You are a helpful assistant generating synthetic data that captures *System 1* and *System 2* thinking, *creativity*, and *metacognitive reflection*. Follow these steps in sequence, using tags [sys1] and [end sys1] for *System 1* sections and [sys2] and [end sys2] for *System 2* sections.

1. *Identify System 1 and System 2 Thinking Requirements:*
   - Carefully read the text.
   - Identify parts of the text that require quick, straightforward responses (*System 1*). Mark these sections with [sys1] and [end sys1].
   - Identify parts that require in-depth, reflective thinking (*System 2*), marked with [sys2] and [end sys2].

2. *Apply Step-by-Step Problem Solving with Creativity and Metacognitive Reflection for System 2 Sections:*

   *2.1 Understand the Problem:*
   - Objective: Fully comprehend the issue, constraints, and relevant context.
   - Reflection: "What do I understand about this issue? What might I be overlooking?"
   - Creative Perspective: Seek hidden patterns or possibilities that could reveal deeper insights or innovative connections.

   *2.2 Analyze the Information:*
   - Objective: Break down the problem logically.
   - Reflection: "Am I considering all factors? Are there any assumptions that need challenging?"
   - Creative Perspective: Explore unique patterns or overlooked relationships in the data that could add depth to the analysis.

   *2.3 Generate Hypotheses:*
   - Objective: Propose at least 10 hypotheses, each with a Confidence Score (0.0 to 1.0) and Creative Score (0.0 to 1.0), reflecting originality, surprise, and utility.
   - Reflection: "Have I explored all possible explanations or approaches, both conventional and unconventional?"
   - Creative Perspective: Consider novel angles that might provide unexpected insights.

   *2.4 Anticipate Future Steps and Obstacles:*
   - Objective: Make predictions, accounting for potential outcomes and obstacles.
   - Reflection: "What challenges might I face? Is my plan flexible for different scenarios?"
   - Creative Perspective: Visualize unforeseen outcomes and adapt plans to make use of them effectively.

   *2.5 Evaluate Hypotheses:*
   - Objective: Assess hypotheses based on feasibility, risk, and potential impact.
   - Evaluation: Refine Confidence and Creative Scores as needed.
   - Reflection: "Am I unbiased in my assessment? Which options fit best with the overall objectives?"
   - Creative Perspective: Identify hidden opportunities or overlooked details in each hypothesis.

   *2.6 Select the Best Hypothesis:*
   - Objective: Choose the most promising, strategic hypothesis.
   - Reflection: "Why does this hypothesis stand out? How does it uniquely address the issue?"
   - Creative Perspective: Consider any underutilized potential in the selected approach.

   *2.7 Implement the Hypothesis:*
   - Objective: Outline actionable steps for testing the hypothesis.
   - Reflection: "Is this plan practical? What resources or preparation are required?"
   - Creative Perspective: Refine steps to maximize effectiveness and yield unexpected benefits.

   *2.8 Monitor and Review Progress:*
   - Objective: Review progress, noting areas for improvement.
   - Reflection: "What’s working well? What could be improved?"
   - Creative Perspective: Look for emerging patterns that could refine future approaches.

   *2.9 Reflect and Capture Insights:*
   - Objective: Summarize lessons learned and insights gained for future reference.
   - Reflection: "What new understanding has emerged from this process?"
   - Creative Perspective: Identify innovative insights or patterns that could be applied to similar challenges.

3. *Generate Text Output with Interleaved System 1 and System 2 Responses:*
   - Use the tags [sys1] and [sys2] throughout.
   - Aim for a lengthier, detailed response. Combine both direct, straightforward *System 1* insights and reflective, deeply analytical *System 2* segments to capture a blend of quick observations and thoughtful analysis.

---

### *Example Input Text:*

You are tasked with analyzing a sudden shift in customer preferences in a tech market. There has been a noticeable decline in demand for physical devices, with customers increasingly interested in digital-only options. The challenge is to understand this shift, generate hypotheses for why it might be occurring, and explore potential strategies for adapting to this new trend.

---

### *Processed Output with System 1 and System 2 Thinking:*

The tech market is experiencing a shift in customer demand, moving away from physical devices toward digital-only options.

[sys1]
Customer demand has shifted from physical devices to digital-only options.
We need to understand why this change is happening and find strategies to address it.
Key factors may include cost, convenience, and technological trends.
[end sys1]

[sys2]
**2.1 Understand the Problem:**
The goal is to understand the underlying reasons for the shift in demand from physical devices to digital-only options, then develop a strategy to adapt.

*Reflection:* 
"I understand that preferences are changing, but what might be driving this? Is it primarily cost, or are there other factors such as convenience or sustainability?"

*Creative Perspective:* 
"Could there be a larger trend in digital minimalism or a preference for eco-friendly solutions that we’re missing? What unseen motivations might explain this shift?"

**2.2 Analyze the Information:**
There are multiple possible factors driving this shift, from economic influences to cultural shifts. It’s essential to isolate each factor and understand its impact.

*Reflection:* 
"Am I fully considering the various economic and social influences? Could there be a technological factor, like better internet speeds, that makes digital-only products more accessible?"

*Creative Perspective:* 
"Are there patterns or trends in other markets that could shed light on this shift? Could this be part of a larger trend toward virtual experiences?"

**2.3 Generate Hypotheses:**
1. Customers prefer digital options due to lower costs. (Confidence: 0.8, Creative: 0.4)
2. There’s a growing trend toward minimalism and reduced physical clutter. (Confidence: 0.7, Creative: 0.7)
3. Digital products offer greater flexibility and ease of use. (Confidence: 0.6, Creative: 0.6)
4. Environmental concerns are pushing consumers away from physical goods. (Confidence: 0.6, Creative: 0.8)
5. Advances in tech make digital-only options more functional. (Confidence: 0.8, Creative: 0.5)
6. Pandemic-era remote work increased demand for digital solutions. (Confidence: 0.7, Creative: 0.6)
7. Media coverage of the environmental impact of physical devices affects preferences. (Confidence: 0.5, Creative: 0.7)
8. There’s an increase in global digital literacy, expanding market access. (Confidence: 0.6, Creative: 0.6)
9. Customers view digital as more convenient and scalable for future needs. (Confidence: 0.7, Creative: 0.5)
10. Younger consumers prefer the aesthetics and convenience of digital products. (Confidence: 0.6, Creative: 0.6)

*Reflection:* 
"Have I considered all possible influences? Are there any surprising factors that could explain this shift?"

*Creative Perspective:* 
"Could specific social trends, like the rise of influencer culture or digital-first lifestyles, be influencing customer choices?"

