FILED Dec 19, 2018 02:10 PM(CT) TENNESSEE WORKERS' COMPENSATION APPEALS BOARD 7(11(66((%85($82):25.(56¶&203(16$7,21 :25.(56¶&203(16$7,21$33($/6%2$5' +($5'129(0%(5$7.12;9,//( 5LFN20XQF\ 'RFNHW1R Y 6WDWH)LOH1R 3UHPLXP'LVWULEXWRUV,QFHWDO $SSHDOIURPWKH&RXUWRI:RUNHUV¶ &RPSHQVDWLRQ&ODLPV /LVD$/RZH-XGJH $IILUPHGDQG5HPDQGHG)LOHG'HFHPEHU 7KLVLQWHUORFXWRU\DSSHDODULVHVIURPWKHHPSOR\HH¶VUHTXHVWWRUHWXUQWRWKHDXWKRUL]HG WUHDWLQJ SK\VLFLDQ IRU DQ HYDOXDWLRQ RI KLV ORZ EDFN ZKLFK WKH HPSOR\HH FRQWHQGV KH LQMXUHG LQ D -XO\ ZRUN DFFLGHQW LQ ZKLFK KH DOVR UHSRUWHG LQMXULQJ KLV XSSHU H[WUHPLWLHV 7KH HPSOR\HU UHIXVHG WR DXWKRUL]H WKH HYDOXDWLRQ DVVHUWLQJ WKDW WKH HPSOR\HH¶V ORZ EDFN FRPSODLQWV UHVROYHG VRRQ DIWHU WKH ZRUN DFFLGHQW DQG WKDW WKH HPSOR\HH¶V FXUUHQW ORZ EDFN V\PSWRPV GLG QRW DULVH SULPDULO\ RXW RI WKH ZRUN LQMXU\ )ROORZLQJDQH[SHGLWHGKHDULQJWKHWULDOMXGJHRUGHUHGWKHHPSOR\HUWRDXWKRUL]HDUHWXUQ YLVLWZLWKWKHSK\VLFLDQWRHYDOXDWHDQGWUHDWDQ\ZRUNUHODWHGEDFNLQMXU\7KHHPSOR\HU KDVDSSHDOHG:HFRQFOXGHWKHSUHSRQGHUDQFHRIWKHHYLGHQFHVXSSRUWVWKHWULDOMXGJH¶V GHWHUPLQDWLRQDIILUPWKHH[SHGLWHGKHDULQJRUGHUJUDQWLQJPHGLFDOEHQHILWVDQGUHPDQG WKHFDVH -XGJH'DYLG)+HQVOH\GHOLYHUHGWKHRSLQLRQRIWKH$SSHDOV%RDUGLQZKLFK3UHVLGLQJ -XGJH0DUVKDOO/'DYLGVRQ,,,DQG-XGJH7LPRWK\:&RQQHUMRLQHG $OH[ % 0RUULVRQ DQG 7LIIDQ\ % 6KHUULOO .QR[YLOOH 7HQQHVVHH IRU WKH HPSOR\HU DSSHOODQW3UHPLXP'LVWULEXWRUV,QF $PHHVK$.KHUDQL.QR[YLOOH7HQQHVVHHIRUWKHHPSOR\HHDSSHOOHH5LFN20XQF\ )DFWXDODQG3URFHGXUDO%DFNJURXQG 5LFN0XQF\ ³(PSOR\HH´ ZDVDGHOLYHU\WUXFNGULYHUIRU3UHPLXP'LVWULEXWRUV ,QF ³(PSOR\HU´ 2Q -XO\ KH UHSRUWHG LQMXULHV WR KLV HOERZV DQG ORZ EDFN DIWHUXQORDGLQJLFHFUHDPIURPKLVGHOLYHU\WUXFN(PSOR\HUDFFHSWHG(PSOR\HH¶VFODLP DQGSURYLGHGDSDQHORISULPDU\FDUHSURYLGHUVIURPZKLFK(PSOR\HHVHOHFWHG)DUUDJXW )DPLO\ 3UDFWLFH (PSOR\HH¶V ILUVW YLVLW ZDV RQ -XO\ ZLWK D IDPLO\ QXUVH SUDFWLWLRQHU7KHLQLWLDOPHGLFDOUHSRUWVWDWHG(PSOR\HHZDVGHOLYHULQJLFHFUHDP³ZLWKD YHU\ KHDY\ FUDWH DQG GROO\´ ZKHQ ³>K@H IHOW D SDLQ DQG SXOOLQJ LQ ERWK HOERZV WKDW PRUQLQJ´ 7KH UHSRUW DGGLWLRQDOO\ VWDWHG WKDW (PSOR\HH ZDV DEOH WR FRQWLQXH ZRUNLQJ WKDWGD\DQGQRWHG³>K@HKDGDOLWWOHELWRIORZEDFNSDLQDWWKDWWLPH´)XUWKHUWKHUHSRUW