author: DONALD J. PORTER, District Judge.

text:
    Linda CLIFFORD; Melvina Lesmeister and Pam James, On Behalf of Themselves and All Others Similarly Situated, Plaintiffs, v. William JANKLOW, Governor of the State of South Dakota and James Ellenbecker, Secretary of the South Dakota Department of Social Services, and Successors of the Above, Defendants.
    Civ. No. 83-3092.
    United States District Court, D. South Dakota, C.D.
    Sept. 14, 1984.

      Mark Falk, Black Hills Legal Services, Inc., Rapid City, S.D., for plaintiffs.
    Janice Godtland, Asst. Atty. Gen., Dept, of Social Services, Brent A. Wilbur, May, Adam, Gerdes & Thompson, Sp. Asst. Atty. Gen., Pierre, S.D., for defendants.
   MEMORANDUM OPINION

DONALD J. PORTER, District Judge.

Pending before the court is the question of whether equitable relief should be granted to the plaintiff class in light of the affirmance of the Judgment in this case by the United States Court of Appeals, Eighth Circuit, (Clifford, et al., v. Janklow, et al., 733 F.2d 534, 8th Cir.1984).

This action was commenced December 7, 1983, was tried on the merits at a bench trial on January 10 and 11, 1984, and on January 17 judgment was entered in favor of plaintiffs, permanently restraining defendants from administering the South Dakota Low Income Energy Assistance Program (LIEAP) whereby plaintiff class were denied full participation in LIEAP, in violation of federal law. The judgment required defendants to immediately fully include the plaintiff class in the South Dakota LIEAP and to immediately by appropriate means notify those class members who had not yet applied for inclusion in LIEAP that they were legally entitled to do so.

Defendants moved for a stay of the judgment pending appeal to the United States Court of Appeals, Eighth Circuit. On January 27, this court denied the application of defendants for a stay of the judgment, but extended to February 15, 1984 the time within which payment to class members would be required and within which notice to class members who had not applied must be given by defendants. On February 13 the Court of Appeals affirmed this court’s denial of defendants’ stay application.

On May 2, 1984 the Court of Appeals in Clifford v. Janklow, supra, affirmed the judgment. Mandate from the Court of Appeals was filed with the clerk of this court May 29.

On May 10, 1984 this court ordered that plaintiffs file with the clerk within fifteen days a motion setting out the relief claimed in this court in light of the affirmance of the judgment. Plaintiffs’ response to the court’s order was filed May 18 and the defendants’ reply was filed May 29. On June 4 plaintiffs filed written interrogatories which were answered by defendants June 20. Plaintiffs filed a letter rebuttal brief on July 3 and on August 3, 1984 this court heard counsel of record for the parties orally argue the issue of what equitable relief, if any, this court should grant plaintiffs.

I.

Applications for the 1984 South Dakota LIEAP were accepted by defendants between October 3, 1983 and March 31, 1984. Plaintiff class consists of persons living in subsidized housing. Under the 1984 South Dakota Plan, the members of the plaintiff class were, by virtue of their residence in subsidized housing, placed in a category in which they were barred from receiving full LIEAP payment. All other citizens of the state were placed in a different category, free from the LIEAP payment restrictions imposed upon members of the plaintiff class. Up to January 10, 1984, the first day of trial, 1,089 members of the class had applied for payment under the 1984 South Dakota LIEAP program. 550 had been denied any payment and 539 had been authorized to receive partial payment. In affirming the judgment, the Court in Clifford v. Janklow, 733 F.2d 534, held that the defendants had violated applicable federal law by operating the federally funded South Dakota 1984 LIEAP program so as to deny the plaintiff class full participation in the program and full eligibility for LIEAP payment on the same basis as applied to all citizens of the state not members of the plaintiff class.

Although applications for LIEAP payments were accepted from members of the plaintiff class from October 3, 1983 onward, it was made known by defendants to any class applicant that a subsidized housing resident might not be eligible for any LIEAP payment and in any event would receive only a partial amount of what a similarly situated South Dakota citizen not residing in subsidized housing would receive through the LIEAP program for 1984. After the Court of Appeals on February 13, 1984 affirmed this court’s denial of defendants’ request for a stay of the judgment, defendants did, commencing on February 15, comply with that portion of the judgment requiring defendants to notify class members of their full eligibility under the 1984 LIEAP program and to advise class members of their right to file an application up until March 31, 1984. In the same mailed-out notice, defendants included a statement cautioning the plaintiff class member addressee that the case was on appeal to the Court of Appeals for the Eighth Circuit and that if the state prevailed in the appeal the addressee would have to repay to the state any sum received through the 1984 LIEAP program.

It is reasonable to infer and conclude that the 1984 South Dakota LIEAP plan provisions discriminating against plaintiff class members, along with the warning contained in the defendants’ mailing of February 15 to class members who had not yet applied, discouraged and confused class members so that some failed to apply in the early part of the season when they otherwise would have, and so that many did not apply until a time subsequent to February 15, 1984 and in light of the warning, some probably never did apply. What is certain is that most if not all class members, up to this date, have not received the benefit of the full LIEAP payment to which they are lawfully entitled, under the decision of the Court of Appeals in Clifford, et al. v. Janklow, et al., supra.

By motion and brief first filed February 22, 1984, and renewed after the Court of Appeals’ affirmance, by additional briefing and by written interrogatories served upon and answered by defendants, plaintiffs have urged that in equity the 1984 LIEAP amount due each class member who belatedly received LIEAP credit too late to use it fully by the May 31 cutoff should be forthwith paid such sum by a direct payment by defendants. Against each such payment defendants would be entitled to a credit for any sums paid on behalf of such class member applicant to the fuel supplier of the applicant under the LIEAP program [which ordinarily provides for payment by defendants direct to the fuel supplier, rather than direct to the eligible LIEAP applicant]. Plaintiffs advance an alternative solution which neither this court nor defendants are persuaded is the better of the two alternatives. At oral argument August 3, 1984, this court requested defendants to state, without prejudice to their own contentions, whether plaintiffs’ first proposal or plaintiffs’ herein unstated proposal was administratively preferable. Answering with commendable candor, in response to this court’s question, defendants stated that, without in any way abandoning their own contention, the first contention advanced by plaintiffs (set out above) would be preferable. On the merits, and in response to plaintiffs’ request for equitable relief, defendants contend that this court should simply order the case closed so that all monies remaining in the 1984 LIEAP fund would be carried over into the South Dakota 1985 LIEAP fund, for the benefit of all of the potential LIEAP applicants in 1985.

II.

This court has equitable jurisdiction to consider the effect upon the plaintiff class of the discrimination against the class inherent in the 1984 South-Dakota LIEAP program. Acting in equity, courts have broad power to fashion a remedy which does complete justice. Crawford, et al. v. Janklow, et al., 733 F.2d 541, 542 (8th Cir.1984).

The court considers the following facts and conclusions in seeking an equitable remedy:

1. Defendants violated federal law in the distribution of federal funds in the 1984 LIEAP program. This caused economic loss and personal hardship to qualified and deserving persons for whose benefit Congress enacted the federal statutes involved and discussed in this case, and discussed fully in the Court of Appeals opinion in Clifford v. Janklow, supra.
2. When defendants were fashioning the 1984 South Dakota LIEAP program in the summer of 1983, they had the guidance afforded by the decision in Crawford v. Janklow, 710 F.2d 1321 (8th Cir.1983). At 710 F.2d 1327 the court held that “... if the states wish to narrow the number of persons eligible for [LIEAP] assistance, they must exclude persons from the top of the class described by Congress, in terms of income and proportionate energy costs, rather than from the bottom.”
3. All of the plaintiff class who applied on or after October 3, 1983 were denied in whole or in part 1984 LIEAP assistance during the 1983-84 South Dakota winter, through February, 1984. As the court held in Clifford, supra, the plaintiff class were lawfully entitled, under federal law, to full participation in the 1984 LIEAP program from the beginning [October 3, 1983-May 31, 1984].
4. Those class members who applied before February 15,1984 and were denied assistance, and those who did not apply until after February 15, 1984, were denied the benefits of the state Emergency Crisis Intervention Program [ECIP]. (See Memorandum Opinion of this court, pages 14, 15, filed January 16, 1984).
5. Under the 1984 LIEAP program, actual cost of heating fuel records were not made or kept as a part of the program as to each program participant. The plaintiff class had no way of knowing whether or not they would receive any assistance from the 1984 program at any time, since the matter was in litigation. There is no feasible way, and none has been suggested by defendants, by which this court could order that the actual cost of home heating of each plaintiff class member during the period October 3, 1983 to May 31, 1984 could be computed at this time. Unless this court grants an equitable remedy, there is no way to make the plaintiff class whole or to redress tangible and intangible loss plaintiff class have each sustained through no fault of any of them.
6. The harm caused to plaintiff class as above set out, through much of the 1983-1984 South Dakota winter was more serious because most of the class are among the poorest of the poor.

This court concludes that it would be inequitable to deny plaintiff class any relief by granting defendants’ request that this case be closed without any further payment.

III.

At oral argument on August 3, 1984, defendants advised the court that according to the computer records of defendants approximately $275,000.00 would be required to make direct payments to each of the approximately 1,700 class members who applied to participate in the 1984 South Dakota LIEAP program. By use of the computer capability of the defendants it was stated at oral argument that such payments could be completed ' within thirty days from the date they were ordered.

On January 27, 1984, this court ordered defendants to reserve a sufficient amount of LIEAP funds in the 1984 program to cover the anticipated additional payments required as a result of the judgment rendered January 17, 1984, by this court, subsequently affirmed in Clifford, supra. At oral argument, there was no contention by defendant that the anticipated sum needed, $275,000.00, is not available for the purpose of making direct payments to the plaintiff class members. Moreover, there is nothing in the record in this action to show that such payments would exceed any class member’s actual heating costs during the period October 3, 1983 to May 31, 1984, [the period during which 1984 South Dakota LIEAP payments are made]. Although this court does not have at hand figures covering applications by class members subsequent to February 15, 1984, interrogatories served by plaintiffs and answered by defendants shortly prior to the August 3 oral arguments show that from October 3, 1983 through February 15,1984, 97% of the applications for LIEAP assistance came from non-class members.

