text:
    Joe T. ARNOLD, Petitioner, v. Michael DUTTON, etc., et al., Respondents.
    Civ. A. No. 3:84-0203.
    United States District Court, M.D. Tennessee, Nashville Division.
    April 3, 1984.
    On Appointment of Council April 13, 1984.
    On the Merits Aug. 13, 1984.

      Larry D. Woods, Nashville, Tenn., for petitioner.
    Wayne Uhl, Asst. Atty. Gen., Nashville, Tenn., for respondents.
   MEMORANDUM AND ORDER

NEESE, Senior District Judge, Sitting by Designation.

The petitioner Mr. Joe T. Arnold applied pro se for the federal writ of habeas corpus, claiming inter alia that he is in the custody of the respondent-warden pursuant to the judgment of November 12, 1981 of the Criminal Court of Davidson County, Tennessee, in violation of the Constitution, Fourth, Fifth and Sixth Amendments. 28 U.S.C. § 2254(a). It is unclear from such application whether the applicant claims his exhaustion of remedies available to him in the appellate courts of Tennessee. 28 U.S.C. § 2254(b).

The applicant alleged that he took an appeal from his aforementioned judgment of conviction to the Court of Criminal Appeals of Tennessee, which affirmed that judgment on June 2, 1983 in State of Tennessee, appellee, v. Joe T. Arnold, appellant, no. 81 — 313—III in said Court. He exhibited also his application of July 5, 1983 to the Supreme Court of Tennessee for permission to appeal therein; however, he makes no allegation concerning any action thereon.

Ordinarily, a habeas corpus application by one detained under the judgment of a court of a state will be entertained only after all state-remedies available, including all appellate remedies in the state-courts, have been exhausted. Ex parte Hawk, 321 U.S. 114, 116-117, 64 S.Ct. 448, 450[5], 88 L.Ed. 572 (1944). This Court will withhold further examination of the petitioner’s application on preliminary consideration of his federal claims for 10 days, Rule 4, 28 U.S.C. fol. § 2254, to accord him an opportunity to amend his application so as to demonstrate whether his state-remedies have indeed been exhausted.

All other matters hereby are RESERVED.

On Appointment of Counsel

ORDER

It appearing on additional preliminary consideration thereof, Rule 4, 28 U.S.C. fol. § 2254, from an amendment of the application herein that permission for the petitioner to appeal the judgment of affirmance of June 2, 1983 in State of Tennessee, appellee, v. Joe T. Arnold, appellant, no. 81-313-III in the Court of Criminal Appeals of Tennessee, was denied September 6,1983 by the Supreme Court of Tennessee, establishing a prima facie case of the petitioner’s exhaustion of his available state remedies, 28 U.S.C. §§ 2254(b), (c); and, it appearing furthermore that the applicant herein has stated a substantial claim, that he was deprived in his prosecution by the State of Tennessee of his federally-guaranteed right to a speedy trial, Constitution, Sixth Amendment, Speedy Trial Clause; see Klopfer v. North Carolina, 386 U.S. 213, 226, 87 S.Ct. 988, 995, 18 L.Ed.2d 1 (1967):

It hereby is

DETERMINED that the interests of justice require that the applicant be furnished representation pursuant to the pertinent Plan of this Court, he having been determined on February 3, 1984 unable financially to obtain representation, and Larry D. Woods, Esq., 121 17th Avenue, South, Nashville, Tennessee 37203 (telephone no.: (615)/259-4366), hereby is appointed to furnish such representation. 18 U.S.C. § 3006A(g).

On The Merits

MEMORANDUM OPINION, FINDINGS AND CONCLUSIONS

The petitioner Mr. Joe T. Arnold applied pro se for the federal writ of habeas corpus as a person in the custody of the respondent-warden pursuant to the judgment of November 12, 1981 of the Criminal Court of Davidson County, Tennessee in State of Tennessee v. Joe T. Arnold, et al., no. C-8289. He was furnished counsel herein and, in his amended application, claims he is in such custody in violation of his federal-constitutional rights to a speedy trial, against compulsory self-incrimination, and to due process of law, Constitution, Sixth Amendment, Speedy Trial Clause; Fifth Amendment, Compelled Self-Incrimination and Due Process Clauses; and Fourteenth Amendment, Due Process Clause. 28 U.S.C. § 2254(a). It is conceded by the respondent-warden that the applicant exhausted his state-remedies as to the questions presented to this Court herein. 28 U.S.C. § 2254(b).

The applicant was arrested in Shelby County, Tennessee on the afternoon of October 30, 1980. He was interrogated early that evening by a police-sergeant of Memphis, Tennessee after having been given the warnings required by Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), and answered questions put to him by such interrogator.

In that interrogation, the applicant related inter alia what he claims to have been told by Mr. Robert Edward Hunt concerning the latter’s stealing of guns from a store. When asked the location of that store, the applicant stated either: (a) “No, I ain’t answering no more questions,” or (b) “No, I ain’t asked no more questions,” or (c) “ * * * never expressed any desire or intention to exercise any of his constitutional rights or to decline to answer any more questions of him. * * * ” The interrogation continued thereafter unabated.

The applicant was interrogated again in Memphis the following day, this time by detectives of Nashville, Tennessee. He was reminded of his rights under Miranda, supra, at the outset of the interview.

The applicant and Mr. Hunt were under investigation by the Nashville Police at that time for the crimes on conviction of which he is now in custody, i.e., the armed robbery and aggravated kidnapping of (as well as the assault with intent to commit murder on) Mr. William Corbitt; the murder of Mr. James Chapman; and the armed robbery and kidnapping of Ms. Mary Forsythe. Detective Jerry Moore promised the applicant that any statement he made to the interrogators would not be used against him in court, stating inter alia:

Joe, I’d like to ask you again; you’ve already talked to these [Memphis] officers here about the old [deceased] man out on the river bank behind Metro Center [in Nashville]; Would you mind telling me a little more about that?
Joe, I will advise you again: if you are going to cooperate with me, I need complete cooperation. You know as well as I know that, if you lie to me, all it’s going to do is mess-you-up later.
All right, Joe, the old man down on the river-bank — I want you to listen to me: we know quite a bit about what happened down there; we know quite a bit about what happened later to the old man’s car; we know where that car was — somebody was seen driving that car. .
Now, Joe, I want you to think very carefully about what you say and how much you know about this, ‘cause, if you are involved, we want the truth from you now. If you’re willing to speak about it, we’re willing to listen.
This tape — this interview — is confidential, in the sense that if it’s used by the prosecutors, all of the officers and the district attorney’s office [sic] [are] the only people [sic: persons ] that [sic: who] listen to this tape. It can, it may not be — it may not have to be introduced into court. Do you understand that?
So, if you wish to cooperate with us, your attorney might request that this tape not be — that other people [sic] might not learn or know about what you have spoken, that you have told us. Do you understand? * * * [Emphases added here]

The applicant told the interrogator that he was saying his life was in danger because of what he was saying, to which the interrogator responded inter alia: “I can’t promise you * * * but I have taken many a statement and it [sic] was never introduced in that court room — never nothing said; what the man said [was] never readout in Court * * *. Do you follow me? * * *” (Emphases added here).

Thereafter, the applicant made statements to his interrogator which were inculpatory of himself as to the crime against Mr. Corbitt, and these statements were used in Court against the applicant, contrary to the foregoing promise.

The applicant remains now in the continuous custody of the state of Tennessee into which he was taken on October 30, 1980, supra. He was held to the action of the grand jury on “the Corbitt charges” November 25, 1980 and on a separate murder charge on December 12, 1980. The aforenamed Mr. Hunt was arrested on December 29, 1980 and held on January 8, 1981 to the action of the grand jury.

