text:
    RHODE ISLAND HOSPITAL TRUST NATIONAL BANK, Plaintiff, v. The OHIO CASUALTY INSURANCE COMPANY, Defendant.
    Civ. A. No. 82-0274-B.
    United States District Court, D. Rhode Island.
    July 26, 1985.

      Gordon P. Cleary, George Vetter, Vetter & White, Providence, R.I., for plaintiff.
    Barbara S. Cohen, Levy, Goodman, Semonoff & Gorin, Providence, R.I., for defendant; Louis J. Burnett, Simpson, Moran & Burnett, Birmingham, Mich., of counsel.
   OPINION

FRANCIS J. BOYLE, Chief Judge.

The Plaintiff, Rhode Island Hospital Trust National Bank (“The Bank”), seeks payment as assignee of two bonds issued by the Defendant, Ohio Casualty Insurance Company (“Ohio”), in the total amount of $675,000. The bonds were issued to secure payment for wood burning stoves ordered from Franklin Cast Products, (“Franklin Cast”), a Rhode Island Corporation, by its distributor, Franklin-America, Inc., (“Franklin-America”), a Michigan corporation.

Bond # 2-130-962 provides in its entirety:

KNOW ALL MEN BY THESE PRESENTS, that Franklin-America, Incorporated, as Principal, and The Ohio Casualty Insurance Company, an Ohio Corporation of Hamilton, Ohio, as Surety, are held and firmly bound unto Franklin Cast Products, Inc., as Obligee, in an amount not to exceed Three-hundred Fifty-thousand Dollars ($350,000) for the payment whereof the Principal and Surety bind themselves firmly by these presents.
WHEREAS, the Principal and Obligee have entered into an agreement dated November 5th, 1979 whereby the Principal will act as the distributor for the Obligee’s merchandise in less than one shipping container amounts, and
WHEREAS, the agreement calls for the Principal to receive merchandise and make payment to the Obligee according to specified terms,
NOW THEREFORE THE CONDITION OF THIS OBLIGATION IS SUCH, that if the Principal shall receive merchandise and make payment to the Obligee according to the terms of the agreement, then this obligation shall be null and void, otherwise to remain in full force and effect.
The term of this bond shall be for the period from signature date to July 31, 1980.
This bond may be terminated by any party thereto by giving fifteen (15) days prior notice of cancellation. Such cancellation will in no way effect orders placed for delivery prior to the effective date of cancellation.
Signed, sealed and dated December 15, 1979.

Bond # 2-130-963 in the amount of $325,000 is identical in form except that the fifth paragraph stating the term of the bond is omitted.

The parties disagree as to whether the bonds are penal sums to be paid upon the failure of Franklin-America to pay for stoves delivered by Franklin Cast or whether they are surety bonds that limit liability to the net amount actually due Franklin Cast from Franklin-America. The labels of “guaranty” or “surety” do not control the meaning of the bonds. Rather, the relevant intent of the parties, manifested by the terms of the agreement, controls.

FACTS

From 1977 through 1981, the Bank financed Franklin Cast’s purchases of stoves from a Taiwanese supplier for resale. The Bank predominately used back-to-back letters of credit, issuing them for Franklin Cast’s account to Franklin Cast’s supplier. In turn, Franklin Cast and the Bank took a commercial letter of credit from Franklin’s customers as the Bank’s security for the money it advanced to Franklin Cast to purchase the stoves.

In November, 1979, Franklin-America and Franklin Cast entered an agreement under which Franklin-America was to distribute stoves for Franklin Cast. Franklin-America was uncomfortable with letter-of-credit financing and requested that they use surety credit rather than bank credit.

The principals of Franklin-America were also engaged in the construction business and had obtained payment and performance bonds from Ohio. Franklin-America then asked Ohio, to draw up bonds for the benefit of Franklin Cast. While earlier bonds were issued and cancelled, ultimately, Ohio issued two bonds in the amounts of $325,000 (# 2-130-963) and $350,000 (# 2-130-962) each, on December 15, 1979. Bond # 2-130-962, in the amount of $350,-000, was limited in term up until July 31, 1980. On December 20, 1979, Franklin Cast advised Ohio that it had assigned all of its “claims and their proceeds, which might arise [presently] or in the future” out of the two bonds, to Rhode Island Hospital Trust. Ohio “acknowledged” receipt of the notice of assignment although it had denied the assignability of earlier issued bonds. Plaintiff claims that it advanced money to Franklin Cast in reliance on the assignment to it of the rights to proceeds under the bonds.

In July, 1980, Franklin-America and Franklin Cast agreed to extend time for payment of all outstanding invoices until March 31, 1981. Franklin Cast requested that Ohio consent to extensions on the bond that was limited to July 31, 1980. Ohio refused and cancelled that bond after July 31, 1980.

On June 9, 1981, Franklin Cast notified Ohio that due to nonpayment of invoices in the amount of $625,257.74, as of December 31, 1980 for stoves shipped, it intended to proceed against the surety bonds for payment if payment was not received by the end of the year (1981). Franklin Cast had not pursued payment from Franklin-America first.

Franklin-America cancelled the “open” bond in July, 1981 and sent notice to Franklin Cast. It then sued Franklin Cast on the underlying contract regarding the disputed shipment of stoves, alleging defects in the goods in the United States District Court for the Eastern District of Michigan.

By November, 1981, Franklin Cast was out of business. On March 10, 1982, a default judgment was entered against Franklin Cast in the amount of $901,000, in the United States District Court of the Eastern District of Michigan. The Defendant claims that Franklin-America is entitled to raise the affirmative defense of Franklin Cast’s breach of the contract and to preclude this litigation by giving res judicata effect to the prior Michigan action.

Whether or not the Plaintiff is subject to that defense depends on whether Ohio was a surety or a guarantor of payment, and whether the Bank is an assignee of Franklin Cast’s contract claim or of the proceeds under the bonds.

Plaintiff claims that Franklin America’s failure to pay automatically triggered Ohio’s liability on the bonds. Defendant contends that because the bonds are a surety agreement, Ohio may use the defenses, available to Franklin-America under the principal agreement, against the Bank. It also claims that it owes nothing to the Bank because the bonds were nonassignable. Also, Ohio contends that bond # 2-130-962 was limited in time to July 31,1980 and that because Ohio refused to extend the time for payment of the bond, it expired on the stated date.

CONSTRUCTION OF BONDS

The primary issue before the Court is the construction of the bonds, which appear to be a hybrid of guaranty and surety instruments. Contracts of guaranty and suretyship both promise to answer for the debt of another; their difference lies in their intended purpose. 38 Am.Jur.2d Guaranty §§ 14-16 (1968). Sometimes the two are indistinguishable. See Texas Water Supply Corp. et al. v. Reconstruction Finance Corp., 204 F.2d 190, 194 (5th Cir.1953). Generally, a guaranty is collateral to the primary agreement and binds the guarantor to perform upon the fact of nonperformance of the primary contract. It is a contract of secondary liability. See 38 Am.Jur.2d Guaranty § 15 (1968). Conversely, a surety generally is primarily and jointly liable with the principal debtor and agrees to take over performance of the principal. See generally A. Stearns, The Law of Suretyship at 2 (5th ed. 1951). Therefore, the surety may use any defenses available to the principal debtor against the creditor. Generally, the liability of the surety may be limited because it is measured by the liability of the principal debtor. See 74 Am.Jur.2d Suretyship § 25 (1968).

In determining the construction of the bonds, the probable intent of the parties, shown by the language of the document controls. Allied Plywood Co. v. Pearson, 121 R.I. 72, 75, 395 A.2d 716, 718 (1978). Both Rhode Island and Michigan hold that if the language is ambiguous, the document is construed most strongly against the drafter, who is in this case, Ohio. Bailey & Gallup v. Lachar, 5 R.I. 530, 534 (1858); Post v. Maryland, 68 Mich.App. 182, 187, 242 N.W.2d 62, 65 (1976). But, this analysis must also produce a reasonable interpretation as deduced from the relative conditions of the parties, their probable intent, and the subject of the bonds. Allied Plywood, supra, 121 R.I. at 75, 395 A.2d at 718.

Although the bonds in question use the term “surety” and are signed by FranklinAmeriea and Ohio Casualty, they do not state whether both these parties may be jointly and severally liable and contain only an ambiguous reference to the underlying agreement. Both bonds contain the following language:

NOW THEREFORE THE CONDITION OF THIS OBLIGATION IS SUCH, that if the Principal shall receive merchandise and make payment to the Obligee according to the terms of the agreement then this obligation shall be null and void, otherwise to remain in full force and effect.

Defendants claim that this provision, in effect, incorporates performance of the underlying obligation of the parties. Yet, literally, on its face, it merely provides the condition upon which the obligor is released from liability, the receipt of merchandise and payment according to the agreement.

A promise by a surety would include doing any and all things which were to be done by the principal debtor. See Peterson et al. v. Miller Rubber Co. of New York, 24 F.2d 59, 62 (8th Cir.1928). The bond agreement does not reveal that Ohio would assume any duties of FranklinAmeriea described in the distributor contract and there is no evidence that Ohio was prepared to become involved in the stove business.

In construing the language most strongly against the drafter, the problematic words “according to the terms of the agreement,” appear merely to refer to a collateral agreement. The drafter could easily have incorporated the distributor agreement expressly, limiting its liability. Similarly, it could have included language making its liability joint and several with Franklin America’s. Ohio’s reference in the bonds to the “terms” of the underlying agreement does not draw the entire agreement into the bond. The general construction rule of contracts instructs that “a reference by the contracting parties to an extraneous writing for a particular purpose makes it part of their agreement only for the purpose specified.” Lodges 743 and 1746, International Association of Machinists v. United Aircraft Corporation, 534 F.2d 422, 441 (2d Cir.1975), (citing Guerini Stone Co. v. P.J. Carlin Construction Co., 240 U.S. 264, 277, 36 S.Ct. 300, 306, 60 L.Ed. 636 (1916)). Therefore, the language appears to condition Ohio’s liability merely on receipt of merchandise and nonpayment by Franklin-Ameriea, which supports a guaranty interpretation of the bond.

