Court Opinion

ID: 2970792
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:22:09.554326+00
Date Added: 2024-06-11T15:01:17.058484
License: Public Domain

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
                3XUVXDQW WR 6L[WK &LUFXLW 5XOH                             /HSOH\Y+DUWIRUG$FFLGHQW                  1R
        (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                                                                               DQG,QGHPQLW\&RHWDO
                    )LOH 1DPH DS

                                                                                             BBBBBBBBBBBBBBBBB
81,7('67$7(6&28572)$33($/6                                                                    &2816(/
                   )257+(6,;7+&,5&8,7                                 $5*8('  .HQQHWK / *LEVRQ :(,&. *,%621 	
                     BBBBBBBBBBBBBBBBB                                   /2:5< &X\DKRJD )DOOV 2KLR IRU $SSHOODQW  7LPRWK\
                                                                         sRKQ )LW]JHUDOG *$//$*+(5 6+$53 )8/721 	
                                                                         1250$1 &OHYHODQG 2KLR 'DYLG s )DJQLOOL '$9,6 	
 '(%%5$ /(3/(<,QGLYLGXDOO\       ;                                     <281* &OHYHODQG 2KLR IRU $SSHOOHHV  21 %5,()
 DQGDVWKH$GPLQLVWUDWUL[RI                                           .HQQHWK / *LEVRQ :(,&. *,%621 	 /2:5<
 WKH(VWDWHRIsDFN6KRZDOWHU                                          &X\DKRJD )DOOV 2KLR 6WDQOH\ 3 $URQVRQ $521621 	
                                      1R                       $662&,$7(6 $NURQ 2KLR IRU $SSHOODQW  /DUU\ &
 sU                                                                   *UHDWKRXVH$OWRQ/6WHSKHQVsU*$//$*+(56+$53
             3ODLQWLII$SSHOODQW    !                                   )8/721	1250$1&OHYHODQG2KLR'DYLGs)DJQLOOL
                                    
                                                                        '$9,6	<281*&OHYHODQG2KLRIRU$SSHOOHHV
            Y                      
                                                                                            BBBBBBBBBBBBBBBBB
 +$57)25' $&&,'(17 $1'                                                                          23,1,21
 ,1'(01,7< &203$1<DQG                                                                     BBBBBBBBBBBBBBBBB
                                    
 67 3$8/ 6853/86 /,1(6             
 ,1685$1&( &203$1<                                                       s8/,$ 60,7+ *,%%216 &LUFXLW sXGJH  3ODLQWLII
                                                                        DSSHOODQW 'HEEUD /HSOH\ EURXJKW VXLW DJDLQVW GHIHQGDQWV
         'HIHQGDQWV$SSHOOHHV                                          DSSHOOHHV +DUWIRUG $FFLGHQW DQG ,QGHPQLW\ &RPSDQ\
                                                                        +DUWIRUGDQG6W3DXO6XUSOXV/LQHV,QVXUDQFH&RPSDQ\6W
                                   1                                     3DXOVHHNLQJDGHFODUDWRU\MXGJPHQWWKDWFRPPHUFLDOOLDELOLW\
       $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW                      LQVXUDQFHSROLFLHVLVVXHGWRKHUGHFHDVHGKXVEDQGjVHPSOR\HU
        IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW$NURQ                      SURYLGHG XQLQVXUHGXQGHULQVXUHG 808,0 PRWRULVW
       1RnsDPHV*ZLQ'LVWULFWsXGJH                          FRYHUDJHIRUKLVLQMXULHVLQDPRWRUF\FOHDFFLGHQW/HSOH\
                                                                         DOVRVRXJKWPRQHWDU\UHFRYHU\XQGHUWKHSROLFLHV7KHGLVWULFW
                     $UJXHG0DUFK                             FRXUW JUDQWHG GHIHQGDQWVDSSHOOHHVj PRWLRQV IRU VXPPDU\
                                                                         MXGJPHQW RQ WKH JURXQGV WKDW /HSOH\ ZDV QRW HQWLWOHG WR
               'HFLGHGDQG)LOHGsXQH                         FRYHUDJH EHFDXVH VKH IDLOHG WR VDWLVI\ WKH SROLFLHVj
                                                                         UHTXLUHPHQWV RI SURYLGLQJ SURPSW QRWLFH RI KHU FODLP DQG
 %HIRUH0225(DQG*,%%216&LUFXLWsXGJHV&2+1                       SURWHFWLQJ WKH DSSHOOHHVj ULJKWV WR VXEURJDWLRQ  )RU WKH
               6HQLRU'LVWULFWsXGJH
                                   UHDVRQVVHWIRUWKEHORZZHDIILUPWKHMXGJPHQWRIWKHGLVWULFW
                                                                         FRXUW
    
     7KH +RQRUDEOH $YHUQ &RKQ 6HQLRU 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU
WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

                                    
1R                   /HSOH\Y+DUWIRUG$FFLGHQW                    /HSOH\Y+DUWIRUG$FFLGHQW                    1R
                                DQG,QGHPQLW\&RHWDO                      DQG,QGHPQLW\&RHWDO

