Court Opinion

ID: 2970555
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:16:11.938918+00
Date Added: 2024-06-11T15:00:29.890392
License: Public Domain

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
                3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

        (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                    )LOH 1DPH DS

81,7('67$7(6&28572)$33($/6
                  )257+(6,;7+&,5&8,7
                    BBBBBBBBBBBBBBBBB

 35$0 1*8<(1                      ;
          3ODLQWLII$SSHOOHH       
                                    
                                      1R
            Y                      
                                     !
                                    
 &,7< 2) &/(9(/$1'                 
                    'HIHQGDQW 
                                    
 3$56216 (1*,1((5,1*                
 6&,(1&( ,1&                     
                                    
          'HIHQGDQW$SSHOODQW 
                                   1
       $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
      IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG
       1Rn$QQ$OGULFK'LVWULFWsXGJH
                  $UJXHG6HSWHPEHU
            'HFLGHGDQG)LOHG1RYHPEHU
 %HIRUH0$57,1&KLHI&LUFXLWsXGJH0225(&LUFXLW
           sXGJH:,6(0$1'LVWULFWsXGJH

    
     7KH +RQRUDEOH 7KRPDV $ :LVHPDQ         sU 8QLWHG 6WDWHV 'LVWULFW
sXGJH IRU WKH 0LGGOH 'LVWULFW RI 7HQQHVVHH VLWWLQJ E\ GHVLJQDWLRQ

                                   
     1JX\HQY&LW\RI&OHYHODQGHWDO           1R

                     BBBBBBBBBBBBBBBBB
                          &2816(/
$5*8('$OWRQ/6WHSKHQVsU*$//$*+(56+$53
)8/721 	 1250$1 &OHYHODQG 2KLR IRU $SSHOODQW
$OH[DQGHU06SDWHU63$7(5/$:2)),&(&ROXPEXV
2KLR IRU $SSHOOHH  21 %5,()  $OWRQ / 6WHSKHQV sU
5REHUW (GG\ *$//$*+(5 6+$53 )8/721 	
1250$1&OHYHODQG2KLRIRU$SSHOODQW$OH[DQGHU0
6SDWHU 63$7(5 /$: 2)),&( &ROXPEXV 2KLR IRU
$SSHOOHH
                     BBBBBBBBBBBBBBBBB
                         23,1,21
                     BBBBBBBBBBBBBBBBB
  %2<&( ) 0$57,1 s5 &KLHI &LUFXLW sXGJH  7KH
$SSHOODQW3DUVRQV(QJLQHHULQJ6FLHQFHDSSHDOVWKHGLVWULFW
FRXUWjV RUGHU GHQ\LQJ HQIRUFHPHQW RI DQ DUELWUDWLRQ
DJUHHPHQW  7KH GLVWULFW FRXUW FHUWLILHG LWV RUGHU IRU
LQWHUORFXWRU\DSSHDOSXUVXDQWWR86&EGHVSLWH
WKHDSSHOODQWjVIDLOXUHWRWDNHDQLPPHGLDWHDSSHDOIURPWKH
GHQLDORIDUELWUDWLRQXQGHUWKH)HGHUDO$UELWUDWLRQ$FW2Q
DSSHDOWKH$SSHOOHH3UDP1JX\HQUDLVHVVHYHUDOTXHVWLRQV
RIIDFWZKLFKLIUHVROYHGIDYRUDEO\IRU1JX\HQZRXOGSODFH
WKLV&RXUWLQWKHSRVLWLRQRIUHQGHULQJDQDGYLVRU\RSLQLRQRQ
WKHTXHVWLRQFHUWLILHGIRUDSSHDO7KHVHIDFWXDOLVVXHVZHUH
UDLVHGDWWKHGLVWULFWFRXUW7KHGLVWULFWFRXUWKRZHYHUHLWKHU
RYHUORRNHGWKHVHIDFWXDOLVVXHVRUDVVXPHGWKH\KDGQRPHULW
ZLWKRXWSURYLGLQJDQ\UHFRUGGHOLEHUDWLQJWKHVHLVVXHV7KLV
&RXUWjVPRWLRQVSDQHOJUDQWHGSHUPLVVLRQWRDSSHDOXQDZDUH
RI WKHVH XQUHVROYHG IDFWXDO LVVXHV  7KHUHIRUH IRU WKH
IROORZLQJUHDVRQVZH',60,66WKLVLQWHUORFXWRU\DSSHDORQ
WKH JURXQGV WKDW WKH GLVWULFW FRXUW LPSURYLGHQWO\ JUDQWHG
FHUWLILFDWLRQ
  ,QWKHVXPPHURI3UDP1JX\HQOHIWKLVMREZLWKWKH
&LW\ RI &OHYHODQG DQG EHJDQ HPSOR\PHQW ZLWK 3DUVRQV
(QJLQHHULQJ6FLHQFH2QOHDYLQJKLVMRE1JX\HQILOHGDTXL
     1JX\HQY&LW\RI&OHYHODQGHWDO            1R       1R           1JX\HQY&LW\RI&OHYHODQGHWDO          

