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TCL > August 2009 Issue > Summaries of Selected Opinions

August 2009       Vol. 38, No. 8       Page  151
From the Courts
U.S. Court of Appeals for the Tenth Circuit

Summaries of Selected Opinions

Summaries of selected Tenth Circuit Court of Appeals Opinions appear on a space-available basis. The summaries are prepared for the Colorado Bar Association (CBA) by Katherine Campbell and Frank Gibbard, licensed Colorado attorneys. They are provided as a service by the CBA and are not the official language of this Court. The CBA cannot guarantee the accuracy or completeness of the summaries. Full copies of the Tenth Circuit decisions are accessible from the CBA website: (click on "Opinions/Rules/Statutes").

No. 07-1504. Neiberger v. Fed Ex Ground Package System, Inc. 5/27/2009. D.Colo. Judge Hartz. Expert Testimony—Inadequate Appellate Record—Medical Expense Evidence—Reasonable and Necessary—Linked to Accident.

Plaintiff was injured in a car accident. Under Colorado’s no-fault statute (repealed July 1, 2003), plaintiff could obtain relief through a tort suit only if her injuries were sufficiently severe. A jury found that her injuries did not qualify. She appealed, challenging several rulings by the district court that may have led to the jury’s findings.

The Tenth Circuit considered the district court’s rulings regarding a defense expert witness who opined that the failure of plaintiff’s spine to heal after her pre-accident back surgery was not caused by the accident but instead was due to her cigarette smoking. The Circuit held that the pretrial disclosure of defendant’s expert opinion was adequate and the opinion was sufficiently reliable to be admissible. The opinion was based on several peer-reviewed articles and other recognized authorities. In addition, the expert’s methodology was one generally accepted in the medical community and by the courts.

The Circuit rejected plaintiff’s argument that her expert on damages should have been allowed to testify regarding her medical expenses. Plaintiff failed to include in the record on appeal the relevant testimony, so the Circuit could not determine what, if any, testimony was excluded. Even so, the district court properly excluded the evidence of plaintiff’s medical expenses, because she had failed to adduce evidence showing that her medical bills were reasonable and necessary and that they stemmed from the accident. The district court’s judgment was affirmed.

No. 08-2104. United States v. Dolan. 05/27/2009. D.N.M. Judge Gorsuch. Restitution—Application of Ninety-Day Deadline in Mandatory Victims Restitution Act—Reasonableness of Monthly Payment Obligation.

Defendant pled guilty to assault resulting in serious bodily injury. Defendant picked up a hitchhiker who was an acquaintance and fellow tribe member. The two men began to argue, and defendant parked the car so they could fight. Defendant administered a savage beating to the hitchhiker and then fled the scene, leaving the hitchhiker lying by the side of the road. The hitchhiker eventually was found by a police officer and taken to a hospital. He suffered a fractured nose, a broken wrist, a fractured leg, a spinal injury, broken ribs, and a hematoma in his head.

At defendant’s sentencing hearing, the district court noted that restitution was required by the Mandatory Victims Restitution Act (MVRA). The amount was left open at that time, pending receipt of additional information, but the district court informed defendant that he should anticipate a restitution award would be made. The probation office later estimated the victim’s medical care costs and informed the district court that the MVRA required the court to set a date for final determination of the victim’s losses not to exceed ninety days after sentencing. However, the court did not hold the hearing until four months later. Defendant argued that the court no longer had authority to order restitution because too much time had passed. The district court disagreed, imposed a restitution award, and ordered defendant to pay $250 per month.

On appeal, defendant argued that the district court’s failure to comply with the MVRA deadline deprived it of jurisdiction to award restitution. The Tenth Circuit disagreed. The MVRA mandates restitution. The deadline provision should be read in light of this mandate. The statutory language indicates that the ninety-day provision is procedural, rather than jurisdictional. Without a consequence specified for failure to comply with the deadline, it must be viewed as an incentive toward action, not as a bar to tardy completion of the restitution order. Finally, the statute is designed to protect victims, not defendants.

