author: FOREMAN, Chief Judge:

text:
    Dale HAMMOND, Plaintiff, v. ILLINOIS STATE BOARD OF EDUCATION, County of Madison, Illinois, and Evelyn Bowles, in her official capacity as the County Clerk for Madison County, Illinois, Defendants.
    Civ. No. 85-3497.
    United States District Court, S.D. Illinois, East St. Louis Division.
    Jan. 10, 1986.
    J. Thomas Long, Farrell & Long, P.C., Godfrey, 111., for plaintiff.
    Michael Pasko, West Frankfort, 111., Michael Pasko, Asst. Atty. Gen., Mt. Vernon, 111., for defendants.
   MEMORANDUM AND ORDER

FOREMAN, Chief Judge:

This matter is before the Court on plaintiff’s Motion for a Preliminary Injunction (Document No. 5). By agreement of the parties and due to the urgency of the matter, the Court has consolidated the motion for preliminary injunction and the request for permanent relief. A hearing on the matter was held on January 3, 1986, wherein argument and testimony were presented. The following memorandum represents this Court’s findings of fact and conclusions of law as required by Fed.R.Civ.P. 52(a).

On December 10, 1985, the plaintiff presented to the County Clerk of Madison County his nominating petition to stand as candidate for the office of Regional Superintendent of Schools, Madison County, Illinois. The Clerk refused to accept the nominating petition because the plaintiff did not include with the petition a certificate from the State Board of Education certifying that from the records of its office the plaintiff has the qualifications required by Ill.Rev.Stat. ch. 122, K 3-1. This paragraph provides in pertinent part that:

No one is eligible to file his petition at any primary election for the nomination as candidate for the office of regional superintendent of schools nor to enter upon the duties of such office either by election or appointment unless he possesses the following qualifications: (1) he is of good character, (2) he has a master’s degree, (3) he has earned at least 20 semester hours of credit in professional education at the graduate level, (4) he holds a valid all grade supervisory certificate or a valid state limited supervisory certificate, or a valid state life supervisory certificate, or a valid administrative certificate with superintendent endorsement, (5) he has had at least 4 years experience in teaching, and (6) he was engaged for at least 2 years of the 4 previous years in full time teaching or supervising in the common public schools or serving as a county superintendent of schools or regional superintendent of schools for an educational service region in the State of Illinois.
No petition of any candidate for nomination for the office of regional superintendent of schools may be filed and no such candidate’s name may be placed on a primary or general election ballot, unless such candidate files as part of his petition a certificate from the State Board of Education certifying that from the records of its office such candidate has the qualifications required by this Section; however, any incumbent filing his petition for nomination for a succeeding term of office shall not be required to attach such certificate to his petition of candidacy.

The County Clerk called the State Board of Education and asked if it would issue such a certificate and the State Board indicated that it would not because the plaintiff did not possess the qualifications referred to under subsection (6) above. Namely, the State Board refused to issue a certificate because the plaintiff had not engaged for at least 2 years of the 4 previous years in full time teaching in a common public school in Illinois.

On December 13, 1985, the plaintiff filed a 42 U.S.C. § 1983 complaint in this Court alleging that his constitutional rights have been violated and seeking to have this Court compel the Defendant State Board to issue the required certificate. On that same day, the plaintiff also moved for a temporary restraining order asking this Court to temporarily compel the County Clerk to accept the plaintiff’s nominating petition prior to the December 16, 1985 deadline for filing. After a brief consultation with the defendants, the Court granted the temporary restraining order on December 13, 1985. The defendants have agreed to an extension of the temporary restraining order until final resolution on January 10, 1986.

At the January 3, 1986 hearing, the parties agreed that there were no disputed issues of fact. The plaintiff meets all the requirements to stand for election as the Regional Superintendent of Schools except that the plaintiff has not taught in an Illinois common public school for two of the four years preceding the plaintiff’s request for a certificate of eligibility under paragraph 3-1. The plaintiff is of good character. He holds a Ph.D. degree from Southern Illinois University, Edwardsville, Illinois, and has received all of his education within the State of Illinois. The plaintiff has at least twenty semester hours of credit in professional education at the graduate level and he holds a valid administrative certificate with a superintendent’s endorsement. The plaintiff has been employed as a full time teacher in the Hazelwood School District, Hazelwood, Missouri, from 1974 to the present; therefore, the plaintiff has at least four years experience in teaching.

Both parties have briefed the constitutional issues involved. The plaintiff argues that subsection (6) is violative of the plaintiff’s rights under the first amendment as an unlawful prior restraint to the plaintiff’s fundamental right of association; that the section creates an unlawful classification under the equal protection clause of the fourteenth amendment; and that the section is violative of the privileges and immunities clause in that it seeks to restrain the plaintiff’s right to practice his chosen profession in another state. The defendant contends that the right to be a candidate is not a fundamental right and that subsection (6) is rationally related to a legitimate state interest. Although not briefed by the plaintiff, at the hearing the plaintiff also argued that subsection (6) was ambiguous as to whether the prior teaching experience had to be in Illinois, and that therefore, the Court should interpret the subsection so as to avoid the constitutional issue.

Initially, the Court notes that although the subsection (6) is not perfectly clear, it is not that ambiguous so as to have this Court adopt the plaintiff’s interpretation. The plaintiff argues for the construction of subsection (6) which would have the clause “for an educational school region in the State of Illinois” modify only the wording after the second last disjunctive “or.” Under such a construction, the two years out of the last four years would have had to have been spent in teaching generally and not necessarily in Illinois, and the alternative requirements of serving as a county superintendent of schools or regional superintendent of schools would be limited to an educational service region in the State of Illinois. The plaintiff would meet the teaching requirement under this construction. However, such a construction ignores the fact that common public schools is defined elsewhere in the School Code to mean “any school operated by authority of this Act.” Ill.Rev.Stat. ch. 122, ¶ 1-3. Therefore, even without the “State of Illinois” modification, the" very terms upon which the plaintiff relies would, by definition, require Illinois teaching experience. Further, previous versions of this paragraph clearly required that the most recent teaching experience be in Illinois. The 1961 version of the paragraph states that “[n]o one shall be eligible to file his petition ... who has not at some time during the two preceding years been actively engaged in teaching or supervising on a full time basis in the public schools of the State ....” Ill.Rev.Stat. ch. 122, ¶ 3-1 (Smith-Hunt 1961). Had the Illinois Legislature intended to change the in-state experience requirement it surely would have made such an intention more apparent than the subsection presently reads. Therefore, although not perfectly clear, it is the Court’s opinion that the subsection requires that the plaintiff teach two of his last four years in Illinois.

Implicit in two of three constitutional arguments presented by the plaintiff is the premise that the constitutional right to be a candidate is a fundamental right which requires the Court to apply the “strict scrutiny” and compelling interest test to subsection (6). However, the Supreme Court has never held that such a right, in and of itself, is a fundamental right. Clements v. Fashing, 457 U.S. 957, 963, 102 S.Ct. 2836, 2843, 73 L.Ed.2d 508 (1982) (Opinion of Rehnquist, J.) “Far from recognizing candidacy as a ‘fundamental right,’ we have held that the existence of barriers to a candidate’s access to the ballot ‘does not of itself compel close scrutiny.’ ” Id. (citing Bullock v. Carter, 405 U.S. 134, 143, 92 S.Ct. 849, 855, 31 L.Ed.2d 92 (1972).) See also Hall v. Simcox, 766 F.2d 1171, 1173 (7th Cir.1985) (Supreme Court has not decided which standard to apply). The plaintiff seeks to achieve fundamental right status by contending that a candidacy restriction such as that herein infringes on an individual’s first amendment right of freedom of association and freedom of expression. While the right to be a candidate is certainly intertwined with these two fundamental rights together with right to freedom of choice for voters, the regulation in question here does not restrict the plaintiffs right to associate with any political party or interest, nor does it restrict the voter’s rights to advance a candidate (as opposed to a particular candidate). See e.g., Tribe, American Constitutional Law 775 (1978). Therefore, the Court rejects the argument that subsection (6) infringes a fundamental right which would compel strict scrutiny analysis.

Rejecting the strict scrutiny analysis does not, however, automatically compel the use of the rational basis test. In Anderson v. Celebrezze, 460 U.S. 780, 103 S.Ct. 1564, 75 L.Ed.2d 547 (1983), the Supreme Court invalidated an Ohio statute requiring early filing deadlines for independent presidential candidates by employing a balancing test. The Supreme Court balanced the degree of impact of the ballot restriction on the rights infringed against the interests asserted by the state and the relationship between the restriction and this interest. Likewise, in Clements, a plurality of the Court seemingly employed a balancing test to uphold a Texas constitutional provision that restricted a public official’s ability to become a candidate for a public office other than the one he already had. Some commentators have urged that this balancing process, which would fall into the category of an intermediary test, should be employed to analyze such candidacy restrictions. Nowak, Rotunda, & Young, Constitutional Law 778 (2d ed. 1983). In the present case, the Court need not get caught up in this constitutional debate, because in its opinion, the subsection does not survive even minimal scrutiny under the rational basis test.