VWDWHGWKDWKLVSDLQZRUVHQHGLQKLVHOERZVDVWKHGD\ZHQWRQWKDWKHZDV³VWLOOKDYLQJ SDLQ LQ ERWK HOERZV ZKHQHYHU KH OLIWV VRPHWKLQJ´ DQG WKDW ³>L@W KDV EHHQ VORZO\ LPSURYLQJDQGKDVUHVROYHGQRZ´ $ VHSDUDWH GRFXPHQW WLWOHG :RUNHU¶V &RPSHQVDWLRQ ([DPLQDWLRQ DQG 5HSRUW ³ZRUNHUV¶FRPSHQVDWLRQUHSRUW´ ZKLFKZDVDOVRVLJQHGE\WKHQXUVHSUDFWLWLRQHURQWKH GDWHRI(PSOR\HH¶VLQLWLDOYLVLWGHVFULEHGD³OLIWLQJ´LQMXU\UHVXOWLQJLQD³SXOOHGHOERZ WHQGRQ>DQG@PXVFOHV>LQ@ORZHUEDFN´,WVWDWHG(PSOR\HH³IHOWDSXOOLQERWKHOERZV´LQ WKH HDUO\ PRUQLQJ DQG WKDW KH FRQWLQXHG WR ZRUN ,W DGGLWLRQDOO\ VWDWHG WKDW (PSOR\HH ³>I@HOWVRPHORZEDFNSDLQDVZHOO´WKDWZDV³>V@WLOOSDLQIXO>ZLWK@OLIWLQJ´WKDWKLVEDFN SDLQKDGLPSURYHGWKDWKHKDGEHHQRIIZRUNVLQFHWKHLQMXU\GDWHDQGWKDWKHKDG³QR SDLQ QRZ´ %RWK RI WKH GRFXPHQWV DGGUHVVLQJ (PSOR\HH¶V LQLWLDO PHGLFDO H[DPLQDWLRQ LQGLFDWHG (PSOR\HH ZDV UHOHDVHG WR ZRUN ZLWK UHVWULFWLRQV RI QR OLIWLQJ SXVKLQJ RU SXOOLQJJUHDWHUWKDQSRXQGV 7KHUHFRUGRQDSSHDOLQFOXGHVUHSRUWVRIWKUHHDGGLWLRQDOYLVLWVWR)DUUDJXW)DPLO\ 3UDFWLFH7KHUHSRUWVIRUWKHVHWKUHHYLVLWVDUHOLPLWHGWRZRUNHUV¶FRPSHQVDWLRQUHSRUWV HDFKRIZKLFKLQFOXGHVWKHVLJQDWXUHRI'U*HUDOG5XVVHOO7KHUHSRUWRI(PSOR\HH¶V VHFRQGYLVLWRQ-XO\LQFOXGHGDGHVFULSWLRQRIWKHLQMXU\DV³KXUWORZHUEDFNDQG ERWKDUPV´,WLQGLFDWHGWKDW(PSOR\HHKDGEHHQRIIZRUNVLQFHKLVODVWYLVLWWKDWKHZDV ³EHWWHU´ DQG WKDW KLV SK\VLFDO H[DPLQDWLRQ UHYHDOHG ³PLOG WHQGHUQHVV RYHU >KLV@ EDFN´ DQG ³PHGLDO HSLFRQG\OLWLV´ (PSOR\HH¶V ZRUN UHVWULFWLRQV ZHUH PRGLILHG DW WKLV YLVLW OLPLWLQJOLIWLQJWRQRPRUHWKDQILYHSRXQGVZLWK³HLWKHUDUP´ 7KH UHSRUW RI (PSOR\HH¶V WKLUG YLVLW RQ $XJXVW ZKLFK GHVFULEHG D ORZ EDFN LQMXU\ ³GXH WR KHDY\ UHSHDWHG OLIWLQJ´ LQGLFDWHG (PSOR\HH ZDV EHWWHU RYHUDOO DQG VWDWHGWKDWDOWKRXJKKHUHSRUWHGKDYLQJ³VRPHGLVFRPIRUW´KHIHOWKHFRXOG³GRKLVMRE´ (PSOR\HHZDVUHWXUQHGWRZRUNDQGDGYLVHGWR³XVHHOERZVXSSRUWVEDQGV´DQGWRIROORZ XSLQDZHHNWR³GHWHUPLQHSHUIRUPDQFHOHYHOV´7KHUHSRUWRI(PSOR\HH¶VILQDOYLVLWWKH $OWKRXJKWKHWULDOFRXUWKHOGDQLQSHUVRQHYLGHQWLDU\KHDULQJ(PSOR\HHWHVWLILHGE\DIILGDYLWDQGWKHUH ZDV QR LQSHUVRQ WHVWLPRQ\ :H KDYH JOHDQHG WKH IDFWV IURP (PSOR\HH¶V DIILGDYLW DQG RWKHU GRFXPHQWDU\ HYLGHQFH DGPLWWHG DW WKH