author: LOUGHLIN, District Judge.

text:
    George KILGUS, Jr. v. Michael J. CUNNINGHAM, Warden.
    No. 84-792-L.
    United States District Court, D. New Hampshire.
    Feb. 11, 1985.

      Jean-Claude Sakellarios, Manchester, N.H., for plaintiff.
    Gregory H. Smith, Atty. Gen., Concord, N.H., for defendant.
   ORDER ON WRIT OF HABEAS CORPUS

LOUGHLIN, District Judge.

Plaintiff, George Kilgus moves this court pursuant to 28 U.S.C. § 2241(a), (c)(3), (5) and 28 U.S.C. § 2254 for a Writ of Habeas Corpus. Plaintiff is presently incarcerated in the New Hampshire State Prison for witness tampering, a violation of RSA 641:5. Defendant Cunningham is the Warden of the New Hampshire State Prison. Plaintiff alleges his incarceration in accordance with the state court judgment is in violation of the constitution or laws or treaties of the United States.

The facts for this habeas petition are as follows. On July 7, 1973 a small aircraft operated by the plaintiff made a crash landing at Grenier Field in Manchester, New Hampshire. Apparently, plaintiff neglected to engage the landing mechanism and landed the plane without the landing wheels down. No one was injured. The only other person on board was a Miss Shirley Chartier (now Mrs. Shirley Kulik). After the plane crash, Mr. Tony Luis, a then employee of the plaintiff came to the airport to pick up the plaintiff. Having recently been married and wanting to avoid embarrassment plaintiff asked Mr. Luis to say that he was with him on the plane. Mr. Luis agreed and the incident was so reported to the airport authorities.

In December, 1981 Barbara Labonville reported that her husband was missing. His body was later found in Westford, Massachusetts in early January, 1982. Subsequently, New Hampshire and Massachusetts authorities initiated a homicide investigation. During the early course of their investigation, the authorities questioned plaintiff about his relationship with the Labonvilles. Specifically, he was asked if he had any knowledge as to the death of Paul Labonville.

During the course of this questioning, Detective Roland Lamy of the New Hampshire State Police asked plaintiff who was in the plane with him in 1973. Plaintiff responded Tony Luis. After the questioning, plaintiff telephoned Mr. Luis and informed Luis of his questioning by the authorities about the Labonville homicide. Plaintiff informed Luis that he might be questioned about the 1973 airplane crash. Plaintiff told Mr. Luis to stick with the original story.

When Luis was originally questioned by the New Hampshire authorities he claimed to have been on the plane in 1973. However, once he was informed that the authorities were conducting a murder investigation, Mr. Luis admitted he was not on the plane. Luis testified to these matters at plaintiffs trial concerning the death of Paul Labonville. The record reveals that Mr. Luis renunciated the fabricated story of the 1973 incident once informed of the murder investigation. Luis also testified that he had no knowledge of, or connection with Paul and Barbara Labonville.

After Mr. Luis renunciated the 1973 story, the New Hampshire authorities secured an indictment against the plaintiff, George Kilgus charging him with witness tampering, a violation of RSA 641:5. Plaintiff was tried, convicted and sentenced to not less than one and a half years and not more than three years hard labor at the New Hampshire State Prison. Plaintiff filed his appeal to the New Hampshire Supreme Court.

On appeal to the New Hampshire Supreme Court, the plaintiff claims to have raised the following issues:

a. Whether, for the purposes of RSA 641:5, Mr. Tony Luis is a “witness or informant” with respect to the investigation of the death of Paul Labonville?
b. Whether the statute under which this indictment was filed, RSA 641:5 is unconstitutional on its face for overbreadth and vagueness and for failure to provide sufficient standards to provide guidance to a person that his action may be violating the provisions of the statute?
c. Whether the construction of the statute by the state violates the constitutional rights of the defendant under the first, fifth and the fourteenth amendments of the Constitution of the United States of America and Part I, Article 15 of the Constitution of the State of New Hampshire?
d. Whether the statement made by the defendant to Mr. Tony Luis regarding the unrelated and unconnected plane crash falls within the purview of RSA 641:5 with respect to the investigation of the death of Paul Labonville?
e. Whether the trial court erred in denying the motions to dismiss filed prior to the trial?
f. Whether the trial court erred in denying the defendant’s motion for directed verdict on December 9, 1982?
g. Whether the trial court erred in denying the defendant’s motion to dismiss the indictment filed on December 9, 1982?
h. Whether the trial court erred in granting the state’s motion in limine on September 28, 1983?
i. Whether the trial court erred in denying the requests for jury instructions filed by the defendant on September 28, 1983?
j. Whether the trial court erred in denying the defendant’s motion for directed verdict on September 29, 1983?
k. Whether the trial court erred in denying the defendant’s motion for a mistrial based upon the conduct of the prosecutor on September 29, 1983?
l. Whether by its conduct and the conduct of its agents, the state should have been barred from prosecuting this action by collateral estoppel?
m. Whether the conduct of the prosecution, its agents, servants and employees was improper and violated the constitutional rights of the defendant and denied him a fair trial?
n. Whether there was sufficient evidence to support the conviction of the defendant on the charge of “witness tampering”?
o. Whether the various rulings by the trial court on the objections of the defendant during the course of trial of September 28, 1983 were proper?

It is a well established principle of Federalism that a state decision resting on an adequate foundation of state substantive law is immune from review in federal court. Fox Film Corp. v. Muller, 296 U.S. 207, 56 S.Ct. 183, 80 L.Ed. 158 (1935); Murdock v. Memphis, 20 Wall. 590, 22 L.Ed. 429 (1875); Wainwright v. Sykes, 433 U.S. 72, 81, 97 S.Ct. 2497, 2503, 53 L.Ed.2d 594 (1977); reh’g denied, 434 U.S. 880, 98 S.Ct. 241, 54 L.Ed.2d 163 (1977). The New Hampshire Supreme Court will not consider issues raised on appeal that were not presented in- the lower court. Daboul v. Town of Hampton, 124 N.H. 307, 471 A.2d 1148 (1983); State v. Laliberte, 124 N.H. 621, 622, 474 A.2d 1025 (1984). Accordingly, the New Hampshire Supreme Court refused to consider plaintiff’s estoppel claim because he failed to raise it in the court below. State of New Hampshire v. Kilgus, 484 A.2d 1208 at 1211 (1984).

28 U.S.C. § 2254 explicitly requires that an applicant for a writ of habeas corpus exhaust the state remedies before challenging his conviction in the federal court. The threshold a petitioner must cross to meet this requirement is: “He must have fairly presented to the state courts the substance of his federal habeas corpus claim, (citations omitted); Dyer v. Ponte, 749 F.2d 84, 86 (1st Cir.1984).

Federal courts review Writs of Habeas Corpus only if there are constitutional issues. McMichaels v. Hancock, 428 F.2d 1222, 1223 (1st Cir.1970). Federal District Courts must dismiss habeas petitions containing both unexhausted and exhausted claims. The total exhaustion rule promotes comity and does not unreasonably impair the prisoner’s right to relief. Rose v. Lundy, 455 U.S. 509, 522, 102 S.Ct. 1198, 1205, 71 L.Ed.2d 379 (1982). A review of the record reveals that the plaintiff has exhausted his claims in state courts.

In his writ of habeas corpus, plaintiff makes the following constitutional attacks on RSA 641:5:

1. That RSA 641:5 on its face is void for vagueness.
2. That RSA 641:5 is overbreadth and violates the defendant’s first amendment right of free speech.
3. That RSA 641:5 fails to give proper notice thus it violates the due process requirements of the 14th Amendment.
4. That RSA 641:5 violates the due process requirements of the Fifth Amendment.

RSA 641:5 in pertinent parts provides:

641:5 Tampering with Witnesses and Informants. A person is guilty of a class B felony if

I. Believing that an official proceeding, as defined in RSA 641:1, II, or investigation is pending or about to be instituted, he attempts to induce or otherwise cause a person to

(a) testify or inform falsely; or
(b) withhold any testimony, information, document or thing; or
(c) elude legal process summoning him to provide evidence; or
(d) absent himself from any proceeding or investigation to which he has been summoned.

Plaintiff first asserts that RSA 641:5 is on its face vague and overbroad.

“The void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement. Although the doctrine focuses both on actual notice to citizens and arbitrary enforcement, we have recognized recently that the more important aspect of the vagueness doctrine “is not actual notice, but the other principal element of the doctrine — the requirement that a legislature establish minimal guidelines to govern law enforcement____ Although the doctrine focuses both on actual notice to citizens and arbitrary enforcement, we have recognized recently that the more important aspect of the vagueness doctrine “is not actual notice, but the other principal element of the doctrine — the requirement that legislature establish minimal guidelines to govern law enforcement”. Where the legislature fails to provide such minimal guidelines, a criminal statute may permit “a standardless sweep; [that] allows policemen, prosecutors, and juries to pursue their personal predilections.”

(Citations omitted); Kolender v. Lawson, 461 U.S. 352, 358, 103 S.Ct. 1855, 1859, 75 L.Ed.2d 903 (1983).

When evaluating a facial challenge to state law, a federal court must of course consider any limiting construction that a state court has proffered. Hoffman Estates v. Flipside Hoffman Estates, Inc., 455 U.S. 489, 495, 102 S.Ct. 1186, 1191, 71 L.Ed.2d 362 (1982); reh’g denied, 456 U.S. 950, 102 S.Ct. 2023, 72 L.Ed.2d 476 (1982); Kolender v. Lawson, 461 U.S. 352, 355, 103 S.Ct. 1855, 1857, 75 L.Ed.2d 903 (1983). Plaintiff asserts that if the word “person” in RSA 641:5 is not limited by the specific references to the title witness and informants, then it is void for vagueness as it fails to give fair warning of the forbidden conduct. To the contrary, the New Hampshire Supreme Court held the meaning of the word,

“person” is clear and unambiguous. It refers generally to all people, without limitation as to their status as witnesses or informants. When the language used in a statute is clear and unambiguous, its meaning is not subject to modification by judicial construction. State v. Flynn, 123 N.H. 457, 462, 464 A.2d 268, 271 (1983); RSA 21:2.
We hold that the State did not need to prove that Mr. Luis was a witness or informant in the homicide investigation in order to support the defendant’s conviction under RSA 641:5,1(a). It is sufficient under the statute that the “person” was asked to testify or inform falsely when the defendant believed that an investigation was pending.

