Filed: Aug. 24, 2000
Latest Update: Mar. 02, 2020
Summary: 5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 0F/HDQHWDOY 1RV 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 2QWDULR/WGHWDO (/(&7521,& &,7$7,21 )(' $SS 3 WK &LU )LOH 1DPH DS WKHLUQHJOLJHQFHWKHRU\WRDMXU\7KHMXGJPHQWRIWKHGLVWULFW FRXUWLVWKHUHIRUH5(9(56('DQGWKHFDVHLVUHPDQGHGIRU 81,7('67$7(6&28572)$33($/6 WULDO )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB ; s2+1 ' 0&/($13HUVRQDO 5HSUHVHQWDWLYHRIWKH(VWDWH 1RV
Summary: 5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 0F/HDQHWDOY 1RV 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 2QWDULR/WGHWDO (/(&7521,& &,7$7,21 )(' $SS 3 WK &LU )LOH 1DPH DS WKHLUQHJOLJHQFHWKHRU\WRDMXU\7KHMXGJPHQWRIWKHGLVWULFW FRXUWLVWKHUHIRUH5(9(56('DQGWKHFDVHLVUHPDQGHGIRU 81,7('67$7(6&28572)$33($/6 WULDO )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB ; s2+1 ' 0&/($13HUVRQDO 5HSUHVHQWDWLYHRIWKH(VWDWH 1RV..
More
5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 0F/HDQHWDOY 1RV 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 2QWDULR/WGHWDO (/(&7521,& &,7$7,21 )(' $SS 3 WK &LU )LOH 1DPH DS WKHLUQHJOLJHQFHWKHRU\WRDMXU\7KHMXGJPHQWRIWKHGLVWULFW FRXUWLVWKHUHIRUH5(9(56('DQGWKHFDVHLVUHPDQGHGIRU 81,7('67$7(6&28572)$33($/6 WULDO )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB ; s2+1 ' 0&/($13HUVRQDO 5HSUHVHQWDWLYHRIWKH(VWDWH 1RV RI/LVD,UHQHsLJJHQV 'HFHDVHG ! 3ODLQWLII$SSHOODQW Y 217$5,2 /7'GED 3/$1( 3(5)(&7,21 :,//,$0 $//(1 %$// (17(535,6(6 /7' GED% % $,5&5$)7 'HIHQGDQWV$SSHOOHHV $/%(57$ 0 s,**(16DQG '$9,' %8&.1(5DV3HUVRQDO &R5HSUHVHQWDWLYHVRI%ULDQ (sLJJHQVGHFHDVHGDQG .DOHEsLJJHQVDPLQRU GHFHDVHG 3ODLQWLIIV$SSHOODQWV Y 0F/HDQHWDOY 1RV 1RV 0F/HDQHWDOY 2QWDULR/WGHWDO 2QWDULR/WGHWDO 2QWKHRWKHUKDQG0LFKLJDQjVFRXUWVKDYHDOORZHGDMXU\ 3,3(5 $,5&5$)7 WR FRQVLGHU D UHDVRQDEOH K\SRWKHVLV HYHQ ZKHQ VXSSRUWHG &25325$7,21HWDO ODUJHO\ E\ FLUFXPVWDQWLDO HYLGHQFH ,Q7D\ORU Y 0LFKLJDQ 'HIHQGDQWV 