Court Opinion

ID: 2969628
Source: CourtListenerOpinion
Date Created: 2015-09-22 15:53:30.699283+00
Date Added: 2024-06-11T11:43:25.542446
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

 (67(9$1 *21=$/(6                ;
        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)OLQW
     1Rn3DXO9*DGROD'LVWULFWsXGJH
                    $UJXHG2FWREHU
            'HFLGHGDQG)LOHG1RYHPEHU
    %HIRUH'$8*+75(<DQG&/$<&LUFXLWsXGJHV
               5866(//'LVWULFWsXGJH

                       BBBBBBBBBBBBBBBBB
                            &2816(/
$5*8('5RE\Q%)UDQNHO%ORRPILHOG+LOOV0LFKLJDQ
IRU $SSHOODQW  2OJD $JQHOOR 2)),&( 2) 7+(
3526(&87,1* $77251(< &2817< 2) :$<1(

    
     7KH +RQRUDEOH 7KRPDV % 5XVVHOO 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU
WKH :HVWHUQ 'LVWULFW RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ

                                   
     *RQ]DOHVY(OR                                 1R

'HWURLW 0LFKLJDQ IRU $SSHOOHH  21 %5,()  5RE\Q %
)UDQNHO %ORRPILHOG +LOOV 0LFKLJDQ IRU $SSHOODQW  2OJD
$JQHOOR2)),&(2)7+(3526(&87,1*$77251(<
&2817<2):$<1('HWURLW0LFKLJDQIRU$SSHOOHH
                      BBBBBBBBBBBBBBBBB
                          23,1,21
                      BBBBBBBBBBBBBBBBB
  &/$< &LUFXLW sXGJH  3HWLWLRQHU (VWHYDQ *RQ]DOHV
DSSHDOVIURPWKHGLVWULFWFRXUWjVRUGHUGHQ\LQJKLVSHWLWLRQIRU
DZULWRIKDEHDVFRUSXVEURXJKWSXUVXDQWWR86&
6SHFLILFDOO\RQDSSHDO3HWLWLRQHUFRQWHQGVWKDWWKHGLVWULFW
FRXUW HUUHG LQ GHQ\LQJ KLV DSSOLFDWLRQ IRU D ZULW RI KDEHDV
FRUSXVEHFDXVHKHZDVGHQLHGKLV6L[WK$PHQGPHQWULJKWWR
WKHHIIHFWLYHDVVLVWDQFHRIWULDOFRXQVHO)RUWKHUHDVRQVVHW
IRUWKEHORZZH$)),50WKHGLVWULFWFRXUWjVRUGHU
                       %$&.*5281'
                      3URFHGXUDO+LVWRU\
   3HWLWLRQHUD0LFKLJDQSULVRQHUZDVFRQYLFWHGRIVHFRQG
GHJUHH PXUGHU LQ YLRODWLRQ RI 0LFK &RPS /DZV $QQ
RQ$SULO IROORZLQJDEHQFKWULDOLQWKH
'HWURLW5HFRUGHUV&RXUWLQFRQQHFWLRQZLWKWKHEHDWLQJGHDWK
RI&KULV7XJJOH3HWLWLRQHUZDVVHQWHQFHGWRDWHUPRIWZHOYH
WRWKLUW\\HDUVRILPSULVRQPHQWDQGWKHUHDIWHUILOHGDQDSSHDO
DVRIULJKWLQWKH0LFKLJDQ&RXUWRI$SSHDOVFODLPLQJWKDWKLV
FRQYLFWLRQ ZDV QRW VXSSRUWHG E\ VXIILFLHQW HYLGHQFH  7KH
0LFKLJDQ&RXUWRI$SSHDOVDIILUPHG3HWLWLRQHUjVFRQYLFWLRQ
RQ sDQXDU\   DQG 3HWLWLRQHU GLG QRW VHHN OHDYH WR
DSSHDOWRWKH0LFKLJDQ6XSUHPH&RXUW
  7KHUHDIWHULQsDQXDU\RI3HWLWLRQHUILOHGD0RWLRQIRU
5HOLHI IURP sXGJPHQW SXUVXDQW WR 0LFKLJDQ &RXUW 5XOH
 FODLPLQJ WKDW WKH SURVHFXWLRQ UHOLHG XSRQ SHUMXUHG
WHVWLPRQ\LQVHFXULQJ3HWLWLRQHUjVFRQYLFWLRQDQGWKDWWULDO
FRXQVHOZDVLQHIIHFWLYHLQDGYLVLQJ3HWLWLRQHUUHJDUGLQJKLV
FRQVWLWXWLRQDO ULJKW WR WHVWLI\  7KH WULDO FRXUW GHQLHG
3HWLWLRQHUjVPRWLRQDQG3HWLWLRQHUILOHGDGHOD\HGDSSOLFDWLRQ
    *RQ]DOHVY(OR                                   1R       1R                                *RQ]DOHVY(OR        

   :HDUHQRWSHUVXDGHGE\3HWLWLRQHUjVUHOLDQFHXSRQ%URZQ               IRUOHDYHWRDSSHDOWRWKH0LFKLJDQ&RXUWRI$SSHDOVZKLFK
Y $UWX]  )G  G &LU   7KHUH DOWKRXJK WKH     ZDVGHQLHG3HWLWLRQHUWKHQILOHGDQDSSOLFDWLRQIRUOHDYHWR
6HFRQG &LUFXLW IRXQG WKDW WKH GHIHQVH DWWRUQH\ KDG QRW            DSSHDOWRWKH0LFKLJDQ6XSUHPH&RXUWDQGRQ2FWREHU
SURSHUO\DGYLVHGWKHGHIHQGDQWRIKLVULJKWWRWHVWLI\WKHFRXUW          WKH 0LFKLJDQ 6XSUHPH &RXUW GHQLHG WKH UHTXHVWHG
XOWLPDWHO\ IRXQG WKDW WKH GHIHQGDQW ZDV QRW GHQLHG WKH            OHDYHKRZHYHUWKHFRXUWUHPDQGHGWKHFDVHWRWKHFRXUWRI
HIIHFWLYHDVVLVWDQFHRIFRXQVHOEHFDXVHKHZDVQRWSUHMXGLFHG             DSSHDOVIRUFRQVLGHUDWLRQmDVRQOHDYHJUDQWHGl
E\ WKH DWWRUQH\jV PLVWDNH  ,G DW  3HWLWLRQHU IDLOV WR
FRQVLGHUWKH6HFRQG&LUFXLWjVXOWLPDWHKROGLQJLQ%URZQDQG                2Q1RYHPEHUWKHFRXUWRIDSSHDOVRQFHDJDLQ
LQVWHDG VLPSO\ IRFXVHV RQ WKH FRXUWjV FRQFOXVLRQ WKDW WKH         DIILUPHG3HWLWLRQHUjVFRQYLFWLRQVDQGUXOHGWKDWWKHFODLPRI
GHIHQVH DWWRUQH\jV SHUIRUPDQFH IHOO EHORZ D UHDVRQDEOH              SHUMXU\ZDVPHUHO\DUHQHZHGFKDOOHQJHWRWKHSURVHFXWLRQ
VWDQGDUGRISHUIRUPDQFH3HWLWLRQHUjVVHOHFWLYHUHOLDQFHLVQRW          ZLWQHVVjFUHGLELOLW\ZKLFKZDVWKHUHIRUHPHULWOHVV7KHFRXUW
VXUSULVLQJEHFDXVHLIKHFRQVLGHUHGWKH%URZQGHFLVLRQDVD               RIDSSHDOVDOVRUXOHGWKDW3HWLWLRQHUKDGZDLYHGUHYLHZRIKLV
ZKROH LW ZRXOG FXW DJDLQVW KLP  ,QGHHG DV LQ %URZQ          FODLP IRU LQHIIHFWLYH DVVLVWDQFH RI FRXQVHO LQDVPXFK DV
3HWLWLRQHUKDVIDLOHGWRVKRZWKDWKHZDVDFWXDOO\SUHMXGLFHG             3HWLWLRQHU KDG IDLOHG WR UDLVH WKH FODLP RQ GLUHFW DSSHDO
E\ KLV IDLOXUH WR WHVWLI\  7KH UHFRUG LQGLFDWHV WKDW VHYHUDO   +RZHYHUWKHFRXUWDGGHGWKDWEHFDXVH3HWLWLRQHUZDVDZDUH
ZLWQHVVHVFRUURERUDWHGWKHJRYHUQPHQWjVYHUVLRQRIWKHHYHQWV             RIKLVULJKWWRWHVWLI\DQGEHFDXVHKLVDWWRUQH\KDGDGYLVHG
RQ WKH QLJKW LQ TXHVWLRQ DQG LQ D FDVH ZKHUH 3HWLWLRQHU LV    3HWLWLRQHU DJDLQVW WHVWLI\LQJ DV D PDWWHU RI WULDO VWUDWHJ\
FODLPLQJWKDWKLVWHVWLPRQ\ZRXOGKDYHEHHQWKDW3HUH]oRQH              3HWLWLRQHUjVFODLPZDVPHULWOHVVLQDQ\HYHQW3HWLWLRQHUILOHG
RI WKH JRYHUQPHQWjV ZLWQHVVHV o ZDV QRW WHOOLQJ WKH WUXWK       DQ DSSOLFDWLRQ IRU OHDYH WR DSSHDO WKH FRXUW RI DSSHDOV
3HWLWLRQHU KDV QRW VKRZQ DFWXDO SUHMXGLFH  6HH )DUOH\ Y        GHFLVLRQ WR WKH VWDWH VXSUHPH FRXUW WKH VXSUHPH FRXUW
8QLWHG6WDWHV1R:/DW

