03a0172p.06

01-4200Court of Appeals for the Sixth CircuitJun 3, 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
1$7,21:,'( 0878$/
,1685$1&( &203$1<
3ODLQWLII$SSHOOHH
Y
+20( ,1685$1&( &203$1<
'HIHQGDQW$SSHOODQW
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV
1R²(GPXQG$6DUJXV-U'LVWULFW-XGJH
$UJXHG0D\
'HFLGHGDQG)LOHG-XQH
%HIRUH.(11('<6,/(5DQG*,/0$1&LUFXLW
-XGJHV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 3KLOLS - /RUHH &$':$/$'(5
:,&.(56+$0 7$)7 1HZ <RUN 1HZ <RUN IRU
$SSHOODQW 0LFKDHO / &RKHQ &2+(1 %8&./(<
%DOWLPRUH0DU\ODQGIRU$SSHOOHH21%5,()3KLOLS-
/RUHH &OLIIRUG + 6FKRHQEHUJ &$':$/$'(5
1DWLRQZLGH0XWXDO,QV
&RY+RPH,QV&R
1R
:,&.(56+$0 7$)71HZ<RUN1HZ<RUN*HUDOG3
)HUJXVRQ 925<6 6$7(5 6(<0285 3($6(
&ROXPEXV2KLRIRU$SSHOODQW0LFKDHO/&RKHQ&2+(1
%8&./(< %DOWLPRUH 0DU\ODQG 5DQGROSK &DUVRQ
:LVHPDQ 6WHSKHQ & *UD\ %5,&.(5 (&./(5
&ROXPEXV2KLRIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
.(11('< &LUFXLW -XGJH 'HIHQGDQW$SSHOODQW +RPH
,QVXUDQFH &RPSDQ\ ³+RPH´ DSSHDOV IURP WKH GLVWULFW
FRXUW¶VRUGHUYDFDWLQJDQDZDUGLVVXHGE\WKHDUELWUDWLRQSDQHO
LQ +RPH¶V RQJRLQJ GLVSXWH ZLWK 3ODLQWLII$SSHOOHH
1DWLRQZLGH0XWXDO,QVXUDQFH&RPSDQ\ ³1DWLRQZLGH´
,
,Q1DWLRQZLGHDQG+RPHHQWHUHGLQWRDUHLQVXUDQFH
FRQWUDFW XQGHU ZKLFK +RPH DJUHHG WR FRYHU DOO RI
1DWLRQZLGH¶VREOLJDWLRQVWRDSDUWLFXODULQVXUDQFHSRRO ³WKH
5XWW\ SRRO´ 7KH FRQWUDFW FRQWDLQHG D EURDG DUELWUDWLRQ
FODXVH,Q&,*1$HQWHUHGLQWRDQDVVXPSWLRQFRQWUDFW
ZLWK +RPH ZKHUHE\ &,*1$ SXUFKDVHG DOO RI +RPH¶V
LQWHUHVWVLQWKHUHLQVXUDQFHFRQWUDFWZLWK1DWLRQZLGH
,Q 1DWLRQZLGH ILOHG D FLYLO VXLW LQ IHGHUDO FRXUW
DJDLQVWERWK+RPHDQG&,*1$DOOHJLQJWKDW+RPHIDLOHGWR
SHUIRUPXQGHUWKHUHLQVXUDQFHFRQWUDFW7KHGLVWULFW FRXUW
RUGHUHGWKDWWKHPDWWHUEHDUELWUDWHGSXUVXDQWWRWKHWHUPVRI
WKHFRQWUDFW1DWLRQZLGH0XWXDO,QV&RY+RPH,QV&R
&DVH 1R &&9 7KH 6L[WK &LUFXLW UHYHUVHG WKLV
RUGHU DV WR &,*1$ KROGLQJ WKDW 1DWLRQZLGH FRXOG QRW
FRPSHO&,*1$WRVXEPLWWRDUELWUDWLRQDQGWKDW1DWLRQZLGH
KDGQRGLUHFWFODLPDJDLQVW&,*1$1DWLRQZLGH0XWXDO,QV
&R Y +RPH ,QV &R )G WK &LU
1DWLRQZLGH,

