author: MORAN, District Judge.

text:
    Jeramie AIMONE, a minor, by Mary Ann AIMONE, his mother and next friend, Plaintiff, v. WALGREEN’S CO. and Regent Sports Corporation, Defendants. REGENT SPORTS CORPORATION and Walgreen’s Co., Counter-Plaintiffs, v. Mary Ann AIMONE, Counter-Defendant. REGENT SPORTS CORPORATION and Walgreen’s Co., Third Party Plaintiffs, v. George AIMONE and Wayne Bradford and Paula Bradford, Third Party Defendants.
    No. 83 C 4724.
    United States District Court, N.D. Illinois, E.D.
    Jan. 8, 1985.

      Paul E. Root and Roger B. Gomien, Gomien, Root & Masching, Morris, 111., for plaintiff.
    Royce Glenn Rowe, McKenna, Storer, Rowe, White & Farrug, Marthe C. Purmal, Tyrrell & Flynn, Robert D. Kolar, Robert D. Kolar & Associates, Ltd., Raymond Cu-sack, Johnson, Cusack & Bell, Ltd., Chicago, 111., for defendants.
   MEMORANDUM AND ORDER

MORAN, District Judge.

Plaintiff Jeramie Aimone, a minor bringing suit by his mother, Mary Ann Aimone, was allegedly severely and permanently injured on July 4, 1982, when the point of a lawn dart penetrated his skull and entered his brain. Plaintiff, two and one-half years old at the time of the accident, walked away from his parents without supervision and walked into the path of a lawn dart thrown by an eight-year old girl. The lawn dart was manufactured and distributed by defendant Regent Sports Corporation (Regent) under the product name “Slider Jarts.” The specific dart that injured plaintiff was sold on July 2, 1982, by defendant Walgreen’s Co. at its store in the Jefferson Square Shopping Mall in Joliet. Plaintiff brought a five-count complaint. In Count I plaintiff charged defendant Walgreen’s with liability under 15 U.S.C. § 2072 for selling and distributing a product labeled “hazardous” under 16 C.F.R. § 1500.18. In Count II plaintiff charged defendant Walgreen’s with breach of implied warranty of merchantability. In Count III plaintiff charged defendant Regent with liability under 15 U.S.C. § 2072 for manufacturing and distributing a product labeled “hazardous” under 16 C.F.R. § 1500.15. In Count IV plaintiff sought damages against Regent on a strict liability basis. In Count V plaintiff sought damages from defendants Wayne and Paula Bradford, possessors of the darts and owners of the home where plaintiff was injured, for negligence. In each count plaintiff asked for $7,000,000.

A flurry of counterclaims and third party claims followed the filing of the complaint. Defendants Walgreen’s and Regent brought counterclaims against Mary Ann Aimone, and third party claims against George Aimone, alleging negligent supervision of plaintiff on the day of the injury. They also brought third party claims against the Bradfords, seeking contribution due to the Bradfords’ negligence under the Illinois Contribution Among Joint Tortfeasors Act, Ill.Rev.Stat. ch. 70, § 301 et seq. The Bradfords brought third party actions under the same statute against defendants Walgreen’s and Regent.

Before the court are a number of motions. Both defendant Walgreen’s and plaintiff move for summary judgment on Count I of the complaint. Both defendant Regent and plaintiff move for summary judgment on Count III of the complaint. Defendant Regent also moves for summary judgment on Count IV. The Bradfords move to dismiss Count V of the complaint. Finally, George Aimone and Mary Ann Aimone move to dismiss the third party complaint and counterclaim filed against them respectively.

Count I

Title 15 U.S.C. § 2072(a) provides:

Any person who shall sustain injury by reason of any knowing (including willful) violation of a consumer product safety rule, or any other rule or order issued by the [Consumer Product Safety] Commission may sue any person who knowingly (including willfully) violated any such rule or order in any district court of the United States____

Jurisdiction therefore exists in this court and damages are recoverable under the statute if plaintiff can show that defendant Walgreen’s knowingly violated a Commission rule or order and that plaintiff was injured by reason of that violation.

Lawn darts are banned as a toy intended for the use of children. See 16 C.F.R. § 1500.18(a)(4) (1984). Lawn darts, however, can legally be sold provided that they bear the proper warnings, include clear instructions, and

[a]re not sold by toy stores or store departments dealing predominantly in toys and other children’s articles.

16 C.F.R. § 1500.86(a)(3) (1984). Defendant Walgreen’s claims the lawn darts it allegedly sold that injured plaintiff were displayed in the store’s sporting goods department, isolated from the toy department. In support of its claims Walgreen’s submits the deposition testimony of Joan Farmer, the person who purchased the lawn darts, who states she bought the darts “along the midways” of the store next to “the little birdie things,” referring to a Badminton set. Walgreen’s also presents the affidavits of three store employees: Art Boyce, who states that to the best of his knowledge during the summer of 1982 the darts were not for sale in the store except in the sporting goods department; Deborah Wagner, who states that she personally stacked and supervised the store’s sporting goods department and, to the best of her knowledge, darts were only in the sporting goods department, at least 75 feet away from the toy department; and Michael Zak, who states that in 1982 darts were displayed only in the sporting goods department, above the Badminton sets.

Plaintiff contests Walgreen’s claim that the darts were only properly sold in the sporting goods department. Plaintiff presents a photograph taken on July 21, 1982, that shows the darts displayed among the toys in a “summer toy promotion area” of the store. In addition, plaintiff submits the affidavit of a former employee of the store, Chris Bozue, who states the darts were displayed as indicated in the photograph. Plaintiff also attempts to submit through Rule 803(2) of the Federal Rules of Evidence a hearsay statement by Ms. Farmer, made after the accident, claiming she picked up the darts from the “toy section, display on the floor.” Finally, plaintiff argues that even if Walgreen’s is correct as to where the darts were stacked, that area, though designated a sporting goods department, contained products primarily for children and therefore not proper for lawn darts pursuant to 16 C.F.R. § 1500.86(3)(iii).

Both plaintiff and Walgreen’s move for summary judgment on Count I, with regard to whether Walgreen’s knowingly violated a consumer product safety rule. Summary judgment should be entered only when the pleadings, depositions, affidavits and admissions demonstrate that as to liability “there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). The moving party has the burden of establishing the non-existence of a material issue and all inferences are to be drawn in favor of the non-movant. See Hadley v. County of DuPage, 715 F.2d 1238, 1240 (7th Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 1000, 79 L.Ed.2d 232 (1984); Cedillo v. International Association of Bridge & Structural Iron Workers, Local Union No. 1, 603 F.2d 7, 10 (7th Cir.1979). From the affidavits and depositions submitted by both parties, the court concludes that a material issue does exist as to the placement of the dart sets in the store. The conflicting affidavits, the questioned photograph and the deposition testimony create doubt as to the location that can only be dealt with at trial.

Plaintiff also claims that even if located in the “sporting goods” department, the darts were sold in violation of section 1500.-86(3)(iii). Walgreen’s claims the darts were sold in its outdoor sports center and, for the purposes of this issue, that will be assumed. To resolve this issue the court must determine what products were actually on sale in that center.

The outdoor game center potentially carried a variety of sporting goods equipment. The Walgreen’s outdoor game center promotional sheet [see Boyce dep., ex. 1) shows that available for the center were Little League baseball bats, youth softball bats, adult softball bats, baseball gloves for juniors, youths and Little Leaguers, rubber-covered baseballs and softballs, as well as official baseballs and softballs. Also available were tennis rackets for juniors and adults, badminton and volleyball sets, soccer balls, kickballs, and the lawn darts. Mr. Boyce, the store’s manager at the time of the sale, stated that the sporting goods center basically stocked the items that were available from the promotional sheet (Boyce dep. at 29). He stated that baseball bats and baseball gloves were not included but specifically mentioned as being included: badminton sets, volleyball sets, tennis rackets, tennis balls, and lawn darts (Boyce dep. at 68-69, 79). Ms. Wagner stated that all the products available from the sheet were not stocked in the store (Wagner dep. at 20), though she stated that she stacked the products they did carry in accordance with the sheet (Wagner dep. at 25). Ms. Wagner testified that the department did include badminton sets, volleyball sets, baseball and softball gloves, baseballs, tennis balls and lawn darts (Wagner dep. at 14, 47). At one point in her deposition she stated that baseball bats were included and at another time she said they were not (Wagner dep. at 14, 29). Both Ms. Wagner and Mr. Boyce stated that tennis balls were in both the sporting goods center and the toy center (Wagner dep. at 24; Boyce dep. at 79). Ms. Farmer remembered badminton sets near the lawn darts she purchased and recognized the picture of the promotional sheet as being similar to the aisle setup from where she picked up the darts (Farmer dep. at 54, 63).

The regulations provide that lawn darts will not be considered a hazardous product if they are not “sold by toy stores or store departments dealing predominantly in toys and other children’s articles.” 16 C.F.R. § 1500.86(3)(iii). The question before the court is whether the Walgreen’s sport goods center predominantly contained “toys and other children’s articles.” To define “toys and other children’s articles,” the court notes the similarity between this phrase and “toy or other article intended for use by children” found in 15 U.S.C. § 1261(f)(1)(D) and § 1261(q)(l). Section 1261 was among the authorizing statutes for 16 C.F.R. § 1500. In fact, the Consumer Product Safety Commission has used the two phrases interchangeably. For example, in 16 C.F.R. § 1500.86(4) the Commission used the heading “toys and other children’s articles presenting mechanical hazards” to describe the scope of its authority under 15 U.S.C. § 1261(f)(1)(D). See also 46 F.R. 58702, 58703 (1981) (stating that sections (f)(1)(D) and (q)(l)(A), among others, authorized the regulation of “toys or other children’s articles”). In light of this similarity of the phrases and the Commission’s interchangeable use of the two phrases, the court finds that the Commission intended the types of products referred to in 16 C.F.R. § 1500.86(3)(iii) be the same as those regulated pursuant to 15 U.S.C. § 1261(f)(1)(D) and § 1261(q)(l)(A).

The House Report discussing the definition of “toy or other article intended for use by children,” listed things it intended to be included in the phrase.

Examples of the types of articles covered by that phrase are games; dolls, stuffed animals, and other toys; swings, slides, seesaws, and other playground equipment; sleds, tobaggons, bicycles, tricycles, and other recreational equipment; infants’ carriages and strollers; slotted, netted, or lidded cribs and other nursery equipment; children’s furniture; science and construc-tion kits; children’s footwear; and sports equipment.

H.R.Rep. 91-389, 91st Cong., 1st Sess., reprinted in 1969 U.S.Code & Ad.News, 1231, 1236. Sports equipment is included in this definition. It must also be noted that while furniture and footwear are preceded by the word “children’s,” used as an adjective, the scope of sports equipment included in this definition is not so limited. The Senate Report states:

It was decided that a “toy” was any article that was normally presented to the child for his amusement. The term “other article intended for use by children” included articles normally used for children in close proximity to them.