The applicant undertook to demand through his attorney a speedy trial and a dismissal of “the Corbitt charges” against him sometime in January, 1981, but his attorney filed a motion for such relief only on June 10, 1981. The applicant and Mr. Hunt were indicted on June 26, 1981 on the charges for which they had been under investigation.

Trial of the applicant and Mr. Hunt were assigned on August 6, 1981 for November 9, 1981. The applicant filed a motion on September 16, 1981 for a severance of defendants, a separate trial of the offenses, and for a dismissal of the indictment because of his having been denied a speedy trial.

The “Corbitt charges” were severed from the other charges in the indictment by agreement on November 4, 1981. The trials of the applicant and Mr. Hunt thereon were separated, and the applicant’s aforementioned motion for a dismissal was overruled, on November 9, 1981. The applicant was tried on November 10, 12, 1981.

I

The merits of the factual issue, whether inculpatory statements made by the applicant after he had decided to remain silent were admitted in evidence against him on his trial, were determined on June 2, 1983 after a hearing in State of Tennessee, appellee, v. Joe T. Arnold, appellant, no. 81-313—III in the Court of Criminal Appeals of Tennessee, permis.app.den. September 6, 1983 by the S.Ct. of Tennessee. It was found therein that the applicant “ * * * never expressed any desire or intention to exercise any of his constitutional rights or [to] decline to answer any questions asked of him. * * * ”

That finding must be accorded a presumption of its correctness by this Court. 28 U.S.C. § 2254(d); Sumner v. Mata, 449 U.S. 539, 547, 101 S.Ct. 764, 769[5], 66 L.Ed.2d 722 (1981). As to that claim, therefore, law and justice require that the applicant Mr. Arnold be denied all relief. 28 U.S.C. § 2243.

II

The respondent-warden contends that this Court must accord the same presumption of correctness to such Court’s additional finding, that the applicant’s inculpatory statements given to the detectives of the Nashville Police were “ * * * not coercive in nature, nor was the defendant’s [applicant’s] will overborne at the time the statements] w[ere] made. * * * ” State of Tennessee, appellee, v. Joe T. Arnold, appellant, supra. That contention does not comport with federal-constitutional law:

As to the ultimate issue-of-fact, a federal district judge “ * * * may not defer to [a] state court’s finding of law. It is the district judge’s duty to apply the applicable federal court findings independently. The state conclusion of law may not be given binding weight on [federal] habeas [corpus]. * * *” Townsend v. Sain, 372 U.S. 293, 318, 83 S.Ct. 745, 760 [32], 9 L.Ed.2d 770 (1962).

This Court hereby FINDS and CONCLUDES from the historical facts herein, as found by the courts of Tennessee, that the incriminating statements made to the Nashville policemen by the applicant on October 31, 1980, supra, were obtained by direct promises of the interrogators that such statements would not be used against the applicant on his trial; “ * * * the test of voluntariness * * * is whether the confession was ‘ “extracted by any sort of threats or violence, [or] obtained by any direct or implied promises, [or] by the exertion of any improper influences.” ’ Bram v. United States, 168 U.S. 532, 542-543, 18 S.Ct. 183, 187, 43 L.Ed. 568 (1897) * * Hutto v. Ross, 429 U.S. 28, 30, 97 S.Ct. 202, 203[1], 50 L.Ed.2d 194 (per curiam, 1976); accord: Malloy v. Hogan, 378 U.S. 1, 7, 84 S.Ct. 1489, 1493, 12 L.Ed.2d 653 (1964) (“We have held inadmissible even a confession secured by so mild a whip as the refusal, under certain circumstances, to allow a suspect to call his wife until he confessed.”)

“Bram dealt with a confession given by a defendant in custody, alone and unrepresented by counsel. In such circumstances, even a mild promise of leniency was deemed sufficient to bar the confession, not because the promise was an illegal act as such, but because defendants at such times are too sensitive to inducement and the possible impact on them too great to ignore and too difficult to assess. * * * ” Brady v. United States, 397 U.S. 742, 754, 90 S.Ct. 1463, 1472, 25 L.Ed.2d 747 (1970). The respondent-warden concedes that the applicant was a “drifter” who lived with other homosexuals and does not contest the applicant’s claim that he attended school for only five years and reads and writes “slow”.

The question for this Court here is, did the conduct of the Nashville policemen “ * * * ‘bring about’ a confession ‘not freely self determined’? * * * ” Shotwell Manufacturing Co. v. United States, 371 U.S. 341, 347-348, 83 S.Ct. 448, 453[5], [6], 9 L.Ed.2d 357 (1963). This Court is convinced and hereby FINDS that the incrimination of himself by the applicant was “not freely self-determined” but was “brought-about” by the promises of his interrogators.

“ * * * Governments, state and federal, are compelled to establish guilt by evidence independently and freely secured * * Malloy v. Hogan, supra, 378 U.S. at 7, 84 S.Ct. at 1493[5], and the prime purpose of such rulings “ * * * is to guarantee full effectuation of the privilege against self-incrimination, the mainstay of criminal justice. * * * [T]he rulings secure scrupulous observance of the traditional principle, often quoted but rarely heeded to the full degree, that ‘the law will not suffer a prisoner to be made the deluded instrument of his own conviction.’ [Footnote reference omitted.] * * * ” Johnson v. State of New Jersey, 384 U.S. 719, 729-730, 86 S.Ct. 1772, 1779, 16 L.Ed.2d 882 (1966), reh. den., 384 U.S. 719, 86 S.Ct. 1772, 16 L.Ed.2d 882 (1966).

Law and justice require that the applicant have relief on this ground. 28 U.S.C. § 2243, supra.

Ill

That “[i]n all criminal prosecutions, the accused shall enjoy the right to a speedy trial * * *,” Constitution, Sixth Amendment, supra, is a substantial right we all have, “ * * * one of the most basic rights preserved by our Constitution * * *,” Smith v. Hooey, 393 U.S. 374, 378, 89 S.Ct. 575, 577[2], 21 L.Ed.2d 609 (1969). Included among the purposes of that right is “ * * * ‘[1] to prevent undue and oppressive incarceration prior to trial, [and] [2] to minimize anxiety and concern accompanying public accusation’ * * Klopfer v. North Carolina, 386 U.S. 213, 226, 87 S.Ct. 988, 995, 18 L.Ed.2d 1 (1967).

As stated (and now computed), Mr. Arnold was incarcerated for 214 days after his arrest and prior to his indictment. His anxiety and concern which accompanied his public accusation extended for an aggregate of 370 days after his arrest and prior to commencement of his trial.

A panel of the Court of Criminal Appeals of Tennessee examined each of the four factors delineated in Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972), in making its determination of whether the applicant’s right to a speedy trial had been violated in this instance. It did “ * * * not find any circumstances which warrant dismissal of the prosecution * * * ” against him for such reason. See State of Tennessee, appellee, v. Joe T. Arnold, appellant, supra.

It found that “ * * * [approximately eight months elapsed between defendant’s [applicant’s] arrest and indictment, and a bit more than twelve months between his arrest and trial. * * * ” Ibid. It found “ * * * no evidence of any deliberate attempt to delay trial * * * ” but that the “ * * * only reason appearing for the lapse of time between defendant’s [applicant’s] arrest, referral to the grand jury, and his indictment, was the [prosecuting-attorney for the] State’s misinterpretation of our Rules of Criminal Procedure.

“The Assistant District Attorney General representing the State at the hearing on the [applicant’s] motion to dismiss [the indictment against him] insisted it was incumbent on the State to join the defendants in the same indictment under the facts of this case. Rule 8 of the Rules of Criminal Procedure [of Tennessee] does require mandatory joinder of offenses * * *. Where such joinder of offenses might give rise to an injustice, Criminal Procedure Rule 14 makes provisions for relaxation of the rules.