-- 1 of 6 --

1R 1DWLRQZLGH0XWXDO,QV
&RY+RPH,QV&R

7KLV FKDSWHU LQ WKH KLVWRU\ RI WKH 1DWLRQZLGH+RPH GLVSXWH
HVWDEOLVKHV WKDW WKH SDUWLHV DQG WKH DUELWUDWLRQ SDQHO KDYH FKRVHQ WR GHDO
ZLWK HDFK RI WKH SDQHO¶V UXOLQJV RQ D SLHFHPHDO EDVLV 0RUHRYHU WKH
SDQHO VWDWHG RQ 'HFHPEHU WKDW DQ\ ³IXOO DQG ILQDO GLVSRVLWLRQ RI
D VSHFLILF GLVFUHWH LVVXH´ PD\ EH LQGHSHQGHQWO\ VXEMHFWHG WR MXGLFLDO
UHYLHZ 7KXV WKH RQO\ ³DZDUG´ RQ DSSHDO WR WKLV &RXUW LV 3DUDJUDSK , (
RI WKH SDQHO¶V 0D\ RUGHU DQG ZH PD\ YDFDWH RU DIILUP LW ZLWKRXW
DIIHFWLQJ DQ\ RWKHU ³DZDUG´ RU UXOLQJ RI WKH DUELWUDWLRQ SDQHO
7KHDUELWUDWLRQSURFHHGHGEHWZHHQ1DWLRQZLGHDQG+RPH
$IWHU WKH SDQHO PDGH D IHZ DZDUGV PRVW RI ZKLFK ZHUH
XQIDYRUDEOHWR+RPH+RPHFKDOOHQJHGWKHSDQHODVELDVHG
DQGWKHSDQHOUHVLJQHG$OWKRXJKDUELWUDWLRQZLWKDVHFRQG
SDQHO ZDV VWLOO RQJRLQJ 1DWLRQZLGH DQG +RPH DVNHG WKH
GLVWULFWFRXUWWRFRQILUPRUYDFDWHVRPHRIWKHRUGHUVLVVXHG
E\ ERWK SDQHOV 7KH GLVWULFW FRXUW LQLWLDOO\ UXOHG WKDW WKH
SDUWLHV¶PRWLRQVZHUHSUHPDWXUHEXWLWODWHUUHFRQVLGHUHGDQG
UXOHGRQVHYHUDORIWKHSDQHO¶VRUGHUV1DWLRQZLGH0XWXDO
,QV &R Y +RPH ,QV &R ) 6XSS G 6' 2KLR
7KLVLQFOXGHGDUXOLQJUHMHFWLQJ+RPH¶VDOOHJDWLRQVRI
ELDVDJDLQVWWKHILUVWSDQHO,GDW7KH6L[WK&LUFXLW
DIILUPHG1DWLRQZLGH0XWXDO,QV&RY+RPH,QV&R
)G WK&LU 1DWLRQZLGH,,
7KH VHFRQG DUELWUDWLRQ SDQHO SURFHHGHG WR DGGUHVV WKH
UHPDLQLQJ LVVXHV 2Q 0D\ SXUVXDQW WR D SULRU
GHWHUPLQDWLRQWKDW1DWLRQZLGHZDVOLDEOHWR+RPHIRURI
+RPH¶VDGPLQLVWUDWLYHFRVWVUHODWLQJWRWKH5XWW\SRROWKH
SDQHO RUGHUHG 1DWLRQZLGH WR UHLPEXUVH WKLV DPRXQW WR
$,68. WKH &,*1$ VXEVLGLDU\ WKDW DFWXDOO\ SDLG WKH
DGPLQLVWUDWLYH FRVWV ZLWKRXW DSSOLFDWLRQ RI DQ\ RIIVHWV
H[FHSW ZLWK UHJDUG WR +RPH¶V REOLJDWLRQ WR VKDUH
1DWLRQZLGH0XWXDO,QV
&RY+RPH,QV&R
1R
7KH HQWU\ RI $,68. LQWR WKLV DOUHDG\ FRPSOLFDWHG GLVSXWH GHVHUYHV
H[SODQDWLRQ &,*1$ H[HFXWHG WKH DVVXPSWLRQ FRQWUDFW WKURXJK LWV
VXEVLGLDU\ ,1$ ,1$ LV QRZ &HQWXU\ ,QGHPQLW\ ,QVXUDQFH &RPSDQ\
³&HQWXU\´ &HQWXU\ DGPLQLVWHUV LWV REOLJDWLRQV XQGHU WKH &,*1$+RPH
DVVXPSWLRQ FRQWUDFW WKURXJK DQ DJHQW &68. &68. LV QRZ $,68.
7KXV LW DSSHDUV WKDW $,68. LV WKH HQWLW\ WKDW DFWXDOO\ SDLG WKH GLVSXWHG
FRVWV RI DGPLQLVWHULQJ WKH 5XWW\ SRRO
1DWLRQZLGH¶VRZQDGPLQLVWUDWLYHFRVWV7KHRUGHUUHDGVDV
IROORZV
1DWLRQZLGH¶VOLDELOLW\IRURIDGPLQLVWUDWLYHFRVWV
7KHSULRU3DQHO¶VUXOLQJWKDW+RPHLVHQWLWOHG>WR@D
UHLPEXUVHPHQWLQUHODWLRQWRDGPLQLVWUDWLRQFRVWVPHDQV
WKDW1DWLRQZLGHPXVWUHLPEXUVH$,68.RU&68.IRU
RIDOODGPLQLVWUDWLYHFRVWVSDLGRQEHKDOIRI+RPH
IURP WKH WLPH RI 5XWW\¶V GHPLVH WR GDWH DQG KHUHDIWHU
ZLWKRXWDSSOLFDWLRQRIDQ\RIIVHWE\1DWLRQZLGHVDYHLQ
UHVSHFWRIRIDQ\VXFKDGPLQLVWUDWLYHFRVWVSDLGE\
1DWLRQZLGH +RPH¶V ELOOLQJV WR 1DWLRQZLGH PXVW EH
DFFRPSDQLHGE\IXOODQGDSSURSULDWHGRFXPHQWDWLRQDQG
DQ\ GLVDJUHHPHQW FRQFHUQLQJ WKH ELOOLQJ RU
GRFXPHQWDWLRQPD\EHUHIHUUHGWRWKH3DQHOEXWRQO\DIWHU
WKHSDUWLHVKDYHPDGHDOOSRVVLEOHJRRGIDLWKHIIRUWVWR
UHVROYHWKHPDWWHUWKHPVHOYHV
2Q-XO\1DWLRQZLGHILOHGDVXLWLQGLVWULFWFRXUW
WRYDFDWHWKLVDZDUG7KHGLVWULFWFRXUWJUDQWHG1DWLRQZLGH¶V
PRWLRQLQSDUWDQGGHQLHGLWLQSDUW$OWKRXJKWKHGLVWULFW
FRXUW DIILUPHG 1DWLRQZLGH¶V OLDELOLW\ IRU RI +RPH¶V
DGPLQLVWUDWLYH FRVWV LW IRXQG WKDW WKH DUELWUDWLRQ SDQHO
H[FHHGHGLWVDXWKRULW\ E\GLUHFWLQJWKDWSD\PHQWEHPDGH
WRDWKLUGSDUW\DQG E\IDLOLQJWRFRQVLGHU1DWLRQZLGH¶V
ULJKW WR RIIVHW EDVHG RQ RWKHU OLTXLGDWHG GHEWV RZHG WR
1DWLRQZLGH E\ +RPH :KLOH WKLV DSSHDO ZDV SHQGLQJ
+RPH¶VSUHFDULRXVILQDQFLDOVLWXDWLRQFDPHWRDKHDG DQG
+RPHHQWHUHGLQWRYROXQWDU\UHKDELOLWDWLRQLQWKHVWDWHRI1HZ
+DPSVKLUH