Senate Rep. 91-237, 91st Cong., 1st Sess. (1969), at 5. This Report seems to include sporting goods to the extent they are normally presented to children for their amusement.

Courts have further honed the definition given by the statute. In R.B. Jarts, Inc. v. Richardson, 438 F.2d 846, 852 (2d Cir. 1971), the court discussed the propriety of finding sports equipment within the definition. Without ruling in a case dealing with lawn darts similar to those used here, Judge Friendly wrote:

It is plain enough that such articles as rattles, dolls, stuffed animals, nursery and playground equipment, and infants’ carriages and strollers, which are intended only for use by children, fall within the statutory term. On the other hand, despite the mention of sports equipment in the committee reports, the mere fact that a child might get hold of an article of that character which is kept in the home but is intended solely for use by adults, such as a regulation size golf club or rifle, would scarcely make the statute applicable. Between these ends of the spectrum is a case like this where the article is intended primarily for use by adults but also for use by children when playing with them.

The court in Forester v. Consumer Product Safety Commission, 559 F.2d 774 (D.C. Cir.1977), gave a concrete definition. It noted the foreseeability concepts relied upon by the Federal Hazardous Substance Act, id. at 786 n. 141, and the discussion in R.B. Jarts. It held that products, the use of which by children was reasonably foreseeable and not just incidental, were included in the definition. Id. at 786. The court in Forester found that finding a full-sized bicycle within the definition was not an abuse of discretion or contrary to law. Id.

This court is mindful that the statutory definition should not be stretched too far, see Forester, supra at 786, but it also finds that the legislative history of the statute and the case law calls for an expansive definition. Accordingly, the court finds that “toys and other children’s articles” include those sporting goods which it was reasonably foreseeable would be given to children for play.

It is not clear what was actually in the sporting goods center. There was testimony that badminton sets, volleyball sets, tennis rackets, tennis balls and baseballs were in the center. Other possible products included baseball bats, baseball gloves, 12-inch softballs, 16-inch softballs, racquetball rackets, racquetball balls, leather soccer balls and kickballs. There was no specific testimony as to which of these products were actually present. It is also not certain whether the mix of products that did exist could be classified within the definition of children’s toys laid out earlier. These determinations are more properly made by a trier of fact. Plaintiff’s motion for summary judgment on this ground is also denied.

Count III

Both plaintiff and defendant Regent Sports Corporation, the manufacturer of the darts, move for summary judgment on Count III. Count III is also brought under 15 U.S.C. § 2072(a). Plaintiff claims that Regent introduced a product in violation of 16 C.F.R. § 1500.18(a)(4) and § 1500.-86(a)(3)(iii) because the darts were improperly sold by Walgreen’s. Regent argues that, while possibly improperly sold by Walgreen’s, the product satisfied all the requirements for which it could be held responsible and, therefore, that it did not commit a “knowing (including willful)” violation of the regulation as required by section 2072.

Regent claims, with support through affidavits and exhibits, that it properly packaged the lawn darts and included instructions required by the regulations. This is not disputed by plaintiff. But, because all the requirements laid out in 16 C.F.R. § 1500.86(a)(3) may not have been satisfied, the lawn darts might have been a hazardous product not legally manufactured and sold. If section 2072 was a strict liability statute Regent could consequently be liable. Section 2072, however, allows recovery only on injury sustained by reason of a “knowing (including willful) violation of the consumer product safety rule.” The question becomes whether Walgreen’s possibly improper selling of the darts could constitute a “knowing (including willful) violation” on Regent’s part.

“Knowing (including willful)” is not defined within the section and the legislative history is mute on its meaning. The original draft did not contain the language, it was added on the floor of the House in an amendment designed to reduce the number of cases it was feared would flood the federal courts upon the section’s enactment. See 118 Cong.Rec. 31402 (1972). Debate on the amendment rested exclusively on the addition of a $10,000 minimum requirement. The discussion does indicate, however, that the “knowing (including willful)” language was intended to narrow the range of cases in federal court.

The term “knowingly,” however, is defined in another section of the Act. Section 2069 prescribes civil penalties for a knowing commission of one of the prohibited acts in section 2068. One of the acts is the manufacture of a banned hazardous product. The statute defines “knowingly” as

(1) the having of actual knowledge, or (2) the presumed having of knowledge deemed to be possessed by a reasonable man who acts in the circumstances, including knowledge obtainable upon the exercise of due care to ascertain the truth of representations.

15 U.S.C. § 2069(d). In the Senate Report regarding this section, the definition of “knowingly” included knowledge of the “probable consequences of actions in disregard of reasonable safeguards.” See Senate Rep. 92-742, 92nd Cong., 2d Sess. (1972) 37, reprinted in The Consumer Products Safety Act, BNA (1973). In light of these definitions Regent will have violated section 2072 if it disregarded reasonable safeguards involved in distributing the darts or acted without knowledge ascertainable upon the exercise of due care.

In his affidavit Carl Monette, accounting manager for Regent, detailed the precautions Regent takes in ensuring that the lawn darts are not sold with toys. In the catalogs distributed by Regent the description of the games states, “Not a toy. (Not to be sold in toy departments.)” The invoices state, “Not to be sold in toy or children’s departments.” Every master carton containing the individual game boxes states, “Not to be sold in toy departments.” Mr. Monette states that Regent refuses to sell lawn dart games to toy stores or outlets primarily selling toys. Finally, the games are not delivered directly to Walgreen’s stores but are delivered to the Walgreen’s Deerfield, Illinois, warehouse. Plaintiff does not dispute those affidavits.

It is clear that Regent took a number of precautions in distributing the lawn darts, whether or not the darts were improperly retailed by Walgreen’s. It made it clear in its catalog, invoices and cartons, that the darts were not to be sold with toys. It purposely determined not to sell the product to toy stores. Walgreen’s, to which it did sell, deals primarily in drugs, cosmetics and adult items. In addition, Regent delivered the product not to individual stores but to Walgreen’s warehouses. There is nothing to suggest Regent’s actual knowledge of how Walgreen’s distributed darts to the Joliet store or its knowledge of facts which might have reasonably alerted Regent to the manner of distribution. This court does not believe that Congress intended to impose a duty upon a manufacturer to monitor the merchandising practices of its customers, presumably by some form of roving inspections, in the circumstances here presented. Accordingly, Regent’s motion for summary judgment on Count III is granted and the plaintiff’s cross motion is denied.

Count IV

Because the federal claim against Regent does not survive, this court no longer has pendent jurisdiction over Count IV. Pendent party jurisdiction is not appropriate in this instance. See generally Hixon v. Sherwin-Williams Co., 671 F.2d 1005 (7th Cir.1982); U.S. General, Inc. v. City of Joliet, 598 F.2d 1050, 1054-55 (7th Cir. 1979). The Bradfords, however, brought third party claims against Regent. This court, therefore, can maintain the claims under its ancillary jurisdiction. For that reason, the court addresses plaintiff’s allegations in Count IV.

In Count IV of the complaint plaintiff alleges that the darts were “unreasonably dangerous for their intended use.” Regent moves to dismiss, claiming the darts were not unreasonably dangerous and that unsupervised use by children was not a foreseeable use. Regent’s second argument is rejected. The court, however, dismisses the count on the ground that the darts were not unreasonably dangerous.

Under Illinois law an action in strict liability lies only if the product in question is “ ‘dangerous to an extent beyond that which would be contemplated by the ordinary [person] ..., with the ordinary knowledge common to the community as to its characteristics.’ ” Hunt v. Blasius, 74 Ill.2d 203, 211-12, 23 Ill.Dec. 574, 578, 384 N.E.2d 368, 372 (1979) (emphasis in original), quoting Restatement (2d) of Torts, § 402(a), comment i (1965). See Walker v. Maxwell City, Inc., 117 Ill.App.3d 571, 576, 73 Ill.Dec. 92, 97, 453 N.E.2d 917, 922 (1st Dist.1983); Camp Creek Duck Farm, Inc. v. Shell Oil Co., 103 Ill.App.3d 81, 84, 58 Ill.Dec. 443, 445, 430 N.E.2d 385, 387 (4th Dist.1982) (finding the contamination of property due to use of rat poison to be within contemplation of ordinary consumer of rat poison). This principle precludes, a finding that the lawn darts were unreasonably dangerous because the danger they presented, like the danger inherent in a knife or ax, was obvious.

In Pitts v. Basile, 35 Ill.2d 49, 219 N.E.2d 472 (1966), the Supreme Court of Illinois dealt with a case almost identical to the present one. In the present case an eight-year old girl threw the lawn dart that injured plaintiff. In Pitts an eight-year old boy threw a dart that injured a six-year old plaintiff. The court in Pitts refused to find the dart, even though sold as a child’s toy, to be inherently dangerous. The court wrote:

There are many things used by children that may be said to be unsafe when used for the purpose for which they are intended. A baseball, a baseball bat, a pen knife, a Boy Scout hatchet, a bicycle, all have the capacity to injure the user or others in the course of their normal use. They are not, however, to be categorized as “dangerous instrumentalities.”

Id. at 51-52, 219 N.E.2d at 474. The court found that it was inconceivable that the child who was using the darts was not aware of their potential to cause injury.

The holding in Pitts, dealing with target darts, was the basis for a ruling by the Supreme Court of Oklahoma that lawn darts produced by defendant Regent were not properly the subject of a strict liability claim. See Atkins v. Arlans Department Store, 522 P.2d 1020 (Okla.1974). The court in Atkins, after quoting at length from Pitts and citing another Illinois case, specifically found that the lawn darts contained no dangers beyond those contemplated by the ordinary consumer. Id. at 1022.

Because the dangers involved with lawn darts were inherently obvious, Illinois holds them to be not unreasonably dangerous. The claim in Count IV, premised upon strict liability, therefore, is dismissed.

Count V

This court previously dismissed Count V, finding that pendent party jurisdiction over this count, as with Count IV, was not inappropriate. Because the Bradfords were named in third party complaints alleging negligence, however, the court reinstated Count V under its ancillary jurisdiction. See Aimone v. Walgreen’s Co., 83 C 4724, Order (N.D.Ill. March 26, 1984). The Brad-fords have now moved to dismiss Count V.

Count V of the complaint sounds in negligence. The Bradfords claim that plaintiff was a licensee on their property and as such they owed only the duty to avoid willful and wanton misconduct. They cite Marcovitz v. Hergenrether, 302 Ill. 162, 134 N.E. 85 (1922), and Dent v. Great Atlantic & Pacific Tea Co., 4 Ill.App.2d 500, 124 N.E.2d 360 (4th Dist.1955). That might indeed be the proper rule in this case were plaintiff an adult.

