03a0127p.06

01-4097Court of Appeals for the Sixth CircuitApr 30, 2003

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
-())5(< 0 7+$&.(5
-(66,&$ *$//$*+(5
3ODLQWLIIV$SSHOODQWV
Y
&,7< 2) &2/80%86 ',&.
*867$92 (/,$6 521$/' *
%26/(<DQG67(9(1 5
67$&.LQGLYLGXDOO\DQGLQ
WKHLUFDSDFLW\DV&ROXPEXV
'LYLVLRQRI3ROLFH-())5(<
0 :(17:257+LQGLYLGXDOO\
DQGLQKLVFDSDFLW\DVDQ
DJHQWHPSOR\HHRU
UHSUHVHQWDWLYHRIWKH&LW\2I
&ROXPEXV'LYLVLRQRI)LUH
'HIHQGDQWV$SSHOOHHV
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV
1R²(GPXQG$6DUJXV-U'LVWULFW-XGJH
$UJXHG0DUFK
'HFLGHGDQG)LOHG$SULO
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
7KH +RQRUDEOH 0\URQ + %ULJKW &LUFXLW -XGJH RI WKH 8QLWHG 6WDWHV
&RXUW RI $SSHDOV IRU WKH (LJKWK &LUFXLW VLWWLQJ E\ GHVLJQDWLRQ
%HIRUH&2/(*,/0$1DQG%5,*+7&LUFXLW-XGJHV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' -DPHV ' 0F1DPDUD &ROXPEXV 2KLR IRU
$SSHOODQWV -HIIUH\ 6 )XUEHH &2/80%86 &,7<
$77251(<¶6 2)),&( '(3$570(17 2) /$:
&ROXPEXV 2KLR IRU $SSHOOHHV 21 %5,() -DPHV '
0F1DPDUD &ROXPEXV 2KLR $QWKRQ\ 2 0DQFXVR
*DKDQQD2KLRIRU$SSHOODQWV-HIIUH\6)XUEHH*RUGRQ
%UDGOH\ +XPPHO &2/80%86 &,7< $77251(<¶6
2)),&('(3$570(172)/$:&ROXPEXV2KLRIRU
$SSHOOHHV
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
5 *8< &2/( -5 &LUFXLW -XGJH 3ODLQWLIIV -HIIUH\
7KDFNHUDQG-HVVLFD*DOODJKHUDSSHDOWKHGLVWULFWFRXUW¶VJUDQW
RI VXPPDU\ MXGJPHQW LQ IDYRU RI GHIHQGDQWV WKUHH SROLFH
RIILFHUV6HUJHDQW5RQDOG%RVOH\DQG2IILFHUV'LFN(OLDVDQG
6WHYHQ 6WDFN DQG D SDUDPHGLF -HIIUH\ :HQWZRUWK DOO
HPSOR\HGE\WKH&LW\RI&ROXPEXV2KLR3ODLQWLIIVEURXJKW
WKLVFLYLOULJKWVDFWLRQDIWHUGHIHQGDQWVFDPHWRWKHLUKRPHLQ
UHVSRQVHWRDFDOOUHSRUWLQJDQLQMXU\WR7KDFNHUDQG
XOWLPDWHO\DUUHVWHG7KDFNHUIRUDGRPHVWLFYLROHQFHRIIHQVH
3ODLQWLIIV DVVHUW WKDW GHIHQGDQWV YLRODWHG WKHLU )RXUWK
$PHQGPHQWULJKWVDQGVWDWHWRUWODZE\XQODZIXOO\HQWHULQJ
WKHLU KRPH KDQGFXIILQJ *DOODJKHU DQG DUUHVWLQJ DQG
SURVHFXWLQJ7KDFNHU%HFDXVHSODLQWLIIVFDQQRWGHPRQVWUDWH
WKDW D FRQVWLWXWLRQDO YLRODWLRQ RFFXUUHG DQG LQ DQ\ HYHQW
EHFDXVHGHIHQGDQWVDUHHQWLWOHGWRTXDOLILHGLPPXQLW\IRUWKHLU
DFWLRQVZH$)),50WKHMXGJPHQWRIWKHGLVWULFWFRXUW

-- 1 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
,%$&.*5281'
$)DFWXDO+LVWRU\
2Q6HSWHPEHU-HVVLFD*DOODJKHUDQGKHUOLYHLQ
ILDQFHH-HIIUH\7KDFNHUZHQWRXWGULQNLQJZLWKIULHQGVDQG
ZHUHGULYHQKRPHDIWHUKDYLQJDQXPEHURIDOFRKROLFGULQNV
*DOODJKHUDQG7KDFNHUZHUHSUREDEO\LQWR[LFDWHGZKHQWKH\
DUULYHGKRPHDQG7KDFNHUFRQWLQXHGWRGULQN$FFRUGLQJWR
7KDFNHU RQFH DW KRPH KH GURSSHG D EHHU ERWWOH RQ WKH
NLWFKHQIORRUVOLSSHGDQGIHOORQWKHEURNHQERWWOHFXWWLQJ
KLVZULVW8SRQGLVFRYHULQJWKDW7KDFNHUKDGEHHQFXWDQG
KDG EORRG RQ KLV KDQGV OHJV DQG ER[HU VKRUWV *DOODJKHU
FDOOHG 7KH IROORZLQJ H[FKDQJH WRRN SODFH EHWZHHQ
*DOODJKHUDQGWKHGLVSDWFKHU
'LVSDWFKHU:KDWLV\RXUHPHUJHQF\"
*DOODJKHU:HOOXKP\HPHUJHQF\LVXPVRPHERG\
KHUHDW
':KDW¶VWKHHPHUJHQF\"
*7KHHPHUJHQF\LVKHLVFXW
':KDW"
*+HLVFXW$QGKH¶VEOHHGLQJ
'+RZ¶GKHJHWFXW"
*8P,GRQ¶WNQRZ
''LGKHJHWLQDILJKW"'LGKHFXWKLVRZQZULVWVRU
ZKDWZKDW¶VWKHVWRU\"
*,WKLQN,,GRQ¶WNQRZ>VRXQGVOLNHFU\LQJ@
'2N+H¶VFXW
*+HP\ILDQFHHLVFXW
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
':KHUH"
*,GRQ¶WNQRZ-HIIZKHUH\RXFXW">XQLQWHOOLJLEOH
YRLFHLQEDFNJURXQG@+LVZULVW
'6RKHFXWKLVZULVWV"
*1RKHGLGQ¶W>WHOOKHU XQLQWHOOLJLEOH @
',VLWRQHZULVWRUWZR"
*,WLWLWV>VLF@RQH
'2QH$VNKLPKRZLWKRZLWKDSSHQHG
*-HII>\HV"@-HIIKRZ¶G\RXUZULVWJHWFXW">ZHOO,
ZDV@-HII>\HDK@-HIIKRZ¶V\RXU>XQLQWHOOLJLEOH@-HII
,GRQ¶WNQRZ+HZRQ¶WDQVZHUPH
$WDSSUR[LPDWHO\DP&ROXPEXVSDUDPHGLFV&XUWLV
.DLVHUDQG-HIIUH\:HQWZRUWKZHUHGLVSDWFKHGWR7KDFNHU
DQG*DOODJKHU¶VUHVLGHQFHWRDWWHQGWRDQLQFLGHQWODEHOHGE\
WKHGLVSDWFKHUDVDQDWWHPSWHGVXLFLGH2IILFHUV'LFN(OLDV
DQG6WHYHQ6WDFNRIWKH&ROXPEXV3ROLFH'HSDUWPHQWZHUH
GLVSDWFKHGWRWKHVDPHORFDWLRQRQD&RGHZKLFKUHIHUV
WRHLWKHUDFXWWLQJRUVWDEELQJ&RGHLVDKLJKSULRULW\
FRGHWKDWLQGLFDWHVWKDWWKHLQMXUHGSHUVRQPD\EHWKHYLFWLP
RIDFULPHDQGUHTXLUHVWKDWDWOHDVWWZR RIILFHUVUHVSRQG
7KHSDUDPHGLFVDUULYHGILUVWEXWZDLWHGRXWVLGHIRUWKHSROLFH
RIILFHUVWRDUULYHDQGVHFXUHWKHVFHQH
:KHQ2IILFHUV(OLDVDQG6WDFNDUULYHGWKH\NQRFNHGRQWKH
DSDUWPHQWGRRU7KDFNHUDQG*DOODJKHUDQVZHUHG:KHQWKH
IURQW GRRU ZDV RSHQHG WKH RIILFHUV QRWLFHG WKDW WKHUH ZDV
EURNHQJODVVRQWKHNLWFKHQIORRUDQGDQLQGHQWDWLRQLQRQH
ZDOO ZLWK D OLTXLG VWDLQ EHQHDWK LW 7KDFNHU¶V KDQG ZDV
EOHHGLQJSURIXVHO\DQGKHZDVEORRGLHG9LVLEO\LQWR[LFDWHG
DQG LPPHGLDWHO\ EHOOLJHUHQW 7KDFNHU XVHG SURIDQLW\ DV KH
VSRNHWRWKHRIILFHUV:LWKRXWH[SODLQLQJWKHFDXVHRIKLV
LQMXU\ 7KDFNHU H[FODLPHG WKDW KH KDG FDOOHG IRU WKH
SDUDPHGLFV±QRW WKH SROLFH 7KDFNHU WKHQ LQYLWHG WKH