-- 2 of 6 --

1R 1DWLRQZLGH0XWXDO,QV
&RY+RPH,QV&R

7KH TXHVWLRQ RI ZDLYHU LV D PL[HG TXHVWLRQ RI ODZ DQG IDFW :H
UHYLHZ DQ\ GHWHUPLQDWLRQ RI XQGHUO\LQJ IDFWV XQGHU WKH FOHDUO\ HUURQHRXV
VWDQGDUG RI UHYLHZ DQG PDNH D GH QRYR GHWHUPLQDWLRQ RI ZKHWKHU WKRVH
IDFWV FRQVWLWXWH OHJDO ZDLYHU 6DQGOHU Y $,, $FTXLVLWLRQV &RUS ,QF
)G WK &LU 7KH GLVWULFW FRXUW GLG QRW PDNH DQ\
ILQGLQJV RQ WKH WLPHOLQHVV RI 1DWLRQZLGH¶V REMHFWLRQV EHFDXVH +RPH GLG
QRW UDLVH WKLV DUJXPHQW XQWLO WKLV DSSHDO
+RPH DSSHDOV WKH GLVWULFW FRXUW¶V SDUWLDO JUDQW RI
1DWLRQZLGH¶VPRWLRQFKDOOHQJLQJWKHGLVWULFWFRXUW¶VILQGLQJV
WKDWWKHDUELWUDWLRQSDQHOH[FHHGHGLWVDXWKRULW\:HDIILUP
WKHGLVWULFWFRXUW¶VUXOLQJDVWRWKHSD\PHQWWRDWKLUGSDUW\
EXWKROGWKDWWKHGLVWULFWFRXUWHUUHGLQRUGHULQJWKHDUELWUDWLRQ
SDQHOWRIXUWKHUDGGUHVVWKHLVVXHRIRIIVHWULJKWV
,,
$ IHGHUDO FRXUW PD\ YDFDWH DQ DUELWUDWLRQ DZDUG RQO\ LQ
YHU\ OLPLWHG FLUFXPVWDQFHV 7KRVH FLUFXPVWDQFHV LQFOXGH
³ZKHUH WKH DUELWUDWRUV H[FHHGHG WKHLU SRZHUV´ 86&
† D DQG ZKHUH WKH DUELWUDWRUV DFW ZLWK ³PDQLIHVW
GLVUHJDUGIRUWKHODZ´'DZDKDUHY6SHQFHU)G
WK&LU 7KHTXHVWLRQVRIZKHWKHUDQDUELWUDWLRQ
SDQHO KDV H[FHHGHG LWV SRZHUV RU DFWHG ZLWK PDQLIHVW
GLVUHJDUGIRUWKHODZDUHOHJDOTXHVWLRQVWKDWZHUHYLHZGH
QRYR*UHHQY$PHULWHFK&RUS)G WK&LU