Under the rational basis test, the subsection would withstand constitutional challenge if it were rationally related to a legitimate state interest. At the hearing, the defendants advanced the position that the subsection was designed to ensure that those individuals running for Regional Superintendent of Schools be at least minimally familiar with the Illinois public school system. The defendants conceded, however, that an individual who taught for two of his last four years at the kindergarten level for a Chicago inner city public school would, if all the other requirements were met, qualify for the position of Regional Superintendent of Schools for Madison County, Illinois. The defendants further conceded that, in some cases, the disparity between any two school districts in Illinois could, and in many cases is, greater than the disparity between a school district in Madison County and one in Missouri. Based on these concessions, the defendants attempted to clarify that the State had an interest in ensuring that the candidates have a familiarity with the Illinois School Code and other Illinois school regulations. This is the only interest set forth by the defendants. The defendants agreed that teaching at a common public school would not, by itself, achieve this interest, but that because all teachers are supposedly required to attend four days of seminars a year on topics touching on Illinois school regulations, the requirement in the subsection indirectly ensures the State’s objective.

The Court does not necessarily agree that the State interest involved here is legitimate. The State would certainly have a right to require that the Regional Superintendent be familiar with the Illinois School Code and other regulations if that job concerned such matters. However, Dr. Boyd Mitchell, a former two time superintendent of schools, testified that any legal matter concerning the Code or other regulations would immediately be referred to the Office of Legal Counsel for the State Board of Education. Arguably, the Regional Superintendent would have to be familiar enough with the Code and the regulations to know when a legal question is presented.

Assuming that the purported interest is legitimate, the Court fails to see how the specific requirement in question here rationally relates to that interest. As indicated above, the requirement at best only indirectly achieves its purposes. Dr. Mitchell testified that, in his opinion, an individual such as the plaintiff, whose most recent experience was teaching in Hazelwood, Missouri, would be as qualified, assuming all else being equal, to serve as Regional Superintendent in Madison County as an individual whose most recent experience teaching was in Chicago. The rationale behind this opinion was that the Hazelwood and Madison County School Districts are more similar than Madison County and Cook County School Districts. Dr. Mitchell' further indicated that, in his opinion, Illinois public school teachers, as a whole, are not that familiar with the Illinois School Code because such matters do not touch on their immediate job of teaching. Finally, as a practical matter, he indicated that most state school codes are similar.

While not attempting to engage in any least restrictive means analysis, the Court can think of a number of more rational, and less restrictive means to achieve its stated objective. In the instant case, the Court believes that after analyzing the stated interest and the requirement that attempts to achieve that interest, subsection (6) is unconstitutional because it is not rationally related to the state interest. Implicit in this holding is the Court’s opinion that the rational basis test is not merely a device designed to achieve judgment for the defendant. Even under this low tier analysis, the statute in question must rationally and logically relate to the interest of the State. Such an indirect and tenuous relationship, as here, does not meet this low test. If the plaintiffs lack of Illinois teaching experience is important, the voters would reflect this concern through their vote. It is ironic to note that the position of State Superintendent of Education, the chief education office in Illinois, does not require prior teaching experience in Illinois. In fact, the present State Superintendent does not have any such experience. Nor do the members of the State Board of Education have to meet this requirement. See generally 111. Rev.Stat. ch. 122, ¶ 1A-1 et al. The plaintiff acquired an administrative certificate with a superintendent's endorsement, so that apparently this credential also does not require prior Illinois teaching experience.

Although a discussion of the plaintiff’s privileges and immunities clause argument is unnecessarily based on the above, the Court deems it appropriate to make a few comments. First, the subsection in question does not deprive the plaintiff his right to pursue his profession of teaching outside of Illinois. Second, the subsection treats both Illinois and non-Illinois residents equal; both must have prior Illinois teaching experience. Finally, unlike the typical privileges and immunities situation, Illinois is preventing one of its own citizens who wishes to run for the office from working outside of Illinois. Therefore, the Court does not believe that the privileges and immunities clause is relevant to this case.

Accordingly, the Court holds that Ill.Rev. Stat. ch. 122, if 3-1(6) is unconstitutional as mentioned above. The Court therefore GRANTS the plaintiff’s request for a permanent relief. The Court hereby ORDERS the Illinois State Board of Education to issue a certificate of eligibility to the plaintiff. The Court further ORDERS Evelyn Bowles, in her capacity as County Clerk for Madison County, Illinois, to accept plaintiff’s nominating petition to stand for the office of Regional Superintendent of schools. The Court hereby DIRECTS the Clerk of the Court to enter final judgment for the plaintiff and against the defendants. The plaintiff is ORDERED to submit his application for attorney's fees and costs pursuant to 42 U.S.C. § 1988 within ten (10) days from the date of this order.

IT IS SO ORDERED.


source: Caselaw Access Project

author: GASCH, District Judge.

license: Public Domain

text:
    Katherine T. MURRAY, Plaintiff, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.
    Civ. A. No. 85-1468.
    United States District Court, District of Columbia.
    Jan. 13, 1986.
    Michael DeMouy, Washington, D.C., for plaintiff.
    Claire Whitaker, Asst. U.S. Atty., Washington, D.C., for defendant.
   MEMORANDUM

GASCH, District Judge.

Plaintiff challenges an administrative decision that found that she was not disabled so as to qualify for Supplemental Security Income (“SSI”) benefits. The parties have filed cross-motions for judgment. For the reasons stated below, the Court remands the case to the Secretary for reconsideration.

I. THE FACTUAL BACKGROUND

Plaintiff is a 65-year-old resident of the District of Columbia who worked as a cook, salad maker, and counter clerk from 1976 to 1982. These jobs involved significant walking and standing, some sitting, and stooping, bending, reaching, and limited lifting.

On October 17, 1983, plaintiff filed a claim for SSI benefits. She claims to suffer from a variety of ailments which, taken together, amount to a severe disability rendering her unable to work. These ailments include degenerative arthritis of the spine, hips, knees, and fingers, hypertension, elevated cholesterol levels, restrictive pulmonary disease, and glaucoma.

Plaintiffs application for benefits was denied initially and on reconsideration. On consideration de novo, an administrative law judge (“AU”) ruled that plaintiffs ailments were not such as to prevent her from working as a cook and counter clerk. Plaintiff petitioned the Appeals Council for review of the AU’s decision and submitted a brief arguing her position and additional medical evidence in the form of reports from Dr. Ulep, her treating physician, and the Howard University Hospital. The Appeals Council concluded, however, that there was no basis for changing the ALJ’s decision and, accordingly, declined review.

II. DISCUSSION

A. The Administrative Record

By statute, a person is disabled “if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.” 42 U.S.C. § 1382c(a)(3)(A) (1982 & Supp.1984). Physical impairments must be “demonstrable by medically acceptable clinical and laboratory diagnostic techniques.” Id. § 1382c(a)(3)(C). A combination of impairments may constitute disability. 20 C.F.R. § 416.911 (1985). Here plaintiff argues that the combined effect of her ailments is such as to render her disabled.

The record is replete with medical evidence on plaintiffs condition. A report by Dr. Bruce Kressel dated December 13,1983 found that plaintiff had indicia of hypertension and arthritis and a history of tuberculosis. Her blood pressure was found to be fairly well controlled but, due to arthritis, plaintiff suffered from “mild to moderate” restriction of movement in her hips and knees.

An examination by Dr. Kathleen Cant-well on March 14, 1984 found that plaintiff had arthritic spurring resulting from degenerative changes in her right hip and right knee. On March 21, 1984, Dr. Byron Cooper reported that pulmonary function studies showed that plaintiff had moderate to severe reduction in all pulmonary flows. Dr. Cooper found that these problems were due in part to plaintiff’s tuberculosis operation, her use of a special hypertension drug, and her cigarette smoking habit.

Finally, on April 11, 1984, Dr. Frank Watkins conducted an examination of plaintiff for arthritic problems and determined that plaintiff had a “mild degenerative disease.” Dr. Watkins noted in his report, “I did not see great evidence of disability by these physical as well as radiological findings.”

The medical evidence in the record thus consisted of reports from physicians who each examined one of plaintiff’s impairments. Generally, these individual ailments were found to be of moderate severity. There was no report by a doctor which attempted to ascertain whether, taken as a whole, the ailments constituted severe disability.

On the basis of this medical record, the ALJ concluded that plaintiff was not disabled. The AU’s opinion states:

Claimant’s discomfort and shortness of breath are acknowledged; however, the resulting functional limitations have been characterized as mild to moderate. The evidence contradicts claimant’s allegations that she is unable to work due to arthritis and other impairments. There is no evidence of any medically determinable impairment which precludes her engaging in work activities which entail lifting no more than ten pounds with no carrying, 4 to 6 hours walking and standing, and 1 hour of sitting in an 8 hour day.

The AU found that these work abilities would allow plaintiff to return to her past work and thus ruled that plaintiff was not disabled under 20 C.F.R. § 416.920(e).

After the AU’s decision was rendered, plaintiff offered two additional pieces of medical evidence to the Appeals Council in support of her petition for review. The first was a statement from Dr. Diosdado Ulep of the Howard University Family Health Center, where plaintiff had been treated on a regular basis since 1977. Dr. Ulep recounted the variety of ailments plaguing plaintiff and concluded, “Due. to the multiple medical problems including her age, [plaintiff] is not able to perform gainful employment.” The second piece of medical evidence was a letter from Dr. Robert Copeland of the Howard University Hospital which reported that plaintiff was receiving treatment for chronic open-angle glaucoma.