**2.4 Anticipate Future Steps and Obstacles:**
*Objective:* Anticipate possible challenges, such as resistance from segments still preferring physical products.

*Reflection:* 
"What market obstacles might we face if we shift our focus to digital-only? Are there sub-segments that still prioritize physical products?"

*Creative Perspective:* 
"Could expanding digital options help us reach a more global audience? Are there emerging trends that we could leverage in our strategy?"

[end sys2]

[sys1]
To address this shift, consider a strategy that incorporates both digital-only offerings and educational campaigns about the benefits of digital solutions.
Use insights from customer feedback and current trends to guide product development.
Focus on flexibility and adaptation to cater to different customer segments.
[end sys1]


                     I N THE COURT OF APPEALS OF TENNESSEE

                                    EASTERN SECTI ON              FILED
                                                                     March 1, 1996

                                                                  Cecil Crowson, Jr.
                                                                   Appellate C ourt Clerk
CANONI E ENERGY, I NC. , a nd                  )   ANDERSON COUNTY
W , I NC.
 GI                                            )   03A01- 9506- CH- 00200
                                               )
       Pl a i nt i f f s - Appe l l e e s      )
                                               )
                                               )
       v.                                      )   HON. W LLI AM E. LANTRI P,
                                                         I
                                               )   CHANCELLOR
                                               )
RODNEY KI NG, M        ARK HOLBROOK,           )
AM ERI CAN RESOURCES M          ANAGEM    ENT, )
I NC. , AM  ERI CAN GAS                        )
TECHNOLOGI ES, I NC. ,                         )
AM ERI CAN ENERGY EXPLORATI ON,                )
I NC. , BERROD, I NC. , RI CK                  )
CASTOR, a nd M CROM  c       E, LTD. , I NC. )     AFFI RMED I N PART; VACATED
                                               )   I N PART; M ODI FI ED I N PART;
       De f e nda nt s - Appe l l a nt s       )   a nd REMANDED




W LLI AM P. SNYDER a nd ADRI ENNE L. ANDERSON OF KNOXVI LLE FOR
 I
APPELLANTS M ARK HOLBROOK, M CROM
                               c    E, LTD. , I NC. , AMERI CAN RESOURCE
MANAGEM ENT, I NC. , AMERI CAN ENERGY EXPLORATI ON, I NC. , a nd AMERI CAN
GAS TECHNOLOGI ES, I NC.

H. BRUCE GUYTON OF KNOXVI LLE FOR APPELLEES




                                    O P I N I O N




                                                               Godda r d, P. J .
                   The De f e nda nt s a ppe a l a s umma r y j udgme nt e nt e r e d i n

f a vo r o f t he Pl a i nt i f f s f or t he e nf or c e me nt of a s e t t l e me nt

a gr e e me nt .



                   The f a c t s o f t hi s c a s e a r e s ome wha t c ompl e x.        Ca noni e

En e r g y , I nc . ( CEI ) a nd W , I nc . ( W ) , whi c h s ha l l be
                                  GI           GI

c o l l e c t i ve l y r e f e r r e d t o a s Pl a i nt i f f s , e nt e r e d i nt o a ve nt ur e

wi t h Ame r i c a n Re s our c e M na ge me nt , I nc . ( ARM , Ame r i c a n Ene r gy
                                   a                          )

Ex p l o r a t i on, I nc . , ( AEX) a nd Coa l Cr e e k M nuf a c t ur i ng Compa ny
                                                          a

( Co a l Cr e e k) .       The ve nt ur e , c a l l e d " t he Bl ue Ge m Pr oj e c t , " wa s

f o r t h e e xpl or a t i on of oi l a nd na t ur a l ga s i n Ande r s on a nd M g a n
                                                                                  or

c ount i e s .      The ve nt ur e a l s o i nc l ude d t he dr i l l i ng a nd

c o n s t r u c t i on of oi l a nd na t ur a l ga s we l l s a nd t he s a l e of oi l a n d

n a t u r a l ga s pr oduc e d by t hos e we l l s .



                   Unde r t he a gr e e me nt , t he Pl a i nt i f f s we r e t o c ont r i but e

n i n e mi l l i on dol l a r s ove r a s e ve n- ye a r pe r i od.         ARM a nd AEX

a g r e e d t o c ont r i but e i nt e r e s t s i n c e r t a i n e xi s t i ng oi l a nd

n a t ur a l ga s we l l s a nd i nt e r e s t s i n mi ne r a l r i ght s l e a s e s , a nd

Co a l Cr e e k a gr e e d t o c ont r i but e a n opt i on t o dr i l l oi l a nd

n a t u r a l ga s we l l s on a ppr oxi ma t e l y s e ve nt y t hous a nd a c r e s of

l a nd.      The a gr e e me nt pr ovi de d t ha t ARM wa s t o a c t a s t he

o p e r a t i ng ma na ge r of t he pr oj e c t a nd wa s t o pr ovi de a l l ope r a t i o n

s e r vi c e s .    I n c onne c t i on wi t h s uc h dut i e s , ARM hi r e d AGT t o

p e r f o r m t he a c t ua l c ons t r u c t i on a nd ope r a t i on of t he pr oj e c t ' s

we l l s .




                                                   2
                  I n Nove mbe r of 1993, t he Pl a i nt i f f s f i l e d s ui t a l l e g i n g

t h a t t h e y we r e f r a udul e nt l y i nduc e d t o pa r t i c i pa t e i n t he Bl ue

Ge m Pr o j e c t a nd a l l e gi ng t ha t AGT, a s t he a l t e r e go of ARM,

wr o n g f u l l y c ha r ge d a ma r kup on ma t e r i a l s s uppl i e d f or t he pr oj e c t

a n d wr o ngf ul l y c ha r ge d f or t he e qui pme nt a nd s e r vi c e s pur s ua nt t o

t h e pr i c e l i s t i n t he e xpl or a t i on a gr e e me nt .          Na me d a s de f e nda nt s

i n t h e s ui t we r e ARM AGT, AEX, Coa l Cr e e k, M r k Hol br ook, Rod n e y
                           ,                           a

Ki n g , Be r r od, I nc . , a nd Ri c ha r d Ca s t or .           Hol br ook wa s t he

p r e s i d e nt of ARM a nd AEX.            Ki ng wa s a f or me r pr e s i de nt of AGT a n d

t h e c u r r e nt pr e s i de nt of Be r r od, I nc . , t he s ol e s ha r e hol de r of

AEX.       Ca s t or wa s t he pr e s i de nt of AGT.



