Guzell, Leonard v. Hiller, R. ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 99-4070
Leonard Guzell,
Plaintiff-Appellant,
v.
R. Hiller and J. Gawlik,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99 C 3740--James H. Alesia, Judge.
Argued April 19, 2000--Decided August 7, 2000
Before Posner, Coffey, and Easterbrook, Circuit
Judges.
Posner, Circuit Judge. The plaintiff appeals
from the dismissal under Fed. R. Civ. P. 12(b)(6)
of his Fourth Amendment false-arrest suit against
two Chicago police officers. 42 U.S.C. sec. 1983.
According to the complaint, back in 1988 Guzell,
a travel agent, sold a round-trip Chicago-to-
Warsaw airline ticket to Agniezka Bacik. "In
order to facilitate the travel arrangements and
as security for payment," we read in the
complaint, Bacik left her passport with Guzell.
The ticket was "processed," whatever exactly that
means (probably that it was issued), but Bacik
refused to pay for it, so Guzell did not return
her passport. (Whether she was able to use the
ticket without her passport is unclear--maybe she
had another passport, issued by another country.)
Eleven years later Bacik appeared in Guzell’s
office and demanded her passport back. He
refused, because she had never paid for the
ticket and was unwilling to do so now. She
complained to the police, who went to Guzell’s
office and told him to give her back her
passport. He refused, explaining that he was
holding the passport as part of a business
dispute and that she had a civil remedy. The
police arrested him for misdemeanor theft. He was
prosecuted, but the case against him was
dismissed. Whether Bacik ever got her passport
back, and why she wanted it back since it almost
certainly had expired, are among the unresolved
mysteries of this case. There is no argument that
the police should have known that prosecution
would be barred by the statute of limitations,
since the statute probably did not begin to run
until Bacik’s demand for the return of the
passport, which she had left voluntarily with
Guzell eleven years before, was refused. Cf.
Owens-Illinois, Inc. v. Candle Man, Inc., 279
N.E.2d 774 (Ill. App. 1972); Hobson’s Truck
Sales, Inc. v. Carroll Trucking, Inc., 276 N.E.2d
89, 91 (Ill. App. 1971).
Guzell attached to his complaint the police
report of the arrest, minus one page, which the
defendants have included in their brief. The
record also contains a complaint to the police
signed by Bacik. By attaching pages from the
police report to his complaint, Guzell made them
a part of the complaint "for all purposes." Fed.
R. Civ. P. 10(c). But this does not mean that he
necessarily vouched for all the facts set forth
in them, Northern Indiana Gun & Outdoor Shows,
Inc. v. City of South Bend, 163 F.3d 449, 455
(7th Cir. 1998); Gant v. Wallingford Board of
Education, 69 F.3d 669, 674 (2d Cir. 1995), thus
setting the stage for an argument that he had
pleaded himself out of court. Ogden Martin
Systems of Indianapolis, Inc. v. Whiting Corp.,
179 F.3d 523, 529 (7th Cir. 1999); Thomas v.
Farley, 31 F.3d 557 (7th Cir. 1994); Early v.
Bankers Life & Casualty Co., 959 F.2d 75, 79 (7th
Cir. 1992). A plaintiff in a libel suit who
attached the allegedly libelous article to his
complaint would obviously not be vouching for the
truth of the libelous assertions in the article.
Gant v. Wallingford Board of Education, supra, 69
F.3d at 674. The plaintiff’s purpose in attaching
an exhibit to his complaint determines what
assertions if any in the exhibit are facts that
the plaintiff has incorporated into the
complaint. We need not pursue the issue here,
however, as Guzell does not appear to be
contesting the accuracy of the police report.
Nor do we understand him to be contesting the
authenticity, as opposed to the accuracy, of
Bacik’s signed complaint to the police. Its
accuracy is in any event of limited relevance to
the question whether the police had probable
cause to arrest Guzell. Police are entitled to
base an arrest on a citizen complaint, whether of
a victim (as here) or a nonvictim witness,
without investigating the truthfulness of the
complaint, unless--this turns out to be an
important qualification--they have reason to
believe it’s fishy. Gramenos v. Jewel Cos., 797
F.2d 432, 439-40 (7th Cir. 1986); Rodgers v.
Lincoln Towing Service, Inc., 771 F.2d 194, 200
(7th Cir. 1985); McKinney v. George, 726 F.2d
1183, 1187 (7th Cir. 1984); Butler v. Goldblatt
Bros., Inc., 589 F.2d 323, 325-26 (7th Cir.
1978); Lee v. Sandberg, 136 F.3d 94, 103 (2d Cir.
1997). So we can treat the police report plus
Bacik’s complaint as the factual record upon
which to base a judgment of whether the police
had probable cause, or at least a reasonable
basis for thinking they had probable cause, to
arrest Guzell.
