Ritchie v. Rogers

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+(55(66$ s2/<11 5,7&+,( ; 3HWLWLRQHU$SSHOODQW    1R Y  !  6+,5/(< 52*(56:DUGHQ  5HVSRQGHQW$SSHOOHH  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW'D\WRQ 1Rn0LFKDHO50HU]0DJLVWUDWHsXGJH $UJXHG6HSWHPEHU 'HFLGHGDQG)LOHG'HFHPEHU %HIRUH.(11('<DQG0225(&LUFXLWsXGJHV'2:' 6HQLRU'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8('  7KHUHVD * +DLUH 38%/,& '()(1'(5j6 2)),&( &ROXPEXV 2KLR IRU $SSHOODQW  0 6FRWW &ULVV 2 ) ) ,& (  2 ) 7 + (  $ 7 7 2 5 1 ( <  * ( 1 ( 5 $ / 7KH +RQRUDEOH 'DYLG ' 'RZG sU 6HQLRU 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ   5LWFKLHY5RJHUV 1R &255(&7,216/,7,*$7,216(&7,21&ROXPEXV2KLR IRU $SSHOOHH  21 %5,()  7KHUHVD * +DLUH 'DYLG + %RGLNHU38%/,&'()(1'(5j62)),&(&ROXPEXV2KLR IRU $SSHOODQW  0 6FRWW &ULVV 2)),&( 2) 7+( $77251(< *(1(5$/ &255(&7,216 /,7,*$7,21 6(&7,21&ROXPEXV2KLRIRU$SSHOOHH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB ,,1752'8&7,21 '2:'6HQLRU'LVWULFWsXGJH7KLVLVDQDSSHDOIURPWKH GHQLDORISHWLWLRQHUjVDFWLRQXQGHU86&†VHHNLQJ KDEHDVUHOLHIIURPKHU2KLRVWDWHFRQYLFWLRQLQ0RQWJRPHU\ &RXQW\&RPPRQ3OHDV&RXUWIRUWKHPXUGHURIKHU\HDUROG GDXJKWHU2QsXO\ SHWLWLRQHUPDGHDFDOOWR UHSRUW KHU GDXJKWHU PLVVLQJ  7KH UHSRUW VHW RII D PDVVLYH VHDUFKE\PDQ\YROXQWHHUVLQWKH'D\WRQFRPPXQLW\ZKHUH SHWLWLRQHU DQG KHU GDXJKWHU OLYHG  6HYHUDO GD\V ODWHU RQ sXO\VHDUFKGRJVGLVFRYHUHGWKHPLVVLQJGDXJKWHUjV ERG\LQDSRRORIZDWHULQDQHDUE\IRXQGU\,QWHQVHSXEOLFLW\ DFFRPSDQLHGWKHVHDUFKVXEVHTXHQWGLVFRYHU\RIWKHERG\ DQGWKHFKLOGjVIXQHUDO*ULHIWXUQHGWRSXEOLFVFRUQZKHQ DSSUR[LPDWHO\WZRZHHNVDIWHUWKHLQLWLDOUHSRUWRIWKHPLVVLQJ FKLOG SHWLWLRQHU ZDV ILUVW FKDUJHG ZLWK LQYROXQWDU\ PDQVODXJKWHUDQGXOWLPDWHO\LQGLFWHGIRUWKHPXUGHURIKHU FKLOG 2Q$XJXVWWKH'D\WRQ3ROLFH&KLHIDQQRXQFHGWKDW SHWLWLRQHU KDG FRQIHVVHG WR WKH NLOOLQJ  6XEVHTXHQWO\ SHWLWLRQHUjVER\IULHQGSOHGJXLOW\WRUHODWHGFKDUJHVDQGLWZDV SXEOLFO\GLVFORVHGLQWKHJXLOW\SOHDFROORTX\WKDWSHWLWLRQHU NLOOHGWKHFKLOGDIWHUWKHFKLOGZDQGHUHGLQWRWKHURRPZKHUH SHWLWLRQHUDQGWKHER\IULHQGZHUHHQJDJHGLQVH[XDOUHODWLRQV 7KHFRQWLQXLQJSXEOLFLW\FRQFHUQLQJWKHVWRU\RIWKHFKLOGjV PXUGHU ZDV PDVVLYH  $W WKH HQG RI  'D\WRQ 'DLO\  5LWFKLHY5RJHUV 1R 1R 5LWFKLHY5RJHUV  $IWHUFDUHIXOUHYLHZZHILQGWKDWWKHVWDWHFRXUWVjGHQLDORI 1HZVWKHSULQFLSDOQHZVSDSHULQ'D\WRQFDOOHGWKHKRPLFLGH SHWLWLRQHUjV PRWLRQ IRU FKDQJH RI YHQXH DQG UHMHFWLRQ RI VWRU\WKH1XPEHUQHZVVWRU\IRUWKDWFDOHQGDU\HDU SHWLWLRQHUjV REMHFWLRQV EDVHG RQ WKH LPSDFW RI SUHWULDO SXEOLFLW\WRWKHVZLWFKIURPLQGLYLGXDOYRLUGLUHWRJURXSYRLU 2QsDQXDU\MXVWVHYHQWHHQGD\VEHIRUHWKHMXU\ GLUHQHLWKHUmUHVXOWHGLQDGHFLVLRQWKDWZDVFRQWUDU\WRRU YRLUGLUHFRPPHQFHGSHWLWLRQHUjVFRXQVHOVXSSOHPHQWHGDQ LQYROYHGDQXQUHDVRQDEOHDSSOLFDWLRQRIFOHDUO\HVWDEOLVKHG LQLWLDOPRWLRQIRUFKDQJHRIYHQXH&LWLQJ6WDWHY+HUULQJ )HGHUDOODZlQRUmUHVXOWHGLQDGHFLVLRQWKDWZDVEDVHGRQDQ 2KLR$SSG  SHWLWLRQHUZKLOHFRQFHGLQJWKDW XQUHDVRQDEOHGHWHUPLQDWLRQRIWKHIDFWVl D FDUHIXO DQG VHDUFKLQJ YRLU GLUH SURYLGHV WKH EHVW WHVW IRU GHWHUPLQLQJ ZKHWKHU SUHMXGLFLDO SUHWULDO SXEOLFLW\ KDV 9&21&/86,21 SUHYHQWHGREWDLQLQJDIDLUDQGLPSDUWLDOMXU\IURPWKHORFDOLW\ VXEPLWWHGFRQVLGHUDEOHPDWHULDOLQVXSSRUWRIKHUFODLPWKDW )LQGLQJ QR PHULW LQ HLWKHU RI SHWLWLRQHUjV FODLPV WKH WKHWULDOFRXUWVKRXOGUHYLHZWKHSUHWULDOSXEOLFLW\WRGHWHUPLQH MXGJPHQW RI WKH GLVWULFW FRXUW GHQ\LQJ WKH ZULW RI KDEHDV ZKHWKHULWmZDVVRSHUYDVLYHDQGSUHMXGLFLDOWKDWDQDWWHPSW FRUSXVLV$)),50(' WRVHDWDMXU\ZRXOGEHDYDLQDFWl7KHWULDOFRXUWGLGQRW  7KH MRLQW DSSHQGL[ FRQWDLQV PDQ\ FRSLHV RI QHZVSDSHU DUWLFOHV DGGUHVVLQJ WKH VHDUFK IRU DQG GLVFRYHU\ RI 6DPDQWKD 5LWFKLHjV ERG\ WKH VXEVHTXHQW DUUHVW RI SHWLWLRQHU WKH DUUHVW RI SHWLWLRQHUjV ER\IULHQG DQG KLV DGPLVVLRQ RI JXLOW DV ZHOO DV WKH VDWXUDWLRQ RI LQWHUHVW LQ WKH HQWLUH HSLVRGH E\ ERWK WHOHYLVRQ DQG SULQW PHGLD +RZHYHU WKH MRLQW DSSHQGL[ GLG QRW GLVFORVH WR ZKDW H[WHQW WKH PDWHULDOV WKHUHLQ KDG EHHQ EURXJKW WR WKH DWWHQWLRQ RI WKH WULDO MXGJH $W RUDO DUJXPHQW WKH SDQHO TXHVWLRQHG ZKDW PHGLD FRYHUDJH PDWHULDOV KDG DFWXDOO\ EHHQ VXEPLWWHG WR WKH WULDO FRXUW LQ VXSSRUW RI WKH PRWLRQ IRU FKDQJH RI YHQXH ,Q UHVSRQVH WR WKH SDQHOjV TXHVWLRQV DQG GLUHFWLRQV RQ 2FWREHU   SHWLWLRQHU ILOHG D FHUWLILHG FRS\ RI WKH VXSSOHPHQWDO PHPRUDQGXP ZKLFK SHWLWLRQHUjV WULDO FRXQVHO KDG ILOHG RQ sDQXDU\   7KDW VXSSOHPHQWDO PHPRUDQGXP ZDV DFFRPSDQLHG E\  SDJHV RI H[WUDFWV IURP QHZVSDSHUV D FRS\ RI WKH WUDQVFULSW RI 5LWFKLHjV ER\IULHQGjV SOHD RI JXLOW\ WR SDUWLFLSDWLQJ LQ WKH HYHQWV WKDW OHG WR 6DPDQWKDj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mLQ WKH DEVHQFH RI D FOHDU DQG PDQLIHVW VKRZLQJ E\ WKH GHIHQGDQW WKDW SUHWULDO SXEOLFLW\ ZDV VR SHUYDVLYH DQG SUHMXGLFLDO WKDW DQ DWWHPSW WR VHDW D MXU\ ZRXOG EH D YDLQ DFW ZH KROG WKDW LQ WKH LQWHUHVW RI MXGLFLDO  5LWFKLHY5RJHUV 1R 1R 5LWFKLHY5RJHUV  UXOHRQWKHPRWLRQWRFKDQJHWKHYHQXHXQWLODIWHUDMXU\KDG ,QDKLJKO\SXEOLFL]HGFDVHDVWKLVFDVHZDVZKHUHWKHUHLV EHHQVHDWHGIROORZLQJWKHYRLUGLUH DQ DEVHQFH RI mSUHVXPHG SUHMXGLFHl WKH WULDO FRXUW KDV D UHVSRQVLELOLW\ WR FRQIURQW WKH IDFW RI WKH SXEOLFLW\ DQG  7KHMXU\WULDOEHJDQRQsDQXDU\DQGFRQFOXGHGRQ GHWHUPLQH LI WKH SXEOLFLW\ ULVHV WR WKH OHYHO RI mDFWXDO )HEUXDU\ZLWKFRQYLFWLRQVRISHWLWLRQHUIRUPXUGHU SUHMXGLFHl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jVUHIXVDOWRFKDQJHWKHYHQXHIRU RI VZLIW ZLGHVSUHDG DQG GLYHUVH PHWKRGV RI WKHWULDOEDVHGRQmSUHVXPHGSUHMXGLFHlDQGVHFRQGE\WKH FRPPXQLFDWLRQ DQ LPSRUWDQW FDVH FDQ EH H[SHFWHG WR SURFHVVE\ZKLFKWKHVXEVHTXHQWYRLUGLUHSURFHHGLQJVZHUH DURXVH WKH LQWHUHVW RI WKH SXEOLF LQ WKH YLFLQLW\ DQG FRQGXFWHG  7KH SDUWLHV FRQVHQWHG WR WKH MXULVGLFWLRQ RI D VFDUFHO\DQ\RIWKRVHEHVWTXDOLILHGWRVHUYHDVMXURUVZLOO PDJLVWUDWHMXGJHZKRRQ0D\GHQLHGWKHSHWLWLRQ QRWKDYHIRUPHGVRPHLPSUHVVLRQRIRSLQLRQDVWRWKH IRU D ZULW FRQFOXGLQJ WKDW m>W@KH 2KLR &RXUW RI $SSHDOVj PHULWVRIWKHFDVH7KLVLVSDUWLFXODUO\WUXHLQFULPLQDO DSSOLFDWLRQ RI FRQWUROOLQJ 6XSUHPH &RXUW SUHFHGHQW WR WKH FDVHV  7R KROG WKDW WKH PHUH H[LVWHQFH RI DQ\ IDFWVRIWKLVFDVHZDVREMHFWLYHO\UHDVRQDEOHls$DW SUHFRQFHLYHGQRWLRQDVWRWKHJXLOWRULQQRFHQFHRIDQ 3HWLWLRQHUDSSHDOHG DFFXVHG ZLWKRXW PRUH LV VXIILFLHQW WR UHEXW WKH SUHVXPSWLRQRIDSURVSHFWLYHMXURUjVLPSDUWLDOLW\ZRXOG ,,67$1'$5'2)5(9,(: EHWRHVWDEOLVKDQLPSRVVLEOHVWDQGDUG,WLVVXIILFLHQWLI WKH MXURUFDQOD\DVLGHKLVLPSUHVVLRQRURSLQLRQ DQG $ IHGHUDO FRXUW LV DXWKRUL]HG WR JUDQW D ZULW RI