State of New Hampshire v. Kilgus, supra at 1211, 1212.

On its face the use of the word “person” in the description of the forbidden conduct in RSA 641:5 is sufficient to meet the void for vagueness standard “that men of common intelligence would not be forced to guess at the meaning of the criminal law” set forth in Connally v. General Construction Company, 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322 (1926). Accordingly, this court finds that the language of RSA 641:5 gives an individual actual notice of the prohibited conduct and does not permit a standardless sweep. Therefore, the statute is constitutional and not void for vagueness.

Plaintiff next attacks the constitutionality of RSA 641:5,1(a) claiming it is unconstitutional under the Federal Constitution because it is overbroad. Plaintiff asserts that the statute interferes with his first amendment right of free speech. The United States Supreme Court defined the over-breadth doctrine in NAACP v. Alabama, 377 U.S. 288, 84 S.Ct. 1302, 12 L.Ed.2d 325 (1964) as follows:

“This court has repeatedly held that a governmental purpose to control or prevent activities constitutionally subject to state regulation may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms.” Id. ... [T]he power to regulate must be so exercised as not, in attaining a permissible end, unduly to infringe the protected freedom.” Even though the governmental purpose be legitimate and substantial that purpose cannot be pursued by means that broadly stifle fundamental personal liberties when the end can be more narrowly achieved, (citations omitted). NAACP v. Alabama, supra at 308, 84 S.Ct. at 1314. Claims of facial over-breadth have been achieved in eases involving statutes, which by their terms seek to regulate “only spoken words”. It has been the judgment of the United States Supreme Court that the possible harm to society in permitting some unprotected speech to go unpunished is outweighed by the possibility that protected speech of others may be muted and perceived grievances left to féster because of the possible inhibitory effects of overly broad statutes. Broadrick v. Oklahoma, 413 U.S. 601, 612, 93 S.Ct. 2908, 2916, 37 L.Ed.2d 830 (1973). However, where conduct and not merely speech is involved the overbreadth statutes must not only be real but, substantial as well, judged in relation to the statute’s plainly legitimate sweep. Id. at 615, 93 S.Ct. at 2917.

“When an individual’s interest in expression is ‘miniscule’ compared to the public interest protected by statute prohibiting the expression, then that expression or conduct is not immune under the First Amendment.” Colten v. Kentucky, 407 U.S. 104, 111, 92 S.Ct. 1953, 1958, 32 L.Ed.2d 584 (1972). As the New Hampshire Supreme Court so aptly pointed out under the language of RSA 641:5 it was not necessary that Mr. Luis actually inform or testify so as to become an informant or a witness; it was only necessary that defendant believe that Mr. Luis was a potential witness. Witness tampering is a crime based on the attempt to induce false testimony and, therefore the statute focuses on the defendant’s intent, rather than the actions of the person tampered with, or the outcome of the. pending investigation. State of New Hampshire v. Kilgus, supra at 1211. RSA 641:5 protects the public interest in discovering the truth in official proceedings and investigations. When the state’s interest is balanced against the plaintiff’s right to speak to a potential witness with the intent of tampering with that witness, the plaintiff’s right is “miniscule”. Id.; citing Colten v. Kentucky, 407 U.S. 104, 111, 92 S.Ct. 1953, 1958, 32 L.Ed.2d 584 (1972).

After reviewing the record and arguments proffered this court is neither convinced that RSA 641:5 is either impermissibly vague or overbroad. This court also finds plaintiff’s claim regarding the jury instructions, fair trial and substantial evidence to support his convictions to be without merit. There are no due process violations in the plaintiff’s previous state court trials.

In denying petitioner’s Writ of Habeas Corpus, the court is somewhat perturbed that the State of New Hampshire used a 1973 collateral, unrelated incident for a basis of conviction in this case.

Writ of Habeas Corpus denied.


source: Caselaw Access Project

author: HENRY WOODS, District Judge.

license: Public Domain

text:
    ARKANSAS POWER & LIGHT COMPANY (An Arkansas Corporation and Successor to Arkansas Missouri Power Company), Plaintiff, v. The HOME INSURANCE COMPANY, Defendant.
    No. LR-C-83-294.
    United States District Court, E.D. Arkansas, W.D.
    Feb. 11, 1985.

      William Dean Overstreet, House, Wallace & Jewell, Little Rock, Ark., for plaintiff.
    Tom F. Lovett and James M. Sayes, Little Rock, Ark., for defendant.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

FINDINGS OF FACT

HENRY WOODS, District Judge.

1. Arkansas Power & Light Company is a corporation organized and existing pursuant to the laws of the State of Arkansas with its principal place of business located in Pulaski County, Arkansas.

2. The Home Insurance Company is a foreign corporation existing by virtue of the laws of the State of New Hampshire and is duly qualified to do business in the State of Arkansas.

3. Arkansas Power & Light Company is the successor in interest to Arkansas Missouri Power Company by reason of a merger of the two corporations occurring on January 1, 1981; and by reason of that merger, Arkansas Power & Light Company is the proper party to institute this action.

4. This action is between citizens of different states and involves an amount in controversy in excess of $10,000.00 exclusive of interest and costs.

5. Arkansas Power & Light Company, as well as Arkansas Missouri Power Company prior to the merger, were wholly owned subsidiaries of Middle South Utilities, Inc.

6. Prior to December 31, 1967, Middle South Utilities did not provide combined system-wide liability insurance coverage for all of its operating subsidiaries. Each subsidiary was responsible for procuring and maintaining its own insurance coverage.

7. On or about December 31, 1967, Middle South Utilities, Inc. chose to combine all of the subsidiaries’ liability insurance coverage under one policy.

8. In seeking quotes and bids on the combined insurance coverages, Middle South Utilities, Inc. permitted Rebsamen and Associates, of Little Rock, Arkansas, and Charles Harper, an employee of said corporation, to participate in the bidding process.

9. Through Mr. Harper and Rebsamen Insurance, Middle South Utilities purchased an Excess Liability Insurance Contract with the Home Insurance Company providing combined liability coverages for itself and all of its operating subsidiaries.

10. Upon renewal, the Home Insurance Company issued an excess liability policy, # HEC-4165911, for a policy period of January 1, 1972 through January 1, 1975; this policy provided excess liability coverage in the amount of $4,900,000.00 in excess of a self-insured retention of $100,000.00.

11. In January, 1976 the policy was renewed again by policy number HEC-9006949 for a policy period of January 1, 1976 through January 1, 1977 with a self-insured retention of one million dollars. The excess liability policy was renewed again for January 1, 1977 through January 1,1978 with the same self-insured retention of $1,000,000.00.

12. Paragraph 7 of the excess liability policies defines “occurrence” as one happening or series of happenings arising out of or caused by one event taking place during the terms of this contract.

13. HEC 4165911 was issued January 1, 1972 and was effective through January 1, 1975. This policy provided for a self-insured retention of $100,000 with coverage extending to claims up to $5,000,000.

14. Middle South Utilities had the option of insuring its own self-insured retention of $100,000 and chose to exercise this option in the case of Arkansas Missouri Power Company, placing $75,000 of that layer of coverage with Houston General Insurance Company.

15. In July of 1974 ARKMO had in its employ an apprentice lineman named Billy Sanders. On July 18, 1974, while in the course of his duties as an ARKMO lineman, Billy Sanders came in contact with an energized 7,200 volt electrical distribution line.

16. On October 1, 1981 Sanders settled his Workers’ Compensation Claim by Joint Petition with the Home Insurance Company.

17. On July 14, 1977 Sanders filed a lawsuit in the Circuit Court of Mississippi County, Arkansas against Arkansas Missouri Power Company.

18. In essence, the complaint filed by Sanders alleged that Arkansas Missouri Power Company breached a contract to employ him and pay him his full salary. The complaint prayed for damages as a result of the breach of contract.

19. On March 23,1979 the Circuit Court of Mississippi County, Arkansas dismissed the complaint filed by Sanders finding that the Arkansas Workers’ Compensation Act was not a bar to Sanders’ action, but that Sanders’ complaint did not state sufficient facts to establish valid consideration for an enforceable contract.

20. Sanders appealed the lower court decision to the Arkansas Court of Appeals, and on January 9, 1980 the Arkansas Court of Appeals reversed the lower court decision. The Appellate Court found sufficient facts pled in the complaint to establish a jury question on the issues of promissory estoppel and detrimental reliance.

21. On April 12, 1982 the action filed by Sanders against Arkansas Missouri Power Company was tried in the Circuit Court of Mississippi County, Arkansas, and the jury returned a verdict for Sanders in the amount of $1,099,043.77.

22. The evidence at the trial in support of the damages incurred by Sanders was based upon the testimony of an economist who calculated the amount of lost wages from the date of the breach of the contract to the date of future retirement.

23. The liability instructions given by the court at the trial were based on contract theory, detrimental reliance and promissory estoppel. The damage instructions given by the court at trial were based upon the value of salary and benefits lost in the past and the value of salary and benefits reasonably certain to be lost in the future.

24. On or about August 2, 1982, the judgment entered in favor of Sanders in the Mississippi County litigation was settled and released in consideration of the payment of the sum of $700,000.00 by Arkansas Power and Light Company as the successor corporation to Arkansas Missouri Power Company.

25. Soon after the complaint was filed by Sanders in July, 1977, a representative of Arkansas Missouri Power Company sent to Rebsamen Insurance Company a copy of the complaint along with the recommendations of Ark-Mo’s attorney who was handling the case. Rebsamen Insurance forwarded a copy of that material to Home Insurance Company in August, 1977.

26. In 1978 Rebsamen Insurance forwarded copies of discovery pleadings in the Mississippi County action to Home Insurance Company.

27. In April, 1982 a representative of Rebsamen Insurance told Home Insurance Company that a verdict in the amount of $1,099,043.77 had been entered in the Sanders’ case against Arkansas Missouri Power Company.

28. On April 20, 1982 a representative of Arkansas Power & Light Company made the first demand on Home Insurance Company for indemnification pursuant to its excess liability policy in order to satisfy the judgment entered in the Mississippi County litigation.

29. In May, 1982 the Home Insurance Company formally denied coverage under the excess liability insurance policy for the Sanders’ judgment since it was based upon damages resulting from a breach of contract.