Plaintiff, however, at the time of the accident, was only two and-a-half years old. In Kahn v. James Burton Co., 5 Ill.2d 602, 614, 126 N.E.2d 836 (1955), the Supreme Court of Illinois did away with the licensee, invitee distinction when dealing with children. The court held that in cases where a landowner could reasonably have anticipated that children would be on the landowner’s property, “the only proper basis for decision in such cases dealing with personal injuries to children are the customary rules of ordinary negligence cases.” Id. at 624, 126 N.E.2d at 841. See also Cope v. Doe, 102 Ill.2d 278, 80 Ill.Dec. 40, 464 N.E.2d 1023, (1984); Corcoran v. Village of Libertyville, 73 Ill.2d 316, 325, 22 Ill.Dec. 701, 703-4, 383 N.E.2d 177, 179-80 (1978). This standard applies to children who are social guests.

[Wjhen an infant-social guest is injured on his host’s property, the customary rules of ordinary negligence apply, with the true test of liability to be the foreseeability of injury to the child.

Lance v. Senior, 66 Ill.App.2d 41, 45-46, 213 N.E.2d 616, 618 (5th Dist.1966), rev’d on other grounds, 36 Ill.2d 516, 224 N.E.2d 231 (1967).

The Bradfords, therefore, can be liable for negligence. The test is whether the injury to plaintiff was foreseeable. Without judging the foreseeability of plaintiff’s injury, the motion to dismiss Count V is denied.

Aimones

Mary Ann Aimone and George Aimone move to dismiss the counterclaim and third party claims filed against them, respectively. They base their motion on the grounds of parental immunity. The claims against the Aimones are predicated upon Illinois’ Contribution Among Joint Tortfeasors Act, Ill.Rev.Stat. ch. 70, § 301 et seq. (1984). That Act provides:

Where two or more persons are subject to liability in tort arising out of the same injury to person or property, or the same wrongful death, there is a right of contribution among them, even though judgment has not been entered against any or all of them.

Id. at 302(a). The dispute here arises out of the term “subject to liability in tort.” The Aimones say because of Illinois’ parental immunity, they are not subject to liability in tort for their son’s injury. The Illinois courts, however, have recently rejected that claim.

In Doyle v. Rhodes, 101 Ill.2d 1, 77 Ill.Dec. 759, 461 N.E.2d 382 (1984), the Supreme Court of Illinois interpreted the questioned language. After examining the judicial precursor to the Act, Skinner v. Reed-Prentice Division Package Machin ery Co., 70 Ill.2d 1, 15 Ill.Dec. 829, 374 N.E.2d 437 (1977), cert. denied, 436 U.S. 946, 98 S.Ct. 2849, 56 L.Ed.2d 787 (1978), and the Act’s legislative history, the court interpreted “subject to liability in tort” to focus “on the culpability of the parties rather than on the precise legal means by which the plaintiff was ultimately able to make each defendant compensate him for his loss.” Doyle v. Rhodes, 101 Ill.2d at 14, 77 Ill.Dec. at 765, 461 N.E.2d at 388. In so interpreting the statute the court found that an employer, immune from tort liability for an employee’s injuries through the Worker’s Compensation laws, could still face liability through the Act. This result is in accord with the earlier appellate decisions finding liability under the Act even though immunity against a direct action existed. See Doyle v. Rhodes, 109 Ill.App.3d 590, 65 Ill.Dec. 40, 440 N.E.2d 895 (2d Dist.1982) (employer’s immunity through Worker’s Compensation laws); Larson v. Buschkamp, 105 Ill.App.3d 965, 61 Ill.Dec. 732, 435 N.E.2d 221 (2d Dist. 1982) (parental immunity); Wirth v. City of Highland Park, 102 Ill.App.3d 1074, 58 Ill.Dec. 294, 430 N.E.2d 236 (2d Dist.1981) (spousal immunity). But see Lake Motor Freight, Inc. v. Randy Trucking, Inc., 118 Ill.App.3d 626, 74 Ill.Dec. 192, 455 N.E.2d 222 (1st Dist.1983) (dealing with employer immunity and reversed by the Supreme Court in Doyle).

Two decisions dealing specifically with this precise question have recently been handed down by the Illinois appellate courts. See Moon v. Thompson, 127 Ill.App.3d 657, 82 Ill.Dec. 831, 469 N.E.2d 365 (1st Dist.1984); Hartigan v. Beery, 128 Ill.App.3d 195, 83 Ill.Dec. 445, 470 N.E.2d 571 (1st Dist.1984). In Hartigan, the minor plaintiff injured himself while he and his parents were visiting defendants on defendants’ property. While the adults were talking plaintiff went to play with the other children in the yard and cut himself with a knife lying on top of a barbeque grill. Plaintiff, by his father, sued. Defendants counterclaimed against the father and brought a third party action against the mother claiming negligent supervision. These claims were brought under the Contribution Among Joint Tortfeasors Act. The court, citing Doyle, Wirth and Larson, held that parental immunity was not a bar to a claim under the statute alleging negligent supervision by parents. The court stated: “The use of parent-child immunity to insulate the parents from a contribution action is simply not consistent with our present system of equitable apportionment of fault.” Hartigan, supra, 128 Ill.App.3d at 199, 83 Ill.Dec. 449, 470 N.E.2d 571.

The contribution statute is concerned with culpability and not the ability of the injured to actually receive compensation. Accordingly, immunity doctrines do not automatically come into play. Walgreen’s and Regent claim the Aimones negligently supervised their son. They claim the Aimones are at least partly culpable for the accident. Pursuant to Doyle and Hartigan, the Aimones can properly be held liable under the Act.

Conclusion

Defendant Regent’s motion for summary judgment on.Counts III and IV is granted. All other motions are denied.


source: Caselaw Access Project

author: FRANK A. KAUFMAN, Chief Judge.

license: Public Domain

text:
    Joseph F. SALISBURY v. Margaret HECKLER, etc.
    No. Civ. No. K-83-950.
    United States District Court, D. Maryland.
    Jan. 8, 1985.

      Raymond H. Simmons, Jr., Baltimore, Md., for plaintiff.
    J. Frederick Motz, U.S. Atty., and Larry D. Adams, Asst. U.S. Atty., and Joseph Friedman, Social Sec. Admin., Baltimore, Md., for defendant.
   FRANK A. KAUFMAN, Chief Judge.

Plaintiff’s quest for Social Security disability insurance benefits, commencing as of October 24, 1980, was determined in his favor by the Administrative Law Judge (ALJ), (Tr. 13-14, 81), but thereafter unfavorably by the Appeals Council. (Tr. 230-33). It is from that adverse determination which became the Secretary’s final administrative decision, that plaintiff seeks review in this Court. The record discloses that plaintiff, born in 1929, suffers from “proztatotis [sic] diabetic, bladder contracture, vertigo, pain [and] numbness [in] leg muscles and right arm.” (Tr. 81). The Government agrees that since October 24, 1980 and thereafter, plaintiff could not perform his former employment as “a senior water and sewage plant operator [which] involved some rather strenuous work activities and was, therefore, medium work.” (Decision of Appeals Council, Tr. 7). The Appeals Council concluded that as to plaintiff’s exertional limitations, the grid regulations require the conclusion that plaintiff was not disabled. (Tr. 12 citing to CFR § 404.1569 and to Rule 202.14, Table No. 2 of Appendix 2, Subpart P, Regulations No. 4). As to plaintiff’s nonexertional, environmental limitations, the Appeals Council determined that they did “not significantly affect [plaintiff’s] residual functional capacity for light and sedentary work.” (Tr. 12).

In his opinion, the ALJ, after reviewing all of the medical evidence, found plaintiff’s testimony during the administrative hearing fully credible and determined that plaintiff could not perform even sedentary work and was totally disabled. (Tr. 18). By contrast, the Appeals Council found that “the claimant has the residual functional capacity to at least perform light work”. (Tr. 11). In so doing, the Appeals Council wrote:

Based on the claimant’s exertional limitations only, Section 404.1569 and Rule 202.14, Table No. 2 of Appendix 2, Sub-part P, Regulations No. 4, direct a conclusion that the claimant, considering his residual functional capacity, age, education, and work experience, is not disabled.
The claimant’s nonexertional limitations, that is, his environmental limitations, do not significantly affect his residual functional capacity for light and sedentary work and, therefore, considering that capacity within the framework of the above rule, the claimant is not disabled.

(Tr. 12). It is to be noted that in his decision, the ALJ made no reference to the grids.

It is also to be noted that the Appeals Council, in its decision, wrote that “the claimant’s statements and/or testimony with respect to the severity of his symptoms and resulting limitations or the opinion of Dr. Ronald C. Kretkowski, [a treating physician], that the claimant is unable to work are not supported by the overall record,” (Tr. 11), and that “the claimant’s testimony cannot be given full credibility.” (Tr. 10).

20 C.F.R. § 404.970(a) provides as follows:

The Appeals Council will review a case if—
(1) There appears to be an abuse of discretion by the administrative law judge;
(2) There is an error of law;
(3) The action, findings or conclusions of the administrative law judge are not supported by substantial evidence; or
(4) There is a broad policy or procedural issue that may affect the general public interest.

In repudiating the AU’s findings of credibility, the Appeals Council did not, as a matter of law, exceed its power. As Judge Peck wrote:

It is beyond dispute that the Appeals Council, and the Secretary, have the power to conclude that testimony, even if uncontradicted in the record, is not credible, since the Secretary is entrusted with the duty of making all findings of fact. Since the statutorily-mandated deference to findings of fact runs in favor of the Secretary, not the administrative law judge, the Appeals Council has the power to do so even if the administrative law judge has determined otherwise.

Beavers v. Secretary of Health, Education and Welfare, 577 F.2d 383, 386 (6th Cir. 1978). In Parris v. Heckler, citing, inter alia, to Beavers Judge Russell stated:

The statutorily-mandated deference runs in favor of the Secretary and the Appeals Council, not the AU and the Appeals Council may reach conclusions differing from those of the AU ...

733 F.2d 324, 326 (4th Cir.1984). However, as Judge Peck wrote in Beavers, a federal district court, on appeal by the claimant from the Secretary’s final, adverse administrative decision has the responsibility to determine

whether there is substantial evidence to support the Appeals Council’s decision, and when the administrative law judge has concluded that a witness’s testimony is credible, that is an important factor to consider. The notion that special deference is owed to a credibility finding by a trier of fact is deeply imbedded in our law. The opportunity to observe the demeanor of a witness, evaluating what is said in the light of how it is said, and considering how it fits with the rest of the evidence gathered before the person who is conducting the hearing, is invaluable, and should not be discarded lightly.

Beavers, supra, at 387 (footnote omitted).