                                  ,                                     SURYLVLRQV DQG FDXVHG +DUWIRUG DQG 6W 3DXO WR ORVH WKHLU
                                                                         VXEURJDWLRQULJKWV7KLVWLPHO\DSSHDOIROORZHG
  2Q6HSWHPEHU3DXOD5RVYDQLVEDFNHGKHUFDURXW
RI DQ DOOH\ IDLOHG WR \LHOG DQG KLW sDFN 6KRZDOWHU RQ KLV                                   ,,
PRWRUF\FOH  2Q 6HSWHPEHU   6KRZDOWHU GLHG RI
LQMXULHVVXVWDLQHGLQWKHDFFLGHQW6KRZDOWHUZDVVXUYLYHGE\            7KLV FRXUW UHYLHZV GH QRYR D GLVWULFW FRXUWjV JUDQW RID
KLV ZLIH 'HEEUD QRZ 'HEEUD /HSOH\ DQG WZR GDXJKWHUV           PRWLRQIRUVXPPDU\MXGJPHQW%UDLWKZDLWHY7LPNHQ&R
$IWHU6KRZDOWHUjVGHDWK/HSOH\VXHG5RVYDQLV5RVYDQLVDQG             )GWK&LU7KLVFRXUWUHYLHZVDQ
KHULQVXUHUVHWWOHGZLWK/HSOH\IRU7KH3UREDWH            RUGHUGHQ\LQJVXPPDU\MXGJPHQWRQWKHJURXQGVWKDWWKHUHLV
&RXUWRI0DULRQ&RXQW\2KLRDSSURYHGWKHVHWWOHPHQWRQ                 DJHQXLQHLVVXHRIPDWHULDOIDFWIRUDQDEXVHRIGLVFUHWLRQ
$XJXVW                                                         KRZHYHULIWKHGHQLDOLVEDVHGRQSXUHO\OHJDOJURXQGVWKHQ
                                                                         UHYLHZRIWKHGHQLDOLVGHQRYR*DUQHUY0HPSKLV3ROLFH
   $WWKHWLPHRIWKHDFFLGHQWDQGKLVGHDWK6KRZDOWHUZDV              'HSjW)GWK&LU:KHQUHYLHZLQJWKH
HPSOR\HGZLWKWKH6WDKO0HWDO&RPSDQ\DVXEVLGLDU\RIWKH               UHFRUG DOO LQIHUHQFHV DUH WR EH GUDZQ LQ WKH OLJKW PRVW
6FRWW	)HW]HU&RPSDQ\6KRZDOWHUKRZHYHUZDVQRWDFWLQJ              IDYRUDEOHWRWKHQRQPRYLQJSDUW\%UDLWKZDLWH)GDW
LQWKHVFRSHRIKLVHPSOR\PHQWDWWKHWLPHRIWKHDFFLGHQW              FLWLQJ:R\WKDOY7H[7HQQ&RUS)G
+DUWIRUGLVVXHG6FRWW	)HW]HUDFRPPHUFLDOJHQHUDOOLDELOLW\            WK&LU +RZHYHUDSDUW\RSSRVLQJDPRWLRQIRU
LQVXUDQFHSROLF\3ROLF\1R&6(+(ZLWKOLPLWVRI              VXPPDU\MXGJPHQWmPD\QRWUHVWXSRQPHUHDOOHJDWLRQVRU
OLDELOLW\RIIRUWKHSROLF\SHULRGRI'HFHPEHU             GHQLDOVRIKLVSOHDGLQJEXWPXVWVHWIRUWKVSHFLILFIDFWV
WR'HFHPEHU,QDGGLWLRQ6W3DXOLQVXUHG             VKRZLQJWKDWWKHUHLVDJHQXLQHLVVXHIRUWULDOl,GTXRWLQJ
6FRWW	)HW]HUXQGHUDQXPEUHOODH[FHVVSROLF\3ROLF\1R               $QGHUVRQY/LEHUW\/REE\,QF86
/&2ZLWKH[FHVVOLDELOLW\OLPLWVRI              7KHSDUW\RSSRVLQJWKHPRWLRQPXVWmGRPRUHWKDQVLPSO\
IRUWKHSROLF\SHULRGRI'HFHPEHUWR'HFHPEHU                VKRZWKDWWKHUHLVVRPHPHWDSK\VLFDOGRXEWDVWRWKHPDWHULDO
                                                                   IDFWVl0DWVXVKLWD(OHF,QGXV&RY=HQLWK5DGLR&RUS
                                                                         86m,IDIWHUUHYLHZLQJWKHUHFRUGDVD
  1HLWKHU +DUWIRUG QRU 6W 3DXO UHFHLYHG QRWLFH RI WKH           ZKROHDUDWLRQDOIDFWILQGHUFRXOGQRWILQGIRUWKHQRQPRYLQJ
DFFLGHQWRUWKHVXEVHTXHQWFODLPDJDLQVWDQGVHWWOHPHQWZLWK             SDUW\VXPPDU\MXGJPHQWLVDSSURSULDWHl%UDLWKZDLWH
5RVYDQLVSULRUWR+DUWIRUGILUVWUHFHLYHGQRWLFHRIWKH           )GDWTXRWLQJ(UFHJRYLFKY*RRG\HDU7LUH	5XEEHU
FODLP RQ 0DUFK   WKH GDWH /HSOH\ ILOHG WKLV DFWLRQ     &R)GWK&LUFLWDWLRQRPLWWHG
PRUHWKDQIRXUWHHQ\HDUVDIWHUWKHDFFLGHQW
                                                                            2Q DSSHDO /HSOH\ DUJXHV WKDW WKH GLVWULFW FRXUW HUUHG LQ
  2Q6HSWHPEHUGHIHQGDQWVDSSHOOHHVILOHGPRWLRQV               ILQGLQJWKDWWKHQRWLFHDQGVXEURJDWLRQSURYLVLRQVDSSO\
IRUVXPPDU\MXGJPHQW2QWKDWVDPHGDWH/HSOH\PRYHGIRU                HYHQWKRXJK808,0FRYHUDJHZDVLPSRVHGDVDPDWWHURI
SDUWLDOVXPPDU\MXGJPHQWDJDLQVWERWK+DUWIRUGDQG6W3DXO             ODZDQG/HSOH\LVQRWHQWLWOHGWRFRYHUDJHEHFDXVHVKH
7KH GLVWULFW FRXUW JUDQWHG VXPPDU\ MXGJPHQW LQ IDYRU RI          IDLOHGWRFRPSO\ZLWKWKHQRWLFHDQGVXEURJDWLRQSURYLVLRQV
GHIHQGDQWVDSSHOOHHVDQGGHQLHG/HSOH\jVPRWLRQVIRUSDUWLDO             m>)@RUWKHSXUSRVHRIGHWHUPLQLQJWKHVFRSHRIFRYHUDJHRIDQ
VXPPDU\MXGJPHQWRQ1RYHPEHU7KHGLVWULFWFRXUW                XQGHULQVXUHGPRWRULVWFODLPWKHVWDWXWRU\ODZLQHIIHFWDWWKH
IRXQGWKDW/HSOH\GLGQRWFRPSO\ZLWKWKHSROLFLHVjQRWLFH               WLPH RI HQWHULQJ LQWR D FRQWUDFW IRU DXWRPRELOH OLDELOLW\
                                                                         LQVXUDQFH FRQWUROV WKH ULJKWV DQG GXWLHV RI WKH FRQWUDFWLQJ
1R                      /HSOH\Y+DUWIRUG$FFLGHQW                         /HSOH\Y+DUWIRUG$FFLGHQW                     1R
                                   DQG,QGHPQLW\&RHWDO                           DQG,QGHPQLW\&RHWDO

SDUWLHVl5RVVY)DUPHUV,QV*URXSRI&RV1(G                      WKDWWKHSROLFLHVDWLVVXHIDOOZLWKLQWKHPHDQLQJRIDXWRPRELOH
2KLR2KLR5HYLVHG&RGHZDV                         OLDELOLW\RUPRWRUYHKLFOHOLDELOLW\SROLFLHVXQGHU2KLRODZ
DPHQGHGE\+%ZKLFKWRRNHIIHFW6HSWHPEHU                      6HH 6HODQGHU Y (ULH ,QV *URXS  1(G  
%HFDXVHWKHUHOHYDQWSROLF\SHULRGVZHUH'HFHPEHU                      2KLRQRWLQJWKDWm>Z@KHUHPRWRUYHKLFOHFRYHUDJHLV
WKURXJK'HFHPEHUWKHIRUPHU2KLR5HYLVHG&RGH                         SURYLGHG HYHQ LQ OLPLWHG IRUP XQLQVXUHGXQGHULQVXUHG
DSSOLHV7KLVYHUVLRQRISURYLGHVWKDWDQ                 FRYHUDJHPXVWEHSURYLGHGl
LQVXUHUPXVWRIIHU808,0FRYHUDJHLQDQDPRXQWHTXLYDOHQW
WRWKHDXWRPRELOHOLDELOLW\FRYHUDJHZKHQHYHUDQDXWRPRELOH                                                      $
OLDELOLW\ RU PRWRU YHKLFOH OLDELOLW\ SROLF\ LV RIIHUHG  m,I
808,0 FRYHUDJH LV QRW RIIHUHG LW EHFRPHV SDUW RI WKH                   /HSOH\ILUVWDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQILQGLQJ
SROLF\E\RSHUDWLRQRIODZl6HH'DYLGVRQY0RWRULVWV0XW                   WKDW VKH ZDV ERXQG E\ WKH FRQGLWLRQV FRQWDLQHG LQ WKH
,QV&R1(G2KLR,WLVXQGLVSXWHG                   +DUWIRUGDQG6W3DXOSROLFLHVEHFDXVHWKH808,0FRYHUDJH
                                                                               XQGHU WKRVH SROLFLHV LV LPSRVHG DV D PDWWHU RI ODZ
                                                                               6SHFLILFDOO\/HSOH\FRQWHQGVWKDWDOOFRQGLWLRQVLQFOXGLQJWKH
    