30. Arkansas Power & Light Company paid $7,995.00 for a supersedeas bond to stay the Sanders’ judgment while it was being appealed.

31. Arkansas Power & Light Company paid $2,080.00 for preparation of the transcript of the Mississippi County litigation filed by Sanders.

32. Arkansas Power & Light Company paid the sum of $700,000.00 to Sanders for a release and settlement of the judgment entered in favor of Sanders at the trial of the Mississippi County lawsuit.

33. During the period of time when Middle South Utilities, Inc.’s operating subsidiaries procured their own insurance coverage, Mississippi Power & Light Company was one of those operating subsidiaries procuring its own insurance.

34. While Mississippi Power & Light Company was responsible for its own insurance affairs, it procured a policy of excess liability insurance from the Home Insurance Company. Home Insurance Company Excess Indemnity Policy HEC 9543324 was issued to Mississippi Power & Light Company for the period of June 1, 1963 to June 1, 1966. This policy of insurance insured only Mississippi Power & Light Company and was separate from any insurance acquired by Middle South Utilities, Inc.

35. Following Mr. Sanders’ accident, officials at Arkansas Missouri Power Company immediately notified Rebsamen Insurance in Little Rock, Arkansas of the injury for purposes of reporting the Workers’ Compensation Claim which would ensue.

36. Mr. Sanders’ job injury was accepted as compensable with ARKMO paying the initial $25,000, and with Houston General paying the next $75,000. The amount of Mr. Sanders’ Worker’s Compensation claim which exceeded $100,000 was paid by the Home Insurance Company pursuant to the terms and conditions of HEC 4165911.

37. Mr. Sanders’ Workers’ Compensation Claim was ultimately joint petitioned before the Arkansas Workers’ Compensation Commission.

38. On or about July 14, 1977, approximately three years after Mr. Sanders’ injury, Mr. Sanders filed suit against Arkansas Missouri Power Company in the Circuit Court of Mississippi County, Arkansas.

39. Upon being served with the plaintiff’s complaint, Arkansas Missouri Power Company immediately forwarded a copy of the complaint to Rebsamen Insurance in Little Rock, Arkansas. Arkansas Missouri Power Company also began the defense of Sanders’ litigation.

40. The Sanders’ litigation continued for an extended period of time. During this period, certain pleadings and interrogatories were sent to Rebsamen Insurance in Little Rock for the purpose of advising them of the filing of the lawsuit and notifying them of the potential claim.

41. Although Rebsamen Insurance and the Home Insurance Company were aware of the pendency of the Sanders’ litigation, neither the Home nor Rebsamen Insurance ever took any position with regard to coverage.

42. Arkansas Missouri Power Company continued to defend the Sanders’ litigation until it was tried in April, 1982.

43. Prior to trial the Sanders’ complaint was amended and in its final version contained three distinct theories which can generally be described as follows:

(a) An oral agreement by Mr. McSpadden and Mr. Wafler that ARKMO would pay Mr. Sanders his full salary benefits until such time as he could resume his employment with ARKMO;

(b) That ARKMO's promise, through McSpadden and Wafler, constituted an enforceable contract to pay Mr. Sanders his full salary benefits; and

(c) Alternatively, it was common knowledge and customary practice for ARKMO to continue to pay employees, such as linemen, their full salary benefits in the event they were injured in the course of their employment and this practice constituted an implied employee benefit program.

44. In April, 1982 the Sanders’ litigation went to trial in the Circuit Court of Mississippi County, Arkansas. ' From a review of the various pleadings, of the trial testimony and various parties and witnesses, the jury instructions and the verdict, it would appear that the thrust of the plaintiff’s case was premised upon a breach of an oral contract and promissory estoppel.

45. The policy which the plaintiff urges as coverage for the instant loss, HEC 4165911, was effective January 1, 1972 through January 1, 1975. Under this policy the Home Insurance Company assumed responsibility for Mr. Sanders’ Workers’ Compensation Claim and under this policy ultimately paid all of Mr. Sanders’ Worker’s Compensation Claim.

46. HEC 4165911 is a policy of indemnity, that is, a policy under which the Home Insurance Company is obligated to indemnify the assured, Arkansas Power & Light Company, for sums which the insured shall be legally liable to pay and to pay, or by final judgment be adjudged to pay, as damages. This policy does not provide a defense for the insured, but only provides indemnification for legal liability or a judgment returned.

47. However, the policy does provide that the law costs associated with the defense of litigation shall be borne by the assured and the insurer on a pro-rata basis as their financial interest in the litigation may ultimately be determined.

48. Upon learning of the jury’s verdict, Arkansas Power & Light (now the defendant by reason of the merger) immediately notified William R. Stringfellow of Rebsamen Insurance of the judgment that had been entered.

49. Mr. Stringfellow promptly notified the Home of the entry of the judgment against ARKMO, at which time he was advised that the company’s position was that no coverage was present for the reason that the damages were awarded for breach of contract and that the policy did not provide coverage for breach of contract.

50. Following the jury’s verdict, Arkansas Power & Light filed its Notice of Appeal and made demand upon the Home Insurance Company for coverage. Shortly thereafter Arkansas Power & Light’s demand was refused with the Home again announcing its earlier position.

51. Arkansas Power & Light continued to process the appeal, and during its pend-ency settlement negotiations resolved the outstanding judgment by payment of the sum of $700,000 to Mr. Sanders and his attorneys.

52. At the time of the settlement negotiations, the Home Insurance Company had already announced its position that under the contract of insurance no coverage was afforded the instant loss.

53. In connection with the settlement, Mr. Sanders executed a Release of All Claims in favor of Arkansas Power & Light Company.

Findings 1-53 were agreed to by the parties.

The Court makes these additional findings of fact:

54. Policy No. HEC 4-16-59-11 was in force at the time Sanders was injured, and defendant was bound by its terms (PX 1).

55. On July 18, 1974 Sanders, an employee of Arkansas Missouri Power Company, was injured while acting within the course and scope of his employment.

56. Sanders filed a Workers’ Compensation Claim for his bodily injury.

57. Pursuant to the Arkansas Workers’ Compensation Law, Sanders received payment of medical expenses and wage loss benefits as a result of that bodily injury.

58. The Home Insurance Company paid $252,948.95 in Workers’ Compensation benefits to Sanders pursuant to the coverage provided by the excess liability policy, number HEC-4165911, in force during 1974.

59. Paragraph 7 of the Joint Petition provides in part that “the Respondents (Arkansas Missouri Power Company and Home Insurance Company) will be completely relieved and discharged from any and all liability and responsibility of every kind and nature arising by reason of or related to the alleged accident, injuries, disabilities, known or unknown, developed or which may develop; and the Respondents will have no further liability or responsibility to said Claimant in the future on account of the alleged accidental injuries, disabilities or any consequences that might exist or arise.”

60. The liability assumed by plaintiff in the oral contract to continue Sanders on the payroll was not in the language of the insurance contract; nor was it in the contemplation of the parties to the insurance contract. Nor was it the intention of the parties that such coverage be afforded.

CONCLUSIONS OF LAW

1. The Court has proper jurisdiction of this action pursuant to 28 U.S.C.A. § 1332.

2. The language of the excess liability policy issued by the Home Insurance Company to Middle South Utilities and its subsidiaries is not ambiguous.

3. The Arkansas Workers’ Compensation Act was the exclusive remedy for Sanders for the bodily injury he suffered on the job on July 18, 1974, and as such the Act would be a bar to any cause of action filed by Sanders against his employer based upon that bodily injury. C & L Rural Electric Cooperative Corp. v. Kincaid, 221 Ark. 450, 256 S.W.2d 337 (1953).

4. Any claims by Sanders against Arkansas Missouri Power Company, or its successor corporation, Arkansas Power and Light Company, resulting from the bodily injury to Sanders were settled and released by Joint Petition on October 1,1981 (DX 1).

5. The lawsuit filed by Sanders against Arkansas Missouri Power Company in the Circuit Court of Mississippi County, Arkansas was based upon a breach of contract. The jury in that ease found a breach of contract and awarded damages to Sanders as a result of that breach of contract. (PX 3.)

6. Personal injuries, as used in the excess liability policies, do not include breach of the oral contract to keep Sanders on the payroll. Heritage v. Board of Education, 447 F.Supp. 1240 (D.Del.1978).

7. Contractual liability for damages from personal injuries, as used in the excess liability policy, does not include breach of a contractual duty or damages for a breach of a contractual duty as was found in the lawsuit filed by Sanders against Arkansas Missouri Power Company. Continental Casualty Co. v. Alexis Dupont School District, 317 A.2d 101 (Del.1974).

8. A cause of action for a breach of contract does not accrue until the breach occurs. The breach of contract by Arkansas Missouri Power Company occurred in 1976.

9. The applicable policy period was January 1, 1976 through January 1, 1977 at which time excess liability policy number HEC 9006949 was in effect. This policy provided for a self-insured retention of one million dollars.

10. Waiver and/or estoppel cannot act to create coverage under an insurance policy where coverage did not initially exist. Looney v. Allstate Ins. Co., 392 F.2d 401 (8th Cir.1968); Peoples Protective Life Ins. Co. v. Smith, 257 Ark. 76, 514 S.W.2d 400 (1974).

11. The excess liability policies issued by Home Insurance Company to Middle South Utilities, Inc. and its subsidiaries were indemnity policies whereby no duty was imposed upon Home Insurance Company until Middle South or one of its subsidiaries were held legally liable to pay sums as damages for personal injuries. C & L Rural Electric Cooperative Corp. v. American Casualty Co., 199 F.Supp. 220 (E.D.Ark.1961); Carter v. Adamson, 21 Ark. 287 (1860).

12. No coverage is provided by the excess liability policies issued by Home Insuranee Company to Middle South Utilities, Inc. and its subsidiaries for the judgment and/or settlement of the damages awarded to Sanders in the Mississippi County lawsuit filed by him against Arkansas Missouri Power Company.

13. Even if coverage might be provided, the issue is moot since the applicable policy period was January 1, 1976 through January 1, 1977 when the self-insured retention was one million dollars, which is obviously more than the $700,000.00 paid by Arkansas Power and Light Company in settlement of the Sanders’ judgment and litigation.

