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w Di g it al Re posit or y

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w . vi l l a no va . e du . Re c omme nde d C it at ion " D VI F in S e r Inc v

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___________ D V I FIN AN C I AL S E R V I C E S , IN C .; U SB A N KPO R T F O L I O SE R V I C E S, a di v i s i on of L y on F i n anci alSer v i ces , I nc. as Ser v i cerf or DVI Re c e i v a b l e s XV, L. L. C.

v. B A Y A R E A R E G IO N A L C A N C E R C E N T E R , L . P . ; P IN O L E R A D IA T IO N

O N C O L O G Y M E D IC A L A S S O C IA T E S , IN C . ; A T H U R P O R T E R , M . D . ; J A M E S F O N T A N E S I,

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___________ Sub mit t ed U nderT hi r d C i r cu i t L A R 34. 1( a)

O ct ob er3, 2006 B efor e: M cKEE , AM B R O , and N Y GA AR D , C i rcu i t J u dg es.

( F i l ed A pr i l17, 2007 )2 ___________ OPINI ON O F T HE COU RT

___________ N Y G A A R D , C i r cu i t J u dge. I . D V I F i na nc i a lS e r v i c e s ( D V I ) a g r e e d t o p r o v i d e m e d i c a le q u ip m e nt a nd f i na nc i ng t o B ayA r ea Regi on alC ancerC en t erand i t s f

ounder s ( col l ect i v elyB ayA r ea) f or con s t r u ct i on

of t he ce n t erand i t s i ni t i aloper at i on s . T he par t i es exec u t ed a M as t er E qu ipmen

t L ease Agr eemen

t , a L oan and S ecurit yAgr eemen t and repay men

t schedu l es. I n a d d i ti o n , B a yAr e a ’s fo und e rs s i g n e d unc o nd i ti o n a lg u a ra n te e s to b a c k i ts o b l i g a ti o n s . B ayA r ea f

alt er ed f i n anci al l y , and t he par t i es r es t r u ctur ed t he arr angem en t t w i ce. Af t er B ayAr ea defau l t ed for a t hi rd t i me, D V I fi l ed a b reach of con t ractact i on

agai n st B ayA r ea a nd i t s gu ar an t or s i n t he B u cks C oun

t yC our t of

C omm on

Pl eas . B ayA r ea r em ov ed t he s u i t t o t he D i s t r i ctC our t on di v er s i t ygr ounds . M ean w hi l e, D V I f

i l ed f or C hapt er11 b an

kr upt cypr ot ect i on

and as s i gn ed i t s r i ght s again s t B ayA r ea t o D V I R ece i v ab l es X V , L L C . D V I R ece i v ab l es hi r ed U . S. B an k Por t f ol i o Ser v i ces ( U . S. B an

k) a nd g ra n te d i t a p o w e r o f a tto rn e yto p urs u e c o l l e c ti o n s . T h e D i str i ct C o urtg ran

ted U.S . B an

k ’s mo ti o n

to j o i n the a cti o n

as a p l ai n

ti ff und er F ED . R . C IV . P. 25( c) . T he cour t condu ct ed a b ench t r i aland gr an t ed U . S. B an

k a $5, 332, 763. 43 j u dgme n t , plu s at t or n ey s ’ f

ees and cos t s . B ayA r ea’ s mot i on f or a new1. T he ca s e w as or i gi n al l yas s i gn ed t o t he H on . C har l es R . Wei n er . J u dge Wei n er

pas s ed aw ayon

N ov em b er9, 2005. Seni or D i s t r i ctJ u dge J ohn F u l l am adj u di cat ed t he c a s e up o n

re m a nd . 3 t r i alw as deni ed, and i t appea l ed. Pu r s u an t t o F ED . R . A PP . P. 10( e) , w e r em anded t he c a se to th e D i stri c t C o urt to d e ter mi n e w h e th e r i t af fo rd e d B a yAre a a n

o p p o rtuni tyto co n test U. S . B an

k ’s j o i nd er u nd er F ED . R . C IV . P. 25( c) . T he D i s t r i ctC our t appr ov ed a stip u l a ted sup p l e me n

t to th e re c o rd a nd c o nc lu d e d B a yAre a h a d a su ffi c i e n t o p p o rtuni ty t o o pp ose t he j oi nder. W e w i l laff i rm . 1 I I .

