Public shaming is seen by some as a way to get folks to pay overdue taxes.
If you're naughty when it comes to paying — or rather not paying — your California tax bill, then everybody, not just Santa, can know. That's the official word from the U.S. Supreme Court.
The nation's top jurists decided on Monday, Dec. 10, that they won't consider a case challenging California's tax delinquent list.
That means the names of the state's Top 500 tax delinquents will remain public.
No High Court hearing: At issue was the Golden State law that requires the publication of the names of delinquent taxpayers and the suspension of the offenders' driver's and occupational licenses.
By refusing to hear Franceschi v. Yee, the Supreme Court leaves in place the determination by the United States Court of Appeals for the Ninth Circuit that the state's actions are constitutional.
California attorney Ernest Franceschi in 2014 challenged the law, which took effect two years earlier, that mandates that the California Franchise Tax Board (FTB) publish at least twice a year a list of the 500 largest state income tax delinquents whose bills are more than $100,000.
State tax officials say the folks on the Top 500 List are major contributors to California's annual tax gap — that's the amount of tax owed vs. the amount that's actually paid — of around $10 billion.
Tax naming/shaming procedure: Before adding anyone to the list, the FTB must provide the tax debtors 30 days' notice.
List advocates say that gives them the opportunity to either pay their bills or enter into payment agreements. They contend that the publication of certain tax debtors' names and subsequent license suspensions are the best remedy short of criminal charges to get the attention of large tax-owing taxpayers.
Franceschi's lawsuit, filed after he got notice he would appear on the next delinquent taxpayers update, contended that the California statute violates the due process clause.
He argued that the state does not provide "a prior hearing or a prompt opportunity for independent review" of the license suspension or the individual's tax liability.
Appeals court sides with state tax officials: The Ninth Circuit judges were not convinced by Franceschi's arguments.
"California's Revenue and Taxation Code sets forth a framework under which a delinquent taxpayer, like Franceschi, has multiple opportunities to challenge deficiency assessments. Cal. Rev. & Tax Code § 19031, et seq. At the outset, the FTB is required to send the taxpayer notice of the proposed deficiency assessment for any tax deficiency it proposes to assess. Id. § 19033(a). The taxpayer may then file a protest within sixty days. Id. § 19041(a). If the taxpayer files a protest, the FTB must reconsider the assessment and, if the taxpayer so requests, grant the taxpayer a hearing on the deficiency. Id. § 19044(a). If the deficiency is not resolved at this stage, a taxpayer has further recourse by appealing to the State Board of Equalization. Id. § 19045. After the State Board of Equalization rules on the matter, a still dissatisfied taxpayer can then petition the State Board of Equalization for rehearing. Id. § 19048.
Still further, a taxpayer has an additional opportunity to be heard on the validity of his or her tax delinquency by paying the taxes and filing a claim for refund with the FTB. Id. § 19382. Utilization of this procedure here would have permitted Franceschi to both challenge the original assessments and to retain his driver’s license while doing so. If the FTB denied the claim he could have sued for a refund in California Superior Court. Franceschi concedes that he did not avail himself of any of these multiple remedial procedures."
The Ninth Circuit essentially determined that California tax officials, under the delinquent taxpayer list law, provide tax-owing taxpayers multiple chances to take actions that would keep them from being publicly shamed and prevent the loss of their licenses.
And the Supreme Court apparently believes the Ninth Circuit had covered the matter sufficiently, deciding that the case didn't need further judicial review.
So now, it's cased closed. And it's time for Franceschi and others on California's Top 500 List to start making nice with the state tax collector.


text:
The controversy hinges upon the power of a court to stay proceedings in one suit until the decision of another, and upon the propriety of using such a power in a given situation.
subsidiary operating companies, these last being engaged as public utilities in supplying gas and electricity to consumers in different states. The other plaintiff, American Water Works & Electric Company, is at the apex of another pyramid including like subsidiaries. The defendants in both suits (petitioners in this Court) are the members of the Securities and Exchange Commission, the Attorney General of the United States, and the Postmaster General.
On November 26, 1935, the Commission filed a bill of complaint in the District Court of the United States for the Southern District of New York to compel other holding companies, members of a different public utility system, to register with the Commission in accordance with the statute. At the beginning, the defendants were the Electric Bond & Share Company, the parent holding company, and five intermediate holding company subsidiaries. Sixteen other holding company subsidiaries were later added as defendants with the Government's consent. All the twenty-two defendants, parties to that suit, appeared and answered the complaint. All joined in a cross-bill contesting the validity of the Act and praying a decree restraining its enforcement. To give opportunity for full relief, the present petitioners appeared as cross-defendants, answering the cross-bill and opposing an injunction.
"to clog the courts, overtax the facilities of the Government, and make against that orderly and economical disposition of the controversy that is the Government's aim."
Accordingly, the court was asked to stay proceedings in the suits at bar "until the validity of said Act has been determined by the Supreme Court of the United States" in the Electric Bond & Share case, "or until that case is otherwise terminated." To that motion, the plaintiffs filed an answer on December 12, 1935, contesting the power of the court to grant the requested stay, asserting that the questions to be passed upon in their suits were not identical with the questions presented in the test one, pointing out that the Act, even if valid as applied to some companies, might be invalid as applied to others, and dwelling upon the loss that they were suffering day by day while the menace of the Act obstructed their business and cast a cloud on its legality.
to reserve any legal or constitutional right and to stipulate that its registration should be void and of no effect in the event that such a reservation should be adjudged invalid or ineffective. Finally, the Attorney General offered to submit to a temporary injunction restraining the enforcement of the Act until the Electric Bond & Share case should be determined by this Court. On the other side, the plaintiffs offered to consolidate their cases, and thus dispose of them as one. They also offered, as we were informed upon the argument, to select a group of suits, not more than three or four, to be tried at the same time, with the understanding that any others would then be held in abeyance. These offers were rejected, and the Government stood upon its motion.
was a possibility, more or less uncertain, that there would be a renewal in that district of the suits begun elsewhere and discontinued or dismissed. Along with the affidavit and stipulation, the Government submitted a copy of the complaint and the cross-bill in the suit against the Bond & Share Company.
"by the Supreme Court in the Electric Bond and Share case, even if it should not dispose of all the questions involved, would certainly narrow the issues in the pending cases and assist in the determination of the questions of law involved."
in the control of its own docket shall find that course expedient. He couples this with a statement that a stay so indefinite as the one before him would be too broad in any case. Nonetheless, much latitude of judgment would have been left to the trial judge if the standards of that opinion had been adopted as a guide. But plainly they were not. The order of the Court of Appeals in each of the two suits reverses the stay order and remands the cause "for further proceedings not inconsistent with the opinion of this Court." Evidently the trial judge was expected to conform to doctrine expounded for his instruction in the course of an opinion, yet he would have difficulty in knowing which opinion to select. He might believe that comity or deference constrained him to submit to the opinion approved by two members of the reviewing court, since none had been accepted by the vote of a majority. At the very least, there was a likelihood, and indeed almost a certainty, of confusion and embarrassment. In such circumstances, the call is plain for a decision that will mark with greater clearness the bounds of power and discretion. We granted certiorari that this result might be attained.
weigh competing interests and maintain an even balance. Kansas City Southern Ry. Co. v. United States, 282 U. S. 760, 282 U. S. 763; Enelow v. New York Life Ins. Co., 293 U. S. 379, 293 U. S. 382. True, the suppliant for a stay must make out a clear case of hardship or inequity in being required to go forward, if there is even a fair possibility that the stay for which he prays will work damage to some one else. Only in rare circumstances will a litigant in one cause be compelled to stand aside while a litigant in another settles the rule of law that will define the rights of both. Considerations such as these, however, are counsels of moderation, rather than limitations upon power. There are indeed opinions, though none of them in this Court, that give color to a stricter rule. Impressed with the likelihood or danger of abuse, some courts have stated broadly that, irrespective of particular conditions, there is no power by a stay to compel an unwilling litigant to wait upon the outcome of a controversy to which he is a stranger. Dolbeer v. Stout, 139 N.Y. 486, 489, 34 N.E. 1102; Rosenberg v. Slotchin, 181 App.Div. 137, 138, 168 N.Y.S. 101; cf. Wadleigh v. Veazie, Fed.Cas.No.17,031; Checker Cab Mfg. Co. v. Checker Taxi Co., 26 F.2d 752; Jefferson Standard Life Ins. Co. v. Keeton, 292 F. 53. Such a formula, as we view it, is too mechanical and narrow. Kansas City Southern Ry. v. United States, supra; Friedman v. Harrington, 56 F. 860; Amos v. Chadwick, L.R. 9 Ch.Div. 459; L.R. 4 Ch.Div. 869, 872. All the cases advancing it could have been adequately disposed of on the ground that discretion was abused by a stay of indefinite duration in the absence of a pressing need. If they stand for more than this, we are unwilling to accept them. Occasions may arise when it would be "a scandal to the administration of justice" in the phrase of Jessel, M.R. (Amos v. Chadwick, L.R. 9 Ch.Div. 459, 462), if power to coordinate the business of the court efficiently and sensibly were lacking altogether.
We must be on our guard against depriving the processes of justice of their suppleness of adaptation to varying conditions. Especially in cases of extraordinary public moment, the individual may be required to submit to delay not immoderate in extent and not oppressive in its consequences if the public welfare or convenience will thereby be promoted. In these Holding Company Act cases, great issues are involved -- great in their complexity, great in their significance. On the facts, there will be need for the minute investigation of intercorporate relations, linked in a web of baffling intricacy. On the law, there will be novel problems of far-reaching importance to the parties and the public. An application for a stay in suits so weighty and unusual will not always fit within the mould appropriate to an application for such relief in a suit upon a bill of goods. True, a decision in the cause then pending in New York may not settle every question of fact and law in suits by other companies, but, in all likelihood, it will settle many and simplify them all. Even so, the burden of making out the justice and wisdom of a departure from the beaten track lay heavily on the petitioners, suppliants for relief, and discretion was abused if the stay was not kept within the bounds of moderation.
decision in the suit selected as a test, laying to one side the question whether it should even go so far. How the District Court in New York will decide the issues in that case is not to be predicted now. The Act may be held valid altogether, or valid in parts and invalid in others, or void in its entirety. Whatever the decision, the respondents are to be stayed by the terms of the challenged order until this Court has had its say. They are not even at liberty, in case of an adjudication of partial invalidity, to bring themselves within the class adjudged to be exempt, though their membership in such a class may be uncertain or contested. Relief so drastic and unusual overpasses the limits of any reasonable need at least upon the showing made when the motion was submitted.