     7KH VWDWXWH VWDWHV LQ SHUWLQHQW SDUW
                                                                               QRWLFHDQGVXEURJDWLRQSURYLVLRQVFRQWDLQHGLQWKH+DUWIRUG
         $ 1R DXWRPRELOH OLDELOLW\ RU PRWRU YHKLFOH OLDELOLW\ SROLF\         DQG 6W 3DXO SROLFLHV GR QRW DSSO\ WR 808,0 PRWRULVW
    RI LQVXUDQFH LQVXULQJ DJDLQVW ORVV UHVXOWLQJ IURP OLDELOLW\                FRYHUDJHWKDWDULVHVWKURXJKRSHUDWLRQRIODZ5HO\LQJLQSDUW
    LPSRVHG E\ ODZ IRU ERGLO\ LQMXU\ RU GHDWK VXIIHUHG E\ DQ\ SHUVRQ           RQ6FRWW3RQW]HUY/LEHUW\0XW)LUH,QV&R1(G
    DULVLQJ RXW RI WKH RZQHUVKLS PDLQWHQDQFH RU XVH RI D PRWRU               2KLR/HSOH\FODLPVWKDWWKHLQWHQWRIWKHSDUWLHV
    YHKLFOH VKDOO EH GHOLYHUHG RU LVVXHG IRU GHOLYHU\ LQ WKLV VWDWH ZLWK
    UHVSHFW WR DQ\ PRWRU YHKLFOH UHJLVWHUHG RU SULQFLSDOO\ JDUDJHG LQ
                                                                               H[SUHVVHGLQWKHPRUHOLPLWHGFRYHUDJHSURYLGHGLQWKHSROLF\
    WKLV VWDWH XQOHVV ERWK RI WKH IROORZLQJ FRYHUDJHV DUH RIIHUHG WR           FDQQRW EH H[WUDSRODWHG WR 808,0 FRYHUDJH LPSRVHG E\
    SHUVRQV LQVXUHG XQGHU WKH SROLF\ IRU ORVV GXH WR ERGLO\ LQMXU\ RU          RSHUDWLRQRIODZ,Q6FRWW3RQW]HUWKH2KLR6XSUHPH&RXUW
    GHDWK VXIIHUHG E\ VXFK LQVXUHGV                                           DGGUHVVHG ZKHWKHU DQ H[FOXVLRQ FRXOG EH DSSOLHG WR OLPLW
          8QLQVXUHG PRWRULVW FRYHUDJH ZKLFK VKDOO EH LQ DQ                 XQGHULQVXUHG PRWRULVW FRYHUDJH WKDW DURVH E\ RSHUDWLRQ RI
    DPRXQW RI FRYHUDJH HTXLYDOHQW WR WKH DXWRPRELOH OLDELOLW\ RU
    PRWRU YHKLFOH OLDELOLW\ FRYHUDJH DQG VKDOO SURYLGH IRU ERGLO\
                                                                               ODZ&LWLQJ'HPHWU\Y.LP1(G2KLR
    LQMXU\ RU GHDWK XQGHU SURYLVLRQV DSSURYHG E\ WKH VXSHULQWHQGHQW
                                                                               WKHFRXUWFRQFOXGHGWKDWWKHH[FOXVLRQZKLFKZDVLQWHQGHGWR
    RI LQVXUDQFH IRU WKH SURWHFWLRQ RI SHUVRQV LQVXUHG WKHUHXQGHU             DSSO\VROHO\WROLDELOLW\FRYHUDJHGLGQRWDSSO\WRWKHLPSOLHG
    ZKR DUH OHJDOO\ HQWLWOHG WR UHFRYHU GDPDJHV IURP RZQHUV RU                 XQGHULQVXUHGPRWRULVWFRYHUDJH6FRWW3RQW]HU1(G
    RSHUDWRUV RI XQLQVXUHG PRWRU YHKLFOHV EHFDXVH RI ERGLO\ LQMXU\            DW
    VLFNQHVV RU GLVHDVH LQFOXGLQJ GHDWK VXIIHUHG E\ D SHUVRQ XQGHU
    WKH SROLF\
         

          8QGHULQVXUHG PRWRULVW FRYHUDJH ZKLFK VKDOO EH LQ DQ
                                                                                   
    DPRXQW RI FRYHUDJH HTXLYDOHQW WR WKH DXWRPRELOH OLDELOLW\ RU                    +DUWIRUG FRQWHQGV WKDW EHFDXVH WKH +DUWIRUG SROLF\ PDNHV H[SUHVV
    PRWRU YHKLFOH OLDELOLW\ FRYHUDJH DQG VKDOO SURYLGH SURWHFWLRQ IRU          SURYLVLRQ IRU 808,0 FRYHUDJH WKH 808,0 FRYHUDJH LWVHOI LV QRW
    DQ LQVXUHG DJDLQVW ORVV IRU ERGLO\ LQMXU\ VLFNQHVV RU GLVHDVH           LPSOLHG E\ RSHUDWLRQ RI ODZ RQO\ WKH OLPLW RI VXFK FRYHUDJH LV LPSRVHG
    LQFOXGLQJ GHDWK VXIIHUHG E\ DQ\ SHUVRQ LQVXUHG XQGHU WKH SROLF\          E\ RSHUDWLRQ RI ODZ 6W 3DXO GRHV QRW GLVSXWH WKDW 808,0 FRYHUDJH LV
    ZKHUH WKH LQVXUHG XQGHU DOO ERGLO\ LQMXU\ OLDELOLW\ ERQGV DQG              LPSRVHG E\ RSHUDWLRQ RI ODZ ZLWK UHJDUG WR WKH 6W 3DXO SROLF\ %HFDXVH
    LQVXUDQFH SROLFLHV FRYHULQJ SHUVRQV OLDEOH WR WKH LQVXUHG DUH OHVV         ZH ILQG WKDW WKH FRQGLWLRQV DW LVVXH DUH DSSOLFDEOH HYHQ LI 808,0
    WKDQ WKH OLPLWV IRU WKH LQVXUHGjV XQLQVXUHG PRWRULVW FRYHUDJH             FRYHUDJH LV LPSOLHG E\ RSHUDWLRQ RI ODZ ZH QHHG QRW UHDFK +DUWIRUGjV
                                                                               DUJXPHQW WKDW WKH 808,0 FRYHUDJH LQ LWV SROLF\ LV QRW LPSRVHG E\
2KLR 5HY &RGH                                                        RSHUDWLRQ RI ODZ
1R                  /HSOH\Y+DUWIRUG$FFLGHQW                    /HSOH\Y+DUWIRUG$FFLGHQW                      1R
                               DQG,QGHPQLW\&RHWDO                      DQG,QGHPQLW\&RHWDO