If an Appeals Council decides to reject the credibility findings of an administrative law judge, or to disregard testimony which was clearly central to the administrative law judge’s determination, it should do so expressly, identifying the considerations which led it to its conclusion. Combs v. Weinberger, 501 F.2d 1361 (4th Cir.1974).

Id. at 387. In Parris, supra, at 326, Judge Russell wrote that “evidence supporting a conclusion may be considered less substantial when an impartial, experienced examiner has drawn conclusions differing from those of the Appeals Council,” noting also that “the substantial evidence standard itself is not modified by such disagreement” (at 327), and that the subjective evidence considered reliable by the AU “cannot take precedence over objective medical evidence or the lack thereof” upon which the Appeals Council may rely. In Beavers, Judge Peck wrote (at 388):

If the Appeals Council concludes that it must disagree with the credibility findings of an administrative law judge, then it may do so, but only if there is substantial evidence undercutting the reliability of the testimony, evidence which “a reasonable mind might accept as adequate to support a conclusion” that the administrative law judge was wrong about the credibility of the witness, in spite of the advantage of having heard the testimony and lived with the case.

In Parris, Judge Russell wrote (at 326) that “the Appeals Council may reach conclusions differing from those of the AU ... if supported by substantial evidence.”

In oral argument before this Court, counsel for the Government conceded that the record in this case discloses that the AU’s findings as to the credibility of plaintiff’s testimony before the AU are not only supported by substantial evidence, but are indeed supported by objective testimony and that accordingly, pursuant to the standards set forth in Beavers and in Parris, the Appeals Council in this case should not have refused to follow the AU’s determination of such credibility. While, in a given case, a remand by a federal district court, with regard to such a credibility question might be in order so that further evidence could be taken, see Breeden v. Weinberger, 493 F.2d 1002, 1011-12 (4th Cir.1974); see also Taylor v. Weinberger, 512 F.2d 664, 668 (4th Cir.1975); Jones v. Schweiker, 551 F.Supp. 205, 208 (D.Md. 1984), evidence which might enable the Appeals Council or an AU to explain (which the Appeals Council did not do in the within case) why such credibility is open to attack, the Government during oral argument in this Court agreed that the record in this case is sufficiently well developed to make such a remand inappropriate and to permit the AU’s credibility determination to stand and to be binding upon the Government. In this case, the plaintiff testified at length with respect to a number of limitations and impairments which rendered him unable to work: (1) Plaintiff suffers from incontinence for which he must wear a bag. (2) Plaintiff spends fifteen to thirty minutes every one and one-half hours taking care of the maintenance of the bag. (Tr. 73). (3) Plaintiff must drink plenty of water to avoid a burning sensation in his bladder. (Tr. 53). (4) Plaintiff must perform a blood test on himself with a glucose meter every two to four hours in order to regulate his blood sugar level. (Tr. 31). (5) Depending upon his blood sugar level, plaintiff often experiences a burning in his feet when he walks. (Tr. 53). (6) Plaintiff has an eye problem which has not cleared up as he had expected it would; it manifests itself in double vision. (7) Plaintiff wears an eye patch to correct that last mentioned problem, but still is unable to read at all or to write without a magnifying glass. (Tr. 57-58, 75-77). (8) Plaintiff experiences vertigo and nausea frequently and if he moves too fast, pain shoots down his neck and he falls. (Tr. 50). (9) Plaintiff has pain in his lower extremities when walking, sitting, or lying down. (Tr. 61-62).

The AU, finding all of plaintiff’s testimony to be “fully credible”, (Tr. 18), summarized it as follows:

He testified that he last worked on October 24, 1980. He was bleeding constantly and then had blood clots. He was bleeding especially when urinating. He was told that he had a tear near his prostate. He had an operation in October 1980. Because of continuing problems he had to have an additional operation in 1981. He now has to wear a bag. If he doesn’t drink a lot of water, it causes burning when he urinates. He also has constant headaches. When he walks, he has a burning sensation of his feet. It feels like he is walking on pebbles. In January 1982, he bought a glucometer in order to attempt to control his diabetes. He must have a blood test with the meter every four hours. He also has a problem with his eyes. He now wears a patch over the left eye. If he doesn’t wear the patch, he has double vision. He has vertigo and dizziness which lasts ten to fifteen minutes at a time. It is becoming more and more noticeable. It causes nausea and pain down the back of his neck. He also has pain in his hips, thighs, and legs. He has had three accidents when driving. His last accident was July 1982. He stated that he will not drive anymore. He stated that he is able to do minor cleaning. However, he has other people do his major cleaning.

(Tr. 17).

The ALJ not only found this testimony credible, but also relied heavily on it in making his determination, reiterating many of these observations in his final conclusions, (Tr. 17-18). Also, during the hearing before him, the ALJ expressly commented that “light work would be a problem as the doctor indicated you might hurt yourself .. with this dizziness. And sedentary work it would require more eye hand coordination, you have your problem now with your vision. You seem to be a very honorable man to me.. ” (Tr. 66).

The Appeals Council specifically observed in its decision that “the administrative law judge obviously placed great weight on the claimant’s testimony with respect to the severity of his symptoms and resulting limitation. In addition, the record contains two certifications by Dr. Ronald C. Kretkowski ... that state that the claimant is unable to work.” (Tr. 8). Nevertheless, the Appeals Council discounted most of plaintiff’s testimony, observing with respect to the limitations placed on plaintiff as a result of his bag maintenance, that

no anatomical or physiological abnormalities reflected in the record that could reasonably be expected to produce the functional limitations described by the claimant including his testimony that he is not able to work because it takes him 4 hours per day to maintain the bag he must wear because of some urinary incontinence or because he has to frequently do blood tests with a glucometer for control of his diabetes. Accordingly, the claimant’s testimony cannot be given full credibility.

(Tr. 10). The record does include a report of one consultative doctor that plaintiff had “adapted well” to wearing his bag. (Tr. 8). Yet, “adapting well” does not mean necessarily that plaintiff is not still required to spend a substantial amount of time maintaining his bag. Nor is there any evidence in the record which contradicts such assertion by the plaintiff. If indeed plaintiff is required to perform this task for one-half hour out of every two hours, then his capacity for even sedentary work could be severely curtailed.

There is also in the record a medical report which states expressly that “the patient needs to check his blood glucose with the use of his glucometer approximately four times a day in order to remain under good control.” (Tr. 187). As to plaintiff’s double vision, the Appeals Council merely stated that the doctor who diagnosed plaintiff’s problem as a Right VI Cranial Nerve Palsy thought such symptom “generally clears within 2-3 months,” (Tr. 189), but failed to comment upon that same doctor’s observation that on a second visit, plaintiff’s condition “appeared worse,” and that “[t]he double vision is a severely disabling symptom, or that if it did not clear up within 2-3 months, a “muscle surgery would be necessary approximately 6 months.” (Id. at 189). The Appeals Council did note that plaintiff was still wearing the eye patch at the August 12, 1982 hearing, over two months after the initial diagnosis, but it discounted the import of that fact with the comment that “the record contains no further evidence of treatment.” (Tr. 9).

As to plaintiff’s testimony regarding the severity and impact of his bouts of vertigo, light-headedness, numbness, weakness, and pain in his lower extremities, the Appeals Council commented that one result of electrodiagnostic studies showed that plaintiff “had stiffness of the neck and burning sensations [only] at times,’’ (Tr. 8), and that such studies were only “compatible with mild neuropathy,” (id. (both emphases included by Appeals Council)), and that plaintiff’s personal physician reported in April, 1982 that there had been no evidence of diabetic neuropathy, “of motor dysfunction or abnormality of dextrous movements, gait, or station.” (Tr. 187). Yet, once again, although the Appeals Council noted that this same doctor reported that claimants “main disability of two year duration has been vertigo and secondly, weakness of the lower extremities,” (Tr. 8), it did not seemingly recognize those findings as corroborative of the credibility of plaintiffs own testimony. Furthermore, that same doctor stated upon examination of claimant that plaintiff suffered from, inter alia, “[v]ertigo, secondary to vascular labyrinthitis,” “[l]eft hip osteoarthritis,” “[recurrent lumbosacral strain,” [and] “[l]ower extremity myopathy.” (Tr. 187). While that doctor did state, as the Appeals Council noted, that there is “no disorganization of motor function,” the doctor qualified that conclusion, by adding, “[e]xcept for the lower extremity.” (Tr. 187).

The Appeals Council, in its decision, referred to the report of a doctor who stated that the claimant “was seen because of episodes of vertigo, nausea, headache, confusion, as well as severe back pain, and pain down both legs. His examination at that time and subsequent studies have shown the fact that he has vertebral-basilar transient ischemic episodes due to severe vascular disease of the brain and peripheral neuropathy, a mixed sensory and motor neuropathy.” (Tr. 181). However, apparently without expressly considering that report in conjunction with claimant’s own testimony before the AU, the Appeals Council concluded that it did “not find this severe diagnosis confirmed in the record.” (Tr. 9).

The Appeals Council did rely upon the report of a consultative physician who expressed the view that plaintiff’s neurological problems resulted in a mild disability at worst. (Tr. 184, 9). Yet, the Appeals Council did not refer to the fact that that doctor, who was not plaintiff’s treating physician, also recommended that plaintiff “should have a psychological evaluation done, especially in the light ... [of] a [pri- or] nervous breakdown at one time and there seemed to be a lot of anxiety while [plaintiff] was giving history.” (Tr. 184).

In sum, the Appeals Council’s rejection of the AU’s findings of credibility is not supported by substantial evidence. But that does not mean that the Appeals Council should necessarily have affirmed the AU’s grant of benefits or, to put it another way, would have committed error if it had remanded plaintiff’s claim to the AU to take further evidence. That is so because the record does not include any in-depth evidence concerning whether plaintiff is a claimant who can or cannot perform any work available in the national economy.

In reaching its decision, the Appeals Council relied upon medical-vocational grid regulations in determining plaintiff’s lack of disability. The validity of those regulations has been recognized by the Supreme Court in Heckler v. Campbell, 461 U.S. 458, 103 S.Ct. 1952, 76 L.Ed.2d 66 (1983). Further, the Fourth Circuit has carefully considered precisely how the grids must be applied by the Secretary. Thus, in Grant v. Schweiker, 699 F.2d 189 (4th Cir.1983), Chief Judge Winter (at 192) held that the AU inappropriately, “conclusively” applied the grids “in the face of substantial evidence that [plaintiff’s] exertional impairment ... was coupled with two nonexertional impairments”, without making “specific findings” as to whether or not the nonexertional impairments did indeed exist. In Smith v. Schweiker, 719 F.2d 723 (4th Cir.1984), in a post-Heckler per curiam opinion, the Fourth Circuit wrote (at 725) that “not every malady of a ‘nonexertional’ nature rises to the level of a ‘nonexertional impairment’ and thus the relevant question becomes whether “a given nonexertional condition affects an individual’s residual functional capacity to perform work of which he is exertionally capable”; and that whether there is such an effect “is a question of fact.”