By letter dated March 4, 1985, the Appeals Council rejected plaintiff's request for review. The letter stated, “In reaching this conclusion, the Appeals Council carefully considered each of the contentions raised by your ... brief ..., as well as the additional medical evidence but decided that neither the contentions nor the additional evidence provides a basis for changing” the AU’s decision.

B. Review of the Administrative Decision

The Secretary’s disability decisions are reviewed under a substantial evidence standard. See Holland v. Heckler, 768 F.2d 277, 280 (8th Cir.1985); Bilby v. Schweiker, 762 F.2d 716, 718 (9th Cir.1985) (per curiam). “Substantial evidence” is more than a mere “scintilla” of evidence; it is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed. 2d 842 (1971).

The burden of showing disability is on the claimant. See Bianchi v. Secretary of Health and Human Services, 764 F.2d 44, 45 (1st Cir.1985) (per curiam). As such, affirmance of the AU’s decision is justified if the claimant failed to offer sufficient evidence of medically determinable ailments to carry her burden. See Wilson v. Heckler, 761 F.2d 1383, 1386 (9th Cir. 1985).

Here the evidence showed that plaintiff suffered from a number of ailments which, taken individually, were classified as moderately severe. None of the medical reports, however, considered whether the aggregate effect of plaintiff’s ailments was such as to render her disabled. As the court of appeals for this circuit recently noted, an AU may fail to understand “the implications of [the claimant’s] combination of disabilities on his ability to perform” past work. Narrol v. Heckler, 727 F.2d 1303, 1307 (D.C.Cir.1984) (per curiam).

This Court need not consider whether the AU failed to properly consider the combined effect of plaintiff’s ailments, however, because it is clear that the Appeals Council erred in not reviewing the AU’s decision after plaintiff had submitted the statement of Dr. Ulep.

It is hornbook law that, in disability cases, the assessment made by the claimant’s treating physician is entitled to significant weight. See, e.g., Jones v. Heckler, 760 F.2d 993, 997 (9th Cir.1985); Harris v. Heckler, 756 F.2d 431, 435 (6th Cir.1985); Wilson v. Heckler, 734 F.2d 513, 518 (11th Cir.1984) (per curiam). As the Narrol court explained, “Because [treating] doctors had much greater familiarity with [the claimant’s] condition, their reports should have been accorded substantial weight.” Narrol, 727 F.2d at 1306.

Accordingly, as one court recently noted, “If the [Secretary] wishes to disregard the opinion of the treating physician, [the Secretary] must make findings setting forth specific, legitimate reasons for doing so that are based on substantial evidence in the record, even where the treating physician’s opinion is controverted by the Secretary’s consultant.” Fife v. Heckler, 767 F.2d 1427, 1431 (9th Cir.1985). See Narrol v. Heckler, 727 F.2d at 1307; see also Ferguson v. Schweiker, 765 F.2d 31, 37 (3d Cir.1985).

Thus, the Appeals Council was required to provide reasons for its decision to disregard the analysis of Dr. Ulep, and the curt and perfunctory letter rejecting plaintiff’s appeal fell far short of meeting this requirement. Accordingly, in this case, as in Narrol, the Court believes a remand is appropriate to allow for full administrative consideration of the cumulative effect of plaintiff’s ailments and the diagnosis of Dr. Ulep. If the Secretary elects to disregard Dr. Ulep’s opinion, then she must set forth specific reasons for doing so.

        . In 1964, plaintiff underwent an operation for pulmonary tuberculosis. A surgical incision was made into the wall of the chest and part of her left lung was removed.

      . The only other evidence relating to plaintiffs medical condition consisted of statements by plaintiff and Social Security Administration officials. Plaintiffs comments included complaints of leg pain and swelling and of difficulties in lifting, climbing stairs, standing for long periods, and walking for long distances. One official stated that she “did not observe any difficulties" with plaintiff, while another noted that plaintiff "walked slowly" and “appeared to have limited mobility of arms and hands.”


author: EDWARD WEINFELD, District Judge.

text:
    A & S LITHO, INC., Plaintiff, v. RITE MACHINERY CORP. and Daniel Crognale, Defendants.
    No. 84 Civ. 8680 (EW).
    United States District Court, S.D. New York.
    Jan. 13, 1986.

      Paul P. Mathews, Paramus, N.J., for plaintiff.
    Robert C. Damm, Cliffside Park, N.J., for defendants; Lynne Van Voorhis, of counsel.
   OPINION

EDWARD WEINFELD, District Judge.

This action was tried to the Court, following which, based upon the trial testimony, the parties submitted proposed findings of fact and conclusions of law, as well as post-trial memoranda. Upon a study of the foregoing, the Court’s word-by-word reading of the entire trial transcript, and its contemporaneously made trial notes which contain an appraisal of the demeanor of the witnesses as they testified, the Court finds that plaintiff has failed to sustain its burden of proof as to any of its various claims, and that defendants have sustained their burden of proof upon their counterclaim in the sum of $225,000, and are entitled to judgment accordingly.

Plaintiff A & S Litho (A & S) was in 1984, and had been for a number of years prior thereto, engaged in the printing business. Anthony Suppa (“Suppa”) was its President and principal stockholder. In the operation of its business, plaintiff used a two-color Aurelia printing press (the “Aurelia”) of which it was the lessee, and upon which, at the time of the events at issue in this case, it owed the lessor a balance of $40,000.

Defendant Rite Machinery Corporation (“Rite”) is a New Jersey corporation engaged in the business of reconstructing printing presses, including Harris four-col- or presses. Defendant Daniel Crognale (“Crognale”), its chief executive and principal stockholder, had assisted plaintiff in acquiring and financing the Aurelia.

Plaintiff was interested in purchasing a four-color Harris press, the subject of this action. On March 2, 1984, following a period of negotiation, an agreement was entered into whereby plaintiff agreed to purchase from Rite a rebuilt Harris four-color press for the sum of $250,000. The agreement was evidenced by a written purchase order which provided, among other matters, that the purchase price was to be paid when the press began commercial operation, and that the seller was to provide a six-months’ parts and labor warranty.

Plaintiff contends that the parties also agreed that, upon installation of the Harris four-color press in its premises, defendants would remove the Aurelia press to sell to a third party on plaintiff’s behalf for the sum of $40,000, and would promptly remit to plaintiff the proceeds of such sale. Plaintiff further contends that such sale and remittance was a prerequisite to the purchase of and payment for the Harris four-color press; that the defendants knew that plaintiff intended to use the proceeds from the sale of the Aurelia to pay the outstanding balance to the Aurelia’s lessor; and that plaintiff was to get the $40,000 before plaintiff paid for the four-color press. In effect, plaintiff claims that the parties entered into two separate and independent contracts, one for the sale of the Aurelia by defendants on the plaintiff’s behalf, and one for the purchase of the Harris. Plaintiff charges defendants with the conversion of the monies realized from the sale of the Aurelia pursuant to the alleged oral agreement; no writing evidencing its terms exists or was offered upon the trial.

Defendants’ version of the transaction is different. They contend that they agreed to accept the proceeds from the sale of the Aurelia, if any, as a credit against the purchase price of the Harris; that the Aurelia was sold for $40,000 in September 1984; that they credited plaintiff $40,000 less $15,000 expenses of sale; and that they are thus entitled upon their counterclaim to the sum of $225,000: the $250,000 purchase price of the Harris as provided for in the written purchase order less the $25,000 credit from the sale of the Aurelia.

As to the second agreement, for the purchase of the Harris four-color press, plaintiff asserts other claims for breach of contract and warranty, alleging that the Harris press was not properly rebuilt; that it was not commercially acceptable in that from the time it was first print-tested all four units of the press showed excessive streaking, which appeared on solid and print patterns, as well as other defects and deficiencies; and that although Rite attempted to correct this and other technical problems, it failed to do so.

The Harris press was installed by the defendants at plaintiffs premises on June 20, 1984, at which time the Aurelia was removed. It took several weeks for Rite’s employees to set up and assemble the Harris press for functional operation. The operation of the press required pressmen familiar with this type of machinery, and while plaintiff obtained the services of one such experienced pressman some weeks after installation, it appears from the testimony that two experienced operators were necessary for proper operation of the press. After installation was complete, adjustments were required, and in response to plaintiff’s requests these were timely made by defendants’ experienced employees. Some of the problems which Rite was called upon to remedy were clearly due to the fact that plaintiff had over an extended period failed to engage an experienced four-color pressman. In any event, whenever plaintiff complained, Rite corrected the alleged deficiencies and performed its warranty obligation under the contract. The adjustments made were generally of the sort required on a “shakedown cruise.-” The evidence fully warrants a finding that the primary purpose of the contract was fulfilled; that the alleged breaches claimed by the plaintiff are trivial; and that defendants substantially performed their obligations as required by the contract.

Moreover, the proof establishes not only that the claimed deficiencies in performance were minor, but that the plaintiff put the press into commercial use in the filling of customer orders, and that in the several instances where price allowances were made to customers for “streaking,” the allowances were minor and the product was accepted by plaintiff’s customers.

The testimony of plaintiff’s expert, who examined the machine in March 1985, five months after the events surrounding plaintiff’s claim of trespass, discussed below, is not entitled to credence. There is a complete absence of proof that when examined by the expert in March 1985 the Harris press was in the same condition as at the beginning of November 1984, the last date on which defendants had access to the machine. The evidence also warrants a finding that there is a certain irreducible minimum amount of streaking on all Harris color presses, and whether a machine functions adequately for commercial use is determined by what is “tolerable or what is intolerable” for the customer. According to defendants, the machine was tested prior to its removal to plaintiff’s premises, and again upon its installation there, and on each occasion was found to be capable of commercially acceptable production. Upon all the evidence, the Court finds that Rite Machinery performed under its warranty, and that the press was properly rebuilt and functioned appropriately for its intended commercial use and purpose.

