Detroit v. Simon
Detroit v. Simon
Opinion
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 DS
81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB
; 7+( &,7< 2) '(752,7 3ODLQWLII$SSHOOHH 1RV Y ! *(25*( 6,021 s26(3+ 6,021 125,1$ 6,021 6+,5/(< 6,021 0$85,&( 7$</25 0$'(/,1( 7$</25 86 *5283 ,1&D0LFKLJDQ FRUSRUDWLRQ 86 (48,30(17 &203$1<D0LFKLJDQ FRUSRUDWLRQ 'HIHQGDQWV$SSHOODQWV ($721 &25325$7,21DQ 2KLRFRUSRUDWLRQ 'HIHQGDQW 7+( &,7< 2) '(752,7 3ODLQWLII$SSHOODQW Y &LW\RI'HWURLWY6LPRQHWDO 1RV
*(25*( 6,021 s26(3+ 6,021 125,1$ 6,021 6+,5/(< 6,021 ($721 &25325$7,21DQ2KLR FRUSRUDWLRQ 'HIHQGDQWV$SSHOOHHV 0$85,&( 7$</25 0$'(/,1( 7$</25 86 *5283 ,1&D0LFKLJDQ FRUSRUDWLRQ 86 (48,30(17 &203$1<D0LFKLJDQ FRUSRUDWLRQ 'HIHQGDQWV $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW 1R n$YHUQ&RKQ'LVWULFWsXGJH $UJXHG 1RYHPEHU 'HFLGHGDQG)LOHG $SULO %HIRUH 1(/6216,/(5DQG&/$<&LUFXLWsXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8(' 5REHUW&KDUOHV'DYLV'$9,6/$:*5283 0W &OHPHQV 0LFKLJDQ (ULF s 0DJQXVRQ 5,'(5 %(11(77(*$1 $581'(/0LQQHDSROLV0LQQHVRWD IRU 'HIHQGDQWV 5XEHQ $FRVWD ),1. =$860(5 .$8)0$1'HWURLW0LFKLJDQIRU3ODLQWLII21%5,() 5REHUW&KDUOHV'DYLV'$9,6/$:*52830W&OHPHQV 0LFKLJDQ3DWULFN)*RUGRQsDPHV+5XVVHOO:,16721 675$:1 &KLFDJR ,OOOLQRLV +DUU\ 7 4XLFN 1RV &LW\RI'HWURLWY6LPRQHWDO 0$57,1'$/(%5=<7:$ 48,&.&OHYHODQG2KLR IRU 'HIHQGDQWV 5XEHQ $FRVWD ),1. =$860(5 .$8)0$1'HWURLW0LFKLJDQIRU3ODLQWLII BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB '$9,' $ 1(/621 &LUFXLW sXGJH 7KLV LV DQ HQYLURQPHQWDOSURWHFWLRQFDVHLQZKLFKWKHSODLQWLII WKH&LW\ RI'HWURLW WKRXJKWLWKDGUHDFKHGDVHWWOHPHQWZLWKRQHRIWKH FRUSRUDWHGHIHQGDQWV (DWRQ&RUSRUDWLRQ GXULQJWKHVHFRQG GD\RIWULDO:KHQWKHWULDOFRXUWZDVDGYLVHGWKDW(DWRQDQG WKH FLW\ KDG UHVROYHG WKHLU GLIIHUHQFHV WKH WHUPV RI WKH VHWWOHPHQWZHUHSODFHGRQWKHUHFRUGLQRSHQFRXUW6RPH ZHHNV ODWHU KRZHYHU (DWRQ GHQLHG WKDW WKHUH KDG EHHQ D PHHWLQJ RI WKH PLQGV ZLWK UHVSHFW WR WKH VFRSH RI WKH mFRQWULEXWLRQ SURWHFWLRQl LH LQGHPQLILFDWLRQ DJDLQVW GHPDQGVIRUFRQWULEXWLRQDPRQJWRUWIHDVRUV WKDW(DWRQZDV WRUHFHLYHIURPWKHFLW\7KHFLW\jVSRVLWLRQZDVDQGLVWKDW WKHUHFRUGFRQWDLQVDFOHDUH[SUHVVLRQRIDJUHHPHQWRQWKH VFRSHRIVXFKSURWHFWLRQ 3URIHVVLQJ LWVHOI XQDEOH WR GHWHUPLQH SUHFLVHO\ ZKDW WKH SDUWLHV KDG FRPH WR DJUHHPHQW RQ WKH WULDO FRXUW GHQLHG D PRWLRQE\WKHFLW\IRUHQWU\RIDVHWWOHPHQWMXGJPHQW7KH FDVHZDVHYHQWXDOO\WULHGWRFRPSOHWLRQDQGDILQDOMXGJPHQW ZDVHQWHUHGRQDOOFODLPV 8SRQ UHYLHZ ZH FRQFOXGH WKDW WKH WULDO FRXUW HUUHG LQ GHFOLQLQJWRKROG(DWRQWRWKHVHWWOHPHQWLWKDGVDLGLWZDV DFFHSWLQJ7KHUHFRUGDVZHUHDGLWVKRZVWKDWWKHFLW\jV ODZ\HU DGHTXDWHO\ FODULILHG WKH VFRSH RI WKH DJUHHG FRQWULEXWLRQ SURWHFWLRQ 7KH UHFRUG IXUWKHU VKRZV WKDW (DWRQjVODZ\HUH[SOLFLWO\DFNQRZOHGJHGWKDWWKHFODULILFDWLRQ ZDVFRUUHFW,QVRIDUDVWKHGLVWULFWFRXUWVXEVHTXHQWO\IRXQG WKDWWKHUHFRUGGLGQRWPDQLIHVWDPHHWLQJRIPLQGVZHDUH VDWLVILHGWKDWWKHFRXUWjVILQGLQJZDVFOHDUO\HUURQHRXV &LW\RI'HWURLWY6LPRQHWDO 1RV 1RV &LW\RI'HWURLWY6LPRQHWDO %RWKWKHFLW\DQGWKHUHPDLQLQJGHIHQGDQWVFKDOOHQJHRWKHU 6LPRQJURXSjVDUJXPHQWXQGHUWKHFLUFXPVWDQFHVRIWKLVFDVH DVSHFWVRIWKHILQDOMXGJPHQWDVZHOO8QSHUVXDGHGZHVKDOO ZKHUHWKHDUJXPHQWZDVQHYHUSUHVHQWHGWRWKHGLVWULFWFRXUW UHMHFWWKHVHFKDOOHQJHV DQG LV RIIHUHG IRU WKH ILUVW WLPH DIWHU QHDUO\ D GHFDGH RI