-- 2 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
SDUDPHGLFVEXWQRWWKHSROLFHRIILFHUVWR³>F@RPHRQLQ´WR
WKHDSDUWPHQW$WQRWLPHGLG7KDFNHUJLYH(OLDVDQG6WDFN
SHUPLVVLRQ WR HQWHU WKH KRPH DOWKRXJK KH DOVR GLG QRW
H[SUHVVO\SURKLELWWKHRIILFHUVIURPHQWHULQJHLWKHU
$IWHU WKLV LQLWLDO H[FKDQJH WKH RIILFHUV FRQFOXGHG WKDW
7KDFNHUZDVQRWDUHOLDEOHVRXUFHRILQIRUPDWLRQDQGHQWHUHG
WKHDSDUWPHQWWRLQYHVWLJDWHDSRVVLEOHFULPHDVVLVW7KDFNHU
DQGDQ\RWKHULQMXUHGSHUVRQVDQGGHWHUPLQHZKHWKHULWZDV
VDIHIRUWKHSDUDPHGLFVWRHQWHUWKHDSDUWPHQW2QFHLQVLGH
DOWKRXJKWKHRIILFHUVVWLOOZHUHXQVXUHSUHFLVHO\KRZ7KDFNHU
KDGEHHQLQMXUHGWKH\GHWHUPLQHGWKDW7KDFNHUDQG*DOODJKHU
ZHUH WKH RQO\ SHRSOH SUHVHQW LQ WKH DSDUWPHQW 7KDFNHU
QHHGHGPHGLFDODWWHQWLRQDQGLWZDVVDIHIRUWKHSDUDPHGLFV
WRHQWHUDVORQJDVWKHRIILFHUVUHPDLQHGLQWKHDSDUWPHQW
2IILFHU (OLDV VLJQDOHG IRU WKH SDUDPHGLFV WR HQWHU WKH
DSDUWPHQW DQG WKH\ HQWHUHG DQG EHJDQ WUHDWLQJ 7KDFNHU
2IILFHUV(OLDVDQG6WDFNUHPDLQHGLQWKHDSDUWPHQWIRUWKH
VDIHW\ RI WKH SDUDPHGLFV EHFDXVH WKLV ZDV WKHLU JHQHUDO
SUDFWLFH DQG EHFDXVH 7KDFNHU ZKR ZDV VWLOO LQWR[LFDWHG
DFWHG DOWHUQDWHO\ EHOOLJHUHQWO\ DQG FRRSHUDWLYHO\ .DLVHU
GHWHUPLQHG WKDW 7KDFNHU QHHGHG VWLWFKHV DQG RIIHUHG WR
WUDQVSRUWKLPWRWKHKRVSLWDO7KDFNHUUHIXVHG
:KLOH7KDFNHUZDVEHLQJWUHDWHG2IILFHU(OLDVQRWLFHGWKDW
*DOODJKHUKDGDEUXLVHRQKHUULJKWXSSHUDUPDQGPHQWLRQHG
LW2IILFHU6WDFNDQGSDUDPHGLFV.DLVHUDQG:HQWZRUWKWKHQ
QRWLFHGWKHEUXLVLQJZKLFKZDVRQ*DOODJKHU¶VOHJVDVZHOO
7KHSDUDPHGLFVGHVFULEHGWKHEUXLVHVDVUHFHQWRU³IUHVK´
$W ILUVW *DOODJKHU WROG WKH RIILFHUV WKDW VKH UHFHLYHG WKH
EUXLVHVZKHQVKHIHOORXWRIEHG$WWKHRIILFHUV¶UHTXHVW
*DOODJKHUVKRZHGWKHPKHUEHGZKLFKZDVRQO\DPDWWUHVV
RQ WKH IORRU $W WKLV SRLQW *DOODJKHU H[SODLQHG WKDW VKH
UHFHLYHGWKHEUXLVHVZKHQVKHWULSSHGRYHUWKHEHGDQGIHOO
LQWRDGUHVVHU/DWHUWKDWQLJKW*DOODJKHUDJDLQFKDQJHGKHU
H[SODQDWLRQIRUWKHEUXLVLQJWHOOLQJWKHRIILFHUVWKDWVRPHRI
WKHEUXLVHVZHUHWKHUHVXOWRIDIDOORQWKHIURQWVWHSVWRWKH
DSDUWPHQW
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
2IILFHU 6WDFN FODLPV WKDW KH DQG *DOODJKHU WKHQ VSRNH
RXWVLGHWKHDSDUWPHQWDQG*DOODJKHUFRQIHVVHGWRKLPWKDW
7KDFNHUKDGVWUXFNKHUDZHHNHDUOLHUFDXVLQJWKHEUXLVHV
7KHUHDIWHU WKH SDUDPHGLFV TXHVWLRQHG *DOODJKHU DERXW WKH
EUXLVHV'XULQJWKLVTXHVWLRQLQJERWK:HQWZRUWKDQG.DLVHU
QRWHG WKDW *DOODJKHU ZDV DSSUHKHQVLYH DERXW DQVZHULQJ
:HQWZRUWK¶VTXHVWLRQVLQ7KDFNHU¶VSUHVHQFH$FFRUGLQJO\
:HQWZRUWKEURXJKW*DOODJKHUZLOOLQJO\WRWKHSDUDPHGLFV¶
YDQ VR WKDW KH FRXOG LQVSHFW KHU EUXLVHV ,QVLGH WKH YDQ
:HQWZRUWK TXHVWLRQHG *DOODJKHU DERXW WKH EUXLVHV +H
FODLPV WKDW XOWLPDWHO\ VKH WROG KLP WKDW ³VKH GHVHUYHG
LW²WKDWVKHDQG0U7KDFNHUKDGJRWWHQLQWRDQDUJXPHQW
WKDWVKHPDGHKLPPDGDQGWKDWKHVWDUWHGKLWWLQJDQGNLFNLQJ
KHU´$IWHUVSHDNLQJZLWK*DOODJKHU:HQWZRUWKWROG(OLDV
WKDW*DOODJKHUKDGDGPLWWHGWKDW7KDFNHUKDGEHDWHQKHU
$W DSSUR[LPDWHO\ DP DIWHU UHFHLYLQJ WKLV
LQIRUPDWLRQ(OLDVFRQWDFWHGKLVVXSHUYLVRU6HUJHDQW%RVOH\
ZKR FDPH WR WKH VFHQH 2IILFHU 6WDFN WHVWLILHG WKDW KH
LQIRUPHG %RVOH\ WKDW *DOODJKHU KDG WROG KLPVHOI DQG
:HQWZRUWKWKDW7KDFNHUKDGFDXVHGWKHEUXLVHVRQKHUERG\
8SRQKLVDUULYDO%RVOH\VSRNHZLWK7KDFNHUZKR%RVOH\
FODLPVH[SODLQHGWKDWKHKDGEHHQDUJXLQJZLWK*DOODJKHUEXW
KDGQRWVWUXFNKHU%RVOH\WKHQVSRNHZLWK*DOODJKHULQVLGH
WKHDSDUWPHQWEXWZKHQ7KDFNHUUHSHDWHGO\LQWHUUXSWHGWKH
FRQYHUVDWLRQWKH\ILQLVKHGWKHFRQYHUVDWLRQRXWVLGH%RVOH\
GHVFULEHGWKHH[FKDQJHDVIROORZV
>6@KHDQG0U7KDFNHUKDGJRQHRXWWKH\KDGERWKEHHQ
GULQNLQJ WKH\ DUJXHG DQG 0U 7KDFNHU WKUHZ D EHHU
ERWWOHDWKHU$WILUVW0V*DOODJKHUWROGPHWKDWVKHJRW
WKH EUXLVHV IDOOLQJ RXW RI EHG 0V *DOODJKHU ZDV
QHUYRXVDQGVKDNLQJ,WROGKHUWKDWWKHEUXLVHVORRNHGDV
LIWKH\ZHUHWKHUHVXOWRIDQDVVDXOWWKDWLIVKHKDGEHHQ
DVVDXOWHGVKHQHHGHGWRWHOOPHWKHWUXWKWKDWRWKHUZLVH
VKHFRXOGEHREVWUXFWLQJMXVWLFHDQGWKDWKHUVDIHW\ZDV
RXUILUVWDQGIRUHPRVWFRQFHUQ0V*DOODJKHUWKHQVDLG
WKDW7KDFNHUKDGKLWKHU

-- 3 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
*DOODJKHUPDLQWDLQVWKDWVKHQHYHUVWDWHGWRDQ\RQHWKDW
7KDFNHUKDGVWUXFNKHURUFDXVHGWKHEUXLVHV
6HUJHDQW%RVOH\GLUHFWHG(OLDVDQG6WDFNWRDUUHVW7KDFNHU
IRU GRPHVWLF YLROHQFH 2IILFHUV (OLDV DQG 6WDFN SODFHG
7KDFNHUXQGHUDUUHVWIRUGRPHVWLFYLROHQFHDQGDVVDXOW7KH
RIILFHUV SKRWRJUDSKHG *DOODJKHU¶V EUXLVHV (OLDV WKHQ
WHOHSKRQHG*DOODJKHU¶VIDWKHUDQGWROGKLPWKDW7KDFNHUKDG
EHHQDUUHVWHGIRUGRPHVWLFYLROHQFH6WDFNWKHQFRPSOHWHGD
SROLFHUHSRUW
$OWKRXJK*DOODJKHUFODLPVWKDWWKHRIILFHUVKDQGFXIIHGKHU
IRUDSSUR[LPDWHO\RQHPLQXWHVRWKDWWKH\FRXOGSKRWRJUDSK
KHUEUXLVHVHDFKRIWKHGHIHQGDQWVWHVWLILHGWKDW*DOODJKHU
ZDVQHYHUKDQGFXIIHG*DOODJKHUDOVRFODLPVWKDWWKHRIILFHUV
ZHUH\HOOLQJDQGFXUVLQJDWKHUDQGWKUHDWHQLQJKHUZLWKDUUHVW
LI VKH GLG QRW FRRSHUDWH 7KDFNHU FODLPV WKDW WKH RIILFHUV
FXUVHG DW KLP ZKHQ WKH\ ILUVW HQWHUHG WKH DSDUWPHQW
+RZHYHU WKH RIILFHUV WHVWLILHG WKDW WKH\ GLG QRW VZHDU DW
7KDFNHURU*DOODJKHU1RQHRIWKHRIILFHUVRUSDUDPHGLFVKDG
SULRUFRQWDFWZLWKRUNQRZOHGJHRIWKHSODLQWLIIV
2Q6HSWHPEHUWZRFULPLQDOFRPSODLQWVZHUHILOHG
DJDLQVW 7KDFNHU FKDUJLQJ KLP ZLWK GRPHVWLF YLROHQFH DQG
DVVDXOW 7KDFNHU ZDV KHOG LQ MDLO IRU DSSUR[LPDWHO\ WKUHH
GD\V+RZHYHUWKHFKDUJHVDJDLQVWKLPZHUHGLVPLVVHGRQ
2FWREHUDIWHU*DOODJKHUUHIXVHGWRFRRSHUDWHZLWK
WKHSURVHFXWLRQ*DOODJKHUZDVQHYHUDUUHVWHGRUSURVHFXWHG
LQFRQQHFWLRQZLWKWKLVLQFLGHQW
%3URFHGXUDO+LVWRU\
7KDFNHU DQG *DOODJKHU ILOHG D FRPSODLQW DOOHJLQJ
FRQVWLWXWLRQDO DQG VWDWH ODZ WRUWV DJDLQVW WKH &LW\ RI
&ROXPEXV &ROXPEXV SROLFH RIILFHUV (OLDV 6WDFN %RVOH\
5LFN 1HZSRII 0DUYLQ 5DSHQSRUW DQG 6XVDQ +LOO DQG
SDUDPHGLFV .DLVHU DQG :HQWZRUWK 6XEVHTXHQWO\ +LOO
1HZSRIIDQG'DYHQSRUWZHUHGLVPLVVHGDVGHIHQGDQWV
2Q -DQXDU\ SODLQWLIIV PRYHG IRU VXPPDU\
MXGJPHQWRQWKHLU)RXUWK$PHQGPHQWFODLPVIRUXQODZIXO
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
HQWU\DQGVHL]XUHDQGUHODWHGVWDWHODZFODLPV2Q0D\
GHIHQGDQWV(OLDV6WDFN%RVOH\.DLVHU:HQWZRUWK
DQGWKH&LW\RI&ROXPEXVILOHGDFURVVPRWLRQIRUVXPPDU\
MXGJPHQW VHHNLQJ MXGJPHQW DV D PDWWHU RI ODZ RQ DOO RI
SODLQWLIIV¶ FODLPV DQG TXDOLILHG LPPXQLW\ ZLWK UHVSHFW WR
SODLQWLIIV¶)RXUWK$PHQGPHQWFODLPV7KHUHDIWHUWKH&LW\RI
&ROXPEXVDQG.DLVHUZHUHGLVPLVVHGIURPWKHFDVHOHDYLQJ
DVWKHRQO\UHPDLQLQJGHIHQGDQWV(OLDV6WDFN%RVOH\DQG
:HQWZRUWK
2Q-XO\SODLQWLIIVPRYHGIRUOHDYHWRDPHQGWKH
FRPSODLQWWRVWDWHDFODLPEDVHGXSRQWKHZDUUDQWOHVVHQWU\
LQWRWKHLUDSDUWPHQWDVDYLRODWLRQRIWKH)RXUWK$PHQGPHQW
3ODLQWLIIVWKHQGLVPLVVHGDOOFODLPVH[FHSWWKHLU †
FODLP IRU XQODZIXO HQWU\ LQ YLRODWLRQ RI WKH )RXUWK
$PHQGPHQW † FODLP IRU XQODZIXO DUUHVW DQG
PDOLFLRXVSURVHFXWLRQRI7KDFNHULQYLRODWLRQRIWKH)RXUWK
$PHQGPHQW † FODLP IRU XQODZIXO VHL]XUH RI
*DOODJKHULQYLRODWLRQRIWKH)RXUWK$PHQGPHQWDQG VWDWH
WRUWFODLPVIRUIDOVHDUUHVWRI7KDFNHUDQG*DOODJKHUDQGIRU
PDOLFLRXVSURVHFXWLRQRI7KDFNHU
2Q$XJXVWWKHGLVWULFWFRXUWLVVXHGDQRSLQLRQ
DQGRUGHUGHQ\LQJSODLQWLIIV¶PRWLRQIRUOHDYHWRDPHQGWKH
FRPSODLQW EXW FRQVWUXLQJ WKH ZDUUDQWOHVV HQWU\ FODLP DV
SURSHUO\SOHG7KHGLVWULFWFRXUWJUDQWHGGHIHQGDQWV¶FURVV
PRWLRQIRUVXPPDU\MXGJPHQWDQGGHQLHGSODLQWLIIV¶PRWLRQ
IRUVXPPDU\MXGJPHQW7KLVDSSHDOIROORZHG
,,$1$/<6,6
:HUHYLHZWKHGLVWULFWFRXUW¶VGHFLVLRQWRJUDQWVXPPDU\
MXGJPHQWGHQRYRDQGDSSO\WKHVDPHVWDQGDUGWKHGLVWULFW
FRXUWDSSOLHG)ULGOH\Y+RUULJKV)G WK
&LU $JUDQWRIVXPPDU\MXGJPHQWLVSURSHUZKHQ
³WKHSOHDGLQJVGHSRVLWLRQVDQVZHUVWRLQWHUURJDWRULHVDQG
DGPLVVLRQVRQILOHWRJHWKHUZLWKWKHDIILGDYLWVLIDQ\VKRZ
WKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWDQGWKDW
WKHPRYLQJSDUW\LVHQWLWOHGWRDMXGJPHQWDVDPDWWHURIODZ´
)(' 5 &,9 3 F $GLVSXWHRYHUDPDWHULDOIDFWZLOORQO\
EHJHQXLQHLI³DUHDVRQDEOHMXU\FRXOGUHWXUQDYHUGLFWIRUWKH

