.783.8558 n/a (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01Entry into a Material Definitive Agreement Equity Offering On July 15, 2014,Electronic Cigarettes International Group, Ltd. (the “Company”)completed a private offering with Man FinCo Limited, a company incorporated as an offshore company under the regulations of the Jebel Ali Free Zone Authority (the “Purchaser”) for totalgross proceeds to the Company of $20,000,000less placement agent fees and other expenses, pursuant to a securities purchase agreement dated July 3, 2014, as described on the Current Report to Form 8-K filed with the SEC on July 10, 2014. In the offering, we issued 2,962,963 shares (the “Shares”) of our common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $6.75 per share or $20,000,000 in the aggregate (the “Purchase Price”). In the event that the Company sells shares of Common Stock in a public offering at a price of less than $7.94 (the “Public Offer Price”), then the Company shall issue to the Purchaser such additional number of shares of Common Stock as equal to the Purchase Price divided by the Public Offer Price multiplied by 0.85 less any shares initially issued to the Purchaser. Voting Agreement On July 15, 2014, the Company and the Purchaser along with Brent Willis, Marc Hardgrove and William Fields (the “Key Holders”) entered into a voting agreement (the “Voting Agreement”). Pursuant to the Voting Agreement, the Purchaser has the ability to designate a director to the Company’s board of directors either within six months from July 15, 2014 or within six months of the date the Company exercises its option to purchase additional shares as described in the securities purchase agreement. If the Purchaser does not designate a director or if there is a vacancy in such director position, then the Purchaser may appoint a board observer whom the Company shall invite to attend all board meeting in a non-voting capacity. The Key Holders have agreed to vote any and all of their shares for the election of any director designated by the Purchaser. The voting agreement will remain in effect until the Purchaser holds fewer than 296,297 shares. Registration Rights Agreement In connection with the sale of the Shares, we entered into a registration rights agreement (the “Purchaser Registration Rights Agreement”) with the Purchaser, pursuant to which the Company agreed to register all of the Shares on a Form S-1 registration statement (the “Purchaser Registration Statement”) to be filed with the SEC by October13, 2014 (the “Filing Date”), subject to (1)underwriter approval should the Company be involved in an underwritten public offering and if such approval is not granted then Filing Date means the 45thcalendar day following the closing date of such underwritten public offering and (2)subject to the satisfaction of any registration rights previously granted by the Company, and to cause the Purchaser Registration Statement to be declared effective under the Securities Act within 90 days following the Filing Date (the “Required Effective Date”). If the Purchaser Registration Statement is not filed by the Filing Date or declared effective by the Required Effective Date, the Company is required to pay partial liquidated damages in cash to each purchaser in the amount equal to 2% for the purchase price paid for the Shares then owned by the Purchaser for each 30-day period for which the Company is non-compliant. The foregoing descriptions of the terms of the Voting Agreement and Purchaser Registration Rights Agreement are qualified in their entirety by reference to the provisions of the agreements filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K (this “Report”), which are incorporated by reference herein. Acquisition of Hardwire Assets On July 16, 2014, we completed the acquisition of the assets ofHardwire Interactive Inc., a British Virgin Islands company (“Hardwire”) pursuant to an asset purchase agreement by and between (i) the Company, (ii) Hardwire Interactive Acquisition Company, a Delaware corporation and a wholly-owned subsidiary of the Company, (iii) Hardwire, and (iv) the selling owners of the Hardwire (the “Selling Owners,” and together with Hardwire, the “Seller Parties” ) as described on the Current Report to Form 8-K filed with the SEC on July 10, 2014. Pursuant to the terms of the asset purchase agreement, we purchased all of Hardwire’s assets and properties held in connection with, necessary for, or material to Hardwire’s business of selling electronic cigarettes via the internet for a purchase price of (1) $5,000,000, (2) 3,000,000 shares (the “Hardwire Shares”) of Common Stock and (3) the assumption of all of Hardwire’s liabilities relating to or arising out of any assigned contracts, the employment of Hardwire’s employees or the ownership, operation or use of the assets being sold. Registration Rights Agreement In connection with the sale of the Hardwire Shares, we entered into a registration rights agreement (the “Hardwire