Pouillon v. Little

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH   3RXLOORQY/LWWOHHWDO 1R (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS *LOGQHU6,0(1),*85$ 3$5.(5)OLQW0LFKLJDQIRU $SSHOOHH 81,7('67$7(6&28572)$33($/6 *,%%216sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK 6,/(5sMRLQHG%2**6sSGHOLYHUHGDVHSDUDWH )257+(6,;7+&,5&8,7 FRQFXUULQJRSLQLRQ BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB

s$0(6 328,//21 ; 23,1,21 3ODLQWLII$SSHOOHH BBBBBBBBBBBBBBBBB   1R s8/,$ 60,7+ *,%%216 &LUFXLW sXGJH  3ODLQWLII Y  DSSHOOHHs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n$QQD'LJJV7D\ORU'LVWULFWsXGJH 3RXLOORQ PRYHG IRU DWWRUQH\jV IHHV SXUVXDQW WR  86& †DQGGHIHQGDQWVPRYHGIRUFRVWVSXUVXDQWWR)HGHUDO $UJXHG'HFHPEHU 5XOH RI &LYLO 3URFHGXUH   7KH GLVWULFW FRXUW JUDQWHG 3RXLOORQjVPRWLRQIRUIHHVDQGGHQLHGGHIHQGDQWVjPRWLRQIRU 'HFLGHGDQG)LOHG$SULO FRVWV

%HIRUH%2**66,/(5DQG*,%%216&LUFXLWsXGJHV 7KLVDSSHDOSUHVHQWVWZRLVVXHVZKHWKHUWKHMXU\DZDUG LQIDYRURI3RXLOORQIRUQRPLQDOGDPDJHVVXSSRUWVDQDZDUG BBBBBBBBBBBBBBBBB RI DWWRUQH\jV IHHV SXUVXDQW WR †  DQG  ZKHWKHU DQ XQDFFHSWHG5XOHRIIHUORVHVLWVFRVWVKLIWLQJHIIHFWDIWHUDQ &2816(/ DSSHDODQGUHPDQG)RUWKHUHDVRQVVHWIRUWKEHORZZHKROG WKDWWKHMXU\DZDUGLQIDYRURI3RXLOORQIRUQRPLQDOGDPDJHV $5*8('  sDVRQ ' .RONHPD s2+1621 526$7, GRHV QRW VXSSRUW DQ DZDUG RI DWWRUQH\jV IHHV SXUVXDQW WR /D%$5*($6(/7<1( ),(/'/DQVLQJ0LFKLJDQIRU †DQGWKDWDQXQDFFHSWHG5XOHRIIHUGRHVQRWORVHLWV $SSHOODQWV  0LFKDHO s *LOGQHU 6,0(1 ),*85$ FRVWVKLIWLQJHIIHFWDIWHUDQDSSHDODQGUHPDQG$FFRUGLQJO\ 3$5.(5)OLQW0LFKLJDQIRU$SSHOOHH21%5,()sDVRQ ZH UHYHUVH WKH GLVWULFW FRXUWjV MXGJPHQW DQG UHPDQG IRU '.RONHPDs2+1621526$7,/D%$5*($6(/7<1( IXUWKHUSURFHHGLQJVFRQVLVWHQWZLWKWKLVRSLQLRQ  ),(/' /DQVLQJ 0LFKLJDQ IRU $SSHOODQWV  0LFKDHO s

 1R 3RXLOORQY/LWWOHHWDO   3RXLOORQY/LWWOHHWDO 1R

