author: SHAPIRO, District Judge.

text:
    UNITED STATES of America v. Sherman WASHINGTON, Jr.
    Crim. No. 85-155.
    United States District Court, E.D. Pennsylvania.
    June 21, 1985.

      Mark Schaffer, Philadelphia, Pa., for defendant.
    Linda Dale Hoffa, Asst. U.S. Atty., for Government.
   MEMORANDUM OF DECISION

SHAPIRO, District Judge.

On April 24, 1985, a federal grand jury in this district indicted defendant Sherman Washington, Jr. on one count of transportation of stolen property (18 U.S.C. §§ 2314 and 2(b)) and two counts of bank larceny (18 U.S.C. § 2113(b)). Defendant moved this court to suppress incriminating statements concerning his alleged role in this bank larceny scheme that he admittedly made to an Assistant United States Attorney (“AUSA”) and FBI agent at a meeting held on November 15, 1984. Defendant argued that his statements were made in the course of plea discussions and are therefore inadmissible at trial under both Fed.R.Crim.P. 11(e)(6) and Fed.R.Evid. 410. The Government opposed this motion.

On June 13, 1985, this court held an evidentiary hearing on defendant’s in limine motion. Defendant testified on his behalf, and the Government called FBI Special Agent John Kundts. After considering the evidence presented, credibility of the witnesses, arguments of counsel, and applicable law, this court granted defendant’s motion on June 13, 1985. This Memorandum states the reasons for the court’s action.

Certain of the relevant facts were not in dispute:

For some time prior to November 15, 1984, a federal grand jury was investigating defendant for bank larceny and the interstate transportation of a stolen check. Defendant and his attorney were aware of this investigation.

During August, 1984, Agent Kundts was at a branch of the Philadelphia National Bank in the course of this investigation. Agent Kundts had not arranged a meeting with the defendant but observed defendant enter the bank; he recognized the defendant from his picture. Agent Kundts asked defendant if he were willing to speak with him about this matter. Defendant responded that he had an attorney and refused to answer questions without his attorney’s advice; he provided Agent Kundts with the name and telephone number of his attorney.

Shortly thereafter, defendant’s attorney called Agent Kundts. Agent Kundts said he would notify defense counsel when an AUSA had been assigned to this investigation. After being informed of the identity of the AUSA and prior to November 15, 1984, defense counsel requested that the AUSA meet with him and his client. The first time defendant and his attorney tried to see this AUSA she was otherwise occupied.

On November 15, 1984, defendant, his attorney, Agent Kundts, and the AUSA met in the United States Attorney’s Office. Defendant was not then under arrest, had not been indicted, and was not in custody. The AUSA but not Agent Kundts took notes for the Government during this meeting; Agent Kundts stated that generally only one Government representative took notes at such meetings so that “they [the two sets of notes] won’t disagree.” It is unknown whether defendant or defense counsel took any .notes.

Both the Government and the defense agreed on most aspects of the November 15, 1984 meeting. They agreed that defendant was not in custody, spoke voluntarily, explained his version of the facts, and offered to cooperate with the Government in its investigation of another person allegedly involved in the scheme to transport stolen securities by wearing a concealed electronic device to record conversations and testifying. They also agreed that defendant was not told that any statements he made could be used against him nor was he tendered a proffer letter.

But they disagreed on other aspects of the meeting. Agent Kundts testified that without being asked, defendant began by explaining his version of events relevant to the investigation, expressed no interest in pleading to a misdemeanor charge and never requested immunity. Agent Kundts also testified that only after defendant completed his version of events did the Government explore his willingness to cooperate and to “wear a wire.”

Defendant stated that he came to the meeting voluntarily to bargain for immunity and negotiate a plea but the conversation began with either the AUSA or Agent Kundts questioning him. Defendant also testified that he maintained his innocence throughout the meeting even though he was willing to plead guilty to a lesser offense. He testified that his purpose in giving information to the Government was to persuade the prosecutor to cease investigating him, grant him immunity, or indict him for a misdemeanor rather than a felony. It is unclear whether defendant testified this was his subjective intent on November 15,1984 or if he maintained that he stated this intention at the November 15, 1984 meeting. Defendant conceded that the Government did not promise him immunity and that the possibility of charging him with a misdemeanor was not discussed.

The AUSA’s notes from the meeting first recorded defendant’s description of events and his stated willingness “to wear wire and testify.” (G-l). The notes then record that defendant, his attorney, Agent Kundts and the AUSA “will meet Tuesday to discuss deal” and that defendant was promised nothing in return for his offer of cooperation as of that date (November 15, 1984).

The follow-up meeting was held as scheduled (presumably November 20, 1984); on November 29, 1984, the AUSA mailed defense counsel a proposed plea bargain. It contemplated that defendant would plead guilty to an information charging two counts of bank larceny in exchange for his agreement to tell all he knew about the matters under investigation, testify on those matters and submit to a polygraph examination if requested by the Government. This proposed agreement was neither formally rejected nor accepted by defendant.

Agent Kundts testified without contradiction that he did not file the usual FBI Form 302 investigatory report after the November 15, 1984 meeting. On April 2, 1985, the AUSA asked Agent Kundts to “memorialize” her notes of the meeting in a Form 302 report to be used by the Government in preparing for presentation of the case to a grand jury. Between April 2 and April 5, 1985, Agent Kundts and the AUSA met to review the AUSA’s notes and refresh his recollection of the November 15, 1984 meeting. On April 5, 1985, Agent Kundts dictated his report of the meeting and these notes were transcribed on April 8, 1985. The grand jury’s three-count indictment against defendant was returned on April 24, 1985.

The Form 302 Report (G-2) differed from the AUSA’s notes in several aspects: 1) the AUSA’s notes stated, “defendant gave the following statement, voluntarily — ” and then summarized defendant’s statement of events. Form 302 stated, “Washington began the interview by stating that he was providing the following information voluntarily” and then summarized defendant’s description of events; 2) when discussing cooperation, the AUSA’s notes said, “defendant says he [is] willing to wear wire and testify;” Agent Kundts’ Report referred more generally to Washington’s willingness “to assist the Government in this matter;” 3) the AUSA’s notes stated that the meeting to be held the following Tuesday was “to discuss deal,” while Agent Kundts’ Report noted that the purpose of the meeting was “to discuss a possible plea agreement.”

Federal Rule of Criminal Procedure 11(e)(6) provides that any statement made in connection with an offer to plead guilty is inadmissible against the accused in any civil or criminal proceeding:

(6) Inadmissibility of Pleas, Plea Discussions, and Related Statements.
Except as otherwise provided in this paragraph, evidence of the following is not, in any civil or criminal proceeding, admissible against the defendant who made the plea or was a participant in the plea discussions:
>¡t >¡c # % *
(D) any statement made in the course of plea discussions with an attorney for the government which do not result in a plea of guilty or which result in a plea of guilty later withdrawn.
However, such a statement is admissible (i) in any proceeding wherein another statement made in the course of the same plea or plea discussions has been introduced and the statement ought in fairness be considered contemporaneously with it, or (ii) in a criminal proceeding for perjury or false .statement if the statement was made by the defendant under oath, on the record, and in the presence of counsel.

Fed.R.Crim.P. 11(e)(6), as amended 1980, (emphasis added).

Where it applies, Rule 11(e)(6) is a “per se rule” of inadmissibility, see Advisory Committee Notes on 1979 Amendment. Therefore, the issue is whether the November 15, 1984 meeting was a privileged plea discussion. Once defendant properly raises the issue, the Government bears the burden of proving that the discussion was not a plea negotiation. The Government’s burden of proof is by the preponderance of the evidence. See United States v. Robertson, 582 F.2d 1356, 1366 n. 21 (5th Cir.1978) (en banc); Lego v. Twomey, 404 U.S. 477, 92 S.Ct. 619, 30 L.Ed.2d 618 (1972) (prosecution must establish the admissibility of a confession by at least a preponderance of the evidence).

The Court of Appeals for the Fifth Circuit in Robertson considered the admissibility of statements made by a defendant under Rule 11(e)(6) as it existed in 1978. Former Rule 11(e)(6) held inadmissible “statements made in connection with, and related to” a guilty plea or “an offer to plead guilty,” and did not limit admissibility to plea discussions with a Government attorney. The court held that the defendant’s post-arrest parking lot conversation with Drug Enforcement Administration agents was only an attempt to arrange a “confession bargain” and not a protected plea negotiation. The court articulated this test to determine whether the defendant’s statements were protected under Rule 11(e)(6):

To determine whether a discussion should be characterized as a plea negotiation and as inadmissible, the trial court should carefully consider the totality of the circumstances____ The trial court must apply a two-tiered analysis and determine, first, whether the accused exhibited an acutal subjective expectation to negotiate a plea at the time of the discussion, and, second, whether the accused’s expectation was reasonable given the totality of the objective circumstances.”

582 F.2d at 1366.

Since Robertson, several courts have used this test to determine whether a defendant who has made incriminating admissions had an actual and reasonable expectation that he was engaging in protected plea discussions. See, e.g., United States v. Grant, 622 F.2d 308 (8th Cir.1980); United States v. Pantohan, 602 F.2d 855 (9th Cir.1979); United States v. Geders, 566 F.2d 1227, reh’g en banc, 585 F.2d 1303 (5th Cir.), cert. denied, 441 U.S. 922, 99 S.Ct. 2031, 60 L.Ed.2d 396 (1979); United States v. Mannino, 551 F.Supp. 13 (S.D.N.Y.1982); see also Commonwealth v. Calloway, 313 Pa.Super. 173, 459 A.2d 795 (1983) (articulating a state rule that “statements made in connection with an offer to plead guilty are inadmissible” and noting that Robertson “provides a workable analytical framework” for identification of protected statements).