H[SHGLWHG KHDULQJ (DFK RI WKH ZRUNHUV¶ FRPSHQVDWLRQ UHSRUW IRUPVIRU(PSOR\HH¶VIRXUYLVLWVWR)DUUDJXW)DPLO\3UDFWLFHLQFOXGHVKDQGZULWWHQHQWULHVDQG(PSOR\HH¶V VLJQDWXUH7KHUHFRUGGRHVQRWGLVFORVHZKDWLQIRUPDWLRQLQFOXGHGLQWKHVHUHSRUWVLIDQ\ZDVZULWWHQE\ (PSOR\HHDQGZKDWLQIRUPDWLRQZDVZULWWHQE\'U5XVVHOOWKHIDPLO\QXUVHSUDFWLWLRQHURURWKHUVRQWKH VWDIIDW)DUUDJXW)DPLO\3UDFWLFH IROORZLQJZHHNDOVRGHVFULEHGLQMXULHVWR(PSOR\HH¶V³ORZHUEDFNDQGERWKDUPV´GXHWR KHDY\ OLIWLQJ ,W IXUWKHU VWDWHG WKDW (PSOR\HH ZDV ³EDFN DW ZRUN ZHDULQJ DUP EDQGV´ (PSOR\HHZDVUHOHDVHGWRUHWXUQWRZRUNZLWKRXWUHVWULFWLRQVDWWKH$XJXVWYLVLW (PSOR\HHWUHDWHGZLWK'U5REHUW,Y\IRUKLVHOERZFRPSODLQWV7KHUHFRUGGRHV QRWLQFOXGHWKHUHSRUWVRI(PSOR\HH¶VWUHDWPHQWZLWK'U,Y\EXWGRHVLQFOXGHD)RUP& $)LQDO0HGLFDO5HSRUWVLJQHGE\'U,Y\RQ'HFHPEHU,WLQGLFDWHV'U,Y\ WKRXJKW(PSOR\HHKDGDZKROHERG\SHUPDQHQWLPSDLUPHQWDVDUHVXOWRIKLVZRUN UHODWHG LQMXULHV 7KH SDUWLHV VWLSXODWHG WKDW 'U ,Y\ SURYLGHG DXWKRUL]HG WUHDWPHQW IRU (PSOR\HH¶VHOERZFRPSODLQWV ,Q -DQXDU\ (PSOR\HH ILOHG D SHWLWLRQ UHTXHVWLQJ PHGLFDO WUHDWPHQW IRU KLV EDFN (PSOR\HU GHQLHG WKDW (PSOR\HH¶V ORZ EDFN V\PSWRPV UHVXOWHG IURP WKH ZRUNLQFLGHQWDQGGHQLHGDXWKRUL]DWLRQIRU(PSOR\HHWRUHWXUQWR'U5XVVHOO(PSOR\HH UHTXHVWHGDQH[SHGLWHGKHDULQJDQGILOHGKLVDIILGDYLWLQVXSSRUWRIKLVUHTXHVW7KHWULDO MXGJHVFKHGXOHGWKHKHDULQJIRU$XJXVW2Q$XJXVW(PSOR\HUILOHGD ³PHGLFDO TXHVWLRQQDLUH´ ZLWK WKH FRXUW FRQVLVWLQJ RI WZR TXHVWLRQV SUHVHQWHG WR 'U 5XVVHOODQG'U5XVVHOO¶VVLJQHGUHVSRQVHV7KH³PHGLFDOTXHVWLRQQDLUH´DVNHG %DVHGRQ\RXUHYDOXDWLRQDQGWUHDWPHQWRI>(PSOR\HH@LVLW\RXURSLQLRQWR D UHDVRQDEOH GHJUHH RI PHGLFDO FHUWDLQW\ WKDW >(PSOR\HH¶V@ FXUUHQW FRPSODLQWV UHPDLQ D SULPDU\ UHVXOW >RI@ KLV DOOHJHG -XO\ ZRUN DFFLGHQW" ,I \HV SOHDVH H[SODLQ KRZ KLV FXUUHQW ORZ EDFN FRPSODLQWV DUH SULPDULO\ UHODWHGWRKLVLQMXU\DQGZKHWKHUKHUHTXLUHVDQ\RQJRLQJPHGLFDOFDUH DVDUHVXOW 'U 5XVVHOO FKHFNHG ³1R´ LQ UHVSRQVH WR WKH ILUVW TXHVWLRQ EXW QRQHWKHOHVV LQFOXGHGWKHIROORZLQJLQUHVSRQVHWRWKHVHFRQGTXHVWLRQ +LV SULPDU\ FRPSODLQW RQ LQFOXGHG KLV HOERZV +H GLG PHQWLRQ ORZEDFNSDLQ0RVWRIKLVYLVLWVXQWLOKLVUHOHDVHRQZHUHUHODWHG WRKLVHOERZSDLQ $WWKHH[SHGLWHGKHDULQJ(PSOR\HHLQWURGXFHGKLVDIILGDYLWLQWRHYLGHQFHVWDWLQJ WKDWKH³VXVWDLQHGLQMXULHVWR>KLV@ORZEDFN´WKDWKHKDG³EHHQVHHQE\'U,Y\UHODWLYHWR >KLV@XSSHUH[WUHPLW\LQMXULHV´DQGWKDWKH³FRQWLQXH>G@WRUHPDLQV\PSWRPDWLFUHODWLYH WR >KLV@ ORZ EDFN LQMXU\ DQG >QHHGHG@ WUHDWPHQW UHODWLYH WR >KLV@ ORZEDFN LQMXU\´ 7KH DIILGDYLW IXUWKHU VWDWHG WKDW(PSOR\HH UHTXHVWHG ³DQ DSSRLQWPHQW WR EH VHHQ E\'U *HUDOG 5XVVHOO UHODWLYH WR >KLV@ ORZ EDFN V\PSWRPV´ DQG WKDW ³(PSOR\HU UHIXVHG WR SURYLGH DQ DSSRLQWPHQW IRU >KLV@ EDFN LQMXU\´ (PSOR\HU RIIHUHG QR WHVWLPRQ\ RU GRFXPHQWDU\HYLGHQFHTXHVWLRQLQJWKHVWDWHPHQWVLQ(PSOR\HH¶VDIILGDYLW1RLQSHUVRQ WHVWLPRQ\ZDVSUHVHQWHGDWWKHKHDULQJ 7KHWULDOMXGJHGHWHUPLQHGWKDW(PSOR\HHKDGPHWKLVEXUGHQRIHVWDEOLVKLQJKLV HQWLWOHPHQW WR D UHWXUQ YLVLW ZLWK 'U 5XVVHOO 1RWLQJ WKDW 'U 5XVVHOO KDG ODVW VHHQ (PSOR\HH³WZR\HDUVDJR´WKHWULDOMXGJHTXHVWLRQHGKRZ'U5XVVHOOFRXOGNQRZZKDW (PSOR\HH¶VFXUUHQWFRPSODLQWVZHUHDQGKRZKHFRXOGDVVHVVZKHWKHUWKHFRPSODLQWVDUH UHODWHGWRWKHZRUNLQMXU\³ZKHQKHODVWVDZ>(PSOR\HH@VRORQJDJR´6WDWLQJWKDW³'U 5XVVHOO¶VFDXVDWLRQRSLQLRQLVSUHVXPHGFRUUHFW´ WKHWULDOMXGJHQRQHWKHOHVV³UHMHFW>HG@ WKH SUHVXPSWLRQ´ GHWHUPLQLQJ WKDW 'U 5XVVHOO¶V VWDWHPHQW LQ WKH TXHVWLRQQDLUH DFNQRZOHGJLQJWKDW(PSOR\HHPHQWLRQHGEDFNSDLQZDV³QRQUHVSRQVLYHRUDWOHDVWQRQ GHWHUPLQDWLYHRIZKHWKHU>(PSOR\HH@VXVWDLQHGDZRUNUHODWHGEDFNLQMXU\WKDWFXUUHQWO\ QHFHVVLWDWHV WUHDWPHQW´ &RQFOXGLQJ WKDW ZKHWKHU (PSOR\HH¶V DOOHJHG EDFN FRPSODLQWV UHVXOWHG IURP D FRPSHQVDEOH LQMXU\ ³KDV \HW WR EH GHWHUPLQHG´ WKH WULDO MXGJH RUGHUHG (PSOR\HU WR SURYLGH (PSOR\HH D UHWXUQ YLVLW WR 'U 5XVVHOO ³WR HYDOXDWH DQG WUHDW DQ\ ZRUNUHODWHGEDFNLQMXU\´(PSOR\HUKDVDSSHDOHG 6WDQGDUGRI5HYLHZ 7KH VWDQGDUG ZH DSSO\ LQ UHYLHZLQJ D WULDO FRXUW¶V GHFLVLRQ SUHVXPHV WKDW WKH FRXUW¶VIDFWXDOILQGLQJVDUHFRUUHFWXQOHVVWKHSUHSRQGHUDQFHRIWKHHYLGHQFHLVRWKHUZLVH See 7HQQ &RGH $QQ F :KHQ WKH WULDO MXGJH KDV KDG WKH RSSRUWXQLW\ WR REVHUYH D ZLWQHVV¶V GHPHDQRU DQG WR KHDU LQFRXUW WHVWLPRQ\ ZH JLYH FRQVLGHUDEOH GHIHUHQFH WR IDFWXDO ILQGLQJV PDGH E\ WKH WULDO FRXUW Madden v. Holland Grp. of Tenn., Inc. 6:G 7HQQ +RZHYHU ³>Q@R VLPLODU GHIHUHQFHQHHGEHDIIRUGHGWKHWULDOFRXUW¶VILQGLQJVEDVHGXSRQGRFXPHQWDU\HYLGHQFH´ Goodman v. Schwarz Paper Co.1R: 6&5:&7HQQ/(;,6DW 7HQQ :RUNHUV¶ &RPS 3DQHO -DQ 6LPLODUO\ WKH LQWHUSUHWDWLRQ DQG DSSOLFDWLRQRIVWDWXWHVDQGUHJXODWLRQVDUHTXHVWLRQVRIODZWKDWDUHUHYLHZHGde novoZLWK QR SUHVXPSWLRQ RI FRUUHFWQHVV DIIRUGHG WR WKH WULDO FRXUW¶V FRQFOXVLRQV See Mansell v. Bridgestone Firestone N. Am. Tire, LLC 6:G 7HQQ :H DUH DOVR PLQGIXO RI RXU REOLJDWLRQ WR FRQVWUXH WKH ZRUNHUV¶ FRPSHQVDWLRQ VWDWXWHV ³IDLUO\ LPSDUWLDOO\ DQG LQ DFFRUGDQFH ZLWK EDVLF SULQFLSOHV RI VWDWXWRU\ FRQVWUXFWLRQ´ DQG LQ D ZD\WKDWGRHVQRWIDYRUHLWKHUWKHHPSOR\HHRUWKHHPSOR\HU7HQQ&RGH$QQ $QDO\VLV (PSOR\HU FRQWHQGV WKH SUHSRQGHUDQFH RI WKH HYLGHQFH GRHV QRW VXSSRUW WKH WULDO MXGJH¶V GHWHUPLQDWLRQ ,W FRQWHQGV WKH PHGLFDO SURRI LV XQGLVSXWHG DQG HVWDEOLVKHV WKDW (PSOR\HH¶V ORZ EDFN FRPSODLQWV KDG UHVROYHG VKRUWO\ DIWHU WKH ZRUN LQFLGHQW DQG WKDW (PSOR\HH¶V FXUUHQW ORZ EDFN V\PSWRPV GLG QRW DULVH SULPDULO\ RXW RIKLV HPSOR\PHQW :HGLVDJUHH ,Q McCord v. Advantage Human Resourcing 1R 71 :UN &RPS$SS%G/(;,6DW 7HQQ:RUNHUV¶&RPS$SS%G0DU ZH FRQFOXGHG WKDW DW DQ H[SHGLWHG KHDULQJ DQ HPSOR\HH QHHG QRW SURYH HDFK DQG HYHU\ HOHPHQW RI KLV RU KHU FODLP E\ D SUHSRQGHUDQFH RI WKH HYLGHQFH LQ RUGHU WR REWDLQ WHPSRUDU\ GLVDELOLW\ EHQHILWV RU PHGLFDO EHQHILWV ,QVWHDG ZH HPSKDVL]HG WKDW DQ HPSOR\HHKDVWKHEXUGHQWRFRPHIRUZDUGZLWKVXIILFLHQWHYLGHQFHIURPZKLFKWKHWULDO FRXUW FDQ GHWHUPLQH WKDW WKH HPSOR\HH LV OLNHO\ WR SUHYDLO DW D KHDULQJ RQ WKH PHULWV FRQVLVWHQWZLWK7HQQHVVHH &RGH$QQRWDWHGVHFWLRQ G Id. 7KXV ZKLOH DQ LQMXUHGZRUNHUUHWDLQVWKHEXUGHQRISURRIDWDOOVWDJHVRIDZRUNHUV¶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ee Madden v. Holland Grp. of Tenn. 6:G 7HQQ /LNHZLVHZKHQHYLGHQFHLVSUHVHQWHGWRDWULDOMXGJHLQ WKHIRUPRIDQDIILGDYLWDQGRWKHUGRFXPHQWDU\HYLGHQFHWKHUHYLHZLQJFRXUWPXVWUHDFK LWV RZQ FRQFOXVLRQV DERXW WKH ZHLJKW DIIRUGHG WR WKH HYLGHQFH SeeGlisson v. Mohon Int’l., Inc.6:G 7HQQ $WULDOMXGJHRFFXSLHVQREHWWHUSRVLWLRQ WKDQ DQ DSSHOODWH FRXUW LQ UHYLHZLQJ DQG LQWHUSUHWLQJ GRFXPHQWDU\ HYLGHQFH See Umanzor v. Zurich Am. Ins. Co. 1R ::&5:& 7HQQ /(;,6 DW Q 7HQQ :RUNHUV¶ &RPS 3DQHO $SU 7KHUH LV KRZHYHU D SUHVXPSWLRQ WKDW