We think the answer is inadequate that, in the contingencies suggested, the respondents will be at liberty to move to vacate the stay, and will prevail upon that motion if they can satisfy the court that its restraints are then oppressive. To drive them to that course is to make them shoulder a burden that should be carried by the Government. The stay is immoderate, and hence unlawful unless so framed in its inception that its force will be spent within reasonable limits, so far, at least, as they are susceptible of prevision and description. When once those limits have been reached, the fetters should fall off. To put the thought in other words, an order which is to continue, by its terms, for an immoderate stretch of time is not to be upheld as moderate because conceivably the court that made it may be persuaded at a later time to undo what it has done. Disapproval of the very terms that have already been approved as reasonable is, at best, a doubtful outcome of an application for revision. If a second stay is necessary during the course of an appeal, the petitioners must bear the burden, when that stage shall have arrived, of making obvious the need. Enough for present purposes that they have not done so yet.
& Co. v. Unione Austriaca, 248 U. S. 9, 248 U. S. 21. Benefit and hardship will be set off, the one against the other, and upon an ascertainment of the balance discretionary judgment will be exercised anew.
In each suit, the decree of the Court of Appeals is reversed, the order of the District Court vacated, and the cause remanded to the District Court to determine the motion for a stay in accordance with the principles laid down in this opinion.
* Together with No. 222, Landis et al. v. American Water Works & Electric Co., Inc. Certiorari to the United States Court of Appeals for the District of Columbia.

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Plaintiff Erma Alaniz ("Alaniz") submitted a Bill of Costs in the above-referenced matter, pursuant to 28 U.S.C. § 1920, following a jury verdict in favor of Alaniz reached on June 26, 2008. While Defendants do not dispute the Alaniz's entitlement to costs as the prevailing party in this litigation, they do take issue with certain categories of costs claimed by Alaniz, arguing that those items are unreasonable and/or unnecessary and should consequently not be allowed.
The Bill lists $12,792.91 in total costs.
The Court has reviewed Alaniz's Bill of Costs, along with the documentation submitted in support thereof, and has further reviewed Defendants' objections. Costs are awarded to Alaniz as set forth below.
Under Federal Rule of Civil Procedure 54(d), the prevailing party in a lawsuit may recover its costs "unless the court otherwise directs". As this language suggests, the ultimate decision on whether to award costs is a matter within the court's discretion. Association of Mexican-American Educators v. State of Calif., 231 F.3d 572, 591-92 (9th Cir. 2000). If the Court declines to award costs as requested by the prevailing party, however, it should specify its reasons for doing so. Berkla v. Corel Corp., 302 F.3d 909, 921 (9th Cir. 2002). Claims for cost items not properly documented will generally not be allowed.English v. Colorado Dept. Of Corrections, 248 F.3d 1002, 1013 (10th Cir. 2001).
Defendants first object to hotel expenses of $997.92 incurred by Plaintiff's counsel. Although Rule 54(d) allows broad discretion to courts to award costs, the court may not tax costs beyond those authorized by 28 U.S.C. § 1920. Crawford Fitting Co. v. J.T. Gibbons, 482 U.S. 437, 441 (1987). It is well established that an attorney's expenses in attending both court proceedings are not recoverable as costs. Wahl v. Carrier Mfg. Co., Inc., 511 F.2d 209, 217 (7th Cir. 1975). Accordingly, Plaintiff may not recover $997.92 of hotel expenses included in the Bill of Costs.
Defendant also objects to $15 in parking fees incurred by Plaintiff's Counsel during the trial. This cost is associated with expenses in attending court proceedings and may not be taxed.
Next, Defendants object to Counsel's online research fees of $9.95. Those costs will not be taxed because the expense of computerized legal research are properly deemed as a component of the attorney's fee rather than a reimbursable cost under the purview of 28 U.S.C. § 1920. See Invessys Inc. v. McGraw-Hill Cos., Ltd., 369 F.3d 16, 22-23 (1st Cir. 2004). Additionally, conference call costs in the amount of $47.96 will not be taxed because they do not fall under the provisions listed in § 1920.
Finally, Defendants contest $750 in charges associated with the re-service of subpoenas on witnesses to appear at trial. Section 1920 allows costs associated with service of subpoenas to be taxed, and Defendants do not offer argument as to why reservice is unreasonable. The Court will allow the costs associated with the service of these subpoenas to remain in Plaintiff's Bill of Costs.
Given the foregoing, costs are taxed in favor of Alaniz in the sum of $11,722.08.


ARGUED: Barry Steven McNeill, Special Deputy Attorney General, North Carolina Department Of Justice, Raleigh, NC, For Appellant. James Patrick Cooney, III, Kennedy, Covington, Lobdell & Hickman, L.L.P., Charlotte, NC, For Appellee. ON BRIEF: Michael F. Easley, Attorney General Of North Carolina, North Carolina Department Of Justice, Raleigh, NC, For Appellant.
Before ERVIN, HAMILTON, and LUTTIG, Circuit Judges.
Affirmed in part and reversed in part by published opinion. Judge ERVIN wrote the opinion, in which Judge HAMILTON and Judge LUTTIG joined.
John Thomas Noland filed a petition seeking a writ of habeas corpus pursuant to 28 U.S.C. § 2254 (1994). The district court granted Noland's petition with regard to his sentence, ordering the State of North Carolina to conduct a new sentencing hearing. It ruled that the jury was improperly instructed at the sentencing phase of Noland's trial as to its consideration of mitigating circumstances, in violation of McKoy v. North Carolina, 494 U.S. 433, 110 S. Ct. 1227, 108 L. Ed. 2d 369 (1990). The district court rejected all of Noland's other claims for relief. The state appeals the issuance of the writ as to Noland's sentence and Noland cross-appeals on four issues rejected by the district court that involve both the guilt-innocence and penalty phases of his trial. Because we believe the district court wrongly decided the McKoy issue, the writ should have been denied and we therefore reverse in part and affirm in part.
Noland and Susan Milton Noland were married for nine years prior to their separation on March 3, 1981. The couple had two daughters and resided in Charlotte, North Carolina for the last eight years of their marriage. In the weeks immediately after their separation, Noland visited Susan and his daughters at least once a week and talked on the phone with them frequently. Noland constantly begged Susan to return to him. Later, he began making threats regarding their property.
During this time, Noland's parents arranged for him to receive psychiatric treatment. A staff psychiatrist at the Mecklenburg Mental Health Center, Dr. Reback, evaluated Noland in April 1981 and recommended partial hospitalization at the Center. By May 1981, Dr. Reback was of the opinion that Noland was mentally ill and dangerous, and needed full, in-patient hospitalization. On May 21, 1981, a North Carolina state court ordered Noland committed to a state hospital, finding him to be "mentally ill and dangerous to himself" by clear and convincing evidence. The record does not indicate when Noland was released from the hospital.
In June 1981, Susan moved with the children to California to live with her older sister. She informed Noland by letter where she and the children were living. For the next several months, Noland maintained ongoing telephone contact with them. After approximately four months, Susan and the children moved again but did not give Noland the new address or phone number. She maintained periodic contact with Noland through her sister's telephone.
Every time Susan and Noland talked by phone, he asked her when she was coming back to Charlotte. She always replied that she did not know. In November 1981, Noland began making threats against Susan's family. Noland told her that he would kill her father, mother, and sister if she did not return to Charlotte with the children before Christmas. He said, "I'm going to kill Cindy [Susan's sister] first because she means more to you than anything. I'm going to kill your daddy and make your momma watch." Noland further specified that he would place a "gun between your daddy's eyes and blow his head off." Susan and the children did not return to Charlotte.
On February 5, 1982, Noland telephoned Susan and told her that he would kill her family if she did not return to Charlotte within two weeks. The following day, Noland called again and demanded her decision immediately. When Susan answered that she did not want to take the children out of school, Noland responded, "Well, you will come back; you'll have to come back, because I am going to kill your family."On the evening of February 21, 1982, Cindy Milton (Susan's sister), was watching television with two friends in the living room of her home in Charlotte. This house was the same one that had previously been occupied by Noland and Susan. Noland entered the house through the back door and chased Cindy into the laundry room yelling, "I told you not to get involved." As Cindy huddled behind the laundry room door, Noland shot Cindy in the back of the head, killing her.
Directly across a vacant lot from Cindy's house lived her parents, Mary and Troy Milton. Noland left Cindy's house and walked across the street to her parents' home. Noland entered a bedroom and shot Troy Milton in the face while he slept, killing him. Noland pushed the door to a second bedroom open and told Mary Milton, "I told you I was going to kill all three of you. And, I've already killed Cindy and your old man. I'm going to get you." Mary lunged at Noland with a bar stool as he shot her at pointblank range, inflicting a nonlethal wound. She fell to the floor and remained very still. After Noland left, Mary phoned Cindy's house and discovered from her guests that Cindy had been shot; Mary then called the Charlotte Police Department.
Charlotte police officers found Noland within one hour after the shootings. He was taken to the police department and properly advised of his Miranda rights. Noland invoked his right to have an attorney present during any further questioning by the officers. Later that night, Noland made the following unsolicited and voluntary comment to a police officer: "Man, I just killed two people, man. Why are you being so nice to me?"