   8QOLNH6FRWW3RQW]HUZKLFKGHDOWZLWKDOLDELOLW\H[FOXVLRQ     LVVXHRIFRQGLWLRQVSUHFHGHQWLQUHODWLRQWRWKH2KLR6XSUHPH
WKHLVVXHLQWKHLQVWDQWFDVHLVZKHWKHUDFRQGLWLRQSUHFHGHQW       &RXUWjVRSLQLRQLQ'XULDN$FFRUGLQJWRWKH+HLQH\FRXUW
LV DSSOLFDEOH WR 808,0 FRYHUDJH LPSOLHG E\ ODZ  $V
H[SODLQHG E\ WKH GLVWULFW FRXUW DQG LQ DQ 2KLR &RXUW RI           7KHEURDGDSSOLFDWLRQRIFRQGLWLRQVSUHFHGHQWWRDOO
$SSHDOVj GHFLVLRQ WKLV LV DQ LPSRUWDQW GLVWLQFWLRQ  6HH        FRYHUDJHVSURYLGHGXQGHUDQLQVXUDQFHSROLF\LQFOXGLQJ
/XFNHQELOOY0LGZHVWHUQ,QGHP&R1(G                FRYHUDJHVLPSOLHGE\ODZLVGHPRQVWUDWHGE\'XULDNY
2KLR&W$SSm/RJLFDOO\SDUWLHVWRDQLQVXUDQFH            *OREH $PHULFDQ &DV &R  1(G  
SROLF\ FDQ QHYHU QHJRWLDWH H[FOXVLRQV WR XQGHULQVXUHG              RYHUUXOHGRQRWKHUJURXQGVE\0LOOHUY3URJUHVVLYH&DV
PRWRULVW FRYHUDJH WKDW WKH\ QHYHU HQYLVLRQHG ZRXOG H[LVW         ,QV&R1(G,Q'XULDNWKHSODLQWLII
+RZHYHU WKH SDUWLHV WR DQ LQVXUDQFH SROLF\ FDQ QHJRWLDWH        ZDV FRYHUHG XQGHU WZR LQVXUDQFH SROLFLHVo D SULPDU\
FRQGLWLRQV SUHFHGHQW WKDW ZRXOG DSSO\ WR DQ\ DQG DOO             SROLF\ZKLFKLQFOXGHGXQLQVXUHGPRWRULVWFRYHUDJHDQG
FRYHUDJHV SURYLGHG XQGHU WKH SROLF\l  +HLQH\ Y 7KH             DQ H[FHVV SROLF\ ZKLFK GLG QRW LQFOXGH XQLQVXUHG
+DUWIRUG1R$3:/DW
2KLR                   PRWRULVW FRYHUDJH  7KH SULPDU\ SROLF\ UHTXLUHG DOO
&W$SSsXO\7KHUHIRUHVXFKJHQHUDOFRQGLWLRQV             DFWLRQV DJDLQVW WKH LQVXUHU EH FRPPHQFHG ZLWKLQ RQH
DSSO\ WR 808,0 FRYHUDJH GHVSLWH WKH IDFW WKDW VXFK              \HDU7KHH[FHVVSROLF\VWDWHGWKDWFRYHUDJHXQGHUWKDW
FRYHUDJHDULVHVDVDPDWWHURIODZ,G                                SROLF\ ZDV FRQGLWLRQHG XSRQ FRPSOLDQFH ZLWK WKH
                                                                         SULPDU\ SROLF\  7KH SODLQWLII IDLOHG WR FRPPHQFH KHU
  /HSOH\DUJXHVWKDWWKHGLVWLQFWLRQEHWZHHQH[FOXVLRQVDQG              DFWLRQDJDLQVWWKHSULPDU\LQVXUHUIRUXQLQVXUHGPRWRULVW
FRQGLWLRQVSUHFHGHQWLVDGLVWLQFWLRQZLWKRXWDGLIIHUHQFH$V          FRYHUDJH ZLWKLQ WKH RQH\HDU SHULRG UHTXLUHG E\ WKH
WKHGLVWULFWFRXUWQRWHGKRZHYHUWKH2KLR6XSUHPH&RXUWjV              SULPDU\SROLF\$OWKRXJKXQLQVXUHGPRWRULVWFRYHUDJH
GHFLVLRQ LQ 'XULDN Y *OREH $PHULFDQ &DVXDOW\ ,QVXUDQFH           ZDVUHDGLQWRWKHH[FHVVSROLF\E\RSHUDWLRQRIODZWKH
&R 1(G2KLRUHYjGRQRWKHUJURXQGV                 SODLQWLIIZDVSUHFOXGHGIURPUHFRYHULQJXQGHUWKHH[FHVV
0LOOHU Y 3URJUHVVLYH &DVXDOW\ ,QVXUDQFH &R  1(G          SROLF\EHFDXVHWKHSODLQWLIIIDLOHGWRVDWLVI\WKHJHQHUDO
2KLRVXSSRUWVWKHYDOLGLW\RIWKLVGLVWLQFWLRQ,Q          FRQGLWLRQSUHFHGHQWRIWKDWSROLF\oFRPSOLDQFHZLWKWKH
'XULDNWKH2KLR6XSUHPH&RXUWIRXQGWKDWZKLOHWKHH[FHVV               WHUPVRIWKHSULPDU\SROLF\
SROLF\ LQFOXGHG XQLQVXUHG PRWRULVW FRYHUDJH LPSRVHG DV D
PDWWHU RI ODZ WKH LQVXUHG ZDV UHTXLUHG WR FRPSO\ ZLWK D   +HLQH\:/DW

FRQGLWLRQSUHFHGHQWWRVXFKFRYHUDJHm>7@KHSURYLVRLQWKH
SROLF\SUHGLFDWLQJUHFRYHU\XSRQFRPSOLDQFHZLWKWKHSULPDU\           $OWKRXJKWKHFDVHODZLVQRWHQWLUHO\FRQVLVWHQWWKHZHLJKW
LQVXUDQFHFRYHUDJHLVHIIHFWLYHWRSUHFOXGHUHFRYHU\IURPWKH        RI DXWKRULW\ IURP WKH DSSHOODWH FRXUWV LQ 2KLR KROGV WKDW
>H[FHVV@SROLF\HYHQLIZHLQVHUWXQLQVXUHGPRWRULVWFRYHUDJH        FRQGLWLRQV SUHFHGHQW DSSO\  HYHQ ZKHQ 808,0 FRYHUDJH
LQWRWKHSROLF\DVDPDWWHURIODZl,GDW                   DULVHVE\RSHUDWLRQRIODZ)RUH[DPSOHLQ&KDPEHUOLQY