Applying the Robertson criteria, we find defendant’s in-court “account of his prior [November 15, 1984] subjective mental impressions” (582 F.2d at 1366) credible. Defendant’s refusal to speak to Agent Kundts at the Philadelphia National Bank without his attorney and his attending the November 15, 1984 meeting with his attorney evidence a belief that he would benefit from meeting with the AUSA and that his rights would be adequately protected. Though defendant's remarks were admittedly voluntary, he did not simply walk into the AUSA’s office and “spill the beans.” Based on defendant’s appearance and demeanor, the court credits his testimony that he intended to convince the Government not to prosecute him or to prosecute him for a lesser offense. Defendant’s subjective intent at the meeting, whether or not clearly manifested, was to negotiate with the Government in the hope of securing a concession.

Based on the totality of the circumstances, defendant’s belief that he was engaged in plea discussions with a Government attorney was reasonable. There were outward manifestations that the November 15, 1984 conversation could be regarded as a plea discussion. Only the AUSA took notes at the meeting although the investigation was under the direction of the FBI; FBI Agent Kundts did not then file a Form 302 Report. This suggests that Agent Kundts and the AUSA thought this investigation would be concluded by defendant’s agreement to plead guilty. Also, at the end of the meeting, the parties specifically agreed to discuss a possible “deal” or plea agreement several days later. The Form 302 Report was not filed until five months after the meeting when it was clear a plea agreement had not been reached and an indictment would be sought. Based on these factors, we find it was objectively reasonable for defendant to have regarded the November 15, 1984 meeting as a plea discussion. Therefore, any statements made by defendant in the course of that plea discussion are inadmissible under Rule 11(e)(6).

The Court of Appeals for this Circuit has not yet considered amended Rule 11(e)(6) or the usefulness of the Robertson test. But a Government prosecutor would be well advised to state in writing at the outset of conversations that could arguably be categorized as plea discussions whether the Government was prepared to negotiate and, if not, that statements of a defendant or target of investigation could be used as evidence against him. Placing on the Government the burden of categorizing discussions with an actual or potential defendant results in a rational, workable standard under Rule 11(e)(6) that is not dependent on difficult post-incident determinations of fact and evaluations of intent gleaned from oral recollections or informal notes of off-the-record conferences.

The Robertson test was appropriate pri- or to the 1980 Amendments to Rule 11(e)(6). Rule 11(e)(6) formerly contemplated plea bargaining with anyone with real or apparent negotiating authority, including DEA, FBI, and Secret Service agents and police. See, e.g., United States v. Pantohan, 602 F.2d 855 (9th Cir.1979) (Bureau of Alcohol, Tobacco, and Firearms agents); Robertson, (DEA agents); United States v. Herman, 544 F.2d 791 (5th Cir.1977) (postal inspectors). Examining the circumstances surrounding a defendant’s admissions to determine whether they were reasonably intended to occur in a bargaining context was then necessary. But Rule 11(e)(6) has since been restricted to plea discussions with a Government attorney, so that it is proper to place the burden of communicating the nature of the meeting on the Government. A Government prosecutor, generally presumed to have the authority to plea bargain, should have the obligation of informing a defendant of the nature of a meeting; just as a Government attorney can make a proffer, he or she can make a “non-proffer.”

“Plea discussions” may be broadly defined, so it is appropriate for a Government attorney to communicate expressly to a defendant if a discussion that might arguably be a plea discussion is not in fact a protected plea discussion; otherwise, all statements at a meeting where the possibility of a plea is mentioned should be considered to have been made in the course of plea discussions.

The post-Robertson amendments to Rule 11(e)(6) broadened privileged communications to include “any statement made in the course of plea discussions” rather than only statements “made in connection with, and related to” an offer to plead guilty. The Advisory Committee Notes on the 1979 Amendments state, “by relating the statements to ‘plea discussions’ rather than ‘an offer to plead,’ the amendment ensures ‘that even an attempt to open plea bargaining [is] covered under the same rule of inadmissibility.’ ” Advisory Committee Notes on 1979 Amendments (citing United States v. Brooks, 536 F.2d 1137 (6th Cir.1976)).

In addition to the post-Robertson changes in the language of Rule 11(e)(6), other policies and principles favor placing the burden of communication on the Government. Plea bargaining would then occur only when both prosecutor and defendant are aware of the context of negotiations. Plea bargaining is an integral part of our criminal justice system:

Whatever might be the situation in an ideal world, the fact is that the guilty plea and the often concomitant plea bargain are important components of this country’s criminal justice system. Properly administered, they can benefit all concerned.

Blackledge v. Allison, 431 U.S. 63, 71, 97 S.Ct. 1621, 1627, 52 L.Ed.2d 136 (1977) (citations omitted). See also Santobello v. New York, 404 U.S. 257, 261, 92 S.Ct. 495, 498, 30 L.Ed.2d 427 (1971) (“Disposition of charges after plea discussions is not only an essential part of the process but a highly desirable part for many reasons.”).

Plea bargaining can only be beneficial if it fulfills the Congressional intent of not “discouragpng] defendants from being completely candid and open during plea negotiations.” Advisory Committee Notes on 1979 Amendments (citing H.R.Rep. No. 94-247, 94th Cong., 1st Sess. 7 (1975)). Candor is best achieved if defendants are free to participate in discussions with Government attorneys without fear that admissions can subsequently be used against them.

The legal background has thus shifted from the propriety of plea bargaining to how best to implement and oversee the process. Plea bargaining is a tool of conciliation. It must not be a chisel of deceit or a hammered purchase and sale____ Accordingly, we must examine plea bargains under the doctrine of caveat prosecutor.

United States v. Herman, 544 F.2d 791, 796 (5th Cir.1977). We find that a rule of caveat prosecutor, properly applied, places the burden on a Government attorney to decide and state when it is engaged in a bargaining posture and when it is not so that prosecutors would neither intentionally nor unintentionally trap an unwary defendant who makes admissions in the vain hope of obtaining a bargain.

Placing this burden on the Government best assures the preservation of a defendant’s constitutional rights. Plea bargaining sometimes involves suspects who have yet to be indicted or arraigned, so that no Sixth Amendment constitutional right to counsel will have attached and defendants might not have counsel when meeting with a Government attorney. A rule of presumed inadmissibility in the absence of an express Government disclaimer protects defendants whether with or without counsel from self-incriminating statements arguably “involuntary” because made in the misguided belief that they were given in exchange for possible Government concessions.

A clearly articulated, non-fact specific standard is also more easily administered that the Robertson test. If a Government attorney were to explain whether defendant’s statements could subsequently be used against him at the beginning of any meeting where bargaining for concessions was a possibility, it would preclude the problem posed where defendant and prosecutor both act in good faith but fail to have a “meeting of the minds” concerning the content and context of a discussion. This standard would minimize the need for determining the veracity of expectations asserted after-the-fact and making fine line distinctions between inadmissible plea negotiations and admissible “confession bargains.” See Robertson, 582 F.2d at 1371-72 (Morgan, J., concurring) (criticizing the majority for making an untenable distinction between plea and confession bargaining).

Communications from a defendant or target of investigation to a prosecutor that may arguably be considered plea discussions should, in the absence of a prosecutorial disclaimer, be presumed inadmissible under Rule 11(e)(6). Such a standard provides ready guidance to both prosecutors and defendants and fulfills the objectives of Fed.R.Crim.P. 11(e)(6) and our system of criminal justice.

      . During the evidentiary hearing, there was disagreement over whether a fifth person, a high school student observing the United States Attorney’s Office as part of a school project, was present at this meeting; the dispute was resolved when all agreed that this student was present at a subsequent meeting.

      . Neither the AUSA nor defense counsel testified as to their recollections of the meeting.

      . Federal Rule of Evidence 410(3) and (4) conforms to Fed.R.Crim.P. 11(e)(6):
      Rule 410. Inadmissibility of Pleas, Plea Discussions, and Related Statements.
      Except as otherwise provided in this rule, evidence of the following is not, in any civil or criminal proceeding, admissible against the defendant who made the plea or was a participant in the plea discussions:
      ******
      (3) any statement made in the course of any proceedings under Rule 11 of the Federal Rules of Criminal Procedure or comparable state procedure regarding either of the foregoing pleas; or
      (4) any statement made in the course of plea discussions with any attorney for the prosecuting authority which do not result in a plea of guilty or which reuslt in a plea of guilty later withdrawn.
      However, such a statement is admissible (i) in any proceeding wherein another statement made in the course of the same plea or plea discussions has been introduced and the statement ought in fairness be considered contemporaneously with it, or (ii) in a criminal proceeding for perjury or false statement if the statement was made by the defendant under oath, on the record and in the presence of counsel.
      Fed.R.Evid. 410, as amended 1980. This Opinion will hereafter refer only to Fed.R.Crim.P. 11(e)(6).

      . In 1978, Fed.R.Crim.P. 11(e)(6) provided:
      Inadmissibility of Pleas, Offers of Pleas and Related Statements. Except as otherwise provided in this paragraph, evidence of a plea of guilty, later withdrawn, or a plea of nolo contendere, or of an offer to plead guilty or nolo contendere to the crime charged or any other crime, or of statements made in connection with, and related to, any of the foregoing pleas or offers, is not admissible in any civil or criminal proceeding against the person who made the plea or offer. However, evidence of a statement made in connection with, and relevant to, a plea of guilty, later withdrawn, a plea of nolo contendere, or an offer to plead guilty or nolo contendere to the crime charged or any other crime, is admissible in a criminal proceeding for perjury or false statement if the statement was made by the defendant under oath, on the record, and in the presence of counsel.

