text:
    In re Grand Jury Subpoena of Fred VIGORITO et al., Appellees, United States of America, Appellant.
    No. 1063, Docket 74-1322.
    United States Court of Appeals, Second Circuit.
    Argued April 26, 1974.
    Decided July 11, 1974.
    Fred F. Barlow, Brooklyn, N. Y. (Edward J. Boyd, V, U. S. Atty., for the E. D. N. Y., Dennis Dillon, James W. Dougherty, Dept, of Justice, New York. City, on the brief), for appellant.
    Gustave H. Newman, Brooklyn, N. Y., for appellees.

      Before LUMBARD and HAYS, Circuit Judges, and JAMESON, District Judge.

       Honorable William J. Jameson, Senior District Judge for the District of Montana, sitting by designation.

   HAYS, Circuit Judge:

The appellees’ conversations in the Highway Lounge in Williamsburg, Brooklyn were overheard and recorded by means of microphones secreted by the government pursuant to court orders. Appellees are not currently defendants in any criminal action, and have not been called to testify before the grand jury which is investigating the subject matter of the conversations. They moved under Chapter 119 of Title 18 of the United States Code to discover the contents of the interception orders and supporting papers, and to suppress the use and derivative use by the grand jury of tapes of their conversations. The district court granted the motion. The government appeals from the district court’s order, which directs that no use be made of recordings of the appellees’ conversations or matter derived therefrom without first disclosing to counsel for the appellees the contents of the authorizing orders and supporting papers, and which permits the appellees to move to suppress the intercepted matter after the expiration of a reasonable time after disclosure. The district court premised discovery of the orders entirely on its holding that the appellees have a right to pursue a motion to suppress, and on its finding that the orders will aid appellees’ counsel in proceeding with such a motion. The principal issue on this appeal is whether one whose conversations are overheard pursuant to court-ordered electronic surveillance and who is not a criminal defendant or grand jury witness may move under 18 U.S.C. § 2515 (1970) to suppress the use of recordings of his conversations. We hold that he may not.

On April 12 and May 3, 1973, Judge Bartels of the Eastern District of New York signed orders permitted by 18 U. S.C. § 2518 (1970) authorizing the interception and continued interception of oral communications at the Highway Lounge. Judge Neaher authorized further continued interception on May 24, 1973. During April, May and June the oral communications of the appellees were overheard and recorded by concealed electronic equipment placed in the lounge. In September 1973 the appellees and about 40 other persons were served with inventories pursuant to 18 U.S.C. § 2518(8)(d) (1970), notifying them that the intercept orders had been entered and that oral communications had been intercepted. The appellees were subsequently served with grand jury subpoenas requiring them to provide voice exemplars for comparison with the intercepted communications. They were not required to testify before the grand jury. Each supplied an exemplar which consisted of a recitation of the first and second paragraphs of the Declaration of Independence.

The appellees moved the, district court for discovery by their counsel of the surveillance orders and for suppression of the intercepted conversations. On oral argument they moved in the alternative for suppression and return of the intercepted conversations under F.R. Crim.Proc. 41(e). Without reaching the Rule 41(e) issue, Judge Dooling held that under section 2515 the appellees had the right to move for suppression, despite the fact 2515 does not by its terms provide a suppression remedy, and despite the fact that the suppression procedure provided by Chapter 119, see 18 U.S.C. § 2518(10), does not by its terms apply to grand jury evidence.

Before reaching the statutory issue, we note that the exclusionary rule, a rule which permits a criminal defendant to suppress the use at his trial of evidence and the fruits of evidence obtained in violation of his constitutional rights, see Weeks v. United States, 232 U.S. 383, 35 S.Ct. 199, 58 L.Ed. 652 (1914); Mapp v. Ohio, 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed.2d 1081 (1961), Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963), does not give the appellees the right to suppress the use of evidence by a grand jury. In United States v. Calandra, 414 U.S. 338, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974), the Supreme Court held that a witness ordered to testify before a grand jury may not refuse to testify on the ground that the inquiry is derived from evidence obtained in the course of an unlawful search and seizure. The Court weighed the historic function and power of the grand jury against the prophylactic purpose of the exclusionary rule and concluded that the exclusionary rule’s potential for impeding the grand jury’s investigative function outweighs its potential for deterring illegal law enforcement activity. It refused to allow the witness in effect to bring on a suppression hearing by refusing to answer, expressing a “disinclination to allow litigious interference with the grand jury proceedings.” 414 U.S. at 350, 94 S.Ct. at 621. The Calandra rationale applies with equal force in a case like the present, where a suppression hearing is brought on by a non-witness’s motion. The non-witness’s interest in the investigation is more tenuous than a witness’s interest since he is not subject to the court’s contempt power. Giving the present appellees the benefit of the exclusionary rule would interfere with the function of the grand jury to an even greater extent than giving the benefit of the rule to witnesses, yet it would not have a greater deterrent effect on illegal law enforcement activity.

Thus, if the appellees are entitled to move to suppress grand jury evidence, such entitlement must be based on a specific statute rather than the exclusionary rule. The district court held that section 2515 is a statutory basis for a motion to suppress grand jury evidence. We disagree.

In In re Persico, 491 F.2d 1156 (2d Cir. 1974), a case decided after the entry of the order in the present case, we held that a witness before a grand jury who has refused to answer a question and who is being proceeded against for contempt may assert the defense that the question posed is the product of electronic surveillance unlawful under Chapter 119 “only if there is an absence of a necessary court order or if there is a concession from the Government that the surveillance was not in conformity with statutory requirements or if there is a prior judicial adjudication that the surveillance was unlawful.” 491 F.2d at 1162 (emphasis in original). The defendant in that case argued that he should be permitted a plenary hearing to test the validity of the electronic interception from which the question derived, relying mainly on Gelbard v. United States, 408 U.S. 41, 92 S.Ct. 2357, 33 L.Ed.2d 179 (1972). We rejected that argument, noting that while the Gelbard court held that in a contempt proceeding a witness who refuses to testify before a grand jury may avail himself of the defense that the question is derived from unauthorized electronic surveillance, it did not decide “whether [witnesses] may refuse to answer questions if the interceptions of their conversations were pursuant to court order.” 408 U.S. at 61 n. 22, 92 S.Ct. at 2368. Nevertheless, Mr. Justice White, writing a separate opinion supplying the decisive vote, see 408 U.S. at 69, 92 S.Ct. 2357, suggested that, if an interception is supported by a court order, requiring a hearing as to the validity of the order would be an unwarranted infringement upon the traditional prerogatives of the grand jury:

“Where the Government produces a court order for the interception . and the witness nevertheless demands a full-blown suppression hearing to determine the legality of the order, there may be room for striking a different accommodation between the due functioning of the grand jury system and the federal wiretap statute. Suppression hearings in these circumstances would result in protracted interruption of grand jury proceedings. At the same time, prosecutors and other officers who have been granted and relied on a court order for the interception would be subject to no liability under the statute, whether the order is valid or not; and, in any event, the deterrent value of excluding the evidence will be marginal at best.” 408 U.S. at 70, 92 S.Ct. at 2372.

In Pérsico we adopted Justice White’s suggestion. We found that the legislative history of section 2518(10), the only provision in Title 119 that specifically provides for suppression hearings, indicates that Congress did not intend Title 119 to interfere with traditional methods of conducting grand jury proceedings so long as the interception is not patently illegal:

“As noted, though Congress prescribed that illegal wiretap evidence must be excluded from all grand jury proceedings, hearings to suppress evidence were not to be permitted during such proceedings. These seemingly inconsistent policy determinations can be reconciled only by interpreting the statute as requiring exclusion only when it is clear that a suppression hearing is unnecessary, as when the Government concedes that the electronic surveillance was unlawful or when the invalidity of the surveillance is patent, such as, for example, when no prior court order was obtained, or when the unlawfulness of the Government’s surveillance has been established in a prior judicial proceeding. In these situations both statutory policies — the exclusion of illegally acquired evidence and the maintenance of unimpeded grand jury proceedings —are served. But where illegality is claimed and, if established, can be established only by way of a plenary suppression hearing, one important aim of the legislation would be frustrated.” 491 F.2d at 1161-1162.

The appellees do not claim that their case is one in which the tapes of their conversations should or may be suppressed without a hearing; in fact they ultimately seek a hearing on their motion to suppress. Rather they argue that Pérsico does not govern this case because they are not witnesses before the grand jury, and because they are not being proceeded against for contempt. These two distinctions suggest that there is even less justification for a plenary suppression hearing in the present case than there was in Pérsico. In Pérsico our rationale for not allowing the witness to initiate a hearing on the legality of evidence derived from our concern that the hearing would impede the grand jury investigation. The same concern is dispositive in the present case. Were we to permit the boundless class of non-witnesses to move for suppression we would create an infinite potential for disruption of grand jury proceedings. If every non-witness overheard in the course of the electronic gathering of evidence were allowed to object to the consideration of that evidence, the jury’s inquiry would move at a snail’s pace pending the resolution of a myriad of suppression motions. Non-witness objection to grand jury evidence, if permitted at all, must be limited to those cases in which the illegality can be established without a hearing.

The appellees’ alternate motion for the suppression and return of their conversations under Rule 41(e) has no basis in the text of the Rule. In Bova v. United States, 460 F.2d 404 (2d Cir. 1972), we held, albeit in the context of our appellate jurisdiction, that telephone conversations are not “property” as that term is used in Rule 41(e). We see no reason to apply a different standard in this case. Decisions urged upon us by the appellees which extend the protection of the Fourth Amendment to governmental seizures of intangibles, compare Katz v. United States, 389 U.S. 347, 353, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967), with Olmstead v. United States, 277 U.S. 438, 457, 466, 48 S.Ct. 564, 72 L.Ed. 944 (1928), are not relevant to the narrow issue of what constitutes “property” as that term is used in Rule 41(e). Since the conversations are not property of the appellants, they are not subject to return and suppression under Rule 41(e).

Reversed.

      . 18 U.S.C. §§ 2510-2520 (1970). Chapter 119 provides a comprehensive scheme for regulating wiretapping and electronic surveillance. It was added to Title 18 by Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 82 Stat. 211 (1968).

