Court Opinion

ID: 2970224
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:07:37.972376+00
Date Added: 2024-06-11T09:32:52.956037
License: Public Domain

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
    &OD\WRQY0HLMHU,QF                             1R                        3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

                                                                                     (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU

                                  ,9                                                            )LOH 1DPH DS

   %DVHGXSRQWKHIRUHJRLQJWKHMXGJPHQWRIWKHGLVWULFWFRXUW
LV$)),50('                                                                 81,7('67$7(6&28572)$33($/6
                                                                                                )257+(6,;7+&,5&8,7
                                                                                                  BBBBBBBBBBBBBBBBB

                                                                              $17+21< &/$<721                  ;
                                                                                      3ODLQWLII$SSHOODQW       
                                                                                                                 
                                                                                                                   1R
                                                                                         Y                      
                                                                                                                  !
                                                                                                                 
                                                                              0(,s(5 ,1&25325$7('              
                                                                                        'HIHQGDQW$SSHOOHH 1
                                                                                    $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
                                                                                   IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW
                                                                                    1RnsRKQ)HLNHQV'LVWULFWsXGJH
                                                                                              6XEPLWWHG1RYHPEHU
                                                                                          'HFLGHGDQG)LOHG)HEUXDU\
                                                                              %HIRUH0$57,1&KLHI&LUFXLWsXGJH%$7&+(/'(5
                                                                                      &LUFXLWsXGJH6$5*86'LVWULFWsXGJH
                                                                                                    BBBBBBBBBBBBBBBBB
                                                                                                          &2816(/
                                                                             21%5,()sRKQ55XQ\DQ6$&+6:$/'0$1'HWURLW
                                                                             0LFKLJDQ IRU $SSHOODQW  7KRPDV 0 0LOOHU 6(1,25
                                                                             /$%25 &2816(/ 0(,s(5 /(*$/ '(3$570(17
                                                                             *UDQG5DSLGV0LFKLJDQIRU$SSHOOHH

                                                                                 
YLRODWLRQ PHUHO\ EHFDXVH LW ZDV WKH HPSOR\HHjV ILUVW YLRODWLRQ RI WKH GRFN        7KH +RQRUDEOH (GPXQG $ 6DUJXV sU 8QLWHG 6WDWHV 'LVWULFW sXGJH
SROLF\                                                                      IRU WKH 6RXWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ

                                                                                                                 
     &OD\WRQY0HLMHU,QF                        1R       1R                                  &OD\WRQY0HLMHU,QF                

                     BBBBBBBBBBBBBBBBB                                   ,QWKLVFDVHWKHHPSOR\HUGLVFKDUJHGDQ$IULFDQ$PHULFDQ
                                                                       HPSOR\HHZKRKDGHQJDJHGLQDVHULRXVDFWRIPLVFRQGXFW
                         23,1,21                                       ZKLFK UHVXOWHG LQ LQMXU\ WR D FRZRUNHU ZKR ZDV UHQGHUHG
                     BBBBBBBBBBBBBBBBB                                 WRWDOO\ GLVDEOHG  :KLOH RWKHU ZKLWH HPSOR\HHV PD\ KDYH
                                                                       HQJDJHGLQWKHVDPHDFWVRIQHJOLJHQFHWKHHPSOR\HULVQRW
  6$5*86 'LVWULFW sXGJH  $QWKRQ\ &OD\WRQ SODLQWLII           SUHFOXGHG IURP FRQVLGHULQJ WKH KDUP UHVXOWLQJ IURP WKH
DSSHOODQWDSSHDOVWKHGHFLVLRQRIWKHGLVWULFWFRXUWJUDQWLQJ         FRQGXFW RI LWV HPSOR\HHV  ,Q WKLV FDVH RQO\ &OD\WRQjV
VXPPDU\ MXGJPHQW WR WKH GHIHQGDQWDSSHOOHH 0HLMHU               QHJOLJHQFH FDXVHG VHULRXV LQMXU\ WR D FRZRUNHU  7KLV LV
,QFRUSRUDWHG m0HLMHUl RQ KLV 7LWOH 9,, FODLP RI UDFLDO       SUHFLVHO\ mVXFK GLIIHUHQWLDWLQJ RU PLWLJDWLQJ FLUFXPVWDQFHl
GLVFULPLQDWLRQ)RUWKHUHDVRQVWKDWIROORZWKHGHFLVLRQRI          WKDWGLVWLQJXLVKHV&OD\WRQjVFRQGXFWIURPWKRVHRIWKHWKUHH
WKHGLVWULFWFRXUWLVDIILUPHG                                        ZKLWHFRZRUNHUV0LWFKHOO)GDW7KHIDFWWKDWDQ
                                                                       HPSOR\HU GLVFKDUJHG DQ $IULFDQ$PHULFDQ HPSOR\HH ZKR
                                 ,                                    VHULRXVO\ LQMXUHG D FRZRUNHU EXW GLG QRW GLVFKDUJH ZKLWH
                                                                       HPSOR\HHVZKRHQJDJHGLQWKHVDPHFRQGXFWZLWKRXWLQMXU\
   ,Q0HLMHUKLUHG&OD\WRQDQ$IULFDQ$PHULFDQDVD            WR IHOORZ HPSOR\HHV GRHV QRW JLYH ULVH WR DQ LQIHUHQFH RI
WUXFNGULYHU$VDUHVXOWRIDQDFFLGHQWZKLFKRFFXUUHGRQ            GLVFULPLQDWLRQ,QWKLVFDVHWKHLQMXULHVWRWKHFRZRUNHUZHUH
0D\   0HLMHU GLVFKDUJHG &OD\WRQ  7KHUHDIWHU           VHULRXVDQGGLVDEOLQJ:KLOHWKHDQDO\VLVUHTXLUHGE\0LWFKHOO
&OD\WRQ ILOHG DQ DFWLRQ LQ WKH GLVWULFW FRXUW DOOHJLQJ WKDW   DQG(UFHJRYLFKLVRIWHQIDFWGHSHQGHQWDQGQRWDPHQDEOHWR
0HLMHUYLRODWHG7LWOH9,,RIWKH&LYLO5LJKWV$FWRI          VXPPDU\ GLVSRVLWLRQ WKDW DQDO\VLV GRHV QRW SUHFOXGH
86&HHWVHT                                              VXPPDU\MXGJPHQWKHUH7KHXQGLVSXWHGIDFWVLQWKLVFDVH
   2Q $XJXVW   WKH GLVWULFW FRXUW JUDQWHG 0HLMHUjV      GHPRQVWUDWHWKDW&OD\WRQjVLQIUDFWLRQZDVTXDOLWDWLYHO\PRUH
PRWLRQIRUVXPPDU\MXGJPHQW7KHFRXUWIRXQGWKDW&OD\WRQ             VHULRXVWKDQWKRVHRIKLVWKUHHFRZRUNHUV7KHHPSOR\HUjV
IDLOHGWRHVWDEOLVKDSULPDIDFLHFDVHRIUDFLDOGLVFULPLQDWLRQ       PRUH VHYHUH WUHDWPHQW RI PRUH HJUHJLRXV FLUFXPVWDQFHV
7KHMXGJHDSSOLHGWKHIDPLOLDU0F'RQQHOO'RXJODV&RUSY              VLPSO\FDQQRWJLYHULVHWRDQLQIHUHQFHZKLFKZRXOGVXSSRUW
*UHHQ  86   DQDO\VLV  7KH GLVWULFW FRXUW      WKHHVWDEOLVKPHQWRIDSULPDIDFLHFDVHRIGLVFULPLQDWLRQ
GHWHUPLQHGWKDWWKHSODLQWLIIKDGHVWDEOLVKHGWKDWKHKDGPHW
WKH ILUVW WKUHH SURQJV RI WKH EXUGHQ VKLIWLQJ IUDPHZRUN E\
HVWDEOLVKLQJWKDWKHZDVDPHPEHURIWKHSURWHFWHGFODVVWKDW               
                                                                              ([DPSOHV DERXQG LQ WKH ODZ LQYROYLQJ GLIIHUHQWLDO WUHDWPHQW RI ZKDW
KH VXIIHUHG DQ DGYHUVH HPSOR\PHQW DFWLRQ DQG WKDW IRU          ZRXOG RWKHUZLVH EH LGHQWLFDO DFWV WKDW UHVXOW LQ GLIIHULQJ OHYHOV RI KDUP WR

