Court Opinion

ID: 2970439
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:13:00.726597+00
Date Added: 2024-06-11T15:01:57.258937
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

 &257(= 6&277                   ;
         3HWLWLRQHU$SSHOODQW 
                                  
                                     1R
           Y                     
                                   !
                                  
 )5$1. (/2:DUGHQ               
         5HVSRQGHQW$SSHOOHH 
                                 1
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
     IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW
   1Rn9LFWRULD$5REHUWV'LVWULFWsXGJH
                  $UJXHG$XJXVW
          'HFLGHGDQG)LOHG6HSWHPEHU
       %HIRUH.(11('<68+5+(,15,&+DQG
            %$7&+(/'(5&LUFXLWsXGJHV
                    BBBBBBBBBBBBBBBBB
                        &2816(/
$5*8('sDPHV6WHUOLQJ/DZUHQFH'HWURLW0LFKLJDQIRU
$SSHOODQW  sDQHW $ 9DQ &OHYH 2)),&( 2) 7+(
$77251(<*(1(5$/+$%($6&25386',9,6,21
/DQVLQJ 0LFKLJDQ IRU $SSHOOHH  21 %5,()  sDPHV
6WHUOLQJ/DZUHQFH'HWURLW0LFKLJDQIRU$SSHOODQWsDQHW$
9DQ &OHYH 2)),&( 2) 7+( $77251(< *(1(5$/

                              
      6FRWWY(OR                                   1R    1R                                    6FRWWY(OR     

+$%($6 &25386 ',9,6,21 /DQVLQJ 0LFKLJDQ IRU                     $JDLQZHFDQQRWVD\WKDWWKH&RXUWRI$SSHDOVjDSSOLFDWLRQ
$SSHOOHH                                                          RI6WULFNODQGZDVXQUHDVRQDEOH$OWKRXJKWKHWHVWLPRQ\ZDV
                                                                     QRWFXPXODWLYHZLWKUHVSHFWWR6FRWWjVHDUOLHUVKRRWLQJLQWKH
                       BBBBBBBBBBBBBBBBB                             GLUHFWLRQ RI :LOOLDPV WKHUH ZDV VXIILFLHQW HYLGHQFH LQ WKH
                                                                     UHFRUGDVLGHIURPWKLVIDFWWRVXSSRUWDILUVWGHJUHHPXUGHU
                           23,1,21                                   FRQYLFWLRQ  $V VHW IRUWK VXSUD 3DUW ,,$ WKDW HYLGHQFH
                       BBBBBBBBBBBBBBBBB                             FRQVLVWHGRI6FRWWjVDGPLVVLRQWKDWKHKDUERUHGLOOIHHOLQJV
                                                                     WRZDUG:LOOLDPVWKHRIILFHUjVWHVWLPRQ\UHJDUGLQJWKHHDUOLHU
  .(11('<&LUFXLWsXGJH3HWLWLRQHU&RUWH]6FRWWDSSHDOV           VSHDNHUGLVSXWHWKHIDFWWKDW6FRWWSXWDJXQLQKLVSRFNHW
WKHGHQLDORIKLVDSSOLFDWLRQIRUZULWRIKDEHDVFRUSXV)RUWKH    EHIRUHKHZDVSLFNHGXSE\:LOOLDPV DQGWKHIDFWWKDWKH
IROORZLQJ UHDVRQV ZH DIILUP WKH MXGJPHQW RI WKH GLVWULFW    WRRN:LOOLDPVWRDSDUNLQJORWDQGVKRWKLPDVHFRQGWLPH,Q
FRXUW                                                               OLJKWRIWKLVHYLGHQFH6FRWWLVXQDEOHWRVKRZWKDWFRXQVHOjV
                                                                     HUURULQIROORZLQJWKLVOLQHRITXHVWLRQLQJGHSULYHGKLPRID
                                  ,                                 IDLUWULDO$FFRUGLQJO\6FRWWjVFODLPRILQHIIHFWLYHDVVLVWDQFH
  )ROORZLQJ D MXU\ WULDO LQ *HQHVHH &RXQW\ 0LFKLJDQ         RIFRXQVHOIDLOV
&LUFXLW&RXUWSHWLWLRQHU&RUWH]6FRWWZDVFRQYLFWHGRIILUVW                             )&XPXODWLYH(UURU
GHJUHH PXUGHU DQG SRVVHVVLRQ RI D ILUHDUP GXULQJ WKH
FRPPLVVLRQ RI D IHORQ\  7KH 0LFKLJDQ &RXUW RI $SSHDOV        6FRWWjVILQDOFODLPLVWKDWWKHFXPXODWLYHHIIHFWRIWKHHUURUV
VXPPDUL]HGWKHXQGHUO\LQJIDFWV                                     GHWDLOHGLQKLVILUVWILYHFODLPVGHSULYHGKLPRIDIDLUWULDO
                                                                     7KH0LFKLJDQ&RXUWRI$SSHDOVUHMHFWHGWKLVFODLPEHFDXVHLW
      7KHUHFRUGUHYHDOVWKDWRQWKHHYHQLQJRI)HEUXDU\         IRXQGQRHUURUVLQ6FRWWjVRWKHUFODLPV7KH6XSUHPH&RXUW
     GHIHQGDQW VKRW DQG NLOOHG WZHQW\RQH\HDUROG         KDV QRW KHOG WKDW FRQVWLWXWLRQDO FODLPV WKDW ZRXOG QRW
    7\URQH :LOOLDPV ZKLOH WKH\ DQG sDPHV &UDLQ ZHUH           LQGLYLGXDOO\VXSSRUWKDEHDVUHOLHIPD\EHFXPXODWHGLQRUGHU
    GULYLQJLQ:LOOLDPV
3RQWLDF*UDQG$PLQ)OLQW&UDLQ           WRVXSSRUWUHOLHI6HH/RUUDLQHY&R\OH)G
    WHVWLILHG WKDW EHIRUH WKH VKRRWLQJ KH RYHUKHDUG WKH       WK&LU,QDQ\HYHQWZHGRQRWILQGWKDWDQ\HUURUV
    GHIHQGDQW VD\ WKDW KH FRXOG URE :LOOLDPV :LWKRXW         HYHQZKHQFXPXODWHGGHQLHG6FRWWDIDLUWULDO7KH0LFKLJDQ
    ZDUQLQJGHIHQGDQWZKRZDVULGLQJLQWKHEDFNRIWKH            FRXUWjV GHFLVLRQ ZDV QRW FRQWUDU\ WR QRU DQ XQUHDVRQDEOH
    FDU SXOOHG RXW D JXQ DQG VKRW :LOOLDPV LQ WKH KHDG   DSSOLFDWLRQRIIHGHUDOODZ
    $IWHUGHIHQGDQWFOLPEHGIURPWKHEDFNRIWKHYHKLFOHWR
    WKHGULYHU
VVHDW&UDLQMXPSHGRXWDQGGHIHQGDQWVSHG                                          ,,,
    DZD\:LWKLQDQKRXU&UDLQFDOOHGIURPDUHODWLYH
V
    KRXVHDQGWROGWKHRSHUDWRUZKDWKDGKDSSHQHG&UDLQ              )RUWKHIRUHJRLQJUHDVRQVZHDIILUPWKHMXGJPHQWRIWKH
    LQGLFDWHGWKDWRQDSUHYLRXVRFFDVLRQGHIHQGDQWVKRWLQ         GLVWULFWFRXUW
    :LOOLDPV
 GLUHFWLRQ DIWHU DQ DUJXPHQW RYHU VWHUHR
    VSHDNHUV
      )OLQW'HWHFWLYH6HUJHDQW7KRPDV.RUDELNWHVWLILHGWKDW
    ZKLOHFRQGXFWLQJDQLQWHUYLHZDWWKHSROLFHVWDWLRQWKDW
    HYHQLQJ GHIHQGDQW VWDWHG WKDW KH DQG :LOOLDPV KDG
    SUREOHPV LQ WKH SDVW DQG UHIHUUHG WR WKH LQFLGHQW
    UHJDUGLQJWKHVWHUHRVSHDNHUV'HIHQGDQWIXUWKHUVWDWHG
    6FRWWY(OR                                   1R       1R                                    6FRWWY(OR      