-- 4 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
QRQPRYLQJSDUW\´$QGHUVRQY/LEHUW\/REE\,QF86
$WWKLVVWDJHFRXUWVDUHUHTXLUHGWRYLHZDOO
IDFWVDQGWKH LQIHUHQFHVGUDZQWKHUHIURPLQWKHOLJKWPRVW
IDYRUDEOH WR WKH QRQPRYLQJ SDUW\ 6HH 0DWVXVKLWD (OHF
,QGXV&RY=HQLWK5DGLR&RUS86
$)RXUWK$PHQGPHQW8QODZIXO(QWU\&ODLP
3OHDGLQJV
2QDSSHDOGHIHQGDQWVFODLPWKDWWKLV&RXUWVKRXOGGLVPLVV
SODLQWLIIV¶)RXUWK$PHQGPHQWXQODZIXOHQWU\FODLPEHFDXVH
SODLQWLIIV IDLOHG WR SOHDG WKLV FODLP VXIILFLHQWO\ ,Q LWV
$XJXVWGHFLVLRQWKHGLVWULFWFRXUWUHIXVHGOHDYHWR
DPHQG RQ WKH JURXQGV WKDW DPHQGPHQW ZRXOG EH IXWLOH
EHFDXVH H[LJHQW FLUFXPVWDQFHV MXVWLILHG GHIHQGDQWV¶ HQWU\
+RZHYHUWKHGLVWULFWFRXUWFRQVWUXHGWKHFRPSODLQWDVKDYLQJ
VXIILFLHQWO\ SOHG D FODLP IRU XQODZIXO HQWU\ ILQGLQJ WKH
DOOHJDWLRQVLQWKHFRPSODLQW³PLQLPDOO\VXIILFLHQW´WRVXSSRUW
VXFK D FODLP :H UHYLHZ WKH GLVWULFW FRXUW¶V GHFLVLRQ IRU
DEXVHRIGLVFUHWLRQ7HIIWY6WHZDUG)G WK
&LU
8SRQDSODLQWLII¶VUHTXHVWIRUOHDYHWRDPHQGWKHFRPSODLQW
DGLVWULFWFRXUWLVREOLJHGWRJLYHOHDYHIUHHO\³ZKHQMXVWLFHVR
UHTXLUHV´6HH)(' 5 &,9 3 D 7HIIW)GDW
7KLV&RXUWKDVH[SODLQHGWKDW)HGHUDO5XOHRI&LYLO3URFHGXUH
LVLQWHQGHGWRUHLQIRUFHWKHSULQFLSOHWKDWFDVHVVKRXOGEH
GHFLGHGRQWKHLUPHULWVDQGQRWPHUHO\XSRQWKHWHFKQLFDOLWLHV
RI WKH SOHDGLQJV 7HIIW )G DW FLWLQJ &RQOH\ Y
*LEVRQ86
$V WKH GLVWULFW FRXUW IRXQG WKH FRPSODLQW DOOHJHV WKDW
GHIHQGDQWV³DSSHDUHGDWWKHVXEMHFWUHVLGHQFH´DQGWKDW³>W@KH
ZURQJIXODQGPDOLFLRXVDFWVE\ 'HIHQGDQWV(OLDV%RVOH\
6WDFN>DQG@:HQWZRUWKGHSULYHG3ODLQWLIIVRIWKHLU
OLEHUWLHVDQGULJKWVDVJXDUDQWHHGE\WKH&RQVWLWXWLRQVRIWKH
8QLWHG6WDWHVDQG6WDWHRI2KLR´7KHSDUWLHVDOVRFRQGXFWHG
GLVFRYHU\RQWKHXQODZIXOHQWU\FODLPSXWWLQJGHIHQGDQWVRQ
QRWLFHWKDWSODLQWLIIVZHUHDVVHUWLQJVXFKDFODLP)RUWKHVH
IDFWXDOUHDVRQVDQGEHFDXVHRIRXUSUHIHUHQFHIRUGHFLGLQJ
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
$QRWKHU H[FHSWLRQ WR WKH SURKLELWLRQ RQ HQWHULQJ D KRPH ZLWKRXW D
ZDUUDQW LV PDGH ZKHUH ³YROXQWDU\ FRQVHQW LV JLYHQ WR WKH VHDUFK E\ WKH
RZQHU RI WKH KRPH RU SURSHUW\´ RU E\ VRPHRQH ZLWK DSSDUHQW DXWKRULW\ WR
FRQVHQW 8QLWHG 6WDWHV Y &DPSEHOO )G WK &LU
+RZHYHU WKH SDUWLHV KDYH QRW DSSHDOHG WKH GLVWULFW FRXUW¶V GHFLVLRQ WKDW
FDVHV RQ WKH PHULWV ZH ILQG WKDW WKH GLVWULFW FRXUW GLG QRW
DEXVHLWVGLVFUHWLRQLQILQGLQJWKHSOHDGLQJVWREHVXIILFLHQW
0HULWVRI8QODZIXO(QWU\&ODLP
7KH ³FKLHI HYLO´ DJDLQVW ZKLFK WKH )RXUWK $PHQGPHQW
SURWHFWVLVWKH³SK\VLFDOHQWU\RIWKHKRPH´3D\WRQY1HZ
<RUN 86 7KH )RXUWK $PHQGPHQW
UHTXLUHVWKDWVHDUFKHVRIWKHKRPHEHUHDVRQDEOH6HH,OOLQRLV
Y 5RGULJXH] 86 7KLV
UHDVRQDEOHQHVV UHTXLUHPHQW JHQHUDOO\ UHTXLUHV WKDW SROLFH
REWDLQ D ZDUUDQW EDVHG XSRQ D MXGLFLDO GHWHUPLQDWLRQ RI
SUREDEOHFDXVHSULRUWRHQWHULQJDKRPH6HH3D\WRQ
86DW+RZHYHUWKHUHDUHDIHZZHOOGHILQHGDQG
FDUHIXOO\FLUFXPVFULEHGFLUFXPVWDQFHVLQZKLFKDZDUUDQWZLOO
QRWEHUHTXLUHG6HH0LQFH\Y$UL]RQD86
VHHDOVR8QLWHG6WDWHVY-RKQVRQ)G
WK&LU
,Q WKLV FDVH LW LV XQGLVSXWHG WKDW GHIHQGDQWV HQWHUHG
SODLQWLIIV¶KRPHZLWKRXWDZDUUDQWLQUHVSRQVHWRDFDOO
SODFHGIURPWKHKRPH7KH)RXUWK$PHQGPHQWSURKLELWLRQ
DJDLQVW HQWHULQJ D KRPH ZLWKRXW D ZDUUDQW DSSOLHV HTXDOO\
ZKHWKHUWKHSROLFHHQWHUDKRPHWRFRQGXFWDVHDUFKRUVHL]XUH
RUIRUVRPHRWKHUSXUSRVH6HH8QLWHG6WDWHVY5RKULJ
)G WK &LU 7KXV XQOHVV WKH
FLUFXPVWDQFHVRIWKLVFDVHIDOOLQWRRQHRIWKHH[FHSWLRQVWR
WKHZDUUDQWUHTXLUHPHQWWKH)RXUWK$PHQGPHQWZLOOKDYH
EHHQYLRODWHG
,Q WKLV FDVH ZH DUH FDOOHG XSRQ WR DGGUHVV ZKHWKHU WKH
³H[LJHQWFLUFXPVWDQFHV´H[FHSWLRQWRWKHZDUUDQWUHTXLUHPHQW
MXVWLILHGGHIHQGDQWV¶HQWU\LQWRSODLQWLIIV¶KRPH6HH(ZROVNL
Y &LW\ RI %UXQVZLFN )G WK &LU