  /HSOH\FODLPVWKDWUHOLDQFHRQ'XULDNLVPLVSODFHGEHFDXVH
WKHEDVLVIRU'XULDNjVKROGLQJKDVEHHQmGHVWUR\HGlE\ODWHU              
                                                                           6HH /XFNHQELOO  1(G DW  ILQGLQJ WKDW mZKHQ 808,0
2KLR6XSUHPH&RXUWRSLQLRQV+RZHYHULQ+HLQH\DQ2KLR             FRYHUDJH LV LPSRVHG E\ RSHUDWLRQ RI ODZ WKH LQVXUHG PXVW VDWLVI\ WKH
DSSHDOVFRXUWGLVDJUHHGDVLVHYLGHQWE\LWVUHFHQWUHOLDQFHRQ      GXWLHV LPSRVHG RQ KLP E\ WKH SROLF\ LQ RUGHU WR REWDLQ WKH EHQHILWV RI WKH
'XULDNLQILQGLQJWKDWFRQGLWLRQVSUHFHGHQWDSSO\WRFRYHUDJH        FRQFRPLWDQW GXW\ WR SURYLGH FRYHUDJH WKDW WKH ODZ LPSRVHV RQ WKH
LPSRVHGE\RSHUDWLRQRIODZ7KH+HLQH\FRXUWGLVFXVVHGWKH         LQVXUHUl :LOOLDPV Y $OOVWDWH ,QGHP &R 1R   :/ 
                                                                     DW 
 2KLR &W $SS )HE   QRWLQJ WKDW mFRQGLWLRQV SUHFHGHQW WR
1R                       /HSOH\Y+DUWIRUG$FFLGHQW                     /HSOH\Y+DUWIRUG$FFLGHQW                         1R
                                    DQG,QGHPQLW\&RHWDO                        DQG,QGHPQLW\&RHWDO

:LOOLDPV1R6:/2KLR&W$SS                       )HUUDQGRY$XWR2ZQHUV0XWXDO,QVXUDQFH&R1(G
1RYWKHFRXUWIRXQGWKDWmWKHIDFWWKDW808,0                     2KLR  WKHUHE\ LPSOLFLWO\ UHFRJQL]LQJ WKDW WKH
FRYHUDJH DULVHV E\ RSHUDWLRQ RI ODZ GRHV QRW UHOLHYH WKH             DSSHOODWHFRXUWZDVFRUUHFWLQILQGLQJWKDWWKHQRWLFHSURYLVLRQ
LQVXUHGRIKLVRUKHUREOLJDWLRQXQGHUWKHFRQWUDFWWRFRPSO\                 ZDV DSSOLFDEOH GHVSLWH EHLQJ LPSRVHG DV D PDWWHU RI ODZ
ZLWK WKH QRWLFH DQG VXEURJDWLRQ SURYLVLRQVl  ,G DW 
             &LQFLQQDWL ,QV &R Y (VWDWH RI 0F&ODLQ 1R 
6LPLODUO\LQ.QR[Y7UDYHOHUV,QVXUDQFH&R1R$3                   :/DW
2KLR0D\$FFRUGLQJO\
:/2KLR&W$SS'HFWKHFRXUW                     LIDQLQVXUDQFHSROLF\VSHFLILHVJHQHUDOFRQGLWLRQVSUHFHGHQW
KHOGWKDWFRQGLWLRQVSUHFHGHQWDSSO\WR8,0FRYHUDJHDULVLQJ                  WKDW PXVW EH VDWLVILHG EHIRUH DQ LQVXUHG LV HQWLWOHG WR DQ\
DVDPDWWHURIODZ,GDW
                                             FRYHUDJH WKHQ DQ LQVXUHGjV IDLOXUH WR FRPSO\ ZLWK WKRVH
                                                                              FRQGLWLRQV SUHFHGHQW SUHFOXGHV UHFRYHU\ XQGHU 808,0
  )LQDOO\LQ&LQFLQQDWL,QV&RY0F&ODLQ1R&$                    FRYHUDJHWKDWDULVHVE\RSHUDWLRQRIODZ
:/2KLR&W$SS0DUWKHFRXUW
DSSOLHGWKHQRWLFHDQGVXEURJDWLRQ SURYLVLRQVHYHQWKRXJK                      %DVHGRQWKHDERYHDXWKRULW\ZHILQGWKDWWKHm>Q@RWLFHDQG
FRYHUDJHZDVLPSOLHGE\RSHUDWLRQRIODZ2QDSSHDOWKH                     VXEURJDWLRQFODXVHVDUHYDOLGDQGHQIRUFHDEOHSUHFRQGLWLRQV
6XSUHPH&RXUWRI2KLRUHPDQGHGWKHFDVHWRWKHWULDOFRXUW                    WR DQ LQVXUHGjV GXW\ WR SURYLGH XQGHULQVXUHG PRWRULVW
mWR FRQVLGHU ZKHWKHU WKH LQVXUHU ZDV SUHMXGLFHGl XQGHU                 FRYHUDJHHYHQZKHUH808,0FRYHUDJHDULVHVDVDPDWWHURI
                                                                              ODZl&KDPEHUOLQ:/DW
7KHUHIRUHWKH
                                                                              IDFWWKDW/HSOH\jV808,0FRYHUDJHXQGHUWKHSROLFLHVDURVH
FRYHUDJH FOHDUO\ GR DSSO\ WR LQVXUDQFH LPSRVHG E\ RSHUDWLRQ RI ODZl
                                                                              E\RSHUDWLRQRIODZGRHVQRWUHOLHYHKHURIWKHREOLJDWLRQWR
/LQWQHU Y 0LGZHVWHUQ ,QGHP &R 1R &$  :/
                                                                              FRPSO\ZLWKWKHQRWLFHDQGVXEURJDWLRQSURYLVLRQVVHWIRUWK
 DW 
 2KLR &W $SS 2FW   ILQGLQJ WKDW FRQGLWLRQV        LQWKH+DUWIRUGDQG6W3DXOSROLFLHV
SUHFHGHQW RI SURPSW QRWLFH DQG SUHVHUYDWLRQ RI VXEURJDWLRQ ULJKWV DSSO\
HYHQ ZKHQ FRYHUDJH LV LPSRVHG DV D PDWWHU RI ODZ :RRGULFK Y )HG ,QV                                          %
&R 1R &$  :/  DW 
 2KLR &W $SS 6HSW 
 ILQGLQJ WKDW LPSRVLWLRQ RI 808,0 FRYHUDJH E\ RSHUDWLRQ RI ODZ             /HSOH\ QH[W DUJXHV WKDW WKH GLVWULFW FRXUW HUUHG LQ
GRHV QRW UHOLHYH LQVXUHG RI GXW\ WR FRPSO\ ZLWK QRWLFH RU FRQVHQW
SURYLVLRQV LQ D OLDELOLW\ SROLF\ +RXVHU Y 0RWRULVWV ,QV &R 1R 
                                                                              FRQFOXGLQJWKDWVKHLVEDUUHGIURPUHFRYHULQJ8,0EHQHILWV
  :/  DW 
 2KLR &W $SS sXQH   ILQGLQJ WKDW         EHFDXVH VKH IDLOHG WR VDWLVI\ WKH SROLFLHVj UHTXLUHPHQWV RI
ZKHUH XQGHULQVXUHG PRWRULVW FRYHUDJH ZDV LPSOLHG E\ RSHUDWLRQ RI ODZ         SURYLGLQJ SURPSW QRWLFH DQG RI SURWHFWLQJ GHIHQGDQWV
VHWWOHPHQW RI FODLP ZLWKRXW QRWLI\LQJ LQVXUHU SUHFOXGHG UHFRYHU\ *UHHQ      DSSHOOHHVjVXEURJDWLRQULJKWV%RWKWKH+DUWIRUGDQG6W3DXO
Y &LQFLQQDWL ,QV &R 1R +  :/  DW 
 2KLR &W         SROLFLHVSURYLGHWKDWDQLQVXUHGLVEDUUHGIURPEULQJLQJDQ
$SS 'HF   m>H@YHQ WKRXJK RSHUDWLRQ RI  6FRWW3RQW]HU SULQFLSOHV     DFWLRQDJDLQVWWKHLQVXUHULIWKHLQVXUHGIDLOVWRFRPSO\ZLWK
UHVXOW LQ 8,0 FRYHUDJH IRU WKLV FODLP DSSHOODQWjV IDLOXUH WR PHHW SROLF\     WKHLQVXUHGjVREOLJDWLRQVXQGHUWKHFRQWUDFW6SHFLILFDOO\WKH
SUHFRQGLWLRQV XOWLPDWHO\ GHQ\ KHU UHFRYHU\l %XW VHH 5RKU Y &LQFLQQDWL
,QV &R 1R &$  :/  DW 
 2KLR &W $SS 0DU          +DUWIRUG SROLF\ SURYLGHV  m1R DFWLRQ VKDOO OLH DJDLQVW WKH
  ILQGLQJ WKDW FRQGLWLRQV DQG GXWLHV LPSRVHG E\ LQVXUDQFH SROLF\     FRPSDQ\XQOHVVDVDFRQGLWLRQSUHFHGHQWWKHUHWRWKHUHVKDOO
GLG QRW DSSO\ WR 808,0 FRYHUDJH ZKLFK DURVH E\ RSHUDWLRQ RI ODZ           KDYHEHHQIXOOFRPSOLDQFHZLWKDOORIWKHWHUPVRIWKLVSROLF\
3RXOWRQ Y $P (FRQ ,QV &R 1RV &$ 	 &$
                                                                                 l  7KH 6W 3DXO SROLF\ VWDWHV WKDW m1R DFWLRQ VKDOO OLH
 :/  DW 
 2KLR &W $SS 'HF   IROORZLQJ              DJDLQVWWKH&RPSDQ\ZLWKUHVSHFWWRDQ\RFFXUUHQFHXQOHVV
5RKU DQG %XUNKDUW Y &1$ ,QV &R 1R &$  :/
 2KLR &W $SS )HE          VXSHUFHGHG E\ VWDWXWH RQ RWKHU   DVDFRQGLWLRQSUHFHGHQWWKHUHWRWKH,QVXUHGVKDOOKDYHIXOO\
JURXQGV LQ $OOHQ   Y 7UDQVS ,QV &R    :/  2KLR &W $SS     FRPSOLHGZLWKDOOWKHWHUPVRIWKLV3ROLF\l
1RY  
1R                  /HSOH\Y+DUWIRUG$FFLGHQW              /HSOH\Y+DUWIRUG$FFLGHQW                   1R
                               DQG,QGHPQLW\&RHWDO                  DQG,QGHPQLW\&RHWDO

