author: JOHN V. PARKER, Chief Judge.

text:
    Walter BURNETTE, Jimmie Graves, Nester L. Sosa, Joseph Bradberry, Michael Glover, Mark Ford, Dale George, Wortham J. Jones, Billy McLeod, Roger Yates, Roy Collins, Joseph Casbon, William McRae v. C. Paul PHELPS, Frank Blackburn, Warden, Hilton, Deputy Warden, H.D. Byargeon, Col., James E. Teer, Major, Edward Cornish, Camp A, Steve Weber, Lt., William Neely, Sgt., Richard Marks, Lt., Allen C. Gientz, Lt., Three Unknown Agents of Shakedown Crew, Lionel Williams, Sgt., Ralph Carter, Dietician, President, C & S Securities, Inc., Allen McNeal, Cadet.
    Civ. A. No. 81-804-A.
    United States District Court, M.D. Louisiana, Division “A”.

    Nov. 18, 1985.

      Walter Burnette, Jimmie Graves, Nester L. Sosa, Joseph Bradberry, Michael Glover, Mark Ford, Dale George, Wortham J. Jones, Billy McLeod, Roger Yates, Roy Collins, Joseph Casbon, William McRae, in pro per.
    William J. Guste, Atty. Gen., Joseph Erwin Kopsa, Asst. Atty. Gen., Corrections Section Louisiana Dept. of Justice, Baton Rouge, La., for defendants.
   JOHN V. PARKER, Chief Judge.

This matter is before the court on cross motions for summary judgment brought by plaintiff Walter Burnette and on behalf of the defendant officials and employees of the Louisiana Department of Corrections, namely: C. Paul Phelps, Frank Blackburn, Hilton Butler, H.D. Byargeon, James E. Teer, Edward Cornish, Steve Weber, William Neely, Richard Marks, Allen C. Gientz, Lionel Williams, Ralph Carter and Allen McNeal (although service had been returned unexecuted on McNeal). No other plaintiff of the remaining eleven plaintiffs has complied with the United States Magistrate’s order, dated June 3, 1985, requiring cross motions for summary judgment. Defendant “President, South Central Bell,” was previously dismissed from this action; defendants “three unknown agents of shakedown crew” and “President, C & S Securities, Inc.” have not been served with this action.

Thirteen pro se inmates at Louisiana State Penitentiary filed this action pursuant to 42 U.S.C. § 1983 against the defendants alleging a litany of deprivations of purported rights and privileges in Camp A where plaintiffs were then confined. In his motion for summary judgment, plaintiff Burnette states that only he and plaintiff Jimmie Graves remain in Camp A. Plaintiff further states that plaintiffs Joseph Bradberry, Michael Glover, Roger Yates, Roy Collins, Joseph Casbon and William McRae have been transferred to other units within Angola. The record confirms that Dale George has been transferred to another institution; Mark Ford, Wortham J. Jones and Bill McLeod have been discharged; and plaintiff Nester L. Sosa was voluntarily dismissed from the action.

Plaintiffs, who unsuccessfully sought to pursue their claims in the form of a class action, complain that defendants are violating their constitutional rights by requiring the inmates to live in allegedly unclean vermin infested quarters where plaintiffs are denied educational and rehabilitative programs, larger lockers, designated writ writing areas and towel racks for wet towels. Plaintiffs also allege that laundry service and recreational space are less than adequate; that occasionally hygenic supplies have not been provided and that there is only one small mirror in the dormitory bathroom for the use of sixty men. Other alleged constitutional deprivations include: restrictions which prohibit colored underclothes and personal property items which are allowed in other state prisons and rules which hamper free exchanges of speech with certain persons in the dining hall. Plaintiffs also complain that they are restrained with “black boxes” when transported from their quarters; that they are subjected to strip searches and exposure to homosexuals and epileptics on their tier and that they are sometimes harassed by the corrections officers in retaliation for lawsuits. Plaintiffs’ complaints regarding the costs and types of telephone service were previously dismissed.

Although the record reveals that plaintiff Burnette stipulated to the dismissal of several of his claims and dismissal of one defendant, each allegation will be considered so as to finally adjudicate each issue as to all complaints currently assigned to Camp A, the matter being moot as to all others.

Defendants now move for summary judgment on the grounds that there are no facts showing violations of constitutional rights and there are no material issues of fact in dispute. In support of the motion, defendants have submitted a statement of undisputed facts; an investigative report and affidavit by Mariana Leger, affidavits by Joseph Lee and Roger Thomas; true copies of departmental policies, regulations, internal memoranda and food service inspection reports.

In support of his motion for summary judgment, plaintiff Burnette has submitted his own affidavit and an affidavit by inmate Arthur Mitchell, both of which reaffirm the original allegations. As additional support, plaintiff has attached a copy of proposed bylaws for the “Christian Fellowship Finance Committee” and a copy of the voluntary motion to dismiss filed by Nestor L. Sosa.

Summary judgment is appropriate where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Rule 56, Fed.R.Civ.P. Supporting affidavits must set forth specific facts showing that there is a genuine issue for trial. Rule 56(c), Fed.R.Civ.P. A review of the record reveals that plaintiffs have failed to contest any of the evidence presented by defendants regarding the prison rules, regulations, policies or conditions.

Prison officials are accorded broad discretion in the administration of prisons; it is not within the discretion of the courts to manage prisons, but to intervene only in the face of constitutional deprivations. Bell v. Wolfish, 441 U.S. 520, 99 S.Ct. 1861, 60 L.Ed.2d 447 (1979); Ruiz v. Estelle, 679 F.2d 1115, 1145 (5th Cir.) modified, 688 F.2d 266 (1982); Sampson v. King, 693 F.2d 566 (5th Cir.1982). Prison regulations should be sustained unless they are unreasonable and arbitrary. Sullivan v. Ford, 609 F.2d 197 (5th Cir.1980); Hill v. Estelle, 537 F.2d 214 (5th Cir.1976).

Plaintiffs’ allegations regarding the lack of educational or rehabilitative programs in Camp A do not rise to that level. Prisons are not educational institutions; there is no federal constitutional right to participate in a prison educational program, Newman v. State of Alabama, 559 F.2d 283 (5th Cir.) (Rehearing and Rehearing En Banc Denied Nov. 7, 1977), although where such programs exist, each prisoner should have impartial, equal access on an objective standard. Id., 559 F.2d 283, 292. It is uncontested that while Camp A has no educational program within the camp, an inmate may participate in self-teaching or correspondence courses or request admittance to a program. See affidavit by Mariana Leger. There are no allegations that any plaintiff requested enrollment in any program or was denied the opportunity to further his education while he was confined to Camp A. Plaintiffs’ allegations regarding the alleged lack of rehabilitative programs are based on the administration’s rejection of a proposed organization, “Christian Fellowship Finance Committee.” See proposed bylaws attached to plaintiff’s motion for summary judgment. There are no allegations that any plaintiff sought remedial benefits of other programs listed in their complaint, “e.g. J.C.’s, Dale Carnegie, A.A.” It is undisputed that the warden may approve or disapprove the formation of any inmate organization and that other programs must be coordinated through the Camp A social and athletic club. See affidavit by Mariana Leger and prison memorandum dated September 9, 1985. Considering the broad discretion recognized in administrative matters, this court cannot say that the rejection of an organization founded by inmates, solely according to its bylaws, “to collect and dispense charitable contributions” is an abuse of that discretion.

Plaintiffs’ next contention, that prison restrictions are violative of the inmates’ rights to free speech, are also without merit. While inmates do not completely lose the freedom of speech protected by the First Amendment, see Pell v. Procunier, 417 U.S. 817, 94 S.Ct. 2800, 41 L.Ed.2d 495 (1974), it is well established that lawful incarceration results in the limitation of privileges and rights enjoyed by the ordinary citizen. The limitations presented in this action, where inmates may not freely converse with trustees and other inmates who are not within the immediate vicinity, are not overly restrictive within the confines of the limitations of prison walls.

Nor do the allegations that Camp A lockers are smaller than some other lockers or that the institution’s policies on personal property, including “white only” underwear, are more restrictive than other state prisons, raise issues of federally protected rights. There is no constitutional mandate that every inmate have identical state issued items or that all of Louisiana’s prisons follow completely uniform procedures on personal property; there is simply no constitutional provision guaranteeing an inmate his choice of color in undergarments or to enjoy the use of larger lockers, cassette records, etc. Similarly, the contentions that hygenic supplies are occasionally not provided and that inmates may not hang wet towels on their beds are without merit. The affidavit by Mariana Leger, as well as the complaint, indicates that any depletion of toiletries was of short duration and unintentional. Affiant further states that as of 1982, the prison policy permitted hanging wet towels over the edges of the beds; since plaintiffs do not disagree, the issue of mildewed towels is moot; moreover, the issue is not of constitutional dimension.

Plaintiffs also complain that they are compelled to live and dine in small unsanitary quarters which are infested with flies, roaches, rodents, the mentally ill and epileptic inmates. Plaintiffs further complain that the laundry service is poor and the recreation yard inadequate. Prison conditions can be so bad that it is cruel and unusual punishment to force inmates to endure them. Gates v. Collier, 501 F.2d 1291, 1301 (5th cir.1974); Sampson v. King, supra, 693 F.2d at 568. As plaintiffs’ affiant notes, this court has continuing jurisdiction over the state prisons and monitors the conditions in which the inmates are confined, maintaining a constitutional level of conditions in each institution under the “totality of circumstances” constitutionally required. Rhodes v. Chapman, 452 U.S. 337, 345-50, 101 S.Ct. 2392, 2398-2400, 69 L.Ed.2d 59 (1981); Jones v. Diamond, 636 F.2d 1364, 1368 (5th Cir.) (en banc), cert. denied 453 U.S. 950, 102 S.Ct. 27, 69 L.Ed.2d 1033 (1981); Williams v. Edwards, 547 F.2d 1206 (5th Cir.1977). It is undisputed that the administration attempts to control the infestation of insects common to our southern climate and that regular inspections are made of the facility by the health department. See affidavit by Mariana Leger and Inspection Reports. Plaintiffs concede that other repairs have been undertaken, but complain that they are insufficient and burdensome with regard to the lack of restroom facilities in the recreation yard. Considering that plaintiffs’ complaints are all of a general nature and are being addressed by the administrators and monitored by inspections by the court, the issues of sanitation and space allotted to the inmates herein presented do not violate “contemporary standards of decency” espoused in Rhodes, et al, supra. The complaints that allegedly mentally ill and epileptic inmates reside in their camp are also without merit. While the state has a responsibility to protect the safety of its prisoners, Sampson v. King, supra, the wholly speculative allegations that plaintiffs might be endangered by the mere presence of these inmates are insufficient to state a claim under § 1983. Woodhaus v. Virginia, 487 F.2d 889 (4th cir. 1973). The record reveals that each inmate is classified according to departmental regulations and that inmates who are determined to be dangerous are isolated from other inmates. It is apparent that plaintiffs have voiced no specific fears and those of a general nature are being controlled by administrative procedures.