Defendant also argued that the $250 monthly restitution obligation was unreasonably high. The Circuit concluded that the court did not abuse its discretion in setting this amount. Although defendant’s low income, poor employment history, and substance abuse problem made it apparent that he might have trouble meeting his payment obligation, the facts that he had a GED, had been able to obtain employment in the past, was physically able to work, had few other obligations, and received a modest annual stipend from his tribe weighed in favor of his being able to meet his obligations. Should circumstances prove such that defendant cannot meet his obligations, the district court can modify the restitution schedule. The Circuit therefore affirmed the restitution obligation and schedule.

No. 08-7070. United States v. Orr. 05/27/2009. E.D.Okla. Judge Briscoe. Sentencing Guidelines—Sufficiency of Evidence—Credit Card Fraud—Number of Victims—Amount of Loss.

Defendant was convicted after a jury trial of one count of knowingly possessing fifteen or more counterfeit or unauthorized access devices, and one count of using a counterfeit access device. Officers arrested defendant after they discovered he had used a counterfeit credit card under a fake name to pay for his motel room. Acting with permission from another occupant of the room, officers searched it and seized twenty-two counterfeit credit, debit, and gift cards. Of the twenty-six counterfeit cards seized in connection with defendant’s arrest, seven had been fraudulently used. Each of the seven individuals involved had made a fraud claim, and none had given defendant permission to use the card.

After defendant’s conviction, the probation officer submitted a final presentence report (PSR) in which it was alleged that defendant was the leader of a Texas-based conspiracy to create and use counterfeit credit cards. The PSR alleged that there were 704 known credit card numbers issued by seventy-five banks compromised in the case. It also alleged that five of these banks suffered actual monetary losses, totaling slightly more than $10,000, in connection with the cards seized from defendant. The PSR imposed a fourteen-level enhancement, based on the total amount of calculated loss of more than $472,000, and a two-level enhancement because the offense involved ten or more victims. Defendant objected to the loss figures, contending that there was no actual proof of the losses, and that the individuals who had owned the cards were not victims, because their losses were reimbursed by the credit card companies. The district court overruled these objections.

On appeal, defendant argued that reimbursed individuals were not victims for purposes of determining whether there were ten or more victims. The Tenth Circuit noted that the evidence did not include details regarding specific losses incurred by legitimate account owners or their issuing banks. Moreover, the Sentencing Guidelines focus on "actual loss," which does not include as victims account holders who have been fully reimbursed for their losses. The Circuit therefore agreed with defendant’s position.

Defendant also argued that the district court had no evidence to support the amount of calculated loss identified in the PSR and applied by the court. The government conceded that no evidence was presented as to how specific actual loss amounts were calculated in the PSR. Because defendant had disputed the amounts contained in the PSR, the government was obligated to substantiate the allegations at the time of sentencing. The Circuit therefore reversed defendant’s sentence and remanded the case for resentencing.

No. 08-1196. United States v. Warren. 05/29/2009. D.Colo. Judge Hartz. Fourth Amendment—Special-Needs Exception—Search of Parolee’s Premises.

Defendant was convicted of being a felon in possession of a firearm and of possessing with intent to distribute a substance containing cocaine base. The gun and cocaine were discovered after parole officers and police searched defendant’s residence without a warrant. The search was initiated by defendant’s parole officer as part of a home visit to ensure he was complying with the conditions of his parole. The parole officers brought along police to provide backup, a routine practice when making a home visit, particularly if the parolee has a gang affiliation, as defendant had. After defendant’s wife let them into the residence and evidence of parole violations was discovered, the parole officers instructed officers to search the residence, where they discovered the contraband.

On appeal, defendant argued that the warrantless search of his residence violated the Fourth Amendment. The Tenth Circuit disagreed. The search was appropriate under the "special-needs exception" connected with the supervision of probationers, which required only reasonable grounds to conduct a search. The Circuit rejected defendant’s argument that a police officer involved violated his Fourth Amendment rights by personally searching his home. A police officer may participate in a search by parole officers as long as he is acting under the direction of the parole officer, as the policeman was in this case. The Circuit therefore affirmed the district court’s judgment.

No. 07-4282. Olah v. Baird, MD. 6/3/2009. D.Utah. Judge McConnell. Bankruptcy—Executory Contract—Significant Remaining Obligations—Assignment—Trustee’s Discretion.

