01a0233p.06

00-1046; 00-1078Court of Appeals for the Sixth CircuitJul 20, 2001

Full text


5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU
)LOH 1DPH DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
:,//,$0 - 0(<(56
3ODLQWLII$SSHOOHH
&URVV$SSHOODQW
Y
:$/0$57 6725(6 ($67
,1&GED:DO0DUW
'HIHQGDQW$SSHOODQW
&URVV$SSHOOHH
;!

1
1RV
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW)OLQW
1R²3DXO9*DGROD'LVWULFW-XGJH
$UJXHG-XQH
'HFLGHGDQG)LOHG-XO\
%HIRUH*8<%2**6DQG*,/0$1&LUFXLW-XGJHV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' -HIIUH\ 6 6XWWRQ -21(6 '$< 5($9,6
32*8(&ROXPEXV2KLRIRU$SSHOODQW/LQGD0*DODQWH
0$=85 025*$1 0(<(56 .,77(/ 'HWURLW
0LFKLJDQ IRU $SSHOOHH 21 %5,() -HIIUH\ 6 6XWWRQ

-- 1 of 10 --

0H\HUVY:DO0DUW6WRUHV 1RV
-21(6'$<5($9,6 32*8(&ROXPEXV2KLR5RQDOG
( :HVWHQ 5REHUW 3DWULFN *HRUJH /832 .2&=.85
'HWURLW 0LFKLJDQ 0HODQLH 3 6DUZDO :$/0$57
6725(6,1&%HQWRQYLOOH$UNDQVDVIRU$SSHOODQW/LQGD
0 *DODQWH -HIIUH\ 7 0H\HUV 0$=85 025*$1
0(<(56 .,77(/'HWURLW0LFKLJDQIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
521$/' /(( *,/0$1 &LUFXLW -XGJH :LOOLDP -
0H\HUV D \HDUROG FODLPDQW VOLSSHG DQG IHOO RQ ORRVH
FDUGERDUGLQWKHHPSW\ER[DUHDDWD6DP¶V&OXEVWRUH7KH
IDOOIUDFWXUHGKLVKLSFDXVLQJKLPWRXQGHUJRKLSUHSODFHPHQW
VXUJHU\0H\HUV¶VUHKDELOLWDWLRQSURFHVVJUHDWO\DJJUDYDWHG
KLVSUHH[LVWLQJDUWKULWLFFRQGLWLRQ
$IWHU D QLQHGD\ MXU\ WULDO GXULQJ ZKLFK WKUHH RI WKH
RULJLQDOVHYHQMXURUVZHUHGLVPLVVHGE\WKHGLVWULFWFRXUWZLWK
WKH FRQVHQW RI ERWK SDUWLHV WKLV QHJOLJHQFH DFWLRQ ZDV
VXEPLWWHG WR WKH UHPDLQLQJ IRXU MXURUV 7KH MXU\ UHWXUQHG
ZLWK D YHUGLFW LQ IDYRU RI 0H\HUV LQ WKH DPRXQW RI
ZLWKDILQGLQJRIFRPSDUDWLYHQHJOLJHQFHRQ
KLVSDUW7KLVUHGXFHGKLVGDPDJHVWRZKLFKWKH
GLVWULFWFRXUWIXUWKHUUHGXFHGE\LQUHVSRQVHWRWKH
GHIHQGDQW¶VPRWLRQIRUDUHPLWWLWXUOHDYLQJDQHWYHUGLFWRI

:DO0DUW DV WKH RZQHU RI WKH 6DP¶V &OXE VWRUH QRZ
DSSHDOVRQYDULRXVJURXQGVDUJXLQJWKDW WKHGLVWULFWFRXUW
HUUHGLQSHUPLWWLQJ0H\HUV¶V³DJJUDYDWLRQ´FODLPWRJRWRWKH
MXU\ WKHUHZDVLQVXIILFLHQWHYLGHQFHWRVXSSRUWWKHMXU\¶V
YHUGLFW WKHIRXUSHUVRQMXU\ZDVXQFRQVWLWXWLRQDODQG
WKHGLVWULFWFRXUWVKRXOGKDYHUHPLWWHGWKHYHUGLFWE\PRUH
WKDQ 0H\HUV FURVVDSSHDOHG FKDOOHQJLQJ WKH
UHPLWWLWXU )RU WKH UHDVRQV VHW IRUWK EHORZ ZH
$)),50WKHMXGJPHQWRIWKHGLVWULFWFRXUW

-- 2 of 10 --

1RV 0H\HUVY:DO0DUW6WRUHV
,%$&.*5281'
$ )DFWXDOEDFNJURXQG
2Q-XO\0H\HUVDQGKLVZLIHZHQWVKRSSLQJDWWKH
6DP¶V&OXEVWRUHLQ6RXWKJDWH0LFKLJDQ:KLOHKLVZLIHZDV
ZDLWLQJ LQ WKH FKHFNRXW OLQH 0H\HUV ZDONHG RYHU WR WKH
HPSW\ER[DUHDWRILQGDER[LQZKLFKWRSODFHWKHFRXSOH¶V
SXUFKDVHV 0H\HUV ZDV LQLWLDOO\ FDUU\LQJ D FXS RI IUR]HQ
FXVWDUG EXW VHW WKH FXS GRZQ MXVW EHIRUH HQWHULQJ WKH ER[
DUHD +H PRYHG VHYHUDO ER[HV LQ RUGHU WR ORFDWH RQH RI
VXLWDEOHVL]H2QFHKHIRXQGDER[WKDWKHZDQWHGKHWXUQHG
DURXQGJUDEEHGKLVFXVWDUGDQGEHJDQWROHDYHWKHER[DUHD
DWZKLFKSRLQWKHWULSSHGRQVRPHORRVHFDUGERDUGDQGIHOO
0H\HUVFODLPVWKDWKLVLQMXULHVDQGVXEVHTXHQWGDPDJHVDOO
IORZIURPWKLVLQFLGHQW
% 7ULDOEDFNJURXQG
0H\HUV ILOHG VXLW LQ VWDWH FRXUW RQ 'HFHPEHU
DOOHJLQJ WKDW KLV LQMXULHV ZHUH FDXVHG E\ :DO0DUW¶V
QHJOLJHQFH:DO0DUWUHPRYHGWKHDFWLRQWRIHGHUDOFRXUW
EDVHGXSRQGLYHUVLW\RIFLWL]HQVKLSXQGHU86&†
$WWULDO:DO0DUWVWLSXODWHGWKDW0H\HUVVOLSSHGRUWULSSHG
RQFDUGERDUGO\LQJRQWKHIORRULQWKHER[DUHD6HYHUDO:DO
0DUW HPSOR\HHV WHVWLILHG WKDW DW WKH WLPH RI WKH DFFLGHQW
WKHUHZHUHER[HVOHIWDOORYHUWKHER[DUHDEHFDXVHWKHUHZDV
QRRWKHUSODFHWRSXWWKHPWKDWWKHUHZDVORRVHFDUGERDUG
XQGHUWKHER[HVDQGWKDWFOHDQXSZDVGRQHRQO\RQD³FDWFK
DVFDWFKFDQ´EDVLV7ZRRIWKHHPSOR\HHVHYHQDGPLWWHGWKDW
WKHFRQGLWLRQRIWKHER[DUHDZDVGDQJHURXV
7KH XQFRQWUDGLFWHG HYLGHQFH HVWDEOLVKHG WKDW 0H\HUV
IUDFWXUHG KLV KLS DV D UHVXOW RI WKH IDOO +LSUHSODFHPHQW
VXUJHU\ZDVUHTXLUHGLQRUGHUWRUHVWRUHKLVDELOLW\WRZDON
DQG KH VXIIHUHG D GHJUHH IHYHU IRU IRXU GD\V DIWHU WKH
RSHUDWLRQ $V D UHVXOW RI WKH KLJK WHPSHUDWXUH KLV GRFWRU
GLVFRQWLQXHGDOOSDLQPHGLFDWLRQFDXVLQJ0H\HUVWREH³LQ
DJRQ\´GXULQJWKLVWLPH0H\HUVFRQWLQXHGWRIHHOSDLQDIWHU
KHEHJDQRXWSDWLHQWSK\VLFDOWKHUDS\7KLVWKHUDS\LQYROYHG
VWDQGLQJDQGZDONLQJH[HUFLVHVLQFOXGLQJWKHXVHRIFUXWFKHV