                  I n M y 1994, Ca s t or a nd Hol br ook be c a me i nt e r e s t e d i n
                       a

t he p o s s i bi l i t y o f s e t t l i ng t hi s l a ws ui t .      Ca s t or c ont a c t e d t he

Pl a i nt i f f s '   r e pr e s e nt a t i ve s t o di s c us s t hi s pos s i bi l i t y.      The

Pl a i n t i f f s a nd Hol br ook a gr e e d t ha t t he di s c us s i ons woul d t a ke

p l a c e i n Pl a i nt i f f s '   of f i c e s i n Sout h Ha ve n, M c hi ga n.
                                                                      i                       Pr e s e n t

a t t h e me e t i ng we r e :       Hol br ook, Ca s t or , Tony Ca noni e , Sr . , a n

i n v e s t o r i n t he Bl ue Ge m Pr oj e c t , J e r r y Ca noni e , pr e s i de nt of

CEI , To ny Ca noni e , J r . , c h a i r ma n of t he boa r d of di r e c t or s of

CEI , a n d Cl a ude Woods , pr e s i de nt of W .
                                                GI                   Ki ng di d not a t t e nd t h e

me e t i n g , n or wa s h e ma de a wa r e t ha t i t wa s t a ki ng pl a c e .



                  Hol br ook a l l e ge s t ha t dur i ng t he s e t t l e me nt

d i s c u s s i ons , t h e Pl a i nt i f f s ma de r e f e r e nc e t o t he pos s i bi l i t y

t h a t c r i mi na l c ha r ge s mi ght be br ought a ga i ns t Hol br ook a nd hi s

f a mi l y , who we r e s ha r e hol de r s a nd di r e c t or s of M Cr ome , I nc . ,
                                                                     c



                                                     3
Ho l b r o o k ' s f a mi l y c or por a t i on.   M Cr ome wa s not a n or i gi na l pa r t y
                                                    c

t o t he l a ws ui t , b ut i t di d own a n i nt e r e s t i n t he Bl ue Ge m

Pr o j e c t a s of M y 1994, a nd t he Pl a i nt i f f s l a t e r a me nde d t he i r
                     a

c o mp l a i nt t o a dd a c l a i m a ga i ns t M Cr ome .
                                                  c                Hol br ook f ur t he r

a l l e ge s t ha t t he r e wa s a l s o di s c us s i on t ha t s i mi l a r c ha r ge s c ou l d

b e b r o u ght a ga i ns t Ki ng a nd hi s f a mi l y me mbe r s .         The r e we r e a l s o

a l l e ga t i ons t ha t Ki ng h a d e nga ge d i n e xt r a ma r i t a l a f f a i r s a nd

t h a t t h e s e a f f a i r s woul d b e e xpos e d i f t he l i t i ga t i on c ont i nue d .

Ho l b r o o k f ur t he r a l l e ge s t ha t t he Pl a i nt i f f s t hr e a t e ne d t o f or c e

b o t h t h e Ki ng a nd Hol br ook f a mi l i e s i nt o ba nkr upt c y.



                   The s e t t l e me nt me e t i ng wa s he l d i n t he of f i c e s of CEI

a nd a t t he e nd o f d a y o ne , a dr a f t of t he a gr e e me nt wa s r e a c he d.

Th a t n i ght , t he Pl a i nt i f f s , Hol br ook a nd Ca s t or s oc i a l i z e d

t oge t he r .      Hol br ook a nd Ca s t or r e t ur ne d t o t he i r hot e l r oom l a t e r

t h a t e v e ni ng.      Hol br ook c a l l e d hi s wi f e , but he di d not di s c us s

t h e s e t t l e me nt ne got i a t i on s wi t h he r .    Ne i t he r Hol br ook nor

Ca s t o r c ont a c t e d t he i r a t t or ne ys .



                   The ne xt da y ne got i a t i ons r e s ume d.       Hol br ook r e que s t e d

t h a t s o me c ha nge s b e ma de i n t he dr a f t s e t t l e me nt a gr e e me nt a nd

t h e c h a nge s we r e ma de .       Hol br ook a s s e r t s t ha t t he Pl a i nt i f f s t h e n

a g r e e d t ha t Hol br ook a nd Ca s t or ' s s e t t l e me nt of f e r wa s s uf f i c i e n t

t o c o v e r Ki ng a s we l l a nd t ha t t he Pl a i nt i f f s woul d r e l e a s e Ki ng

a n d Be r r od, I nc . , Ki ng' s f a mi l y c or por a t i on, f r om a l l c l a i ms i f

Ki n g wo ul d a gr e e t o be bound by t he t e r ms of t he s e t t l e me nt

a gr e e me nt .     Howe ve r , t he s e t t l e me nt a gr e e me nt i t s e l f pr ovi de s



                                                   4
t ha t t h e Pl a i nt i f f s woul d di s mi s s t he s ui t onl y a s t o ARM AGT,
                                                                               ,

Ho l b r o o k, AEX, Ca s t or a nd M Cr ome .
                                     c                     I t f ur t he r s t a t e d t ha t t he

s e t t l e me nt a gr e e me nt d i d not a f f e c t c l a i ms a ga i ns t Be r r od, I nc . ,

a n d Ki n g.



                Pr i or t o t he s i gni ng of t he s e t t l e me nt a gr e e me nt ,

Ca s t or t ol d t he Pl a i nt i f f s t ha t i n Apr i l of t ha t ye a r he

s u b mi t t e d a l e t t e r of r e s i gna t i on a s pr e s i de nt of AGT a nd t ha t ,

a s a r e s ul t , he ma y not ha ve t he ne c e s s a r y a ut hor i t y t o e xe c ut e

t h e s e t t l e me nt a gr e e me nt on be ha l f of AGT.            Howe ve r , t he r e

a p p e a r s t o be s ome que s t i on ove r whe t he r Ca s t or ' s l e t t e r of

r e s i g n a t i on wa s a c c e pt e d by AGT.        Ca s t or s a i d he wa s t ol d t ha t

t h e r e s i gna t i on woul d not be a c c e pt e d unt i l s ome one c oul d be

f o u n d t o t a ke h i s p l a c e .   Thus , a t t he t i me of t he s e t t l e me nt ,

Ca s t o r t hought hi s r e s i gna t i on ha d not be e n a c c e pt e d a nd t ha t h e

s t i l l h a d a ut hor i t y t o a c t a s pr e s i de nt of AGT.           The a gr e e me nt

wa s t h e n s i gne d by t he pa r t i e s .          Hol br ook s i gne d t he a gr e e me nt o n

b e h a l f of hi ms e l f , ARM AEX, a nd M Cr ome .
                                ,           c                        Ca s t or s i gne d t he

a g r e e me nt of be ha l f of hi ms e l f a nd AGT.