In October 1982, a jury found Noland guilty of first degree murder in the deaths of Cindy and Troy Milton. The jury also returned sentences of death for both murders. The judgments were affirmed by the North Carolina Supreme Court. State v. Noland, 312 N.C. 1, 320 S.E.2d 642 (1984), cert.denied, 469 U.S. 1230, 105 S. Ct. 1232, 84 L. Ed. 2d 369(1985). Noland sought state collateral relief by filing a motion for appropriate relief in Mecklenburg County Superior Court. Following an evidentiary hearing, the court denied relief. Noland's petition for a writ of certiorari to the North Carolina Supreme Court was denied. State v. Noland, 361 S.E.2d 85 (N.C.1987).
In August 1988, Noland filed a petition for writ of habeas corpus in the U.S. District Court for the Western District of North Carolina. The district court conditionally granted the writ as to both convictions and sentences. Noland v. Dixon, 831 F. Supp. 490 (W.D.N.C. 1993). We vacated this judgment on the ground that the district court erred in not allowing the state to amend its pleadings to raise Teague as an affirmative defense to all of Noland's claims. Noland v. Dixon, 53 F.3d 328, 1995 WL 253149 (4th Cir. May 1, 1995) (unpublished opinion). We remanded the case to the district court with instructions "to allow the state to amend its answer to raise Teague as an affirmative defense to all of Noland's claims, and address the claims raised by Noland in his petition on a clean slate." Id. at * 3.
On remand, the district court ruled on nine issues, five of which are relevant to this appeal. First, the district court ruled in favor of Noland on his claim that the jury instructions in the sentencing phase impaired the jury's ability to consider mitigating factors in violation of McKoy v. North Carolina, 494 U.S. 433, 110 S. Ct. 1227, 108 L. Ed. 2d 369 (1990). On four other claims, the district court denied Noland's petition: 1) that the jury instructions on insanity violated due process by relieving the State of its burden to prove the element of mens rea for murder beyond a reasonable doubt; 2) that the State used evidence of Noland's invocation of his Miranda rights to rebut his defense of insanity; 3) that Noland's counsel was ineffective at both the guilt-innocence and penalty phases of his trial; and 4) that Noland was incompetent to stand trial. On the basis of the McKoy violation, the district court issued the writ as to Noland's sentence, ordering the State to resentence him. The parties cross-appeal the district court's decisions on these five issues and we consider them seriatim.
As a preliminary matter, we must address the State's argument regarding the appropriate standard of review for this case. The Antiterrorism and Effective Death Penalty Act of 1996 ("AEDPA"), 110 Stat. 1214, was signed into law on April 24, 1996 and amended 28 U.S.C. § 2254 to change the standard by which we review the habeas petition of a person in custody pursuant to the judgment of a state court. Under pre-AEDPA law, we review a state court's determinations of questions of law and mixed questions of law and fact de novo. Howard v. Moore, 131 F.3d 399, 410-11(4th Cir. 1997) (en banc); Savino v. Murray, 82 F.3d 593, 598 (4th Cir. 1996), cert. denied, --- U.S. ----, 117 S. Ct. 1, 135 L. Ed. 2d 1098. Under § 2254 as amended by the AEDPA, the reviewing court cannot grant the writ unless the state court adjudication "resulted in a decision that was contrary to, or involved an unreasonable application of, clearly established Federal law, as determined by the Supreme Court of the United States." 110 Stat. 1214, 1219, 28 U.S.C.A. § 2254(d) (1) (West Supp.1997). The parties briefed the issue of whether this new standard of review should be retroactively applied to petitions pending in the federal courts prior to passage of the AEDPA.
After the parties filed their briefs, the Supreme Court decided Lindh v. Murphy, --- U.S. ----, 117 S. Ct. 2059, 138 L. Ed. 2d 481 (1997), holding that the amendments to Chapter 153 of Title 28, of which the new standard of review is a part, should not be applied to cases pending at the time the AEDPA took effect. At oral argument in the instant case, counsel for the State did not waive its argument that the new standard of review should apply, distinguishing Lindh as a non-capital case. Nothing in Lindh supports such an argument and this court has already held that Lindh requires us to use the pre-AEDPA standard of review in a capital case pending in federal court at the time the AEDPA was signed into law. See Howard, at 404-06. We therefore review questions of law and mixed questions of law and fact de novo. Any factual findings by the State court are presumed to be correct as long as they were made after a full, fair, and adequate hearing on the merits. See 28 U.S.C.A. § 2254(d) (West 1994) (pre- AEDPA).
In McKoy v. North Carolina, 494 U.S. 433, 110 S. Ct. 1227, 108 L. Ed. 2d 369 (1990), the Supreme Court struck down the North Carolina practice that required a capital sentencing jury to find mitigating circumstances unanimously before they could be considered for the purpose of sentencing. The Court held that the unanimity requirement limited the individual juror's consideration of mitigating circumstances and was therefore unconstitutional. Noland claims, and the district court held, that the sentencing instructions at Noland's trial constituted McKoy error. In determining whether the jury instructions violated McKoy in Noland's trial, the question is "whether there is a reasonable likelihood that the jury has applied the challenged instruction in a way that prevents the consideration of constitutionally relevant evidence." Boyde v. California, 494 U.S. 370, 380, 110 S. Ct. 1190, 1197-98, 108 L. Ed. 2d 316 (1990).
In this case, the trial court did not give the explicit unanimity instruction on mitigating circumstances that was struck down by the Court in McKoy. The judge instructed the jury to answer four issues in reaching its decision at the penalty phase: 1) whether the jury unanimously found, beyond a reasonable doubt, the existence of the aggravating circumstance; 2) whether the jury unanimously found, beyond a reasonable doubt, that the aggravating circumstance was sufficiently substantial to call for imposition of the death penalty; 3) whether the jury found one or more mitigating circumstances; and 4) whether the jury unanimously found, beyond a reasonable doubt, that the aggravating circumstances outweighed the mitigating circumstances. This portion of the instructions has been held on several occasions by this court not to violate McKoy. See Smith v. Dixon, 14 F.3d 956, 981 n. 15 (4th Cir. 1994) (en banc); Lawson v. Dixon, 3 F.3d 743, 754 (4th Cir. 1993); Maynard v. Dixon, 943 F.2d 407, 418-20 (4th Cir. 1991).
In addition to the proper instructions, however, the trial court also gave a general unanimity instruction. The instruction was "general" in the sense that it was not directed to any particular issue or question to be decided by the jury on its verdict form. Just before releasing the jury to begin its deliberations at the penalty phase, the trial court instructed the jury: "After you have reached a unanimous decision as to each issue ... have your Foreman mark the appropriate place or places on the issues and recommendations forms." J.A. at 1542 (emphasis added). Noland argues that this comment by the trial court created a reasonable likelihood that the jury believed that it must have found any mitigating circumstances unanimously. We disagree.
The trial court's "general unanimity" comment did not occur during its careful explanation of the verdict form, but rather as a supplemental instruction just before the jurors retired to deliberate. The trial court's remark could not reasonably have been understood as a substantive instruction of law since it came after the explanation of the specific and detailed instructions contained on the verdict form. Prior to the general unanimity instruction, the judge read and explained the four issues on the verdict form while each juror followed along with his or her own written copy of the form. It was entirely clear from this portion of the instructions that three of the four issues on the verdict form required juror unanimity while one, the mitigating factor question, did not. The judge's final comment did not create a reasonable probability that the jury would have disregarded the previous clear and precise instructions of the trial court. When read in its proper context, the trial court was merely describing the procedure by which the jury foreman was to record the verdict, and not giving a substantive instruction on the unanimity requirement.
Noland argues that the North Carolina Supreme Court's decision in State v. McNeil, 327 N.C. 388, 395 S.E.2d 106 (1990), supports the finding of a McKoy violation. In McNeil, the court ruled that general references to jury unanimity could constitute a McKoy violation, even when the court's explicit instructions on mitigating circumstances did not require unanimity. In McNeil, while the verdict form and accompanying instructions contained no express unanimity requirement as to mitigating factors, the trial court made three general references that the verdict required unanimity. See id. at 109 (" [T]he trial court stated at least three times that the jury's answer to all the issues must be unanimous."). The distinction between McNeil and the instant case is obvious. While three general references to unanimity, which contradict the verdict form's silence on unanimity as to mitigating factors, might create a reasonable probability that the jury would assume it needed to find mitigating circumstances unanimously, one such reference in the present context does not.
The explicit substantive instructions and the verdict form made it clear that the jury need not have been unanimous in its determination of mitigating circumstances. The trial court's unanimity comment during its description of how the foreman was to fill out the verdict form does not rise to the level of a McKoy violation, and the district court erred in so holding. Because we find that the judge's comment regarding unanimity does not constitute error under McKoy, we have no reason to consider the other questions regarding this issue, which were briefed by the parties in considerable detail.
In his cross-appeal, Noland argues that the district court erred in four of its rulings on his habeas petition. We find no merit in Noland's arguments.
First, Noland argues that the judge's instructions at the guilt-innocence phase prevented the jury from considering evidence of Noland's mental illness in determining whether he possessed the proper intent for first-degree murder. A jury in North Carolina may consider evidence of mental illness, not only in its decision on the affirmative defense of insanity, but also on the essential element of mens rea. "Under North Carolina law, the existence of mental illness can negate the possibility of intent, deliberation, and premeditation." Cooper v. North Carolina, 702 F.2d 481, 484 (4th Cir. 1983) . During jury instructions in the guilt-innocence phase of Noland's trial, the judge informed the jurors that they must find all the essential elements of murder before considering Noland's proffered affirmative defense of insanity.
You will consider [evidence of insanity] only if you find that the State has proved, beyond a reasonable doubt, each of the offenses, each of the elements of the offenses of murder or second-degree murder.
After or if you have reach [ed] that verdict, then you will consider evidence with regard to the mental state of the defendant.