      . Therefore, the court did not find it necessary to decide if defendant was precluded from raising a defense under Rule 11(e)(6) for the first time on appeal. The court also mentioned as significant that defendant sought concessions for his "lady friend" rather than himself. 582 F.2d at 1364 n. 17, 1369-71.

      . Certainly, defense counsel was partially to blame for the apparent absence of a "meeting of minds" between the prosecution and defense on November 15, 1984. Defense counsel could have clarified or asked the AUSA to clarify the purpose of the meeting and made this motion unnecessary.

      . This court rejects the distinction between a deal and plea negotiations articulated in Commonwealth v. Calloway, 313 Pa.Super. 173, 459 A.2d 795 (1983). The court there wrote, "[tjhere are myriad possible explanations underlying his [the accused’s] motivation to provide 'information' for a ‘deal’ [to a district attorney]." 459 A.2d at 801. In the absence of alternative proffered explanations, it is most likely that the defendant contemplated exchanging information for lenient treatment.

      . Rule 11(e)(6) does not distinguish between pre-indictment and post-indictment plea discussions with a Government prosecutor.

      . The only federal case since the 1980 amendments to Rule 11(e)(6) concerning a defendant’s statements to an AUSA found the statements inadmissible; the court's analysis relied on the Robertson factors. See United States v. Alamino, 551 F.Supp. 13 (S.D.N.Y.1982). But see Commonwealth v. Calloway, 313 Pa.Super. 173, 459 A.2d 795, 801 (1983) (finding suspect’s remarks to district attorney were "unsolicited, unilateral statements”).

      . The vast majority of all defendants in federal courts plead guilty. In fiscal year 1970, 24,111 of 28,178 convictions in United States District Courts were by pleas of guilty or nolo contendere, see Santobello v. New York, 404 U.S. 257, 264 n. 2, 92 S.Ct. 495, 499 n. 2, 30 L.Ed.2d 427 (1971) (Douglas, J. concurring) (citing Report of Director of the Administrative Office of the United States Courts for the period July 1 through December 31, 1970). See also J. Bond, Plea Bargaining & Guilty Pleas § 1.2 (2nd ed. 1982) (noting that approximately 85% of federal cases are disposed of by guilty plea).

      . "A disclaimer of bargaining authority, if sufficiently brought home to the defendant, will erode the reasonableness of any belief that genuine bargaining is to transpire. A confession given in the face of a sufficient disclaimer might be precatory rather than tendered in exchange for a particular concession." Robertson, 582 F.2d at 1373 n. 3 (Morgan, J., concurring).


source: Caselaw Access Project

author: PAUL, District Judge.

license: Public Domain

text:
    UNITED STATES of America, v. Stephen A. GARRAHAN, Defendant.
    No. GCA 84-0119-MMP.
    United States District Court, N.D. Florida, Gainesville Division.
    June 25, 1985.
    N. Sherrill Newton, Office of Dist. Counsel, Bay Pines, Fla., for the U.S.
    Stephen A. Garrahan, defendant, pro se.
   PAUL, District Judge.

ORDER

The United States brought this action to recover an overpayment of $1,022.27, plus costs and interest, received by the defendant from the Veterans’ Administration. This sum represents educational benefits paid from January 9, 1979, through March 81, 1979, to which defendant is allegedly not entitled because he received zero credit hours for that term and failed to submit any mitigating circumstances to the VA that could result in a waiver of liability for his indebtedness. The case is now before the Court on a motion for summary judgment filed by the United States. For the reasons stated below, this motion is granted.

The defendant, Stephen A. Garrahan, enrolled in Santa Fe Community College to pursue an AA degree. The school submitted an “Enrollment Certification” form to the VA certifying that the defendant would be attending three-quarter time (9 credit hours) for the period January 9, 1979, through August 16, 1979. Based on this information, the VA awarded educational benefits at the three-quarter time rate to be paid monthly. Defendant subsequently withdrew from his classes on three separate occasions: January 22, January 25, and April 20 — the last day of the term. Defendant was assigned a non-punitive grade for the term, a W, which is neither a passing or failing grade and is not used in computing graduation requirements. Following each notice sent by the school of the change in defendant’s status, the VA sent letters to the defendant informing him that, since the law prohibits payment for a course from which the student withdraws, it is important to notify the VA of the reasons for the change. The letters also state that if no reasons are furnished, benefits will be reduced or terminated effective the first day of that term. There is no evidence any reasons were provided by the defendant. The VA then generated a series of demand letters notifying the defendant that a retroactive reduction in benefits created an overpayment which resulted in a debt that must be repaid. These letters also informed the defendant of his right to have this debt considered for waiver. There is no evidence defendant requested a waiver of liability. The United States then initiated this action to recover the educational benefits paid for courses from which the defendant withdrew.

There currently exists conflicting case law on the issue of whether the VA is statutorily entitled to retrieve educational benefits previously expended to a veteran on the grounds that the veteran did not receive academic credit for a course. In United States v. Brandon, 584 F.Supp. 803 (W.D.N.C.1984), the Court held that a veteran was not required to repay benefits he had already received. In that case the United States argued two statutory bases for recovery of these funds.

The first was 38 U.S.C. § 1780(e), the Recovery of Erroneous Payment:

(e) If an eligible veteran or eligible person fails to enroll in or pursue a course for which an educational assistance or subsistence allowance advance payment is made, the amount of such payment and any amount of subsequent payments which, in whole or part, are due to erroneous information required to be furnished under subsection (d)(2) of this section, shall become an overpayment and shall constitute a liability of such veteran or person to the United States and may be recovered, unless waived pursuant to section 3102 of this title, from any benefit otherwise due such veteran or person under any law administered by the Veterans’ Administration or may be recovered in the same manner as any other debt due the United States.

The court in Brandon found that 1780(e) is clearly a retrospective directive in that it contemplates recovery of payments already made. However the court held an advance payment only becomes an overpayment subject to recovery in two situations: 1) if a veteran fails to enroll in or pursue a course, and 2) if a subsequent payment is disbursed due to erroneous information given in applying for benefits. Brandon at 806.

The United States also argued this issue was governed by 38 U.S.C. § 1780(a)(4):

(a) Payment of educational assistance or subsistence allowances to eligible veterans or eligible persons pursuing a program of education or training ... in an educational institution ... shall be paid as provided in this section____ Such payment shall be paid only for the period of the veterans’ or persons’ enrollment in, and pursuit of, such program, but no amount shall be paid
(4) to any eligible veteran or person for a course for which the grade assigned is not used in computing the requirements for graduation including a course from which the student withdraws unless the Administrator finds there are mitigating circumstances ...

(Emphasis added)

The court in Brandon construes this section as a prospective directive. “No amount shall be paid” is interpreted to deny future benefits. The mention of withdrawals, which suggests a retrospective evaluation of educational benefits, is applicable only in deciding whether to pay benefits in the future. Brandon at 806. Based on this analysis, the court denied the United States’ motion for summary judgment and later ruled the VA could not recover benefits paid simply because a veteran did not receive academic credit. United States v. Brandon, 601 F.Supp. 795 (W.D.N.C.1985).

To this court’s knowledge, Brandon stands alone in denying the government the right to recover these benefits. The only other case in accord was United States v. Steinberg, 553 F.Supp. 184 (D.C.Mass.1982), but that court later, in an unpublished order, reversed itself on a motion for rehearing and granted summary judgment for the United States.

In United States v. Oakley, 744 F.2d 1553 (11th Cir.1984), the appellate court affirmed an order granting the United States’ motion for summary judgment in an action to collect an overpayment of educational benefits. The overpayment in Oakley, as in the case at bar, was created by the defendant’s reduction of hours. The defendant in Oakley did not submit a request for waiver of recovery of this overpayment, therefore the VA was authorized to institute legal proceedings for recovery of the debt. Oakley at 1556. Similarly, in United States v. Kirby, 522 F.Supp. 424, 425 (N.D.Ga.1981), the court found Kirby liable to repay benefits for courses he never completed and granted the United States’ motion for summary judgment. Kirby argued that he could not finish the term because of illness and that the involuntary nature of his failure to complete the courses coupled with the fact that he never formally withdrew from his classes precluded his indebtedness to the United States within the meaning of 38 U.S.C. § 1780(e). The Court found Kirby liable pursuant to 38 U.S.C. §§ 1780(a)(4) and (e). He did not receive a grade that counted toward graduation, and the reason for failing to complete the course was irrelevant to the issue of his liability to the United States. Kirby at 425. The Court reasoned that Kirby could have applied for a waiver of this liability under 38 U.S.C. § 1780(e) but he did not do so. The court would not allow Kirby to sidestep this procedure by bringing the matter of his liability before the court. Kirby at 425. The court also noted it would have granted summary judgment for the United States on the basis of § 1780(e) alone. Kirby at 425, fn. 2. See also United States v. Ramsey, 539 F.Supp. 1062 (E.D.Tenn.N.D.1982).

The interpretation of section 1780(a)(4) and (e) that appears to be most commonly applied is summarized in United States v. Rowin, 550 F.Supp. 643 (W.D.N.Y.1982) as follows:

“Section 1780(a)(4) of Title 38 provides that no educational benefits shall be paid for a course from which the student withdraws unless the Administrator finds that there are mitigating circumstances. In the absence of mitigating circumstances, payments that are received constitute overpayments. Section 1780(e) further provides that erroneously paid educational allowances may be recovered as any other debt owed the government unless waived pursuant to 38 U.S.C. § 3102 ...”