Registration Rights Agreement”) with the Purchaser, pursuant to which the Company agreed to register all of the Hardwire Shares on a Form S-1 registration statement (the “Purchaser Registration Statement”) to be filed with the SEC by October14, 2014 (the “Filing Date”), subject to (1)underwriter approval should the Company be involved in an underwritten public offering and if such approval is not granted then Filing Date means the 45thcalendar day following the closing date of such underwritten public offering and (2)subject to the satisfaction of any registration rights previously granted by the Company, and to cause the Purchaser Registration Statement to be declared effective under the Securities Act within 90 days following the Filing Date (the “Required Effective Date”). If the Purchaser Registration Statement is not filed by the Filing Date or declared effective by the Required Effective Date, the Company is required to pay partial liquidated damages in cash to each purchaser in the amount equal to 2% of the value of the Hardwire Shares on the closing date for each 30-day period for which the Company is non-compliant. 2 The foregoing descriptions of the terms of the Hardwire Registration Rights Agreement is qualified in its entirety by reference to the provisions of the agreement filed as Exhibits 10.3 to this Report, which is incorporated by reference herein. Item 2.01Completion of Acquisition or Disposition of Assets The information set forth in Item1.01 hereof is incorporated herein by reference. Item 3.02Unregistered Sales of Equity Securities Reference is made to the disclosure set forth under Item 1.01 of this Report, which disclosure is incorporated herein by reference. The Shares were issued in reliance upon exemptions from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Regulation S promulgated under the Securities Act (“Regulation S”). These shares of our common stock qualified for exemption Regulation S as all of the Shares were issued to non-US persons as that term is defined in Regulation S. These shares of our common stock qualified for exemption Regulation S as all of the Shares were issued to non-US persons as that term is defined in Regulation S. The sale and the issuance of the Hardwire Shares were offered and sold in reliance upon exemptions from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act (“Regulation D”).We made this determination based on the representations of the Seller Parties which included, in pertinent part, that such Seller Party was (a) an “accredited investor” within the meaning of Rule 501 of Regulation D or (b) a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and upon such further representations from each Purchaser that (i) such Seller Party is acquiring the securities for his, her or its own account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the Securities Act, (ii) the Seller Party agrees not to sell or otherwise transfer the purchased shares unless they are registered under the Securities Act and any applicable state securities laws, or an exemption or exemptions from such registration are available, (iii) the Seller Party has knowledge and experience in financial and business matters such that he, she or it is capable of evaluating the merits and risks of an investment in us, (iv) the Seller Party had access to all of our documents, records, and books pertaining to the investment and was provided the opportunity to ask questions and receive answers regarding the terms and conditions of the offering and to obtain any additional information which we possessed or were able to acquire without unreasonable effort and expense, and (v) the Seller Party has no need for the liquidity in its investment in us and could afford the complete loss of such investment. In addition, there was no general solicitation or advertising for securities issued in reliance upon Regulation D. Item 8.01Other Events On July 16, 2014, the Company issued a press release announcing the completion of the financing from the Purchaser, a copy of which is attached to this Report as Exhibit 99.1. Item 9.01 Financial Statements and Exhibits (d) Exhibits Exhibit No. Description Voting Agreement Purchaser Registration Rights Agreement Hardwire Registration Rights Agreement Press Release dated July 16, 2014 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 18, 2014 ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD. By: /s/ James P. McCormick Name: James P. McCormick Title: Chief Financial Officer 4
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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 233
Appellant was charged by information and convicted of having issued and delivered to one Frank Prott a check for the sum of $100, and to a Mrs. Ada I. Bailey a check for $212.50, without having money, funds, or credit at the bank with which to meet them. A motion for new trial was presented, and overruled, and this is an appeal from the ruling upon such motion, and from the judgment.