CONCLUSION

This court is convinced that taking into account all of the circumstances in this case, a fair, reasonable, equitable remedy to plaintiff class, made necessary by the fact that the 1984 LIEAP program was conducted in violation of federal law, is to require that defendants forthwith make a direct money payment from the remaining 1984 LIEAP program funds to each plaintiff class member who applied between October 3, 1983 and March 31, 1984 to participate in the 1984 South Dakota program. Such payment shall, as to each such plaintiff class member, be in a sum equal to the difference between what such class member actually received and what such class member would have received had such class member been granted assistance according to the 1984 program matrix, as applied to a non-class member similarly situated.

Defendants shall file a written report with the clerk within thirty days setting out the action taken as required by the order entered this date.


source: Caselaw Access Project

author: KEETON, District Judge.

license: Public Domain

text:
    George PRICE, Plaintiff, v. UNITED PARCEL SERVICE, INC., Defendant.
    Civ. A. No. 84-1844-K.
    United States District Court, D. Massachusetts.
    Sept. 20, 1984.

      Stephen M.A. Woodworth, Francis J. Lynch, II, P.C., Brockton, Mass., for George Price.
    Michael T. Cetrone, Nutter, McClennen & Fish, Boston, Mass., for United Parcel Service.
   Memorandum and Order

KEETON, District Judge.

This action was brought by George Price (“Price”) against his former employer, United Parcel Service (“UPS”) for damages caused by UPS’ termination of his employment on January 19, 1983. The complaint was filed on April 26, 1984, in the Superior Court Department of the Trial Court of the Commonwealth of Massachusetts for Plymouth County and defendant removed to this court pursuant to 28 U.S.C. § 1441(b), 29 U.S.C. § 185, and 42 U.S.C. § 1983. The complaint contains five counts alleging a variety of causes of action. Count I alleges that the termination of Price by UPS was wrongful in that the termination was based upon specific wrongful acts of an agent of UPS. Count II alleges that the discharge of Price broke the contract terms of the New England Supplement to the National Master United Parcel Service, Inc. Agreement. Count III alleges that UPS engaged in intentional conduct which resulted in mental and emotional harm to Price and the disruption and dissolution of his marital and familial relationships. Count IV alleges negligent infliction by UPS of mental anguish and the disruption and dissolution of Price’s marital and familial relationships. Count V alleges that UPS “acting under color of law” deprived Price of his rights under the Fifth and Fourteenth Amendments of the United States Constitution. The defendant moves for summary judgment on Counts I and II, for dismissal of Counts III and IV for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted, and for dismissal of Count V for failure to state a claim upon which relief can be granted. The plaintiff opposes all of these motions, except that he assents to the “dismissal” of Count II.

In deciding a motion for summary judgment, the court must look at the record in the light most favorable to the party opposing the motion. Poller v. Columbia Broadcasting System, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962). It must also draw all inferences in favor of the non-movant. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). The moving party has the burden of showing the absence of a disputed issue of material fact. Mack v. Cape Elizabeth School Board, 553 F.2d 720, 722 (1st Cir.1977). The judgment sought shall be rendered only if the record shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c).

In passing on a motion to dismiss, whether on the ground of lack of jurisdiction over the subject matter or for failure to state a cause of action, the court construes the allegations of the complaint favorably to the pleader. The claim should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 474 (1974). Material facts alleged in the complaint are to be taken as true, but conclusions of the pleader are not to be treated as if they were allegations of fact.

The factual allegations of the complaint which must be taken as true in the case are as follows: Price was an employee of UPS from August 1975 to January 19, 1983; in December 1982, UPS retained a female security agent to covertly investigate Price; the female agent was to befriend Price and to entice and encourage him to purchase for her an illegal controlled substance (cocaine); on January 19, 1983, Price purchased and provided to the female security agent a quantity of cocaine, whereupon he was arrested by the Taunton Police; UPS terminated Price’s employment as of that date; “[t]he purchase and sale of the controlled substance and the subsequent arrest was ostensibly the basis for Price’s dismissal;” and UPS knew or should have known of Price’s vulnerability to the romantic advances of the female security agent because of his existing “domestic difficulties.”

The terms and conditions of employment at UPS were exclusively governed by a collective bargaining agreement between UPS and Local 653 of the International Brotherhood of Teamsters (“Union”). The agreement, in Article 52, provides that an employee shall not be discharged without “just cause.” Article 41 establishes a grievance procedure, including final arbitration, to be followed for any dispute arising under the provisions of the agreement. Following Price’s discharge, the Union prosecuted a grievance under the agreement on his behalf through the entire grievance procedure. The New England Area Parcel Grievance Committee unanimously upheld Price’s discharge by written decision dated August 9, 1983.

Plaintiff's attempt to characterize his action as aVommon law “wrongful termination” action or a breach of the implied covenant of good faith and fair dealing (a concept developed by Massachusetts courts in employment-at-will termination cases) cannot withstand judicial scrutiny. The Massachusetts cases defining this concept have dealt with employment situations in which there was no written employment contract at all or no contractual provisions governing the termination of employment. In all of the cases, the employment was terminable at will. See, e.g., Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251 (1977), Cort v. Bristol Myers Co., 385 Mass. 300, 431 N.E.2d 908 (1982); Gram v. Liberty Mutual Ins. Co., 384 Mass. 659, 429 N.E.2d 21 (1980).

In Gram, supra, the Massachusetts Supreme Judicial Court discussed whether it should adopt a common law rule giving employees-at-will the same measure of job security that “[cjollective bargaining agreements and public employment statutes [which] generally permit discharge only for good cause” give other employees. Gram v. Liberty Mutual Ins. Co., 384 Mass. at 670-71, 429 N.E.2d at 28 (1981). The court specifically declined to do so. As stated recently in Bertrand v. Quincy Market Cold Storage & Warehouse, 728 F.2d 568, 571 (1st Cir.1984):

[W]e doubt that the Massachusetts courts would ever imply the covenant in this case. The covenant has generally been implied in contracts of employment “at will.” This, however, was not an at will employment contract; the company had negotiated away its right to discharge anyone except for “just cause.” Since there is an explicit contractual provision giving the employee greater protection than the implied covenant, there is no need to imply the covenant.

Price was protected by a union-negotiated collective bargaining agreement which prevented UPS from dismissing covered employees without just cause. Therefore, the implied covenant of good faith and fair dealing has no application to this situation since the agreement requires an even stricter standard to be applied in reviewing UPS’ actions in discharging an employee.

Rather than falling under a doctrine applicable to employment-at-will situations, this case comes under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a), which enables an employee or his union to sue an employer for failure to comply with a collective bargaining agreement. Plaintiff’s allegations in Count I and Count II essentially allege facts which bring the case under § 301. However, as plaintiff himself has noted in his reply memorandum to defendant’s motion for summary judgment, an action against UPS for a breach of the collective bargaining agreement (Count II) cannot be sustained on these facts.

In a § 301 ease, “absent an allegation in the complaint either that the employer repudiated the grievance procedures or that the union wrongfully refused to process the employee’s grievance through arbitration, the court ‘may not usurp those functions which collective-bargaining contracts have properly “entrusted to the arbitration tribunal.” ’ ” Hayes v. New England Millwork Distributors, Inc., 602 F.2d 15, 18 (1st Cir.1979), quoting Hines v. Anchor Motor Freight, 424 U.S. 554, 562-63, 96 S.Ct. 1048, 1055, 47 L.Ed.2d 231 (1976). Plaintiff’s complaint does not contain any allegations that UPS in any way frustrated the grievance procedure, nor does it allege bad faith or failure to prosecute his grievance on the part of the Union. For these reasons, I conclude that defendant’s motion for summary judgment as to Counts I and II must be granted.

Defendant also argues that plaintiff’s first two counts are barred by the applicable statute of limitations. I agree. In DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), the Supreme Court held that the six-month limitations period of 29 U.S.C. § 160(b) applied to § 301 actions. More than eight months separate the last and final adjudication of Price’s grievance (August 9, 1983) and the filing of this action (April 26, 1984). I therefore rule that Counts I and II are time-barred. For this additional reason, summary judgment for defendant on Counts I and II must be entered.

The only other federal claim that the plaintiff raises is contained in Count V wherein the plaintiff alleges that UPS violated 42 U.S.C. § 1983 on the grounds that “acting under color of law,” UPS deprived Price of his rights under the Fifth and Fourteenth Amendments to the United States Constitution by depriving him of his property without due process of law. The essence of a § 1983 action is a showing of some “state action.” There is a significant legal difference between the deprivation of constitutional rights by the state and by “private conduct, ‘however discriminatory or wrongful,’ against which the Fourteenth Amendment offers no shield.” Lugar v. Edmondson Oil Co., 457 U.S. 922, 936, 102 S.Ct. 2744, 2754, 73 L.Ed.2d 482 (1982), quoting Jackson v. Metropolitan Edison Co., 419 U.S. 345, 349, 95 S.Ct. 449, 453, 42 L.Ed.2d 477 (1974). “Our cases [under § 1983] have accordingly insisted that the conduct allegedly causing the deprivation of a federal right be fairly attributable to the State.” Lugar, 457 U.S. at 937, 102 S.Ct. at 2754. Even construing the facts in the complaint in the light most favorable to the plaintiff, I find nothing to show that UPS’ action in discharging the plaintiff was, in any way, conduct that could be attributed to the state. Indeed the only governmental action alleged by the plaintiff was his arrest by Taunton police officers following his admitted purchase of cocaine. Consequently, I grant the defendant’s motion to dismiss Count V.

Counts III and IV of the complaint are based on state law tort claims for intentional and negligent infliction of mental and emotional harm. Pendent jurisdiction over these state law claims depends upon the existence of a “federal claim ... [of] substance sufficient to confer subject matter jurisdiction on the court” and of “a common nucleus of operative fact” for both the federal and state law claims. United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). Given these principles, it is extremely doubtful that this court has the power to exercise pendent jurisdiction over these state law claims. However, if the court does have the power to do so, the court also has some discretion in its exercise of pendent jurisdiction. Even viewing the facts of the case in the most favorable manner for the plaintiff, I find that it would be inappropriate to exercise this court’s pendent jurisdiction over Counts III and IV in light of my conclusions' that defendant’s motion for summary judgment on Counts I and II and its motion for dismissal on Count V must be granted.

For the foregoing reasons, it is ORDERED:

1) Defendant’s motion for summary judgment on Counts I and II is GRANTED.

2) Defendant’s motion for dismissal on Count V is GRANTED.