Accordingly, defendant Rite Machinery is entitled to judgment in its favor upon its counterclaim for the sum of $250,000, the agreed-upon purchase price of the Harris press, which plaintiff was obligated to pay under the terms of the purchase order upon installation and start of commercial production, which the Court finds upon all the evidence occurred not later than August 30, 1984. The amount owing on the purchase order is reduced by the credit in plaintiffs favor of $25,000, the net proceeds derived from the sale of the Aurelia press.

Plaintiff asserts one other claim. The effective operation of the four-color press was apparently beyond the capacity of plaintiff and plaintiffs employees. Normal adjustments of the press for production operation presented problems with which plaintiffs employees were unable to cope, and so Suppa decided to give up the ghost. Shortly before Election Day 1984, Suppa requested that Crognale and Rite remove the Harris; Suppa testified that he told Crognale that if Crognale paid him the $40,000 for the Aurelia, less $6,000 rigging costs incurred in the delivery of the Harris, the parties would be even, and that Crognale agreed. Crognale denies that such an agreement was made. He contends that he told Suppa that Rite was entitled to immediate payment because the Harris was being used for commercial production, offered to extend warranty coverage for one more month at Rite’s cost, and left A & S’s shop.

Immediately after this conversation, Crognale testified, he instructed employees of Rite to enter plaintiff’s facility for the purpose of rendering the Harris press inoperable. Defendants’ representatives had received keys to A & S’s print shop in connection with the installation of the Harris four-color press, and also had access to the premises through an adjoining plant which they had permission to use. On Election Day, November 6, 1984, defendants’ employees entered plaintiff’s premises and dismantled the controls of the Harris press so that it could not be operated. Crognale testified that he ordered this done because he believed the Harris was being damaged by improper use and absence of maintenance. In addition to dismantling the four-color Harris, defendants’ employees also removed parts from two other machines, a 36-inch single-color Harris and a 36-inch two color Harris, which were not involved in the controversy at issue in this case. Crognale testified that these other two machines were rendered inoperable at his instructions, because plaintiff was behind on lease payments owed to the lessor of the two presses, Daniels Leasing Co., a leasing firm in which Crognale was the principal stockholder, and because Crognale believed that these machines also were not being properly maintained. Plaintiff claims that defendants’ conduct in entering the premises and disabling the two leased machines amounted to trespass, and seeks compensatory and punitive damages.

Plaintiff’s trespass claim fails for two reasons. In the first place, defendants’ employees did not enter the premises at A & S by force or without permission: they had been provided with keys at an earlier time, and in addition had access through the adjoining print shop, a fact of which plaintiff was aware.

More importantly, the agreement under which plaintiff leased the two 36-inch Harris presses specifically provided that:

In the event of default, Lessor may at its option ... without demand or legal process and without being guilty of trespass or conversion ... enter into the premises where the equipment may be found and take possession of same and remove same, whereupon all rights of Lessee in such equipment shall terminate absolutely.

Suppa conceded that the last made a monthly lease payment on these two machines in June 1984, five months before the defendants took the action of which plaintiff complains. Plaintiff was therefore clearly in default under the provisions of the lease, and defendants’ entry upon the premises was a remedy to which Daniels Leasing or its agent was entitled by express reservation in the lease agreement.

Accordingly, the Court finds that the plaintiff has failed to sustain its burden of proof as to any of its claims, and that defendants are entitled to judgment in the sum of $225,000 on their counterclaim.

Submit order.

      . Cf. Anderson, Clayton & Co. v. Alanthus Corp., 91 A.D.2d 985, 457 N.Y.S.2d 578 (2d Dept. 1983); Jacob & Youngs v. Kent, 230 N.Y. 239, 129 N.E. 889 (1921) (Cardozo, J.); Le Cordon Bleu, S.A v. BPC Publ. Ltd., 451 F.Supp. 63, 71 (S.D.N.Y. 1978)

      . Tr. at 113 (testimony of Joseph Sahagian, plaintiffs pressman).

      . Tr. at 172-74 (testimony of Daniel Crognale).

      . Tr. at 24-25.

      . Tr. at 35-36.

      . Tr. at 189 (testimony of Daniel Crognale).

      . Tr. at 184.

      . Tr. at 147 (deposition testimony of Daniel Crognale): id, at 185 (trial testimony of Daniel Crognale).

      . Tr. at 185.

      . Tr. at 183-84.

      . Defendants’ Exhibit J, at para. 11.

      . Tr. at 90.


author: YOUNG, District Judge.

text:
    UNITED STATES of America, for the use and benefit of P.J. Keating Company, Plaintiff, v. WARREN CORPORATION and National Grange Mutual Insurance Company, Defendant, Third-Party Plaintiff, v. BAKER FENCE, INC.; Salvatore Cosimi; Capone Bros., Inc.; Miller Engineering & Testing, Inc.; John D. Mazzaferro; John McCourt Co.; P.J. Equipment, Inc.; the Hession Company, Inc.; and the United States of America (Internal Revenue Service), Third-Party Defendants.
    Civ. A. No. 84-1502-Y.
    United States District Court, D. Massachusetts.
    Jan. 13, 1986.

      Jerome A. McCusker, Riemer & Braunstein, Boston, Mass., for plaintiff.
    Steven J. Comen, Snyder, Tepper & Co-men, Boston, Mass., for John McCourt Co.
    Stephen E. Weyl, Debra L. Weiss, Sheehan, Phinney, Bass, & Green, Manchester, N.H., for Miller Engineering.
    Leonard Salter, Wasserman, Salter & Rome, Boston, Mass., for Baker Fence.
    Thomas J. Clark, Tax Div. Dept, of Justice, Washington, D.C., for the IRS.
    Charles E. Snow, Charles E. O’Brien, Albany, N.Y., for defendant.
    Bartholomew P. Molloy, Tyler & Reynolds, Boston, Mass., for National Grange.
    John J. Curley, III, McEvilly & Curley, Leominster, Mass., for third party defendant.
   MEMORANDUM OF DECISION

YOUNG, District Judge.

This is a case brought under the Miller Act, 40 U.S.C. § 270a et seq. On September 30, 1982 the defendant, Warren Corporation (“Warren”), entered into a contract with the United States Department of the Army (the “Army”) for the reconstruction of a roadway at Fort Devens, Ayer, Massachusetts (the “contract”). As required by the Miller Act, Warren provided a performance bond and a payment bond covering the work to be performed at Fort Devens. The defendant, third-party plaintiff, National Grange Mutual Insurance Company (“National Grange”), was the surety upon these two bonds.

Warren hired a number of sub-contractors, and by November 26, 1983 all work to be performed under the contract was complete except for topsoiling, seeding, and the correction of certain deficiencies. On that date Warren, apparently because of financial difficulties, executed an assignment and delegation of the contract to National Grange. Warren notified the Army of this assignment. On December 6, 1983, the Army informed Warren that it considered the assignment null and void. The next day Richard Walsh (“Walsh”), president of Warren, submitted a “Payment Estimate-Contract Performance” form to the Army seeking to collect $144,026.55 for the work performed under the contract.

On January 30, 1984 the Internal Revenue Service (the “Service”) served a notice of levy on the Army for $152,041.51 owed to the United States by Warren. That same day, the Army approved Warren’s Payment Estimate. Pursuant to the levy the Army paid $144,026.55 over to the Service on February 2, 1984. This represented the entire amount to which Warren was entitled on the contract.

Not surprisingly, the sub-contractors began to wonder how and whether they would get paid. P.J. Keating Company, one of the sub-contractors, brought this suit against Warren and National Grange to recover $78,217.58 owed it by Warren for work done at the Fort Devens project. National Grange brought in the remaining unpaid sub-contractors and the Service as third-party defendants. National Grange’s claim against P.J. Keating Company and the other sub-contractors is in the nature of an interpleader, and asks the Court fairly to divide the limited funds available under the payment bond. National Grange’s claim against the Service seeks recovery of part of the contract proceeds upon which the Service levied. National Grange claims that the levy was wrongful and fraudulent, and that it therefore is entitled, to the extent of its liability on the payment bond, to the money earned by Warren under the contract. The Service now moves to defeat the claim of National Grange by summary judgment.

National Grange’s third-party complaint, along with its memorandum in opposition to the present motion, spins an intriguing tale of fraud and deception on the part of the Service and the Army. According to National Grange, the Service devised a scheme to collect money owed it by Warren, Walsh, and another company controlled by Walsh, Walsh Co. Inc. Under this alleged scheme the Service would see to it that Warren was awarded the Fort Devens contract. In return, Warren agreed not to seek progress payments, but rather to allow its account to build up so that the Service could levy on it to satisfy the tax liabilities of the three related taxpayers. Since virtually all the work on the project was to be done by sub-contractors, Warren effectively would be getting these sub-contractors to pay its taxes. Unfortunately for National Grange, there is not a scintilla of evidence which suggests that this bizarre “plot” is anything other than the product of National Grange’s corporate imagination.