It appeared from the testimony of the prosecuting witnesses that each of them had advertised an automobile for sale, and that appellant negotiated for the purchase, and obtained possession, of both machines, in each instance displaying a pass-book of the First National Bank of Long Beach, where he claimed to have an account. An officer of the bank was sworn and testified that appellant had some months previously opened an account with said bank, but that he withdrew all but fifty cents on the next day, and *Page 234
that he made no further deposits, and had no account with the bank at the time of giving the checks in question.
Prott testified that the transaction occurred on a Saturday afternoon, and that he hesitated about accepting a check, but that appellant assured him that he was a member of the Automobile Club of Southern California, and at the same time signed and delivered to Prott a check for $500 on the California Bank, which was post dated. Mrs. Bailey and her son each testified that appellant told them that he was a member of said club, and exhibited one of its membership cards. He also gave her a post-dated check for $500, drawn on the Long Beach bank. On one check which he gave to Prott appellant wrote his address as the Torrey Pine Apartments and on the $500 check to Mrs. Bailey he gave his residence as 1106 Thirty-seventh Place, Los Angeles. An officer of the California Bank testified that appellant had no account with that institution. An attorney for the Automobile Club swore that appellant had ceased to be a member of the club some six months previously to giving the checks, and a police officer testified upon investigation he found that appellant did not reside at either of the addresses which he gave. Each of the prosecuting witnesses detailed the circumstances of their respective sales, and the checks were introduced in evidence. An officer also stated that the defendant admitted when arrested that the check for $212.50 was not good, but asserted that he had the money with which to take it up. It appeared that appellant borrowed about $320 from a loan company on the Bailey car, for which he had paid with the worthless checks, and this he admitted upon the trial, but denied that he had shown a bank-book or membership card of the Automobile Club, or that he had claimed to be a member thereof.
[1] It is first contended that the trial court erred in permitting the evidence as to post-dated checks to be introduced, and in receiving the checks themselves in evidence. However, it clearly appears that the respective $500 checks were component parts of the transactions in which they were given, and that they were offered for the purpose of showing intent. Such evidence was properly admitted in accordance with the provisions of sections 1850 and 1854 of the Code of Civil Procedure, as declarations and writings *Page 235
embraced within the same transaction, and as tending to throw light on the question before the court and jury.
[2] In cross-examining one of the complaining witnesses, Mrs. Bailey, appellant's counsel asked if the defendant did not in fact telephone her to hold the check for $212.50 and state that he would pay her in cash, to which she replied in the affirmative. It developed, however, that such conversation occurred on the day following the issuance of the spurious paper, after the defendant had procured a loan on Mrs. Bailey's car, and after she had discovered that the check was worthless and had called the officers. The testimony was therefore stricken out on motion of the district attorney, and appellant assigns this ruling as prejudicial error. It is urged in his brief that a case could be imagined where one who had issued a worthless check and fled might telephone back, "Hold the check. It is not good. I will bring you the money." It is asserted that while under such conditions the ruling would be proper, appellant should have been allowed to show an honest intent to pay the amount of the check; that he actually had the money, and that when he appeared at the Bailey residence he was arrested. We are unable to substantially distinguish the cases. Having obtained possession of an automobile on the strength of two fraudulent checks and upon false representations, and having pledged the car elsewhere upon other false representations, and thus being enabled to raise funds with which to cover up the previous crime, the offer to use such funds so obtained for that purpose is no evidence of honest intentions at the time appellant issued the check in question. The ruling of the trial court was proper.