Plaintiffs sued defendant, a physician, in state court for medical malpractice. While the suit was pending, the physician filed for bankruptcy. Plaintiffs offered to buy the physician’s right to approve a malpractice settlement so they could pursue coverage under the physician’s medical-malpractice insurance policy. A Chapter 7 provision, 11 U.S.C. § 365(d)(1), provides that if the trustee does not assume or reject an executory contract within sixty days after the discharge order, the contract is deemed rejected. The district court ruled that the contract was executory and therefore could not be assigned to plaintiffs.

The Tenth Circuit held that the malpractice insurance policy was not an executory contract; therefore, it was not rejected and the trustee had the discretion to sell it to plaintiffs. The Circuit ruled that for an executory contract to exist, there must be significant remaining obligations that if either side failed to perform would constitute a breach. Applying this definition to the liability policy, the Circuit found that the physician had upheld the contract when he paid the premium, even though the policy had expired before he declared bankruptcy (but was in effect at the time of plaintiffs’ alleged injury). The Circuit ruled that the contract could be assigned by the trustee because, under Utah law, the nonassignability clause did not apply after the event triggering the loss had occurred. Consequently, the policy could be assigned, at the discretion of the trustee. The district court’s judgment was reversed and the case was remanded.

No. 08-1022. Garcia v. Berkshire Life Insurance Co. of America. 6/10/2009. D.Colo. Judge McConnell. Dismissal for Discovery Fabrications—District Court’s Inherent Equitable Power—Abuse of Discretion— Attorney Fees.

Plaintiff sued her insurer for disability benefits. Among her claimed disabling conditions were cognitive defects. However, during the time she claimed to be cognitively disabled, she obtained law and master’s degrees and operated a real estate business. She did not comply with the insurer’s requests for a medical examination and for access to her medical records. During discovery, plaintiff submitted several documents related to her claims that the district court determined she had fabricated in an effort to win her case. The district court granted summary judgment to the insurer and also independently dismissed the action as a sanction for plaintiff’s discovery abuses. Plaintiff appealed.

The Tenth Circuit did not address the summary judgment ruling because it affirmed the dismissal based on discovery abuses. The Circuit held that the district court had acted within its inherent equitable powers to dismiss the case and had not abused its discretion in doing so. When the sanction is dismissal, due process requires that the violation be predicated on willfulness, bad faith, or some fault of the plaintiff, rather than an inability to comply. Merely excluding the fabricated evidence would encourage litigants to manufacture evidence.

The Circuit addressed the insurer’s request for an award of appellate attorney fees based on additional documents submitted after dismissal that the insurer claimed also were fabricated. The matter was remanded for the district court to assess whether the documents were false and, if they were, to award reasonable attorney fees for the appeal to the insurer. The district court’s judgment was affirmed.

No. 08-3062. United States v. Barwig. 06/17/2009. D.Kan. Judge Lucero. Sentencing—Oral Pronouncement of Sentence—Ambiguity—Supervised Release Versus Probation.

Defendant pled guilty of one count of making a false statement to a federal law enforcement officer and was sentenced to two years’ probation. In June 2007, approximately sixteen months later, defendant admitted to certain violations of her probation and pled no contest to others. The district court sentenced her to four months’ home confinement, to be followed by a two-year term of supervised release. In February 2008, defendant pled no contest to additional violations of the June 2007 sentence. The district court revoked the June 2007 sentence and sentenced her to five years’ imprisonment.

On appeal, defendant argued that the June 2007 sentence was a sentence of supervised release, which did not permit the district court to impose more than two years’ imprisonment on revocation. The government argued that it was a sentence to a term of probation, which permitted a sentence on revocation up to the statutory maximum of five years. The Tenth Circuit agreed with defendant. The oral sentence pronounced in June 2007 indicated that the district court intended to place defendant on supervised release. The fact that the district court’s subsequent written order referred to the revocation and reinstatement of a term of probation did not trump the oral pronouncement of sentence, which unambiguously called for supervised release. Moreover, the written order was not intended as a correction to the oral sentence. The district court’s unambiguous formal pronouncement of sentence controls. The Circuit therefore reversed defendant’s five-year sentence and remanded the case for resentencing.

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