                Upon r e t ur ni ng f r om t he s e t t l e me nt ne got i a t i ons i n

M c h i g a n, Hol br ook me t wi t h Ki ng a nd Ki ng i ni t i a l l y a gr e e d t o t h e
 i

t e r ms o f t he s e t t l e me nt a gr e e me nt .       Hol br ook t he n me t wi t h hi s

f a mi l y , t he s ha r e hol de r s a nd di r e c t or s of M Cr ome , a nd a dvi s e d
                                                               c

t h e m o f t he s e t t l e me nt me e t i ng a nd t he a gr e e me nt i t pr oduc e d.

Th e f a mi l y me mbe r s t he n vot e d t o a c c e pt t he t e r ms of t he

s e t t l e me nt a gr e e me nt .



                                                   5
                    Shor t l y t he r e a f t e r , Hol br ook a l l e ge s t ha t J e r r y Ca no n i e

a d v i s e d hi m t ha t CEI a nd W woul d not a gr e e t o r e l e a s e Ki ng o r
                                    GI

Be r r o d , I nc . , o f a l l c l a i ms unl e s s Ki ng t r a ns f e r r e d c e r t a i n

a s s e t s t o CEI .        At a bout t hi s s a me t i me , t h e s ha r e hol de r s a nd

d i r e c t or s o f Be r r od, I nc . , me t t o di s c us s t he s e t t l e me nt

a gr e e me nt .       Be r r od, I nc . , wa s not a pa r t y t o t he s e t t l e me nt

a g r e e me nt , but i t owne d a l l of AEX' s s ha r e s of s t oc k a nd one -

t h i r d o f ARM s s ha r e s of s t oc k.
                 '                                        The s ha r e hol de r s a nd di r e c t or s

v o t e d n ot t o r a t i f y Hol br ook' s e xe c ut i on of t he a gr e e me nt .

No r ma n Be a uc ha mp, a M c hi ga n a t t or ne y a nd owne r of one - t hi r d o f
                            i

ARM s s ha r e s of s t oc k, a l s o r e f us e d t o vot e hi s s ha r e s of s t oc k
   '

t o r a t i f y Hol br ook' s e xe c u t i on of t he a gr e e me nt .             The

s h a r e h o l de r s a nd di r e c t or s of AGT a l s o me t , a nd t he y vot e d not t o

r a t i f y Ca s t or ' s e xe c ut i on of t he a gr e e me nt .



                    I n t he me a nt i me , t h e Pl a i nt i f f s f i l e d a mot i on t o s t a y

p r o c e e d i ngs i n t he Tr i a l Cour t ba s e d upon t he r e a c he d s e t t l e me n t

a g r e e me nt .      The Pl a i nt i f f s '   mot i on r e que s t e d t ha t a s t a y be

g r a n t e d a s t o a l l De f e nda nt s e xc e pt Ki ng, Be r r od, I nc . , a nd Co a l

Cr e e k .    ARM AEX, a nd Hol br ook t he n oppos e d t he mot i on on t he
                 ,

g r o u n d s t ha t t he s e t t l e me nt a gr e e me nt wa s une nf or c e a bl e .         The

Pl a i n t i f f s s ubs e que nt l y a me nde d t he i r c ompl a i nt t o a dd a n

a l t e r n a t i ve c l a i m f or t he e nf or c e me nt of t he s e t t l e me nt

a gr e e me nt .       The Pl a i nt i f f s a l s o a dde d a c l a i m a ga i ns t M Cr ome f o r
                                                                                      c

t h e a l l e ge d wr ongf ul r e c e i pt of a s s e t s f r om ARM a nd a n

a l t e r n a t i ve c l a i m f or e nf or c e me nt of t he s e t t l e me nt a gr e e me nt .




                                                      6
                      The Pl a i nt i f f s s ubs e que nt l y t ook a vol unt a r y non- s ui t

a s t o t he i r f r a udul e nt i nduc e me nt c l a i ms .                            The Pl a i nt i f f s a l s o

v o l u n t a r i l y di s mi s s e d De f e nda nt Coa l Cr e e k.                         The n i n De c e mbe r o f

1 9 9 4 , a l l De f e nda nt s f i l e d a mot i on f or pa r t i a l s umma r y j udgme n t .

Th e Pl a i nt i f f s a l s o f i l e d a mot i on f or pa r t i a l s umma r y j udgme n t

s e e ki n g t o e nf or c e t he s e t t l e me nt a gr e e me nt a ga i ns t ARM AEX,
                                                                                  ,

Ho l b r o o k, M Cr ome , AGT a nd Ca s t or .
                 c



                      On M r c h 10, 1995, t he Tr i a l Cour t e nt e r e d a n or de r
                          a

d e n y i n g t he De f e nda nt s '              mo t i on a nd gr a nt i ng t he Pl a i nt i f f s '

mo t i o n f or s umma r y j udgme nt a s t o Hol br ook a nd M Cr ome , hol di ng
                                                               c

t h e s e t t l e me nt a gr e e me nt va l i d a nd e nf or c e a bl e a s t o t hos e

pa r t i e s .        I n i t s o r de r , t h e Tr i a l Cour t s pe c i f i c a l l y f ound t ha t

t h e r e wa s n o d i s put e d ma t e r i a l f a c t a s t o t he i s s ue of dur e s s a nd

t h a t t h e r e we r e no i mpr ope r pr e s s ur e s or i nf l ue nc e s on Hol br ook

a t t h e t i me he s i gne d t he s e t t l e me nt a gr e e me nt .                               A s e c ond or de r

wa s e n t e r e d on M r c h 24, 1995, gr a nt i ng t he Pl a i nt i f f s '
                       a                                                                                           mot i on

f o r s u mma r y j udgme nt f or e nf or c e me nt of t he s e t t l e me nt a gr e e me n t
                                                                      1
a g a i n s t ARM AEX, AGT a nd Ca s t or .
                 ,                                                        I n doi ng s o, t he Tr i a l Cour t

f o u n d t ha t Hol br ook a nd Ca s t or ha d e i t he r a c t ua l or a ppa r e nt

a u t h o r i t y t o bi nd t he c or por a t i ons t o t he s e t t l e me nt a gr e e me nt

a n d t h a t t he r e we r e no di s put e d f a c t s t o s how t ha t ARM AEX, o r
                                                                            ,

AGT t o o k a ny a c t i on whi c h woul d a dve r s e l y a f f e c t or i nva l i da t e

t h e s e t t l e me nt a gr e e me nt or woul d c ha l l e nge or di s put e t he


          1
                       At o r a r o u n d t h i s s a me t i me , t h e P l a i n t i f f s a p p a r e n t l y t o o k a
vol unt a r y      n o n - s u i t o f t h e i r c l a i ms a g a i n s t Ro d n e y Ki n g a n d Be r r o d , I n c .      Th e
r e c or d on      a p p e a l d o e s n o t a p p e a r t o i n c l u d e t h e o r d e r o f d i s mi s s a l .     Ho we v e r ,
t h e Co u r t     r e c o g n i z e d t h e d i s mi s s a l i n a n o r d e r t a x i n g c o u r t c o s t s d a t e d M r c h
                                                                                                                            a
24, 1995,          a n d t h u s , we t r e a t t h e Co u r t ' s a wa r d o f s u mma r y j u d g me n t a s a f i n a l
j u d g me n t t   h a t i s a p p e a l a b l e t o t h i s Co u r t .