The language must also support a guaranty interpretation after taking into consideration the conditions of the parties, their probable intent, and the subject of the bond. Allied Plywood, supra, 121 R.I. at 75, 395 A.2d at 718; Feutz v. Massachusetts Bonding & Insurance Co., 85 F.Supp. 418, 425 (E.D.Mo.1949), aff'd, 182 F.2d 752 (8th Cir.1950). Collateral security, or security that is secondary to the underlying agreement, is customarily used in the commercial setting such as this where the subject of the security is goods. Here, the parties deliberately contracted to change the method of security from letters of credit to bonds. The critical point of analysis then is the intended purpose of the bonds, determined through the objective intention and mutual purpose of the parties. Kassin v. Arc-Mation, Inc., 94 Mich. App. 520, 524-25, 288 N.W.2d 413, 415 (1979); Hill v. M.S. Alpert & Son, Inc., 106 R.I. 38, 47, 256 A.2d 10, 15 (1969). There is no evidence that the parties intended to avoid collateral security and create joint liability. Rather, the purpose of using bonds rather than letters of credit was primarily to benefit Franklin-Ameriea by freeing up its bank funds.

Plaintiff claims that the manifest purpose of the bonds was to act as a substitute for the letters of credit and induce the Bank to make extensions of credit to Franklin Cast. Ohio knew that security was required as a condition of any sales of Franklin Cast stoves to Franklin-America. However, there is no evidence that the principal or Ohio were aware that the bonds would be used to induce the Bank to extend credit to Franklin Cast. Ohio claims it thought the bonds would guaranty the agreement between Franklin-America and Franklin Cast for Franklin Cast’s benefit. (Deposition of William K. Law pp. 6-7).

Whether or not Ohio contemplated the Bank’s loan is irrelevant, however, after considering the commercial setting of the parties, the subject of the bonds, and the absence of language creating joint liability. Consideration of language of the bonds and the surrounding circumstances shows that the bonds are most reasonably susceptible to a guaranty construction.

Therefore, the Court need not consider any possible defenses available to Ohio on the underlying distributor agreement.

ASSIGNMENT

The next issue is whether, in the absence of express language in the bonds, they are properly assignable to the Bank or whether this assignment severed Ohio’s liability. Usually, general guarantees, which are addressed to persons generally, may be enforced by anyone to whom they are presented. Special guarantees, which name particular obligees, may usually only be enforced by the named persons. See 38 Am.Jur.2d Guaranty § 20 (1968). Here, the bonds name Franklin Cast as a specific obligee, making the guaranty special.

The law of Rhode Island and Michigan differ on the assignability of special guarantees. Whether the law of the place where the guaranty was made and performed, or the law of the place where the guaranty was accepted will control depends on the choice of law rule for Rhode Island. See Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 497, 61 S.Ct. 1020, 1022, 85 L.Ed. 1477 (1941). Because Rhode Island has not ruled on the choice of laws for a financial guaranty, the Court must apply the law of the state with the most significant relationship to the transaction. Rhode Island follows the general choice of law principles in determining the most significant relationship: predictability of results, maintenance of interstate order, simplification of the judicial task, advancement of the forum’s governmental interests, and application of the better rule of law. Turcotte v. Ford Motor Co., 494 F.2d 173, 177 (1st Cir.1974).

The negotiations between Franklin Cast and Franklin-America took place in Michigan and the bonds were executed there. Plaintiff later became an assignee. The only Rhode Island connection at the time of the execution of the bonds was that the Obligee was a Rhode Island corporation. Michigan was also the situs of any event triggering liability. However, the agreement was accepted in Rhode Island and later assigned in Rhode Island.

Michigan has adopted the modern rule of financial guarantees, the “Illinois rule,” which states that special guarantees, as well as general guarantees, are assignable as long as the assignment of a special guaranty does not materially alter the guarantor’s undertaking. The guarantor must show prejudice. See Chris Nelson & Son, Inc. v. Michigan Corp., 84 Mich.App. 29, 32-33, 269 N.W.2d 295, 297 (1978). Rhode Island courts have not addressed this specific issue since the 1880 decision of King & King v. Batterson, 13 R.I. 117, 119-20 (1880), which holds that special guarantees are not assignable.

Rhode Island may be considered the place of the “making” of the guaranty, in applying general contract principles. Franklin-America and Ohio signed the instruments in Michigan and delivered them to Franklin Cast in Rhode Island.

Michigan, however, has the more important contacts with the drafting and performance of the bonds, and has a significant interest in determining the negotiability of the bonds made there. Whether Rhode Island would continue to follow its 1880 decision on nonassignability of a special guarantees is a consideration also, in terms of what is the better rule of law. Modern business conditions would seem to require favoring assignability. Therefore, the parties could reasonably predict that Michigan law would apply. These considerations show Michigan has the more significant interest in the bonds.

In applying the “Illinois rule,” the assignment will be valid absent a showing of prejudice on the part of the Defendant. Ohio has shown no such prejudice. It claims that the assignment severed the obligation of Franklin Cast to sell the goods from its right to receive payment. This condition that Franklin Cast would provide buyers for the merchandise was a part of the distributor agreement, but, this was never a condition of the bond agreement, therefore, the assignment of the bond could not sever this obligation from the right to receive payment and it did not prejudice Ohio.

EXTENSION OF TIME TO THE DEBTOR

In July, 1980, Franklin Cast requested Ohio to extend the time of payment on one of the bonds, in the amount of $350,000 (# 2-130-962), from July 31, 1980 to March 31, 1981. Ohio refused this request, and cancelled this bond. The other bond, in the amount of $325,000, was not limited by date.

The guarantor’s refusal to consent to an extension of time for payment of the principal obligation discharged it from liability. See 38 Am.Jur.2d Guaranty § 92 (1968). However, when an extension of time is contemplated within the agreement, such extension does not discharge the guarantor. See Old Stone Bank v. McKenney, 456 A.2d 266, 268 (R.I.1983). Where the underlying agreement is for the sale of goods, the parties could reasonably anticipate modifications and extensions of time for payment. Therefore, the bond not limited by date is a continuing bond, which is unaffected by an extension of time in the underlying agreement.

The Plaintiff may recover the principal sum of the bond, # 2-130-963 in the amount of $325,000. But, it is precluded from collecting under the limited bond, # 2-130-962 in the amount of $350,000, which expired on July 31, 1980. Judgment will enter for Plaintiff in the amount of $325,000, plus interest and costs.

SO ORDERED.


source: Caselaw Access Project

author: SPIEGEL, District Judge.

license: Public Domain

text:
    Karen ROBERTS-WEY, Plaintiff, v. SEAFLA, INC., Defendants.
    No. C-1-83-2005.
    United States District Court, S.D. Ohio, W.D.
    July 26, 1985.

      Monica R. Bohlen, Cincinnati, Ohio, for plaintiff.
    Eric C. Holzapfel, Wood & Lamping, Cincinnati, Ohio, for defendants.
   ORDER DENYING PLAINTIFF’S MOTION TO DISMISS

SPIEGEL, District Judge.

This matter came on for consideration on plaintiff’s motion to dismiss defendants’ counterclaim (doc. 36). Defendants have filed a memorandum in opposition (doc. 39), to which plaintiff has replied (doc. 41). The sole issue before the Court is whether defendants may assert a counterclaim against plaintiff for slander if the statute of limitations with respect to said tort had run as of the date of the filing of the counterclaim, but not as of the date of commencement of the action as a whole. While the issue at hand readily was identified, recent cases on point regrettably were not located with the same ease. For the reasons that follow, however, we believe defendants present the better position and accordingly rule in their favor.

Plaintiff filed suit on December 20, 1983, alleging violations of Title YII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e(b) and the Fair Labor Standards Act (FLSA), 29 U.S.C. § 203(d) (doc. I). Original defendant Seafla, Inc. answered on February 21, 1984, but alleged no counterclaims (doc. 2). Plaintiff’s motion for leave to file an amended complaint against defendant Seafla and to join Richard Higgins as a defendant (doc. 12) was granted orally on January 31, 1985 (see doc. 31, p. 87). Defendants filed their answer to plaintiff’s amended complaint on April 2, 1985 (doc. 33), in which they included what appears to be a counterclaim for slander.

We begin with those propositions of law to which both parties agree. There is no dispute that this Court is bound to apply Ohio law and that the relevant statute of limitations is one year. See Ohio Rev. Code § 2305.11(A). However, plaintiff moves this Court to dismiss defendants’ counterclaim, urging that, because more than one year has passed between the last alleged defamatory statement and their April 1985 filing date, defendants are time barred from asserting it. Defendants, in response, maintain that their counterclaim is timely by virtue of the fact that plaintiff's original cause of action was filed within the one year period of limitations applicable to slander claims. Ohio law, it seems, substantiates defendants’ position.

Although written over forty years ago, National Retailers Mutual Insurance Co. v. Gross, 142 Ohio St. 132, 50 N.E.2d 258 (1943) is instructive. Paragraph 2 of its syllabus states quite clearly:

If a counterclaim is not barred by a statute of limitation at the commencement of the action in which it is pleaded, it does not become so during the pendency of that action.

National Retailers confirmed a much older ruling to the same effect. See McEwing v. James, 36 Ohio St. 152 (1880) (statute of limitations ceases to run against setoff from date of commencement of action in which it is pleaded). Ohio Jurisprudence 2d teaches a similar lesson:

Unless the defendant’s claim is purely defensive, as by way of recoupment, or has coexisted with the plaintiff’s claim, it is essential to the allowance of the counterclaim that the action in which it is set up be commenced within the period of the statute of limitations pertaining to the claim of the defendant. But the statute of limitations ceases to run against the counterclaim from the date of the commencement of the action in which it is pleaded.

34 Ohio Jur.2d Limitations of Actions § 24 (1958).

Turning to more recent authorities, we observe that in Riverside Methodist Hospital Ass’n of Ohio v. Guthrie, 3 Ohio App.3d 308, 444 N.E.2d 1358 (1982), both National Retailers and McEwing were cited as binding precedent.