In the within case, the Appeals Council determined that the grids “direct a conclusion” that plaintiff was not disabled with respect to his exertional limitations, and that plaintiff’s wow exertional limitations “do not significantly affect his residual functional capacity for light and sedentary work and, therefore, considering that capacity within the framework of the above rule, the claimant is not disabled.” (Tr. 12, emphasis added). It is thus to be noted that the Appeals Council appropriately did not consider the grids controlling with respect to plaintiffs nonexertional limitations. But, nevertheless, in the view of this Court, the Appeals Council’s conclusions with respect to the severity of plaintiff’s symptoms, set forth supra, and with respect to the impact of those limitations on plaintiff’s capacity to perform light and sedentary work were not, for the reasons set forth supra, supported by substantial evidence. In that regard, it is to be noted that the record contains medical and other evidence of plaintiff’s vision difficulties, environmental limitations resulting from his bouts of vertigo, nausea, light-headedness and weakness and pain in his lower extremities, (Tr. 56-70, 75-77, 181, 187, 189), and that limitations of that type potentially constitute “nonexertional impairments,” see Social Security Rule 83-13 (Jan. 1983) at 62 (postural-manipulative impairments, visual impairments, environmental limitations), and are the kinds of impairments which have been held to limit a claimant’s capacity for light and sedentary work. See Belton v. Schweiker, 535 F.Supp. 1319 (D.C. 1982). Seemingly, however, the Appeals Council inappropriately rejected the AU’s findings of credibility, did not consider adequately the potential impact of plaintiff’s symptoms upon plaintiff’s capacity for light work, and, accordingly, failed to make the specific findings required by Grant and Smith with respect to whether plaintiff’s alleged nonexertional limitations rose, as of October 24, 1980, to the level of nonexertional impairments.

That failure on the part of the Appeals Council requires a remand by this Court for further findings at the administrative level with respect to whether plaintiff’s nonexertional limitations rendered plaintiff on October 24, 1980 unable to perform any work available in the national economy. On remand, further evidence should be presented bearing upon that issue, including the testimony of a vocational expert. See Smith v. Schweiker, supra at 725, Grant v. Schweiker, supra at 192. On remand, also, if the Secretary so desires, evidence relative to change, if any, in plaintiff’s condition since October 24, 1980, may be taken with respect to plaintiff’s entitlement to benefits after the remand hearing. But as to plaintiff’s entitlement to benefits from and after October 24,1980 and to and including an AU’s determination on remand of any change in plaintiff’s October 24, 1980 condition, the question of whether plaintiff is or is not entitled to benefits with respect to said period shall be decided on remand solely by determination of whether plaintiff, concededly unable to return to his former employment and concededly suffering from the problems which the ALT found to exist, could perform as of October 24, 1980 any work available in the national economy.

The remand hearing shall be held within seventy-five days from the date hereof. During oral argument before this Court, counsel for plaintiff and the Government agreed to those time requirements and also that the substantive contours of the remand proceeding should be as set forth in this opinion. This Court is accordingly today entering an appropriate remand Order.

      . Accordingly, the burden is on the Government to go forward to show that plaintiff can do other work available in the national economy. Hall v. Harris, 658 F.2d 260 (4th Cir.1981).


author: BERTELSMAN, District Judge:

text:
    LIBERTARIAN PARTY; David Bergland, Libertarian Party Candidate for President of the United States; Jim Lewis Libertarian Party Candidate for Vice-President of the United States; Thomas Vetter, Libertarian Party Candidate for the United States Representative from the Seventh Congressional District; and David Gailey and Mitch Wayne, Libertarian Party Electors, Plaintiffs, v. Drexell R. DAVIS, in his official capacity as Secretary of State and Chair of the State Board of Elections; and Raymond Bossmeyer, Jane G. Bruce, Marian H. Farris, Charles E. Rodgers, Janie G. Catron and Andrew Gus Parsley in their official capacity as members of the State Board of Elections, Defendants.

      Civ. No. 84-70.
    United States District Court, E.D. Kentucky, Frankfort Division.
    Jan. 9, 1985.
    David A. Friedman, Louisville, Ky., for plaintiffs.
    William L. Davis, Asst. Atty. Gen., and Ann Z. Stewart, General Counsel, Frankfort, Ky., for defendants.
   MEMORANDUM OPINION AND ORDER

BERTELSMAN, District Judge:

On August 28, 1984, representatives of the Libertarian Party presented a petition containing two thousand, four hundred fifty (2,450) signatures of Kentucky registered voters to the Secretary of State. This petition had been drawn up for the purpose of having the names of candidates of the Libertarian Party for President and Vice President of the United States placed upon the ballot for the Kentucky General Election to be held November 6, 1984. Plaintiffs were informed that the Secretary of State could not accept the petition because it did not contain the 5,000 signatures required by KY.REV.STAT. 118.315. A letter to this effect was given to representatives of the Libertarian Party at their' request on August 28, 1984, at 4:50 p.m. [See Plaintiffs Exhibit A — Letter from Assistant Secretary of State.]

Thereafter, on September 12,1984, Plaintiffs tendered a supplemental nominating petition containing two thousand nine hundred and nine (2,909) signatures, for David Bergland as candidate for President of the United States, and for Jim Lewis as candidate for Vice President of the United States. On September 12, 1984, Plaintiffs also tendered a petition containing four hundred thirty-nine (439) signatures for Thomas Vetter as candidate for United States Representative from the Seventh Congressional District. Plaintiffs were informed that the Secretary of State could not accept these petitions, due to their being filed fifteen (15) days after the filing deadline set out at KY.REV.STAT. 118.365. Letters to this effect were given to representatives of the Libertarian Party at their request on September 12, 1984, at 11:35 a.m. [See Plaintiffs’ Exhibits B and C— Letters from Assistant Secretary of State.]

However, the Libertarian Party did file on August 28, 1984, with the Secretary of State, a petition containing the required number of signatures, over four hundred (400), nominating Tony Suruda as the Libertarian candidate for the United States House of Representatives for the Sixth Congressional District. He was on the ballot on November 6,1984, as a candidate for that office.

Thereafter, on October 15, 1984, fifty-five (55) days after August 21, 1984, the date Plaintiffs admitted actual knowledge of the new filing date (see Plaintiffs’ complaint, paragraph 21), and ninety-four (94) days after the amended KY.REV.STAT. 118.365 became effective, Plaintiffs filed a complaint in the United States District Court, the Eastern District of Kentucky at Frankfort. This action was brought pursuant to 42 U.S.C. § 1983, alleging violations of Plaintiffs’ rights under the First, Fifth, and Fourteenth Amendments to the Constitution of the United States of America, as well as alleging that KY.REV.STAT. 118.-365 is unconstitutional. This complaint named as Defendants Drexell R. Davis [hereinafter Secretary of State] in his official capacity as Secretary of State and Chairman of the State Board of Elections, as well as the six individual members of the State Board of Elections. The complaint was accompanied by a motion for preliminary injunction and was not served upon the Secretary of State until three days later, October 18, 1984.

One day after filing of the suit, October 16, 1984, Plaintiffs’ attorneys telephoned the General Counsel for the Secretary of State to discuss a possible hearing date for Plaintiffs’ motion. Counsel for the Secretary of State expressed her willingness to appear at a hearing the next day, October 17, 1984, providing that the Secretary of State was properly served prior to the time of hearing. However, the Court ordered both parties to present memorandums upon the issues of the case, and set a hearing date of October 25, 1984, at 10:00 a.m.

The Court ordered Plaintiffs to serve their memorandum upon Defendants by October 18, 1984, but such memorandum was not served until October 21, 1984, four (4) days before the scheduled hearing. [See Defendants’ Exhibit — Affidavit of Ann Z. Stewart]. On October 22, 1984, Defendants served their reply memorandum upon Plaintiffs and upon the Court.

On October 25, 1984, a hearing was held on the Plaintiffs’ Motion for Preliminary Injunction. Following the hearing, an order was entered denying this motion, dated October 25, 1984.

Thereafter, the Defendants filed their Answer to the Plaintiffs’ complaint and a Motion for Judgment on the Pleadings on October 26, 1984.

In reviewing the relevant cases on ballot access, it is clear that KY.REV. STAT. 118.365 is constitutional and does not violate the Plaintiffs’ rights under the First, Fifth and Fourteenth Amendments to the United States Constitution. Lubin v. Panish, 415 U.S. 709, 94 S.Ct. 1315, 39 L.Ed.2d 702 (1974); Storer v. Brown, 415 U.S. 724, 94 S.Ct. 1274, 39 L.Ed.2d 714 (1974); American Party of Texas v. White, 415 U.S. 767, 94 S.Ct. 1296, 39 L.Ed.2d 744 (1974); Libertarian Party of Texas v. Fainter, 741 F.2d 728 (5th Cir.1984); Dart v. Brown, 717 F.2d 1491 (5th Cir.1983); Anderson v. Hooper, 498 F.Supp. 898 (D.N.M.1980); Anderson v. Hooper, 498 F.Supp. 905 (D.N.M.1980); Libertarian Party of Alabama v. Wallace, 586 F.Supp. 399 (M.D.Ala.1984); Anderson v. Celebrezze, 460 U.S. 780, 103 S.Ct. 1564, 74 L.Ed.2d 547 (1983); Maddox v. Wrightson, 421 F.Supp. 1249 (D.Del.1976); Libertari an Party of Florida v. State of Florida, 710 F.2d 790 (11th Cir.1983).

However, even if it were assumed, contrary to the Court’s finding, that Plaintiffs’ rights were violated, the extraordinary relief requested would be barred by laches. Laches, a reflection of the maxim “equity aids the vigilant,” arises when there has been an unwarranted delay which would work a hardship or disadvantage to another. Thus, those courts which have considered comparable claims have in effect balanced the interests of the parties and required that any claims against the state procedure be pressed expeditiously. As time passes, the state’s interest in proceeding with the election increases in importance as resources are committed and irrevocable decisions are made, and the candidate’s and party’s claims to be a serious candidate and a serious party who have received a serious injury become less credible by their having slept on their rights. Williams v. Rhodes, 393 U.S. 23, 34-35, 89 S.Ct. 5, 12-13, 21 L.Ed.2d 24 (1968); Kay v. Austin, 621 F.2d 809, 813 (6th Cir.1980); Maddox v. Wrightson, supra at 1251-1253.