KDYHEHHQHDVLO\FRQWUDGLFWHGE\WKHSK\VLFDOHYLGHQFHDQG               WKDWZKLOHULGLQJLQWKH*UDQG$PKHEHJDQWKLQNLQJRI
6FRWWjVRZQLQFRQVLVWHQWVWDWHPHQW                                      WKHSUHYLRXVSUREOHPVEHWZHHQWKHWZRSXOOHGRXWWKH
                                                                         JXQSRLQWHGLWLQWKHDLUDQGVDLGWR:LOOLDPV:KDW
V
                &URVV([DPLQDWLRQRI&UDLQ                           XS QRZ" 'HIHQGDQW WKHQ ORZHUHG WKH JXQ DQG VKRW
                                                                         :LOOLDPV LQ WKH KHDG 'HIHQGDQW H[SODLQHG WKDW DIWHU
  6FRWW DOVR FRQWHQGV WKDW KLV WULDO FRXQVHOjV FURVV              &UDLQMXPSHGRXWRIWKHFDUKHFRQWLQXHGWRGULYHDQG
H[DPLQDWLRQ RI &UDLQ ZDV D GHILFLHQF\ DPRXQWLQJ WR                WKUHZWKHJXQRXWRIWKHFDUILYHKRXVHVGRZQWKHURDG
LQHIIHFWLYHDVVLVWDQFHRIFRXQVHO7KHTXHVWLRQLQJDWLVVXH             )XUWKHUPRUHGHIHQGDQWLQGLFDWHGWKDWKHKDGWKHJXQLQ
ZHQWDVIROORZV                                                         KLVULJKWSDQWVSRFNHWEHIRUH:LOOLDPVSLFNHGKLPXSWKDW
                                                                         HYHQLQJ :LOOLDPV ZDV IRXQG DW D QHDUE\ VFKRRO ZLWK
  4  ,Q \RXU SUHVHQFH KDV KH HYHU WKUHDWHQHG 7\URQH           JXQVKRW ZRXQGV WR WKH KHDG DQG VWRPDFK %ORRG DQG
  :LOOLDPV"                                                              EUDLQPDWWHUZHUHGLVFRYHUHGLQWKH*UDQG$P
  $<HV
  4:KHQ"                                                              3HRSOH Y 6FRWW 1R   :/  DW 

  $$ERXWoDERXWIRXUPRQWKVEHIRUHWKDWKDSSHQHGKH               0LFK&W$SS sDQ   XQSXEOLVKHG SHU FXULDP
  o\RXNQRZKLPDQG7\URQHH[FKDQJHGZRUGVDVZH                    RSLQLRQIRRWQRWHRPLWWHG6FRWWZDVVHQWHQFHGWROLIHLQ
  ZDV WDONLQJ o PH DQG VRPHERG\ HOVH ZDV WDONLQJ o            SULVRQ ZLWKRXW SDUROH IRU WKH PXUGHU FRQYLFWLRQ DQG D
  &RUWH] VKRW KLV JXQ DW 7\URQH WKDW GD\ VKRW DW KLP       FRQFXUUHQW WZR \HDU WHUP IRU WKH ILUHDUP FRQYLFWLRQ  2Q
  WRZDUGKLP\RXNQRZVKRWWRZDUGKLP                               GLUHFWDSSHDOWRWKH0LFKLJDQ&RXUWRI$SSHDOV6FRWWUDLVHG
  4:KDWZDVWKHDUJXPHQWRYHU"                                     WKHIROORZLQJFODLPV
  $  , JXHVV LW ZDV D NLFNHU ER[ WKH\ KDG SUHYLRXVO\
  DUJXHGRYHUDVSHDNHUER[                                            ,7KHUHZDVLQVXIILFLHQWHYLGHQFHSUHVHQWHGWRFRQYLFW
                                                                  DSSHOODQWRIILUVWGHJUHHPXUGHU
  42ND\\RXVDLGWKDW\RXVDZ&RUWH]WDNHDVKRWDW
  7U\RQHDERXWIRXUPRQWKVSULRU"                                        ,,7KHSURVHFXWRUjVDUJXPHQWVKLIWHGWKHEXUGHQRISURRI
  $<HV                                                             WRDSSHOODQWZKLFKFRQVWLWXWHVSURVHFXWRUPLVFRQGXFWDQG
  4<RXZLWQHVVHGWKDW"                                              UHYHUVLEOHHUURU
  $<HV
                                                                         ,,,$SSHOODQWZDVGHQLHGGXHSURFHVVRIODZZKHUHWKH
7KH 0LFKLJDQ &RXUW RI $SSHDOV QRWHG WKDW WKLV OLQH RI           UHFRUG IDLOV WR LQFOXGH WKH HQWLUH SRUWLRQ RI WKH
TXHVWLRQLQJZDVmXQZLVHlEXWQRQHWKHOHVVIRXQGWKDWLWGLG              SURVHFXWRUjVILQDODUJXPHQW
QRW PHHW WKH 6WULFNODQG WHVW IRU LQHIIHFWLYH DVVLVWDQFH RI
FRXQVHO7KHFRXUWKHOGWKDWLWZDVQRWSUHMXGLFLDOWR6FRWW           ,9  7KH MXU\ LQVWUXFWLRQV ZHUH UHYHUVLEO\ HUURQHRXV
7KH SROLFH RIILFHU ZKR WRRN 6FRWWjV VWDWHPHQW KDG DOUHDG\        EHFDXVHWKHFRXUWGLGQRWGLVWLQJXLVKEHWZHHQYROXQWDU\
WHVWLILHGWKDW6FRWWWROGKLPDERXWWKHVWHUHRVSHDNHUGLVSXWH          DQG LQYROXQWDU\ PDQVODXJKWHU GHVSLWH DSSHOODQWjV
DOWKRXJKQRWKLQJZDVPHQWLRQHGDERXW6FRWWjVVKRRWLQJLQWKH             DVVHUWLRQRIDQDFFLGHQWGHIHQVH
GLUHFWLRQ RI :LOOLDPV  7KH FRXUW DOVR KHOG WKDW WKHUH ZDV
DPSOH HYLGHQFH RWKHU WKDQ WKLV WHVWLPRQ\ WR VXSSRUW D
FRQYLFWLRQRIILUVWGHJUHHPXUGHU
                                                                           