A. F i rs t , B ayAr ea argu es t hat t he D i st ri ct C ou rtdeni ed i t an op po rtuni t yt o co n

t est U.S . B a n k ’s j o i nd e r a s a p l a i n

ti ff. W e d i sa g re e . T h e D i stri c t C o urt h e l d tw o t e l e c onf e r e nc e s w i t h t he pa r t i e s , pe r m i t t e d BayA r e a t o f i l e a b r i e f i n op po s i t i on

t o U . S. B an k’s m oti on

t o j oi n and amen ded i t s order t o faci l i t at e B ayAr ea’s cou n t ercl ai ms a g a i ns t D V I . W e a r e s a t i s f i e d t h a t t h e D i s t r i c t C o ur t g r a nt e d B a yA r e a a s u f f i c i e nt o p p o rtuni tyto b e h ea rd o n the m att er. BayA r e a a l s o c on

t e nds t he D i s t r i c t Cou r t a b u s e d i t s di s c r e t i on i n a l l owi ng U . S. B an k to j o i n und er F ED . R . C IV . P . 2 5 ( c ) . R u le 2 5 ( c ) p r o v id e s , in r e le v a n t p a r t : I n case of an

yt ran sf er of i n t eres t , t he acti on

mayb e cont i n

u ed b yor agai n st t he or i gi n alpar t y , unl es s t he cour t upon mot i on di r ect s t he per s on

t o w hom4

t he in t er es t i s t r an s f

er r ed t o b e s ub s t i t u t ed in t he ac t i on

or j oi n ed w i t h t he o ri g i n a lp a rt y . F ED . R . C IV . P . 2 5 (c) (20 0 7 ). U . S. B an k pos s es s ed a t r an s f

er ab l e in t er es t i n t he ac t i on

b yv i r t u e of

i t s pow erof a tto rn e ya nd i ts c o n

tr a c tual o b l i g a ti o n s to D V I R e c e i v a b l e s X V . I n a d d i ti o n , D V I r em ain ed a pa r t yt o t he ac t i on and w as s ub

j ectt o B ayA r ea’ s coun t er cl ai ms . T he D i s t r i ct C our t di d not ab u s e i t s di s cr et i on w hen i t per mit t ed U . S. B an

k t o j oi n t he ac t i on

as an a d d i ti o n a lp l a i n

ti ff. B . Second, B ayA r ea a r gu es t hatt heir agr eem en t s w i t h D V I di d not s peci f yt he a p p lic a b le in

t e r e s t r a t e , a nd t h a t t h e r e f o r e itw a s t o b e c a lc u la t e d a s a s ix -p e r c e n t s im p le ra te, p ursuan

t to P e n n sy l v a ni a l a w . W h e re th e p a rti e s fa i lto p ro v i d e fo r a sp e c i fi c ra te a nd m e t h o d o f

c o m p u t a t io n , P e n

n s y lv a nia la w im p lie s a s ix -p e r c e n t r a t e c a lc u la t e d o nly up o n th e o ri g i n a lp ri nc ip a l . See 41 P A. S T AT . A NN . § 2 0 2 (W est S up p . 2 0 0 6 ), and Mu r r a y v . P r u d e n t i a lI

n s . Co . o f A m. , 1 8 A . 2 d 8 2 0 , 8 2 3 ( P a . S up e r . 1 9 4 1 ) . H e r e , t h e r e is no n e e d to i mp l yth e i n

ter e st ra te o r m e th o d o f c o mp u tati o n , b e c a u se th e p a rti e s a g re e d to t he am oun

t b or r ow ed, t he am oun

t t o b e r epai d and t he s chedu l e of r epayme n

t . T he D i s t r i ctC our t pr oper l yi n f er r ed t he appl i cab l e in

t er es t r at e and me t hod of com pu t at i on f r om the agr eed- upon

s ums . T he cour t ’ s cal cu l at i on of B ayA r ea’ s l i ab i l i t yw as not cl earlyerr on eou s.5 C . F i n a l l y , B a yAre a c l a i ms th a t th e D i stri c t C o urt c l e a rl ye rre d i n fi nd i ng th a t D V I cr edi t ed i t w i t h un earn ed f i n ance c har ges and t hatD V I di d not i mpos e penalt ychar ges again s t t hem . Schedu l e N o. 4, how ev er , es t ab l i s hed t he t er ms of t he f i n alr es t r u ctur i ng, a nd th e re fo re p ro v i d e d c o nc lu s i v e e v i d e nc e o f t h e p a rt i e s ’ i n te nd e d a g re e m e n

t. Y occa v . P i t t s bur gh St eel ers Spor t

s , I nc. , 8 5 4 A.2 d 4 2 5 , 4 3 6 - 3 7 (P a . 2 0 0 5 ). B a yAre a fa i l e d to s h o w th a t th e ya g re e d to th e te rm s o f t h e fi n a lre s tr u c turi ng b e c a u s e o f f ra u d o r m i s ta k e . I I I . T he D i s t r i ctC our t pr ov i ded B ayA r ea w i t h s u f f i ci en t oppor t uni t yt o chal l enge t he j oi nderof

U . S. B an

k, and di d not ab u s e i t s di s cr et i on i n al l ow i ng U . S. B an

k t o j oi n t he act i on . N ei t herdi d t he cour t er r i n cal cu l at i ng B ayA r ea’ s ob l i gat i on s . We w i l laf f i r m the c o urt ’s o rd e r.

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