[3] The next point urged for reversal is that the defendant was precluded from cross-examining Mrs. Bailey regarding an alleged conversation between herself and the defendant on the next day after the check was given. There was some colloquy between the court and counsel as to whether or not the witness had testified upon direct examination as to such conversation, wherein it developed that she had not, and objections to the defendant's questions were thereupon sustained. However, he later cross-examined her upon the subject, and it then appeared that the only conversation on that day consisted of a telephone message that Alexander was going to Long Beach for some money, that he would *Page 236
accompany his wife to a doctor's office, and that he would see the witness in the afternoon and pay her the $212.50, to which she replied, "All right." Appellant testified in his own behalf that when he gave the check to Mrs. Bailey he asked her to hold it, but this she unqualifiedly denied. The result was that appellant was not limited in his cross-examination of the witness, and the only question presented was one of fact for the jury, upon conflicting testimony, as to the sincerity of his intentions. We see no error in the ruling below.
[4] It is insisted that the court also committed prejudicial error in sustaining objections of the district attorney to appellant's cross-examination of Mrs. Bailey's son, when he was asked: "When you returned at 9:30 on that morning, did your mother tell you he had telephoned?" "What did she say relative to that?" and "Had your mother told you that he was coming out to the house with the money that afternoon?" The witness replied that his mother did inform him of the telephone call, but was not permitted to answer the questions following such answer, and it is urged that the purpose of them was to impeach her testimony. But she did not testify that she had not so stated; no inconsisent or contradictory statements of Mrs. Bailey are cited, nor was any foundation laid for such impeaching evidence. The objections were therefore properly sustained. (People v.Rousse, 26 Cal. App. 100 [146 P. 65].)
[5] Again, appellant contends that the cross-examination of L.R. Bailey, the son, was erroneously and prejudicially limited, and that the trial court usurped the functions of the jury. The witness at first stated that his mother presented the $212.50 check and the $500 check at the bank on the same day, but not at the same time, but later corrected himself when asked, "What do you mean by `the same day'?" He answered, "Perhaps she did present both checks at that time." Asked which was right, he replied, "She presented them both." "Q. Then you were mistaken a moment ago? A. I was. Q. When you were so positive? A. I am." The court then interposed, saying, "I would not argue that. It is apparent he is mistaken. You don't need to take time further."
Counsel did not object nor assign the remarks of the court as prejudicial, but had he done so, it is a familiar rule that *Page 237
counsel are not permitted to argue with a witness, and the only other statement of the court to which exception is taken consisted of a repetition of the witness' own admission that he was mistaken. This was also doubtless apparent to the jury from other evidence in the case, and we do not coincide with appellant's assertion that a "glaring discrepancy was glossed off as an apparent mistake" of a "lying witness." If constrained to hold that the remarks of the court added weight to the statement of the witness in this trivial respect, the jury were instructed to disregard the remarks of both counsel and the court, and we must assume that such instruction was observed.
[6] Appellant's only remaining point consists of the assertion that he was charged "with having given to one Frank J. Prott a check for $600 in payment for a secondhand car." And it is urged that there is no evidence to support a conviction upon count II of the information, involving such charge. It appears upon the face of the record that he was charged with having given Prott a check for $100, and the evidence shows that he gave one for $500 at the same time, which he asked Prott to hold. We have heretofore briefly set forth a summary of the facts, gathered from a careful perusal of the evidence. Appellant was not charged with having given a $600 check, nor do we find any mention of such a document. There was an abundance of evidence tending to show that the defendant issued and delivered the check for $100 as alleged, and that he had no money in the bank at the time to meet it. This constituted ample ground upon which to base the verdict and judgment, and is supported by other evidence of the defendant's false representations and manipulations in the realms of "high finance," from all of which we think the jury wholly justified in convicting him.
The judgment and order denying the motion for new trial are affirmed.
Finlayson, P.J., and Works, J., concurred. *Page 238 |
Citation Nr: 0913095
Decision Date: 04/08/09 Archive Date: 04/15/09
DOCKET NO. 08-00 759 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Hartford,
Connecticut
THE ISSUE
Entitlement to an initial disability evaluation in excess of
30 percent for post-traumatic stress disorder (PTSD).
