Halberstam v. Welch

• Decision Date: 12 April 1983
• Docket Number: No. 82-1364,82-1364
• Citation: 227 U.S. App. D.C. 167,705 F.2d 472
• Parties: Elliott Jones HALBERSTAM, Individually, and as Administratrix of the Estate of Michael Halberstam, Deceased v. Bernard C. WELCH, Jr., a/k/a Norm Hamilton, Larry Lee Boone, John William Landis, Bernard Miles, Myron Henry Snow, Jr., Linda S. Hamilton, Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 472

705 F.2d 472

227 U.S.App.D.C. 167

Elliott Jones HALBERSTAM, Individually, and as Administratrix of the Estate of Michael Halberstam, Deceased v. Bernard C. WELCH, Jr., a/k/a Norm Hamilton, Larry Lee Boone John William Landis, Bernard Miles, Myron Henry Snow, Jr., Linda S. Hamilton, Appellants.

No. 82-1364.

United States Court of Appeals District of Columbia Circuit.

Argued Dec. 3, 1982.

Decided April 12, 1983.

Appeal from the United States District Court for the District of Columbia (D.C. Civil Action No. 81-00903).

Albert J. Ahern, Jr., Baileys Crossroads, Va., for appellants.

Jacob A. Stein, Washington, D.C., for appellee.

Before WALD, BORK and SCALIA, Circuit Judges.

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge:

Linda S. Hamilton appeals a judgment of the district court in a diversity action that she is civilly liable, as a joint venturer and coconspirator, for the killing of Michael Halberstam by Bernard C. Welch, Jr. on December 5, 1980, in the District of Columbia. The appellee, Elliott Jones Halberstam, is the personal representative of the estate of Michael Halberstam, her late husband. She brought this wrongful death and survival action ¹ for damages on behalf of the estate, Michael Halberstam's two children, and herself. Halberstam alleged that Bernard Welch and Linda Hamilton engaged in a joint criminal venture and conspiracy in the course of which Welch killed Michael Halberstam while burglarizing the Halberstams' home. Welch failed to file an answer, and the district court entered a default judgment against him on May 19, 1981. Hamilton actively defended the suit, but after a nonjury trial on January 12, 1982, the court found her jointly and severally liable with Welch and entered a judgment against both in the amount of $5,715,188.05. Hamilton now appeals the issue of her liability. ² We conclude that the district court's findings of fact are not clearly erroneous, and that it applied the proper law; accordingly, we affirm the judgment against Hamilton.

I. BACKGROUND

This case arises out of the shocking climax to a coldly efficient criminal campaign that had confounded, frustrated, and ultimately terrorized the Washington area. We are asked to determine the civil liability of the passive but compliant partner to this rampage that left widowed the wife of one of the community's most eminent physicians. As a result of Welch's innumerable burglaries over the course of five years, he and Hamilton acquired a fortune that would have been the envy of a Barbary brigand. In the words of the district court, Hamilton:

knew full well the purpose of [Welch's] evening forays and the means by which she and Welch had risen from "rags to riches" in a relatively short period of time. She closed neither her eyes nor her pocketbook to the reality of the life she and Welch were living. She was compliant, but neither dumb nor duped, so long as her personal comfort and fortune were assured. She was a willing partner in his criminal activities.

Halberstam v. Welch, No. 81-0903, mem. op. at 5 (D.D.C. Mar. 24, 1982) [hereinafter cited as District Court Opinion]. The district court based this conclusion largely on Hamilton's own testimony.

Hamilton first met Welch in October 1975, when Welch walked up to her in an apartment parking lot and asked her for a date. Hamilton stated that this was the first and only time she saw Welch with a gun. At the time of their meeting, Hamilton, a twenty-five-year-old high school graduate, worked as a secretary-compositor at the National Academy of Sciences. Welch told Hamilton that he bought estates and invested in coins, jewelry stores, and real estate. Welch moved into Hamilton's apartment a few weeks after their first meeting; apparently, his only assets at that time were a new Monte Carlo automobile, some clothing, a watch, pocket change, and some gold coins. They continued to live together, in various residences, until Welch shot Halberstam during the course of a burglary of Halberstam's home on December 5, 1980. Trial Transcript ("Tr.") at 12-15, 29-30; Hamilton Deposition at 4-5.

In 1976, Hamilton and Welch moved to a rented house in Falls Church, Virginia. Hamilton, still employed at this time, gave Welch her salary in cash to invest for her in gold coins. Welch had no outside employment, and spent most days at home managing investments. He would leave the house four or five times each week between 5:00 p.m. and 5:30 p.m., and return between 9:00 p.m. and 9:30 p.m. This routine continued throughout the five years Hamilton lived with Welch. ³ Hamilton stated that she never accompanied Welch on these evening expeditions. She did not think his absences peculiar, and said she never had a full discussion with him about where he had been. She assumed he was checking on his investments or meeting with coin and jewelry dealers. Hamilton remembered only one instance, in Minnesota, when she joined Welch on a visit to a coin dealer. Now and then Hamilton picked up coins for Welch from dealers, paying for the coins with cash Welch supplied. Tr. at 13-15, 17-18, 31; Hamilton Deposition at 6, 13, 23.