In the first place, the documents submitted by the Service demonstrate conclusively that the levy related solely to the tax obligations of Warren Corporation. Likewise, there is absolutely no evidence of an agreement between the Service and Walsh. In its answers to National Grange’s interrogatories the Service denies knowledge or record of any such agreement. Moreover, the record is absent any deposition or affidavit testimony from Walsh, the other party one would expect could verify National Grange’s theory. In short, only National Grange’s counsel claims knowledge of the agreement. National Grange points to the fact that Warren did not seek progress payments before the work was completed as its “smoking gun.” The Court rules that, as matter of law, that evidence is an insufficient basis from which the trier of fact could infer the alleged agreement.

Summary judgment is appropriate where there exists no disputed issues of material fact and the moving party is entitled to judgment as matter of law. Rule 56(c), Fed.R.Civ.P. Bare allegations do not create disputed issues of fact, however. A party opposing a motion for summary judgment has an affirmative duty to adduce some evidence which supports his claim of a factual dispute. Massaro v. Vernitron Corp., 559 F.Supp. 1068, 1073 (D.Mass. 1983). As the preceding discussion demonstrates there is insufficient evidence before the Court to create a question of fact concerning the alleged agreement between Walsh and the Service. Viewing the record now before the Court in the light most favorable to National Grange, the only question in the case is this: Is the United States’ claim to the contract proceeds superior to National Grange’s claim, notwithstanding the assignment by Warren, and the fact that National Grange is subrogated to the rights of the subcontractors? The Court holds that it is, and the Service’s motion for summary judgment therefore must be allowed.

The papers filed in this case suggest three bases by which National Grange seeks to attack the Service’s levy on the contract proceeds; (1) 40 U.S.C. § 270a(d), (2) 26 U.S.C. § 7426(a)(1), and (3) as a subrogee of the sub-contractors. Neither the two statutes, nor the subrogation theory are sufficient to overcome the United States' superior right of setoff.

National Grange’s reliance on 40 U.S.C. § 270a(d) is clearly misplaced. That statute specifies the circumstances under which the United States can claim against a performance bond for taxes withheld by the contractor. Contrary to the arguments of National Grange, the section is not applicable to an attempt by a materialman or an assignee to recover contract proceeds.

Section 7426(a)(1) of Title 26 likewise is unavailing for National Grange. That section sets forth the method by which a party may challenge the actions of the United States in levying for taxes upon property. It provides that:

any person (other than the person against whom is assessed the tax out of which such levy arose) who claims an interest in or lien on such property and that such property was wrongfully levied upon may bring a civil action against the United States in a district court of the United States.

National Grange claims that the assignment to it by Warren of the contract proceeds gives it a sufficient interest to attack the levy. For the reasons that immediately follow the Court disagrees, and rules that because National Grange cannot properly claim an interest in the proceeds it is not within the class of persons to which § 7426 is available.

Section 3727 of Title 31 specifies the only method by which an entity other than a financial institution can assign any part of a claim against the United States. Section 3727(b) requires, inter alia, that the assignment be made only after a claim is allowed, and that the assignment shall be acknowledged before an official who shall certify that he explained the assignment when it was acknowledged. These rather technical requirements are intended, in part, to ensure that the United States is able to avail itself of rights of setoff or cross-claims against original claimants which might not be applicable to an assignee. United States v. Shannon, 342 U.S. 288, 291-92, 72 S.Ct. 281, 283-84, 96 L.Ed. 321 (1952); McKenzie v. Irving Trust Co., 323 U.S. 365, 369, 65 S.Ct. 405, 407, 89 L.Ed. 305 (1945). The applicability of this rationale to the case at bar counsels a strict adherence to the literal requirements of the statute. Thus, Warren’s attempted assignment must fail because it was made before payment was authorized, and was not properly certified. Although the assignment may well have altered rights as between National Grange and Warren, as between National Grange and the Army the assignment was null and void. Therefore, National Grange cannot claim an “interest” in the proceeds of the contract.

National Grange’s final argument is that as subrogee of the materialmen its claim is superior to the United States’ right of setoff. If National Grange means to argue that the sub-contractors have viable claims against the United States, it is wrong. “[NJothing is more clear than that laborers and materialmen do not have enforceable claims against the United States for their compensation.” United States v. Munsy Trust, 332 U.S. 234, 241, 67 S.Ct. 1599, 1602, 91 L.Ed. 2022 (1947). This is the very reason the Miller Act requires the contractor to provide a payment bond. If, instead, National Grange means to argue that it should prevail over the United States as a competing creditor of Warren, that argument too is without merit. In Munsey Trust the Supreme Court said that:

The government has the same right “which belongs to every creditor, to apply the unappropriated moneys of his debtor, in his hands, in extinguishment of the debts due to him.” ... And one whose own appropriation and payment of money is necessary to create a fund for general creditors .,. is not compelled to lessen his own chance of recovering what is due him by setting up a fund undiminished by his claim, so that others may share it with him.

332 U.S. at 240, 67 S.Ct. at 1602; accord Barrett v. United States, 367 F.2d at 838 (the claim “of the surety is subordinate and inferior to the right of the United States to set off the amount of taxes owed it by the contractor.”).

In summary, the claim of National Grange for reimbursement from the United States must fail. The record properly before the Court does not evince a genuine dispute as to the fact that Warren owed the government an amount in excess of the total contract price. Therefore the United States had a right to set off the taxes owed and refuse payment. National Grange’s conspiracy argument is not supported in any way by the record, and thus does not affect the Court’s analysis. The motion of the United States for summary judgment is ALLOWED.

ORDER

It is hereby ORDERED that:

1) The motion of National Grange Mutual Insurance Company to amend this Court’s Order of November 8, 1985 is allowed. Accordingly, the clerk of the court shall:

a) Vacate the summary judgments granted in favor of Salvatore Cosimi, John D. Mazzaferro, and The Hession Company, Inc. (the “non-appearing parties”) against National Grange,
b) Enter a default judgment against the non-appearing parties, as provided by Rule 55 of The Federal Rules of Civil Procedure for failure to plead or otherwise defend, and
c) Forthwith refund to National Grange $4,111.73 of $68,277.54 which it paid into this Court on November 25, 1985.

2) Summary Judgment is granted as to damages in the following amounts:

P.J. Keating Company .........$49,022.68
Baker Fence, Inc...............$ 2,245.81
Capone Bros., Inc..............$ 4,234.94
Miller Engineering.............$ 5,004.93
John D. Mazzaferro............$ 769.99
John McCourt Co...............$ 2,887.46

The clerk of the court shall distribute the proceeds of the bond in the above stated amounts to the proper parties on January 31, 1986.

3) Judgment shall enter against Warren Corporation in favor of P.J. Keating Company in the amount of $29,194.90.

4) In accordance with the Memorandum of Decision issued this date the motion for summary judgment of the United States (Internal Revenue Service) is allowed.

5) The only matter in this case that remains to be tried is John McCourt Company’s chapter 93A claim.

      . Although the formal mechanism by which the setoff in this case was accomplished was a levy directed from one agent of the government to another, the cases uniformly assume that the United States is to be treated as a single entity, and therefore may set off an account receivable in one department against an account payable in another. See Aetna Ins. Co. v. United States, 456 F.2d 773 (Ct.Cl.1972); Barrett v. United States, 367 F.2d 834 (Ct.Cl.1966).


author: FUSTE, District Judge.

text:
    Manuel ALAYO I CARRERAS, personally and on Behalf and for the Benefit of Ultra Vision Dominicana, S.A., Plaintiff, v. CABLE WEST CORPORATION, Theodore C. Bentley, Michael L. Robertson, Leo Hoarty, Ultra Vision Puerto Rico, Inc., Robert J. Ball, Robert Smith, John Doe and Richard Roe, Carlos Rivera Hernandez, Jose Romero, Defendants.
    Civ. No. 85-0757 (JAF).
    United States District Court, D. Puerto Rico.
    Jan. 13, 1986.

      John M. García, Hato Rey, Puerto Rico, for plaintiff.
    José L. Novas Dueño, Hato Rey, Puerto Rico, for Cable West & Ultra Vision.
    Robert Smith, pro se.
    Blas C. Herrero, Jr., Hato Rey, Puerto Rico, for Carlos Rivera Hernández & Leo Harty.
    Adrian Mercado, San Juan, Puerto Rico, for Carlos Rivera Hernandez.
   OPINION AND ORDER

FUSTE, District Judge.

We now decide that counsel who retains an economic and proprietary interest in a parent corporation cannot represent the subsidiary as plaintiff against the parent and at the same time be the legal representative of the shareholders in a highly-adversary context. We base our decision on the alleged facts presented by the parties which are taken for consideration of this motion only. The factual background is as follows:

Cable West Corporation, Theodore C. Bentley, and Michael L. Robertson entered into a written agreement with plaintiff Manuel Alayo i Carreras, Carlos Rivera Hernández, Manuel Carro and William Boso (“Buyers”), under which a corporation to be created in the Dominican Republic was going to be acquired by the group referred to herein as the Buyers. For purposes of acquiring the Dominican Republic corporation, a Puerto Rico corporation was created under the name of Ultra Visión Puerto Rico, Inc. The sole shareholders of the Puerto Rico corporation were to be: Cable West Corp., Theodore Bentley, and Michael Robertson, and as a minority shareholder, attorney José Luis NovasDueño, with 26.250 common stock, which allegedly is equivalent to 5% of the corporate ownership.