Plaintiffs’ allegations regarding denial of access to the courts include complaints that Camp A was temporarily without an inmate legal assistant; that there is no specific area for preparation of legal documents, nor provisions allowing typing tables in the dormitory; and that notarization of documents is sometimes impeded by harassment. The standards of access to the courts for pro se litigants was set out by the United States Supreme Court in Bounds v. Smith, 430 U.S. 817, 97 S.Ct. 1491, 52 L.Ed.2d 72 (1977). In the matter now before the court, it is apparent that defendants have met those standards. Although defendants concede that at one time an inmate counsel assigned to Camp A was temporarily confined to administrative lock-down for disciplinary reasons, plaintiffs do not dispute the rebuttal that a substitute counsel was sent to the camp and that inmates requiring other assistance could contact the director of legal programs or their classification officers. It is undisputed that all inmates who are able to do so may use the prison law library and that those who cannot are permitted to check out law books. The prison authorities are merely required to allow inmates free access to the courts, they are not required to provide twenty-four hour a day service. Nor do plaintiffs allege any set of facts establishing any detriment or prejudice to pending cases caused by inconveniences associated with noisy surroundings, minor delays in receipt of legal materials or notary services. Bounds does not require more than the provisions and assistance undisputedly afforded plaintiffs and evidenced in the record. Any allegations of confiscation of property may be directed to the state courts. See Hudson v. Palmer, — U.S. -, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984), Marshall v. Norwood, 741 F.2d 761 (5th Cir.1984).

Plaintiffs’ complaints that they are handcuffed with movement restricted by the use of a “black box” over the cuffs when they are transported out of their unit do not constitute cruel and unusual punishment. Unequal use of restraints of prisoners in matters of security was found to fall within the discretion of prison officials. Fulford v. King, 692 F.2d 11, 13 (5th Cir. 1982). Although plaintiff Burnette suggests that he has never posed any problems on trips outside the prison, he does not contest the use of the device as a security measure to ensure that there would be “no problems.” Since no plaintiff alleges any serious injury due to the extra security measure, the additional impediments to movement do not present a claim of constitutional merit under Fulford.

In addition to recognizing the need for supplemental restraints, .the jurisprudence is uniform that reasonable steps taken to enforce security needs in a prison do not violate a prisoner’s constitutional rights: See Olgin v. Darnell, 664 F.2d 107 (5th Cir.1981); McFadden v. Lucas, 713 F.2d 143 (5th Cir.), cert denied 464 U.S. 998, 104 S.Ct. 499, 78 L.Ed.2d 691 (1983). Prisoners also have no legitimate expectation of privacy and the Fourth Amendment’s prohibition of unreasonable searches do not apply in prison cells. Hudson v. Palmer, supra, 104 S.Ct. at 3201. Regulation No. 3025, attached to defendants’ motion for summary judgment, clearly authorizes general routine searches of tiers during which the inmates may be required to remove their clothing so that the clothing only may be searched. There are no allegations that the searches were overly intrusive or contrary to prison policy; only that the searches were “without probable cause” and embarrassing to the inmates. Since the facts before the court reveal that such searches are authorized and justified in light of the contraband confiscated (See affidavit by Mariana Leger), the shakedowns are a reasonable requirement in the unit as well as in individual cells under Hudson, Id.

Plaintiffs’ specious allegations of rampant homosexuality condoned by corrections officers who often harass and verbally abuse the inmates lack a factual basis and are countermanded by defendants’ affidavits and exhibits of prison rules and regulations for both inmates and employees (attachments numbered 11 & 12). Moreover, plaintiffs have not indicated what individual constitutional rights would be violated had there been specified homosexual encounters in their camp, other than their subjective revulsion and disgust which are not actionable under § 1983.

Allegations of verbal abuse alone do not present claims under § 1983. “Mere threatening, language and gestures of a custodial officer do not, even if true, amount to a constitutional violation.” McFadden v. Lucas, supra, 713 F.2d at 146; Johnson v. Glick, 481 F.2d 1028, 1033, n. 7 (2d Cir.1973). Plaintiffs do not contradict defendants’ position that inmates are required to carry their identification cards and duty status slips, subject to “on the spot” production and inspection; implementation of this reasonable rule by security officers cannot be said to be harassment.

Plaintiffs also generally complain that corrections officers “often force plaintiff to perform duties not in compliance with the duty status, resulting in frivolous disciplinary reports.” Complaint If 26. However, the record shows no factual support for these allegations; nor are there allegations of any physical impairment caused by an order not in compliance with a duty status. See also affidavit by Mariana Leger regarding additional or alternative job assignments. As defendants point out in brief, there are a variety of jobs which inmates at Angola perform. Some are more desirable than others but inmates do not acquire job security or tenure and they may be required to perform any task for which they are physically fit.

Similarly, there are no specific contentions of denial of due process. An inmate cannot complain that a disciplinary report was unfairly issued for an act he did not commit. Collins v. King, 743 F.2d 248 (5th Cir.1984). The disciplinary procedures which are in effect at the Louisiana State Penitentiary were previously approved by this court in Williams v. Edwards, supra, and affirmed by the Court of Appeals. Those procedures more than comply with the standards set forth in Wolff v. McDonnell, 418 U.S. 539, 94 S.Ct. 2963, 41 L.Ed.2d 935 (1974) and Stewart v. Thigpen, 730 F.2d 1002 (5th Cir.1984). Inasmuch as there is a proper and constitutionally correct disciplinary hearing procedure at the penitentiary, plaintiffs may allege specific dissatisfactions with those results in civil actions. No plaintiff has raised such complaints in this action and none contest defendants’ evidence that inmates may occasionally have to perform other than assigned tasks and that disciplinary proceedings follow the procedural rules.

Considering that the complaint and all other pleadings filed in the record as well as the opposition to defendants’ motion for summary fail to reveal any violations of federally protected rights, and since plaintiffs have failed to show genuine issue as to any material fact, it is evident that defendants are entitled to judgment as a matter of law. Accordingly, plaintiffs’ motion for summary judgment is hereby DENIED and defendants’ motion for summary judgment is hereby GRANTED.

Furthermore, since the record reveals that plaintiffs have failed to correctly identify and serve “three unknown agents of shakedown crew” and “President, C & S Securities, Inc.” over the course of several years and since the court has determined that neither the shakedowns nor the use of the restraints presumably manufactured by C & S Securities violated any constitutional rights, these remaining defendants will be dismissed under 28 U.S.C. § 1915(d). There will be judgment in favor of all defendants and against all remaining plaintiffs dismissing this action.


source: Caselaw Access Project

author: DORSEY, District Judge.

license: Public Domain

text:
    MIDDLETOWN PLAZA ASSOCIATES v. DORA DALE OF MIDDLETOWN, INC.
    No. Civ. H-85-7 (PCD).
    United States District Court, D. Connecticut.
    Nov. 19, 1985.
    Jacob D. Zeldes, William C. Longa, Zeldes, Needle & Cooper, Bridgeport, Conn., for plaintiff.

      Michael A. Katz, Bridgewater, Conn., Paul H. Appel, Friedman, Leeds & Shorenstein, New York City, for defendant.
   RULING ON PLAINTIFF’S MOTION TO STRIKE AFFIRMATIVE DEFENSES AND TO DISMISS COUNTERCLAIMS

DORSEY, District Judge.

Background

Plaintiff brings this action to recover sums owed to it pursuant to a commercial lease. Plaintiff alleges that defendant has failed and refused to pay certain sums of money owed to it under the terms and conditions of the commercial lease and amendments. In its answer, defendant sets forth three affirmative defenses and counterclaims. In response thereto, plaintiff has moved to strike as insufficient all affirmative defenses and to dismiss all counterclaims.

Discussion

1. Plaintiffs Motion to Strike Affirm- ' ative Defenses

Defendant’s first affirmative defense alleges that plaintiff’s complaint fails to state a claim upon which relief can be granted. Plaintiff asserts that the complaint sets forth all of the necessary elements of its asserted claim and moves to strike this affirmative defense as legally insufficient. Motions to strike are generally not favored. See 2A Moore’s Federal Practice ¶ 12.21[2] (2d ed. 1985). See also, Salcer v. Envicon Equities, 744 F.2d 935, 939 (2d Cir.1984). A motion to strike a defense “will be denied if the defense is sufficient as a matter of law or if it fairly presents a question of law or fact which the court ought to hear.” Gilbert & Bennett Mfg. v. Long Truck Lines, Inc., 574 F.Supp. 176, 177 (D.Conn.1983). Although the standard for determining the legal sufficiency of a defense is a narrow one, a motion to strike may be granted where the legal insufficiency of that defense is “clearly apparent.” May Dept. Stores v. First Hartford Corp., 435 F.Supp. 849, 855 (D.Conn.1977) quoting Wright and Miller, Federal Practice and Procedure, Civil § 1381 at 802 (1969).

Defendant’s first affirmative defense is clearly insufficient and must be stricken. Both counts of plaintiff’s complaint sufficiently state claims upon which relief may be granted. The first count alleges that the lease, signed by both parties, obligated defendant to make “certain specified payments” as well as a fixed annual minimum rental. It further alleges that defendant has failed to make the specified payments required of it under the lease and amendments thereto. These allegations sufficiently state a cause of action for money owed under a lease. The second count sufficiently states the necessary elements of a quantum meruit claim, alleging that defendant benefited from services provided by plaintiff pursuant to an agreement providing for payment therefor. A complaint should not be dismissed for failure to state a claim “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitled him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). Both counts of plaintiff’s complaint sufficiently state a claim upon which relief may be granted. The motion to strike defendant’s first affirmative defense is granted.