14. The insurance contract entered into by the parties did not by any stretch of the imagination contemplate the type of contractual liability which plaintiff incurred by reason of the oral promise of its agents. The insuring agreement provides that “the policy is to indemnify the named insured ... for any and all sums which they, the insured, shall be legally liable to pay, and shall pay or by final judgment be adjudged to pay (subject to the limitations hereinafter mentioned) as damages for personal injuries ... resulting from any activity, trade, or business of the insured, including all liability arising under any Workmen’s Compensation Law____” (PX 1.)

15. The plaintiff principally relies upon the language of paragraph (4) of the insurance policy which reads as follows:

It is hereby understood and agreed that this policy is extended to include Contractual Liability under contracts or agreements entered into by the Insured, such liability being limited to liability for loss of life or personal injury, sickness or disease, or property damage as already defined in the wording hereof. It is also understood and agreed that this policy shall indemnify the Insured for any and all sums which they may be liable to pay as damages for personal injury, sickness or disease to one or more of their employees by reason of such contractual liability, anything contained herein to the contrary notwithstanding.

16. The inclusion of the paragraph such as No. 4 in the policy in question is necessary because of the prevalence of indemnity contracts in today’s business world. It is often necessary that business organizations, such as this plaintiff, should enter into indemnity agreements to indemnify others for bodily injuries. Such agreements are standard in the construction industry, and in Arkansas can be used to indemnify even against one’s own negligence providing the language is clear, unequivocal and certain. Pickens-Bond Const. Co. v. North Little Rock Electric Co., 249 Ark. 389, 459 S.W.2d 549 (1970). Indemnity by operation of law (such as the old active-passive negligence doctrine and primary-secondary negligence doctrine) has virtually disappeared except in the principal-agent and manufacturer-distributor situation. Today liability in indemnity for personal injury almost always arises by virtue of contract. See H. Woods, Some Observations on Contribution and Indemnity, 38 Ark.L.Rev. 44, 6 (1984).

17. A person may acquire personal injury liability through tortious breach of a contract entered into for the benefit of third parties. Such a contract was that in Hogan v. Hill, 229 Ark. 758, 318 S.W.2d 580 (1958) where a highway contractor breached a contract provision inserted for the benefit of the traveling public. The plaintiff herein may well enter into such a contract and acquire liability for personal injury from a breach thereof. Such liability will be covered by paragraph (4) of the insurance contract.

18. Liability for personal injury based on the implied warranties of the Uniform Commercial Code, Ark.Stat.Ann. § 85-2-316, et seq. (Supp.1973) is grounded in contract in the view of many authorities. Certainly, express warranty is a contract theory on which recovery for personal injury may be based.

19. Liability for personal injury based on indemnity, tortious breach of contract or breach of warranty is the type of personal injury related to contract within the contemplation of the parties when they entered into the insurance contract herein (PX 1). It was never meant to cover, and it did not cover an oral agreement to pay an employee his salary. If such a contract were covered by this policy, so would any agreement to employ plaintiff’s wife or children because of his injury.

20. The complaint of Arkansas Power & Light Company against Home Insurance Company is dismissed with prejudice.


author: MENCER, District Judge.

text:
    Frederick C. KOHLER, Plaintiff, v. UNITED STATES of America, Defendant.
    Civ. A. No. 84-0207.
    United States District Court, W.D. Pennsylvania.
    Feb. 12, 1985.
    John A. Caputo, Pittsburgh, Pa., for plaintiff.
    Albert W. Schollaert, Asst. U.S. Atty., United States District Court, Western District of Pennsylvania, Pittsburgh, Pa., for defendant.
   MEMORANDUM OPINION

MENCER, District Judge.

Plaintiff instituted this diversity action against the defendant, the United States of America, pursuant to the Federal Tort Claims Act (FTCA), 28 U.S.C. § 2671 et seq. Arguing that application of the FTCA and the Pennsylvania Workmen’s Compensation Act, 77 P.S. § 1 et seq. bar recovery in this case, the United States filed a Motion to Dismiss or, Alternatively, for Summary Judgment, along with briefs in support and the affidavits of Homer K. Browne, Jr., and Ralph Y. McKnight. Plaintiff has filed a brief in opposition to defendant’s motion and the affidavit of Julie Frazee Steidl.

On or about October 2, 1981, the plaintiff was injured on the defendant’s premises, the Butler Post Office, while attempting to load from defendant’s dock onto his employer’s truck, an overfilled mail hamper. The plaintiff was employed by McKnight Trucking, which was under contract with the United States Postal Service to transport mail.

On September 30, 1983, the plaintiff submitted a claim to the United States Postal Service. This claim was rejected by letter dated November 30, 1983. Plaintiff, in addition, had submitted a claim for workmen’s compensation benefits. Pennsylvania Manufacturer’s Insurance Co., the insurance carrier for McKnight Trucking, paid this claim.

We will treat this as a Motion for Summary Judgment. Summary judgment is proper under Rule 56(c) of the Federal Rules of Civil Procedure if there is no genuine issue as to any material fact. Disposition of this motion requires examination of two statutes — the Federal Tort Claims Act and the Pennsylvania Workmen’s Compensation Act.

Traditionally, the United States has been immune to suit without its consent. The Federal Tort Claims Act provides a broad exception to this general rule. Under the FTCA, the United States is liable for the tortious conduct of its employees to the same extent as a private individual. United States v. Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976). The pertinent part of the FTCA, 28 U.S.C. § 2674, states:

The United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances but shall not be liable for interest prior to judgment or for punitive damages.

In other words, the “government stands in the shoes of a private person in like circumstances.” Hunt v. United States, 636 F.2d 580, 585 (D.C.Cir.1980). We shall, therefore, accord the United States the same rights and liabilities as a private individual. We must determine whether the actions of the United States, if performed by a private individual, would have subjected the private individual to tort liability.

The federal government’s liability shall be determined “in accordance with the law of the place where the (wrongful) act or omission occurred.” 28 U.S.C. § 1346(b). We will, therefore, consult Pennsylvania law because the injury occurred at the Butler Post Office in Butler, Pennsylvania. The law to be scrutinized is the Pennsylvania Workmen’s Compensation Act, 77 P.S. § 1 et seq., which guarantees immediate, fixed benefits to employees, regardless of fault, but as a quid pro quo denies them the right to sue their employer for any injury. 77 P.S. § 481(a).

The defendant contends that the United States through its agent, the United States Postal Service, meets the criteria of “statutory employer” under the Pennsylvania Workmen’s Compensation Act. If it is a statutory employer, it would be liable to pay workmen’s compensation benefits, if required, as if to its own employee, but it would also be entitled to statutory immunity from the plaintiff’s claim.

Courts which have decided the issue of whether the United States may enjoy a statutory employer defense have reached mixed results. The Tenth Circuit in Richardson v. United States, 577 F.2d 133 (10th Cir.1978), addressed the issue of whether the government may invoke a defense available under a state workmen’s compensation statute and held that the statutory employer defense was not available to the United States. The Florida law of workmen’s compensation was held to be controlling since the accident occurred in Florida. The court stressed that although the government had required the contractor and subcontractor to maintain adequate workmen’s compensation insurance and such insurance was in effect at the time the plaintiff was injured, since the government did not have a duty to provide workmen’s compensation insurance, it could not avail itself of the statutory employer defense. 577 F.2d at 134-35.

The Fifth Circuit reached an opposite conclusion in Roelofs v. United States, 501 F.2d 87 (5th Cir.1974), cert. denied, 423 U.S. 830, 96 S.Ct. 49, 46 L.Ed.2d 47 (1975). The court reasoned that since the United States did, as a matter of its own policy, require the contractor to provide workmen’s compensation insurance for its own employees it should enjoy the benefit of any immunity provided to private employers. In the Richardson case, the court discussed the Roelofs decision. “In Roelofs it was assumed that the United States, had it been a private employer, would have been liable for workmen’s compensation under the Louisiana statute.” 577 F.2d at 137. This is also true in Pennsylvania. In Pennsylvania, a statutory employer is liable to such an injured employee in the same manner and to the same extent as to his own employee. 77 P.S. § 52.

We hereby adopt the reasoning in the Roelofs decision as it is more persuasive. The court in Watkins v. United States, 479 F.Supp. 785 (D.S.Car.1979), expressed it well. “A private person who had done for his employees what the United States has required here would enjoy statutory employer immunity, therefore, it is appropriate that the United States should also enjoy that immunity.” 479 F.Supp. at 788.

In light, of the statutory policy of Pennsylvania of supplanting an employee’s common law rights against his employer with a system of benefits payable to the employee by the employer, without regard to negligence or contributory fault in return for the employer’s immunity from common law liability, we will afford the United States the opportunity to invoke the statutory employer defense.

A statutory employer is defined as follows:

An employer who permits the entry upon premises occupied by him or under his control of a laborer or an assistant hired by an employe or contractor, for the performance upon such premises of a part of the employer’s regular business entrusted to such employe or contractor, shall be liable to such laborer or assistant in the same manner and to the same extent as to his own employe.

77 P.S. § 52 (Purdons 1983).

The Pennsylvania Supreme Court in McDonald v. Levinson Steel Co., 302 Pa. 287, 153 A. 424 (1930), enunciated five conditions which must be satisfied before the relationship of statutory employer is created:

(1) An employer who is under contract with an owner or one in position of an owner.
(2) Premises occupied by or under the control of such employer.
(3) A subcontract made by such employer.
(4) Part of the employer’s regular business intrusted to such subcontractor.
(5) An employee of such subcontractor.

In order to determine whether the United States is a statutory employer it is necessary to analyze these five elements in terms of the Postal Service as the employer. This analysis was followed in Wiltrout v. Circle Mobile Home Sales, Inc., 293 Pa.Super. 131, 437 A.2d 1240 (1981). The plaintiffs in that case instituted an action for injuries against Bell Telephone Company. The plaintiff was injured when he fell from a telephone pole while removing wires. He was employed at the time of the accident by Penn Line Service, Inc. That company had a contract with Bell Telephone Company to perform work on the telephone lines. Bell Telephone asserted the statutory employer defense. The court held that the Bell Telephone Company had satisfied all five elements of McDonald and was, therefore, entitled as a statutory employer to immunity from liability in tort to the plaintiffs.

It appears to this Court that these elements have • also been satisfied here. The first requirement, that the United States be under contract with an owner, has been satisfied. According to. the affidavits submitted by counsel, the Postal Service is under contract with the owner of the property. The Postal Service is a lessee of the premises and not the owner.