  :LWKUHJDUGWRQRWLFHWKH+DUWIRUG3ROLF\SURYLGHV               HYHU\WKLQJQHFHVVDU\WRVHFXUHWKHVHULJKWVDQGPXVWGR
                                                                      QRWKLQJWKDWZRXOGMHRSDUGL]HWKHP
  ,QWKHHYHQWRIDQRFFXUUHQFHZULWWHQQRWLFHFRQWDLQLQJ
  WKHSDUWLFXODUVVXIILFLHQWWRLGHQWLI\WKHLQVXUHGDQGDOVR       7KH6W3DXOSROLF\SURYLGHV
  UHDVRQDEO\REWDLQDEOHLQIRUPDWLRQZLWKUHVSHFWWRWLPH
  SODFH DQG FLUFXPVWDQFHV WKHUHRI DQG WKH QDPHV DQG           7KH&RPSDQ\VKDOOEHVXEURJDWHGWRWKHH[WHQWRIDQ\
  DGGUHVVRIWKHLQMXUHGDQGRIDYDLODEOHZLWQHVVHVVKDOOEH         SD\PHQWKHUHXQGHUWRDOOWKH,QVXUHGjVULJKWVRIUHFRYHU\
  JLYHQE\RUIRUWKHLQVXUHGWRWKH&RPSDQ\RUDQ\RILWV            WKHUHIRUDQGWKH,QVXUHGVKDOOGRQRWKLQJDIWHUORVVWR
  DXWKRUL]HGDJHQWVDVVRRQDVSUDFWLFDEOHDIWHUNQRZOHGJH            SUHMXGLFHVXFKULJKWVDQGVKDOOGRHYHU\WKLQJQHFHVVDU\
  WKHUHRI LV UHFHLYHG DW WKH &RUSRUDWH +HDGTXDUWHUV DV         WRVHFXUHVXFKULJKWV
  VKRZQRQWKHGHFODUDWLRQVSDJHRIWKLVSROLF\
                                                                      5HFHQWO\WKH2KLR6XSUHPH&RXUWVSHFLILFDOO\GLVFXVVHG
6LPLODUO\WKH6W3DXOSROLF\VWDWHV                              WKHFLUFXPVWDQFHVXQGHUZKLFKDQLQVXUHUVKRXOGEHUHOLHYHG
                                                                    RIWKHREOLJDWLRQWRSURYLGHFRYHUDJHZKHQDQLQVXUHGYLRODWHV
  ,QWKHHYHQW RI DQRFFXUUHQFHZKLFKDSSHDUVOLNHO\WR          WKHSURPSWQRWLFHDQGVXEURJDWLRQSURYLVLRQVLQSROLFLHVRI
  LQYROYH WKLV 3ROLF\ ZULWWHQ QRWLFH FRQWDLQLQJ WKH          LQVXUDQFH6HH)HUUDQGR1(GDW3XUVXDQWWR
  SDUWLFXODUV VXIILFLHQW WR LGHQWLI\ WKH ,QVXUHG DQG DOVR    )HUUDQGRm>Z@KHQDQLQVXUHUjVGHQLDORI8,0FRYHUDJHLV
  UHDVRQDEO\REWDLQDEOHLQIRUPDWLRQZLWKUHVSHFWWRWLPH           SUHPLVHGRQWKHLQVXUHGjVEUHDFKRIDSURPSWQRWLFHSURYLVLRQ
  SODFH DQG FLUFXPVWDQFHV WKHUHRI DQG WKH QDPHV DQG         LQ D SROLF\ RI LQVXUDQFH WKH LQVXUHU LV UHOLHYHG RI WKH
  DGGUHVVRIWKHLQMXUHGDQGRIDYDLODEOHZLWQHVVHVVKDOOEH       REOLJDWLRQ WR SURYLGH FRYHUDJH LI LW LV SUHMXGLFHG E\ WKH
  JLYHQE\RUIRUWKH,QVXUHGWRWKH&RPSDQ\RUDQ\RILWV          LQVXUHGjVXQUHDVRQDEOHGHOD\LQJLYLQJQRWLFHl,GDW
  DXWKRUL]HGDJHQWVDVVRRQDVSUDFWLFDEOH                       m$Q LQVXUHGjV XQUHDVRQDEOH GHOD\ LQ JLYLQJ QRWLFH LV
                                                                    SUHVXPHG SUHMXGLFLDO WR WKH LQVXUHU DEVHQW HYLGHQFH WR WKH
 %RWK SROLFLHV DOVR FRQWDLQ VXEURJDWLRQ SURYLVLRQV  7KH     FRQWUDU\l,GDW)XUWKHUPRUHmZKHQDQLQVXUHUjVGHQLDO
+DUWIRUGSROLF\SURYLGHV                                           RI 8,0 FRYHUDJH LV SUHPLVHG RQ WKH LQVXUHGjV EUHDFK RI D
                                                                    FRQVHQWWRVHWWOHRURWKHUVXEURJDWLRQUHODWHGSURYLVLRQLQD
  ,Q WKH HYHQW RI DQ\ SD\PHQW XQGHU WKLV SROLF\ WKH       SROLF\RILQVXUDQFHWKHLQVXUHULVUHOLHYHGRIWKHREOLJDWLRQWR
  FRPSDQ\VKDOOEHVXEURJDWHGWRDOOWKHLQVXUHGjVULJKWVRI        SURYLGHFRYHUDJHLILWLVSUHMXGLFHGE\WKHIDLOXUHWRSURWHFWLWV
  UHFRYHU\WKHUHRIDJDLQVWDQ\SHUVRQRURUJDQL]DWLRQDQG           VXEURJDWLRQ ULJKWVl  ,G  m$Q LQVXUHGjV EUHDFK RI VXFK D
  WKH LQVXUHG VKDOO H[HFXWH DQG GHOLYHU LQVWUXPHQWV DQG      SURYLVLRQ LV SUHVXPHG SUHMXGLFLDO WR WKH LQVXUHU DEVHQW
  SDSHUVDQGGRZKDWHYHUHOVHLVQHFHVVDU\WRVHFXUHVXFK           HYLGHQFHWRWKHFRQWUDU\l,G
  ULJKWV  7KH LQVXUHG VKDOO GR QRWKLQJ DIWHU ORVV WR
  SUHMXGLFHVXFKULJKWV                                              )HUUDQGR VSHFLILHV D WZRVWHS DQDO\VLV LQ DSSO\LQJ LWV
                                                                    KROGLQJV,QODWHQRWLFHFDVHVWKHFRXUWPXVWILUVWFRQVLGHU
7KH+DUWIRUGSROLF\IXUWKHUVWDWHV                                 ZKHWKHUWKHmLQVXUHUUHFHLYHGQRWLFHµZLWKLQDUHDVRQDEOHWLPH
                                                                    LQOLJKWRIDOORIWKHVXUURXQGLQJIDFWVDQGFLUFXPVWDQFHVjl
  ,IZHPDNHDQ\SD\PHQWZHDUHHQWLWOHGWRUHFRYHUZKDW           ,G DW  TXRWLQJ 5XE\ Y 0LGZHVWHUQ ,QGHPQ &R 
  ZHSDLGIURPRWKHUSDUWLHV$Q\SHUVRQWRRUIRUZKRP            1(G  2KLR   ,I WKH LQVXUHU UHFHLYHG QRWLFH
  ZHPDNHSD\PHQWPXVWWUDQVIHUWRXVKLVRUKHUULJKWVRI          ZLWKLQDUHDVRQDEOHWLPHWKHUHZDVQREUHDFKDQGWKH8,0
  UHFRYHU\DJDLQVWDQ\RWKHUSDUW\7KLVSHUVRQPXVWGR
1R                  /HSOH\Y+DUWIRUG$FFLGHQW                /HSOH\Y+DUWIRUG$FFLGHQW                     1R
                               DQG,QGHPQLW\&RHWDO                    DQG,QGHPQLW\&RHWDO