-- 5 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
SODLQWLIIV GLG QRW FRQVHQW WR GHIHQGDQWV¶ HQWU\ LQWR WKHLU DSDUWPHQW
7KHUHIRUH ZH GR QRW KDYH RFFDVLRQ WR DGGUHVV WKH TXHVWLRQ RI FRQVHQW
([LJHQWFLUFXPVWDQFHVDUHVLWXDWLRQVZKHUH³μUHDOLPPHGLDWH
DQGVHULRXVFRQVHTXHQFHV¶´ZLOO³FHUWDLQO\RFFXU´LIWKHSROLFH
RIILFHU SRVWSRQHV DFWLRQ WR REWDLQ D ZDUUDQW ,G TXRWLQJ
2¶%ULHQY&LW\RI*UDQG5DSLGV)G WK&LU
TXRWLQJ :HOVK Y :LVFRQVLQ 86
7KLV&RXUWKDVH[SODLQHGWKDWWKHIROORZLQJIRXU
VLWXDWLRQVPD\JLYHULVHWRH[LJHQWFLUFXPVWDQFHV³ KRW
SXUVXLW RI D IOHHLQJ IHORQ LPPLQHQW GHVWUXFWLRQ RI
HYLGHQFH WKHQHHGWRSUHYHQWDVXVSHFW¶VHVFDSHDQG D
ULVNRIGDQJHUWRWKHSROLFHRURWKHUV´-RKQVRQ)GDW
VHH0LQQHVRWDY2OVHQ86
'HIHQGDQWV FRQWHQG WKDW WKH ZDUUDQWOHVV HQWU\ LQWR
SODLQWLIIV¶KRPHDWLVVXHKHUHSUHVHQWVWKHIRXUWKVLWXDWLRQ,Q
SDUWLFXODU GHIHQGDQWV DUJXH WKDW WKH\ ZHUH UHTXLUHG WR
GHWHUPLQH ZKHWKHU DQ\WKLQJ RU DQ\RQH LQ SODLQWLIIV¶ KRPH
SRVHG D ULVN RI GDQJHU HLWKHU WR WKHPVHOYHV RU WR WKH
SDUDPHGLFV ZKR VRXJKW WR HQWHU WKH KRPH WR DWWHQG WR WKH
LQMXUHGRUDOWHUQDWLYHO\WRVRPHRQHLQVLGHWKHKRPH7KLV
&RXUWKDVH[SODLQHGWKDWWKH³μULVNRIGDQJHU¶H[LJHQF\´PRVW
IUHTXHQWO\ MXVWLILHV ³ZDUUDQWOHVV HQWULHV LQ FDVHV ZKHUH WKH
*RYHUQPHQWLVDFWLQJLQVRPHWKLQJRWKHUWKDQDWUDGLWLRQDO
ODZ HQIRUFHPHQW FDSDFLW\´ 5RKULJ )G DW VHH
HJ0LFKLJDQY7\OHU86 ILQGLQJ
ZDUUDQWOHVV HQWU\ LQWR D EXUQLQJ EXLOGLQJ ZDV MXVWLILHG
-RKQVRQ)GDW ILQGLQJOLPLWHGZDUUDQWOHVVHQWU\
ZDVMXVWLILHGWRIUHHDYLFWLPZKRKDGEHHQKHOGDJDLQVWKHU
ZLOODQGVH[XDOO\DVVDXOWHG
³>7@KH )RXUWK $PHQGPHQW GRHV QRW EDU SROLFH RIILFHUV
IURP PDNLQJ ZDUUDQWOHVV HQWULHV DQG VHDUFKHV ZKHQ WKH\
UHDVRQDEO\ EHOLHYH WKDW D SHUVRQ ZLWKLQ LV LQ QHHG RI
LPPHGLDWHDLG´0LQFH\86DW3ROLFHKDYHDULJKW
DQGDGXW\WRUHVSRQGWRHPHUJHQF\VLWXDWLRQV7KHHQFRXQWHU
LQ WKLV FDVH ZDV WULJJHUHG E\ D FDOO UHSRUWLQJ DQ
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
*DOODJKHU¶V FDOO UHSRUWLQJ DQ HPHUJHQF\ MXVWLILHG D SROLFH
UHVSRQVH WR LQYHVWLJDWH WKH VLWXDWLRQ IXUWKHU EXW GLG QRW QHFHVVDULO\ MXVWLI\
HQWU\ LQWR D SULYDWH KRPH 6HH 8QLWHG 6WDWHV Y 0HL[QHU :/
DW (' 0LFK 2FW FRQFOXGLQJ HYHQ D KDQJ
XS FDOO FRGHG DV D SRVVLEOH GRPHVWLF YLROHQFH VLWXDWLRQ MXVWLILHG RQO\ D
OLPLWHG UHVSRQVH 2QO\ ZKHQ WKH SROLFH DUULYHG DW WKH KRPH DQG REVHUYHG
IDFWV LQGLFDWLYH RI H[LJHQW FLUFXPVWDQFHV ZHUH WKH\ MXVWLILHG LQ HQWHULQJ
WKH KRPH :H PDNH QR GHWHUPLQDWLRQ WKDW H[LJHQW FLUFXPVWDQFHV
QHFHVVDULO\ DULVH HYHU\ WLPH ERWK D SROLFH RIILFHU DQG D SDUDPHGLF UHVSRQG
WR D FXWWLQJ RU VWDEELQJ
HPHUJHQF\ZKLFKZDVODEHOHGE\WKHGLVSDWFKHUDVUHODWLQJWR
D³FXWWLQJRUVWDEELQJ´
6RPHFRXUWVKDYHIRXQGWKDWXQGHUFHUWDLQFLUFXPVWDQFHV
D FDOO UHSRUWLQJ DQ HPHUJHQF\ ZLWKRXW PRUH PD\ EH
HQRXJKWRVXSSRUWDZDUUDQWOHVVVHDUFKRIDKRPH6HHHJ
8QLWHG6WDWHVY&XQQLQJKDP)G WK
&LU ILQGLQJ FDOO IURP ZRPDQ ZKR LGHQWLILHG
KHUVHOIDQGFODLPHGWKDWVKHZDVEHLQJKHOGDJDLQVWKHUZLOO
MXVWLILHG SURWHFWLYH VZHHS RI GZHOOLQJ 8QLWHG 6WDWHV Y
5LFKDUGVRQ)G WK&LU FRQFOXGLQJ
WKDWDFDOOZKHUHWKHFDOOHULGHQWLILHGKLPVHOIDQGVWDWHG
WKDW³/XFN\´KDGUDSHGDQGPXUGHUHGDZRPDQZKRVHERG\
FRXOGEHIRXQGLQWKHEDVHPHQWRIDSDUWLFXODUDGGUHVVZDV
HQRXJK WR VXSSRUW D ZDUUDQWOHVV VHDUFK XQGHU WKH H[LJHQW
FLUFXPVWDQFHVH[FHSWLRQ $OWKRXJKZHKDYHQRWSUHYLRXVO\
KHOGWKDWDFDOODORQHPD\MXVWLI\DZDUUDQWOHVVHQWU\LQWR
D SULYDWH KRPH ZH QHHG QRW DQG GR QRW UHDFK VXFK D
FRQFOXVLRQKHUH
:KHQ WKH RIILFHUV DUULYHG DW SODLQWLIIV¶ UHVLGHQFH WKHLU
REVHUYDWLRQV DQG WKH QHHG WR VDIHJXDUG WKH SDUDPHGLFV
VXSSRUWHG WKH FRQFOXVLRQ WKDW WKHUH H[LVWHG H[LJHQW
FLUFXPVWDQFHVMXVWLI\LQJHQWU\LQWRSODLQWLIIV¶KRPHZLWKRXW
DZDUUDQW6HH(ZROVNL)GDW,QSDUWLFXODUWKH
WRWDOLW\RIWKHFLUFXPVWDQFHVLQFOXGLQJWKHHPHUJHQF\
FDOO7KDFNHU¶VFRQGXFWDQGWKHXQFHUWDLQW\RIWKHVLWXDWLRQ
MXVWLILHGHQWU\WRVHFXUHWKHVDIHW\RIWKHSROLFHSDUDPHGLFV
DQGRWKHUSHRSOHSRVVLEO\LQVLGHWKHKRPH

-- 6 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
9LHZLQJWKHIDFWVLQWKHUHFRUGLQWKHOLJKWPRVWIDYRUDEOH
WRSODLQWLIIVWKHIROORZLQJLQIRUPDWLRQZDVDYDLODEOHWRWKH
RIILFHUVEHIRUHWKH\HQWHUHGSODLQWLIIV¶DSDUWPHQW6RPHRQH
KDGSODFHGDFDOOUHSRUWLQJDQHPHUJHQF\±DFXWWLQJRU
VWDEELQJ±DW WKH UHVLGHQFH 7KDFNHU DQVZHUHG WKH GRRU
VKLUWOHVV ZLWK EORRG RQ KLV OHJV DQG ER[HU VKRUWV ,W ZDV
DSSDUHQW WKDW 7KDFNHU KLPVHOI ZDV LQMXUHG DV WKH RIILFHUV
FRXOGVHHWKDWKHZDVEOHHGLQJIURPDFXWRQKLVKDQG7KH
FXW ZDV GHHS HQRXJK WR UHTXLUH VWLWFKHV EXW 7KDFNHU KDG
ZUDSSHG KLV VKLUW DURXQG KLV KDQG WR VORZ WKH SURIXVH
EOHHGLQJ,PPHGLDWHO\7KDFNHUDFWHGEHOOLJHUHQWO\DQGXVHG
SURIDQLW\ +H DSSHDUHG LQWR[LFDWHG 7KDFNHU IDLOHG WR
SURYLGHDQ\H[SODQDWLRQIRUWKHLQMXU\,QVWHDGKHGHPDQGHG
DVVLVWDQFHIURPWKHSDUDPHGLFVZKRZHUHZDLWLQJRXWVLGHIRU
WKHRIILFHUVWRWHOOWKHPWKDWLWZDVVDIHWRHQWHU³:KHQWKH
GRRUZDVRSHQHG´2IILFHU6WDFNFRXOGVHHWKHNLWFKHQDUHD
LQFOXGLQJWKHNLWFKHQWDEOHWRWKHULJKWDQGWKHPDLQOLYLQJ
URRPDUHDWRWKHOHIW,QWKHNLWFKHQKHFRXOGVHHDEURNHQ
EHHUERWWOHRQWKHIORRUDKROHLQWKHNLWFKHQZDOOD³FRXSOH
IHHWRIIWKHIORRU´DQGOLTXLGVSODVKHGRQWKHZDOODQGVSLOOHG
RQWKHIORRU7KHRIILFHUVGLGQRWVHH*DOODJKHUXQWLOWKH\
ZHUHDOUHDG\FURVVLQJWKHWKUHVKROGWRHQWHUWKHDSDUWPHQWDW
ZKLFK SRLQW 7KDFNHU OHIW WKH GRRUZD\ WR VLW DW WKH NLWFKHQ
WDEOH
$OWKRXJKLWSUHVHQWVDFORVHTXHVWLRQWKHXQFHUWDLQW\RIWKH
VLWXDWLRQLQSDUWLFXODURIWKHQDWXUHRIWKHHPHUJHQF\DQGWKH
GXDOQHHGVRIVDIHJXDUGLQJWKHSDUDPHGLFVZKLOHWHQGLQJWR
7KDFNHU¶VLQMXU\FUHDWHGH[LJHQWFLUFXPVWDQFHVKHUH7KH
FDOOLQWKLVFDVHUHSRUWHGDFXWWLQJRUVWDEELQJ6XFKDQ
HPHUJHQF\FDOOUHTXLUHVDSROLFHDQGSDUDPHGLFUHVSRQVHDQG
SRWHQWLDOO\LQYROYHVVHULRXVSHULOWRWKHRIILFHUVSDUDPHGLFV
RURWKHUV7KHFDOOVROLFLWHGDUHVSRQVHIURPDQHPHUJHQF\
WHDP$OWKRXJKWKLVGRHVQRWDPRXQWWRFRQVHQWMXVWLI\LQJWKH
VHDUFKLWFOHDUO\ZHLJKVLQIDYRURIILQGLQJWKDWSODLQWLIIV¶
H[SHFWDWLRQRISULYDF\LQWKHLUKRPHZDVGLPLQLVKHG7KH
RIILFHUVZHUHSODFHGLQDGLIILFXOWSRVLWLRQLQWKDWWKH\ZHUH
GXW\ERXQGWRUHVSRQGWR7KDFNHU¶VUHTXHVWIRUDVVLVWDQFHEXW
DOVRUHEXIIHGZKHQWKH\DWWHPSWHGWRGRVR
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
7KH XQODZIXO HQWU\ FODLP DJDLQVW GHIHQGDQW :HQWZRUWK D
SDUDPHGLF FDQQRW VXUYLYH VXPPDU\ MXGJPHQW :HQWZRUWK HQWHUHG WKH
DSDUWPHQW ZLWK 7KDFNHU¶V FRQVHQW WR WUHDW 7KDFNHU¶V LQMXULHV $V VXFK
:HQWZRUWK¶V HQWU\ LQWR SODLQWLIIV¶ KRPH ZDV MXVWLILHG
7KHVDIHW\RIWKHSDUDPHGLFVDQGRWKHUVLQWKLVFDVHDOVR
PXVWEHFRQVLGHUHG7KHRIILFHUVKDGWRVHFXUHWKHVDIHW\RI
WKH SDUDPHGLFV EHIRUH WKH SDUDPHGLFV FRXOG DWWHQG WR
7KDFNHU7KDFNHUGLGQRWH[SODLQKLVLQMXU\RUDQ\WKLQJHOVH
WRWKHSROLFHZKLOHWKH\ZHUHRQWKHSRUFK+LVGHPHDQRUDQG
DWWLWXGHLQGLFDWHGWKDW7KDFNHUFRXOGKDYHSRVHGDWKUHDWWR
WKHVDIHW\RIWKHRIILFHUVRUSDUDPHGLFV0RUHRYHULWZDVQRW
FOHDUZKRHOVHZDVLQWKHDSDUWPHQWDQGWKHUHIRUHZKHWKHU
DQ\RWKHUVPLJKWHLWKHUSRVHDWKUHDWRUEHLQGDQJHU7KH
RIILFHUVFRXOGVHHEURNHQJODVVDQGDKROHLQWKHNLWFKHQZDOO
7KLVREVHUYDWLRQPDGHLWXQFOHDUZKHWKHUDQDOWHUFDWLRQRUDQ
DFFLGHQWKDGRFFXUUHG7KHVHIDFWVFUHDWHGXQFHUWDLQW\WKDW
JLYHQ7KDFNHU¶VODFNRIFRRSHUDWLRQFRXOGRQO\EHGLVSHOOHG
E\HQWHULQJWKHKRPHDQGLQYHVWLJDWLQJIXUWKHU)LQDOO\WKHUH
ZDVQRRSSRUWXQLW\WRREWDLQDZDUUDQWEHIRUHDGPLQLVWHULQJ
PHGLFDODLGWR7KDFNHUZKRZDVREYLRXVO\VHULRXVO\LQMXUHG
&I-RKQVRQ)GDW ILQGLQJSROLFHKDG³DPSOHWLPH´
DIWHUIUHHLQJVH[XDODVVDXOWYLFWLPZKRKDGEHHQKHOGDJDLQVW
KHUZLOOWRVHFXUHDZDUUDQWEHIRUHIXUWKHUVHDUFKLQJWKHKRPH
LQZKLFKVKHKDGEHHQKHOG
7KXV WKH SRWHQWLDO GDQJHUV DWWHQGDQW WR D FXWWLQJ RU
VWDEELQJFDOOWKHIDFWWKDWSODLQWLIIV¶VROLFLWHGWKHUHVSRQVH
WKH\ UHFHLYHG WKH QHHG WR VDIHJXDUG WKH SDUDPHGLFV DQG
RWKHUVLQFOXGLQJFUHDWLQJDVDIHHQYLURQPHQWDQGILJXULQJRXW
ZKDW KDSSHQHG DQG WKH QHHG WR DFW VZLIWO\ WR WHQG WR
7KDFNHU¶VLQMXU\MXVWLILHGWKHHQWU\LQWKLVFDVH
%)RXUWK$PHQGPHQW8QODZIXO6HL]XUH&ODLPV
7KH )RXUWK $PHQGPHQW VWDWHV LQ SHUWLQHQW SDUW WKDW ³QR
:DUUDQWVVKDOOLVVXHEXWXSRQSUREDEOHFDXVHVXSSRUWHGE\
2DWKRUDIILUPDWLRQDQGSDUWLFXODUO\GHVFULELQJWKHSODFHWR
EHVHDUFKHGDQGWKHSHUVRQVRUWKLQJVWREHVHL]HG´86
&2167 DPHQG,9³>,@WLVZHOOHVWDEOLVKHGWKDWDQ\DUUHVW