KDEHDV UHQGHUDYHUGLFWEDVHGXSRQWKHHYLGHQFHSUHVHQWHGLQ FRUSXVWRDVWDWHSULVRQHUZKRLVKHOGmLQFXVWRG\LQYLRODWLRQ FRXUW RIWKH&RQVWLWXWLRQRUODZVRUWUHDWLHVRIWKH8QLWHG6WDWHVl 86&† D 7KLV&RXUWUHYLHZVDGLVWULFWFRXUWjV ,UZLQ86DW HPSKDVLVDGGHG  GHFLVLRQ LQ D KDEHDV SURFHHGLQJ GH QRYR  6HH +DUULV Y 6WRYDOO)G WK&LU  2XUUHYLHZRIDVWDWHFRXUWjVGHFLVLRQLQDKDEHDVVHWWLQJLV OLPLWHGE\WKHSURYLVLRQVRI86&† G   DQG   7KH$QWLWHUURULVPDQG(IIHFWLYH'HDWK3HQDOW\$FWRI 3XE/1R   6WDW    m$('3$l  DPHQGHGIHGHUDOKDEHDVODZE\DPRQJRWKHUWKLQJVFKDQJLQJ FKDQJH RI YHQXH PRWLRQV LQFOXGH  0LFKDHO sDFRE :KHOODQ 1RWH † G RIWKHKDEHDVVWDWXWHWRSURYLGHDVIROORZV :KDWjV +DSSHQHG WR 'XH 3URFHVV $PRQJ WKH 6WDWHV" 3UHWULDO 3XEOLFLW\ DQG 0RWLRQV IRU &KDQJH RI 9HQXH LQ &ULPLQDO 3URFHHGLQJV  $  s0 &5,0  /     /HVOLH 5HQHH %HUJHU 1RWH &DQ WKH )LUVW DQG 6L[WK $PHQGPHQWV &R([LVW LQ D 0HGLD 6DWXUDWHG 6RFLHW\"  1< / 6&+ 80  s + 76  5     DQG  sRDQQH $UPVWURQJ %UDQGZRRG HFRQRP\ FRQYHQLHQFH DQG H[SHQVH WR WKH WD[SD\HU WKDW D JRRG IDLWK 1RWH WKH IHGHUDO@FRXUWFRQFOXGHVLQLWVLQGHSHQGHQWMXGJPHQWWKDW  ,W DOVR UHMHFWHG WKH SHWLWLRQHUjV UHOLDQFH RQ WKH 6WDQGDUGV IRU WKH UHOHYDQW VWDWHFRXUW GHFLVLRQ DSSOLHG FOHDUO\ &ULPLQDO sXVWLFH SURPXOJDWHG E\ WKH $PHULFDQ %DU $VVRFLDWLRQ ZKLFK HVWDEOLVKHGIHGHUDOODZHUURQHRXVO\RULQFRUUHFWO\l,G UHTXLUH LQGLYLGXDO YRLU GLUH m>L@I WKHUH LV D VXEVWDQWLDO SRVVLELOLW\ WKDW DW LQGLYLGXDO MXURUV ZLOO EH LQHOLJLEOH WR VHUYH EHFDXVH RI H[SRVXUH WR SRWHQWLDOO\ SUHMXGLFLDO PDWHULDOl ,G DW  5HFHQW DUWLFOHV DGGUHVVLQJ IDLU WULDOV DQG D IUHH SUHVV LQ WKH FRQWH[W RI  5LWFKLHY5RJHUV 1R 1R 5LWFKLHY5RJHUV  ,,, ',' 7+( 0$7(5,$/6 68%0,77(' %< 7+( EDVHGRQWKHHYLGHQFHQRDEXVHRIGLVFUHWLRQLVVKRZQ 3(7,7,21(5,168332572)$027,21)25 ,G &+$1*( 2) 9(18( '(021675$7( m35(680('35(s8',&(l" :HFDQQRWVD\WKDWWKHIDFWWKDWWKHWULDOFRXUWDOORZHG JURXSTXHVWLRQLQJRIWKH&DWHJRU\7KUHHDQG)RXUMXURUV 2XUUHFHQWGHFLVLRQLQ1HYHUVY.LOOLQJHU)G ZDVXQUHDVRQDEOHRUDQDEXVHRIGLVFUHWLRQ1RUGRZH WK &LU   WHDFKHV LQ WKH FRQWH[W RI  86& ILQGSHUVXDVLYHWKHDUJXPHQWWKDWJURXSYRLUGLUHRIWKRVH † G  mWKDWWKHUHLVFOHDUO\HVWDEOLVKHG6XSUHPH&RXUW MXURUVFRQWDPLQDWHGWKHSRRO%DVHGXSRQWKHUHFRUGZH SUHFHGHQWGLVWLQJXLVKLQJEHWZHHQFDVHVLQYROYLQJSUHVXPHG FRQFOXGHWKDW5LWFKLHjVULJKWWRDPHDQLQJIXOYRLUGLUH SUHMXGLFHZKHQ WKH µVHWWLQJ RI WKH WULDO >LV@ LQKHUHQWO\ ZDVSUHVHUYHGDQGWKDWQRSUHMXGLFHRFFXUUHGE\UHDVRQ SUHMXGLFLDOjDQGDFWXDOSUHMXGLFHZKHQUHYLHZRIERWKWKH RIWKHPHWKRGFKRVHQE\WKHWULDOFRXUWIRUFRQGXFWLQJ MXU\ YRLU GLUH WHVWLPRQ\ DQG WKH H[WHQW DQG QDWXUH RI WKH YRLUGLUH PHGLDFRYHUDJHLQGLFDWHVµDIDLUWULDO>ZDV@LPSRVVLEOHjl,G DW  TXRWLQJ 0XUSK\ Y )ORULGD  86   s$DW   7KH 2KLR &RXUW RI $SSHDOVj UHIHUHQFH WR 0Xj0LQ Y 7KH ZHOONQRZQ WULORJ\ RI mSUHVXPHG SUHMXGLFHl FDVHV 9LUJLQLD86  UHTXLUHVIXUWKHUGLVFXVVLRQLQ LQFOXGHV ,UZLQ Y 'RZG  86    5LGHDX Y WKH FRQWH[W RI KLJKO\ SXEOLFL]HG FDVHV  7KH 0Xj0LQ FDVH /RXLVLDQD86  DQG6KHSSDUGY0D[ZHOO SUHVHQWHGWKHLVVXHRIZKHWKHUWKHSHWLWLRQHUjVFODLPWKDWKLV  86     7KH RSLQLRQV LQ WKLV WULORJ\ GLG QRW 6L[WK $PHQGPHQW ULJKW WR DQ LPSDUWLDO MXU\ DQG KLV VHSDUDWHRULGHQWLI\WKHWZRFRQFHSWVRImSUHVXPHGSUHMXGLFHl )RXUWHHQWK $PHQGPHQW ULJKW WR GXH SURFHVV ZHUH YLRODWHG