, ODZ DQG KDG LPSURSHUO\ VXEPLWWHG TXHVWLRQV RI ODZ WR WKH MXU\,G )RURYHUWHQ\HDUVsDPHV3RXLOORQVWDJHGDERUWLRQSURWHVWV DOPRVWGDLO\RQWKHSXEOLFVLGHZDONLQIURQWRIWKHFLW\KDOO $IWHU WKLV FRXUW LVVXHG LWV RSLQLRQ 3RXLOORQ RIIHUHG WR EXLOGLQJ LQ 2ZRVVR 0LFKLJDQ  2Q 'HFHPEHU   DFFHSW GHIHQGDQWVj SULRU VHWWOHPHQW RIIHU RI  EXW 3RXLOORQPRYHGKLVSURWHVWIURPKLVFXVWRPDU\SRVWRQWKH GHIHQGDQWVGHFOLQHGWRUHLQVWDWHWKHLUSULRURIIHUZKLFKKDG VLGHZDONWRDSRVLWLRQRQWKHVWHSVRIFLW\KDOO2QWKDWGD\ EHHQGHHPHGZLWKGUDZQSXUVXDQWWR5XOH$VHFRQGMXU\ SROLFH RIILFHUV 6KDURQ /LWWOH DQG :* %ODQFKHWW DUUHVWHG WULDOFRPPHQFHGDQGWKHVHFRQGMXU\UHWXUQHGDYHUGLFWLQ sDPHV3RXLOORQDIWHUKHUHIXVHGWKHLURUGHUVWRPRYHEDFNWR IDYRURI3RXLOORQLQWKHDPRXQWRI$IWHUWKHYHUGLFW WKHVLGHZDON 3RXLOORQ PRYHG WR UHFRYHU DWWRUQH\jV IHHV SXUVXDQW WR  86& †  DQG GHIHQGDQWV PRYHG WR UHFRYHU FRVWV 3RXLOORQILOHGWKLVDFWLRQLQ0LFKLJDQVWDWHFRXUWDJDLQVWWKH SXUVXDQWWR)HGHUDO5XOHRI&LYLO3URFHGXUH7KHGLVWULFW &LW\ RI 2ZRVVR DQG SROLFH RIILFHUV /LWWOH DQG %ODQFKHWW FRXUW JUDQWHG 3RXLOORQjV PRWLRQ IRU DWWRUQH\jV IHHV LQ WKH DOOHJLQJIDOVHDUUHVWDQGPDOLFLRXVSURVHFXWLRQ'HIHQGDQWV DPRXQWRIDQGGHQLHGGHIHQGDQWVjPRWLRQIRUFRVWV UHPRYHGWKHDFWLRQWRIHGHUDOFRXUWFKDUDFWHUL]LQJ3RXLOORQjV 'HIHQGDQWV DSSHDO WKH GLVWULFW FRXUWjV RUGHU JUDQWLQJ FRPSODLQW DV D )LUVW $PHQGPHQW FODLP  ,Q IHGHUDO FRXUW 3RXLOORQjVPRWLRQIRUDWWRUQH\jVIHHVDQGWKHGLVWULFWFRXUWjV 3RXLOORQDPHQGHGKLVFRPSODLQWWRDOOHJHH[SOLFLWO\YLRODWLRQV RUGHUGHQ\LQJWKHLUPRWLRQIRUFRVWV RIKLV)LUVWDQG)RXUWK$PHQGPHQWULJKWV,QKLVDPHQGHG FRPSODLQW 3RXLOORQ UHTXHVWHG FRPSHQVDWRU\ GDPDJHV ,, SXQLWLYHGDPDJHVDQGDWWRUQH\jVIHHV $7KH'LVWULFW&RXUWjV$ZDUGRI$WWRUQH\jV)HHVWR 2Q'HFHPEHUGHIHQGDQWVVHUYHG3RXLOORQZLWKD 3RXLOORQ IRUPDORIIHURIMXGJPHQWSXUVXDQWWR)HGHUDO5XOHRI&LYLO 3URFHGXUHLQWKHDPRXQWRILQFOXVLYHRIFRVWVDQG 7KH &LYLO 5LJKWV $WWRUQH\jV )HHV $ZDUG $FW RI  DWWRUQH\jV IHHV  3RXLOORQ GLG QRW DFFHSW WKLV RIIHU  2Q 86&†ESHUPLWVDFRXUWLQLWVGLVFUHWLRQWRDZDUG 0DUFKGHIHQGDQWVVHUYHG3RXLOORQZLWKDVHFRQG WKH mSUHYDLOLQJ SDUW\l LQ D †  DFWLRQ mUHDVRQDEOHl IRUPDORIIHURIMXGJPHQWSXUVXDQWWR5XOHLQWKHDPRXQW DWWRUQH\jVIHHVDVSDUWRIWKHFRVWV(YHQDSODLQWLIIZKRZLQV RILQFOXVLYHRIFRVWVDQGDWWRUQH\jVIHHV3RXLOORQ RQO\QRPLQDOGDPDJHVLVFRQVLGHUHGDmSUHYDLOLQJSDUW\lIRU GLGQRWDFFHSWWKLVRIIHUHLWKHU SXUSRVHV RI †   )DUUDU Y +REE\  86   $OWKRXJKWKHWHFKQLFDOQDWXUHRIDQRPLQDOGDPDJHV $IRXUGD\MXU\WULDOFRPPHQFHGRQ$SULODQGWKH DZDUG GRHV QRW GLVTXDOLI\ D SODLQWLII IURP SUHYDLOLQJ SDUW\ MXU\ UHWXUQHG D YHUGLFW LQ IDYRU RI GHIHQGDQWV  3RXLOORQ VWDWXVLWGRHVEHDURQWKHUHDVRQDEOHQHVVRIDQ\DWWRUQH\jV DSSHDOHGDQGWKLVFRXUWDIILUPHGLQSDUWUHYHUVHGLQSDUWDQG IHHV DZDUG  ,G DW   7KH PRVW FULWLFDO IDFWRU LQ UHPDQGHGWKHFDVHWRWKHGLVWULFWFRXUWIRUIXUWKHUSURFHHGLQJV GHWHUPLQLQJWKHUHDVRQDEOHQHVVRIDQDWWRUQH\jVIHHVDZDUGLV 3RXLOORQY&LW\RI2ZRVVR)G WK &LU WKHGHJUHHRIVXFFHVVREWDLQHG,G,QDFLYLOULJKWVDFWLRQIRU 6SHFLILFDOO\WKLVFRXUWDIILUPHGWKHGLVWULFWFRXUWjVGLVPLVVDO FRPSHQVDWRU\ DQG SXQLWLYH GDPDJHV WKH DZDUGLQJ RI RQO\ RI3RXLOORQjVFODLPIRUSXQLWLYHGDPDJHVEXWWKLVFRXUWIRXQG QRPLQDOGDPDJHV KLJKOLJKWVWKHSODLQWLIIjVIDLOXUHWRSURYH WKDWWKHGLVWULFWFRXUWKDGLQVWUXFWHGWKHMXU\LQFRUUHFWO\RQWKH DFWXDOLQMXU\RUDQ\EDVLVIRUDZDUGLQJSXQLWLYHGDPDJHV6HH LGDWm:KHQDSODLQWLIIUHFRYHUVRQO\QRPLQDOGDPDJHV  EHFDXVH RI KLV IDLOXUH WR SURYH DQ HVVHQWLDO HOHPHQW RI KLV 7KH GLVWULFW FRXUW GLVPLVVHG 3RXLOORQjV FODLPV DJDLQVW WKH &LW\ RI 2ZRVVR DQG 3RXLOORQ KDV QRW DSSHDOHG WKLV GLVPLVVDO FODLPIRUPRQHWDU\UHOLHIWKHRQO\UHDVRQDEOHIHHLVXVXDOO\ 1R 3RXLOORQY/LWWOHHWDO   3RXLOORQY/LWWOHHWDO 1R