      . Section 2515 provides in relevant part:
      “Whenever any wire or oral communication has been intercepted, no part of the contents of such communication and no evidence derived therefrom may be received in evidence in any trial, hearing, or other proceeding in or before any court, grand jury ... if the disclosure of that information would be in violation of this chapter.” 18 U.S.O. § 2515 (1970).


source: Caselaw Access Project

author: EUGENE A. WRIGHT, Circuit Judge: DUNIWAY, Circuit Judge

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellant, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant-Appellee.
    No. 73-1001.
    United States Court of Appeals, Ninth Circuit.
    July 9, 1974.

      Stan Pitkin, U. S. Atty., Seattle, Wash., Charles F. Mansfield, Asst. U. S. Atty., Morton D. Hollander, William D. Appier, Washington, D. C., for plaintiff-appellant.
    John P. Braislin, Skeel, McKelvey, Henke, Evenson & Betts, Seattle, Wash., for defendant-appellee.
    Before DUNIWAY, WRIGHT and CHOY, Circuit Judges.
   OPINION

EUGENE A. WRIGHT, Circuit Judge:

The United States appeals from summary judgment denying its claim for payment under an automobile insurance policy for providing medical care to insured persons. The district court found that the parties to the insurance contract did not intend to benefit the United States as a third-party beneficiary and that coverage was excluded by a specific clause of the policy. We reverse and remand.

John and Margaret Buckner, the insured parties under the policy involved in this dispute, were injured in an automobile accident in Washington State caused solely by the negligence of Mr. Buckner. They were given preliminary medical treatment at a hospital near the accident and were then transferred to Madigan General Hospital, a military hospital at Fort Lewis, Washington. Because Mr. Buckner was a retired serviceman, he and his wife were entitled to free medical care on a space available basis in a military hospital pursuant to 10 U.S.C. §§ 1074(b), 1075, 1076(b). The reasonable value of the free care provided at Madigan General was $4,503.75, and the United States sued to recover $4,000, the monetary limit of the policy, from Nationwide.

Nationwide defended on the grounds that the United States could not recover as a third-party beneficiary under the policy and that coverage was excluded by one of the policy’s exclusionary clauses. The district court found both that Nationwide did not contract with the intent to benefit the United States under these circumstances and that the exclusionary clause barred recovery. Summary judgment was granted in favor of Nationwide, and the government appeals.

A threshold question, not considered by the district court, is whether Washington or federal law should be applied. The United States invoked the jurisdiction of the district court under 28 U.S.C. § 1345, giving the district court jurisdiction in all cases where the United States is a party plaintiff. Federal courts that have considered the question have held that suits under § 1345 are not controlled by Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), requiring adherence to appropriate state substantive law. E. g., United States v. Williams, 441 F.2d 637 (5th Cir. 1971); Tri-State Ins. Co. v. United States, 340 F.2d 542 (8th Cir. 1965). But where there has been no clear federal law to apply, federal courts have referred to state law to provide the appropriate rule. United States v. Williams, supra; United States v. Hedburg, 217 F.Supp. 711 (D.S.D.1963). There is no appropriate federal rule in the situation with which we are faced: the interpretation of an insurance contract and third-party beneficiary recovery. Indeed, two federal courts that have considered the latter problem have referred to state law. United States v. Government Employees Ins. Co., 461 F.2d 58 (4th Cir. 1972); United States v. State Farm Mutual Automobile Ins. Co., 455 F.2d 789 (10th Cir. 1972). Thus, we look to the law of Washington to provide the substantive rules to be applied to the problem before us.

While Washington substantive law will be applied here, certain issues must nevertheless be decided by reference to federal law. Specifically, the determination whether a question is an issue of fact for the trier of fact or an issue of law for the court is controlled by federal law. Such would be the rule even if state law were applicable under the mandate of Erie. Byrd v. Blue Ridge Rural Electric Cooperative, Inc., 356 U.S. 525, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958); Gillespie v. Travelers Ins. Co., 486 F.2d 281, 283 n. 1 (9th Cir. 1973). On the other hand, the right of a third-party beneficiary to sue on a contract and special rules concerning the resolution of ambiguities against the drafter of an adhesion contract or against the insurer in an insurance contract reflect a substantive state policy and will be analyzed with reference to Washington law. See Gillespie v. Travelers Ins. Co., supra at 283 n. 2.

Having ascertained the governing law, we turn to the United States’ assignments of error. First, it argues that the district court erred in finding that it was not a third-party beneficiary. The policy obligated Nationwide to pay reasonable medical expenses “to or for” the injured party. The government argues that the word “for” must be given meaning and that its inclusion evidences an intent that payment be made “for” the injured party to the entity providing medical care as an alternative to payments made “to” the injured party directly. The government relies on judicial and commentary analyses reaching similar conclusions. See United States v. Government Employees Ins. Co., supra; United States v. State Farm Mutual Automobile Ins. Co., supra; Long, Government Recovery Beyond the Federal Medical Recovery Act, 14 S.Dak.L.R. 20, 35-37 (1969); see also Franklin Casualty Insurance Co. v. Jones, 362 P.2d 964 (Okl.1961) (dissenting opinion). We need not, however, determine whether the government’s suggested meaning is correct.

Washington law permits third-party beneficiaries to enforce contracts if the contract was intended to benefit the third party. See Ridder v. Blethen, 24 Wash.2d 552, 166 P.2d 834 (1946). Under the circumstances of this case, the government can qualify, if at all, only as a donee beneficiary, because the insured party was under no obligation to reimburse the government for the medical services rendered. To do so, the contract must have been intended by the promisee to confer a gift upon the government. Id. Whether it was so intended by the promisee is a question concerning the meaning of the contract and is, under federal law, an issue of fact to be decided by the trier of fact. See Gillespie v. Travelers Ins. Co., supra, and authorities cited therein.

The district court found as fact that Nationwide did not intend to benefit the government. As a finding of fact we will overturn the district court’s conclusion only if it is “clearly erroneous.” Fed.R.Civ.P. 52. But even if the finding is not clearly erroneous, it does not support a conclusion that the government is not a third-party beneficiary; as the promisor, Nationwide’s intent is not determinative. Since the intent of the promisee, the insured, is an issue of fact upon which there was no finding, the case must be remanded to the district court for further factual determinations.

Second, we consider whether the district court* correctly found that recovery was barred by the exclusionary clause:

There shall be no protection afforded . (13) under Coverages D(l) and D(2) to that amount of any expense which is paid or payable to or on behalf of the injured person under the provisions of any (1) premises insurance affording benefits for medical expenses, (2) individual, blanket or group accident, disability or hospitalization insurance, (3) medical, surgical, hospital or funeral service, benefit or reimbursement plan or (4) workmen’s compensation or disability benefits law or any similar law. .

The district court found that medical care furnished by law to retired service personnel is a “medical, surgical or hospital benefit or reimbursement plan within the meaning of Exclusion (13) of [the] policy.” Although this is a factual finding that should be reversed only if “clearly erroneous,” there is no indication that the district court applied the proper legal standard.

Under Washington law, insurance contracts are to be interpreted strictly against the insurer by resolving ambiguities in favor of the insured. See, e. g., Metropolitan Mortg. & Security Co. v. Reliable Ins. Co., 64 Wash.2d 98, 390 P.2d 694 (1964); Thompson v. Ezzell, 61 Wash.2d 685, 379 P.2d 983 (1963). The district court does not appear to have applied this rule of interpretation. The case must, therefore, be remanded for a factual finding by the district court applying the proper rule of construction.

The Washington rule requiring ambiguities in an insurance contract to be resolved against the insurer and in favor of the insured raises an interesting problem concerning the third-party beneficiary issue: A finding of intent by the promisee that the third party be benefited is not necessarily a finding in favor of the insured or against the insurer. Thus, it is unclear how the rule of interpretation should be applied, if at all, to the question whether the promisee intended to benefit the third party. Since the case must be remanded for factual findings, and since the parties have not argued this issue before this court, it is appropriate that the district court consider in the first instance whether the Washington rule of construction should be applied to the question whether the promisee intended to benefit the third party.

The judgment of the district court is reversed, and the case is remanded for further proceedings consistent with this opinion.

DUNIWAY, Circuit Judge

(concurring and dissenting):

For the purpose of this opinion, I assume that Judge Wright is correct in holding that the governing law is that of the State of Washington.

No Washington case cited to us is even remotely in point. I therefore look to the general rules applied by courts to the construction of insurance policies, which are followed in Washington. The major rule is well stated in Aschenbrenner v. United States, 1934, 292 U.S. 80, 54 S.Ct. 590, 78 L.Ed. 1137, in which Mr. Justice Stone (as he then was), writing for the Court said:

The phraseology of contracts of insurance is that chosen by the insurer and the contract in fixed form is tendered to the prospective policy holder who is often without technical training and who rarely accepts it with a lawyer at his elbow. So if its language is reasonably open to two constructions, that more favorable to the insured will be adopted, (at 85, 54 S.Ct. at 592)

This is the law in almost every American jurisdiction, including the State of Washington. See, e. g., V. Van Dyke Trucking, Inc. v. “The Seven Provinces” Ins. Ltd., 1965, 67 Wash.2d 122, 406 P.2d 584, 588:

If it can be said that there is any ambiguity in this provision, then under standard horn-book law, the ambiguity is to be construed against the drafter of the contracts or policy.

I can perceive no good reason why this rule is not applicable to the question before us, namely, whether the United States, which provided medical service “for” the insured, is a beneficiary of the policy. I suggest that, to apply rules applicable to contracts, the terms of which are negotiated, to this case, and to remand for a fact finding hearing as to the intent of the insured when he bought the policy, will prove to be an exercise in utter futility. It seems to me almost certain that the insured had no intent in relation to the question before us, and I would have little, if any, confidence in the reality or veracity of anything that he might now say, after the fact.

Moreover, the policy itself seems to prohibit it. It provides:

8. CHANGES’; CONFORMITY TO STATUTES
The terms of this policy may not be waived or changed by notice to or knowledge possessed by any agent or other person, but only by policy endorsement.

To me, this means that the Insurance Company, having chosen the words of its policy, wishes to be governed by those words and nothing else. I would take it at its word, and construe the words under the rule of construction that applies to all such policies.

In my opinion, the words of the policy, quoted in Judge Wright’s opinion, are readily susceptible to the construction that the Company’s obligation is to pay the insured’s medical expenses to the insured or to whatever person or organization has incurred such expenses in his behalf, i. e., “for” him. And so say the cases construing similar language: United States v. Government Employees Ins. Co., 4 Cir., 1972, 461 F.2d 58; United States v. State Farm Mut. Auto. Ins. Co., 10 Cir., 1972, 455 F.2d 789; United States v. United Services Auto Ass’n, 5 Cir., 1970, 431 F.2d 735.