Defendant’s second affirmative defense alleges that “plaintiff is indebted to defendant for sums which are in excess of the amounts demanded in the complaint,” and that “plaintiff must offset such sums against any accounts to which it might otherwise be affected.” Defendant’s Answer and Counterclaim. Plaintiff asserts that defendant’s set-off claim is not an affirmative defense, but rather a counterclaim. Plaintiff further asserts that the court should redesignate the defense as a counterclaim and, therefore, dismiss it with defendant’s other counterclaims. Defendant claims that a set-off is an affirmative defense. The nature and circumstances of this claim are not identified, making it difficult to ascertain whether defendant’s claim is a set-off or a recoupment. Defendant merely asserts that its claim is a setoff and cites cases which characterize a set-off as an affirmative defense. Defendant’s citations do not support a set-off as generally recognized to be an affirmative defense. Instead, these cases merely suggest that a particular type of set-off may, in certain circumstances, be treated as an affirmative defense. In general, both set-offs and recoupments are to be pleaded as counterclaims rather than affirmative defenses. See 3 Moore’s, Federal Practice ¶ 13.02 at 13 n. 1 (2d ed. 1985); 6 C. Wright & A. Miller, Federal Practice and Procedure, Civil § 1401 (1971 & Supp.1982). See also, First Nat’l Bank of Louisville v. Master Auto Serv. Corp., 693 F.2d 308, 310 (4th Cir.1982) (“set-off is a counterclaim arising from an independent claim the defendant has against the plaintiff”); Complaint of American Export Lines, Inc., 568 F.Supp. 956, 961 (S.D.N.Y.1983) (“a counterclaim for recoupment must arise from the same transaction or occurrence as the plaintiff’s claim”). Since both recoupments and set-offs are treated as counterclaims, it is unnecessary to determine whether defendant’s claim is a set-off or a recoupment. See 3 Moore’s, Federal Practice 1113.02 at 13 n. 1. Defendant’s second claim against plaintiff is deemed a counterclaim and, pursuant to Rule 8(c) of the Federal Rules of Civil Procedure, will be treated as if it had been properly pleaded as such and plaintiff’s motion to strike defendant’s second affirmative defense is denied.

Defendant’s third affirmative defense alleges that “[pjlaintiff has knowingly violated [its] warranty of habitability and is therefore barred from obtaining the relief [it] seeks.” Plaintiff asserts that breach of warranty of habitability is not a defense in an action for rent due under a commercial lease unless the breach causes a constructive eviction, meaning actual abandonment of the premises by the tenant necessitated by the breach of the warranty. Defendant relies primarily on Haskill v. Surita, 109 Misc.2d 409, 439 N.Y.S.2d 990 (Civ.Ct.1981), to support the validity of this type of affirmative defense. Although Haskill is distinguishable from the present case in that it deals with counterclaims rather than affirmative defenses, the most damaging defect in defendant’s third affirmative defense is the lack of specificity of its allegations. Under New York law, which is controlling in this case, there must be a constructive eviction, a condition effectively precluding defendant’s use of the premises before a breach of warranty of habitability may be the basis for a defense in an action for rent due under a commercial lease. Defendant’s allegations do not set forth the elements of a constructive eviction. However, granting plaintiffs motion to strike in this circumstance is not appropriate. “Motions to strike are not favored and should not be granted unless the allegations attacked have no possible relation to the controversy____” Salcer v. Envicon Equities, 744 F.2d at 939. There is a genuine possibility that defendant can set forth allegations that do state the requisite elements of a constructive eviction. Therefore, decision on plaintiff’s motion to strike defendant’s third affirmative defense is reserved at this time and defendant is granted leave to amend its allegations within fourteen (14) days of the date of this order. If defendant amends, the motion will be denied as of the amendment. If defendant fails to amend, as authorized, the motion to strike will be granted as of fourteen (14) days from the date of this order. If the amendment does not satisfy the above stated criteria, plaintiff may renew its motion.

2. Plaintiffs Motion to Dismiss Counterclaims

Since plaintiffs motion to dismiss defendant’s counterclaims questions the sufficiency of defendant’s answer, all allegations contained in the pleadings must be deemed true for the purposes of this motion. See A.T. Brod & Co. v. Perlow, 375 F.2d 393 (2d Cir.1967); Laub v. Genway Corp., 60 F.R.D. 462 (D.Conn.1973). Plaintiff’s motion to dismiss defendant’s counterclaims is premised upon a provision in the lease which expressly prohibits defendant from bringing a counterclaim in any action by plaintiff for the nonpayment of rent. Defendant raises two arguments for the validity of its counterclaims. First it argues that the waiver of the right to counterclaim only applies to plaintiff’s claims based expressly on the lease, but not to the unjust enrichment claim and, second, that a waiver of the right to counterclaim is within the discretion of the court and should not be enforced. Both of these arguments are without merit. Defendant’s assertion that the waiver only applies to the claim based on the lease ignores the express and unambiguous language of the lease. The lease specifically states that defendant’s waiver applies in “any proceeding” for the nonpayment of rent. Furthermore, its reliance on Waldman v. Englishtown Sportswear, Ltd., 92 A.D.2d 833, 460 N.Y. S.2d 552 (1st Dept.1983), is misplaced. Waldman merely discusses the propriety of actions to recover on theories of unjust enrichment or quasi contract. The case neither deals with nor discusses counterclaim waivers, and in no way suggests that waivers apply only to claims based on a lease and not to other proceedings related to it. The express language of the lease agreement is too clear to attach such a meaning to it. Finally, defendant’s assertion that this court should not enforce the waiver provision is also rejected. Plaintiff correctly relies on New York law to support the proposition that contractual agreements which waive the right to assert a counterclaim are enforceable. See DeRoll Iron Works v. Webb & Knapp, 36 Misc.2d 216, 232 N.Y.S.2d 111 (Sup.Ct. Bronx Co. 1962); Orlowsky v. East House Enterprises, Inc., 32 Misc.2d 664, 228 N.Y.S.2d 19 (Sup.Ct.App. Term, 1st Dept.1961). Defendant’s allegations do not compel the court to invalidate the contractual waiver. Therefore, plaintiff’s motion to dismiss defendant’s counterclaims is granted.

SO ORDERED.

      . A provision in the lease agreement expressly prohibits defendant from bringing a counterclaim in any action by plaintiff for the nonpayment of rent. Plaintiff, therefore, seeks to have defendant's second affirmative defense redesignated as a counterclaim and dismissed with the other counterclaims. For a discussion of this court's dismissal of all defendant's counterclaims see infra at 1166.

      . The facts surrounding this case raise the initial issue of what law controls when the parties to the agreement execute the lease in Connecticut while the leased premises are in New York. Generally, if a contract “(i)s to have its operative effect or place of performance in a jurisdiction other than the place where it was entered into, [Connecticut's] rule is that the law of the place of operative effect or performance governs its validity and construction.” Whitfield v. Empire Mut. Ins. Co., 167 Conn. 499, 506, 356 A.2d 139 (1975) quoting Breen v. Aetna Cas. & Sur. Co., 153 Conn. 633, 637, 220 A.2d 254 (1966). See also, Masarjian v. Mark Lighting Fixtures Co., 595 F.Supp. 869, 870-71 (D.Conn.1984).


author: ROBERT D. POTTER, Chief Judge.

text:
    MONROE HARDWARE COMPANY, Plaintiff, v. Lewis L. ROBINSON, Jr., and Charles A. Robinson, Partners, trading as Robinson Hardware Company, Defendants.
    No. C-C-85-574-P.
    United States District Court, W.D. North Carolina, Charlotte Division.
    Nov. 19, 1985.

      C. Frank Griffin, Griffin, Caldwell, Held-er & Steelman, Monroe, N.C., for plaintiff.
    G. Thomas Cooper, Jr., Cooper, Beard & Dibble, Camden, S.C., for defendants.
   ORDER

ROBERT D. POTTER, Chief Judge.

THIS MATTER is before the Court upon Motion of Defendants for a dismissal of this case on the ground that there exists no personal jurisdiction over Defendants in the Western District of North Carolina. It appears that Defendants have requested a hearing on this matter; however, the Court believes a hearing is unnecessary.

In support of their Motion, Defendants state by way of filed affidavits that they have never done business within the State of North Carolina, either permanently or temporarily.

This case is a suit on an account. The Plaintiff is a North Carolina corporation with its principal offices and place of business in Monroe, North Carolina. The Defendants are citizens and residents of the State of South Carolina and operate a retail hardware store in Camden.

Plaintiff has salesmen who solicit orders from Defendants in South Carolina. The orders are transferred to the wholesale division of Plaintiff in Monroe, North Carolina, and the goods are shipped from there to Camden, South Carolina. The Defendants, Plaintiff alleges, have occasionally picked up goods from Plaintiffs wholesale distribution site in Monroe. The Plaintiff claims that Defendants owe $61,596.52 for goods either shipped from or picked up at its facility in Monroe.

The question before this Court is whether the Defendants’ contacts with North Carolina are sufficient for the Court to exercise personal jurisdiction over the Defendants.

The Court may assert jurisdiction over the Defendants only if statutory law provides a ground and if Defendants have such minimum contacts with the State that is fair to require them to defend here. See, Vishay Intertechnology, Inc. v. Delta Int’l Corp., 696 F.2d 1062 (4th Cir.1982).

The North Carolina Long-Arm Statute provides for jurisdiction over the parties under the following circumstances:

(5) Local Services, Goods or Contracts— In any action which:
(a) Arises out of a promise, made anywhere to the plaintiff ... by the defendant ... to pay for services to be performed in this state by the plaintiff; or
(d) Relates to goods, documents of title or other things of value shipped from this state by plaintiff to the defendant on his order or direction;

N.C.Gen.Stat. § 1-75.4(5)(d).

There is a clear mandate that the North Carolina Long-Arm Statute be given liberal construction, thereby favoring a finding of personal jurisdiction. Vishay Intertechnology, Inc. v. Delta Int’l. Corp., supra.

Regardless of the statutory ground, a court cannot expand the permissible scope of state jurisdiction over nonresident parties beyond due process limitations. There must be a showing that the Defendants have sufficient minimum contacts with North Carolina. Speizman Knitting Mach. Co. v. Terrot Strickmaschinen, 505 F.Supp. 200 (W.D.N.C.1981). The criteria for determining whether minimum contacts exist include: (1) the quantity of contacts, (2) the nature and quality of contacts, (3) the source and connection of the cause of action with those contacts, (4) the interests of the forum state and convenience, and (5) whether the defendant invoked benefits and protections of law of the forum state. Southern Case, Inc. v. Management Recruiters, Int’l, Inc., 544 F.Supp. 403 (E.D. N.C.1982); Speizman, supra.

A contract executed in North Carolina or to be performed in North Carolina may be a sufficient minimal contact in which to base personal jurisdiction. Byrum v. Register’s Truck & Equip. Co., 32 N.C.App. 135, 231 S.E.2d 39 (1977). If a contract is to be actually performed in North Carolina and has a substantial connection with this State, jurisdiction will lie. Staley v. Homeland, Inc., 368 F.Supp. 1344 (E.D.N.C. 1974).

A recent Fourth Circuit case reversed an Eastern District Court’s dismissal for lack of personal jurisdiction over a foreign corporation. Vishay Intertechnology, Inc. v. Delta Int’l Corp., supra. The Court, in a unanimous decision, held that due process was not violated regardless of the fact that the defendant only wrote three letters and executed five phone calls to North Carolina and neither maintained a place of business there nor had an agent there. Id. at 1068. The defendant was held subject to jurisdiction under N.C.Gen.Stat §§ 1-75.4(4)(a), 55-145(a)(4) (North Carolina’s Long-Arm Statute applicable to foreign corporations). The Court stated that defendant intended forseeable injury to plaintiff in North Carolina and could reasonably expect to answer plaintiff in North Carolina on claims arising out of defendant’s North Carolina contacts with plaintiff and to avail itself of the benefits and protections of North Carolina laws. Id.