In the case at bar, Plaintiffs waited forty-eight (48) days after the Secretary of State had refused to allow them to file their petition containing only two thousand, four hundred fifty (2450) signatures, and they waited ninety-four (94) days after the revised KY.REV.STAT. 118.365 became law before filing suit. Further, plaintiffs had constructive knowledge of the amendment to KY.REV.STAT. 118.365 through Baldwin’s Official Edition of the Kentucky Revised Statutes and Rules Service, 1984 Acts Issue, which was published on May 15, 1984, and was available to Kentucky subscribers at least by July 5, 1984. [See affidavit of Baldwin’s Publishers, Defendants’ Exhibit 3]. Mauney v. United States, 338 F.Supp. 1078 (E.D.Tenn.1971), affirmed 454 F.2d 273 (6th Cir.1972); Freeman v. Louisville & Jefferson County P & Z Com’n, 308 Ky. 360, 214 S.W.2d 582 (1948).

Moreover, Clint Newman, Assistant Secretary of State of Kentucky, testified that as of October 25, 1984, voting machines had been set in virtually all of Kentucky’s counties. He further stated that due to the large field of candidates and an extremely crowded “ballot face,” the inclusion of additional Presidential and Vice Presidential candidates would require that the entire “ballot face” be redesigned and reprinted for Kentucky’s counties. Also, the cost of reprinting ballots and resetting voting machines would be significant to counties and government. On the basis of these facts before it, it is the conclusion of this Court that the failure of the Plaintiffs to press their case when they should have known that an injury had occurred is fatal to their receiving any relief.

Judgment Accordingly.


author: GRIESA, District Judge.

text:
    COUDERT BROTHERS, a Partnership, Plaintiff, v. EASYFIND INTERNATIONAL, INC., Kenneth Mandeno Sowden, and Glen Ernest Ion, Defendants.
    No. 84 Civ. 3424.
    United States District Court, S.D. New York.
    Jan. 14, 1985.

      Stephen Sayre Singer, New York City, for plaintiff.
    Todd L. Herbst, Max E. Greenberg, Cantor & Reiss, New York City, Seth Price, Stokes, Shapiro, Fussell & Genberg, Atlanta, Ga., for defendants.
   OPINION

GRIESA, District Judge.

Defendant Easyfind International, Inc. removed this action to the federal court, alleging jurisdiction based on diversity of citizenship. Plaintiff Coudert Brothers moves to remand the action to the state court. The motion is granted.

Coudert is a law firm based in New York City. It is a partnership. Most of its partners are citizens of New York. It has an office in Paris and a few of its partners reside in France. They are United States citizens. However, their residence in France results in the fact that they are not citizens of any state of the United States for the purposes of diversity jurisdiction. These facts are conceded by Easyfind. Defendant Easyfind is a Delaware Corporation. Defendant Ion is a resident and citizen of Australia; defendant Sowden is a resident of the State of Georgia and a citizen of New Zealand.

The statute provides for diversity jurisdiction where an action is between—

(1) citizens of different States;
(2) citizens of a State and citizens or subjects of a foreign state;
(3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; ...

If Coudert could be considered a citizen of New York there would be diversity jurisdiction. However the cases have held that, for the sake of applying the diversity jurisdiction statute, a partnership must be considered to be a citizen of any and all states and foreign countries of which its partners are citizens. Cunard Line v. Abney, 540 F.Supp. 657, 661 n. 6 (S.D.N.Y.1982); Coopers & Lybrand v. Cocklereece, 506 F.Supp. 587, 588 (S.D.N.Y.1981); Great Southern Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 20 S.Ct. 690, 44 L.Ed. 842 (1900).

If we were dealing with the situation where a partnership had partners who were citizens of New York and citizens of France, there would be diversity jurisdiction under subdivision (3) of the statute. However our case is different. The status of the Coudert partners residing in France is that they are still citizens of the United States and are not citizens of France. If these partners were suing by themselves they would not fit within any of the categories referred to in the statute, since they are neither citizens of a state of the United States nor are they citizens or subjects of a foreign state. Therefore a suit by them could not give rise to diversity jurisdiction. DeWit v. KLM Royal Dutch Airlines, N.V., 570 F.Supp. 613, 617 (S.D.N.Y.1983); Sadat v. Mertes, 615 F.2d 1176, 1180 (7th Cir.1980); Smith v. Carter, 545 F.2d 909, 911 (5th Cir.) cert. denied, 431 U.S. 955, 97 S.Ct. 2677, 53 L.Ed.2d 272 (1977); 13B C. Wright, A. Miller, E. Cooper, Federal Practice and Procedure § 3621 (1984).

The precise problem in the present case is somewhat different. The question is what to do about the Coudert partnership, which consists of partners who are citizens of New York and partners who are not citizens of either a state of this country or of a foreign state. It would appear to be a logical extension of the rules of law referred to above that the Coudert partnership is not a party who can sue in a federal court under diversity jurisdiction. For jurisdictional purposes it must be considered to include partners who lack the citizenship status required. Therefore there is not complete compliance with the statute, and subject matter jurisdiction is lacking. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806).

The motion to remand the action to the state court is granted.

So ordered.


text:
    Maude E. MYERS v. Margaret M. HECKLER, etc.
    Civ. No. K-81-1430.
    United States District Court, D. Maryland.
    Jan. 14, 1985.
    Elizabeth Renuart, Legal Aid Bureau, Inc., Frederick, Md., for plaintiff.
    J. Frederick Motz, U.S. Atty., and Larry D. Adams, Asst. U.S. Atty., Baltimore, Md., for defendant.
   FRANK A. KAUFMAN, Chief Judge.

This case is before this Court for the second time, having originated in this Court in 1981. Plaintiffs applications for supplemental security income and widow’s benefits date back to 1979. This case has been far too long in the administrative and judicial channels and requires the promptest kind of attention and determination.

Originally, plaintiff sought widow’s benefits as well as supplemental security income benefits. However, plaintiff has long since abandoned her quest for widow’s benefits.

On June 9, 1982, this Court remanded to the Secretary, for further administrative proceedings, plaintiff’s within claim for supplemental security income benefits on the basis that, as the Secretary conceded in this Court in June, 1982, plaintiff’s past sewing machine work is correctly classified as “light,” as opposed to “sedentary,” work. Further, the Secretary agreed in this Court in June, 1982 that there is no question but that plaintiff cannot return to her past sewing machine work because of her disabilities.

After this Court’s remand order of June 9, 1982, the Administrative Law Judge (AU), who conducted the hearing on remand, concluded that plaintiff was entitled to supplemental security income benefits. However, the Appeals Council reversed that determination by the AU. It is from that reversal that plaintiff appeals once again to this Court.

Plaintiff seeks a reversal rather than a remand. However, plaintiff requests, on a secondary basis, that if there is a remand, she should have an opportunity to present new, noncumulative evidence. The Government, in argument before this Court on January 9, 1985, on the record, stated that it did not oppose a remand or the opportunity for plaintiff to present such further evidence. In so doing, government counsel agreed, once again, that plaintiff’s prior work as a sewing machine operator in a shoe factory constituted light work and not sedentary work and that plaintiff is not able to perform light work. While the vocational expert, in the course of giving testimony during the remand administrative proceeding, seems to have indicated that there may be sewing-machine-operator type of work which can appropriately be classified as sedentary, the record does not contain substantial evidence showing that given plaintiff’s age and skills, plaintiff has the ability to transfer those skills so as to enable her to perform one or more jobs of a sedentary work nature which are available in the national economy in substantial numbers.

The Appeals Council, in its decision of December 5,1983, could, in the view of this Court, have remanded the case to the AU for further proceedings in order to give the Secretary the opportunity to present further evidence of the type described in the preceding sentence of this opinion. However, instead, the Appeals Council, in reversing the AU’s determination on remand from this Court, concluded, inter alia, that plaintiff’s subjective testimony was not credible. The Appeals Council so stated in a single, cursory observation, without making any specific findings as to which portions of plaintiff’s testimony were not credible. The Appeals Council does have the right to reject an AU’s determination with regard to credibility of testimony but, in order so to do, the Appeals Council is required to meet certain clear standards. See Parris v. Heckler, 733 F.2d 324 (4th Cir.1984); Beavers v. Secretary of Health, Education and Welfare, 577 F.2d 383 (6th Cir.1978). This Court has recently had occasion to review the application of those standards in Salisbury v. Heckler, 601 F.Supp. 516 (1985). Accordingly, in any event, the action of the Appeals Council requires reversal or remand by this Court. However, that does not mean, as stated supra, that the Appeals Council could not have appropriately remanded the within case to the AU for further proceedings after the AU’s decision on remand from this Court.

Plaintiff, in written and oral argument to this Court, strongly urges this Court to reverse the action of the Appeals Council and to enter judgment in favor of plaintiff. It is “appropriate to reverse without remanding where the record does not contain substantial evidence to support a decision denying coverage under the correct legal standard and when reopening the record for more evidence would serve no purpose.” Breeden v. Weinberger, 493 F.2d 1002, 1012 (4th Cir.1974) (emphasis added). Herein, it cannot be said that reopening the record for more evidence will serve no purpose. That is because, on further remand, the plaintiff will have the opportunity to present new, nonrepetitive evidence and, in any event, a vocational expert can be asked to testify before an AU as to whether or not plaintiff can perform sedentary work available in the national economy in substantial quantity, 1. e., sedentary work to which plaintiffs skills are transferable. In the light of up-to-date testimony concerning plaintiffs disabilities and in the light of such further specific evidence from the vocational expert, the AU will be able to make the determination required in this case, i.e., whether plaintiff can perform any work which is available in the national economy in substantial quantity. During the hearing held on January 9, 1985 in this Court, the Government agreed, inter alia, that on remand the sole determination to be made is the one which this Court has specifically set forth in the preceding sentence hereof, and that a further hearing will be conducted by an AU, commencing no later than March 11, 1985.

In rejecting plaintiffs quest for reversal and entry of judgment in favor of plaintiff at this time, this Court has not lost sight of the fact that the Secretary has already had opportunities in two administrative hearings, held both before and after this Court’s June 9, 1982 remand, to attempt to bear the Secretary’s burden of establishing that plaintiff can perform any work in the national economy available in substantial quantity. Accordingly, plaintiff's argument that the Government should not be given a third opportunity is not without a certain degree of merit. See Taylor v. Weinberger, 512 F.2d 664, 668 (4th Cir. 1975); Ray v. Secretary of Health, Education & Welfare, 465 F.Supp. 832 (E.D.Mich, S.D.1978); Lochte v. Schweiker, No. R-82-491 (D.Md. Nov. 30, 1984) (mem. op.). But, in this case, at this time, the overall interests of society are best served by a remand, for a limited specific purpose and with an agreement by the Government to provide a prompt hearing, rather than a reversal.