I also am of the opinion that the exclusion quoted in Judge Wright’s opinion does not plainly refer to the government’s statutory obligation to provide medical care to retired servicemen. Clearly, the government’s obligation is not “insurance” (subd. (2)) nor a “workman’s compensation or disability law or any similar law” (subd. (4)). The trial judge thought that subdivision (3) applies: “Medical, surgical, hospital or funeral service benefit or reimbursement plan.” This is a closer question, but to it I would apply another universal rule, relating to exclusions in insurance policies. Because they limit the coverage elsewhere apparently granted and because they tend to defeat the natural expectations of the insured and his beneficiaries, the rule of strict construction applicable to insurance policies is most strongly applicable to exclusions. Applying that rule, I cannot hold that the government’s statutory obligation is a “benefit or reimbursement plan” within the meaning of subdivision (3). The apparent purpose of the exclusion is to prevent a possible double recovery by the insured; if he is compensated by a benefit or reimbursement plan, he cannot collect again from Nationwide. ,-That is not what is involved here. It would be a strained construction of subdivision (3) to say that the United States government, furnishing medical care under a statutory command, is a “benefit or reimbursement plan.”

There are a large number of servicemen who, like the insured in this case, are entitled to medical care at government expense. If the Insurance Company desires to exclude the expense of such care from the coverage of its policy, it could do so expressly. It is not entitled to rely on ambiguous language such as it has used to achieve the same result.

I concur in the reversal, but I would remand with directions to enter judgment for the United States.

      . In its complaint, the United States asserted a right to recover under the Medical Care Recovery Act [42 U.S.C. §§ 2651-2653]. Because the defendant is neither a tort-feasor nor the insurer of one, the United States now concedes that the Act is inapplicable and asserts only that recovery is available under the terms of the policy.

      . In certain cases of significant local interest, such as cases involving title to land, state law has been held to apply. See United States v. Buras, 332 F.Supp. 1017 (D.La.1970), rev’d on other grounds 458 F.2d 346, rehearing denied 475 F.2d 1370 (5th Cir. 1972).

      . Because we conclude that state law will be applied regardless of the applicability of Erie, we need not decide whether other circuits have correctly concluded that Erie is inapplicable to suits under § 1345. Similarly, we need not decide whether reference to state law for convenience rather than under the mandate of Erie is reference to the law of the state in which the district court is located, including that state’s conflict of laws rules, Klaxon Co. v. Stentor Electric Mfg. Co., Inc., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), or reference directly to “appropriate” state law using a federal choice of law rule. In the present circumstances both methods lead us to adopt Washington law.

      . D. Medical Payment: To pay all reasonable expenses, incurred within one year following the accident, for necessary medical, dental, surgical, ambulance, hospital, professional nursing and funeral services and prosthetic devices, to or for:
      (I) Each person whose bodily injury or death was sustained while in . . . the described automobile ....

      . Government Employees and State Farm differ from the instant case in one important respect. In both cases there was significant language apart from the “to or for” clause evidencing an intent that the provider of medical care was an intended beneficiary of the contract- Such language is not present in the Nationwide policy.

      . The Washington Supreme Court is not absolutely clear on the requirement that the promisee’s intent controls. At one point, it states that the intention of the “parties” controls. Ridder v. Blethen, 24 Wash.2d 552, 166 P.2d 834, 835 (1946). But it also cites approvingly the Restatement rule that the intent of the promisee controls. Id. Since the common law rule is that the promisee’s intent is the significant factor, see Corbin on Contracts, § 776, and-since Washington does not indicate a rejection of the common law rule (indeed the Restatement is approvingly cited), we conclude that Washington would look to the promisee’s intent.

      . This is not a problem regarding the exclusionary clause because it is clear which interpretation would favor the insured and which would favor the insurer.
      The dissent argues that ambiguities should be resolved in favor of the government on the issue whether the government is a third-party beneficiary. If the exclusionary clause does not bar recovery, the question is whether the government or the insured may recover. It is difficult to see how a finding in favor of the government is one in favor of the insured. It is rather a finding against the insured. Since the insurer would be required to pay either the government or the insured, such a finding would be neither in favor of nor against the insurer.
      If the contract is interpreted to confer a gift upon the government, the retired serviceman will have paid indirectly for the medical care to which he was entitled becausa of his service. Again, it is difficult to see how such a finding would benefit the insured.
      But whatever our view, the remand will enable the district court, after the parties have briefed the issue, to decide how Washington would decide this issue.

      . Gillespie v. Travelers Ins. Co., 9 Cir. 1973, 486 F.2d 281, is not in point. In that case we said that “the meaning of words used in a contract [of insurance] is normally an issue of fact to be decided by the trier of fact rather than the court.” But we held, first as a matter of law, not fact, that the helicopter there involved was not a “public conveyance” within the meaning of that phrase as used in the policy, thus overruling a jury verdict, and second, again as a matter of law, not fact, that the helicopter was being used for “the sole purpose of transportation,” within the meaning of that phrase as used in the policy. In the second holding, we relied upon the following rule: “Since Alaska law requires the adoption of the reasonable interpretation which favors the insured there was nothing for the jury to decide.” In the case at bar, I would apply Gillespie’s holding, not its dictum.

      . United States v. Government Employees Insurance Co., 5 Cir., 1971, 440 F.2d 1338, 1339; United States v. United Services Auto. Ass’n, D.Conn., 1970, 312 F.Supp. 1314, 1316; United States v. Commercial Union Ins. Group, S.D.N.Y., 1969, 294 F.Supp. 768, 771.


author: BUTZNER, Circuit Judge:

text:
    Juanita MOSLEY, Administratrix C.T.A. of the Estate of Grady G. Mosley, Appellant, v. UNITED STATES of America, Appellee.
    No. 73-2112.
    United States Court of Appeals, Fourth Circuit.
    Argued April 1, 1974.
    Decided July 18, 1974.

      William H. Holdford, Wilson, N. C. (Narron, Holdford, Babb & Harrison, Wilson, N. C., on brief), for appellant.
    Jack B. Crawley, Jr., Asst. U. S. Atty. (Thomas P. McNamara, U. S. Atty. for the E. D. N. C., on brief), for appellee.
    Before BUTZNER, RUSSELL and FIELD, Circuit Judges.
   BUTZNER, Circuit Judge:

In this appeal of an action brought under the Federal Tort Claims Act, Juanita Mosley’s sole assignments of error pertain to the adequacy of the damages awarded by the district court for her husband’s wrongful death and the sufficiency of the findings on which the award is based. Concluding that the evidence and the district court’s findings fail to provide information necessary for proper review of the award, we vacate the judgment and remand the case for redetermination of the damages.

The district court held that personnel of a Veterans Administration Hospital were responsible for the death of Grady G. Mosley in December 1968, and it awarded $2000 for his pain, suffering, and mental anguish. Neither the government nor Mrs. Mosley appeal those rulings. The district court also awarded $10,000 for Mosley’s wrongful death, and it is to this part of the judgment that Mrs. Mosley assigns error.

Mosley, age 44, supported his wife and three minor children on his earnings as a railroad engineer, which were about $11,000 in 1967, and $10,800 through October 1968. The district court found that because Mosley’s heart was impaired, his life expectancy was not in excess of 10 years and his effective working expectancy, assuming successful heart surgery, was not in excess of five years. Weighing these facts and applying North Carolina’s measure of damages, the district court ruled that the present value of Mosley’s net pecuniary worth was “not in excess of $10,000.”

The district court properly recognized that North Carolina law governed the measure of damages for Mosley's death. See United States v. Price, 288 F.2d 448 (4th Cir. 1961). When Mosley died, North Carolina’s statutes simply prescribed “fair and just compensation” for the pecuniary loss resulting from wrongful death. The prevailing standard for assessing fair and just compensation was stated in Mendenhall v. North Carolina R. R. Co., 123 N.C. 275, 278, 31 S.E. 480 (1898), as follows:

“The measure of damages is the present value of the net pecuniary worth of the deceased, to be ascertained by deducting the cost of his own living and expenditures from the gross income, based upon his life expectancy.”

Other North Carolina decisions make it clear that gross income is not limited to wages but may include other sources of income for life, such as disability income, retirement benefits, pensions, and annuities. Bryant v. Woodlief, 252 N.C. 488, 494, 114 S.E.2d 241, 246 (1960). Deductions from gross income include only those necessary expenses the deceased himself would have incurred — not those incurred by other members of his family. Carter v. North Carolina R. R. Co., 139 N.C. 499, 52 S.E. 642 (1905).

The exactness with which a district court must state its findings of fact depends, of course, on the circumstances of each particular case. Kelley v. Everglades Drainage Dist., 319 U.S. 415, 419, 63 S.Ct. 1141, 87 L.Ed. 1485 (1943). There is no inflexible mathematical formula for computing damages, and the trier of fact must be allowed latitude in evaluating the components of the award. Neal v. Saga Shipping Co., 407 F.2d 481 (5th Cir.), cert. denied, 395 U.S. 986, 89 S.Ct. 2143, 23 L.Ed.2d 775 (1969). Therefore, reviewing courts have generally tended to uphold judgments where the record discloses that the overall award is reasonable even though the district court’s findings may lack specificity. United States v. Pendergrast, 241 F.2d 687 (4th Cir. 1957). On the other hand, an appellate court must remand the case when it cannot adequately review an award in the light of the objections raised to its validity. Hatahley v. United States, 351 U.S. 173, 182, 76 S.Ct. 745, 100 L.Ed. 1065 (1956); Neill v. Diamond M. Drilling Co., 426 F.2d 487 (5th Cir. 1970).

Mrs. Mosley contests the district judge’s findings about her husband’s work and life expectancies. We conclude, however, that they are amply supported by the record. Therefore, in reviewing the award we accept, as we must, the five-year limitation on Mosley’s effective work expectancy. Since the uncontradicted evidence disclosed that Mosley’s most recent annual earnings were in excess of $11,000, a reasonable expectation of gross income would be at least $55,000, even without taking into consideration such relevant factors as the likelihood of pay increases during his working years and disability payments or other income during the balance of his life expectancy.