3) Unless the plaintiff wishes this court to remand Counts III and IV to the Superi- or Court Department of the Trial Court of the Commonwealth of Massachusetts for Plymouth County (from which this action was removed to this court), and so moves in writing on or before September 30, 1984, Counts III and IV will be dismissed.

      . Although plaintiff argues that the concept of "wrongful termination” more properly sounds in tort than in contract, this is contrary to how the concept has been defined by the Massachusetts courts. The cases indicate that a "bad faith” termination action involves the breach of an implied covenant of good faith and fair dealing in an employment-at-will contract. Siles v. Travenol Laboratories, Inc., 13 Mass.App.Ct. 354, 358, 433 N.E.2d 103, 106 (1982) and cases cited therein. This is in essence and nature a contract claim and not a tort claim.


author: MORAN, District Judge.

text:
    In the Matter of Ibrahim ODEH, Petitioner.
    No. 84 C 2761.
    United States District Court, N.D. Illinois, E.D.
    Oct. 1, 1984.

      James R. Fennerty, Susan R. Gzesh, James R. Fujimoto, John H. Alexander, Chicago, 111., for petitioner.
    Jack Penca, Asst. U.S. Atty., Chicago, 111., on behalf of government.
   MEMORANDUM AND, ORDER

MORAN, District Judge.

Before the court is respondent’s motion to deny the present writ of habeas corpus. Also before the court is petitioner’s motion to consolidate his habeas corpus action with the civil action he subsequently filed raising, he claims, similar issues.

The administrative record and the pleadings of the habeas action reveal the following. Petitioner Ibrahim Odeh was born in Jerusalem in 1951 and is a citizen of Jordan. He entered the United States in March 1970 as a non-immigrant student. He was granted extensions of his student status until March 10, 1973. An order to show cause was issued in Chicago to determine whether petitioner could remain in this country, and petitioner was found deportable on May 7, 1975. The withholding of his deportation for fear of racial, religious or political prosecution pursuant to 8 U.S.C. § 1253(h) was denied. Petitioner was granted a voluntary departure. On November 12, 1975, petitioner’s appeal of his Section 1253(h) denial was dismissed and on February 23, 1976, Odeh filed for refugee status. The District Director denied petitioner’s request on May 13, 1980, and a regional commissioner affirmed that decision on August 1, 1980.

On August 7, 1980, petitioner was informed that he was to leave the United States under voluntary departure on or before September 7, 1980. In September, petitioner married Yvette Rivera, a United States citizen. He received a “bag and baggage” letter in June 1981, ordering his departure. His wife filed an 1-130 petition seeking permanent resident status for her husband. Petitioner was granted a number of extensions but before the 1-130 petition was adjudicated petitioner was divorced. In August 1982 petitioner received another “bag and baggage” letter requiring an October 6, 1982 departure date.

In August 1982 petitioner’s attorney was informed that petitioner’s file could not be found. In November 1982 petitioner divorced his wife Yvette and in December of that year married Camille, his present wife. At that time petitioner had twice been ordered to depart, the most recent order being but two months before. In December 1982 Camille filed an 1-130 petition for him. Petitioner’s file could not be located until January 1984. After an interview petitioner was given a “bag and baggage” letter requiring departure on March 29, 1984. On March 27, 1984, petitioner’s attorney sought a stay of deportation, a motion to reopen his deportation, and a suspension of his deportation. On March 29, 1984, the District Director denied petitioner’s motion for a stay in a three-page memorandum. On that same day the Board of Immigration Appeals denied petitioner’s telephonic motion for a stay. Petitioner reported to the Immigration and Naturalization Service (INS) on March 29, 1984, and was taken into custody. Petitioner was released without bond on March 30, 1984. Petitioner now appeals, through this habeas action, the denial of the stay.

This court does not have jurisdiction over an order to deport. Primary jurisdiction of such an order lies with the Court of Appeals. See Immigration and Naturalization Service v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 2777-78, 77 L.Ed.2d 317 (1983). Denial of a stay, however, is not considered a final order and is not appealable to the Court of Appeals. See Diaz-Salazar v. Immigration and Naturalization Service, 700 F.2d 1156, 1159 (7th Cir.), cert. denied, — U.S.-, 103 S.Ct. 3112, 77 L.Ed.2d 1367 (1983). Thus, this court has jurisdiction to review the District Director’s denial of petitioner’s motion to stay his deportation. See Cheng Fan Kwok v. Immigration and Naturalization Service, 392 U.S. 206, 88 S.Ct. 1970, 20 L.Ed.2d 1037 (1968). These jurisdictional requirements, however, necessarily limit this court’s review to only the denial of petitioner’s motion to stay.

The regulation governing the issuance of a stay provides that the “District Director, in his discretion may grant a stay under such conditions as he may deem appropriate.” 8 C.F.R. § 243.4 (1984). As a discretionary decision, the denial of a stay will not be overturned “absent a clear showing of abuse of discretion.” Kladis v. Immigration and Naturalization Service, 343 F.2d 513, 515 (7th Cir.1965). See Bueno v. Immigration and Naturalization Service, 578 F.Supp. 22, 24 (N.D.Ill.1983). Some disagreement exists between the parties as to the proper standard for determining whether an abuse of discretion exists.

Petitioner seeks to have this court accept a standard devised by Judge Friendly in the Second Circuit. Judge Friendly wrote:

[W]e think the denial of suspension to an eligible alien would be an abuse of discretion if it were made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis such as an invidious discrimination against a particular race or group, or, in Judge Learned Hand’s words, on other “considerations that Congress could not have intended to make relevant.” United States ex rel. Kaloudis v. Shaughnessy, supra, [489] 180 F.2d [489] at 491 [2 Cir.1950].

Wong Wing Hang v. Immigration and Naturalization Service, 360 F.2d 715, 719 (2d Cir.1966). This standard has recently been referred to by a court in this district. See Bueno v. Immigration and Naturalization Service, 578 F.Supp. at 25. Petitioner argues that he was denied a stay because of his race, religion and national origin and because of activities protected by the First Amendment. If the court follows this standard, these charges should be considered, possibly through the extensive discovery sought by petitioner.

Respondent, however, claims that this circuit has adopted a much narrower standard. In Joseph v. Landon, 679 F.2d 113, 116 (7th Cir.1982), the Seventh Circuit followed the Ninth Circuit in stating:

The abuse of discretion may be found “only if there is no evidence to support the decision or if a decision is based on an improper understanding of the law.” Song Jook Suh v. Rosenberg, 437 F.2d 1098, 1102 (9th Cir.1971).

Id. In adopting this standard the court neither discussed the Second Circuit’s earlier formulation nor stated whether this standard, without reference to the discriminatory factors mentioned in Wong Wing Hang, supra, was the only standard a reviewing court need apply. If the Ninth Circuit’s formulation is followed, without reference to any other factors, the court in the first instance need not look into the motives of the Immigration and Naturalization Service.

This court has determined, after reviewing the case law, that the Ninth Circuit’s standard, applied without any consideration of impermissible motives,' is the proper standard for determining whether an abuse of discretion has occurred. In determining what standards to apply, courts have cited the long history of deference to congressional authorization of executive discretion in matters of immigration policy. See Kleindienst v. Mandel, 408 U.S. 753, 761-62, 92 S.Ct. 2576, 2581, 33 L.Ed.2d 683 (1972); Bertrand v. Sava, 684 F.2d 204, 211-12 (2d Cir.1982). In Mandel, after reviewing the history of congressional regulation of immigration, and the judiciary’s deference to that regulation, the court stated:

In the case of an alien excludable [due to advocation of certain political beliefs, see 8 U.S.C. § 1182(a)(28) ], Congress has delegated conditional exercise of this power to the Executive. We hold that when the Executive exercises this power negatively on the basis of a facially legitimate and bona fide reason, the courts will neither look behind the exercise of that discretion nor test it by balancing its justification against the [constitutional] interests [affected].

408 U.S. at 770, 92 S.Ct. at 2585. In Bertrand v. Sava, supra, decided sixteen years after Wong Wing Hang, the Second Circuit held, based on Mandel, that as long as an exercise of discretion by the INS is legitimate and bona fide it will be upheld on review. The court in Sava emphasized the heavy presumption of legitimacy granted all decisions of the INS. 684 F.2d at 212-13. See also Jean v. Nelson, 727 F.2d 957, 977 (11th Cir.1984) (citing Sava and Mandel and concluding that the crucial question of reviewing an exercise of discretion is whether the INS acted within the scope of its sweeping delegated powers). Following these cases, this court finds it cannot reach petitioner’s claims of discrimination or First Amendment violations if the INS, in declining to stay deportation, has evidence to support its decision and is not acting contrary to the law.

It must also be noted that courts have not heavily scrutinized the basis for an exercise of the INS’ discretion. In Mandel, for example, the court accepted the INS’ decision to deny a visa based on previous unauthorized activities, even though it was noted that petitioner had not been informed of any limits on his previous visit. See 408 U.S. at 759, 769, 92 S.Ct. at 2580, 2585. In the regulation providing for stays of deportation, all that is required is a written notice of the disposition of the request, which includes reasons for any denial. See 8 C.F.R. § 243.4 (1984). No specific basis is required for the denial as long as some reasons are given. This court’s review, therefore, is limited to determining whether the reasons given satisfy the minimum requirements for finding no abuse of discretion. With this background, and after examining the record, the court concludes that the denial of petitioner’s stay is based on the evidence, is not premised on a misreading of the law, and passes the very limited nature of this court’s review.

Petitioner originally sought a stay of deportation on March 22, 1984. The stay was denied on March 29, 1984, in a letter signed by District Director Moyer. The letter noted petitioner’s extensive history with the INS and his two marriages. It found that any delays in deportation were caused by his delaying tactics and acted to his benefit, not his prejudice. It also discussed briefly the possibility of his being granted permanent resident status pursuant to 8 U.S.C. § 1254(a). In this regard, it found that his family’s economic situation, and his family’s community ties, would not justify a finding of extreme hardship either to petitioner or petitioner’s wife. Without a finding of extreme hardship, petitioner would not be able to make a prima facie case for suspension of his deportation pursuant to Section 1254. Accordingly, the stay was denied.