WK                   WKHUHDIWHUGHQLHGOHDYHQRWLQJWKDW3HWLWLRQHUFRXOGQRWVDWLVI\
&LU $XJ   XQSXEOLVKHG RUGHU ILQGLQJ WKDW WKH         WKHFDXVHDQGSUHMXGLFHSUHUHTXLVLWHRI0LFKLJDQ&RXUW5XOH
SHWLWLRQHUKDGQRWVKRZQDFWXDOSUHMXGLFHE\KLVDWWRUQH\jV               '
IDLOXUHWRSURSHUO\DGYLVHKLPDERXWKLVULJKWWRWHVWLI\ZKHUH
VHYHUDOZLWQHVVHVFRUURERUDWHGWKHJRYHUQPHQWjVYHUVLRQRI                  3HWLWLRQHU WKHQ VRXJKW KDEHDV UHOLHI LQ WKH 8QLWHG 6WDWHV
WKHHYHQWV                                                              'LVWULFW&RXUWIRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQRQsXQH
                                                                           SXUVXDQW WR  86&    2Q $SULO  
                         &21&/86,21                                       0DJLVWUDWH sXGJH 'RQDOG $ 6FKHHU LVVXHG D UHSRUW DQG
                                                                          UHFRPPHQGDWLRQ LQ ZKLFK KH UHFRPPHQGHG WKDW DQ
   ,Q VXPPDU\ DOWKRXJK 3HWLWLRQHU GLG QRW SURFHGXUDOO\             HYLGHQWLDU\KHDULQJEHKHOGDVWR3HWLWLRQHUjVFODLPLQYROYLQJ
GHIDXOWRQKLVLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOFODLPZHKROG           LQHIIHFWLYHDVVLVWDQFHRIFRXQVHO7KHGLVWULFWFRXUWDGRSWHG
WKDW WKH GLVWULFW FRXUW SURSHUO\ GLVPLVVHG 3HWLWLRQHUjV             WKH PDJLVWUDWHjV UHFRPPHQGDWLRQ DQG 0DJLVWUDWH 6FKHHU
DSSOLFDWLRQIRUDZULWRIKDEHDVFRUSXVZKHUH3HWLWLRQHUKDV              SUHVLGHGRYHUWKHHYLGHQWLDU\KHDULQJRQ)HEUXDU\
IDLOHGWRVKRZWKDWKHZDVGHQLHGKLV6L[WK$PHQGPHQWULJKW
WRWKHHIIHFWLYHDVVLVWDQFHRIFRXQVHO:HWKHUHIRUH$)),50                7KH PDJLVWUDWH WKHUHDIWHU LVVXHG D UHSRUW DQG
WKHGLVWULFWFRXUWjVRUGHU                                               UHFRPPHQGDWLRQZKHUHLQKHUHFRPPHQGHGWKDWWKHSHWLWLRQ
                                                                          IRU D ZULW RI KDEHDV FRUSXV EH GHQLHG  7KH PDJLVWUDWH
                                                                          FRQFOXGHGWKDW3HWLWLRQHUjVWULDOFRXQVHOZDVQRWLQHIIHFWLYH
                                                                          DQG WKDW KLV FRXQVHO SURSHUO\ DGYLVHG 3HWLWLRQHU RI KLV
                                                                          FRQVWLWXWLRQDOULJKWWRWHVWLI\LQKLVRZQEHKDOI2QsXO\
     *RQ]DOHVY(OR                                   1R       1R                                *RQ]DOHVY(OR       

'LVWULFWsXGJH3DXO9*DGRODDGRSWHGWKHPDJLVWUDWHjV                 ,Q OLJKW RI WKLV &RXUWjV SURQRXQFHPHQW LQ :HEEHU
UHSRUW DQG UHFRPPHQGDWLRQ DQG GHQLHG 3HWLWLRQHUjV                   3HWLWLRQHUjV FODLP LV ZLWKRXW PHULW  $V IRXQG LQ :HEEHU
DSSOLFDWLRQIRUWKHZULW                                                mZKHQDWDFWLFDOGHFLVLRQLVPDGHQRWWRKDYHWKHGHIHQGDQW
                                                                          WHVWLI\WKHGHIHQGDQWjVDVVHQWLVSUHVXPHGl)GDW
  7KH GLVWULFW FRXUW GHFOLQHG WR LVVXH D FHUWLILFDWH RI           +HUH GHIHQVH FRXQVHO +LOGDJR WHVWLILHG DW WKH HYLGHQWLDU\
DSSHDODELOLW\KRZHYHURQ0DUFKWKLV&RXUWJUDQWHG             KHDULQJWKDWKHPDGHDWDFWLFDOGHFLVLRQWRDGYLVH3HWLWLRQHU
3HWLWLRQHU D FHUWLILFDWH RI DSSHDODELOLW\ DQG WKLV DSSHDO         QRW WR WDNH WKH VWDQG EHFDXVH 3HWLWLRQHU GLG QRW DSSHDU
HQVXHG                                                                   FUHGLEOH3HWLWLRQHUWHVWLILHGWKDWGHIHQVHFRXQVHODGYLVHGKLP
                                                                          QRW WR WHVWLI\ DV D VWUDWHJLF PRYH EHFDXVH RI 3HUH]jV
                                )DFWV                                     WHVWLPRQ\ DV ZHOO DV EHFDXVH RI 3HWLWLRQHUjV DSSHDUDQFH
                                                                          $FFRUGLQJ WR 3HWLWLRQHU GHIHQVH FRXQVHO WROG KLP WKDW KH
   sRQDWKRQ3DXONZKRZDVILIWHHQ\HDUVROGDWWKHWLPHRI               mORRNHGWRRPHDQlWRWHVWLI\SDUWLFXODUO\ZKHQFRPSDUHGWR
3HWLWLRQHUjV WULDO WHVWLILHG WKDW KH OLYHG GLUHFWO\ DFURVV WKH   3HUH]  :KDWHYHU WKH UHDVRQ JLYHQ WKH SDUWLHV DJUHH WKDW
VWUHHWIURPWKHYLFWLP&KULV7XJJOHLQWKH&LW\RI'HWURLW             GHIHQVHFRXQVHOjVGHFLVLRQWRDGYLVH3HWLWLRQHUQRWWRWHVWLI\
2Q6HSWHPEHUDWDERXWSP3DXONREVHUYHG                 ZDV D WDFWLFDO RQH EDVHG RQ WULDO VWUDWHJ\  $V VXFK
7XJJOHDV7XJJOHUHPRYHGWKHVSHDNHUVIURPWKHWUXQNRIKLV               3HWLWLRQHUjV DVVHQW LV SUHVXPHG DV LV WKH HIIHFWLYHQHVV RI
YHKLFOH3DXONQRWHGWKDW7XJJOHjVYHKLFOHZDVSDUNHGRQWKH             3HWLWLRQHUjVFRXQVHOEDUULQJDQ\LQGLFDWLRQE\3HWLWLRQHUDW
VDPHVLGHRIWKHVWUHHWRQZKLFK7XJJOHOLYHGDQGWKDWWKH               WULDOWKDWKHGLVDJUHHGZLWKKLVFRXQVHO6HHLG
GLVWDQFHIURPWKHXSVWDLUVZLQGRZRIWKHKRXVHZKHUH3DXON
ZDVSRVLWLRQHGWRZKHUH7XJJOHjVFDUZDVSDUNHGZDVDERXW                   7KH UHFRUG LV YRLG RI DQ\ VXFK LQGLFDWLRQ E\ 3HWLWLRQHU
WZHQW\WRWKLUW\IHHW3DXONVWDWHGWKDW3HWLWLRQHUZKRP3DXON          ,QGHHGDVWKHPDJLVWUDWHQRWHG3HWLWLRQHUGLGQRWUDLVHWKLV
UHIHUUHGWRDVm&KLQDPDQlZDVVWDQGLQJQH[WWRWKHFDUDV                FODLPXQWLOQHDUO\VL[\HDUVDIWHUKLVFRQYLFWLRQDQGDIWHUKLV
7XJJOH UHPRYHG WKH VSHDNHUV IURP WKH WUXQN  3DXON DOVR          DSSHDODVRIULJKWZDVUHMHFWHGs$DWQOHWDORQH
VWDWHGWKDWRQFH7XJJOHUHPRYHGWKHVSHDNHUVIURPKLVWUXQN              YRLFHDQ\VXFKFRQFHUQDWWULDO)XUWKHUPRUHEDVHGXSRQWKH
7XJJOHZHQWLQWRKLVKRXVHZKLOH3HWLWLRQHUUHPDLQHGRXWVLGH              WHVWLPRQ\HOLFLWHGDWWKHKHDULQJRQWKLVLVVXH3HWLWLRQHUKDV
QH[WWRWKHFDU                                                         QRWRYHUFRPHWKHSUHVXPSWLRQWKDWKHZLOOLQJO\DJUHHGZLWK
                                                                          KLV FRXQVHOjV DGYLFH QRW WR WHVWLI\ DQG WKDW KLV FRXQVHO
   3DXONWHVWLILHGWKDWKHWKHQREVHUYHGDPDQWKDWKHFDOOHG             UHQGHUHG HIIHFWLYH DVVLVWDQFH  7KH PDJLVWUDWH FUHGLWHG WKH
m%XGG\lODWHULGHQWLILHGDVsHVVH3HUH]ZDONLQJGRZQWKH               WHVWLPRQ\RIGHIHQVHFRXQVHOZKHQFRXQVHOVWDWHGWKDWLWZDV
VWUHHWZLWKDQRWKHU\RXQJPDQDQGWZRJLUOV3DXONREVHUYHG              KLV FXVWRPDU\ SUDFWLFH WR DGYLVH KLV FOLHQWV RI WKHLU )LIWK
%XGG\DQGKLVFRPSDQLRQVZDONSDVW3HWLWLRQHUWRWKHFRUQHU               $PHQGPHQW ULJKWV HYHQ WKRXJK FRXQVHO FRXOG QRW
RI WKH VWUHHW %XGG\ WKHQ UHWXUQHG WR ZKHUH 3HWLWLRQHU ZDV       VSHFLILFDOO\UHPHPEHUWKHDGYLFHWKDWKHJDYHWR3HWLWLRQHU
VWDQGLQJ%\WKLVWLPH7XJJOHKDGMRLQHG3HWLWLRQHUEDFNE\              7KHPDJLVWUDWHGLVFUHGLWHGZKDWKHIRXQGWREH3HWLWLRQHUjV
WKH FDU WKH WKUHH PHQ WKHQ JRW LQWR WKH YHKLFOH DQG GURYH     VHOHFWLYHPHPRU\RIWKHDGYLFHSURYLGHGE\GHIHQVHFRXQVHO
DZD\$FFRUGLQJWR3DXON7XJJOHZDVGULYLQJ3HWLWLRQHU                 %HFDXVHWKLVFRXUWGRHVQRWGLVWXUELVVXHVRIFUHGLELOLW\WKH
ZDVLQWKHSDVVHQJHUjVVHDWDQG%XGG\ZDVLQWKHEDFNVHDW              PDJLVWUDWHDQGWKHUHIRUHWKHGLVWULFWFRXUWGLGQRWFOHDUO\HUU
7KHRQO\FRQYHUVDWLRQWKDW3DXONKHDUGEHWZHHQWKHPHQZDV                LQPDNLQJKLVILQGLQJVDQGWKDW3HWLWLRQHUjVDUJXPHQWWKXV
ZKHQ3HWLWLRQHURUGHUHG%XGG\WRmJHWLQWKHEDFNDVVKROHl               IDLOV
7XJJOH3HWLWLRQHUDQG%XGG\WKHQGURYHDZD\DQG3DXONGLG
QRWVHHDQ\RIWKHPHQDJDLQKRZHYHU3DXONWHVWLILHGWKDWKH
   *RQ]DOHVY(OR                                 1R    1R                                *RQ]DOHVY(OR        