The North Carolina Court of Appeals has similarly held sufficient minimum contacts existed for asserting personal jurisdiction in the recent case of Harrelson Rubber Co. v. Dixie Tire and Fuels, Inc., 62 N.C.App. 450, 302 S.E.2d 919 (1983). In that case, the contract giving rise to plaintiff’s suit was made in North Carolina, the agreement provided that it should be governed by North Carolina law, and the contract was performed in North Carolina by virtue of the plaintiff manufacturing the goods and then shipping them to out-of-state defendant. Citing N.C.Gen.Stat. § 55-145(a)(1), the court held that “a single contract which was made or was to be performed in this state is sufficient to subject a nonresident corporation to suit.” Id. 302 S.E.2d at 921.

In the instant case, Defendants rely on their respective affidavits to factually support their request for a dismissal for a lack of jurisdiction. The essence of Defendants’ affidavits is that neither have ever done business in the State of North Carolina. The Court finds this premise without merit in light of the copies of accounting records attached to Plaintiff’s Complaint, designated “Exhibit A.” Those records indicate that Defendants, as South Carolina citizens and residents, have had an on-going and substantial commercial relationship with the Plaintiff. Defendants’ statements that they have no business goings-on in this State, without anything more, does not seem logical. True, the Defendants may not have had retail business contacts here, but it appears to the Court that from August 27, 1984 until September 23, 1985, the Defendants had regular business contacts in Monroe, North Carolina, evidenced by well over 100 wholesale purchases they made of Plaintiff’s merchandise. Thus, the quantity of contacts with this forum are significant. Further, those contacts are at the base of this controversy, that is, the Defendants’ possible liability for the price of the merchandise they ordered from the Plaintiff. There is no question that for over a year the Plaintiff rendered a substantial amount of performance in this forum by regularly shipping to the Defendants the goods which they systematically ordered. See, Byrum, supra (single contract to be performed in North Carolina may be sufficient minimal contact); and Staley, supra (contract actually performed in North Carolina and having substantial connection with this State gives rise to personal jurisdiction.)

Furthermore, the Defendants, by carrying on such an extensive and systematic business relationship with the Plaintiff, could reasonably expect answering to the Plaintiff in North Carolina on claims arising out of Defendants’ North Carolina contacts with the Plaintiff and to avail themselves of the benefits and protections of North Carolina laws. See Vishay, supra at 1068; and Harrelson Rubber Co., supra 302 S.E.2d at 921.

Thus, the Court is of the opinion that the Defendants are subject to this Court’s in personam jurisdiction. IT IS, THEREFORE, ORDERED that Defendants’ Motion to dismiss for lack of jurisdiction is DENIED.


author: OWEN, District Judge.

text:
    Barbara HORGAN, as Executrix of the Estate of George Balanchine, Plaintiff, v. MacMILLAN, INC., et al., Defendants.
    No. 85 Civ. 8028(RO).
    United States District Court, S.D. New York.
    Nov. 19, 1985.
    Proskauer, Rose, Goetz & Mendelsohn, New York City (Lois D. Thompson, of counsel), for plaintiff.
    Cowan, Liebowitz & Latman, P.C., New York City (Robert J. Bernstein, Roger L. Zissu, Elliot Schachner, of counsel), Jan F. Constantine, Associate Gen. Counsel, MacMillan, Inc., New York City, for defendants.
   OPINION AND ORDER

OWEN, District Judge.

Each Christmas, the New York City Ballet features the ballet The Nutcracker, with music by Tschaikovsky, choreography by George Balanchine, the recently deceased world-renowned choreographer, scenery and lighting by Rouben Ter-Arutunian, and costumes by Karinska. The choreography is copyrighted with the rights held by Balanchine’s estate. The estate now contends that certain photographs of the production of the The Nutcracker in a new book, The Nutcracker: A Story & A Ballet, written by Ellen Switzer and published by MacMillan, Inc., infringe upon Mr. Balanchine’s copyright of his Nutcracker ballet choreography.

As I see it, choreography has to do with the flow of the steps in a ballet. The still photographs in the Nutcracker book, numerous though they are, catch dancers in various attitudes at specific instants of time; they do not, nor do they intend to, take or use the underlying choreography. The staged performance could not be recreated from them. Thus, I find that the photographs in the book are not an infringement of Mr. Balanchine’s choreography.

Moreover, The Nutcracker does not violate the Balanchine name’s right to be free of publicity. While the book extensively mentions and pictures Mr. Balanchine — concededly, I am sure, a public figure — by doing so it basically conveys interesting information concerning life around us. I get no sense that it is being published for trade or advertising purposes. See, e.g., Stephano v. News Group Publications, Inc., 64 N.Y.2d 174, 485 N.Y.S.2d 220, 474 N.E.2d 580 (1984), and Ann-Margret v. High Society Magazine, Inc., 498 F.Supp. 401 (S.D.N.Y.1980). Any other view of this situation would make the writing of an unauthorized biography actionable. See Frosch v. Grosset & Dunlap, Inc., 75 A.D.2d 768, 427 N.Y.S.2d 828 (1980).

Finally, plaintiff has unduly delayed in seeking the claimed relief. Letters from the Balanchine estate as early as April 3 of this year indicate that the estate was aware of MacMillan’s general intentions. Further, on May 10, 1985, MacMillan unequivocally notified plaintiff that despite plaintiff’s objections, MacMillan was going ahead with publication of The Nutcracker. While the estate objected to MacMillan’s decision in a letter of May 31, it took no further action until filing this suit; no adequate explanation has been offered. Given the change of position by the publisher since that date, and the fact that such a delay tips the scales against a party seeking injunctive relief, Mego Corp. v. Mattel, Inc., 203 U.S.P.Q. 377 (S.D.N.Y.1978), a preliminary injunction is denied.

So ordered.

      . Just as a Beethoven symphony could not be recreated from a document containing only every twenty-fifth chord of the symphony.

      . Parenthetically, I note that the photographs were taken by certain of the Company's "official” photographers, who also participated in the book, and that the photographs were used with the permission of the New York City Ballet and the Company's unions and individual dancers.

      . Notwithstanding the Horgan deposition, a comparison of the defendants' book with others in the field leaves no question as to its fine quality.


author: STANTON, District Judge.

text:
    Janet NARDELLA, as Administratrix of the Estate of Matthew Nardella, and Janet Nardella, individually, Plaintiffs, v. Harold I. BRAFF, Michael I. Litvak, Leo Ertag, Frederick A. Wortmann, Brian C. Harris, Ira Sukoneck and Braff, Litvak, Ertag, Wortmann, Harris and Sukoneck, George C. Nardella, Nardella & Nardella, and Roy J. Konray, Defendants.
    No. 84 Civ. 9101 (LLS).
    United States District Court, S.D. New York.
    Nov. 19, 1985.

      Robert D. Gould, P.C., New York City, for plaintiffs; Robert D. Gould, Elliot B. Pasik, of counsel.
    Cole & Deitz, New York City, for defendants; Robert D. Lang, of counsel.
   OPINION AND ORDER

STANTON, District Judge.

This case is before the court on plaintiff Janet Nardella’s motion pursuant to Fed.R. Civ.P. 15(a) for leave to amend the complaint. Janet Nardella is proceeding individually and as administratrix of the estate of Matthew Nardella against the law firm of Braff, Litvak, Ertag, Wortmann, Harris and Sukoneck (“Braff”) and some of its individual members, alleging legal malpractice. Plaintiff’s motion is granted in part, on consent, and denied as to the balance.

The action has its source in an automobile accident in which Matthew Nardella was killed. His wife Janet Nardella retained the defendants to prosecute a negligence action against four potential defendants for the wrongful death of Matthew Nardella and for the concomitant loss of services suffered by her. (Compl. 112) She charges that defendants accepted and investigated the case, but failed to institute suit before the statute of limitations expired. (Compl. 11113-7)

Plaintiff seeks to amend her complaint in four respects. She wishes to add the individual attorneys George Nardella, Esq. and Roy Konray, Esq. and the law firm of Nardella & Nardella, as additional defendants. She also would add a second cause of action alleging breach of contract. Defendants do not oppose these amendments. Plaintiff is accordingly granted leave to amend the complaint, adding those defendants and the cause of action alleging breach of contract.

Plaintiff also seeks to add two statutorily-based causes of action. The first is a claim under § 487 of the New York Judiciary Law, and the second is a claim under § 349 of the New York General Business Law. Defendants oppose the addition of these statutory claims.

Leave of court is required for a party to amend his pleading when the adverse party has already served a responsive pleading and does not consent to the amendment. Fed.R.Civ.P. 15(a). That is the situation here. The rule provides that “leave shall be freely given when justice so requires,” and the Supreme Court has stated that “this mandate is to be heeded.” Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962).

The Court went on in Foman, however, to note that “futility of amendment” is sufficient reason to deny a motion for leave to amend. Id. at 182, 83 S.Ct. at 230. It is well settled that it is not an abuse of discretion to deny leave to amend a complaint when the new claims could not withstand a motion to dismiss. Freeman v. Marine Midland Bank — New York, 494 F.2d 1334, 1338 (2d Cir.1973); Wrenn v. New York City Health and Hospitals Corp., 104 F.R.D. 553, 557 (S.D.N.Y.1985). As one court has stated, “[t]he liberal amendment rules of Fed.R.Civ.P. 15(a) do not require that courts indulge in futile gestures.” DeLoach v. Woodley,. 405 F.2d 496, 497 (5th Cir.1968). Thus plaintiff may not be granted leave to amend if the statutory claims fail to state a cause of action. Section 487 of the New York Judiciary Law

In the proposed amended complaint, plaintiff alleges that defendants practiced “a deceit upon their former client, Janet Nardella,” in that they “had themselves retained by plaintiff [and] they advised plaintiff, both expressly and impliedly, that they were legally competent to prosecute such a case when in fact they were not.” (Proposed Amended Compl. 11 32)

The facts as alleged in plaintiffs proposed amended complaint fail to state a cause of action under § 487 of the New York Judiciary Law. First, the statute has been held by the Second Circuit not to apply extraterritorially. Schertenleib v. Traum, 589 F.2d 1156, 1166 (2d Cir.1978). The proposed complaint alleges no conduct within the borders of New York State. Second, the statute applies only to attorneys who are guilty of deceit with intent to deceive “any party.” For a civil action to lie for violation of § 487 the deceit complained of must occur during the pendency of a court action. Singer v. Whitman & Ransom, 83 A.D.2d 862, 442 N.Y.S.2d 26, 27 (1981). Here plaintiff's grievance is that no action was ever filed. For both reasons, plaintiff’s proposed amended complaint fails to state a cause of action under § 487.