The District Director’s conclusion concerning extreme hardship was based on the evidence and in accordance with applicable law. Again, when reviewing a determination that no extreme hardship exists, this court must show great deference to the INS determination. The granting of a Section 1254 suspension, like a Section 1255 adjustment, is statutorily placed firmly in the Attorney General’s discretion. See 8 U.S.C. § 1254(a); 8 U.S.C. § 1255(a). The Seventh Circuit recently stated of petitions under Section 1255, in a statement which applies equally to petitions under Section 1254:

The applicant bears the burden of proving that his application merits a favorable exercise of discretion, which is a matter of grace.

Patel v. Immigration and Naturalization Service, 738 F.2d 239, 242 (7th Cir.1984). “Extreme hardship,” as required by the statute, is, in the first instance, to be defined by the Attorney General and his delegates. See Immigration and Naturalization Service v. Wang, 450 U.S. 139, 140, 101 S.Ct. 1027, 1029, 67 L.Ed.2d 123 (1981); Mendoza-Hernandez v. Immigration and Naturalization Service, 664 F.2d 635, 638 (7th Cir.1981). The limits of extreme hardship, as defined by the Immigration and Naturalization Service, and upheld by the courts, does not necessarily enclose petitioner’s situation. Petitioner has lived in this country for a number of years and is presently married to his second wife. He also has community contacts and a job from which he derives economic benefits. He does not, however, have any children in this country and there is no indication that his health or well-being depends on his remaining in this country. A number of applicants whose situation were far graver than petitioner’s have been found not to be under extreme hardship and been required to leave this country. See e.g., Moore v. Immigration and Naturalization Service, 715 F.2d 13 (1st Cir.1983); Diaz-Salazar v. Immigration and Naturalization Service, 700 F.2d 1156, 1160 (7th Cir.1983). See also Mesa v. Immigration and Naturalization Service, 726 F.2d 39 (1st Cir.1984). The finding in District Director’s Moore letter that deportation of petitioner would not constitute extreme hardship is accepted as within a proper exercise of discretion. The court finds this especially so with regard to petitioner’s wife, considering that petitioner married her after the passing of a deportation date and less than one month after divorcing his first wife. This necessarily casts some doubt on the basis of the marriage and the hardship to petitioner’s wife that would ensue. In addition, both petitioner and his wife were aware of the imminent possibility of his deportation at the time of the marriage.

On March 29, after receiving notice of the District Director’s denial of his motion for a stay, petitioner’s attorney telephonically applied for a stay from the Board of Immigration Appeals. That request was denied. The Board wrote:

After consideration of all information, the Board has concluded that there is little likelihood that the motion to reopen, when received, will be granted. Therefore, request for a stay of deportation will be denied.

When this denial is read in conjunction with the District Director’s earlier denial, the basis for the decision becomes clear. The District Director found no excessive hardship and, therefore, found that petitioner had not made a prima facie case for suspension of his deportation. Thus, the Board was correct in determining that petitioner had little chance of having his case reopened, based upon the District Director’s finding.

The court finds that the decision of the INS is based on the evidence and not premised on a misinterpretation of the law. Because the INS’ determination is based upon a facially legitimate bona fide reason, the court need not look behind the exercise of the INS’ discretion. Petitioner will not be allowed the massive discovery he seeks in this action. The writ of habeas corpus is denied.

Because the court has denied petitioner’s writ without the discovery he sought, the court sees no reason to consolidate petitioner’s two actions. The motion to consolidate is also denied.


author: LAFFITTE, District Judge.

text:
    Elba ALVARADO AVILES, personally and in representation of her minor son Juan Enrique Bonilla, Jr., Plaintiff, v. Jorge Diaz BURGOS, et al., Defendants and Third party Plaintiffs, v. The TRAVELERS INDEMNITY CO., Third party Defendants.
    Civ. No. 81-2480 HL.
    United States District Court, D. Puerto Rico.
    Oct. 4, 1984.

      Luis N. Blanco Matos, José R. Jiménez Del Valle, Hato Rey, P.R., for plaintiff.
    Amancio Arias Cestero, Aráis Cestero and Arias Guardiola, Santurce, P.R., for Sea Land Services, Inc.
    Pedro Toledo González, Geigel, Silva, Irizarry & Toledo, San Juan, P.R., for Navieras de P.R., Inc.
    Pedro Toledo González, San Juan, P.R., for Ariel Ruiz Charón.
    Antonio Montalvo Nazario, Old San Juan, P.R., for Corp. Insular de Seguros & A. Ruiz Charon.
   OPINION AND ORDER

LAFFITTE, District Judge.

Present before this Court are various post-judgment motions of codefendants Corporación Insular de Seguros (Corporación), Ariel Ruiz Charón (Ruiz Charón), Navieras de Puerto Rico (Navieras), and Travelers Indemnity Co. (Travelers). Judgment was entered in this action on August 31, 1984. On September 1, 1984, Corporación and Ruiz Charón brought motions under FRCP 59(e) to alter or amend the judgment. On September 10, 1984, Navieras moved the Court for judgment notwithstanding the Verdict and for a new trial. On September 21, 1984, Travelers brought a motion under FRCP 60(b)(1) or 60(b)(6) for relief from judgment.

A. NAVIERAS’ MOTION FOR JUDGMENT NOTWITHSTANDING VERDICT, AND FOR NEW TRIAL.

At the outset, we note the difference between these two kinds of motion and the standard applicable to each.

“Thus on a motion for a new trial — unlike a motion for a directed verdict — the judge may set aside the verdict even though there is substantial evidence to support it. He is not required to take that view of the evidence most favorable to the verdict-winner. The mere fact that the evidence is in conflict is not enough to set aside the verdict. Indeed the more sharply the evidence conflicts, the more reluctant the judge should be to substitute his judgment for that of the jury. But on a motion for a new trial on the ground that the verdict is against the weight of the evidence, the judge is free to weigh the evidence for himself ...” 11 Wright & Miller, Fed. Practice and Procedure, Section 2806, p. 43-45.

In reviewing a motion for judgment notwithstanding the verdict it is improper to weigh- credibility or resolve conflicting testimony. Rios v. Empresas Lineas Maritimas Argentinas, 575 F.2d 986, 990 (1st Cir.1978). The evidence presented at trial established that the scene of the accident was dark; that the flatbed owned by Navieras was parked on the rolling surface of the road, occupying eight feet of a twelve feet lane, following a semi-curve; that Navieras’ premises were located in the near proximity of the scene of the accident, and that the flatbed was parked there for a lengthy period of time. There was also evidence that codefendant (cross-claimant) Burgos, had drunk alcoholic beverages the night of the accident, and that the headlights of his car were functioning properly.

This Court harbors no doubt that the jury verdict, finding that Navieras, Burgos, and Ruiz Charon were comparatively negligent, is amply supported by the record. Furthermore, where credibility of witnesses is at issue, special care should be taken not to interfere with the verdict. Rios v. Empresas Lineas Maritimas Argentinas, supra.

Navieras further moved the Court, in the alternative, for a reduction of the damages awarded by the jury to plaintiff Juan E. Bonilla, Jr., on the grounds of excessiveness. The jury, based on expert, photographic and other testimonial evidence, awarded plaintiff Elba Alvarado Avilés, a passenger in the car driven by codefendant Burgos, $200,000. Alvarado Avilés, mother of coplaintiff Juan E. Bonilla, suffered multiple and serious bodily injuries, consisting of open fracture of her right femur and pelvis, fracture of the jaw and deformity of right thigh. She underwent oral and orthopedic surgery; was unconscious for two weeks and was hospitalized for two months. She was left permanently injured.

On the other hand, coplaintiff Juan E. Bonilla, Jr., son of Elba Alvarado, was approximately 12 years old at the time of the accident. He had been living with his divorced mother in New Haven, Connecticut. He was visiting in Puerto Rico with his mother in 1980, where the accident occurred. He was not a passenger in the car and was not involved in the accident. His claim is for grief and mental anguish. Bonilla, Jr., testified that he visited his mother at the hospital the day following the accident; that he stayed at his uncle’s house in Levittown for a month while his mother was hospitalized, and then returned to Connecticut. He further testified about his deep love and affection for his mother; how he used to go skating with his mother, and that he cannot skate with his mother any more, following the accident. The evidence showed that his mother was able to return to her job with the City of New London as a dental assistant at a wage rate of $6.48 per hour, where she has been working for the last ten years.

No expert testimony was presented concerning future emotional damages, if any, suffered by Bonilla, Jr. Nor was there evidence as to whether Alvarado’s absence from work as a result of her injuries caused any economic hardship on Bonilla, Jr. Normally, a jury is accorded broad discretion in setting damages awards, specially in the troublesome area of recovery for grief or mental anguishes. The damages awarded, however, must be reasonable, based on the evidence, and should not be excessive. Bonn v. Puerto Rico International Airlines, Inc., 518 F.2d 89 (1st Cir.1975); Compañia Transatlantica Española v. Melendez Torres, 358 F.2d 209 (1st Cir.1966); Ramos Rivera v. Ela, 90 DPR 828 (1964); Moa v. Ela, 100 DPR 573, 587 (1972).

After a careful review of the evidence concerning the mental anguishes suffered by Bonilla, Jr., the Court finds that the $100,000 award (reduced to $95,000 by virtue of his mother’s comparative negligence), is excessive and is not supported by the evidence. The Court finds that in the light of the evidence said award is unreasonable and is clearly against the weight of the evidence.

Therefore, the Court shall deny the motion for judgment notwithstanding verdict and grant Navieras’ motion for a new trial limited to the question of damages as to coplaintiff Juan Enrique Bonilla, Jr., unless said plaintiff file a remittitur, within twenty days of the filing of this order, to reduce the verdict to $30,000. De Thomas v. Delta SS Lines, Inc., 58 FRD 335 (D.P.R. 1973).

B. RULE 60(b) MOTION.

Travelers’ motion is DENIED as untimely. Travelers’ motion is essentially asking the Court to reconsider its application of the law in this case and to alter the judgment based on that application. Although some circuits have allowed parties to bring such a motion under Rule 60(b), the First Circuit Court of Appeals has clearly stated that:

“If the Court merely wrongly decides a point of law, that is not ‘inadvertence, surprise, or excusable neglect.’ Moreover, the words in the context of Rule 60(b) seem addressed to some special situations justifying extraordinary relief.” Silk v. Sandoval, 435 F.2d 1266, 1267-68 (1st Cir.), cert. denied, 402 US 1012 [91 S.Ct. 2189, 29 L.Ed.2d 435] (1971), as quoted in Scola v. Boat Frances, R. Inc., 618 F.2d 147 (1st Cir.1980).