-- 7 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
ZLWKRXW SUREDEOH FDXVH YLRODWHV WKH )RXUWK $PHQGPHQW´
&URFNHWWY&XPEHUODQG&ROO)G WK&LU
)RUSUREDEOHFDXVHWRDUUHVWWRH[LVWWKH³IDFWVDQG
FLUFXPVWDQFHV ZLWKLQ WKH RIILFHU¶V NQRZOHGJH >PXVW EH@
VXIILFLHQWWRZDUUDQWDSUXGHQWSHUVRQRURQHRIUHDVRQDEOH
FDXWLRQLQEHOLHYLQJLQWKHFLUFXPVWDQFHVVKRZQWKDWWKH
VXVSHFWKDVFRPPLWWHGLVFRPPLWWLQJRULVDERXWWRFRPPLW
DQRIIHQVH´,G FLWLQJ0LFKLJDQY'H)LOOLSSR86
VHH+LQFKPDQY0RRUH)G WK
&LU FLWLQJ&ULVVY&LW\RI.HQW)G
WK &LU :KHWKHU WKHUH H[LVWV D SUREDELOLW\ RI
FULPLQDODFWLYLW\LVDVVHVVHGXQGHUDUHDVRQDEOHQHVVVWDQGDUG
EDVHG RQ ³μDQ H[DPLQDWLRQ RI DOO IDFWV DQG FLUFXPVWDQFHV
ZLWKLQ DQ RIILFHU¶V NQRZOHGJH DW WKH WLPH RI DQ DUUHVW¶´
&URFNHWW )G DW TXRWLQJ (VWDWH RI 'LHWULFK Y
%XUURZV )G WK &LU 7KH
H[LVWHQFHRISUREDEOHFDXVHLVDMXU\TXHVWLRQXQOHVVWKHUHLV
RQO\RQHUHDVRQDEOHGHWHUPLQDWLRQWKDWLVSRVVLEOH,GDW
*DUGHQKLUHY6FKXEHUW)G WK&LU
3ODLQWLII7KDFNHU
7KDFNHU ZDV DUUHVWHG IRU GRPHVWLF YLROHQFH SXUVXDQW WR
2KLR5HYLVHG&RGH† $ 6HFWLRQ $ VWDWHV
³1R SHUVRQ VKDOO NQRZLQJO\ FDXVH RU DWWHPSW WR FDXVH
SK\VLFDOKDUPWRDIDPLO\RUKRXVHKROGPHPEHU´8QGHUWKH
VWDWXWH D ³KRXVHKROG PHPEHU´ LQFOXGHV ³>D@Q\ RI WKH
IROORZLQJZKRLVUHVLGLQJRUKDVUHVLGHGZLWKWKHRIIHQGHU´
D³VSRXVHDSHUVRQOLYLQJDVDVSRXVHRUDIRUPHUVSRXVHRI
WKHRIIHQGHU´2+,2 5(9 &2'( † ( $
μSHUVRQOLYLQJDVDVSRXVH¶PHDQVDSHUVRQZKRLVOLYLQJ
RUKDVOLYHGZLWKWKHRIIHQGHULQDFRPPRQODZPDULWDO
UHODWLRQVKLS ZKR RWKHUZLVH LV FRKDELWLQJ ZLWK WKH
RIIHQGHU RU ZKR RWKHUZLVH KDV FRKDELWHG ZLWK WKH
RIIHQGHUZLWKLQILYH\HDUVSULRUWRWKHGDWHRIWKHDOOHJHG
FRPPLVVLRQRIWKHDFWLQTXHVWLRQ
,G2KLRKDVDSUHIHUUHGDUUHVWSROLF\LQGRPHVWLFYLROHQFH
VLWXDWLRQV ,Q SDUWLFXODU 2KLR ODZ SURYLGHV WKDW ZKHUH D
SHDFH RIILFHU KDV ³UHDVRQDEOH JURXQGV WR EHOLHYH WKDW WKH
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
7KH SDUDPHGLFV EHOLHYHG WKDW *DOODJKHU ZDV QHUYRXV GLVFXVVLQJ WKH
EUXLVHV DURXQG 7KDFNHU +RZHYHU WKHUH LV QR GLUHFW HYLGHQFH WKDW WKLV
EHOLHI ZDV FRQYH\HG WR WKH DUUHVWLQJ RIILFHUV DQG WKXV UHOLHG XSRQ LQ
PDNLQJ WKH GHWHUPLQDWLRQ WKDW SUREDEOH FDXVH H[LVWHG 1HYHUWKHOHVV WKHUH
RIIHQVH RI GRPHVWLFYLROHQFHKDVEHHQFRPPLWWHGDQG
UHDVRQDEOHFDXVHWREHOLHYHWKDWDSDUWLFXODUSHUVRQLVJXLOW\
RIFRPPLWWLQJWKHRIIHQVHLWLVWKHSUHIHUUHGFRXUVHRIDFWLRQ
LQ WKLV VWDWH WKDW WKH RIILFHU DUUHVW DQG GHWDLQ WKDW SHUVRQ´
2+,2 5(9 &2'( † % E VHH 6FRWW Y &LW\ RI
%H[OH\)HG$SS[ WK&LU XQSXE¶G
³7KH )RXUWK $PHQGPHQW GRHV QRW UHTXLUH WKDW D SROLFH
RIILFHUNQRZDFULPHRFFXUUHGDWWKHWLPHWKHRIILFHUDUUHVWVRU
VHDUFKHVDVXVSHFW7KH)RXUWK$PHQGPHQWDIWHUDOO
QHFHVVLWDWHV DQ LQTXLU\ LQWR SUREDELOLWLHV QRW FHUWDLQW\´
8QLWHG6WDWHVY6WULFNODQG)G WK&LU
7KXVIRUSUREDEOHFDXVHWRDUUHVW7KDFNHUWRH[LVWKHUHWKH
RIILFHUVZRXOGQRWKDYHWRKDYHSURRIRIHDFKHOHPHQWRID
GRPHVWLFYLROHQFHRIIHQVHEXWZRXOGKDYHWREHOLHYHWKDWD
SUREDELOLW\H[LVWHGWKDWKHFRPPLWWHGWKHRIIHQVH
$W WKH WLPH 6HUJHDQW %RVOH\ RUGHUHG 2IILFHUV (OLDV DQG
6WDFNWRDUUHVW7KDFNHUWKHIROORZLQJLQIRUPDWLRQKDGEHHQ
JDWKHUHGFROOHFWLYHO\E\WKHRIILFHUVRQWKHVFHQHDQGVKDUHG
6HH &ROOLQV Y 1DJOH )G WK &LU
³3UREDEOH FDXVH PD\ EH HVWDEOLVKHG IURP WKH FROOHFWLYH
NQRZOHGJHRIWKHSROLFHUDWKHUWKDQVROHO\IURPWKHRIILFHU
ZKRDFWXDOO\PDGHWKHDUUHVW´ 7KDFNHUDQG*DOODJKHUOLYHG
WRJHWKHU 7KDW QLJKW WKH SDLU GUDQN WR WKH SRLQW DW ZKLFK
7KDFNHUZDVSUREDEO\LQWR[LFDWHGDQGWKHQDUJXHG3ODLQWLIIV¶
VKDUHGDSDUWPHQWZDVLQGLVDUUD\7KHPHVVLQWKHDSDUWPHQW
LQFOXGHGDEURNHQERWWOHWKDWDSSHDUHGWRKDYHVKDWWHUHGZKHQ
WKURZQ DJDLQVW D ZDOO RI WKH NLWFKHQ 7KDFNHU DFWHG
EHOOLJHUHQWO\*DOODJKHUKDGVHYHUHEUXLVHVRQKHUERG\WKDW
ZHUH DQ\ZKHUH IURP D ZHHN WR D IHZ GD\V ROG 7KDFNHU
LQWHUUXSWHG *DOODJKHU ZKHQ VKH WULHG WR UHVSRQG WR
GHIHQGDQWV¶ TXHVWLRQV DERXW KRZ VKH UHFHLYHG KHU EUXLVHV
*DOODJKHU DOVR DSSHDUHG QHUYRXV GLVFXVVLQJ WKH EUXLVHV LQ
IURQWRI7KDFNHUDQGZDVHYDVLYHLQDQVZHULQJWKHRIILFHUV¶