From the amount that a decedent could reasonably have been expected to earn there must be deducted sums equivalent to the cost of his own living and expenditures in order to determine the net pecuniary loss to his family. .The district court adverted to “the probable cost of [Mosley’s] own living and his ordinary or usual expenses,” but it made no findings concerning the amount of this indispensable factor of the equation. The record, moreover, discloses no reason for assuming that Mosley would consume a disproportionate share of his annual income, leaving his four dependents with less than 20 percent of his earnings.

Even when an appropriate factor is used to discount future earnings and expenses to reach present value, we are unable to reconstruct a net worth of only $10,000. The record does not disclose how the district judge discounted the gross figures, but in any event the discount would have a minor effect because the judgment was entered more than four years after Mosley’s death. Earnings and expenses attributable to the period between death and judgment are not future accruals, and, consequently, they are not subject to discount to ascertain their present value. Brooks v. United States, 273 F.Supp. 619, 633 (D.S.C. 1967).

Understandably, the district court and the parties were preoccupied by the difficult, closely contested issue of liability. Perhaps for this reason, neither the evidentiary record nor the district court’s carefully reasoned opinion on the complex question of fault provide us with a sufficient basis for reviewing the adequacy of the award for wrongful death. To do justice to both Mosley’s family and the government, it appears that the record must be reopened to provide evidence relating to Mosley’s personal expenditures, changes in his pay scale, any additional income for life, and other relevant facts which the parties may wish to call to the court’s attention. Fortunately, much of this information should be available by stipulation because the passage of time has revealed a significant period of the future as viewed from the date of Mosley’s death in 1968. Similarly, the need for discounting gross figures to ascertain present worth has been reduced, but if estimates of future income and expenses are an element of the award, the court should briefly explain the salient features of its computation.

The part of the judgment pertaining to the damages for wrongful death is vacated, and the case is remanded for redetermination of the award.

      . The paragraphs in the district judge’s opinion referring to the amount of damages for Mosley’s wrongful death contain the following findings of fact and conclusions of law:
      “The court therefore finds that Mr. Mosley’s life expectancy was not in excess of ten years; that his effective work life expectancy following successful heart surgery would not have been in excess of five years; and that the present value of the net pecuniary worth of the deceased ascertained by deducting the probable cost of his own living and his ordinary or usual expenses from the probable gross income which would have been derived from his own exertions based upon his life expectancy is not in excess of $10,000.
      “As damages for wrongful death the plaintiff is entitled to recover the sum of $10,000 in accordance with the provisions of the North Carolina statute, G.S. § 28-174, as the statute read on December 10, 1968.”

      . North Carolina’s G.S. § 28-174, pertaining to damages for wrongful death, was amended in 1969 to provide greater coverage and more specific categories of awards, but the revised statute does not apply retroactively where, as in Mosley’s case, death occurred before the effective date of the amendment. Smith v. Mercer, 276 N.C. 329, 172 S.E.2d 489 (1970).

      . Brooks illustrates the computation of damages under a wrongful death statute that resembles in many respects the North Carolina law.


author: CUMMINGS, Circuit Judge.

text:
    Henry M. SUCKLE, M.D., Plaintiff-Appellant, v. MADISON GENERAL HOSPITAL, Defendant-Appellee.
    No. 73-1931.
    United States Court of Appeals, Seventh Circuit.
    Heard April 8, 1974.
    Decided July 17, 1974.
    Rehearing Denied Aug. 15, 1974.
    Robert F. Hanley, David C. Roston, Chicago, 111., for plaintiff-appellant.
    Eugene 0. Gehl, Willard S. Stafford, Madison, Wis., for defendant-appellee.

      Before HASTINGS, Senior Circuit Judge, CUMMINGS, Circuit Judge, and NOLAND, District Judge.

       District Judge James E. Noland of the Southern District of Indiana is sitting by designation.

   CUMMINGS, Circuit Judge.

The complaint herein was brought under the Civil Rights Act (42 U.S.C. §§ 1983 and 1985) by a neurological surgeon seeking reinstatement to the staff of Madison General Hospital in Madison, Wisconsin.

After being certified by the American Board of Neurological Surgeons in 1948, plaintiff limited his practice to the field of neurological surgery. He was a member of the medical staff of St. Mary’s Hospital and Methodist Hospital in Madison but attended and treated most of his surgical and clinical patients at Madison General, where he served as Chief of Staff for three years.

According to the complaint, in 1967 the defendant hospital appointed a Bed Utilization Committee of the medical staff to investigate the cause of a shortage of beds in the hospital. During that year, plaintiff’s patients utilized more hospital beds than those of any other doctor. After various internal investigations, the Executive and Credentials Committee of the medical staff at the defendant hospital made the following recommendation to the hospital’s Board of Directors on January 6,1969:

“The Executive and Credentials Committee recommended that Dr. Henry M. Suckle be asked to resign voluntarily from the medical staff of Madison General Hospital, and that any reapplication not be considered until after three years. The Committee suggests that one of these year's be spent in postgraduate neurosurgical training in an accredited program.
“If this recommendation is not accepted by Dr. Suckle, the Committee recommends to the Board of Directors at their January 22, 1969 meeting that Dr. Suckle not be reappointed to the medical staff at Madison General Hospital.”

At its January 22, 1969, meeting, defendant’s Board of Directors decided not to renew plaintiff’s appointment, precipitating this lawsuit.

The gravamen of the complaint is that the hospital employed improper procedures in dropping plaintiff from its staff, thus depriving him of due process of law in violation of the Fourteenth Amendment. The hospital’s acts were stated to be committed under the color of state law, and this was later conceded by defendant (362 F.Supp. at 1199).

After a trial on the merits, the district court issued an exhaustive opinion concluding with an order dismissing the action on its merits. 362 F.Supp. 1196. The district court observed that on January 7, 1969, defendant’s chief of staff proffered plaintiff an opportunity to appear before the entire active medical staff. Without explanation, plaintiff declined to do so. The court concluded that he was barred from judicial relief because he declined the hearing before the active medical staff without inquiring whether its proceedings were to be based on a specific detailed set of charges related to particular cases or requesting that they be so based. The court concluded that although proceedings up to January 7 did not comply with due process requirements, the plaintiff probably would have received constitutionally adequate treatment by the staff if this inquiry had been answered affirmatively. 362 F.Supp. at 1222. For somewhat different reasons, we affirm.

Under defendant’s bylaws, to protect the public interest, appointments to its staff were to be made by the Board of Directors of the hospital for a period of only one year. Although the district court found that a member of the medial staff could realistically expect to continue as a member for an indefinite period of time in the absence of cause for nonrenewal, and that procedural protections were guaranteed by hospital bylaws (362 F.Supp. at 1199), the opinion below and plaintiff’s briefs point to nothing in state law suggesting that his expectancy was a claim of entitlement amounting to a property interest for due process purposes under Perry v. Sindermann, 408 U.S. 593, 599, 92 S.Ct. 2694, 33 L.Ed.2d 570. Procedural protections or the lack thereof do not determine whether a property right exists. Arnett v. Kennedy, 416 U.S. 134, 94 S.Ct. 1633, 40 L.Ed.2d 15; Adams v. Walker, 492 F.2d 1003, 1006 (7th Cir. 1974); Jeffries v. Turkey Run Cons. School District, 492 F.2d 1, 3 (7th Cir. 1974). Rather, plaintiff must show a substantive restriction on the hospital's discretion, namely, that reappointment may be denied only for certain reasons under state law. Procedural protections may be persuasive, for they suggest that there are factual issues which matter. But if it is proper under state law for the hospital to deny reappointment regardless of what is shown at a hearing, then no property right exists.

Similarly, under Shirck v. Thomas, 486 F.2d 691 (7th Cir. 1973) and Adams v. Walker, supra, 492 F.2d at 1007 et seq., the defendant’s statements that the plaintiff did not do his job well do not deprive him of a liberty interest which would activate the due process clause. We are unwilling to make an exception to the rule of those cases merely because plaintiff is a surgeon.

Therefore, affirmance might well be warranted on the ground that plaintiff had no interest to which due process protection attached. But we do not rest our decision on this ground because it does not appear that the issue was seriously contested below. Although it seems clear that no liberty rights were taken, plaintiff might have shown a property right had he been on notice to develop the issue more fully.

Assuming that plaintiff had a sufficient property or liberty interest to guarantee him the procedural protections of the Fourteenth Amendment, the hearing offered to plaintiff before defendant’s entire active medical staff was not inherently deficient. We agree with Judge Doyle that lodging the decision-making function in the medical staff was constitutionally permissible. As he stated:

“Implicit in this' conclusion is the proposition that the Fourteenth Amendment is not automatically offended despite the realistic possibility, even probability, that among the members of the medical staff there are some who harbor resentment or jealousy, and others who have formed personal evaluations in the court of experience over the years with the physician in ■ question. Indeed, there may well be some members of the staff who have not been free of advance impressions, whether accurate or distorted, with respect to the merits of the controversy, but in my view, this circumstance should not automatically bar them from participation in the decision-making process. I do not believe that the constitution requires the decision-making process to be as antiseptic in this context as it is required to be, for example, in a criminal prosecution.” 362 F.Supp. at 1209-1210.

This conclusion is reinforced by the likelihood that in a tribunal with 144 members, personal enemies would be balanced by personal friends. We also agree with Judge Doyle that a panel of 144 is not so inherently unwieldy as to deny due process. The hospital was free to offer plaintiff a jury of all his peers.

The offer of a hearing was sketchy and did not specify all the procedural details to be followed; we accept the trial court’s finding that plaintiff did not request a clarification. Judge Doyle felt obligated to determine what procedures were reasonably implied in the offer, and what additional procedural safeguards plaintiff could reasonably have expected to be granted if requested. He felt obliged to undertake this “extraordinarily difficult” decision because the offer did not explicitly set forth all the procedural rules applicable to the hearing, showing explicity that the hearing would fully comply with the requirements of due process. 362 F.Supp. at 1218.

There is an easier ground of decision. We find it controlling that the offer of a hearing set forth no procedural details which clearly precluded compliance with due process. Under these circumstances plaintiff should have asked for any additional safeguards he desired. Until the question whether a particular procedural rule will be applied is directly posed, the likelihood is that a committee of doctors will not have thought about it, for it is not a common responsibility of the medical profession to administer due process hearings. Plaintiff complains that the decision below required him to speculate what the response to his request for' additional safeguards might have been. We hold that when such a hearing is offered, the offeree should assume that it will be a fair hearing until the offeror indicates otherwise. Cf. Miller v. School District Number 167, 495 F.2d 658, 660 (7th Cir. 1974), where the hearing offered plaintiff was clearly insufficient under the law at the time the hearing was offered.