Section 349 of the New York General Business Law

In the proposed amended complaint, plaintiff alleges that “defendants engaged in deceptive acts and practices, illegal under New York General Business Law Section 349.” The charge is based upon defendants’ failure to bring an action on behalf of Janet Nardella before the expiration of the period of limitations, and upon defendants’ allegedly false assurances that “they were legally competent to prosecute Nardella’s case when in fact they were not.” (Proposed Amended Compl. ¶¶ 23, 32, 35) Plaintiff’s allegations are not cognizable under § 349. On its face the statute proscribes “deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state.” (emphasis added) As previously stated, plaintiff makes no allegations of conduct by defendants within New York.

Plaintiff has cited no case in which § 349 was applied to an attorney’s handling of a case for an individual client, and the legislative history of § 349 argues against such an application. The intention of the New York Legislature “in enacting § 349 of the General Business Law was to follow in the steps of the Federal Trade Commission with respect to the interpretation of deceptive acts and practices outlawed in Section 5 of the Federal Trade Commission Act (15 U.S.C.A. § 45).” People by Lefkowitz v. Colorado State Christian College, 76 Misc.2d 50, 346 N.Y.S.2d 482, 487 (1973).

The Federal Trade Commission Act, 15 U.S.C. § 45, (“the Act”) proscribes “[u]nfair methods of competition in commerce and unfair or deceptive acts or practices in commerce.” The scope of the “deceptive acts” covered by the Act is defined in the Procedures and Rules of Practice for the Federal Trade Commission:

The Commission acts only in the public interest and does not initiate investigation or take other action when the alleged violation of law is merely a matter of private controversy and does not tend adversely to affect the public.

16 C.F.R. § 2.3 (1973); see also Federal Trade Commission v. Klesner, 280 U.S. 19, 25, 50 S.Ct. 1, 3, 74 L.Ed. 138 (1929)

Thus, as Judge Weinfeld noted in Genes-co Entertainment v. Koch, 593 F.Supp. 743, 752 (S.D.N.Y.1984), “[pjrivate transactions not of a recurring nature or without ramifications for the public at large are not a proper subject of” action under the Act or under § 349. In Genesco the court held that an action would not lie for an alleged breach of contract and fraud under § 349 where “[t]he only parties truly affected by the alleged misrepresentations in this case are the plaintiff and the defendants. ‘A breach of private contract affecting no one but the parties to the contract, whether the breach be negligent or intentional, is not an act or practice affecting the public interest.’ ” Id. at 752 (quoting Lightfoot v. MacDonald, 86 Wash.2d 331, 544 P.2d 88, 90 (1976) (en banc)).

The misconduct alleged in the proposed amended complaint involves a private relation between Janet Nardella and defendants. No conduct occurred in New York State. The facts do not state a claim falling under the coverage of § 349.

That portion of plaintiff’s motion for leave to amend the complaint by adding defendants and a cause of action for breach of contract is granted on consent. Because plaintiff’s proposed amended complaint fails to state a cause of action under either § 487 of the New York Judiciary Law or § 349 of the New York General Business Law, that portion of plaintiff’s motion for leave to amend the complaint to add claims based on those statutes is denied.

SO ORDERED.

      . Defendants’ Memorandum of Law in Opposition to Plaintiff’s Motion to Amend the Complaint at 2.

      . Since leave to amend must be denied if the proposed claim would not withstand a motion to dismiss, the standards applied under a Rule 12(b)(6) motion must be applied here. In deciding a motion to dismiss a court must assume the truth of the factual allegations contained in the complaint, and the motion must be denied unless no reasonable interpretation of the facts alleged can support the plaintiffs claim for relief. Cruz v. Beto, 405 U.S. 319, 322, 92 S.Ct. 1079, 1081, 31 L.Ed.2d 263 (1972); Clay v. Martin, 509 F.2d 109, 112 (2d Cir.1975); Poloron Products, Inc. v. Lybrand Ross Bros. & Montgomery, 72 F.R.D. 556, 558 (S.D.N.Y.1976).

      . Section 487 provides, in relevant part;
      An attorney or counselor who:
      1. Is guilty of any deceit or collusion, ... with intent to deceive the court or any party; ... [i]s guilty of a misdemeanor, and in addition to the punishment prescribed therefor by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action.

      . Section 349 provides, in relevant part:
      Deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful____ [Ajny person who has been injured by reason of any violation of this section may bring an action in his own name to enjoin such unlawful act or practice, an action to recover his actual damages or fifty dollars, whichever is greater, or both such actions.

      . See, e.g., Platt Corp. v. Platt, 17 N.Y.2d 234, 237, 270 N.Y.S.2d 408, 217 N.E.2d 134 (1966):
      "The failure of a man to do anything at all when he is physically in one State is not an ‘act’ done or ‘committed’ in another State. His decision not to act and his not acting are both personal events occurring in the physical situs. That they may have consequences elsewhere does not alter their personal localization as acts.”


author: CURTIN, Chief Judge.

text:
    Ollie SIMMONS, Jr., Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
    No. CIV-80-1157C.
    United States District Court, W.D. New York.
    Nov. 19, 1985.
    Neighborhood Legal Services, Inc. (Keith A. Morgenheim, of counsel), Buffalo, N.Y., for plaintiff.
    Salvatore R. Martoche, U.S. Atty. (Kathleen M. Mehltretter, Asst. U.S. Atty., of counsel), Buffalo, N.Y., for defendant.
   CURTIN, Chief Judge.

This action is before me after a remand for a new hearing consistent with Campbell v. HHS, 665 F.2d 48 (2d Cir.1981), reversed, 461 U.S. 458, 103 S.Ct. 1952, 76 L.Ed.2d 66 (1982). The case was remanded March 24, 1982.

Once again, the court must address the problem which was recently raised in Wolf v. Secretary, 612 F.Supp. 289 (W.D.N.Y. 1985). In that case, plaintiff, an alcoholic, was denied benefits because of a finding by the Secretary that he was not disabled, so no assessment was made of his ability to control his drinking. That case was remanded to the Secretary for reconsideration and further findings. Here, although the Secretary found plaintiff to be an alcoholic, she determined that he had retained the voluntary ability to control his drinking.

Although in this case the Secretary found that plaintiff’s present abstinence indicated that he had always had the ability to control his drinking, the remarks made by the United States Court of Appeals for the Fifth Circuit in Ferguson v. Schweiker, 641 F.2d 243, 249 (5th Cir.1981), have particular force:

The fact that Ferguson may have undergone what was formerly thought to be successful detoxification some time ago does not present evidence that he now has the ability to control his drinking. Indeed, the fact that appellant has been hospitalized more than once as a result of his drinking problem ... suggests that while past detoxification as apparently thought to have been successful ..., the roots of the disease remained deep within appellant. One of the more tragic aspects of alcoholism is that the hopes spawned by an apparently successful effort to “dry out” may in a moment be dashed against the rocks of a whiskey glass____ Hence, the reports of appellant’s past detoxification provide little guidance concerning his present ability to control his alcoholism. The conclusory assertion that because a person has once stopped drinking, he can again do so ... is unwarranted and shows an insensitivity to the problems faced by alcoholics.

Ferguson, supra at 249.

In this case, on January 4, 1982, plaintiff was admitted to a hospital, during which time his left leg was amputated above the knee. On remand, the Administrative Law Judge [AU] found that plaintiff was disabled and awarded benefits beginning January 4, 1982. The AU found, however, that plaintiff was not disabled from the alleged onset date of December 4, 1978, through January 4, 1982. There was evidence before the Secretary that after the operation, plaintiff stopped drinking. It appears to be the Secretary’s theory that if he could stop drinking at that time, he could have done so during the period from 1978 through January of 1982. Plaintiff in this action appeals from the finding of the Secretary.

At the outset, the court notes that an onset date of January 4, 1982, seems somewhat arbitrary. The record clearly demonstrates the progressive nature of plaintiff’s illnesses. Plaintiff’s condition was obviously disabling sometime prior to the decision to amputate his leg.

On this appeal, the main issues before the court are the non-exertional limitations resulting from plaintiff’s drinking and whether or not plaintiff was able to control his drinking. As has been stated in a supplemental brief from the government, the determination as to whether plaintiff retains the voluntary ability to control his drinking need only be made once it has been found that plaintiff is disabled under the Act and that discontinuance of drinking would end the disability. See Rutherford v. Schweiker, 685 F.2d 60, 62 (2d Cir.1982).

The evidence in the record as to plaintiff’s limitations in 1979 is contradictory. Several reports from physicians indicate that plaintiff will be able to return to work after treatment (Tr., pp. 180-81, 186-87). Others say it is unknown when plaintiff will be able to return to work (Tr., pp. 175-78).

Treating physician Barry Gruber issued two reports and a residual functional capacities assessment in February of 1980. In a February 27, 1980, report, he found plaintiff “severely disabled.” He found plaintiff unable to engage in sustained work and termed the outlook “dismal” (Tr., p. 208). In the same report, he noted that plaintiff was incapable of handling benefits on his own (Tr., p. 210). The physical capacities assessment prepared that same day, however, indicated that plaintiff could do sedentary work (Tr., p. 211). In view of that report, the Secretary’s finding that plaintiff had the physical capacity for sedentary work is supported by substantial evidence.

However, the AU failed to account for the non-exertional limitations caused by plaintiff’s drinking as shown by the record. During the second hearing, a vocational expert testified that if plaintiff retained the ability for sedentary work and had no other restrictions, he would be able to work (Tr., p. 264). However, the expert also stated that if plaintiff had a “chronic and acute” problem with alcohol, which caused forgetfulness and frequent absences, plaintiff could not work (Tr., pp. 262 and 263).

Plaintiff has been repeatedly diagnosed as a chronic alcoholic, and this was one of the diagnoses upon which his treating physician found him to be “severely disabled” (Tr., p. 208). The testimony of plaintiff’s brother indicates that plaintiff was released from his last job due to his drinking and poor health. He testified that plaintiff has worked for 23 years despite a drinking problem, but that his drinking eventually caught up with him. Plaintiff was sent home from work on several occasions because of his drinking. Finally, plaintiffs brother testified that plaintiff did not remember things when he was drinking (Tr., pp. 254-57).

Plaintiff’s sister also testified. She said he had a “drinking problem” during the years in question. His drinking forced him to leave his mother’s home and live, for a time, at a YMCA. His sister recalled that plaintiff would forget his doctor’s appointments during this time (Tr., p. 257-61).

Plaintiff himself testified that he does not concentrate well. He appeared confused (Tr., pp. 74-76). Finally, a CAT scan of his brain revealed minimal cortical cerebral atrophy (Tr., p. 128). This was not mentioned by the AU.