Noland's argument that this instruction constitutes error relies on our decision in Cooper v. North Carolina, 702 F.2d 481, 484 (4th Cir. 1983). In Cooper, a habeas petitioner argued that the judge's failure "specifically to instruct the jury that it should consider mental illness evidence in connection with the state's proof of specific intent, premeditation, and deliberation, ... put the burden on him of demonstrating, through the insanity defense, the absence of intent." Id. at 484. Cooper rejected the argument that failure to include the proffered instruction misled the jury into thinking that it could consider mental illness evidence with respect to a defense of insanity "only in that regard," and not with respect to intent, premeditation, and deliberation. Id. at 485.
Noland argues that, unlike Cooper, this is a case in which the jury was explicitly told that it could not consider evidence of mental illness when it was determining his ability to form the requisite intent for first-degree murder. Although Noland attempts to distinguish Cooper on this basis, his argument cannot meaningfully be distinguished from Cooper's claim. Noland, like Cooper, relies on the risk that a jury might not consider relevant evidence based on the judge's instruction that it must decide all the elements of murder before it can consider whether the defendant was legally insane.
This interpretation of these instructions was specifically rejected by the North Carolina Supreme Court in State v. Mize, 315 N.C. 285, 337 S.E.2d 562 (1985). Mize rejected an argument that these same instructions prohibited a jury from considering evidence of insanity as it related to their deliberations on premeditation, deliberation and malice. The court in Mize reasoned that the instructions at issue "merely reflect [ed] the order of the issues which would be submitted to the jury" and did not direct the jury to disregard evidence of insanity as it related to the elements of premeditation, deliberation, and malice. Id. at 567 (emphasis added). Mize relied on previous decisions which held that a defendant is not entitled to an affirmative instruction that the jury must consider evidence of his mental condition when determining whether the defendant acted with premeditation, deliberation and malice. Id. The court also reasoned that the trial court's clear instructions that the intent elements must be found beyond a reasonable doubt eviscerated any danger that the jury might not consider evidence of insanity when determining these elements. Id.
The district court held that Noland's claim of improper instructions at the guilt-innocence phase was barred by the principles set forth in Teague v. Lane, 489 U.S. 288, 109 S. Ct. 1060, 103 L. Ed. 2d 334 (1989), and we agree. Teague holds that "habeas corpus cannot be used as a vehicle to create new constitutional rules of criminal procedure." Teague, 489 U.S. at 316, 109 S. Ct. at 1078. A case announces a new rule if the outcome "was not dictated by precedent existing at the time the defendant's conviction became final." Id. at 301, 109 S. Ct. at 1070 (emphasis in original); O'Dell v. Netherland, 95 F.3d 1214, 1223-24 (4th Cir. 1996) (en banc) (new rule test is "whether it would have been objectively unreasonable, under the law existing at that time, for a judge to reach a contrary result to that subsequently reached").
Read together, Cooper and Mize demonstrate not only that Noland's claim is not dictated by existing precedent, but that existing precedent is squarely on point against Noland's argument. Contrary to Noland's assertions, Leland v. Oregon, 343 U.S. 790, 72 S. Ct. 1002, 96 L. Ed. 1302 (1952), and Patterson v. New York, 432 U.S. 197, 97 S. Ct. 2319, 53 L. Ed. 2d 281 (1977), do not dictate the resolution of this issue. Those cases decided that states did not violate the Due Process Clause of the Fourteenth Amendment by requiring criminal defendants to prove affirmative defenses. They did not address the question at issue in this case: whether the judge's instructions created a risk that the jury would not consider all relevant evidence in its determination of the essential elements of a crime.
Were we to hold that the instructions at issue deprived Noland of his right to due process, we would create a new rule, which is forbidden by Teague. Neither of the two exceptions to Teague, see Teague, 489 U.S. at 307-10, 109 S. Ct. at 1073-75, applies to Noland's claim: this rule would not place certain conduct beyond the power of the law-making authority to proscribe, nor would it constitute a watershed rule of criminal procedure. For these reasons, we find that this claim by Noland is barred by Teague.
Second, Noland claims that the prosecution used his post-arrest invocation of Miranda rights to rebut his affirmative defense of insanity, in violation of Doyle v. Ohio, 426 U.S. 610, 96 S. Ct. 2240, 49 L. Ed. 2d 91 (1976), and Wainwright v. Greenfield, 474 U.S. 284, 106 S. Ct. 634, 88 L. Ed. 2d 623 (1986). The district court held that the prosecutor's actions during direct examination of two witnesses and closing argument constituted Greenfield error, but held that this error was harmless. See J.A. at 1350-51. We find no Greenfield error in the first place.
The State twice elicited testimony from police officers that Noland understood his Miranda rights and exercised them. But these comments were in the context of the officers' narratives regarding Noland's apprehension and arrest. Defense counsel did not object at trial, and the prosecutor's questions did not in any way draw attention to Noland's silence or invocation of his right to an attorney. Although no Fourth Circuit case has directly addressed the issue, other circuits have held that mere mention of a defendant's exercise of Miranda rights is not per se prohibited; rather, a Greenfield violation depends on "the particular use to which the post-arrest silence is being put." Lindgren v. Lane, 925 F.2d 198, 202 (7th Cir. 1991); see also Jones v. Stotts, 59 F.3d 143, 146 (10th Cir. 1995) (holding that "it is the prosecutor's exploitation of a defendant's exercise of his right to silence which is prohibited"); United States v. Stubbs, 944 F.2d 828, 835 (11th Cir. 1991) (finding no Greenfield violation "when the government does not specifically and expressly attempt to use ... the improper comment to impeach the defendant"). Greenfield "does not impose a prima facie bar against any mention whatsoever of a defendant's right to request counsel, but instead guards against the exploitation of that constitutional right by the prosecutor." Lindgren, 925 F.2d at 202.
Contrary to Noland's assertion, the prosecutor did not use his closing argument to suggest that Noland's invocation of Miranda rights rebutted evidence of insanity. The prosecutor mentioned Miranda to remind jurors of the timing of the event, but argued that Noland's voluntary statement ("Why are you being so nice to me when I just killed two people?") rebutted his claim that he was unable to appreciate the wrongfulness of his actions. Reading the prosecutor's argument in its proper context clearly shows that his argument related to Noland's voluntary statement, and not to his mention of Miranda. See J.A. at 1415-16. Indeed, it would have made little sense for the prosecutor to have argued that Noland's invocation of his right to a lawyer rebutted evidence of insanity when much more inculpatory and direct evidence--Noland's curiosity that he was not being mistreated by the police after having killed two people--was available. Because trial testimony only made passing reference to Miranda, and the prosecutor did not specifically exploit Noland's exercise of his Miranda rights, we find no Greenfield error.
Third, Noland claims that his trial counsel rendered ineffective assistance at both the guilt-innocence and penalty phases of trial in violation of the Sixth Amendment. We agree with the district court that this claim has no merit.
In Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984), the Supreme Court established a two-prong test for determining whether assistance of counsel was so defective as to require reversal of a conviction or sentence. First, the defendant must establish that counsel's performance was deficient in that it fell below an objective standard of reasonableness under prevailing professional norms. Id. at 687-88, 104 S. Ct. at 2064-65. Second, he must establish that the deficient performance prejudiced the defense to the extent that he was deprived of a fair trial. Id. at 687, 104 S. Ct. at 2064.
Initially, Noland contends that he was not afforded a fair and adequate hearing in state post-conviction because the state court refused to allow an attorney to testify as an expert as to what constitutes the objective standard of reasonable competence for a lawyer trying a death penalty case. We agree with the district court that when an expert witness is not in a better position than the fact finder to render an opinion on a matter, it is not error to exclude that witness' testimony. See J.A. at 1353-54. Under North Carolina law, the trial court is the finder of fact in a motion for appropriate relief. See N.C. Gen.Stat. § 15A-1413 (1997). Noland's expert was in no better position than the trial court judge, who had tried a number of capital cases, J.A. at 390, to explain the general standard of practice and to assess the adequacy of Noland's trial counsel. Noland was therefore not prejudiced in his state court hearing, and is not entitled to remand for further factual development by the district court.
In the district court, Noland argued that four errors by trial counsel fell below Strickland 's objective standard of reasonable performance. J.A. at 1360-62. These issues can be reduced essentially to two contentions: 1) trial counsel failed to prepare an adequate insanity defense, and 2) trial counsel failed to challenge Noland's capacity to stand trial.
As to counsel's preparation for an insanity defense, the most serious allegation by Noland is that the defense presented no expert witness to testify that he was insane at the time of the murders. The prosecution relied on this lack of evidence in its closing argument to the jury. See J.A. at 1406. Noland claims that failure to present an expert to testify that he was legally insane fell below reasonable standards of professional competence.
The decision not to find such an expert, however, was a deliberate trial strategy by defense counsel. The record indicates that defense counsel had recently been "burned" in other trials by relying on expert witnesses who were derided by prosecutors as the "swami from New York" and the "shrink from California." J.A. at 270. Noland's lawyers petitioned the trial court to appoint a psychiatrist to determine both his competency to stand trial and his mental state at the time of the crimes. See J.A. at 268-69. Dr. Billy Royal, a psychiatrist on staff at a state mental hospital, evaluated Noland but was unable to form an opinion as to his sanity at the time of the crimes. Defense counsel presented the testimony of Dr. Royal at trial, who described Noland's history of mental illness and his mental state at the time the crimes occurred. Defense counsel relied on this testimony and argued to the jury that it was their responsibility, not that of an expert, to determine whether Noland was legally insane. Strickland counsels that trial lawyers must have wide latitude in making tactical decisions. Strickland, 466 U.S. at 689, 104 S. Ct. at 2065. Defense counsels' request for a psychiatrist and use of Dr. Royal at trial suggest that their efforts were within the range of reasonable professional conduct.