                                                                            &ODLPV , WKURXJK ,,, ZHUH UDLVHG E\ 6FRWW WKURXJK KLV FRXQVHO
                                                                       &ODLPV ,9 WKURXJK 9, ZHUH UDLVHG E\ 6FRWW LQ SUR SHU
        6FRWWY(OR                                        1R         1R                                     6FRWWY(OR     

    9$SSHOODQWZDVGHSULYHGRIKLVFRQVWLWXWLRQDOULJKWRI                                 (,QHIIHFWLYH$VVLVWDQFHRI&RXQVHO
    HIIHFWLYHDVVLVWDQFHRIWULDOFRXQVHO
                                                                                   6FRWWjV ILIWK FODLP LV WKDW KH ZDV GHQLHG WKH HIIHFWLYH
    9,7KHFXPXODWLYHHIIHFWRIWKHHUURUVMXVWLI\UHYHUVDO                    DVVLVWDQFHRIWULDOFRXQVHO+HDGYDQFHVWZRUHDVRQVKLV
    IRUDQHZWULDO                                                             FRXQVHOjV IDLOXUH WR UHTXHVW DQ LQVWUXFWLRQ RQ LQYROXQWDU\
                                                                                 PDQVODXJKWHU DQG  KLV FRXQVHOjV FURVVH[DPLQDWLRQ RI
   7KH&RXUWRI$SSHDOVDIILUPHG6FRWWjVFRQYLFWLRQV6FRWW                     &UDLQZKLFKEURXJKWRXWWHVWLPRQ\WKDW6FRWWDQG:LOOLDPV
ILOHG D GHOD\HG DSSOLFDWLRQ IRU OHDYH WR DSSHDO ZLWK WKH                KDGEHHQLQYROYHGLQDSULRUGLVSXWHRYHUVWHUHRVSHDNHUVDQG
0LFKLJDQ 6XSUHPH &RXUW  7KH 0LFKLJDQ 6XSUHPH &RXUW                       WKDW6FRWWKDGVKRWLQ:LOOLDPVjVGLUHFWLRQGXULQJWKDWSULRU
YDFDWHGWKHRSLQLRQRIWKH&RXUWRI$SSHDOVZLWKUHVSHFWWR                      GLVSXWH  7KH WHVW IRU GHWHUPLQLQJ ZKHWKHU FRXQVHO LV
WKHWUDQVFULSWLVVXHILQGLQJWKDWWKH&RXUWRI$SSHDOVFRXOG                    FRQVWLWXWLRQDOO\ LQHIIHFWLYH ZDV VHW IRUWK LQ 6WULFNODQG Y
QRW UHVROYH VRPH RI 6FRWWjV FODLPV ZKHUH D SRUWLRQ RI WKH              :DVKLQJWRQ868QGHU6WULFNODQGD
WUDQVFULSWRIWKHSURVHFXWRUjVFORVLQJDUJXPHQWZDVPLVVLQJ                     SHWLWLRQHU PXVW ILUVW VKRZ WKDW FRXQVHOjV SHUIRUPDQFH ZDV
DQGUHPDQGHGIRUIXUWKHUSURFHHGLQJV7KH&RXUWGLUHFWHG                        GHILFLHQW7RGRVRWKHSHWLWLRQHUPXVWSURYHWKDWFRXQVHO
WKDWWKH&RXUWRI$SSHDOVREWDLQDYLGHRWDSHRUDFRPSOHWH                       PDGHHUURUVVRVHULRXVWKDWKHRUVKHZDVQRWIXQFWLRQLQJDV
WUDQVFULSW RI WKH WULDO RU GLUHFW VHWWOHPHQW RI WKH UHFRUG             FRXQVHODVJXDUDQWHHGE\WKH6L[WK$PHQGPHQW,G6HFRQG
SXUVXDQWWR0&5%EHIRUHDGGUHVVLQJWKHPHULWVRI                     WKH SHWLWLRQHU PXVW HVWDEOLVK WKDW FRXQVHOjV GHILFLHQW
6FRWWjV FODLPV RI SURVHFXWRU PLVFRQGXFW DQG LQHIIHFWLYH                    SHUIRUPDQFH SUHMXGLFHG WKH GHIHQVH  ,G  7KLV UHTXLUHV D
DVVLVWDQFHRIFRXQVHO$VWRDOORWKHUFODLPVWKH0LFKLJDQ                     VKRZLQJ WKDW FRXQVHOjV HUURUV ZHUH VR VHULRXV WKDW WKH\
                                                                                 GHSULYHGSHWLWLRQHURIDIDLUWULDO,G
     