Plaintiff relies on cases holding that state administrative remedies need be exhausted only when the state clearly shows that the remedy is adequate and effective. We have no quarrel with this principle, but plaintiff attempts to misapply it in this context. We disagree with cases that have accepted plaintiff’s application of the rule, such as Hayes v. Cape Henlopen School District, 341 F.Supp. 823, 829-833 (D.Del.1972).

Plaintiff has no federal right to be on the staff of Madison General Hospital. The only federal right he claims is the right to a due process hearing before denial of reappointment. It is therefore incorrect to characterize the proffered hearing as a remedy which must be exhausted; for federal purposes, it is the right which he seeks. He cannot sue in federal court to secure a right which he declined when it was voluntarily offered to him.

Exhaustion of remedies analysis would be relevant, if at all, only to the steps by which plaintiff could have secured a due process hearing. Until he told the hospital what procedures he wanted, it could not know what rights he was claiming. It never indicated that his rights would be denied, and until there was such an indication, there was nothing to be remedied. The inquiry required of plaintiff by this opinion does not amount to exhaustion of remedies; rather, it is necessary to demonstrate the existence of a case or controversy.

In our view the medical staff hearing offered on January 7th was neither explicitly nor obviously insufficient. Plaintiff was not entitled to reject it out of hand merely because it might turn out to be inadequate. Judicial relief is not warranted where a plaintiff rejects a seemingly adequate hearing without inquiring about procedural details that he considers crucial.

Judgment affirmed.


author: WIDENER, Circuit Judge:

text:
    AERONCA, INC., Appellee, v. STYLE-CRAFTERS, INC., and Gladding Corporation, Appellants.
    No. 73-1871.
    United States Court of Appeals, Fourth Circuit.
    Argued Dec. 4, 1973.
    Decided July 17, 1974.

      Hunter M. Jones, Charlotte, N. C. (Jonathan N. Brownell, Montpelier, Va., Jones, Hewson & Woolard, Charlotte, N. C., on brief), for appellants.
    Edgar Love, III, Charlotte, N. C. (Kennedy, Covington, Lobdell & Hickman, Charlotte, N. C., on brief), for appellee.
    Before BRYAN, Senior Circuit Judge, and CRAVEN and WIDENER, Circuit Judges.
   WIDENER, Circuit Judge:

Aeronca, Inc., an Ohio corporation with a usual place of business in Charlotte, North Carolina, brought this suit to recover $26,928.20 alleged to be due it as successor to Microtron Corporation from Microtron’s former subsidiary, Style-Crafters, Inc., on an intercompany account. Gladding Corporation was named as a defendant since, after buying the stock of Style-Crafters from Microtron, Gladding dissolved Style-Crafters and received all of its assets in dissolution. Gladding has asserted two counterclaims. The first sought a recovery of $14,023.51 for breaches of warranty contained in the contract for the sale of Style-Crafters stock from Microtron to Gladding. The second counterclaim sought a recovery of $59,128.84 for adjustments Gladding claimed should be made in the intercompany account “to arrive at the proper status of the account between Mictrotron and StyleCrafters.”

The district court, on September 1, 1972, granted Aeronca’s motion for summary judgment against both Style-Crafters and Gladding in the amount of $26,928.20. The court also dismissed Gladding’s second counterclaim seeking adjustments in the intercompany account. Gladding’s first counterclaim was tried before the court which found that the breaches of warranty Gladding had shown did not amount to as much as the $12,500 deductible clause contained in the agreement. The court then ordered final judgment in favor of Aeronca in the amount of $26,778.20. The defendants appeal.

I.

The dispute between the parties has its inception in the negotiations for the sale by Microtron to Gladding of all the outstanding stock in Style-Crafters, Inc. Throughout the period of negotiations, Microtron was a North Carolina corporation with its principal office and place of business in Charlotte, North Carolina. Prior to November 5, 1969, StyleCrafters, then a wholly-owned subsidiary of Microtron, was a South Carolina corporation with its principal place of business in Greenville, South Carolina. Gladding has at all times been a New York corporation with a principal place of business in that state.

Gladding first indicated interest in purchasing Style-Crafters on about August 8, 1969 at a trade show in Chicago. Negotiations did not get serious, however, until September 25, 1969, when Microtron’s president, Richard Fechhelm, and Gladding’s president, J. Gerald May-er, met at the Charlotte, North Carolina airport for a discussion of the proposed sale. At that time, Mayer was given a copy of an audited statement of StyleCrafters as of September 30, 1968. He was also shown a copy of an unaudited statement dated August 31, 1969. At the conclusion of this September 25, 1969 meeting, Fechhelm, on behalf of Microtron, made a definite proposal which Mayer, for Gladding, took under advisement. Gladding’s acceptance was conditioned upon their reaching an agreement with Gregory D. Shorey to continue as president of Style-Crafters after the sale. On September 30, 1969, Mayer telephoned Fechhelm that he had come to terms with Shorey, and that Gladding would accept the Microtron proposal. Mayer then sent Fechhélm a letter agreement dated October 1, 1969 stating that Microtron would sell to Gladding all the issued and outstanding stock of Style-Crafters, Inc., for certain consideration, including: (a) Gladding’s agreement to assume various debts amounting to $198,516.00; (b) delivery to Microtron of Gladding common stock having a market value of $94,000.00; and (c) payment in cash to Microtron by Gladding of $207,484.00. Fechhelm signed this agreement and returned a copy to Mayer.

Several days prior to the closing, Mayer received from Fechhelm a letter dated October 31, 1969, which stated there was a balance due Microtron of $29,474.15 on an intercompany account it maintained with Style-Crafters. The letter further indicated that Microtron wanted an understanding that the account would be paid by Style-Crafters on or before November 30, 1969, when Microtron’s fiscal year would end. Mayer declined to sign an agreement to this effect. Neither Mayer nor any other officer of Gladding attempted to investigate the nature of this intercompany account prior to closing.

On November 5, 1969, representatives of Microtron and Gladding met in Charlotte, North Carolina to close the transaction. At this meeting, Microtron produced a statement of September 30, 1969 showing, among other items, a balance due Microtron on the intercompany account from Style-Crafters of $29,472.15. Microtron’s officers refused to close unless Gladding signed a letter guaranteeing payment of the account by January 5, 1970. Relying on warranties in the formal contract and various assurances given orally by Microtron’s representatives, Gladding’s vice-president, Walter E. Robb, III, signed the letter. At the conclusion of the November 5, 1969 closing, Microtron transferred all of the outstanding stock of Style-Crafters, Inc., to Gladding Corporation and GladdingStyle-Crafters, Inc., a South Carolina subsidiary of Gladding created for the purpose of the transfer.

Neither Gladding nor Style-Crafters made any payment on the intercompany account on or before the due date of January 5, 1970. A single payment of $2,543.95 by Style-Crafters to Microtron Abrasives, a subsidiary of Microtron, was made on January 14, 1970. Thereafter, no further payments were forthcoming. On January 28, 1970, Glad-ding’s accounting officer, A. A. Cogan, wrote Microtron claiming breaches of warranty and errors in the intercompany account. Among these was a claim to eliminate the charge for a 'management fee of $37,900.00 entered August 31, 1969 on the books of Style-Crafters.

On May 28, 1970, Style-Crafters, Inc., was effectively dissolved under the laws of South Carolina, and its assets were subsequently distributed to GladdingStyle-Crafters. The following year, on January 26, 1971, Gladding Corporation became qualified to do business in South Carolina. Immediately thereafter, Glad-ding-Style-Crafters was merged into Gladding under the laws of South Carolina and New York.

On January 21, 1971, Microtron was merged into Aeronca, Inc., an Ohio corporation. As a result of this transaction, Aeronca, the surviving corporation, succeeded to all the assets and liabilities of Microtron.

This suit was subsequently brought on October 1, 1971 by Aeronca, as successor to Microtron, for the balance due of $26,928.20 on the Microtron-Style-Crafters intercompany account. Style-Crafters was named a defendant since it was the entity with which the debt was incurred. The suit was brought against Gladding both as successor in interest to Style-Crafters’ liability on the intercompany account, and also on its guaranty agreement of November 5, 1969. The defendants first filed a motion to dismiss for lack of personal jurisdiction, which the court denied on February 24, 1972. The defendants then filed an answer denying a balance was due on the account. Gladding also asserted two counterclaims: the first was for breaches of warranty given in the sales agreement, alleging that inaccuracies in the financial statement of September 30, 1969 had damaged it to the extent of $14,023.51 in excess of the $12,500.00 deductible figure set forth in the agreement; in the second counterclaim, Glad-ding sought to recover $59,128.84 for adjustments it claimed should be made in the intercompany account to reflect its proper status.

In its order of September 1, 1972, the district court granted Aeronca’s motion for summary judgment against StyleCrafters and Gladding, jointly and severally, in the amount of $26,928.20 and dismissed Gladding’s second counterclaim on account of adjustments in the inter-company account. The issues raised in the first counterclaim were set for trial. On March 22, 1973, the court found that the breaches of warranty Gladding had shown did not amount to as much as the $12,500.00 deductible clause in the agreement. Subsequently, the court entered final judgment in favor of Aeronca in the amount of $26,778.20.

II.

Gladding and Style-Crafters contend that the federal district court for the Western District of North Carolina lacked personal jurisdiction over them, since both are foreign corporations and neither maintains a place of business in North Carolina. Gladding further asserts that the contract entered with Microtron for the purchaser of Style-Crafters was effected not at the November 5, 1969 closing in Charlotte, but by telephone on about September 30, 1969 when Gladding’s officer in New York accepted the Microtron offer.

We. find these contentions to be without merit. The plaintiff, Aeronca, maintains a usual place of business in Charlotte, North Carolina; consequently, Aeronca is entitled to the benefit of the North Carolina long-arm statute. The relevant legislation, N.C. Gen.Stat. § 55-145, provides in pertinent part:

“§ 55-lJf.ñ. Jurisdiction over foreign corporations not transacting business in this State, (a) Every foreign corporation shall be subject to suit in this State, by a resident of this State, or by a person having a usual place of business in this State ... on any cause of action arising as follows:
(1) Out of any contract made in this State or to be performed in this State; . . . .”