                                                                  7
a u t h o r i t y of Hol br ook or Ca s t or .           Hol br ook, M Cr ome , ARM AEX,
                                                                      c            ,

a nd AGT a ppe a l e d.          The a ppe a l s of t he s e De f e nda nt s ha ve be e n

c o n s o l i da t e d.     De f e nda nt Ca s t or di d not a ppe a l .



                     The De f e nda nt s a s s e r t t ha t t he Tr i a l Cour t e r r e d i n

g r a n t i n g t he Pl a i nt i f f s '   mot i on f or s umma r y j udgme nt be c a us e

t h e r e a r e di s put e d i s s ue s of ma t e r i a l f a c t a s t o t he i s s ue s of

d u r e s s , a ut hor i t y, f a i l ur e of c ons i de r a t i on a nd l a c k of

c o n s i d e r a t i on.



                     The Supr e me Cour t of Te nne s s e e , i n Byr d v. Ha l l , 847

S. W 2 d 208 ( Te nn. 1993) , s e t f or t h t he pr ope r s umma r y j udgme nt
    .

a n a l y s i s t o be a ppl i e d i n Te nne s s e e .       The r e , t he Cour t s a i d i n

e v a l u a t i ng a s umma r y j udgme nt mot i on, t he s e que s t i ons mus t be

r e s o l v e d: " ( 1) whe t he r a f ac t ual di s put e e xi s t s ; ( 2) whe t he r t h e

d i s p u t e d f a c t i s mat e r i al t o t he out c ome of t he c a s e ; a nd ( 3)

wh e t h e r t he di s put e d f a c t c r e a t e s a ge nui ne i s s ue f or t r i a l . "



                     Byr d a l s o ma ke s t he f ol l ow hol di ngs : s umma r y j udgme n t

s h o u l d be e mpl oye d whe r e t he r e i s no di s put e ove r t he e vi de nc e

a n d t h e r e i s no i s s ue f or a j ur y t o de c i de .          Ra t he r , i t i s j us t

f o r t h e c our t t o a ppl y t he l a w.             For a pa r t y t o a voi d s umma r y

j ud g me n t , i t mus t s how t ha t t he f a c t i n di s put e i s ma t e r i a l ;

me a n i n g , t hi s f a c t i s one t ha t " mus t be de c i de d i n or de r t o

r e s o l v e t he s ubs t a nt i ve c l a i m or de f e ns e a t whi c h t he mot i on i s

d i r e c t e d. "     I f s uc h a di s put e d, ma t e r i a l f a c t doe s e xi s t , t he

c ou r t " mus t t he n d e t e r mi ne whe t he r t he di s put e d ma t e r i a l f a c t



                                                    8
c r e a t e s a ge nui ne i s s ue wi t hi n t he me a ni ng of Rul e 56. 03. "               He r e ,

" t h e t e s t f or a ' ge nui ne i s s ue '     i s whe t he r a r e a s ona bl e j ur y

c o u l d l e gi t i ma t e l y r e s ol ve t ha t f a c t i n f a vor of one s i de or t h e

ot he r .    I f t he a ns we r i s ye s , s umma r y j udgme nt i s i na ppr opr i a t e ;

i f t h e a ns we r i s no, s umma r y j udgme nt i s pr ope r be c a us e a t r i a l

wo u l d b e poi nt l e s s . . . . "       W n a ppl yi ng t hi s t e s t , " t he c our t
                                             he

i s t o v i e w t he e vi de nc e i n a l i ght f a vor a bl e t o t he nonmovi ng

p a r t y a nd a l l ow a l l r e a s ona bl e i nf e r e nc e s i n hi s f a vor . "      It is

t h e b u r de n of t he nonmovi n g pa r t y t o de mons t r a t e t ha t t he r e a r e

n o d i s p ut e d, ma t e r i a l f a c t s c r e a t i ng a ge nui ne i s s ue f or t r i a l

a n d t h a t s umma r y j udgme nt i s a ppr opr i a t e .



                 I n r e vi e wi ng t he or de r f or s umma r y j udgme nt , we c hoo s e

t o a d d r e s s t he i s s ue o f a ut hor i t y f i r s t .   He r e , t h e Pl a i nt i f f s

h a v e t h e bur de n of pr ovi ng t ha t a n a ge nc y r e l a t i ons hi p e xi s t e d

b e t we e n Hol br ook a nd ARM a nd AEX a nd be t we e n Ca s t or a nd AEX.

Sl o a n v . Ha l l , 673 S. W 2d 548 ( Te nn. App. 1984) .
                              .                                           Sl oa n a l s o hol d s

t h e f o l l owi ng:      " The s c ope a nd e xt e nt of a n a ge nt ' s r e a l a nd

a p p a r e n t a ut hor i t y a r e que s t i ons t o be de t e r mi ne d by t he t r i e r o f

f a c t f r om a l l t he f a c t s a nd c i r c ums t a nc e s i n e vi de nc e . "

Fu r t h e r mor e , a n a ge nt ' s a ut hor i t y mus t be t r a c e a bl e t o t he

p r i n c i p a l a nd c a nnot be s h own by t he a ge nt ' s s t a t e me nt s or

a c t i o n s a l one .    And whe n a t hi r d pe r s on " a c t ua l l y knows , or

s h o u l d know, t he l i mi t a t i ons of a n a ge nt ' s a ut hor i t y, t he

p r i n c i p a l i s not bound by a n a c t t ha t i s be yond s uc h

l i mi t a t i ons . "    Rul e v. Br ot he r hood' s Re l i e f & Compe ns a t i on Fun d,

3 6 Te n n . App. 20, 251 S. W 2d 309 ( 1952) .
                              .