       0&5 % SURYLGHV
                                                                                            ,QYROXQWDU\0DQVODXJKWHU,QVWUXFWLRQ
 7UDQVFULSW 8QDYDLODEOH :KHQ D WUDQVFULSW RI WKH SURFHHGLQJV LQ WKH
WULDO FRXUW RU WULEXQDO FDQQRW EH REWDLQHG IURP WKH FRXUW UHSRUWHU RU              7KH0LFKLJDQ&RXUWRI$SSHDOVGHWHUPLQHGWKDWFRXQVHOjV
UHFRUGHU WKH DSSHOODQW VKDOO ILOH D VHWWOHG VWDWHPHQW RI IDFWV WR VHUYH DV D    IDLOXUH WR UHTXHVW D MXU\ LQVWUXFWLRQ RQ LQYROXQWDU\
VXEVWLWXWH IRU WKH WUDQVFULSW                                                   PDQVODXJKWHU GLG QRW DPRXQW WR D GHILFLHQW SHUIRUPDQFH
D :LWKLQ  GD\V DIWHU ILOLQJ WKH FODLP RI DSSHDO WKH DSSHOODQW VKDOO ILOH    EHFDXVHWKHHYLGHQFHGLGQRWVXSSRUWDILQGLQJRILQYROXQWDU\
ZLWK WKH WULDO FRXUW RU WULEXQDO FOHUN DQG VHUYH RQ HDFK DSSHOOHH D
SURSRVHG VWDWHPHQW RI IDFWV 7KH SURSRVHG VWDWHPHQW RI IDFWV PXVW
                                                                                 PDQVODXJKWHUDQGEHFDXVHFRXQVHOPDGHDVWUDWHJLFGHFLVLRQ
FRQFLVHO\ VHW IRUWK WKH VXEVWDQFH RI WKH WHVWLPRQ\ RU WKH RUDO SURFHHGLQJV      WR DGYDQFH WZR RWKHU GHIHQVH WKHRULHV o LQWR[LFDWLRQ DQG
EHIRUH WKH WULDO FRXUW RU WULEXQDO LI QR WHVWLPRQ\ ZDV WDNHQ LQ VXIILFLHQW      SURYRFDWLRQ+DYLQJUHYLHZHGWKHUHFRUGZHFDQQRWVD\WKDW
GHWDLO WR LQIRUP WKH &RXUW RI $SSHDOV RI WKH QDWXUH RI WKH FRQWURYHUV\ DQG       WKH 0LFKLJDQ &RXUW RI $SSHDOV XQUHDVRQDEO\ DSSOLHG WKH
RI WKH SURFHHGLQJV LQ WKH WULDO FRXUW RU WULEXQDO                               6WULFNODQG WHVW  $V GHWDLOHG DERYH WKHUH ZDV LQVXIILFLHQW
E 7KH DSSHOODQW VKDOO QRWLFH WKH SURSRVHG VWDWHPHQW RI IDFWV IRU SURPSW
VHWWOHPHQW EHIRUH WKH WULDO FRXUW RU WULEXQDO $Q DPHQGPHQW RU REMHFWLRQ
                                                                                 HYLGHQFH WR VXSSRUW DQ DFFLGHQW WKHRU\  7KDW DQ DFFLGHQW
WR WKH SURSRVHG VWDWHPHQW RI IDFWV PXVW EH LQ ZULWLQJ ILOHG LQ WKH WULDO
                                                                                 WKHRU\ ZDV QRW QHFHVVDULO\ LQFRQVLVWHQW ZLWK WKH RWKHU WZR
FRXUW RU WULEXQDO EHIRUH WKH WLPH VHW IRU VHWWOHPHQW DQG VHUYHG RQ WKH          GHIHQVHV GRHV QRW PHDQ DV 6FRWW DUJXHV LQ KLV EULHI WKDW
DSSHOODQW DQG DQ\ RWKHU DSSHOOHH                                                FRXQVHO ZDV GHILFLHQW IRU QRW UHTXHVWLQJ WKH LQVWUXFWLRQ
F 7KH WULDO FRXUW RU WULEXQDO VKDOO VHWWOH DQ\ FRQWURYHUV\ DQG FHUWLI\ D       &RXQVHOPDGHDVWUDWHJLFGHFLVLRQWRDGYDQFHWKHWZRPRUH
VWDWHPHQW RI IDFWV DV DQ DFFXUDWH IDLU DQG FRPSOHWH VWDWHPHQW RI WKH
SURFHHGLQJV EHIRUH LW
                                                                                 SODXVLEOHGHIHQVHWKHRULHVUDWKHUWKDQWRSUHVHQWWKHMXU\ZLWK
G 7KH VWDWHPHQW RI IDFWV DQG WKH FHUWLI\LQJ RUGHU PXVW EH ILOHG ZLWK WKH
                                                                                 DGLIIHUHQWVWRU\RIKRZWKHVKRRWLQJWRRNSODFHZKLFKFRXOG
WULDO FRXUW RU WULEXQDO FOHUN DQG D FRS\ RI WKH FHUWLI\LQJ RUGHU PXVW EH ILOHG
ZLWK WKH &RXUW RI $SSHDOV
    6FRWWY(OR                                      1R        1R                                    6FRWWY(OR        

  $<HV7KHQDWXUDOUHIOH[DQG,MXPSHGEXWWKHJXQ                   6XSUHPH&RXUWGHQLHGOHDYHWRDSSHDO3HRSOHY6FRWW
  KDGZHQWRIIE\WKHQ                                                   1:G0LFK
6FRWWDUJXHVWKDWWKLVHYLGHQFHZDVVXIILFLHQWWRUHTXLUHDQ                  7KHDSSHOODWHFRXUWIRXQGWKDWWKHWULDOWUDQVFULSWRPLWWHG
LQYROXQWDU\PDQVODXJKWHULQVWUXFWLRQ+HLJQRUHVKRZHYHU                DSSUR[LPDWHO\HLJKWHHQPLQXWHVRIWKHSURVHFXWRUjVFORVLQJ
HYLGHQFHWKDWZRXOGSUHYHQWDUHDVRQDEOHMXU\IURPILQGLQJ                 DUJXPHQW DQG WKDW QR RWKHU WUDQVFULSW RU YLGHRWDSH RI WKH
LQYROXQWDU\PDQVODXJKWHU)LUVWWKLVVWDWHPHQWGLIIHUHGIURP             FORVLQJDUJXPHQWH[LVWHG,WWKHUHIRUHGLUHFWHGWKHWULDOFRXUW