SXUSRVHVRIWKHPRWLRQKHZDVTXDOLILHGIRUWKHSRVLWLRQIURP          WKLUG SDUWLHV )RU H[DPSOH D IDLOXUH WR XVH D EOLQNHU ZKHQ FKDQJLQJ ODQHV

ZKLFKKHZDVWHUPLQDWHG,GDW7KHGLVWULFWFRXUWIRXQG        LV LQ YLUWXDOO\ HYHU\ MXULVGLFWLRQ D PLQRU PLVGHPHDQRU 7KH VDPH FRQGXFW

WKDW&OD\WRQGLGQRWVDWLVI\WKHIRXUWKSURQJRIWKH0F'RQQHOO         KRZHYHU PD\ UHVXOW LQ D GHDGO\ FROOLVLRQ
                                                                       MXULVGLFWLRQV    ZRXOG    WUHDW   WKH   FLUFXPVWDQFHV
                                                                                                                            ,Q WKLV FLUFXPVWDQFH PRVW
                                                                                                                               DV   LQYROYLQJ     YHKLFXODU
'RXJODVDQDO\VLVLQWKDWKHGLGQRWHVWDEOLVKWKDWKHZDVHLWKHU       KRPLFLGH DQ RIIHQVH IRU ZKLFK PXFK JUHDWHU SHQDOWLHV DUH DYDLODEOH <HW
UHSODFHGE\DSHUVRQIURPRXWVLGHWKHSURWHFWHGFODVVRUZDV           LQ ERWK FLUFXPVWDQFHV WKH FRQGXFW RI WKH RIIHQGLQJ SDUW\ ZDV WKH VDPH

WUHDWHGGLIIHUHQWO\IURPVLPLODUO\VLWXDWHGHPSOR\HHVRXWVLGH
                                                                             
WKHSURWHFWHGFODVV,G&OD\WRQDSSHDOHGWKHGLVWULFWFRXUWjV              &OD\WRQ DOVR FRQWHQGV WKDW KH VKRXOG QRW KDYH EHHQ ILUHG IRU D VLQJOH

JUDQWRIVXPPDU\MXGJPHQW                                             YLRODWLRQ RI 0HLMHUjV SROLF\ UHTXLULQJ GULYHUV WR PDNH FHUWDLQ WKH GRFN
                                                                       SODWH LV SXOOHG DQG WKH WUDLOHU GRRUV ORFNHG        :KLOH WKLV SDUWLFXODU SROLF\
                                                                       SURYLGHV IRU GLVFKDUJH DIWHU RQO\ D VHFRQG YLRODWLRQ DQRWKHU SROLF\
                                                                       SURYLGHV IRU GLVFKDUJH XQGHU WKH FRPSDQ\jV VDIHW\ SROLF\ ,W LV FOHDU WKDW
                                                                       WKH   IRUPHU    SROLF\   GRHV   QRW   SUHFOXGH   GLVFKDUJH   IRU   D   VHULRXV   VDIHW\
    &OD\WRQY0HLMHU,QF                           1R   1R                              &OD\WRQY0HLMHU,QF        