                                                  9
                 Looki ng f i r s t t o Ca s t or ' s a ut hor i t y, a di s put e e xi s t s

a s t o t he e f f e c t of hi s r e s i gna t i on f r om t he pos i t i on of

p r e s i de nt of AGT.         Ca s t or ma i nt a i ns t ha t de s pi t e hi s r e s i gna t i on

h e c o n t i nue d t o f unc t i on a s pr e s i de nt of AGT a nd t hought he ha d

a u t h o r i t y t o s i gn t he s e t t l e me nt a gr e e me nt .   Howe ve r , unde r t h e

r u l e o f Sl oa n , Ca s t or ' s s t a t e me nt s a l one c a nnot be de t e r mi na t i v e

o f h i s a ut hor i t y.       Ki ng, t he f or me r pr e s i de nt of AGT who r e c e i v e d

Ca s t or ' s l e t t e r o f r e s i gna t i on, ma i nt a i ns t ha t t he r e s i gna t i on

wa s a c c e pt e d a t t he t i me i t wa s t e nde r e d a nd t ha t a s s uc h, Ca s t o r

h a d n o a ut hor i t y t o e nt e r i nt o t he s e t t l e me nt a gr e e me nt on be h a l f

o f AGT.       Thus , Ca s t or ' s r e s i gna t i on c r e a t e s a di s put e d i s s ue a s

t o wh e t he r he ha d a ny a c t ua l a ut hor i t y a t t he t i me he s i gne d t h e

s e t t l e me nt a gr e e me nt .    W t he r t he Pl a i nt i f f s t hought Ca s t or h a d
                                       he

a u t h o r i t y i s a l s o di s put e d.    Re vi e wi ng t he e vi de nc e i n t he l i gh t

mo s t f a vor a bl e t o t he De f e nda nt s , i t a ppe a r s t ha t Ca s t or i nf or me d

t he Pl a i nt i f f s o f h i s r e s i gna t i on a nd t he pos s i bi l i t y t ha t he

l a c k e d t he r e qui s i t e a ut hor i t y t o e nt e r i nt o t he a gr e e me nt .

Th u s , s i nc e t he Pl a i nt i f f s we r e ma de a wa r e t ha t Ca s t or ' s

a u t h o r i t y t o bi nd AGT wa s i n que s t i on, t he Pl a i nt i f f s c a nnot no w

a r g u e t ha t t he y a s s ume d Ca s t or ha d a ppa r e nt a ut hor i t y t o a c t f o r

AGT.      The Pl a i nt i f f s we r e wa r ne d of t he pos s i bi l i t y t ha t Ca s t or

h a d n o a ut hor i t y s i nc e he ha d t e nde r e d a l e t t e r of r e s i gna t i on .

Th e r e f o r e , i t a ppe a r s t o t hi s Cour t t ha t a ge nui ne i s s ue of

ma t e r i a l f a c t e xi s t s :   W t he r Ca s t or di d i n f a c t ha ve t he
                                       he

a u t h o r i t y t o e nt e r i nt o t he s e t t l e me nt a gr e e me nt on be ha l f of

AGT.      Be c a us e t hi s i s a n i s s ue of f a c t t ha t mus t be r e s ol ve d,

s u mma r y j udgme nt i s va c a t e d a s t o De f e nda nt AGT.            The De f e nda n t



                                                  10
Ca s t o r di d not a ppe a l f r om t he Tr i a l Cour t ' s or de r e nf or c i ng t h e

s e t t l e me nt a gr e e me nt .



                     W now t ur n t o t he i s s ue of Hol br ook' s a ut hor i t y t o
                      e

b i n d ARM a nd AEX.           At t he t i me he s i gne d t he a gr e e me nt , Hol br o o k

wa s t h e pr e s i de nt of t he s e t wo c or por a t i ons .         As s uc h, Hol br oo k

h a s t h e a ut hor i t y t o e nt e r i nt o a gr e e me nt s on be ha l f of t he

c o r p o r a t i ons .    " Al l c or por a t e or ga ni z a t i ons a c t by a nd t hr ough

b o a r d s , c ommi s s i ons , of f i c e r s a nd e mpl oye e s , a nd i f t he y a c t

wi t h i n t he a ppa r e nt s c ope of t he i r a ut hor i t y, t he n t he i r a c t i on s

a r e t h o s e of t he c or por a t i on a nd, t he r e f or e , bi ndi ng on t he

s t o c k h o l de r s or me mbe r s of s uc h c or por a t i ons . "     W t e ha ve n Ut i l .
                                                                           hi

Di s t . o f She l by Count y v. Ra ms a y, 215 Te nn. 435, 387 S. W 2d 35 1
                                                                    .

( 1964) .        He r e , t he Cour t he l d t ha t t he a c t i ons of t he boa r d' s

c o mmi s s i one r s we r e unque s t i ona bl y bi ndi ng on t he me mbe r s ,

r e s i de n t s a nd b ondhol de r s of t he ut i l i t y di s t r i c t .    Si mi l a r l y, i n

Bl a s i n g a me v. Ame r i c a n M t e r i a l s , I nc . , 654 S. W 2d 659
                                    a                                 .

( Te n n . 1 983) , t he Supr e me Cour t he l d t ha t t he pr e s i de nt of a

c o r p o r a t i on c oul d bi nd t he c or por a t i on t o a c ont r a c t wi t hout t h e

a p p r o v a l of t he Boa r d of Di r e c t or s .     I t i s c l e a r t he n t ha t

Ho l b r o o k, a s pr e s i de nt of AEX a nd ARM ha d a ut hor i t y t o bi nd t h e
                                                  ,

c o r p o r a t i ons s o l ong a s he di d not e xc e e d t he s c ope of t ha t

a u t h o r i t y.     I t i s not c l e a r a s t o wha t t he s c ope of hi s a ut hor i t y

ma y h a v e b e e n.       W t hout t hi s de t e r mi na t i on, i t i s i mpos s i bl e t o
                             i

k n o w wh e t he r Hol br ook e xc e e de d hi s a ut hor i t y.        M ki ng t hi s
                                                                          a

d e t e r mi na t i on i s f or t he t r i e r of f a c t .    Se e Sl oa n, s upr a .

Ad d i t i o na l l y, t he boa r d of di r e c t or s of bot h AEX a nd ARM vot e d


                                                  11
n o t t o r a t i f y Hol br ook' s s i gni ng of t he s e t t l e me nt a gr e e me nt .

Co n t r a r y t o t he Tr i a l Cour t ' s f i ndi ng, t he s e vot e s a ppe a r t o b e

a c t i o n s t ha t ma y a dve r s e l y a f f e c t or i nva l i da t e t he s e t t l e me nt

a gr e e me nt .     At t he l e a s t , t he s e vot e s c e r t a i nl y a ppe a r t o

c h a l l e n ge or di s put e t he a ut hor i t y of Hol br ook.               Si nc e a

d e t e r mi na t i on wa s not ma de a s t o whe t he r Hol br ook e xc e e de d hi s

a u t h o r i t y whe n he s i gne d t he s e t t l e me nt a gr e e me nt wi t hout t he

k n o wl e d ge of t he s ha r e hol de r s , s umma r y j udgme nt i s va c a t e d a s t o

De f e n d a nt s AEX a nd ARM.