In Taylor, Judge Craven considered the Government’s quest for a remand rather than a reversal and noted that the Government “suggested that if there were a flaw in the proceedings below it consisted simply of an understandable failure on the part of the hearing examiner to call a vocational expert as a witness. The unstated assumption seems to be that any such expert will, of course, testify that Mrs. Taylor possesses the necessary skill to work as a keypunch operator and telephone operator. The assumption seems doubtful in the present state of the record.” Id. Accordingly, Judge Craven concluded that the Secretary should not be permitted “to start over again in his determination to deny benefits to Mrs. Taylor.” Id. In Ray and in Lochte, Judges Feikens and Ramsey, respectively, seem to have concluded, at least implicitly, that in those cases there did not exist a sufficient possibility that a reopening of the record would provide evidence which would serve a sufficiently useful purpose. Accordingly, in those cases, the standard enunciated in Breeden, 493 F.2d at 1012, which is quoted supra at page 529, was apparently not met. In the within case, by way of contrast, this Court believes that the additional testimony of a vocational expert will provide an appropriate basis for an AU to determine whether there exists in the national economy in substantial quantity one or more sedentary type of jobs which plaintiff can perform. If, on remand, the Secretary is not going to be ready to produce such evidence at an administrative hearing before an AU to be commenced no later than March 11, 1985, then the Secretary should, as promptly as possible after the date hereof, make payment to plaintiff of the supplemental security income benefits to which she would, under such circumstances, be entitled. On the record during the proceeding on January 9, 1985, government counsel agreed that that was an appropriate direction for this Court to issue to the Secretary. Additionally, this Court asks the AU, who presides at the administrative hearing, to make available to the vocational expert in advance of the administrative hearing a copy of this opinion, and the AU and all others who have anything to do with the handling of this case on remand, including the Appeals Council, if this case is once again before it, to proceed as expeditiously as possible so that the Secretary can enter at an early date a final administrative decision. Counsel on both sides agreed during the said January 9, 1985 hearing that such requests were appropriate and desirable.

This Court is today entering an Order implementing the within opinion.

      . A copy of that opinion has been placed in the court file in this case.

      . A copy of Judge Ramsey's opinion in Lochte has been placed in the court file in this case.


author: SWEET, District Judge.

text:
    Mr. Ramon GILLEAD, Plaintiff, v. FORDHAM HILL OWNERS’ CORP., Lessor, Defendant.
    No. 84 Civ. 8797 (RWS).
    United States District Court, S.D. New York.
    Jan. 14, 1985.
   MEMORANDUM OPINION

SWEET, District Judge.

This is a pro se § 1983 action seeking recovery for the alleged unconstitutional eviction of Ramon Gillead (“Gillead”) pursuant to a cooperative conversion plan authorized by Section 61 of the New York Rent Stabilization Code. Defendant E.T. Williams (“Williams”), the owner of the shares in Gillead’s apartment, has brought a motion to dismiss for failure to state a claim upon which relief can be granted. The motion is granted.

The court sympathizes with the frustrations of Gillead in his effort to retain possession of an apartment in which he had lived for a decade. However, the attack Gillead brings upon the statute authorizing the cooperative conversion plan does not state a federal cause of action.

Statutes which provide preferences for senior citizens in the housing market have been upheld by the state courts. See Parrino v. Lindsay, 323 N.Y.S.2d 689, 323 N.Y.S.2d 689, 272 N.E.2d 67 (1971); Reinner-Kaiser v. McConnochie, 429 N.Y.S.2d 343, 429 N.Y.S.2d 343 (1979). It is well settled that a benefit can be extended to a class such as senior citizens, consistent with the mandates of the Due Process and Equal Protection clauses, as long as the benefit is rationally related to the achievement of a legitimate state objective. Richardson v. Belcher, 404 U.S. 78, 81-82, 92 S.Ct. 254, 257, 30 L.Ed.2d 231 (1971). Under that standard, I hold that the benefit here extended — an exemption from eviction under certain cooperative plans — is rationally related to the legitimate state objective of preserving the stability of the housing stock available to senior citizens. No discrimination violative of the Constitution is present on the facts as alleged by the plaintiff. The motion for summary judgment is granted, and the clerk is directed to enter judgment dismissing the complaint.

IT IS SO ORDERED.


author: WARREN, District Judge.

text:
    The UNITED STATES SHOE CORPORATION, an Ohio Corporation, Plaintiff, v. Patrick A. HACKETT and Rosemary H. Hackett, Defendants.
    No. 84-C-0176.
    United States District Court, E.D. Wisconsin.
    Jan. 15, 1985.

      Gary P. Lantzy, Kohner, Mann & Kailas, S.C., Milwaukee, Wis., for plaintiff.
    Michael A. Bowen, Foley & Lardner, Milwaukee, Wis., for defendants.
   CASE STATEMENT

WARREN, District Judge.

This is a collection action based on diversity jurisdiction. Defendants responded to plaintiff’s complaint by moving to dismiss on the ground that the complaint failed to state a claim upon which relief can be granted, or, in the alternative, for summary judgment. Plaintiff resisted and by cross-motion seeks summary judgment. Both sides have filed extensive briefs and affidavits, and the Court has heard oral argument. Furthermore, since one of defendants’ business entities, G.I. Corporation, Inc., formerly Graebels, Inc., has filed a petition under Chapter 11 of the Bankruptcy Code, and commenced a preference suit against the United States Shoe Corporation claiming a preference of $13,219.13, the parties have entered into a stipulation whereby the alleged preference suit has been settled and the amount of that settlement added to the plaintiff’s prayer for relief herein subject to various procedural guarantees. Thus the prayer in this case is increased from $77,788.26 to $84,788.26. The Court has approved that stipulation. The following shall constitute the Court’s findings in this case with respect to the motions under Rule 12(b) and Rule 56, F.R. C.P.

FINDINGS AND DECISION

Plaintiff herein is an Ohio corporation engaged in the manufacturing of shoes. Defendants are a husband and wife engaged in retail shoe sales in and around the Milwaukee area. They have previously done business through a variety of corporate entities, to-wit, Hackett Enterprises, Inc., Graebels, Inc., Graebel’s Fond du Lac Shoe Corporation, Inc., and Mequon Shoe Corporation. On December 28, 1976, all four corporations were merged and the sole surviving corporation was Graebels, Inc.

For some years prior to the merger, the Hacketts had been expanding their business endeavors. During the period in question in this case, Hackett Enterprises, Inc. would frequently make wholesale shoe purchases for various other Hackett corporations. In so doing, Hackett Enterprises would order shoes from the plaintiff with the purchase order directing delivery to other Hackett stores, but with instructions that the billings were to be rendered to Hackett Enterprises, Inc. at 7630 West Capitol Drive, Milwaukee, Wisconsin 53222. A similar practice was sometimes followed with respect to purchase of other supplies for the Hackett corporations.

Anthony P. Rastani was the Regional Credit Manager of the United States Shoe Corporation who had oversight of the various Hackett business entities during the period from 1973 through May, 1978. Rastani was well acquainted with both defendants and dealt with all of the Hackett business entities at various times. He testified on deposition that plaintiff had a new Director of Credit in 1971 or 1972 and this person began seeking personal guarantees on all larger or marginal business accounts. Rastani sought and obtained, on December 21, 1973, a personal guaranty from Patrick Hackett and Rosemary Hackett, as individuals, covering the debts of “HACKETT ENTERPRISES, INC., a Wisconsin corporation d/b/a GRAEBELS, whose principal address is 7630 West Capitol Drive, Milwaukee, Wisconsin 53222.” A copy of this document is attached hereto as Attachment A. The form was one prepared by the plaintiff’s Legal Department. Rastani indicated in his affidavit and deposition that words describing the debtor on this form had been prepared by him during a conversation with Hackett. He testified that the plaintiff chose all the language of the guaranty and that Hackett signed the document just the way it was submitted to him (Rastani Dep. T-35).

At the time the guaranty at issue was sought and obtained, the Hacketts were purchasing, through Hackett Enterprises, Inc., the start-up inventory for a new store in the Bayshore Shopping Center. Thus the purchases were substantially larger, than the on-going purchases made through Hackett Enterprises for the regular course of business of the various outlets. Mrs. Hackett’s affidavit explains that the couple wanted to pay off the start-up costs over a 36-month period on an installment basis. The plaintiff agreed to the proposal but insisted that the guaranty be provided in connection with this special arrangement. Defendants’ affidavit avers that the debt arising from the start-up inventory purchase was retired over a 36-month period as contemplated, and that by 1976 or early 1977 at the latest, that debt had been paid in full. This contention was not refuted by plaintiff and the parties agree that the obligation being sued upon represented purchases made after the merger of the earlier corporations into Graebels, Inc.

The record further indicates that on January 29, 1974, a security agreement was entered into between Mequon Shoe Corporation and the United States Shoe Corporation wherein the debtor was described as a “corporation in good standing under the laws of the State of Wisconsin” and that it “is doing business as Graebels.” In transmitting a copy of the agreement to defendants, plaintiff addressed it to “Mr. Pat Hackett, Graebels, Inc.” It is clear and undisputed that before, during, and after the submission of the guaranty, Rastani was familiar with the various Hackett entities and their practice of doing business as Graebels.

On December 28,1976, about three years after the guaranty described above, articles of merger were filed under which Hackett Enterprises, Inc., Mequon Shoe Corporation, Inc., Graebel’s Fond du Lac Shoe Corporation and Graebel's, Inc. were merged into a single corporation under the name of the surviving entity, “Graebels, Inc.” Under Article IV of said document, the assets and liabilities of the constituent corporations were transferred to the survivor. Hackett Enterprises, Inc. ceased to exist as of the date of the merger and conducted no business thereafter. The purchases involved in this lawsuit were made during 1982 and 1983 and do not cover purchases made by any business entity while Hackett Enterprises, Inc. was still in existence. After the merger described above, the Hacketts continued to control Graebels, Inc. and to conduct business in said name. Neither Patrick Hackett nor Rosemary Hackett ever formally, in writing or otherwise, revoked the guaranty executed by them on December 21, 1973.

It is undisputed that the Hacketts never formally advised the plaintiff of the merger of the various corporations into Graebels, Inc. However, it is also clear that plaintiff had knowledge of the separate corporate entities and did business with each of them.

Under common law, the obligations devolving upon one who is a guarantor under a suretyship agreement are derived from the terms of the agreement. Mitchell Street State Bank v. Froedtert, 169 Wis. 120, 170 N.W. 822 (1919). Thus the scope of a guaranty, as to duration and obligations covered, will be determined by the document which creates it.

Where the language of a guarantee contract is unclear, the Court may consider parol evidence to determine the intentions of the parties. As noted in Wisconsin REIT v. Weinstein, 509 F.Supp. 1289, 1295 (E.D.Wis.1981),

“The court must determine if there is ambiguity in the language. If there is, then it is for the finder of fact to resolve, based upon the parole evidence, the meaning of the instrument, unless the extrinsic evidence is not conflicting or no conflicting inferences can be drawn from it....”