WHVWLI\l6HH)GDW,QGLVFXVVLQJWKHILUVWLVVXH     VDZ 7XJJOHjV FDU RQ ILUH FORVH WR PLGQLJKW LQ WKH FKXUFK
WKLV&RXUWRSLQHGWKDW                                             SDUNLQJORWEHKLQG3DXONjVKRXVH
     $OWKRXJKWKHXOWLPDWHGHFLVLRQZKHWKHUWRWHVWLI\UHVWV           sHVVH3HUH]DNDm%XGG\lDOVRWHVWLILHGDWWULDO3HUH]
  ZLWKWKHGHIHQGDQWZKHQDWDFWLFDOGHFLVLRQLVPDGHQRW          VWDWHG WKDW RQ WKH GD\ LQ TXHVWLRQ 3HWLWLRQHU DND
  WRKDYHWKHGHIHQGDQWWHVWLI\WKHGHIHQGDQWjVDVVHQWLV          m&KLQDPDQlDUULYHGDW3HUH]jVPRWKHUjVKRPHDWDERXW
  SUHVXPHG>8QLWHG6WDWHVY@sRHOVRQ)G>@DW           SPDQGWKHWZRZDONHGXSWRDORFDOEDUZKHUHWKH\VSHQW
  >WK&LU@7KLVLVVREHFDXVHWKHGHIHQGDQWjV        VHYHUDOKRXUVGULQNLQJEHHUWKH\OHIWDQGZHQWWRDQRWKHUEDU
  DWWRUQH\LVSUHVXPHGWRIROORZWKHUXOHVRISURIHVVLRQDO          IRU MXVW D PRPHQW DQG WKHQ OHIW  7KH WZR ZDONHG WRZDUG
  FRQGXFW DQG LV mVWURQJO\ SUHVXPHG WR KDYH UHQGHUHG         3HUH]jVPRWKHUjVKRXVHEXW3HWLWLRQHUVSOLWIURP3HUH]ZKLOH
  DGHTXDWHDVVLVWDQFHlLQFDUU\LQJRXWWKHJHQHUDOGXW\             3HUH]UHWXUQHGKRPHDQGVDWRQWKHEDFNSRUFKEHFDXVHKH
  mWR DGYRFDWH WKH GHIHQGDQWjV FDXVH DQG WKH PRUH            ZDVQRWIHHOLQJZHOO3HUH]VWDWHGWKDWDERXWWZHQW\PLQXWHV
  SDUWLFXODU GXWLHV WR FRQVXOW ZLWK WKH GHIHQGDQW RQ         ODWHU3HWLWLRQHUUHWXUQHGGULYLQJDGDUNFRORUHGFDU+HWROG
  LPSRUWDQWGHFLVLRQVDQGWRNHHSWKHGHIHQGDQWLQIRUPHG            3HUH]WRJHWLQWRWKHFDUDQGWRJRZLWKKLP3HUH]GHFOLQHG
  RI LPSRUWDQW GHYHORSPHQWV LQ WKH FRXUVH RI WKH             EHFDXVHKHZDVQRWIHHOLQJZHOOKRZHYHU3HWLWLRQHULQVLVWHG
  SURVHFXWLRQl6WULFNODQGY:DVKLQJWRQ86            VR3HUH]JRWLQWRWKHSDVVHQJHUVHDWRIWKHYHKLFOHDQGOHIW
  %DUULQJDQ\VWDWHPHQWVRUDFWLRQVIURP            ZLWK3HWLWLRQHU
  WKHGHIHQGDQWLQGLFDWLQJGLVDJUHHPHQWZLWKFRXQVHORU
  WKHGHVLUHWRWHVWLI\WKHWULDOFRXUWLVQHLWKHUUHTXLUHGWR       3HUH]WHVWLILHGWKDW3HWLWLRQHUZDVKHDGHGWR7ROHGR2KLR
  VXDVSRQWHDGGUHVVDVLOHQWGHIHQGDQWDQGLQTXLUHZKHWKHU         EXW VWRSSHG LQ (FRUVH 0LFKLJDQ DW WKH KRPH RI 3HUH]jV
  WKH GHIHQGDQW NQRZLQJO\ DQG LQWHQWLRQDOO\ ZDLYHG WKH        JLUOIULHQG6XVDQ9LFWRUZKROLYHGZLWKKHUDXQW%RQQ\/RX
  ULJKWWRWHVWLI\QRUHQVXUHWKDWWKHGHIHQGDQWKDVZDLYHG        0LODQRYLFK 7KH WZR PHQ ZHQW LQVLGH DQG 3HWLWLRQHU WROG
  WKHULJKWRQWKHUHFRUGsRHOVRQ)GDW           3HUH]LQ6SDQLVKWKDWKHZDVJRLQJWRNLOOVRPHRQHWKDWQLJKW
                                                                    DQGWKDWKHZDQWHG3HUH]WRJRZLWKKLP3HUH]VWDWHGWKDWKH
    $GHIHQGDQWZKRZDQWVWRWHVWLI\FDQUHMHFWGHIHQVH             WROG3HWLWLRQHUWKDWKHGLGQRWZDQWWRJRZLWKKLPEXWWKDWKH
  FRXQVHOjVDGYLFHWRWKHFRQWUDU\E\LQVLVWLQJRQWHVWLI\LQJ      XOWLPDWHO\ DJUHHG WR JR ZLWK 3HWLWLRQHU  7KH WZR PHQ OHIW
  FRPPXQLFDWLQJ ZLWK WKH WULDO FRXUW RU GLVFKDUJLQJ          9LFWRUjV KRXVH JRW LQWR WKH FDU DQG GURYH DZD\ ZLWK
  FRXQVHOsRHOVRQ)GDW$WEDVHDGHIHQGDQW           3HWLWLRQHUEHKLQGWKHZKHHO3HUH]WHVWLILHGWKDWLWZDVDERXW
  PXVWmDOHUWWKHWULDOFRXUWlWKDWKHGHVLUHVWRWHVWLI\RUWKDW   SPE\WKLVWLPHDQGWKDW3HWLWLRQHUGURYHWRWKHHQG
  WKHUHLVDGLVDJUHHPHQWZLWKGHIHQVHFRXQVHOUHJDUGLQJ            RI:HVWILHOGURDGDQGWKHQVWRSSHGWKHFDU
  ZKHWKHU KH VKRXOG WDNH WKH VWDQG  3HO]HU >Y 8QLWHG
  6WDWHV 1R @  :/  DW
 >WK &LU         $IWHU3HWLWLRQHUVWRSSHGWKHFDUKHSRSSHGWKHWUXQNDQG
  sDQ@:KHQDGHIHQGDQWGRHVQRWDOHUWWKHWULDO       3HUH]REVHUYHGD\RXQJ&DXFDVLDQPDQJHWRXWRIWKHWUXQN
  FRXUWRIDGLVDJUHHPHQWZDLYHURIWKHULJKWWRWHVWLI\PD\       3HWLWLRQHUJRWRXWRIWKHFDUEXW3HUH]UHPDLQHGLQVLGH3HUH]
  EH LQIHUUHG E\ WKH GHIHQGDQWjV FRQGXFW  :DLYHU LV        FODLPHG WKDW IURP KLV SRVLWLRQ LQVLGH WKH FDU KH REVHUYHG
  SUHVXPHGIURPWKHGHIHQGDQWjVIDLOXUHWRWHVWLI\RUQRWLI\        3HWLWLRQHUDQGWKH\RXQJPDQDUJXLQJ3HWLWLRQHUZDVSXVKLQJ
  WKHWULDOFRXUWRIWKHGHVLUHWRGRVRsRHOVRQ)GDW       WKHPDQDQGWKHPDQZDVSOHDGLQJZLWK3HWLWLRQHUQRWWRKXUW
                                                                KLP3HWLWLRQHUJUDEEHGDWLUHMDFNIURPWKHWUXQNRIWKHFDU
                                                                    DQGKLWWKHPDQLQWKHXSSHUSDUWRIKLVERG\VHYHUDOWLPHV
,GDWIRRWQRWHRPLWWHGHPSKDVLVDGGHG                      7KHPDQIHOOWRWKHJURXQG3HWLWLRQHUJRWEDFNLQWRWKHFDU
     *RQ]DOHVY(OR                                  1R       1R                                  *RQ]DOHVY(OR       

DQGKHWKHQGURYHRIIZLWK3HUH]OHDYLQJWKHPDQjVEHDWHQ                  7KHPDJLVWUDWHUHOLHGXSRQWKH(OHYHQWK&LUFXLWjVGHFLVLRQ
ERG\ EHKLQG  :KHQ 3HWLWLRQHU JRW EDFN LQWR WKH FDU KH         LQ8QLWHG6WDWHVY7HDJXH)GWK&LU
ZDUQHG 3HUH] QRW WR WHOO DQ\RQH ZKDW KH REVHUYHG RU             LQVXSSRUWRILWVUHFRPPHQGDWLRQWKDW3HWLWLRQHUjVFODLPPXVW
3HWLWLRQHUZRXOGNLOOKLP                                               IDLO7KHPDJLVWUDWHIRXQGWKHIDFWVRIWKHFDVHDWKDQGRQDOO
                                                                         IRXUVZLWK7HDJXH7KHPDJLVWUDWHQRWHGWKDWLQ7HDJXHWKH
  7KH WZR SURFHHGHG EDFN WR 9LFWRUjV KRPH 3HUH] DVNHG           GHIHQGDQWFODLPHGDGHQLDORIKLVFRQVWLWXWLRQDOULJKWWRWHVWLI\
9LFWRUWRVSHQGWKHQLJKWZLWKKLPVKHDJUHHGDQGOHIWZLWK            EHFDXVHKLVFRXQVHOGLGQRWFDOOKLPDVDZLWQHVVKRZHYHUDW
3HWLWLRQHUDQG3HUH]7KHPHQGURSSHG9LFWRURIIDW3HUH]jV             WKH HYLGHQWLDU\ KHDULQJ RQ WKH LVVXH WKH GHIHQVH DWWRUQH\
PRWKHUjV KRXVH  $IWHU WKH PHQ GURSSHG RII 9LFWRU WKH\         WHVWLILHGWKDWLWZDVSDUWRIKHUQRUPDOSUDFWLFHWRLQIRUPWKH
SURFHHGHGGRZQDQDOOH\DQGWKHQ3HWLWLRQHUPDGH3HUH]JHW               FOLHQWWKDWKHKDGWKHULJKWWRWHVWLI\DQGWKDWVKHSUREDEO\
RXW RI WKH FDU DOOHJHGO\ EHFDXVH 3HUH] ZDV PDNLQJ KLP          H[SODLQHGWRWKHGHIHQGDQWWKDWLWZDVKLVGHFLVLRQZKHWKHUWR
QHUYRXV  6HYHUDO GD\V ODWHU 3HUH] OHIW IRU 7ROHGR 2KLR      WDNHWKHVWDQGs$DW7KHGHIHQVHFRXQVHODOVR
ZKLOHWKHUHKHUDQLQWRKLVVLVWHU5RVLHZKRZDVZLWKDIULHQG         H[SUHVVHGFRQFHUQWKDWVKHPD\QRWKDYHPDGHLWFOHDUWRKHU
3HUH] VWDWHG WKDW 5RVLH LQIRUPHG KLP WKDW WKH SROLFH ZHUH       FOLHQWWKDWWKHFKRLFHWRWHVWLI\EHORQJHGWRKLPKRZHYHUWKH
ORRNLQJIRUD\RXQJER\EDFNLQ'HWURLW3HUH]WROG5RVLHWKDW          GLVWULFW FRXUW GHWHUPLQHG WKDW DQ DGHTXDWH DGYLVHPHQW KDG
KHZDVJRLQJWRIOHHWKHVWDWHDQGKHDGWR,QGLDQDEXWWKHQ             EHHQPDGHDQGWKH(OHYHQWK&LUFXLWDIILUPHGs$DW
GHFLGHGWRUHWXUQWR'HWURLWRQ2FWREHUZLWK5RVLH               7KH PDJLVWUDWH LQ WKLV FDVH WKHQ DQDORJL]HG WKDW D VLPLODU
DQGKHUIULHQG8SRQDUULYLQJLQ'HWURLW3HUH]FRQWDFWHGWKH           GHWHUPLQDWLRQ VKRXOG EH PDGH LQ WKLV FDVH EDVHG XSRQ
KRPLFLGHXQLWRIWKH'HWURLW3ROLFH'HSDUWPHQWE\WHOHSKRQH             +LOGDOJRjVWHVWLPRQ\s$DW
DQGWROG/LHXWHQDQW'HDQHDERXWWKHHYHQWVWKDWKHREVHUYHG
RQ WKH HYHQLQJ RI 6HSWHPEHU  LQYROYLQJ 3HWLWLRQHU DQG            2Q DSSHDO WKH JRYHUQPHQW DOVR UHOLHV XSRQ 7HDJXH LQ
7XJJOH7KHUHDIWHUWKH'HWURLW3ROLFHSLFNHGXS3HUH]DWDQ            VXSSRUWRILWVFRQWHQWLRQWKDWWKHPDJLVWUDWHDQGXOWLPDWHO\
DJUHHG ORFDWLRQ DQG 3HUH] WKHQ GLUHFWHG WKH SROLFH WR WKH      WKHGLVWULFWFRXUWLQDGRSWLQJWKHPDJLVWUDWHjVUHFRPPHQGDWLRQ
ORFDWLRQ ZKHUH 3HUH] REVHUYHG 3HWLWLRQHU EHDW 7XJJOH DQG          oSURSHUO\IRXQGQRPHULWWR3HWLWLRQHUjVFODLP,QWHUHVWLQJO\
DEDQGRQ 7XJJOHjV ERG\  7KH SROLFH UHFRYHUHG 7XJJOHjV             3HWLWLRQHUUHOLHVXSRQ7HDJXHDVZHOOLQVXSSRUWRIKLVFODLP
EHDWHQUHPDLQV                                                          WKDWWKHPDJLVWUDWHHUUHGLQUHDFKLQJKLVGHFLVLRQ3HWLWLRQHU
                                                                         FODLPV WKDW WKH PDJLVWUDWH PLVDSSOLHG 7HDJXH LQ WKDW WKH
  6XVDQ 9LFWRU DOVR WHVWLILHG DW 3HWLWLRQHUjV WULDO  6KH        (OHYHQWK&LUFXLWPDGHFOHDUWKDWDGHIHQVHFRXQVHOZRXOGEH
FRUURERUDWHG3HUH]jVYHUVLRQRIWKHHYHQWVWKDWWRRNSODFHRQ            FRQVLGHUHGLQHIIHFWLYHLIKHIDLOHGWRLQIRUPWKHFOLHQWWKDWWKH
WKHQLJKWLQTXHVWLRQH[FHSWWKDWVKHVWDWHGWKDW3HUH]KDGWROG        XOWLPDWHGHFLVLRQWRWHVWLI\UHVWVZLWKWKHGHIHQGDQW%DVHG
KHU WKDW 7XJJOH KDG EHHQ ULGLQJ DURXQG ZLWK KLP DQG             XSRQWKLV&RXUWjVUHFHQWGHFLVLRQLQ8QLWHG6WDWHVY:HEEHU
3HWLWLRQHUWKDWDWRQHSRLQW3HWLWLRQHUDQG7XJJOHJRWRXWRI           )GWK&LULWLVQRWQHFHVVDU\WRFRQGXFWDQ
WKHFDUDQG3HWLWLRQHUEHJDQKLWWLQJ7XJJOHZLWKDPHWDOSLSH           LQTXLU\LQWR7HDJXHDQGLWVDSSOLFDWLRQWRWKHFDVHDWKDQG
WKDW3HUH]WULHGWRVWRS3HWLWLRQHUEXWZDVXQDEOHWRGRVRDQG
WKDWDIWHU3HWLWLRQHUEHDW7XJJOH3HUH]DVVLVWHG3HWLWLRQHULQ             ,Q:HEEHUWKHGHIHQGDQWUDLVHGWZRDOOHJDWLRQVRIHUURURQ
SXWWLQJ7XJJOHjVERG\LQWKHWUXQNRIWKHFDU$FFRUGLQJWR             GLUHFWDSSHDORIKLVFRQYLFWLRQIRUFRQVSLUDF\WRSRVVHVVZLWK
9LFWRU 3HUH] WROG KHU WKDW WKH\ WKHQ UHWXUQHG WR 9LFWRUjV      LQWHQWWRGLVWULEXWHFRFDLQHEDVHGLVWULEXWLRQRIFRFDLQHEDVH
KRXVH SLFNHG KHU XS WR WDNH KHU WR 'HWURLW DQG DIWHU WKH\   DQGDLGLQJDQGDEHWWLQJGLVWULEXWLRQRIFRFDLQHEDVHmKLV
GURSSHG9LFWRURIIDW3HUH]jVPRWKHUjVKRXVH3HWLWLRQHUDQG             ULJKWWRWHVWLI\RQKLVRZQEHKDOIZDVZDLYHGE\KLVDWWRUQH\
3HUH]ZHQWDIHZEORFNVDZD\DQGEXUQHGWKHFDUDSSDUHQWO\              DQG  WKH WULDO FRXUW LPSHUPLVVLEO\ µFKLOOHGj KLV ULJKW WR
    *RQ]DOHVY(OR                                 1R       1R                                *RQ]DOHVY(OR       