[Defendant contends that the trial court erred in sustaining plaintiffs motion to dismiss her counterclaim upon the ground that it was filed more than one year after the claim accrued and, thus, was barred by R.C. 2305.11(A), which establishes a one-year statute of limitations for malpractice actions against a hospital. We agree.
The decision of the trial court is directly contra to the second paragraph of the syllabus of National Retailers Mut. Ins. Co. v. Gross (1943), 142 Ohio St. 132 [50 N.E.2d 258, 26 O.O. 337], which states:
“If a counterclaim is not barred by a statute of limitation at the commencement of the action in which it is pleaded, it does not become so during the pendency of that action.”
Defendant’s counterclaim was not barred by the statute of limitations at the time plaintiff filed its complaint. Accordingly, the counterclaim may be the basis for affirmative relief, even though the one-year limitation had elapsed five days prior to the filing of the counterclaim since, under applicable law, the running of time for filing a counterclaim is tolled by the filing of plaintiff’s complaint. See, also, McEwing v. James (1880), 36 Ohio St. 152.

Id. at 309, 444 N.E.2d at 1360. Nor do we read Riley v. Montgomery, 11 Ohio St.3d 75, 463 N.E.2d 1246 (1984) to the contrary. Riley involved a suit, brought in 1981, for collection of attorney fees. Legal services were rendered last in 1978. Defendants answered with a general denial and asserted a counterclaim alleging malpractice. The collecting attorney moved for summary judgment on the grounds that defendants’ counterclaim was barred by the one-year statute of limitations for malpractice. Id. at 75, 463 N.E.2d at 1247. The Supreme Court of Ohio isolated the issue as “whether a claim of negligence, breach of trust, or malpractice may be considered as a defense or recoupment to an attorney’s suit for fees grounded on an written note, when the statute of limitations for an original action based on malpractice has run.” Id. at 76, 463 N.E.2d at 1248. On this question of first impression, the court ruled

that a claim which would be barred by the statute of limitations if brought in an action for affirmative relief is available as a defense or under the common-law theory of recoupment, when the claim of the defendant arises out of the same transaction as the plaintiff’s claim for relief, and when it is offered to reduce the plaintiff’s right to relief.

Id. at 78, 462 N.E.2d at 1249.

Plaintiff cites Riley for the proposition that it narrows National Retailers and McEwing. We disagree. In the course of its reasoning, the Riley court makes no mention of either case. Moreover, unlike the facts at bar, the statute of limitations with respect to the Riley defendants’ malpractice claim would have been time-barred at the commencement of plaintiff’s action. We think it imprudent to infer that because the state supreme court permits defensive use of a time-barred claim, it concomitantly would refuse to allow “offensive,” if you will, use of a claim that was not time-barred at the time a plaintiff filed his or her complaint.

We appreciate the niceties plaintiff attempts to draw between this action and National Retailers and McEwing, but feel compelled to find the distinctions of no moment. It is true that both cases involved counterclaims that arguably were in the nature of recoupment rather than for affirmative relief. Strictly speaking, however, they were independent actions, as here, on which judgment could be rendered. It is also true that neither case involved a situation in which defendants filed a counterclaim to an amended answer. Yet the language of the Supreme Court in both, as repeated in Riverside, is unequivocal and in defendants’ favor. Perhaps the state high court’s rulings were unduly broad, but we think somewhere within the body of the Riley decision would have been an appropriate place to so indicate. Seeing no qualifications, we are obliged to apply this “plain reading” of the applicable Ohio law.

In addition to her statute of limitations argument, plaintiff additionally contends that we should dismiss defendants’ counterclaim because it is frivolous and vexatious, and because it will unduly prejudice her. As to the latter, we believe additional time for discovery will cure any such prejudice. In connection with the former, we decline to make any ruling with arguable Rule 11 consequences on such sparse allegations.

In accordance with the foregoing, plaintiffs motion to dismiss is hereby DENIED. This case is set for status conference on August 8, 1985, at 11:00 a.m., during which the parties should be prepared to advise the Court, among other things, what additional time for discovery is necessary and how quickly we can proceed to trial.

SO ORDERED.

      . This Court dismissed plaintiff’s Title VII claim for lack of subject matter jurisdiction on July 11, 1985 (see doc. 45). Her FLSA and battery claims remain, however.

      . To the extent that plaintiff argues that defendants' slander claim "does not arise out of the same transaction or occurrence as [her] claim for relief" {see doc. 41, p. 3), we agree insofar as she means that defendants’ claim in no fashion can be construed as representing a defense or as viable under the common-law theory of recoupment.


author: FOREMAN, Chief Judge:

text:
    Donald L. SNOWDEN, Plaintiff, v. CITY OF CARBONDALE, et al., Defendants.
    Civ. No. 85-4079.
    United States District Court, S.D. Illinois, Benton Division.
    July 26, 1985.

      Charles J. Kolker, Belleville, 111., for plaintiff.
    Richard A. Green, Feirich, Schoen, Mag-er, Green & Associates, Carbondale, 111., for defendants.
   MEMORANDUM AND ORDER

FOREMAN, Chief Judge:

Before the Court is defendants' Motion to Dismiss. On February 21, 1985, plaintiffs filed this action under 42 U.S.C. § 1983 alleging that his civil rights were violated on February 29, 1980, when he was beaten by a Carbondale police officer. Defendants, relying on Wilson v. Garcia, — U.S. -, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), contend that the § 1983 action is time-barred under Illinois’ two-year limitations period for personal injuries.

As Congress has not established a specific statute of limitations applicable to § 1983 actions, courts are directed to borrow and apply the most appropriate state statute of limitations. Burnett v. Grattan, — U.S. ---, 104 S.Ct. 2924, 82 L.Ed.2d 36 (1984); Board of Regents v. Tomanio, 446 U.S. 478, 100 S.Ct. 1790, 64 L.Ed.2d 440 (1980); Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975). Plaintiff’s complaint clearly sets forth a personal injury claim, which would be time-barred under the two-year limitations period adopted for personal injury claims in Illinois, Ill.Rev.Stat. ch. 110, ¶ 13-202, regardless of the applicability of Wilson v. Garcia, — U.S. ---, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), to this case. Even if the instant complaint did not clearly set forth a personal injury claim, Wilson v. Garcia, — U.S. ---, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), would be applicable and would serve to bar this claim as untimely.

The United States Supreme Court has held that for the purpose of § 1983 claims, the state limitations statute governing personal injury action constitutes the most appropriate statute of limitations to be borrowed. Wilson v. Garcia, — U.S. ---, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985). The Seventh Circuit appears to recognize that, even as to actions initiated prior to Wilson v. Garcia, — U.S. ---, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), the “state statute of limitations that the federal courts must borrow in a section 1983 suit is the statute of limitations for personal-injury suits.” Bailey v. Faulkner, 765 F.2d 102, 103 (7th Cir.1985). This position is consistent with recent decisions rendered in other circuits which have applied personal injury limitations periods to actions filed prior to the Supreme Court’s decision in Wilson. See, e.g., Jones v. Preuit & Mauldin, 763 F.2d 1250 (11th Cir.1985); Johnson v. Swyka, 763 F.2d 602 (3d Cir.1985); Burkhart v. Randles, 764 F.2d 1196 (6th Cir.1985); Serrano v. Torres, 764 F.2d 47 (1st Cir.1985); Smith v. City of Pittsburgh, 764 F.2d 188 (3d Cir.1985); Acoff v. Abston, 762 F.2d 1543 (11th Cir.1985); Knoll v. Springfield Township School District, 763 F.2d 584 (3d Cir.1985).

In Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07, 92 S.Ct. 349, 355-56, 30 L.Ed.2d 296 (1971), the Supreme Court advanced a three-part analysis to determine whether rulings as to applicable statutes of limitations should be applied retrospectively. The factors to be considered include: the extent of change from established prior law; the purpose and effect of the rule in question and whether retrospective application would advance or retard this purpose; and the equities of retrospective application. Although the Seventh Circuit has not yet specifically addressed these factors in light of the Supreme Court’s decision in Wilson, the Third Circuit, in Smith v. City of Pittsburgh, 764 F.2d 188, at 194-197 considered these factors in depth and determined that restricting the holding in Wilson to prospective application was not warranted.

Regarding the first factor, the change from prior law, the rationale set forth in Wilson clearly indicates that Congress originally intended to characterize § 1983 as providing a remedy for personal injuries sounding in tort. In rejecting the theory that the choice of the statute of limitations depends on the particular facts of each claim, the Wilson Court noted, “there is no reason to believe that Congress would have sanctioned this interpretation of its statute.” — U.S.-, 105 S.Ct. at 1946. In light of the Wilson rationale, as well as the mass confusion and general lack of consistency regarding the selection of state statutes of limitation under § 1988, it cannot be said that the Wilson Court’s decision overruled clear past precedent or decided an issue of first impression whose resolution was not clearly foreshadowed. The Supreme Court’s intention that is decision in Wilson should be applied retrospectively is further evinced by its remanding of two cases to the Third Circuit for further consideration in light of Wilson v. Garcia, — U.S. ---, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985). Swyka v. Johnson, — U.S. ---, 105 S.Ct. 2108, 85 L.Ed.2d 474 (1985); Springfield Township School District v. Knoll, — U.S. ---, 105 S.Ct. 2065, 85 L.Ed.2d 275 (1985).

The Wilson Court was also clear that the purpose of its decision is to provide for “uniformity within each state ... consistent with the borrowing principle contained in § 1988.” — U.S. ---, 105 S.Ct. at 1947. To hold that claims for relief which accrued before April 17, 1985, or actions filed before April 17, 1985, are viable under various statutes of limitations, but that identical claims are subject to only the personal injury limitation by virtue of the time of filing, would certainly not advance the purpose underlying the ruling in Wilson and would, in fact, retard this purpose.

In reference to the third factor in the Chevron analysis, the equities of retrospective application, it cannot be said in the instant case that plaintiff was justified in relying on a five-year limitations period. As previously noted, plaintiff’s claim clearly involves personal injury and would be time-barred even in the absence of the decision in Wilson v. Garcia. In any event, the Supreme Court in Wilson noted that “Plaintiffs may be denied their just remedy if they delay in filing their claims, having wrongly postulated that the courts would apply a longer statute.” — U.S. ---, 105 S.Ct. at 1947 n. 34.