Motions to amend or alter a judgment are properly brought within ten days after entry of judgment, pursuant to Rule 59(e). See also, Morgan Guaranty Trust Co. v. Third National Bank, 545 F.2d 758, 760 & n. 3 (1st Cir.1976). The ten day limitation fixed by Rule 59(e) is one of the few limitary periods which the Court has no power to enlarge. Scola, supra, 618 F.2d at 154. For this reason, a Rule 60(b) motion does not toll the time period to file a notice of appeal, as does a Rule 59 motion to amend. See Federal Rule of Appellate Procedure 4. However, because the Court still has the codefendant’s Rule 59 motions under consideration, it shall address the merits of Travelers’ motion, sua sponte, along with motions under 59(e) by Corporación and Ruiz Charon.

C. RULE 59(e) MOTION.

Corporación and Ariel Ruiz Charon’s motion under Rule 59(e) asks the Court to reconsider its application of the doctrine of set-off and the right of contribution to the facts of this case. These issues are presented by paragraphs (a), (b), and (e) of Corporation's motion. Paragraph (e) requests that the prorata distribution of coverage by the insurance companies be altered. Paragraph (d) requests the Court to reconsider its ruling on the effect of the hold harmless agreement between Ruiz Charón and Navieras. And finally, paragraph (f) requests that the additional sums be deducted from plaintiffs’ damages pursuant to ACAA, 9 LPRA 2058.

The Rule 59 Motion shall be granted in part and denied in part.

Relief requested in paragraph (f) is DENIED for the reasons stated in the Conclusions of Law entered on August 31, 1984. Relief requested in paragraph (c) is GRANTED, and the Judgment shall be amended to provide that Corporación shall pay 9% and Travelers pay 91%, rather than 10% and 90%, as stated in the original Judgment.

The relief requested by paragraphs (a) and (d) require more discussion. The Hold Harmless Clause in the contract between Navieras and Ruiz Charón provided that Ruiz Charón agreed “to hold the Lessor [Navieras] harmless from any responsibility for any loss, injury or wrong to any person or property as the result of the use, performance, maintenance, or possession of said trailer van and its equipment, due to any cause or reason which may occur ...” Clause 3.5, Trailer Interchange Agreement.

Corporación and Ruiz Charón argue that based on the Jury finding that Ruiz Charón did not exceed the permissive we granted by virtue of such Trailer Interchange Agreement, the hold harmless clause has no effect. The Court held that the effectiveness of the hold harmless clause did not depend upon the breach of the contract by Ruiz Charón. The Court now reiterates that position. However, in the Judgment Ruiz Charón was found liable only for 80% of any damages caused. The Court now clearly concludes that Ruiz Charón should not be bound to indemnify Navieras for its own negligence. Because the jury found Navieras to be 20% causally negligent, the Court concludes that Ruiz Charón shall only be bound to hold Navieras harmless for damages not caused by Navieras.

The Supreme Court of Puerto Rico has held that “clear and explicit language is required in the contract to absolve a person from the consequences of his own conduct.” Cabrera v. Doval, 76 PRR 728, 731 (1954), as quoted in Chico Ramos v. Editorial Ponce, Inc., 101 DPR 759 (1973), Vol. 101 Official Translation, at p. 1058. The Trailer Interchange Agreement does not clearly state that Ruiz Charón shall hold Navieras harmless for its own negligent acts. Therefore, the Court shall not impose such a responsibility. Relief requested by paragraph (d) is DENIED, and the Judgment as to the responsibility of Ruiz Charón under the Hold Harmless Clause shall remain unchanged.

The relief requested by paragraphs (a), (b) and (e) of Rule 59(e) motion shall be granted, but for reasons other than those stated in defendant’s motion. In its Conclusions of Law of August 31, 1984, the Court applied a two-step procedure to determine the joint debts of the parties resulting from the jury verdict. The first step applied the doctrine of set off, reducing the common debt owed as to each claimant. In the second step, the Court considered that newly determined joint debt for purposes of the right of contribution between the codefendants.

Upon review of this procedure, the Court finds that it improperly applied the doctrine of set off as between coplaintiff Elba Alvarado Avilés, her son Juan Enrique Bonilla, and codefendant George Diaz Burgos. A close scrutiny of the record in this case reveals that no counterclaim was ever brought by codefendant George Diaz Burgos against the coplaintiffs. Diaz Bur-gos only brought cross-claims for his damages against the other codefendants. In other words, although plaintiffs alleged and proved to the jury that Diaz Burgos was 60% causally negligent, George Diaz Burgos never alleged or attempted to prove that co-plaintiffs were in any way responsible for his damages. Because Diaz Bur-gos never claimed against co-plaintiffs, the doctrine of set off should not have been applied between them. In other words, George Diaz Burgos is responsible as a joint and several tortfeasor to Elba Alvarado Avilés and Juan Enrique Bonilla for all of their damages. But, Elba Alvarado Avilés and Juan Enrique Bonilla are not responsible for Diaz Burgos’ damages, and he never claimed that they were so liable.

Because the doctrine of set off was improperly applied to reduce the joint debt of George Diaz Burgos, the rights of Navieras and Ruiz Charón to contribution was improperly limited to a percentage of that reduced amount.

Therefore, the Court now concludes that George Diaz Burgos is jointly and severally liable with Ruiz Charón and Navieras for all of the plaintiffs’ damages. Consequently, the doctrine of set off shall still be applied as between George Diaz Burgos and co-defendants Navieras and Ruiz Charón, but not as to co-plaintiffs.

WHEREFORE, Travelers’ Rule 60(b) motion is hereby DENIED. It is further ORDERED that Navieras’ motion for judgment notwithstanding the verdict is DENIED.

It is further ORDERED that Navieras’ motion for new trial limited to the question of damages as to co-plaintiff Juan Enrique Bonilla, Jr., is GRANTED, unless said plaintiff file a remittitur, within twenty days of filing of this order, to reduce the verdict as to Juan Enrique Bonilla to $30,-000. De Thomas v. Delta SS Lines, Inc., 58 F.R.D. 335 (DPR 1973).

It is further ORDERED that Corporación and Ruiz Charon’s Rule 59(e) motion is DENIED in part, and GRANTED in part.

The Judgment of August 31, 1984, shall be amended accordingly, following the twenty days granted to co-plaintiff Bonilla to file remittitur.

IT IS SO ORDERED.

      . In Rios v. Empresas Líneas Marítimas Argentinas, supra, at note 5, Judge Bownes states: "We note that the standard has been variously stated as requiring that the verdict be against the 'clear weight’ or the 'overwhelming weight’ or the 'great weight’ of the evidence.”

      . The partial new trial device, allowed under Rule 59(a) of the Federal Rules of Civil Procedure, is often used to limit the new trial to the issue of damages where liability has been completely determined by the jury and the damage issue is not interwoven with the liability issue. Yates v. Dann, 11 F.R.D. 386 (D.Del.1951); Calaf v. Fernández, 239 F. 795 (1st Cir.1917).

      . Although Travelers' Rule 60 motion was denied as untimely, by ruling on Corporación’s Rule 59 motion, the Court feels the merits of Travelers’ motion shall be addressed, as it raises substantively the same issues.

      . The Court has in effect ruled on the merits of Travelers’ motion by addressing this point and affirming its original judgment.

      . Note that the Court also granted a motion for new trial, if plaintiff Juan Enrique Bonilla does not remit damages, as explained at pages 31-32 above.


author: PAINE, District Judge.

text:
    German REYES, Plaintiff, v. Margaret M. HECKLER, Secretary of Health & Human Services, Defendant.
    No. 83-6901-Civ-JCP.
    United States District Court, S.D. Florida.
    Oct. 26, 1984.

      Lyle D. Lieberman, Miami, Fla., for plaintiff.
    Ana T. Barnett, Asst. U.S. Atty., Miami, Fla., for defendant.
   ORDER

PAINE, District Judge.

The Court hereby finds the following:

1. This action was pending before this Court on September 19, 1984;
2. This action raises the issue of whether an individual who has had his entitlement to benefits under Title II, XVI, or XVIII of the Social Security Act based on disability terminated (or period of disability ended) should not have had such entitlement terminated (or period of disability ended) without consideration of whether there has been medical improvement in the condition of such individual (or another individual on whose disability such entitlement is based) since the time of a prior determination that the individual was under a disability.

Accordingly, it is

ORDERED and ADJUDGED that this action be and hereby is remanded to the Secretary of Health and Human Services pursuant to Section 2 of the Social Security Disability Benefits Reform Act of 1984 for review in accordance with the provisions of the Social Security Disability Benefits Reform Act of 1984.

REPORT AND RECOMMENDATION

Mr. Reyes filed an application for Disability Insurance Benefits on December 16, 1981, alleging disability from June 22, 1980 due to a back injury and severe back pain. (Tr. 52). After being denied initially (Tr. 59) and upon reconsideration (Tr. 67), he filed a Request for Hearing (Tr. 27) and subsequently appeared before an Administrative Law Judge on August 18. (Tr. 28).

The AU found that Plaintiff was disabled from June 22, 1980 until April 30, 1982, when his disability ceased because he could perform sedentary work activity, and that under the Medical-Vocational Guidelines, he was not disabled. (Tr. 17). Plaintiff filed a timely Request for Review with the Appeals Council; it declined to review the decision of the AU, which then became the final decision of the Secretary. (Tr. 2). Plaintiff has filed a motion for summary judgment; counsel for the Secretary has notified the U.S. Magistrate that the Government will not file in opposition to Plaintiff's motion.

The record shows that German Reyes was born on October 11, 1934, and was 47 years of age at the end of April, 1982, the date on which the AU found his disability to have ceased. Mr. Reyes was born in Cuba and has a 4th grade education. He testified through an interpreter. He does not speak English, except for short phrases. (Tr. 44). He can neither read nor write in English. (Tr. 43). His prior relevant work was as a maintenance man and assistant embroidery machine operator (he did not operate the machine). (Tr. 34).

Mr. Reyes has undergone two back surgeries, a diffuse sacral disc operation in August, 1980 (Tr. 94), and another laminectomy at L-4, 5 and S-l in April, 1981. Mr. Reyes testified that despite the surgery, his pain continues. The pain is in his hip and radiates down the right side. He can walk two blocks, stand 10-12 minutes and sit down between 10 and 12 minutes. He can lift between 5 and 10 pounds, but cannot bend. (Tr. 36-37).