KLVUHVSRQVHVGXULQJDQLQIRUPDOLQWHUYLHZLQZKLFK6FRWW                 WRVHWWOHWKHUHFRUG2QUHPDQGWKHWULDOFRXUWKHOGDKHDULQJ
VDLG WKDW KH SXOOHG RXW WKH JXQ SXW LW XS LQ WKH DLU VDLG   WRGHWHUPLQHZKDWKDSSHQHGGXULQJWKHPLVVLQJSRUWLRQRIWKH
m:KDWjV XS QRZ"l DQG WKHQ ORZHUHG WKH JXQ DQG VKRW                SURVHFXWRUjVFORVLQJDUJXPHQWV$IWHUUHYLHZLQJWKHUHFRUG
:LOOLDPV)XUWKHUWKHILUVWJXQVKRWZRXQGZDVLQWKHULJKW               RIWKDWKHDULQJDQGWKHUHFRUGRQDSSHDOWKH0LFKLJDQ&RXUW
VLGH RI :LOOLDPVjV KHDG DERYH WKH ULJKW HDU DQG VOLJKWO\         RI$SSHDOVDJDLQDIILUPHG6FRWWjVFRQYLFWLRQV7KH0LFKLJDQ
EHKLQG WKH WHPSOH  ,I :LOOLDPV KDG WXUQHG DURXQG WR IDFH        6XSUHPH &RXUW GHQLHG OHDYH WR DSSHDO  6FRWW WKHQ ILOHG D
6FRWWLWLVXQOLNHO\WKDWWKHEXOOHWZRXOGKDYHHQWHUHGDWWKDW           SHWLWLRQIRUZULWRIKDEHDVFRUSXVZLWKWKH86'LVWULFW&RXUW
SRLQW0RVWLPSRUWDQWO\6FRWWLJQRUHVWKHHYLGHQFHWKDWKH               IRU WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ DGYDQFLQJ WKH VDPH
OHIW WKH VFHQH RI WKH ILUVW VKRRWLQJ GURYH WR D SDUNLQJ ORW   FODLPVKHKDGPDGHLQWKHVWDWHFRXUWV2Q0DUFK
SXOOHG:LOOLDPVRXWRIWKHFDUDQGVKRWKLPRQHPRUHWLPH                WKH GLVWULFW FRXUW GHQLHG 6FRWWjV SHWLWLRQ  7KLV DSSHDO
(YHQLIDUHDVRQDEOHMXU\FRXOGKDYHIRXQGWKDWWKHILUVWVKRW             IROORZHG
ZDVDQDFFLGHQWQRUHDVRQDEOHMXU\FRXOGKDYHIRXQGWKDWWKH
VHFRQG VKRW ZDV DFFLGHQWDO  :KHQ FRQVLGHULQJ DOO WKH                                              ,,
HYLGHQFH SUHVHQWHG DW WULDO LW VLPSO\ GLG QRW VXSSRUW DQ
LQYROXQWDU\PDQVODXJKWHULQVWUXFWLRQ                                        :HUHYLHZWKHGLVWULFWFRXUW
VOHJDOFRQFOXVLRQVGHQRYRDQG
                                                                           LWVIDFWXDOILQGLQJVIRUFOHDUHUURU'H/LVOHY5LYHUV)G
   0RUHRYHU HYHQ LI 6FRWWjV FODLP ZDV QRW SURFHGXUDOO\             WK&LU6FRWWILOHGKLVSHWLWLRQIRUIHGHUDO
GHIDXOWHGDQGHYHQLIWKHWULDOFRXUWHUUHGDVDPDWWHURIVWDWH          KDEHDV FRUSXV UHOLHI RQ $SULO    7KXV WKH 
ODZWKDWLVQRWDVXIILFLHQWEDVLVIRUJUDQWLQJKDEHDVUHOLHI            DPHQGPHQWV WR  86&   HPERGLHG LQ WKH
$OWKRXJKWKH6XSUHPH&RXUWKDVKHOGWKDWLWLVDYLRODWLRQRI              $QWLWHUURULVPDQG(IIHFWLYH'HDWK3HQDOW\$FWm$('3$l
GXHSURFHVVIRUDFRXUWWRIDLOWRLQVWUXFWRQDOHVVHULQFOXGHG           DUHDSSOLFDEOHWR6FRWWjVSHWLWLRQ6HH/LQGKY0XUSK\
RIIHQVHVXSSRUWHGE\WKHHYLGHQFHLQDFDSLWDOFDVHVHH%HFN              86
Y$ODEDPD86LWKDVQRWVRKHOGLQ
QRQFDSLWDOFDVHV7RWKHFRQWUDU\WKH6L[WK&LUFXLWKDVKHOG               7KH 6XSUHPH &RXUW UHFHQWO\ GHVFULEHG WKH VWDQGDUG IRU
WKDW IDLOXUH WR LQVWUXFW RQ D OHVVHU LQFOXGHG RIIHQVH LQ D       UHYLHZLQJVWDWHFRXUWGHFLVLRQVXQGHUWKH$('3$DVIROORZV
QRQFDSLWDO FDVH LV QRW mVXFK D IXQGDPHQWDO GHIHFW DV
LQKHUHQWO\UHVXOWVLQDPLVFDUULDJHRIMXVWLFHRUDQRPLVVLRQ                8QGHUGWKHZULWPD\LVVXHRQO\LIRQHRIWKH
LQFRQVLVWHQWZLWKWKHUXGLPHQWDU\GHPDQGVRIIDLUSURFHGXUHl                IROORZLQJ WZR FRQGLWLRQV LV VDWLVILHG o WKH VWDWHFRXUW
%DJE\Y6RZGHUV)GWK&LU)RUDOO                DGMXGLFDWLRQUHVXOWHGLQDGHFLVLRQWKDWmZDVFRQWUDU\
RIWKHVHUHDVRQV6FRWWLVQRWHQWLWOHGWRKDEHDVUHOLHIRQWKLV             WRFOHDUO\HVWDEOLVKHG)HGHUDOODZDVGHWHUPLQHGE\
FODLP                                                                       WKH 6XSUHPH &RXUW RI WKH 8QLWHG 6WDWHVl RU
                                                                             mLQYROYHGDQXQUHDVRQDEOHDSSOLFDWLRQRIFOHDUO\
                                                                             HVWDEOLVKHG)HGHUDOODZDVGHWHUPLQHGE\WKH6XSUHPH
                                                                             &RXUW RI WKH 8QLWHG 6WDWHVl  8QGHU WKH mFRQWUDU\ WRl
      6FRWWY(OR                                    1R    1R                                       6FRWWY(OR     