-- 8 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
LV VWURQJ FLUFXPVWDQWLDO HYLGHQFH VXSSRUWLQJ WKH FRQFOXVLRQ WKDW WKH SROLFH
RIILFHUV ZHUH DZDUH WKDW *DOODJKHU ZDV QHUYRXV ZKHQ TXHVWLRQHG LQ IURQW
RI 7KDFNHU )LUVW WKH RIILFHUV ZHUH SUHVHQW ZKHQ :HQWZRUWK TXHVWLRQHG
*DOODJKHU LQ IURQW RI 7KDFNHU 0RUHRYHU (OLDV NQHZ :HQWZRUWK WRRN
*DOODJKHU WR WKH SDUDPHGLFV¶ YDQ WR VHSDUDWH KHU IURP 7KDFNHU )LQDOO\
WKH RIILFHUV WKHPVHOYHV VHSDUDWHG SODLQWLIIV WR WDON WR WKHP LQGLYLGXDOO\
7KXV WKH UHFRUG VXSSRUWV WKH LQIHUHQFH WKDW WKH RIILFHUV HLWKHU NQHZ RI WKH
SDUDPHGLFV¶ EHOLHI RU IRUPHG D VLPLODU EHOLHI LQGHSHQGHQWO\
3ODLQWLIIV ³KRWO\´ FRQWHVW FHUWDLQ IDFWV LQ WKHLU EULHI WR WKLV &RXUW ,Q
SDUWLFXODU SODLQWLIIV FRQWHVW WKDW 7KDFNHU DGPLWWHG KH DUJXHG ZLWK
*DOODJKHU RQ WKH HYHQLQJ LQ TXHVWLRQ DQG WKDW *DOODJKHU ZDV QHUYRXV DQG
HYDVLYH +RZHYHU SODLQWLIIV KDYH IDLOHG WR SURYLGH DQ\ DGPLVVLEOH
HYLGHQFH ZKDWVRHYHU WR VXSSRUW WKHVH FRQWHQWLRQV 1R MXU\ FRXOG
UHDVRQDEO\ ILQG WKDW SODLQWLIIV KDG SURYHG WKHVH IDFWV 6HH /LEHUW\ /REE\
,QF 86 DW
TXHVWLRQVDERXWKHUEUXLVHV7KHRIILFHUVGLGQRWEHOLHYHWKH\
FRXOGUHFRQFLOH*DOODJKHU¶VWKULFHFKDQJLQJH[SODQDWLRQVIRU
WKH EUXLVHV ZLWK WKH VHYHULW\ DQG ORFDWLRQV RI WKH EUXLVHV
)LQDOO\WKHUHLVHYLGHQFHWKDW6HUJHDQW%RVOH\ZDVWROGWKDW
*DOODJKHUFRQIHVVHGWKDW7KDFNHUKDGFDXVHGWKHEUXLVHVRQ
KHUERG\$OWKRXJK*DOODJKHUFODLPVWKDWVKHQHYHUPDGH
VXFKDFRQIHVVLRQWKHHYLGHQFHGHPRQVWUDWHVDWDPLQLPXP
WKDW:HQWZRUWKWROG(OLDVWKDWVKHKDGFRQIHVVHGWRKLPDQG
WKDW %RVOH\ UHDVRQDEO\ UHOLHG XSRQ WKLV LQIRUPDWLRQ LQ
GHWHUPLQLQJ WKDW SUREDEOH FDXVH WR DUUHVW 7KDFNHU IRU D
GRPHVWLFYLROHQFHRIIHQVHH[LVWHG
*DOODJKHU¶VFRQIHVVLRQWKDW7KDFNHUKDGDEXVHGKHUDORQH
LVVXIILFLHQWWRHVWDEOLVKSUREDEOHFDXVH6HH.OHLQY/RQJ
)G WK &LU H[SODLQLQJ RIILFHUV
QHHGQRWLQWHUYLHZDQDOOHJHGRIIHQGHUZKHUHDYLFWLPFODLPV
WKDW VKH ZDV DEXVHG LI VXFK DQ LQWHUYLHZ ZRXOG DW PRVW
SURGXFHDQH[FXOSDWRU\GHQLDORIZURQJGRLQJ FHUWGHQLHG
6&W VHHDOVR$KOHUVY6FKHELO)G
WK&LU ³>$YLFWLP¶V@DFFXVDWLRQWKDWVKHKDG
EHHQVH[XDOO\DVVDXOWHGE\WKHSODLQWLIIVWDQGLQJDORQHZDV
VXIILFLHQW WR HVWDEOLVK SUREDEOH FDXVH´ +RZHYHU HYHQ
FUHGLWLQJ*DOODJKHU¶VVWDWHPHQWWKDWVKHQHYHUFRQIHVVHGDW
DOOWKHWRWDOLW\RIWKHIDFWVDQGFLUFXPVWDQFHVNQRZQWRWKH
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
1RWDEO\ %RVOH\ GLUHFWHG WKDW 7KDFNHU EH DUUHVWHG DQG (OLDV FDUULHG
RXW %RVOH\¶V RUGHUV ZKLOH 6WDFN ZURWH D SROLFH UHSRUW 6XPPDU\
MXGJPHQW LV DSSURSULDWH RQ WKH XQODZIXO HQWU\ DQG XQODZIXO VHL]XUH FODLPV
LQVRIDU DV WKHVH FODLPV DUH DOOHJHG DJDLQVW :HQWZRUWK ZKR GLG QRW
SDUWLFLSDWH LQ WKH DUUHVW
RIILFHUVFROOHFWLYHO\SURYLGHGSUREDEOHFDXVHWRDUUHVW7KDFNHU
IRU GRPHVWLF YLROHQFH 7KH EHKDYLRU RI *DOODJKHU DQG
7KDFNHULQIRUPDWLRQWKDWWKHSDLUKDGDUJXHGWKDWQLJKWWKH
EURNHQ ERWWOH DQG GLVDUUD\ RI WKH DSDUWPHQW *DOODJKHU¶V
EUXLVHV DQG KHU RIWFKDQJLQJ VWRU\ FRPELQHG ZLWK 2KLR¶V
SUHIHUUHGDUUHVWSROLF\DSSHDUDWOHDVWPLQLPDOO\WRVXSSRUW
DILQGLQJRISUREDEOHFDXVH
3ODLQWLII*DOODJKHU
*DOODJKHUFODLPVWKDWVKHZDVXQFRQVWLWXWLRQDOO\GHWDLQHG
LQ YLRODWLRQ RI WKH )RXUWK $PHQGPHQW ZKHQ WKH RIILFHUV
KDQGFXIIHG KHU IRU RQH PLQXWH ZKLOH VKH ZDV LQVLGH WKH
SDUDPHGLFV¶ YDQ LQ RUGHU WR SKRWRJUDSK KHU EUXLVHV
*DOODJKHU KDV IDLOHG WR FOHDUO\ LGHQWLI\ ZKLFK GHIHQGDQW
KDQGFXIIHG KHU 'HIHQGDQWV WHVWLILHG WKDW DW QR WLPH ZDV
*DOODJKHUKDQGFXIIHG7KH)RXUWK$PHQGPHQWLVLPSOLFDWHG
ZKHQDQLQGLYLGXDO¶VIUHHGRPWROHDYHLVUHVWULFWHG'XQDZD\
Y1HZ<RUN86Q FI%XUFKHWWY
.LHIHU )G WK &LU *DOODJKHU LV
UHTXLUHGWRVKRZQRWRQO\WKDWWKHUHZDVDVHL]XUHEXWDOVR
WKDWLWZDVXQUHDVRQDEOHXQGHUWKH)RXUWK$PHQGPHQW6HH
%XUFKHWW)GDW*DOODJKHULGHQWLILHGWKHGHIHQGDQW
ZKRKDQGFXIIHGKHUDVDZKLWHPDOHZKRZDVQRW%RVOH\DQG
³SUREDEO\´ ZDV QRW (OLDV %HFDXVH ZLWKRXW PRUH QR
UHDVRQDEOH MXU\ FRXOG ILQG IRU KHU RQ WKLV FODLP VXPPDU\
MXGJPHQWLVDSSURSULDWH(YHQDVVXPLQJWKDWDMXU\ZRXOG
FUHGLW *DOODJKHU¶V WHVWLPRQ\ WKDW VKH KDG EHHQ KDQGFXIIHG
RYHUWKHWHVWLPRQ\RIWKHRIILFHUVDQGSDUDPHGLFVWKDWVKHZDV
QRW*DOODJKHUZRXOGVWLOOEHXQDEOHWRSURYHZKLFKGHIHQGDQW
KDGYLRODWHGKHUULJKWV
*DOODJKHUDOVRFODLPVWKDWWKHRIILFHUVWKUHDWHQHGKHUZLWK
DUUHVWLIVKHGLGQRWFRRSHUDWHDQG\HOOHGDWKHU7KHRIILFHUV