Bacik’s complaint, though much trumpeted by the
defendants, has limited relevance to the question
whether they were acting reasonably in arresting
Guzell. Obviously written by the police though
signed by her, it merely recites the statutory
elements of theft--that Guzell "knowingly
obtained control over property of Bacik [namely
her passport] . . . intending to deprive [her]
permanently of the use of the property." See 720
ILCS 5/16-1. Since it is obvious and indeed
conceded that Bacik told the police more than
this, the reasonableness of their action cannot
be predicated on the written complaint alone.
There is no rule that the police can make an
arrest whenever they have a scrap of paper that
contains statements which if true (even though
they may have been taken out of context)
establish probable cause for an arrest. Otherwise
they could have arrested Guzell on the basis of
the complaint that we have quoted plus a
statement by Bacik that he had obtained control
over her passport by using a giant magnet to draw
it out of her safe deposit box. Police must act
reasonably on the basis of what they know, and if
what they know is more than an isolated sentence
in a police report they can’t close their eyes to
the additional information.
Bacik’s complaint is, moreover, contradicted by
the defendants’ own argument that the passport
was and is the property of the United States and
thus not, as her complaint states, "property of
Bacik." The argument founders immediately on the
fact that there is nothing in the record to
indicate that it is a U.S. passport; it may be a
Polish passport, and we have no idea whether
Poland regards the holder of its passports as
having a property interest in them. No doubt
Poland--no doubt every country--places more
restrictions on a person’s use of his passport
than on his use of his toothbrush, but this does
not mean that the passport is not, at least for
many purposes, the person’s property.
It may seem surprising that the defendants would
argue that the passport was not Bacik’s property,
since if they reasonably believed that it was,
whether or not it really was, that would, one
might think, give them probable cause to arrest
Guzell for withholding it. The police could not
be faulted for lacking a clear idea of the
property rights in passports, an esoteric issue.
The problem, and the motivation for this line of
argument, is that to establish probable cause the
defendants must show they were reasonable in
thinking that Guzell wasn’t merely trying to
enforce a security interest in the passport, but
had really stolen the passport. They deny that
the passport was Bacik’s property (despite what
she told them) in order to show that Guzell
couldn’t have had a security interest in it. This
is another misstep. Under the law of theft, all
that is required to demonstrate that he didn’t
steal the passport is that he had a bona fide
belief that he had a valid security interest in
it which he could lawfully enforce by holding on
to the passport until she paid for the ticket.
Phelps v. People, 55 Ill. 334 (1870); People v.
Baum, 579 N.E.2d 374, 375 (Ill. App. 1991) ("a
bona fide belief, even though mistakenly held,
that one has a right or claim to another’s
property, can negate an intent to permanently
deprive the owner of his property"); People v.
Baddeley, 245 N.E.2d 593, 595 (Ill. App. 1969).
The LaFave and Scott treatise treats as
unproblematic the defense of good faith when
property "is taken for security, rather than in
satisfaction of, the debt or claim." 2 Wayne R.
LaFave and Austin W. Scott, Jr., Substantive
Criminal Law sec. 8.5, p. 363 (1986). In any
event, one can have (and not just believe,
mistakenly but honestly, that one has) a valid
security interest in property that is not owned
by the grantor of the interest. Midwest Decks,
Inc. v. Butler & Baretz Acquisitions, Inc., 649
N.E.2d 511, 516 (Ill. App. 1995); In re Pubs,
Inc. of Champaign, 618 F.2d 432, 436 (7th Cir.
1980); Kunkel v. Sprague National Bank, 128 F.3d
636, 641 (8th Cir. 1997); First National Bank v.
Avondale Mills Bevelle Employees Federal Credit
Union, 967 F.2d 556, 559 (11th Cir. 1992); 2
James J. White & Robert S. Summers, Uniform
Commercial Code sec. 24-6, pp. 322-23 (3d ed.
1988). Thus a tenant can borrow against his
leasehold, id., p. 323; In re Fullop, 6 F.3d 422,
425 (7th Cir. 1993), even though by definition he
does not own the leased property.
The defendants’ further argument, for which no
authority is offered, that U.S. law forbids the
granting of a security interest in a passport
also assumes without any basis in the scanty
record that Bacik’s passport is a U.S. passport.
What we do know, recurring to the restrictions
that countries place on the use of the passports
they issue, is that Guzell, should he have tried
to "foreclose" his alleged security interest,
could not have sold Bacik’s passport to someone
else to use, or have used it himself. 18 U.S.C.
sec. 1544. But it does not follow that Bacik
could not have pledged the passport to him as
security for his advancing her the money for the
airline ticket. Secured credit has been said to
originate in the practice of giving hostages to
secure one’s promises, Oliver Wendell Holmes,
Jr., The Common Law 247-51, 260 (1881), since a
thing as well as a person can be a hostage. We do
not permit the use of human beings as pledges any
more and so if Bacik had given Guzell her child
to hold until she paid for her ticket he could
not refuse to return it to her even if she
refused to pay for the ticket. But we are given
no reason to think that the law treats a
passport, especially a foreign passport,
similarly, though we can find no cases on the
point.