DQG mDFWXDO SUHMXGLFHl  5DWKHU WKDW GLVWLQFWLRQ ZDV ILUVW ZKHQWKHWULDOMXGJHUHIXVHGWRTXHVWLRQ SURVSHFWLYHMXURUV LGHQWLILHGLQ0XUSK\Y)ORULGD86   DERXWVSHFLILFFRQWHQWVRIQHZVUHSRUWVWRZKLFKWKHMXURUV KDG EHHQ H[SRVHG  7KH WULDO MXGJH GHQLHG WKH SHWLWLRQHUjV PRWLRQIRULQGLYLGXDOYRLUGLUHDQGUHIXVHGWKHSHWLWLRQHUjV  $V SRLQWHG RXW E\ WKH 6WDOH\ FRXUW DQG DV ZH GLVFXVV LQIUD WKH UHTXHVWWRDVNDQ\RIKLVSURSRVHGTXHVWLRQVUHODWLQJWRWKH mGHEDWDEOH DPRQJ UHDVRQDEOH MXULVWVl VWDQGDUG DGRSWHG E\ 1HYHUV  FRQWHQW RI QHZV LWHPV WKDW WKH SRWHQWLDO MXURUV PLJKW KDYH )G DW  DQG 0DXULQR Y sRKQVRQ  )G   WK &LU VHHQRUUHDG   KDV EHHQ H[SUHVVO\ GLVDYRZHG E\ WKH 6XSUHPH &RXUW 6HH :LOOLDPV Y 7D\ORU  86     +DUULV Y 6WRYDOO  &KLHI sXVWLFH 5HKQTXLVW ZULWLQJ IRU WKH PDMRULW\ RI ILYH )G   WK &LU   +RZHYHU ZH DUH UHO\LQJ RQ 1HYHUV MXVWLFHVGHVFULEHGWKHVHWWLQJDVIROORZV QRW IRU LWV VWDQGDUG RI UHYLHZ EXW IRU LWV GLVFXVVLRQ RI WKH ODZ UHODWLQJ WR SUHWULDO SXEOLFLW\ 0Xj0LQZDVDQLQPDWHDWWKH9LUJLQLD'HSDUWPHQWRI  0XUSK\ D KDEHDV FRUSXV FDVH OLNH RXUV DURVH LQ WKH 6RXWKHUQ &RUUHFWLRQVj+D\PDUNHW&RUUHFWLRQDO8QLWVHUYLQJD 'LVWULFW RI )ORULGD $V LQGLFDWHG LQ WKH RSLQLRQ WKH SHWLWLRQHU UHOLHG \HDUVHQWHQFHIRUDILUVWGHJUHHPXUGHUFRQYLFWLRQ SULQFLSDOO\ RQ WKH DERYHUHIHUHQFHG WULORJ\ RI FDVHV DQG DOVR RQ (VWHV Y 2Q 6HSWHPEHU   KH ZDV WUDQVIHUUHG WR WKH 7H[DV  86    7KH PDMRULW\ RSLQLRQ LQ 0XUSK\ GHVFULEHG 9LUJLQLD 'HSDUWPHQW RI 7UDQVSRUWDWLRQ 9'27 WKRVH IRXU FDVHV DV mVWDWHFRXUW FRQYLFWLRQ>V@ REWDLQHG LQ D WULDO +HDGTXDUWHUVLQ3ULQFH:LOOLDP&RXQW\DQGDVVLJQHGWR DWPRVSKHUH WKDW KDG EHHQ XWWHUO\ FRUUXSWHG E\ SUHVV FRYHUDJHl  86 DZRUNGHWDLOVXSHUYLVHGE\D9'27HPSOR\HH'XULQJ DW  ,Q FRQFOXVLRQ sXVWLFH 0DUVKDOO ZULWLQJ IRU WKH PDMRULW\ VWDWHG m,Q VXP ZH DUH XQDEOH WR FRQFOXGH LQ WKH FLUFXPVWDQFHV SUHVHQWHG LQ WKLV KLVOXQFKEUHDNKHHVFDSHGRYHUDSHULPHWHUIHQFHDWWKH FDVH WKDW SHWLWLRQHU GLG QRW UHFHLYH D IDLU WULDO 3HWLWLRQHU KDV IDLOHG WR 9'27IDFLOLW\DQGPDGHKLVZD\WRDQHDUE\VKRSSLQJ  5LWFKLHY5RJHUV 1R 1R 5LWFKLHY5RJHUV  sXVWWZR\HDUVODWHULQ'REEHUWY)ORULGD86   $VVRFLDWHsXVWLFH5HKQTXLVWUHO\LQJRQ0XUSK\DQGZULWLQJ ,QUHVSRQVHWRWKHLVVXHRIWKHVZLWFKIURPLQGLYLGXDOWR IRUWKHPDMRULW\RSLQHG JURXS YRLU GLUH WKH 2KLR &RXUW RI $SSHDOV LQ VXPPDU\ GHFODUHG 7KHUHZDVXQGHUVWDQGDEO\H[WHQVLYHSUHWULDOSXEOLFLW\ FRQFHUQLQJ VHYHUDO DVSHFWV RI WKLV FDVH  :H DFFHSW :HFDQQRWFRQFOXGHWKDW5LWFKLHZDVSUHMXGLFHGE\WKH SHWLWLRQHUjVDVVHUWLRQWKDWWKHUHZDVVXEVWDQWLDOPHGLD WULDO FRXUWjV GHFLVLRQ WR FRQGXFW JURXS YRLU GLUH  7KH FRYHUDJH LQFOXGLQJ D QXPEHU RI WHOHYLVLRQ DQG UDGLR 2KLR 6XSUHPH &RXUW KDV KHOG WKDW mQHLWKHU 2KLR QRU VWRULHVUHJDUGLQJWKHYDULRXVDVSHFWVRIWKHFDVH IHGHUDOODZUHTXLUHVLQGLYLGXDOYRLUGLUH7KDWLVVXHLV ZLWKLQ WKH GLVFUHWLRQ RI WKH WULDO MXGJHl  6WDWH Y   /DQGUXP  2KLR6WG1(G   7KLV FRXUW KDV DOVR IRXQG JURXS YRLU GLUH 3HWLWLRQHUjVDUJXPHQWWKDWWKHH[WHQVLYHFRYHUDJHE\ DFFHSWDEOH ZH KDYH KHOG WKDW WKH mGHVLUH WR FRQVHUYH WKH PHGLD GHQLHG KLP D IDLU WULDO UHVWV DOPRVW HQWLUHO\ WLPH DQG MXGLFLDO UHVRXUFHV LV D UHDVRQDEOH EDVLV IRU XSRQWKHTXDQWXPRISXEOLFLW\ZKLFKWKHHYHQWVUHFHLYHG TXHVWLRQLQJMXURUVHQPDVVHl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j0LQY9LUJLQLD   