Soon Welch's "investments" bore fruit. In April 1978, after Hamilton gave birth to the first of their three children, Welch and Hamilton purchased a house in Minnesota for $102,000. Welch contributed about $55,000 in cash, and Hamilton put up about $20,000. The house was titled in Hamilton's name. They lived in Minnesota during portions of 1978, 1979, and 1980. Tr. at 22, 32-36, 41, 116; Hamilton Deposition at 23-24.

In 1979, the couple built a home in Great Falls, Virginia, valued at $1,000,000. Except for a trip to Minnesota during the summer, they lived in Great Falls from November 1979 until December 1980, when Welch was arrested for killing Halberstam. Hamilton's niece and the niece's child moved in with them. As suited their lifestyle, Welch and Hamilton bought two 1980 Mercedes-Benz cars and a station wagon, and hired a housekeeper. Tr. at 8, 18-19, 116; Hamilton Deposition at 12, 15; Plaintiff's exhibit 8.

Meanwhile, a different kind of refinement was taking place in the garage. With Hamilton's knowledge, Welch installed a smelting furnace in the garage and used it to melt gold and silver into bars. He then sold the ingots to refiners in other states. Hamilton typed transmittal letters for these sales. She also kept inventories of antiques sold, and in general did the secretarial work for Welch's "business." The buyers of Welch's goods made their checks payable to her, and she deposited them in her own bank accounts. She kept the records on these asymetrical transactions--which included payments coming in from buyers, but no money going out to the sellers from whom Welch had supposedly bought the goods. Hamilton remembered no mail from dealers in antiques or precious metals. Tr. at 24-25, 42-43, 72-83, 119-22, 126-29; Hamilton Deposition at 6, 9, 14-15, 18-21.

Not surprisingly, given the "low" cost of Welch's materials, his business was a profitable one. By 1978 Hamilton and Welch had a gross annual income in excess of $1,000,000. Hamilton's individual tax returns for 1978 and 1979 reported gross earnings of $647,569.21 and $491,762.16, respectively, from the sale of gold and silver. She took deductions, per Welch's instructions, for "cost of goods sold and/or operations" in 1978 and 1979 of $498,770.87 and $360,000, respectively--despite the absence of any evidence of payouts for such goods. Hamilton assumed that Welch filed a separate tax return. Tr. at 22-24, 38-41; Plaintiff's exhibits 6 and 7.

After the police apprehended Welch, they obtained a search warrant for the Great Falls house and discovered Welch's basement "inventory": some fifty boxes containing approximately three thousand stolen items--antiques, furs, jewelry, silverware, and various household and personal effects. While Hamilton admitted having seen the boxes, she claimed not to have seen their contents before. She said she did not go down to the basement often, although she had free access to it. Indeed, she provided policemen the key to Welch's locked basement study. ⁴ Tr. at 8-10, 15-16, 21-22, 95-96; Hamilton Deposition at 9-10, 18-19; Plaintiff's exhibits 4 and 5.

The district court concluded that this loot "was the source of [Welch's] and Hamilton's livelihood, income and investments. Disposing of the loot was the principal business in which Welch and Hamilton engaged while at home." District Court Opinion at 5.

II. ANALYSIS

The primary issues raised by this appeal are what kind of activities of a secondary defendant (Hamilton) will establish vicarious liability for tortious conduct (burglaries) by the primary wrongdoer (Welch), and to what extent will the secondary defendant be liable for another tortious act (murder) committed by the primary tortfeasor while pursuing the underlying tortious activity. To illuminate these issues, we need to clarify basic elements of vicarious liability in tort and to analyze case law to see what evidence is sufficient to establish them.

Various theories of civil liability are untidily grouped under the general heading of concerted tortious action. ⁵ To guide our deliberations, we initially outline a framework for this area of tort law, focusing on the two theories of liability the district court found applicable here--civil conspiracy, and aiding and abetting. We discuss a series of cases in the context of the framework, beginning with the sparse District of Columbia precedent. Then, after testing the district court's factual inferences against the "clearly erroneous" standard of review, we finally apply the law to these facts to determine Hamilton's liability for Michael Halberstam's death.

A. Legal Framework

Prosser notes that "[t]he original meaning of 'joint tort' was that of vicarious liability for concerted action. All persons who acted in concert to commit a trespass, in pursuance of a common design, were...