“Defendant [applicant] * * * could have been indicted at the January [,1981] term of court except for the coincidence that his co-defendant, Hunt, was not arrested until the end of December, and was bound over to the grand jury in January. As a practical matter he was not indicted until the May term, beginning on the second Tuesday of that month. Because of the misconception of the rules [by the attorney for the state of Tennessee] defendant’s [applicant’s] indictment was also held over. * * ” Ibid.

It found that the applicant “ * * * did assert his right to have the proceedings expedited * * * and [there was] absolutely no evidence of either actual or presumptive prejudice to the defendant [applicant] in the short [emphasis added by this writer] delay which was incurred * * As the respondent-warden also argues by brief, the panel stated that “ * * the societal disadvantages of lengthy pre-trial incarceration may be presumed * * citing Barker v. Win- go; “* * * however, * * * prejudice is only one of the factors to be considered together with such other circumstances as may be relevant. Any. prejudice to the defendant [applicant] in this case was minimal. * * *” Ibid.

The finding of the intermediate criminal-appellate Court of Tennessee, that there were no circumstances factually relating to the trial of the applicant which deprived him of a speedy trial, must also be accorded a presumption of correctness by this Court. 28 U.S.C. § 2254(d), supra; Sumner v. Mata, supra. As to that claim, accordingly, law and justice require that the applicant Mr. Arnold be denied all relief. 28 U.S.C. § 2243, supra.

IV

Because the applicant was deprived of his right under the federal Constitution against self-incrimination, supra, the detention of the petitioner Mr. Joe L. Arnold pursuant to the judgment of November 12, 1981 of the Criminal Court of Davidson County, Tennessee in State of Tennessee v. Joe T. Arnold, et al., no. C-8289, is void. Therefore, he is entitled to his release from the custody of the respondent-warden unless he is retried within a reasonable time on the indictment therein free of such constitutional violation.

      . The assistant attorney-general of Tennessee is commended for bringing to attention the fact that the previously-considered promises omitted much of the foregoing and commends him and adverse counsel for providing a more comprehensive transcript of the interview than was provided the courts of Tennessee.


source: Caselaw Access Project

author: ROSZKOWSKI, District Judge.

license: Public Domain

text:
    UNITED STATES of America v. William L. PARKINSON.
    No. 84 CR 20013.
    United States District Court, N.D. Illinois, W.D.
    Aug. 16, 1984.
    Paul Gaziano, Rockford, Ill., for defendant.
    Keith Syfert, Asst. U.S. Atty., Rockford, Ill., for Government.
   ORDER

ROSZKOWSKI, District Judge.

Before the court is a stipulated bench trial involving a charge of felony tax evasion for the 1981 tax year. 26 U.S.C. § 7201. The sole issue before the court is whether the supplying of false or fraudulent withholding information to an employer in violation of 26 U.S.C. § 7205 constitutes a “willful commission” sufficient to transform a misdemeanor offense for willfully failing to file a return, 26 U.S.C. § 7503, into a felony offense for willfully attempting to evade or defeat tax liability. 26 U.S.C. § 7501. For the reasons set forth herein, the court holds that the defendant's conduct in the present case was sufficient to violate § 7201 for the 1981 tax year.

Background

The relevant facts have been stipulated to by the parties. On March 25, 1980 after attending various seminars concerning the constitutionality of the income tax laws, the defendant supplied his employer with a false and fraudulent Employee’s Withholding Allowance Certificate claiming 27 allowances. As a result, defendant’s employer withheld only $86.17 in Federal income tax from his 1981 salary of $17,808. Subsequently, the defendant willfully failed to file an income tax return for 1981. On May 28,1982, plaintiff supplied an additional Employee’s Withholding Allowance Certificate indicating that he did not owe any Federal income tax in 1981, that he had a right to a full refund of all income tax withheld during 1981, that he did not expect to owe any Federal income tax in 1982, that he expected to have a right to a full refund of all income tax withheld during 1982, and, consequently, that he was exempt from Federal income tax withholding. Based upon these facts, this court is asked to decide whether the defendant’s conduct violated 26 U.S.C. § 7201 for the 1981 tax year.

Discussion

Title 26 U.S.C. § 7201 provides in relevant part:

Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall ... be guilty of a felony ...
Title 26 U.S.C. § 7203 provides in relevant part:
Any person required under this title to ... make a return ... who willfully fails to ... make such a return ... shall ... be guilty of a misdemeanor____

The distinction between § 7201 and § 7203 was set forth by the Supreme Court in Sansone v. United States, 380 U.S. 343, 85 S.Ct. 1004, 13 L.Ed.2d 882 (1965):

... [T]he difference between a mere willful failure to pay a tax (or perform other enumerated actions) when due under § 7203 and a willful attempt to evade or defeat taxes under § 7201 is that the latter felony involves ‘some willful commission in addition to the willful omissions that make up the list of misdemeanors.’ (quoting Spies v. United States, 317 U.S. 492, 63 S.Ct. 364, 87 L.Ed. 418 (1943)).

Courts have been extremely liberal in identifying conduct sufficient to constitute a willful commission for the purposes of § 7201. In United States v. Goodyear, 649 F.2d 226, 228 (4th Cir.1981), for example, the court held that a defendant’s false statement in 1974 that he had not filed an income tax return in 1971 because he had no income for that year was sufficient to constitute a willful commission supporting a felony conviction for a charge of evasion arising out of the 1971 tax year. Id. at 228. The court noted that, “[w]here the taxpayer has willfully failed to file a return — a misdemeanor under I.R.C. § 7203 —a prior, concomitant, or subsequent false statement may lift the lesser offense to the degree of a felony.” Id.

The only willful commission alleged by the government in the present case is the defendant’s supplying of false withholding information in violation of 26 U.S.C. § 7205. Section 7205 provides in relevant part:

(a) Any individual required to supply information to his employer ... who willfully supplies false or fraudulent information ... shall ... be fined not more than $1,000, or imprisoned not more than 1 year, or both.

Defendant contends that the supplying of such information to his employer does not constitute a willful commission aimed at evading or defeating his tax liability. Defendant points out that the supplying of false withholding information “does not have the effect of concealing income as the employer must still report the amount of wages paid.” Thus, the defendant argues that the violation of the two misdemeanor tax statutes § 7203 and § 7205 cannot give rise to a felony prosecution under § 7201.

The government contends that the supplying of such withholding information was a willful commission elevating the mere failure to file misdemeanor to the felony of evasion. Specifically, the government contends that “[t]he affirmative actions of the defendant in making these false statements to his employer furthered his attempt to evade taxes by substantially reducing, without legal justification, the withholding of taxes from his paycheck and by fraudulently reporting that he had no tax liability.”

While the issue is not completely free from doubt, the court concludes that the stipulated facts in this case are sufficient to establish a violation of § 7201. The various written statements made by the defendant in his 1981 and 1982 Employee’s Withholding Allowance Certificates (claiming twenty-seven withholding allowances in 1981, indicating that he did not owe any Federal income tax in 1981, and indicating that he had a right to a full refund of all income tax withheld during 1981) were at least as likely to mislead the Internal Revenue Service in its investigation and conceal his income as the simple oral statement alleged in Goodyear. Indeed, since the written statements in the present case were made under penalty of law as set forth in § 7205, the IRS had the right to assume they were reliable.

The defendant’s argument that the supplying of false withholding information “does not have the effect of concealing income as the employer must still report the amount of wages paid” is unpersuasive. While the court agrees it was foreseeable that the defendant's employer’s compliance with Federal reporting requirements would frustrate his attempted evasion, the court does not agree that this relieves him from the consequences of his actions. In the view of this court, a willful commission in furtherance of an attempt to evade or defeat the payment of Federal income taxes does not become less simply because the attempt was inept and ultimately ineffective. Thus, the court concludes that the concomitant and subsequent filing of false and fraudulent Employee’s Withholding Allowance Certificates in violation of § 7205, was sufficient to elevate the lesser offense of failure to file under § 7203 to the larger offense of felony evasion under § 7205.