WKH ILQGLQJV DQG FRQFOXVLRQV RI WKH WULDO MXGJH DUH FRUUHFW XQOHVV WKH SUHSRQGHUDQFHRIWKHHYLGHQFHLVRWKHUZLVH7HQQ&RGH$QQ F +HUH LW LV XQGLVSXWHG WKDW (PSOR\HH ZDV LQYROYHG LQ D VSHFLILF ZRUNUHODWHG LQFLGHQWDQGWKDWKHYRLFHGFRPSODLQWVRIXSSHUH[WUHPLW\SDLQDQGORZEDFNSDLQDWKLV LQLWLDOPHGLFDOYLVLWDOWKRXJKWKHUHFRUGVRIWKDWYLVLWLQGLFDWH(PSOR\HHUHSRUWHGKLVORZ EDFNFRPSODLQWVKDGLPSURYHGDQGKHKDG³QRSDLQQRZ´7KHSDUWLHVVWLSXODWHGWKDWWKH LQFLGHQWRFFXUUHGRQ-XO\DQGWKDW(PSOR\HHJDYHSURSHUQRWLFHRIWKHZRUN UHODWHG LQMXU\ (PSOR\HH¶V DIILGDYLW VWDWHG WKDW KH ³FRQWLQXH>G@ WR UHPDLQ V\PSWRPDWLF UHODWLYHWR>KLV@ORZEDFNLQMXU\DQG>QHHGHG@WUHDWPHQWUHODWLYHWR>KLV@ORZEDFNLQMXU\´ (PSOR\HUSUHVHQWHGQRWKLQJWRFRQWUDGLFWWKHDVVHUWLRQVLQ(PSOR\HH¶VDIILGDYLW ,QVWHDG (PSOR\HU UHOLHV RQ WKH TXHVWLRQQDLUH VHQW WR 'U 5XVVHOO LQ ZKLFK KH FKHFNHG³>Q@R´WRWKHTXHVWLRQDVNLQJZKHWKHU(PSOR\HH¶V³FXUUHQWFRPSODLQWVUHPDLQD SULPDU\UHVXOW>RI@KLVDOOHJHG-XO\ZRUNDFFLGHQW´(PSOR\HUDVVHUWVWKLVLVD FDXVDWLRQ RSLQLRQ FRQFHUQLQJ (PSOR\HH¶V ORZ EDFN LQMXU\ WR ZKLFK WKH VWDWXWRU\ SUHVXPSWLRQRIFRUUHFWQHVVDSSOLHVDQGWKDW(PSOR\HHIDLOHGWRRIIHUDQ\PHGLFDORSLQLRQ DGGUHVVLQJFDXVDWLRQ)RFXVLQJRQWKHSUHFLVHTXHVWLRQSUHVHQWHGWR'U5XVVHOOLQTXLULQJ DERXW³FXUUHQWFRPSODLQWV´DQGQRWLQJWKDW'U5XVVHOO³ODVWVDZ>(PSOR\HH@WZR\HDUV DJR´WKHWULDOMXGJHFRQFOXGHGWKDW'U5XVVHOO¶VUHVSRQVHVZHUH³QRQGHWHUPLQDWLYHRI ZKHWKHU>(PSOR\HH@VXVWDLQHGDZRUNUHODWHGEDFNLQMXU\WKDWFXUUHQWO\QHHGVWUHDWPHQW´ 7KHWULDOMXGJHFRQFOXGHGWKDWWKHFRPSHQVDELOLW\RI(PSOR\HH¶VDOOHJHGEDFNFRPSODLQWV ³KDV \HW WR EH GHWHUPLQHG´ DQG WKDW (PSOR\HH ³SUHVHQWHG VXIILFLHQW HYLGHQFH HQWLWOLQJ KLP WR HYDOXDWLRQ E\ 'U 5XVVHOO IRU WUHDWPHQW RI DQ\ ZRUNUHODWHG EDFN LQMXU\´ :H DJUHH 7KH UHSRUWV IRU HDFK RI (PSOR\HH¶V IRXU YLVLWV ZLWK WKH DXWKRUL]HG PHGLFDO SURYLGHUUHIHUHQFH(PSOR\HH¶VFRPSODLQWVWRKLVHOERZDUPDQGORZEDFN7KHLQLWLDO UHSRUWV GDWHG ILYH GD\V DIWHU WKH ZRUN LQFLGHQW QRWHG WKDW DOWKRXJK (PSOR\HH ³>I@HOW VRPH ORZ EDFN SDLQ´ KLV EDFN SDLQ KDG LPSURYHG DQG WKHUH ZDV ³QR SDLQ QRZ´ 7KH UHSRUWRIWKHIROORZLQJYLVLWLQGLFDWHG³PLOGWHQGHUQHVVRYHUEDFN´DQGWKHTXHVWLRQQDLUH WKDW 'U 5XVVHOO UHVSRQGHG WR DOPRVW WZR \HDUV ODWHU LQ -XQH VWDWHG