-- 3 of 10 --

0H\HUVY:DO0DUW6WRUHV 1RV
DQG ZDONHUV 0H\HUV WHVWLILHG WKDW WKH H[HUFLVHV DQG
VXSSRUWLYH GHYLFHV FDXVHG KLP WR IHHO SDLQ LQ KLV KDQGV
VKRXOGHUVKLSVZULVWVHOERZVDQGRWKHUMRLQWV7KHSDLQ
PDGHLWKDUGIRUKLPWRVOHHSDWQLJKW
$OWKRXJKVRPHRIWKHVHV\PSWRPVHYHQWXDOO\DEDWHGRWKHUV
VWLOOUHPDLQ0H\HUVWHVWLILHGWKDWWKHKLSUHSODFHPHQWVXUJHU\
SHUPDQHQWO\ DIIHFWHG KLV JDLW DQG KLV HYHU\GD\ OLYLQJ
DFWLYLWLHV+HKDVEHHQXQDEOHIRUH[DPSOHWRVWDQGIRUPRUH
WKDQWRPLQXWHVDWDWLPHRUWRZDONPRUHWKDQDPLOH
DQGDKDOIZLWKRXWIHHOLQJSDLQLQKLVKLSQRUFDQKHULGHKLV
ELF\FOHDVIDUDVKHZDVRQFHDEOHWRGR
3ULRUWRWKHDFFLGHQW0H\HUVKDGVXIIHUHGIURPUKHXPDWRLG
DUWKULWLVIRUPDQ\\HDUVEXWKDGQRWQHHGHGVWHURLGWUHDWPHQW
VLQFH+LVWUHDWLQJSK\VLFLDQ'U5D\PRQG:HLW]PDQ
WHVWLILHGWKDW0H\HUV
ZHQWIRUDORQJSHULRGZLWKRXW>VWHURLGV@EHIRUHKHIHOO
DQG IUDFWXUHG KLV KLS +H ZDV QRW UHDOO\ JRLQJ
WKURXJKIODUHXSVIRUWKHIHZ\HDUVSULRUWRWKHIUDFWXUHRI
KLVKLS,WDSHUHGWKH3UHGQLVRQHVRWKDWEHWZHHQ
DQG6HSWHPEHURIKHZDVRIIDOOVWHURLGV
+LVGLVHDVHRQWKHJROG>DW\SHRIPHGLFDOWUHDWPHQWIRU
UKHXPDWRLG DUWKULWLV LQYROYLQJ JROG VDOWV@ DFWXDOO\ GLG
ZHOODQGKHVHHPHGWRVWDELOL]H
'U:HLW]PDQDOVRFRQILUPHGWKDW0H\HUV¶VDUWKULWLVIODUHG
XSDIWHUKLVIDOOQRWLQJWKDW0H\HUV¶V³GLVHDVHSURFHVVVHHPHG
WRFKDQJHDIWHUWKHIUDFWXUHKHEHFDPHIODUHGXSLQDOORIKLV
MRLQWVQRWMXVWWDONLQJDERXWWKHKLS´+HDOVRSRLQWHGRXW
WKDW WKHVH V\PSWRPV DSSHDUHG WR EH WHPSRUDOO\ UHODWHG WR
0H\HUV¶VKLSLQMXU\³,QRWKHUZRUGVLWVHHPHGSUHWW\FOHDU
FXWWKDWWKHDUWKULWLVIODUHGIROORZLQJWKHIUDFWXUH´0RUHRYHU
'U:HLW]PDQWHVWLILHGWKDWWKHJROGVDOWVWUHDWPHQWKHKDG
EHHQ XVLQJ IRU 0H\HUV¶V DUWKULWLF FRQGLWLRQ ORVW LWV
HIIHFWLYHQHVVDIWHUWKHDFFLGHQWHYHQDIWHUKHLQFUHDVHGWKH
GRVDJHDQGIUHTXHQF\RIWKHVKRWV7KLVUHTXLUHGDUHWXUQWR
LQMHFWLQJ 0H\HUV ZLWK VWHURLGV VXFK DV 3UHGQLVRQH DQG
&RUWLVRQH
1RV 0H\HUVY:DO0DUW6WRUHV
( 7KHGLVWULFWFRXUW¶VIDLOXUHWRRIIHU0H\HUVWKHRSWLRQ
RIDFFHSWLQJWKHUHPLWWLWXURUUHFHLYLQJDQHZWULDO
3ULRUWRRUDODUJXPHQWRQDSSHDOZHDVNHGERWKSDUWLHVWR
VXEPLW D EULHI VWDWLQJ WKHLU SRVLWLRQ UHJDUGLQJ WKH GLVWULFW
FRXUW¶VIDLOXUHWRSURYLGH0H\HUV ZLWKWKHRSWLRQRIHLWKHU
VXEPLWWLQJWRDQHZWULDORUDFFHSWLQJWKHDPRXQWRIGDPDJHV
WKDW WKH GLVWULFW FRXUW FRQVLGHUHG MXVWLILHG 6HH )DUEHU Y
0DVVLOORQ%GRI(GXF)G WK&LU
³>$@IRUFHGUHPLWWLWXUZLWKRXWWKHRIIHURIWKHRSWLRQRID
QHZWULDORQWKHLVVXHRIGDPDJHVFRQVWLWXWHVHUURUUHTXLULQJ
WKLVFRXUWWRUHYHUVHDQGUHLQVWDWHWKHYHUGLFW´ %UHZHUY
8QLUR\DO ,QF )G WK &LU ³>7@KH
'LVWULFW &RXUW PXVW RIIHU WKH SDUW\ DZDUGHG GDPDJHV WKH
FKRLFH RI D QHZ WULDO RU WKH DPRXQW RI WKH &RXUW¶V
UHPLWWLWXU´ 0H\HUVUHVSRQGHGE\VWDWLQJWKDWLIJLYHQWKH
FKRLFHKHZRXOGDFFHSWWKHUHPLWWLWXU
:HDOVRDVNHG0H\HUV¶VFRXQVHODWWKHRUDODUJXPHQWLWVHOI
ZKHWKHU0H\HUVZDVZLOOLQJWRIRUHJRKLVULJKWWRDQHZWULDO
E\ DFFHSWLQJ WKH GLVWULFW FRXUW¶V UHPLWWLWXU &RXQVHO DJDLQ
FRQILUPHGWKDWWKLVZDVKHUFOLHQW¶VFKRLFH$FFRUGLQJO\ZH
UHJDUGWKLVHUURURQWKHSDUWRIWKHGLVWULFWFRXUW DVKDYLQJ
EHHQZDLYHG6HH7KRUQHY:HON,QY,QF)G
WK &LU WUHDWLQJ WKH GLVWULFW FRXUW¶V HUURU LQ
IDLOLQJWRRIIHUWKHSODLQWLIIDQHZWULDOUHPLWWLWXUHOHFWLRQDV
ZDLYHG ZKHQ WKH ³>S@ODLQWLII KDV UHSUHVHQWHG WKURXJK KHU
DWWRUQH\VWKDWVKHZLOOZDLYHKHUULJKWWRDQHZWULDOLIJLYHQ
WKHFKRLFH´ 0H\HUV¶VFURVVDSSHDOFKDOOHQJLQJWKH
UHPLWWLWXULVWKHUHIRUHGLVPLVVHGDVPRRW
,,,&21&/86,21
)RU DOO WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH
MXGJPHQWRIWKHGLVWULFWFRXUW