The second element has also been satisfied. Although it is not the owner, the Postal Service occupies the premises. Plaintiff in his brief agreed that the subject premises were under the control of the defendant and that the plaintiff was simply there using the premises to load and haul mail. This is substantiated by the affidavit of Homer K. Browne, Jr., Postmaster of the Butler Post Office. He states that the United States Postal Service has exclusive control of the Post Office premises, including the area known as the loading dock.

The third requirement, that there be a subcontract made with the Postal Service, is satisfied. The contract between McKnight Trucking and the Postal Service whereby McKnight Trucking was obligated to transport mail is sufficient. In Wiltrout, the contract between Bell Telephone Company and Penn Line Services, Inc. to perform work on its telephone lines was considered a subcontract for purposes of the statutory employer analysis.

Part of the Postal Service’s regular business is to deliver mail. 39 U.S.C. § 404(a)(1). The transportation of that mail, entrusted in part to McKnight Trucking, was an integral part of that business. Thus, the fourth element has been satisfied.

Frederick Kohler was an employee of McKnight Trucking, the subcontractor in this case. Therefore, all five requirements for a statutory employer are met under the facts of this case.

Since the federal government is treated as a private individual pursuant to the Federal Tort Claims Act and it meets the statutory requirements, it is entitled to immunity as a statutory employer under the Pennsylvania Workmen’s Compensation Act.


author: MUECKE, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. 129.4 ACRES OF LAND, MORE OR LESS, IN the COUNTY OF YUMA, STATE OF ARIZONA; Fred W. Kamrath, et al., and Unknown Others, Defendants.
    No. CIV 75-166 PHX-CAM.
    United States District Court, D. Arizona.
    Feb. 14, 1985.

      Richard S. Allemann, Asst. U.S. Atty., Phoenix, Ariz., for U.S.
    Thaddeus G. Baker, Yuma, Ariz., for defendants.
   ORDER

MUECKE, District Judge.

Having received and considered Defendants’ memorandum In Re Damages, filed May 10, 1982; Plaintiffs Post Trial Memorandum, filed July 7, 1982; Defendant Yuma Mesa Irrigation District’s Reply Memo-Issue of Just Compensation, filed July 29, 1982; Defendants’ Findings of Fact and Conclusions of Law, filed July 9, 1982; Plaintiff’s Proposed Findings of Fact and Conclusions of Law, filed July 13,1982, and the Joint Memorandum and affidavit, filed January 22,1985, this Court finds and concludes as follows:

This matter concerns the recovery of the loss of annual income incurred by Defendant Yuma Mesa Irrigation and Drainage .District (“District”) due to a taking of property by Plaintiff. The taking at issue concerns the loss of income to the District based upon the removal of property from the assessment base of the District from which it obtains funds to repay the costs of a federal water reclamation project. The only issue remaining before this Court consists of the calculation of the damages which will be incurred in the District due to the loss of income. At trial, both parties presented expert testimony in an attempt to clarify the proper procedure to be implemented in such a calculation. Before a determination of the proper method is achieved, it is helpful to describe the result which is sought in this action. To adequately compensate the District due to its loss of annual income, it must be provided with a sufficient amount today that will provide it with adequate funds to cover the costs incurred each year for the remainder of the contract period. Based upon the need to make annual withdrawals, this Court cannot simply rely upon the use of present values as presented by Plaintiff.

FINDINGS OF FACT

Based upon the evidence presented at the trial held February 1-4, 1982, this Court makes the following findings of fact:

On March 20, 1975, Plaintiff filed its Complaint in Condemnation and Declaration of Taking in the above-captioned case, and thereupon full fee simple title to the 129.4 acres described in the Complaint in Condemnation, subject to certain road easements, vested in the United States. Of the 129.4 acres thus acquired by the Plaintiff, approximately 77.3 acres lie within the Yuma Mesa Irrigation and Drainage District. The Yuma Mesa Irrigation and Drainage District is a political subdivision in the State of Arizona and a part of the Yuma Mesa division of the Gila Project, a federal reclamation project as redefined by Congress under the Gila Project Reauthorization Act, 61 Stat. 628 (July 30, 1947).

Of the land taken, 77.3 acres were considered “irrigable” under the reclamation law and under the contract existing between the District and the Secretary of Interior and entitled to waters from the Colorado River pursuant to the Boulder Canyon Project Act, 45 Stat. 1057, and under the general reclamation laws of the United States. Pursuant to a contract with the Secretary of the Interior, the District is obligated to repay both the construction costs of the District’s lined lateral system and pumping stations and its proportionate share of the operation and maintenance costs of the Gila Project works. Accordingly, the costs of the project also are spread proportionately, with the 77.3 acres being responsible for its pro-rata share of construction costs and operation and maintenance costs incurred and to be incurred in the construction and operation of the project.

Pursuant to the prior ruling of this Court dated May 26, 1976, affirmed by the Ninth Circuit in 572 F.2d 1385 (9th Cir.1978), the reduction of the assessment base of the district by the loss of 77.3 acres was and is a compensable property right in favor of the District.

In an attempt to quantify the loss of this compensable property right, a projection of the future operation and maintenance costs of the District should be made. To calculate the loss, this Court must consider the actual operation and maintenance charges of the District per acre as the proper measure of the loss as opposed to the use of the annual assessment imposed by the Board of Directors of the District against these lands.

The annual assessment should not be utilized in such a calculation as it is a variable, dependent upon a number of considerations such as the use of reserve funds, sale of excess water, and the judgment of the board of the District on an annual basis and is an uncertain basis upon which to make a projection as to future costs.

The actual operation and maintenance costs per acre of land within the District per year since the date of taking (March 20, 1975) are as follows:

YEAR TOTAL ACTUAL COST
1976 $38.62
1977 $37.71
1978 $29.56
1979 $42.81
1980 $51.77
1981 $56.45
1982 $58.35
1983 $58.63
1984 $60.93

The remaining period of obligation under the repayment contract is 36 years. Establishing a forecast as to the future loss of operation and maintenance charges, the remaining period of the contract is a reasonable basis upon which to project these costs. Based upon the fact that the 1984 costs are the most recent costs available, they provide a more accurate basis upon which to determine the amount of future losses to be incurred by the District.

A reasonable basis for calculating the compensation to be paid is to measure and multiply the 1984 net revenue loss per acre, $60.93, times 77.3, the number of acres, times the remaining term of the contract, 36 years, or $169,775.28 (60.93 X 77.3 X 36 = 169,775.28).

The payment of this sum will enable the District to deduct the annual operation and maintenance charges attributable to the 77.3 acres for each of the next 36 years, resulting in a zero balance or reasonably close to a zero balance at the end of the contract period.

As the District’s expert pointed out, the historical operation and maintenance costs have tracked the changes in the cost of living (CPI) and closely paralleled the increases and decreases in that index of costs. It was also shown that the historical operation and maintenance costs have further paralleled on an indexed basis the short term government bonds and treasury bills available for investment. Further, the appropriate inflation rate of the costs incurred by the District was shown to be 9% per year. In other words, and as testified to by the District’s expert, annual interest earned on the principal will cover the annual increased costs. It should also be noted that the District is a political subdivision and its investment policy is limited by the specific terms of A.R.S. § 45-1578.01.

Based upon the fact that the historic and projected costs of operation and maintenance should reasonably parallel the changes in the cost of living CPI and changes in the investment return of short term government bonds and notes, and considering the District’s need to make annual withdrawals to cover such costs, there is no occasion to discount the above-mentioned sum to its present value. Thus, a reasonable present award is the sum of $169,-775.28.

There is no dispute that since the inception of this lawsuit, the Department of the Navy has voluntarily paid the District the costs that have been incurred each year. The District is therefore not entitled to be compensated for those years, up to and including 1984.

The District, since the date of taking, has earned upon its investment of the reserve funds required under the contract an average compound interest rate of 8.73%. This Court finds that the average compound interest rate of 8.73% is consistent with the marketplace and is a reasonable sum to be assessed against any award herein.

Therefore, the sum of $169,775.28 is held to be just compensation and shall bear interest at the compound rate of 8.73% until paid.

CONCLUSIONS OF LAW

The Yuma Mesa Irrigation and Drainage District is a political subdivision of the State of Arizona and a federal reclamation project under the Gila Project Reauthorization Act, 61 Stat. 628 (July 30, 1947).

On March 20, 1975, the United States, as a matter of right, acquired the property involved herein from the District. By virtue of such taking the defendant, Yuma Mesa Irrigation and Drainage District, lost its assessment base in the 77.3 acres included within the perimeter- of the District.

As was stated above, this Court previously held on May 26, 1976, and was affirmed by the Ninth Circuit at 572 F.2d 1385 (9th Cir.1978), that the loss of the 77.3 acres from the District and the loss of the right to assess these properties for ongoing operation and maintenance costs is a compensable property right in favor of the District. The sum necessary to defray these annual costs, taking into consideration the contemplated changes in the costs of operation and maintenance service, the investment return on the money, and inflationary changes is in the sum of $169,-775.28.

Based upon the changes in the marketplace, the reasonable rate of return upon any award in condemnation during the period of this lawsuit, 1975-1984, has exceeded the statutory amount of 6% as provided in the Declaration of Taking Act, 40 U.S.C. § 258a. In order to afford due process in this instance the District is thus entitled to sum in excess of the statutory interest rate. It was shown that the District has earned upon its investment program a return of 8.73% and therefore the compounded sum of 8.73% is a reasonable return on investments and any sum awarded herein will bear interest at the compound rate of 8.73% until paid. Further, the District is entitled to the above-stated interest on and after the entry of this judgment until paid.

The District has been made whole for all charges it has incurred from the date of the taking through December 31, 1984. The remainder of the repayment contract between the District and the Secretary of the Interior runs through December 2021, a period of 36 years. Therefore, the appropriate term to calculate the loss of future annual income to the District is 36 years. The inflation rate of the annual costs to the District has been shown to be 9% per year. There is also a need to include in the calculation the annual use of funds based upon the annual allocations of cost.

Accordingly, this Court finds the said net award of $169,775.28 is just compensation and in satisfaction of the due process requirements of the law.

Based upon the foregoing,

IT IS ORDERED that Plaintiffs Proposed Findings of Fact and Conclusions of Law, filed July 13, 1982, and Defendants’ Findings of Fact and Conclusions of Law, filed July 9, 1982, are adopted to the extent reflected herein.

IT IS FURTHER ORDERED that the Plaintiff pay the Defendant Yuma Mesa Irrigation and Drainage District the sum of $169,775.28, together with interest at the compound rate of 8.73% until paid.

IT IS FINALLY ORDERED that the Clerk enter judgment in accordance with this Order.


author: BUA, District Judge.

text:
    Floy STEFFENS, Plaintiff, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.
    No. 83 C 5823.
    United States District Court, N.D. Illinois, E.D.
    Feb. 14, 1985.
    Robert C. Kielian, Wheaton, Ill., for plaintiff.
    Gregory C. Jones, Acting U.S. Atty. by Linda A. Wawzenski, Asst. U.S. Atty., Chicago, Ill., for defendant.
   ORDER

BUA, District Judge.

Before the Court is the plaintiff’s motion for an award of attorneys’ fees under the Equal Access to Justice Act (the EAJA), 28 U.S.C. § 2412. This motion arose out of an action remanded to the defendant Secretary of Health and Human Services (the Secretary) for further evidentiary proceedings regarding the plaintiffs application for widows’ disability insurance benefits pursuant to 42 U.S.C. § 402(e)(l)(B)(ii). For the reasons stated herein, the motion is denied.

DISCUSSION

The EAJA provides that “a court shall award to a prevailing party other than the United States” reasonable attorneys’ fees and expenses, in addition to costs, “incurred by that party in any civil action ... brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances made an award unjust.” 28 U.S.C. § 2412(d)(1)(A) (1982). Thus, to support a motion for attorneys’ fees, two important prerequisites must be set forth: (1) the court must determine that the claimant was a “prevailing party;” and, (2) that after the claimant has prevailed, the court must further find that the position of the government was not “substantially justified” and that no “special circumstances” make an award of fees unjust.

1. The Prevailing Party Requirement

Plaintiff argues that the purpose of the EAJA in awarding attorneys’ fees is to correct inequities in civil actions between the United States and private litigants so that the parties would be on a more even footing. Plaintiff concludes that the remand in her case based on the AU’s failure to develop a complete record is a proper situation for awarding attorneys’ fees under the EAJA. Defendant argues that attorneys’ fees under the EAJA should be awarded only if the claimant is actually awarded benefits. Defendant concludes that attorneys’ fees for the remand in this case are inappropriate because the plaintiff did not prevail on the merits and has not yet been awarded benefits.

The plaintiff relies on Gross v. Schweiker, 563 F.Supp. 260 (N.D.Ind.1983), which allowed an award of attorneys’ fees under the EAJA after the district court reversed and remanded the case to the Secretary for a new hearing and “fresh findings and conclusions.” As practical as the Gross reasoning is, we decline to follow it because it is too broad an interpretation of the EAJA. The Gross court rejects what might be called an “on-the-merits” test. Under this test, claimants are only awarded attorneys’ fees when they have received benefits under the Social Security Act and thereby prevailed on the merits of the claim. It is clear that Gross embraces the minority view.

Contrary to the Gross case, several Circuit Courts of Appeals have embraced the majority view in holding that the plaintiff is not a prevailing party simply because she obtained a remand. The leading case is McGill v. Secretary of Health and Human Services, 712 F.2d 28 (2d Cir.1983), cert. denied, _ U.S. _, 104 S.Ct. 1420, 79 L.Ed.2d 745 (1984). In McGill, the Second Circuit held that a claimant whose case is remanded to the Secretary for the taking of additional evidence is not a prevailing party under EAJA. Id. at 32. The court reasoned that a claimant will not become a prevailing party until a claimant is awarded the benefits sought. Id. Similarly, in Cook v. Heckler (Secretary of Health and Human Services), 751 F.2d 240 (8th Cir.1984), the court found that it is not enough for an award of attorneys’ fees under the EAJA for a Social Security claimant to have won a remand to the Secretary for further evidentiary proceedings. It is the receipt of these benefits that renders a typical Social Security claimant a prevailing party. Id. at 241. “When a court vacates an administrative decision and remands the matter for reconsideration, the successful party generally should not recover attorneys’ fees at that particular time since the claimant’s rights and liabilities have not yet been determined.” Brown v. Secretary of Health and Human Services, 747 F.2d 878 at 883 (3rd Cir.1984).

In the instant case, the AU determined that the plaintiffs condition did not meet the Listing of Impairments. This Court noted that “the AU’s observations may indeed be valid” but determined that further evidentiary proceedings are necessary. Steffens v. Heckler, No. 83 C 5823, slip op. at 2 (N.D.Ill. June 25, 1984). This Court did not seek to reverse the Secretary, but only to remand the case for further hearings. The plaintiff still has no certainty of ultimately receiving benefits. Though the AU failed to fulfill his duty to fully develop a complete administrative record, there is no reason to find the plaintiff a prevailing party under the “on-the-merits” test.

The Court adopts the court’s reasoning in McGill and its narrow interpretation of the EAJA. The Court holds that no claimant who attains a remand is a prevaling party under the majority view, the “on-the-merits” test. Should the plaintiff prevail on remand, then her fee request was simply premature. If the plaintiff should not prevail, she will not receive attorneys’ fees. Since the Court finds that the plaintiff may be granted or denied benefits on remand, it is not inconsistent with its interpretation of the EAJA to hold that a claimant who receives a remand from the district court is not a prevailing party.

We join the Second, Third, and Eighth Circuits in holding that the claimant here may not recover attorneys’ fees and costs under the EAJA since she is not a prevailing party. Since the claimant is not a prevailing party, the issue of whether the government was substantially justified need not be addressed. Accordingly, the plaintiff’s motion for an award of attorneys’ fees is denied.

CONCLUSION

For the reasons stated above, the plaintiff’s motion for attorneys’ fees is denied.

IT IS SO ORDERED.


author: HADEN, Chief Judge.

text:
    Natalie MITCHELL, Administratrix and personal representative of the Estate of Lanny D. Mitchell, Plaintiff, v. MONONGAHELA POWER COMPANY, Defendant.
    Civ. A. No. 83-A126.
    United States District Court, S.D. West Virginia, Parkersburg Division.
    Feb. 14, 1985.

      R. Vance Golden, III, Robert K. Tebay, III, Parkersburg, W.Va., for plaintiff.
   MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

I. Background

The Plaintiff brought this wrongful death action pursuant to W. Va. Code, § 55-7-5, et seq., against Monongahela Power Company alleging Monongahela Power’s negligent ownership and maintenance of an electric service line proximately caused her husband’s death when the service line became entangled with, or was magnetically drawn onto, the mobile home Plaintiff’s deceased was moving beneath the line. The complaint alleged diversity jurisdiction to exist between Plaintiff, a West Virginia citizen, and Monongahela Power, a corporation alleged to be incorporated under the laws of the State of Ohio and a citizen of that state. See 28 U.S.C. § 1332. The Defendant moved the dismiss the complaint pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure on the ground that the Court does not have diversity jurisdiction inasmuch as Monongahela Power’s principal place of business is in West Virginia making it a citizen of West Virginia for diversity jurisdiction purposes. The Court, by Memorandum Opinion and Order entered December 8, 1983, took under advisement Monongahela Power’s motion to dismiss pending completion of discovery on the jurisdictional issue. The discovery having been completed on the jurisdictional question, the Court finds that Monongahela Power’s motion to dismiss is mature for decision.

II. Discussion

In diversity cases, the determination of the citizenship of the parties is a preliminary question of fact to be decided by the trial court. Sligh v. Doe, 596 F.2d 1169 (4th Cir.1979); Webb v. Nolan, 361 F.Supp. 418 (M.D.N.C.1972) affirmed 484 F.2d 1049 (4th Cir.1973). Once a Plaintiff’s allegations of jurisdictional facts are properly challenged by a defendant, the plaintiff must support the allegations contained in the complaint by competent proof. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); Thompson v. Gaskill, 315 U.S. 442, 446, 62 S.Ct. 673, 675, 86 L.Ed. 951 (1936); Gibbs v. Buck, 307 U.S. 66, 72, 59 S.Ct. 725, 729, 83 L.Ed. 1111 (1939). In the case at bar, such a challenge has been properly made by Monongahela Power through its motion to dismiss, KVOS, Inc. v. Associated Press, 299 U.S. 269, 277, 57 S.Ct. 197, 200, 81 L.Ed. 183 (1936), wherein it alleges that its principal place of business is in Fairmont, West Virginia, and that, therefore, it is a citizen of West Virginia for purposes of diversity jurisdiction. See n. 1, supra. It is incumbent upon the Plaintiff, then, to demonstrate by reference to the evidence obtained through the discovery process that the jurisdiction of this Court has been properly invoked by proving, by a preponderance of the evidence, that Monongahela Power’s principal place of business is in a state other than West Virginia. See Hatfield v. Mullins Ford, Inc., 389 F.Supp. 278, 280 (W.D.Va.1975); Payton v. Freeze, 49 F.R.D. 11, 14 (E.D.Va.1969).

In considering the question of where Monongahela Power’s principal place of business is, two analyses may be used. One analysis is the “nerve center” test, which focuses upon the decision making functions of the corporation. Scot Typewriter v. Underwood Corp., 170 F.Supp. 862 (S.D.N.Y.1959). A second analysis focuses on the place of operation, that is, the situs of the corporation’s tangible assets. Inland Rubber Corp. v. Triple A Tire Service, Inc., 220 F.Supp. 490 (S.D.N.Y.1963). The Fourth Circuit has recognized each of the tests, but has adopted neither exclusively. Mullins v. Beatrice Pocahontas Co., 489 F.2d 260, 262 (4th Cir.1974).

Commentators on the diversity statute suggest that the place of operations test is the one most consistent with the legislative intent:

“Where a corporation has its executive or administrative offices in one state and its physical operations wholly or predominately in another state, courts have generally agreed with the Inland case finding the latter to be the principal place of business.”

J. Moore and D. Wickstein, Corporations and Diversity of Citizenship Jurisdiction: A Supreme Court Fiction Revisited, 77 Harvard L.Rev. 1426, 1432 (1964). Also, at 13A, Wright & Miller, Federal Practice and Procedure, Section 3625 at 633 (1984), the authors state:

“The legislative history of the statute supports the conclusion that emphasis should typically be placed on the locus of operations rather than where the policy making functions are carried out.”