REPRESENTATION
Veteran represented by: AMVETS
ATTORNEY FOR THE BOARD
Kristy L. Zadora, Associate Counsel
INTRODUCTION
The Veteran had active duty service from June 1966 to June
1968. He served in Vietnam from November 1966 to November
1967.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal of an October 2007 rating decision of the
Hartford, Connecticut regional office (RO) of the Department
of Veterans Affairs (VA), which granted service connection
for PTSD and established an initial disability rating of 30
percent, effective April 11, 2007.
FINDING OF FACT
For the entire claims period, the Veteran's PTSD has been
manifested by social isolation without occupational
impairment.
CONCLUSION OF LAW
The criteria for a disability rating in excess of 30 percent
for PTSD have not been met. 38 U.S.C.A. § 1155 (West 2002);
38 C.F.R. §§ 4.3, 4.7, 4.21, 4.126, 4.130, Diagnostic Code
(DC) 9411 (2008).
REASONS AND BASES FOR FINDING AND CONCLUSION
VCAA
The Veterans Claims Assistance Act of 2000 (VCAA) describes
VA's duty to notify and assist claimants in substantiating a
claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103,
5103A, 5107, 5126 (West 2002 & Supp. 2008); 38 C.F.R.
§§ 3.102, 3.156(a), 3.159 and 3.326(a) (2008).
The claim arises from disagreement with the initial rating
following the grant of service connection. The courts have
held that once service connection is granted the claim is
substantiated, additional VCAA notice is not required; and
any defect in the notice is not prejudicial. Hartman v.
Nicholson, 483 F.3d 1311 (Fed. Cir. 2007); Dunlap v.
Nicholson, 21 Vet. App. 112 (2007).
The United States Court of Appeals for Veterans Claims
(Court) has elaborated that filing a notice of disagreement
begins the appellate process, and any remaining concerns
regarding evidence necessary to establish a more favorable
decision with respect to downstream elements are
appropriately addressed under the notice provisions of 38
U.S.C. §§ 5104 and 7105. Hartman v. Nicholson, 483 F.3d 1311
(Fed. Cir. 2007).
Where a claim has been substantiated after the enactment of
the VCAA, the Veteran bears the burden of demonstrating any
prejudice from defective VCAA notice with respect to the
downstream elements. Goodwin v. Peake, 22 Vet. App. 128
(2008). There has been no allegation of prejudice in this
case.
The VCAA also requires VA to make reasonable efforts to help
a claimant obtain evidence necessary to substantiate his
claim. 38 U.S.C.A. §5103A; 38 C.F.R. §3.159(c)(d). This
duty to assist contemplates that VA will help a claimant
obtain records relevant to his claim(s), whether or not the
records are in Federal custody, and that VA will provide a
medical examination and/or opinion when necessary to make a
decision on the claim. 38 C.F.R. § 3.159(c)(4).
VA has met the duty to assist the Veteran in the development
of his claim. The Veteran's service treatment records and VA
treatment records have been obtained. The Veteran has been
afforded a VA examination and a sufficient medical opinion
has been obtained. The examiner did not have access to the
Veteran's claims folder, but did consider an accurate history
related by the Veteran, and had access to electronic records
showing the Veteran's treatment and history. The Board has
been able to consider the entire history, including service
treatment and personnel records and it does not appear that
the examiner failed to consider pertinent history.
As the Veteran's representative has indicated that there is
no outstanding pertinent evidence to be obtained, the Board
may proceed with consideration of the Veteran's claim.
Factual Background
Records from a Vet Center show treatment for symptoms of PTSD
as early as November 1994 and as recently as August 2003.
The records do not contain opinions as to the severity of the
disability, but the more recent records show that he was
found to be stable.
A May 2003 letter from the Veteran's sister indicates that
the Veteran's eye now twitched and that he suffered from a
"slight speech disorder."
The Veteran received VA outpatient treatment for PTSD from
June 2003 to January 2007. He was assigned GAF scores of 55
and 60. He complained of difficulty sleeping and intrusive
thoughts. In June 2003, he reported that he felt better
since he had stopped drinking, and in March 2005 it was
reported that he continued to "do very well at work,"
although he experienced sadness and anxiety when watching
news about the war in Iraq. In January 2007, he reported
that he was stable.