Moreover, the court is not disturbed that the violation of two distinct misdemeanor statutes could be combined to give rise to a separate felony prosecution. At least in the present case, while a violation of either misdemeanor statute individually probably would not have resulted in the evading or defeating of any Federal income tax liability, the combined violation of both misdemeanor statutes resulted in the defendant’s evading or defeating all but $86.17 of his Federal income tax liability. Specifically, if the defendant had filed an accurate Employee’s Withholding Allowance Certificate in accordance with § 7205, his failure to file a proper return in compliance with § 7203 probably would not have resulted in his substantially evading or defeating his Federal income tax liability. Indeed, if the defendant had filed an accurate Employee’s Withholding Allowance Certificate, his failure to file a proper return could well have deprived him of a Federal income tax refund.

Similarly, if the defendant had filed an accurate Federal income tax return in accordance with § 7203, his filing of a false and fraudulent Employee’s Withholding Allowance Certificate in violation of § 7205 probably would not have resulted in his substantially evading or defeating his Federal income tax liability. If the defendant had filed an accurate Federal income tax return, his filing of a false and fraudulent Employee’s Withholding Allowance Certificate would simply have altered the manner in which his Federal income tax liability was paid. Thus, the combined effect of both violations goes far beyond the effect of either individually.

For all the reasons set forth herein, the court finds the defendant violated 26 U.S.C. § 7201’s prohibition against willfully evading or defeating Federal income tax liability for 1981.

      . Specifically, as a lump sum payment rather than in installments through withholding.


author: CAHILL, District Judge.

text:
    Frances KATHRINER, Plaintiff, v. CITY OF OVERLAND, MISSOURI, et al., Defendants.
    No. 82-1579-C (4).
    United States District Court, E.D. Missouri, E.D.
    Sept. 4, 1984.

      Alan E. DeWoskin, St. Louis, Mo., for plaintiff.
    Norman A. Seiner, Seiner, Glaser, & Komen, St. Louis, Mo., for defendants.
   ORDER

CAHILL, District Judge.

This matter is before the Court on defendants’ motion for a new trial and stay of execution.

The central issue in this 42 U.S.C. § 1983 action was the constitutionality of plaintiff Frances Kathriner’s being strip searched pursuant to the policy of the City of Overland. Defendants Poeschel, Nelson, and Myers were before the Court because of their part in implementing this policy. The policy complained of, strip searching all detainees without regard to probable cause for such a search, was in effect on March 10, 1980, when Kathriner’s cause of action arose.

The City of Overland’s policy of strip searching all persons to be detained in a cell, regardless of how short the detention period and regardless of whether probable cause existed to believe that person may possess contraband or weapons, violated the Fourth and Fourteenth Amendments to the United States Constitution. While the City of Overland may detain any person charged with any crime or ordinance violation, it may not strip search those persons charged only with misdemeanors or ordinance violations unless there is reasonable cause to believe that such detainees possess weapons or contraband. Tinetti v. Wittke, 479 F.Supp. 486 (E.D.Wis.1979), aff'd, 620 F.2d 160 (7th Cir.1980); Mary Beth G. v. City of Chicago, 723 F.2d 1263 (7th Cir.1983).

Because strip searches are a particularly demeaning invasion of privacy they must only be used when less intrusive means of discovering weapons or contraband cannot be used and the particular circumstances warrant such a search. In the case at bar the evidence shows, and the defendants admit, that no one believed Frances Kathriner to possess contraband or weapons. Neither did the particular circumstance of her arrest and detention warrant such an intrusive search. Furthermore, the Court found that Kathriner’s strip search was distinguishable from the strip search of federal pretrial detainees after contact visits, held constitutional in Bell v. Wolfish, 441 U.S. 520, 99 S.Ct. 1861, 60 L.Ed.2d 447 (1979). Accordingly, because the City of Overland cannot assert the defense of good faith immunity, Owen v. City of Independence, Mo., 445 U.S. 622, 100 S.Ct. 1398, 63 L.Ed.2d 673 (1980), plaintiff’s motion for a directed verdict against the City of Overland was granted.

Qualified or good faith immunity generally shields public officials from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known. Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). The law, however, was not clearly established at the time of plaintiff’s strip search. At the time of plaintiff’s arrest and strip search on March 10, 1980, the most recent applicable pronouncement of law was that of the United States Supreme Court in Bell v. Wolfish, 441 U.S. 520, 99 S.Ct. 1861, 60 L.Ed.2d 447 (1979). In Bell the Supreme Court held that visual body cavity strip searches at a detention facility could be conducted on less than probable cause despite the significant privacy interests of the inmates. 441 U.S. at 560, 99 S.Ct. at 1885. At first glance this holding appears consistent with the defendants’ policy of strip searching all persons to be detained in a cell and would not have put the City on notice that their policy was unconstitutional. Insofar as defendants Poeschel and Myers’ conduct did not violate clearly established rights and the plaintiff had neither alleged nor submitted evidence that they had a malicious intent to deprive her of her rights, they were shielded from liability by good faith immunity. Accordingly, defendants Poeschel’s and Myers’ motion for a directed verdict was granted.

On the other hand, plaintiff alleged, and arguably the evidence supported, that defendant Nelson intended to punish her. The Court, for purposes of this motion, interpreted this allegation as a charge that Nelson intended to deprive plaintiff of her rights or otherwise injure her. The question of defendant Nelson’s subjective intent was left for the jury, which decided in his favor.

The Court has reviewed the defendants’ arguments in support of a new trial and denies them on their merits. The Court does not find, as suggested by the plaintiff, that this motion is untimely. The motion was mailed to the plaintiff on the tenth day after judgment. “Service by mail is complete upon mailing.” Fed.R. Civ.P. 5. Accordingly,

IT IS HEREBY ORDERED that defendants’ motion for a new trial is DENIED.

IT IS FURTHER ORDERED that defendants’ motion to stay execution of the judgment pending consideration of the motion for a new trial is DENIED as MOOT.

SO ORDERED.


author: ROBERT J. McNICHOLS, Chief Judge.

text:
    Gary R. EITEL, Plaintiff, v. William D. McCOOL, Defendant.
    No. C-84-354.
    United States District Court, E.D. Washington.
    Sept. 10, 1984.

      Gary R. Eitel, pro se.
    Thomas Scribner of Minnick, Hayner & Zagelow, P.S., Walla Walla, Wash., for defendant.
   ORDER

ROBERT J. McNICHOLS, Chief Judge.

Plaintiff and defendant enjoyed an attorney/client relationship over the course of some years which commenced while each resided in Alaska. Due to a number of factors not here relevant, that relationship began to deteriorate and finally broke down completely in late 1983. Mr. Eitel eventually commenced the instant action. The ink on the complaint was hardly dry when a purported settlement agreement was reached. It is the existence and terms of that agreement which supply the basis for defendant’s pending motion for an order compelling execution of a general release. Pertinent chronology is as follows:

January 17, 1984 — Mr. Eitel filed a complaint with the Washington State Bar Association alleging certain acts of misfeasance and malfeasance on Mr. McCool’s part.
April 26,1984 — Attorney Scribner, acting on behalf of McCool, offered to settle this impending (but not yet filed) action for: (1) $40,000; (2) stipulated dismissal with prejudice; and (3) execution of a general release. By return letter, plaintiff rejected the offer.
May 10, 1984 — Scribner renewed the offer, noting that it would terminate as of May 25, 1984.
May 17, 1984 — The instant action was commenced.
June 18, 1984 — Attorney Boundy, acting on behalf of defendant’s insurance carrier, contacted Mr. Eitel by telephone. According to Boundy’s affidavit in support of the instant motion, the terms of his offer were identical to that posed by Scribner. According to Eitel, the agreement contemplated payment of $40,000 and a stipulated dismissal, but not a general release.
June 20, 1984 — A draft for $40,000 was received by George White, an attorney in Texas who had been advising Eitel but who had never appeared of record. White turned over the draft and accompanying stipulation forms to Eitel. Eitel then prepared his own form of dismissal and mailed it to Scribner, commenting that he considered the entire matter to now be concluded. Scribner replied that it would not be “concluded” until such time as Eitel signed the general release.
July 11, 1984 — After a series of communications, Eitel came to the conclusion that if Scribner was not going to file the dismissal (which in fact was never filed), then it must have been defendant’s intention to proceed with this action notwithstanding the payment of $40,000. Accordingly, Eitel filed a notice of default based on defendant’s failure to answer.