   $WWKHWLPH1JX\HQVLJQHGWKHVHIRUPVKHZDVDERXWWR              WDP DFWLRQ XQGHU VHFWLRQ D RI WKH )DOVH &ODLPV $FW
LQLWLDWHDVXEVWDQWLDOODZVXLWRQEHKDOIRIWKH8QLWHG6WDWHVIRU      DJDLQVWKLVIRUPHUHPSOR\HU7KH8QLWHG6WDWHVLQWHUYHQHGLQ
IUDXG E\ KLV IRUPHU HPSOR\HU WKH &LW\ RI &OHYHODQG           WKHDFWLRQDQGWKHFDVHZDVXQVHDOHGWKXVPDNLQJ1JX\HQjV
&HUWDLQO\ 1JX\HQ ZDV DZDUH WKDW 3DUVRQV FRQGXFWHG D            QDPH SXEOLF  1JX\HQ FODLPV WKDW DW WKDW WLPH WKH &LW\ RI
VXEVWDQWLDODPRXQWRIEXVLQHVVZLWKWKH&LW\RI&OHYHODQGDQG          &OHYHODQGEHJDQSUHVVXULQJ3DUVRQVWRUHPRYHKLPIURPDOO
WKDWKHZRXOGEHLQYROYHGLQWKHVHSURMHFWV&RQVHTXHQWO\            ZRUNRQFLW\FRQWUDFWV1JX\HQjVZRUNDW3DUVRQVSULPDULO\
1JX\HQjVFRQFHUQDERXWGLVSXWHUHVROXWLRQVHHPVUHDVRQDEOH             LQYROYHG FLW\ FRQWUDFW ZRUN WKXV LW FDPH WR D VWDQGVWLOO
LQOLJKWRIWKHTXLWDPDFWLRQKHZDVEULQJLQJDJDLQVWWKH&LW\        3DUVRQV WKHQ WHUPLQDWHG KLV HPSOR\PHQW LQ 'HFHPEHU RI
RI&OHYHODQG                                                            $IWHU 3DUVRQV WHUPLQDWHG KLV HPSOR\PHQW 1JX\HQ
                                                                       LQLWLDWHGDVHSDUDWHIDOVHFODLPVDFWLRQXQGHU6HFWLRQK
  2QWKHLUIDFHWKHVHDOOHJDWLRQVFKDOOHQJHWKHYDOLGLW\RIWKH       RIWKH$FWDJDLQVWERWK3DUVRQVDQGWKH&LW\RI&OHYHODQG
GRFXPHQWV 1JX\HQ VLJQHG ZKHQ DFFHSWLQJ HPSOR\PHQW DW
3DUVRQV:HUHFHQWO\VWDWHGWKDWDFRQWUDFWXDODJUHHPHQWWR             7KH TXHVWLRQ FHUWLILHG IRU DSSHDO LV ZKHWKHU WKH )DOVH
DUELWUDWH PXVW EH HQIRUFHG XQOHVV VRPH JURXQG H[LVWV RQ        &ODLPV $FW SUHYHQWV WKH HQIRUFHPHQW RI DQ DUELWUDWLRQ
ZKLFK WKH FRQWUDFW PD\ EH YRLGHG  +DVNLQV Y 3UXGHQWLDO      DJUHHPHQWEHWZHHQ3DUVRQVDQG1JX\HQWKHUHIRUHDOORZLQJ
,QVXUDQFH&R)GWK&LU1JX\HQjV            1JX\HQjVKFODLPWREHKHDUGLQIHGHUDOFRXUW&LUFXLW
DIILGDYLWUDLVHVDUHDVRQDEOHTXHVWLRQDVWRZKHWKHUWKHUHZDV         &LW\ 6WRUHV ,QF Y $GDPV PDNHV FOHDU WKDW WKH )HGHUDO
YDOLGDVVHQWRQKLVSDUWRUZKHWKHUWKHDUELWUDWLRQDJUHHPHQW          $UELWUDWLRQ $FW FDQ FRYHU PDQ\ IRUPV RI HPSOR\PHQW
FRYHUHGWKHIDFWXDOVLWXDWLRQRXWOLQHGDERYH,WLVQRWFOHDU         FRQWUDFWV   86    VWDWLQJ WKH )HGHUDO
ZKHWKHUERLOHUSODWHODQJXDJHVWDWLQJWKDWWKHHPSOR\HHGLVSXWH         $UELWUDWLRQ $FW mFRPSHOV MXGLFLDO HQIRUFHPHQW RI D ZLGH