0F'RQQHOO'RXJODV86DWLQZKLFKWKHSODLQWLII                                              ,,
DQ $IULFDQ$PHULFDQ HQJDJHG LQ DQ XQODZIXO WUDIILF
REVWUXFWLRQDWWKHHPSOR\HUjVORFDWLRQEXWZDVWUHDWHGPRUH             2Q0D\&OD\WRQGURYHDVHPLWUXFNWR0HLMHUjV
VHYHUHO\WKDQZKLWHHPSOR\HHVHQJDJLQJLQWKHVDPHFRQGXFW          VWRUHLQ%U\GHQ0LFKLJDQDQGGURSSHGRIIDSDUWLDOO\IXOO
$VIXUWKHUH[SODLQHGLQ0F'RQDOGY6DQWD)H7UDQVS&R             WUDLOHU:KLOHHQURXWHKHZDVDGYLVHGE\WKHVWRUHPDQDJHU
 86   mWKH XOWLPDWH    TXHVWLRQ DV ZH    KHZDVWRSLFNXSDQHPSW\WUDLOHUUHDG\WREHWDNHQEDFNWR
LQGLFDWHGLQ0F'RQDOG'RXJODV>LVZKHWKHU@DQDOOHJDWLRQ             WKH 0HLMHU 'LVWULEXWLRQ &HQWHU IURP ZKLFK &OD\WRQ KDG
WKDWµRWKHUHPSOR\HHVLQYROYHGLQDFWVDJDLQVWWKHHPSOR\HU         GHSDUWHG
RI FRPSDUDEOH VHULRXVQHVV    ZHUH QHYHUWKHOHVV UHWDLQHG
jl,GDWQHPSKDVLVLQRULJLQDO                       $IWHUGURSSLQJRIIWKHILUVWWUDLOHU&OD\WRQEDFNHGXSKLV
                                                                      WUXFNWRDQHPSW\WUDLOHUDQGKLWFKHGLWWRKLVULJ,QVXODWLRQ
  $VWKLV&RXUWKHOGLQ0LWFKHOOWKHHPSOR\HHVWRZKRPWKH           SDGGLQJ VXUURXQGHG WKH GRFN GRRU ZKHUH WKH WUDLOHU ZDV
SODLQWLIIVHHNVWRFRPSDUHKLPVHOIPXVWmKDYHHQJDJHGLQWKH          SDUNHG&RQVHTXHQWO\IURPKLVWUXFN&OD\WRQFRXOGQRWVHH
VDPH FRQGXFW ZLWKRXW VXFK GLIIHUHQWLDWLQJ RU PLWLJDWLQJ         LQWRWKHORDGLQJGRFNDQGFRXOGQRWVHHWKHUHDUWUDLOHUGRRU
FLUFXPVWDQFHV WKDW ZRXOG GLVWLQJXLVK WKHLU FRQGXFW RU WKH      ,WLVXQGLVSXWHGWKDW&OD\WRQZDVDZDUHRIWKHFLUFXPVWDQFHV
HPSOR\HUVWUHDWPHQWRIWKHPIRULWl)GDW$V            DQGNQHZWKDWKHZDVWRPDNHVXUHWKHUHDUWUDLOHUGRRUZDV
IXUWKHUH[SODLQHGLQ(UFHJRYLFKWKHSODLQWLIILVUHTXLUHGWR         FORVHG DQG WKH GRFN SODWH ZDV UDLVHG EHIRUH PRYLQJ WKH
mGHPRQVWUDWHWKDWKHRUVKHLVVLPLODUO\VLWXDWHGWRWKHQRQ         WUDLOHU
SURWHFWHGHPSOR\HHLQDOOUHOHYDQWUHVSHFWVl)GDW
HPSKDVLVLQRULJLQDO                                                 &OD\WRQ DFNQRZOHGJHG LQ KLV GHSRVLWLRQ WKDW LW ZDV KLV
                                                                      UHVSRQVLELOLW\WRFKHFNWKDWWKHUHDUGRRURIWKHWUDLOHUZDV
  ,WLV&OD\WRQjVEXUGHQWRHVWDEOLVKWKHHOHPHQWVRIDSULPD         FORVHGDQGWKDWWKHGRFNSODWHKDGEHHQUDLVHGEHIRUHKHFRXOG
IDFLHFDVH$VZHQRWHGLQ+ROOLQVY$WODQWLF&R,QF        VDIHO\GULYHDZD\&OD\WRQDOVRDGPLWVWKDWEHIRUHKHGURYH
)GWK&LU                                             WKHULJDZD\IURPWKHGRFNKHGLGQRWJRWRWKHUHDURIWKH
                                                                      WUXFNDQGGHWHUPLQHIRUKLPVHOIWKDWWKHGRRUZDVFORVHGDQG
     ,Q%XUGLQH86DW6&WWKH                WKHGRFNSODWHUDLVHG+HDOVRGLGQRWXVHDWHOHSKRQHRQWKH
     6XSUHPH&RXUWREVHUYHGWKDWm>W@KHXOWLPDWHEXUGHQ               RXWVLGHRIWKHGRFNGRRUVWRGHWHUPLQHWKHVWDWXVRIWKHWUDLOHU
     RI SHUVXDGLQJ WKH WULHU RI IDFW WKDW WKH GHIHQGDQW       GRRUDQGGRFNSODWH
     LQWHQWLRQDOO\ GLVFULPLQDWHG DJDLQVW WKH SODLQWLII
     UHPDLQV DW DOO WLPHV ZLWK WKH SODLQWLIIl DQG WKDW          $V&OD\WRQGURYHWKHWUXFNDQGWUDLOHUDZD\IURPWKHGRFN
     m>W@KHEXUGHQRIHVWDEOLVKLQJDSULPDIDFLHFDVHRI              DVHULRXVDFFLGHQWHQVXHG7KHGRRURIWKHWUDLOHUZDVQRW
     GLVSDUDWHWUHDWPHQWLVQRWRQHURXVl7KHSULPDIDFLH            FORVHG)XUWKHUWKHGRFNSODWHZDVVWLOOLQSODFH$\HDU
     FDVHPHUHO\VHUYHVWRUDLVHDUHEXWWDEOHSUHVXPSWLRQ             ROGIHPDOHFRZRUNHUZDVDFWXDOO\VWDQGLQJRQWKHGRFNSODWH
     RIGLVFULPLQDWLRQE\mHOLPLQDWLQJWKHPRVWFRPPRQ                DVWKHYHKLFOHSXOOHGDZD\IURPWKHGRFN$VDUHVXOWWKH
     QRQGLVFULPLQDWRU\ UHDVRQV IRU WKH >HPSOR\HUjV                GRFNSODWHIHOODQGWKHFRZRUNHUIHOOIRXUIHHWWRWKHJURXQG
     WUHDWPHQW RI WKH SODLQWLII@l LG DW   6 &W
      DQG QRW WR VDWLVI\ WKH SODLQWLIIjV XOWLPDWH
     EXUGHQRISHUVXDVLRQ
                                                                          