The above application of the Chevron factors is consistent with a similar Seventh Circuit analysis regarding retroactive application of a Supreme Court statute of limitations decision. The court in Landahl v. PPG Industries, Inc., 746 F.2d 1312 (7th Cir.1984), held that the six-month limitations period prescribed in DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), should be applied retroactively. The Landahl court examined the Chevron factors and determined that the confusion and conflict among the circuits regarding the appropriate statute of limitations to be applied in employment discharge cases involving violations of § 301 of the Labor Management Relations Act was merely clarified by DelCostello, which did not therefore represent a “clean break” with past precedent. Landahl, 746 F.2d at 1314-15. Further, the DelCostello rule had been adopted to provide uniformity; giving retroactive effect to the DelCostello rule would further its purpose. Id., at 1315. Finally, although plaintiff in Landahl had filed his suit within fifteen months, the court found “no equitable factor that would support a nonretroactive application.” Id., at 1316. The Landahl court also found persuasive the fact that other courts of appeals had decided in favor of retroactive application. An analysis parallel to the above would apply to the instant case.

Given the above analysis, the Court is convinced that the principles set forth in Wilson v. Garcia, — U.S. ---, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), would be applicable to the instant action even if it were not otherwise barred. As this claim was filed approximately five years after it accrued, it is time-barred under the two-year personal injury limitations period set forth at Ill.Rev.Stat. ch. 110, 1113-202.

Accordingly, defendants’ Motion to Dismiss (Document No. 15) is hereby GRANTED; this action is hereby DISMISSED.

IT IS SO ORDERED.


author: GERALD J. WEBER, District Judge.

text:
    Rom C. HURST v. SEARS, ROEBUCK & CO., a corporation; Quaker City Enterprises, Inc., a corporation; Frank Giunta, an individual; Bob Carrigan, an individual; Lawrence LEYTON and Leyton Furnace Cleaning Company, Inc. v. SEARS, ROEBUCK & CO., a corporation; Quaker City Enterprises, Inc., a corporation; Frank Giunta, an individual; Bob Carrigan, an individual.
    Civ. A. Nos. 84-2572, 84-2593.
    United States District Court, W.D. Pennsylvania.
    July 26, 1985.
    Thomas M. Junker, Pittsburgh, Pa., for plaintiff.
    W. Richard Booth, Pittsburgh, Pa., for Sears, Roebuck & Co.
    Paul M. Puskar, Pittsburgh, Pa., for Quaker City Enterprises and Frank Giunta.
    David E. Shapiro, Philadelphia, Pa., for Carrigan.
   MEMORANDUM OPINION

GERALD J. WEBER, District Judge.

Plaintiffs filed these cases in October 1984. The two complaints are identical, save for the names of the plaintiffs, so we granted a motion to consolidate in May 1985. The complaints contain six counts: five based on state court claims, and one under the Racketeer Influenced Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq. Plaintiffs alleged diversity jurisdiction but the contents of their complaints refute this claim. Plaintiffs are Pennsylvania citizens. They state that defendant Frank Giunta is a Pennsylvania citizen, and that defendant Quaker City Enterprises is incorporated and has its principal place of business in Pennsylvania. Diversity jurisdiction thus would fail for lack of complete diversity. Our jurisdiction came to rest entirely on the sufficiency of plaintiffs’ RICO count.

Defendants Quaker City Enterprises and Frank Giunta moved to dismiss the complaints in December 1984. Defendant Carrigan did likewise in April 1985. Both motions relied upon the same grounds; lack of diversity and insufficient RICO allegations. The Supreme Court had then recently heard arguments in two cases where it considered conflicting interpretations about the scope of RICO. We stayed all action in these cases pending a decision from the Supreme Court.

These decisions were issued July 1, 1985. Sedima, S.P.R.L. v. Imrex Co., — U.S. ---, 105 S.Ct. 8275, 87 L.Ed.2d 346 (1985); American National Bank & Trust Co. of Chicago v. Haroco, Inc., — U.S. ---, 105 S.Ct. 3291, 87 L.Ed.2d 437 (1985). Reviewing these decisions has dispelled our initial skepticism about plaintiffs’ ability to bring what is in essence a state action into the federal courts under RICO. The majority of the Court settled questions about the scope of RICO which until now had divided support among the circuits.

Defendants make many of the same arguments in their motions and briefs and we will address them collectively. Defendants first sought a limiting interpretation of civil RICO by arguing that a cause of action requires a prior criminal conviction, a relationship to organized crime, or proof of injuries outside those caused by the predicate acts. We must now reject these positions according to Sedima.

Defendants’ other claims rely on the facts of these cases as pleaded. They contend that plaintiffs’ allegations of racketeering activity, connection to interstate commerce, and civil conspiracy under RICO are too vague. We acknowledge that the RICO count has little detail. But Rule 8(a), highly favored by the Court, requires only a short and plain statement of the claim. Furthermore, under Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), we should not dismiss a complaint for insufficiency unless it appears beyond doubt that plaintiffs can prove no set of facts which would entitle them to relief. To collect the necessary details, defendants have available the broad scope of federal discovery. Even if we granted dismissal, we would do so with leave to amend. But we believe discovery is the more efficient method of obtaining particulars than dismissing complaints which are shorter and plainer than the ideal. These cases therefore will survive defendants’ motions to dismiss and will proceed in the usual fashion.


author: JACKSON, District Judge.

text:
    Elnora M. BOWLING, Personal Representative of the Estate of Squire Bowling, Jr., Deceased, and Individually and as Mother and Next Friend of Tanya A. Bowling, a minor, and Georgie A. Bowling, a minor, Plaintiffs, v. George B. BUTLER, et al., Defendants.
    Civ. A. No. 84-1990.
    United States District Court, District of Columbia.
    July 29, 1985.

      Donald E. Fitzgerald, Bethesda, Md., for plaintiffs.
    Edward J. Gorman, Jr., Bethesda, Md., for Burgess Enterprises.
    John D. Holler, Mount Rainier, Md., for Butler.
   MEMORANDUM AND ORDER

JACKSON, District Judge.

In this diversity action for wrongful death by electrocution on June 29, 1983, of a plumber allegedly working in proximity to a defectively-wired garbage disposal unit in a residential kitchen sink, one of the co-defendants, Burgess Enterprises, Inc., an electrical contractor who may have worked on the premises more than a decade earlier, has moved for summary judgment of dismissal on limitations grounds.

The parties have briefed the legal issues they perceive the case to present: whether the contractor’s work, if done at all, can be considered (or must be for the purpose) an “improvement;” whether the “discovery rule,” i.e., the rule which suspends the running of the statute until such time as a plaintiff knows he has an action, applies to such absolute statutes of repose as that involved here; and whether the statute, if it operates to bar this action, is constitutional.

Summary judgment, however, presupposes the existence of a matrix of at least some undisputed facts, which must appear of record with evidentiary dignity, from which it can then be argued that the law requires judgment for the moving party. See Catrett v. Johns-Manville Sales Corp., 756 F.2d 181, 184 (D.C.Cir.1985). The Court’s review of the record now before it convinces it that it is impossible, at the moment, to find any truly material facts to exist without dispute, and that any ruling with respect to the applicability of the statute of limitations at this stage would, therefore, demand so much in the way of factual assumption — indeed, speculation — as to make the ruling purely advisory in nature. It will thus deny the motion.

To begin with, the record fails to make it clear, either by way of allegation- and-admission or evidence, that the parties are even agreed that the place of plaintiff’s decedent’s injury and the premises at which defendant contractor may have done some work in the past are the same. The complaint says plaintiff’s decedent was working at 1505 S Street, S.E. when he was electrocuted; plaintiff’s answers to interrogatories say it was 1605 S Street, S.E.; and the complaint asserts, as do certain documents upon which plaintiff relies — as yet unauthenticated permit applications, permits, and invoices all dated in 1972— that the defendant’s allegedly negligent electrical work was performed at 1506 S Street, S.E.

Next, it is conspicuously unconceded by the defendant contractor that it ever did any electrical work at any of those locations, whatever the correct address at which plaintiff’s decedent met his death. Defendant’s president’s affidavit asserts that its own records for 1972 were destroyed as obsolete a year before this suit was filed; that defendant knows no more about work it may have done with which plaintiff’s decedent may have come in contact than plaintiff’s own unauthenticated documents might suggest; and that none of those documents mentions garbage disposals, at 1506 S Street, S.E., or elsewhere (which, by the way, the affidavit does aver, purportedly from personal knowledge, defendant has never furnished or installed in the course of its business at all since at least 1969).

Finally, plaintiff's documents bear the name “Alton P. Burgess Electrical Contractor, Inc.,” whereas the current defendant trades as “Burgess Enterprises, Inc.,” and does so at a different address. While some identity between the former and the latter can be inferred from the president’s affidavit, the nature of that relationship is, once again, conspicuously not shown.

It may well be that if the state of the proof is no more illuminating at the close of plaintiff’s case than it is at present, defendant contractor will be entitled to the dismissal it seeks now, but the dismissal will clearly not come on statute of limitations grounds. The statute of limitations issues will not be reached, if ever, until at least one of three events occur on the record: (1) plaintiff alleges, and defendant admits for purposes of a motion, or (2) one or more of the parties offers evidence without contradiction, or (3) the parties stipulate, that the same contractor who is presently before the Court as a defendant (or a predecessor for whom it would be liable) actually performed services in relation to the wiring of the garbage disposal on the premises at which plaintiff’s decedent was electrocuted, and that it did so sometime prior to June 29, 1973, and not thereafter.

For the foregoing reasons, therefore, it is, this 29th day of July, 1985,

ORDERED, that the motion of defendant Burgess Enterprises, Inc. for summary judgment of dismissal is denied without prejudice.

      . D.C.Code § 12-310 bars inter alia, actions for wrongful death "resulting from the defective or unsafe condition of an improvement to real property” occurring more than 10 years after the improvement is "substantially completed.”

      . Plaintiff has obtained, from a source other than defendant contractor but not shown by the record, a number of documents which she says, if authentic, purport to show that defendant (or a predecessor) performed services on the premises 1506 S Street, S.E., on various occasions in 1972, the latest being December 13, 1972. She is unwilling to concede, however, that it performed no services after that date, and, specifically, after June 29, 1973, i.e., 10 years prior to her decedent’s death. She simply has no evidence of any post-December, 1972, work at the moment.

      . The Court notes that the views of Circuit Judge Bork, dissenting, in Catrett v. Johns-Manville, supra, which would permit the trial judge to test the non-moving party's proof in opposition to a motion for summary judgment in the circumstances presented here to avoid an unnecessary trial are not presently the law of this Circuit.


author: GESELL, District Judge.

text:
    Byrd F. RICHARDSON, Plaintiff, v. UNITED STATES POSTAL SERVICE, et al., Defendants.
    Civ. A. No. 84-3648.
    United States District Court, District of Columbia.
    July 29, 1985.