As before mentioned, Aeronca’s claim against Gladding and Style-Crafters is based alternatively on either of two contracts. The first is the intercompany account, established and maintained by Microtron at its Charlotte, North Carolina offices with Style-Crafters, its wholly-owned South Carolina ' subsidiary. The second contract sued upon is Glad-ding’s written agreement of November 5, 1969 which guarantees payment of the intercompany account. The intercompany account was created, at least in part, in North Carolina. And since payment on the intercompany account was to be made by Style-Crafters to its North Carolina parent, the contract was to be performed' in North Carolina. Moreover, Gladding concedes that the letter guaranteeing payment of the account was signed by its officer at the closing in Charlotte, North Carolina. Thus, on these facts, we find the district court’s exercise of personal jurisdiction over the defendants proper. See Byham v. National Cibo House Corp., 265 N.C. 50, 143 S.E.2d 225, esp. p. 233, 4 (1965); Goldman v. Parkland of Dallas, Inc., 277 N.C. 223, 176 S.E.2d 784 (1970).

III.

Our discussion of the merits of the appeal will focus first on the summary judgment issues, Aeronea’s claim for $26,928.20 on the intercompany account and Gladding’s counterclaim for adjustments in that account amounting to $59,128.82.

The district court’s order of September 1, 1972, which grants summary judgment for the plaintiff on both claims, gives no reason to support its action. Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”

A.

In its motion for summary judgment upon the intercompany account, Aeronca contended in the district court that summary disposition was proper for two reasons: First, there was no genuine issue of material fact that Style-Crafters' owed $26,928.20 on the account, since Style-Crafters and Gladding had raised no defense to the suit other than the matters contained in the second counterclaim ; and secondly, there was no issue of material fact since Gladding had conceded that its officer, with authority, had signed the letter guaranteeing payment of the account. We find neither reason compelling.

The affidavit of Gregory D. Shorey of July 19, 1972, which must be taken as true on a motion for summary judgment, raises a question of fact as to •whether there was any amount owing to Microtron on the intercompany account. Shorey states that from February 1967 to November 5, 1969 he was the elected president of Style-Crafters, Inc., that he was employed full time on its corporate activities, and that he was familiar with and knowledgeable concerning most of the operations of Style-Crafters, Inc. He further states that he had “no knowledge of any prior authorization or approval of any ‘management fee’ to be paid by Style-Crafters, Inc., to Micro-tron Corporation nor does any such authorization or approval appear in the minute books maintained by Style-Crafters, Inc., recording the action of the Board of Directors and stockholders of Style-Crafters, Inc.” Shorey also claims that the management fees claimed by Microtron for both 1968 and 1969 were entered on Style-Crafters’ books by a clerical employee of Style-Crafters acting on the orders of Microtron officers. The 1968 and 1969 fees together total $81,393.00, by far the largest items disclosed in the account. If the management fees are improper, Style-Crafters’, and Gladding’s liability on the intercompany account may be extinguished. Similarly, Gladding’s liability on the guaranty letter, which, if a true guarantee as may be inferred by its treatment by the parties, would be contingent on the existence of a balance due Microtron on the account, might also terminate.* See 10 Williston on Contracts § 1214 (3rd Ed. Jaeger 1967).

Another triable issue of fact remains as to Gladding’s liability on the guaranty letter. Both in the pleadings and also in its briefs, Gladding claimed that its representative, Walter E. Robb, III, signed the letter because induced by untrue representations on the part of Microtron. Gladding’s answer to the complaint alleges that the letter was signed “in reliance upon representations of the officers of Microtron Corporation that the indebtedness therein recited was justly owing and that the amount thereof was true and correct, which representations were not true.” The defense is further supported by the affidavit of Walter E. Robb. If the execution of the guaranty was induced by Microtron’s untrue statements, a defense may exist as to any liability on the letter; thus, Gladding should be given the opportunity to develop its defense at trial in the district court. See American Pure Food Co. v. Elliott & Co., 151 N.C. 393, 66 S.E. 451 (1909); White Sewing Machine Co. v. Bullock, 161 N.C. 1, 76 S.E. 634, 639 (1912); Homelite v. Trywilk Realty Co., 272 F.2d 688 (4th Cir. 1964).

B.

In its second counterclaim, Gladding claimed it was entitled to recover from Aeronca, as successor to Microtron, a balance of $59,128.84 by reason of a number of adjustments required to be made in the intercompany account. Specifically, Gladding made the following claims:

(1) The journal entries of November 30, 1968 for $43,493.00 and August 31, 1969 for $37,900.00 charged to StyleCrafters for management fees are improper and should be eliminated from the account;
(2) Style-Crafters is entitled to a credit against Microtron in the amount of $1,325.77 since, at the behest of Microtron, it equipped an IBM Data Processing Machine with special panels for serving Microtron Abrasives, Inc., a subsidiary of Microtron. During October and November of 1969, Style-Crafters furnished Abrasives the use of its data processing facilities and other supplies.
(3) Style-Crafters is entitled to a total adjustment of $3,150.15 arising out of Microtron’s take-over of an IBM 632 machine belonging to StyleCrafters. At the time of the change of ownership, Microtron assumed the remaining debt on the machine and charged $400.15 against Style-Crafters. But because the reasonable market value of the IBM 632 was $2,750.-00 in excess of the debt assumed, Style-Crafters should have received a credit for that amount and the $400.-15 charge should never have been assessed.
(4) Style-Crafters is entitled to a credit of $188.12, since Microtron took possession of four new tires purchased by Style-Crafters.

When the district ■ court granted summary judgment on the intercompany account, it also entered summary judgment and dismissed the second counterclaim. Aeronca has argued both in the district court and on appeal that, since the transactions which were the subject of the counterclaim took place prior to the date of sale of the stock, Gladding was foreclosed from asserting its defense and counterclaim under general principles of equity. It relies upon Park-Terrace, Inc. v. Burge, 249 N.C. 308, 106 S.E.2d 478, 482-483 (1959), and F.R. Civ.P. 23.1 as preventing Gladding from attacking corporate transactions which took place before it bought the StyleCrafters stock. In granting summary judgment for Aeronca, the district court apparently regarded Gladding’s counterclaim as essentially a stockholder’s derivative action and applied either Park-Terrace or the contemporaneous shareholder doctrine of F.R.Civ.P. 23.1, since the pleadings and affidavits raise genuine issues of fact regarding StyleCrafters’ liability. We do not view this suit as equitable in nature; nor do we feel that the rules applying to shareholder’s derivative actions should apply. Thus, we find neither reasons supports summary judgment.

When Microtron and Gladding met at Charlotte, North Carolina on November 5, 1969 to close the transaction, settlement of the intercompany account became part of the larger transaction of the purchase of all of the Style-Crafters stock by Gladding from Microtron. And Gladding claims it was agreed it was to be given an opportunity to inspect the company records to verify the various items on the account before payment became due. Both Aeronca’s claim and Gladding’s second counterclaim depend in whole or in part on these facts. Aeronca seeks the stated amount of $26,928.20 allegedly due on the account; Gladding claims that because of numerous irregularities a balance is in fact due Style-Crafters. Viewed in this light, the conflicting claims represent not a shareholder’s derivative action, but a dispute between a buyer and a seller' over the purchase price of a chattel and the value of the chattel sold. Thus, the fact that Gladding was not a shareholder at the time of the transactions complained of does not disqualify it as a matter of law from asserting its defense or its counterclaim in this case. Glad-ding is entitled to defend in its own right as the purchaser of the stock and also as the successor to the liabilities and assets of Style-Crafters. The opposite approach would lead to the untenable holding that, although Aeronca might sue its former subsidiary, the subsidiary could neither defend nor assert a counterclaim because of the rules of Park-Terrace and F.R.Civ.P. 23.1. We have had cited to us and found no case which so holds, and we decline to apply to this transaction (which is essentially a dispute between adversary corporations about corporate rights rather than a dispute between a corporation, or shareholder, and its officers or directors) any such strained construction of rules designed to govern suits between stockholders and corporate officers or directors, or stockholders and the corporation in which they may hold stock. Cf. Bangor Punta Operations, Inc. v. Bangor & Aroostook Railroad Co., — U.S. —, 94 S.Ct. 2578, 41 L.Ed.2d 418 (1974). If Style-Crafters had not been dissolved under S.C.Code, Title 12, Ch. 1.12, and certainly corporate'dissolutions are an everyday occurrence in the business world, no serious contention could have been made that it might not defend a suit by its former parent on the merits of the claim or assert a counterclaim against its former parent. We are of opinion dissolution interposed no such restriction, either under Park-Terrace or F.R.Civ.P. 23.1.

Although decided prior to the insertion of F.R.Civ.P. 23.1 in 1966, we think the language of the court in Central Ry. Signal Co. v. Longden, 194 F.2d 310, 321 (7th Cir. 1952) is persuasive:

“[w]e think the doctrine of contemporaneous ownership, as defined in Rule 23(b) of the Federal Rules of Civil Procedure does not apply to a suit by a corporation. The title of the rule is ‘Class Actions’ and the pertinent portion is designated, ‘Secondary Action by Shareholders.’ It provides that where a stockholder institutes a class action because of the corporation’s refusal to enforce rights which it might properly assert, the complaint must aver that the plaintiff was a shareholder at the time of the transaction of which he complains or that his share thereafter devolved on him by operation of law. Under the rule, the complaint must set forth with particularity the efforts of the plaintiff to secure from the managing directors such, action as he desires and the reasons for his failure to obtain such action or for not making the effort. It is clear that the rule has to do with a secondary action by shareholders and not with primary actions by incorporated or unincorporated associations; it has no application where the corporation brings the action itself to enforce its own right, as here.”

See also Zahn v. Transamerica Corp., 162 F.2d 36, 48 (3rd Cir. 1947); General Inv. Co. v. Lake Shore & M. S. Ry., 250 F. 160 (6th Cir. 1918); 7A Wright and Miller, Federal Practice and Procedure (1972), p. 353.

Because these are triable issues of fact as to Aeronca’s original claim and as to Gladding’s second counterclaim, they must be remanded for trial.

IV.