-- 4 of 10 --

0H\HUVY:DO0DUW6WRUHV 1RV
&I+XQGOH\Y0LOQHU+RWHO0JPW&R)6XSS
:'.\ KROGLQJWKDWWKHGHIHQGDQWFRXOGQRW
FRPSODLQ LQ LWV PRWLRQ IRU MXGJPHQW QRWZLWKVWDQGLQJ WKH
YHUGLFW RU LQ WKH DOWHUQDWLYH IRU QHZ WULDO WKDW WKH
LQWURGXFWLRQRIFHUWDLQORYHOHWWHUVDVHYLGHQFHFDXVHGWKHMXU\
WRUHQGHULWVGHFLVLRQEDVHGRQSDVVLRQDQGSUHMXGLFHZKHQWKH
GHIHQGDQW GHOLEHUDWHO\ LQWURGXFHG WKH ORYH OHWWHUV LQWR
HYLGHQFHLQWKHILUVWSODFH
6XSSRUWIRUWKHFRPSDUDWLYHQHJOLJHQFHILQGLQJ
)LQDOO\ :DO0DUW DUJXHV WKDW 0H\HUV¶V DZDUG ZDV
H[FHVVLYH EHFDXVH WKH HYLGHQFH GLG QRW VXSSRUW WKH MXU\¶V
ILQGLQJ WKDW 0H\HUV ZDV RQO\ DW IDXOW IRU KLV LQMXULHV
,QVWHDGDUJXHV:DO0DUW³DEXQGDQWHYLGHQFHVXSSRUWHGD
PXFKKLJKHUQHJOLJHQFHUXOLQJ´IRU0H\HUVDQGWKHUHIRUHD
PXFKORZHUQHJOLJHQFHUXOLQJIRU:DO0DUW:HZLOOQRWVHW
DVLGHWKHGLVWULFWFRXUW¶VGHWHUPLQDWLRQWKDW:DO0DUW¶VIDXOW
DSSRUWLRQPHQW ZDV QRW H[FHVVLYH KRZHYHU DEVHQW D FOHDU
DEXVHRIGLVFUHWLRQ6HH3DGJHWWY65\&R)G
WK&LU VHHDOVR7XOORVY5HVRXUFH'ULOOLQJ,QF
)G WK&LU VSHFLILFDOO\ DSSO\LQJD
FOHDUO\ HUURQHRXV VWDQGDUG RI UHYLHZ WR WKH MXU\¶V
DSSRUWLRQPHQWRIIDXOW
,QWKHSUHVHQWFDVHWKHUHZDVVXIILFLHQWHYLGHQFHWRVXSSRUW
WKH MXU\¶V ILQGLQJ WKDW :DO0DUW ZDV DW IDXOW IRU
0H\HUV¶V LQMXULHV 6HH WKH GLVFXVVLRQ LQ 3DUW ,,% DERYH
UHJDUGLQJ WKH HYLGHQFH VXSSRUWLQJ WKH MXU\¶V YHUGLFW
HVSHFLDOO\ WKH SURRI DFNQRZOHGJLQJ WKH ODFN RI UHJXODU
PDLQWHQDQFHLQWKHER[DUHDGHVSLWH:DO0DUW¶VDZDUHQHVVRI
WKH FDUGERDUG FOXWWHU DQG WKH DGPLVVLRQ E\ WZR RI LWV
HPSOR\HHVWKDWWKHDUHDZDVDKD]DUGWRFXVWRPHUV*LYHQDOO
RIWKLVWHVWLPRQ\ZHFDQQRWVD\WKDWWKHGLVWULFWFRXUWDEXVHG
LWVGLVFUHWLRQLQXSKROGLQJWKHMXU\¶VDSSRUWLRQPHQWRIIDXOW
7KHGLVWULFWFRXUW¶VGHFLVLRQQRWWRUHPLWWKHMXU\¶VYHUGLFWE\
DQDGGLWLRQDODPRXQWWRDFFRXQWIRUDJUHDWHUGHJUHHRIIDXOW
RQWKHSDUWRI0H\HUVDFFRUGLQJO\LVDIILUPHG
1RV 0H\HUVY:DO0DUW6WRUHV
$IWHUDQLQHGD\WULDOWKHMXU\UHWXUQHGZLWKDXQDQLPRXV
YHUGLFWLQIDYRURI0H\HUVLQWKHDPRXQWRIZLWK
DILQGLQJRIFRPSDUDWLYHQHJOLJHQFHRQKLVSDUW%HFDXVH
RIWKHFRPSDUDWLYHQHJOLJHQFHDOORFDWLRQ0H\HUV¶VGDPDJHV
ZHUHUHGXFHGWR7KHILQDOMXU\ZDVFRPSRVHGRI
RQO\IRXUPHPEHUVEHFDXVHWKUHHRIWKHRULJLQDOVHYHQMXURUV
KDG EHHQ H[FXVHG E\ WKH GLVWULFW FRXUW ZLWK WKH ZULWWHQ
FRQVHQWRIERWKSDUWLHV
:DO0DUW ILOHG VHYHUDO SRVWWULDO PRWLRQV 7KH GLVWULFW
FRXUWUHMHFWHG:DO0DUW¶VPRWLRQIRUMXGJPHQWDVDPDWWHURI
ODZ UHJDUGLQJ 0H\HUV¶V FODLP IRU DJJUDYDWLRQ RI KLV
SUHH[LVWLQJDUWKULWLFFRQGLWLRQDVZHOODVLWVPRWLRQIRUDQHZ
WULDOEDVHGRQFKDOOHQJHVWRWKHVXIILFLHQF\RIWKHHYLGHQFHLQ
VXSSRUW RI WKH DZDUG DQG WKH FRQVWLWXWLRQDOLW\ RI WKH IRXU
SHUVRQMXU\6HH0H\HUVY:DO0DUW6WRUHV(DVW,QF)
6XSSG ('0LFK +RZHYHU
WKH FRXUW JUDQWHG :DO0DUW¶V PRWLRQ WR UHPLW WKH YHUGLFW
EDVHGXSRQDUDQJHRIDOOHJHGO\FRPSDUDEOHFDVHV6HHLGDW
$FFRUGLQJO\WKHGLVWULFWFRXUWUHPLWWHGWKHYHUGLFWE\
WRUHDFKDQDPRXQWDSSUR[LPDWLQJWKDWDZDUGHGLQ
6OH]DNY0DULQH0LGODQG%DQN-951R:/
DW 1<$SS'LY DZDUGLQJ
WR D SODLQWLII ZKR UHTXLUHG D KLS UHSODFHPHQW ZKHQ VKH
VOLSSHG DQG IHOO DW WKH GHIHQGDQW¶V EDQN 7KLV UHPLWWLWXU
ZKLFKUHVXOWHGLQDQHWDZDUGWR0H\HUVRIZDV
PDGHZLWKRXWRIIHULQJKLPWKHFKRLFHRIHLWKHUDFFHSWLQJWKH
UHPLWWLWXURUSURFHHGLQJWRDQHZWULDO
7KLVWLPHO\DSSHDODQGFURVVDSSHDOIROORZHG
,,$1$/<6,6
$ $JJUDYDWLRQ RI 0H\HUV¶V SUHH[LVWLQJ FRQGLWLRQ RI
UKHXPDWRLGDUWKULWLV
$ PRWLRQ IRU MXGJPHQW DV D PDWWHU RI ODZ ³PD\ QRW EH
JUDQWHG XQOHVV UHDVRQDEOH PLQGV FRXOG QRW GLIIHU DV WR WKH
FRQFOXVLRQVWREHGUDZQIURPWKHHYLGHQFH´0F-XQNLQ&RUS
Y 0HFKV ,QF )G WK &LU $Q
DSSHDOV FRXUW LV QRW WR ³ZHLJK WKH HYLGHQFH SDVV RQ WKH