The instant motion then was brought, and oral argument was heard telephonically on August 31,1984. Having in mind the full record, including all exhibits and affidavits contained therein, as well as representations made during the course of argument, the Court disposes of the issues raised as follows.

The $40,000 Payment:

Eitel now contends that his actual out-of-pocket loss attributable to McCool’s alleged malpractice is some $400,000, and that he was induced to accept the comparatively nominal sum offered only by reason of economic duress. He asks that his improvident acceptance of the $40,000 be considered a product of such duress, and that the settlement be “rescinded.” There are several problems with this approach. First, in view of Eitel’s letters to Scribner and to the Bar Association immediately after receipt of the funds, there can be no doubt whatever that plaintiff was prepared to accept the sum offered, and did in fact accept it. External economic pressure cannot serve as a predicate for disregarding what was clearly a meeting of the minds at the formation stage of the agreement. Further, even if the Court were inclined to accept a “rescission” argument, the plain fact of the matter is that Eitel no longer has the $40,000, having spent it on family necessities.

Stipulation of Dismissal:

Nor can there be any room for doubt as to the parties’ mutual intent to dismiss this action with prejudice. Eitel himself drafted and signed such a stipulation, and Scribner agreed in argument that it was substantially identical to the form proposed by the defendant.

General Release:

Where there is a good deal of uncertainty, is the issue of whether the subject of a general release came under discussion at the time of the Boundy/Eitel settlement conference, and if so, whether Eitel agreed to its terms and conditions. Given the directly conflicting renditions of the respective individuals involved, and the self-serving nature of such representations, there is no way the Court can make the requisite credibility judgments either on the basis of the present record or over the telephone. If this aspect of the instant controversy were to be determined on the merits, it would necessarily be at the conclusion of an evidentiary hearing: a prospect neither of the parties seemed to be overly enthralled with due to the expense and time involved.

There are two thrusts behind the general release sought. The first is to guard against the possibility that Eitel may continue to pursue additional damage claims against McCool. Given the broad-based allegations in the complaint, and the expansive timeframe involved, it.would appear that the claims raised in the instant case are virtually co-extensive with the Eitel/McCool relationship, and it is probably a rare court which would fail to give issue preclusive effect to entry of dismissal with prejudice of the action at hand. To ensure that this was in fact the situation, the Court pointedly asked Eitel whether he intended to bring any further damage actions against McCool. He replied that he did not. In like fashion, the Court inquired of Scribner whether McCool considered the instant action dispositive as to any and all counterclaims he may have against Eitel. Scribner (with McCool listening in on an extension), represented that this was true. So viewed, it is apparent that this order will serve both parties as the functional equivalent of a mutual general release as to any further litigation which could have been advanced in the instant action.

The second thrust underlying defendant’s desire for execution of a general release concerns Eitel’s announced intention to proceed with his complaint to the Bar, and to lodge an additional complaint as well based on events occurring since this action was commenced. The intent of the parties in regard to this aspect of the instant motion is irrelevant. Even in the face of uncontroverted evidence that an agreement had been reached prohibiting the filing or maintenance of a bar complaint, the Court would not enforce a provision so clearly contrary to public policy.

Unlike an action in damages which involves a controversy between individuals, the focus of a bar investigation lies in safeguarding the public interest. See, e.g., In re McGlothlen, 99 Wash.2d 515, 522, 663 P.2d 1330 (1983). Whether or not a complainant has, or even could state, a cause of action is totally immaterial to the conduct of a disciplinary proceeding. In re Miller, 99 Wash.2d 695, 700-01, 663 P.2d 1342 (1983). Indeed, even the failure of an injured party to lodge a bar complaint will not be considered a factor of any weight in ascertaining whether an ethical breach has occurred. In re Denend, 98 Wash.2d 699, 707, 657 P.2d 1379 (1983). There are few who would dispute that the legal profession’s ability and willingness to put its own house in order has had a checkered past. See generally, The True Story of Lawyer Discipline, 70 A.B.A. Journ. 3 at 92 (Sept. 1984). The courts should not be expected to put the judicial stamp of approval upon any private agreement which would tend to impair the impressive gains made in this area in recent years. Accordingly, since the term at issue would not be enforced in any event, it is unnecessary to reach the question of whether such term was agreed to.

THEREFORE IT IS ORDERED that:

(1) Defendant’s Motion to Compel Execution of Release is DENIED except insofar as it relates to dismissal of this action.

(2) Pursuant to the parties’ agreement this action is DISMISSED WITH PREJUDICE.

(3) The Clerk shall enter judgment accordingly.

(4) If an appeal is contemplated, a notice of appeal must be filed with the Clerk of this Court within thirty (30) days from entry of judgment.

      . Whatever may be the relevance of DR 3-101(A) and EC 3-7, the facts of this case powerfully underscore the general proposition that any legal action worth a lawyer’s advice is probably worth his retainage as well.

      . In order to foreclose the possibility that language in the accompanying text may be put to a use not intended by the Court, it should be made abundantly clear that the merits of this action have in no sense been reached. Thus, I express no opinion whatever as to the truth of plaintiffs allegations.


author: SHADUR, District Judge.

text:
    BRASCO, INC., Plaintiff, v. INTERNATIONAL GRAPHIC SERVICES, INC., Defendant.
    No. 83 C 9494.
    United States District Court, N.D. Illinois, E.D.
    Oct. 23, 1984.

      John A. Relias, Richard F. Zehnle; Vedder, Price, Kaufman & Kammholz, Chicago, Ill., for plaintiff.
    Louis Pretekin, Chicago, Ill., for defendant.
   MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Brasco, Inc. (“Brasco”) sues International Graphic Services, Inc. (“IGS”) for breach of contract (Count I) and fraud (Count II). On April 20, 1984 this Court denied IGS’ motion to dismiss or strike Count II. Bras-co now moves under Fed.R.Civ.P. (“Rule”) 56 for summary judgment on Count I. For the reasons stated in this memorandum opinion and order, that motion is granted.

Facts

In November 1982 IGS contracted with the Regional Transportation Authority to install and thereafter to maintain, at suburban bus stops in the Chicago area, passenger shelters equipped with advertising panels. In turn IGS contracted to purchase the shelters and panels from Brasco, which agreed to supply up to 1,000 shelters and 379 extra panels at the rate of at least 45 shelters and 15 panels per month beginning in February 1983. Agreement 113(a) set the terms of payment at thirty days net from the date of each delivery unless IGS then owed Brasco at least $100,000, in which event Agreement 113(b) required:

For all shipments which, when aggregated with prior shipments, leave the buyer indebted to the seller in amounts greater than $100,000.00: cash on delivery.