An August 2007 VA psychiatric examination reflects the
Veteran's reports of daily intrusive thoughts of combat
experiences and that he avoided reminders of those
experiences by not watching news of current conflicts or war-
related movies. Frequent nightmares, an exaggerated startle
response, chronic anxiety, memory difficulties, and quickness
to anger were reported.
The Veteran stated that he had no hobbies and no friends, and
that he resided with his wife of 30 years and an adult son.
He was noted to be socially isolated.
Chronic sleep disturbances, including restless sleep, were
reported. He also reported being employed as a manufacturing
worker with the same company for 25 years. Employment
difficulties, or difficulties with his activities of daily
living, were denied. Hallucinations, delusions and suicidal
ideations were also denied.
The examiner noted that the Veteran was poorly groomed in
that he was wearing a very dirty t-shirt, that he was
somewhat dysphoric, but that his thought process was logical.
His insight and judgment were fair, and his cognition was
found to be grossly intact. The examiner noted that the
Veteran was concerned over the possible reoccurrence of his
prostate cancer, which served as an additional stressor and
source of anxiety for him. Following a review of the
Veteran's electronic medical records, the examiner diagnosed
PTSD and assigned a GAF score of 55.
The examiner found that the Veteran's highest GAF score over
the past year ranged between 55 and 60. The examiner
elaborated that the Veteran had mild to moderate impairment
in social function with no vocational impairment.
Rating Criteria
Disability evaluations are determined by evaluating the
extent to which a Veteran's service-connected disability
adversely affects his ability to function under the ordinary
conditions of daily life, including employment, by comparing
his symptomatology with the criteria set forth in the
Schedule for Rating Disabilities (Rating Schedule).
38 U.S.C.A. § 1155; 38 C.F.R. §§ 4.1, 4.2, 4.10.
Consideration is given to the potential application of the
various provisions of 38 C.F.R. Parts 3 and 4, whether or not
they are raised by the Veteran, as required by Schafrath v.
Derwinski, 1 Vet. App. 589 (1991).
If there is a question as to which of two evaluations should
apply, the higher rating is assigned if the disability
picture more nearly approximates the criteria required for
that rating. Otherwise, the lower rating is assigned.
38 C.F.R. § 4.7.
In view of the number of atypical instances it is not
expected, especially with the more fully described grades of
disabilities, that all cases will show all the findings
specified. Findings sufficiently characteristic to identify
the disease and the disability therefrom, and above all,
coordination of rating with impairment of function will,
however, be expected in all instances. 38 C.F.R. § 4.21.
In instances in which the Veteran disagrees with the initial
rating, the entire evidentiary record from the time of the
Veteran's claim for service connection to the present is of
importance in determining the proper evaluation of
disability, and staged ratings are to be considered in order
to reflect the changing level of severity of a disability
during this period. Fenderson v. West, 12 Vet. App. 119
(1999).
PTSD is evaluated under VA's General Rating Formula for
Mental Disorders. 38 C.F.R. § 4.130, DC 9411. Under the
formula, a 10 percent rating is provided for occupational and
social impairment due to mild transient symptoms, which
decrease work efficiency only during periods of significant
stress or symptoms are controlled by medication. Id.
A30 percent rating is assigned where the disorder is
manifested by occupational and social impairment with an
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; and mild
memory loss (such as forgetting names, directions, and recent
events). Id.
A 50 percent rating is assigned when there is 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 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. Id.
A 70 percent evaluation is warranted for PTSD if the Veteran
exhibits: 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 actives; speech intermittently illogical,
obscure, or irrelevant; near-continuous panic or depression
affecting the ability to function independently,
appropriately and effectively; 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.
Id.
A 100 percent evaluation is warranted when there is 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. Id.