The academic support for the place of operations analysis appears well-founded. In Nuclear Energy Co. v. General Electric Co., 435 F.Supp. 344, 346 (D.D.C.1977) the court approached the principal place of business question by determining where the corporation would be most visible, would have the most contact with the public, and where the corporation would consider its home, although the court conceded that no one fact would control. The focus in the Nuclear Energy case centered upon where the actual business operations of the corporation were carried out, where it employed people, and where a corporation becomes popularly recognized as a domestic corporation. 435 F.Supp. at 346.

In Huggins v. Winn-Dixie Greenville, Inc., 233 F.Supp. 667, 671 (E.D.S.C.1964), the court held that a corporation with operations mostly in South Carolina but with corporate decisions being made in Florida was to be considered a citizen of South Carolina as the corporation’s South Carolina operation made South Carolina its principal place of business. See Riggs v. Island Creek Coal Co., 542 F.2d 339 (6th Cir.1976) (corporate headquarters did not govern where the profit making portion of the business was solely in another state); Kelly v. U.S. Steel Corp., 284 F.2d 850, 854 (3d Cir.1960) (place of tangible assets of the corporation predominates over place where directors occasionally met); Messinger v. United Canso Oil and Gas Ltd., 80 F.R.D. 730, 735-36 (D.Conn.1978) (place of business operations considered principal place of business). See also Camera v. Lancaster Chemical Corp., 387 F.2d 946, 947 (3d Cir.1967) (concluding that plaintiff failed to prove diversity and looking to place where business actually carried on); Horwatt v. Paulsen-Webber Cordage Corp., 336 F.Supp. 1020, 1021 (W.D.Pa.1971).

The nerve center analysis, focusing attention on the decision making process within the corporation, is better suited where there is no clear center of corporate business activity. Exxon Corp. v. Duval County Ranch Co., 406 F.Supp. 1367, 1369 (S.D.Tex.1975) (where business operations are in several states, administrative offices would control for purposes of determining principal place of business); Scot Typewriter Co. v. Underwood Corp., 170 F.Supp. 862, 865 (S.D.N.Y.1959) (where profit making enterprise is “far flung and varied”, administrative offices controlled for purposes of determining principal place of business). The nerve center analysis is also preferred where there is no current enterprise in which the business is engaged. Miner v. Commerce Oil Refining Corp., 198 F.Supp. 887, 892-93 (D.R.I.1961) (business of the corporation not yet undertaken, thus the place of the administrative offices determined the principal place of business).

In the case sub judice, the discovery conducted on the jurisdictional issue discloses the following pertinent information regarding Monongahela Power’s operations.

1. Monongahela Power is a wholly owned subsidiary of Allegheny Power System, Inc. and is engaged in the production, transmission, distribution and sale of electricity to residential, commercial and industrial customers. 1982 Annual Report at p. 1, attached to Hayes deposition as Exhibit No. 1.

2. Other than a “small area” centered around Washington County, Ohio, Monongahela Power’s service territory lies entirely in West Virginia. Hayes deposition at p. 5. It has no operations in any other state. Hayes deposition at p. 5.

3. Of approximately 1,900 employees of Monongahela Power, a few are located in New York (mostly corporate officers of Monongahela Power who also hold positions with Allegheny Power System, Inc.), 25 are located in Ohio and the balance work in West Virginia. Hayes deposition at pp. 109- 110.

4. All of Monongahela Power’s regular customers are located in West Virginia or the small area of Ohio serviced by Monongahela Power. Hayes deposition at pp. 110- 111.

5. The day-to-day operations of the corporation are carried out from Monongahela Power’s headquarters in Fairmont, West Virginia. Hayes deposition at p. 108. General policy decisions and financial matters are handled through Allegheny Power System, Inc.’s headquarters in New York. Hayes deposition at pp. 21-22; Owens deposition at pp. 26-31.

6. Monongahela Power considers its headquarters and principal place of business to be in Fairmont, West Virginia. Hayes deposition at p. 5; Owens deposition at pp. 21-22.

Because Monongahela Power generates virtually all of its revenue from the sale of electricity to West Virginia customers, transacts business almost exclusively in West Virginia and, with few exceptions, locates all of its employees in West Virginia, the Court finds that its operations are definitely not “far flung and varied” and that the place of operations test is, therefore, controlling in deciding the situs of Monongahela Power’s principal place of business. See cases discussed supra, at pp. 5-6. These same facts equally compel the Court to find that Monongahela Power’s principal (and, essentially, only) place of business is in West Virginia. See Nuclear Energy Co. v. General Electric Co., 435 F.Supp. at 346 (factors considered in determining principal place of business) discussed supra at pp. 4-5. Therefore, the Court concludes that it does not have jurisdiction to hear this matter inasmuch as both parties to this action are citizens of West Virginia for diversity jurisdiction purposes.

The conclusion that this Court does not have jurisdiction to preside over this action is mandated not only by the facts disclosed during the discovery process, but also by the rule that “the policy of the [diversity] statute calls for its strict construction.” Healy v. Ratta, 292 U.S. 263, 270, 54 S.Ct. 700, 703, 78 L.Ed. 1248 (1934). This rule of strict construction of the diversity statute is in recognition of the principle that “the power reserved to the states, under the Constitution, to provide for the determination of controversies in their courts may be restricted only by the Congress in conformity to the judiciary sections of the Constitution.” Nelson v. Keefer, 451 F.2d 289, 294 (3d Cir.1971) citing Kline v. Burke Construction Co., 260 U.S. 226, 233-34, 43 S.Ct. 79, 82, 67 L.Ed. 226 (1971). In addition to these constitutional arguments for careful exercising of federal diversity jurisdiction, the Court would note a very practical one: Were this Court to ignore the clear weight of the evidence produced during discovery and deny Defendant’s motion to dismiss for lack of jurisdiction, the parties and counsel would be exposed to the very serious risk that any jury decision in this case would be held for naught by an appellate ruling that this Court had no jurisdiction to hear this case. The safe course, therefore, is to permit the parties to litigate this matter in state court where there is no question jurisdiction is proper. See Burgess v. Charlottesville Savings and Loan Association, 477 F.2d 40, 43 (4th Cir.1973) (“[I]t has often been held that federal courts must be alert to avoid overstepping their limited grants of jurisdiction. At any stage of a litigation, including the appellate, subject-matter jurisdiction may be questioned.”); Freeman v. Colonial Liquors, Inc., 502 F.Supp. 367, 369 (D.Md.1980).

III. Conclusion

For the reasons discussed above, the Court finds that both parties to this action are citizens of the State of West Virginia for diversity jurisdiction purposes and, therefore, concludes that this Court does not have jurisdiction to entertain Plaintiff’s action. Accordingly, the Court having decided that Plaintiff has failed to establish the necessary facts to establish federal jurisdiction, this Court must dismiss this action pursuant to Monongahela Power’s motion under Rule 12(b)(1). Thompson v. Gaskill, 315 U.S. 442, 62 S.Ct. 673, 86 L.Ed. 951 (1942); St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840 (1938); KVOS v. Associated Press, 299 U.S. 269, 57 S.Ct. 197, 81 L.Ed. 183 (1936); Nelson v. Keefer, 451 F.2d 289 (3d Cir.1971); Gauldin v. Virginia Winn-Dixie, 370 F.2d 167 (4th Cir.1966). In dismissing this action the Court notes that it does so without having reached the merits of Plaintiff’s cause of action and, therefore, this dismissal is without prejudice to Plaintiff’s right to reinstate this action in a proper forum. See W.Va.Code, § 55-2-18; Tompkins v. Pacific Mutual Life Ins. Co., 53 W.Va. 479, 44 S.E. 439 (1903). Cf., Litten v. Peer, 156 W.Va. 791, 197 S.E.2d 322 (1973).

      . See 28 U.S.C. § 1332(c):
      “For the purposes of this section and section 1441 of this title, a corporation shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business____”
      Section 1332 was amended by Congress in 1958 to include, inter alia, this double citizenship test for corporations in order to restrict the federal courts' diversity jurisdiction. Horton v. Liberty Mutual Insurance Co., 367 U.S. 348, 350-51, 81 S.Ct. 1570, 1571-72, 6 L.Ed.2d 890 (1961). In 1958 Congress also raised the long-standing $3,000 jurisdictional minimum to $10,000 in order "to check, to some degree, the rising caseload of the federal courts, especially with regard to the federal courts’ diversity of citizenship jurisdiction.” Snyder v. Harris, 394 U.S. 332, 339-40, 89 S.Ct. 1053, 1058, 22 L.Ed.2d 319 (1969). As a final measure, Congress enacted Section 1332(b) which authorizes the imposition of costs on a plaintiff who recovers less than $10,000 in a diversity action. Horton, 367 U.S. at 350-51, 81 S.Ct. at 1571-72.

        . Cf., Scot Typewriter Co. v. Underwood Corp., 170 F.Supp. 862, 865 (S.D.N.Y.1959).


author: THOMAS F. HOGAN, District Judge.

text:
    Nicholas NASAKA, Plaintiff, v. DATA ACCESS SYSTEMS, et al., Defendants.
    Civ. A. No. 84-1277.
    United States District Court, District of Columbia.
    Feb. 14, 1985.
    Douglas R. Stevens, Washington, D.C., for plaintiff.
    Christopher E. Hassle, Washington, D.C., for defendants.
   MEMORANDUM OPINION

THOMAS F. HOGAN, District Judge.

At issue before the Court is a novel claim requiring an interpretation of the District of Columbia Compulsory/No-Fault Motor Vehicle Insurance Act of 1982 (“D.C. No-Fault Law”), D.C. Law 4-155, D.C.Code § 35-2101, et seq. (1984 Supp.) Plaintiff claims that his status as a taxicab driver renders him exempt from the provisions of the D.C. No-Fault Law. Thus, plaintiff argues, he may proceed with this diversity action despite the No-Fault Law’s limits on civil liability actions, which would otherwise bar his claims.

In brief, the complaint alleges that Mr. Nasaka, a cab driver, was injured when his vehicle was struck by the defendant’s vehicle. Plaintiff further alleges that the sole cause of the collision was the negligence of the defendants.