On December 22, 1982 Brasco shipped a prototype shelter unit to IGS, followed by 5 units on February 2, 1983, 20 units on March 7, 45 units and 15 extra advertising panels on March 31 and 5 additional advertising panels on April 7. On April 29, May 3 and May 11 Brasco shipped the component parts for an additional 65 units. Brasco however withheld shipment of the dome roof sections for 13 of those units after IGS’ $50,000 check had been dishonored by the bank for insufficient funds.

Thus Brasco shipped IGS a total of 136 units, of which 123 were complete and 13 lacked only the dome roof section. IGS has yet to pay for the major share of the goods shipped. At the end of February 1983 it tendered a partial payment of $1,259.38. During early April it sent another part payment of $7,700, leaving it indebted to Brasco for another $95,530.22. Brasco accordingly notified IGS any further monthly shipments would be made only on a cash basis as Agreement II 3(b) provided.

On April 28 a Brasco representative conferred with IGS Chairman Eugene P. Rosciano (“Rosciano”). That meeting generated a $50,000 IGS check post-dated to May 10, in reliance on which Brasco made the April 29, May 3 and May 11 shipments (bringing IGS’ total indebtedness to $164,-649.92). When timely presented, the check was dishonored and Brasco thereupon ceased all shipments to IGS.

In a June 17 letter Brasco notified IGS it would have to assess interest charges at the rate of 18% per annum on all past due amounts. According to the affidavit of Brasco General Manager Thomas J. Lennon (“Lennon”) IGS thereafter made payments of $2,469.75 and $7,875.43, representing accrued interest through August 31 (Lennon Aff. If 16). IGS has made no further payments on its obligation under the Agreement. On December 27 Brasco filed this action.

Summary Judgment Analysis

On those facts Brasco argues it is entitled as a matter of law to judgment on Count I for $164,649.92 plus interest at 18% per annum from September 1, 1983. IGS does not dispute the fact of its obligation to Brasco under the Agreement. Instead it challenges the amount of that obligation because, it says:

1. IGS received only 117 units, not 136 as Brasco contends.
2. IGS is entitled to set off damages resulting from Brasco’s failure to deliver goods conforming to its obligations under the Agreement.
3. IGS did not agree and is not obligated to pay interest on any past due balances.

IGS offers each of those contentions as establishing the existence of an issue of material fact sufficient to defeat Brasco’s motion. This opinion will consider them in turn.

1. Number of Units Shipped

In support of its assertion that it received only 117 bus shelter units, IGS cites only Rosciano Aff. II4:

Brasco shipped no more than one hundred seventeen (117) shelters during the relevant period herein.

By contrast Brasco describes in some detail (Lennon Aff. ¶¶ 10-14) the circumstances surrounding the April 29, May 3 and May 11 shipments — the only ones allegedly in dispute. But there is more: Brasco submits copies of its bills of lading for those three shipments, directly confirming that the component parts of 65 shelters (20 without advertising panels and 13 without dome roof sections) were in fact shipped.

Once a movant has met its burden of establishing that there is no genuine issue as to a given material fact, the burden shifts to the nonmoving party to show an issue remains for the factfinder. Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.1983) (citations omitted) teaches:

To create a question of fact, an adverse party responding to a properly made and supported summary judgment motion must set forth specific facts showing that there is a genuine issue for trial____ A party may not rest on mere allegations or denials of his pleadings; similarly a bare contention that an issue of fact exists is insufficient to raise a factual issue____ Rule 56 of the Federal Rules of Civil Procedure clearly requires that an adverse party set forth specific facts showing a genuine issue for trial.

See also Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160, 163 (7th Cir.1984) .

IGS clearly has not generated a genuine factual issue as to the number of units shipped. In light of Brasco’s showing, IGS had to provide specific evidentiary support for its counter-assertion. Rosciano’s conclusory affidavit statement is not even a makeweight to that end.

2. Defects in Units Shipped

IGS says the shelters shipped by Brasco were defective in three respects:

1. Some of the units were delivered with badly scratched posts.
2. Locking devices provided to prevent members of the public from tampering with the advertising panels were inadequate.
3. Anchor clips provided with the shelters were not large or strong enough to keep the shelters from opening and collapsing.

Here too IGS mistakes its evidentiary burden: Rosciano’s affidavit sets out “facts” in a way no witness could do from the stand, substituting instead a kind of generalized conclusory narrative. Nonetheless this opinion will — for the moment — assume arguendo the claimed flaws in the goods exist. If so their legal effect must be determined by reference to the Agreement and to the provisions of the Uniform Commercial Code (“UCC”) as adopted in Michigan. Mich.Comp.Laws §§ 440.1101-440.-9994 (cited as “Section” following by the last four digits of the section number).

Because IGS plainly accepted the units Brasco shipped (see Section 2606), IGS’ right to a remedy for claimed breaches is governed by Section 2607(3)(a), under which a buyer who has accepted the tender of goods:

must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy.

In turn Section 1204(1) provides:

Whenever this act requires any action to be taken within a reasonable time, any time which is not manifestly unreasonable may be fixed by agreement.

Those statutory provisions must be considered in light of Agreement If 15, which states:

The Buyer shall be deemed to have accepted the goods in as is condition unelss [sic], within five -thir-ty 10 days after delivery to the Buyer’s warehouse, Buyer notifies the Seller in writing of defects.

That indisputably satisfies Section 1204(1), particularly where the parties specifically negotiated and agreed upon the need for written notice and its time requirement. Moreover the contractual provision that the notice be in writing is both appropriate and enforceable. Section 1102(3)-(4); see also Prompt Electrical Supply Co. v. Allen-Bradley Co., 492 F.Supp. 344, 347-48 (E.D.N.Y.1980). Though the UCC does not mandate written notice, the parties have a reasonable interest in providing by agreement for the existence of a written record in the event their dealings under the contract become the subject of litigation. See 3 Hawkland, Uniform Commercial Code Series § 2-607:07, at 70.

As to the scratched posts, IGS clearly fails the Agreement If 15 requirement. Rosciano Aff. ¶ 7 says only “he notified Brasco of the scratches immediately upon receipt by IGS of the shelters.” That may carry with it a reasonable inference of timeliness, but surely not one of written notification (IGS tenders no supporting document).

IGS does point to Brasco’s having shipped spray paint to be used for touching up the posts (Def. Ex. II). But that is not at all inconsistent with Agreement ¶ 15’s “as is” provision. Indeed Rosciano Aff. ÍI11 confirms (though it cavils at) the fact Brasco charged IGS for the touch-up paint. Clearly Brasco did not interpret any notice it arguably received as triggering any obligation to cure the scratches. Contrast Reinhardt v. Bennett, 45 Mich.App. 18, 205 N.W.2d 847, 852 (1973) (defendant’s response on three occasions to complaints about defects in swimming pool raised question as to waiver, through a course of dealing, of contract’s written notice requirement).

Thus no genuine factual dispute even arguably undercuts Agreement ¶ 15 as to the scratched posts. Section 2607(3)(a) bars any remedy on that score.

IGS’ second issue, the asserted inadequacy of the advertising panel tamper-proof devices, might perhaps pose more difficulty. There Rosciano did write Brasco on April 18 (Def. Ex. I):

We are in agreement that the screw is much too short and may create a hazard to the general public. We currently have 23 units on the street and certainly wish to avoid any possible liabilities incurred by this insufficient locking system.
Please advise what necessary steps Bras-co will take to remedy this situation.