Gladding based its first counterclaim upon Microtron’s warranties contained in the agreement of sale of November 5, 1969. Microtron had warranted the correctness of Style-Crafters’ financial statements of September 30, 1968 and September 30, 1969, and also the absence of any liabilities not disclosed in the September 30, 1969 statement. Mierotron further agreed to indemnify Glad-ding for any liabilities in excess of $12,500.00 caused by breach of any warranties given in the agreement. Glad-ding claims that Microtron’s breaches of warranty have damaged it to the extent of $14,023.51 in excess of the $12,500.00 deductible figure set forth in the agreement.

The issues raised in this counterclaim were set for trial before the court sitting without a jury. In its judgment of March 22, 1973, the court found several items constituted breaches of warranty totaling $6,625.73. Since the $12,500.00 deductible clause exceeded this amount, the court denied relief under the first counterclaim.

Gladding contends that the court erred in several rulings leading to its conclusion, most of which concern findings of fact, among them:

(a) Microtron made certain concessions in a letter of E. L. Disbrow of July 7, 1971. Aeronca sought to withdraw the concessions so to leave the items in dispute. At trial, it was shown that Disbrow had not been with Microtron at the time that Hartley, Microtron’s Treasurer, and Cogan, Gladding’s accountant, had met to discuss the intercompany account. Hartley’s deposition, introduced at trial, indicated that Disbrow wrote the letter on the basis of information later learned to be incorrect. The court treated these concessions as properly withdrawn.
(b) A Peoples National Bank letter of credit in the amount of $5,751.35 was in order to pay for a shipment of kapok. Because the shipment had allegedly not been received, the letter of credit was treated as an asset on the intercompany account. After hearing evidence, the court concluded there was no evidence that the kapok shipment referred to in the documents had been received, and that the item was properly treated as an asset as of September 30, 1969.
(c) Prepaid advertising in the amount of $5,035.83 consisted of items such as the boat show in September 1969, and the 1970 catalogues. They were expenses incurred at the end of the period in question and designed to produce results in the forthcoming year.
(d) As for accounts receivable in the amount of $1,711.65 and disputed accounts receivable in the amount of $1,336.74 which the defendants claimed were worthless September 30, 1969, the court found no evidence presented as to the financial condition of the debtors, nor whether the collectibility of those accounts had been or reasonably could have been established before the end of September 1969.

We have considered these claims in light of Rule 52(a) of the Federal Rules of Civil Procedure, which provides that “[f]indings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.” We are of opinion that, with the possible exception of the $5,751.35 letter of credit, the findings are not clearly erroneous. There is evidence to support each of the district court’s disputed findings of fact. We are also of opinion the district court did not abuse its discretion in treating the concessions as withdrawn. As to the People’s National Bank letter of credit for $5,751.35, there is evidence tending to show the kapok shipment was received. Documents accompanying the kapok indicate that 200 bales of kapok were loaded on the “Temeraire” April 26, 1969 in Bangkok, consigned to the Chase Manhattan Bank for Style-Crafters. The Bill of Lading (#40958) shows that when the shipment was received in Charleston, South Carolina on July 30, 1969, one bale was missing. A. Style-Crafters receiving record of August 7, 1969 acknowledges receipt of 399 bales of kapok. It would appear this represents two shipments of what were originally 200 bales each. Moreover, Style-Crafters’ August 1969 claim against Palmetto Shipping Company for the short bale on B/L 40958 represents an implied admission that the remaining 199 bales were received. But even if we were to find clearly erroneous the district court’s holding that the kapok shipment was never received by Style-Crafters, the loss caused by this breach added to the previously ascertained amount ($5,751.35 + $6,625.73) would result in an aggregate below the $12,500.00 deductible, so there would not be reversible error, and Gladding would still not be entitled to a recovery on the first counterclaim.

We note that we express no opinion as to the merits of Aeronca’s original claim nor as to the merits of Gladding’s second counterclaim, but only hold entry of summary judgment was not proper.

We also note that nothing we have said would foreclose litigation on remand of whether or not the purchase price of the Style-Crafters’ stock was adjusted in the amount of $26,472.15 without regard to whether or not such sum was actually owed by Style-Crafters to Microtron. We do not suggest any such agreement existed, but neither does the record at this stage foreclose the possibility, and, for this reason, we deem it worthy of mention here.

Affirmed in part; reversed in part; and remanded.

      . Prior to trial of the breach of warranty issues, both parties stipulated that Gladding was entitled to a credit of $150.00 against the court’s judgment of September 1, 1972 for Microtron’s rental of Style-Crafters’ equipment after the date of sale.

      . In this action, Gladding also challenges the validity of a management fee of $43,493.00 charged as of November 30,1968.

      . No opinion giving reasons for the court’s action accompanied the order granting summary judgment in favor of Aeronca on its claim on the intercompany account and dismissing the second counterclaim.

      . For the application of state long-arm statutes in Federal court proceedings, see F.R. Civ.P. 4(e).

      . Gladding contends that Aeronca’s claim based upon the agreement to pay the account amounts to mere surplusage. It suffices to say that Rule 8(a), F.R.Civ.P., permits a party to demand relief in the alternative; Rule 18(a) permits a party to join, either as independent or alternative claims, as many claims as he has against an opposing party. Gladding further argues that the agreement is nevertheless invalid since it lacks consideration. Yet, in return for guaranteeing payment on the account, Gladding received an extension of time for payment of the account, and Microtron’s agreement to go forward with the closing.

      . The amount of $59,128.84 is arrived at by eliminating from the account the management fees, totaling $81,393.00; and by crediting Style-Crafters, Inc., with $1,325.77 due by Microtron Abrasives, Inc., $3,150.15 for the IBM 632 machine, and $188.12 for the tires. These adjustments in favor of StyleCrafters total $86,057.04. Subtracting the debit balance shown in the books of $26,928.20 leaves a credit balance of $59,128.84 in favor of Style-Crafters.

      . Park-Terrace, Inc. v. Burge involved a derivative action brought against officers and directors of Park-Terrace Corporation by certain shareholders, none of whom owned stock at .the time of the transactions complained of. The North Carolina Supreme Court held:
      “[i]n view of the fact that none of the present stockholders of the plaintiff corporation was a stockholder at the time of the transactions of which the plaintiff complains; the further fact that they obtained their shares through voluntary purchase or transfer (citation omitted), and not hy operation of law, and since the action was not brought in behalf of creditors or for the purpose of ‘asserting or endeavoring to protect a title to property,’ but solely as a suit in equity as the representative of its stockholders, it cannot be maintained . . . . ”

      . Rule 23.1 of the Federal Rules of Civil Procedure provides, in relevant part:
      “In a derivative action brought by one or more shareholders or members to enforce the right of a corporation or of an unincorporated association, the corporation or association having failed to enforce a right which may properly be asserted by it, the complaint shall be verified and shall allege (1) that the plaintiff was a shareholder or member at the time of the transaction of which he complains or that his share or membership thereafter devolved on him by operation of law. ...”

      . The court found the account receivable from Custom Products shown in the amount of $2,363.00 on the financial statement of September 30, 1969 was worthless; the Computer Systems item shown on the September 30, 1969 statement as a prepaid expense in the amount of $9,518.11 was worthless to the extent of $3,455.90; and the parties had stipulated that the prepaid travel item in the amount of $806.83 on .the financial statement of September 30, 1969 should have been written off as of that date.


author:
      BUTZNER, Circuit Judge:
      WINTER, Circuit Judge

text:
    UNITED STATES of America, Appellee, v. Jeris E. BRAGAN, Appellant.
    No. 73-2066.
    United States Court of Appeals, Fourth Circuit.
    Argued Feb. 6, 1974.
    Decided July 16,1974.

      Philip J. Hirschkop, Alexandria, Ya. [court-appointed counsel], for appellant.
    Justin W. Williams, Asst. U. S. Atty. (Brian P. Gettings, U. S. Atty., for the E. D. Va., on brief), for appellee.
    Before WINTER, BUTZNER and WIDENER, Circuit Judges.
   BUTZNER, Circuit Judge:

Jeris E. Bragan, a private detective, appeals from his conviction of violating provisions of the Omnibus Crime Control Act pertaining to wiretapping and wiretap devices, 18 U.S.C. §§ 2511 and 2512. His principal assignment of error deals with the district court’s denial of a continuance which he sought for the purpose of substituting counsel. The court’s ruling, he asserts, deprived him of his right to obtain counsel of his choice. Finding neither abuse of the trial court’s discretion nor infringement of the sixth amendment, we affirm.

Bragan was arrested on February 15, 1973, and his preliminary hearing was conducted on March 7. He was indicted on March 14 for intercepting and disclosing, and trying to intercept, telephone conversations of persons he was investigating, and for manufacturing, possessing, and transporting wiretap devices. At his arraignment on March 19, the court designated April 7 as the cutoff date for pretrial motions and scheduled a hearing on the motions for April 20. Trial by jury was scheduled for May 14. Throughout all of the preliminary proceedings and at the trial, Bragan was represented by able, experienced counsel whom he had retained shortly after his arrest.

On April 13, Bragan’s counsel moved for a continuance so that new counsel could be substituted for the defense. Four days later, the prospective counsel renewed the motion, explaining that Bragan wished to employ him because of his experience in the law pertaining to wiretapping, but that he could not participate in a trial on May 14 due to a previous commitment for a hearing in another court on the same day.

The district judge declined to continue the trial. However, he expressed the belief that the principal legal issues involving the wiretapping charges could be considered at the hearing on pretrial motions. Accordingly, he reopened the cutoff date for filing the motions and continued the pretrial hearing from April 20 to May 4. This permitted Bragan’s new counsel to file a number of motions and participate as co-counsel in the proceedings on May 4. The principal legal issues pertaining to co-counsel’s field of expertise were argued by the co-counsel at the rescheduled pretrial hearing and they now provide the basis for most of Bragan’s assignments of error. At the trial, conducted as scheduled on May 14, Bragan was represented only by his originally retained attorney. However, the government used no evidence of wiretaps or other electronic devices that had not been the subject of the previous pretrial hearing.