In this case, there is a great deal of extrinsic evidence that is not conflicting as to the facts. Therefore, the Court believes this action may appropriately be disposed of as a matter of law.

The guaranty at issue by its terms was to “... continue until expressly revoked by written notice to U.S. Shoe____” If the parties intended that a guaranty shall continue for an indefinite time, it will be operative until rightfully revoked or otherwise terminated, Thiensville Creamery Co. v. Hickcox, 165 Wis. 537, 162 N.W. 660 (1917).

Where subsequent to the execution of a guaranty or suretyship an obligor commercial enterprise undergoes a change in name, location, composition, structure, or the like, it is frequently argued by a guarantor or surety, upon the obligor’s default, that such changes serve to release the obligor from its liability to the obligee. As a general proposition, the courts have taken the position that such liability is not terminated merely because the obligor business undergoes a change of name or location; in the type of business conducted; from a sole proprietorship to a corporation; from a partnership to a corporation; by the transfer of its assets to another corporation or by its reincorporation; by the takeover of a corporation by its creditors; or by a corporation’s dissolution or cessation of business. 69 A.L.R.3d 567 § 2(a) (1976).

Those cases where it has been held that some change in the identity of the debtor released the guarantor were decided on the grounds that the change had the effect of creating a different contract on which the guarantor never intended to be liable. 38 Am.Jur.2d Guaranty § 81 (1968). Some of the older cases indeed seem to stand for the proposition that a guarantor has the right to prescribe very technically the exact terms upon which he will enter into a guaranty and that any variation from those terms vitiates his obligation, Peara v. Atlanta Newspapers, Inc., 120 Ga.App. 163, 169 S.E.2d 670 (1969). Other courts have taken the position that only changes that produce harm to the guarantor will serve to release the obligation.

Thus, as a common proposition, the courts have not permitted the guarantor to escape liability based upon a mere change of name or location without more. It is only where transformation of the obligor results in increased risk to the surety that release of the latter becomes a consideration. 38 Am.Jur.2d Guaranty § 81 (1968).

Here, plaintiff argues that both before and after the merger there was a continuity of control; that the nature of the business remained the same; that the same stores were still selling shoes under the name “Graebels”; and that the merger amounted to a change of form, but not of substance. Defendants contend that the guaranty was drafted by United Shoe and must be construed against United Shoe. Defendants also argue that the guaranty was sought by and intended by the parties to undergird a particular transaction. They claim that the application of a 1973 guaranty for the debts of Hackett Enterprises, Inc. to the 1982 and 1983 debts of a bankrupt Graebels, Inc. demonstrates the expansion of risk which should vitiate any liability.

Plaintiff presents Mountain States Telephone and Telegraph v. Lee, 95 Idaho 134, 504 P.2d 807 (1972), as being a close parallel to the case at bar. There, Lee Pontiac d/b/a Trans Magic Airlines operated a business under the latter name. Lee guaranteed the payment of the “Trans Magic Airlines” account to Mountain States Telephone. Trans Magic Airlines later was incorporated and the assets of Lee Pontiac transferred to the new corporation with Lee participating. The Supreme Court of Idaho held that Lee was estopped to deny liability under these circumstances where he, as president, participated in the change without withdrawing the guaranty or advising the telephone company. 504 P.2d at 809.

Plaintiff feels that the scope and nature of the Graebels operation was the same before and after the merger in 1976 and that Patrick and Rosemary Hackett should be estopped to deny liability on the guaranty. New York American v. Hub Advertis ing Agency, 136 Misc. 596, 240 N.Y.S. 367 (1930); D.N. & E. Walter & Company v. Zuckerman, 214 Cal. 418, 6 P.2d 251 (1931) ; Massey-Ferguson, Inc. v. Finocchiaro Equipment Co., 496 F.Supp. 655 (E.D. Penn.1980), aff'd, 649 F.2d 859 (3rd Cir. 1981). The plaintiff’s position is that the Court should not give credence to form over substance. Defendants argue that the change here involved substance and not merely form.

The defendants rely on Teledyne Mid-America Corporation v. HOH Corporation, 486 F.2d 987 (9th Cir.1973) for the proposition that an original guaranty by individuals of the debts of a proprietorship, C.W. Shafer, d/b/a Shafer Distributing Company, which was later incorporated, merged and reborn as a wholly-owned subsidiary of HOH Corporation, were released because the entity the creditors sought to reach no longer remotely resembled the original obligor. Defendants also call the Court’s attention to International Paper Company v. Grossman, 541 F.Supp. 1236, 1241 (N.D.Ill.1982), where the court explained:

New York’s appellate court dealt a half-century ago with the identical question posed by this ease — the effect on a guaranty of the debtor’s merger into another corporation (with the consequent loss of identity of the debtor) — and has decided that the guarantor could not be held liable for defaults occurring after the merger, [citing case] That result ... follows a fortiori where the extensions of credit on which plaintiff sues were given after the merger. (Emphasis original). ____To distort and extend the language of the Guaranty to a situation not contemplated or provided for when it was drafted would do violence to the principles announced in the Illinois case law as well as in Worth [Corp. v. Metropolitan Casualty Ins. Co. of New York, 142 Misc. 734, 255 N.Y.S. 470 (1932)] and other New York cases.

As in Teledyne, there is no question in the present case that the transactions on which plaintiff sues took place after the merger.

However, the case that gives this Court the clearest guidance as to what the appropriate decision in this action should be is Bernardi Bros., Inc. v. Great Lakes Distributing Inc., 712 F.2d 1205 (7th Cir.1983). In that case a gentleman named Estevez, planning to open a car wash business in Chicago, arranged for Great Lakes Distributing to guarantee the installment note for the car wash equipment. Andre Estevez was a sole proprietor. Between the time of the guaranty and the execution of the sales contract on the equipment, he incorporated his business as “Finest Car Wash, Inc.” After Estevez defaulted, the car wash equipment manufacturer sued Great Lakes as guarantor. Defendant argued release by reason of material changes. Id. at 1206-08.

The Seventh Circuit panel hearing Bernardi noted that in Essex International, Inc. v. Clamage, 440 F.2d 547, 550 (7th Cir.1971), the court had said:

“Unless there is some material change in the business dealings between the debtor and the creditor-guarantee and some increase in the risk undertaken by the guarantor, the obligation of the guarantor is not discharged.”

The court then proceeded to examine whether or not the facts of Bernardi constituted a “material change” in the relationship of the parties so as to justify'-release. It felt that the only result of the incorporation was to divide Estevez’s personal assets into the corporate assets of Finest Car Wash and the remaining personal assets of Estevez. Since Estevez was personally liable on the note under either case, Great Lakes Distributing remained liable on the guarantee.

The case at bar is illuminated by Bernardi, but the facts are different. This is not a case where the original debtor merely changed its name or form of business entity. Assuredly the situation is complicated by the wording of the guaranty document. The Hacketts’ guaranteed the obligations of

“HACKETT ENTERPRISES, INC., a Wisconsin corporation, d/b/a GRAEBEL’S whose principal address is 7630 West Capitol Drive, Milwaukee, Wisconsin 53222.”

The Court interprets this to mean the Hacketts were guarantying the obligations of Hackett Enterprises when doing business as Graebels. The affidavits show that this is a role that Hackett frequently played, i.e., that of a purchasing agent for the various corporations. At the time the guaranty was executed, however, there were four distinct corporations. There is no indication that United Shoe, in 1973, was seeking in this document the guaranty of any of the other corporations. Indeed, shortly after the execution of this guarantee, United Shoe and Mequon Shoe Corporations executed a security agreement wherein Mequon Shoe Corporation was described as “doing business as Graebels.” If the parties intended the 1973 guaranty to cover the four merged corporations doing business as Graebels, Inc. in its own right, why did United Shoe execute the security agreement with Mequon Shoe Corporation in January, 1974? After the merger, Hackett Enterprises ceased to exist. Graebels, Inc. came into being doing the business formerly done by all four corporations sometimes in their own names, sometimes under the non-corporate trade name “Graebels.” It is clear to the Court that the risk inherent in guarantying the obligations of “Hackett Enterprises d/b/a Graebels” is nowhere near as great as that in gurantying the combined obligations of the four corporations merged into a new entity entitled “Graebels, Inc.”

This view of the case is buttressed by the affidavit of the Hacketts to the effect that the guaranty was meant to cover the one-shot start up inventory of the new Bay-shore store and contemplated a pay-off within 36 months. This averment was not controverted by plaintiff’s materials.

Because it believes that the undisputed facts before it present a case where the entity whose debts were guaranteed underwent a change that significantly expanded the guarantor’s risk and because the new entity is an entirely different business organization than the one whose debts the Hacketts guaranteed, the Court does herewith GRANT defendants' motion for summary judgment against the plaintiff and in favor of defendants.

EXHIBIT A GUARANTY

GUARANTY

To: THE UNITED STATES SHOE CORPORATION (and subsidiaries)

1658 Herald Avenue

Cincinnati, Ohio 45212

IN CONSIDERATION of your having at the request of the undersigned agreed to establish credit for HACKETT ENTERPRISES, INC., a Wisconsin Corporation, d/b/a GRAEBEL's whose principal address is 7630 West Capitol Drive, Milwaukee, Wisconsin 53222. (“Debtor”), for merchandise sold and delivered or to be sold and delivered in the future, or for other monetary or credit advances heretofore, concurrently or subsequently granted to the Debtor by The United States Shoe Corporation and its subsidiaries (“U. S. Shoe”), and in the further consideration of the sum of ONE DOLLAR and other good and valuable consideration in hand paid to the undersigned, the receipt of which is hereby acknowledged, the undersigned (jointly and severally) does hereby unconditionally guarantee the prompt payment at maturity of any and all indebtedness now due U. S. Shoe or which may hereafter by incurred by said Debtor to U. S. Shoe, together with reasonable collection charges and reasonable attorneys’ fees. This Guaranty shall extend to and cover renewals of any indebtedness guaranteed hereby or extensions of time for payment thereof and shall not be affected by any surrender, exchange, acceptance or release by U. S. Shoe of any other security held by it for any indebtedness hereby guaranteed, now existing or hereafter arising.

THIS GUARANTY shall continue until expressly revoked by written notice to U. S. Shoe, but in no case is it to be revoked as pertaining to merchandise already delivered or ordered and in process of manufacture, or for monetary advances granted to the Debtor prior to actual receipt of said notice of revocation. Such notice of revocation shall be sent by registered or certified mail, return receipt requested, to U. S. Shoe at the address shown above, or to such other address as may be specified in writing by U. S. Shoe.

The undersigned hereby agrees that this Guaranty shall bind the heirs, executors, administrators, successors and assigns of the undersigned, but in no event shall the obligations of the undersigned hereunder be transferred or assigned without the prior express written consent of U. S. Shoe.