OLWLJDWLRQ6HH1REOHY&KU\VOHU0RWRUV&RUSs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jVRFFXSDQF\'LIIHUHQWRFFXSDQWVGLVSRVHGRIGLIIHUHQW KD]DUGRXV ZDVWHV RQ WKH VLWH 7KH FRQWDPLQDQWV LQFOXGHG SRO\FKORULQDWHG ELSKHQ\OV m3&%Vl SHWUROHXP DQG SHWUROHXPE\SURGXFWVVXFKDVHWK\OEHQ]HQHWROXHQHDQG [\OHQH 'XULQJ D SHULRG WKDW HQGHG LQ WKH SURSHUW\ ZDV RFFXSLHGE\GHIHQGDQW86(TXLSPHQW&RDZKROO\RZQHG VXEVLGLDU\ RI GHIHQGDQW 86 *URXS ,QF 7KH ODWWHU FRUSRUDWLRQ LV FRQQHFWHG ZLWK GHIHQGDQWV *HRUJH sRVHSK 1RULQDDQG6KLUOH\6LPRQ,WZLOOEHFRQYHQLHQWIRU XVWR UHIHU WR WKH 6LPRQV 86 (TXLSPHQW DQG 86 *URXS FROOHFWLYHO\DVmWKH6LPRQJURXSl 7KH &LW\ RI 'HWURLW DFTXLUHG WKH UHDO HVWDWH E\ FRQGHPQDWLRQLQ 7KHSXUSRVHRIWKHFLW\jVDFTXLVLWLRQ ZDVWRFOHDUIOLJKWSDWKVIRUDPXQLFLSDODLUSRUWORFDWHGRQWKH IDUVLGHRIDUDLOURDGWUDFNWKDWUXQVQH[WWRWKHSURSHUW\ 7KH FLW\ GHPROLVKHG WKH IDFWRU\ DQG RWKHUEXLOGLQJV FOHDQHG XS WKH 3&%V DQG WKURXJK FRQVXOWDQWV PDGH D GHWDLOHGVXUYH\RIWKHUHPDLQLQJFRQWDPLQDQWV7KHFLW\WKHQ EURXJKWWKHLQVWDQWODZVXLWDJDLQVWWKH6LPRQJURXS(DWRQ *HQHUDO 0RWRUV &RUSRUDWLRQ D VRPHWLPH OHVVHH RI WKH SURSHUW\ DQG RWKHUV 7KH UHOLHI VRXJKW LQFOXGHG ERWK &LW\RI'HWURLWY6LPRQHWDO 1RV 1RV &LW\RI'HWURLWY6LPRQHWDO :'0LFK UHYjGRQRWKHUJURXQGV UHFRYHU\RIWKHHQYLURQPHQWDOFOHDQXSDQGLQYHVWLJDWLRQFRVWV )G WK&LU DOUHDG\ LQFXUUHG E\ WKH FLW\ DQG HQWU\ RI D GHFODUDWRU\ MXGJPHQWZLWKUHVSHFWWRIXWXUHUHPHGLDWLRQFRVWV7KHFLW\jV 7KH SURSHUW\ DW LVVXH LQ WKLV FDVH KDV D ORQJ KLVWRU\RI FODLPV ZHUH EDVHG LQ SDUW RQ WKH &RPSUHKHQVLYH LQGXVWULDO XVH 7R UHTXLUH IRUPHU RFFXSDQWV WR DVVXPH (QYLURQPHQWDO5HVSRQVH&RPSHQVDWLRQDQG/LDELOLW\$FW OLDELOLW\IRUFOHDQXSFRVWVJRLQJEH\RQGWKHOHYHOQHFHVVDU\WR 86& HW VHT m&(5&/$l DQG WKH IRUPHU PDNHWKHSURSHUW\VDIHIRULQGXVWULDOXVHZRXOGEHWRSURYLGH 0LFKLJDQ(QYLURQPHQWDO5HVSRQVH$FW m0(5$l 0&/ DQXQZDUUDQWHGZLQGIDOOWRWKHEHQHILFLDU\RIWKHFOHDQXS HW VHT QRZ UHFRGLILHG LQ 3DUW RI WKH 0LFKLJDQ1DWXUDO5HVRXUFHVDQG(QYLURQPHQWDO3URWHFWLRQ & $FW0&/HWVHT m15(3$l )LQDOO\ZHFRPHWRWKH6LPRQJURXSj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jV3&%FODLPQRWRQO\XQGHU&(5&/$ VHWWOHPHQW ZHUH SURPSWO\ PHPRULDOL]HG DW WKH FRXUWjV WKHIHGHUDOFRVWUHFRYHU\VWDWXWHEXWDOVRXQGHU15(3$WKH UHTXHVWLQSURFHHGLQJVFRQGXFWHGRQWKHUHFRUG:LWKWKH 0LFKLJDQ FRVWUHFRYHU\ VWDWXWH 7KH 0LFKLJDQ &RXUW RI UHDGHUjVLQGXOJHQFHZHVKDOOGHVFULEHWKHVHSURFHHGLQJVLQ $SSHDOVKDVVTXDUHO\KHOGWKDWVXEVWDQWLDOFRPSOLDQFHZLWK VRPHGHWDLO WKH1&3LVQRWDSUHUHTXLVLWHWRFRVWUHFRYHU\XQGHU15(3$ 6HH&LW\RI3RUW+XURQY$PRFR2LO&R1:G $IWHU VWDWLQJ KLV XQGHUVWDQGLQJ WKDW WKHUH KDG EHHQ D 0LFK$SS 0LFK$SS OHDYHWRDSSHDO UHVROXWLRQRIWKHGLVSXWHEHWZHHQWKHFLW\DQG(DWRQEXWQR GHQLHG 1:G 0LFK :H GHIHU WR WKH UHVROXWLRQ RI WKH GLVSXWH EHWZHHQ WKH FLW\ DQG WKH 6LPRQ 0LFKLJDQFRXUWjVLQWHUSUHWDWLRQRI0LFKLJDQODZ6HHHJ *URXSWKHWULDOMXGJHWXUQHGWRWKHFLW\IRUDQDFFRXQWRIZKDW &RRSHUY6FURRJ\)G Q WK&LU ZDVEHLQJDJUHHGWR0U'DYLG+)LQNRQHRIWKHODZ\HUV UHSUHVHQWLQJWKHFLW\UHVSRQGHGDVIROORZV ,QLWVUHSO\EULHIWKH6LPRQJURXSDUJXHVIRUWKHILUVWWLPH WKDW UHFRYHU\ IRU 3&% FRQWDPLQDWLRQ XQGHU 15(3$ LV m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mLQGXVWULDOl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mFOHDQXS DJDLQVWDQ\RWKHUSDUWLHV7KH\ZRXOGKDYHFRQWULEXWLRQ FDWHJRU\SURSRVHGVKDOOEHWKHRSWLRQRIWKHSHUVRQSURSRVLQJ SURWHFWLRQ WKH UHPHGLDO DFWLRQ VXEMHFW WR GHSDUWPHQW DSSURYDO FRQVLGHULQJWKHDSSURSULDWHQHVVRIWKHFDWHJRULFDOFULWHULDWR 