  KHUHIXVHGWRRIIHUWKHWHVWLPRQ\RIDFOLHQWZKRHOHFWHG             ZLWK7XJJOHjVERG\VWLOOLQWKHWUXQN9LFWRUjVDXQW%RQQ\
  WRWDNHWKHVWDQGLQKLVRZQEHKDOI                                  0LODQRYLFK DOVR WHVWLILHG DQG VWDWHG WKDW VKH ZDV SUHVHQW
                                                                        GXULQJ WKH YLVLWV E\ 3HWLWLRQHU DQG 3HUH] RQ WKH QLJKW LQ
s$ DW   ,Q FRPSDULVRQ WKH PDJLVWUDWH IRXQG DV      TXHVWLRQDQGWKDWDWRQHSRLQWVKHRYHUKHDUG3HWLWLRQHUWHOO
IROORZVUHJDUGLQJWKHWHVWLPRQ\WKDW3HWLWLRQHUSURYLGHGDWWKH         3HUH]LQ6SDQLVKWKDWWKH\KDGWRKXUU\XSDQGJHWULGRIWKH
KHDULQJ                                                                ERG\
    3HWLWLRQHUjVKHDULQJWHVWLPRQ\LQFOXGHVVSHFLILFGHQLDO                7KH PHGLFDO H[DPLQHU WHVWLILHG WKDW KH SHUIRUPHG DQ
  WKDW0U+LOGDOJRH[SODLQHGKLV)LIWK$PHQGPHQW5LJKWV               DXWRSV\RQ7XJJOHjVERG\DQGGHWHUPLQHGWKHFDXVHRIGHDWK
  7KH WHQVLRQ EHWZHHQ WKDW VSHFLILF GHQLDO DQG 0U               WRKDYHEHHQPXOWLSOHEORZVWRWKHKHDGDQGWKDW7XJJOHKDG
  +LOGDOJRjVPRUHJHQHUDOWHVWLPRQ\LPSOLFDWHVWKHLVVXHRI             EHHQGHDGIRUVHYHUDOZHHNVEHIRUHKLVERG\ZDVUHFRYHUHG
  WKHLU UHVSHFWLYH FUHGLELOLW\  %HFDXVH WKH 3HWLWLRQ
  FKDOOHQJHVWKHDGHTXDF\RIKLVSURIHVVLRQDOVHUYLFHVLW                                      ',6&866,21
  FRXOGUHDVRQDEO\EHVXJJHVWHGWKDW0U+LOGDOJRKDGD
  SHUVRQDO PRWLYDWLRQ WR WHVWLI\ WKDW KH DFWHG SURSHUO\            3HWLWLRQHUDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQGHQ\LQJKLV
  7KDW PRWLYDWLRQ KRZHYHU SDOHV LQ FRPSDULVRQ WR WKH           DSSOLFDWLRQIRUDZULWRIKDEHDVFRUSXVZKHUHKLVFRXQVHOjV
  SHUVRQDO LQWHUHVW RI 3HWLWLRQHU LQ SURPRWLQJ KLV RZQ           IDLOXUHWRSURSHUO\DSSULVH3HWLWLRQHUWKDWKLVULJKWWRWHVWLI\
  YHUVLRQRIWKHIDFWV7KHFOHDUO\DQGYLWDOO\VHOIVHUYLQJ           ZDV D SHUVRQDO ULJKW ZKLFK KH FRXOG DVVHUW GHVSLWH KLV
  QDWXUHRI0U*RQ]DOHVjWHVWLPRQ\LQFRQMXQFWLRQZLWK                FRXQVHOjV DGYLFH WR WKH FRQWUDU\ IHOO EHORZ DQ REMHFWLYH
  KLV GHOD\ LQ UDLVLQJ KLV )LIWK DQG 6L[WK $PHQGPHQW            VWDQGDUGRIUHDVRQDEOHQHVVDQGSUHMXGLFHG3HWLWLRQHUWKHUHE\
  FODLPV WLSV WKH EDODQFH RQ WKH LVVXH RI FUHGLELOLW\ LQ      GHQ\LQJ3HWLWLRQHUKLV6L[WK$PHQGPHQWULJKWWRWKHHIIHFWLYH
  IDYRURI0U+LOGDOJR%RWKZLWQHVVHVZHUHWHVWLI\LQJWR             DVVLVWDQFHRIFRXQVHO3HWLWLRQHUFODLPVWKDWEDVHGXSRQWKH
  WKH HYHQWV ZKLFK RFFXUUHG PDQ\ \HDUV HDUOLHU  0U            HYLGHQWLDU\KHDULQJFRQGXFWHGRQWKLVLVVXHWKHPDJLVWUDWH
  +LOGDOJRUHDGLO\DGPLWWHGKLVODFNRIVSHFLILFUHFDOODQG            FOHDUO\HUUHGLQILQGLQJFRXQVHOjVH[SHULHQFHVLJQLILFDQWWKDW
  WHVWLILHGDVWRKLVH[SHULHQFHDQGJHQHUDOSUDFWLFHDQG              FRXQVHOKDGSURSHUO\DGYLVHG3HWLWLRQHUDQGWKDW3HWLWLRQHU
  RQO\ VXFK VSHFLILF PHPRU\ DV ZDV UHIUHVKHG E\ KLV             MRLQHGKLVFRXQVHOLQWKHGHFLVLRQQRWWRWHVWLI\
  UHYLHZRIWUDQVFULSWVHFWLRQVDQGWKHGRFXPHQWVLQWKLV
  FDVH$OWKRXJK3HWLWLRQHUjVUHFROOHFWLRQZDVVXEMHFWWR                 7KH JRYHUQPHQW PDLQWDLQV WKDW WKH GLVWULFW FRXUW
  WKH VDPH SDVVDJH RI WLPH DQG KLV WHVWLPRQ\ ZDV               LPSHUPLVVLEO\ FRQVLGHUHG WKH PHULWV RI 3HWLWLRQHUjV FODLP
  RWKHUZLVH VXEVWDQWLDOO\ GHYRLG RI GHWDLOHG IDFWXDO               EHFDXVH3HWLWLRQHUKDVSURFHGXUDOO\GHIDXOWHG,QRWKHUZRUGV
  UHFROOHFWLRQV KH DVVHUWHG FHUWDLQW\ WKDW KLV DWWRUQH\jV        WKH JRYHUQPHQW FRQWHQGV WKDW EHFDXVH 3HWLWLRQHU IDLOHG WR
  H[SODQDWLRQ RI KLV )LIWK $PHQGPHQW 5LJKWV ZDV                   UDLVHKLVFODLPRILQHIIHFWLYHDVVLVWDQFHRIFRXQVHOEHIRUHWKH
  LQVXIILFLHQW  , ILQG LVRODWHG FHUWDLQW\ LQKHUHQWO\             VWDWHDSSHOODWHFRXUWVWKHGLVWULFWFRXUWVKRXOGKDYHUHTXLUHG
  VXVSLFLRXVDQGDJDLQ,YLHZWKHEDODQFHRIFUHGLELOLW\WR           3HWLWLRQHU WR VKRZ FDXVH DQG SUHMXGLFH WR H[FXVH KLV
  IDYRU0U+LOGDOJRjVWHVWLPRQ\                                       SURFHGXUDO GHIDXOW EHIRUH HYHU UHDFKLQJ WKH PHULWV RI
                                                                        3HWLWLRQHUjV FODLP  7KH JRYHUQPHQW IXUWKHU FRQWHQGV WKDW
s$DWIRRWQRWHRPLWWHG7KHPDJLVWUDWHDOVRQRWHG         3HWLWLRQHU FDQQRW VKRZ FDXVH DQG SUHMXGLFH WR H[FXVH KLV
WKDW 3HWLWLRQHU mGLG QRW UDLVH WKHVH FODLPV XQWLO QHDUO\ VL[   SURFHGXUDOGHIDXOW+RZHYHUWKHJRYHUQPHQWDUJXHVLQWKH
\HDUVDIWHUKLVFRQYLFWLRQDQGDIWHUKLVDSSHDORIULJKWZDV           DOWHUQDWLYHWKDWHYHQLIWKLV&RXUWVKRXOGH[FXVH3HWLWLRQHUjV
UHMHFWHGls$DWQ                                          GHIDXOW WKH GLVWULFW FRXUW SURSHUO\ FRQFOXGHG WKDW WKH
                                                                        DSSOLFDWLRQ IRU WKH ZULW VKRXOG EH GHQLHG ZKHUH GHIHQVH
        *RQ]DOHVY(OR                                1R       1R                                 *RQ]DOHVY(OR       