      Philip A. Gagner, Washington, D.C., for plaintiff.
    Edith S. Marshall, Asst. U.S. Atty., Washington, D.C., for defendants.
   MEMORANDUM

GESELL, District Judge.

Plaintiff Richardson brings this action to challenge his discharge from the United States Postal Service on March 30, 1978, and the Court now has for decision defendants’ Motion to Dismiss or, in the alternative, for Summary Judgment, which has been fully briefed and argued.

Background

Richardson, a long-time employee of the Postal Service, was terminated under its Code of Ethical Conduct which specified that “Conviction of a violation of any criminal statute may be grounds for disciplinary action.” He was suspended when charged with Assault with Intent to Kill after he attempted to kill his wife and himself. After several months of incarceration when he was diagnosed as having a deep depression with paranoid tendency and alcoholism he pled guilty to an assault and weapon charge and was thereafter terminated. His union grieved for reconsideration with back pay. The grievance was denied at the first and second steps of the grivance procedure and never taken to arbitration by the union, which was an available recourse under the labor contract. In denying the grievance the management noted the underlying off-duty criminal conduct was adequate cause for termination under the regulations and also concluded, on July 27, 1978, that Richardson’s “return to an active duty status would not be in the best interests of the Postal Service, of the public, good morale or efficient service.”

On September 27, 1978 Richardson, who is black, pursued the matter by filing a claim of discrimination due to race, sex and handicap (alcoholic) with the Equal Employment Opportunity Commission. The underlying theory of the handicap claim was that Richardson’s supervisors knew of his condition and had failed to accommodate his handicap as required by the Rehabilitation Act of 1973, 29 U.S.C. §§ 791, 794, and his alcoholism, in turn, caused or contributed to the criminal act which caused his discharge. Richardson pursued his EEOC claim unsuccessfully through various stages until final denial by the Office of Review and Appeals, which rejected his claims in October, 1984, and again in November, 1984. The present complaint, which was filed December 3, 1984 and was amended when counsel was available, charges discrimination on the basis of handicap (alcoholism) and violation of the collective bargaining agreement.

Discussion

The only claim that has survived and requires consideration here is the claim of discrimination based on the Postal Service’s alleged failure to accommodate Richardson’s alcoholic handicap. Richardson dropped his Fair Labor Standards Act claim at oral argument. He did not raise the claim of lack of notice in the union grievance proceeding or in his EEOC complaint so these claims are barred by the statute of limitations. 28 U.S.C. § 2401(a). Moreover, notice appears to have been adequate and the grievance-arbitration procedure satisfied due process even when the union (not a party here) failed to proceed to arbitration. Winston v. United States Postal Service, 585 F.2d 198, 209-10 (7th Cir.1978); Stritzl v. United States Postal Service, 602 F.2d 249, 252 (10th Cir.1979). Any challenge to the termination based on “off duty” criminal felony conduct, standing alone, cannot be entertained, particularly since Richardson was not a preference eligible employee covered by 5 U.S.C. § 7513(a), and the Postal Service has a well-established policy of discharging even preference eligible employees who are guilty of criminal conduct. See Yacovone v. Bolger, 645 F.2d 1028, 1032-33 (D.C.Cir.1981); Gueory v. Hampton, 510 F.2d 1222, 1226 (D.C.Cir.1975).

Turning to the Rehabilitation Act claim, it is clear that Richardson depends on a tenuous chain of causation. He had been an alcoholic for years and he claims his supervisors knew this and warned him, but took no decisive action to force him into treatment; there was much drinking by employees sorting mail at the Main Post Office, where he worked as a sorter; he had marital difficulties; he had been drinking heavily when he committed the offense; if he had been “accommodated” for his alcohol problem this might not have happened and thus his difficulties arise from the Postal Service’s allegedly inadequate attention to his alcohol handicap.

The nexus between the crime and the alcohol is, of course, highly conjectural. But even if events of 1978 and earlier were to be examined to untangle the reasons underlying Richardson’s mental difficulties and alcohol use and Richardson’s alcoholism was shown to be a substantial cause of his criminal conduct, it would not benefit Richardson here. Richardson was discharged for his criminal conduct, not because of alcoholism or poor job performance due to alcohol. He does not claim otherwise. The Rehabilitation Act only protects against removal “solely because of alcohol abuse.” 29 U.S.C. § 794. It does not prohibit an employer from discharging an employee for improper off-duty conduct when the reason for the discharge is the conduct itself, and not any handicap to which the conduct may be related. See Huff v. Israel, 573 F.Supp. 107 (M.D.Ga.1983); Guerriero v. Schultz, 557 F.Supp. 511 (D.D.C.1979). The Act does not create a duty to accommodate an alcoholic who is not “otherwise qualified,” i.e. commits an act which standing alone disqualifies him from service and is not entirely a manifestation of alcohol abuse. Nor does it provide any remedy for a employee who has been discharged for nondiscriminatory reasons and alleges that the employer failed to fulfill the duty to accomodate sometime in the .past. The criminal acts that which Richardson committed are disqualifying acts under the rules and policy of the Postal Service and he was properly discharged.

Summary judgment shall be entered for defendants.

      . At argument the Court requested and there has since been filed records of the grievance brought by Richardson's union on his behalf and the transcript of his testimony at deposition in this case. These papers are considered herein.

      . Code of Ethical Conduct for Postal Employees, §§ 442.253, 442.12.

      . The Postal Service argues that the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment, and Rehabilitation Act of 1970, 42 U.S.C. § 290dd-l which provides additional protection to alcoholic employees, see Whitlock v. Donovan, 598 F.Supp. 126, 130-31 (1984), may not apply to the Postal Service and therefore the Service’s duty to provide "reasonable accommodation” under the Rehabilitation Act may be less than that imposed on other federal employers. Cf. Guerriero v. Schultz, 557 F.Supp. 511, 513 (D.D.C.1983) (Rehabilitation Act may not apply with full force to the Foreign Service). The Court does not reach this issue in light of its conclusion in this case.


author: FONG, Chief Judge.

text:
    WINDWARD CITY CENTER OF HAWAII, a Hawaii limited partnership, Plaintiff, v. TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY, formerly known as Occidental Life Insurance Company of California, a California corporation, Defendant.
    Civ. No. 83-0357.
    United States District Court, D. Hawaii.
    July 30, 1985.
    James Paul, Honolulu, Hawaii, Kenneth J. Adelson, Terence N. Church, San Francisco, Cal., for plaintiff.
    William S. Miller, Honolulu, Hawaii, for defendant.
   ORDER GRANTING MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION

FONG, Chief Judge.

Defendant’s motion to dismiss for lack of subject matter jurisdiction came on for hearing before the Honorable Harold M. Fong on April 9, 1985. James T. Paul and Kenneth J. Adelson appeared on behalf of plaintiff, and William S. Miller represented defendant. The court, having reviewed the memoranda filed in support of and in opposition to the motion, having considered the arguments of counsel, and being otherwise advised of the premises herein, finds as follows:

FACTUAL BACKGROUND

On March 29, 1983, plaintiff filed this action for declaratory judgment with respect to a promissory note and mortgage, both of which were executed on July 21, 1971. Extensive discovery occurred, hearings were held on various discovery and dispositive motions, and trial was scheduled to commence April 2, 1985.

Less than one week before trial was scheduled to begin, defendant filed this motion to dismiss for lack of subject matter jurisdiction. Defendant argues that the requisite diversity of citizenship between the parties is lacking.

It is undisputed that at the time that this suit was initiated plaintiff was a Hawaii limited partnership consisting of a Hawaii corporation as the sole general partner and several limited partners, some of whom are citizens of California. Defendant is a California corporation with its principal place of business in California.

DISCUSSION

Plaintiff has asserted jurisdiction under 28 U.S.C. § 1332, which states in part:

(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and is between—
(1) citizens of different States; ____

The Supreme Court has repeatedly held that the citizenship of an unincorporated association, for jurisdictional purposes, is deemed to be that of each of its members. See, e.g., Chapman v. Barney, 129 U.S. 677, 9 S.Ct. 426, 32 L.Ed. 800 (1889) (joint stock company); Great Southern Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 20 S.Ct. 690, 44 L.Ed. 842 (1900) (“limited partnership,” where all partners were of same status); United Steelworkers of America v. R.H. Bouligny, Inc., 382 U.S. 145, 86 S.Ct. 272, 15 L.Ed.2d 217 (1965) (labor union).

The Supreme Court, however, has reserved ruling on the issue of whether, in the case of a two-tiered limited partnership consisting of both general and limited partners, the court should consider the citizenship of all the partners or only the general partners. See Navarro Savings Association v. Lee, 446 U.S. 458, 475 n. 6, 100 S.Ct. 1779, 1789 n. 6, 64 L.Ed.2d 425 (1980) (Blackmun, J., dissenting).

The first court of appeal to address the issue was the Second Circuit in Colonial Realty Corp. v. Bache & Co., 358 F.2d 178 (2d Cir.), cert. denied, 385 U.S. 817, 87 S.Ct. 40, 17 L.Ed.2d 56 (1966). That court held that diversity between the plaintiff and all the general partners of defendant was sufficient to permit that court to exercise jurisdiction. The court noted that under the applicable New York statute a limited partner is not a proper party to proceedings by or against a partnership, except where the object of the suit is to enforce a limited partner’s right against or liability to the partnership.

The Third Circuit rejected the Colonial Realty approach in Carlsberg Resources Corp. v. Cambria Savings & Loan Association, 554 F.2d 1254 (3d Cir.1977). The court stated that it was “troubled by the readiness with which Colonial Realty en-grafts capacity-to-sue rules to the traditional requirements of diversity jurisdiction.” Id. at 1260. Such an approach would “empower state legislators or state courts to determine the perimeters of federal jurisdiction.” Id. at 1261. The Carlsberg court also noted that neither Congress nor the Supreme Court has given any indication that the citizenship of limited partners should be ignored for diversity purposes. Finally, the court found that the principles of judicial economy and federalism militated against endorsing the Second Circuit approach.