The recent emphasis on quickening the pace of criminal proceedings, exemplified by Rule 50(b) of the Federal Rules of Criminal Procedure, has created tension between the rule’s policy of eliminating undue delay and the occasional attempts of both prosecutors and defendants to seek additional time between arraignment and trial. Although the rulé does not freely countenance pleas for delay, it permits the trial judge to retain sufficient flexibility over his docket to assure proper disposition of justifiable motions for continuance. Consequently, the rule does not deprive the judge of the discretion that he has traditionally exercised in considering a request for a continuance. Review of his ruling, therefore, must take into consideration all of the circumstances, particularly those which were presented when the motion was argued. When these circumstances raise an issue about the defendant's right to counsel, the trial court must exercise its discretion, and the reviewing court must test its ruling, by the precepts of the sixth amendment. Ungar v. Sarafite, 376 U.S. 575, 589, 84 S.Ct. 841, 11 L.Ed.2d 921 (1964); Franken v. United States, 248 F.2d 789 (4th Cir. 1957) (by implication).

United States v. Inman, 483 F.2d 738 (4th Cir. 1973), contains our most recent review of the principles governing continuances to enable a defendant to obtain representation by counsel of his choice. We found in that case no abuse of discretion in the court’s denial of a continuance because the motion was made without mitigating explanation for its delay on the morning of trial, although the trial date had been set approximately two months earlier. Furthermore, the record disclosed that the defendant had received competent representation from his appointed counsel. But even so, we cautioned that the case presented an instance when “the outermost reach of discretion was exercised.” 483 F.2d at 740. Almost concurrently, we found error in the refusal of a continuance and the consequent denial of the right to counsel in United States v. Fisher, 477 F.2d 300 (4th Cir. 1973). There, because of confusion that arose through no fault of the defendant, his lawyers were unprepared. Despite knowledge of this fact, the court denied a motion for a continuance on the morning of trial. We reversed Fisher because the circumstances and the record of the trial established that the court’s insistence on proceeding with the scheduled trial had deprived the defendant of effective representation.

Inman and Fisher, read together, underscore the care with which a trial court must exercise its discretion when it rules on a continuance that will affect the representation that a defendant receives. They teach that the sixth amendment’s provision for the right to counsel embraces the right to an attorney of the defendant’s choice and a reasonable opportunity to obtain this representation. Powell v. Alabama, 287 U.S. 45, 53, 53 S.Ct. 55, 77 L.Ed. 158 (1932). Implicit, also, is the right to effective representation. Stokes v. Peyton, 437 F.2d 131, 136 (4th Cir. 1970). Inman cautions and Fisher illustrates that “a myopic insistence upon expeditiousness in the face of a justifiable request for delay can render the right to defend with counsel an empty formality.” But the Constitution does not afford an accused, who has ample time to obtain counsel, the “unbridled’right” to insist that his trial be held in abeyance while he replaces one competent attorney with another. United States v. Grow, 394 F.2d 182, 209 (4th Cir.), cert. denied, 393 U.S. 840, 89 S.Ct. 118, 21 L.Ed.2d 111 (1968).

Applying these principles, we conclude that the trial judge’s discretion was tempered by proper consideration of Bragan’s sixth amendment rights. Dates for the filing and hearing of motions and for trial were selected to provide for the orderly progress of the case, and the nearly 60 days that intervened between arraignment and trial allowed ample time for thorough preparation. The court’s rearrangement of the pretrial schedule and its continuance of the hearing on the pretrial motions afforded Bragan’s new co-counsel an adequate opportunity to raise defenses peculiar to his field of expertise.

The: trial lawyer who represented Bragan throughout the case is recognized as an experienced, able practitioner of criminal law. Promptly after he was retained, and even before the grand jury returned the indictment, he conferred extensively with the United States Attorney’s assistants for the purpose of informal discovery. He heard tapes implieating Bragan which the government had obtained through the cooperation of Bragan’s erstwhile accomplices, and he obtained an outline of the government’s theory of the prosecution. He participated in the pretrial hearing in which Bragan’s co-counsel also appeared. There is no indication that he was ignorant of the facts or the law, and his conduct of the trial cannot be faulted. It is apparent that Bragan was effectively represented by competent counsel throughout the proceedings.

Bragan’s motion for a continuance was made a month before the date scheduled for trial. His request was grounded on reasons which dispelled any inference that he sought an unjustifiable delay. Therefore, it merited the careful consideration of the district court. Had the court denied the motion out of hand, it is unlikely that Bragan would have had an opportunity to present his complex defenses properly. This, of course, would have raised a serious question about the propriety of the court’s ruling. However, by reopening the cutoff date for motions and continuing the pretrial hearing for an appropriate interval, the court afforded Bragan the right to be represented at a critical time by a co-counsel whose expertise he valued. On the other hand, since Bragan had able, experienced trial counsel, the presence of his co-counsel at the trial was not indispensable. We find, therefore, no error in the court’s denial of Bragan’s motion to continue the trial.

Bragan’s other assignments of error require only brief comment. The district court did not err in denying his motion for separate trials for each of two wiretaps. Bragan can show no prejudice in the joinder of these offenses because all the evidence admissible in the joint trial would have been admissible in separate trials had the court severed the offenses. Federal Rules of Criminal Procedure 8(a) and 14; United States v. Simon, 453 F.2d 111, 113 (8th Cir. 1971); ABA Standards Relating to Joinder and Severance §§ 1.1, 2.2 (App. Draft 1968).

The government relied in part on transcripts and tapes of Bragan’s conversations with his former accomplices. This evidence was admissible because it was obtained with the consent of a participant. 18 U.S.C. § 2511 (2) (c). United States v. White, 401 U.S. 745, 91 S.Ct. 1122, 28 L.Ed.2d 453 (1971); ABA Standards Relating to Electronic Surveillance § 4.1 (App. Draft 1971). The record discloses that the government neither obtained nor used evidence, or the fruits of evidence, in violation of Title III, Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. § 2510 et seq. Consequently, the type of hearing required in Alderman v. United States, 394 U.S. 165, 89 S.Ct. 961, 22 L.Ed.2d 176 (1969), was unnecessary. Taglianetti v. United States, 394 U.S. 316, 89 S.Ct. 1099, 22 L.Ed.2d 302 (1969); United States v. Hauff, 473 F.2d 1350, 1355 (7th Cir.), cert. denied, 412 U.S. 907, 93 S.Ct. 2299, 36 L.Ed.2d 972 (1973).

Because Bragan’s victims consented to the introduction into evidence of their wiretapped conversation, the exclusionary rule of 18 U.S.C. § 2515 did not render inadmissible the wiretaps Bragan made in violation of 18 U.S.C. § 2511. It is the victims’ consent that distinguishes this case from the ruling of the court of appeals reversing United States v. Liddy, 354 F.Supp. 217 (D.D.C.), rev’d, 155 U.S.App.D.C. 382, 478 F.2d 586 (1973). In any event, Bragan lacks standing to suppress the contents of his illegal wiretaps because he is not an aggrieved person within the meaning of 18 U.S.C. §§ 2510(11) and 2518(10) (a).

The judgment is affirmed.

WINTER, Circuit Judge

(dissenting):

I think that my brothers are persuasive that defendant received effective assistance of counsel. But the fact remains that he was not permitted to have counsel of his choice, and on that ground I would reverse.

In United States v. Inman, 483 F.2d 738, 739-740 (4 Cir. 1973), we said explicitly “[t]he Sixth Amendment right to counsel includes . . . the right of any accused, if he can provide counsel for himself . . . to be represented by an attorney of Ms own choosing.” (Emphasis added.) This is the law of this circuit unless Inman is now being overruled.

In the instant case, promptly after defendant was arraigned and his trial scheduled for a date approximately 60 days thereafter, defendant employed counsel having, in his view, special expertise in defense of the crime with which defendant was charged. Although the district court adjusted its schedule to permit this new attorney to participate in pretrial motions which would generate rulings having a controlling effect on the trial of the case, it declined a continuance to permit this attorney, who had a previous trial commitment, to participate in the trial of the case. In oral argument, we were told that a continuance of a few days would have been all that was required to permit defendant to be tried, represented by the lawyer of his choice.

There is no warrant in this record for saying that defendant’s desire to be represented by the lawyer who was excluded was confined to representation on pretrial motions. Defendant asserts, and the record supports him, that he wanted this lawyer for trial. There is no basis on which to conclude that defendant’s request to substitution of counsel was made in bad faith for purposes of delay. There is no basis on which to say that defendant’s request to substitution of counsel was belated. If either of the latter, we could well conclude that defendant had forfeited or waived his right to counsel of his choosing. United States v. Grow, 394 F.2d 182 (4 Cir.), cert. den., 393 U.S. 840, 89 S.Ct. 118, 21 L.Ed.2d 111 (1968); United States v. Lisk, 454 F.2d. 205 (4 Cir. 1972); United States v. Pigford, 461 F.2d 648 (4 Cir. 1972).

I do not question that defendant received competent representation at trial by his original attorney whom he was forced. to retain. ' But effectiveness of substitute counsel is not a relevant consideration when he is not counsel of choice. Davis v. State, 292 Ala. 210, 291 So.2d 346 (1974).

Under Inman, effectiveness of representation is not enough. Inman requires reversal because defendant was not represented by the lawyer of his choice, even though defendant could have provided that representation for himself, and there was absent any valid reason to deny him the right to choose.

      . Title 18 U.S.C. §§ 2511 and 2512 prohibit the interception and disclosure of wire or oral communications and the manufacture and possession of intercepting devices.

      . FedJt.Crim.P. 50(b) provides in part:
      “To minimize undue delay and to further the prompt disposition of criminal cases, each district court . . . shall prepare a plan . . . which shall include rules relating to the time limits within which procedures prior to trial, the trial itself, and sentencing must take place . . . . ”
      The plan for the Eastern District of Virginia prescribes a limit of 120 days from arraignment to trial, which, however, is subject to extension for good cause. Plan Oases, 111(b) and IV (E.D.Va.1973). for Processing and Disposing of Criminal

      . The sixth amendment provides in part:
      “In all criminal prosecutions, 'the accused shall enjoy the right ... to have the Assistance of Counsel for his defense.”

      . The quotation is from Mr. Justice White’s opinion for the Court in Ungar v. Sarafite, 376 U.S. 575, 589, 84 S.Ct. 841, 849, 11 L.Ed.2d 921 (1964).

      . Title 18 U.S.O. § 2515 excludes from evidence the contents of an illegal wiretap and its fruits.

      . Title 18 U.S.O. § 2510(11) defines an aggrieved person as “a party to any intercepted wire or oral communication or a person against whom the interception was directed.”
      Title 18 U.S.O. § 2518(10) (a) empowers an aggrieved person to move for the suppression of the contents of an illegal wiretap.