3RZHUDFDVHLQVWUXFWLYHE\FRPSDULVRQWKHGHFHGHQWVGLHG LQ DQ H[SORVLRQ WKDW DOVR GHVWUR\HG FUXFLDO HYLGHQFH 7KH SODLQWLIIVWKHRUL]HGWKDWDJDVPDLQQHDUWKHEXLOGLQJEURNH 217$5,2 /7'GED 3/$1( 3(5)(&7,21 OHDNLQJJDVLQWRDVHZDJHSLSHZKLFKWKHQIORZHGWKURXJKD VHZDJHYHQWLQWRWKHEXLOGLQJjVDWWLFZKHUHLWFROOHFWHGDQG 'HIHQGDQW$SSHOOHH H[SORGHG7KHVWDWHDSSHOODWHFRXUWDIILUPHGWKHMXU\jVYHUGLFW 1 IRUWKHSODLQWLIIVGHVSLWHWKHFLUFXPVWDQWLDOQDWXUHRIWKHFDVH $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW EHFDXVH LW FRQFOXGHG WKDW D MXU\ FRXOG UHDVRQDEO\ KDYH IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW EHOLHYHG WKH SODLQWLIIVj WKHRU\ DQG LW ZDV VXIILFLHQWO\ 1RVn3DXO'%RUPDQ VXSSRUWHGE\WKHHYLGHQFH 'LVWULFWsXGJH $OWKRXJK WKH HYLGHQFH LQ VHYHUDO DUHDV RI WKLV FDVH LV $UJXHGsXQH FRQIOLFWLQJWKHUHZDVVXIILFLHQWHYLGHQFHWRSRLQWWRD ORJLFDOVHTXHQFHRIFDXVHDQGHIIHFWLIEHOLHYHGE\WKH 'HFLGHGDQG)LOHG$XJXVW MXU\ ,Q D FDVH VXFK DV WKLV RQH ZKHUH PXFK RI WKH HYLGHQFH ZDV GHVWUR\HG WKH IDFW WKDW WKHUH PD\ KDYH %HIRUHs21(6%2**6DQG0225(&LUFXLWsXGJHV EHHQ RWKHU SODXVLEOH WKHRULHV RI FDXVH DQG HIIHFW VXSSRUWHGE\WKHHYLGHQFHGRHVQRWMXVWLI\DUHYHUVDORI BBBBBBBBBBBBBBBBB WKHMXU\jVGHWHUPLQDWLRQ &2816(/ 7D\ORUY0LFKLJDQ3RZHU&R1:G0LFK &W $SS +HUH WKH SODLQWLIIV KDYH DOVR SUHVHQWHG D $5*8(' %DUEDUD + *ROGPDQ /23$7,1 0,//(5 SODXVLEOH WKHRU\ VXSSRUWHG E\ ZKDW HYLGHQFH LV DYDLODEOH )5(('0$1%/8(6721( +(56.29,&6RXWKILHOG ZKLFKLIEHOLHYHGE\WKHMXU\FRXOGHVWDEOLVKQHJOLJHQFHRQ 0LFKLJDQIRU$SSHOODQWLQ&DVH1RsDQHW&DOODKDQ WKHSDUWRIWKHGHIHQGDQWV %DUQHV.2+/6(&5(67:$5'/(/ 7@KHRULHVFDQQRWEH VDLGWREHFRQWUDGLFWRU\ZKHQWKH\FRXOGORJLFDOO\OHDG , ZLWKUHDVRQDEOHFHUWDLQW\WRWKHXOWLPDWHIDFWDVVHUWHG 7KLVFRXUWUHYLHZVDJUDQWRIVXPPDU\MXGJPHQWGHQRYR /DPSKLHDUY6NDJLW&RUS3G:DVK$SS XVLQJWKHVDPH5XOHFVWDQGDUGDVWKHGLVWULFWFRXUW6HH /HDYLQJDVLGH:LONHQjVGHIHUULQJWR'RQKDPRQWKH &R[Y.HQWXFN\'HSjWRI7UDQVS)GWK&LU IOXWWHU LVVXH DQG WKH IDFW WKDW ERWK H[SHUWV ZRXOG QRW FLWLQJ +DQVDUG Y %DUUHWW )G WK &LU