,GDW
                                                                            $ PHWDO GRFN SODWH IRUPV D EULGJH IURP WKH UHFHLYLQJ GRFN WR WKH
                                                                      UHDU RI WKH WUDLOHU DQG LV XVHG WR ORDG PDWHULDOV IURP WKH LQVLGH EXLOGLQJ
                                                                      RQWR WKH WUDLOHU
     &OD\WRQY0HLMHU,QF                          1R       1R                                &OD\WRQY0HLMHU,QF             

,QWKHFRXUVHRIWKHIDOOVKHEURNHKHUULJKWNQHHDQGKDVEHHQ         RULJLQDO$VIXUWKHUH[SODLQHGLQ(UFHJRYLFKm>W@KHSODLQWLII
XQDEOHWRUHWXUQWRZRUNDVDUHVXOWRIKHULQMXULHV                    QHHGQRWGHPRQVWUDWHDQH[DFWFRUUHODWLRQZLWKWKHHPSOR\HH
                                                                         UHFHLYLQJPRUHIDYRUDEOHWUHDWPHQWLQRUGHUIRUWKHWZRWREH
  )ROORZLQJ&OD\WRQjVGLVFKDUJHKLVIRUPHUVXSHUYLVRUKLUHG             FRQVLGHUHGµVLPLODUO\VLWXDWHGjUDWKHUWKHSODLQWLIIDQGWKH
DQDGGLWLRQDOWHQWUXFNGULYHUVWRSHUIRUPWKHVDPHNLQGRI              HPSOR\HHZLWKZKRPWKHSODLQWLIIVHHNVWRFRPSDUHKLPVHOI
ZRUNSUHYLRXVO\GRQHE\&OD\WRQ:KLOHWKHUHFRUGEHORZLV              RUKHUVHOIPXVWEHVLPLODULQµDOORIWKHUHOHYDQWDVSHFWVjl
QRWSUHFLVHDWOHDVWWKUHHDQGSHUKDSVILYHRIWKHQHZKLUHV            )GDWHPSKDVLVLQRULJLQDOFLWDWLRQRPLWWHG)LQDOO\
ZHUH $IULFDQ$PHULFDQ  1R VLQJOH QHZ KLUH ILOOHG WKH            LQ3HUU\ZHH[SODLQHGWKDWmWKLV&RXUWKDVDVVHUWHGWKDWLQ
SRVLWLRQIRUPHUO\SHUIRUPHGE\&OD\WRQ                                  DSSO\LQJ WKH VWDQGDUG >WKDW SODLQWLII PXVW VKRZ WKDW KH LV
                                                                         WUHDWHG GLIIHUHQWO\ WKDQ VLPLODUO\ VLWXDWHG HPSOR\HHV IURP
  &OD\WRQDOVRVXEPLWWHGHYLGHQFHLQVXSSRUWRIKLVFODLPWKDW           RXWVLGHWKHFODVV@FRXUWVVKRXOGQRWGHPDQGH[DFWFRUUHODWLRQ
RWKHUZKLWHHPSOR\HHVZKRHQJDJHGLQHVVHQWLDOO\WKHVDPH                EXWVKRXOGLQVWHDGVHHNUHOHYDQWVLPLODULW\l)GDW
FRQGXFW IRU ZKLFK KH ZDV ILUHG ZHUH QRW WKHPVHOYHV               $SSO\LQJWKHSULQFLSOHVVHWIRUWKLQ0LWFKHOO(UFHJRYLFKDQG
GLVFKDUJHG$OOWKUHHRIWKHHPSOR\HHVLGHQWLILHGE\&OD\WRQ            3HUU\ WKH ZKLWH FRZRUNHUV WR ZKRP &OD\WRQ VHHNV WR
ZHUHWUXFNGULYHUVIRU0HLMHUDQGZHUHLQYROYHGLQLQFLGHQWV             FRPSDUH KLPVHOI ZHUH LQYROYHG LQ FRQGXFW VXSHUILFLDOO\
ZKLFK ZHUH VLPLODU ZLWK UHVSHFW WR WKH FRQGXFW RI WKH           VLPLODUWRWKDWHQJDJHGLQE\WKHSODLQWLII$OOWKUHHZKLWHFR
HPSOR\HHEXWGLVVLPLODUZLWKUHVSHFWWRWKHUHVXOWDQWLQMXULHV           ZRUNHUV ZHUH WUXFN GULYHUV IRU WKH GHIHQGDQW  $OO WKUHH
WRFRZRUNHUV                                                            DGPLWWHGO\ SXOOHG D ULJ DZD\ IURP D ORDGLQJ GRFN ZLWKRXW