7KHUHZRXOGQRWEHDQ\JXDUDQWHHRILQGHPQLILFDWLRQ WKHIDFLOLW\l0&/D DVWRWKLUGSDUW\FODLPV7KH&LW\LVQRWDZDUHRIDQ\ WKLUGSDUW\FODLPVWKDWKDYHEHHQEURXJKWRUWKUHDWHQHGLQ :HDUHQRWSHUVXDGHG:LWKDIHZH[FHSWLRQVQRWUHOHYDQW DQ\ZD\ZLWKUHVSHFWWRWKHVLWH ZLWKWKHH[FHSWLRQRI KHUHWKHW\SHVRIUHVSRQVHFRVWVUHFRYHUDEOHXQGHU&(5&/$ LVVXHVUHODWHGWR(3$DQG(3$KDVORQJVLQFHJLYHQXS DUHOLPLWHGWRWKRVHWKDWDUHmQHFHVVDU\lLQOLJKWRIWKHQDWXUH ZLWK UHVSHFW WR WKH 6LPRQ GHIHQGDQWVl (PSKDVLV DQG W\SH RI SURSHUW\ WR EH FOHDQHG XS 6HH 86& VXSSOLHG D % 6HYHUDOIHGHUDOFRXUWVKDYHUHFRJQL]HGWKDW UHFRYHU\RIHQYLURQPHQWDOFOHDQXSFRVWVLQFXUUHGWRDFKLHYH 0U)LQNZHQWRQWRGHVFULEHWZRREOLJDWLRQVWREHDVVXPHG DKLJKHUOHYHOWKDQWKHXVHRIWKHSURSHUW\QHFHVVLWDWHVZRXOG E\ (DWRQ DQ REOLJDWLRQ WR FRRSHUDWH ZLWK WKH FLW\ RQ D YLRODWH &(5&/$jV UHTXLUHPHQW WKDW UHFRYHUDEOH UHVSRQVH VWDWXWRU\FODLPQRWGLUHFWO\UHOHYDQWKHUHDQGDQREOLJDWLRQWR FRVWVEH µQHFHVVDU\j6HHHJ*s/HDVLQJ&RY8QLRQ FRRSHUDWH RQ WKH FLW\jV FODLPV DJDLQVW RWKHU SDUWLHV 0RUH (OHFWULF &R )G WK &LU 6RXWKIXQG VSHFLILFDOO\DVIDUDVWKHODWWHUREOLJDWLRQZDVFRQFHUQHG0U 3DUWQHUV,,,Y6HDUV5RHEXFNDQG&R)6XSSG )LQNH[SODLQHGWKDW(DWRQZDVDJUHHLQJQRWWRREMHFWWRWKH 1'*D 05 9HJD $OWD ,QF Y &DULEH FLW\jV ZRUNLQJ ZLWK H[SHUWV LQLWLDOO\ UHWDLQHG E\ (DWRQ LW *HQHUDO (OHFWULF 3URGXFWV ,QF )6XSSG EHLQJXQGHUVWRRGWKDW(DWRQZRXOGQRWKDYHWRLQFXUIXUWKHU '3XHUWR5LFR FRVWVLQWKLVFRQQHFWLRQ 6LPLODUO\ 15(3$ SURYLGHV WKDW WKH FOHDQXS SURSRVHG $WWKLVSRLQWWKHWUDQVFULSWVKRZV0UsDPHV+5XVVHOO VKRXOGEHmDSSURSULDWHlLQOLJKWRIWKHIDFLOLW\jVFDWHJRULFDO HQYLURQPHQWDO OLWLJDWLRQ FRXQVHO IRU (DWRQ DVNHG IRU FULWHULDVHH0&/D DQGLWDOVRSURYLGHVWKDW SHUPLVVLRQWRFRQIHUZLWKmFRFRXQVHOl 0U5XVVHOOPD\ UHFRYHUDEOH FRVWV PXVW EH mQHFHVVDU\l 6HH 0&/ KDYH EHHQ UHIHUULQJ KHUH WR (DWRQ KRXVH FRXQVHO 6KDURQ D E $V 15(3$ IRUPHUO\ 0(5$ ZDV 2j)ODKHUW\ RU OHDG WULDO FRXQVHO +DUU\ 7 4XLFN RU ERWK SDWWHUQHG DIWHU &(5&/$ LW VKRXOG EH FRQVWUXHG LQ $IWHU DQ RIIWKHUHFRUG GLVFXVVLRQ EHWZHHQ FRXQVHO 0U DFFRUGDQFHZLWKWKHIHGHUDOVWDWXWH6HH)UHHSRUW0F0RUDQ 5XVVHOOZHQWGLUHFWO\WRWKHH[SHUWZLWQHVVSRLQW KHRIIHUHG 5HVRXUFH3DUWQHUV/WG3DUWQHUVKLSY%%3DLQW&RUS QR REMHFWLRQ RU RWKHU FRPPHQW UHJDUGLQJ 0U )LQNjV )6XSSGQ ('0LFK DQG.DODPD]RR H[SODQDWLRQ RI WKH VFRSH RI WKH SURWHFWLRQ (DWRQ ZRXOG 5LYHU 6WXG\ *URXS Y 5RFNZHOO ,QWHUQDWLRQDO )6XSSG UHFHLYHDJDLQVWFODLPVIRUFRQWULEXWLRQDPRQJWRUWIHDVRUV &LW\RI'HWURLWY6LPRQHWDO 1RV 1RV &LW\RI'HWURLWY6LPRQHWDO 6IDW 0LFK $SS 1:G :KDW0U5XVVHOOVDLGZDVWKLV mEHFDXVH GHIHQGDQW ZDV SUHVHQW ZKHQ WKH WHUPV RI WKH VHWWOHPHQWDJUHHPHQWZHUHUHDGLQRSHQFRXUWDQGKHYRLFHG m:HGRQRWH[SHFWDSUREOHPLQWKHRSHUDWLRQRIWKH QRREMHFWLRQVWKHUHWRZHPXVWFRQFOXGHWKDWLWPHWZLWKKLV ODVW SRLQW WKDW 0U >)@LQN KDV MXVW LGHQWLILHG , GRQjW DSSURYDOl NQRZWKDWZHjUHSUHSDUHGWRSXWWKDWLQWRWKHDJUHHPHQW ,I (DWRQjV ODZ\HUV ZHUH XQGHU WKH LPSUHVVLRQ WKDW DV D 7KHUHDVRQLVWKDWWKHH[SHUWVWKDW0U)LQNZRXOGZLVK PDWWHURIODZ(DWRQFRXOGQRWEHERXQGE\DQ\WKLQJVDLGLQ WR KDYH DUH LQGHSHQGHQW FRQWUDFWRUV WKH\ DUH RXWVLGH WKH FRXUWURRP EHFDXVH RI WKH IDFW WKDW WKH GHWDLOV RI WKH H[SHUWVl DJUHHPHQW ZRXOG EH IOHVKHG RXW LQ ZULWLQJ ODWHU WKHLU LPSUHVVLRQZDVPLVWDNHQ6HH3HGGHUY.DOLVK0LFK 7KH FRXUW WKHQ SURSRVHG D ZD\ RI UHVROYLQJ WKH H[SHUW $SS1:G (DWRQZDVREYLRXVO\QRW ZLWQHVV SUREOHP LI LW ZDV D SUREOHP DQG 0U 5XVVHOO DWOLEHUW\ WR