-- 5 of 10 --

0H\HUVY:DO0DUW6WRUHV 1RV
FUHGLELOLW\RIZLWQHVVHVRUVXEVWLWXWHLWVMXGJPHQWIRUWKDWRI
WKHMXU\´7RWKY<RGHU&R)G WK&LU
,QVWHDGZHPXVWYLHZWKHHYLGHQFHLQWKHOLJKWPRVW
IDYRUDEOH WR WKH RSSRVLQJ SDUW\ GUDZLQJ DOO UHDVRQDEOH
LQIHUHQFHVLQKLVIDYRU6HHLG
:DO0DUWFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGLQDOORZLQJ
WKH MXU\ WR FRQVLGHU 0H\HUV¶V FODLP WKDW WKH KLS LQMXU\
DJJUDYDWHGKLVDUWKULWLFFRQGLWLRQ$FFRUGLQJWR:DO0DUW
WKHHYLGHQFHSUHVHQWHGWRWKHMXU\IDLOHGWRVXSSRUW0H\HUV¶V
FODLP IRU WZR UHDVRQV H[SHUW WHVWLPRQ\ DERXW D
³WHPSRUDO´UHODWLRQVKLSEHWZHHQDQDFFLGHQWDQGDSUHH[LVWLQJ
FRQGLWLRQLVQRWVXIILFLHQWWRHVWDEOLVKSUR[LPDWHFDXVHDQG
0H\HUV¶VOD\WHVWLPRQ\DORQHFDQQRWHVWDEOLVKDPHGLFDO
FRQQHFWLRQ EHWZHHQ KLV IDOO DQG WKH DJJUDYDWLRQ RI KLV
DUWKULWLV $OWKRXJK ZH DJUHH ZLWK :DO0DUW¶V VHSDUDWH
SURSRVLWLRQVLQWKHDEVWUDFWZHFRQFOXGHWKDWWKHFRPELQDWLRQ
RIERWKH[SHUWDQGOD\WHVWLPRQ\LVVXIILFLHQWXQGHU0LFKLJDQ
ODZWRSUHVHQWDWULDEOHLVVXHIRUWKHMXU\6HH.RQLHF]NDY
0W&OHPHQV0HWDO3URGV&R1:G 0LFK
KROGLQJ WKDW WKH WHVWLPRQ\ RI OD\ ZLWQHVVHV WKDW
.RQLHF]ND VXIIHUHG IURP DQ[LHW\ DIWHU EXW QRW EHIRUH KHU
DXWRPRELOHDFFLGHQWZKHQFRPELQHGZLWKPHGLFDOWHVWLPRQ\
WKDWWKHDFFLGHQW³FRXOGKDYHEHHQDSUHFLSLWDWLQJIDFWRURI
0UV .RQLHF]ND¶V LQYROXQWDU\ GHSUHVVLRQ´ ZDV VXIILFLHQW
HYLGHQFH WR VXSSRUW WKH KHLJKWHQHG GDPDJHV UHFHLYHG E\
.RQLHF]ND RQ WKH EDVLV WKDW WKH DFFLGHQW SUHFLSLWDWHG KHU
VXEVHTXHQWDQ[LHW\
0H\HUVGLGQRWFODLPWKDWWKHIDOOFDXVHGKLVUKHXPDWRLG
DUWKULWLVEXWUDWKHUWKDWWKHIDOOH[DFHUEDWHGKLVSUHH[LVWLQJ
DUWKULWLFFRQGLWLRQ6HH+HUPDQY)RUG0RWRU&R1:
0LFK DZDUGLQJ GDPDJHV XQGHU WKH
:RUNHUV¶ &RPSHQVDWLRQ $FW ZKHUH D SUHH[LVWLQJ KHUQLD
EHFDPH GLVDEOLQJ DIWHU WKH SODLQWLII IHOO DW ZRUN 8QGHU
0LFKLJDQODZ³μEHIRUHDQGDIWHU¶OD\WHVWLPRQ\LVFRPSHWHQW
HYLGHQFH´ RQ WKH LVVXH RI GDPDJHV 6HH .RQLHF]ND
1:GDW
1RV 0H\HUVY:DO0DUW6WRUHV
)G G&LU *LYHQWKHKLJKO\GHIHUHQWLDO
VWDQGDUGRIUHYLHZDFFRUGHGWRWKHGHWHUPLQDWLRQRIZKHWKHU
D MXU\¶V YHUGLFW LV H[FHVVLYH DQG JLYHQ WKH GLVWULFW FRXUW¶V
ZHOOUHDVRQHGDQGFRPSUHKHQVLYHDQDO\VLVLQWKHFDVHEHIRUH
XVZHZLOOGHIHUWRLWVHYDOXDWLRQ$FFRUGLQJO\ZHDIILUPWKH
GLVWULFWFRXUW¶VUHPLWWLWXU
/DFNRISDVVLRQRUSUHMXGLFHRQWKHSDUWRIWKHMXU\
:DO0DUW UDLVHV WKH UHODWHG DUJXPHQW WKDW WKH GDPDJH
DZDUGZDVH[FHVVLYHEHFDXVHRIWKHWKHDOOHJHG³LPSURSHU
SDVVLRQDQGSUHMXGLFH´RQWKHSDUWRIWKHMXU\6HH6NDONDY
)HUQDOG(QYWO5HVWRUDWLRQ0JPW&RUS)G
WK &LU ³,Q WKH DEVHQFH RI XQGXH SDVVLRQ DQG
SUHMXGLFH RQ WKH SDUW RI WKH MXU\ ZH UHYLHZ IRU DEXVH RI
GLVFUHWLRQWKHGLVWULFWFRXUW¶VUHIXVDOWRJUDQWDQHZWULDOEDVHG
RQH[FHVVLYHGDPDJHVRUDUHPLWWLWXU´ 6SHFLILFDOO\:DO
0DUW DUJXHV WKDW ³WKLV ZDV D V\PSDWKHWLF FODLPDQW QRW
EHFDXVHRIWKHIDOODW6DP¶V&OXE EXWEHFDXVHRIWKHZLGH
UDQJHRIVHULRXVDLOPHQWVKHKDGDOUHDG\VXIIHUHGEHIRUHWKH
DFFLGHQWDQGWKDWKHWKHQVXIIHUHGWKHWZR\HDUVDIWHULW´,W
FODLPVWKDWHYLGHQFHDERXW0H\HUV¶V³XQIRUWXQDWHOLWDQ\RI
SULRU PHGLFDO SUREOHPV´ XQIDLUO\ SUHMXGLFHG WKH MXU\ IRU
0H\HUVDQGDJDLQVW:DO0DUW
:HGLVDJUHH$VWKHGLVWULFWFRXUWSRLQWHGRXWWKHUHLV³QR
HYLGHQFH WR VXJJHVW WKDW WKH MXU\¶V DZDUG ZDV SXQLWLYH RU
VZD\HGE\SDVVLRQELDVRUSUHMXGLFH´0H\HUVY:DO0DUW
6WRUHV(DVW,QF)6XSSG ('0LFK
0H\HUVQHYHUPDGHDQ\GLVSDUDJLQJRULPSURSHUVWDWHPHQWV
DERXWRUDJDLQVW:DO0DUWDQGHYHQUHIHUUHGWRDOOWKHSHRSOH
LQYROYHG LQ WKLV PDWWHU DV ³QLFH SHRSOH´ 0RUHRYHU WKH
UHFRUGVXJJHVWVWKDWLWZDV:DO0DUWZKRUHSHDWHGO\VWUHVVHG
0H\HUV¶V ³XQIRUWXQDWH OLWDQ\ RI SULRU PHGLFDO SUREOHPV´
SUHVXPDEO\ LQ RUGHU WR VXSSRUW LWV DUJXPHQW WKDW 0H\HUV
ZRXOGKDYHVXIIHUHGPHGLFDOSUREOHPVUHJDUGOHVVRIKLVIDOO
+DYLQJHPSKDVL]HG0H\HUV¶VIUDJLOHFRQGLWLRQDWWULDO:DO
0DUW FDQQRW QRZ FRPSODLQ WKDW WKH MXU\ UHOLHG XSRQ WKLV
WHVWLPRQ\ LQ GHWHUPLQLQJ WKDW 0H\HUV VXIIHUHG HQKDQFHG
LQMXULHVIURPWKHIDOOGXHWRKLVSUHH[LVWLQJPHGLFDOFRQGLWLRQ