$ :KHWKHUWKH3DQHO0D\2UGHU1DWLRQZLGHWR3D\
$,68.D7KLUG3DUW\
:DLYHU
$SDUW\PD\ZDLYHLWVREMHFWLRQWRWKHMXULVGLFWLRQRIWKH
DUELWUDWRUVE\DFTXLHVFLQJLQWKHDUELWUDWLRQZLWKNQRZOHGJH
RIWKHSRVVLEOHGHIHFW2UGHURI5\&RQGXFWRUV %UDNHPHQ
%URWKHUKRRGRI557UDLQPHQY&OLQFKILHOG55&R
)G WK &LU +RPH DUJXHV WKDW 1DWLRQZLGH
FRQVHQWHG WR WKH DUELWUDWLRQ SDQHO¶V MXULVGLFWLRQ E\
1DWLRQZLGH0XWXDO,QV
&RY+RPH,QV&R
1R
³YROXQWDULO\DQGXQUHVHUYHGO\´VXEPLWWLQJWKHTXHVWLRQWRWKH
SDQHO6HH-RQHV'DLU\)DUPY/RFDO1R3)G
WK &LU 1DWLRQZLGH KRZHYHU QHYHU
VXEPLWWHG RU DFTXLHVFHG LQ WKH VXEPLVVLRQ RI WKH LVVXH RI
ZKHWKHUWKHSDQHOFRXOGRUGHU1DWLRQZLGHWRSD\DWKLUGSDUW\
GLUHFWO\
7KH SDUW\ FODLPLQJ ZDLYHU FDUULHV WKH EXUGHQ RI SURRI
&RUGUH\Y(XFNHUW)G WK&LU ,Q
RUGHUWRFDUU\LWVEXUGHQ+RPHILUVWSRLQWVWR1DWLRQZLGH¶V
DUJXPHQW WKDW +RPH ZDV QRW HQWLWOHG WR UHLPEXUVHPHQW
EHFDXVH&,*1$QRW+RPHKDGSDLGWKHDGPLQLVWUDWLYHFRVWV
DVVRFLDWHG ZLWK WKH 5XWW\ SRRO 1DWLRQZLGH UDLVHG WKLV
DUJXPHQWEHIRUHWKHDUELWUDWLRQSDQHORQVHYHUDORFFDVLRQV
7KLVGRHVQRWFRQVWLWXWHZDLYHU1DWLRQZLGHZDVDVNLQJWKH
SDQHOWRUXOHRQZKHWKHULWZDVREOLJDWHGWRSD\+RPHDWDOO
JLYHQ1DWLRQZLGH¶VLQWHUSUHWDWLRQRIWKHSDQHO¶VSULRURUGHUWR
VSOLW DGPLQLVWUDWLYH FRVWV 1DWLRQZLGH ZDV QRW DVNLQJ WKH
SDQHOWRUXOHRQLWVREOLJDWLRQVWR&,*1$RULWVDIILOLDWHV
6HFRQG+RPHSRLQWVWR1DWLRQZLGH¶VIDLOXUHWRREMHFWWR
WKHSDQHO¶V'HFHPEHUUXOLQJWKDWWKHLVVXHRIWKH
³DOOHJHG OLDELOLW\ RI 1DWLRQZLGH WR UHLPEXUVH &68.¶V
DGPLQLVWUDWLYHH[SHQVHV´ZRXOGEHUHVROYHGLQ3KDVH,,,7KLV
UXOLQJGLGQRWSXW1DWLRQZLGHRQQRWLFHWKDWWKHSDQHOZRXOG
FRQVLGHU RUGHULQJ UHLPEXUVHPHQW GLUHFWO\ WR &68. QRZ
$,68. ,WZDVPHUHO\DQDFFXUDWHGHVFULSWLRQRIWKHWUXH
QDWXUHRIWKHH[SHQVHVIRUZKLFK1DWLRQZLGHPLJKWEHKHOG
OLDEOHLQLWVDUELWUDWLRQZLWK+RPH,WZDVQRWXQWLOLWVRUGHU
RI0D\WKDWWKHSDQHOOLVWHGWKHLVVXHRIZKLFKSDUW\
± +RPH RU $,68. ± ZRXOG UHFHLYH WKH SD\PHQW IURP
1DWLRQZLGH$WWKDWSRLQW1DWLRQZLGHWLPHO\REMHFWHGDWWKH
0D\ KHDULQJ E\ PDNLQJ FOHDU LWV SRVLWLRQ WKDW WKH
SDQHOFRXOGRQO\RUGHUUHLPEXUVHPHQWWR+RPHLIDWDOO:H
WKHUHIRUHILQGQREDVLVIRUFRQFOXGLQJWKDW1DWLRQZLGHZDLYHG
LWVREMHFWLRQWRWKHDUELWUDWLRQSDQHO¶VMXULVGLFWLRQ