Rowin at 645. A careful review of the legislative history of 38 U.S.C. § 1780(a)(4) leads this Court to concur with the statutory construction set forth in Rowin, supra.

One of the purposes of the Veterans’ Education and Employment Assistance Act of 1976 (P.L. 94-502) was to curb abuses and overpayments inherent in the VA education program. Among the problems discussed in the legislative history are the following:

“The most significant development, however, has been the uncovering of problems and abuses with respect to veterans attending degree granting institutions. In the past several years, substantial VA overpayments have been established. These overpayments often have been the result of lack of timely notification by the veteran and/or the school, of changes in training status, or of slow administrative processing of these changes by the Veterans’ Administration itself.
“Apart from these administrative problems ... is mounting evidence that many veterans are enrolling in courses ..., not to pursue an education or training program, but solely to receive VA monthly assistance allowances.”

U.S.Code Cong. & Ad.News, 94th Cong.2d Sess. (Vol 5 1976) 5241 at 5269.

The legislative history further notes that changing educational practices have lead some schools to turn increasingly to non-punitive grading and liberalized withdrawal policies. This trend, coupled with liberalized VA administrative policies that ensure timely payments, has resulted in substantial overpayments in cases of discontinued schooling or reduced training time. The committee expressed a duty to prescribe procedures to curb actual and potential abuses and to ensure that Federal tax dollars are spent in the manner intended by law. These benefits are “specially predicated upon serious pursuit of educational or vocational objectives by veterans and are not intended as a gratuitous income supplement program”. Id. at 5271.

Title 38 was strengthened and clarified to ensure that educational assistance benefits are paid only to those veterans in serious pursuit of a course of education. One step was the addition of 38 U.S.C. § 1780(a)(4) prohibiting payment for courses in which the grade assigned is not used in computing graduation requirements, including a course from which the student withdraws, unless the Administrator finds mitigating circumstances. This section was targeted to curb abuses afforded by the educational community’s increasing permissiveness of non-punitive grading and withdrawals, which allow a veteran to enroll in classes, withdraw on the last day without penalty, and repeat the process the following semester. Although it may appear harsh to allow recovery simply for failure to take a course to a final grade, the administrator is authorized to waive liability on a finding of mitigating circumstances. This waiver authority is to be exercised “with compassion and with an understanding of the domestic difficulties- and the problems often encountered by educationally disadvantaged veterans making a serious attempt to obtain an education”. U.S.Code Cong. & Ad.News, 94th Cong.2d Sess. (Vol. 5 1976) at 5342.

The area of VA educational assistance benefits was revisited by Congress in 1980. Subcommittee field hearings revealed the VA’s continuing problems of educational overpayments and recovering defaulted education loans. The legislative history of P.L. 96-466 [U.S.Code Cong. & Ad.News (Vol. 4, 1980) ] concluded that the VA is not sufficiently aggressive in collecting debts. Collection methods at that time were expensive and slow. Consequently there were many educational assistance overpayment accounts for which active collection action was no longer being taken. Unless these veterans applied for future benefits from which the debt could be offset, there was little hope of future collection. The VA’s failure to collect these debts is unfair to veterans who do repay their over-payments and to taxpayers who bear the cost. One result of this finding was the addition of 38 U.S.C. § 1785(a) clearly stating that when the administrator finds an overpayment has been made for a veteran, that amount constitutes a liability of such veteran. § 1785(c) further states this overpayment may be recovered in the same manner as any other debt due the United States. 38 U.S.C. § 3116 was also added authorizing attorneys employed by the VA to exercise the right of the United States to bring suit to recover any indebtedness owed by virtue of a person’s participation in a benefits program administered by the VA. This court arrives at the seemingly inescapable conclusion that the legislative intent is to allow the United States to recover funds disbursed to veterans for classes when no academic credit is achieved.

The government also has a long standing common law right to bring suit to recover funds erroneously paid from the public treasury. United States v. Wurts, 303 U.S. 414, 58 S.Ct. 637, 82 L.Ed. 932 (1938); Wisconsin Central Railroad v. United States, 164 U.S. 190, 17 S.Ct. 45, 41 L.Ed. 399 (1896); Mount Sinai Hospital of Greater Miami, Inc., v. Weinberger, 517 F.2d 329 (5th Cir.1975). In United States v. Macioci, 345 F.Supp. 325 (D.C.R.I.1972) the government sought to recover in excess of nineteen thousand dollars disbursed in VA compensation benefits after Mr. Macioci was admitted to a Veterans’ Home where he received free care. The payment of these benefits was in violation of 38 U.S.C. § 3203(b)(2). Although the court found no express statutory authority to recover these funds, it held that no statute is required to authorize this common law right and granted summary judgment for the government.

This court concludes that, as a matter of law, the United States is entitled to institute legal proceedings to recover VA educational benefits expended on courses in which the grade assigned is not used to compute graduation requirements. In the instant case there is no dispute that Stephen A. Garrahan withdrew from the courses he had enrolled in and received no credit for graduation. There is no evidence he submitted mitigating circumstances or requested a waiver of liability. In light of the affidavits and supporting attachments filed by the United States, this Court can find no genuine dispute of any material fact.

Accordingly, it is ORDERED:

1. The United States’ motion for summary judgment (doc 6) is GRANTED.

2. Judgment enter in favor of the United States in the amount of the principal sum of $1,022.27, plus prejudgment interest at a rate of 15.05% per annum accruing from August 2, 1983, until entry of judgment, plus administrative costs.

3. This judgment shall bear interest at a rate of 7.70% from the date of entry.


author: TELESCA, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. Heriberto LEON, et al., Defendants.
    No. CR-85-31T.
    United States District Court, W.D. New York.
    June 26, 1985.
    See also, 2d Cir., 766 F.2d 77.
    Salvatore R. Martoche, U.S. Atty., Rochester, N.Y., (Melchor E. Castor, Asst. U.S. Atty., Rochester, N.Y., of counsel), for plaintiff.
    John R. Parrinello, Rochester, N.Y., for defendant.
   DECISION and ORDER

TELESCA, District Judge.

INTRODUCTION

Defendant, Heriberto Leon, has been held in pre-trial detention since his arrest on January 18, 1985. He now moves for release from detention under 18 U.S.C. Section 3164, which requires that a person in pre-trial detention must have his case go to trial within ninety (90) days of the detention or be subject to automatic release. A 1979 amendment to that Section, however, allows the court to exclude from the computation any time periods excludable under 18 U.S.C. Section 3161(h). As set forth below, since much of the time between Leon’s detention and the present date is excludable, the 90 days has not yet run and Leon’s motion must be denied.

FACTS

Leon was arrested and detained on January 18, 1985. He was arraigned the next day before Magistrate David G. Larimer, and upon motion of the Government, he was detained without bail, pending a pretrial detention hearing which was scheduled for January 21, 1985. On January 21, the pre-trial detention hearing was adjourned to the following day at the request of defense counsel. The detention hearing was held on January 22 and 23, and the Magistrate determined that Leon should be held without bail. The period from January 19 through January 23 is thus excludable as delay resulting from the filing of a pre-trial motion through conclusion of the hearing, under 18 U.S.C. Section 3161(h)(1)(F).

The Speedy Trial Act clock began to run on January 24,1985 until January 28,1985, when it stopped because a preliminary hearing was conducted before Magistrate Larimer. The clock was not stopped again until February' 25, 1985 when Leon was arraigned on his indictment. The clock began to run again the next day, and was stopped on March 6, 1985 when Leon moved to amend the Magistrate’s pre-trial detention order. At this point a total of thirty-nine (39) non-excludable days had elapsed.

The motion to amend was decided on March 13, 1985. On March 26, 1985 Leon moved in District Court for an order amending the Magistrate’s pre-trial detention order. The motion was heard on April 1 and on April 2 this Court issued its decision affirming the Magistrate. Twelve (12) more days had elapsed between March 13 and March 25, 1985.

On April 8, 1985, co-defendant Elba Rodriguez filed an omnibus motion before Magistrate Larimer seeking various forms of pre-trial relief. Five (5) more days had run at that time. Oral argument on this motion is set for June 24, 1985 along with the omnibus motions of Leon and co-defendants Rafael and Luz Nereida Vigo. (At the arraignment on the original indictment, the Government informed the defendants that a superseding indictment would be filed in the matter; all defendants except Elba Rodriguez elected not to file motions until after the filing of the superseding indictment on May 23, 1985.)

In addition, Leon filed an interlocutory appeal of this Court’s denial of his motion for pre-trial release on April 12, 1985. Although this appeal has received expedited review, a decision has not yet been rendered by the Second Circuit. Thus a total of only fifty-six (56) non-excludable days have elapsed since Leon was arrested and detained (assuming that the filing of Elba Rodriguez’s omnibus motion stopped the clock as to all the co-defendants).

DISCUSSION

Leon’s first argument is based upon the interpretation of Section 3164(b) itself, which provides that, “[t]he periods of delay enumerated in Section 3161(h) are excluded in computing the time limitations specified in this section.” Leon argues that this sentence should be read so that the Section 3161(h) exclusions do not apply to the computation of time under Section 3164.