-- 6 of 10 --

0H\HUVY:DO0DUW6WRUHV 1RV
7KHGLVWULFWFRXUWKRZHYHUGLVWLQJXLVKHG5XIIRQWKHEDVLV
WKDW³WKHUHLVQRLQGLFDWLRQLQSODLQWLII¶VEULHIDVWRWKHVHYHULW\
RI WKH LQMXULHV VXIIHUHG E\ WKH SODLQWLII LQ 5XII´ 0H\HUV
)6XSSGDW,WWKHQGLVWLQJXLVKHG3HUNVRQ WKH
EDVLVWKDW3HUNV³FRQFHUQHGDWUDIILFDFFLGHQWDQGQRWDVLPSOH
VOLSDQGIDOO´DQGLQYROYHG³FRQVLGHUDEO\PRUHLPSDFWLQMXULHV
WKDQWKHKLSLQMXU\VXVWDLQHGE\SODLQWLII0H\HUV´,G
$IWHUGLVWLQJXLVKLQJ5XIIDQG3HUNVWKHGLVWULFWFRXUWFKRVH
WKH1HZ<RUNFDVHRI6OH]DNY0DULQH0LGODQG%DQN-95
1R:/DW 1< DZDUGLQJ
WRDSODLQWLIIZKRVXIIHUHGDIUDFWXUHGKLSZKHQ
VKHVOLSSHGDQGIHOORQWKHGHIHQGDQW¶VSUHPLVHVUHTXLULQJD
WRWDO KLS UHSODFHPHQW DV D UHVXOW DV D FRPSDUDEOH FDVH
UHSUHVHQWLQJWKHXSSHUOLPLWRIDUHDVRQDEOHMXU\YHUGLFW,W
DFFRUGLQJO\IRXQGWKDW³WKHDZDUGLQWKHSUHVHQWFDVHVKRXOG
EHUHGXFHGWRIDOOLQOLQHZLWKWKH6OH]DNSUHFHGHQW´0H\HUV
)6XSSGDW
:HILQGQRHUURULQWKHGLVWULFWFRXUW¶VUHOLDQFHRQ6OH]DN
EHFDXVHRILWVVLPLODULWLHVWRWKHFDVHEHIRUHXVDQGEHFDXVH
FRQWUDU\WRWKHDUJXPHQWVRI:DO0DUW0LFKLJDQODZGRHV
DOORZ WKH FRQVLGHUDWLRQ RI RXWRIVWDWH FDVHV ZKHQ XVLQJ
FRPSDUDEOHV WR HYDOXDWH WKH UHDVRQDEOHQHVV RI D GDPDJH
DZDUG6HH3DOHQNDVY%HDXPRQW+RVS1:G
0LFK DOORZLQJWKHFRQVLGHUDWLRQRI³ZKHWKHUWKH
DPRXQWDFWXDOO\DZDUGHGLVFRPSDUDEOHWRDZDUGVLQVLPLODU
FDVHVZLWKLQWKHVWDWHDQGLQRWKHUMXULVGLFWLRQV´ 0RUHRYHU
JLYHQWKHFRPSDUDEOHGDPDJHVDZDUGHGLQ6OH]DNDQGLQWKH
RWKHUFDVHVFLWHGE\WKHGLVWULFWFRXUWDVZHOODVWKHDPRXQWRI
LQIODWLRQWKDWKDVRFFXUUHGLQWKHLQWHULPWKHDZDUGJLYHQWR
0H\HUVLVQRWVRODUJHDVWRVKRFNRXUMXGLFLDOFRQVFLHQFH
6HH7KRPSVRQY1DW¶O553DVVHQJHU&RUS)G
WK&LU ³7KHDSSHOODWHFRXUWZLOORQO\FRQVLGHU
ZKHWKHUWKHWULDOFRXUWDEXVHGLWVGLVFUHWLRQE\JUDQWLQJDQ
DZDUGVRODUJHDVWRVKRFNWKHMXGLFLDOFRQVFLHQFH´
:HDOVRQRWHWKDWWKHGLVWULFWFRXUW³LVLQWKHEHVWSRVLWLRQ
WRHYDOXDWHWKHHYLGHQFHDQGDVVHVVZKHWKHUWKHMXU\¶VYHUGLFW
LVUDWLRQDOO\EDVHG´5LYHUDY9LUJLQ,VODQGV+RXV$XWK
1RV 0H\HUVY:DO0DUW6WRUHV
0H\HUVGLGQRWUHO\VROHO\XSRQHLWKHUWKHWHVWLPRQ\RIKLV
WUHDWLQJSK\VLFLDQRUXSRQKLVRZQOD\WHVWLPRQ\WRHVWDEOLVK
WKH DJJUDYDWLRQ RI KLV SUHH[LVWLQJ FRQGLWLRQ ,QVWHDG KH
SURIIHUHG WKH FRPELQHG WHVWLPRQ\ RI ERWK WR VXSSRUW KLV
FODLP)LUVW'U:HLW]PDQRSLQHGDVDPHGLFDOH[SHUWWKDW
0H\HUVKDGDSUHH[LVWLQJDUWKULWLFFRQGLWLRQ+HDOVRWHVWLILHG
WKDWDIWHUWKHLQMXU\0H\HUV¶VUKHXPDWRLGDUWKULWLVLQFUHDVHG
LQVHYHULW\0RUHRYHU'U:HLW]PDQQRWHGWKDWWKHHQWLUH
GLVHDVHSURFHVVVHHPHGWRFKDQJHDIWHU0H\HUVVXIIHUHGKLV
KLSLQMXU\FDXVLQJDOORIKLVMRLQWVWREHDGYHUVHO\DIIHFWHG
7KLV FKDQJH LQ WKH GLVHDVH SURFHVV DFFRUGLQJ WR
'U:HLW]PDQUHTXLUHG0H\HUVWREHWUHDWHGZLWKVWHURLGV
HYHQWKRXJKKHKDGEHHQFRPSOHWHO\RIIVWHURLGVIRUWKHWKUHH
\HDUVSULRUWRKLVLQMXU\
1H[W 0H\HUV WHVWLILHG DV D OD\ ZLWQHVV WKDW KLV DUWKULWLV
LQFUHDVHGLQVHYHULW\DIWHUWKHDFFLGHQW6HH.RQLHF]ND
1:GDW FLWLQJDORQJOLVWRIFDVHVKROGLQJWKDW³EHIRUH
DQGDIWHU´OD\ZLWQHVVWHVWLPRQ\LVFRPSHWHQWHYLGHQFHRQWKH
LVVXHRIGDPDJHV +LVXVHRIFUXWFKHVDQGWKHZDONHUGXULQJ
WKHUHKDELOLWDWLRQSURFHVVFDXVHGKLPWRH[SHULHQFHSDLQLQKLV
KDQGV VKRXOGHUV KLSV ZULVWV HOERZV DQNOHV DQG
NQHHV²SDLQWKDWKHGLGQRWKDYHSULRUWRWKHDFFLGHQW,Q
DGGLWLRQ0H\HUVVDLGWKDWDIWHUEHFRPLQJLQMXUHGKHIRXQG
LWKDUGWRVOHHSDWQLJKW7KLVFRPELQDWLRQRIH[SHUWDQGOD\
WHVWLPRQ\SURYLGHGDEDVLVIRUDUHDVRQDEOHMXU\WRFRQFOXGH
WKDW WKH LQMXU\ DJJUDYDWHG 0H\HUV¶V SUHH[LVWLQJ DUWKULWLF
FRQGLWLRQ6HHLGDW
:DO0DUW KRZHYHU DUJXHV WKDW H[SHUW WHVWLPRQ\
HVWDEOLVKLQJ QRWKLQJ PRUH WKDQ D ³WHPSRUDO UHODWLRQVKLS´
FDQQRWVXIILFHWRSURYHWKHFDXVDWLRQRIDQLQMXU\,QVXSSRUW
RIWKLVSURSRVLWLRQ:DO0DUWFLWHV+DVOHUY8QLWHG6WDWHV
)G WK&LU LQZKLFKWKLVFRXUWUHMHFWHGWKH
GLVWULFW FRXUW¶V ILQGLQJ RI OLDELOLW\ ZKHUH WKH SODLQWLII
SUHVHQWHG RQO\ WHPSRUDO HYLGHQFH WKDW VKH GHYHORSHG
UKHXPDWRLGDUWKULWLVWHQGD\VDIWHUVKHUHFHLYHGDVZLQHIOX
YDFFLQDWLRQ