Afterwards, Ultra Visión Puerto Rico, Inc. became the owner of 80% of the shares of Ultra Visión Dominicana by purchase to the Buyers. This transaction is the basis of this action. Manuel Alayo i Carreras initiated a personal and shareholder-derivative suit on behalf of Ultra Visión Dominicana, S.A., the corporation also joined as a plaintiff, claiming that the purchasing corporation — Ultra Visión Puerto Rico, Inc.— and its shareholders, to wit: Cable West, Theodore Bentley, Michael Robertson, Leo Hoarty, Robert J. Ball, and Robert Smith, owed to plaintiff a total sum of approximately $1,450,000, plus interest. As a second count, it is alleged that the defendants were obligated to create a mortgage on all properties owned by Ultra Visión Dominicana to guarantee said purchase price and they had refused and failed to do so. Thirdly, it is claimed that all co-defendants, aiding and abetting each other, conspired to obtain the delivery of the securities of Ultra Visión Dominicana, in alleged violations of the Securities Act of 1933. 15 U.S.C. §§ 77a-77aa. Finally, as a fourth count, plaintiff claims monetary compensation for the wrong done by the alleged mismanagement of Ultra Visión Dominicana by all the co-defendants.

In the present suit, attorney NovasDueño has assumed the representation of plaintiff Ultra Visión Dominicana, S.A. and of co-defendants Cable West Corporation and Ultra Visión Puerto Rico, Inc. Plaintiff Manuel Alayo has requested the disqualification of Novas Dueño based on: (1) an existence of conflict of interest in representation, (2) a personal interest in the co-defendant corporation Ultra Visión Puerto Rico, Inc., and (3) that he is to be the principal witness to the negotiations and transactions which form the basis of the complaint.

The issue now before us is whether in a shareholder-derivative suit, an attorney who usually represented the corporation sought to be protected by a shareholder, may assume its representation while at the same time he represents some of the co-defendants in the suit.

Ethical Considerations

The Local Rules of the United States District Court for the District of Puerto Rico have adopted the Model Rules of Professional Conduct of the American Bar Association as a frame of reference of the minimal professional conduct required to be met by the lawyers who practice before our Court. See Local Rule 211.4(B). The standard to be applied in situations which involve an ethical conflict is that of reasonableness (see Preamble to Model Rules of Professional Conduct, p. 3), always bearing in mind that a lawyer’s conscience need not only be at peace with itself, but that also he is required not to inflame ethical nor moral doubts to his clients nor to the courts. A motion to disqualify not only calls to question the probity of an individual lawyer, but the legal profession as a whole. See Hull v. Celanese Corp., 513 F,2d 568 (2nd Cir. 1975).

In the present situation, one of the basic allegations is that Ultra Visión Dominicana, S.A. has not paid the total amount of monies accorded for the exchange of 80% of its stock to Ultra Visión Puerto Rico, Inc. and that the Buyers consented to defraud Seller in violation of the dispositions of the Federal Securities Act. In this adversary context, counsel Novas-Dueño represents the major shareholders of Ultra Visión Dominicana and its officers. Prima facie there appears a conflict of interest between representing the creditor Ultra Visión Dominicana, S.A. and representing the alleged debtors at the same time. Rule 1.7 of the “Model Rules of Professional Conduct” of the ABA regulates the above-referred situation. Said rule clearly establishes in mandatory language that:

RULE 1.7 Conflict of Interest: General Rule
(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
(2) each client consents after consultation.

Here we are under the situation typified under paragraph (a) which prohibits representation of opposing parties in litigation. We do not see how reasonable minds could argue that no harm is caused by representing the creditor and debtor in the same case. Furthermore, Rule 1.13 establishes the standard a lawyer employed by an organization must meet in cases of legal discrepancies between the members and the organization itself. The relevant provisions establish that:

(e) A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders or other constituents, subject to the provisions of Rule 1.7. If the organization’s consent to the dual representation is required by Rule 1.7, the consent shall be given by an appropriate official of the organization other than the individual who is to be represented, or by the shareholders. (Emphasis supplied)

The comments of the House of Delegates of the ABA under the above-quoted rule state that when there is adversity of interest, the lawyer for the organization cannot provide legal representation for the individual and the organization concurrently. Novas-Dueño alleges that in the present case no such conflict exists and that in the event it materialized, he would resign. As stated in Cannon v. U.S. Acoustics Corp., 398 F.Supp. 209, 220 (N.D.Ill.1975), this type of reasoning is plagued with flaws: First of all, if we accepted Novas-Dueño’s position, we would be ignoring the conflict of interest which arises prima facie. Secondly, “counsel overlooks the hardship on the courts and the parties” if in the middle of the litigation new counsel had to be retained. The appropriate course is for the corporation to retain independent counsel. Lewis v. Shaffer Stores Co., 218 F.Supp. 238 (S.D. N.Y.1963); Murphy v. Washington American League Base Ball Club, 324 F.2d 394 (D.C.Cir.1963). Novas-Dueño will remain as counsel for Cable West Corporation and Ultra Visión Puerto Rico, Inc. subject to the written approval submitted by the shareholders of Ultra Visión Puerto Rico, Inc., Rule 1.7(b), “Model Rules of Professional Conduct”, to be submitted to this Court within ten (10) days.

Under the above-quoted Rules of Professional Conduct, and the power of the Court to regulate the practice of law before it, 28 U.S.C. § 1654, attorney Novas-Dueño is disqualified of representing Ultra Visión Dominicana, S.A. By reaching this decision, in no way do we decide or reach the merits of the case.

IT IS SO ORDERED.

      . Counsel that will assume representation of plaintiff corporation Ultra Visión Dominicana, S.A. cannot be the same counsel that represents Manuel Alayo i Carreras for the same reasons stated herein.


text:
    Kimberly Ann JOHNSON, et al., Plaintiffs, v. CUMIS INSURANCE SOCIETY, INC., Defendant.
    Civ. A. No. 85-1946.
    United States District Court, District of Columbia.
    Jan. 14, 1986.

      Bernadette Gartrell, Washington, D.C., for plaintiff.
    Andrew Kline, and Irwin Liptz, Washington, D.C., for defendant.
   MEMORANDUM

GASCH, District Judge.

This is a diversity action concerning the scope of coverage afforded by an insurance policy. Both parties have moved for summary judgment. The sole question before the Court is whether, as a matter of law, plaintiff Kimberly Ann Johnson was covered by the insurance policy on the day her car struck and killed a pedestrian. For the reasons stated below, the Court concludes that Kimberly Ann Johnson was not covered by the policy on the day of the fatal accident. Accordingly, summary judgment is entered for the defendant.

I. STATEMENT OF FACTS

The material facts are not in dispute. On August 14, 1982, defendant and plaintiff Leroy E. Johnson contracted for automobile liability insurance. The policy was in effect from August 14, 1983 to February 14, 1984 and provided coverage for certain cars and for certain family members, including Kimberly Ann Johnson, Leroy Johnson’s daughter. On August 18, 1983, Leroy Johnson was mailed an “amendment of policy provision” which stated, in part:

In accordance with the requirements of the District of Columbia no-fault law, all policy coverages shall be suspended for you, or any family member, who operates any vehicle during any period when that person’s driver’s license is suspended or revoked.

During 1982 and 1983, Kimberly Ann Johnson was issued a number of traffic citations for violations of Maryland law. Ms. Johnson failed to contest those violations. Finally, on November 16, 1983, Ms. Johnson went to the District of Columbia Department of Motor Vehicles to obtain a duplicate of her license. There she was served with an Official Notice of Proposed Suspension of her District of Columbia operator’s permit, and Ms. Johnson signed the notice to acknowledge her receipt of it. The notice stated, in pertinent part:

You are hereby notified that, unless you apply for a hearing ... your District of Columbia motor vehicle operator’s permit ... is suspended effective five days ... from the date of service of this notice and that thereafter it shall be unlawful for you to operate a motor vehicle in the District of Columbia.

Ms. Johnson was also orally advised that she had to pay $60 in unpaid Maryland traffic citations or face suspension of her license. Ms. Johnson then caused a third party to pay the $60 debt, and payment of that amount was received by the Administrative Clerk of the District Court of Maryland on November 25, 1983. Ms. Johnson did not request a hearing within the specified five-day period, however, and the suspension of her operator’s permit became final on November 24, 1983. Ms. Johnson never sought appeal of that suspension.

On February 4, 1984, Ms. Johnson was driving a car covered by the insurance policy when, at a point near Bladensburg Road and Route 450 in Prince George’s County, Maryland, her car struck and killed Maria Semciw, a pedestrian.

After the accident, Ms. Johnson learned that her operator’s permit was suspended. On February 8, 1984, after paying an additional $60, her permit was reinstated. At no time between November 24, 1983 and February 4, 1984 was Ms. Johnson directly notified that her license was suspended or that, due to the suspension, she was not covered under the insurance policy.

On January 4, 1985, Maria Semciw’s personal representative filed a wrongful death and survivorship action against Leroy and Kimberly Ann Johnson in the Circuit Court for Prince George’s County, Maryland. Defendant has refused to defend the John-sons in that action or to acknowledge that Kimberly Ann Johnson was covered by the policy at the time of the accident.