GLVDYRZWKHVXEVWDQFHRIWKDWWRZKLFKLWZDV UHVSRQGHGWRWKHFRXUWjVSURSRVDOE\VD\LQJm>Z@HKDYHQR DJUHHLQJLQRSHQFRXUWsXVWDV(DWRQZDVQRWIUHHWRGHFLGH REMHFWLRQl WKDWLWZRXOGSD\RQO\DIWHUKDYLQJDJUHHGWRSD\ VRDOVRZDVLWERXQGE\LWVDJUHHPHQWWRDFFHSW 0U)LQNRQEHKDOIRIWKHFLW\WKHQUHWXUQHGWRWKHVXEMHFW OLPLWHG FRQWULEXWLRQ SURWHFWLRQ LQ OLHX RI WKH EURDG RIFRQWULEXWLRQSURWHFWLRQ FRQWULEXWLRQSURWHFWLRQLWKDGDVNHGIRURULJLQDOO\ m<RXU+RQRUWKHRQO\LWHPRQWKHOLVWWKDW,VHHWKDW 2XU FRQFOXVLRQ LV LQ QR ZD\ XQGHUPLQHG E\ WKH SDUWLHVj ZLOOUHTXLUHDQ\µIO>H@VKLQJRXWjLQWKHDJUHHPHQWLWVHOILV UHFRJQLWLRQWKDWWKHUHPLJKWEHIXWXUHGLVDJUHHPHQWRYHUKRZ WKHIRUPRIWKHFRQWULEXWLRQSURWHFWLRQDQG,MXVWZDQWWR WKHSULQFLSOHVDJUHHGWRRQ0DUFKVKRXOGEHZRUGHGLQWKH EHFOHDUIURPWKH&LW\jVS>HU@VSHFWLYHDQGWKDWLVWKDWZH IRUPDOVHWWOHPHQWDJUHHPHQWWKDWZDVWRIROORZ7KHGLVWULFW ZRXOGH[SHFWWKDWDQ\FODLPVEURXJKWDJDLQVW(DWRQWKDW FRXUWjVmEDVHEDOODUELWUDWLRQl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l (PSKDVLV GRFXPHQWZDVQRWDPHUHGLVDJUHHPHQWRYHUWKHQXDQFHVRI VXSSOLHG ODQJXDJHLQWHQGHGWRFDSWXUHDSULQFLSOHRQZKLFKWKHUHZDV VWLOOPXWXDODJUHHPHQW ZKDWVXUIDFHGUDWKHUZDVDQDSSDUHQW $WWKLVMXQFWXUHWKHFRXUWRIIHUHGDVXJJHVWLRQZLWKUHJDUG DWWHPSW E\ (DWRQ WR UHSXGLDWH WKH DJUHHPHQW LWVHOI 7KH WRWKHILQDO ZRUGLQJRIWKHDJUHHPHQWZLWKUHVSHFWWRVXFK GLVWULFWFRXUWFOHDUO\HUUHGLQGHFLGLQJWROHW(DWRQJHWDZD\ FODLPV ZLWKWKLV m:HOOOHWPHVXJJHVWWKLV ,IWKHUHLVDQ\GLVSXWHWKDWLV % WRVD\DVWRWKHZRUGLQJRIWKLVSRUWLRQRIWKHDJUHHPHQW \RXZLOOHDFKVXEPLW\RXUUHVSHFWLYHGUDIWWRWKH&RXUW 7KHFLW\FRQWHQGVWKDWWKHGLVWULFWFRXUWDOVRHUUHGZKHQLW DQGWKH&RXUWZLOOFKRRVHEHWZHHQWKHWZRl (PSKDVLV OLPLWHGWKHGHIHQGDQWVjWRWDOOLDELOLW\IRUIXWXUHFRVWVWRZKDW VXSSOLHG &LW\RI'HWURLWY6LPRQHWDO 1RV 1RV &LW\RI'HWURLWY6LPRQHWDO $GGLQJWKDWKHHQYLVLRQHGWKHSRVVLELOLW\WKDWmWKHUHPD\EH DJDLQVWRWKHUSDUWLHVl6XFKFRQWULEXWLRQSURWHFWLRQ0U)LQN D GLVSXWH RYHU WKH SKUDVHRORJ\l RI WKLV SRUWLRQ RI WKH PDGH FOHDU ZRXOG QRW H[WHQG WR WKLUGSDUW\ FODLPV QRW DJUHHPHQWWKHMXGJHGHVFULEHGKLVSURSRVDOIRUUHVROYLQJDQ\ VWHPPLQJIURPGHPDQGVE\WKHFLW\ m7KHUHZRXOGQRWEH VXFKGLVSXWHDVmEDVHEDOODUELWUDWLRQl0U5XVVHOOVSHDNLQJ DQ\JXDUDQWHHRILQGHPQLW\DVWRWKLUGSDUW\FODLPVl RQEHKDOIRI(DWRQVDLGWKDWWKHFRXUWjVVXJJHVWLRQZDVmILQH ZLWK XVl 0U )LQN LQGLFDWHG WKDW WKH VXJJHVWLRQ ZDV ,I(DWRQZDVXQZLOOLQJWRDFFHSWWKLVOLPLWDWLRQLWKDGDQ DFFHSWDEOHWRWKHFLW\DVZHOOmDVORQJDVWKH&RXUWGLGQRW REOLJDWLRQWRVD\VR<HWLWYRLFHGQRREMHFWLRQDWDOO2QWKH ILQGZKDW,VWDWHGRQWKHUHFRUGLVREMHFWLRQDEOHl FRQWUDU\ZKHQ0U)LQN UHSHDWHGWKDWWKHFLW\ZDVWDONLQJ DERXW mDQ\ FODLPV EURXJKW DJDLQVW (DWRQ WKDW DULVH IURP D 7KH MXGJH DVVXUHG 0U )LQN WKDW m, GRQjW ILQG LW FODLPEURXJKWE\WKHFLW\l0U5XVVHOOH[SOLFLWO\VWDWHGWKDW REMHFWLRQDEOHl0U)LQNH[SODLQHGWKDWKHZDQWHGmWRDYRLG WKH FRPSDQ\ DJUHHG LQ SULQFLSOH ZLWK ZKDW 0U )LQN KDG DQ\PLVXQGHUVWDQGLQJRQWKHUHFRUGl,QUHVSRQVHWKHFRXUW VDLG $QG ZKHQ WR DYRLG HYHQ WKH VOLJKWHVW SRVVLELOLW\ RI DVNHG 0U 5XVVHOO LI KH DJUHHG LQ SULQFLSOH ZLWK ZKDW 0U PLVXQGHUVWDQGLQJ 0U )LQN DJDLQ PDGH LW FOHDU WKDW WKH )LQNKDGVDLG0U5XVVHOODQVZHUHGLQWKHDIILUPDWLYH m,Q FRQWULEXWLRQSURWHFWLRQWREHSURYLGHGE\WKHFLW\ZDVmQRW SULQFLSOH\HVl0U5XVVHOOWKHQUHSHDWHGWKDW(DWRQKDGQR LQGHPQLILFDWLRQWKURXJKDQ\WKLUGSDUW\lEXWZDVOLPLWHGWR SUREOHPZLWKWKHFRXUWjVmEDVHEDOODUELWUDWLRQlVXJJHVWLRQ SURWHFWLRQDJDLQVWm>D@Q\FODLPEURXJKWDJDLQVW(DWRQDULVLQJ IURPDFODLPEURXJKWE\WKH&LW\RI'HWURLWl(DWRQDJUHHG 