    FODXVHDIHGHUDOKDEHDVFRXUWPD\JUDQWWKHZULWLIWKH          UHVXOWLQJIURPWKHWUDQVFULSWLRQHUURU6FRWWLVWKHUHIRUHQRW
    VWDWH FRXUW DUULYHV DW D FRQFOXVLRQ RSSRVLWH WR WKDW      HQWLWOHGWRKDEHDVUHOLHIEDVHGRQWKHWUDQVFULSWLRQHUURU
    UHDFKHGE\WKLV&RXUWRQDTXHVWLRQRIODZRULIWKHVWDWH
    FRXUWGHFLGHVDFDVHGLIIHUHQWO\WKDQWKLV&RXUWKDVRQD                                'sXU\,QVWUXFWLRQ
    VHW RI PDWHULDOO\ LQGLVWLQJXLVKDEOH IDFWV  8QGHU WKH
    mXQUHDVRQDEOHDSSOLFDWLRQlFODXVHDIHGHUDOKDEHDVFRXUW            6FRWWjV IRXUWK FODLP LV WKDW WKH WULDO FRXUW HUUHG E\ QRW
    PD\JUDQWWKHZULWLIWKHVWDWHFRXUWLGHQWLILHVWKHFRUUHFW      JLYLQJWKHMXU\DQLQVWUXFWLRQRQLQYROXQWDU\PDQVODXJKWHU
    JRYHUQLQJOHJDOSULQFLSOHIURPWKLV&RXUWjVGHFLVLRQVEXW         7KH WULDO FRXUW LQVWUXFWHG WKH MXU\ RQ ILUVW GHJUHH PXUGHU
    XQUHDVRQDEO\ DSSOLHV WKDW SULQFLSOH WR WKH IDFWV RI WKH   VHFRQGGHJUHHPXUGHUDQGYROXQWDU\PDQVODXJKWHU6FRWWGLG
    SULVRQHUjVFDVH                                                  QRWUHTXHVWDQLQYROXQWDU\PDQVODXJKWHULQVWUXFWLRQDWWULDO
                                                                      7KH0LFKLJDQ&RXUWRI$SSHDOVGHQLHGUHOLHIRQWKLVFODLP
:LOOLDPVY7D\ORU86:LWKWKHVH          EDVHGXSRQ6FRWWjVIDLOXUHWRUHTXHVWWKHLQVWUXFWLRQ+HQFH
VWDQGDUGVLQPLQGZHFRQVLGHUHDFKRI6FRWWjVFODLPVLQWXUQ        WKLV FODLP LV SURFHGXUDOO\ GHIDXOWHG XQOHVV 6FRWW FDQ VKRZ
                                                                      FDXVHDQGSUHMXGLFHRUVKRZWKDWGHQLDORIUHOLHIZLOOUHVXOWLQ
                $,QVXIILFLHQF\RIWKH(YLGHQFH                     DIXQGDPHQWDOPLVFDUULDJHRIMXVWLFH
  6FRWWjVILUVWDUJXPHQWLVWKDWWKHUHZDVLQVXIILFLHQWHYLGHQFH         6FRWW DUJXHV WKDW LQHIIHFWLYH DVVLVWDQFH RI WULDO FRXQVHO
WR FRQYLFW KLP RI ILUVW GHJUHH PXUGHU  6SHFLILFDOO\ KH     SURYLGHVWKHFDXVHIRUKLVIDLOXUHWRUHTXHVWDQLQYROXQWDU\
FRQWHQGV WKDW WKHUH ZDV QR HYLGHQFH WKDW WKH NLOOLQJ ZDV     PDQVODXJKWHU LQVWUXFWLRQ  $V WKH GLVWULFW FRXUW IRXQG
SUHPHGLWDWHGDQGGHOLEHUDWH,QsDFNVRQY9LUJLQLDWKH&RXUW       KRZHYHUHYHQLIZHDVVXPHWKDW6FRWWFDQHVWDEOLVKFDXVHKH
KHOGWKDWDSHWLWLRQHULVQRWHQWLWOHGWRKDEHDVFRUSXVUHOLHI        FDQQRW GHPRQVWUDWH DFWXDO SUHMXGLFH RU D IXQGDPHQWDO
EDVHG RQ LQVXIILFLHQW HYLGHQFH ZKHUH DIWHU YLHZLQJ WKH        PLVFDUULDJHRIMXVWLFH7KHUHZDVQRWVXIILFLHQWHYLGHQFHIRU
HYLGHQFHLQWKHOLJKWPRVWIDYRUDEOHWRWKHSURVHFXWLRQDQ\          DMXU\WRUHDFKDYHUGLFWRILQYROXQWDU\PDQVODXJKWHU7KH
UDWLRQDOWULHURIIDFWFRXOGKDYHIRXQGWKHHVVHQWLDOHOHPHQWV        RQO\WKHRU\WKDW6FRWWQRZDGYDQFHVWRVXSSRUWVXFKDYHUGLFW
RIWKHFULPHEH\RQGDUHDVRQDEOHGRXEW86            LV WKDW WKH VKRRWLQJ ZDV DQ DFFLGHQW  6FRWW SRLQWV WR KLV
 6DQGHUV Y )UHHPDQ  )G   WK &LU      ZULWWHQVWDWHPHQWLQTXHVWLRQDQGDQVZHUIRUPWRWKHSROLFH
7KLVVWDQGDUGDSSOLHVZKHWKHUWKHHYLGHQFHRIJXLOW
ZDVGLUHFWRUFLUFXPVWDQWLDO6HH6SDOODY)ROW])G            4$WRQHSRLQWZKLOH\RXZHUHLQWKHFDU\RXSXOOHGWKH
WK&LU                                             JXQIURP\RXUSRFNHW"
                                                                        $<HV
   8QGHU 0LFKLJDQ ODZ ILUVW GHJUHH PXUGHU UHTXLUHV D            4$QGKHOGLWLQWKHDLU"
VKRZLQJE\WKHSURVHFXWLRQWKDWWKHGHIHQGDQWLQWHQWLRQDOO\             $<HV
NLOOHGWKHYLFWLPDQGWKDWWKHDFWRINLOOLQJZDVSUHPHGLWDWHG         4:KDWGLG\RXVD\DWWKDWWLPH"
DQGGHOLEHUDWH3HRSOHY6FKROODHUW1:G              $:KDWZDVXSEHWZHHQPHDQGKLP
+HUHERWKWKH0LFKLJDQ&RXUWRI$SSHDOVDQGWKH               4%HWZHHQ\RXDQG7\URQH"
GLVWULFWFRXUWIRXQGWKDWWKHHYLGHQFHVXSSRUWHGWKHFRQYLFWLRQ         $<HV
IRUILUVWGHJUHHPXUGHU%RWKFRXUWVUHOLHGRQHYLGHQFHWKDW           4:KDWGLG\RXGRWKHQ"
6FRWWKDGSODFHGDJXQLQKLVSRFNHWEHIRUH:LOOLDPVSLFNHG             $%\WKDWWLPH7HUU\KDGOHIWRXWWKHFDUMXPSHGRXW
KLPXSWKHWHVWLPRQ\RI&UDLQWKDW6FRWWDQG:LOOLDPVKDG             WKHFDU7\URQHKDGJUDEEHGP\KDQGDQG,VTXHH]HGWKH
DSULRUGLVSXWHRYHUVWHUHRVSHDNHUV6FRWWjVDGPLVVLRQWKDWKH         WULJJHUDQGLWZHQWRII
KDGLOOIHHOLQJVWRZDUG:LOOLDPVDQGHYLGHQFHWKDW6FRWWVKRW          40HDQLQJWKHJXQZHQWRII"
    6FRWWY(OR                                    1R       1R                                      6FRWWY(OR      