The short answer to this argument is that, if Congress’ intent was that the Section 3161(h) exclusions would not apply under Section 3164, the statute would have been worded exactly that way. The statute reads, however, that the “periods of delay ... are excluded”, which is exactly the language used in Section 3161(h). This conclusion is strengthened by reference to the legislative history of the 1979 amendment when this sentence was added. Congress was faced at that time with conflicting decisions from different circuit courts on the question whether the Section 3161(h) exclusions applied under Section 3164. Compare United States v. Tirasso, 532 F.2d 1298 (9th Cir.1976) (holding that virtually no exclusions should be applied), with United States v. Corley, 548 F.2d 1043 (D.C.Cir.1976) and United States v. Mejias, 417 F.Supp. 579 (S.D.N.Y.1976), aff'd. on other grounds, sub nom., United States v. Martinez, 538 F.2d 921 (2d Cir.1976) (holding that the exclusions should be applied). According to the House Report accompanying the 1979 amendment, Section 7 of that amendment “also specifies that Section 3161(h) exclusions and continuance provisions and the Section 3162 dismissal sanction apply to [cases arising under Section 3164], thus resolving a split of the circuits on this question”. (H.Rep. No. 96-390, 1979 U.S.Code, Cong, and Admin.News pg. 805, 816.) Therefore it is clear that defendant’s reading of the statute does not comport with Congress’ intent.

Leon also argues that his motions and appeals in this case have addressed his pre-trial detention, not the “substance” of his case (as, for example, a suppression motion), that these motions and appeals need not have occasioned any delay in his trial, and that the time during the pendency of these motions and appeals ought not to be excluded. At first blush, this argument would seem to have some appeal since Sections 3164 and 3161(h) both refer to “periods of delay” resulting from, inter alia, any interlocutory appeal or any pretrial motion. Leon also argues that, when Congress applied the Section 3161(h) exclusions to Section 3164, it intended to do so “... in such a manner as to extend only to the bare minimum necessary detention of persons in custody____” 1979 U.S.Code Cong, and Admin.News p. 816.

The Second Circuit faced this issue in United States v. Cobb, supra, a case arising under Section 3161. The Court held that excludable time under Sections 3161(h)(l-7) is automatically triggered once the existence of a proceeding or condition referred to in a particular subsection is established, e.g., once a motion or interlocutory appeal is filed. 697 F.2d at 42. Any other reading would force a court, anytime it takes a motion or interlocutory appeal under advisement for a time, or any time a motion is adjourned, to determine what portion of that time was “reasonably necessary” delay. Not only would this “present extremely difficult factual questions”, United States v. Stafford, 697 F.2d 1368, 1371 (11th Cir.1983), but such a reading would clearly be inconsistent with, for example, Section 3161(h)(l)(J) which automatically excludes any delay up to thirty (30) days attributable to any period during which any proceeding concerning a defendant is actually under advisement by a court.

Leon’s most compelling argument is that the statute effectively penalizes a detainee who files (or whose co-defendants file) motions, by lengthening the period of his or her detention. To the extent he argues that he is penalized for filing his own motions or appeals, this is an unavoidable consequence of Congress’ application of the Section 3161(h) exclusions to Section 3164 detainees. Although it is an unfortunate consequence, Leon has not urged its unconstitutionality upon this Court. To the extent he argues that he is penalized because his co-defendants have filed motions, courts which have addressed this issue under Section 3161(h)(7) have held that the filing of a motion or interlocutory appeal as to one defendant stops the Speedy Trial Act clock as to all co-defendants. See, e.g., United States v. McGrath, 613 F.2d 361 (2d Cir.1979), cert. denied, sub nom. Buckle v. United States, 446 U.S. 967, 100 S.Ct. 2946, 64 L.Ed.2d 827 (1980); United States v. Darby, 744 F.2d 1508 (11th Cir.1984); United States v. Tedesco, 726 F.2d 1216 (7th Cir.1984); United States v. Stafford, 697 F.2d 1368 (11th Cir.1983); United States v. Fogarty, 692 F.2d 542 (8th Cir.1982), cert. denied, 460 U.S. 1040, 103 S.Ct. 1434, 75 L.Ed.2d 792 (1983); United States v. Edwards, 627 F.2d 460, 461 (D.C.Cir.1980), cert. denied, 449 U.S. 872, 101 S.Ct. 211, 66 L.Ed.2d 92 (1980). Although there appear to be no cases applying Section 3161(h)(7) to persons detained under Section 3164, this exclusion, like any other Section 3161(h) exclusion, was expressly made applicable to Section 3164 cases by the 1979 amendment to Section 3164.

CONCLUSION

On the record before me, fifty-six (56) days of nonexcludable time have expired since Heriberto Leon was detained on January 18, 1985. The rest of the time is ex-cludable delay under 18 U.S.C. Section 3161(h). Accordingly, defendant Leon’s motion for release from detention is denied.

SO ORDERED.

      . Because Section 3161(h)(1)(F) refers to "any pre-trial motion” (emphasis added), and Section 3161(h)(1)(E) refers to "any interlocutory appeal” (emphasis added), the fact that Leon’s motions and appeals have only challenged his pre-trial detention is itself of no significance. See United States v. Cobb, 697 F.2d 38, 42 (2d Cir.1982).

      . Beyond that 30 day period, the causation analysis espoused by defendant Leon arguably takes over, and the Court is required to state its reasons for excluding such time as "reasonably necessary”. United States v. Simmons, 763 F.2d 529 (2d Cir.1985); United States v. Bufalino, 683 F.2d 639, 645 (2d Cir.1982), cert. denied, 459 U.S. 1104, 103 S.Ct. 727, 74 L.Ed.2d 952 (1983). Likewise, a court which adjourns the hearing of a motion for a lengthy period must explain the reasons for the delay, under U.S. v. Cobb, supra.


author: BIGGERS, District Judge.

text:
    BADDOUR, INC. and BMC Sales, Inc., Plaintiffs, v. UNITED STATES of America and Michael E. Posey, Defendants.
    No. DC82-108-NB-O.
    United States District Court, N.D. Mississippi, Delta Division.
    June 28, 1985.

      Eugene Greener, Jr., Memphis, Tenn., Nat G. Troutt, Senatobia, Miss., for plaintiffs.
    Thomas W. Dawson, Oxford, Miss., Steven Shapiro, William D. Holmes, Tax Div., Southern Region, Dept, of Justice, Washington, D.C., for defendants.
   MEMORANDUM OPINION

BIGGERS, District Judge.

This case was taken under advisement by the court following a bench trial. Having considered the oral arguments, testimony, post-trial briefs, and other memoranda offered by the parties, and being fully advised in the premises, the court is now in a position to render a decision. The plaintiffs herein, Baddour, Inc. and its wholly owned subsidiary BMC Sales, Inc., shall be considered throughout this opinion as the same entity and shall be referred to as “Baddour.”

A. Facts

In this case, the plaintiff Baddour seeks damages due to an alleged wrongful levy on its property by defendant United States of America, acting through the United States Internal Revenue Service (the IRS), and defendant Michael E. Posey, an IRS agent. Furthermore, Baddour seeks recovery for storage costs allegedly incurred due to verbal instructions from the defendant.

1. The Batesville Levy

This action arose from the following facts. Baddour entered into a contract with Brame Manufacturing Co., Inc. (hereinafter “Brame” or “the taxpayer”) whereby Baddour periodically shipped raw material from its facility in Memphis, Tennessee to the Brame factory in Batesville, Mississippi. Thereafter, Brame manufactured the raw material into finished garments, shipped them to Baddour’s pre-arranged purchasers, and received a portion of the purchase price as payment for its manufacturing work. The parties contemplated that Baddour would retain full ownership in the goods, and that Brame would hold the raw materials only for manufacture and shipping.

In 1981 and 1982, the IRS assessed Brame for tax delinquencies in excess of $170,000.00. Subsequently, the IRS filed notices of federal tax liens in both the office of the Chancery Clerk in Sardis, Mississippi and the office of the Chancery Clerk in Batesville, Mississippi. The IRS agent in charge of the case, defendant Michael E. Posey, then met with Julius Brame, the president and owner of the taxpayer, to ascertain the taxpayer’s assets. Following this meeting, the defendant Posey completed an IRS form styled “Collection Information Statement for Business,” and noted “approx. 60,000 [sic] in plant that probably belongs to Baddour.” However, based both upon Mr. Brame’s description of the business arrangement between Brame and Baddour and upon the absence of a UCC filing statement by Baddour on the goods, Posey nevertheless believed that Brame actually had title to the goods. Therefore, the IRS issued a levy (the “Batesville levy”) and a Notice of Seizure on April 23, 1982 to the taxpayer and seized the goods in the Batesville factory by placing a padlock on the outside door. Some if not all of the goods levied on belonged to Baddour.

Following the seizure, Charles S. Vail, the corporate secretary of Baddour, wrote a letter to Mr. Posey detailing Baddour’s ownership of the property. In this letter, Vail asserted that the taxpayer “had no interest in the goods,” that Baddour “bought the goods, paid for the goods, and had them shipped” to the taxpayer’s plant, that the taxpayer was “to do certain work to said goods and ship them” to Baddour’s customers, and that “the transaction was never intended as a security transaction” because the goods belonged to Baddour at all times. The letter and supporting documents were hand-delivered to Posey at a meeting in Sardis, Mississippi on May 4, 1982 between Posey, Vail, and Leon Weatherford, the vice-president of Baddour. Although Posey responded that no U.C.C. statement was filed on the goods, Vail and Weatherford argued that no such filing was necessary. Cf. Miss.Code Ann. § 75-9-402 (1972) (U.C.C. filing statement reflects security interest in goods; not a demonstration of ownership). At the conclusion of the meeting, Posey promised to “get back” with Vail regarding both Baddour’s asserted ownership in the property and its request for an inventory. Unfortunately, Posey initiated no further contact with regard to these matters.