                                                                         LQVXULQJWKDWWKHEDFNGRRUVZHUHFORVHGDQGWKDWWKHGRFN
  ,QWKHFDVHRI'DYLG$OEDLQWKHHPSOR\HHSXOOHGDWUDLOHU             SODWHKDGEHHQUHPRYHG
DZD\IURPDZDUHKRXVHGRFNZLWKRXWYHULI\LQJWKDWWKHUHDU
GRRUZDVFORVHGDQGWKHGRFNSODWHZDVUDLVHG$FRZRUNHU                 7KHIDFWUHPDLQVKRZHYHUWKDWWKHWKUHHHPSOR\HHVZKR
ZDVDFWXDOO\LQWKHWUDLOHURSHUDWLQJDW\SHRIIRUNOLIW$OEDLQ        ZHUHDOVRLQYROYHGLQVLPLODUFRQGXFWDV&OD\WRQjVGLVFKDUJH
GURYHWKHWUDLOHUWRDVWDJLQJDUHDZKHUHLWZDVSDUNHGZLWKRXW          GLG QRW LQMXUH D FRZRUNHU  $OO IRXU GULYHUV LQFOXGLQJ WKH
LQMXU\ WR WKH FRZRUNHU ZKR UHPDLQHG ZLWKRXW $OEDLQjV             SODLQWLII ZHUH JXLOW\ RI DW OHDVW QHJOLJHQW FRQGXFW LQ WKH
NQRZOHGJH LQ WKH WUDLOHU  $OEDLQ ZDV JLYHQ D WKUHH GD\       PDQQHULQZKLFKWKH\GURYHWKHLUULJVDZD\IURPWKHGRFN
GLVFLSOLQDU\VXVSHQVLRQDVDUHVXOWRIWKHVDIHW\YLRODWLRQ             2QO\ &OD\WRQ KRZHYHU VHULRXVO\ LQMXUHG D FRZRUNHU
                                                                         UHQGHULQJKHUWRWDOO\GLVDEOHGIURPIXUWKHUHPSOR\PHQW
   &OD\WRQ DOVR SURGXFHG WHVWLPRQ\ WKDW 0LFKDHO 3UXLWW D
0HLMHUWUXFNGULYHUZRUNLQJRXWRIWKHGLVWULEXWLRQFHQWHULQ               ,WLVZHOOHVWDEOLVKHGWKDW&OD\WRQPD\REWDLQUHOLHIXQGHU
/DQVLQJ0LFKLJDQDOVRSXOOHGDWUDLOHUIURPDGRFNZLWKRXW             7LWOH9,,HYHQLIKHHQJDJHGLQVHULRXVPLVFRQGXFWSURYLGHG
FKHFNLQJ WKH UHDU GRRU DQG GRFN SODWH  7KH FRQYH\RU            WKDWZKLWHHPSOR\HHVZKRHQJDJHLQWKHVDPHFRQGXFWZHUH
H[WHQGLQJIURPWKHWUDLOHUWRWKHGRFNIHOOWRWKHJURXQGDVWKH         HLWKHU QRW GLVFLSOLQHG RU QRW GLVFLSOLQHG DV VHYHUHO\
WUDLOHU SXOOHG DZD\  $V LQ WKH FDVH RI $OEDLQ 3UXLWW DOVR
UHFHLYHGDWKUHHGD\GLVFLSOLQDU\VXVSHQVLRQ
                                                                             
  )LQDOO\ &OD\WRQ SRLQWV WR WKH FDVH RI 6FRWW )UDOH\ DOVR          $OEDLQjV FLUFXPVWDQFHV ZHUH WKH PRVW VLPLODU WR WKH SODLQWLIIV 7KH

HPSOR\HGE\0HLMHUDVDWUXFNGULYHU7KHLQFLGHQWLQYROYLQJ            LQFLGHQW   LQYROYLQJ   $OEDLQ   RFFXUUHG   ZLWKLQ   VL[   PRQWKV   RI   &OD\WRQjV

)UDOH\RFFXUUHGLQ2FWREHURYHURQH\HDUDIWHU&OD\WRQ            LQIUDFWLRQ DQG DW WKH VDPH ORFDWLRQ )XUWKHU $OEDLQ ZDV VXSHUYLVHG E\ WKH

ZDVGLVFKDUJHG)UDOH\DOVRSXOOHGKLVYHKLFOHDZD\ZLWKWKH            VDPH LQGLYLGXDO DV ZDV WKH SODLQWLII :LWK UHJDUG WR 3UXLWW DQG )UDOH\ WKH
                                                                         ORFDWLRQV RI WKH LQFLGHQWV ZHUH QRW LGHQWLFDO DOWKRXJK WKH FRQGXFW ZDV
GRFN SODWH VWLOO LQ SODFH DQG WKH WUDLOHU GRRUV RSHQ  $      UHPDUNDEO\ VLPLODU RWKHU WKDQ WKH IDFW WKDW QR FRZRUNHU ZDV LQMXUHG
     &OD\WRQY0HLMHU,QF                       1R      1R                        &OD\WRQY0HLMHU,QF       