UHVROXWLRQ SURJUDP FRYHUV mDOO FODLPV DULVLQJ RXW RI WKH       UDQJHRIZULWWHQDUELWUDWLRQDJUHHPHQWVl)XUWKHUPRUHWKHUH
HPSOR\PHQWUHODWLRQVKLSlZRXOGDSSO\WRDKFODLP               KDV ORQJ EHHQ D mOLEHUDO IHGHUDO SROLF\ IDYRULQJ DUELWUDWLRQ
SDUWLFXODUO\RQHLQYROYLQJDSDUW\EHLQJVXHGE\WKH8QLWHG            DJUHHPHQWVl0RVHV+&RQH0HPRULDO+RVSLWDOY0HUFXU\
6WDWHVIRUIUDXGZKRWKHQSUHVVXUHVWKHHPSOR\HUWRILUHWKH           &RQVWU &RUS  86     )HGHUDO VWDWXWRU\
NH\ZLWQHVVLQWKHIUDXGDFWLRQ                                       FODLPV DULVLQJ XQGHU DQ HPSOR\PHQW FRQWUDFW FDQ EH
                                                                       DSSURSULDWHO\ UHVROYHG WKURXJK DUELWUDWLRQ DQG KDYH EHHQ
  ,QILUVWH[DPLQLQJZKHWKHUD6HFWLRQKFODLPFDQEH            HQIRUFHGE\FRXUWV,GDWFLWLQJ5RGULJXH]GH4XLMDVY
DUELWUDWHG ZLWKRXW UHVROYLQJ WKHVH IDFWXDO LVVXHV RI YDOLG      6KHDUVRQ$PHULFDQ ([SUHVV ,QF  86  
DVVHQW DQG WKH VFRSH RI WKH DOOHJHG DJUHHPHQW WKH GLVWULFW   6KHDUVRQ$PHULFDQ([SUHVV,QFY0F0DKRQ86
FRXUWFUHDWHVDUHDVRQDEOHSRVVLELOLW\WKDWZHZRXOGUHQGHUDQ         
DGYLVRU\RSLQLRQLQDFDVHRIILUVWLPSUHVVLRQLQDQDUHDRI
MXULVSUXGHQFHWKDWKDVVHHQPXFKDFWLYLW\LQUHFHQW\HDUV7KH           :KLOHZHQRWHWKDWWKLVSUHVXPSWLRQLQIDYRURIDUELWUDWLRQ
GLVWULFWFRXUWHLWKHURYHUORRNHGWKHVHIDFWXDOFRQVLGHUDWLRQVRU       FDQFRYHUDEURDGDUUD\RIHPSOR\PHQWFRQWUDFWV&RQJUHVV
DVVXPHG WKH\ KDG QR PHULW ZLWKRXW SURYLGLQJ DQ\ UHFRUG         VWLOOKDVWKHSRZHUWRH[FOXGHZKDWLWIHHOVDSSURSULDWHIURP
GHOLEHUDWLQJ WKHVH LVVXHV  :H ',60,66 WKLV LQWHUORFXWRU\       WKHVFRSHRIDUELWUDWLRQDJUHHPHQWV*UHHQ7UHH)LQDQFLDO
DSSHDO EHFDXVH WKH GLVWULFW FRXUW LPSURYLGHQWO\ JUDQWHG          &RUS$ODEDPDY5DQGROSK86,QRUGHU
FHUWLILFDWLRQXQGHU6HFWLRQE                                   WRGHWHUPLQHZKHWKHUDVWDWXWRU\FODLPVKRXOGEHDUELWUDWHG
                                                                       WZRLVVXHVPXVWEHFRQVLGHUHG,GDW)LUVWDFRXUWPXVW
                                                                       H[DPLQHZKHWKHUWKHSDUWLHVDJUHHGWRVXEPLWWKHLUFODLPVWR
                                                                       DUELWUDWLRQ  ,G  6HFRQG D FRXUW PXVW FRQVLGHU ZKHWKHU
     1JX\HQY&LW\RI&OHYHODQGHWDO              1R       1R           1JX\HQY&LW\RI&OHYHODQGHWDO        