Subsequent to Carlsberg, the Supreme Court decided Navarro. The Court held that trustees of a business trust could invoke federal diversity jurisdiction on the basis of their own citizenship, rather than that of the trust’s beneficial shareholders. The Court held that the trustees were the “real parties to the controversy” because they held legal title, managed the assets, and controlled the litigation. Id. 446 U.S. at 465, 100 S.Ct. at 1784.

In Trent Realty Associates v. First Federal Savings & Loan Ass’n of Philadelphia, 657 F.2d 29 (3d Cir.1981), the Third Circuit was asked to re-examine its position in light of the Supreme Court’s holding in Navarro. The Third Circuit found “nothing in the Court’s opinion” which would require it to reconsider its position on this issue. Id. at 32.

The only other court of appeal which has addressed this issue is the Seventh Circuit in Elston Investment Ltd. v. David Altman Leasing Corp., 731 F.2d 436 (7th Cir.1984). That court found “the Third Circuit’s view to be more consonant with Supreme Court precedent” and rejected the approach of the Second Circuit. Id. at 438.

The Ninth Circuit has not addressed this issue. Further, it appears that no district court in this circuit has confronted the issue.

In Fifty Associates v. Prudential Insurance Co. of America, 446 F.2d 1187 (9th Cir.1970), however, the Ninth Circuit did briefly touch upon a tangential issue. In holding that the plaintiff’s allegations of diversity jurisdiction were insufficient, the court stated:

The citizenship of each member of an unincorporated association must be alleged, even though the entity might be recognized at state law as having the ability to sue and the liability to be sued.

Id. at 1190.

CONCLUSION

The court finds the approach espoused by the Third and Seventh Circuits to be more persuasive for several reasons.

First, decades of Supreme Court rulings have firmly established the general rule that in evaluating the existence of diversity jurisdiction, a court must consider the citizenship of each member of an unincorporated association. The Supreme Court’s recent decision in Navarro does not evidence a departure from this long-standing rule. The Navarro Court began its opinion by reaffirming the general rule and the holdings of Chapman v. Barney, 129 U.S. 677, 9 S.Ct. 426, 32 L.Ed. 800 (1889), Great Southern Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 20 S.Ct. 690, 44 L.Ed. 842 (1900), and United Steelworkers of America v. R.H. Bouligny, 382 U.S. 145, 86 S.Ct. 272, 15 L.Ed.2d 217 (1965). Further, the Court specifically grounded its holding in “more than 150 years” of law which “has permitted trustees ... to sue in their own right, without regard to the citizenship of the trust beneficiaries.” 446 U.S. at 465-466, 100 S.Ct. at 1784.

Second, in Fifty Associates v. Prudential Insurance Company of America, 446 F.2d 1187 (9th Cir.1970), the Ninth Circuit acknowledged this general rule and held further that this rule is applicable regardless of whether the unincorporated association could or could not be sued under state law. Thus, the Ninth Circuit may have tacitly rejected the approach of the Second Circuit in Colonial Realty which based its exception on the fact that limited partners are not liable in most actions under New York law. See Colonial Realty, 358 F.2d at 183-84.

Third, as noted by Professors Wright, Miller, and Cooper, the Third Circuit approach “streamlines the determination of jurisdiction and advances the policy of restricting diversity jurisdiction to those cases in which it is clearly appropriate.” 13B C. Wright, A. Miller & E.. Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3630 at 701 (1984).

The court recognizes that the position adopted herein may have the effect of precluding large numbers of litigants from access to a federal forum. As stated by the Supreme Court in United Steelworkers v. R.H. Bouligny, Inc., 382 U.S. 145, 150-51, 86 S.Ct. 272, 274-75, 15 L.Ed.2d 217 (1965), however, “these arguments, however appealing, are addressed to an inappropriate forum, and ... pleas for extension of the diversity jurisdiction to hitherto uncovered broad categories of litigants ought to be made to the Congress and not to the courts.”

Therefore, in the absence of controlling authority to the contrary, this court will continue to adhere to the general rule that for purposes of determining diversity jurisdiction, the court must consider the citizenship of each member of an unincorporated association. In light of the undisputed fact that some of plaintiffs limited partners are citizens of California, and in view of the fact that defendant is a California corporation with its principal place of business in California, the court finds that the requisite complete diversity is lacking here.

ACCORDINGLY, defendant’s motion to dismiss for lack of subject matter jurisdiction is hereby GRANTED.

      . Exhibits submitted by defendant indicate that plaintiff's corporate general partner, Mactra, Inc., was dissolved on November 9, 1984, for failure to file an annual exhibit for a period of two years as required by Hawaii Rev.Stat. § 416-122 (1976). It appears, therefore, that at the present time plaintiff may not be a valid limited partnership, as defined by Hawaii state law. See Hawaii Rev.Stat. § 425-21 (1976).
      Nevertheless, it is axiomatic that "[w]hether federal diversity jurisdiction exists is determined by examining the citizenship of the parties at the time the action is commenced.” 13B C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3608 at 448 (1984). See, e.g., World Communications Corp. v. Micronesian Telecommunications Corp., 456 F.Supp. 1122 (D.Hawaii 1978).

      . The Fifth Circuit, in dictum, has found the Second Circuit analysis more persuasive than the Third Circuit approach. Lee v. Navarro Savings Ass’n, 597 F.2d 421 (5th Cir.1979), aff’d, 446 U.S. 458, 100 S.Ct. 1779, 64 L.Ed.2d 425 (1980). Further, the issue has been recognized but not decided by two other courts of appeal. See Missouri-Indiana Investment Group v. Shaw, 699 F.2d 952, 957 n. 6 (8th Cir.1983); Anchorage-Hymning & Co. v. Moringiello, 697 F.2d 356, 357 n. 1 (D.C.Cir.1983).

      . Compare Wroblewski v. Brucher, 550 F.Supp. 742 (W.D.Okla.1982) and Sixth Geostratic Energy Drilling Program 1980 v. Ancor Exploration Co., 544 F.Supp. 297 (N.D.Okla.1982) (applying rationale of Navarro and concluding that only citizenship of general partners should be considered).


author: PATRICK F. KELLY, District Judge.

text:
    Ruby TROYER, Plaintiff, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.
    No. 83-1748-K.
    United States District Court, D. Kansas.
    July 30, 1985.

      Jim L. Lawing, Wichita, Kan., for plaintiff.
    Steve Lester, Asst. U.S. Atty., Wichita, Kan., for defendant.
   MEMORANDUM AND ORDER

PATRICK F. KELLY, District Judge.

On March 20, 1985, the Court entered certain findings, and as a consequence thereof ordered the Secretary to commence payment of benefits owing since April 1981.

Now the plaintiff seeks attorney fees pursuant to 28 U.S.C. § 2412(d). Essentially, she urges that since certain decisions of the Appeals Council were not substantially justified, her attorney fees necessarily incurred to correct the wrong are in order. For reasons stated below, the Court concurs.

In the interest of clarity, the Court’s findings bear repeating here:

1. On September 23, 1981, the plaintiff applied for disability benefits under §§ 216(i) and 223 of the Social Security Act, alleging disability since April 1981.
2. As of the date the plaintiff’s disability commenced, she suffered from arthritis, heart disease, hypertension, chronic migraine headaches, urinary bladder disorder, a hernia, and the residuals of polio.
3. After the plaintiff’s application was turned down through administrative channels, she requested and received a hearing before an Administrative Law Judge on August 3, 1982; and on December 14, 1982, the Administrative Law Judge entered a decision rejecting the plaintiff’s claim of being disabled as of April 1981, finding her to be able to stand and walk for brief periods of time and to be able to sit for prolonged periods.
4. Plaintiff subsequently requested the decision of the Administrative Law Judge to be reviewed by the Appeals Council.
5. On February 28, 1983, subsequent to the hearing decision but prior to any action of the Appeals Council, Dr. James L. Barber, the plaintiff’s physician, who had previously expressed an opinion that the plaintiff could do light work, sent a letter to the Appeals Council with the information that the plaintiff had been found to suffer from a seizure disorder which prevented her from doing any work other than that which was sedentary in nature and which disabled her from working around machinery. Despite having this medical opinion, on March 8, 1983, the Appeals Council affirmed the finding of the Administrative Law Judge and adopted the hearing decision of the Administrative Law Judge as the Secretary’s final decision.
6. The plaintiff duly perfected an appeal from the decision of the Appeals Council, and after a considerable delay during which time this Court- required the Secretary to locate and transcribe the administrative record, the case has now been presented fully to the Court.
7. The Court finds that the Administrative Law Judge misperceived the plaintiff’s disability and that the Appeals Council should have corrected the misperception of the Administrative Law Judge’s decision when it received Dr. Barber’s second report. In light of the history and the documented physical ailments and impairments of the plaintiff, she could not be expected to have performed any work at any time past the occasion of her application for disability benefits, and the record is clear that she had not worked for a considerable time back to and even beyond April 1981.
8. Therefore, the Court finds that as a matter of law the record discloses that the Secretary based its decision against the plaintiff without having substantial evidence to support that decision, and the Court further finds that all of the evidence supports the only other conclusion that plaintiff has been disabled since April 1981.

It is of interest to note that the order for payment of benefits commencing April 1981 intended them to run until such time as the Secretary finally recognized her disability pursuant to a subsequent application filed by plaintiff in August 1983. We understand that the latter decision is geared to the same medical data available from the outset.

It is also clear that from the first instance, a sense of obstinacy has pervaded the Council, the thrust of which directed its decision not to consider the supplanted report of Dr. Barber, which, of course, in the Court’s view, it was duty-bound to entertain.

In days past, even when faced with the most unreasonable findings of either the AU or the Appeals Council, this Court has declined to assess attorney fees. In this, ever sensitive to the rather quasi-judicial process engaged in these proceedings, it has been the Court’s attempt to shape policy with decisions of remand rather than hold the Secretary responsible for fees and expenses incurred as the claimants pursued their remedies here. Such a notion has been as frustrating as it has been naive.

In more recent times, the Court’s patience exhausted, a stream of reversals rather than remand with instructions have transpired. In most instances, it was simply the Court’s view that these claimants are not deserving, of the expenditure of further time and delay in what has developed to be a most fruitless exercise.