-- 9 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
WHVWLILHG WKDW WKH\ GLG QRW VZHDU DW 7KDFNHU RU *DOODJKHU
$VVXPLQJ WKDW WKLV IDFWXDO GLVSXWH LV JHQXLQH ZH ILQG LW
LPPDWHULDO EHFDXVH WKUHDWV DORQH FDQQRW VXSSRUW D
FRQVWLWXWLRQDOFODLP6HH(PPRQVY0F/DXJKOLQ)G
WK&LU
&0DOLFLRXV3URVHFXWLRQ&ODLPV
,Q$OEULJKWY2OLYHU86 DSOXUDOLW\RIWKH
6XSUHPH&RXUWFRQFOXGHGWKDWWKHVXEVWDQWLYHFRPSRQHQWRI
WKH)RXUWHHQWK$PHQGPHQW¶V'XH3URFHVV&ODXVH³ZLWKLWV
VFDUFH DQG RSHQHQGHG JXLGHSRVWV´ PD\ QRW JLYH ULVH WR D
IHGHUDOFRQVWLWXWLRQDOPDOLFLRXVSURVHFXWLRQFODLP,GDW
+RZHYHU WKH $OEULJKW &RXUW H[SODLQHG WKDW WKH )RXUWK
$PHQGPHQWZKLFKJRYHUQV³GHSULYDWLRQVRIOLEHUW\WKDWJR
KDQGLQKDQGZLWKFULPLQDOSURVHFXWLRQV>@´ZRXOGEHUHOHYDQW
WR VXFK D FODLP ,G DW ³:KHUH D SDUWLFXODU
$PHQGPHQW SURYLGHV DQ H[SOLFLW WH[WXDO VRXUFH RI
FRQVWLWXWLRQDO SURWHFWLRQ DJDLQVW D SDUWLFXODU VRUW RI
JRYHUQPHQW EHKDYLRU WKDW $PHQGPHQW QRW WKH PRUH
JHQHUDOL]HGQRWLRQRIVXEVWDQWLYHGXHSURFHVVPXVWEHWKH
JXLGHIRUDQDO\]LQJWKHVHFODLPV´ 8OWLPDWHO\WKH$OEULJKW
&RXUWUHIXVHGWRDGGUHVVZKHWKHUWKH)RXUWK$PHQGPHQWKDG
EHHQYLRODWHGLQWKDWSDUWLFXODUFDVHEHFDXVHWKHSODLQWLIIKDG
QRWSURSHUO\UDLVHGWKHLVVXH
$IWHUWKH6XSUHPH&RXUW¶VGHFLVLRQLQ$OEULJKWWKLV&RXUW
UHFRJQL]HGDIHGHUDOFODLPRIPDOLFLRXVSURVHFXWLRQXQGHUWKH
)RXUWK$PHQGPHQWZKHUHSODLQWLIIVDOOHJHGWKDWGHIHQGDQWV
ZURQJIXOO\ LQYHVWLJDWHG SURVHFXWHG FRQYLFWHG DQG
LQFDUFHUDWHG WKHP 6SXUORFN Y 6DWWHUILHOG )G
WK&LU ILQGLQJ³PDOLFLRXVSURVHFXWLRQRIDQ
LQGLYLGXDODQGFRQWLQXHGGHWHQWLRQRIDQLQGLYLGXDOZLWKRXW
SUREDEOHFDXVHFOHDUO\YLRODWHULJKWVDIIRUGHGE\WKH)RXUWK
$PHQGPHQW´
+RZHYHU LQ )UDQW] Y 9LOODJH RI %UDGIRUG WKLV &RXUW
DSSDUHQWO\GLVUHJDUGHG6SXUORFN¶VKROGLQJZKHQLWKHOGWKDW
³LQ FDVHV EDVHG RQ DOOHJHG )RXUWK $PHQGPHQW YLRODWLRQV
SODLQWLIIVGRQRWKDYHDVHSDUDWH†FODLPIRUPDOLFLRXV
SURVHFXWLRQ´)G Q WK&LU
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
8QGHU )UDQW] ZH ZRXOG EH UHTXLUHG WR GLVPLVV 7KDFNHU DQG
*DOODJKHU¶V IHGHUDO PDOLFLRXV SURVHFXWLRQ FODLPV EHFDXVH WKHUH LV QR
FDXVH RI DFWLRQ VHSDUDWH IURP WKHLU RWKHU )RXUWK $PHQGPHQW FODLPV 6HH
'DUUDK )G DW $W PRVW SODLQWLIIV FRXOG UHFRYHU DGGLWLRQDO
GDPDJHV DV SDUW RI D )RXUWK $PHQGPHQW FODLP ³LI IROORZLQJ DQ DUUHVW
ZLWKRXW SUREDEOH FDXVH LQ YLRODWLRQ RI WKH )RXUWK $PHQGPHQW D
SURVHFXWLRQ IROORZV´ ,G
ILQGLQJSODLQWLIIZKRDOOHJHG)RXUWK$PHQGPHQWFODLPVIRU
XQUHDVRQDEOHVHL]XUHDUUHVWZLWKRXWSUREDEOHFDXVHDQGIDOVH
LPSULVRQPHQW FRXOG QRW UDLVH VHSDUDWH FDXVH RI DFWLRQ IRU
PDOLFLRXV SURVHFXWLRQ ,Q DGGLWLRQ WR ILQGLQJ PDOLFLRXV
SURVHFXWLRQFODLPVSUHFOXGHGXQOHVVWKH\DFFRPSDQ\D)RXUWK
$PHQGPHQWFODLPWKH)UDQW]&RXUWUHDG$OEULJKWWRSHUPLW
DVXEVWDQWLYHGXHSURFHVVFODLPZKHUHQR)RXUWK$PHQGPHQW
FODLPH[LVWV,GDW
0RVWUHFHQWO\WKLV&RXUWDGGUHVVHGWKHYLDELOLW\RIDIHGHUDO
PDOLFLRXVSURVHFXWLRQFODLPLQ'DUUDKY&LW\RI2DN3DUN
)G WK&LU 7KH 'DUUDK&RXUW
FRQFOXGHGWKDWLQVRIDUDV)UDQW]ZDVLQFRQVLVWHQWZLWKRXU
SUHYLRXV GHFLVLRQ LQ 6SXUORFN ZH DUH REOLJHG WR IROORZ
6SXUORFN ,G DW FLWLQJ 6RZDUGV Y /RXGRQ &RXQW\
7HQQ)GQ WK&LU +RZHYHUWKH
'DUUDK&RXUWZHQWRQWRDQDO\]HWKHIDFWVRIWKDWFDVHXQGHU
ERWK )UDQW] DQG 6SXUORFN DQG FRQFOXGHG WKDW XQGHU ERWK
DSSURDFKHVWKHSODLQWLII¶VPDOLFLRXVSURVHFXWLRQFODLPLQWKDW
FDVHIDLOHG,G
$V LQ 'DUUDK LQ WKH SUHVHQW FDVH WKH GLVWULFW FRXUW
DQDO\]HG SODLQWLIIV¶ FODLPV XQGHU WKH VWDQGDUGV VHW RXW LQ
)UDQW]DQG6SXUORFN+RZHYHUWKH'DUUDK&RXUWXOWLPDWHO\
FRQFOXGHGWKDWDFDXVHRIDFWLRQPXVWEHUHFRJQL]HGXQGHU
6SXUORFN)GDW:HDJUHHWKDWZHDUHREOLJHGWR
IROORZ 6SXUORFN DQG UHFRJQL]H D VHSDUDWH FRQVWLWXWLRQDOO\
FRJQL]DEOHFODLPRIPDOLFLRXVSURVHFXWLRQXQGHUWKH)RXUWK
$PHQGPHQW6HHLGDW
$OWKRXJKWKLV&RXUWKDV\HWWRUHVROYHWKHHOHPHQWVRID
IHGHUDOPDOLFLRXVSURVHFXWLRQFODLPLWLVFOHDUWKDWDSODLQWLII

-- 10 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
7KH GLVWULFW FRXUW GLG QRW ILQG LW QHFHVVDU\ WR DGGUHVV ZKHWKHU
GHIHQGDQWV DUH HQWLWOHG WR TXDOLILHG LPPXQLW\ %HFDXVH WKLV FRXUW PD\
DIILUP WKH GLVWULFW FRXUW¶V GHFLVLRQ RQ DQ\ JURXQG VXSSRUWHG E\ WKH UHFRUG
ZH PD\ UHYLHZ ZKHWKHU GHIHQGDQWV DUH HQWLWOHG WR TXDOLILHG LPPXQLW\ IRU
WKHLU DFWLRQV 6HH +LQFKPDQ )G DW FLWLQJ %URZQ Y
7LGZHOO )G WK &LU SHU FXULDP
PXVWVKRZDWDPLQLPXP³WKDWWKHUHZDVQRSUREDEOHFDXVH
WRMXVWLI\>KLV@DUUHVWDQGSURVHFXWLRQ´,GDW7KDFNHU¶V
DUUHVWDQGSURVHFXWLRQKHUHZHUHMXVWLILHGE\SUREDEOHFDXVH
%HFDXVH KH FDQQRW VKRZ WKH DEVHQFH RI SUREDEOH FDXVH
7KDFNHUFDQQRWGHPRQVWUDWHDQ\VHL]XUHLQYLRODWLRQRIWKH
)RXUWK$PHQGPHQW7KXVZHQHHGQRWDWWHPSWWRHQXQFLDWH
WKHRWKHUHOHPHQWVRIDPDOLFLRXVSURVHFXWLRQFODLPKHUH
'4XDOLILHG,PPXQLW\
:KHWKHUDQRIILFHULVHQWLWOHGWRTXDOLILHGLPPXQLW\LVD
TXHVWLRQRIODZWKDWLVUHYLHZHGGHQRYR)HDWKHUVY&LW\RI
$NURQ)G WK&LU FLWLQJ.OHLQ
)G DW 4XDOLILHG LPPXQLW\ VKLHOGV JRYHUQPHQW
RIILFLDOVSHUIRUPLQJGLVFUHWLRQDU\IXQFWLRQVIURPOLDELOLW\IRU
FLYLOGDPDJHVLQVRIDUDVWKHLUFRQGXFWGRHVQRWYLRODWHFOHDUO\
HVWDEOLVKHG VWDWXWRU\ RU FRQVWLWXWLRQDO ULJKWV RI ZKLFK D
UHDVRQDEOHRIILFLDOZRXOGKDYHNQRZQ(ZROVNL)GDW
TXRWLQJ +DUORZ Y )LW]JHUDOG 86
7KLV&RXUWH[SODLQHGLQ(ZROVNLWKDW
4XDOLILHGLPPXQLW\LQYROYHVDWZRVWHSLQTXLU\)LUVW
WKH FRXUW PXVW GHWHUPLQH ZKHWKHU EDVHG XSRQ WKH
DSSOLFDEOH ODZ WKH IDFWV YLHZHG LQ WKH OLJKW PRVW
IDYRUDEOH WR WKH SODLQWLIIV VKRZ WKDW D FRQVWLWXWLRQDO
YLRODWLRQ RFFXUUHG ,I WKH FRXUW ILQGV D FRQVWLWXWLRQDO
YLRODWLRQ LW PXVW WKHQ FRQVLGHU ZKHWKHU WKH YLRODWLRQ
LQYROYHG ³μFOHDUO\ HVWDEOLVKHG FRQVWLWXWLRQDO ULJKWV RI
ZKLFKDUHDVRQDEOHSHUVRQZRXOGKDYHNQRZQ¶´
,GDW
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
$OWKRXJK ZH KDYH FRQFOXGHG WKDW QR FRQVWLWXWLRQDO
YLRODWLRQVRFFXUUHGLQWKLVFDVHHYHQDVVXPLQJWKDWVXFKD
YLRODWLRQGLGRFFXUGHIHQGDQWVZRXOGEHHQWLWOHGWRTXDOLILHG
LPPXQLW\EHFDXVHWKH\GLGQRWYLRODWHDQ\FOHDUO\HVWDEOLVKHG
ULJKWVRIZKLFKDUHDVRQDEOHRIILFHUZRXOGKDYHNQRZQ$
ULJKW ZLOO EH FRQVLGHUHG FOHDUO\ HVWDEOLVKHG ZKHQ WKH
³FRQWRXUVRIWKHULJKW>DUH@VXIILFLHQWO\FOHDUWKDWDUHDVRQDEOH
RIILFLDOZRXOGXQGHUVWDQGWKDWZKDWKHLVGRLQJYLRODWHVWKDW
ULJKW´$QGHUVRQY&UHLJKWRQ86
8QODZIXO(QWU\
$OWKRXJKQRFDVHKDVH[SOLFLWO\VDQFWLRQHGDQHQWU\LQWRD
SULYDWHKRPHXQGHUFLUFXPVWDQFHVLGHQWLFDOWRWKRVHSUHVHQWHG
KHUHVXFKSUHFHGHQWLVQRWUHTXLUHGIRUTXDOLILHGLPPXQLW\
SXUSRVHV$VWKLV&RXUWKDVH[SODLQHGLQWKHSDVW³$OWKRXJK
LWQHHGQRWEHWKHFDVHWKDWWKHYHU\DFWLRQLQTXHVWLRQKDV
EHHQSUHYLRXVO\KHOGXQODZIXOLQOLJKWRISUHH[LVWLQJODZ
WKHXQODZIXOQHVVPXVWEHDSSDUHQW´+LQFKPDQ)GDW
FLWLQJ(ZROVNL)GDW VHHDOVR7KRPDVY
&RKHQ )G WK &LU 4XDOLILHG
LPPXQLW\ ZLOO SURWHFW DOO EXW ³WKH SODLQO\ LQFRPSHWHQW RU
WKRVHZKRNQRZLQJO\YLRODWHWKHODZ´0DOOH\Y%ULJJV
86 ,W ZDV QRW DSSDUHQW WKDW HQWHULQJ
SODLQWLIIV¶DSDUWPHQWWRVHFXUHWKHVDIHW\RIWKHSDUDPHGLFV
ZDVXQODZIXO,QIDFWUHDVRQDEOHRIILFLDOVDWWKHVFHQHZRXOG
OLNHO\GLVDJUHHRYHUZKHWKHUWKHHQWU\LQWRSODLQWLIIV¶KRPH
YLRODWHGSODLQWLIIV¶ULJKWV³,PPXQLW\DSSOLHVLIUHDVRQDEOH
RIILFLDOVFRXOGGLVDJUHHDVWRZKHWKHUWKHFRQGXFWYLRODWHGWKH
SODLQWLII VULJKWV´7KRPDV)GDW FLWLQJ0F&ORXG
Y 7HVWD )G WK &LU 7KXV ZH
FDQQRWILQGWKDWLWZDVFOHDUO\HVWDEOLVKHGWKDWHQWHULQJDKRPH
ZLWKRXWDZDUUDQWWRVHFXUHWKHVDIHW\RISDUDPHGLFVXQGHUWKH
FLUFXPVWDQFHVSUHVHQWHGLQWKLVFDVHZRXOGYLRODWHWKH)RXUWK
$PHQGPHQW7KHUHIRUHGHIHQGDQWVDUHHQWLWOHGWRTXDOLILHG
LPPXQLW\ WR WKH H[WHQW WKH\ FRPPLWWHG D FRQVWLWXWLRQDO
YLRODWLRQZKHQWKH\HQWHUHGSODLQWLIIV¶KRPH