7KHWUDQVFULSWFRQWLQXHVDVIROORZV DJDLQ m7KDWjVFRUUHFWl0U5XVVHOOVDLGRQWKHUHFRUG m05),1. <RXU+RQRUH[SHULHQFHVXJJHVWVWRPHLV 7KHUHZDVQRWKLQJWKHOHDVWELWDUFDQHDERXWWKLV7KHFLW\jV WKHEHVWWKLQJDWWKLVSRLQWZRXOGEHWREHFDQGLGZLWKWKH LQWHUSUHWDWLRQRIWKHDJUHHPHQWUHDFKHGRQ0DUFK LV &RXUWDERXWZKHUHWKHGLVDJUHHPHQWIHOODWRQHSRLQW>LQ WKH LQWHUSUHWDWLRQ WR ZKLFK DQ\ REMHFWLYH UHDGLQJ RI WKH WKHVHWWOHPHQWQHJRWLDWLRQV@WREHVXUHWKDWWKHo WUDQVFULSWQHFHVVDULO\OHDGV 7+(&2857 $OOULJKWJRDKHDG ,I0U5XVVHOOjVRZQVXEMHFWLYHXQGHUVWDQGLQJRIZKDWZDV EHLQJ VDLG KDSSHQHG WR EH GHILFLHQW IRU VRPH UHDVRQ WKLV 05),1. $WRQHSRLQWLQGLVFXVVLRQVDPRQJ&RXQVHO FRXOG KDUGO\ FKDQJH WKH UHVXOW :KHWKHU WKH PLQGV RI WKH WKHUHZDVDVXJJHVWLRQWKDWoE\RSSRVLQJFRXQVHOoWKDW SDUWLHVDUHWREHGHHPHGWRKDYHPHWRQDQRUDOVHWWOHPHQW FRQWULEXWLRQ SURWHFWLRQ PLJKW LQYROYH WKH &LW\ DJUHHPHQWLVmMXGJHGE\DQREMHFWLYHVWDQGDUGORRNLQJWRWKH UHLPEXUVLQJ(DWRQIRUWKHFRVWRIGHIHQGLQJFODLPVXQGHU H[SUHVVZRUGVRIWKHSDUWLHVDQGWKHLUYLVLEOHDFWVl*URXO[Y WKHFLUFXPVWDQFHVol &DUOVRQ0LFK$SS 1:G (PSKDVLVVXSSOLHG 7KH WULDO FRXUW XQIRUWXQDWHO\ GLG QRW DOORZ 0U )LQN WR ILQLVKKLVVHQWHQFH&XWWLQJ0U)LQNRIIDVKHZDVVWDUWLQJWR 7KH H[SUHVV ZRUGV DQG YLVLEOH DFWV RI WKH SDUWLHV LQ WKH GHVFULEH ZKDW (DWRQ KDG VXJJHVWHG DERXW FRQWULEXWLRQ LQVWDQWFDVHOHDYHXVZLWKWKHILUPFRQYLFWLRQWKDWWKHUHZDV SURWHFWLRQWKHFRXUWVDLGm1RWKDWjVQRWSDUWRIWKLV7KDWjV DPXWXDOPDQLIHVWDWLRQRILQWHQWWRDFFHSWDVHWWOHPHQWRQWKH QRWFRQWULEXWLRQSURWHFWLRQl WHUPVVWDWHGE\0U)LQN$QGZHDUHVWUHQJWKHQHGLQWKLV FRQYLFWLRQ E\ WKH IDFW WKDW KRXVHFRXQVHO IRU (DWRQ ZDV 7KHFRXUWjVLQWHUMHFWLRQHYRNHGWKHIROORZLQJUHVSRQVH SUHVHQW DW WKH 0DUFK VHVVLRQ DQG QHYHU H[SUHVVHG WKH VOLJKWHVW UHVHUYDWLRQ DERXW WKH DJUHHPHQW WKDW ZDV EHLQJ SODFHG RQ WKH UHFRUG 6HH 0LFKLJDQ %HOO 7HOHSKRQH &R Y &LW\RI'HWURLWY6LPRQHWDO 1RV 1RV &LW\RI'HWURLWY6LPRQHWDO (DWRQ LWVHOI o WKH GLVWULFW FRXUW KDG ORQJ VLQFH HQWHUHG DQ m05),1. 7KH&LW\REYLRXVO\ZRXOGEHRQO\DEOHWR RSLQLRQDQGRUGHUKROGLQJWKDWmPXQLFLSDOLWLHVDUHQRWZLWKLQ FRQWURO WKH GHIHQVH LI LW DFFHSWHG OLDELOLW\ DQG LW PXVW WKHVFRSHRIWKHWHUP6WDWHl (PSKDVLVVXSSOLHG 5( DFFHSWOLDELOLW\LQDQ\NLQGRIFRQWULEXWLRQDFWLRQWKDW 0HPRUDQGXPDQG2UGHURIsXO\ 7KHUHLVWKXV PD\ DULVH IURP &LW\ DFWLRQ 7KHQ ZH GR KDYH DQ QRZD\WKDWWKHFLW\jVVHWWOHPHQWRILWVHQYLURQPHQWDOFODLPV DJUHHPHQWl (PSKDVLVVXSSOLHG DJDLQVW (DWRQ FRXOG KDYH HQWLWOHG (DWRQ WR WKH VWDWXWRU\ FRQWULEXWLRQSURWHFWLRQSUHVFULEHGE\&(5&/$ZKHUHDVWDWH 7XUQLQJ WR 0U 5XVVHOO WKH FRXUW DVNHG LI KH KDG DQ\ VHWWOHVLWV&(5&/$FODLPV SUREOHP ZLWK ZKDW 0U )LQN KDG VDLG 7KH IROORZLQJ H[FKDQJHHQVXHG 7KHOLPLWHGDYDLODELOLW\RIVWDWXWRU\FRQWULEXWLRQSURWHFWLRQ GRHVQRWPHDQRIFRXUVHWKDW(DWRQFRXOGQRWKDYHDVNHGWKH m055866(// ,j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o 7KDWjVWKHQDWXUHRIFRQWULEXWLRQSURWHFWLRQWKH\ZDQW DQG IRU SXUSRVHV RI WKLV RSLQLRQ ZH VKDOO DVVXPH WKDW WKH WR EH LPPXQL]HG IURP DQ\ DIIHFW RI DQ\ FRQWULEXWLRQ PLQGVRIWKHSDUWLHVKDGQRWSUHYLRXVO\PHWRQWKLVLVVXHoWKH RWKHUSDUW\l 0DUFKWUDQVFULSWFOHDUO\PDQLIHVWVDPHHWLQJRIPLQGVDW WKDWSRLQW7KHVXPPDU\RIWKHGHDOSODFHGRQWKHUHFRUGE\ (DWRQjV EULHI RQ DSSHDO FKDUDFWHUL]HV WKLV SDUWLFXODU 0U )LQN LQ RSHQ FRXUW RQ 0DUFK PDNHV LW VWDWHPHQWDVmXQLQWHUSUHWDEOHl7KHFKDUDFWHUL]DWLRQVWULNHV DEXQGDQWO\ FOHDU WKDW WKH FLW\jV FRPPLWPHQW WR KROG (DWRQ XVDVDSW7KHWULDOMXGJHKRZHYHUWKRXJKWKHXQGHUVWRRG KDUPOHVV DJDLQVW FRQWULEXWLRQ FODLPV DGYDQFHG E\ RWKHU ZKDW0U)LQNZDVWU\LQJWRVD\ DOOHJHGWRUWIHDVRUVZRXOGEHOLPLWHGWRVLWXDWLRQVZKHUHWKH RWKHUWRUWIHDVRUVZHUHDVNLQJ(DWRQIRUH[RQHUDWLRQLQUHVSHFW m7+(&2857 :KDW0U)LQNLVVD\LQJLVWKDWLI\RX RIFODLPVDVVHUWHGE\WKHFLW\LWVHOI:KHWKHU(DWRQPLJKW LQFXU DQ\ H[SHQVH DV D FRQVHTXHQFH RI EHLQJ QDPHG VWLOO KDYH ZDQWHG LQGHPQLILFDWLRQ EURDGHU WKDQ WKDW LV RWKHUWKDQH[SHQVHVUHODWLQJWRDQ\DOOHJHGEUHDFKRIWKH LPPDWHULDO o IRU 0U )LQN UHSHDWHGO\ H[SODLQHG LQ WKH &LW\jVREOLJDWLRQWKH\jUH\RXURZQ FOHDUHVWRIWHUPVWKDWEURDGHULQGHPQLILFDWLRQZDVVLPSO\QRW 055866(// :HDJUHHZLWKWKDW RQRIIHU 7+(&2857 ,VQjWWKDWZKDW\RXVDLG" 7KH FLW\jV FRPPLWPHQW DV 0U )LQN H[SODLQHG ZLWKRXW DPELJXLW\ZRXOGEHWRSURYLGHFRQWULEXWLRQSURWHFWLRQmZLWK 05),1. ,I,GLGQjW,VKRXOGKDYH UHVSHFWWRDQ\FODLPVEURXJKWE\WKHFLW\RI'HWURLWlo ERWKWKHSHQGLQJFODLPVDJDLQVWWKH6LPRQJURXSDQGmDQ\ 055866(// 7KDWjVILQHl RWKHU FODLP WKDW PLJKW EH EURXJKW E\ WKH FLW\ RI 'HWURLW &LW\RI'HWURLWY6LPRQHWDO 1RV 1RV &LW\RI'HWURLWY6LPRQHWDO (YLGHQWO\ ZDQWLQJ WR JHW EDFN WR WKH SRLQW KH KDG EHHQ SURYLVLRQV RI WKH IHGHUDO 1DWLRQDO 2LO DQG +D]DUGRXV DERXWWRPDNHZKHQLQWHUUXSWHGE\WKHFRXUW0U)LQNWKHQ 6XEVWDQFHV3ROOXWLRQ&RQWLQJHQF\3ODQ m1&3l &)5 VSRNHDVIROORZV 3DUW SUHFOXGHG UHFRYHU\ RI WKH 3&% FRVWV :H VKDOO DGGUHVVWKHVHLVVXHVLQWKHVHTXHQFHLQGLFDWHG m05),1. 7KHUHZDVRQHWKLQJWKDWZDVVDLGE\0U 5XVVHOO ,GRQjWWKLQNLWZDVLQWHQWLRQDOO\H[FOXGHGEXW, ,, ZDQW WR EH FOHDU +H UHIHUHQFHG µDQ\ FODLP EURXJKW DJDLQVW(DWRQj$Q\FODLPEURXJKWDJDLQVW(DWRQDULVLQJ $ IURP D FODLP EURXJKW E\ WKH &LW\ RI 'HWURLW ,WjV QRW LQGHPQLILFDWLRQ WKURXJK DQ\ WKLUGSDUW\ WR EH ILOHGl $V ZH KDYH VHHQ (DWRQ UHSUHVHQWV WKDW GXULQJ WKH (PSKDVLVVXSSOLHG QHJRWLDWLRQVWKDWSUHFHGHGWKH0DUFKPHPRULDOL]DWLRQRIWKH VHWWOHPHQW 0U 5XVVHOO XVHG WKH SKUDVH mFRQWULEXWLRQ 7KHVHZRUGVLWVHHPVWRXVDUHIDUIURPXQLQWHUSUHWDEOH SURWHFWLRQl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jV LQGHPQLI\(DWRQDJDLQVWWKLUGSDUW\FODLPVWKDWGLGQRWDULVH DIILGDYLWV VR LQGLFDWH DQG GXULQJ WKH 0DUFK FRXUWURRP IURPFODLPVDVVHUWHGE\WKHFLW\ FROORTX\0U)LQNPHQWLRQHGWKLVDVDQLVVXHRYHUZKLFKWKHUH KDGEHHQGLVDJUHHPHQW$VZLOOEHREYLRXVIURPH[DPLQDWLRQ 0U )LQNjV FODULW\ RQ WKLV SRLQW LV IXOO\ PDWFKHG E\ WKH RI WKH WH[W RI I KRZHYHU VHH QRWH VXSUD FODULW\RIWKHUHVSRQVHJLYHQE\FRXQVHOIRU(DWRQ (DWRQjV DVVHUWLRQ WKDW ERWK SDUWLHV ZHUH XQGHUVWRRG WR EH UHIHUULQJWRmVWDWXWRU\FRQWULEXWLRQSURWHFWLRQXQGHURI m055866(// 7KDWjVFRUUHFWl (PSKDVLVVXSSOLHG &(5&/$>86& @lZRXOGPHDQLIWUXHWKDWERWK SDUWLHVZHUHPLVUHDGLQJ&(5&/$:HILQGLWFXULRXVWKDW m7KDWjVFRUUHFWlZHWDNHLWPHDQVZKDWLWVD\V:HGRQRW VRSKLVWLFDWHGODZ\HUVVXFKDVWKHVHVKRXOGQRWKDYHNQRZQ LQWHUSUHW 0U 5XVVHOOjV UHVSRQVH DV PHDQLQJ mWKDWjV QRW ZKDWRI&(5&/$DFWXDOO\VD\V FRUUHFWl<HWRQ$SULO DOLWWOHRYHUVHYHQZHHNV DIWHUWHOOLQJWKHFRXUWDQGFRXQVHOWKDW0U)LQNZDVFRUUHFWLQ :KDW LW VD\V LV WKDW DQ DGPLQLVWUDWLYH VHWWOHPHQW RU D KLV GHVFULSWLRQ RI ZKDW WKH SDUWLHV ZHUH DJUHHLQJ WR 0U MXGLFLDOO\ DSSURYHG VHWWOHPHQW RI mOLDELOLW\ WR WKH 8QLWHG 5XVVHOO VHQW 0U )LQN D OHWWHU DVVHUWLQJ WKDW m>W@KH IRUP RI 6WDWHV RU D 6WDWHl ZLOO SURWHFW WKH VHWWOLQJ SDUW\ DJDLQVW SURWHFWLRQ (DWRQ ZRXOG UHFHLYH ZDV QHYHU FODULILHG E\ WKH OLDELOLW\RQFODLPVIRUFRQWULEXWLRQ6WULFWO\VSHDNLQJWKHQ &LW\l7HQGHUHGZLWKWKH$SULOOHWWHUZDVDSURSRVHG mVWDWXWRU\FRQWULEXWLRQSURWHFWLRQlFDQH[LVWRQO\ZKHQWKH VHWWOHPHQWDJUHHPHQWFRQWDLQLQJDQLQGHPQLW\SURYLVLRQVR VHWWOHPHQW LV ZLWK WKH IHGHUDO JRYHUQPHQW RU D VWDWH EURDG DV WR EH LUUHFRQFLODEOH LQ RXU MXGJPHQW ZLWK WKH JRYHUQPHQW DJUHHPHQW LQ SULQFLSOH PHPRULDOL]HG LQ WKH 0DUFK WUDQVFULSW 7KHFLW\RI'HWURLWLVFHUWDLQO\QRWmWKH8QLWHG6WDWHVl$QG (DWRQKDGQRUHDVRQWRVXSSRVHWKDWWKHFLW\FRXOGEHHTXDWHG ZLWKmD6WDWHl:HNQRZWKLVLVVREHFDXVHoRQPRWLRQRI &LW\RI'HWURLWY6LPRQHWDO 1RV 1RV &LW\RI'HWURLWY6LPRQHWDO