Medical evidence includes the report of the treating orthopedic surgeon, Dr. Sanchez-Medina (Tr. 93, 115). A report dated September 8, 1982 indicates that the Plaintiff was limited to lifting not more than 10-15 pounds, on a non-repetitive basis, and that Mr. Reyes should not be required to sit or stand for long periods of time. (Tr. 115). On January 28, 1982, Mr. Reyes was examined by Dr. Salvador Ramirez, a consulting orthopedic surgeon for the SSA. Dr. Ramirez found Mr. Reyes to have continued back pain with radiation to his right lower extremity. Forward flexion was approximately 20% of normal, forward extension was 5% of normal. Right and left bending was 50% of normal and the straight leg raising test was positive at 80°, bilaterally. Reflexes were hypoactive and X-rays showed a Grade II spondylolisthesis. (Tr. 110-112). On April 19, 1982, Mr. Reyes was examined by Dr. Patrick J. Barry with regard to a Workers Compensation claim. The X-rays showed spondylolisthesis at L-5, S-l, and a solid fusion. Dr. Barry found no obvious spasms, negative straight leg raising test, and mildly depressed reflexes on the right. Dr. Barry attempted to relieve Mr. Reyes’ pain with injections, but the pain immediately returned to the “prior extent”. Dr. Barry suggested Mr. Reyes was fit for light work, and would hold his lifting to 40 pounds or less, with no repeated bending or lifting. (Tr. 113-114).

The decision of the AU places more weight on the comments of an adversarial physician employed by a worker’s compensation carrier than on those of the Plaintiff’s treating physician or the SSA’s own consultant. The AU’s use of the Medical-Vocational Guidelines is erroneous because the medical evidence establishes that the Plaintiff cannot perform a full range of sedentary work, and is illiterate. As that evidence indicates that Mr. Reyes cannot perform a full range of even sedentary work, and would be mandated disabled even if he could, arguendo, perform a full range of sedentary work (20 C.F.R. Part 404, Subpart P, Appendix 2, Rule 201.17), the AU’s decision must be reversed. This cause should be remanded with direction to continue Mr. Reyes benefits. To further particularize, the Court finds, as the Plaintiff accurately argued:

1. The Secretary erred in finding that Mr. Reyes was literate in English. The Plaintiff testified that he was educated to the 4th grade in Cuba, and that he neither reads nor writes in English. He does not speak English except for short phrases. (Tr. 43-44). The Secretary’s Regulations provide that an education below the 6th grade is considered “marginal”, and inability to read and write a simple message such as instructions or inventory lists in English is considered illiteracy. (20 C.F.R. Section ' 404.1564). Consequently, the Secretary erred in applying Rule 201.18 to Mr. Reyes; that Vocational Rule requires at least literacy and the ability to communicate in English. Rule 201.17 applies to Mr. Reyes who is both illiterate and unable to communicate in English, and mandates a finding of disabled.

2. The Secretary erred in rejecting Plaintiffs testimony of pain and limitation.

The medical evidence shows that Mr. Reyes underwent major back surgery on two occasions over the period of a year to correct a congenital deformity and relieve pain from an injury. His treating orthopedic surgeon, Dr. Sanchez-Medina, indicated that Mr. Reyes, even after the surgeries, was unable to lift more than 15 pounds on a non-repetitive basis, or sit or stand for long periods. (Tr. 1115). This conforms with the testimony of Mr. Reyes, and is supported by both clinical and laboratory testing over the period from August, 1980 through September, 1982. Even the SSA’s consulting orthopedic surgeon, Dr. Salvador Ramirez, found severe limitation of motion in the back and positive straight leg raising, bilaterally, and hypoactive reflexes. His X-rays showed a Grade II spondylolisthesis. (Tr. 110-112). Thus the AU’s belief (that the Plaintiff’s testimony was not supported by the medical evidence) was erroneous. Furthermore, the AU’s finding is not supported by substantial evidence. In discrediting the Plaintiff’s testimony, the AU has ignored the report of the treating physician, and used an improper legal standard by requiring medical verification of the Plaintiff’s subjective complaints of pain. Boyd v. Heckler, 704 F.2d 1207 (11th Cir.1983); Walden v. Schweiker, 672 F.2d 835 (11th Cir.1982).

3. The Secretary erred in rejecting the opinion of Mr. Reyes’ longtime treating orthopedic surgeon, Dr. Sanchez-Medina. Court of Appeals decisions require that, absent good cause to the contrary, the testimony of the treating physician must be accorded substantial weight. Fruge v. Harris, 631 F.2d 1244 (5th Cir.1980). “It is not only legally relevant, but unquestionably logical that the opinions, diagnosis, and medical evidence of a treating physician whose familiarity with the patient’s injuries, course of treatment, and responses over a considerable length of time, should be given considerable weight.” Smith v. Schweiker, 646 F.2d 1075, 1080 (5th Cir. 1981). As the opinion of Dr. Sanchez-Medina is substantiated by extensive clinical and laboratory findings, it is entitled to greater weight than that of the physician who examined Mr. Reyes for the Worker’s Compensation carrier. As Dr. Sanchez-Medina has opined that Mr. Reyes’ condition would not permit him to either stand or sit for prolonged periods of time (Tr. 115), and a full range of sedentary work requires substantial sitting (approximately 6 out of 8 hours, 20 C.F.R. Section 404.1567(a), SSR 83-10), Mr. Reyes cannot perform a full range of sedentary work.

Once the claimant has established a prima facie case by demonstrating that he can no longer perform his former employment, the burden shifts to the Secretary to establish that the claimant can perform other substantial gainful employment. DePaepe v. Richardson, 464 F.2d 92, 100 (5th Cir.1972). As the claimant’s testimony and the medical evidence establish that he cannot perform a full range of even sedentary work, a finding of disability is warranted. 20 C.F.R. Part 404, Subpart P, Appendix 2, Section 201.00(h). Furthermore, even if Mr. Reyes were able to perform a full range of sedentary work, Rule 201.17 would be applicable and would mandate a finding of disability.

4. When the evidence has been fully developed and unequivocally points to a specific finding, the reviewing Court may enter the finding that the Secretary should have made. Gardner v. Smith, 368 F.2d 77, 86 (5th Cir. 1966); DePaepe v. Richardson, 464 F.2d 92 (5th Cir.1972). The evidence in the present case has been sufficiently developed to establish that Plaintiff Reyes continues to be disabled as defined in the Secretary’s regulations. Consequently, the Court concludes as a matter of law that the record establishes that Mr. Reyes cannot perform his prior relevant work or any other work existing in the national economy within his residual functional capacity. Because the record establishes Mr. Reyes’ entitlement to continued benefits, this Court Recommends that this case be remanded to the Secretary with directions to enter an award of continued Disability Insurance Benefits for Mr. Reyes.

Pursuant to statute, the parties may file and serve written objections to this recommendation with the Honorable James C. Paine, United States District Judge, within ten (10) days of receipt thereof.

/s/ Peter Nimkoff

PETER L. NIMKOFF

UNITED STATES MAGISTRATE


author: TAURO, District Judge.

text:
    The BOSTON FIVE CENTS SAVING BANK, Plaintiff, v. Samuel R. PIERCE, Jr., Secretary of the United States Department of Housing and Urban Development, and Kenmore Tower Corporation, Defendants.
    Civ. A. No. 81-34-T.
    United States District Court, D. Massachusetts.
    Oct. 26, 1984.
    Harrison & Maguire, Stewart T. Herrick, Boston, Mass., for plaintiff.
    Gregory Flynn, Asst. U.S. Atty., Boston, Mass., James G. Bruen, Jr., Civil Div., Dept, of Justice, Washington, D.C., for Secretary of Housing and Urban Development, Elizabeth A. Ritvo, Brown, Rudnick, Freed & Gesmer, Boston, Mass., for Kenmore Tower Corp.
    Anthony M. Feeherry, Goodwin, Procter & Hoar, Boston, Mass., for Nat’l Ass’n.
   ORDER

TAURO, District Judge.

This court approves Magistrate DeGiacomo’s report and recommendation. In addition to the points made by the Magistrate in his report, this court notes that section 4 of the mortgage agreement, which states that all “rents, profits and income” from the property are assigned to the mortgagee, supports a conclusion that the parties did not intend to limit the subject property to use as rental units. If the parties had indeed contemplated that the property would be so limited, there would have been no need to specify as to the disposition of “profits and income,” in addition to “rents.”

Accordingly, the defendants’ motion for summary judgment is hereby granted.

It is so ORDERED.

The BOSTON FIVE CENTS SAVINGS BANK v. SAMUEL R. PIERCE, JR., as Secretary of the United States Department of Housing and Urban Development, and Kenmore Tower Corporation, formerly Harbro, Inc.

Magistrate No. 608-83-D

MEMORANDUM AND RECOMMENDATIONS RE RENEWED MOTIONS FOR SUMMARY JUDGMENT

January 30, 1984

DeGIACOMO, United States Magistrate.

The issue raised by these motions is whether there has been a breach of a Department of Housing and Urban Development insured mortgage by the mortgagor so as to enable the mortgagee bank (the plaintiff) to obtain the insurance benefits. There is no dispute as to the procedural history or any material fact. The action is cast in the form of a complaint seeking declaratory relief pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201. Initially, following extensive discovery, motions for summary judgment brought by the parties, with the exception of the defendant Kenmore Tower Corporation, were denied by the trial judge. Following additional discovery, the matter was then assigned for a master’s hearing. At pretrial conferences it became obvious that, on the then state of the record, renewed motions for summary judgment by all parties would be appropriate. It was so suggested and, all parties being in agreement, the instant renewed motions were filed, briefed and argued. For the reasons which follow, I am satisfied that summary judgment should be granted for the defendants.

I. THE MATERIAL FACTS

Following an application in 1963 by the owners of a multi-story apartment building, they obtained in January, 1965 a mortgage from the plaintiff bank, insured by the Federal Housing Authority in the principal amount of three million one hundred fourteen thousand six hundred dollars ($3,114,600.00) for a period of 40 years at an interest rate of §xk% per annum. The property consisted of rental housing. A regulatory agreement between HUD, acting through the Federal Housing Administration, and the owners was incorporated into and made a part of the mortgage. (Exhibit B) A security agreement pledging personalty as collateral was also executed. (Exhibit D) See also Plaintiff’s Exhibits 8 and 9 of Volume 1.