-- 7 of 10 --

0H\HUVY:DO0DUW6WRUHV 1RV
7KHNH\LVVXHLQ+DVOHUKRZHYHUZDVZKHWKHUWHPSRUDO
HYLGHQFHDORQHZDVVXIILFLHQWWRHVWDEOLVKWKDWWKHVZLQHIOX
YDFFLQDWLRQFDXVHGWKHRQVHWRIWKHSODLQWLII¶VQHZGLVHDVH
QRWZKHWKHUWKHYDFFLQDWLRQH[DFHUEDWHGDNQRZQSUHH[LVWLQJ
FRQGLWLRQ8QOLNHLQ+DVOHUWKHUHLVQRTXHVWLRQWKDW0H\HUV
ZDVLQMXUHGDQGUHTXLUHGPHGLFDOWUHDWPHQWDVDUHVXOWRIWKH
LQFLGHQWLQTXHVWLRQ7KHUHZDVDOVRQRTXHVWLRQWKDW0H\HUV
KDGDSUHH[LVWLQJPHGLFDOFRQGLWLRQ0RUHRYHUWKHPHGLFDO
WHVWLPRQ\HVWDEOLVKHGWKDWWKLVVSHFLILFSUHH[LVWLQJFRQGLWLRQ
LQWXUQFRXOGFDXVHKLPWRH[SHULHQFHVHYHUHFROODWHUDOHIIHFWV
IURPDKLSLQMXU\ZLWK'U:HL]PDQSRLQWLQJRXWKRZWKH
HQWLUHSURFHVVRI0H\HUV¶VDUWKULWLFGLVHDVHVHHPHGWRFKDQJH
DIWHUWKHLQMXU\6SHFLILFDOO\'U:HLW]PDQWHVWLILHGWKDWWKH
³LQFUHDVHG DFWLYLW\ FDQ FDXVH´ D IODUHXS RI 0H\HUV¶V
SUHH[LVWLQJUKHXPDWRLGDUWKULWLV
7KHUHZDVWKXVD³ORJLFDOVHTXHQFHRIFDXVHDQGHIIHFW´
EHWZHHQWKHDFFLGHQWDQGWKHDJJUDYDWLRQRI0H\HUV¶VDUWKULWLF
FRQGLWLRQ6HH.DPLQVNLY*UDQG7UXQN:551:G
0LFK KROGLQJ WKDW HYLGHQFH DERXW WKH
SRVLWLRQ RI WKH WUDLQ EHIRUH DQG DIWHU DQ DFFLGHQW WKH
FRQVWUXFWLRQ RI D QHDUE\ PHWDO FDUW DQG WKH VRXQG RI WKH
FUDVK ZDV VXIILFLHQW WR FUHDWH D TXHVWLRQ RI IDFW DV WR WKH
QHJOLJHQFH RI WKH UDLOURDG LQ DQ DFFLGHQW WKDW DOOHJHGO\
RFFXUUHGZKHQWKHWUDLQVWUXFNWKHPHWDOFDUWFDXVLQJWKHFDUW
WRPRYHDQGVWULNHWKHSODLQWLIIHYHQWKRXJKWKHSODLQWLIIZDV
XQDEOHWRYLVXDOO\LGHQWLI\WKHFDXVHRIWKHDFWXDOFROOLVLRQ
:H FRQVHTXHQWO\ ILQG +DVOHU GLVWLQJXLVKDEOH IURP WKH
FLUFXPVWDQFHVRIWKHSUHVHQWFDVH
*LYHQ WKH FRPELQDWLRQ RI 'U :HLW]PDQ¶V PHGLFDO
WHVWLPRQ\DQG0H\HUV¶VOD\WHVWLPRQ\ZHDUHRIWKHRSLQLRQ
WKDW 0H\HUV SUHVHQWHG VXIILFLHQW HYLGHQFH IRU UHDVRQDEOH
PLQGVWR³GLIIHUDVWRWKHFRQFOXVLRQVWREHGUDZQIURPWKH
HYLGHQFH´0F-XQNLQ&RUS)GDW$FFRUGLQJO\
WKH GLVWULFW FRXUW GLG QRW HUU LQ SHUPLWWLQJ 0H\HUV¶V FODLP
UHJDUGLQJ WKH DJJUDYDWLRQ RI KLV SUHH[LVWLQJ UKHXPDWRLG
DUWKULWLVWREHVXEPLWWHGWRWKHMXU\
1RV 0H\HUVY:DO0DUW6WRUHV
DSSUDLVDOV´3DGJHWWY65\&R)G WK&LU
FLWDWLRQVRPLWWHG
&DVHVVXSSRUWLQJWKHVL]HRIWKHMXU\DZDUG
%RWK:DO0DUWDQG0H\HUVKDYHFKDOOHQJHGRQDSSHDOWKH
GLVWULFW FRXUW¶V UHPLWWLWXU RI WKH MXU\ DZDUG DUJXLQJ
UHVSHFWLYHO\WKDWWKHUHPLWWLWXUVKRXOGKDYHEHHQKLJKHURU
WKDWWKHDZDUGVKRXOGQRWKDYHEHHQUHPLWWHGDWDOO:DO0DUW
DUJXHV WKDW WKH UHPLWWLWXU ZDV RXW RI OLQH ZLWK WKH GDPDJH
DZDUGVJLYHQLQFRPSDUDEOH0LFKLJDQFDVHVZKLOH0H\HUV
KDV SUHVHQWHG DOOHJHGO\ FRPSDUDEOH FDVHV LQ ZKLFK WKH
SODLQWLIIVUHFHLYHGHYHQJUHDWHUDZDUGV
,QGHFLGLQJWRJUDQWDUHPLWWLWXURIWKHGLVWULFW
FRXUW H[DPLQHG D ZLGH UDQJH RI FDVHV ERWK IURP ZLWKLQ
0LFKLJDQDQGIURPRXWVLGHWKHVWDWH6HH0H\HUVY:DO0DUW
6WRUHV(DVW,QF)6XSSG ('0LFK
7KHGLVWULFWFRXUWILUVWHYDOXDWHGWKHDSSOLFDELOLW\RI
WKHFDVHVFLWHGE\:DO0DUW6HHLGDW GHVFULELQJ
VHYHQFDVHVLQZKLFKORZHUDZDUGVZHUHJLYHQIRUSODLQWLIIV
ZKRDVDUHVXOWRIWKHLUIDOOVUHTXLUHGKLSUHSODFHPHQWV ,W
QH[WH[DPLQHGWKHDSSOLFDELOLW\RIWKHFDVHVFLWHGE\0H\HUV
6HH LG DW OLVWLQJ HOHYHQ FDVHV LQ ZKLFK GDPDJHV
FRPSDUDEOHWRWKHRQHDZDUGHGWR0H\HUVZHUHJLYHQ
,QWZRRIWKHFDVHVFLWHGE\0H\HUVWKHSODLQWLIIVUHFHLYHG
HYHQJUHDWHUGDPDJHVWKDQWKDWDZDUGHGLQWKHSUHVHQWFDVH
6HH5XIIY'RQXW6\V,QF&LY &DVH1R12
:/DW /53-XU\*HQHVHH&R0LFK
DZDUGLQJWRDZRPDQZKRLQMXUHGKHUNQHHDWD
GRQXWVKRSZKHUHWKHRQO\UHFRXUVHWRUHOLHYHKHUSDLQZDVWR
XQGHUJR D IXWXUH NQHH UHSODFHPHQW 3HUNV Y =LHJHOKRIIHU
*RUGRQ)RRG6HUY,QF1R1,:/
DW /53 -XU\ :DVKWHQDZ &R 0LFK DZDUGLQJ
WR D SODLQWLII ZKR VXIIHUHG D IUDFWXUHG SDWHOOD
PXOWLSOHHOERZIUDFWXUHVDQGDIUDFWXUHGKLSWKDWUHTXLUHGD
IXWXUH KLS UHSODFHPHQW DOO UHVXOWLQJ IURP DQ DFFLGHQW LQ
ZKLFKWKHSODLQWLII¶VYHKLFOHVWUXFN WKHGHIHQGDQW¶VSDUNHG
WDQGHPWUXFN