7KHVHWWOHPHQWDJUHHPHQWSURSRVHGE\(DWRQRQ$SULO ZRXOGKDYHREOLJDWHGWKHFLW\WRLQGHPQLI\(DWRQDJDLQVWmDOO m)RU WKH UHDVRQV VWDWHG DERYH DQG IRU UHDVRQV RI FODLPVlLQYROYLQJWKHFLW\DQGRU(DWRQDVVHUWHGE\mDQ\RU MXGLFLDOHFRQRP\DQGSUXGHQFHDVZHOODVWKHLQDELOLW\RI DOOlSHUVRQVRUHQWLWLHVJRYHUQPHQWDORUQRQJRYHUQPHQWDOLQ WKH&RXUWWRGHWHUPLQHSUHFLVHO\ZKDWWKHSDUWLHVFDPHWR FRQQHFWLRQZLWKFRQWDPLQDWLRQDWWKH)UHQFK5RDG*ULQQHOO DJUHHPHQWRQRQ0DUFKWK WKLVFDVH>PXVW@JR $YHQXHVLWH7KHUHZDVQRH[FOXVLRQRIWKLUGSDUW\FODLPVQRW WRWULDOl DULVLQJ IURP FODLPV DVVHUWHG E\ WKH FLW\ &RQWUDU\ WR WKH XQGHUVWDQGLQJ UHIOHFWHG LQ WKH 0DUFK WUDQVFULSW WKH QHZ 7KH FDVH GLG JR WR WULDO D UHTXHVW IRU FHUWLILFDWLRQ RI DQ SURSRVDO FDOOHG IRU LQGHPQLILFDWLRQ RI (DWRQ E\ WKH FLW\ LQWHUORFXWRU\DSSHDOKDYLQJEHHQGHQLHGDQGDILQDOMXGJPHQW DJDLQVWDQ\VXFKFODLPVDVZHOODVDJDLQVWFRQWULEXWLRQFODLPV ZDVHQWHUHGRQ'HFHPEHU 7KDWMXGJPHQWDPRQJ DULVLQJIURPFODLPVE\WKHFLW\ RWKHUWKLQJV 7KH FLW\ GLG QRW VLJQ WKH SURIIHUHG DJUHHPHQW VR (DWRQ o IL[HG(DWRQjVWRWDOOLDELOLW\DVRI2FWREHU PRYHGWRKDYHWKHFDVHUHVHWIRUWULDO$EULHIRSSRVLQJWKLV DW PRWLRQZDVILOHGE\WKHFLW\WRJHWKHUZLWKDPRWLRQIRUHQWU\ RI D VHWWOHPHQW MXGJPHQW 7KH FLW\jV SURSRVHG IRUP RI o IL[HGWKH6LPRQJURXSjVOLDELOLW\DVRIWKDWGDWHDW MXGJPHQWZRXOGKDYHUHTXLUHGWKHFLW\WRmGHIHQGDQGKROG H[FOXVLYH RI OLDELOLW\ IRU WKH FRVWV (DWRQ KDUPOHVV IURP DQG DJDLQVW DQ\ DQG DOO FODLPV RU DVVRFLDWHGZLWKWKHFOHDQXSRI3&%V GHPDQGV IRU FRQWULEXWLRQ RU ODZVXLWV RU RWKHU DFWLRQV IRU FRQWULEXWLRQEURXJKWDJDLQVW(DWRQDVDGLUHFWUHVXOWRIDQ\ o ILQDOL]HG WKH MXGJPHQW DJDLQVW WKH FODLPGHPDQGODZVXLWRURWKHUDFWLRQEURXJKWE\WKH&LW\LQ 6LPRQJURXSIRU3&%FRVWVDQGVHWWKHLQWHUHVWWKDW FRQQHFWLRQ ZLWK HQYLURQPHQWDO FRQWDPLQDWLRQ RI WKH UHDO KDGDFFUXHGWKHUHRQWKURXJK2FWREHU DW SURSHUW\ DQG LPSURYHPHQWV ORFDWHG DW WKH LQWHUVHFWLRQ RI DQG )UHQFK 5RDG DQG *ULQQHOO $YHQXH l (PSKDVLV o GHFODUHG (DWRQ DQG WKH 6LPRQ JURXS OLDEOH IRU VXSSOLHG VSHFLILHG SHUFHQWDJHV RI IXWXUH UHFRYHUDEOH (DWRQRSSRVHGWKHFLW\jVPRWLRQLQDEULHIDFFRPSDQLHGE\ m5HVSRQVH&RVWVlDQGm5HVSRQVH$FWLYLW\&RVWVl DIILGDYLWV IURP 0HVVUV 5XVVHOO DQG 4XLFN 7KH 5XVVHOO VXEMHFW WR WKH SURYLVR WKDW WKHUH VKRXOG EH QR DIILGDYLWFRQWDLQHGWKHIROORZLQJDYHUPHQWVDPRQJRWKHUV OLDELOLW\IRUFRVWVm>L@QFXUUHGWRDFKLHYHDFOHDQXS OHYHOLQH[FHVVRIWKHLQGXVWULDOFOHDQXSFDWHJRU\LQ o WKDWLQWKHHQYLURQPHQWDOOHJDOFRPPXQLW\DV0U 0LFK&RPS/DZVD G l 5XVVHOO EHOLHYHG mFRQWULEXWLRQ SURWHFWLRQl ZDV ZLGHO\XQGHUVWRRGWREHDWHUPRIDUWVLJQLI\LQJWKDW 7KH FLW\ UDLVHV WZR LVVXHV RQ DSSHDO ZKHWKHU WKH XSRQ WKH VHWWOHPHQW RI D &(5&/$ FODLP DOO GLVWULFW FRXUW HUUHG LQ UHIXVLQJ WR HQIRUFH WKH VHWWOHPHQW FRQWULEXWLRQOLDELOLW\RIDQDOOHJHGMRLQWWRUWIHDVRULV DJUHHPHQWPHPRULDOL]HGLQWKHSURFHHGLQJVKHOGRQ0DUFK H[WLQJXLVKHG DQG ZKHWKHUWKHGLVWULFWFRXUWHUUHGLQOLPLWLQJWKH GHIHQGDQWVjOLDELOLW\IRUIXWXUHFOHDQXSFRVWVWRWKRVHFRVWV