In 1980 an application to HUD was made for a transfer of physical assets to Mr. Brown and when a copy of 'the application was forwarded to the bank, it informed HUD that it would not execute the application nor consent to the transfer. (Exhibit F) The application was subsequently amended and Mr. Brown, as proposed purchaser, was replaced by Harbro, Inc. HUD requested the bank to state its reasons for refusing to consent to the application and the bank declined. (Exhibits I and J) Approval by HUD was granted and the property was conveyed to Harbro, Inc. It executed an assumption agreement. (Exhibit L) Shortly thereafter, the bank was informed by Harbro, Inc. that it intended to change the property from rental residential housing to cooperative residential housing. HUD’s opinion was requested on the proposed change and HUD responded that:

... Accordingly, we conclude that there is no legal prohibition, in terms of mortgagor or property eligibility, against the continuation of mortgage insurance on a mortgage which has been assumed by a cooperative corporation in connection with a transfer of physical assets of a rental project.
For the same reasons, we also conclude that there is no legal prohibition against HUD’s permitting a rental project covered by a HUD-held mortgage to convert to a cooperative by means of a transfer of physical assets and assumption of the existing mortgage.
II. Your second question concerns the legal requirements that would apply to a cooperative conversion.
The properties under discussion are already insured before the conversion, so they are subject to the Regulatory Agreement requirements____
IV. Your final question involves the use of non-FHA notes for the individual purchase of dwelling unit shares in a cooperative project.
We see no objection to the use of such notes on a noninsured loan as long as the note-holder’s security does not amount to an actual or potential lien or encumbrance on the property of the cooperative. The individual borrowing additional monies to purchase a membership in the cooperative may secure the loan by a pledge of the cooperative shares of any other collateral as long as no lien or encumbrance is placed on the real property—

(Pages 3 and 4, Exhibit N) Final approval was given by HUD to the transfer of assets to Harbro, Inc. (Exhibit P) HUD approved the cooperative plan (Exhibit R), and advised counsel for the bank that:

By memorandum dated October 10, 1980 the HUD Office of General Counsel has determined that there is no legal prohibition against HUD permitting a rental project insured under Section 207 to convert to a cooperative by means of a transfer of physical assets and assumption of the existing mortgage. (Please find attached a copy of the October 10, 1980 memorandum.)

(Exhibits Q and R; the October 10, 1980 memorandum is Exhibit N.) Thereafter, the conversion took place, common stock was issued and leases executed. (Exhibit S) Some shareholders obtained financing from the First Federal Savings & Loan Association by pledging shares in the cooperative and executing leasehold mortgages. (Plaintiff's Exhibits 27, 28, 29, Volume 1) This complaint for declaratory relief was filed on January 7, 1981, and was subsequently amended, the plaintiff alleging:

... That the conversion of 566 Commonwealth Avenue from rental apartments to cooperative ownership breaches its mortgage, since it results in a change in use of the property; additional liens being created against the property securing the mortgage; and an assignment of the rents and profits of the property. In addition, ... the conversion of the property violates the National Housing Act since cooperatives are not eligible for mortgage insurance under Section 207 of the National Housing Act.

(Plaintiff’s Memorandum in Support of its Motion at (VI).) Both defendants argue inter alia that the mortgage has not been breached in that a cooperative can be insured under Section 207 of the National Housing Act (12 U.S.C. § 1713); HUD may allow rental apartments to be converted to cooperative ownership while maintaining the mortgage insurance; and finally, that the consent of the mortgagee is not required before HUD can allow a conversion.

II. DISCUSSION

A. Standing

As a preliminary matter, the bank argues that an order of the trial judge on August 5, 1982 which provided in relevant part that:

After consideration of the arguments presented by the parties at oral argument and in their written submissions, the court has determined that the plaintiff has standing to maintain this action, that plaintiff has not failed to exhaust its administrative remedies, and that the court is not precluded from reviewing the decision of the Department of Housing and Urban Development under Hahn v. Gottlieb, 430 F.2d 1243 (1st Cir.1970) and Falzarano v. United States, 607 F.2d 506 (1st Cir.1979).

is “the law of the case.” I agree, and see no need of further discussion or citation.

B. The Mortgage

The threshold question as recognized by the parties is whether or not the mortgage has been breached. If it has, the bank must prevail. If it has not, pages of argument become superfluous, need not be addressed, and the defendants must prevail.

The mortgage incorporates the regulatory agreement. The bank argues that equal force and effect must be given to both the mortgage and the regulatory agreement:

if it is reasonably possible to do so and it cannot be subsumed that the provisions of one negate the provisions of the other, or are reasonably intended to do so. In addition, both the Mortgage and Regulatory Agreement were drafted by HUD which further emphasizes the proposition that they are to be read as supplementing each other rather than being in the conflict which Defendants’ advocated construction would superintend.

(Plaintiff’s Memorandum in Support, footnote 1, page 8; emphasis supplied.) This position presupposes both conflict and equality. In my opinion, there is no conflict, and to give each document equal force would be to ignore what the bank admits; namely, that without the Regulatory Agreement there would be no mortgage. In short, the mortgage depends for its life on the Regulatory Agreement. Moreover, it must control, otherwise the authority of the Secretary would be set at naught with control passing to the bank. Nowhere in the frequently amended National Housing Act is there any evidence of such a Congressional intent. To the contrary, where a bank wishes to have its risk removed by having the benefit of the insurance under the Act, it gives up the control it exercises in a conventional mortgage and this is assured by the incorporation of the Regulatory Agreement with all its conditions. Trans-Bay Engineers and Builders, Inc. v. Hills, 551 F.2d 370, 379 (D.C.Cir.1976), cited by the bank, is not to the contrary. Thus, by the fact of prior approval conversion of the property to cooperative apartments, even assuming arguendo that this conversion constituted a change in use, creation of liens or an assignment of rents, it is my opinion that under the provisions of paragraph 6 of the Regulatory Agreement there has been no breach of the mortgage.

It follows that the involved arguments concerning a change in use of the property by conversion to cooperative ownership, liens and encumbrances allegedly created by the purchases of cooperative shares in financing said purchases and assignments of rents and profits, need not be reached. It will suffice to say that I have considered the bank’s arguments with reference to these matters, and find them without merit. They are easily disposed of. By definition a cooperative apartment is a dwelling unit in a multi-dwelling complex in which each owner has an interest in the entire complex and a lease of his own apartment though he does not own his apartment as in the case of a condominium. BLACK’S LAW DICTIONARY (5th ed. 1979, West Publishing Co.). The use of the property is residential. See Bronstein, et al. v. The Prudential Insurance Company of America, et al., 390 Mass. 701, 459 N.E.2d 772 (S.J.C.1984). Contrary to the argument of the bank, Bronstein is not authority that a change from a rental apartment project, encumbered by a mortgage, to a cooperative housing project without the consent of the mortgagee constituted a change in use within the meaning of the matters at issue herein. As argued by the defendants in their memoranda, Bronstein:

... holds that under a specific Massachusetts statute relating to a type of urban redevelopment project requiring approval of a mayor and city redevelopment authority, conversion from rental apartments to cooperative ownership is a “fundamental change” in the “type and character of the buildings on such project” necessitating prior approval from a government entity, the redevelopment authority.

(HUD’s Statement Concerning Plaintiff’s Motion for Judicial Notice of Massachusetts State Law Re: Cooperative Conversion, page 3.)

The bank’s complaint about rents being diminished by conversion is specious. Paragraph 4 of the mortgage provides:

That all rents, profits and income from the property covered by this Mortgage are hereby assigned to the Mortgagee for the purpose of discharging the debt hereby secured. Permission is hereby given to Mortgagor so long as no default exists hereunder, to collect such rents, profits and income for use in accordance with the provisions of the Regulatory Agreement.

First, the bank has no right to determine the level of rents. The approval of rents and charges is committed to agency discretion by law. Hahn v. Gottlieb, 430 F.2d 1243, 1249-1251 (1st Cir.1970). See also Falzarano v. United States, 607 F.2d 506, 512 (1st Cir.1979). Thus, whether the carrying charges paid by the shareholder to the cooperative corporation are high or low, is not the concern of the bank unless the mortgage is in default. Conversion, as set forth supra, is not a default nor is the change in rent. Rent assignments are conditioned on a default, and even under those circumstances the bank is protected by the insurance contract with HUD. Nor has there been any dimunition in the bank’s security interest.

The bank’s argument that, when some tenant shareholders pledged their shares and leases as security for loans, paragraph 12 of the mortgage which provides that “the Mortgagor covenants that it will not voluntarily create or permit to be created against the property subject to this Mortgage any lien or liens inferior or superior to the lien of this Mortgage ...” was violated, also misses the mark. The bank simply refuses to accept the fact that the sale of stock in a cooperative corporation is not a sale of realty. As the temporary emergency Court of Appeals held in Stockton v. Lucas, 482 F.2d 979, 984 (1973) in upholding a decision of the United States District Court for the Southern District of New York:

In the instant case, the District Court states: “In the vernacular, plaintiffs ‘bought a co-operative apartment,’ ... and that is all they bought.” Whatever the vernacular usage may be, we think the New York law on the question was clearly stated in Susskind v. 1136 Tenants Corp., 43 Misc.2d 588, 598, 251 N.Y. S.2d 321, 325 (N.Y.City Civil Ct.1964), where the court held: “It is the shares of the corporation that are sold, and, despite a vernacular use to the contrary, the apartment is not sold but leased under a so-called proprietary lease____
(Emphasis in original).

The court also accepted the appellees’ common-sense argument in which it is stated:

[A]n owner of stock in a co-operative corporation, although he is entitled to possession of an accomodation, is only entitled to it so long as he complies with the terms and conditions of a proprietary lease. Should he default under such terms possession could be forfeited although the stock ownership under such circumstances could be retained. The ownership therefor is that of the stock.

Massachusetts law is not to the contrary. The shareholders have no ownership interest in the real property. Where a shareholder pledges his shares in return for a loan, the only interest held by the pledgee is an interest in personal property. There is no encumbrance on the realty. It follows that there is no violation of the provisions of paragraph 12 of the mortgage, supra.