-- 8 of 10 --

0H\HUVY:DO0DUW6WRUHV 1RV
]HUR E\ ZDLYLQJ D MXU\ WULDO DOWRJHWKHU DQG KDYLQJ WKHLU
FRQWURYHUV\GHFLGHGE\WKHFRXUW
:HDOVRQRWHWKDW:DO0DUWFRXOGKDYHDYHUWHGWKHIRXU
SHUVRQMXU\WULDOVLPSO\E\UHIXVLQJWRVWLSXODWHWRWKHUHGXFHG
VL]H7KHUHFRUGUHIOHFWVWKDWWKHGLVWULFWFRXUWH[SUHVVO\JDYH
:DO0DUWWKLVFKRLFH,QVWHDGERWKSDUWLHVYROXQWDULO\ILOHG
DZULWWHQVWLSXODWLRQWRSURFHHGZLWKRQO\IRXUMXURUV6HH
0H\HUVY:DO0DUW6WRUHV(DVW,QF)6XSSG
Q (' 0LFK :H DFFRUGLQJO\ UHJDUG :DO
0DUW¶VREMHFWLRQDVZDLYHG6HH:HLVVY+RGJH1:G
0LFK &W $SS ³:KHUH DV KHUH SDUWLHV
VWLSXODWHDQDUUDQJHPHQWWKDWOLPLWVRQHSDUW\¶VULJKWVWROHVV
WKDQWKDWZKLFKLVRWKHUZLVHUHTXLUHGWKDWSDUW\PD\QRWODWHU
FRPSODLQ RQ DSSHDO DERXW WKLV UHVWULFWLRQ´ FI %XUQV Y
/DZWKHU)G WK&LU ³7KH6HYHQWK
$PHQGPHQWULJKWWRDFLYLOMXU\LVQRWDEVROXWHDQGPD\EH
ZDLYHGLIWKHUHTXHVWIRUDMXU\ZDVQRWWLPHO\´
,QOLJKWRI:DO0DUW¶VVWLSXODWLRQWKHODQJXDJHRI5XOH
DQG WKH DEVHQFH RI FDVH ODZ LQ VXSSRUW RI :DO0DUW¶V
DUJXPHQWZHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWHUULQ
DOORZLQJWKHFDVHWRSURFHHGZLWKDIRXUSHUVRQMXU\:DO
0DUW¶V 6HYHQWK $PHQGPHQW DUJXPHQW WR WKH FRQWUDU\ LV
WKHUHIRUHZLWKRXWPHULW
' $OOHJHGH[FHVVLYHQHVVRIWKHMXU\¶VYHUGLFW
:DO0DUW¶V ILQDO FKDOOHQJHV UHODWH WR WKH IDLOXUH RI WKH
GLVWULFW FRXUW WR UHGXFH WKH MXU\¶V YHUGLFW E\ PRUH WKDQ
:LWKUHJDUGWRMXU\YHUGLFWVWKLVFRXUWKDVKHOG
WKDW DQ DZDUG ZLOO QRW EH KHOG H[FHVVLYH ³LI WKH YHUGLFW LV
ZLWKLQ WKH UDQJH RI SURRI DQG WKH MXU\ ZDV SURSHUO\
LQVWUXFWHG´/HLOD+RVS +HDOWK&WUY;RQLFV0HG6\V
,QF)G WK&LU ,QHYDOXDWLQJWKHMXU\
DZDUG WKH SULPDU\ FRQVLGHUDWLRQ LV ZKHWKHU WKH DZDUG LV
ZLWKLQWKHUDQJHRISURRI³>7@KHGHWHUPLQDWLRQRIZKHWKHUD
MXU\¶V YHUGLFW LV H[FHVVLYH LV UHVROYHG E\ WKH GLVFUHWLRQDU\
FRQVLGHUDWLRQ RI WKH WULDO MXGJH $EVHQW FOHDU DEXVH RI
GLVFUHWLRQ DSSHOODWH FRXUWV ZLOO QRW PDNH WKHLU RZQ
1RV 0H\HUVY:DO0DUW6WRUHV
% 6XIILFLHQF\ RI WKH HYLGHQFH LQ VXSSRUW RI 0H\HUV¶V
DZDUG
$GLVWULFWFRXUW¶VGHFLVLRQWRGHQ\DPRWLRQIRUDQHZWULDO
ZLOOQRWEHVHWDVLGHXQOHVVWKHFRXUWDEXVHVLWVGLVFUHWLRQ6HH
/RJDQY'D\WRQ+XGVRQ&RUS)G WK&LU
6XFK DQ DEXVH ZLOO EH IRXQG RQO\ LI ZH KDYH ³D
GHILQLWHDQGILUPFRQYLFWLRQWKDWWKHWULDOFRXUWFRPPLWWHGD
FOHDUHUURURIMXGJPHQW´,G³7KHDPRXQWDOORZHGIRUSDLQ
DQGVXIIHULQJPXVWUHVWLQWKHVRXQGMXGJPHQWRIWKHWULHUVRI
WKHIDFWV´6WHYHQVY(GZDUG&/HY\&R1:G
0LFK
,Q WKH FDVH EHIRUH XV WKHUH ZDV PRUH WKDQ VXIILFLHQW
HYLGHQFHWRVXSSRUWWKHMXU\¶VYHUGLFW)LUVWWKHMXURUVZHUH
SUHVHQWHGZLWKHYLGHQFHXSRQZKLFKWKH\FRXOGUHDVRQDEO\
FRQFOXGH WKDW :DO0DUW ZDV QHJOLJHQW LQ PDLQWDLQLQJ LWV
SUHPLVHV:DO0DUWVWLSXODWHGWRWKHIDFWWKDW0H\HUVVOLSSHG
RU WULSSHG RQ FDUGERDUG O\LQJ RQ WKH IORRU 6HYHUDO RI LWV
HPSOR\HHVWHVWLILHGWKDWWKHER[HVZHUHOHIWDOORYHUWKHER[
DUHDEHFDXVHWKHUHZDVQRSODFHHOVHWRSXWWKHPWKDWWKHUH
ZDVORRVHFDUGERDUGXQGHUWKHER[HVDQGWKDWFOHDQXSZDV
GRQHRQO\RQD³FDWFKDVFDWFKFDQ´EDVLV,QDGGLWLRQRQHRI
:DO0DUW¶V HPSOR\HHV FRQFHGHG WKDW OHWWLQJ FXVWRPHUV JR
LQWR WKH DUHD WR REWDLQ ER[HV ZDV DQ ³DFFLGHQW ZDLWLQJ WR
KDSSHQ´DQGDQRWKHUVDLGWKDWWKHGLVRUJDQL]HGER[HVFRXOG
EHD³WULSDQGIDOOKD]DUG´WRFXVWRPHUV
7KHUHZDVDOVRVXIILFLHQWHYLGHQFHIRUDUHDVRQDEOHMXURUWR
FRQFOXGHWKDW0H\HUVVXIIHUHGH[WHQVLYHSDLQDVDGLUHFWUHVXOW
RIKLVLQMXU\,PPHGLDWHO\DIWHUWKHDFFLGHQWD:DO0DUW
HPSOR\HHVDZ0H\HUVUROOLQJRQWKHIORRUVFUHDPLQJ7KH
HPSOR\HH WHVWLILHG WKDW 0H\HUV DSSHDUHG WR EH LQ D JUHDW
DPRXQW RI SDLQ 0H\HUV DOVR KDG WR XQGHUJR D WRWDO KLS
UHSODFHPHQWDVDUHVXOWRIKLVIDOO%HFDXVHRIWKHKLJKIHYHU
KH H[SHULHQFHG LPPHGLDWHO\ DIWHU WKH KLS UHSODFHPHQW
0H\HUV¶V XVH RI PRUSKLQH KDG WR EH GLVFRQWLQXHG 7KLV
IRUFHGKLPWRUHFXSHUDWHIURPDPDMRURSHUDWLRQZLWKRXWDQ\
SDLQ UHOLHI D SURFHVV WKDW FDXVHG KLP WR H[SHULHQFH
³WUHPHQGRXVSDLQ´DQG³DJRQ\´