LQFXUUHGLQDFKLHYLQJDQmLQGXVWULDOFOHDQXSlDVGHILQHGLQ 15(3$7KH6LPRQJURXSUDLVHVDVLQJOHLVVXHRQDSSHDO ZKHWKHUDIDLOXUHE\WKHFLW\WRFRPSO\ZLWKFHUWDLQQRWLFH &LW\RI'HWURLWY6LPRQHWDO 1RV 1RV &LW\RI'HWURLWY6LPRQHWDO o WKDWWKLVXVDJHVWHPPHGIURPRI&(5&/$ EHIRUHWKH&RXUWLQRSHQFRXUWWRVHWIRUWKWKHGHWDLOV 86& ZH TXRWH WKH UHOHYDQW VWDWXWRU\ RIWKHSDUWLHVjSURSRVHGVHWWOHPHQWl ODQJXDJHLQWKHPDUJLQ $WWRUQH\ 4XLFNjV DIILGDYLW ZKLFK ZDV PXFK VKRUWHU o WKDW LQ VHWWOHPHQW GLVFXVVLRQV FRQGXFWHG ZLWK WKH DYHUUHGLQHVVHQFHWKDW FLW\jVFRXQVHOSULRUWR0DUFK 0U5XVVHOO KDG PDGH LW FOHDU WKDW (DWRQ ZRXOG UHTXLUH EURDG o RQFH VHWWOHPHQW GLVFXVVLRQV KDG FRPPHQFHG 0U DQGILQDOSURWHFWLRQIURPIXWXUHFODLPV 4XLFNPDGHLWFOHDUWRWKHFLW\jVFRXQVHOWKDW(DWRQ LQWHQGHG WR FRQGLWLRQ VHWWOHPHQW XSRQ WKH FLW\jV o WKDW 0U 5XVVHOO KDG XVHG WKH WHUP mFRQWULEXWLRQ SURYLGLQJ(DWRQmFRPSOHWHSURWHFWLRQIURPDQ\ SURWHFWLRQlLQIRUPXODWLQJ(DWRQjVVHWWOHPHQWRIIHUV IXWXUH FODLPV E\ WKH 0LFKLJDQ 'HSDUWPHQW RI DQG LQ VR GRLQJ KH KDG EHHQ UHIHUULQJ o DV KH 1DWXUDO 5HVRXUFHV DGMRLQLQJ ODQGRZQHUV DQGRU EHOLHYHG0U)LQNKDGEHHQUHIHUULQJomWRVWDWXWRU\ VXEVHTXHQWSXUFKDVHUVRIWKHVXEMHFWSURSHUW\ lDQG FRQWULEXWLRQ SURWHFWLRQ XQGHU RI &(5&/$ l o 0U)LQNWROG0U4XLFNWKDWWKHFLW\ZDVSURKLELWHG E\ODZIURPOHQGLQJLWVFUHGLWVRDVWRSURYLGH(DWRQ o WKDW VHWWOHPHQW GLVFXVVLRQV FRQGXFWHG XQGHU WKH ZLWK LQGHPQLW\ EXW WKDW 0U )LQN NQRZLQJ ZKDW GLVWULFWFRXUWjVDXVSLFHVRQWKHPRUQLQJRI0DUFK (DWRQGHVLUHGLQGLFDWHGWKDWHTXLYDOHQWSURWHFWLRQ KDGIDLOHGDQGWKHSDUWLHVKDGEHHQRUGHUHG FRXOGEHSURYLGHGZLWKUHVSHFWWRVXFKFODLPV EDFNLQWRWKHFRXUWURRPWRUHFRPPHQFHWULDO WKHQ VHFRQGVEHIRUHWKHMXGJHUHHQWHUHGWKHFRXUWURRP 2Q $XJXVW DIWHU KHDULQJ RUDO DUJXPHQW RQ WKH 0U )LQN DSSURDFKHG (DWRQjV WULDO WDEOH DQG VDLG SHQGLQJPRWLRQVWKHGLVWULFWFRXUWDQQRXQFHGIURPWKHEHQFK m:HjOOWDNHWKH l WKDWLWZDVJUDQWLQJ(DWRQjVPRWLRQWRVHWWKHFDVHIRUWULDODQG ZDV GHQ\LQJ WKH FLW\jV PRWLRQ IRU HQWU\ RI D VHWWOHPHQW o WKDWWKHUHZDVQRGLVFXVVLRQRIDQ\RWKHUFRPSRQHQW MXGJPHQW,QH[SODLQLQJLWVWKLQNLQJWKHFRXUWPDGHWKHVH RIWKHVHWWOHPHQWXQWLOWKHFRXUWDVNHG0U)LQNWR REVHUYDWLRQVDPRQJRWKHUV VXPPDUL]HWKHDJUHHPHQW DQG m7KHVWDWXWHVLQYROYHGDUHFRPSOH[7KHGLVWLQFWLRQ o WKDWm>V@LQFHLWZDVFOHDUWRERWKFRXQVHOIRU'HWURLW WKHSDUWLHVGUDZRQZKDWZDVVDLGRQ0DUFKWK DQGWKH&RXUWWKDWWKHVHWWOHPHQWEHWZHHQ(DWRQDQG LQYROYH DUFDQH FRQFHSWV RI ODZ DQG DUH EDVHG RQ D 'HWURLW QHHGHG WR EH UHGXFHG WR ZULWLQJ >0U VSHFLDOL]HGJORVVDU\7KH&LW\PD\ZHOOEHULJKWWKDWWKH 5XVVHOO@ GLG QRW UHJDUG WKH FRPPHQWV RI FRXQVHO SURWHFWLRQ IRU (DWRQ LW DJUHHG WR ZDV OLPLWHG DQG WKDW (DWRQjVFRQFHUQVDUHDWEHVWVSHFXODWLYHDQGFRQMHFWXUDO m2Q WKH RWKHU KDQG (DWRQ DJUHHG WR SD\ >@ZLWKLWVD\VWKHH[SHFWDWLRQLWZRXOG m$ SHUVRQ ZKR KDV UHVROYHG LWV OLDELOLW\ WR WKH 8QLWHG 6WDWHV RU D 6WDWH LQ DQ DGPLQLVWUDWLYH RU MXGLFLDOO\ DSSURYHG VHWWOHPHQW VKDOO QRW EH KDYH SHDFHRIPLQGDQGJHWRQZLWKLWVFRUSRUDWHOLIH OLDEOH IRU FODLPV IRU FRQWULEXWLRQ UHJDUGLQJ PDWWHUV DGGUHVVHG LQ WKH )RU WKH &RXUW WR VDQFWLRQ WKH &LW\jV YLHZ RI WKH VHWWOHPHQW 6XFK VHWWOHPHQW GRHV QRW GLVFKDUJH DQ\ RI WKH RWKHU DJUHHPHQW UHDFKHG RQ 0DUFK WK ZRXOG EH SRWHQWLDOO\ OLDEOH SHUVRQV XQOHVV LWV WHUPV VR SURYLGH EXW LW UHGXFHV WKH SRWHQWLDO OLDELOLW\ RI WKH RWKHUV E\ WKH DPRXQW RI WKH VHWWOHPHQWl LQDSSURSULDWH 86& I
Case-law data current through December 31, 2025. Source: CourtListener bulk data.