WUHDWHG PRUH IDYRUDEO\ WKDQ WKH SODLQWLIIl  ,G DW     FRQYH\RUV\VWHPZDVVWLOORQWKHWUDLOHUDQGRQHHPSOR\HHZDV
HPSKDVLVLQRULJLQDO                                        DFWXDOO\ VWDQGLQJ RQ WKH GRFN SODWH  7KH HPSOR\HH KDG WR
                                                                     MXPS DZD\ IURP WKH GRFN WR HVFDSH LQMXU\  7KH FRQYH\RU
   2WKHU7LWOH9,,FDVHVGHFLGHGE\WKLV&RXUWKDYHUHDFKHG          V\VWHP DQG SURGXFW ZHUH GDPDJHG DV WKH\ FUDVKHG WR WKH
WKH VDPH FRQFOXVLRQ 6HH HJ %UDLWKZDLWH Y 7LPNHQ &R   JURXQG  )UDOH\ ZDV GLVFKDUJHG EDVHG XSRQ KLV FRQGXFW
)GWK&LU3HUU\Y0F*LQQLV            $OWKRXJK)UDOH\jVFRQGXFWGLGQRWUHVXOWLQ LQMXU\WRDFR
)GWK&LU+HLQY$OO$P3O\ZRRG&R          ZRUNHU)UDOH\KDGEHHQ LQYROYHGLQIRXUDFFLGHQWVZKLFK
,QF)GWK&LU0LWFKHOOY7ROHGR          0HLMHU GHHPHG SUHYHQWDEOH LQ WKH WZR \HDUV SULRU WR KLV
+RVS)GWK&LU)XUWKHUWKLV          GLVFKDUJH
&RXUW KDV DSSOLHG WKH VDPH DQDO\VLV LQ XWLOL]LQJ WKH
0F'RQQHOO'RXJODVIUDPHZRUNZLWKUHJDUGWRWKHHOHPHQWV                7KH FLUFXPVWDQFHV LQYROYLQJ $OEDLQ 3UXLWW DQG )UDOH\
RIWKHSODLQWLIIjVEXUGHQLQHVWDEOLVKLQJDSULPDIDFLHFDVHRI      VKDUHDQXPEHURIVLPLODULWLHVLQFOXGLQJWKHIDFWWKDWDOOWKUHH
GLVFULPLQDWLRQ ZLWK UHJDUG WR RWKHU DQWLGLVFULPLQDWLRQ          ZHUH WUXFN GULYHUV IRU 0HLMHU DQG FRPPLWWHG WKH VDPH
VWDWXWHV+RSNLQVY(OHF'DWD6\V&RUS)G       FRQGXFWIRUZKLFK&OD\WRQZDVGLVFKDUJHG2IWKHWKUHHRQO\
WK&LUDSSO\LQJWKH0F'RQQHOO'RXJODVWHVWLQD            )UDOH\ZDVGLVFKDUJHG+LVSULRUZRUNUHFRUGLQFOXGHGD
FDVHXQGHUWKH$PHULFDQVZLWK'LVDELOLWLHV $FW86&           QXPEHURISUHYHQWDEOHDFFLGHQWVZKLFKZDVQRWWKHFDVHZLWK
HWVHT(UFHJRYLFKY*RRG\HDU7LUH	5XEEHU&R         &OD\WRQ7KHGLVWULFWFRXUWIRXQGWKDWWKHSULPDU\GLIIHUHQFH
)GWK&LUDSSO\LQJWKH0F'RQQHOO            EHWZHHQWKHFLUFXPVWDQFHVLQYROYLQJWKHEDVLVIRU&OD\WRQjV
'RXJODVWHVWWRWKH$JH'LVFULPLQDWLRQDQG(PSOR\PHQW$FW           GLVFKDUJH DQG WKH WUHDWPHQW DIIRUGHG $OEDLQ 3UXLWW DQG
86&                                                    )UDOH\ZDVWKHIDFWWKDW&OD\WRQFDXVHGVHULRXVSK\VLFDOKDUP
                                                                     WRDFRZRUNHUZKLOHWKHFRQGXFWRIWKHRWKHUWKUHHGLGQRW
  ,QOLJKWRIWKHSUHYLRXVGHFLVLRQVIURPWKLV&RXUWWKLVSDQHO
FRQFOXGHV WKDW WKH GLVWULFW FRXUW FRUUHFWO\ KHOG WKDW WKH       7KHGLVWULFWFRXUWFRQFOXGHGWKDW&OD\WRQIDLOHGWRHVWDEOLVK
SODLQWLIIPXVWSURYHWKDWKHZDVHLWKHUUHSODFHGE\DSHUVRQ         D SULPD IDFLH FDVH XQGHU 0F'RQQHOO 'RXJODV  7KH FRXUW
RXWVLGHRIWKHSURWHFWHGFODVVRUVKRZWKDWVLPLODUO\VLWXDWHG      IRXQGWKDW&OD\WRQKDGQRWHVWDEOLVKHGWKDWKHZDVUHSODFHG
QRQSURWHFWHGHPSOR\HHVZHUHWUHDWHGPRUHIDYRUDEO\                 E\DSHUVRQRXWVLGHRIWKHFODVVRUWKDWKHKDGEHHQWUHDWHG
                                                                     GLIIHUHQWO\IURPVLPLODUO\VLWXDWHGQRQPLQRULW\HPSOR\HHV
   7KHPRUHGLIILFXOWLVVXHSUHVHQWHGE\&OD\WRQLVZKHWKHUKH
ZDVWUHDWHGGLIIHUHQWO\WKDQQRQPLQRULW\HPSOR\HHVHQJDJLQJ                                        ,,,
LQWKHVDPHRUVLPLODUFRQGXFW7KHSODLQWLIIFRQFHGHVWKDWKH
FDQQRWHVWDEOLVKWKDWKHZDVUHSODFHGE\DSHUVRQRXWVLGHRI           7KLV&RXUWUHYLHZVWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\
WKHSURWHFWHGFODVVLILFDWLRQ7KHUHIRUHLQRUGHUWRHVWDEOLVK      MXGJPHQWGHQRYR6HH*ULEFKHFNY5XQ\RQ)G
DSULPDIDFLHFDVHRIGLVFULPLQDWLRQKHPXVWVKRZWKDWKH           WK&LU7KHVWDQGDUGVDSSOLFDEOHWRVXFKUHYLHZ
ZDVWUHDWHGGLIIHUHQWO\WKDQVLPLODUO\VLWXDWHGHPSOR\HHVIURP       DUHZHOOHVWDEOLVKHG
RXWVLGHWKHFODVV
                                                                       6XPPDU\ MXGJPHQW LV DSSURSULDWH ZKHUH QR JHQXLQH
   $V WKLV &RXUW ILUVW H[SODLQHG LQ 0LWFKHOO m>L@W LV         LVVXHRIPDWHULDOIDFWH[LVWVVRWKDWWKHPRYDQWLVHQWLWOHG
IXQGDPHQWDOWKDWWRPDNHDFRPSDULVRQRIDGLVFULPLQDWLRQ              WRMXGJPHQWDVDPDWWHURIODZ)HG5&LY3F7KH
SODLQWLIIjVWUHDWPHQWWRWKDWRIQRQPLQRULW\HPSOR\HHVWKH           FRXUWGHWHUPLQHVZKHWKHUmWKHUHDUHDQ\JHQXLQHIDFWXDO
SODLQWLII PXVW VKRZ WKDW WKH µFRPSDUDEOHVj DUH VLPLODUO\        LVVXHVWKDWSURSHUO\FDQEHUHVROYHGRQO\E\DILQGHURI
VLWXDWHG LQ DOO UHVSHFWVl   )G DW  HPSKDVLV LQ     IDFWEHFDXVHWKH\PD\UHDVRQDEO\EHUHVROYHGLQIDYRURI
      &OD\WRQY0HLMHU,QF                         1R      1R                             &OD\WRQY0HLMHU,QF           