-- 9 of 10 --

0H\HUVY:DO0DUW6WRUHV 1RV
7KH HYLGHQFH DOVR GHPRQVWUDWHG WKDW 0H\HUV VXIIHUHG D
JUHDWDPRXQWRISDLQGXHWRWKHUHKDELOLWDWLYHWKHUDS\UHTXLUHG
DVDUHVXOWRIKLVLQMXULHVPRUHVRWKDQZRXOGW\SLFDOO\EHWKH
FDVH 0H\HUV¶V SK\VLFLDQ WHVWLILHG WKDW ³>Z@KDW KDSSHQHG
IROORZLQJWKHIUDFWXUHZDVWKDWKLVMRLQWVEHFDPHPXFKPRUH
SDLQIXODQGPXFKPRUHVZROOHQ´$VDUHVXOWRIWKLVFKDQJH
LQWKHDUWKULWLFGLVHDVHSURFHVV0H\HUVKDGWRUHWXUQWREHLQJ
WUHDWHG ZLWK VWHURLGV D FRXUVH RI WUHDWPHQW WKDW KDG EHHQ
GLVFRQWLQXHGIRUWKUHH\HDUVSULRUWRWKHDFFLGHQW
7KLVFDVHLVHVVHQWLDOO\DSDUDOOHOWRWKHFODVVLFWH[WERRN
H[DPSOH RI WKH SODLQWLII ZLWK DQ HJJVKHOO VNXOO ZKHUH WKH
WRUWIHDVRUPXVWWDNHWKHLQMXUHGSDUW\DVLWILQGVKLPDQGLV
OLDEOHIRUWKHIXOOH[WHQWRIWKHKDUPFDXVHGE\LWVQHJOLJHQFH
HYHQLIDPRUH³QRUPDO´SODLQWLIIZRXOGQRWKDYHVXIIHUHG
QHDUO\ DV PXFK 6HH : 3DJH .HHWRQ HW DO 3URVVHU DQG
.HHWRQRQ7KH/DZRI7RUWV†DW WKHG
,Q WKLV LQVWDQFH 0H\HUV¶V SUHH[LVWLQJ DUWKULWLF FRQGLWLRQ
FDXVHG DQ LQIODPPDWLRQ RI KLV MRLQWV GXH WR WKH VWUHVV
QHFHVVDULO\SODFHGRQWKHPGXULQJWKHUHKDELOLWDWLYHSURFHVV
IROORZLQJ KLV KLSUHSODFHPHQW VXUJHU\ 7KH LQIODPPDWLRQ
H[SRQHQWLDOO\LQFUHDVHG0H\HUV¶VSDLQDQGVXIIHULQJGXULQJ
WKHSURFHVVEXWWKLVLVDFRQVHTXHQFHIRUZKLFK:DO0DUWLV
OLDEOHXQGHU0LFKLJDQODZ6HH:LONLQVRQY/HH1:G
0LFK KROGLQJ WKDW WKH HYLGHQFH
VXSSRUWHGDMXU\¶VILQGLQJWKDWDQDXWRPRELOHDFFLGHQWZDVWKH
FDXVHLQIDFWRIV\PSWRPVVXFKDVQDXVHDVHYHUHKHDGDFKHV
GL]]LQHVVGRXEOHYLVLRQDQGDFFHOHUDWLQJPHPRU\ORVVIURP
DSUHH[LVWLQJEUDLQWXPRUZKHUHWKHUHZDVPHGLFDOWHVWLPRQ\
WKDW WKH WUDXPD FDXVHG E\ WKH DFFLGHQW WULJJHUHG WKH
V\PSWRPV
)LQDOO\ ERWK 0H\HUV DQG KLV ZLIH WHVWLILHG WKDW WKH KLS
UHSODFHPHQW VXUJHU\ SHUPDQHQWO\ DIIHFWHG KLV JDLW DQG KLV
HYHU\GD\OLYLQJDFWLYLWLHV+HFDQQRWVWDQGIRUPRUHWKDQ
WRPLQXWHVRUZDONPRUHWKDQDPLOHDQGDKDOIZLWKRXW
IHHOLQJSDLQLQKLVKLSQRUFDQKHULGHKLVELF\FOHDVIDUDVKH
ZDVRQFHDEOHWRGR7KHVHSUREOHPVGLGQRWH[LVWSULRUWRWKH
DFFLGHQW
1RV 0H\HUVY:DO0DUW6WRUHV
$OORIWKLVHYLGHQFHZKHQFRQVLGHUHGWRJHWKHUSURYLGHV
PRUHWKDQVXIILFLHQWVXSSRUWIRUWKHMXU\¶VYHUGLFW%HFDXVH
ZHDUHQRW³OHIWZLWKWKHGHILQLWHDQGILUPFRQYLFWLRQWKDWD
PLVWDNHUHVXOWLQJLQSODLQLQMXVWLFHKDVEHHQFRPPLWWHGRU
>WKDW@WKHYHUGLFWLVFRQWUDU\WRDOOUHDVRQZHPXVWDIILUPWKH
MXU\¶VYHUGLFW´6FKRRQRYHUY&RQVRO)UHLJKWZD\V&RUSRI
'HODZDUH /RFDO )G WK &LU
LQWHUQDOTXRWDWLRQPDUNVRPLWWHG
& &RQVWLWXWLRQDOLW\RIWKHIRXUSHUVRQMXU\
:DO0DUW QH[W DUJXHV WKDW WKH XVH RI D IRXUSHUVRQ MXU\
YLRODWHGLWV6HYHQWK$PHQGPHQWULJKW WR D MXU\WULDO7KH
6XSUHPH&RXUWKDVOHIWRSHQWKLVLVVXHVWDWLQJWKDW³ZKLOHZH
H[SUHVVQRYLHZDVWRZKHWKHUDQ\QXPEHUOHVVWKDQVL[ZRXOG
VXIILFHZHFRQFOXGHWKDWDMXU\RIVL[VDWLVILHVWKH6HYHQWK
$PHQGPHQW¶V JXDUDQWHH RI WULDO E\ MXU\ LQ FLYLO FDVHV´
&ROJURYHY%DWWLQ86 XSKROGLQJ
DGLVWULFWFRXUW¶VORFDOUXOHWKDWDXWKRUL]HGWKHXVHRIDVL[
PHPEHUMXU\LQFLYLOFDVHV
5XOHRIWKH)HGHUDO5XOHVRI&LYLO3URFHGXUHKRZHYHU
H[SOLFLWO\DGGUHVVHVWKHVL]HRIMXULHVLQFLYLOFDVHV
7KHFRXUWVKDOOVHDWDMXU\RIQRWIHZHUWKDQVL[DQGQRW
PRUHWKDQWZHOYHPHPEHUVDQGDOOMXURUVVKDOOSDUWLFLSDWH
LQWKHYHUGLFWXQOHVVH[FXVHGIURPVHUYLFHE\WKHFRXUW
SXUVXDQW WR 5XOH F 8QOHVV WKH SDUWLHV RWKHUZLVH
VWLSXODWH WKHYHUGLFWVKDOOEHXQDQLPRXVDQG QR
YHUGLFWVKDOOEHWDNHQIURPDMXU\UHGXFHGLQVL]HWRIHZHU
WKDQVL[PHPEHUV
)HG5&LY3 HPSKDVLVDGGHG 7KLVODQJXDJHFOHDUO\
LQGLFDWHVWKDWSDUWLHVFDQVWLSXODWHWRDMXU\RIIHZHUWKDQVL[
PHPEHUVDV:DO0DUWDQG0H\HUVKDYHGRQHLQWKLVFDVH
:DO0DUWLQWXUQKDVIDLOHGWRFLWHDQ\FDVHLQZKLFKDFRXUW
KDVRYHUWXUQHGDFLYLOMXU\YHUGLFWRQWKHEDVLVRIMXU\VL]H
ZKHUHWKHSDUWLHVKDYHVWLSXODWHGWRWKHUHGXFHGVL]H7KH
DEVHQFHRIDQ\VXFKDXWKRULW\LVQRWVXUSULVLQJFRQVLGHULQJ
WKDWWKHSDUWLHVDUHDOZD\VIUHHWRVWLSXODWHWRDMXU\VL]HRI

-- 10 of 10 --

Continue your research in ChatGPT or Claude

Connect Omnilex to search the legal corpus from your AI assistant.