C. The National Housing Act

Finally, there remains the bank’s statutory argument that the conversion of the property violated the National Housing Act since cooperatives are not eligible for mortgage insurance under Section 207 of the Act, 12 U.S.C. § 1713. This was most recently squarely addressed by Judge Lacey in Angleton, et al. v. Samuel R. Pierce, Jr., Secretary, U.S. Department of Housing and Urban Development, et al., 574 F.Supp. 719 (D.N.J.1983). In that case the plaintiffs argued that the Secretary could not under any circumstances approve the conversion of rental housing to a cooperative, when the mortgage on the property was insured pursuant to 12 U.S.C. § 1713. Section 207

has been described as “the major federal commitment to non-subsidized housing.” ... It, like the Act’s numerous other mortgage insurance provisions, furnishes an incentive for private parties to build and finance residential housing by authorizing the Secretary to guarantee mortgages given by private developers to private lenders. Section 1713 empowers the Secretary to insure mortgages covering residential property held by governmental bodies or by
any other mortgagor approved by the Secretary which, until the termination of all obligations of the Secretary under the insurance ..., is regulated or restricted by the Secretary as to rents or sales, charges, capital structure, rate of return, and methods of operation to such extent and in such manner as to provide reasonable rentals to tenants and a reasonable return on the investment.

After a thorough learned analysis of the legislative history and the applicable case law, Judge Lacey concluded that

The legislative history clearly shows that Congress intended to allow cooperatives to be eligible § 207 mortgagors____ The court concludes that the Secretary’s approval of the transfer of the assets ... to a cooperative does not violate 12 U.S.C. § 1713.

Angleton, pp. 731-732. The bank argues that Judge Lacey’s analysis and conclusions are incorrect. I reject this position and specifically adopt his analysis of the legislative history of the Act and his conclusions therefrom. I am satisfied that I cannot improve on this and, therefore, to aid the trial judge in what I assume will be the inevitable appeal, Judge Lacey’s decision is annexed to this recommendation as an appendix. I find it dispositive of the bank’s argument.

I have carefully considered all other positions raised by the bank. I find them completely without merit. Inescapable in this entire litigation is the position of the bank, laudable from a business point of view, to escape from a 5XA% mortgage by obtaining the benefits of the government insurance, thus enabling it to recoup its funds and utilize them in a more profitable manner. The law being to the contrary, resuce is not that simple. One cannot build bricks without straw.

The familiar criteria of Hahn v. Sargent, 523 F.2d 461 (1975) being complied with, it is RECOMMENDED that the motions of the defendants for summary judgment be granted, and that the motion of the plaintiff for summary judgment be denied.

      . The owner’s "chain of title" is as follows: The Kenmore Square Apartment Company, a general partnership, Harold Brown, Harbro, Inc., a Massachusetts corporation wholly owned by Harold Brown, and Kenmore Tower Corporation (Exhibit H) The exhibits of the parties as they refer to material facts are duplicative. References, unless otherwise indicated are to joint exhibits of the defendants in support of their motions for summary judgment (docket # 156). The mortgage in question is Exhibit C.

       Others include 12 U.S.C. §§ 1709 (mortgage insurance for one- to four-family residences and units in cooperative housing projects), 1715e (mortgage insurance for cooperative housing projects), 1715/ (mortgage insurance for housing for moderate income and displaced families), 1715m (mortgage insurance for servicemen), and 1738 (mortgage insurance for veterans).


author: PRADO, District Judge.

text:
    James E. REVELEY, D.D.S. v. BERG PUBLICATIONS, INC., d/b/a Mortuary Management Magazine, and Tom Fisher.
    Civ. A. No. SA-83-CA-413.
    United States District Court, W.D. Texas, San Antonio Division.
    Oct. 29, 1984.

      James S. Wilkins, San Antonio, Tex., for plaintiff.
    Mark J. Cannan, San Antonio, Tex., for defendants.
   ORDER

PRADO, District Judge.

The matter before the court is defendants’ resisted motion for judgment notwithstanding verdict filed July 20, 1984.

On July 6, 1984 the jury rendered a verdict for plaintiff finding that an article written by defendant Fisher and published by Berg Publications in a mortuary trade journal defamed plaintiff. Judgment was entered on July 13, 1984 awarding plaintiff $34,000 actual damages and $86,000 punitive damages consistent with the jury’s verdict.

Defendants now move for judgment n.o.v. arguing that the article was an expression of opinion and therefore not actionable. They also argue that the evidence presented was not “clear and convincing” that defendants published the article with either actual awareness of its falsity or with reckless disregard of its truth or falsity. Finally, defendants contend that there was no evidence that plaintiff suffered actual injury to his reputation as a result of the publication.

When ruling on a motion for judgment n.o.v., the court must focus its analysis on the evidence presented to the jury. The evidence must be considered in the light most favorable to the verdict winner and all reasonable inferences drawn in favor of the prevailing party. If there is any substantial evidence or evidence of such quality and weight that reasonable and fairminded persons exercising . impartial judgment might reach a different conclusion, the motion should be denied. Boeing Co. v. Shipman, 411 F.2d 365, 374-75 (5th Cir.1969); Dalaton v. Toyota Motor Sales, Inc., 703 F.2d 137 (5th Cir.1983).

Libel is defined as “a defamation expressed in printing or writings ... tending to injure the reputation of one who is alive and thereby expose him to public hatred, contempt or ridicule.” Tex.Rev.Civ.Stat. Ann. art. 5430 “[T]he gist of an action for libel is injury to plaintiff’s reputation.” Lyle v. Waddle, 144 Tex. 90, 188 S.W.2d 770, 771 (1945). Balancing the important first amendment interests present when the alleged defamation concerns a public figure such as this plaintiff against providing compensation for injuries to reputation, the Supreme Court has directed that proof of actual injury, whether impairment of reputation and standing in the community, personal humiliation, mental anguish or suffering, precede recovery. Gertz v. Robert Welch, Inc., 418 U.S. 323, 345, 348-50, 94 S.Ct. 2997, 3009, 3011-12, 41 L.Ed.2d 789 (1974).

At the trial of this matter the court heard from plaintiff’s friends and acquaintances, both personal and professional, of plaintiff’s good character and excellent reputation as a dentist and mortician. No evidence was presented suggesting that as a result of reading the publication anyone thought any less of plaintiff in a personal or business sense. No evidence was heard that either of plaintiff’s businesses suffered as a result of the publication. Contrary to plaintiff’s contention, the evidence concerning the display of the article in question to Charles Altsman by Professor Byron Starr, a person with whom plaintiff had had philosophical differences concerning mortuary trade practices predating this publication, showed that Mr. Altsman’s opinion of plaintiff was unchanged by the article.

Plaintiff himself testified that he was depressed because of the publication but there was no evidence of a physical or emotional reaction nor financial evidence sufficient to prove up the mental anguish claimed. In Gertz the Supreme Court held that actual injury was required to support a finding of liability. Gertz v. Welch, 418 U.S. at 350, 94 S.Ct. at 3012. The nature of injuries recoverable in public figure libel cases was left to the states to define. Id. In Texas, the question has not yet been squarely addressed by the courts since Gertz, but in A.H. Belo Corp. v. Rayzor, 644 S.W.2d 71, 86 (Tex.Civ.App.—Ft. Worth 1982), the self serving statements by plaintiff of embarrassment and humiliation without other, independent indicia of injury, were deemed to be insufficient evidence of mental anguish. Generally Texas courts have required evidence of “intense pain of body and mind and something more than mere worry, vexation or disappointment” to support damages for mental anguish. 17 Tex.Jur.2d Damages §§ 125 & 126. This court holds that no evidence of actual injury sufficient to satisfy the above standards was presented to the jury so as to support the verdict. Further, the court concludes that in the wake of Gertz even if evidence was heard that the article tended to injure plaintiff, that a mere tendency to injure without proof of actual injury cannot support a finding of defamation, contrary to a literal reading of the Texas libel statute.

Defendants also argue that there was no clear and convincing evidence of publication with actual awareness of falsity or with reckless disregard of truth or falsity. Recently, the Supreme Court has reiterated that findings of actual malice in defamation cases require careful review and an independent examination of the whole record by appellate courts to ensure that the New York Times v. Sullivan, 376 U.S. 254, 272, 84 S.Ct. 710, 721, 11 L.Ed.2d 686 (1964), standard is met. Bose Corp. v. Consumers Union of U.S., Inc., — U.S. -, 104 S.Ct. 1949, 1960, 80 L.Ed.2d 502 (1984). Proof of “reckless disregard” requires evidence that the article was published with a high degree of awareness of its probable falsity and that defendant entertained serious doubts as to the truth of the publication. Foster v. Upchurch, 624 S.W.2d 564, 566 (Tex.1981). In ruling on the motion for judgment n.o.v., this court considers its constitutional responsibility of insuring that speech found libelous by the jury is indeed outside the protection of the first amendment, no differently than in Bose, New York Times or Foster.

Reviewing the proof in this case the court cannot agree that there was clear and convincing evidence of either actual awareness or reckless disregard of probable falsity. At most, the evidence showed that defendant Fisher negligently wrote an article based only on his recollection of unverified statements contained in an earlier published article, and that defendant Berg negligently published an article without verifying the facts contained therein. Evidence that plaintiff and defendants held conflicting views on funeral industry practices does not demonstrate publication with actual malice. Furthermore, examination of the article itself, read in its entirety, does not demonstrate malice. Words used therein with reference to plaintiff and his dentistry and funeral businesses are not in and of themselves sufficient evidence of actual malice. Foster v. Upchurch, 624 S.W.2d at 566. Finally, the only phrase that arguably contains a falsity, that regarding plaintiffs dental business and credentials (p. 2 Exhibit A to Plaintiffs Complaint: “would be dentist”) is inconsistent with the majority of other references to plaintiff as the “dentist from Texas” without further qualification. When assessing falsity of an allegedly libelous publication, the Court must examine the speech in its entirety, recognizing that some error is inevitable. New York Times v. Sullivan, 376 U.S. at 271, 84 S.Ct. at 721. The Court cannot agree that this article is outside first amendment protection. Bose mandates that the jury finding of malice be set aside.

In light of the above the court does not address defendants’ final contention that the article was one of opinion only.

Finding no evidence of injury and constitutionally insufficient evidence of actual malice to support the jury’s verdict, the court GRANTS defendants’ motion for judgment n.o.v. and directs that the judgment previously entered on July 13 be set aside and the judgment signed this date bé entered.