    HLWKHUSDUW\l$QGHUVRQY/LEHUW\/REE\,QF86           SODLQWLIIFDQHVWDEOLVKWKHODVWSURQJRIDSULPDIDFLHFDVHE\
    6&W/(GG2I                VLPSO\VKRZLQJmWKDWKLVSRVLWLRQUHPDLQHGRSHQIRURUZDV
    FRXUVHmLQIHUHQFHVWREHGUDZQIURPWKHXQGHUO\LQJIDFWV           ILOOHGE\DSHUVRQZKRVHTXDOLILFDWLRQVZHUHVLPLODUWRKLVl
    PXVWEHYLHZHGLQWKHOLJKWPRVWIDYRUDEOHWRWKHSDUW\             ,GDW7KH&RXUWKHOGWKDWHYLGHQFHUHJDUGLQJGLVSDUDWH
    RSSRVLQJWKHPRWLRQVl0DWVXVKLWD(OHF,QGXV&RY              WUHDWPHQWRIRWKHUVRXWVLGHWKHSURWHFWHGFODVVLILFDWLRQVKRXOG
    =HQLWK 5DGLR &RUS  86    6&W         RQO\EHFRQVLGHUHGLQWKHWKLUGDQGILQDOVWDJHRIWKHDQDO\VLV
      /(GG    7KH PRYDQW PHHWV LWV         PHDQLQJ DIWHU WKH GHIHQGDQW KDV UHVSRQGHG ZLWK D QRQ
    LQLWLDOEXUGHQmE\µVKRZLQJjoWKDWLVSRLQWLQJRXWWRWKH         GLVFULPLQDWRU\   H[SODQDWLRQ IRU WKH DGYHUVH HPSOR\PHQW
    GLVWULFW FRXUW oWKDWWKHUHLVDQDEVHQFHRIHYLGHQFHWR          DFWLRQ
    VXSSRUWWKHQRQPRYLQJSDUW\jVFDVHl&HORWH[&RUSY
    &DWUHWW  86    6&W                &OD\WRQDFNQRZOHGJHVWKDWWKLV&RXUWKDVQRWDGRSWHGWKH
    /(GG    $W WKDW SRLQW WKH QRQPRYDQW          IRUPXODWLRQ VHW IRUWK E\ WKH )LUVW &LUFXLW LQ &RQZDUG
    mPXVW VHW IRUWK VSHFLILF IDFWV VKRZLQJ WKDW WKHUH LV D     ,QVWHDGWKLV&RXUWKDVKHOGWKDWLQRUGHUWRHVWDEOLVKDSULPD
    JHQXLQHLVVXHIRUWULDOl)HG5&LY3H$QGHUVRQ            IDFLHFDVHRIGLVFULPLQDWLRQE\WKHGHIHQGDQWmWKHSODLQWLII
    86DW6&W                                    PXVW VKRZ  WKDW KH LV D PHPEHU RI D SURWHFWHG JURXS
                                                                        WKDWKHZDVVXEMHFWWRDQDGYHUVHHPSOR\PHQWGHFLVLRQ
'L[RQ Y $QGHUVRQ  )G   Q WK &LU       WKDWKHZDVTXDOLILHGIRUWKHSRVLWLRQDQGWKDWKHZDV
SDUDOOHOFLWDWLRQVRPLWWHG                                           UHSODFHGE\DSHUVRQRXWVLGHRIWKHSURWHFWHGFODVV>W@KH
                                                                        IRXUWKHOHPHQWPD\DOVREHVDWLVILHGE\VKRZLQJWKDWVLPLODUO\
   ,QFKDOOHQJLQJWKHJUDQWLQJRIVXPPDU\MXGJPHQW&OD\WRQ             VLWXDWHG QRQSURWHFWHG HPSOR\HHV ZHUH WUHDWHG PRUH
ILUVW DVVHUWV WKDW WKH GLVWULFW FRXUW LQFRUUHFWO\ DSSOLHG WKH   IDYRUDEO\l7DOOH\Y%UDYR3LWLQR5HVW/WG)G
0F'RQQHOO'RXJODVWHVW6SHFLILFDOO\&OD\WRQDVVHUWVWKDW             WK&LUFLWDWLRQVRPLWWHG
WKHGLVWULFWFRXUWHUUHGLQUHTXLULQJKLPWRSURGXFHHYLGHQFH
WRVXSSRUWDILQGLQJWKDWSODLQWLIIZDVUHSODFHGE\VRPHRQH                7KLV&RXUWLQ7DOOH\IXUWKHUKHOGmVKRZLQJWKDWVLPLODUO\
RXWVLGHWKHSURWHFWHGFODVV                                           VLWXDWHGQRQSURWHFWHGHPSOR\HHVZHUHWUHDWHGPRUHIDYRUDEO\
                                                                        WKDQSODLQWLIILVQRWDUHTXLUHPHQWEXWUDWKHUDQDOWHUQDWLYHWR
  7RWKHFRQWUDU\WKHGLVWULFWFRXUWTXLWHVSHFLILFDOO\VWDWHG         VDWLVI\LQJ WKH IRXUWK HOHPHQW RI WKH SULPD IDFLH FDVH o D
WKDWRQFHWKHSODLQWLIIHVWDEOLVKHGWKDWKHZDVDPHPEHURID           SODLQWLIIPD\VDWLVI\WKHIRXUWKHOHPHQWE\VKRZLQJHLWKHUWKDW
SURWHFWHGFODVVWKDWKHVXIIHUHGIURPDQDGYHUVHHPSOR\PHQW            WKHSODLQWLIIZDVUHSODFHGE\DSHUVRQRXWVLGHRIWKHSURWHFWHG
DFWLRQDQGWKDWKHZDVTXDOLILHGIRUWKHSRVLWLRQIURPZKLFK           FODVVRUWKDWVLPLODUO\VLWXDWHGQRQSURWHFWHGHPSOR\HHVZHUH
KHZDVWHUPLQDWHGWKDWWKHSULPDIDFLHFDVHXQGHU0F'RQQHOO
'RXJODVLVHVWDEOLVKHGLIWKHSODLQWLIIWKHQHVWDEOLVKHVRQHRU
ERWK RI WZR DOWHUQDWLYH WKHRULHV  $FFRUGLQJ WR WKH GLVWULFW
FRXUWWKHSODLQWLIIFRXOGHLWKHUHVWDEOLVKWKDWKHZDVUHSODFHG            
                                                                             ,Q VR KROGLQJ WKH &RXUW RI $SSHDOV QRQHWKHOHVV IRXQG WKDW ZKLOH WKH
E\VRPHRQHRXWVLGHWKHSURWHFWHGFODVVRUWKDWKHZDVWUHDWHG           SODLQWLII ZDV HQWLWOHG WR WKH LQYRFDWLRQ RI WKH SUHVXPSWLRQ WKH HPSOR\HU