Second, Noland argues that his counsel was ineffective for not asking the court to reevaluate his competency during the trial. Noland points out that defense counsel at trial did not "feel comfortable" predicting Noland's behavior. See Appellee's Br. (filed July 21, 1997) at 41. Noland argues that this disquietude would have compelled a reasonable lawyer to interrupt the proceedings and challenge Noland's competency to stand trial. However, we find this evidence insufficient to overcome the "strong presumption that counsel's conduct falls within the wide range of reasonable professional assistance." Strickland, 466 U.S. at 689, 104 S. Ct. at 2065. In sum, Noland's counsel rendered effective assistance at the guilt-innocence phase of the trial.
In the district court, Noland presented 11 instances of what he alleged were errors by his trial counsel at the penalty phase that satisfy Strickland 's test for ineffective assistance. J.A. at 1354-55. Although Noland does not specifically enumerate his contentions on appeal, they can be grouped into three colorable issues: 1) that defense counsel presented no mitigating evidence and was unprepared at the sentencing phase; 2) that defense counsel did not consult with Noland in their decision not to present evidence at the sentencing phase; and 3) that defense counsel opened the door for the prosecution to argue that his crime was especially heinous, atrocious, or cruel.
Although several witnesses were prepared to testify on Noland's behalf at the sentencing phase, his trial counsel decided not to present their testimony to the jury. Noland's counsel presented no evidence at the sentencing phase; the sentencing phase consisted solely in the arguments of counsel. The failure to present mitigating evidence, however, is not per se violative of Strickland 's performance prong. See Turner v. Williams, 35 F.3d 872, 900-03 (4th Cir. 1994), overruled on other grounds, O'Dell v. Netherland, 95 F.3d 1214 (4th Cir. 1996).
This decision not to present mitigating evidence did not violate Noland's right to effective counsel. First, Noland presented much of his mitigating evidence during the guilt-innocence phase: Noland's mother and sister both testified as to his love for his children and previous good relationship with the victims, and Dr. Royal testified as to Noland's mental disorders. Had these witnesses testified again, their testimony would have been cumulative. Second, while Noland points out that several witnesses were prepared to testify at the penalty phase, he does not indicate how their testimony would have been different from the evidence already presented at the guilt-innocence phase. Trial counsel cannot be faulted for deciding not to present witnesses whose testimony would only reiterate what had already been presented during the guilt phase of the trial. We agree with the district court that trial counsel's decision not to present mitigating evidence was sound trial strategy and therefore within the objective standard of reasonable performance required by Strickland.
Second, Noland argues that counsel was ineffective for failing to discuss with him the decision not to present mitigating evidence. Counsel has a duty to keep her client informed of important developments in the trial and "to consult with the defendant on important decisions." Strickland, 466 U.S. at 688, 104 S. Ct. at 2065. Noland's counsel performed that duty in this case. It appears from the record that counsel informed Noland of their decision not to present mitigating evidence at the penalty phase. J.A. at 278. Noland was also aware of his right to testify at the penalty phase, but when informed by counsel that they did not intend to present evidence, Noland did not disagree or ask any questions. J.A. at 278. Trial counsel's actions in this respect did not violate Noland's right to effective counsel under Strickland.
Finally, Noland argues that his counsel erred by submitting the absence of the "especially heinous, atrocious, or cruel" (HAC) aggravating factor as a mitigating factor, opening the door for the prosecution to argue that Noland's crime was especially heinous, atrocious, or cruel. Prior to sentencing, defense counsel had successfully argued to the judge that the crimes were not sufficiently heinous, atrocious, or cruel for the jury to consider the HAC aggravating factor. But in its list of explicit mitigating factors to be submitted to the jury, defense counsel inexplicably included a statement that Noland's crime was not especially heinous, atrocious, or cruel, thereby opening the door for the prosecution to argue this issue.
When it is possible to resolve a Strickland claim on the prejudice prong, we may do so without deciding whether counsel's conduct was outside the range of reasonable competence. See Strickland, 466 U.S. at 697, 104 S. Ct. at 2069-70. In this case, whether or not counsel's decision was outside the range of reasonable competence, there is no reasonable probability that but for this alleged error the result would have been different. Whatever prejudice could have occurred as a result of counsel's decision apparently did not; the prosecutor did not emphasize the especially heinous, atrocious, or cruel nature of this crime at closing argument. Also, the absence of the HAC aggravating factor was only one of 17 mitigating factors submitted to the jury. There is simply no reasonable probability that had it not been submitted, the jury would have rendered a different verdict.
Finally, Noland argues that although a pre-trial examination found him competent to stand trial, see J.A. at 269, he became incompetent during the course of trial and his conviction and sentence therefore violated his right to due process of law. The district court found that Noland was provided a full and fair hearing on this issue in his state post-conviction attack, and that the state court's finding was presumed to be correct under 28 U.S.C.A. § 2254(d) (West 1994) (pre-AEDPA).
At the post-conviction hearing, the state court judge heard testimony from Noland and his trial counsel that Noland was incompetent to stand trial. The state court also considered Noland's relevant mental health records and medical evaluations. From this information, the state court judge made a written factual finding that Noland "failed to establish that at the time of his trial he was ... unable to understand the nature and object of the proceedings against him, to comprehend his own situation with reference to them, or to assist in his own defense." J.A. at 261. The state court's consideration of this matter adequately developed the material facts and provided Noland a full and fair hearing, and is therefore presumed to be correct under § 2254(d), notwithstanding Noland's argument that the state court did not consider the affidavit of a psychiatrist who evaluated Noland after the post-conviction hearing. See Appellee's Br. (filed July 21, 1997) at 49.
For the reasons articulated above, the district court erred when it granted Noland's petition and ordered the State to resentence him. The writ should have been denied as to all of Noland's claims. The district court's order granting the writ is vacated and the matter is remanded to the district court for the entry of an order denying the writ in its entirety.


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A German seller, plaintiff, and a French buyer, defendant, concluded a dealer agreement according to which the buyer was to act as the seller's appointed dealer in the sale of fitness equipment. Pursuant to that agreement, the buyer made several equipment purchases. When the seller sued for unpaid purchases, the buyer objected to the jurisdiction of the German court.
The appellate court confirmed the ruling of the court of first instance that, under article 5(1) of the European Communities Convention on Jurisdiction and Enforcement of Judgements in Civil and Commercial Matters, jurisdiction is based on the place of performance of the contract. Since both Germany and France were Contracting States to the CISG, and since the parties had agreed on the application of German law, the CISG was applicable to determine the place of performance. The court found that the parties had not agreed upon a place of payment other than at the seller's place of business (article 57(1)(a) CISG) and had not agreed on payment to be made against the handing over of goods or documents (article 57(1)(b) CISG). Neither the contractual clause requiring payment to be made by irrevocable letter of credit nor the contractual provisions altering the passing of risk had changed the place of performance. As this was the place where the seller had its business in Germany, the court held that it had jurisdiction.
The court found that the dealer agreement provided that the seller "sells" goods to the buyer; any subsequent contract entered into thereunder for the purchase of equipment was a contract of sale to which the Convention applied (article 1(1)(a) CISG). Although the buyer acted as an intermediary, application of the Convention was not excluded by article 3(2) of the CISG.
The [seller] sued the [buyer] for payment for delivery of goods.
On 1 January 1993, the parties concluded a dealer agreement (hereinafter DA) according to which the [buyer] was to act as the [seller]'s authorized retailer in France. The contract governs particulars for the purchase of goods by the [buyer]. Among others, clause 3 requires that payment normally had to be made by irrevocable letter of credit; however, the conditions were subject to variation ("... may be varied from time to time ...") in the form that payment was to be made by bank draft. The parties further agreed to subject their contractual relations to German law (clause 16 DA); this is referred to in enclosure K 29 of the contract.
The contract was executed by the parties as follows. In January 1995, the parties came to a supplementary agreement to the effect that the [seller] should have the right to deliver goods directly to the French company C; the [buyer] was to receive a commission of 10% of the amount that was charged to C's account (enclosure B 8). In the course of 1995, the [seller]'s manager also entered into contractual talks with the owner of company C, Mr. D., who is also the owner of the largest fitness-club-chain in France. Mr. D. showed interest in becoming an authorized retailer of [seller] in France. However, a corresponding frame contract was not concluded in the end.
On 27 April 1995, company L Atlantic BV Rotterdam, a daughter company of the [seller] (hereinafter BV), reported to the [buyer] that the export department of [seller] would henceforth coordinate the sales activities from Rotterdam (enclosure B 1).
10 fitness devices according to the order of 15 June 1995 - invoice of 29 June 1995, in the amount of US $39,398 (cf. enclosures K 12 to K 15).
The [buyer] furthermore ordered several fitness devices on 28 August 1995 (cf. enclosures K 27, B 13 respectively); the [buyer] ordered supplementary two further "Lifecycles" (enclosure K 28) on 5 September 1995, as well as two further "Lifesteps" (cf. enclosure B 14) on 8 September 1995. The five "Lifesteps", which were delivered altogether, were invoiced separately by the [seller] in the amount of US $12,000 on 18 September 1995 (cf. enclosure K 23). The further devices were billed by the [seller] with invoice enclosure K 25; undisputedly due from this invoice are the positions of two "Liferides" 9500 HRE (billed by the [seller] at US $14,000), two "Liferowers" 9500 E (billed by the [seller] at US $6,500) and three "Lifecycles" 9500 REC HRE (billed by the [seller] at US $ 7,797).
It is undisputed that a credit in the amount of DM 106.82 dated 1 September 1995 has to be subtracted from the total amount due.
The [seller] terminated the "Dealer Agreement" by letter dated 12 December 1995 (enclosures K 32, B 11 respectively) effective immediately, and additionally, as a mere precaution, with a time-limit also until the end of February 1996.