Since the defendants have failed to establish
that Guzell could not possibly have had a
security interest in the passport, a fortiori
they have failed to establish that he could not
have had a bona fide belief that he had such an
interest. Guzell could no more be charged with
knowledge of the intricacies of secured
transactions than the police could be. But we
reject Guzell’s argument that because he did not
intend to keep the passport "permanently," but
only until Bacik paid him for the ticket, he
could not be guilty of theft under Illinois law.
There are two fallacies in this argument. The
first is its failure to recognize that under
Illinois law, extortion, which includes holding
someone’s property for ransom, is treated as a
form of theft. United States v. Bedell, 981 F.2d
915 (7th Cir. 1992); cf. United States v.
Lallemand, 989 F.2d 936, 939 (7th Cir. 1993).
Second and related but more fundamental, the word
"permanently" when it appears in statutory or
judicial definitions of theft is not to be taken
literally. Otherwise if Guzell had taken Bacik’s
diamond necklace and told her he would see to it
that it was returned to her heirs in the year
3000, he would not be guilty of theft. What
"permanently" means in this context is "either
permanently or for an unreasonable length of
time, or [that the defendant] intended to use it
in such a way that the owner will probably be
deprived of his property." 2 LaFave and Scott,
supra, sec. 8.5, p. 357. The defendant may
originally not have intended to keep the property
"permanently" (in this extended sense), but if
upon demand for its return he refuses to give it
up an inference of such an intent can arise; the
refusal then marks the point at which his holding
of the property went over into theft. People v.
Block, 540 N.E.2d 512, 516-17 (Ill. App. 1989);
cf. People v. Davis, 523 N.E.2d 165, 167 (Ill.
App. 1988). This is why, as we noted earlier, the
statute of limitations probably didn’t start to
run until Guzell rejected Bacik’s demand for the
return of the passport.
What the question in this case comes down to,
therefore, is whether the police had reason to
believe that Guzell was treating the passport as
if he owned it. The answer is yes if they
reasonably believed that he had no color of right
to withhold possession of the passport from
Bacik. And so let us turn to the police report,
the accuracy of which, as we said, Guzell does
not contest. The report recites that Bacik had
told the police that Guzell had taken her
passport in order "to perform a service thru his
travel agency" and then when she tried to recover
it he told her "’give me 350 and it’s yours,’"
though "no service was performed." The report
goes on to say that the police went to Guzell and
told him to return the passport but that he
refused, saying he would not return it until "she
paid a renewal fee"--which makes absolutely no
sense. Although the passport would have expired
(at least if it was a U.S. passport), obviously
Guzell would not have expected Bacik to pay him
the renewal fee, since he could not renew her
passport. Before arresting him, the police
"attempted to explain he could not hold the
passport for payment (that being a civil
matter)." The police report also and
inconsistently states that he told them he had
refused to return the passport because she owed
him "money for services rendered" and that the
police had responded that "in order to recover
money for services was a civil matter and he
could not hold the passport for payment."
Had Bacik denied that she had any dispute with
Guzell over payment for past services, the police
could have chosen to believe her (although such a
denial, unsupported by any documentary evidence,
about what had happened eleven years earlier
might warrant a high degree of skepticism) and
disbelieve Guzell. That possibility is implicit
in the rule that allows the police to arrest on a
citizen complaint without investigating its
truthfulness. And apparently Bacik did tell them
that Guzell had never performed any service for
her that would justify his keeping her passport
until she paid him $350. But she did not deny
that there was a dispute over this. Or if she
did, it nevertheless appears from the police
report that the police accepted Guzell’s
contention that he had a dispute with Bacik, and
specifically that he thought she owed him money
(there is no contention that the police thought
the debt barred by the statute of limitations)
and that he was holding the passport as security
for the payment of that money. We have not been
told on what basis the police could have
determined that Guzell knew, or was reckless in
failing to learn, that he had no right to treat
the passport as security. If they reasonably
believed that a passport is just like a child and
so cannot be a pledge, and that this is so clear
that Guzell was unlikely to have a bona fide
belief to the contrary, then they may have had
probable cause to arrest him after all. But of
this there is no indication in the record, which
in its present almost naked state is entirely
consistent with the defendants’ having no ground
for doubting Guzell’s good faith in claiming a
security interest in Bacik’s passport. A fuller
development of the facts may cast them in a quite
different light, and perhaps provide a basis for
a defense of immunity if not for a finding of
probable cause; but the dismissal of the
complaint on motion under Rule 12(b)(6) was
premature.
Reversed and Remanded.