QR IHH DW DOOl  ,G FLWDWLRQV RPLWWHG DIILUPLQJ WKH )LIWK HQGKHUHFRYHUHGQHLWKHUFRPSHQVDWRU\QRUSXQLWLYHGDPDJHV &LUFXLWjVUHYHUVDORIDGLVWULFWFRXUWjVDZDUGRIDWWRUQH\jVIHHV DJDLQVW DQ\ GHIHQGDQW DQG KH UHFRYHUHG RQO\  LQ WR D SODLQWLII ZKR ZRQ RQO\ QRPLQDO GDPDJHV VHH DOVR QRPLQDO GDPDJHV IURP RIILFHUV /LWWOH DQG %ODQFKHWW &UDPEOLWY)LNVH)GWK&LUDIILUPLQJ 3RXLOORQjVWHFKQLFDOYLFWRU\GRHVQRWGHPRQVWUDWHDGHJUHHRI DGLVWULFWFRXUWjVGHQLDORIDWWRUQH\jVIHHVWRDSODLQWLIIZKR VXFFHVV VXIILFLHQW WR MXVWLI\ DQ DZDUG RI DWWRUQH\jV IHHV ZRQRQO\QRPLQDOGDPDJHV SXUVXDQWWR†3RXLOORQKDVQRWGHPRQVWUDWHGWKDWKLV FDVH LV GLVWLQJXLVKDEOH IURP WKH mXVXDOl FDVH ZKHUH D 'HVSLWH WKH 6XSUHPH &RXUWjV ZDUQLQJV DERXW DZDUGLQJ SUHYDLOLQJFLYLOULJKWVSODLQWLIILVQRWHQWLWOHGWRDWWRUQH\jVIHHV DWWRUQH\jVIHHVWRDFLYLOULJKWVSODLQWLIIZKRKDVZRQRQO\ ZKHQDOOWKDWKHKDVZRQLVDWHFKQLFDOYLQGLFDWLRQRIULJKWVLQ QRPLQDO GDPDJHV WKH GLVWULFW FRXUW DZDUGHG 3RXLOORQ WKHIRUPRIQRPLQDOGDPDJHV6HH)DUUDU86DW DWWRUQH\jVIHHVLQDEULHIRUDOUXOLQJ,QVXSSRUWRILWVGHFLVLRQ KROGLQJWKDWQRPLQDOGDPDJHVDUHmXVXDOO\lQRWHQRXJKWR WRDZDUG3RXLOORQDWWRUQH\jVIHHVWKHGLVWULFWFRXUWSUDLVHGWKH MXVWLI\DQDZDUGRIDWWRUQH\jVIHHVVHHDOVRsRKQVRQY&LW\ HIIRUWVRI3RXLOORQjVDWWRUQH\VRQWKHUHFRUGDQGVWDWHGm,jP RI$LNHQ)GWK&LUKROGLQJWKDWD VXUHLI\RXDVN0U3RXLOORQKHIHHOVWKDWKHZDVYLQGLFDWHG GLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQLQDZDUGLQJDWWRUQH\jVIHHV LQKLV)LUVW$PHQGPHQW5LJKWVE\WKHDFWLRQWKDWWKH\WRRN XQGHU†WRDFLYLOULJKWVSODLQWLIIZKRZRQRQO\QRPLQDO KHUHl:HUHYLHZDGLVWULFWFRXUWjVDZDUGRIDWWRUQH\jVIHHV GDPDJHV  $FFRUGLQJO\ WKH GLVWULFW FRXUW DEXVHG LWV SXUVXDQW WR  86& †  IRU DEXVH RI GLVFUHWLRQ GLVFUHWLRQLQJUDQWLQJ3RXLOORQjVPRWLRQIRUDWWRUQH\jVIHHV &UDPEOLW)GDW 3RXLOORQ DUJXHV WKDW WKLV FRXUW VKRXOG DIILUP WKH GLVWULFW sRVHSK)DUUDUWKHSODLQWLIILQ)DUUDUY+REE\DOVRKDGKLV FRXUWjV JUDQW RI DWWRUQH\j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jVIHHVEDVHG YLFWRU\LQWKLVFDVH,QVXSSRUWRIWKLVFRQWHQWLRQ3RXLOORQ RQKLVmWHFKQLFDOlYLFWRU\,G:LWKUHJDUGWR)DUUDUjV