FRXQVHOjVSHUIRUPDQFHLQDGYLVLQJ3HWLWLRQHURIKLVULJKWWR              WRWHVWLI\ZDVDULJKWSHUVRQDOWRKLPDQGWKDW3HWLWLRQHUFRXOG
WHVWLI\ZDVQRWEHORZDQREMHFWLYHVWDQGDUGRIUHDVRQDEOHQHVV            DVVHUWWKDWULJKWGHVSLWHKLVDWWRUQH\jVDGYLFHWRWKHFRQWUDU\
                                                                          $IWHUWKHKHDULQJKHOGRQWKLVLVVXHWKHPDJLVWUDWHLVVXHGD
  :HUHYLHZDGLVWULFWFRXUWjVGHFLVLRQ LQDKDEHDVFRUSXV               UHSRUWDQGUHFRPPHQGDWLRQZKHUHLQKHXOWLPDWHO\FRQFOXGHG
SURFHHGLQJGHQRYR&UHPHDQVY&KDSOHDX)G                   DVIROORZV
WK&LU+RZHYHUWKH&RXUWUHYLHZVDGLVWULFW
FRXUWjV ILQGLQJV RI IDFW IRU FOHDU HUURU  6HH 0F4XHHQ Y         ,QYLHZRI0U+LOGDOJRjV>GHIHQVHFRXQVHOjV@VWDWHPHQWV
6FURJJ\)GWK&LU7KHSURYLVLRQV                DVWRKLVFXVWRPDU\SUDFWLFH,ILQGLWPRUHOLNHO\WKDWD
RI WKH $QWLWHUURULVP DQG (IIHFWLYH 'HDWK 3HQDOW\ $FW                 VXIILFLHQW)LIWK$PHQGPHQWDGYLVHPHQWZDVLVVXHGEXW
m$('3$lGRQRWDSSO\WRWKLVFDVHLQDVPXFKDV3HWLWLRQHUjV                WKDW LW ZDV QRW DGHTXDWHO\ DSSUHKHQGHG E\ *RQ]DOHV
DSSOLFDWLRQZDVILOHGEHIRUH$SULOWKHHIIHFWLYHGDWH             +DYLQJREVHUYHGERWKZLWQHVVHVDQGKDYLQJHYDOXDWHG
RI WKH $('3$  6HH /LQGK Y 0XUSK\  86              WKHLUWHVWLPRQ\LQOLJKWRIP\RZQH[SHULHQFH,ILQG0U
+HUEHUWY%LOO\)GWK&LU                  +LOGDOJRPRUHFUHGLEOHWKDQ0U*RQ]DOHV7KXV,ILQG
                                                                      WKDW3HWLWLRQHUjVIDLOXUHWRDVVHUWKLVULJKWWRWHVWLI\LVQRW
                                                                            DWWULEXWDEOHWRLQDGHTXDWHUHSUHVHQWDWLRQ
        3URFHGXUDO 'HIDXOW  o  &DXVH DQG 3UHMXGLFH
          6WDQGDUG                                                        s$DW
  ,W LV ZHOO VHWWOHG WKDW D SULVRQHU VHHNLQJ KDEHDV UHOLHI LQ     7KH PDJLVWUDWH EDVHG WKLV FRQFOXVLRQ LQ SDUW XSRQ WKH
IHGHUDOFRXUWPXVWKDYHSUHVHQWHGWKHFODLPXSRQZKLFKKH                 WHVWLPRQ\RIGHIHQVHFRXQVHO0LFKDHO+LOGDOJRDQGPDGHWKH
VHHNV UHOLHI WR WKH VWDWH DSSHOODWH FRXUWV  6SHFLILFDOO\ LQ    IROORZLQJILQGLQJV
&ROHPDQ Y 7KRPSVRQ  86    WKH
6XSUHPH&RXUWRSLQHGDVIROORZV                                            7ULDOFRXQVHO0U+LOGDOJRWHVWLILHGWKDWKLVRIILFHILOH
                                                                            RQ 3HWLWLRQHUjV FDVH KDV EHHQ ORVW LQ WKH FRXUVH RI
    ,QDOOFDVHVLQZKLFKDVWDWHSULVRQHUKDVGHIDXOWHGKLV                UHORFDWLQJKLVSUDFWLFHRQWKUHHGLIIHUHQWRFFDVLRQVVLQFH
    IHGHUDOFODLPVLQVWDWHFRXUWSXUVXDQWWRDQLQGHSHQGHQW                3HWLWLRQHUjVWULDO0U+LOGDOJRGLGKRZHYHUWHVWLI\IURP
    DQGDGHTXDWHSURFHGXUDOUXOHIHGHUDOKDEHDVUHYLHZRI                  JHQHUDO UHFROOHFWLRQ RI KLV UHSUHVHQWDWLRQ RI 0U
    WKHFODLPLVEDUUHGXQOHVVWKHSULVRQHUFDQGHPRQVWUDWH                 *RQ]DOHVUHLQIRUFHGE\KLVUHYLHZSULRUWRKLVKHDULQJ
    FDXVHIRUWKHGHIDXOWDQGDFWXDOSUHMXGLFHDVDUHVXOWRI               WHVWLPRQ\ RI WKH VXEPLVVLRQV RI WKH SDUWLHV DQG P\
    WKHDOOHJHGYLRODWLRQRIIHGHUDOODZRUGHPRQVWUDWHWKDW               RULJLQDO5HSRUWDQG5HFRPPHQGDWLRQLQWKHLQVWDQWFDVH
    IDLOXUHWRFRQVLGHUWKHFODLPVZLOOUHVXOWLQDIXQGDPHQWDO             DQGDUHDGLQJRISRUWLRQVRIWKHWULDOWUDQVFULSWVLQFOXGLQJ
    PLVFDUULDJHRIMXVWLFH                                                 KLVRZQILQDODUJXPHQWDQGWKHVHQWHQFLQJSURFHHGLQJV
                                                                            ,W LV IDLU WR QRWH WKDW KH GLG QRW KDYH DQ LQGHSHQGHQW
  ,QWKHFDVHDWKDQGWKH0LFKLJDQDSSHOODWHFRXUWVUHOLHG                 UHFROOHFWLRQRIWKHVSHFLILFDGYLFHWKDWKHUHQGHUHGWR0U
XSRQ0LFKLJDQ&RXUW5XOH'WRSUHFOXGHUHYLHZRI                     *RQ]DOHVRQWKHLVVXHRIKLVULJKWWRWHVWLI\1RQHWKHOHVV
3HWLWLRQHUjVFODLP7KH0LFKLJDQ&RXUWRI$SSHDOVZKLOHQRW               0U +LOGDOJR ZDV DEOH WR WHVWLI\ DV WR KLV FXVWRPDU\
VSHFLILFDOO\FLWLQJWKHUXOHRSLQHGDVIROORZV                            SUDFWLFHZLWKUHJDUGWRDGYLVLQJKLVFOLHQWVRIWKHLUULJKW
                                                                            WRWHVWLI\LQFULPLQDOPDWWHUVDQGKLVODFNRIUHFROOHFWLRQ
                                                                            RIDQ\LQVWDQFHLQZKLFKKHQHJOHFWHGWRSURSHUO\DGYLVH
                                                                            DFOLHQWRIKLVKHU)LIWK$PHQGPHQW5LJKWVRULQZKLFK
     *RQ]DOHVY(OR                                     1R        1R                                *RQ]DOHVY(OR          