Now, in this Court’s view, the time -has surely come to apprise the Secretary that she, through her agents, has responsibilities. In this regard, the AU is expected to be fair and impartial, and the Appeals Council is not intended to function as a “rubber stamp” of whatever decision the AU has entered. Most assuredly, it would be a rarity to note the AU’s affirmance of any'- disability claim or the Appeals Council’s disagreement. It is imperative here that the Secretary must be sensitive to all that transpires in these proceedings, and have the fortitude to act when the Secretary knows, or should know, that these bodies are simply wrong.

This Court is not alone. Solace is taken in a recent decision of Chief Judge O’Con-nor in Cole v. Heckler, 616 F.Supp. 871, wherein he has noted in part as follows:

... Here, we found the AU’s findings concerning plaintiff’s complaints and sedentary work to be incredible and unsupported. Also, there was the AU’s failure to apply Appendix 1. The Appeals Council’s “rubber stamp” of these findings requires us to conclude that there was no reasonable basis or evidence to support the Secretary’s position that plaintiff was not disabled.

Judge O’Connor assessed attorney fees.

It is clear that as Judge O’Connor came to grips with the problems in dealing with the Secretary on the issue of attorney fees, he, in turn, found support from our colleague Judge Frank Theis, whose comment in Espinosa v. Secretary of Health & Human Services, 565 F.Supp. 810, 815 (D.Kan.1983), probably says it all:

The only possible explanation for [the Secretary’s action] is the SSA’s dogged fixation on reduction of expenses through unfounded denial of benefits to the helpless. Such actions by the SSA are becoming all too frequent.

Additionally, the Court has at hand the well-reasoned decision of Judge Theis in Lane v. Heckler, 602 F.Supp. 333 (D.Kan.1985).

Most recently, this Court belatedly addressed the issue and fully reviewed the situation wherein fees' should be awarded in Social Security cases. In the matter of Hawkins v. Heckler, 600 F.Supp. 832 (D.Kan.1985), the Appeals Council had refused to grant the plaintiff’s request for a review of the AU’s decision. This Court ruled in its Memorandum and Order dated January 22, 1985, that the Appeals Council’s refusal to review in the face of substantial new evidence was error. At that time the Court had no doubt that the plaintiff was disabled and that there was no substantial evidence to the contrary. As of then, out of deference to the agency, the Court wanted to give the Secretary the opportunity to make a proper determination of her own rather than simply reverse the agency’s ruling at that time. The Appeals Council ignored this Court’s order of remand, and simply reaffirmed the termination of plaintiff’s period of disability, failing to obtain reconsideration by the AU. To this sense of obstinacy, this Court stated as follows:

It was hoped that with the instructions contained in the remand of this case that the Secretary would reconsider this case in the proper and legal perspective. Instead, the Secretary has turned a deaf ear to a case of obvious disability. This attitude is shocking enough. But the Secretary has shown this Court no more respect nor concern for following the law than it has shown Plaintiff. This Court ordered the Secretary to include reconsideration by the AU as part of its proceedings pursuant to the remand of this case. The Secretary instead defied this order by conducting the reconsideration only through the Appeals Council. This defiance of the Court’s order did not enter into the deliberations of the merits of this case, but this Court cannot refrain from observing that such defiance indicates an arrogant administrative attitude that is either bent upon denying benefits no matter how meritorious the claim or a callousness and indifference that amounts to the same thing.

On May 14, 1985, this Court approved attorney fees.

In light of the foregoing, this Court has joined his colleagues, convinced that in those instances where the absence of substantial justification is apparent and anyone who reviews the files knows or should know this, attorney fees are probably allowable.

In Hawkins, supra, the Court fully reviewed those elements necessary for consideration of assessment of attorney fees and reiteration is unnecessary here. In the case at bar, the plaintiff’s counsel has extended his statement for services in the aggregate of 40 hours and 45 minutes, at $100.00 per hour. His statement is in the amount of $4,075.00. In this, the Court now finds that plaintiff’s claim is timely and plaintiff counsel’s statement for services is fair and reasonable. The Court further notes that the plaintiff’s claim for attorney fees in the amount of $100.00 per hour is allowable here, the Court being fully aware of the diligence, persistence, and quality of work expended by said attorney. The Secretary is ordered to pay the amount of $4,075.00 within 60 days of the filing of this order.


author: GENE CARTER, District Judge.

text:
    UNITED STATES of America, v. Jonas KLIMAVICIUS.
    Civ. No. 84-0183 P.
    United States District Court, D. Maine.
    July 30, 1985.

      Ronnie L. Edelman, Trial Atty., Alan Held, Trial Atty., U.S. Dept, of Justice, Washington, D.C., F. Mark Terison, Asst. U.S. Atty., Portland, Me., for plaintiff.
    Ivars Berzins, Babylon, N.Y., Daniel Bates, Daniel G. Lilley, Portland, Me., for defendant.
   MEMORANDUM OF DECISION AND ORDER

GENE CARTER, District Judge.

In this action Plaintiff seeks the denaturalization of Defendant on the grounds that he illegally procured his visa and naturalization by obscuring or misrepresenting certain alleged facts about his background, specifically, that he had been a member of the Lithuanian Schutzmannschaft and had assisted in the Nazi persecution of Jews and other civilians. The case is now before the Court on Plaintiff’s Motion to Strike Defendant’s Demand for a Jury Trial.

In 1913 the United States Supreme Court determined that a denaturalization proceeding brought on the grounds that citizenship had been fraudulently and illegally procured was not a suit at common law because the right asserted and the remedy sought were “essentially equitable.” Therefore, there was no right to a jury trial. Luria v. United States, 231 U.S. 9, 27, 34 S.Ct. 10, 15, 58 L.Ed. 101 (1913). In 1946 the Supreme Court again characterized a denaturalization proceeding brought on the grounds of fraud in the procurement of citizenship as a suit in equity. Knauer v. United States, 328 U.S. 654, 66 S.Ct. 1304, 90 L.Ed. 1500 (1946).

Defendant argues strenuously that Luna no longer has any validity. Since denaturalization proceedings continue to be considered equitable in nature, this Court sees no reason to reexamine Luna’s holding that there exists no right to a jury trial in denaturalization proceedings. See United States v. Walus, 616 F.2d 283, 304, n. 53 (7th Cir.1980).

Defendant also contends that various constitutional provisions require that he be afforded a jury trial in this proceeding. He has not, however, cited the Court to a single case of this nature which has been tried to a jury. The Court has carefully considered all of Defendant’s arguments and will address the major points raised in his memorandum.

In making his claims that the Fifth and Sixth Amendments require a jury trial, Defendant contends that denaturalization is penal in nature because it deprives an individual of the most fundamental of all rights, his citizenship. He points to Kennedy v. Mendoza-Martinez, 372 U.S. 144, 165, 83 S.Ct. 554, 565, 9 L.Ed.2d 644 (1963), in which the Court held two statutes invalid “because in them Congress has plainly employed the sanction of deprivation of nationality as a punishment — for the offense of leaving or remaining outside the country to evade military service — without affording the procedural safeguards guaranteed by the Fifth and Sixth Amendments.” It is very clear that although the outcome may be the same, a denaturalization proceeding differs significantly from the forfeiture of citizenship found unconstitutional in Mendoza-Martinez. While recognizing the seriousness of a deprivation of citizenship, the denaturalization eases

have also recognized that there must be strict compliance with all the congressionally imposed prerequisites to the acquisition of citizenship. Failure to comply with any of these conditions renders the certificate of citizenship “ ‘illegally procured,’ and naturalization that is unlawfully procured can be set aside.” ... This judicial insistence on strict compliance with the statutory conditions precedent to naturalization is simply an acknowledgment of the fact that Congress alone has the statutory authority to prescribe rules for naturalization, and the courts’ task is to assure compliance with the particular prerequisites to the acquisition of United States citizenship.

Fedorenko v. United States, 449 U.S. at 506, 101 S.Ct. at 747. Setting aside naturalization for failure to comply with the particular prerequisites to the acquisition of citizenship is not a punishment; it merely represents an undoing of that which should not have been done in the first place. Since the denaturalization is not penal, no jury trial is required under the Sixth Amendment.

Defendant also argues that due process requires a jury trial. It is clear that the courts have thoroughly considered the severe and unsettling consequences occasioned by loss of the precious right to citizenship. As the Supreme Court has stated:

For these reasons, we have held that the Government “carries a heavy burden of proof in a proceeding to divest a naturalized citizen of his citizenship.” ... The evidence justifying revocation of citizenship must be “ ‘clear, unequivocal, and convincing’ ” and not leave “ ‘the issue in doubt.’ ” ... Any less exacting standard would be inconsistent with the importance of the right that is at stake in a denaturalization proceeding. And in reviewing denaturalization cases, we have carefully examined the record ourselves ____

Fedorenko v. United States, 449 U.S. at 505-06, 101 S.Ct. at 746-47 (citations omitted). Despite the attention the courts have paid to procedural detail in protecting the “precious” right of citizenship, no court has yet decided that due process requires trial by jury. This Court also finds that the procedural safeguards already established are sufficient to afford adequate protection to the rights of defendants in denaturalization proceedings.

Accordingly, it is ORDERED that Plaintiff’s Motion to Strike Defendant’s Demand for a Jury Trial is GRANTED. Defendant’s Demand for a Jury Trial is hereby STRICKEN.

So ORDERED.

      . In Fedorenko v. United States, 449 U.S. 490, 101 S.Ct. 737, 66 L.Ed.2d 686 (1981), the Supreme Court again acknowledged this characterization in Luria and Kramer although it determined that district courts have no equitable discretion in cases in which the court has determined that a naturalized citizen obtained his citizenship illegally or by willful misrepresentation.


author: LOVELL, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. Gordon Ernest NOBLE, Sr., Defendant.
    No. CR 85-22-H.
    United States District Court, D. Montana, Helena Division.
    July 30, 1985.

      Carl E. Rostad, Asst. U.S. Atty., Great Falls, Mont., for plaintiff.
    Eula Compton, Cok & Wheat, Bozeman, Mont., for defendant.
   OPINION AND ORDER

LOVELL, District Judge.

Defendant Gordon Ernest Noble, Sr. moves for dismissal of the indictment; or, in the alternative, for dismissal of Counts II and III of the indictment. The motions, having been briefed fully, are ripe for determination.