Rather, Posey and Julius Brame entered into an agreement without Baddour’s knowledge for the “release” of the goods. However, this release was conditioned upon the goods being transported to Mississippi Mills, a factory located in Sardis, Mississippi, where manufacture was to be completed. Thereafter, the goods were to be sold and the net proceeds of the sale, after payment of finishing and shipping costs to Mississippi Mills, were to be disbursed 50% to the IRS, 25% to Brame for sales expense, and 25% to the Panola County Bank, a creditor of Brame. The release was documented by a printed form styled “Receipt for Property Returned,” dated March 25, 1982 and signed by Michael Posey for the IRS and Mr. Fred Klyce as “Agent for Brame.” The contemporaneous agreement for manufacture and sale was memorialized in a handwritten letter to Posey from Fred Klyce. The United States ultimately received $1,502.00 under this agreement, with a similar amount divided between Brame and the Panola County Bank.

Subsequent to this “release,” representatives of Baddour discovered that their goods were no longer in the Brame factory. Baddour immediately contacted Posey to ascertain the whereabouts of their property; however, Posey divulged merely that the goods had been “released to the taxpayer.” Only after commencement of the present litigation did Baddour learn of the contemporaneous agreement for manufacture and sale. Thereafter, Baddour representatives visited Mississippi Mills and determined that most of the goods were either odd scrap or irregulars. Furthermore, all the goods allegedly were badly wrinkled and deteriorating from humidity and vermin infestation. The property at that time was given a value of $6,625.60; however, it allegedly has no present value due to continued deterioration.

2. The Memphis Levy

Contemporaneously with the Batesville levy, Posey sent a Form 668-A Notice of Levy to Baddour in Memphis, Tennessee (the “Memphis levy”), levying upon any Brame property held by Baddour. Baddour responded by letter, documented its possession of goods belonging to Brame, and requested further instructions. Posey allegedly responded orally that the goods should be stored and that Baddour would be entitled to reasonable storage costs. Baddour secured the goods in its own trailer; however, inasmuch as further instructions were not given despite Baddour’s repeated requests, the goods remain stored in the trailer. Therefore, Baddour seeks an alleged reasonable storage cost of $25.00 per day.

B. Conclusions of Law

1. The Batesville Levy

The plaintiff seeks recovery for the Batesville levy under 26 U.S.C. § 7426 (1954 & Supp.1985), entitled “Civil Actions by Persons other than Taxpayers.” 26 U.S.C. § 7426(a)(1) provides in part as follows:

If a levy has been made on property or property has been sold pursuant to a levy, 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 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.

Id. 26 U.S.C. § 7426 constitutes a waiver by the United States of its sovereign immunity to suit; however, if the wrongful levy is released prior to the filing of the suit, no waiver exists and the court acquires no jurisdiction under this statute. See Nickerson v. United States, 75-1 U.S.T.C. para. 9455 (D.R.I.1974), aff'd per curiam, 513 F.2d 31 (1st Cir.1975). Accordingly, if the Batesville levy were properly released, this court cannot entertain an action under § 7426. But cf. Smith v. United States, 458 F.2d 1231, 1233 (9th Cir.1972) (damages award directly under Fifth Amendment prohibition against taking of private property without just compensation). Thus, this court must preliminarily determine whether the levy was released prior to the filing of this suit.

26 U.S.C. § 6343(a) (1954), entitled “Release of Levy,” provides as follows:

It shall be lawful for the Secretary, under regulations prescribed by the Secretary, to release the levy upon all or part of the property or rights to property levied upon where the Secretary determines that such action will facilitate the collection of the liability, but such release shall not operate to prevent any subsequent levy.

Unfortunately, the statute and the regulations thereunder, see Treas.Reg. §§ 301.-6343-l(a)(l)-(b)(3), delineate only circumstances in which a levy may be released, but do not establish a procedure for such release. Cf. 26 U.S.C. § 6325 (1954 & Supp.1985) (procedure for release of tax lien). Although the genesis of the Mississippi Mills arrangement is murky, the levy clearly would not have been “released” unless the contemporaneous agreement for manufacture and sale existed. Therefore, the question is whether a strings-attached release constitutes a “release of levy” under 26 U.S.C. § 6343(a).

The plaintiff strenuously argues that a “release” is a giving up or an abandonment and therefore may not be conditioned upon an agreement for transportation, manufacture, and sale. The regulations under 26 U.S.C. § 6343, which are valid unless unreasonable and plainly inconsistent with the statute, see Thor Power Tool Co. v. C.I.R., 439 U.S. 522, 533 n. 11, 99 S.Ct. 773, 781 n. 11, 58 L.Ed.2d 785, 796 n. 11 (1979), clearly indicate that a release may be conditioned upon the provision of a substitute for the property levied on, see, e.g., Treas. Reg. §§ 301.6343-1(a)(2)(i)-(v) (release of levy conditioned respectively on escrow arrangement, bond, payment of amount of United States’ interest in property, assignment of salaries and wages, and installment payment arrangements) or the performance of some other action, see Treas. Reg. § 301.6343-l(a)(2)(vi) (release of levy conditioned on extension of statute of limitations). Thus, it appears that a release of a levy might be conditioned upon the taxpayer agreeing to send his own property to another factory for manufacture, sale, and satisfaction of a tax liability. However, this is distinguishable from a taxpayer obtaining a release of a levy on his property by substituting property which both the taxpayer and the I.R.S. knew or should have known was owned by a third party. In the latter case, the taxpayer is not in a status quo, but has gained a windfall at the expense of a third party. The court concludes that such a strings-attached release is not a “release” under 26 U.S.C. § 7426. Accordingly, the property in issue in the present case was not validly released, and jurisdiction exists under 26 U.S.C. § 7426.

Inasmuch as jurisdiction exists under 26 U.S.C. § 7426, the court must determine whether a “wrongful levy” occurred whereby Baddour is entitled to recovery. The statute by its terms contains two prerequisites to application: (1) the plaintiff must have an interest in or lien on the property in issue, and (2) the levy must be wrongful. Flores v. United States, 551 F.2d 1169, 1171 (9th Cir.1977). With respect to the first prong, the plaintiff has clearly demonstrated his interest in the property levied on. With regard to the second prong, “wrongful” refers to “a proceeding against property which is not the taxpayer’s.” S.Rep. No. 1708, 89th Cong., 2d Sess. 30, reprinted in 1966 U.S.Code Cong. & Ad.News 3722, 3751. Furthermore, relief under this statute is conditioned upon a finding that the property levied on did not belong to the taxpayer. Id. at 3752. In the present case, the parties do not dispute and the court specifically finds that the property in issue did not belong to the taxpayer Brame but rather was owned by Baddour; therefore, the court concludes that wrongful levy occurred in this case and the plaintiff is entitled to recovery. Cf. Rosenblum v. United States, 549 F.2d 1140, 1145 (8th Cir.), cert. denied, 434 U.S. 818, 98 S.Ct. 58, 54 L.Ed.2d 74 (1977) (statute redresses wrong to third party when his property taken to satisfy another’s tax liability).

26 U.S.C. § 7426(b)(2) concerns the available forms of relief for a wrongful levy. Although subparagraph (c) of the statute was recently amended with regard to wrongful levies occurring after December 31, 1982, the statute in effect at the time of the wrongful levy on April 23, 1982 provided as follows:

If the court determines that such property has been wrongfully levied upon, the court may—
(A) order the return of specific property if the United States is in possession of such property;
(B) grant a judgment for the amount of money levied upon; or
(C) grant a judgment for an amount not exceeding the amount received by the United States from the sale of such property.
For the purposes of subparagraph (C), if the property was declared purchased by the United States at a sale pursuant to section 6335(e) (relating to manner and conditions of sale), the United States shall be treated as having received an amount equal to the minimum price determined pursuant to such section or (if larger) the amount received by the United States from the resale of such property-

Relief is not proper in the present case under 26 U.S.C. § 7426(b)(2)(A), since the specific property levied on is no longer in existence. Furthermore, although 26 U.S.C. § 7426(b)(2)(B) appears to allow recovery for the amount of the assessment, it has been limited to cases wherein a specific sum of money is levied on. See, e.g., Flores v. United States, 551 F.2d at 1173; cf. S.Rep. No. 1708, 89th Cong., 2d Sess. 30, reprinted in 1966 U.S.Code Cong. & Ad. News at 3751 (relief for wrongful levy on money limited to amount of money levied on). Thus, Baddour may recover only under 26 U.S.C. § 7426(b)(2)(C), which deals with an actual or deemed sale of the property.

28 U.S.C. § 7426(b)(2)(C) was amended, effective for levies after December 31, 1982, to provide that upon a wrongful levy, the court may,

(C) if such property was sold, grant a judgment for an amount not exceeding the greater of—
(i) the amount received by the United States from the sale of such property, or
(ii) the fair market value of such immediately before the levy.

Id. Inasmuch as the levy in issue took place on April 23, 1982, prior to the effective date of the amendment, the parties dispute the proper measure of recovery, i.e., the fair market value of its property, immediately prior to the levy, which allegedly is $64,775.00, or the $1,502.00 received by the United States from sale of the goods. Specifically, the parties dispute whether the statutory amendment allowing recovery of fair market value codifies existing law or excludes such recovery by negative inference.