In light of the vocational expert’s opinion that plaintiff would be unable to perform substantial gainful activity if he suffered from alcohol-related, non-exertional restrictions, the testimony that he did have such restrictions and his physician’s view that plaintiff was severely disabled, a finding of “not disabled” is not supported by substantial evidence.

Plaintiff’s disability was clearly related to his alcohol consumption such that the cessation of his drinking probably would have ended the disability. The next step in the analysis is whether plaintiff retained the voluntary ability to stop drinking. Interestingly, even though the AU found plaintiff not disabled, he went on to find that plaintiff could control his drinking.

' The AU pointed to plaintiff’s long history of work despite his alcoholism. However, plaintiff was forced to quit work in large part because of his drinking. The AU relied most heavily on the testimony of plaintiff’s sister that plaintiff no longer drinks, and has not since his surgery. The AU believed that since plaintiff has now stopped drinking, he could have controlled his drinking in the two or three years before surgery (Tr., p. 231).

It is difficult to see the relevance of plaintiff’s cessation of drinking in 1982 to his ability to control his drinking in 1979-81, a time when his drinking had intensified (Tr., p. 231). Plaintiff was essentially forced to stop drinking in 1982, since he spent several weeks in the hospital after the amputation of his leg and was restricted in his ability to move about. The fact that an alcoholic can now control his drinking does not mean he could control it in the past.

The Appeals Council supplemented the AU’s opinion on this issue. In addition to the above, the Council noted that plaintiff had been advised on several occasions to stop drinking and to attend rehabilitative programs (Tr., p. 223). The AU made a similar observation, noting that plaintiff failed to heed the advice of his doctors to stop drinking and also to take his prescriptions (Tr., p. 231). The government only points to one place in the record where it is shown that plaintiff did not take his medication (Tr., p. 150). Plaintiff certainly did not stop drinking.

However, once a person is found to have alcohol-related impairments which prevent him from engaging in substantial gainful activity, he cannot be denied benefits simply because he continues to drink. If he is unable to control his drinking, he is entitled to benefits. Adams v. Weinberger, 548 F.2d 239, 242-43 (8th Cir.1977).

The Council also noted that, on one occasion, plaintiff did attend some Alcohol Anonymous meetings, but stopped going. In early 1979, Dr. Skipper noted that plaintiff had attended a few sessions. However, unlike the case of the plaintiff in Rutherford, 685 F.2d at 62, these few meetings were not helpful. Plaintiff showed poor recognition of his drinking problem, fair motivation, and he did not improve (Tr., pp. 120 and 130). Plaintiff’s failed attempt to stop drinking indicates that he has lost the voluntary ability to control his consumption. See, generally, Johnson v. Harris, 625 F.2d 311 (9th Cir. 1980).

The reasons given by the Secretary for finding that plaintiff was able to control his drinking do not constitute substantial evidence in support of that finding.

The decision of the Secretary is reversed. The case is remanded for a calculation of benefits from February 1980, the time plaintiffs treating physician labeled him “severely disabled” and unable to handle benefits.

So ordered.

      . According to a recent article in the New York Times Sunday Magazine, new medical evidence indicates that alcoholism is, in large part, biologically determined. The metabolism of alcoholics differs distinctly from the metabolism of non-alcoholics. This difference is believed to be due either to the effects of past heavy drinking or to genetic predisposition. This view has led some experts in the field to doubt the ability of an alcoholic to overcome his illness through will power and psychological counseling alone, since alcoholics are biologically addicted. "A New Attack on Alcoholism,” The New York Times Magazine, October 20, 1985, p. 46.


author: WEXLER, District Judge.

text:
    Julio A. VEGA, Plaintiff, v. FEDERAL AVIATION ADMINISTRATION and Lynn Helms, Defendants.
    No. CV 83-0540.
    United States District Court, E.D. New York.
    Nov. 19, 1985.
    Jack B. Solerwitz, Mineóla, N.Y., for plaintiff.

      Raymond J. Dearie, U.S. Atty. by Igou M. Allbray, Asst. U.S. Atty., Brooklyn, N. Y., for defendants.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

WEXLER, District Judge.

Plaintiff Julio Vega brings this action against defendants Federal Aviation Administration (“FAA”) and Lynn Helms, FAA Administrator, for unconstitutional discharge. Vega alleges first that the FAA’s decision to discharge him from a position as a probationary air traffic controller deprived him of a constitutionally protected property interest in his job. Vega alleges next that the FAA violated his liberty interest by claiming falsely that he possessed hashish. Finally plaintiff alleges that the FAA’s discharge procedures violated his constitutional right to due process. This matter was tried before the Court on September 19, 1985.

The Court makes the following findings of fact and conclusions of law.

FINDINGS OF FACT

1. On December 14, 1981, plaintiff began his employment with the FAA as an air traffic controller. He was placed on probationary status and ordered to report for training by the FAA.

2. Upon his arrival at the FAA facility, plaintiff met with an employee of the FAA to discuss certain charges against plaintiff.

3. The FAA gave plaintiff prior notice of his discharge containing the reasons for the discharge.

4. Plaintiff was discharged by the FAA on March 29, 1982. At the time of his discharge, plaintiff had not completed his one-year probationary period. 5 U.S.C. §§ 3321(a), 7511(a)(1).

5. Plaintiff presented no evidence other than that he was a probationary air traffic controller who was discharged by the FAA after notice and an opportunity for a hearing.

6. Plaintiff presented no evidence that he was foreclosed from other economic opportunities as a result of a stigma created by the FAA’s publication of false and defamatory statements regarding his discharge.

7. Plaintiff presented no evidence that he had a right to expect continuous employment as an air traffic controller by the FAA.

8. Plaintiff presented no evidence that the FAA made, published, or disseminated any false or defamatory statements about him either concerning his employment or in connection with his discharge.

9. Plaintiff failed to serve Lynn Helms personally.

CONCLUSIONS OF LAW

1. This Court has jurisdiction of this action pursuant to 28 U.S.C. § 1331.

2. A probationary employee has no constitutionally protected property interest in his position unless he has a justified expectation of continued employment by statute, rule or understanding with the employer. Sampson v. Murray, 415 U.S. 61, 83, 94 S.Ct. 937, 949 (1974); Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2706, 33 L.Ed.2d 548 (1972); Shaw v. United States, 223 Ct.Cl. 532, 622 F.2d 520, 527 (1980). See also Beeson v. Hudson, 630 F.2d 622, 626 & n. 6 (5th Cir.1980) (probationary civil service employee has only the weakest of claims to entitlement).

3. Plaintiff was a probationary employee and has no entitlement to continued FAA employment. C.F.R. § 315.804 (1984). Accordingly, discharge of plaintiff by the FAA did not violate any constitutionally protected property interest.

4. Plaintiff has failed to prove that the employer made false and defamatory statements regarding the discharge of the plaintiff. Gentile v. Wallen, 562 F.2d 193, 197 (2d Cir.1977) (citations omitted). Accordingly, plaintiff failed to prove that his liberty interest was abridged.

5. Plaintiff has failed to prove that he was denied due process. He received notice from the FAA as to the reasons for his termination before the discharge and has failed to prove that he was denied a hearing or opportunity to clear his name.

6. The claim against defendant Helms is dismissed for lack of in personam jurisdiction because Helms was not served pursuant to Fed.R.Civ.P. 4(d)(5).

SANCTIONS

Pursuant to the authority granted this Court under the recently amended Rule 11, Fed.R.Civ.P., the Court has determined that this action is frivolous and has decided to impose costs and fees on plaintiffs counsel. The notes of the Advisory Committee on the 1983 amendment to Rule 11 reveal a greater determination to eliminate spurious lawsuits and unprepared attorneys.

The new language is intended to reduce the reluctance of courts to impose sanctions ... by emphasizing the responsibilities of the attorney and reenforcing those obligations by the imposition of sanctions.
The new language stresses the need for some prefiling inquiry into both the facts and the law to satisfy the affirmative duty imposed by the rule.

Fed.R.Civ.P. 11 advisory committee note, 1983 Amendment. See, e.g., Van Berkel v. Fox Farm and Road Machinery, 581 F.Supp. 1248 (D.Minn.1984) (attorney sanctioned when he refused to discontinue suit long after statute of limitations had run).

In the present case, the conduct of plaintiff’s attorneys warrants the imposition of sanctions. Since June 12, 1984, this Court repeatedly asked plaintiff’s counsel to state the legal and factual basis for the action. They failed to do so on each occasion and accordingly, were warned about the likelihood of sanctions if the Court determined that the action was frivolous. After these warnings plaintiff’s counsel did not discontinue the action or withdraw and the trial was set to begin on September 18, 1985. On that date, the Court again sought to determine plaintiff’s legal and factual basis for the claims. In response, a different attorney from the same firm, one who had not previously appeared in the case, stated that he had only been assigned to the case the prior evening, and requested an adjournment to the following day in order to research plaintiff’s position. The request was granted.

On the following day, September 19, yet another attorney from the same firm appeared for plaintiff. This attorney stated that he had only been assigned the case the prior evening and, like his predecessor, he was unable to provide the Court with any legal and factual basis for the lawsuit because the library was closed. After a brief trial and upon oral motion the Court dismissed the action.

The Court concludes that this record provides ample basis for the imposition of sanctions under Rule 11.

Accordingly, it is ordered that the action against defendant Helms is dismissed for lack of in personam jurisdiction. It is further ordered that the action against defendant FAA is dismissed with prejudice. Finally, it is ordered that plaintiff’s attorney is to pay defendant FAA costs and fees of $822.02.

The Clerk of the Court is directed to enter judgment for defendants.

SO ORDERED.


author: GENE CARTER, District Judge.

text:
    Claire KENERSON, Plaintiff, v. Charles STEVENSON, M.D., et al., Defendants.
    Civ. 83-0070 P.
    United States District Court, D. Maine.
    Nov. 19, 1985.

      Dennis Levandoski, Kettle & Carter, Portland, Me., for plaintiff.
    John N. Kélly, Graydon G. Stevens, Kelly, Rem'mel & Zimmerman, John J. Flaherty, Mary P. Mitchell, Daniel Rappaport, Portland, Me. for defendants.
   ORDER DENYING MOTIONS OF DEFENDANTS MEMORIAL HOSPITAL AND LINDBLADE TO DISMISS AND FOR SUMMARY JUDGMENT

GENE CARTER, District Judge.