LWVHOIWRUHQGHUDWULDOFRQVWLWXWLRQDOO\XQIDLU3HWLWLRQHU 86/(GG6&W6RORQJDV LQWKLVFDVHKDVVLPSO\VKRZQWKDWWKHFRPPXQLW\ZDV WKHWULDOFRXUWLVVDWLVILHGWKDWSURVSHFWLYHMXURUVFDQVHW PDGHZHOODZDUHRIWKHFKDUJHVDJDLQVWKLPDQGDVNVXV DVLGHWKHFRQWHQWRIQHZVUHSRUWVDQGUHQGHUDIDLUYHUGLFW RQ WKDW EDVLV WR SUHVXPH XQIDLUQHVV RI FRQVWLWXWLRQDO PDJQLWXGHDWKLVWULDO7KLVZHZLOOQRWGRLQWKHDEVHQFH RI D mWULDO DWPRVSKHUH    XWWHUO\ FRUUXSWHG E\ SUHVV $ 7KH FDVH ZDV DOVR WDONHG DERXW DW ZRUN EXW QRW LQ GHWDLO ,W ZDV FRYHUDJHl0XUSK\Y)ORULGDVXSUDDW2QHZKR PRUH OLNH GLG \RX KHDU DERXW WKH FKLOG EHLQJ PLVVLQJ" LVUHDVRQDEO\VXVSHFWHGRIPXUGHULQJKLVFKLOGUHQFDQQRW $IWHUZDUGV LW ZDV GLG \RX KHDU WKHUH ZDV DQ DUUHVW" 7KDWjV H[SHFWWRUHPDLQDQRQ\PRXV DERXW WKH DPRXQW RI WDONLQJ WKDW , ZDV LQYROYHG LQ DW ZRUN 4 2ND\ $Q\WKLQJ HOVH WKDW \RX UHFDOO WKDW \RX VDZ RQ 79 DERXW WKH GHIHQGDQW RU WKDW \RX KHDUG RU UHDG DQ\WKLQJ VSHFLILFDOO\" $ 0RVW RI PLQH ZDV EHIRUH WKH FKLOG ZDV IRXQG 4 RI WKH ILUVW @ MXURUV    KDG QR SULRU RU  SUHVHQW IL[HG RSLQLRQl    LV PDQLIHVWO\ HUURQHRXV D UHYLHZ RI 7KH TXHVWLRQV DQG DQVZHUV RI MXURUV 6PLWK DQG &KHFN ZKR ZHUH WKH UHFRUG UHYHDOV WKDW  RI WKH  KDG DFNQRZOHGJHG HLWKHU D TXHVWLRQHG GXULQJ WKH YRLU GLUH IROORZV SULRU RU D SUHVHQW RSLQLRQ    7KH WULDO MXGJHjV mSUDFWLFDOO\ QR %< 05 +(&. SXEOLFLW\l VWDWHPHQW DOVR LJQRUHV WKH ILUVWWULDO GHWDLOV ZLWKLQ WKH 4 0UV 6PLWK QHZV VWRULHV 7KHVH LQFOXGHG X@QGHU †  G  jV µXQUHDVRQDEOH DSSOLFDWLRQj s$DW FODXVH WKHQ D IHGHUDO KDEHDV FRXUW PD\ QRW LVVXH WKH ZULW VLPSO\EHFDXVHWKDWFRXUWFRQFOXGHVWKDWWKHUHOHYDQWVWDWH 2QFHWKHJURXSYRLUGLUHRIMXURUVLQ&DWHJRU\1REHJDQ FRXUW GHFLVLRQ DSSOLHG FOHDUO\ HVWDEOLVKHG IHGHUDO ODZ DOOWKHMXURUVZHUHTXHVWLRQHGLQDJURXSVHWWLQJ(DFKVXFK HUURQHRXVO\RULQFRUUHFWO\5DWKHUWKDWDSSOLFDWLRQPXVWDOVR MXURUZKHQTXHVWLRQHGLQDJURXSVHWWLQJLQGLFDWHGDEHOLHI EHXQUHDVRQDEOHls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s$ DW  ZKR GHFODUHG WKHPVHOYHV WR EH LQ &DWHJRU\ 1R  ZHUH  TXHVWLRQHGLQGLYLGXDOO\DQGDOOMXURUVLQWKDW&DWHJRU\ZHUH 7KH PDMRULW\jV GHFLVLRQ LQ :LOOLDPV DV LW UHODWHV WR WKH WHVW VHW IRUWK H[FXVHG$IWHUWKHLQLWLDOYRLUGLUHSURFHVVZDVFRPSOHWHGDV LQ †  G  ZDV ZULWWHQ E\ sXVWLFH 2j&RQQRU LQ 6HFWLRQ ,, RI KHU RSLQLRQ WRWKHHIIHFWRIWKHSUHWULDOSXEOLFLW\&DWHJRU\1RMXURUV EHFDPHLQYROYHGLQWKHEDODQFHRIWKHYRLUGLUHSURFHVV  IXUWKHU SURYLGHV :LOOLDPV (DFKVLGHXVHGWKHLUDOORWWHGIRXUSHUHPSWRU\FKDOOHQJHV 8QGHU WKH mXQUHDVRQDEOH DSSOLFDWLRQl FODXVH D IHGHUDO 7KHWZHOYHMXURUVWKDWUHPDLQHGDFFRUGLQJWRUHVSRQGHQWDQG KDEHDV FRXUW PD\ JUDQW WKH ZULW LI WKH VWDWH FRXUW LGHQWLILHV WKH ZLWKQRGLVSXWHIURPSHWLWLRQHULQFOXGHGIRXU&DWHJRU\1R FRUUHFW JRYHUQLQJ OHJDO SULQFLSOH IURP WKLV &RXUWjV GHFLVLRQV EXW MXURUV %UHQWV 6KHOGRQ 6PLWK DQG &KHFN  $OO IRXU ZHUH XQUHDVRQDEO\ DSSOLHV WKDW SULQFLSOH WR WKH IDFWV RI WKH SULVRQHUjV TXHVWLRQHGDERXWWKHHIIHFWRISUHWULDOSXEOLFLW\%UHQWVDQG FDVH 6KHOGRQGXULQJWKHLQGLYLGXDOYRLUGLUHDQG6PLWKDQG&KHFN  86 DW  GXULQJWKHJURXSYRLUGLUH$OOIRXULQGLFDWHGWKDWWKH\FRXOG  5LWFKLHY5RJHUV 1R 1R 5LWFKLHY5RJHUV  6XEVHTXHQWO\WKHWULDOFRXUW RYHUSHWLWLRQHUjVREMHFWLRQ 7KHGLVWULFWFRXUWUHYLHZHGWKHVWDWHFRXUWjVDSSOLFDWLRQVRI GLUHFWHG