FRYHUDJHLVQRWSUHFOXGHG,G,IWKHLQVXUHUGLGQRWUHFHLYH       DW
0RUHRYHUWKH6FRWW3RQW]HUGHFLVLRQZDV
UHDVRQDEOHQRWLFHWKHQWKHFRXUWPXVWQH[WGHWHUPLQHZKHWKHU         LVVXHGRQsXQHDQG/HSOH\GLGQRWSURYLGHQRWLFH
WKHLQVXUHUZDVSUHMXGLFHG,G8QUHDVRQDEOHQRWLFHFUHDWHV         XQWLO0DUFK
DSUHVXPSWLRQRISUHMXGLFHDQGWKHLQVXUHGEHDUVWKHEXUGHQ
RISUHVHQWLQJHYLGHQFHWRWKHFRQWUDU\,G                             /HSOH\IXUWKHUDUJXHVWKDWKHUGHOD\LQQRWLI\LQJGHIHQGDQWV
                                                                      DSSHOOHHVRIWKHDFFLGHQWZDVQRWXQUHDVRQDEOHEHFDXVHWKH
  ,QVXEURJDWLRQFDVHVWKHFRXUWILUVWGHWHUPLQHVmZKHWKHUWKH       QRWLFHSURYLVLRQLQWKH+DUWIRUGSROLF\RQO\UHTXLUHVWKDW6FRWW
SURYLVLRQDFWXDOO\ZDVEUHDFKHGl,G,ILWZDVQRWFRYHUDJH       	)HW]HUQRWLI\+DUWIRUGDIWHU6FRWW	)HW]HUUHFHLYHVQRWLFH
PXVW EH SURYLGHG  ,G  ,I D EUHDFK RFFXUUHG WKH FRXUW    DWLWVFRUSRUDWHKHDGTXDUWHUV8QGHUWKLVLQWHUSUHWDWLRQRQO\
FRQVLGHUVZKHWKHUWKH8,0LQVXUHUZDVSUHMXGLFHG,G2QFH          6FRWW 	 )HW]HUjV IDLOXUH WR QRWLI\ GHIHQGDQWVDSSHOOHHV
DJDLQWKHUHLVDSUHVXPSWLRQRISUHMXGLFHDQG WKHLQVXUHG          UHJDUGLQJ DFFLGHQWV RI ZKLFK LW ZDV DZDUH ZRXOG SUHFOXGH
EHDUVWKHEXUGHQRISUHVHQWLQJFRQWUDU\HYLGHQFH,G                FRYHUDJHXQGHUWKHSROLF\$QHPSOR\HHLQVXUHGZRXOGQHYHU
                                                                      EHUHTXLUHGWRSURYLGHVXFKQRWLFHDQGFRXOGUHFHLYHFRYHUDJH
   ,Q WKH LQVWDQW FDVH 6KRZDOWHUjV DFFLGHQW RFFXUUHG RQ       XQGHU WKH SROLF\  7KLV ZRXOG UHQGHU WKH SURPSW QRWLFH
6HSWHPEHU    /HSOH\ GLG QRW LQIRUP GHIHQGDQWV        SURYLVLRQXVHOHVVDQGWKHUHIRUHZRXOGQRWmJLYHPHDQLQJWR
DSSHOOHHV RI WKH DFFLGHQW DQG KHU FODLP XQWLO 0DUFK     HYHU\SURYLVLRQlRIDSROLF\DVUHTXLUHGXQGHU2KLRLQVXUDQFH
7KH GLVWULFW FRXUW FRQFOXGHG WKDW /HSOH\jV PRUH WKDQ           ODZ+HOEHUJY1DWjO8QLRQ)LUH,QV&R1(G
IRXUWHHQ\HDU GHOD\ LQ JLYLQJ QRWLFH ZDV XQUHDVRQDEOH  ,Q    2KLR
ILQGLQJ /HSOH\jV IDLOXUH WR SURYLGH SURPSW QRWLFH
XQUHDVRQDEOHWKHFRXUWFRQVLGHUHGWKHOHQJWKRIWKHGHOD\DQG           %DVHGRQWKHDERYHIDFWVDQGFLUFXPVWDQFHVZHILQGWKDW
/HSOH\jVIDLOXUHWRSURYLGHDQ\QRWLFHXQWLOWKHGDWHVKHILOHG       WKH GLVWULFW FRXUW FRUUHFWO\ FRQFOXGHG WKDW GHIHQGDQWV
KHUFRPSODLQW                                                        DSSHOOHHVGLGQRWUHFHLYHQRWLFHLQDUHDVRQDEOHWLPH%HFDXVH
                                                                      WKH GHOD\ ZDV XQUHDVRQDEOH WKHUH LV D SUHVXPSWLRQ WKDW
  /HSOH\ FODLPV WKDW VKH FRPSOLHG ZLWK WKH QRWLFH DQG         GHIHQGDQWVDSSHOOHHV ZHUH SUHMXGLFHG E\ /HSOH\jV GHOD\ LQ
VXEURJDWLRQSURYLVLRQVDVVRRQDVSUDFWLFDEOHLQOLJKWRIDOO         SURYLGLQJ QRWLFH  /HSOH\ DUJXHV WKDW )HUUDQGR UHTXLUHV D
WKHVXUURXQGLQJIDFWVDQGFLUFXPVWDQFHV/HSOH\DUJXHVWKDW          UHPDQG WR DOORZ WKH GLVWULFW FRXUW WR FRQVLGHU HYLGHQFH
SULRU WR WKH 6FRWW3RQW]HU GHFLVLRQ VKH KDG QR UHDVRQ WR    UHEXWWLQJWKHSUHVXPSWLRQRISUHMXGLFH7KHGLVWULFWFRXUWjV
EHOLHYHWKDWVKHZRXOGEHFRYHUHGXQGHUWKHSROLFLHVDQGVKH         RSLQLRQKRZHYHUPDNHVFOHDUWKDWLWDSSOLHGWKHIUDPHZRUN
FODLPV WKDW +DUWIRUG ZRXOG KDYH GHQLHG KHU FODLP  :KLOH     VHW IRUWK LQ )HUUDQGR  $FFRUGLQJ WR WKH GLVWULFW FRXUW mD
/HSOH\ LV FRUUHFW WKDW WKH 6FRWW3RQW]HU GHFLVLRQ FOHDUO\      SUHVXPSWLRQRISUHMXGLFHDULVHVZKHQDGHOD\LQJLYLQJQRWLFH
HVWDEOLVKHG WKH H[LVWHQFH RI WKH FRYHUDJH DW LVVXH QRWKLQJ   LVXQUHDVRQDEOHDVDPDWWHURIODZDQG3ODLQWLII/HSOH\RIIHUV
SUHYHQWHG /HSOH\ IURP H[HUFLVLQJ GXH GLOLJHQFH DQG              QR HYLGHQFH WR UHEXW WKLV SUHVXPSWLRQl DQG WKHUHIRUH
LQYHVWLJDWLQJ SRVVLEOH LQVXUDQFH FRYHUDJHV XQGHU KHU             mSUHMXGLFH WR WKH GHIHQGDQWV UHPDLQV EHFDXVH RI KHU
KXVEDQGjV HPSOR\HUjV SROLFLHV DQG QRWLI\LQJ GHIHQGDQWV          XQUHDVRQDEOHGHOD\l)XUWKHUPRUHWKHFRXUWQRWHGWKDWmWKH
DSSHOOHHVRIWKHDFFLGHQW/HSOH\PD\EHFRUUHFWWKDW+DUWIRUG       RQO\ PHQWLRQ >/HSOH\@ PDNHV RI WKH QRWLFH UHTXLUHPHQWV
ZRXOGKDYHGHQLHGFRYHUDJHEXW/HSOH\FRXOGKDYHOLWLJDWHG           H[FHSWDUJXLQJWKHLULQDSSOLFDELOLW\LVWRVD\WKDWVKHGLGQRW
WKH PDWWHU  $ZDLWLQJ D IDYRUDEOH 2KLR 6XSUHPH &RXUW          YLRODWHWKHSURYLVLRQVDQGWKDWWKHGHIHQGDQWVGLGQRWRIIHU
GHFLVLRQLVQRWDUHDVRQDEOHH[FXVHIRUGHOD\LQJQRWLFHDQG           HYLGHQFHVKRZLQJVKHIDLOHGWRJLYHQRWLFHl/HSOH\RIIHUHG
IDLOLQJWRSUHVHUYHVXEURJDWLRQULJKWV6HH+HLQH\:/
1R                  /HSOH\Y+DUWIRUG$FFLGHQW       
                               DQG,QGHPQLW\&RHWDO