&RQJUHVV mHYLQFHG DQ LQWHQWLRQ WR SUHFOXGH D ZDLYHU RI           H[FOXVLYH PHDQV IRU UHVROYLQJ ZRUNSODFH GLVSXWHV  2Q
MXGLFLDOUHPHGLHVIRUWKHVWDWXWRU\ULJKWVl,GFLWLQJ*LOPHU         $XJXVW1JX\HQVLJQHGDQHPSOR\PHQWDJUHHPHQW
Y ,QWHUVWDWHsRKQVRQ /DQH &RUS  86           ZLWKDQRWKHUDUELWUDWLRQFODXVHVWDWLQJWKDWmDQ\FRQWURYHUV\
0LWVXELVKL0RWRUV&RUSY6ROHU&KU\VOHU3O\PRXWK,QF             UHODWLQJ WR WKH HPSOR\PHQW DJUHHPHQW VKDOO EH VXEMHFW WR
86                                                   DUELWUDWLRQl$OVRRQ$XJXVW1JX\HQVLJQHGDRQHSDJH
                                                                         (PSOR\HH'LVSXWH5HVROXWLRQ)RUPVWDWLQJWKDWKHDJUHHGWR
   5HFHQWO\WKH6HFRQG&LUFXLWH[DPLQHGZKHWKHU&RQJUHVV                EHmERXQGE\WKHWHUPVRIWKHHPSOR\HHGLVSXWHUHVROXWLRQ
LQWHQGHG WR SUHFOXGH DUELWUDWLRQ RI D UHWDOLDWRU\ GLVFKDUJH       SURJUDPGXULQJDQGDIWHUKLVHPSOR\PHQWZLWK3DUVRQVIRUDOO
FODLP XQGHU WKH ZKLVWOHEORZHU SURYLVLRQV RI WKH )LQDQFLDO         FODLPV DULVLQJ RXW RI P\ HPSOR\PHQW UHODWLRQVKLS ZLWK
,QVWLWXWLRQV5HIRUP5HFRYHU\DQG(QIRUFHPHQW$FWRI               3DUVRQVl7KLVIRUPDOVRVWDWHGWKDW1JX\HQUHFHLYHGDFRS\
2OGUR\GY(OPLUD6DYLQJV%DQN)GG&LU              RI WKH (PSOR\HH 'LVSXWH 5HVROXWLRQ +DQGERRN  7KRXJK
,QH[DPLQLQJWKHLVVXHRI&RQJUHVVLRQDOLQWHQWWKH6HFRQG               1JX\HQ DOOHJHV KH QHYHU UHFHLYHG WKH (PSOR\HH 'LVSXWH
&LUFXLWVWDWHGWKDWLIVXFKLQWHQWH[LVWVmLWZLOOEHGLVFRYHUDEOH       5HVROXWLRQ +DQGERRN H[SODLQLQJ WKH SURJUDP KH VLJQHG D
LQ WKH WH[W RI WKH >VWDWXWH@ LWV OHJLVODWLYH KLVWRU\ RU DQ   FKHFNOLVW RQ $XJXVW  GHWDLOLQJ KLV UHFHLSW RI VRPH ILIW\
µLQKHUHQW FRQIOLFWj EHWZHHQ DUELWUDWLRQ DQG WKH >VWDWXWHjV@        ERRNOHWV IRUPV SODQ GHVFULSWLRQV DQG SROLF\ LQIRUPDWLRQ
XQGHUO\LQJ SXUSRVHVl  ,G DW  FLWLQJ *LOPHU DW         2QH RI WKH LWHPV FKHFNHG ZDV SROLF\ LQIRUPDWLRQ RQ WKH
)ROORZLQJWKH6HFRQG&LUFXLWUHDVRQLQJIURPWKHSXUSRVHVRI             HPSOR\HHGLVSXWHUHVROXWLRQSURJUDP
WKHVWDWXWHFDQEHDSSURSULDWHLIWKHWH[WDQGOHJLVODWLYHKLVWRU\
DUHLQGHWHUPLQDWH,G+RZHYHUUHDVRQLQJRQWKHEDVLVRI                ,QKLVDIILGDYLW1JX\HQFODLPVWKDWRQUHFHLYLQJKLVRIIHURI
SXEOLFSROLF\LVQRWDSSURSULDWH,G                                   HPSOR\PHQWKHDVNHGWKHYLFHSUHVLGHQWKRZWKHDJUHHPHQW
                                                                         ZRXOGKDQGOHMREWHUPLQDWLRQ7KHYLFHSUHVLGHQWWROGKLPKH