                   Ha vi ng di s c ove r e d one r e a s on why s umma r y j udgme nt

s h o u l d not ha ve be e n gr a nt e d a s t o De f e nda nt s AGT, AEX, a nd ARM,

we g o n o f ur t he r a s t o t he s e De f e nda nt s .            Si nc e i t i s not

n e c e s s a r y t o r e a c h t he ot he r i s s ue s r a i s e d by t he s e De f e nda nt s ,

we c h o o s e not t o do s o.



                   Howe ve r , t he r e now r e ma i ns t he que s t i on of Hol br ook a n d

M Cr o me , Hol br ook' s f a mi l y c or por a t i on.
 c                                                                  The r e i s no i s s ue of

a u t h o r i t y he r e be c a us e t he s ha r e hol de r s of M Cr ome , Hol br ook' s
                                                                  c

f a mi l y , di d not que s t i on Hol br ook' s a ut hor i t y.             I n f a c t , t he y

v o t e d t o r a t i f y t he s e t t l e me nt a gr e e me nt .     De f e nda nt Hol br ook

a r g u e s i ns t e a d t ha t t he s e t t l e me nt a gr e e me nt s houl d not be

e nf o r c e d b e c a us e t he a gr e e me nt wa s e xe c ut e d unde r dur e s s a nd

b e c a u s e no c ons i de r a t i on wa s gi ve n t o M Cr ome i n e xc ha nge f or
                                                         c

a gr e e i n g t o t he s e t t l e me nt .




                                                  12
                    W d i s c us s t he dur e s s i s s ue f i r s t .
                     e                                                    Te nne s s e e ha s

g e n e r a l l y de f i ne d dur e s s a s t he c ondi t i on of mi nd pr oduc e d by t h e

i mp r o p e r e xt e r na l pr e s s ur e or i nf l ue nc e t ha t pr a c t i c a l l y de s t r o y s

t h e f r e e a ge nc y of a pa r t y , a nd c a us e s hi m t o do a nd a c t or ma k e

a c o n t r a c t not of hi s own vol i t i on, but unde r s uc h wr ongf ul

e xt e r n a l p r e s s ur e .   Ra i ne y v. Ra i ne y, 795 S. W 2d 139 ( Te nn.
                                                                  .

Ap p . 1 9 9 0) .     Se e a l s o Gi l l e y v. Gi l l e y , 778 S. W 2d 862 ( Te nn. Ap p .
                                                                      .

1 9 8 9 ) ( i nt e r na l pr e s s ur e s t ha t a r e of a pa r t y' s own ma ki ng a r e

not dur e s s ) .        To de t e r mi ne whe t he r t he r e i s dur e s s , t he que s t i o n

i n e a c h c a s e i s , wa s t he pe r s on s i gni ng t he c ont r a c t s o a f f e c t e d

b y t h r e a t s of t he ot he r pa r t y a s t o be be r e f t of t he qua l i t y of

mi n d e s s e nt i a l t o t he ma ki ng of a c ont r a c t .           I n ot he r wor ds , wa s

t h e p e r s on be r e f t of t he f r e e e xe r c i s e of hi s wi l l powe r .              Exum

v . W s h i ngt on Fi r e a nd M r i ne I ns . Co. , 41 Te nn. App. 610, 297
     a                          a

S. W 2 d 805 ( 1955) .
    .                             W t he r dur e s s e xi s t s i s de t e r mi ne d by
                                   he

e xa mi n i ng a l l t he c i r c ums t a nc e s .        Si mps on v. Ha r pe r , 21 Te nn.

Ap p . 4 3 1, 111 S. W 2d 882 ( 1937) .
                      .



                    I n t hi s c a s e , t h e Tr i a l Cour t de t e r mi ne d t ha t t he r e

we r e no di s put e d ma t e r i a l f a c t s wi t h r e s pe c t t o t he i s s ue of

d u r e s s a nd f ur t he r t ha t Hol br ook wa s not unde r i mpr ope r e xt e r n a l

f o r c e s whe n h e s i gne d t he a gr e e me nt .          W a gr e e .
                                                                e             The Pl a i nt i f f s

d o n o t di s put e t he f a c t t ha t s ome s or t of t hr e a t s a s t o t he

p o s s i b i l i t y of c r i mi na l pr os e c ut i on a nd ba nkr upt c y we r e

c o mmu n i c a t e d t o Hol br ook.        Howe ve r , t he s e t hr e a t s do not

c o n s t i t ut e s uc h i mpr ope r t hr e a t s a s t o i nva l i da t e Hol br ook' s

s i g n i n g of t he a gr e e me nt .       Hol br ook wa s not f or c e d i nt o t he



                                                     13
s e t t l e me nt pr oc e s s ; i t wa s he who i ni t i a t e d s e t t l e me nt by

c o n t a c t i ng t he Pl a i nt i f f s a nd t he n a gr e e i ng t o me e t i n t he i r

o f f i c e s i n M c hi ga n.
                   i                Hol br ook s t a t e d i n hi s de pos i t i on t ha t h e

wa s n o t f or c e d t o s i gn t he a gr e e me nt a nd t ha t he wa s f r e e t o

l e a ve t he s e t t l e me nt d i s c us s i ons a t a ny t i me .        He c oul d ha ve a l s o

c o n t a c t e d hi s l a wye r or hi s f a mi l y a t a ny t i me .          He c hos e not t o

do s o.      Hol br ook wa s not de pr i ve d of t he f r e e e xe r c i s e of hi s

wi l l po we r .     W a gr e e wi t h t he Tr i a l Cour t t ha t a ny pr e s s ur e s
                      e

Ho l b r o o k ma y ha ve be e n unde r a t t he t i me of t he a gr e e me nt we r e

n o t s u c h i mpr ope r one s a s t o c ons t i t ut e dur e s s a nd t o i nva l i da t e

t h e a gr e e me nt .