-- 3 of 6 --

1R 1DWLRQZLGH0XWXDO,QV
&RY+RPH,QV&R

$XWKRULW\RIWKH$UELWUDWLRQ3DQHO
7KHEXUGHQRISURYLQJWKDWWKHDUELWUDWRUVH[FHHGHGWKHLU
DXWKRULW\LVYHU\JUHDW)HGHUDWHG'HS¶W6WRUHV,QFY-9%
,QGXV,QF)G WK&LU ³>$@VORQJDV
WKH DUELWUDWRU LV HYHQ DUJXDEO\ FRQVWUXLQJ RU DSSO\LQJ WKH
FRQWUDFWDQGDFWLQJZLWKLQWKHVFRSHRIKLVDXWKRULW\WKDWD
FRXUWLVFRQYLQFHGKHFRPPLWWHGVHULRXVHUURUGRHVQRWVXIILFH
WRRYHUWXUQKLVGHFLVLRQ´8QLWHG3DSHUZRUNHUV,QW¶O8QLRQ
Y0LVFR,QF86
$Q DUELWUDWLRQ SDQHO PD\ QRW GHWHUPLQH WKH ULJKWV RU
REOLJDWLRQVRIQRQSDUWLHVWRWKHDUELWUDWLRQ6HH(OMHU0IJ
,QFY.RZLQ'HY&RUS)G WK&LU
,QW¶O%URWKHUKRRGRI(OHF:RUNHUV/RFDO1RY2.
(OHF&R)G WK&LU 2ULRQ6KLSSLQJ
7UDGLQJ&RY(DVWHUQ6WDWHV3HWUROHXP&RUSRI3DQDPD
)G G&LU ,Q1&5&RUSY6DF&R
,QF)G WK&LU ZHKHOGWKDWDQDUELWUDWRU
H[FHHGHG KLV DXWKRULW\ E\ RUGHULQJ SD\PHQW RI SXQLWLYH
GDPDJHVWRQRQSDUWLHV,QWKDWFDVHWKHDUELWUDWRUHUUHGE\
FUHDWLQJOHJDOULJKWVLQWKHUHFLSLHQWVRIWKHSXQLWLYHGDPDJH
DZDUGDOORIZKRPZHUHQRQSDUWLHVWRWKHDUELWUDWLRQ,QWKH
LQVWDQWFDVH+RPHDQG1DWLRQZLGHDJUHHWKDW&,*1$DQGLWV
DIILOLDWH$,68.DUHQRQSDUWLHVWRWKHFRQWUDFWDQGWRWKH
DUELWUDWLRQ7KXVWKHDUELWUDWLRQDZDUGH[FHHGVWKHSDQHO¶V
DXWKRULW\
7KHGLVWULFWFRXUWKHOGWKDWWKHDUELWUDWLRQDZDUGPXVWEH
YDFDWHGEHFDXVHLWLVLQ³PDQLIHVWGLVUHJDUG´RIRXUKROGLQJLQ
1DWLRQZLGH,$QDZDUGLVLQPDQLIHVWGLVUHJDUGLI³ WKH
DSSOLFDEOHOHJDOSULQFLSOHLVFOHDUO\GHILQHGDQGQRWVXEMHFWWR
UHDVRQDEOHGHEDWHDQG WKHDUELWUDWRUVUHIXVHGWRKHHGWKDW
OHJDOSULQFLSOH´'DZDKDUHY6SHQFHU)G
WK&LU ,Q1DWLRQZLGH,ZHKHOGWKDW1DWLRQZLGH
FRXOG QRW EULQJ VXLW GLUHFWO\ DJDLQVW &,*1$ RU FRPSHO
&,*1$ WR VXEPLW WR DUELWUDWLRQ EHFDXVH RI D WKLUGSDUW\
GLVFODLPHU SURYLVLRQ LQ WKH DVVXPSWLRQ FRQWUDFW EHWZHHQ
+RPHDQG&,*1$:HFRQVWUXHGWKLVGLVFODLPHUSURYLVLRQ
1DWLRQZLGH0XWXDO,QV
&RY+RPH,QV&R
1R
DV D OLPLWDWLRQ RQ WKH REOLJDWLRQV &,*1$ XQGHUWRRN LQ LWV
DVVXPSWLRQ FRQWUDFW ZLWK +RPH 7KHUHIRUH 1DWLRQZLGH¶V
RQO\UHFRXUVHZDVDJDLQVW+RPHDQG&,*1$DQGLWVDIILOLDWHV
ZHUH QRW SDUWLHV WR WKH DUELWUDWLRQ 1DWLRQZLGH , WKHQ
UHLQIRUFHVWKHFOHDUO\GHILQHGOHJDOSULQFLSOHWKDWWKLUGSDUWLHV
VXFK DV &,*1$ DQG $,68. ZHUH QRW SDUWLHV WR WKH
DUELWUDWLRQ7KHDUELWUDWLRQSDQHOZDVFRQVFLRXVRIERWKRXU
GHFLVLRQLQ1DWLRQZLGH,DQGLWVLPSOLFDWLRQVIRUWKHVWDWXVRI
&,*1$¶VDIILOLDWHV7RWKHH[WHQWWKDWWKHDUELWUDWLRQDZDUG
YHVWV DQ\ ULJKWV LQ $,68. RU FUHDWHV DQ\ REOLJDWLRQ WR
$,68.LWLVLQPDQLIHVWGLVUHJDUGIRUWKHOHJDOSULQFLSOHWKDW
DQ DUELWUDWLRQ SDQHO PD\ QRW DVVHUW MXULVGLFWLRQ RYHU QRQ
SDUWLHVWRWKHDUELWUDWLRQ
+RPHGRHVQRWGLVSXWHWKLV5DWKHU+RPHDUJXHVWKDWWKH
FRQIOLFWEHWZHHQ1DWLRQZLGH,DQGWKHDUELWUDWLRQDZDUGFRXOG
EHDYRLGHGE\LQWHUSUHWLQJWKHDUELWUDWLRQDZDUGDVFUHDWLQJQR
OHJDOULJKWVLQ$,68.EXWRQO\GLUHFWLQJWKHUHPHG\E\ZKLFK
1DWLRQZLGH PXVW GLVFKDUJH LWV OHJDO REOLJDWLRQV WR +RPH
8QGHUWKLVLQWHUSUHWDWLRQ$,68.LWVHOIZRXOGKDYHQROHJDO
VWDQGLQJ WR FROOHFW IURP 1DWLRQZLGH 2QO\ +RPH FRXOG
HQIRUFHWKHDUELWUDWLRQDZDUG
,Q8QLWHG6WHHOZRUNHUVRI$PHULFDY(QWHUSULVH:KHHO
&DU &RUSRUDWLRQ 86 WKH 6XSUHPH
&RXUW KHOG WKDW ³>D@ PHUH DPELJXLW\ LQ WKH RSLQLRQ
DFFRPSDQ\LQJDQDZDUGZKLFKSHUPLWVWKHLQIHUHQFHWKDWWKH
DUELWUDWRUPD\KDYHH[FHHGHGKLVDXWKRULW\LVQRWDUHDVRQIRU
UHIXVLQJWRHQIRUFHWKHDZDUG´7KXVLIWKHUHLVDPELJXLW\LQ
WKHOHJDOPHDQLQJRIDQDUELWUDWLRQDZDUGZHZLOOFRQVWUXHLW
LQIDYRURIXSKROGLQJWKHDZDUG6HHDOVR0HUULOO/\QFK
3LHUFH)HQQHU 6PLWKY-DURV)G WK&LU
³,IDFRXUWFDQILQGDQ\OLQHRIDUJXPHQWWKDWLVOHJDOO\
SODXVLEOHDQGVXSSRUWVWKHDZDUGWKHQLWPXVWEHFRQILUPHG´