The [seller] asserted further purchase-money claims in first instance (cf. statement of claim dated 13 February 1996, pp. 1-9 of the claim). The [seller] requested the Court of First Instance to order [buyer] to pay [seller] DM 328,537.40 plus 10% interest on DM 239,830.25 from 12 October 1995 onwards and on DM 88,707.15 from 13 December 1995 onwards.
The [buyer] objected in advance to the local jurisdiction of the German court and otherwise requested the dismissal of the claim.
The [buyer] based the objection to the German court's jurisdiction on the legal opinion that the place of performance for the obligations in dispute was not to be determined by the CISG because the [seller] asserted its claims to payment out of an authorized dealer contract which assigns to the [buyer] the role of a commercial representative. Furthermore, the parties excluded the CISG through their choice of law. Nonetheless, at least the provision of Art. 57(1)(a) CISG was excluded. The contractually stipulated mode of payment through irrevocable letter of credit documented the parties' intention to determine the place of payment as that seat of the bank which presents the letter of credit. The [seller] also did not have the right of action. As a consequence of the note enclosure B 1, the [buyer] exclusively placed its orders in Rotterdam; [buyer]'s contractual partner became BV seated there. Accordingly, since spring 1995, the entire correspondence regarding the "Dealer Agreement" was conducted only by BV (cf. enclosures B 3, B 4) who, by letter of 1 June 1995, also sent the new price list for sales (enclosure B 2). BV's request to make payments out of the disputed contracts of sale to "its account" (cf. enclosure B 7) also shows that BV had become the owner of the claims. The ostensible existence of a legal situation evoked by the [seller]'s daughter company had to be attributed to the [seller], especially since in the course of the assumption of the export activities of the L-group, the daughter company also took over the respective claims in accordance with Section 25 HGB [*].
In other respects, the purchase-money claims asserted by the [seller] should be broadly denied. Insofar as purchase-money claims have to be granted on the merits of the reasons given above (cf. above), they have been extinguished by way of set-off. To begin with, the [buyer] made a claim of commission for a delivery to company C through the [seller], which is available for set-off. The [buyer]'s claim out of the agreement enclosure B 8 is not accessory to the continuance of the "Dealer Agreement" and has to be calculated based on the market price of the delivered goods (f [French francs] 334,925). The commission of the [buyer] thus amounts to f 33,492.50 = DM 9,712.82. However, in any case, the [buyer] has a claim to a commission in the amount of 10% of the "friendly price" granted by the [seller] to company C in the amount of US $35,000, i.e., DM 5,285. A claim against the [seller] for payment of advertising costs allowance for the year 1995 in the amount of DM 14,000 was furthermore made available for set-off by the [buyer]. A corresponding allowance was promised by the [seller] (cf. enclosure B 15), but has never been paid. Also made available for set-off is a claim for damages of the [buyer] out of an intentional breach of the "Dealer Agreement". The [seller] has tried to "weaken" the [buyer]. The [seller]'s first step in that direction was the agreement to make delivery to company C. Added to that, were delays in the promise of the allowance for advertising costs, conversions in the supply of spare parts, delayed deliveries, as well as the conversations with Mr. D. in which the [buyer] had not been involved. As a consequence of the negotiations with Mr. D., the [buyer] had lost both the fitness clubs of Mr. D., [buyer]'s largest customer up until then, and ten other customers. In the second half of 1995, the [buyer] had suffered a loss of almost 40% of [buyer]'s turnover. In consideration of its own costs (50%), this means the loss of a net margin in the amount of approximately f 150,000. The [buyer] suffered further damage through the unjustified termination [of the agreement] by the [seller]. The termination was not effective formally yet, since it was not addressed to the [buyer], but to [buyer]'s manager personally. Besides, there was no reason for the termination. The [buyer] rightfully had not made any payment on the invoices in dispute. The [seller] could not rely on the non-compliance with agreed sales quota, as the [seller] itself was responsible for the slow sales (e.g., inscription and operating instruction of the devices only in English language, insufficient support in marketing measures), especially since the agreed quota had been economically completely unrealistic from the beginning. Due to the termination [of the agreement], the [buyer] had to terminate its activity for the [seller] two years earlier than contractually scheduled. At an average annual net margin of about f 1 million, this led to a lost profit of at least DM 600,000. Finally, a right of the [buyer] to demand compensation of the authorized retailer is made available for set-off. The [buyer] had been involved in the [seller]'s organization of the sales. The [buyer] had been obliged to further the sales of the [seller]'s products, run advertisements, participate in fairs and exhibitions, deliver customer services as well as inform the [seller] about the sales and market position of [seller]'s products under specification of customer relations. Due to this information it was then also possible for the [seller] to inform the customers of the [buyer] about the "new structures of sale" of its products after the notice of termination. For the calculation of the compensation of the commercial agent for loss of clientele, the [buyer] takes as a basis an average annual turnover of f 4,618,000. With respect to a commission of 10%, which has to be regarded as reasonable, this results in an average "annual commission" of DM 159,241.
The [seller] regards the claim it raised as admissible. A purchase-money claim is being invoked, to which the CISG is applicable. A diverging agreement concerning the place of payment has not been made; when payment is made by letter of credit, the place of payment is regularly at the bank advising the credit or a confirming second bank in the country of the seller. In the case at issue, this is the Bayerische Vereinsbank in Munich. Even as far as the "Dealer Agreement" opens the possibility of payment by bank draft, no agreement about the change of the place of payment has been sought. Even after the reorganization of its export activities, the [seller] remained the contractual partner of the [buyer]. Only since February 1996 onwards, did BV appear as the contractual partner [of the buyer]. However, the contracts with the [buyer] that are in dispute were not effected by that anymore. It should be especially pointed out, that the [buyer] addressed all orders of sale in dispute directly to the [seller]. The orders have also been confirmed by the [seller]. Furthermore, the [seller] did not assign any of its claims to BV. The request for payment (enclosure B 7) was made by BV as "coordinator".
The [buyer]'s claims made available for set-off are non-existent. A claim for commission of the [buyer] in the matter [of company] C did not arise. At first, only "demonstration-devices" had been set up at company C. Only after the termination of the contract with the [buyer], in the second half of December 1995, did the owner of company C decide to accept the devices at a price of US $35,000. The seller [in that transaction] was not the Plaintiff, but BV, who was not affected by the commission agreement. The promise for share of costs for advertising measures asserted by [buyer] is contested by [seller]. The [seller] did not breach the "Dealer Agreement" in any other way. The "sales on credit" were unanimously fixed; it was thereby known that the "displays" of the devices were in the English language.
The conversations with Mr. D. took place under the participation of the manager of the [buyer]; a cooperation between Mr. D., the [seller] and the [buyer] had been the issue. The conversations had been led confidentially and did not result in an insecurity of the market. The damage alleged by the [buyer] is not understandable. The termination of the "Dealer Agreement" is effective. Under no circumstances can the [buyer] rely on a compensatory claim of the commercial agent for loss of clientele. The claim already fails because the [buyer] had not been involved in the sales organization of the [seller]. In particular, the [buyer] did not have a duty to give information comparable to the requirements of Section 86(2) HGB [*]. Furthermore, the [buyer] was not subject to directions or interference by the [seller]. Reports of business calls have never been demanded. Furthermore, the [buyer] was not obliged to provide [buyer]'s customer data to the [seller]. In fact, the regular customers of the [buyer] remained unknown to the [seller], with the exception of the few customers who had been directly supplied by the [seller] after the arrangement with the [buyer].
The District Court of Munich [Court of First Instance] with decision of 19 December 1996, granted the [seller]'s claim in the amount of DM 271,418.18 as well as interest thereon. The claims raised are governed by the CISG because the subject matter is concerned with the settlement of contracts of sale. A differing agreement upon the place of payment has not been met; accordingly, the Court of First Instance has jurisdiction. The Court of First Instance held the claim only partly valid on the merits. The [seller] could demand payment of the invoices according to letters II.6, 7 and 12 of the statement of claim, as well as a partial amount of DM 40,040 out of the invoice according to letter II.13 of the statement of claim; the total amount sums up to DM 276,703.18. This amount is not disputed by the [buyer] on the merits. Further claims have not been substantiated sufficiently by the [seller]. The [seller]'s right of action regarding the claims granted already follows from the fact that the [buyer] charged the goods to the [seller] and not to BV. Explanations by BV regarding the "Dealer Agreement" have no legal relevance. The [buyer] can set-off the balance owed with a claim for commission in the amount of DM 5,285 out of a delivery to company C. It is decisive in that matter that the delivery is contractually associated with the [seller] as a measure governed by him, even if the sale took place through BV in the end. However, the commission is calculated only on the basis of the actually charged price of sale of US $35,000 - a higher "actual market price" of the goods delivered is of no relevance. The [buyer] cannot raise any further claims of set-off. It cannot be discovered how the [seller] could have breached the "Dealer Agreement" by holding negotiations with Mr. D. Also lacking is a substantiated report by the [buyer] regarding the matter, in what amount did [buyer] suffer a correspondingly caused damage. The mentioning of turnover figures does not suffice for that, even more so, as the [seller] was contractually permitted to act in the [buyer]'s business area. The same applies to the [buyer]'s claim of damages for the alleged unlawful termination of the "Dealer Agreement". The [seller] was in the position to orderly terminate the "Dealer Agreement"; the [buyer] did not demonstrate why [buyer] was still entitled to such a claim of damages for the termination. The Court of First Instance could not "approach" the claim of allowance for advertising expenses relied upon by the [buyer], as it was pleaded for the first time in that regard in the memorandum of 11 November 1996, which is not diminished by that matter. This has a similar effect on the [buyer]'s alleged right to demand compensation of the authorized retailer. In that respect, details have also been mentioned for the first time in the memorandum of 11 November 1996. Furthermore, the new allegation itself is not substantiated sufficiently, neither regarding the ground of the claim nor the amount of the claim relied upon. For the closer presentation of facts, reference is made to the decision of the Court of First Instance, which was delivered to the [buyer] on 28 January 1997 and to the [seller] on 30 January 1997.