   ,QKLVDUJXPHQWRQDSSHDO1JX\HQUDLVHVYDULRXVIDFWXDO              GLG QRW NQRZ EXW ZRXOG JHW EDFN WR KLP  $FFRUGLQJ WR
FRQVLGHUDWLRQV FRQFHUQLQJ WKH VFRSH RI WKH DUELWUDWLRQ             1JX\HQWKHYLFHSUHVLGHQWQHYHUJRWEDFNWRKLPDQG1JX\HQ
DJUHHPHQWDQGZKHWKHUKHNQRZLQJO\ZDLYHGKLVULJKWWRKDYH              VLJQHG WKH HPSOR\PHQW RIIHU DVVXPLQJ LW GLG QRW FRYHU
KLV ZKLVWOHEORZHU FODLP KHDUG LQ IHGHUDO FRXUW  7KHVH           ZURQJIXO WHUPLQDWLRQ1JX\HQFODLPVWZRZHHNVODWHUWKH
FRQVLGHUDWLRQV ZHUH UDLVHG EHIRUH WKH GLVWULFW FRXUW LQ           YLFH SUHVLGHQW WKHQ WROG KLP WKDW WKH GLVSXWH UHVROXWLRQ
1JX\HQjV0HPRUDQGXP&RQWUD3DUVRQVjV0RWLRQWR'LVPLVV                   SURJUDP RQO\ DSSOLHV WR GLVSXWHV GXULQJ WKH FRXUVH RI KLV
DQGLQKLVDIILGDYLWILOHGLQVXSSRUWRIWKLVPHPRUDQGXP7KH           HPSOR\PHQW+HFODLPVWKDWWKHGHSXW\PDQDJHUWROGKLPWR
GLVWULFW FRXUW PDGH QR UXOLQJ FRQFHUQLQJ WKHVH DOOHJDWLRQV       VLJQ WKH FRPSDQ\ (PSOR\HH 'LVSXWH 5HVROXWLRQ 3URJUDP
UDWKHU LW MXVW DVVXPHG WKHUH ZDV DQ DUELWUDWLRQ DJUHHPHQW        )RUPLIKHZDQWHGWRVWD\HPSOR\HGDW3DUVRQV7KLVIRUP
ZKLFK IHOO XQGHU WKH VFRSH RI WKH )HGHUDO $UELWUDWLRQ $FW      VWDWHV WKDW WKH VLJQRU UHFHLYHG D FRS\ RI WKH +DQGERRN
%HIRUHGHWHUPLQLQJZKHWKHU&RQJUHVVmHYLQFHGDQLQWHQWLRQ                KRZHYHU 1JX\HQ VWDWHV WKDW KH ZDV WROG D FRS\ ZDV
WR SUHFOXGH D ZDLYHU RI MXGLFLDO UHPHGLHV IRU WKH VWDWXWRU\     XQDYDLODEOHZKHQKHVLJQHGWKHIRUP1JX\HQIXUWKHUDOOHJHV
ULJKWVl WKH GLVWULFW FRXUW PXVW ILUVW GHWHUPLQH ZKHWKHU WKH     WKDWKHWULHGXQVXFFHVVIXOO\WRREWDLQDFRS\RIWKH(PSOR\HH
SDUWLHV DJUHHG WR VXEPLW WKLV ZKLVWOHEORZHU FODLP WR              'LVSXWH5HVROXWLRQ+DQGERRN+HGLGQRWUHFHLYHRQHXQWLO
DUELWUDWLRQ*UHHQ7UHH86DW                              WKHILOLQJRI3DUVRQVjVPRWLRQWRGLVPLVV,QVKRUWKHDUJXHV
                                                                         KHQHYHUDJUHHGWRWKHWHUPVRXWOLQHGLQWKH+DQGERRN2Q
  7KHUHFRUGLQGLFDWHV1JX\HQVLJQHGDQRIIHURIHPSOR\PHQW              UHYLHZRIWKHSOHDGLQJVEHIRUHWKHGLVWULFWFRXUW3DUVRQVGLG
IURP3DUVRQVRQsXO\ZLWKDJHQHUDOFODXVHVWDWLQJ             QRW FKDOOHQJH WKHVH VSHFLILF DOOHJDWLRQV  5DWKHU 3DUVRQV
WKDW3DUVRQVjVHPSOR\HHGLVSXWHUHVROXWLRQSURJUDPZDVWKH               PHUHO\QRWHGWKHODQJXDJHRIWKHGRFXPHQWV1JX\HQVLJQHG