Before deciding the instant motions it is necessary to establish which law will be applied since this is a tort action brought under the Court’s diversity jurisdiction. In diversity cases a federal court must apply the choice of law rules of the state in which it sits. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941). In looking to the law of Maine, this Court finds that in choice of law questions arising in tort cases, the Maine Supreme Judicial Court has specifically endorsed the “most significant contacts and relationships” test of the Restatement (Second) of Conflict of Laws §§ 145-46 (1971). Adams v: Buffalo Forge Co., 443 A.2d 932, 984 (Me.1982). Section 146 of the Restatement states that in an action for personal injury the court should apply the law of the state where the injury occurred unless another state has a more significant relationship to the occurrence and the parties. Since the injury in this case took place in New Hampshire, the Court must determine whether “the presumptive applicability of the law of [New Hampshire is] overcome by policy considerations or by an imbalance of contacts.” Mason v. Southern New England Conference Association of Seventh-Day Adventists, 696 F.2d 135, 137 (1st Cir. 1982).

The contacts in this case are primarily with the state of New Hampshire. Although Plaintiff’s decedent died in Maine, the actions alleged as the cause of his death and as the cause of Plaintiff’s mental distress occurred in New Hampshire. Moreover, Plaintiff’s initial injury occurred in New Hampshire. The Defendants are all New Hampshire residents and the relationship between the parties was centered at the hospital in New Hampshire. The fact that Plaintiff is a Maine resident is the sole significant contact with the state of Maine. The Court perceives no overarching policies of Maine which would suggest that the law of this state should apply. All parties make reference to the law of New Hampshire in their memoranda and Defendants expressly concede that New Hampshire law should apply. Given the presumption in favor of New Hampshire law and the preponderance of contacts with that state, the Court will apply New Hampshire law.

Motion to Dismiss

Defendant Memorial Hospital has moved to dismiss Count II of the complaint for failure to state a claim. Count II alleges that Defendants’ alleged tortious conduct was a gross, willful and wanton departure from the appropriate standard of care. Count II seeks the same compensatory damages as set forth in Count I as well as exemplary damages. New Hampshire law expressly prohibits the award of exemplary or punitive damages, as such. Crowley v. Global Realty, Inc., 124 N.H. 814, 474 A.2d 1056 (1984). New Hampshire law does provide, however, for the award of liberal compensatory damages when an act is proven to be wanton, malicious or oppressive. Vratsenes v. N.H. Auto, Inc., 112 N.H. 71, 73, 289 A.2d 66, 68 (1972). Such an award is permitted to reflect the aggravated circumstances of the conduct. Id.

Although Plaintiff seeks exemplary damages, the allegations in Count II of willful and wanton conduct are sufficient for pleading purposes to state a claim under New Hampshire law for “liberal compensatory damages.” Crowley, 474 A.2d 1056. The Court will, therefore, deny Defendant’s motion to dismiss.

Motion for Summary Judgment

Defendant Hospital has also moved for summary judgment on all counts. It bases its motion on its assertion that Defendant Stevenson was an independent contractor and that the hospital is not therefore liable for Stevenson’s actions on a theory of respondeat superior. Relying on Hunter v. R.G. Watkins & Son, Inc., 110 N.H. 243, 265 A.2d 15 (1970), Defendant suggests that the relevant inquiry in determining whether an individual is an independent contractor is whether the person is subject to the owner’s control in the details of his work. In support of the motion, Defendant submits the agreement between it and Dr. Stevenson which characterizes him as an independent contractor and denies the hospital any right to exercise control or direction over the methods used by Dr. Stevenson in performance of his job.

The Court finds that Defendant has mischaracterized the Hunter case. In that case the New Hampshire Supreme Court expressly disavowed the right to control as the exclusive determinant of a master-servant relationship: “[generally, the control factor has been overemphasized in judicial reasoning ... and we are ' usually concerned with whether on all the facts the community would consider the person an employee.” (Citation omitted). The appropriate test for determining whether an individual is an employee or an independent contractor has recently been termed the “totality of the circumstances” test. Hamel Real Estate, Inc. v. Shepherd, 121 N.H. 733, 433 A.2d 1320, 1321 (1981). Circumstances to be considered include the agreement between the parties, the control exercised by the putative master, and other pertinent aspects of the relationship between the hospital, doctor and patient. See id.; see also Continental Insurance Co. v. New Hampshire Insurance Co., 120 N.H. 713, 422 A.2d 1309 (N.H.1980).

Summary judgment is proper only “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c); Condon v. Local 2944, United Steelworkers of America, 683 F.2d 590, 594 (1st Cir.1982). In this case, the agreement between Dr. Stevenson and the hospital recites that he is an independent contractor not subject to control by the hospital. The agreement also shows, however, that he was paid by' the hour and that his schedule was fixed by the hospital. Plaintiff’s decedent had no choice of emergency room physicians; Stevenson was the physician provided by the hospital and he did not bill the patient. The facts as set forth in the record before the Court raise a genuine issue of fact as to whether Stevenson’s relationship with the hospital was that of an independent contractor or of a servant. A jury should be allowed to consider all the facts and make this determination.

Accordingly, it is ORDERED that Defendant Memorial Hospital’s Motion to Dismiss be, and is hereby, DENIED. It is FURTHER ORDERED that Defendant Memorial Hospital’s Motion for Summary Judgment be, and is hereby, DENIED.

      . This action is technically for wrongful death and negligent infliction of mental distress. Since these actions parallel personal injury actions, the Court finds § 146 of the Restatement equally applicable to cases involving such claims.

      . The Court in Hunter acknowledged in dictum, and it generally seems to be the law, that control is the decisive factor involving employees of an otherwise independent contractor or borrowed employees. See, e.g., Wise v. Kentucky Fried Chicken Corp., 555 F.Supp. 991, 995 (D.N. H.1983).


author: BILLINGS, District Judge.

text:
    UNITED STATES of America v. Sandra P. LANG, Constance A. Tidd, Mary K. Wanger and Peter Wanger.
    Civ. A. No. 84-176.
    United States District Court, D. Vermont.
    Nov. 20, 1985.
    Christopher B. Baril, Asst. U.S. Atty., Rutland, Vt., for plaintiff.
    Norman C. Smith, Bloomberg & Green-berg, Burlington, Vt., for defendant Sandra P. Lang.
    Michael L. Burak, Goldstein, Manello & Burak, Burlington, Vt., for defendants Mary K. Wanger and Peter Wanger.

      No appearance for defendant Constance A. Tidd.
   OPINION AND ORDER

BILLINGS, District Judge.

On September 19, 1985, defendant Peter Wanger (“defendant”) filed with this Court a motion for summary judgment dismissing the action. The government opposed the motion. The Court heard oral argument on October 10, 1985. For the reasons recited below the motion is GRANTED.

BACKGROUND

The government brings this action on behalf of the Small Business Administration against defendant for a deficiency judgment concerning a promissory note executed by Neptune Sports Enterprises, Inc. (“Neptune Sports”) in Vermont. Defendant, a resident of Nevada who signed the note by power of attorney, had guaranteed payment of any deficiency after default by Neptune Sports. Defendant brought this motion for summary judgment on grounds that the government failed to give notice of the sale of collateral as required by 9A V.S.A. § 9-504(3). Defendant cites this Court’s order of June 18, 1985, 610 F.Supp. 292, granting the summary judgment motion of defendant Sandra P. Lang, president of Neptune Sports, because the government failed to meet the provision of 9A V.S.A. § 9-504(3).

DISCUSSION

9A V.S.A. § 9-504(3) requires that the secured party give notice to the debtor of the time and place of any public or private sale. The parties agree that defendant, as a guarantor of the note, is a debtor within the meaning of § 9-504(3). See also Adams v. B & D Builders & Development, Inc., 144 Vt. 353, 356, 477 A.2d 628 (1984) (guarantors are debtors within the meaning of § 9-504(3)). The parties do not dispute that no notice, actual or constructive, was given. But, the United States contends that defendant waived any right to notice by the terms of the note. The note gave the government full authority to sell the collateral “in its uncontrolled discretion and without notice to the undersigned”; however, this power was limited to the extent permitted by law. Plaintiff’s Exhibit E at II (e) attached to the complaint. Thus, the question before the Court is whether a guarantor can waive the notice provisions of § 9-504(3).

9A V.S.A. § 9-501(3) states that the notice requirements of § 9-504(3) can not be waived by a debtor and the government acknowledges this fact. Plaintiff’s opposition to defendant Wanger’s motion dated October 8, 1985 at pg. 3. However, the government argues that the non-waiver provision of § 9-501(3) does not apply to guarantors, citing two cases. In both cases, United States v. Lattauzio, 748 F.2d 559 (10th Cir.1984) and United States v. Kukowski, 735 F.2d 1057 (8th Cir.1984), a critical distinction must be made between them and this case. Both of the cited cases apply different state laws, New Mexico and North Dakota, respectively. In the absence of federal law, this Court may apply Vermont law. United States v. Kimbell Foods, Inc., 440 U.S. 715, 729, 99 S.Ct. 1448, 1459, 59 L.Ed.2d 711 (1979) (state commercial codes afford rules not inconsistent with federal interests). Since Vermont adopted article 9 of the Uniform Commercial Code, 9A V.S.A. § 9-501(3) reads the same as the provisions interpreted by the courts applying North Dakota and New Mexico law. However, after researching Vermont law the Court arrives at a different conclusion.

The Vermont Supreme Court has not decided the issue of whether a guarantor can waive the notice provisions of § 9-504(3). The Vermont Supreme Court has recognized broadly the need for a guarantor to receive notice. “The purpose of notice under § 9-504(3) of the UCC is to allow persons having any interest in the collateral or possible liability for a deficiency claim to do whatever is necessary to redeem the property or see that the disposition brings a fair price to minimize the deficiency.” Id. 144 Vt. at 356, 477 A.2d 628 (emphasis added). In Adams, the Vermont Supreme Court cited a Utah case, FMA Financial Corp. v. Pro-Printers, 590 P.2d 803 (Utah Sup.Ct.1979), and a Colorado case, First National Bank of Denver v. Cillessen, 622 P.2d 598 (Colo.App.1980). Id. Both cases involved deficiency judgment actions where the secured party failed to give notice and neither court allowed the deficiency judgment. In First National Bank of Denver, the court stated clearly that notice under § 9-504(3) may not be waived. First National Bank of Denver v. Cillessen, 622 P.2d 598, 601 (Colo.App.1980). This position appears to be the majority position in the country. See Ford Motor Credit Co. v. Lotosky, 549 F.Supp. 996, 1004 (E.D.Pa.1982) (reasons supporting conclusion that guarantors are debtors under § 9-504 apply equally to waiver issue); Commercial Discount Corp. v. King, 515 F.Supp. 988, 992. (N.D. Ill.1981) (pre-default waiver not permitted under Illinois law); United States ex. rel. Small Business Administration v. Chatlins Dept. Store, Inc., 506 F.Supp. 108, 112 (E.D.Pa.1980) (under federal common law unconditional guaranty in technical sense does not waive defense); Commercial Credit Corp. v. Lane, 466 F.Supp. 1326, 1332 (M.D.Fla.1979) (guarantor stands in shoes of debtor regarding entitlement to notice); see also United States v. Willis, 593 F.2d 247, 256 (6th Cir.1979) (requirement of commercial reasonableness of sale is part of federal common law and is nonwaiverable).