WKLVFDVHZHILQGWKDW3HWLWLRQHUFDQQRWEHGHHPHGWRKDYH                       'HIHQGDQWjVWULDOFRXQVHOjVIDLOXUHWRKDYHGHIHQGDQW
EHHQVRDSSULVHG                                                             WHVWLI\DWWULDORUWRLQIRUPGHIHQGDQWRIKLVULJKWWRWHVWLI\
                                                                                ZDVDOVRDQ LVVXHZKLFKFRXOGKDYHDQGVKRXOGKDYH
   ,Q3HRSOHY5HHG1:G0LFKWKH                     EHHQ UDLVHG LQ GHIHQGDQWjV RULJLQDO DSSHDO
0LFKLJDQ6XSUHPH&RXUWH[SODLQHGWKDWm>E@HIRUH2FWREHU                      &RQVHTXHQWO\LWWRRLVQRWSURSHUO\EHIRUHXV
 WKH SURFHGXUH IRU FROODWHUDO UHYLHZ RI FULPLQDO
FRQYLFWLRQV LQ 0LFKLJDQ GLG QRW PDNH DQ\ SURYLVLRQ IRU                s$DW3HRSOHY*RQ]DOHV1R0LFK&W$SS
ILQDOLW\RIMXGJPHQWV$VDFRQVHTXHQFHGHIHQGDQWVFRXOG                    1RYXQSXEOLVKHGPHPRUDQGXP8SRQUHYLHZ
DQGGLGUHSHDWHGO\VHHNUHOLHIZLWKRXWOLPLWDWLRQ>@lWKHFRXUW              RI3HWLWLRQHUjVDSSOLFDWLRQIRUOHDYHWKH0LFKLJDQ6XSUHPH
UXOHZDVHQDFWHGLQRUGHUWRUHFWLI\WKHVHUHSHDWHGDWWHPSWVDW               &RXUWVLPLODUO\RSLQHGZKHQLWKHOGWKDW
FROODWHUDO UHYLHZ  +HUH 3HWLWLRQHU ZDV FRQYLFWHG LQ WKH
'HWURLW5HFRUGHUV&RXUWRQ$SULODQGWKH0LFKLJDQ                        2QRUGHURIWKH&RXUWWKHGHOD\HGDSSOLFDWLRQIRUOHDYH
&RXUW RI $SSHDOV DIILUPHG 3HWLWLRQHUjV FRQYLFWLRQ LQ DQ                  WRDSSHDOLVFRQVLGHUHGDQGLWLV'(1,('EHFDXVHWKH
RSLQLRQGDWHGsDQXDU\ZHOOEHIRUHWKHHQDFWPHQWRI                    GHIHQGDQWKDVIDLOHGWRPHHWWKHEXUGHQRIHVWDEOLVKLQJ
0&5'DQGDVVXFKZHOOEHIRUH3HWLWLRQHUFRXOG                      HQWLWOHPHQWWRUHOLHIXQGHU0&5'
UHDVRQDEO\EHHQDSSULVHGRI0&5'jVPDQGDWHRI
ILQDOLW\  6HH 5RJHUV  )G DW  FLWLQJ 'RVWHU Y            s$DW3HRSOHY*RQ]DOHV1R0LFK1RY
%DQQDQ  )G   WK &LU  mµ8QGHU                    XQSXEOLVKHGRUGHU
0LFKLJDQODZWKHUHLVQRILQDOWLPHOLPLWDWLRQXSRQWKHSRZHU
RI WKH WULDO FRXUW WR JUDQW D PRWLRQ IRU QHZ WULDOj    l      0LFKLJDQ&RXUW5XOH'LVWKHVWDWHDQDORJWRIHGHUDO
TXRWLQJ0,&+ &7 5 7KXVLQWKHFDVHDWKDQG                H[KDXVWLRQ,QRWKHUZRUGVWKHFRXUWUXOHUHTXLUHVWKDWDQ
0&5 ' FDQQRW VHUYH DV DQ LQGHSHQGHQW DQG                     DSSHOODQWVHHNLQJDGGLWLRQDOUHYLHZRIDFODLPmZKLFKFRXOG
DGHTXDWH VWDWH JURXQG XSRQ ZKLFK WR EDVH 3HWLWLRQHUjV                  KDYHEHHQUDLVHGRQDSSHDOIURPWKHFRQYLFWLRQDQGVHQWHQFH
SURFHGXUDOGHIDXOWDQGWKHWKLUG0DXSLQIDFWRULVWKHUHIRUH                  RULQDSULRUPRWLRQlPXVWGHPRQVWUDWHJRRGFDXVHIRUIDLOXUH
QRWPHWWKHUHE\DOORZLQJIRUDUHYLHZRI3HWLWLRQHUjVKDEHDV                 WRUDLVHVXFKJURXQGVRQDSSHDODQGDFWXDOSUHMXGLFHFDXVHG
FODLP                                                                        IURPWKHLUUHJXODULWLHVWRVXSSRUWWKHFODLPIRUUHOLHI0,&+
                                                                              &7 5 '7KH0LFKLJDQDSSHOODWHFRXUWVDVLGHIURP
   +RZHYHU ZLWK WKDW VDLG 3HWLWLRQHUjV DSSOLFDWLRQ IRU WKH           WKHFRXUWRIDSSHDOVDOWHUQDWLYHKROGLQJUHIXVHGWRFRQVLGHU
ZULWZDVSURSHUO\GHQLHGZKHUHDVH[SODLQHGLQWKHIROORZLQJ                 3HWLWLRQHUjV FODLP EHFDXVH KH KDG QRW VKRZQ FDXVH DQG
VHFWLRQ 3HWLWLRQHU KDV IDLOHG WR VKRZ WKDW KLV FRXQVHOjV             SUHMXGLFHXQGHUWKHFRXUWUXOH
SHUIRUPDQFHIHOOEHORZDUHDVRQDEOHVWDQGDUGDQGSUHMXGLFHG
3HWLWLRQHUVRDVWRGHSULYH3HWLWLRQHURIKLV6L[WK$PHQGPHQW                   $ GHWHUPLQDWLRQ RI ZKHWKHU D SHWLWLRQHU SURFHGXUDOO\
ULJKW6HH6WULFNODQGY:DVKLQJWRQ86                    GHIDXOWHGKLVFODLPEURXJKWEHIRUHWKHIHGHUDOFRXUWUHTXLUHV
                                                                       DQDQDO\VLVXQGHUWKHIRXUSDUWWHVWRI0DXSLQY6PLWK