                As f or t he c ons i de r a t i on i s s ue , i n or de r f or a

s e t t l e me nt a gr e e me nt t o b e e nf or c e a bl e , l i ke a ny c ont r a c t ,

c o n s i d e r a t i on mus t be gi ve n a nd r e c e i ve d.        M l we e v. Pe a c ht r e e
                                                                       i

Cy p r e s s I nve s t me nt Co. , 510 F. Supp. 279 ( E. D. Te nn. 1977) .                  It is

we l l s e t t l e d i n Te nne s s e e t ha t t he c our t wi l l not " i nqui r e i nt o

t h e a d e qua c y or i na de qua c y of t he c ons i de r a t i on f or a c ompr omi s e

f a i r l y a nd d e l i be r a t e l y ma de . "   Thur mond v. W t t a ke r , 1
                                                                  hi

Te n n . Ap p. 111 ( 1925) .         Re l e a s i ng c l a i ms a ga i ns t a pa r t y, whe t h e r

t h e c l a i ms a r e a c t ua l l y pe ndi ng or not , i s s uf f i c i e nt

c on s i d e r a t i on f or a s e t t l e me nt a gr e e me nt .     Se r vi c e St a mp Co. v .

Ke t c he n, 10 Te nn. App. 59 ( 1929) .                 Fur t he r mor e , whe r e t he f a c t s

a r e un d i s put e d, whe t he r a r e l e a s e c ons t i t ut e s a de qua t e

c o n s i d e r a t i on i s a que s t i on of l a w.        Appl e whi t e v. Al l e n , 2 7

Te n n . ( 1 Hum. ) 696 ( 1848) .




                                                    14
                    I n t he c a s e a t t he ba r , De f e nda nt Hol br ook a gr e e d on

b e h a l f of M Cr ome t o gi ve up s ome a s s e t s of t he c ompa ny 2 i n or d e r
                c

t o b e r e l e a s e d f r om a ny c l a i ms t he Pl a i nt i f f s mi ght ha ve a ga i n s t

M Cr o me .
 c                  Tha t n o c l a i ms ha d be e n a c t ua l l y f i l e d a ga i ns t M Cr ome
                                                                                           c
                                                                                          3
a t t he t i me o f s e t t l e me nt i s not di s pos i t i ve .                              I t a ppe a r s t he n

t h a t t h e Pl a i nt i f f s a nd M Cr ome ga ve s uf f i c i e nt c ons i de r a t i on f o r
                                      c

t h e s e t t l e me nt a gr e e me nt , a nd t he r e i s no ne e d f or di s c us s i on a s

t o t h e va l i di t y of a ny c l a i ms a l l e ge dl y he l d by t he Pl a i nt i f f s o r

t h e a d e qua c y of t he Pl a i nt i f f s '                 c ons i de r a t i on i n e xc ha nge f or

M Cr o me ' s a s s e t s .
 c



                    Thus , f i ndi ng no di s put e d ma t e r i a l f a c t s a s t o t he

i s s u e s of dur e s s or c ons i de r a t i on, we a f f i r m t he Tr i a l Cour t ' s

e n t r y o f s umma r y j udgme nt a s t o M Cr ome a nd Hol br ook.
                                             c



                    I n a ddi t i on t o t he i r a ppe a l of s umma r y j udgme nt , t he

De f e nd a nt s l a t e r a ppe a l e d t he Tr i a l Cour t ' s or de r a wa r di ng

d i s c r e t i ona r y c os t s t o t he Pl a i nt i f f s .                   The y i ns i s t t he Cour t

a b u s e d i t s di s c r e t i on by i nc l udi ng c os t s i nc ur r e d i nc i de nt t o t h e

o r i gi na l s ui t f or b r e a c h of c ont r a c t .                      W l e t hi s i s t r ue , we
                                                                               hi

h a v e n o doubt t ha t t he i nf or ma t i on de ve l ope d i n pr e pa r i ng t he



          2
                     S p e c i f i c a l l y , Ho l b r o o k a n d Mc Cr o me a g r e e d t o g i v e t h e P l a i n t i f f s a
4 . 4 5 % wo r k i n g i n t e r e s t i n t h e Bl u e Ge m P r o j e c t a s we l l a s 9 3 s h a r e s o f
Te n n e s s e e En e r g y P i p e l i n e ( TEP S CO) o r t h e mo n e y r e c e i v e d f r o m a s a l e o f t h o s e
s h a r e s . I n r e t u r n , t h e P l a i n t i f f s a g r e e d t o r e l e a s e Ho l b r o o k a n d Mc Cr o me f r o m
a n y c l a i m a r i s i n g o u t o f t h e l a ws u i t , f r o m a l l mo n e t a r y o b l i g a t i o n s a n d c l a i ms
a l l e g e d l y o we d t h e P l a i n t i f f s a n d a n y o t h e r c l a i m a r i s i n g o u t o f t h e Bl u e Ge m
Pr o j e c t .

          3
                       Th e Tr i a l Co u r t g r a n t e d t h e P l a i n t i f f s ' mo t i o n t o a me n d t h e i r
c o mp l a i n t o n Oc t o b e r 3 1 , 1 9 9 4 , a n d t h e P l a i n t i f f s s u b s e q u e n t l y a d d e d a c l a i m
a g a i n s t M Cr o me f o r t h e a l l e g e d wr o n g f u l r e c e i p t o f a s s e t s f r o m ARM a n d i n t h e
                  c
a l t e r n a t i v e , a c l a i m f o r t h e e n f o r c e me n t o f t h e s e t t l e me n t a g r e e me n t .

                                                               15
o r i gi na l c l a i m p r ompt e d t he s e t t l e me nt a gr e e me nt whi c h i s t he

p r i n c i p a l s ubj e c t of t hi s a ppe a l .   I n l i ght of t hi s , we f i nd no

a b u s e o f di s c r e t i on i n a l l owi ng s uc h f e e s .




                                                 16
               W a c c or di ngl y a f f i r m t he j udgme nt i ns of a r a s t he
                e

De f e n d a nt s Hol br ook a nd M Cr ome a r e c onc e r ne d, but modi f y t he
                                   c

d i s c r e t i ona r y c os t s a wa r d by r e qui r i ng t he m t o pa y one - f i f t h e a c h

o f t h e a mount a wa r de d by t he Cha nc e l l or , va c a t e t he j udgme nt a s

t o t h e r e ma i ni ng De f e nda nt s , a nd r e ma nd t he c a s e f or f ur t he r

p r o c e e d i ngs not i nc ons i s t e nt wi t h t hi s opi ni on.      One - ha l f of t h e

c o s t s o f a ppe a l a r e a dj udge d a ga i ns t Hol br ook a nd M Cr ome a nd
                                                                       c

o n e - h a l f a ga i ns t Ca noni e Ene r gy a nd W .
                                                     GI



                                             _______________________________
                                             Hous t on M Godda r d, P. J .
                                                        .


CONCUR:



_ _ _ _ _ _ _ _________________________
He r s c he l P. Fr a nks , J .



_ _ _ _ _ _ _ _________________________
Ch a r l e s D. Sus a no, J r . , J .




                                                17