GLIIHUHQWO\IURPVLPLODUO\VLWXDWHGQRQPLQRULW\HPSOR\HHV             KDG UHVSRQGHG ZLWK D OHJLWLPDWH EXVLQHVV MXVWLILFDWLRQ IRU WKH GLVFKDUJH

2SLQLRQDQG2UGHUS                                              7KH &RXUW DOVR IRXQG WKDW WKH SODLQWLII KDG IDLOHG WR HVWDEOLVK WKDW RWKHU
                                                                        HPSOR\HHV QRW LQ WKH SURWHFWHG FODVVLILFDWLRQ KDG EHHQ WUHDWHG GLIIHUHQWO\

  &OD\WRQXUJHVWKLV&RXUWWRDGRSWWKHVWDQGDUGDUWLFXODWHG            7KH )LUVW &LUFXLW DOVR H[SODLQHG DV KDV WKLV &RXUW GHVFULEHG WKH SODLQWLII

E\WKH)LUVW&LUFXLWLQ&RQZDUGY&DPEULGJH6FK&RPP
                                                                        EHDUV WKH EXUGHQ RI HVWDEOLVKLQJ WKDW mRWKHUV VLPLODUO\ VLWXDWHG WR KLP LQ
                                                                        DOO UHOHYDQW DVSHFWV ZHUH WUHDWHG GLIIHUHQWO\ E\ WKH HPSOR\HUl &RQZDUG
 )G   VW &LU   7KH &RXUW KHOG WKDW D      )G DW 