Against that decision, the [buyer] raised an appeal which was received by the Appellate Court on 25 February 1997 and substantiated by memorandum of 25 April 1997, as well as a follow-up appeal by the [seller], received and at the same time substantiated on 18 June 1997, partly revoked by memorandum of 19 June 1997.
The [buyer] mostly repeats its allegations at first instance for the statement of grounds. [Buyer] maintains its already stated opinion of law, that the Court of First Instance unlawfully assumed its international and local jurisdiction. The [seller]'s claim is also unfounded. The [seller] did not have a right of action. The Court of First Instance did not deal with the point that the [seller] assigned its export trade and with that its contractual relations with the [buyer] to BV in the beginning of 1995 (cf. especially enclosures B 1 and B 2). At least the claims relied upon were assigned to BV by the [seller]; this is exhibited in the communication enclosure B 7. Furthermore, the claims for payment granted by the Court of First Instance had ceased to exist by way of set-off. For the calculation of the [buyer]'s claim of commission resulting out of the delivery to company C, granted by the Court of First Instance, one had to rely on the market price of the delivered devices, not on the amount of the invoice; this is inferred from the interpretation of the supplementary agreement enclosure B 8, in which a charge of a "friendly price" was not contemplated. In the end, this results in a claim for commission in the amount of DM 9,712.82. Further consideration has to be given to the allowance of advertising expenses in the amount of DM 14,000 that was promised by the [seller]. In that respect, the Court of First Instance failed to notice that the relevant statement of the [buyer] contains a rejoinder of the statement of the [seller] in the memorandum of 30 September 1996, in which the [seller] denied its promise despite better knowledge. By way of set-off with the [seller], the [buyer] applied a claim of damages for intentional breach and unlawful termination of the "Dealer Agreement". This claim itself exceeds the claim of the [seller]. For no discernible reasons, the Court of First Instance left unconsidered the facts presented by the [buyer] on that issue. The reference by the Court of First Instance, that the [seller] had been permitted to act itself in the business area of the [buyer], is wrong. The negotiations between the [seller] and Mr. D. were not about the delivery of single devices, but about the conclusion of a contract of exclusive dealership. The statement of the Court of First Instance, that the [buyer] did not refute the [seller]'s right to orderly terminate the "Dealer Agreement", is also wrong. The [buyer] already denied explicitly, in the first instance, that the prerequisites of a termination without notice and/or of an orderly termination were met. The [buyer] also substantiated the amount of the damage [buyer] suffered. [Buyer] could restrict itself to presenting the probable profit which could have been expected in the normal course of events (Section 252 BGB [*]). Finally, the [buyer] is also still entitled to the right, upon which [buyer] has relied, to demand compensation of the authorized retailer. In the answer to the statement of claim, the [buyer] already presented all of the factual prerequisites of this claim. In the following, [buyer] repeats numerous facts which prove the incorporation into the [seller]'s sales organization. Among others, the [buyer] points out that the [seller] had decided in which fairs the [buyer] had to participate. The [seller] had also given binding directions to the [buyer] as to the shaping and the fittings of [buyer]'s fair stall. The [buyer] generally had to proceed according to the directions of the [seller] (cf. enclosure B 8). The [seller] set the marketing of the products in all detail and also made precise directions as to the fixing of the prices. In connection with the sale of the [seller]'s products [L.-products], the [buyer] had not even marked them with [buyer]'s own registered company, but with "L. France". [Buyer] also repeatedly had to report the sales of the [seller]'s products under the specification of [buyer]'s customer relations. A comparison of the reference list enclosure B 17, which contains the customers recruited by the [buyer], with enclosure B 18 also proves that the L.-group [seller's group] continued the business relations with the customers of the [buyer].
The [buyer] requests the review of the decision of 19 December 1996 by the Court of First Instance and the dismissal of the [seller]'s claim. [Buyer] also requests protection from execution (Section 712 ZPO [*]).
The [seller] requests the dismissal of the [buyer]'s appeal.
The Court of First Instance rightfully recognized its international jurisdiction. Munich is the place of performance of the purchase price claims in dispute. The [seller] also has the right of action. All orders in dispute were addressed by the [buyer] to the [seller] and have been confirmed by the [seller]. Also, the claims have not been assigned. With regard to the claim of commission for deliveries to company C, made available for set-off by the [buyer], the Court of First Instance rightfully recognized an invoice amount of US $35,000.
This was a "bargain price", as one wanted to win company C. as a customer. Still, the invoice amount is decisive. The [buyer] also does not have a claim to the requested allowance for advertising expenses. There has been no overall agreement as to a share of the costs. Rather, the parties had assumed that a sharing of the advertising costs of the [buyer] in the amount of DM 14,000 by the [seller] would arise only if the [buyer] kept [buyer]'s contractual obligations to sell the [seller]'s products and to take the required measures. Neither had happened. In other respects, the statement of the [buyer] on that issue had been rightfully dismissed by the Court of First Instance; also in the instance of appeal, the [buyer] is excluded from its set-off. The Court of First Instance rightfully denied the [buyer]'s claims of damages for alleged breaches of contract by the [seller]. The negotiations which were held between the manager of the [seller] and Mr. D. for the purpose of a possible collaboration in sales, had not been contrary to the contract. Also lacking is any substantiated statement of the [buyer] regarding this. It is disputed that the [buyer] had lost but one customer due to the negotiations questioned. The [seller] had effectively terminated the frame contract with the [buyer]. The [buyer] was in arrears with the payment, did not reach the contractually laid down minimum sales and breached the agreed contractual prohibition of competition. Finally, the [buyer] also cannot demand compensation. [Buyer] had not been incorporated into the [seller]'s organization of sales. The [seller] especially did not give any binding directions to the [buyer] regarding the sale of its products, with the exception of the sales quota. The [buyer] was also not obliged to give information; [buyer] was not obliged to provide data on [buyer]'s established clientele to the [seller]. The reference list presented as enclosure B 17 does not originate from the [seller], but from its new contractual partner who took over the list from the advertising leaflets of the [buyer]. The statement of the [buyer] regarding the amount of [buyer]'s alleged claim for compensation is not comprehendible. The basis for calculation is not the turnover, but the "discount core" equivalent to the compensatory claim of the commercial agent for loss of clientele. Furthermore, the [buyer] essentially profited by the suction effect of the brand L [seller's brand].
Reference is made in detail to the statement of grounds for appeal of 25 April 1997 and to the response to the appeal of 27 May 1997.
In its follow-up appeal, the [seller] requests the review of the appealed decision with the measure to hold the [buyer] liable to pay [seller] DM 287,150.33 plus 5% interest on DM 225,830.25 from 12 October 1995 onwards, and on DM 61,320.08 from 13 December 1995 onwards.
The [buyer] requests the dismissal of the [seller]'s follow-up appeal.
The [seller] states in the argumentation of its request that the Court of First Instance incorrectly reduced the [seller]'s purchase price claim from the invoice of 26 September 1995 (para. II.13 of the statement of claim) by a total of DM 10,447.15. On the one hand, alongside the sporting equipment considered by the Court of First Instance, two further Lifecycles 9500 REC HRE had been ordered (cf. order enclosure K 28; delivery note K 26). On the other hand, the order had to be transacted on the basis of the rightly invoiced export-traders-prices. This results in a total price of DM 50,487.15 for the order. Additionally, the Court of First Instance incorrectly considered the [buyer]'s claim for commission out of the transaction with company C. The contract of sale of the devices concerned had been concluded - on an offer by BV - only after the termination of the dealer contract. The parties agreed at all times that a commission would certainly be owed only if the sale ensues during the time the dealer contract existed.
The [buyer] refers to the correct, in that respect, considerations of the Court of First Instance. [Buyer] did indeed order two further Lifecycles 9500 REC HRE. However, in delivery note K 26, it can be seen clearly that only three of the devices were delivered. Furthermore, the "Dealer Agreement" does not provide the currency in which the [buyer] had to pay the purchase price. Thus, each respective order of the [buyer], which the [seller] accepted by delivery of the devices, is decisive. The subsequent invoicing could not effect a change of the contracts of sale. The Court of First Instance correctly regarded as substantiated the [buyer]'s set-off with the claim of commission from C. Enclosure K 41 proves that an agreement over the purchase of the devices in question had already been met during the term of the "Dealer Agreement"; only the amount of the purchase price had not been specifically fixed. In other respects, the [buyer] is also entitled to a claim of commission in accordance with Section 87(3) No. 1 HGB [*], even for a deal that has been concluded after the termination of the "Dealer Agreement", as it is obvious that the [seller] knowingly delayed the invoicing of the purchase price.
The admissible appeal by [buyer] as well as the admissible follow-up appeal by [seller] are only partly successful.