The extent of social impairment will also be considered, but
an evaluation will not be assigned solely on the basis of
social impairment. 38 C.F.R. § 4.126(b).
The symptoms listed in the criteria for a 50 percent
evaluation are not intended to serve as an exhaustive list,
but as examples of the type of symptomatology that would
warrant that evaluation, but without those factors,
differentiating a 30 percent evaluation from a 50 percent
evaluation would be difficult. Mauerhan v. Principi, 16 Vet.
App. 436, 442 (2002). If the evidence demonstrates that a
claimant suffers symptoms or effects that cause occupational
and social impairment equivalent to that which would be
caused by those listed in the rating criteria the appropriate
equivalent rating will be assigned. Mauerhan v. Principi, at
442-3.
GAF is a scale reflecting the "psychological, social, and
occupational functioning on a hypothetical continuum of
mental health-illness." Diagnostic and Statistical Manual of
Mental Disorders (4th ed. 1994) (DSM-IV).
A GAF score of 61 to 70 reflects some mild symptoms, or some
difficulty in social, occupational, or school functioning,
but generally functioning pretty well, with some meaningful
interpersonal relationships. A GAF score of 51 to 60
indicates moderate symptoms, or moderate difficulty in
social, occupational, or school functioning. A GAF score of
41 to 50 signifies serious symptoms (e.g., suicidal ideation,
severe obsessional rituals, frequent shoplifting) or any
serious impairment in social, occupational, or school
functioning (e.g., no friends, unable to keep a job). A GAF
score of 31 to 40 signifies some impairment in reality
testing or communication, or major impairment in several
areas, such as work or school, family relations, judgment,
thinking, or mood (e.g., where a depressed man avoids
friends, neglects family, and is not able to work). DSM-IV;
38 C.F.R. §§ 4.125, 4.130. See Carpenter v. Brown, 8 Vet.
App. 240, 242 (1995).
When there is an approximate balance of positive and negative
evidence regarding any issue material to the determination of
a matter, the VA shall give the benefit of the doubt to the
claimant. 38 U.S.C.A. § 5107(b).
Analysis
The Veteran contends that the VA examiner found he had
moderate symptoms and that this finding supports a rating in
excess of 30 percent. He asserts that he was given a 30
percent rating because the RO found his disability to be only
mild. As just noted, however, a 10 percent rating is
provided for mild symptoms. The 30 percent rating recognizes
a disability in excess of that level. 38 C.F.R. § 4.130.
Ratings in excess of 30 percent, would require a showing of
occupational impairment. Id. The examiner found that there
was no vocational impairment and the Veteran has not reported
such impairment. In fact, he has reported that was doing
[email protected]. The GAF scores imply moderate impairment, but
the record contains no actual reports of difficulties in
occupational functioning.
In addition, most of the symptoms enumerated in the criteria
for the next higher rating of 50 percent have not been
reported. Although the Veteran has reported impaired memory,
his cognition was intact on examination and mild memory loss
is contemplated in the criteria for the 30 percent
evaluation. Given his job performance, it cannot be found
that he has difficulty completing tasks, can retain only
highly learned material, or has impaired motivation.
Similarly, there have been reports in the past of a depressed
mood, but this symptom is also contemplated in the 30 percent
criteria. The Veteran has not reported and the record does
not show panic attacks. He has some difficulty in
maintaining social relationships, but no reported difficulty
in maintaining effective work relationships.
Examination has shown his thought process and cognition to be
intact, and his insight and judgment to be fair. There have
been no reports of panic attacks, flattened speech or
difficulty in understanding complex commands. Interference
with his occupation was denied by the Veteran. No evidence
was presented indicating that the Veteran suffered from
impairments in judgment, thinking or family relations.
The Veteran has been able to maintain social and occupational
relationships as documented by his long-term marriage, his
relationship with his children and his employment with the
same employer for 25 years. While he has reported that he
must "try his best" to maintain his relationships with his
children, his efforts have apparently been successful as
there have been no reported breaks in these relationships.