-- 11 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
8QODZIXO6HL]XUH
³,W LV FOHDUO\ HVWDEOLVKHG WKDW DQ DUUHVW ZLWKRXW SUREDEOH
FDXVHYLRODWHVWKH)RXUWK$PHQGPHQW´'RQRYDQY7KDPHV
)G WK&LU ,QVRIDUDVWKHTXHVWLRQ
RI SUREDEOH FDXVH KHUH LV D FORVH RQH UHDVRQDEOH RIILFLDOV
FRXOG GLVDJUHH DV WR ZKHWKHU SUREDEOH FDXVH H[LVWHG 6HH
7KRPDV)GDW FLWLQJ0F&ORXG)GDW
7KXVWKHGHIHQGDQWRIILFHUVDUHHQWLWOHGWRTXDOLILHGLPPXQLW\
RQ7KDFNHU¶V)RXUWK$PHQGPHQWVHL]XUHFODLP
(6WDWH/DZ&ODLPVIRU0DOLFLRXV3URVHFXWLRQDQG
)DOVH$UUHVW
7KHGLVWULFWFRXUWFRQFOXGHG WKDWLWZDVXQFOHDUZKHWKHU
SODLQWLIIVLQWHQGHGWRSXUVXHVXSSOHPHQWDOVWDWHODZFODLPVIRU
PDOLFLRXVSURVHFXWLRQDQGIDOVHDUUHVWEXWIRXQGWRWKHH[WHQW
WKDWVXFKFODLPVZHUHDVVHUWHGWKDWWKH\KDGQRPHULWEHFDXVH
WKHUH ZDV SUREDEOH FDXVH IRU 7KDFNHU¶V DUUHVW DQG
SURVHFXWLRQ2QDSSHDO7KDFNHUDVVHUWVWKDWWKHGLVWULFWFRXUW
HUUHGLQILQGLQJKLVFODLPVIRUPDOLFLRXVSURVHFXWLRQDQGIDOVH
DUUHVW XQGHU 2KLR ODZ WR EH ZLWKRXW PHULW /LNHZLVH
*DOODJKHUDVVHUWVWKDWWKHGLVWULFWFRXUWLPSURSHUO\FRQFOXGHG
WKDWKHUFODLPIRUIDOVHDUUHVWIDLOVDVDPDWWHURIODZ
$OWKRXJKWKHGLVWULFWFRXUWDGGUHVVHGWKHPHULWVRIWKHVH
VWDWHODZFODLPVZHQRWHWKDWLWZRXOGKDYHEHHQDSSURSULDWH
WRUHIXVHWRH[HUFLVHSHQGHQWMXULVGLFWLRQDQGWRGLVPLVVWKHVH
FODLPVZLWKRXWSUHMXGLFHWREHLQJUHILOHGLQWKHFRXUWVRIWKH
6WDWHRI2KLR6HH*DIIY)',&)G WK&LU
³,WLVJHQHUDOO\UHFRJQL]HGWKDWZKHUHDVLQWKLVFDVH
IHGHUDOLVVXHVDUHGLVPLVVHGEHIRUHWULDOGLVWULFWFRXUWVVKRXOG
GHFOLQHWRH[HUFLVHMXULVGLFWLRQRYHUVWDWHODZFODLPV´ FLWLQJ
8QLWHG 0LQH :RUNHUV Y *LEEV 86
$OWKRXJKWKLVDFWLRQPD\KDYHEHHQSDUWLFXODUO\DSSURSULDWH
LQDFDVHVXFKDVWKLVRQHZKHUHWKHVWDWHODZFODLPVGRQRW
WXUQRQSUHFLVHO\WKHVDPHVWDQGDUGDVGRWKHIHGHUDOFODLPV
ZHILQGWKHGLVWULFWFRXUW¶VIDLOXUHWRIROORZWKLVFRXUVHZDV
KDUPOHVVXQGHUWKHFLUFXPVWDQFHVRIWKLVFDVH
7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO 1R
0DOLFLRXV3URVHFXWLRQ
8QGHU2KLRODZ³μ>W@KHHOHPHQWVRIWKHWRUWRIPDOLFLRXV
FULPLQDO SURVHFXWLRQ DUH PDOLFH LQ LQVWLWXWLQJ RU
FRQWLQXLQJWKHSURVHFXWLRQ ODFNRISUREDEOHFDXVHDQG
WHUPLQDWLRQ RI WKH SURVHFXWLRQ LQ WKH IDYRU RI WKH
DFFXVHG´7UXVVHOOY*HQ0RWRUV&RUS1(G
2KLR VHHDOVR5RJHUVY%DUEDUD1(G
6\OODEXV 2KLR $OWKRXJK PDOLFH LV DQ HVVHQWLDO
HOHPHQWLQDFWLRQVIRUPDOLFLRXVSURVHFXWLRQ³WKHZDQWRI
SUREDEOHFDXVHLVμWKHUHDOJLVWRIWKHDFWLRQ¶´7RXUODNLVY
%HYHUDJH'LVWULEV,QF:/DW 2KLR&W
$SS'HF FLWLQJ0HODQRZVNLY-XG\1(
2KLR 7KXVLIWKHODFNRISUREDEOHFDXVHLV
GHPRQVWUDWHG ³WKH OHJDO LQIHUHQFH PD\ EH GUDZQ WKDW WKH
SURFHHGLQJVZHUHDFWXDWHGE\PDOLFH´,G VDPH
2KLRODZGHILQHVSUREDEOHFDXVHLQVXEVWDQWLDOO\WKHVDPH
ZD\ WKDW LW LV GHILQHG XQGHU WKH )RXUWK $PHQGPHQW ,Q
SDUWLFXODUSUREDEOHFDXVHLVDVVHVVHGEDVHGRQWKHIDFWVDQG
FLUFXPVWDQFHVNQRZQDWWKHWLPHWKHRIIHQVHLVFKDUJHGDQG
UHTXLUHV³μ$UHDVRQDEOHJURXQGRIVXVSLFLRQVXSSRUWHGE\
FLUFXPVWDQFHVVXIILFLHQWO\VWURQJLQWKHPVHOYHVWRZDUUDQWD
FDXWLRXVPDQLQWKHEHOLHIWKDWWKHSHUVRQDFFXVHGLVJXLOW\RI
WKHRIIHQVHZLWKZKLFKKHLVFKDUJHG¶´6HH0HODQRZVNL
1(DW TXRWLQJ$VKY0DUORZ2KLR
,QVRIDU DV WKHUH ZDV SUREDEOH FDXVH IRU 7KDFNHU¶V DUUHVW
7KDFNHU¶VVWDWHODZFODLPIRUPDOLFLRXVSURVHFXWLRQIDLOV
)DOVH$UUHVW
8QGHU2KLRODZDVXFFHVVIXOIDOVHDUUHVWFODLP UHTXLUHV
SURRIRI³ DGHWHQWLRQRIWKHSHUVRQDQG DQXQODZIXO
GHWHQWLRQ´ )DXONQHU Y )DXONQHU :/ DW
2KLR 7KHGLVWULFWFRXUWGLVSRVHGRI7KDFNHU¶VIDOVH
DUUHVWFODLPEDVHGRQLWVILQGLQJWKDWGHIHQGDQWVKDGSUREDEOH
FDXVH WR DUUHVW KLP +RZHYHU WKLV PD\ QRW KDYH EHHQ
DSSURSULDWH
7KHHVVHQFHRIWKHWRUWRIIDOVHDUUHVWLVWKHGHSULYLQJRI
DSHUVRQRIKLVRUKHUOLEHUW\ZLWKRXWODZIXOMXVWLILFDWLRQ

-- 12 of 13 --

1R 7KDFNHUHWDOY&LW\RI&ROXPEXVHWDO
6SHFLILFDOO\DSODLQWLIIPXVWVKRZRQO\WKDWKHRUVKH
ZDVGHWDLQHGDQGWKDWWKHGHWHQWLRQZDVXQODZIXO7KH
WRUWGRHVQRWUHTXLUHSURRIRIPDOLFHPRWLYHRUODFNRI
SUREDEOHFDXVH
7XFNHUY.URJHU&R1(G 2KLR&W$SS
VHH DOVR )DXONQHU :/ DW ³)DOVH
>DUUHVW@ SHU VH LV QRW FRQFHUQHG ZLWK JRRG RU EDG IDLWK
PDOLFLRXVPRWLYHRUZDQWRISUREDEOHFDXVHRQWKHSDUWRIWKH
SURVHFXWLQJZLWQHVVRUWKHRIILFHUFDXVLQJWKH>GHWHQWLRQ@,I
WKH>GHWHQWLRQ@ZDVODZIXOLWLVQRWWKHOHVVODZIXOWKDWDQ\RU
DOORIWKHIRUHJRLQJHOHPHQWVH[LVWHG7KHVHHOHPHQWVUHODWH
WRDQDFWLRQRIPDOLFLRXVSURVHFXWLRQEXWDUHQRWHVVHQWLDOWR
DQDFWLRQLQIDOVH>DUUHVW@´ FLWLQJ%ULQNPDQY'UROHVEDXJK
1( 6\OODEXVˆ 2KLR 1HYHUWKHOHVV
KHUHWKLVGLVWLQFWLRQPDNHVQRGLIIHUHQFHDVSODLQWLIIVKDYH
SURGXFHGQR HYLGHQFHIURPZKLFKDMXU\FRXOGUHDVRQDEO\
ILQGWKDWWKHGHWHQWLRQRI7KDFNHUZDVXQODZIXO7KHUHIRUH
WKLVFODLPIDLOVDVDPDWWHURIODZ
(YHQ YLHZLQJ WKH IDFWV LQ WKH OLJKW PRVW IDYRUDEOH WR
*DOODJKHUDQGSUHVXPLQJWKDWVKHZDVKDQGFXIIHGIRUDEULHI
SHULRGRIWLPHKHUVWDWHODZIDOVHDUUHVWFODLPIDLOVIRUWKH
VDPH UHDVRQ WKDW KHU )RXUWK $PHQGPHQW FODLP IDLOHG
*DOODJKHUKDVQRWSURYLGHGDQ\HYLGHQFHRIZKRKDQGFXIIHG
KHU²WKDWLVLWLVXQFOHDUZKRLVWKHSURSHUGHIHQGDQWIRUWKLV
FODLP
,,,&21&/86,21
)RUWKHUHDVRQVGHVFULEHGDERYHZH$)),50WKHMXGJPHQW
RIWKHGLVWULFWFRXUW

-- 13 of 13 --

Continue your research in ChatGPT or Claude

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