WKDW ZKLOH ³>P@RVW RI >(PSOR\HH¶V@ YLVLWV XQWLO KLV UHOHDVH RQ ZHUH UHODWHG WR KLV HOERZ SDLQ´KH³GLGPHQWLRQORZEDFNSDLQ´7KHTXHVWLRQSUHVHQWHGWR'U5XVVHOOWRZKLFK KH UHVSRQGHG ³>Q@R´ GLG QRW GLIIHUHQWLDWH EHWZHHQ (PSOR\HH¶V FXUUHQW XSSHU H[WUHPLW\ FRPSODLQWVDQGKLVFXUUHQWORZEDFNFRPSODLQWV ³,Q HYDOXDWLQJ H[SHUW PHGLFDO RSLQLRQV D WULDO MXGJH PD\ FRQVLGHU DPRQJ RWKHU WKLQJV WKH TXDOLILFDWLRQV RI WKH H[SHUWV WKH FLUFXPVWDQFHV RI WKHLU HYDOXDWLRQ WKH LQIRUPDWLRQ DYDLODEOH WR WKHP DQG WKH HYDOXDWLRQRI WKH LPSRUWDQFH RI WKDW LQIRUPDWLRQ E\RWKHUH[SHUWV´Venable v. Superior Essex, Inc.1R71:UN &RPS $SS %G /(;,6 DW 7HQQ :RUNHUV¶ &RPS $SS %G 1RY ³7ULDOFRXUWVKDYHEURDGGLVFUHWLRQWRGHWHUPLQHZKHWKHUWRDFFHSWRUUHMHFWWKHRSLQLRQRI DSURIIHUHGH[SHUW´Cobb v. Henry I. Siegel, Inc.1R::&5&9 7HQQ/(;,6DW 7HQQ:RUNHUV¶&RPS3DQHO2FW DQGZHZLOOQRW VXEVWLWXWH RXU GHWHUPLQDWLRQ RI WKH ZHLJKW WR EH DFFRUGHG DQ H[SHUW RSLQLRQ DEVHQW DQ DEXVHRIGLVFUHWLRQE\WKHWULDOMXGJH0RUHRYHULQUHYLHZLQJDWULDOMXGJH¶VH[HUFLVHRI GLVFUHWLRQZHSUHVXPHWKHWULDOMXGJH¶VGHFLVLRQLVFRUUHFWDQGUHYLHZWKHHYLGHQFHLQD OLJKWPRVWIDYRUDEOHWRXSKROGLQJWKHGHFLVLRQLovlace v. Copley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¶V ³FXUUHQW FRPSODLQWV UHPDLQ D SULPDU\ UHVXOW >RI@´ WKH ZRUN LQFLGHQW 7KH WULDO MXGJH TXHVWLRQHG KRZ 'U 5XVVHOO FRXOG NQRZ ZKDW (PSOR\HH¶V ³FXUUHQW FRPSODLQWV´ DUH DQG KRZ KH FRXOG DVVHVV ZKHWKHU WKRVH FRPSODLQWV UHPDLQ D SULPDU\ UHVXOWRIWKHLQFLGHQWZKHQKHKDGQRWVHHQ(PSOR\HHLQVRORQJ&RQVLGHULQJWKH FLUFXPVWDQFHVRI'U5XVVHOO¶VHYDOXDWLRQVDQGWKHOLPLWHGLQIRUPDWLRQDYDLODEOHWRKLP ZKHQ KH UHVSRQGHG WR WKH TXHVWLRQQDLUH WKH WULDO MXGJH GLG QRW DFFHSW 'U 5XVVHOO¶V RSLQLRQQRWLQJWKDWWKHGRFWRUFRQILUPHGWKDW(PSOR\HH³GLGPHQWLRQORZEDFNSDLQ´DW WKH WLPH RI KLV LQLWLDO HYDOXDWLRQ $V VWDWHG E\ WKH WULDO MXGJH 'U 5XVVHOO¶V UHVSRQVH LQGLFDWLQJ(PSOR\HH³PHQWLRQHGEDFNSDLQEXWWKDWPRVWRIWKHYLVLWVUHODWHGWRKLVHOERZ SDLQ´ZDV³QRQUHVSRQVLYHRUDWOHDVWQRQGHWHUPLQDWLYHRIZKHWKHU>(PSOR\HH@VXVWDLQHG DZRUNUHODWHGEDFNLQMXU\WKDWFXUUHQWO\QHFHVVLWDWHVWUHDWPHQW´ 0RUHRYHU WKH PDQQHU LQ ZKLFK WKH TXHVWLRQ LV SRVHG PDNHV 'U 5XVVHOO¶V UHVSRQVHDPELJXRXV7KHTXHVWLRQDVNVZKHWKHUWKH³FXUUHQWFRPSODLQWV´DUHUHODWHGWR