I. 1. The claim is admissible. The local jurisdiction of the Court of First Instance does not have to be examined in the second instance, Section 512(a) ZPO [*].
a) The place of performance in the sense of Art. 5 No. 1 EuGVÜ [*] is determined by the statute of the contract, which is to be determined by the IPR [*] of the forum. This is valid, even if according to Art. 3(2) EGBGB [*] the place of performance is determined by the CISG (EuGH NJW [*] 95, 183; cf. also von Caemmerer/Schlechtriem, CISG, 2nd ed., Art. 57, No. 10 and 11).
b) In the case at hand, the parties subjected their contractual relations to German law (cf. No. 16 DA enclosure K 29). In so doing, the parties had neither expressly nor by conduct excluded the application of the CISG, so that the CISG, as a part of the German system of law, can generally find application (cf. von Caemmerer/Schlechtriem, CISG, 2nd ed., Art. 6, No. 16).
c) The material prerequisites for the application of the CISG are met in the present case. It is especially to be noted, that the [seller] - regardless of the more detailed judicial qualification of the underlying frame contract enclosure K 29 - pleads for purchase-money claims (cf. only No. 2 DA: "... the price of goods sold to the DEALER ..."). The parties have their places of business in different Contracting States to the CISG. A case of Art. 3(2) CISG is recognizably not met (regarding the main scope of application of the provision, cf. von Caemmerer/Schlechtriem, CISG, 2nd ed., Art. 3, No. 8 and 9).
d) A place of payment, derogating from Art. 57(1)(a) CISG, has not been agreed upon by the parties. Especially, the parties had not agreed on payment to be made against the handing over of goods or documents.
aa) In No. 6 DA, the parties agreed on a provision of the passing of risk to the detriment of the [seller]. This provision, however, does not alter the place of payment; in particular, Art. 57(1)(b) CISG is not applicable to cases of sale by delivery to a place other than the place of performance (cf. von Caemmerer/Schlechtriem, CISG, 2nd ed., Art. 57, No. 16 with further references).
bb) The agreement that payment had to be made by irrevocable letter of credit (No. 3 DA) did not have any influence on the place of payment, either. From its content, the provision regarding the letter of credit, already leaves the place of performance untouched (Canaris in Staub, HGB-Großkommentar, 4th ed., Bankvertragsrecht, No. 1056). At most, the provision can be understood in the sense that the place of payment is agreed as the place where the letter of credit is made payable; this is regularly the place of the second bank in the seller's country (advising or confirming bank); cf. von Caemmerer/Schlechtriem, CISG, 2nd ed., Art. 57, No. 22. Following the insofar-undisputed statement of the [seller], this is the Bayerische Vereinsbank in Munich in the case at hand.
cc) As far as the [buyer] was contractually allowed to pay invoices by bank draft ("... payment by bankers cheque on 30 days net"), this also does not contain a derogating agreement regarding the place of payment. The term "bank draft" is not even defined clearly (cf. BGH [*] WM 85, 736/8). Already in that respect there is no reason for the assumption that the parties wanted to agree on the place of payment, through the use of this term, in the formulation of an alternative mode of payment. In case of doubt, it is also valid here that, according to German law, bank drafts are accepted performance as conditional payment; the original claim for payment remains open (cf. Palandt [*], BGB, 56th ed., Par. 364, No. 6 and 10).
e) Decisive for the place of payment, therefore, is the place of business of the seller. According to Art. 5 No. 1 EuGVÜ [*] this is the place where the obligation relied upon - should one exist - would have to be fulfilled, i.e., the question of the [seller]'s right of action is already not a prerequisite for the admissibility of its claim. However, it would be decisive, if the [seller] changed its place of business and thus established a different legal domicile (cf. von Caemmerer/Schlechtriem, CISG, 2nd ed., Art. 57, No. 11). But even the [buyer] did not assert that the [seller] abandoned its place of business in Unterschleißheim and moved it to Rotterdam. The argumentation of the [buyer] that [buyer]'s contractual partner is the Life Fitness Atlantic BV in Rotterdam must, therefore, be traced only in the examination of the substantiation of the claim (see below).
II. The claim, as far as it still is subject to a decision in second instance, is mostly substantiated. The legal basis is Art. 53 CISG.
1. The contracts of sale still in dispute have been concluded between the parties; the contractual partner of the [buyer] is the [seller]. Regardless of the communication of 27 April 1995 by BV, that it overtook the "coordination" of the sales activities of Life Fitness (enclosure B 1), as well as all further communications by BV, it must be stated that the orders still in dispute - of 12 May 1995 (enclosure K 8), 15 June 1995 (enclosure K 12) and 28 August 1995 (enclosures K 27 and B 13 respectively) - as well as the additional orders of 5 September 1995 and 8 September 1995 (enclosures K 28 and B 14), all have been addressed by the [buyer] to the [seller]. All orders have been either confirmed by the [seller] (cf. enclosures K 9 and K 13) or fulfilled (cf. enclosures K 10, K 14, K 24 and K 26). In this light, the explanations by BV can not be granted significance decisive for the conclusion of the contract.
2. Despite corresponding delivery, it is undisputed that the invoices enclosure K 11 in the amount of DM 163,472.-, enclosure K 15 in the amount of US $ 39,398.-, enclosure K 23 in the amount of US $ 12,000 as well as a partial amount of invoice enclosure K 25 in the amount of DM 40,040 have not been paid. In dispute is the delivery (and therefore the purchase-money claim) of two further devices "Lifecycle 9500 REC HRE" from order enclosure K 28 as well as the price fixing in invoice enclosure K 25 (account on the basis of the prices specified in the order or explained in the invoice).
a) The [buyer] denies having received the two additional "Lifecycles", mainly under reference to the delivery note enclosure K 26. The order as such is undisputed, and in other respects proven by enclosure K 28. The Appellate Court is convinced that both devices had been delivered. This is evidenced in just the delivery note enclosure K 26, cited by the [buyer], which - set under a remark of technical content - explains exactly these two additional "Lifecycles", the account of which is presently at issue. It is obviously an "oversight" (in the true meaning of the word) on behalf of the [buyer]. As the [buyer] also refers to the delivery note to underline [buyer]'s presentation, the Appellate Court sees no reason to doubt the content of the delivery note as such. To that extent, the follow-up appeal of the [seller] is successful.
b) Regarding the decisive prices, the Appellate Court is not able to follow the argumentation of the [seller]. Irrespective of the frame agreement No. 2 DA ("... the price of goods ... shall be export dealer price ..."), the [buyer] proposed to the [seller] a definite offer with [buyer]'s order enclosures K 27, K 28 and B 14, to the price of the goods ordered. The [seller] accepted the offer by conduct through the delivery of the goods. [Seller] was not allowed to calculate higher prices afterwards; the prices in DM explained in the offers are valid.
As far as further invoices expressed in US $ exceeding enclosure K 25 have to be taken into account, the DM-amounts relied upon by the [seller] stay below the prices specified by the [buyer] in [buyer]'s orders. The [buyer] did not object to this form of accounting; it is therefore also binding for the Appellate Court.
3. From the above total amount, an undisputed credit in the amount of DM 106.82 has to be deducted. The remaining sum amounts to DM 283,396.36.
4. The [seller] has not lost the claim explained [above] by way of assignment to BV or by way of assignment of a claim by operation of law. The [seller] denied the assignment alleged by the [buyer]. The [buyer] did not provide evidence for [buyer]'s allegation. The letter by BV of 6 October 1995 presented as enclosure B 7, in which BV speaks of a payment "to our account in Germany", is not sufficient proof for the assignment of a claim, especially since in the letter enclosure B 1 it becomes evident that BV had to exercise coordinating tasks. The [buyer] did not state anything substantiated regarding the prerequisites of the assignment of a right according to Section 25(1) sent. 2 HGB [*]; an assignment of a firm cannot be ascertained.
The [buyer] can set-off against the [seller]'s purchase-money claim still due with a claim for commission against the [seller] out of a delivery to company C. in the amount of DM 5,285. The Appellate Court follows also in this regard the true reasons of the decision appealed. The appeal as well as the follow-up appeal was without success in that respect.
6. The [buyer] can furthermore set-off with a counterclaim in the amount of DM 14,000 against the [seller]'s claim. The legal basis is the promise for allowance of advertising expenses in the specified amount by the [seller]. The [buyer] was successful with [buyer]'s appeal in that respect.
7. Counterclaims for the breach of the "Dealer Agreement" by the [seller] during the execution of the effective contract (until its termination) cannot be raised by the [buyer]. The appeal was not successful in that respect.
8. The [buyer] was also not successful with [buyer]'s claim of damages for breach of the contract through the termination of the "Dealer Agreement". The termination of the contract by the [seller] is effective.
9. Finally, the [buyer] has no right to demand compensation of the authorized retailer. [Buyer]'s set-off with such a compensatory claim runs idle.
The [seller]'s claim of interest follows from Art. 78 CISG in connection with Section 352 HGB [*]. In correspondence with it being due, the [buyer]'s claim of the allowance for advertising expenses had to be deducted already from the first claim relied upon. However, the [buyer]'s claim for commission from the C-deal had only become due on 31 January 1996; Section 87(a)(4) in connection with Section 87(c)(1) HGB [*]. The set-off with this claim could therefore only extinguish the corresponding part of the [seller]'s claim from 31 January 1996 onwards, Section 389 BGB [*]. Thus, for the period from 13 December 1995 to 30 January 1996, additional interest on DM 5,285 had to be paid.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff/Appellee of Italy is referred to as [seller]; the Defendant/Appellant of Germany is referred to as [buyer]. Amounts in German currency [Deutsche Mark] are indicated as [DM]; amounts in the currency of France [French francs] are indicated by [f].
Translator's note on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; BGH = Bundesgerichtshof [German Federal Supreme Court of Justice]; EGBGB = Einführungsgesetzbuch zum Bürgerlichen Gesetzbuche [German Code on Private International Law]; EuGVÜ = [European Communities Convention on Jurisdiction and Enforcement of Judgements in Civil and Commercial Matters]; HGB = Handelsgesetzbuch [the German Commercial Code]; IPR = Rules of conflict of laws; NJW = Neue Juristische Wochenschrift [a well-known German Law Journal]; Palandt [well-known and influential commentary to the German Civil Code]; ZPO = Zivilprozessordnung [German Code on Civil Procedure].
** Tobias Koppitz is a student at law at Humboldt University Berlin, preparing for his State examination. With the team of Humboldt University Berlin, he won the Frédéric Eisemann Award for third place in the 8th Willem C. Vis International Commercial Arbitration Moot 2000/2001. He was coach to the team of Humboldt University Berlin in the 9th Willem C. Vis Moot 2001/2002. The second-iteration redaction of this translation was by Dr. John Felemegas of Australia.

matches:
Art. 57
Art. 5
Art. 3
Art. 57
Art. 6
Art. 3
Art. 3
Art. 57
Art. 57
Art. 57
Art. 57
Art. 5
Art. 57
Art. 53
Art. 78