FLWHV KLV FRXQVHOjV FORVLQJ DUJXPHQW WR WKH VHFRQG MXU\ LQ ODZVXLW WKH 6XSUHPH &RXUW VWDWHG m7KLV OLWLJDWLRQ ZKLFK 3RXLOORQjV FRXQVHO VXJJHVWHG WKDW WKH MXU\ DZDUG DFFRPSOLVKHG OLWWOH EH\RQG JLYLQJ SHWLWLRQHUV µWKH PRUDO QRPLQDO GDPDJHV LI WKH MXU\ IRXQG WKDW 3RXLOORQ KDG QRW VDWLVIDFWLRQRINQRZLQJWKDWDIHGHUDOFRXUWFRQFOXGHGWKDW VXIIHUHGDQ\DFWXDOLQMXU\3RXLOORQDOVRSRLQWVRXWWKDWKLV >WKHLU@ULJKWVKDGEHHQYLRODWHGjLQVRPHXQVSHFLILHGZD\l DWWRUQH\UHTXHVWHGWKHMXU\LQVWUXFWLRQRQQRPLQDOGDPDJHV ,G DW  TXRWLQJ +HZLWW Y +HOPV  86    7KHUHIRUHLQ)DUUDUWKH6XSUHPH&RXUWKHOGWKDW 3XWWLQJDVLGHWKHLVVXHRIZKHWKHU&RQJUHVVWKURXJK† WHFKQLFDOYLQGLFDWLRQRIRQHjVFRQVWLWXWLRQDOULJKWVDORQHLVQRW LQWHQGHG WR HQFRXUDJH LQGLYLGXDOV WR SXUVXH FLYLO ULJKWV HQRXJK WR MXVWLI\ DQ DZDUG RI DWWRUQH\jV IHHV SXUVXDQW WR OLWLJDWLRQVHHNLQJPHUHWHFKQLFDOYLFWRULHVWKHKLVWRU\RIWKLV † FDVHEHOLHV3RXLOORQjVFRQWHQWLRQWKDWWKLVDFWLRQZDVPRUH DERXW REWDLQLQJ D ILQGLQJ RI OLDELOLW\ WKDQ UHFRYHULQJ D $FFRUGLQJWRKLVFRPSODLQW3RXLOORQLQLWLDWHGWKLVODZVXLW VXEVWDQWLDOPRQH\MXGJPHQW3RXLOORQjVFRPSODLQWH[SOLFLWO\ VHHNLQJFRPSHQVDWRU\DQGSXQLWLYHGDPDJHVDJDLQVWWKH&LW\ UHTXHVWHGFRPSHQVDWRU\DQGSXQLWLYHGDPDJHV3RXLOORQGLG RI2ZRVVRDQGSROLFHRIILFHUV/LWWOHDQG%ODQFKHWW,QWKH QRW ILOH D FRPSODLQW IRU D GHFODUDWRU\ MXGJPHQW RU IRU 1R 3RXLOORQY/LWWOHHWDO   3RXLOORQY/LWWOHHWDO 1R

LQMXQFWLYH UHOLHI  0RUHRYHU DV HDUO\ DV 'HFHPEHU  ZLWKLQWHQGD\VWKHQHYHQLIWKHFODLPDQWHYHQWXDOO\SUHYDLOV GHIHQGDQWVRIIHUHGWKDWMXGJPHQWEHHQWHUHGDJDLQVWWKHPIRU LQ WKH OLWLJDWLRQ KH ZLOO EH IRUFHG WR SD\ KLV RZQ DQG WKH EXW3RXLOORQGHFOLQHGWRDFFHSW%HIRUHWKHILUVWWULDO GHIHQGLQJSDUW\jVSRVWRIIHUFRVWVLIKLVYLFWRU\LVQRWPRUH 3RXLOORQDOVRGHFOLQHGWRDFFHSWDQRIIHURIMXGJPHQWDJDLQVW IDYRUDEOHWKDQWKHRIIHU$OWKRXJKQRUPDOO\DGLVWULFWFRXUWjV GHIHQGDQWVIRU3RXLOORQjVRIIHUWRDFFHSWWKHSULRU DZDUGRUGHQLDORIFRVWVLVUHYLHZHGIRUDEXVHRIGLVFUHWLRQ RIIHU RI  RFFXUUHG RQO\ DIWHU WKH FLW\ KDG EHHQ 5XOHjVODQJXDJHLVPDQGDWRU\DQGOHDYHVDGLVWULFWFRXUW GLVPLVVHG DV D GHIHQGDQW DQG WKLV FRXUW KDG DIILUPHG WKH ZLWKRXW DQ\ GLVFUHWLRQ  +RSSHU Y (XFOLG 0DQRU 1XUVLQJ GLVWULFW FRXUWjV GLVPLVVDO RI 3RXLOORQjV FODLP IRU SXQLWLYH +RPH,QF)GWK&LU GDPDJHV 7KHGLVWULFWFRXUWLQWKLVFDVHQHYHUWKHOHVVGHFOLQHGWRJLYH ,I 3RXLOORQjV SULPDU\ LQWHUHVW KDG EHHQ REWDLQLQJ D HIIHFWWRGHIHQGDQWVjWZR5XOHRIIHUVQHLWKHURIZKLFKZDV MXGJPHQWDJDLQVWGHIHQGDQWVUHJDUGOHVVRIDPRXQWKHZRXOG DFFHSWHG E\ 3RXLOORQ ZLWKLQ WHQ GD\V  7KH GLVWULFW FRXUWjV KDYH DFFHSWHG HLWKHU RI GHIHQGDQWVj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mILQDOO\ REWDLQHGl  7KHUH LV QR 3RXLOORQjV FRXQVHO VXJJHVWHG WKH SRVVLELOLW\ RI D QRPLQDO UHTXLUHPHQWWKDWD5XOHRIIHUPXVWEHUHQHZHGDIWHUDQ GDPDJHVDZDUGXQGHUWKHVHFLUFXPVWDQFHVGRHVQRWLQGLFDWH DSSHDODQGUHPDQGWRFRQWLQXHLWVHIIHFWLYHQHVV6HH3D\QH WKDW3RXLOORQjVMXGJPHQWDFKLHYHGKLVSULPDU\JRDOLQ Y0LOZDXNHH&RXQW\)GWK&LU WKLV OLWLJDWLRQ  6LJQLILFDQWO\ 3RXLOORQjV FRXQVHO VXJJHVWHG UHMHFWLQJ DV mVLPSO\ ZURQJl D SODLQWLIIjV DUJXPHQW WKDW D WKDW WKH VHFRQG MXU\ DZDUG 3RXLOORQ   3RXLOORQ GHIHQGDQWjV5XOHRIIHULVLQRSHUDWLYHLILWLVQRWUHQHZHG UHFHLYHGRIWKLVDPRXQW DIWHUDQDSSHDODQGUHPDQG7KH$GYLVRU\&RPPLWWHH1RWHV WRWKH$PHQGPHQWWR5XOHDGGUHVVWKLVSUHFLVHLVVXH %7KH'LVWULFW&RXUWjV'HQLDORI3RVW2IIHU&RVWVWR DQGVWDWHWKDWmDVORQJDVWKHFDVHFRQWLQXHVoZKHWKHUWKHUH 'HIHQGDQWV EHDILUVWVHFRQGRUWKLUGWULDOoDQGWKHGHIHQGDQWPDNHVQR IXUWKHURIIHUKLVILUVWDQGRQO\RIIHUZLOORSHUDWHWRVDYHKLP )HGHUDO5XOHRI&LYLO3URFHGXUHSURYLGHVWKDWDSDUW\ WKHFRVWVIURPWKHWLPHRIWKDWRIIHULIWKHSODLQWLIIXOWLPDWHO\ GHIHQGLQJ DJDLQVW D FODLP PD\ PDNH D SUHWULDO RIIHU RI REWDLQVDMXGJPHQWOHVVWKDQWKHVXPRIIHUHGl VHWWOHPHQWDQGLIWKHRIIHUHHGRHVQRWDFFHSWZLWKLQWHQGD\V DQGmWKHMXGJPHQWILQDOO\REWDLQHGE\WKHRIIHUHHLVQRWPRUH %HFDXVHWKHMXGJPHQWILQDOO\REWDLQHGE\3RXLOORQLV IDYRUDEOH WKDQ WKH RIIHU WKH RIIHUHH PXVW SD\ WKH FRVWV QRWPRUHIDYRUDEOHWKDQGHIHQGDQWVjLQLWLDO5XOHRIIHURI LQFXUUHGDIWHUWKHPDNLQJRIWKHRIIHUl5XOHHQFRXUDJHV 5XOHUHTXLUHVWKDW3RXLOORQSD\DOOFRVWVLQFXUUHG HDUO\ VHWWOHPHQWV E\ LQFUHDVLQJ WKH ULVNV WR FODLPDQWV RI E\ERWKVLGHVDIWHUWKHGDWHRIWKHRIIHU'HFHPEHU FRQWLQXLQJ WR OLWLJDWH RQFH WKH GHIHQGLQJ SDUW\ KDV PDGH D $FFRUGLQJO\WKHGLVWULFWFRXUWHUUHGE\GHQ\LQJGHIHQGDQWVj VHWWOHPHQW RIIHU  ,I WKH FODLPDQW GRHV QRW DFFHSW WKH RIIHU PRWLRQIRUSRVWRIIHUFRVWV 1R 3RXLOORQY/LWWOHHWDO   3RXLOORQY/LWWOHHWDO 1R

,,, BBBBBBBBBBBBBBBBBB )RUDOOWKHIRUHJRLQJUHDVRQVZHUHYHUVHWKHGLVWULFWFRXUWjV &21&855(1&( RUGHUJUDQWLQJ3RXLOORQjVPRWLRQIRUDWWRUQH\jVIHHVUHYHUVH BBBBBBBBBBBBBBBBBB WKHGLVWULFWFRXUWjVRUGHUGHQ\LQJGHIHQGDQWVjPRWLRQIRUSRVW RIIHUFRVWVDQGUHPDQGIRUWKHSXUSRVHRIGHWHUPLQLQJWKH %2**6 &LUFXLW sXGJH FRQFXUULQJ  , FRQFXU LQ sXGJH DPRXQW RI WKH SRVWRIIHU FRVWV WR ZKLFK GHIHQGDQWV DUH *LEERQVj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 :LWKUHVSHFWWRWKHRWKHUSRUWLRQRIWKHFRXUWjVRSLQLRQLW LVLPSRUWDQWWRQRWHWKHUHDVRQIRU3RXLOORQjVIDLOXUHWRREWDLQ DWWRUQH\jVIHHVLQWKLVFDVHHYHQWKRXJKKHGLGUHFHLYHDIDLUO\ VLJQLILFDQW EHQHILW LQ WKDW WKH FRXUWjV MXGJPHQW XSKHOG KLV ULJKW WR SURWHVW RQ WKH VWHSV RI &LW\ +DOO DW OHDVW LQ WKH VSHFLILF PDQQHU WKDW KH GLG RQ 'HFHPEHU    2XU KROGLQJWKDWWKHH[WHQWRIKLVYLFWRU\ZDVQXJDWRU\LVZKROO\ H[SODLQHGE\WKHIDFWWKDWKHRQO\VRXJKWPRQH\GDPDJHV$V WKH FRXUW FDUHIXOO\ QRWHV DW SDJHV  KH mGLG QRW ILOH D FRPSODLQWIRUDGHFODUDWRU\MXGJPHQWRUIRULQMXQFWLYHUHOLHIl 6XFK D FRPSODLQW PLJKW KDYH HYHQ PRUH HPSKDWLFDOO\ YLQGLFDWHGKLVULJKWWREHIUHHIURPDUELWUDU\DQGXQMXVWLILHG DUUHVWIRUKLVSURWHVWVZKLFKPLJKWWKHQKDYHOHGWRDGLIIHUHQW RXWFRPH DV WR DWWRUQH\jV IHHV  6LQFH KH GLG QRW GR WKLV , FRQFXULQWKHFRXUWjVRSLQLRQ