      0HULWV RI 3HWLWLRQHUjV ,QHIIHFWLYH $VVLVWDQFH RI
        &RXQVHO&ODLP
  3HWLWLRQHUFODLPVWKDWKHZDVGHQLHGWKHHIIHFWLYHDVVLVWDQFH
RIFRXQVHOLQYLRODWLRQRIKLV6L[WK$PHQGPHQWULJKWE\KLV
FRXQVHOjVIDLOXUHWRVSHFLILFDOO\LQIRUP3HWLWLRQHUWKDWWKHULJKW
       *RQ]DOHVY(OR                                   1R        1R                              *RQ]DOHVY(OR      

)GWK&LU7KHIRXUIDFWRUVDFRXUWLVWR               ZKREURXJKWKLVGLUHFWDSSHDOSULRUWRWKHUXOHjVHIIHFWLYHGDWH
FRQVLGHUXQGHU0DXSLQDUHDVIROORZV                                       RI 2FWREHU   DQG ZH WKHUHIRUH IRXQG WKDW '
                                                                              FRXOGQRWVHUYHDVDQDGHTXDWHDQGLQGHSHQGHQWVWDWHJURXQG
  )LUVW WKH FRXUW PXVW GHWHUPLQH WKDW WKHUH LV D VWDWH              IRUWKHSULVRQHUjVSURFHGXUDOGHIDXOW6HH5RJHUVY+RZHV
  SURFHGXUDOUXOHWKDWLVDSSOLFDEOHWRWKHSHWLWLRQHUjVFODLP                 )G   WK &LU  m>:@H KROG WKDW WKH
  DQGWKDWWKHSHWLWLRQHUIDLOHGWRFRPSO\ZLWKWKHUXOH               VXEVWDQFHRI0&5'ZDVQRWDILUPO\HVWDEOLVKHG
  6HFRQGWKHFRXUWPXVWGHFLGHZKHWKHUWKHVWDWHFRXUWV                      DQG UHJXODUO\ IROORZHG SURFHGXUDO UXOH DW WKH WLPH RI
  DFWXDOO\ HQIRUFHG WKH VWDWH SURFHGXUDO VDQFWLRQ                 SHWLWLRQHUjV FRQYLFWLRQ DQG WKXV ZDV QRW DQ DGHTXDWH DQG
  7KLUGWKHFRXUWPXVWGHFLGHZKHWKHUWKHVWDWHSURFHGXUDO                   LQGHSHQGHQW VWDWH SURFHGXUDO UXOH EDUULQJ UHYLHZ RI
  IRUIHLWXUHLVDQmDGHTXDWHDQGLQGHSHQGHQWlVWDWHJURXQG                    SHWLWLRQHUjV KDEHDV SHWLWLRQl FLWLQJ %RUULH Y 0DNRZVNL
  RQ ZKLFK WKH VWDWH FDQ UHO\ WR IRUHFORVH UHYLHZ RI D              1RV    :/  DW 

 WK &LU
  IHGHUDOFRQVWLWXWLRQDOFODLP7KLVTXHVWLRQJHQHUDOO\                sDQXQSXEOLVKHG
  ZLOO LQYROYH DQ H[DPLQDWLRQ RI WKH OHJLWLPDWH VWDWH
  LQWHUHVWVEHKLQGWKHSURFHGXUDOUXOHLQOLJKWRIWKHIHGHUDO                   +RZHYHU LQ /XEHUGD Y 7ULSSHWW WKLV &RXUW H[SUHVVO\
  LQWHUHVW LQ FRQVLGHULQJ IHGHUDO FODLPV  >)RXUWK@ WKH               GHFOLQHGWRDGRSWDEULJKWOLQHUXOHWKDW'FRXOGQRW
  SHWLWLRQHUPXVWGHPRQVWUDWHXQGHU>:DLQZULJKWY@6\NHV                    DSSO\WRDQ\0LFKLJDQSULVRQHUFRQYLFWHGEHIRUH'jV
  >86@WKDWWKHUHZDVmFDXVHlIRUKLPQRW                     HIIHFWLYHGDWHRI2FWREHU6HH)G
  WR IROORZ WKH SURFHGXUDO UXOH DQG WKDW KH ZDV DFWXDOO\             WK&LUm>$@µGDWHRIFRQYLFWLRQjUXOHILUVWOHDGVWR
  SUHMXGLFHGE\WKHDOOHJHGFRQVWLWXWLRQDOHUURU                             DEVXUG UHVXOWV DQG VHFRQG UHVWV RQ D VKDN\ WKHRUHWLFDO
                                                                              IRXQGDWLRQl0RUHRYHUWKH/XEHUGDFRXUWmGHFOLQH>G@WR
,GFLWDWLRQVRPLWWHG                                                      DGRSW DQ\ SHU VH DSSURDFK IRU SLQSRLQWLQJ ZKHQ 0&5
                                                                              ' EHFDPH µILUPO\ HVWDEOLVKHGj ZLWK UHVSHFW WR DOO
  +HUHDVHYLGHQFHGE\WKHVWDWHDSSHOODWHFRXUWVjGHFLVLRQV                KDEHDVSHWLWLRQHUVl,GDW5DWKHU/XEHUGDLQVWUXFWV
WKHUH LV DQ DSSOLFDEOH VWDWH UXOH o 0LFKLJDQ &RXUW 5XOH              WKDW mIHGHUDO FRXUWV PXVW GHFLGH RQ D FDVHE\FDVH EDVLV
'oDQGWKDWUXOHLVHQIRUFHGE\WKHVWDWHFRXUWVWKXV                ZKHWKHUGXULQJWKHSHULRGWKDWDGHIHQGDQWPD\LIKHZLVKHV
VDWLVI\LQJ WKH ILUVW WZR 0DXSLQ IDFWRUV  +RZHYHU D                  WDLORU KLV DSSHDO WR DYRLG WKH FRQVHTXHQFHV RI D VWDWH
GHWHUPLQDWLRQRIWKHWKLUG0DXSLQUHTXLUHPHQWWKDWWKHVWDWH                 SURFHGXUDOUXOHWKHµGHIHQGDQWFRXOGEHGHHPHGWR
SURFHGXUDOIRUIHLWXUHLVDQmDGHTXDWHDQGLQGHSHQGHQWlVWDWH                  KDYHEHHQDSSULVHGRI>WKHSURFHGXUDOUXOHjV@H[LVWHQFHjl,G
JURXQGRQZKLFKWKHVWDWHFDQUHO\LVQRWDVFOHDU7KHVWDWH               DOWHUDWLRQ LQ /XEHUGD LQWHUQDO TXRWDWLRQ PDUNV RPLWWHG
JURXQGXSRQZKLFKWKH0LFKLJDQDSSHOODWHFRXUWVUHIXVHGWR                    FLWLQJ)RUGY*HRUJLD86
FRQVLGHU3HWLWLRQHUjVFODLP0LFKLJDQ&RXUW5XOH'
KDVUHFHQWO\EHHQIRXQGLQDSSOLFDEOHWRD0LFKLJDQSULVRQHU                      %HFDXVH3HWLWLRQHUZDVFRQYLFWHGDQGILOHGKLVGLUHFWDSSHDO
                                                                              WR WKH 0LFKLJDQ &RXUW RI $SSHDOV ZHOO EHIRUH 0&5
                                                                              'jV2FWREHUHIIHFWLYHGDWHLQDFFRUGDQFHZLWK
     8
     
          QRWHG LQ 6FRWW Y 0LWFKHOO m>D@OWKRXJK ZH KDYH UHPDLQHG IDLWKIXO   /XEHUGDjVLQVWUXFWLRQZHZLOOILUVWGHWHUPLQHZKHWKHUGXULQJ
WR WKH DQDO\VLV HQGRUVHG E\ 0DXSLQ RXU PRUH UHFHQW GHFLVLRQV KDYH QRW        WKHSHULRGRIWLPHWKDW3HWLWLRQHUPD\KDYHWDLORUHGKLVDSSHDO
DOZD\V HPSOR\HG D µ0DXSLQ WHVWj SHU VHl  )G   Q WK &LU      WRLQFOXGHKLVFODLPIRULQHIIHFWLYHDVVLVWDQFHRIFRXQVHOEDVHG
 FLWLQJ %\UG Y &ROOLQV  )G   WK &LU 
DUWLFXODWLQJ WKH IDFWRUV IURP 0DXSLQ DQG UHODWHG FDVHV GLIIHUHQWO\ E\
                                                                              RQKLVDWWRUQH\jVDOOHJHGIDLOXUHWRSURSHUO\DGYLVH3HWLWLRQHU
DQDORJ\ sRQHV Y 7RRPEV  )G   WK &LU  DSSO\LQJ        RIKLVULJKWWRWHVWLI\3HWLWLRQHUFRXOGEHGHHPHGWRKDYHEHHQ
WKH &ROHPDQ IRUPXODWLRQ ZLWKRXW PHQWLRQLQJ 0DXSLQ DOWKRXJK UHDFKLQJ          DSSULVHGRI0&5'jVH[LVWHQFH8QGHUWKHIDFWVRI
WKH VDPH UHVXOW