In terms of any contractual duty arguably owed by Brasco, that letter is ambiguous: It might represent either a demand for performance or (in light of Rosciano’s February 25 letter referred to later in this paragraph) merely a request for Brasco’s assistance in meeting IGS’ risks. But viewed most favorably to IGS (that is, as a demand) the April 18 language is certainly “sufficient to let the seller know that the transaction is still troublesome and must be watched” (Section 2607, Official Comment 4), so Agreement 1115’s requirement of written notice would be satisfied. As to the timeliness issue, however, IGS had been shipped a prototype shelter on December 22, 1982 and an additional five units on February 2, 1983. On February 25 Rosciano wrote to Lennon (PI. Ex. B):

This will serve as confirmation and acceptance of the prototype delivered to International Graphic Services on your Shipper No. 03-09367 dated February 2, 1983.
The conditions and specifications of the bus shelters being purchased from your company are totally acceptable.

That set of facts could conjure up some legal complexities:

1. As to Brasco’s early shipments the 10-day notice provision was plainly not met. Thus the question would become whether 10 days was “manifestly unreasonable” under the circumstances (Section 2607(3)(a)).
2. As to Brasco’s post-April 8 shipments the notice was timely if the April 18 letter were an effective notice. Thus the question would become whether IGS’ February 25 acceptance of the prototype precluded a later-asserted claim of a defeet, common to the prototype and to all later shipments, under Agreement ¶ 15.

Fortunately this Court need not ring all the changes suggested by those hypotheses, for IGS’ conduct before this lawsuit stimulated its imagination provides the definitive answer. On July 6 — long after the April 18 letter, indeed after Brasco had terminated the Agreement for IGS’ breach — Rosciano wrote Brasco directly acknowledging IGS’ obligation for the contract amount, with no hint of any offsets for alleged defects in the goods (App. 1). In fact Rosciano there confirmed IGS’ willingness to pay for Brasco’s unshipped units in inventory “at our agreed upon price.” Both IGS’ unequivocal recognition of full contract liability in the July 6 letter and the like tone of Rosciano’s letters of October 25 (App. 2) and November 16 (App. 3) give the lie to IGS’ current afterthoughts of allegedly defective merchandise. In fact that is reconfirmed by IGS’ payments of interest in full on account balances that Brasco had clearly calculated in terms of the full sale price of the goods shipped.

These matters conclusively negate any notion IGS is reasonably entitled to the inferences drawn arguendo in the earlier discussion. Whether perceived in terms of the absence of any claim or as the waiver of any arguable claim, IGS’ own conduct belies its current efforts to evade its just obligations.

Precisely the same analysis controls IGS’ remaining claim that the anchor clips are inadequate to keep the shelters from collapsing. Here IGS offers Rosciano’s vague (and improper under Rule 56(e)) affidavit statements (Aff. ¶¶ 16, 18):

16. That several of the shelters have collapsed, and IGS has been informed on one such occasion, a man was hit in the head by one of the collapsing shelters.
* * * * * *
18. That as soon as the inadequacy of the anchor clips was discoverable by IGS, he informed Brasco of it and has discussed the problem with Brasco on numerous occasions but Brasco has made no effort to replace the anchor clips.

Again IGS’ own previously-discussed conduct — confirming its obligation to Brasco with no suggestion of any such claims— torpedoes its current effort to manufacture a basis for non-payment of the obligation it has acknowledged. And on this topic (unlike the one just discussed in earlier paragraphs) IGS also failed to satisfy Agreement 1f 15’s written notice requirement in any event. It is thus doubly defeated.

3. Obligation To Pay Interest

Finally IGS urges it is not obligated to pay interest on any unpaid balance under the Agreement because it never agreed to do so. Indeed Rosciano says (Aff. Till 20-21):

20. That there is no agreement between Brasco and IGS for the payment of interest on the principal balance, if any, owed by IGS to Brasco.
21. That any amounts paid by IGS to Brasco were intended by me to be payments on the principal, if any, due Bras-co.

To be blunt, that statement of Rosciano’s “intention” is simply a lie. On June 17 Brasco wrote Rosciano it would begin assessing interest at 18% per annum on outstanding balances. On July 6 Rosciano wrote to Lennon (App. 1):

I am sorry to hear of your decision to terminate our agreement. I am sending you the interest you had requested on monies due per our last conversation____ Upon completing our arrangements, we will pay Brasco the total amount due plus any interest owing at that time.

Again in his November 16 letter (App. 3) Roseiano referred specifically to “interest” and to “a credit to our company on interest money paid for materials not received.”

It is not proper to weigh conflicting evidence on a motion for summary judgment. But a court is not obligated to credit a litigant’s statement of his claimed intention (by definition a subjective statement incapable of verification) that flies so squarely in the teeth of the litigant’s own prior unequivocal statements and conduct. See 10A Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 2727, at 163-65, 170 (1983):

And, although the court should refrain from assessing the probative value of the material presented, evidence in opposition to the motion that clearly is without any force is insufficient to raise a genuine issue.
******
[T]he evidence offered must have the force needed to allow a jury to rely on it and the court may disregard an offer of evidence that is too incredible to be believed.

So the fact of IGS’ interest payments is beyond dispute. As for its obligation to make such payments, n. 13 identifies the source of such an obligation in contract terms. Even were that not the case, the law is clear that a creditor may recover interest for default in timely payment of a liquidated indebtedness, though the contract does not provide for interest. See 47 C.J.S. Interest & Usury § 27, at 75-76.

True enough, in cases where interest is proper but the parties have not agreed upon a rate, the computation should be made at the legal rate. See Gottesman v. Fay-Bea Construction Co., 355 Mich. 6, 94 N.W.2d 81 (1959) (per curiam). Corporations, however, may agree in writing to pay interest in excess of the legal rate. Mich.Comp.Laws § 450.1275. Here the correspondence between the parties, including IGS’ actual payments of over $10,-000 in interest at the 18% rate, clearly reflects such an agreement unless:

1. other evidence creates a material factual dispute or
2. the agreement is legally unenforceable for some reason.

As to the first of those possibilities, IGS has nothing to put in the scales except Rosciano’s statement of a different intention. For the reason already explained, that is unworthy of credit even in the summary judgment context. As for the second possibility, IGS seeks to invoke either a lack of consideration or a Statute of Frauds defense. Neither holds water:

1. Of course Brasco suffered a detriment: It did not receive the current payment to which it was entitled under the Agreement. Indeed the Agreement itself, which included the implied promise to pay interest on past-due balances (see n. 13), is a paradigm of consideration: a promise for a promise.
2. Agreements to pay interest are not, as such, covered by the Statute of Frauds. Even if they were, though, the writings signed by IGS (for example, its July 6 letter and its interest checks themselves) would do the job. And the same writings satisfy the agreement-in-writing requirement of Mich.Comp.Laws § 450.1275.

Conclusion

It distorts the justice system when parties concoct factual disputes to defer (or avoid entirely) their financial obligations. As long as Brasco held off on suing IGS for its six-figure obligation, IGS was sweetly reasonable. It acknowledged its indebtedness, paid interest when it could, referred to its own financial problems and held out the prospect of meeting its obligations to Brasco. For example:

On July 6: “Upon completing our arrangements, we will pay Brasco the total amount due plus any interest owing at that time. I am sending you this cheek to prove our good faith and assure you that we do intend to complete our obligations.”
On October 25: “We do realize our financial obligation to Brasco and have been working diligently to fulfill our agreement.”
On November 16: “As we have discussed, please set up a payment schedule showing an initial $50,000 deposit on merchandise and balance to be paid in monthly increments not to exceed 24 months. As you know, International Graphic Services has always been concerned with the responsibility owed to your company.”

Once in the courts, though, IGS has sought to manufacture issues without foundation in the relationship between the parties. Rule 11 in its most recent incarnation speaks to such efforts. But for current purposes, suffice it to say there is no genuine issue of material fact as to Bras-co’s Count I, and Brasco is entitled to a judgment on that count as a matter of law.

APPENDIX 1

July 6, 1983

Mr. Tom Lennon

Brasco, Inc.