II. DISCUSSION

Resolution of this case requires this Court to set sail upon the “uncharted waters” of the District of Columbia no-fault law. See Rousey v. Rousey, 499 A.2d 1199, 1209 n. 7 (D.C.App.1985). The pertinent section of that law states:

Grounds for cancellation of a policy. —No insurer shall cancel a policy except:
# 3k * * 5ft *
(3) Where the license of an insured has been suspended or revoked during the period of a policy of motor vehicle insurance, the insurance shall not provide coverage for such insured during the period of suspension or revocation.

D.C.Code § 35-2109(a)(3) (1985 Supp.). Defendant thus contends that, because Kimberly Johnson’s license was officially suspended on the date of the accident, she was not covered by the policy as a matter of law.

Plaintiff, however, points to another provision in the law:

Notice required of cancellation of or refusal to renew policy. — No cancellation or refusal to renew by an insurer of a policy of motor vehicle insurance shall be effective unless the insurer has delivered and mailed to the named insured, at his or her last known address, a written notice of intent to cancel or refusal to renew. The required notice shall be provided to the named insured at least 30 days prior to the effective date of cancellation, or in the case of nonrenewal, 30 days prior to the end of the policy period.

D.C.Code § 35-2109(b) (1985 Supp.). Plaintiffs argue that, because Leroy Johnson never received the required notice, Kimberly Johnson necessarily was covered by the policy at the time of the accident.

There is no reported case law on the construction of these provisions of the no-fault law which would serve to guide this Court’s interpretation of the statute. The Court therefore must look to the language and purpose of the statute to determine its proper construction. See, e.g., Florida Power & Light Co. v. Lorion, — U.S. -, 105 S.Ct. 1598, 1603, 84 L.Ed.2d 643 (1985); Unification Church v. Immigration and Naturalization Service, 762 F.2d 1077, 1083-84 (D.C.Cir.1985).

Analysis of the words and structure of the statute reveals that the notice requirement of Section 35-2109(b) is not applicable to “suspensions” of insurance coverage effected under. Section 35-2109(a)(3). First, a temporary suspension of insurance coverage during the period in which a driver’s license is suspended is not commonly understood to constitute a “cancellation or refusal to renew” a policy. As the Supreme Court recently noted, in construing a statute “it is appropriate to assume that the ordinary meaning of the language ... employed ‘accurately expresses the legislative purpose.’ ” Mills Music, Inc. v. Snyder, — U.S. -, 105 S.Ct. 638, 645, 83 L.Ed.2d 556 (1985) (citations omitted); see also United Scenic Artists, Local 829 v. National Labor Relations Board, 762 F.2d 1027, 1032 n. 15 (D.C.Cir.1985).

This "plain meaning” reading is amply supported by the purpose underlying the notice requirement provision. That purpose evidently was to give the insured adequate time to procure new coverage before coverage under his old policy lapsed. See D.C.Code § 35-2109(b)(3) (1985 Supp.). Those drivers whose licenses are suspended, however, could not obtain new coverage because Section 35-2109(a)(3) precludes insurers from providing such coverage. Thus, the purpose of Section 35-2109(b) would not be served by including suspensions within the scope of that provision.

The Court also notes that its construction avoids potential conflict between Sections 35-2109(a)(3) and 35-2109(b). If “cancellation or refusal to renew” is read to include “suspensions” of coverage during suspensions of driver’s licenses, then the insurer is subjected to conflicting mandates. Under Section 35-2109(b), the insurer must notify the insured and wait 30 days before halting coverage. Section 35-2109(a)(3), however, commands that “the insurance shall not provide coverage for such insured during the period of suspension” and thus, on its face, precludes the insurer from providing any coverage during the 30-day notice period. It is a well-settled tenet of statutory construction that statutes should be construed so as to avoid such internal inconsistencies and absurd results. See Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 575, 102 S.Ct. 3245, 3252, 73 L.Ed.2d 973 (1982).

Accordingly, the Court concludes that defendant was not required to comply with Section 35-2109(b) and that, pursuant to Section 35-2109(a)(3), Kimberly Johnson was not covered by the policy at the time of the accident.

Plaintiffs offer the alternative argument that the suspension of Kimberly Johnson’s license was improper and that, since the license suspension was invalid, the suspension of insurance coverage was invalid as well. The Court need not address this argument.

Plaintiffs' exclusive route for judicial review of the license suspension is to the District of Columbia Court of Appeals. License suspensions clearly are “contested cases” for purposes of the District’s Administrative Procedure Act. See D.C.Code §§ 40-302(a); 1-1509 (1981 ed.). Under Section l-1510(a) of the D.C.Code, judicial review of administrative decisions in contested cases is limited to the D.C. Court of Appeals. See District of Columbia v. Douglass, 452 A.2d 329, 333 (D.C.App. 1982); see also Cheek v. Washington, 333 F.Supp. 481, 483 (D.D.C.1971). As such, this Court lacks jurisdiction to hear plaintiffs’ arguments.

      . Research has uncovered only three cases which even address the no-fault law, and none of the cases relates to the instant question. See Nasaka v. Data Access Systems, 602 F.Supp. 761 (D.D.C. 1985); Dimond v. District of Columbia, 618 F.Supp. 519 (D.D.C.1984); Rousey v. Rousey, 499 A.2d 1199, 1209 n. 7 (D.C.App.1985).

      . This purpose is consistent with the purpose motivating the no-fault law as a whole, which was to provide adequate protection for accident victims by mandating insurance coverage. See D.C.Code § 35 — 2101(b); see also Nasaka, 602 F.Supp. at 762; Dimond, 618 F.Supp. at 525.

      . While the validity of Cheek as to review of agency actions which raise federal questions was undercut by District Properties Associates v. District of Columbia, 743 F.2d 21, 25-27 (D.C. Cir.1984), plaintiffs herein do not allege that this case involves any federal questions. Thus, Cheek remains valid precedent.


author: HADEN, Chief Judge.

text:
    Walter E. BOSLEY and Bernice W. Bosley, Plaintiffs, v. CABOT OIL & GAS CORPORATION OF WEST VIRGINIA, Defendant.
    Civ. A. No. 2:85-0164.
    United States District Court, S.D. West Virginia, Charleston Division.
    Jan. 14, 1986.

      Marvin W. Masters, Masters & Taylor, Charleston, W.Va., for plaintiffs.
    E. Glenn Robinson, Robinson & McElwee, Charleston, W.Va., for defendant.
   MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

This case comes before the Court on the Defendant’s motion for summary judgment. The motion has been fully briefed and the Court now deems it mature for decision.

I. Background

The Plaintiffs filed this action in the Circuit Court of Kanawha County, West Virginia. The Defendant thereupon removed it to this Court. The action stems from a dispute over a right-of-way which has been shared with fluctuating degrees of amicability by the Plaintiffs and the Defendant. The Plaintiffs claim that the right-of-way is exclusively theirs. Conversely, the Defendant claims not one but two sources for its right to cross the property in question.

The Plaintiffs, Mr. and Mrs. Bosley, purchased their property from an adjoining landowner, Freeda McClanahan, in 1965. The deed effecting the transfer granted the Bosley’s a right-of-way over McClanahan’s property. Mrs. McClanahan subsequently sold her property to Eugene Comer. Thus, the Bosley’s right-of-way now passes over land owned by Comer.

On or about January 10, 1969, the Defendant, Cabot Oil & Gas, acquired a right-of-way over the Comer property in anticipation of locating a well on another landowner’s property. Sometime in 1971 Cabot drilled a well on the site. It gained access to the well by traveling across the Comer property via the Bosley right-of-way. By this time the right-of-way had become an improved roadway, complete with a small bridge, by which the Plaintiffs traveled to their residence. Apparently the drilling activity in 1971 resulted in some degree of damage to the Bosley’s roadway. The Plaintiffs retained an attorney and a settlement was reached between the parties. As part of the settlement, the Defendant acquired a right-of-way from the Plaintiffs. The duration of this right-of-way is disputed by the parties.

Following completion of the well, the Defendant continued to use the Bosley right-of-way to tend its well. Uncontroverted is its assertion that the roadway was traveled on a daily or weekly basis by light trucks as part of the regular maintenance. The Plaintiffs made no complaints about such use until November of 1984. On November 26, 1984, the Defendant moved a service rig onto the well site. It was removed on December 20, 1984. During these operations the Defendant accessed the well site by traveling over the Bosley roadway. The Plaintiffs now claim that the Defendant had no right to use their roadway and that such use resulted in damage to same.

II. Discussion

The Defendant attempts to characterize the Plaintiffs’ case as one grounded in trespass. All the arguments in its memoranda are directed to that point. While it is clear that trespass is a major contention of the Plaintiffs, the Court finds that the Defendant reads the Plaintiffs’ complaint too narrowly. The complaint charges that the “Defendant negligently, carelessly, wrongfully and unlawfully and intentionally entered upon [the] Plaintiffs' property and right-of-way and damaged the roadway leading to their home.” Although the complaint is lacking in detail, it surely meets the requirement of “a short and plain statement of the claim showing that the pleader is entitled to relief.” Rule 8(a)(2), Federal Rules of Civil Procedure. From a reading of the complaint, the Court discerns that the Plaintiffs are complaining that (1) the Defendant had no right to use their roadway and (2) even if it had such a right, the Defendant unreasonably used the right-of-way. Naturally, the Plaintiffs’ case is a much stronger one if the trespass issue remains; however, it is not the only issue upon which the Plaintiffs can state a case. The Court considers the Plaintiffs to have pled a case for unreasonable use of a right-of-way. Thus, resolution of the Defendant’s summary judgment motion will be not extinguish in toto the Plaintiffs’ case. Therefore, the Defendant's motion is at best one for partial summary judgment and will be treated as such.