The statutory boilerplate language of 26 U.S.C. § 7426(b)(2), which was unaltered by the amendment, addresses the relationship between a “deemed sale” under 26 U.S.C. § 6335(e) and the recovery provisions of 26 U.S.C. § 7426(b)(2)(C). 26 U.S.C. § 6335(e), regarding the manner and conditions of a sale of seized property, provides that the Secretary shall set a “minimum price” for the property, see 26 U.S.C. § 6335(e)(1); thereafter, the property shall be sold either at public auction or public sale with sealed bids, see 26 U.S.C. § 6335(e)(2). If the minimum price is not bid, the United States shall be treated as having purchased the property at such amount. See Treas.Reg. § 301.6335-l(c)(3). Thus, the boilerplate language of 26 U.S.C. § 7426(b)(2) provides that, upon a deemed sale, the minimum price shall be considered the “amount received by the United States” for purposes of 26 U.S.C. § 7426(b)(2)(C). Furthermore, if the provisions of 26 U.S.C. § 6335(e) are not followed and no minimum price is set, case law indicates that fair market value at the time the property should have been sold pursuant to that statute shall be considered the minimum price. See United States v. Pittman, 449 F.2d 623, 628 (7th Cir.1971) (section 6335 procedures not followed; taxpayer entitled to credit in amount of fair market value at time property should have been sold). Accordingly, this court concludes that 26 U.S.C. § 7426(b)(2)(C) before amendment allows recovery at an amount equal to the fair market value of the property at the time the property should have been sold pursuant to 26 U.S.C. § 6335. Furthermore, such measure of damages is proper in the present case so as to provide complete relief to the plaintiff. In the absence of any evidence regarding a change in value from the time of the levy to the time at which the property should have been sold, the court hereby determines that the plaintiff is entitled to an award of $64,775.00 from the wrongful levy.

,2. The Memphis Levy

With respect to the Memphis levy, the parties agree that Brame’s goods were levied on, that Baddour stored the goods, and that the IRS gave no further instructions with respect to the goods. Although the parties vigorously dispute whether the agent Posey represented that Baddour was entitled to reasonable costs for storage, this factual issue is irrelevant. Baddour undisputedly incurred storage costs at the behest of the IRS; therefore, Baddour is entitled to compensation for such expenses. However, since Baddour stored the goods in its own trailer, the alleged fair rental value of $25.00 per day since April 23, 1982, the date of the levy, sought by Baddour is actually its opportunity cost of possible rental to third parties. The court declines to award such lost opportunity costs and instead concludes that $10,000.00 is a reasonable award to the plaintiff for the storage of the goods. The court assumes that the IRS will take immediate measures either to secure possession of the goods or to release the levy so as to avoid further liability.

Liability of Michael Posey

In addition to the claims against the IRS, the plaintiff seeks damages from Michael Posey personally for his alleged violation of its constitutional rights. See Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 390-97, 91 S.Ct. 1999, 2001-05, 29 L.Ed.2d 619, 623-27 (1971) (cause of action for money damages stated against individual government officials for constitutional violations). The defendant Posey asserts that he possesses either qualified or absolute immunity from this damages action.

Absolute immunity is closely related to the doctrine of prosecutorial discretion. Federal and state prosecutors possess absolute immunity from suits under 42 U.S.C. § 1983 for decisions arising out of their prosecutorial function. See Imbler v. Pachtman, 424 U.S. 409, 420, 96 S.Ct. 984, 990, 47 L.Ed.2d 128, 137-38 (1976). Furthermore, federal officials whose duties are analogous to those of a prosecutor possess absolute immunity from damage suits. Butz v. Economou, 438 U.S. 478, 508-17, 98 S.Ct. 2894, 2911-16, 57 L.Ed.2d 895, 917-23 (1978). For example, an agency official whose duties require him to decide whether to initiate an administrative proceeding is absolutely immune from liability for damages arising from his decision to authorize such proceeding. Id. at 515-16, 98- S.Ct. at 2915-16, 57 L.Ed.2d at 921-22.

Although the defendant Posey performs some duties which are analogous to a prosecutor and for which he therefore possesses absolute immunity, see, e.g., Stankevitz v. Internal Revenue Service, 640 F.2d 205, 206 (9th Cir.1981) (absolute immunity of IRS agents for prosecutorial duties), the alleged transgressions in the present case are not related to his prosecutorial function. Rather, the actions complained of relate to the manner in which Posey performed an unauthorized release. Accordingly, Posey does not possess absolute immunity in the present case.

However, a federal official whose duties are not functionally equivalent to a prosecutor nevertheless possesses qualified immunity upon a satisfactory demonstration of reasonable grounds for a belief in the validity of his actions formed at the time of the action and in light of all the circumstances, coupled with a good faith belief in the validity of the action. Scheur v. Rhodes, 416 U.S. 232, 247-48, 94 S.Ct. 1683, 1692, 40 L.Ed.2d 90, 103 (1973). Thus, a federal official is not liable for a mere mistake in judgment, whether the mistake is one of fact or law. Butz, 438 U.S. at 507, 98 S.Ct. at 2911, 57 L.Ed.2d at 916. Furthermore, qualified immunity is defeated only if an official knew or reasonably should have known that the action he took within his sphere of official responsibility would violate the plaintiffs constitutional rights, or if he took the action with the malicious intention to cause a deprivation of constitutional rights or other injury. Harlow v. Fitzgerald, 457 U.S. 800, 815, 102 S.Ct. 2727, 2736-37, 73 L.Ed.2d 396, 409 (1982).

In determining whether qualified immunity exists in a particular case, if the federal defendant demonstrates that the action giving rise to the claim for damages occurred pursuant to the performance of his duties and within the scope of his discretionary authority, he has made a prima facie case for entitlement to immunity from damages. Barker v. Norman, 651 F.2d 1107, 1121 (5th Cir.1981). Thereafter, the plaintiff bears the burden of demonstrating that the defendant did not act in “good faith,” i.e., that the defendant knew or reasonably should have known that he was violating the plaintiff’s constitutional rights or that the defendant maliciously intended to harm the plaintiff. Id. at 1126. Cf. Rutherford v. United States, 702 F.2d 580, 584 (5th Cir.1983) (qualified immunity asserted by IRS agent who allegedly harassed taxpayer plaintiffs into payment of unowed taxes).

In the instant case, Posey undoubtedly possesses qualified immunity. Posey’s actions undisputedly were taken pursuant to his duties as a revenue officer. Furthermore, Posey reasonably could have believed that Brame had an interest in the goods levied on for at least the value of its work performance; thus, Posey’s acts were within the scope of his discretionary authority and establish a prima facie case for immunity. Furthermore, the plaintiff has failed to adequately demonstrate either a lack of good faith or a malicious intent by Posey. Thus, the court determines that recovery from the defendant Posey in this case is barred by the doctrine of qualified immunity.

Let an order issue accordingly.

      . One who has full title to goods is not required to file a filing statement, cf. Miss.Code Ann. § 75-9-102(1) (1972) (application of secured transaction provisions limited to transaction intended to create security interest or to sale of accounts or chattel paper); thus, Mr. Posey, a layman, reached an erroneous legal conclusion.

      . Significantly, Fred Klyce had no connection with either Brame or Baddour; however, he was both the President of Mississippi Mills, Inc. and a member of the Board of Directors of the Panola County Bank, a major creditor of Brame.


author: FOREMAN, Chief Judge:

text:
    Diana L. EMERY, Plaintiff, v. NATIONAL LIFE & ACCIDENT INSURANCE COMPANY, Defendant and Counter-claim Plaintiff, and Don JAMES, Defendant, v. Jack L. EMERY, Counterclaim Defendant.
    Civ. No. 84-3194.
    United States District Court, S.D. Illinois.
    June 28, 1985.

      Charles E. Hamilton, Ltd., Belleville, Ill., for plaintiff.
    Carl W. Lee, Belleville, Ill., John H. Quinn, III, St. Louis, Mo., W. Thomas Cog-hill, Jr., Belleville, Ill., for defendants.
   MEMORANDUM AND ORDER

FOREMAN, Chief Judge:

Before the Court is counterclaim defendant Jack Emery's Motion for Summary Judgment (Document No. 26).

Deceased Charles Emery purchased a life insurance policy naming his uncle, Jack Emery as beneficiary. Thereafter, Charles married the plaintiff, Diana Emery. The plaintiff alleges that after this marriage Charles instructed Don James, an agent of National Life and Accident Insurance Co. (National), to change the named beneficiary from Jack to Diana. The policy was never changed. After Charles’ death, the plaintiff filed a two-count complaint in St. Clair County against the defendants seeking payment of the insurance proceeds of $20,-000 and payment of $5,000 punitive damages for vexatious delay in the payment of proceeds. The defendants removed the case to this Court and National counterclaimed interpleader alleging that both Diana Emery and Jack Emery have made claims to the proceeds. Jack Emery then filed a counterclaim against National Life seeking payment of the proceeds plus punitives for vexatious delay. On July 10, 1984, National Life deposited $20,591.22 with the registry of this Court. On October 29, 1984, this Court granted National’s request to allow this action to proceed as an interpleader action. However, due to the two vexatious delay claims the Court refused to dismiss National from the case.

Jack Emery now moves for summary judgment arguing that the deceased’s actions in attempting to change the policy were ineffective as a matter of law since he did not perform some overt act which complied with the requirements for changing the beneficiary under the policy. Diana Emery opposes the motion contending that a material issue of fact exists as to whether or not the deceased’s statements to James constituted an overt act.

Summary judgment is appropriate only where the record shows that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56. The party moving for summary judgment has the burden of establishing the lack of a genuine issue of material fact. Korf v. Ball State University, 726 F.2d 1222, 1226 (7th Cir.1984). The Court must view the evidence, and the reasonable inferences to be drawn therefrom, in the light most favorable to the party opposing summary judgment. Where the moving party fails to meet its strict burden of proof, summary judgment cannot be entered even if the opposing party fails to respond to the motion. Yorger v. Pittsburg Corning Corp., 733 F.2d 1215 (7th Cir.1984).