32413 Park Lane

Garden City, MI 48135

Dear Tom:

I am sorry to hear of your decision to terminate our agreement. I am sending you the interest you had requested on monies due per our last conversation. We are sorry for any inconvenience we have caused Brasco, Inc. Upon completing our arrangements, we will pay Brasco the total amount due plus any interest owing at that time. I am sending you this check to prove our good faith and assure you that we do intend to complete our obligations.

On your last visit you had indicated you had units in your inventory. We are willing at this time to pay for these units at our agreed upon price so Brasco is not burdened with unnecessary inventory.

Again, we accept your termination and am sorry for any inconvenience. We do have a viable program and as I told you on your last visit, we had no problem until the financial institution came in to check inventory only to find incomplete shelters. Putting no blame on Brasco or anyone, it did not appear to their better interests to finance a program and pay for material which was not in the possession of International Graphic Services. We have, in fact, overcome this situation and we will be forwarding you a check for the total amount due.

We will wait to hear from you regarding the shelters you have advised are in your inventory. If you should desire to change your mind in regards to termination of this contract with IGS, we would be more than willing to have a fresh start. Until that time, we will consider our contract null and void.

Sincerely,

Eugene P. Rosciano Chairman

EPR:fmc

Enclosure

APPENDIX 2

October 25, 1983

REGISTERED MAIL — RETURN RE-

CEIPT REQUESTED

Mr. Marshall V. Noecker

Brasco, Inc.

13271 Mt. Elliott

Detroit, Michigan 48212

Dear Marshall:

We are in receipt of your letter of October 12, 1983. We certainly apologize for Mr. Siepmann’s promises as we were unaware of them until our discussions with Tom Lennon.

Your belief in International Graphic Services and our project is obvious as it does hold tremendous potential for both our companies. We can become the largest bus shelter advertiser in the country and Brasco, Inc. can surely become the largest bus shelter manufacturer in the country.

We do realize our financial obligation to Brasco and have been working diligently to fulfill our agreement. A temporary mortgage situation as you suggest in your letter would be a positive step in the right direction for both companies. We request an additional ten days from this date to give us an opportunity to work out the details of this alternative.

We will wait to hear your reply, and hopefully our companies can become one in working toward a common goal.

Sincerely,

INTERNATIONAL GRAPHIC SERVICES, INC.

/s/ Eugene P. Rosciano

Eugene P. Rosciano

Chairman

EPR:sc

APPENDIX 3

November 16, 1983

Mr. Marshall V. Noecker

Brasco, Inc.

13271 Mt. Elliott

Detroit, Michigan 48212

Dear Marshall:

In accordance with our recent conversation, please find enclosed a copy of your recent statement dated October 30, 1983.

Please be advised that International Graphic Services, Inc. does not owe Brasco $253,-904.92 which said interest is based upon. At this time we request an itemized list of monies owed, and a credit to our company on interest money paid for materials not received.

As we have discussed, please set up a payment schedule showing an initial $50,-000 deposit on merchandise and balance to be paid in monthly increments not to exceed 24 months.

As you know, International Graphic Services has always been concerned with the responsibility owed, to your company. We hope you will give this matter your immediate attention and look forward to a more compatible working relationship.

Sincerely,

INTERNATIONAL GRAPHIC SERVICES, INC.

Eugene P. Rosicano

EPR:sc

Enclosure

      . Familiar Rule 56 principles impose on the party moving for summary judgment the burden of establishing the lack of a genuine issue of material fact. Korf v. Ball State University, 726 F.2d 1222, 1226 (7th Cir.1984). For that purpose the court must view the evidence and draw all reasonable inferences in the light most favorable to the nonmovant. Hermes v. Hein, 742 F.2d 350, 353 (7th Cir.1984). To the extent IGS seeks to controvert the facts recited in this section (which are stated in conformity with those principles), the later text discussion deals with IGS’ contentions.

      . Though the IGS-Brasco Agreement (the "Agreement”) is dated January 1, 1983, it was not actually executed until April 18 of that year. Because most of the relevant dates were during 1983, dates referred to in this opinion without any year designation occurred in 1983.

      . Advertising panels were omitted from 20 of those units because IGS had decided to use, for that purpose, the 20 extra panels shipped on March 31 and April 7.

      . Both parties have been extraordinarily casual in their approaches to Rule 56(c) and 56(e) requirements. IGS tenders Rosciano's "affidavit," which clearly does not conform to the first sentence of Rule 56(e) in a number of respects. Brasco (which should remember it has the evidentiary burden) simply attaches a number of document photocopies to its memoranda, apparently unmindful of the need to treat documents just as it would exhibits sought to be admitted at trial — after all, summary judgment is really a substitute for trial (except for the resolution of factual disputes). To avoid the further delay of sending the parties back to the drawing boards, this opinion has proceeded on the reasonable assumption Brasco will take the necessary formal steps (via supplemental affidavits) for admissibility of those documents.

      . But see the last sentence of n. 4.

      . This Court is left with the strong suspicion IGS’ counsel has not read or does not understand Rule 56 (or both). For example the "response" to Brasco’s summary judgment motion treats it as though it were a complaint, offering the following extraordinary kind of presentation (only a representative sample is included):
      1. Defendant admits the allegations contained in ¶ 1.
      2. Defendant admits the allegations contained in the first sentence of ¶ 2, but makes no response to the allegations contained in the second sentence, having insufficient knowledge to form a belief as to the truth or accuracy of the allegations contained therein.
      ******
      8. Defendant admits the allegations contained in the first sentence of ¶ 8, but denies the allegations contained in the second sentence therein.
      ******
      12. Defendant denies that it owed Plaintiff any sum whatsoever as and for interest.
      That lack of attention to the entire concept of Rule 56 carries forward into the Rosciano “affidavit."

      . Agreement ¶ 10 provides:
      This contract shall be governed by the Laws of the State of Michigan.
      For purposes of this Court's earlier opinion as to Complaint Count II, the parties agreed Illinois law provided the rule of decision (Opinion 3 n. 2). Given the Agreement’s choice-of-law provision, Brasco’s contract claim should be controlled by its terms, and both parties’ supplemental memoranda do look to Michigan law.

      . Because of the Michigan statutory numbering system, correlation of the Michigan citation with the UCC itself requires only the insertion of a hyphen. Thus for example Section 1204(1) corresponds to UCC § 1-204(1).

      . No clearer example of a negotiated contract term could be imagined. Its original typed version was the five-day requirement. That was stricken manually and a handwritten "thirty” inserted in its place. Then "thirty” was lined out, "10” was written in, and the principals of the contracting parties initialed the interlineation.

      . It is not clear that the scratches were a problem on any but the six units that constituted Brasco’s first two (December 22, 1982 and February 2, 1983) shipments. Brasco included the touch-up paint as part of its third shipment to IGS.

      . Agreement ¶6 might or might not bear on that subject.

      . As the November 16 letter reflects, Brasco’s October 30 computer-generated billing was plainly incorrect: It included a mistaken double billing of an $81,859.70 invoice plus two erroneous rebillings of $3,697.65 each (those items, aggregating $89,255, account for the difference between the $164,649.92 Brasco now correctly claims and the $253,904.92 incorrectly shown in the October 30 statement). But what is significant is that on November 16 Rosciano correctly challenged the statement amount only in terms of "materials not received,” with not even a whisper of any defects in the goods or any right to offsets or credits.

      . It will be remembered Agreement ¶ 3(a) established net 30 day terms. Of course that necessarily implies any unpaid balances will bear interest (else the contract language is rendered meaningless). All that remains, then, is to determine the applicable interest rate.

      . See n. 12.

      . In Michigan the legal rate is 7% per annum. Mich.Comp.Laws § 438.31.

      . As n. 4 reflects, this assumes Brasco will promptly file the appropriate documents to place formally into evidence the exhibits attached to its memoranda.