mQRHYLGHQFHWRVKRZWKDWWKHPRUHWKDQIRXUWHHQ\HDUGHOD\
LQUHFHLYLQJGLGQRWSUHMXGLFHWKHGHIHQGDQWVl
  7KH GLVWULFW FRXUW DSSOLHG WKH IUDPHZRUN VHW IRUWK LQ
)HUUDQGRDQGFRQFOXGHGWKDW/HSOH\KDGIDLOHGWRUHEXWWKH
SUHVXPSWLRQRISUHMXGLFH7KHUHIRUHZHILQGWKDWWKHGLVWULFW
FRXUWGLGQRWHUULQJUDQWLQJVXPPDU\MXGJPHQWLQIDYRURI
GHIHQGDQWVDSSHOOHHVEDVHGRQ/HSOH\jVIDLOXUHWRVDWLVI\WKH
QRWLFHSURYLVLRQVXQGHUWKHSROLFLHV
  %HFDXVHWKHFRXUWILQGVWKDW/HSOH\IDLOHGWRFRPSO\ZLWK
WKH QRWLFH SURYLVLRQV WKH FRXUW LV QRW UHTXLUHG WR UHDFK
GHIHQGDQWVDSSHOOHHVj FODLP WKDW /HSOH\ LV QRW HQWLWOHG WR
FRYHUDJH EHFDXVH VKH GHVWUR\HG WKHLU VXEURJDWLRQ ULJKWV LQ
YLRODWLRQRIWKHSROLFLHV
                               ,,,
  )RUDOOWKHUHDVRQVVHWIRUWKDERYHZHDIILUPWKHMXGJPHQW
RIWKHGLVWULFWFRXUW