+RZHYHU LW LV QRW OHJDOO\ SODXVLEOH WR LQWHUSUHW WKH
DUELWUDWLRQDZDUGDVFUHDWLQJQROHJDOULJKWVLQ$,68.7KH
RUGHU VWDWHV WKDW ³1DWLRQZLGH PXVW UHLPEXUVH $,68. RU

-- 4 of 6 --

1R 1DWLRQZLGH0XWXDO,QV
&RY+RPH,QV&R

,Q WKH FRQWH[W RI WKH GLVSXWH RYHU ZKR ZDV HQWLWOHG WR SD\PHQW RQH
RI WKH DUELWUDWRUV VWDWHG ³7KH IDFW RI WKH PDWWHU LV LQ WKH UHDO ZRUOG
&,*1$ LV D UHDO SDUW\ LQ LQWHUHVW KHUH DQG ZH DUH FDOOHG XSRQ WR UHQGHU
FRPPHUFLDO MXVWLFH DQG ZKDW \RX¶UH SURSRVLQJ LV DQ DEVXUGLW\ RQ LWV
IDFH´ 7KLV VWDWHPHQW LV LQGLFDWLYH RI WKH SDQHO¶V SUDJPDWLF EXW
QRQHWKHOHVV LPSURSHU GHVLUH WR UHVROYH WKH 5XWW\ SRRO SUREOHP HIILFLHQWO\
HYHQ LI LW PHDQW DUELWUDWLQJ LVVXHV RXWVLGH WKH VFRSH RI LWV PDQGDWH
&68.IRURIDOODGPLQLVWUDWLYHFRVWVSDLGRQEHKDOIRI
+RPH´DQGVSHFLILHVWKDWWKHDPRXQWPXVWEHGHWHUPLQHGE\
DSSURSULDWH GRFXPHQWDWLRQ UHJDUGLQJ +RPH¶V FRVWV
$OWKRXJK LW LV FOHDU WKDW OLDELOLW\ VWHPV IURP 1DWLRQZLGH¶V
REOLJDWLRQVWR+RPHWKHRUGHUPDQGDWHVSD\PHQWGLUHFWO\WR
D QRQSDUW\ ,I WKH DUELWUDWLRQ SDQHO KDG LQWHQGHG WR YHVW
HQIRUFHPHQWULJKWVH[FOXVLYHO\LQ+RPHLWZRXOGKDYHPDGH
QR VHQVH WR RUGHU SD\PHQW GLUHFWO\ WR $,68. 7KXV WKH
DUELWUDWLRQ DZDUG XQDPELJXRXVO\ H[FHHGV WKH WHUPV RI WKH
1DWLRQZLGH+RPHFRQWUDFWXDOGLVSXWHDQGDGMXGLFDWHV+RPH
DQG1DWLRQZLGH¶VUHODWLRQVKLSZLWKDQRQSDUW\$,68.7KLV
LWPD\QRWGR
% 7KH'LVWULFW&RXUW¶V2UGHU5HODWLQJWR2IIVHWV
7KHSUHFHGLQJDQDO\VLVHIIHFWLYHO\GLVSRVHVRIWKLVDSSHDO
E\DIILUPLQJWKHGLVWULFWFRXUW¶VRUGHUYDFDWLQJWKHDUELWUDWLRQ
DZDUG DW LVVXH LQ WKLV FDVH +RZHYHU WKH EUHDGWK RI WKH
GLVWULFWFRXUW¶VRSLQLRQFRPSHOVXVEULHIO\WRDGGUHVVWKHLVVXH
RIRIIVHWV,QDGGLWLRQWRILQGLQJWKDWWKHSDQHOGLGQRWKDYH
DXWKRULW\WRRUGHUSD\PHQWWR$,68.WKHGLVWULFWFRXUWDOVR
IRXQG
WKDW WKH SDQHO H[FHHGHG WKHLU SRZHUV E\ GLUHFWLQJ
1DWLRQZLGHWRPDNHVXFKSD\PHQWZLWKRXWDSSOLFDWLRQRI
DQ\RIIVHWLQFOXGLQJOLTXLGDWHGGHEWVRZHGE\+RPHWR
1DWLRQZLGH7KHVFRSHRIGHEWVVXEMHFWWRRIIVHWLIDQ\
WRJHWKHUZLWKWKHPHFKDQLFVRIWKHSURFHGXUHDUHPDWWHUV
WR EH GHWHUPLQHG E\ WKH DUELWUDWLRQ SDQHO &RQVLVWHQW