WKDW YRLU GLUH FRQWLQXH RQ D JURXS EDVLV  ,Q KLV ODZWRIDFWWRGHWHUPLQHLIWKH\ZHUHmREMHFWLYHO\UHDVRQDEOHl H[SODQDWLRQIRUFRQYHUWLQJIURPLQGLYLGXDOWRJURXSYRLUGLUH s$DW7KHFRXUWTXRWHGDWOHQJWKIURPWKHGHFLVLRQRI WKHWULDOFRXUWH[SODLQHG WKH 2KLR DSSHOODWH FRXUW ZKLFK DIILUPHG  SHWLWLRQHUjV FRQYLFWLRQLQFOXGLQJWKHIROORZLQJFRQFOXVLRQRIWKDWFRXUW 7+( &2857  /DGLHV DQG JHQWOHPHQ ZH DUH ZLWK UHVSHFW WR WKH WULDO FRXUWjV FKDOOHQJHG GHQLDO RI WKH SURFHHGLQJ,WKLQNSHUKDSVQRWTXLWHDVUDSLGO\DV,KDG PRWLRQIRUFKDQJHRIYHQXH RULJLQDOO\ DQWLFLSDWHG EXW ZH DUH JRLQJ LQ WKH ULJKW GLUHFWLRQ DV IDU DV LQTXLULQJ RI \RX DERXW \RXU 7KHFULWLFDOLVVXHWREHGHWHUPLQHGLVZKHWKHU5LWFKLHjV TXDOLILFDWLRQVWRVHUYHDVMXURUVLQWKLVFDVH ULJKWWRDIDLUWULDOZDVYLRODWHGE\WKHSUHWULDOSXEOLFLW\ DQGWKHWULDOFRXUWj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s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mFRQWUDU\ WRl 8QLWHG 6WDWHV SDUWLFXODUO\WKHRSLQLRQVZKLFK\RXPD\KDYHIRUPHG 6XSUHPH&RXUWSUHFHGHQW EXW DOVR DQ\ RI WKH LQIRUPDWLRQ WKDW \RX PD\ KDYH  5LWFKLHY5RJHUV 1R 1R 5LWFKLHY5RJHUV  7KLV&RXUWIXUWKHUFRQFOXGHVWKDWWKH2KLR&RXUWRI 3HWLWLRQHUDVVHUWVDQGUHVSRQGHQWGRHVQRWGHQ\WKDWQRQH $SSHDOVj DSSOLFDWLRQ RI WKH FOHDUO\ HVWDEOLVKHG IHGHUDO RIWKHSURVSHFWLYHMXURUVZKRUHVSRQGHGWRWKHTXHVWLRQQDLUH ODZZDVREMHFWLYHO\UHDVRQDEOH LQGLFDWHG WKDW WKH\ ZHUH D &DWHJRU\ 1R MXURU  $IWHU WKH SURVSHFWLYHMXURUVFRPSOHWHGWKHLULQLWLDOFODVVLILFDWLRQVWKH 7KH&RXUWRI$SSHDOVUHFRJQL]HGWKDWSUHWULDOSXEOLFLW\ &DWHJRU\1RMXURUVZHUHVHQWKRPHEHFDXVHWKHWULDOFRXUW LQ WKLV FDVH ZDV SHUYDVLYH DQG XQLIRUPO\ DGYHUVH WR GHFLGHGWKDWWKRVHSURVSHFWLYHMXURUVZRXOGQRWSDUWLFLSDWHLQ 3HWLWLRQHU7KDWSXEOLFLW\ZDVXQGRXEWHGO\IXHOHGE\WKH WKHmSUHWULDOSXEOLFLW\SKDVHlRIWKHYRLUGLUHs$DW REYLRXVFRPSDULVRQEHWZHHQWKLVFDVHDQGWKDWRI6XVDQ 7KH&DWHJRU\1RSURVSHFWLYHMXURUVVWD\HGWRSDUWLFLSDWHRQ 6PLWKD6RXWK&DUROLQDPRWKHUZKRGURZQHGKHUWZR WKHOLPLWHGLVVXHRISUHWULDOSXEOLFLW\s$DW VRQVDQGWKHQFODLPHGWKH\KDGEHHQDGGXFWHG>VLF@$V DUHVXOWWKHFDVHUHFHLYHGH[WHQVLYHORFDOFRYHUDJHDQG %HIRUHPRYLQJWRJURXSYRLUGLUHWKHWULDOFRXUWGLVFXVVHG VRPHVWDWHZLGHDQGHYHQQDWLRQDODWWHQWLRQDIDFWZKLFK LWVUDWLRQDOHIRULQGLYLGXDOYRLUGLUHE\VWDWLQJ WKH &RXUW RI $SSHDOV UHFRJQL]HG   2KLR $SS /(;,6DW ,WQRWHGWKDWWKHSXEOLFLW\ZDVQRWDV ,I\RXDUHLQ&DWHJRU\1RRUZKLFK,DVVXPHWKH KRVWLOHDVWKDWLQ/XQGJUHQ ZKHUHWKH&RXQW\3URVHFXWRU UHPDLQGHURI\RXDUHFRXQVHODQGWKH&RXUWDUHJRLQJWR KDG ODEHOHG GHIHQGDQWV mLQKXPDQl DQG SUHGLFWHG WKH\ SURFHHGWRTXHVWLRQ\RXLQGLYLGXDOO\RXWRIWKHSUHVHQFH ZRXOG GLH LQ WKH HOHFWULF FKDLU  QRU GLG WKH FRYHUDJH RIWKHRWKHUMXURUV7KLVLQGLYLGXDOYRLUGLUHRUVHSDUDWH LQFOXGH GHWDLOV RI 3HWLWLRQHUjV FRQIHVVLRQ DV KDG TXHVWLRQLQJLVEHLQJFRQGXFWHGEHFDXVHZHDUHJRLQJWR KDSSHQHGLQ1REOHV EHDVNLQJHDFKRI\RXH[DFWO\ZKDWLWLVWKDW\RXUHFDOO YLHZLQJOLVWHQLQJWRRUUHDGLQJDERXWSHUWDLQLQJWRWKLV s$DW FDVHDQGZKDW\RXNQRZRUEHOLHYH\RXNQRZDERXWLW :HZLOOWKHQDVN\RXZKDWLIDQ\\RXURSLQLRQVDUHDQG 7KHGLVWULFWFRXUWDFNQRZOHGJLQJWKDWWKH2KLR&RXUWRI WKHH[WHQWWRZKLFKWKH\DUHKHOG $SSHDOVGLGQRWKDYHWKHEHQHILWRI1HYHUVY.LOOLQJHUVXSUD FRPSDUHG WKH OHYHO RI SUHWULDO SXEOLFLW\ LQ 1HYHUV WR 7R PDNH WKHVH LQTXLULHV LQ WKH SUHVHQFH RI HDFK RWKHU SHWLWLRQHUjVFDVHDQGFRQFOXGHG ZRXOG