MOTION TO DISMISS THE INDICTMENT

Defendant is charged with three counts of violating 18 U.S.C. Appendix § 1202(a), which provides in part:

Any person who:
(1) has been convicted by a court of the United States or of a state or any political subdivision thereof of a felony, or (2) has been discharged from the Armed Forces under dishonorable conditions,
and who receives, possesses, or transports in commerce or affecting commerce any firearm, shall be fined not more than $10,000 or imprisoned for not more than two years, or both.

The factual predicate on which these charges are based involves Noble’s April 1982 conviction by a court martial of the United States Army for possession and sale of cocaine, a felony offense punishable by imprisonment for more than one year.

Noble contends that a court martial is not part of the federal judiciary. He argues, therefore, that judgments rendered by this type of military tribunal fall outside the scope of the statute under which he is charged. This narrow question under § 1202(a)(1) is one of first impression.

The cardinal rule of statutory construction is that a statute must be read, if possible, so as to give effect to the intent of Congress. Hudson Distributors, Inc. v. Eli Lilly & Co., 377 U.S. 386, 395, 84 S.Ct. 1273, 1279, 12 L.Ed.2d 394 (1964).

The liability encompassed by 18 U.S.C. Appendix § 1202(a), the prohibition on receipt or possession of firearms in commerce, is imposed on persons who meet one or more of five qualifying factors. Among persons so restricted are those persons convicted of a felony “by a court of the United States or of a State.” 18 U.S.C. Appendix § 1202(a)(1).

The language of the statute concerning federal convictions is not limited to judgments rendered by Article III courts. Courts martial are authorized by Article I of the Constitution. See, e.g., Osborn v. United States, 322 F.2d 835, 838-39 (5th Cir.1963).

The legislative history of the statute in question is quoted extensively in Stevens v. United States, 440 F.2d 144, 152-166 (6th Cir.1971). There is no indication that Congress intended to limit qualifying felony convictions under subdivision (1) of the statute to judgments rendered by Article III Courts. Rather, Congress specifically found that persons previously convicted of felonies present threats to the safety of government officials, to commerce and to the free exercise of constitutional rights. 18 U.S.C. Appendix § 1201.

The broad wording of the provision in question indicates a legislative intent to encompass judgments rendered by any federally authorized or state court competent to impose felony sanctions. The narrow interpretation offered by the defendant is not supported by the legislative history. Furthermore, upon consideration of the public policy involved in enactment of 18 U.S.C. Appendix § 1202(a), the court concludes that it would be unreasonable to construe the language “by a court of the United States” as excluding felony convictions in tribunals of the United States Armed Forces.

Defendant’s argument that he does not meet the qualifying factor set out in subdivision (2) of the statute, that of dishonorable discharge from the military, is well taken. The Uniform Code of Military Justice establishes a three-stage procedure before dishonorable discharge , is final. 10 U.S.C. §§ 801 et seq. Trial is had in a court martial with mandatory appeal to the Court of Military Review and a final appeal to the Court of Military Appeals. Dishonorable discharges based upon conviction of a felony in military court are not final until determination by the Court of Military Appeals. 10 U.S.C. § 871. Defendant’s discharge status has not been resolved at present. It is the opinion of the court, therefore, that Noble cannot be charged under subdivision (2) of 18 U.S.C. Appendix § 1202(a). The indictment need not be dismissed, however, because the five qualifying factors set forth in the statute are stated in the disjunctive. It is sufficient that defendant satisfies the factual predicate stated in subdivision (1).

MOTION TO DISMISS COUNTS II AND III

Count I of the indictment alleges that defendant, a person previously convicted of a felony, received and possessed, in commerce and affecting commerce, a rifle on or about April 11, 1985. Count II contains the same allegations except that the weapon identified is a shotgun. Count III is identical except that it identifies another rifle. Defendant insists that it is improper under 18 U.S.C. § 1202(a) to charge him with three separate offenses for the simultaneous receipt and possession of three firearms.

The courts have uniformly held that simultaneous receipt and possession of multiple firearms is not sufficient to permit separate prosecutions for each weapon involved. See United States v. Conn, 716 F.2d 550, 552 (9th Cir.1983); United States v. Wiga, 662 F.2d 1325, 1336 (9th Cir.1981), cert. denied, 456 U.S. 918, 102 S.Ct. 1775, 72 L.Ed.2d 178 (1982). The court concludes, therefore, that it is improper for the government to charge defendant with three separate offenses in this case.

This court has no desire to arbitrarily decide which two counts of the indictment should be dismissed. Plaintiff, therefore, will be afforded the opportunity to make a written election as to which count it will prosecute. The remaining counts will be deemed dismissed upon the filing of such written election.

ORDER

IT IS HEREBY ORDERED that defendant’s motion to dismiss the indictment is DENIED.

IT IS FURTHER ORDERED that defendant’s motion to dismiss two of the three counts of the indictment is GRANTED. Plaintiff shall file a written election of which count it intends to prosecute within five (5) days. The remaining counts will be deemed dismissed upon the filing of Plaintiff’s written election.


text:
    UNITED STATES of America, Plaintiff, v. Terry A. LOGAN, Richard Angelo Calabrese and Carol Ann Calabrese, Defendants.
    No. CR 84-12-BU.
    United States District Court, D. Montana, Butte Division.
    July 31, 1985.
    Robert L. Zimmerman and James E. Seykora, Asst. U.S. Attys., Billings, Mont., for plaintiff.
    Gregory A. Jackson, Jackson Law Firm, Helena, Mont., Charles F. Moses, Moses Law Firm, Billings, Mont., for defendants.
   MEMORANDUM AND ORDER

LOVELL, District Judge.

Defendant Richard Angelo Calabrese moves the Court to reconsider the order of U.S. District Judge W.D. Murray — filed June 11, 1985 — detaining him without bail pending trial. Judge Murray’s pretrial detention order was made pursuant to the Bail Reform Act of 1984, 18 U.S.C. §§ 3141 et seq. See 18 U.S.C. § 3142.

On November 15, 1985, the grand jury indicted Richard Angelo Calabrese and two co-defendants for conspiring to manufacture and distribute methamphetamine, a controlled substance, in violation of 21 U.S.C. §§ 841(a)(1), 846. The statutes provide the maximum penalty upon conviction: a term of imprisonment not exceeding 15 years or a fine not exceeding $125,000, or both.

Upon the government’s motion to detain Richard Calabrese prior to trial, Judge Murray conducted a hearing on May 22, 1985. Based on the brief submitted by the parties and the evidence submitted at both the May 22 hearing and an earlier pretrial detention hearing, Judge Murray specifically found that Richard Calabrese poses a serious flight risk. Judge Murray further found probable cause to believe defendant committed the offense charged. The undersigned was on the bench with Judge Murray at the May 22 hearing but did not participate in the Court’s ruling. Certainly, however, there was substantial, credible, and unrefuted evidence presented to justify the findings and conclusions entered by the court.

This case has since been assigned to the undersigned, and on July 10, 1985, defense counsel filed the pending motion to reconsider. In support of his motion defendant contends that Judge Murray applied an incorrect standard of proof in determining the flight risk issue, that the government failed to satisfy its burden of proof, and that changed circumstances since the May 22 hearing warrant release pending trial. The parties have submitted briefs. The court heard oral argument on this matter on July 30, 1985.

Under the circumstances I will not disturb the determination of Judge Murray in the absence of clear error of law or changed circumstances which warrant reconsideration of the findings.

Judge Murray found by a preponderance of the evidence that Richard Calabrese presents a risk of flight serious enough to require pretrial detention. Defendant argues the Court erred by failing to require the government to demonstrate flight risk by clear and convincing evidence.

The Bail Reform Act of 1984 apparently establishes two distinct standards of proof required at a pretrial detention hearing— one applicable to safety and the other applicable to flight. The statute expressly provides that a finding that no condition or combination of conditions of release reasonably will assure the safety of other persons must be based on clear and convincing evidence. 18 U.S.C. § 3142(f). The statute, however, is silent as to the amount of proof necessary to establish flight risk.

A statute must be construed, if possible, so as to give effect to the intent of Congress. Hudson Distributors, Inc. v. Eli Lilly & Co., 377 U.S. 386, 395, 84 S.Ct. 1273, 1279, 12 L.Ed.2d 394 (1964). The legislative history of the 1984 Bail Reform Act does not contain any indication that the standard of proof applicable to flight under prior law was to be altered. Given the fact Congress expressly set forth a standard of proof concerning safety, 18 U.S.C. § 3142(f), the court finds it significant that no expression was made regarding the amount of proof required to show flight risk. The court concludes, therefore, that Congress must have contemplated the continued application of the standard observed under prior law.

Thus, proof by a preponderance of the evidence — the standard ordinarily applied in pretrial proceedings — is the standard of proof necessary to demonstrate flight risk under the Bail Reform Act of 1984. See, for example, Lego v. Twomey, 404 U.S. 477, 92 S.Ct. 619, 30 L.Ed.2d 618 (1972); United States v. Matlock, 415 U.S. 164, 94 S.Ct. 988, 39 L.Ed.2d 242 (1974). Judge Murray properly applied the correct standard in making his finding that Richard Calabrese poses a flight risk.

Defendant next argues that the government did not demonstrate his propensity toward flight by clear and convincing evidence. For the reasons stated above, this argument is without merit.

The defendant also contends that changes of circumstance since the May 22 hearing warrant reconsideration of his pretrial detention. The specific changes of circumstance identified by defendant are:

(1) That his hypertension is aggravated by incarceration. Defendant particularly complains that he requires a low-salt diet and that such a diet is not provided at the Silver Bow County Jail in which he is incarcerated.
(2) That incarceration has limited his ability to assist defense counsel in the preparation of his case.
(3) That officials of the jail have made it difficult for defendant to meet with counsel and his wife, a co-defendant in this action, at the same time.

The court finds that the above-described changes of circumstance are not related to the issue of whether or not defendant would flee. The court will not reconsider the June 11 pretrial detention order based on these changes of circumstance. Although the court determines defendant’s motion to reconsider is without merit, it would entertain reasonable motions designed to alleviate the dietary problem identified by defendant or any problem regarding access to counsel.

THEREFORE IT IS ORDERED that defendant Richard Angelo Calabrese’s motion to reconsider pretrial detention is DENIED.