ZLWKWKH2UGHURI9DFDWLRQKHUHLQLVVXHGWKHSDQHOVKDOO
IXUWKHUDGGUHVVWKHPDWWHURIRIIVHWLQFRQMXQFWLRQZLWK
1DWLRQZLGH0XWXDO,QV
&RY+RPH,QV&R
1R
1DWLRQZLGH¶V RIIVHW ULJKWV UHJDUGLQJ DQ\ VXFK H[WHUQDO GHEWV RZHG
E\ +RPH ZRXOG KDYH WR EH DGMXGLFDWHG LQ DQRWKHU FRQWH[W VXFK DV
+RPH¶V UHKDELOLWDWLRQ DFWLRQ LQ WKH VWDWH RI 1HZ +DPSVKLUH
1DWLRQZLGH¶V SD\PHQW RI ILIW\ SHUFHQW RI WKH
DGPLQLVWUDWLYHFRVWV
7KLVODWWHUSRUWLRQRIWKHGLVWULFWFRXUW¶VRSLQLRQPXVWEH
YDFDWHGIRUWZRUHDVRQV)LUVWWKHDUELWUDWLRQRUGHUSODLQO\
SHUPLWV1DWLRQZLGHWRRIIVHWLWVGHEWWR+RPHRQO\E\WKH
DGPLQLVWUDWLYHFRVWVRIWKH5XWW\SRROWKDWWKHSDQHORUGHUHG
+RPH WR SD\ DQG E\ QR RWKHU GHEW 7KLV FRQVWLWXWHV WKH
SDQHO¶V GHWHUPLQDWLRQ RI WKH ³VFRSH RI GHEWV´ VXEMHFW WR
RIIVHW7KHGLVWULFWFRXUWGRHVQRWKDYHWKHSRZHUWRRUGHUWKH
SDQHO WR UHFRQVLGHU WKLV LVVXH HYHQ LI LW ILQGV WKH SDQHO¶V
GLVSRVLWLRQXQIDLURUXQMXVW6HH8QLWHG3DSHUZRUNHUV,QW¶O
8QLRQY0LVFR86 KROGLQJWKDW³DVORQJ
DVWKHDUELWUDWRULVHYHQDUJXDEO\FRQVWUXLQJRUDSSO\LQJWKH
FRQWUDFWDQGDFWLQJZLWKLQKLVVFRSHRIDXWKRULW\WKDWDFRXUW
LVFRQYLQFHGKHFRPPLWWHGVHULRXVHUURUGRHVQRWVXIILFHWR
RYHUWXUQKLVGHFLVLRQ´ /LNHZLVHWKHDEVHQFHRIDUHFRUGRI
GHFLVLRQLQGLFDWLQJZK\WKHSDQHOFKRVHWROLPLW1DWLRQZLGH¶V
RIIVHWULJKWVGRHVQRWJLYHWKHGLVWULFWFRXUWWKHSRZHUWRRUGHU
WKH SDQHO WR FRQVLGHU WKH LVVXH DJDLQ 7KH SDQHO LV QRW
UHTXLUHGWRJLYHUHDVRQVIRULWVGHFLVLRQV6HH'DZDKDUH
)GDW
6HFRQGWKHGLVWULFWFRXUW¶VRUGHULVLQYDOLGWRWKHH[WHQWWKDW
LWDWWHPSWVWRHPSRZHUWKHSDQHOWRFRQVLGHU1DWLRQZLGH¶V
RIIVHWULJKWVZLWKUHJDUGWRDQ\GHEWEHWZHHQ1DWLRQZLGHDQG
+RPH7KHUHLVQRHYLGHQFHWKDWWKHSDUWLHVVXEPLWWHGDQ\
GHEWVRWKHUWKDQWKHRQHVUHODWLQJWRWKH1DWLRQZLGH+RPH
UHLQVXUDQFHFRQWUDFWJRYHUQLQJWKH5XWW\SRRODQGWKXVWKH
DUELWUDWLRQ SDQHO¶V DXWKRULW\ LV LQKHUHQWO\ OLPLWHG WR GHEWV
UHODWLQJ WR WKDW VSHFLILF GLVSXWH ,I WKHUH DUH DQ\ VHSDUDWH
DJUHHPHQWV EHWZHHQ +RPH DQG 1DWLRQZLGH QRW EHIRUH WKH
DUELWUDWLRQSDQHOWKHSDQHOKDVQRMXULVGLFWLRQRYHUWKHPDQG
WKXV WKH GLVWULFW FRXUW FDQQRW RUGHU WKH SDQHO WR DGMXGLFDWH
WKHP