FDXVH VXEVWDQWLDO FRQIXVLRQ DQG SUREDEOH SUHMXGLFHWRWKHSDUWLHVEHFDXVHILUVWRIDOOSHRSOHKHDU 7KH2KLR&RXUWRI$SSHDOVGLGQRWKDYHWKHEHQHILWVRI VHHDQGUHDGDQGLQWHUSUHWWKLQJVDQGUHPHPEHUWKLQJV WKH6L[WK&LUFXLWjVGHFLVLRQLQ1HYHUVEXWWKDWGHFLVLRQ GLIIHUHQWO\SDUWLFXODUO\QHZVLWHPVDQGZHGRQjWZDQW DOVR VXSSRUWV WKLV &RXUWjV FRQFOXVLRQ  1HYHUV ZDV D RQHSHUVRQjVUHFROOHFWLRQRIWKHVHDFFRXQWVHLWKHUDGGLQJ 'HWURLWSROLFHRIILFHUFKDUJHGZLWKVHFRQGGHJUHHPXUGHU WR RU FKDQJLQJ ZKDW DQRWKHU SHUVRQj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mOLWHUDOO\ SRWHQWLDO MXURUV ZKR HLWKHU GR RU GR QRW VKDUH WKRVH PXUGHUHGE\SROLFHl1HYHUWKHOHVVWKHFRXUWDSSOLHGWKH RSLQLRQV ,UYLQY'RZGSURFHGXUHDQGIRXQGWKDWDQLPSDUWLDOMXU\ KDGEHHQVHDWHG6LJQLILFDQWO\WZRMXURUVFKDOOHQJHGIRU $SSHOODQWjV%UDW  5LWFKLHY5RJHUV 1R 1R 5LWFKLHY5RJHUV  7KDWPD\QRWEHHDV\ FDXVHZHUHDFWXDOO\VHDWHGRQWKH1HYHUVMXU\DOWKRXJK WKH FRXUW FLWHG WR WKH 6XSUHPH &RXUWjV REVHUYDWLRQ LQ $SSHOODQWjV%UDW %HFNY:DVKLQJWRQ866&W/(G QG  WKDWWKHIDFWWKHSHWLWLRQHULQWKDWFDVHGLG $JDLQVWWKDWEDFNJURXQGWKHVWDWHWULDOFRXUWVXPPRQHGD QRWFKDOOHQJHDQ\RIWKHVHDWHGMXURUVIRUFDXVHmLVVWURQJ ODUJH QXPEHU RI SURVSHFWLYH MXURUV DQG DVNHG HDFK RQH WR HYLGHQFHKHZDVFRQYLQFHGWKHMXURUVZHUHQRWELDVHGl FDWHJRUL]HKLVRUKHUSRVLWLRQLQFRPSOLDQFHZLWKWKHWULDOjV 7KHIDFWVLQ1HYHUVZHUHFOHDUO\VWURQJHUIRUFKDQJHRI FRXUWLQVWUXFWLRQVDVIROORZV YHQXHWKDQKHUH &DWHJRU\ 2QH ZKDW ZH DUH FDOOLQJ &DWHJRU\ 2QH LV s$DW MXURUVZKRDUHQRWIDPLOLDUZLWKWKLVFDVHRUWKHQHZV DFFRXQWVRUSDUWLHVRUDWWRUQH\VLQWKHFDVHDQGKDYHQR $JDLQVWWKHEDFNGURSRIWKHUHVWULFWLYHGHILQLWLRQRIFDVHV RSLQLRQDERXWZKHWKHUGHIHQGDQWLVJXLOW\RUQRWJXLOW\RI GHPRQVWUDWLQJ mSUHVXPHG SUHMXGLFHl DV VHW IRUWK LQ WKH WKHFKDUJHV 6XSUHPH &RXUW mWULORJ\l DQG RXU RZQ GHFLVLRQ LQ 1HYHUV VXSUDZHKROGWKDWWKHGHFLVLRQRIWKH2KLR&RXUWRI$SSHDOV &DWHJRU\DUHWKRVHMXURUVZKRDUHVRPHZKDWIDPLOLDU LQDIILUPLQJWKHWULDOFRXUWjVGHQLDORIDPRWLRQIRUFKDQJHRI ZLWK WKH FDVH WKH QHZV DFFRXQWV WKH SDUWLHV RU WKH YHQXHEDVHGRQmSUHVXPHGSUHMXGLFHlZDVQHLWKHUmFRQWUDU\ DWWRUQH\VDQGPD\UHFDOOVXFKQHZVEURDGFDVWVRUQHZV WRlQRUDQmXQUHDVRQDEOHDSSOLFDWLRQRIl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mSUHVXPHG SUHMXGLFHl LVVXH EHIRUH RU DIWHU WKH 7KH\KDYHFORVHO\IROORZHGWKHQHZVDFFRXQWVDQGKDYH YRLU GLUH 7KH WULORJ\ RI mSUHVXPHG SUHMXGLFHl FDVHV VHHP WR LQGLFDWH WKDW VXEVWDQWLDOUHFDOORIWKHGHWDLOVRIWKHVHUHSRUWVDQGWKHVH VXFK D PRWLRQ VKRXOG EH GHFLGHG ZLWKRXW FRPPHQFLQJ WKH YRLU GLUH EXW DUHMXURUVZKRKDYHIRUPHGRUH[SUHVVHGRSLQLRQVDERXW WKH 6XSUHPH &RXUW KDV FKRVHQ QRW WR VSHDN GLUHFWO\ WR WKDW LVVXH ZKHWKHUWKHGHIHQGDQWLVJXLOW\RUQRWJXLOW\DQGWKHVH +RZHYHU DV DFNQRZOHGJHG LQ 1HYHUV VXSUD WKH VXEVHTXHQW GHFLVLRQV LQ 0XUSK\ VXSUD DQG 'REEHUW VXSUD GLFWDWH WKDW PRWLRQV IRU FKDQJH RI RSLQLRQVDUHILUPO\KHOG YHQXH EDVHG RQ mSUHVXPHG SUHMXGLFHl DUH UHVHUYHG IRU WKRVH FDVHV ZKHUH mD WULDO DWPRVSKHUH KDV EHHQ XWWHUO\ FRUUXSWHG E\ SUHVV FRYHUDJHl s$DW &RQVHTXHQWO\ DV ZH EHOLHYH WKH ODZ KDV GHYHORSHG XQOHVV WKH PDWHULDOV VXEPLWWHG WR WKH WULDO MXGJH GHPRQVWUDWH DQ XWWHU FRUUXSWLRQ E\ WKH SUHVV RI WKH WULDO DWPRVSKHUH WKH DFWXDO YRLU GLUH EHFRPHV WKH FHQWHUSLHFH RI DWWHQWLRQ RQ WKH PRWLRQ WR FKDQJH WKH YHQXH  