   0D\HUGRHVQRWVWDQGIRUWKHSURSRVLWLRQLPSOLFLWLQ6FRWWjV        :LOOLDPVDVHFRQGWLPHLQWKHVWRPDFKDIWHUOHDYLQJWKHVFHQH
DUJXPHQWWKDWZKHUHDSRUWLRQRIDWULDOWUDQVFULSWLVPLVVLQJ         RI WKH ILUVW JXQVKRW  6FRWW DUJXHV WKDW WKHUH DUH SRVVLEOH
DQGXQREWDLQDEOHDQGZKHUHDGHIHQGDQWPDNHVDFODLPWKDW              DOWHUQDWLYHH[SODQDWLRQVIRUWKHVHRFFXUUHQFHVDQGWKDWWKH\
FRXOGSRVVLEO\LPSOLFDWHWKDWSRUWLRQRIWKHWUDQVFULSWDUHWULDO      GRQRWQHFHVVDULO\VKRZSUHPHGLWDWLRQRUGHOLEHUDWHNLOOLQJ
LVDOZD\VQHFHVVDU\5DWKHUWKH6L[WK&LUFXLWKDVKHOGWKDW           8QGHUWKHsDFNVRQVWDQGDUG6FRWWjVDUJXPHQWVLQWKLVUHJDUG
IHGHUDOKDEHDVUHOLHIEDVHGRQDPLVVLQJWUDQVFULSWZLOORQO\EH        DUHLQDSSRVLWH$UHDVRQDEOHWULHURIIDFWFRXOGKDYHGUDZQ
JUDQWHGZKHUHWKHSHWLWLRQHUFDQVKRZSUHMXGLFH%UDQVIRUG             IURPWKHHYLGHQFHGHVFULEHGDERYHWKHUHDVRQDEOHLQIHUHQFH
Y%URZQ)GWK&LU,Q%UDQVIRUGWKH           WKDW6FRWWjVGHFLVLRQWRNLOO:LOOLDPVZDVSUHPHGLWDWHGDQG
FRXUWFRQVLGHUHGZKHWKHUWKHXQDYDLODELOLW\RIWUDQVFULSWVRI           WKDWWKHDFWRINLOOLQJZDVGHOLEHUDWH6FRWWjVLQVXIILFLHQF\RI
MXU\LQVWUXFWLRQVZDVDSHUVHYLRODWLRQRIGXHSURFHVV7KH           WKHHYLGHQFHFODLPWKHUHIRUHIDLOV
WULDOFRXUWLQWKDWFDVHGHWHUPLQHGWKDWWKHWUDQVFULSWRIWKH
LQVWUXFWLRQV ZDV LUUHWULHYDEO\ ORVW DQG ZDV LQFDSDEOH RI                          %3URVHFXWRULDO0LVFRQGXFW
UHFRQVWUXFWLRQ%UDQVIRUGDUJXHGWKDWKHVKRXOGEHHQWLWOHGWR
UHYLHZ WKH LQVWUXFWLRQV IRU HUURU  $OWKRXJK %UDQVIRUG              6FRWWjV VHFRQG FODLP LV WKDW WKH SURVHFXWRU LPSURSHUO\
SURIIHUHGQRVSHFLILFHUURUVKLVWULDODWWRUQH\UHFDOOHGKDYLQJ        VKLIWHG WKH EXUGHQ RI SURRI DW WULDO  +H SRLQWV WR WKH
PDGHVRPHREMHFWLRQVWRWKHLQVWUXFWLRQVDWWULDO7KHFRXUW           SURVHFXWRUjVVWDWHPHQWGXULQJFORVLQJDUJXPHQWVWKDWmWKHUHjV
KHOGWKDWWKLVVLWXDWLRQGLGQRWSUHVHQWDSHUVHYLRODWLRQRI          QRHYLGHQFHRIKHDWRIWKHPRPHQWKHDWRISDVVLRQRIVRPH
GXH SURFHVV  ,QVWHDG D SHWLWLRQHU mPXVW VKRZ SUHMXGLFH        VXGGHQ XQH[SODLQDEOH LPSXOVHl  6FRWW DUJXHV WKDW WKLV
UHVXOWLQJIURPWKHPLVVLQJWUDQVFULSWVl,G7KHFRXUWZHQW           VWDWHPHQW LPSURSHUO\ SODFHG WKH EXUGHQ RQ 6FRWW WR VKRZ
RQWRQRWHm$OWKRXJKWKLVFRXUWUHFRJQL]HVWKHGLIILFXOW\LQ          VRPHHYLGHQFHRIDIDFWRUWKDWZRXOGUHGXFHWKHFULPHIURP
GHPRQVWUDWLQJ SUHMXGLFH ZKHUH WKH WUDQVFULSWV DUH PLVVLQJ        ILUVWGHJUHHPXUGHUUDWKHUWKDQOHDYLQJWKHEXUGHQZLWKWKH
SHWLWLRQHU PXVW SUHVHQW VRPHWKLQJ PRUH WKDQ JURVV                 SURVHFXWRU WR SURYH WKH HOHPHQWV RI SUHPHGLWDWLRQ DQG
VSHFXODWLRQ WKDW WKH WUDQVFULSWV ZHUH UHTXLVLWH WR D IDLU       GHOLEHUDWH NLOOLQJ EH\RQG D UHDVRQDEOH GRXEW  7KH GLVWULFW
DSSHDOl  ,G  7KH FRXUW IRXQG LQVXIILFLHQW %UDQVIRUGjV         FRXUW FRQFOXGHG WKDW WKLV FODLP ZDV EDUUHG E\ SURFHGXUDO
DUJXPHQWWKDWHUURUVDUHIUHTXHQWO\IRXQGLQMXU\LQVWUXFWLRQV          GHIDXOWDQGDOWHUQDWLYHO\ODFNHGPHULW
IRUIHORQ\PXUGHUWULDODQGKLVWULDODWWRUQH\jVUHFROOHFWLRQ
WKDWVRPHXQVSHFLILHGREMHFWLRQVZHUHPDGH                            7KH RSLQLRQ RI WKH 0LFKLJDQ &RXUW RI $SSHDOV WKH ODVW
                                                                        UHDVRQHG RSLQLRQ RI WKH 0LFKLJDQ FRXUWV FRQVLGHULQJ WKLV
   +HUH6FRWWRIIHUVQRWKLQJPRUHWKDQJURVVVSHFXODWLRQRI            FODLPGHWHUPLQHGWKDW6FRWWKDGZDLYHGWKHFODLPRIHUURUE\
HUURULQWKHPLVVLQJSRUWLRQRIWKHWUDQVFULSW+HFRQWHQGV            IDLOLQJWRREMHFWDWWULDOWRWKHSURVHFXWRUjVUHPDUNV7KHFRXUW
WKDW WKH SURVHFXWRU PLJKW KDYH PDGH VRPH LPSURSHU                WKHUHIRUHFRQVLGHUHGRQO\ZKHWKHUWKHUHPDUNVUHVXOWHGLQD
FRPPHQWV  +H DOVR FRQWHQGV WKDW KLV DWWRUQH\ PLJKW KDYH       PLVFDUULDJH RI MXVWLFH RU ZKHWKHU D FDXWLRQDU\ LQVWUXFWLRQ
REMHFWHG WR WKH RQH VSHFLILF VWDWHPHQW 6FRWW LGHQWLILHV DV      FRXOGQRWKDYHFXUHGDQ\HUURUFRQFOXGLQJ
LPSURSHU<HWDVGLVFXVVHGDERYHWKHWUDQVFULSWLVFRPSOHWH
IROORZLQJWKDWRQHVWDWHPHQWDQGQRREMHFWLRQZDVPDGHWR                7KHUHFRUGUHYHDOVWKDWWKHSURVHFXWRUPHUHO\DUJXHGWKDW
LW  )XUWKHU WKH SURVHFXWRU FRXOG QRW UHFDOO DQ\ REMHFWLRQV     GHIHQGDQW LQWHQGHG WR NLOO LQ D FROGEORRGHG
GXULQJFORVLQJDUJXPHQWVDQGGHIHQVHWULDOFRXQVHOGLGQRW               SUHPHGLWDWHGDQGGHOLEHUDWHPDQQHU6XFKDQDUJXPHQW
GLVSXWHWKHSURVHFXWRUjVDFFRXQW1RUGLGGHIHQGDQWRUKLV               DPRXQWVWRQRWKLQJPRUHWKDQGLVFUHGLWLQJWKHGHIHQVH
ODZ\HUPDNHDQ\DOOHJDWLRQRIPLVFRQGXFWEH\RQGWKHRQHLQ                ZKLFK LV SURSHU    0RUHRYHU WKH WULDO FRXUWjV
WKH UHEXWWDO DUJXPHQW  6FRWW KDV QRW VKRZQ SUHMXGLFH             LQVWUXFWLRQ UHJDUGLQJ WKH EXUGHQ RI SURRI FXUHG DQ\
      6FRWWY(OR                                    1R       1R                                      6FRWWY(OR      