-- 5 of 6 --

1R 1DWLRQZLGH0XWXDO,QV
&RY+RPH,QV&R

7KH FDVH FLWHG E\ +RPH (PSOR\HUV ,QV RI :DXVDX Y 1DW¶O 8QLRQ
)LUH ,QV &R )G WK &LU LV LQDSSRVLWH VLQFH LQ WKDW
FDVH WKH H[WHQW RI WKH LQVXUHU¶V RIIVHW ULJKWV ZDV LWVHOI WKH VXEMHFW RI WKH
DUELWUDWLRQ
$W RUDO DUJXPHQW 1DWLRQZLGH VXJJHVWHG WKDW WKH SDQHO GLG QRW KDYH
DXWKRULW\ WR FRQVLGHU DQ\ RIIVHW LVVXHV EHFDXVH WKH LVVXH ZDV QHYHU
VXEPLWWHG WR WKH SDQHO 7KLV EHODWHG DVVHUWLRQ LV REYLRXVO\ LQ HUURU VLQFH
LQ LWV 'HFHPEHU RUGHU WKH SDQHO H[SOLFLWO\ DVVHUWHG LWV DXWKRULW\
RYHU RIIVHW LVVXHV DQG 1DWLRQZLGH KDV QRW ± XQWLO QRZ ± DWWHPSWHG WR
REMHFW WR WKDW DVVHUWLRQ
+RPH DUJXHV WKDW WKH SDQHO GLG KDYH WKH ULJKW WR OLPLW
1DWLRQZLGH¶VRIIVHWULJKWVZLWKUHVSHFWWRGHEWVH[WHUQDOWRWKH
SDUWLFXODUFRQWUDFWEHIRUHWKHSDQHO+RPHDUJXHVWKDWWKH
SDQHO¶V DXWKRULW\ LV EDVHG RQ WKH ³KRQRUDEOH HQJDJHPHQW´
FODXVHRIWKHLUFRQWUDFW7KDWFODXVHVWDWHV
>7@KH DUELWUDWRUV VKDOO LQWHUSUHW WKLV &RQWUDFW DV DQ
KRQRXUDEOH HQJDJHPHQW DQG QRW DV PHUHO\ D OHJDO
REOLJDWLRQWKH\DUHUHOLHYHGRIDOOMXGLFLDOIRUPDOLWLHVDQG
PD\DEVWDLQIURPIROORZLQJWKHVWULFWUXOHVRIODZDQG
WKH\VKDOOPDNHWKHLUDZDUGZLWKDYLHZRIHIIHFWLQJWKH
JHQHUDOSXUSRVHRIWKLVFRQWUDFWLQDUHDVRQDEOHPDQQHU
UDWKHUWKDQLQDFFRUGDQFHZLWKDOLWHUDOLQWHUSUHWDWLRQRI
WKHODQJXDJH
7KLVFODXVHPD\SHUPLWWKHSDQHOWRDEVWDLQIURPIROORZLQJ
VWULFWUXOHVRIFRQWUDFWLQWHUSUHWDWLRQ LHWKHSDUROHYLGHQFH
UXOHVHH6FKDFKWY%HDFRQ,QV&R)G WK
&LU EXWLWGRHVQRWJLYHWKHSDQHOWKHSRZHUWRH[FHHG
LWVRZQMXULVGLFWLRQ
7KXV EHFDXVH WKH DUELWUDWLRQ SDQHO KDV MXULVGLFWLRQ RQO\
RYHUGHEWVVXEPLWWHGWRWKHSDQHOXQGHUWKH1DWLRQZLGH+RPH
UHLQVXUDQFHFRQWUDFWDQGQRWDVWRDQ\RWKHUGHEWVUHODWHGWR
DQ\ RWKHU DJUHHPHQWV EHWZHHQ 1DWLRQZLGH DQG +RPH WKH
GLVWULFWFRXUWHUUHGLQRUGHULQJWKHDUELWUDWLRQSDQHOWRIXUWKHU
DGGUHVVWKHPDWWHURIRIIVHWV
1DWLRQZLGH0XWXDO,QV
&RY+RPH,QV&R
1R
)RUWKHIRUJRLQJUHDVRQVZH$)),50WKHGLVWULFWFRXUW¶V
RUGHU RI YDFDWLRQ EDVHG RQ WKH DUELWUDWLRQ SDQHO¶V ODFN RI
MXULVGLFWLRQWRRUGHUSD\PHQWWRDWKLUGSDUW\DQG5(9(56(
WKHGLVWULFWFRXUW¶VRUGHUUHTXLULQJWKHSDQHOWRUHFRQVLGHULWV
UXOLQJ RQ RIIVHWV %HFDXVH ZH ILQG VXIILFLHQW JURXQGV WR
GHWHUPLQH WKDW 3DUDJUDSK , ( RI WKH DUELWUDWLRQ SDQHO¶V
0D\ RUGHU H[FHHGHG WKH SDQHO¶V DXWKRULW\ WKDW
DZDUGLVYDFDWHG

-- 6 of 6 --

Continue your research in ChatGPT or Claude

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