5LWFKLHY5RJHUV 1R 1R 5LWFKLHY5RJHUV  ,9 ','7+(&21'8&72)7+(92,5',5(:+,&+ ,QWKLVFDVHWKHWULDOFRXUWREYLRXVO\DZDUHRIWKHH[WHQVLYH 5(68/7(' ,1 $ ),1',1* 2) 12 m$&78$/ SUHWULDOSXEOLFLW\UHFRJQL]HGWKDWWKHDFWXDOYRLUGLUHZRXOG 35(s8',&(l 9,2/$7( 7+( '8( 352&(66 WDNHRQJUHDWLPSRUWDQFHLQGHWHUPLQLQJZKHWKHUDIDLUDQG 5,*+762)3(7,7,21(5" LPSDUWLDOMXU\FRXOGEHLPSDQHOHG :KHQWKHPRWLRQIRUDFKDQJHRIYHQXHEDVHGRQH[WHQVLYH :HWXUQQRZWRDWKRURXJKH[DPLQDWLRQRIWKHSURFHVVE\ SUHWULDO SXEOLFLW\ DQG SUHGLFDWHG RQ mSUHVXPHG SUHMXGLFHl ZKLFKSHWLWLRQHUjVMXU\ZDVVHOHFWHG IDLOVWKHLVVXHRImDFWXDOSUHMXGLFHlUHPDLQVIRUUHYLHZE\WKH WULDOFRXUWWRGHWHUPLQHZKHWKHUDUHYLHZRIERWKWKHMXU\YRLU 7KHSUHWULDOSXEOLFLW\LQWKLVFDVHFRQWLQXHGDQG VKRUWO\ GLUH WHVWLPRQ\ DQG WKH H[WHQW DQG QDWXUH RI WKH PHGLD EHIRUH WKH MXU\ VHOHFWLRQ EHJDQ WKH 'D\WRQ 'DLO\ 1HZV FRYHUDJHLQGLFDWHVDIDLUWULDOLVRULVQRWSRVVLEOH$GGLQJWR SXEOLVKHGDQDUWLFOHZLWKWKHKHDGOLQHm$QJXLVK5HYLVLWHGl WKH GLIILFXOW\ RI KDQGOLQJ mDFWXDO SUHMXGLFHl LVVXHV LV WKH UHPLQGLQJWKHFRPPXQLW\RIWKHKRPLFLGHDQGVWDWLQJ WHQVLRQEHWZHHQWKHGXHSURFHVVULJKWRIDGHIHQGDQWWRDIDLU DQGLPSDUWLDOMXU\DQGWKH)LUVW$PHQGPHQWULJKWRIWKHPHGLD 7KH ILUVW UHSRUW RQ sXO\   WKDW \HDUROG WRUHSRUWRQWKHSURFHHGLQJVLQWKHFRQWH[WRIWKHDSSURDFKLQJ 6DPDQWKD5LWFKLHZDVPLVVLQJIURPKHU+HUPDQ$YHQXH FULPLQDOWULDO7KHWHQVLRQLVZHOOGRFXPHQWHGLQERWK2KLR KRPH WXJJHG DW WKH KHDUWVWULQJV RI 0LDPL 9DOOH\ DQGIHGHUDOMXULVSUXGHQFH,Q'D\WRQ1HZVSDSHUVY3KLOOLSV UHVLGHQWV 2KLR6W  DQRWKHUVHQVDWLRQDOKRPLFLGHFDVHLQ 0RQWJRPHU\&RXQW\WKHFRXUWLVVXHGDZULWRIPDQGDPXV +XQGUHGV RI FRQFHUQHG SHRSOH FRQYHUJHG RQ WKH SURKLELWLQJ WKH &RPPRQ 3OHDV sXGJH DVVLJQHG WKH PXUGHU QHLJKERUKRRG WKDW VLWV LQ WKH VKDGRZ RI WKH 2KLR  FDVHIURPFORVLQJWKHFRXUWURRPWRWKHPHGLDGXULQJDKHDULQJ :HEVWHU6WUHHWRYHUSDVVWRMRLQWKHKXQWDQGWRFRQVROH WRVXSSUHVVWKHFRQIHVVLRQRIWKHGHIHQGDQWZKRZDVFKDUJHG KHUK\VWHULFDOPRWKHU ZLWKWKHNLGQDSPXUGHURIDSURPLQHQW'D\WRQFLWL]HQDIWHUD UDQVRPRIKDGEHHQSDLG,QLVVXLQJWKHZULW&KLHI 7KUHH GD\V ODWHU WKHLU KHDUWV EURNH ZKHQ SROLFH sXVWLFH:LOOLDP2j1HLOZULWLQJIRUWKHFRXUWGHFODUHGWKDWLI DQQRXQFHGWKHJLUOjVERG\KDGEHHQIRXQGVXEPHUJHGLQ DIDLUDQGLPSDUWLDOWULDOFRXOGQRWEHKHOGDFKDQJHRIYHQXH DQHDUE\IRXQGU\SLW VKRXOGEHJUDQWHG,GDW FLWLQJ6KHSSDUGY0D[ZHOO $QGGD\VDIWHUWKDWWKHLUKHDUWVEXUQHGZLWKUDJH VXSUD,UYLQY'RZGVXSUD5LGHDXY/RXLVLDQDVXSUD  ZKHQSROLFHDQQRXQFHG6DPDQWKDjVPRWKHU7KHUUHVVD 1HEUDVND 3UHVV $VVjQ Y 6WXDUW  86   sRO\QQ5LWFKLHKDGEHHQDUUHVWHGLQKHUGDXJKWHUjV UHDFKHG D VLPLODU FRQFOXVLRQ ZKHQ IDFHG ZLWK WKH WHQVLRQ GHDWK EHWZHHQ WKH ULJKW WR D IDLU DQG LPSDUWLDO MXU\ DQG WKH )LUVW 1RZVL[PRQWKVDIWHU5LWFKLHjVILUVWFDOOIRUKHOSVKH $PHQGPHQWULJKWVRIWKHPHGLDLQDKLJKO\SXEOLFL]HGPXUGHU IDFHVWKDW VDPHFRPPXQLW\DQGDVNVLWWRILQGKHUQRW FDVH LQYROYLQJ WKH NLOOLQJ RI VL[ PHPEHUV RI D IDPLO\ LQ D JXLOW\+HUWULDOVWDUWV0RQGD\ VPDOOWRZQRISHRSOHLQ1HEUDVND7KHPHGLDKDGEHHQ UHVWUDLQHGIURPSXEOLVKLQJWKHDFFRXQWVRIFRQIHVVLRQVE\WKH %HIRUHWKDWFDQKDSSHQ0RQWJRPHU\&RXQW\&RPPRQ GHIHQGDQW7KHmSULRUUHVWUDLQWlRUGHUVLVVXHGWRWKHPHGLD 3OHDVH>VLF@sXGJHsRKQ.HVVOHUPXVWGHWHUPLQHZKHWKHU ZHUHYDFDWHG LWjV SRVVLEOH WR ILQG  MXURUV FDSDEOH RI VHWWLQJ DVLGH ZKDWHYHUWKH\NQRZDERXWWKHFDVHDQGJLYLQJ5LWFKLHD IDLUWULDO