Where the moving party has met its initial burden and the opposing party asserts the existence of a question of fact, the Seventh Circuit has identified two considerations to be used in determining whether summary judgment is proper. The Court must determine whether the non-moving party has established that there is a genuine issue as to the fact.

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

Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.), cert. denied, — U.S.-, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983). Furthermore, the disputed fact must be material, that is, it must be outcome-determinative under the applicable law. Egger v. Phillips, 710 F.2d 292, 296 (7th Cir.) (en banc), cert. denied, —U.S.-, 104 S.Ct. 284, 78 L.Ed.2d 262 (1983).

The insurance policy here, like most modern policies, allowed the insured to change the beneficiary at any time. In order to effectuate the change under the policy in question, the deceased was required to fill out and sign a change of beneficiary request form. It is undisputed that he failed to do so. In such situations, courts have been willing to read into the policy the change when the insured intended to make the change and took positive action towards effectuating that end. Dooley v. James A. Dooley Associates, Etc., 92 Ill.2d 476, 65 Ill.Dec. 911, 916, 442 N.E.2d 222, 227 (1982). “Requiring that the evidence establish an unequivocal intent on the insured’s part and that he take positive action to change his beneficiary serves two purposes: doubt as to intent is eliminated and concrete evidence of that intent is provided the payor.” 65 Ill.Dec. at 916, 442 N.E.2d at 227. The positive action must be a concrete attempt to carry out his intention as far as was reasonable in his power. Id. Preliminary steps are insufficient.

In the instant case, the facts taken in the light most favorable to the plaintiff and as gleaned from her deposition are as follows: The policy at the date of death designated Jack Emery as the beneficiary. This designation was never formally changed. The insured was aware that he had to fill out and sign a form to effectuate the change. The plaintiffs deposition indicates that the insured made repeated efforts to secure the proper form from the agent during the three month interval between the insured’s marriage to the plaintiff and the insured’s death. The plaintiff indicated in her deposition that she and the insured felt that the agent was experiencing emotional difficulty due to the agent’s marital problems, and that this difficulty caused the agent to continually forget to bring the form.

Without attacking the intent portion of the Dooley requirements, Jack Emery contends that the insured’s actions in repeatedly requesting the form from the agent were insufficient. Stated another way, the insured did not do all that was reasonably in his power. The plaintiff contends that an issue of material fact exists as to whether the insured complied with the insurer’s instructions. Overlooking the fact that the policy requires a written request in order to change the beneficiary, the plaintiff finds solace in a statement provided on the premiums receipt book which urges the insured to contact the agent when service or information is desired. Further, the plaintiff submits that her payments of the premiums on the policy prior to her marriage constituted the requisite evidence of positive action or at least shows that an issue of material fact exists as to that point.

Assuming the plaintiff’s version is true, the Court must decide whether the insured did all that he reasonably could do under the circumstances. In other words, assuming that the insured had the requisite intent, and assuming that he and his wife made repeated efforts to secure the request form from the agent, together with the fact that the premiums booklet urged the insured to contact the agent, were these actions all the insured could reasonably do under the circumstances? The Court believes that they were not.

The Court feels obliged to pause and discuss the posture of this case and the positions of the parties. As in any case, there are questions of fact, questions of law, and mixed questions of fact and law. In this case, what the insured did or did not do are questions of fact to be determined by the trier of fact. The legal standard to apply to these actions is a question of law to be determined by the judge. Whether or not his conduct comported with this standard is a mixed question of law and fact to be decided by the trier of fact. In a jury case, the mixed questions of law and fact are decided by the jury after being instructed by the judge.

Applying these principles to the case at hand, Jack Emery concedes only for purposes of this motion that the facts are as the plaintiff describes them in her deposition. The Court has already determined that the law requires the insured to do all he reasonably could do under the circumstances to effectuate the change. Therefore, for purposes of this motion, the facts are not in dispute and the law to apply to these facts is decided. The only issue remaining is whether or not the insured did all he reasonably could do under the circumstances. Such a question is a mixed question of law and fact that would be decided by the trier of fact. See Travelers Insurance Co. v. Smith, 106 Ill.App.3d 318, 62 Ill.Dec. 216, 220, 435 N.E.2d 1188, 1192 (1982). Had this been a jury case, the Court would have denied this motion and left such a determination for the jury. Stated in summary judgment phraseology, a material issue of fact would remain as to whether or not the insured did all he reasonably could do under the circumstances. Here however, the Court is the trier of fact and it has to decide whether or not the insured did all he could reasonably do under the circumstances. While an issue of material fact remains, the Court sees no reason to wait until trial to decide such a mixed question of law and fact, when, assuming the insured did all the plaintiff says he did, the Court believes he could have reasonably done more.

The Court's holding is a narrow one. When, for purposes of a motion for summary judgment, the pure questions of fact are not in dispute and all that remains is a mixed question of law and fact or an application of the law to the facts, a court, as trier of fact in a non-jury case, may decide such a question in granting the motion. In every case, the Court must be sure that the opposing party’s entire version is before the Court and that such issues as credibility and demeanor would not aid in the court’s determination.

Such a practice is not entirely new. Courts have traditionally stated that summary judgment should be granted if a directed verdict would be proper. Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 2713.1 n. 11. The rationale being that the standard for both motions is almost identical. Id. One court has also held that summary judgment should be granted if a judgment notwithstanding the verdict would be entered against the party opposing the motion. Time, Inc., v. McLaney, 406 F.2d 565 (5th Cir.1969), cert. denied, 395 U.S. 922, 89 S.Ct. 1776, 23 L.Ed.2d 239 (1970). This Court would not go so far as to say that a summary judgment should be granted if a motion for voluntary dismissal would be granted since on a motion for voluntary dismissal at the close of the plaintiff’s case in a non-jury action, the Court is free to weigh the evidence and make its own findings of fact. The Court does believe, however, that when the plaintiff’s facts are taken as true, and are viewed in the light most favorable to the plaintiff, and the Court is confident that the plaintiff’s entire version is before the Court, the Court is free to decide a mixed question of law and fact in a summary judgment motion. The Court is ever mindful of the fact that the plaintiff’s right to a full trial of any disputed fact issue should be preserved. However, when nothing further will be gained by trial which will aid in the Court’s determination of the matter, the Court should be free to decide the matter on summary judgment and save the litigants the time and expense of trial.

Here, the Court believes that the insured did not do all he could have reasonably done to change the beneficiary. First, the Court notes that in addition to contacting the agent, the statement on the premium booklet urges the insured to contact the local office or home office. (Plaintiffs Exhibit A). Second, according to the plaintiff, the insured was well aware of the requirements of a request form to change the beneficiary. (Plaintiffs deposition Page 18, 21, 23). Third, according to the plaintiff the insured believed that the agent’s marital difficulties were upsetting him and that this caused his forgetfulness regarding this form. (Plaintiff’s deposition Page 23). Fourth, although the plaintiff paid the premiums prior to their marriage from her checking account, the plaintiff admits in her deposition that the insured did not have a checking account and that the insured contributed to her account. (Plaintiff’s deposition Page 20). In any event, the law requires positive action on the insured’s part and not the plaintiff’s part. Fifth, the insured and the plaintiff were married three months prior to the insured’s death during which time the insured was fully capable of securing a form from the home office. (Plaintiff’s deposition Page 22). In fact, according to the plaintiff, the insured told her ten days before his death to get the address and write the base office for a form. (Plaintiff’s deposition Page 24). Finally, the Court believes that had the insured truly intended to change the beneficiary he would have done so immediately. The plaintiff indicates in her deposition that the insured always believed that he was going to die young. (Plaintiff’s deposition Page 9). Further, the insured was shot on two different occasions. (Plaintiff’s deposition Page 15 and 16). In the Court’s opinion, a man who believes he will die young, who has been shot twice, who knows the procedure for effectuating a change, and who knows that his agent is having personal problems and has not provided him with the requested form for three months, has not done all that he reasonably could do under the circumstances. Taking the evidence in the light most favorable to the plaintiff, the Court finds that the counterclaimant Jack Emery is entitled to judgment as a matter of law.

Accordingly, the Court GRANTS the counterclaimant’s Motion for Summary Judgment (Document No. 27). Count I of the plaintiff Diana Emery’s complaint seeking payment of the proceeds and damages for vexatious delay in paying them is hereby DISMISSED with prejudice. With respect to the interpleader action, the Clerk is directed to enter judgment for the proceeds in favor of Jack Emery and against Diana Emery. The Clerk is further directed to transfer to the counterclaimant Jack Emery, the $20,591.20 National Life Insurance Co. deposited with the Court, plus the interest this money earned in the account.

With respect to Jack Emery’s claim against the insurer for vexatious delay in payment of the proceeds, the Court is of the opinion that in light of above facts Jack Emery’s claim should be dismissed as a matter of law. An insurer, caught between two claimants to the proceeds, and who appropriately seeks interpleader, can hardly be vexatious in its delay in the payment of the proceeds. However, since neither party has briefed this issue, the Court will DISMISS the claim with prejudice with leave granted Jack Emery to show this Court within ten (10) days from the date of this Order the merits of such a claim. Accordingly, the counterclaimant Jack Emery’s claim against National is hereby DISMISSED with prejudice and with the above reservation. As the Court perceives the matter, the only remaining claim to be tried is the plaintiff’s claim for negligence against the agent Don James.

IT IS SO ORDERED.