Clearly, the equities of this case weigh for granting the motion. Defendant’s sole contact with the promissory note was signing it through his power of attorney. Defendant had no other contact with Neptune Sports and was clearly a passive investor, residing at great distance from Neptune Sports. By applying § 9-501(3), the Court requires only that notice be given to guarantors as well as debtors. Given the posture of the Vermont Supreme Court to protect broadly the rights of guarantors by requiring that secured parties give them notice pursuant to § 9-504(3) and the minimal burden placed on secured parties by prohibiting waiver of the notice, the Court finds that § 9-501(3) applies to guarantors, and bars defendant’s pre-default waiver of the protection of § 9-504(3).' The government’s failure to meet the requirements of § 9-504(3) precludes recovery of a deficiency judgment.

CONCLUSION

The motion for summary judgment of defendant is GRANTED.

SO ORDERED.

      . Beyond broad policy regulations of the Small Business Administration, no federal law or regulations dealing with the issue of waiver of notice by a guarantor has been cited by the parties.


author: SCHWARZER, District Judge.

text:
    Peter C. FILICE, Jr., and Jane F. Filice, Plaintiffs, v. UNITED STATES of America, Defendant.
    No. C-84-6854-WWS.
    United States District Court, N.D. California.
    Nov. 20, 1985.

      Peter R. Stromer, Los Gatos, Cal., for plaintiffs.
    Jay R. Weill, Asst. U.S. Atty., San Francisco, Cal., for defendant.
   ORDER

SCHWARZER, District Judge.

Plaintiffs, the prevailing party in a tax refund action, have moved for an award of $5,000 in attorney’s fees pursuant to 26 U.S.C. § 7430(a). For the reasons stated, the motion is denied.

Procedural and Factual Background

Plaintiffs filed their complaint on October 19, 1984, seeking a tax refund of $2,418.11. The complaint alleged the IRS had wrongfully disallowed deductions claimed on plaintiffs’ 1980 and 1981 tax returns; the deductions were for contributions to an organization called North Star Ministries. In 1978, the IRS had revoked North Star’s tax exempt status and this revocation was apparently the basis for the disallowance of plaintiffs’ deductions.

On November 30, 1984, the IRS reinstated North Star’s exempt status, retroactive to 1973. The United States Attorney contends he did not know of this IRS ruling at the time his office filed the government’s answer on December 26, 1984, and that he did not learn of the ruling until January 23, 1985. On March 28, 1985, the government notified plaintiffs’ counsel that it conceded the case, which was subsequently dismissed by court order, after stipulation, on June 4, 1985. Plaintiffs filed their present motion for attorney’s fees on August 30, 1985. The government’s opposing papers were filed September 16, 1985.

Discussion

A. Plaintiffs Have Failed to Comply With Local Rule 270-1.

The government has raised Local Rule 270-1 as a defense to plaintiffs’ motion. Local Rule 270-1 states, in pertinent part:

Applications for awards of attorneys’ fees by the court shall be served and filed within 60 days of entry of judgment terminating the action with respect to which services were rendered.

The present action was terminated on June 4, 1985, by court order approving a stipulation for dismissal signed by the parties. The sixty day period to file for attorney’s fees under Local Rule 270-1, as computed according to Fed.R.Civ.Proc. 6(a), expired August 5, 1985. Plaintiffs’ motion was filed August 30, 1985, twenty-five days late.

B. Plaintiffs Have Failed to Substantiate the Fees Claimed.

In Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir.1975), cert. denied, 425 U.S. 951, 96 S.Ct. 1726, 48 L.Ed.2d 195 (1976), the Ninth Circuit adopted guidelines for determining reasonable attorney’s fees which require, among other factors, an examination of the “time and labor required.” “The failure to consider such factors constitutes an abuse of discretion.” Id. at 70. See also Local Rule 270-2 (setting forth the necessary criteria for establishing a claim for attorney’s fees, including “a statement of the services rendered by each person for whose services fees are claimed together with a summary of the time spent by each person ... ”).

Plaintiffs have not substantiated their claim for fees in any way. They simply make the bare allegation that “Plaintiffs incurred attorney fees of five thousand dollars ...” (Plaintiffs’ Motion, Deck of P. Stromer at 2). Thus they have failed to satisfy both the Kerr guidelines and Local Rule 270-2.

C. Plaintiffs Have Not Satisfied the Requirements of Section 7430.

Prevailing parties in tax actions may be awarded attorney’s fees under 26 U.S.C. § 7430(a). This section states, in pertinent part:

In the case of any civil proceeding which is—
(1) brought ... against the United States in connection with the determination, collection, or refund of any tax ... and
(2) brought in a court of the United States ..., the prevailing party may be awarded a judgment for reasonable litigation costs incurred in such proceeding.

“Reasonable litigation costs” is defined in § 7430(c)(1) to include reasonable attorney’s fees, among other costs. “Prevailing party” is defined in § 7430(c)(2)(A) to mean “any party ... which — (i) establishes that the position of the United States in the civil proceeding was unreasonable and (ii)(I) has substantially prevailed with respect to the amount in controversy, ...” In addition, § 7430(b)(2) requires that “[a] judgment for reasonable litigation costs shall not be awarded ... unless the court determines that the prevailing party has exhausted the administrative remedies available to such party within the Internal Revenue Service.”

Thus plaintiffs may be awarded attorney’s fees under section 7430 if:

(1) they substantially prevailed in the action;

(2) they have exhausted their administrative remedies; and

(3) the government’s position in the proceeding was unreasonable.

The last element involves a “reasonableness” standard essentially the same as that used in 28 U.S.C. § 2412, the Equal Access to Justice Act. See Wolverton v. Heckler, 726 F.2d 580 (9th Cir.1984) (§ 2412 involves a “reasonableness” standard); Kaufman v. Egger, 584 F.Supp. 872, 877 n. 1 (D.Me.1984) (there is no “dispositive difference” between the § 2412 and § 7430 “reasonableness” tests).

1. Plaintiffs have substantially prevailed in the action.

Plaintiffs have clearly prevailed in the action; they received refund checks total-ling $2,757.22 on May 30, 1985, in satisfaction of the amount claimed in the complaint, including interest.

2. It is unclear whether plaintiffs have exhausted their administrative remedies.

Plaintiffs have not alleged in their motion that they have exhausted their administrative remedies. On the other hand, the government does not contend in its opposition papers that plaintiffs have failed to exhaust them. In Hallam v. Murphy, 586 F.Supp. 1 (N.D.Ga.1983), the plaintiff’s action for fees under § 7430 was not barred for failure to exhaust administrative remedies where the government did not establish this fact.

3. The government’s conduct was not unreasonable.

Plaintiffs claim the government’s position in the case was unreasonable in that

prior to the filing of its answer to plaintiff’s complaint ..., the government knew or should have known that plaintiff’s charitable contributions which had been disallowed by the IRS, ... had in truth and in fact been made to a bona fide qualified donee organization ...

(Plaintiffs’ Points and Authorities at 2).

Thus the issues presented in plaintiffs’ motion are: 1) Was it unreasonable for the U.S. Attorney not to have ascertained, pri- or to filing the government’s answer, that the IRS had reinstated North Star’s tax exempt status? 2) If not, was it unreasonable for the government to wait until March 28, 1985, to finally concede, two and a half months after it learned of the IRS policy change?

a. Was the late discovery of North Star’s reinstated tax exempt status unreasonable?

The IRS reinstated North Star’s tax exempt status on November 30, 1984, retroactive to 1973. The U.S. Attorney filed the government’s answer to plaintiffs’ complaint on December 26, 1984 and did not learn of the IRS ruling until January 23, 1985.

This one and a half month delay in discovering the IRS ruling does not seem unreasonable for two reasons. First, the ruling occurred during the holiday season and thus a communication lag between the IRS and the U.S. Attorney was understandable. Second, the government is entitled to a reasonable period for discovery. See, e.g., Ashburn v. United States, 740 F.2d 843, 850 (11th Cir.1984) (“The government should not be compelled to decide immediately upon service of the complaint whether to concede or pursue the case. The Justice Department is entitled to the time reasonably necessary to receive and review the Service’s files.”); Potlatch Corp. v. United States, 679 F.2d 153, 156 (9th Cir. 1982) (Government’s delay in pursuing discovery was reasonable where U.S. Attorney first had to secure file from IRS; “Bureaucratic delay and red tape ... cannot be ignored.”); Alspach v. District Dir. of Internal Revenue, 527 F.Supp. 225, 229 (D.Md.1981) (Government entitled to time necessary to receive and review IRS files). But see Spencer v. N.L.R.B., 712 F.2d 539, 555 n. 58 (D.C.Cir.1983) (dicta) (“if the government does not immediately accede to the plaintiff’s demand, but instead initially opposes his claims and then at some later stage ... surrenders, the United States will be liable for attorneys’ fees____”).

b. Was the government unreasonable in taking 2Vs months to concede?

The two and a half month delay between the time the U.S. Attorney learned of the IRS ruling (January 23, 1985) and the time the plaintiff was informed that the government conceded (March 28, 1985) does not appear to be unreasonable for the following reasons. First, the government has explained that the delay was due to the fact that the Department of Justice had to approve concession of the ^case. {See Government’s Opposition; Decl. of J. Weill at 2).

Second, the two and a half month delay is well-within the bounds found permissible by other courts. See, e.g., White v. United States, 740 F.2d 836, 841-42 (11th Cir.1984) (3 month delay in conceding case not unreasonable); Ashburn, 740 F.2d at 850-51 (5 months); Hill v. United States, 3 Cl.Ct. 428 (1983) (4 months); Clark v. United States, 3 Cl.Ct. 194 (1983) (6 months); Grace Baptist Church v. United States, 1 Cl.Ct. 258 (1982) (6 months). Compare Rawlings v. Heckler, 725 F.2d 1192 (9th Cir.1984) (one year delay unreasonable); Ashburn, 740 F.2d at 850-51 (dicta) (delay of “years” would be unreasonable); Environmental Defense Fund, Inc. v. Watt, 722 F.2d 1081 (2d Cir.1983) (seven month delay unreasonable). But see Spencer, 712 F.2d at 555 n. 58 (dicta) (any delay is unreasonable where government later concedes).

Finally, although it is impossible to tell with certainty whether plaintiffs’ counsel worked on the case between January 23, 1985 and March 28, 1985 because he has not submitted any time records, it appears from the court file that little activity occurred in the case during this period; plaintiffs only filed a Status Conference Certificate between those dates. Moreover, it is important to note that any harm to plaintiffs caused by the delay was mitigated to an extent by the interest they received on their refund money for this period.

The motion is therefore denied.

IT IS SO ORDERED.