WKH ZRUN LQMXU\ 2QH FRXOG FRQFOXGH (PSOR\HU LQWHQGHG WR DVN DERXW ERWK HOERZ DQG ORZEDFNFRPSODLQWVDVWKHTXHVWLRQGRHVQRWGLIIHUHQWLDWHEHWZHHQWKHWZR+RZHYHU (PSOR\HUDFNQRZOHGJHVWKDW(PSOR\HHVXVWDLQHGDFRPSHQVDEOHHOERZLQMXU\IRUZKLFK LWLVUHVSRQVLEOHIRUSURYLGLQJWUHDWPHQW7RDFFHSW(PSOR\HU¶VSRVLWLRQWKDW'U5XVVHOO SURYLGHGDPHGLFDORSLQLRQWRZKLFKDSUHVXPSWLRQRIFRUUHFWQHVVVKRXOGEHJLYHQZRXOG UHTXLUHXVWRLQIHUWKHTXHVWLRQFRQFHUQV(PSOR\HH¶VORZEDFNFRPSODLQWVRQO\ 5DWKHUFRQVLVWHQWZLWKWKHWULDOFRXUWZHFRQFOXGH'U5XVVHOO¶VUHVSRQVHVWREH QRQGHWHUPLQDWLYHRIWKHLVVXHLQWKLVDSSHDO7KHTXHVWLRQVDQG'U5XVVHOO¶VDQVZHUVGR QRW SURYLGH D VXIILFLHQWO\ GHILQLWH FDXVDWLRQ RSLQLRQ WR ZKLFK D SUHVXPSWLRQ RI FRUUHFWQHVV FDQ DWWDFK 7KH DPELJXLW\ DQG YDJXHQHVV RI WKH TXHVWLRQV UHQGHU WKH TXHVWLRQQDLUHZRUWK\RIOLWWOHZHLJKW$FFRUGLQJO\ZHFRQFOXGHWKHUHZDVQRDEXVHRI GLVFUHWLRQE\WKHWULDOMXGJHLQUHMHFWLQJ'U5XVVHOO¶VRSLQLRQ &RQFOXVLRQ 7KH HYLGHQFH GRHV QRW SUHSRQGHUDWH DJDLQVW WKH WULDO MXGJH¶V GHWHUPLQDWLRQ WKDW (PSOR\HHLVHQWLWOHGWRUHWXUQWRWKHDXWKRUL]HGSK\VLFLDQIRUHYDOXDWLRQDQGWUHDWPHQWRI DQ\ORZEDFNLQMXU\FDXVDOO\UHODWHGWRWKH-XO\ZRUNDFFLGHQW$FFRUGLQJO\WKH RUGHUJUDQWLQJPHGLFDOEHQHILWVLVDIILUPHGDQGWKHFDVHLVUHPDQGHG 7(11(66((%85($82):25.(56¶&203(16$7,21 :25.(56¶&203(16$7,21$33($/6%2$5' 5LFN20XQF\ 'RFNHW1R Y 6WDWH)LOH1R 3UHPLXP'LVWULEXWRUV,QFHWDO $SSHDOIURPWKH&RXUWRI:RUNHUV¶ &RPSHQVDWLRQ&ODLPV /LVD$/RZH-XGJH &(57,),&$7(2)6(59,&( , KHUHE\ FHUWLI\ WKDW D WUXH DQG FRUUHFW FRS\ RI WKH $SSHDOV %RDUG¶V GHFLVLRQ LQ WKH UHIHUHQFHGFDVHZDVVHQWWRWKHIROORZLQJUHFLSLHQWVE\WKHIROORZLQJPHWKRGVRIVHUYLFH RQWKLVWKH WKGD\RI'HFHPEHU 1DPH &HUWLILHG )LUVW &ODVV 9LD )D[ 9LD 6HQWWR 0DLO 0DLO )D[ 1XPEHU (PDLO $PHHVK$.KHUDQL ; DNKHUDQL#GDYLGKGXQDZD\FRP $OH[%0RUULVRQ ; DEPRUULVRQ#PLMVFRP 7LIIDQ\%6KHUULOO ; WEVKHUULOO#PLMVFRP /LVD$/RZH-XGJH ; 9LD(OHFWURQLF0DLO .HQQHWK06ZLW]HU&KLHI-XGJH ; 9LD(OHFWURQLF0DLO 3HQQ\6KUXP&OHUN&RXUWRI ; 3HQQ\3DWWHUVRQ6KUXP#WQJRY :RUNHUV¶&RPSHQVDWLRQ&ODLPV --HDQHWWH%DLUG HDQHWWH%DLUG 'HSXW\&OHUN:RUNHUV¶&RPSHQVDWLRQ$SSHDOV%RDUG )UHQFK/DQGLQJ'U6WH% 1DVKYLOOH71 7HOHSKRQH (OHFWURQLF0DLO :&$SSHDOV&OHUN#WQJRY