Speech difficulties were not reported in the Veteran's August
2007 VA examination.
The Veteran's disability has been described as stable and
there have been no periods since the effective date of
service connection when the disability has approximated the
criteria for an evaluation in excess of 30 percent.
38 C.F.R. §§ 4.7, 4.21. Staged ratings are therefore not
warranted and the weight of the evidence is against the grant
of a higher schedular rating.
Extraschedular Ratings
Pursuant to § 3.321(b)(1), the Under Secretary for Benefits
or the Director, Compensation and Pension Service, is
authorized to approve an extraschedular evaluation if the
case "presents such an exceptional or unusual disability
picture with such related factors as marked interference with
employment or frequent periods of hospitalization as to
render impractical the application of the regular schedular
standards." 38 C.F.R. § 3.321(b)(1) (2008).
The question of an extraschedular rating is a component of a
claim for an increased rating. See Bagwell v. Brown, 9 Vet.
App. 337, 339 (1996). Although the Board may not assign an
extraschedular rating in the first instance, it must
specifically adjudicate whether to refer a case for
extraschedular evaluation when the issue either is raised by
the claimant or is reasonably raised by the evidence of
record. Barringer v. Peake, No. 06-3088 (U.S. Vet. App.
Sept. 16, 2008)
If the evidence raises the question of entitlement to an
extraschedular rating, the threshold factor for
extraschedular consideration is a finding that the evidence
before VA presents such an exceptional disability picture
that the available schedular evaluations for that service-
connected disability are inadequate. Therefore, initially,
there must be a comparison between the level of severity and
symptomatology of the claimant's service-connected disability
with the established criteria found in the rating schedule
for that disability. Thun v. Peake, 22 Vet. App. 111 (2008).
Under the approach prescribed by VA, if the criteria
reasonably describe the claimant's disability level and
symptomatology, then the claimant's disability picture is
contemplated by the rating schedule, the assigned schedular
evaluation is, therefore, adequate, and no referral is
required. In the second step of the inquiry, however, if the
schedular evaluation does not contemplate the claimant's
level of disability and symptomatology and is found
inadequate, the RO or Board must determine whether the
claimant's exceptional disability picture exhibits other
related factors such as those provided by the regulation as
"governing norms." 38 C.F.R. 3.321(b)(1) (related factors
include "marked interference with employment" and "frequent
periods of hospitalization"). When the rating schedule is
inadequate to evaluate a claimant's disability picture and
that picture has related factors such as marked interference
with employment or frequent periods of hospitalization, then
the case must be referred to the Under Secretary for Benefits
or the Director of the Compensation and Pension Service for
completion of the third step--a determination of whether, to
accord justice, the claimant's disability picture requires
the assignment of an extraschedular rating. Id.
Pursuant to § 3.321(b)(1), the Under Secretary for Benefits
or the Director, Compensation and Pension Service, is
authorized to approve an extraschedular evaluation if the
case "presents such an exceptional or unusual disability
picture with such related factors as marked interference with
employment or frequent periods of hospitalization as to
render impractical the application of the regular schedular
standards." 38 C.F.R. § 3.321(b)(1).
When the rating schedule is inadequate to evaluate a
claimant's disability picture and that picture has related
factors such as marked interference with employment or
frequent periods of hospitalization, then the case must be
referred to the Under Secretary for Benefits or the Director
of the Compensation and Pension Service for completion of the
third step--a determination of whether, to accord justice,
the claimant's disability picture requires the assignment of
an extraschedular rating. Id.
The Veteran's disability is manifested by impairment in mood
and social functioning. The rating criteria contemplate
these impairments. Hence, referral for consideration of an
extraschedular rating is not warranted.
The Board has resolved all reasonable doubt in favor of the
Veteran in reaching this determination. 38 U.S.C.A.
§ 5107(b).
ORDER
Entitlement to an initial rating in excess of 30 percent for
PTSD is denied.
____________________________________________
Mark D. Hindin
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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