In an ordinary situation, the plaintiff would seek recovery for his economic loss under the provisions of the No-Fault Law. Under the terms of the law, compensation would be provided to Mr. Nasaka by the applicable insurer for his medical expenses and lost wages regardless of negligence or fault. D.C.Code § 35-2104. However, Mr. Nasaka could not recover in a civil liability action for non-economic loss, see D.C.Code § 35-2102(19), unless he fell'within one of the limited exceptions set forth in Section 6 of the Act, D.C.Code § 35-2105.

The plaintiff argues that the above procedures and limitations are rendered inapplicable by Section 12(e) of the Act which provides:

The Mayor shall exempt ... taxicabs from the provisions of this chapter (except the provisions of § 35-2109) unless the Mayor finds that such action is not necessary to preserve the economic strength of the taxicab industry.

D.C.Code § 35-2111(e). The Mayor has entered the order setting the statutory exemption into effect. Mayor’s Order No. 82-223 (Dec. 30, 1982). Thus, according to plaintiff, he is “exempt” from the no-fault law and may file this suit despite the otherwise preclusive effect of Section 6. In order to evaluate the validity of this argument, the Court must look to the language, background and purpose of the D.C. No-Fault Law.

The No-Fault Law

The stated purpose of the D.C. No-Fault Law is “to provide adequate protection for victims [of automobile accidents] who are injured in the District____” The law attempts to achieve this purpose by providing “quick and adequate” compensation through mandatory automobile insurance, while minimizing time and expense by (virtually) eliminating common law tort claims. Thus, the D.C. No-Fault statute can, in essence, be broken down into its two concurrent and complementary elements.

First, the Act requires that insurance with a certain level of benefits, D.C.Code § 35-2104, must be obtained for every motor vehicle registered in the District. D.C. Code § 35-2103. The Act is deemed to be “no-fault” in the sense that the insurance will pay for any compensable loss regardless of negligence or fault. See D.C.Code § 35-2104(b). The Act also sets out a schedule of priorities to determine which insurer is liable to pay benefits to the victim of an automobile accident. D.C.Code § 35-2107.

Second, the Act has the effect of eliminating most civil claims for damages based on tort liability. D.C.Code § 35-2105. In theory, such claims are unnecessary — and inefficient — in light of the comprehensive coverage for economic loss provided under the Act. Pared to its essentials, the D.C. No-Fault Act, like those of other states, offers a trade-off between its two major components: accident victims give up the right to sue in exchange for certain, but limited, compensation. See 4 R. Long, The Law of Liability Insurance § 27.01 (1981).

Plaintiff looks at the plain language of the statute and argues that because taxicabs are “exempt” from the “provisions of the act,” he is not only exempt from the mandatory insurance requirement but also from the section eliminating his common law right to sue. Defendant suggests a more subtle analysis.

First, defendant suggests that even under plaintiff’s “plain language” argument it is taxicabs — not cab drivers — who are “exempt” from the act. The difference is not merely semantic. Defendant points out that the mandatory insurance provision refers to “motor vehicle insurance,” D.C. Code § 35-2103, and that the insurance requirement is enforced by requiring as a prerequisite to registration that “the insurance required by this chapter is in effect with respect to that motor vehicle.” D.C. Code § 35-2103(d)(l)(A). The language of the statute limiting civil actions for damages, on the other hand, refers to “persons.” Thus in the lexicon of the no-fault statute, “motor vehicles” — such as taxicabs — carry insurance, but persons are precluded from filing civil claims. This distinction is consistent with defendant’s assertion that the “taxicab” exemption refers only to the mandatory insurance requirement and not to the limitation on civil liability.

Second, the legislative history also supports this reading of the exemption. As defendant points out, the District of Columbia City Council Committee on Public Services and Consumer Affairs, which reported favorably on the No-Fault Act, stated in its report to the Council that the taxicab exemption “is based on the fact that taxicabs are already required to carry liability insurance as a condition of doing business in the District.” See Defendant’s Memorandum of Points and Authorities in Support of Motion for Summary Judgment at 2. Furthermore, the bulk of the testimony at the public hearing focused on whether the cost of no-fault insurance would be too great for the taxicab industry. Id. at 3. Plaintiff has pointed to no legislative history that would support his understanding of the exemption.

Third, plaintiff’s reading of the Act is inconsistent with any arguably valid policy concerns of no-fault. Plaintiff has not attempted to. articulate a rational basis for exempting taxicab drivers from the limitation on civil suits, and this Court does not believe such a basis exists. If one accepts the limitation of tort claims as the quid pro quo of the “automatic” personal injury protection, it is inconceivable that cab drivers, who are presumably entitled to the benefits of no-fault protection, would be released from the burden of the Act’s limitation on non-economic damages.

In the alternative, one could construe the “exemption” to allow taxicab drivers to bring civil claims but to exclude them from entitlement to personal injury benefits under the Act. Aside from any conflict with the language of the Act, such a result would be inconsistent with the no-fault policy of providing quick and adequate compensation and eliminating the time-consuming and expensive litigation process. Whether or not one agrees with the policy, it is difficult to imagine why cab drivers would be treated as a favored — or disfavored — class with respect to compensation under the Act. Unlike the taxicab exemption from the mandatory insurance provisions, which is based upon a legislative judgment of economic necessity, the suggested cab drivers’ exemption from the limitation on tort liability has no apparent rational basis.

Finally, the decision of the Court on this issue is consistent with that of the Office of Insurance Superintendent of the District of Columbia. Letter from Acting Superintendent Marguerite C. Stokes to John A. King (July 16, 1984) (discussing taxicab exemption). The Superintendent’s Office suggests that because personal injury benefits are available to taxicab drivers and the Act restricts civil liability actions “with respect to any injury as to which personal injury protection benefits are payable,” D.C.Code § 35-2105(a), the taxicab exemption has been interpreted to apply only to the mandatory insurance requirements. Such an interpretation is not binding, of course, but it is entitled to considerable deference. See e.g., Quern v. Mandley, 436 U.S. 725, 98 S.Ct. 2068, 56 L.Ed.2d 658 (1978); Moon v. United States Dept. of Labor, 727 F.2d 1315 (D.C.Cir.1984).

Although there is no precedent on point in this circuit, the result reached here is indirectly supported by the case law of other jurisdictions. In cases involving a “motorcycle exemption” similar to the taxicab exemption, state courts have held that although the exemption relieves the motorcycle owner of purchasing no-fault insurance, such persons are nevertheless entitled to no-fault benefits and are therefore limited in bringing civil actions for damages. See Underhill v. Safeco Ins. Co., 407 Mich. 175, 284 N.E.2d 463 (1979); Braden v. Spencer, 100 Mich.App. 523, 299 N.W.2d 65 (1980); New York Transit Authority v. Smith, 382 N.Y.S.2d 355, 52 A.D.2d 624 (1976). In summary, this Court holds that the “exemption” of taxicabs from the D.C. No-Fault Law applies only to the mandatory insurance provision, D.C. Code § 35-2103. The exemption does not prevent a taxicab owner or driver from claiming benefits under the No-Fault Law, nor does it entitle him to avoid the limitations on civil liability set forth in D.C.Code § 35-2105. In addition, it is apparent on the facts before the Court that plaintiff does not qualify for any of the exceptions to the restriction on civil liability suits, and he is therefore precluded from bringing this action.

An appropriate Order will issue in accordance with the terms of this opinion.

      . Plaintiff alleges he incurred $668.00 in medical bills and lost seven weeks of work.

      . The compensation is limited in the sense that only "personal injury protection,” D.C.Code § 35-2102, is provided. Noneconomic loss — including pain and suffering, physical or mental impairment or other nonpecuniary loss — is not usually recoverable under the statute.
      For the record, it should be noted that Judge Oliver Gasch of this Court recently held that the Act’s elimination of the right to sue for non-economic loss except in cases where the victim’s medical expenses exceed $5,000 violates equal protection principles under the Fifth Amendment. Eilleen Dimond, et al. v. District of Columbia, et al., No. 83-1938 (Dec. 7, 1984). The effect of this holding has not been briefed and will thus not affect the outcome of the instant case. See supra note 6.

      . As noted, taxicabs are released from the burden of obtaining no-fault insurance because of the potential cost and consequent injury to the industry. However, this exemption does not disturb the balance of the system because benefits remain available for all accident victims including those without insurance, D.C.Code § 35-2107, unless the victim is in violation of the Act by failing to obtain the mandatory insurance. D.C.Code § 35-2106(e)(l).

      . Plaintiff is not quite clear on whether his reading of the exemption simply allows cabdrivers to claim no-fault benefits or whether this exemption from the civil claim restriction also renders him exempt from benefits.

      . The Act clearly states that “any victim” may recover benefits under the Act. D.C.Code §§ 35-2104(c), 35-2105(a).

      . Because the Court holds that the statute may not be interpreted as the plaintiff suggests, the Court will not reach the issue of whether such an interpretation would be so irrational as to violate due process or equal protection norms. However, the fact that plaintiff's interpretation might raise serious constitutional questions is a factor that weighs against plaintiff’s position. See United States Civil Service Com’n v. Natl Ass’n of Letter Carriers, AFL-CIO, 413 U.S. 548, 93 S.Ct. 2880, 37 L.Ed.2d 796 (1973); Palmore v. Superior Court of the District of Columbia, 515 F.2d 1294 (D.C.Cir.1975).

      . Plaintiff raises two other issues in his opposition that are argued in such a perfunctory fashion that this Court need not reach them. Plaintiff devotes a total of seventy-eight words to eight separate constitutional issues potentially raised by the Act. In light of Judge Gasch’s exhaustive exposition of many of those issues, see fn. 2, supra, and in light of the manner in which they were raised by plaintiff, the Court will treat that portion of plaintiffs opposition as frivolous and inappropriate for discussion.
      Plaintiff also suggests that it is "not altogether clear that plaintiffs injuries are not permanent or that his bills will not exceed the threshold limits of the Act.” If any of the exceptions set forth in § 35-2105(b) were sufficiently "clear” for plaintiff to submit the appropriate opposition papers to the pending summary judgment motion, the Court is confident that the plaintiff would have done so in the six months since the motion was originally filed. In the absence of affidavits, a "statement of genuine issues,” see Fed.R.Civ.P. 56(c) and Rules of the United States District Court for the District of Columbia l-9(h), or other appropriate pleading, and on the undisputed facts, defendant is entitled to summary judgment.