A crucial issue in this litigation is whether the right-of-way enjoyed by the Plaintiffs is “exclusive.” The Plaintiffs contend that it is of such nature. The Defendant disagrees. Another way to state the issue is to ask whether the owners of the servient estate, McClanahan and Comer, had the right to grant successive rights-of-way to the litigants.

The undisputed facts show that McClanahan conveyed a right-of-way to Plaintiffs in 1965 as part of the transfer of an adjoining tract. The grant of the right-of-way was reflected by the following language in that 1965 deed:

“As part of the consideration herein-above stated, the party of the first part grants and conveys unto the party of the second part, his heirs, administrators, executors and assigns, a certain right-of-way and easement to be used for driveway purposes, permitting ingress and egrees to and from West Virginia Secondary Route No. 7 and the property hereinabove described and conveyed; said right-of-way and easement is to be eight (8) feet in width and is more particularly described and shown on the aforesaid map attached hereto and recorded herewith.”

The deed does not state that the right-of-way is to be exclusive. By the same token it does not reserve the use of the right-of-way to the grantor, her heirs or assigns. The parties seize upon these omissions to support their respective positions.

Comer, the successor of McClanahan, granted a right-of-way to the Defendant in 1969. The grant was contained in a one-page contract. For the consideration of $400.00, the contract, in form language, gave the Defendant “the right to construct, maintain and use a roadway over and across the land” of Comer. No mention was made of the Bosley right-of-way; nor did the contract specify where the right-of-way was to cross the Comer property.

Pointing out that their right-of-way was distinctively marked on a plat accompanying their deed, the Plaintiffs argue that this specificity as to location should somehow enable them to prevail over the more general granting language of the Defendant’s right-of-way. The Plaintiffs seem to imply that because the Comers did not specify where the Defendant’s right-of-way was to be located, they meant for it to be someplace other than along their route. The law in West Virginia, however, provides that if an easement is granted without specification as to location, the practical use of the easement by the parties will fix this location. Hoffman v. Smith, 310 S.E.2d 216, 220 (W.Va.1983); see also Rhodes Cemetary Association v. Miller, 122 W.Va. 139, 7 S.E.2d 659 (1940). The record here reflects that the Defendant used the Bosley right-of-way for approximately thirteen years with no objection by Comer as to location. Indeed, common sense would indicate that Comer would prefer the Defendant to use the existing roadway rather than disturbing his property by creating another. With this in mind, the Court now squarely addresses the question of whether Comer could grant a second party, the Defendant, a right-of-way along the same route previously designated for use by the Plaintiffs.

The Plaintiffs argue that once McClanahan conveyed the right-of-way to the Plaintiffs in 1965, she and her assigns had exhausted their ability to make further assignments. This question of successive assignments was addressed by the West Virginia Supreme Court in Sanders v. Roselawn Memorial Gardens, Inc., 152 W.Va. 91, 159 S.E.2d 784 (1968):

“We are of the opinion that the owner of a servient estate may grant successive easements for travel over the same road or way to various persons; that the owner of the servient estate may continue thereafter to use his property in any manner and for any purpose reasonably consistent with the enjoyment of the easement by the various persons entitled thereto; and that no person having an easement for travel over such road or way in common with others can be heard to object to any use of or change in the character of such way or road by the other users or by the owner of the servient estate so long as the rights of the one complaining are not thereby interfered with in an undue or unreasonable manner.”

Id. at 112, 159 S.E.2d at 797, quoted in Rippetoe v. O’Dell, 276 S.E.2d 793, 796 (W.Va. 1981). The Plaintiffs attempt to distinguish Sanders and Rippetoe with the argument that the conveying owners in those cases had reserved the right to make further conveyances. Whether this is correct is not reflected in the opinion of either case. Given the silence of the West Virginia court on the question in both holdings, the converse would appear to be true. More particularly, unless a grantor specifically gives up the right to create further estates, he is presumed to retain such a right.

Public policy arguably supports the right of the servient estate owner to grant successive easements. An easement such as a right-of-way is a limited property interest. Generally, the holder of the interest is most concerned with traversing the servient estate. Unlike other property interests, there is no inherent conflict with sharing this type of interest with someone else. If a right-of-way given under this state of facts was presumed to be “exclusive,” a servient estate could be subjected to the wasteful result of playing host to two or more roadways where one would suffice. Conservation of economic resources and the ecology of the servient estate are best served by precluding where possible duplicative easements.

The Plaintiffs’ reliance on the term “exclusive” may reflect a misunderstanding of that term’s connotation vis-a-vis ownership of a right-of-way. In the vintage case of McNeil v. Kennedy, 88 W.Va. 524, 107 S.E. 203 (1921), the court noted that other parties with interests in a right-of-way could not affect the plaintiff’s “exclusive” right. The court used “exclusive” “in the sense that no one else may lawfully oppose him in that right.” Id., 88 W.Va. at 528, 107 S.E. 203. Thus, although the Plaintiffs may have to share the right-of-way with the Defendant, the Defendant may not interfere with the Plaintiffs’ use of the right-of-way. See Kell, 289 S.E.2d 450. The Plaintiffs are protected by restraint of “reasonableness” placed upon the Defendant. If the Plaintiffs believe themselves injured by the Defendant’s conduct, the relief is to bring an action for damages. The Court finds this to be such an action. The action, however, is not against one who has no right to travel the right-of-way, but is against one who may have exceeded its right to do so.

The Defendant alternatively argues that it acquired a valid right-of-way from the Plaintiffs themselves. It asserts that it made such an acquisition out of an abundance of caution. The record reflects that the right-of-way was conveyed during the time the well was being developed. The conveyance was part of a settlement agreement springing from charges by the Plaintiffs that the Defendant had damaged their roadway. The document of conveyance reflected a consideration of $2,500.00. The Defendant contends that that right-of-way agreement continues to be valid. The Plaintiffs, on the other hand, argue that the right-of-way was limited to the purpose of completing the drilling of the well. Because the Court’s treatment of the first right-of-way is dispositive of the motion, the Court will not tarry long on this point.

The contract by which the Plaintiffs granted the Defendant a right-of-way is somewhat ambiguous as to duration. On that subject it contained the following paragraph:

“Second party shall, upon the termination of this easement, surrender to first parties the right-of-way here granted in the condition granted, together with all alterations and repairs thereon in good order, condition and repair, except for reasonable wear and use thereof.”

The wording is a tautology. It says nothing. Notwithstanding such ambiguity, the Plaintiffs’ argument that the right-of-way was of limited duration is disingenuous. First, it is inconceivable that the Defendant would enter into such an agreement when both parties knew that continued access would be necessary to service the well. Second, for thirteen years the Defendant, without apparent objection by the Plaintiffs, continued to travel over the Plaintiffs’ roadway. “The practical interpretation of the parties to a grant of a right-of-way is very persuasive of what they intended.” Palmer v. Newman, 91 W.Va. 13, 20, 112 S.E. 194 (1922). Third, the sum of $2,500.00 would appear to be an excessive price for a short term easement, especially considering the $400.00 price paid to the Comers just two years prior. Fourth, if the Plaintiffs wished to place a time limit on the right-of-way, they certainly could have employed language of greater precision.

If the Defendant’s motion turned on the interpretation of this right-of-way contract alone, the Court would consider receiving parol evidence to aid in the interpretation of what could be considered an ambiguous passage. Given that such an interpretation is not necessary to the result reached here, the Court merely notes the weakness of the Plaintiffs’ position and moves on.

The uninterrupted use of the Bosley roadway by the Defendant for approximately thirteen years leads the Court to an area which is not addressed by either party. It is quite probable that the Defendant’s usage has given it — if all else fails — a right-of-way by prescription. The West Virginia Supreme Court has described the elements of such an easement:

“To establish an easement by prescription there must be continued and uninterrupted use or enjoyment for at least ten years, identity of the thing enjoyed, and a claim of right adverse to the owner of the land, known to and acquiesced in by him; but if the use is by permission of the owner, an easement is not created by such use.”

Veach v. Day, 304 S.E.2d 860, 862 (W.Va. 1983) (quoting Town of Paden City v. Felton, 136 W.Va. 127, 138, 66 S.E.2d 280, 287 (1951)). The Court notes without deciding that this test appears to be met by the Defendant’s course of conduct.

III. Conclusion

For the foregoing reasons, the Court grants the Defendant’s motion for summary judgment. As mentioned, such a decision does not completely resolve this case. Remaining is the question of whether the Defendant’s use of the Bosley right-of-way unduly interfered with the Plaintiffs’ rights. Given this outcome, the Court denies at this time the Defendant’s request for an award of costs and attorney fees.

The Clerk is directed to send a certified copy of this Memorandum Opinion and Order to counsel of record.

      . "Trespass" as used here is intended to mean unlawful entry. In other words, the Plaintiffs are claiming that the Defendant had no legal right to be on Plaintiffs' right-of-way.

      . In Kell v. APCO, 289 S.E.2d 450 (W.Va.1982), the West Virginia Supreme Court held that a power company which had been granted a right-of-way easement over some land for the purpose of constructing and maintaining a power transmission line did not have a right to exclusive possession of the right-of-way conveyed.