    SRVVLEOHSUHMXGLFLDOHIIHFWIURPWKHSURVHFXWRUjVFORVLQJ            FRXUWQRWHGDQ\SURVHFXWRULDOPLVFRQGXFWLQWKLVVWDWHPHQW
    DUJXPHQW                                                        ZDVQRWVRVHYHUHDVWRGHSULYH6FRWWRIDIDLUWULDO1RUZDV
                                                                         DQ\HUURUVXFKWKDWWKHMXU\LQVWUXFWLRQVFRXOGQRWFXUHLW7KH
6FRWW:/DW
VHHDOVR3HRSOHY6FRWW1R            WULDOMXGJHLVVXHGSURSHULQVWUXFWLRQVRQWKHEXUGHQRISURRI
:/DW
Q0LFK&W$SS                DQG LQVWUXFWHG WKDW DQ\WKLQJ WKH DWWRUQH\V KDG VDLG WR WKH
RQ UHPDQG UHDIILUPLQJ SULRU ILQGLQJ WKDW QR FRPPHQWV           FRQWUDU\ ZDV WR EH GLVUHJDUGHG  6FRWWjV SURVHFXWRULDO
FRXOGEHFRQVWUXHGDVVKLIWLQJWKHEXUGHQRISURRIDQGWKDW             PLVFRQGXFWFODLPLVPHULWOHVV
GHIHQGDQW KDG QRW REMHFWHG WR DQ\ FRPPHQWV PDGH E\ WKH
SURVHFXWRU  7KH GLVWULFW FRXUW WKHUHIRUH IRXQG WKDW WKLV                          &7UDQVFULSWLRQ(UURU
FODLPZDVSURFHGXUDOO\GHIDXOWHG
                                                                            6FRWWjV WKLUG FODLP LV WKDW WKH IDLOXUH WR WUDQVFULEH D
   6FRWW FRQWHQGV WKDW WKLV ZDV HUURU EHFDXVH QHLWKHU WKH        VLJQLILFDQWSRUWLRQRIWKHFORVLQJDUJXPHQWGHQLHGKLPGXH
0LFKLJDQ &RXUW RI $SSHDOV QRU WKH GLVWULFW FRXUW KDG WKH        SURFHVV  6FRWW DJDLQ QRWHV WKDW WKH PLVVLQJ SRUWLRQ RI WKH
EHQHILWRIDFRPSOHWHWUDQVFULSWRIWKHFORVLQJDUJXPHQWVWR             WUDQVFULSW PD\ FRQFHDO DQ REMHFWLRQ KH PD\ KDYH PDGH WR
GHWHUPLQHZKHWKHU6FRWWjVFRXQVHOGLGLQIDFWREMHFWWRDQ\            VRPHLPSURSHUVWDWHPHQWE\WKHSURVHFXWRU6FRWWQRWHVWKDW
VWDWHPHQWV PDGH E\ WKH SURVHFXWRU  <HW WKH VWDWHPHQW DW       KLVFRXQVHOFRXOGQRWUHPHPEHUH[DFWO\ZKDWZDVVDLGGXULQJ
LVVXHZDVPDGHGXULQJWKHSURVHFXWRUjVUHEXWWDOZKLFKZDV               WKHFORVLQJDUJXPHQWVDQGKHZDVWKHUHIRUHOHIWWRWKHPHUF\
IXOO\ WUDQVFULEHG  7KH PLVVLQJ SRUWLRQ RI WKH WUDQVFULSW        RIWKHSURVHFXWRUjVQRWHVDQGPHPRU\ZKLFK\LHOGHGQRWKLQJ
FRYHUHG WKH EHJLQQLQJ RI WKH SURVHFXWRUjV ILUVW FORVLQJ           WKDWZRXOGDLG6FRWWLQKLVDSSHDO6FRWWUHOLHVKHDYLO\RQWKH
DUJXPHQW'HIHQVHFRXQVHOFOHDUO\GLGQRWREMHFWDWDQ\WLPH            6XSUHPH&RXUWjVRSLQLRQLQ0D\HUY&KLFDJR86
EHWZHHQ WKH VWDWHPHQW DW LVVXH DQG WKH FRQFOXVLRQ RI WKH        WRDUJXHWKDWGXHSURFHVVUHTXLUHVWKDWDGHIHQGDQWEH
DUJXPHQWV  ,Q DQ\ HYHQW WKH WULDO FRXUW KHOG D KHDULQJ WR   JLYHQDUHOLDEOHUHFRUGRIVXIILFLHQWFRPSOHWHQHVVWRSHUPLW
GHWHUPLQH ZKDW ZDV VDLG GXULQJ FORVLQJ DUJXPHQWV  7KH           SURSHUUHYLHZRIKLVFODLPV<HW0D\HUZDVDFDVHLQZKLFK
SURVHFXWRU UHFRQVWUXFWHG DQ RXWOLQH RI KLV DUJXPHQW IURP          WKHUH ZDV DQ H[LVWLQJ UHFRUG DQG WKH RQO\ TXHVWLRQ ZDV
QRWHVWKDWKHKDGPDLQWDLQHG7KHSURVHFXWRUZDVWKHQDVNHG             ZKHWKHU DQ LQGLJHQW GHIHQGDQW FRQYLFWHG RI D QRQIHORQ\
ZKHWKHU WKH GHIHQVH PDGH DQ\ REMHFWLRQV WR KLV FORVLQJ           UDWKHUWKDQDIHORQ\ZDVHQWLWOHGWRWKHFRPSOHWHWUDQVFULSW
DUJXPHQWWRZKLFKKHUHVSRQGHGWKDWKHGLGQRWUHFDOODQ\               ZKHUH WKH GHIHQGDQWjV JURXQGV IRU DSSHDO PDGH RXW D
REMHFWLRQV GXULQJ FORVLQJ DUJXPHQWV  $OWKRXJK GHIHQVH             FRORUDEOHQHHGIRUDFRPSOHWHWUDQVFULSW7KH&RXUWKHOGWKDW
FRXQVHOZDVQRWVSHFLILFDOO\DVNHGDWWKHKHDULQJZKHWKHUKH             VXFK D GHIHQGDQW PXVW EH DIIRUGHG D mµUHFRUG RI VXIILFLHQW
REMHFWHGGXULQJWKHSURVHFXWLRQjVFORVLQJDUJXPHQWKHGLG               FRPSOHWHQHVVjWRSHUPLWSURSHUFRQVLGHUDWLRQRI>KLV@FODLPVl
QRWUHIXWHWKHDFFRXQWJLYHQE\WKHSURVHFXWRU                         ,GDW7KH&RXUWZHQWRQWRDFNQRZOHGJHWKDWDUHFRUG
                                                                         RI VXIILFLHQW FRPSOHWHQHVV GLG QRW QHFHVVDULO\ UHTXLUH D
   ,WDSSHDUVWKDW6FRWWPDGHQRREMHFWLRQWRWKHSURVHFXWRUjV           YHUEDWLPWUDQVFULSWVRORQJDVWKHVWDWHIRXQGRWKHUPHDQVRI
DUJXPHQW  $Q\ FRQWHQWLRQ WKDW WKHUH PLJKW KDYH EHHQ DQ         SURYLGLQJDQDGHTXDWHUHFRUGVXFKDVDQDJUHHGVWDWHPHQWRI
REMHFWLRQLVVKHHUVSHFXODWLRQDQGLVFRQWUDU\WRWKHWHVWLPRQ\          IDFWVDIXOOQDUUDWLYHVWDWHPHQWEDVHGRQDFRXUWUHSRUWHUjV
DWWKHVHWWOHPHQWRIWKHUHFRUGKHDULQJDVZHOODVWKHSRUWLRQ          QRWHVRUDMXGJHjVQRWHVRUDE\VWDQGHUjVELOORIH[FHSWLRQV
RIWKHUHFRUGWKDWZHGRKDYH6FRWWGRHVQRWDUJXHWKDWKH             ,G7KH&RXUWSODFHGWKHEXUGHQRQWKHVWDWHLQWKDWVLWXDWLRQ
FDQVKRZFDXVHDQGSUHMXGLFHIRUKLVIDLOXUHWRREMHFWDWWULDO         WRVKRZWKDWVRPHWKLQJOHVVWKDQDFRPSOHWHWUDQVFULSWZRXOG
QRUGRHVKHPDNHDVKRZLQJRIDFWXDOLQQRFHQFH+HQFHWKLV             EHVXIILFLHQW
FODLPLVSURFHGXUDOO\GHIDXOWHG,QDQ\HYHQWDVWKHGLVWULFW