QHFHVVDULO\KDYHEHHQSUHVHQWHGDWWULDOSODLQWLIIVOLNHQWKLV 6XPPDU\ MXGJPHQW LV DSSURSULDWH ZKHUH mWKH FDVH WR /DPSKLHDU LQ WKDW ERWK H[SHUWV SRLQW WR WKH VDPH SOHDGLQJV GHSRVLWLRQV DQVZHUV WR LQWHUURJDWRULHV DQG XOWLPDWH IDFW DQG HLWKHUjV WHVWLPRQ\ VXSSRUWV D ILQGLQJ RI DGPLVVLRQVRQILOHWRJHWKHUZLWKWKHDIILGDYLWVLIDQ\VKRZ GHIHQGDQWVjQHJOLJHQFHZLWKUHDVRQDEOHFHUWDLQW\(YHQLIWKH WKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWDQGWKDW WKHRULHVRIFDXVDWLRQKHUHDUHHTXDOO\OLNHO\WKH\ERWKSRLQW WKHPRYLQJSDUW\LVHQWLWOHGWRDMXGJPHQWDVDPDWWHURIODZl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mWKHUHPXVWEHHYLGHQFHRQZKLFKWKHMXU\FRXOGUHDVRQDEO\ ZKHQ WKH GHIHFWLYH OHIW ZKHHO FDPH RII DQG WKDW WKH ULJKW 0F/HDQHWDOY 1RV 1RV 0F/HDQHWDOY 2QWDULR/WGHWDO 2QWDULR/WGHWDO QHJOLJHQFH RQ 3ODQH 3HUIHFWLRQjV SDUW DQG WKDW WKH UXGGHU ILQGIRUWKH>QRQPRYDQW@l,ELGTXRWLQJ$QGHUVRQY/LEHUW\ KRUQEDODQFHZHLJKWZDVQRWIRXQGXSVWUHDPRIWKHFUDVKDV /REE\,QF86 'RQKDPFUXFLDOO\DVVXPHV ,, 3ODLQWLIIVPDLQWDLQWKDWZKHUHYHUWKHUXGGHUKRUQEDODQFH ZHLJKW ODQGHG WKH PHUH IDFW WKDW LW VHSDUDWHG IURP WKH 7R HVWDEOLVK D SULPD IDFLH FDVH RI QHJOLJHQFH XQGHU DLUFUDIWnWKDWWKHMRLQWFRQQHFWLQJWKHZHLJKWWRWKHDLUFUDIW 0LFKLJDQ ODZ SODLQWLIIV PXVW SURYH WKDW WKH GHIHQGDQW IDLOHGnLQGLFDWHVDSUREOHPZLWKLWVLQVWDOODWLRQ$FFRUGLQJ RZHGDGXW\WRWKHSODLQWLIIVWKDWWKHGHIHQGDQWEUHDFKHG WR'RQKDPLQRUGHUIRUWKHSDUWWRKDYHIDLOHG WKDW GXW\ WKDW WKH GHIHQGDQWjV EUHDFK ZDV D SUR[LPDWH FDXVH RI WKH SODLQWLIIVj GDPDJHV DQG WKDW WKH SODLQWLIIV \RX ZRXOG KDYH WR KDYH H[FHHGHG JjV RQ WKLV VXIIHUHGGDPDJH6HH6ZDQY:HGJZRRG&KULVWLDQ $@QH[SHUWjVRSLQLRQPXVWEHVXSSRUWHGE\µPRUHWKDQ LQUHFRUGHYLGHQFH VXEMHFWLYHEHOLHIDQGXQVXSSRUWHGVSHFXODWLRQjDQGVKRXOGEH VXSSRUWHG E\ µJRRG JURXQGVj EDVHG RQ ZKDW LV NQRZQl 7XUQLQJ QH[W WR 'RQKDPjV WHVWLPRQ\ WKH GLVWULFW FRXUW 3RPHOODY5HJHQF\&RDFK/LQHV/WG)6XSS GHWHUPLQHG WKDW LW GLG QRW HVWDEOLVK D JHQXLQH LVVXH RI ('0LFKTXRWLQJ'DXEHUWY0HUUHOO'RZ3KDUPV FDXVDWLRQIRUWULDOEHFDXVHLWWRRODFNHGUHFRUGVXSSRUW7KH ,QF 86 7KH H[SHUWjV FRQFOXVLRQV GLVWULFWFRXUWGLVFRXQWHG'RQKDPjVWHVWLPRQ\WKDWWKHUXGGHU UHJDUGLQJFDXVDWLRQPXVWKDYHDEDVLVLQHVWDEOLVKHGIDFWDQG KRUQEDODQFHZHLJKWFDPHRIIEHFDXVHWKH176%LQYHVWLJDWRU FDQQRWEHSUHPLVHGRQPHUHVXSSRVLWLRQV6HH6NLQQHU KDGLGHQWLILHGWKDWSDUWDVDWDLOWLSIDLULQJ3ODLQWLIIVUHVSRQG 1:G DW $Q H[SHUWjV RSLQLRQ ZKHUH EDVHG RQ WKDW176%LQYHVWLJDWRUsHII*X]]HWWLjVSULPDU\H[SHUWLVHLVLQ DVVXPHGIDFWVPXVWILQGVRPHVXSSRUWIRUWKRVHDVVXPSWLRQV KHOLFRSWHUVWKDW'RQKDPjVREVHUYDWLRQVDERXWZKHUHSDUWVRI LQWKHUHFRUG6HH6KDZY6WUDFNKRXVH)G WKHSODQHZHUHIRXQGDOVRVXSSRUWHGKLVWKHVLVDQGILQDOO\WKDW G&LU+RZHYHUPHUHmZHDNQHVVHVLQWKHIDFWXDO 'RQKDPjVIL[HGZLQJFUDIWH[SHUWLVHLQLGHQWLI\LQJWKHSDUW EDVLVRIDQH[SHUWZLWQHVVjRSLQLRQEHDURQWKHZHLJKWRI ZDVIRUDMXU\WRZHLJK7KHGLVWULFWFRXUWFKDUDFWHUL]HGWKLV WKHHYLGHQFHUDWKHUWKDQRQLWVDGPLVVLELOLW\l8QLWHG6WDWHV UHVSRQVH DV mQRW UHIXW>LQJ@ 'HIHQGDQWjV DVVHUWLRQ WKDW WKH Y/(&RRNH&R)GWK&LU FRPSRQHQWZDVUHDOO\WKHWDLOWLSIDLULQJl,QVKRUWERWKWKH GLVWULFW FRXUW DQG WKH GHIHQGDQWV WUHDW WKH 176%jV ,,, GHWHUPLQDWLRQ DV GLVSRVLWLYH DQG WKHUHIRUH WUHDW 'RQKDPjV H[SHUWFRQFOXVLRQDVEDVHGXSRQDVVXPSWLRQVQRWVXSSRUWHG 7KHDLUFUDIWVHFWLRQLQFRQWURYHUV\LQWKLVFDVHZDVWKHWDLO E\WKHIDFWXDOUHFRUG VHFWLRQNQRZQFROOHFWLYHO\DVWKHHPSHQQDJH,WLQFOXGHVWKH YHUWLFDO VWDELOL]HU RU ILQ WKH UXGGHU DQG WKH KRUL]RQWDO 'RQKDPDGPLWWHGWKDWKHGRHVQRWNQRZVSHFLILFDOO\ZKDW VWDELOL]HU RU VWDELODWRU WKH HQGV RI ZKLFK DUH FDOOHG 3RSSGLGRUGLGQRWGRZURQJLQUHPRYLQJDQGUHLQVWDOOLQJWKH VWDELODWRU WLSV RU WDLO WLSV 7KH UXGGHU KDV D GUDJUHGXFLQJ UXGGHUKRUQEDODQFHZHLJKW7KHGHIHQGDQWVFRPSODLQWKDW SODVWLFIDLULQJDQGDUXGGHUKRUQEDODQFHZHLJKWWKDWVLWVRQ 'RQKDPjVWHVWLPRQ\LVRYHUO\VSHFXODWLYHm7KHDLUSODQH WRSRIWKHWDLO7KHVWDELODWRULVKLQJHGEHKLQGWKHYHUWLFDOILQ IOHZDORQJWLPHEHIRUH>3ODQH3HUIHFWLRQ@WRXFKHGLWDQGLW DQG FRQWDLQV LQFKURXQG EDODQFH ZHLJKWV ZKLFK WKH GLGQjWODVWYHU\ORQJDIWHUDQGWKH\ZHUHWKHRQHVWKDWGLG VWDELODWRUWLSVFRYHU WKHZRUN6RLWjVP\RSLQLRQWKDWWKH\GLGKDYHDFKHPLFDO PHFKDQLFDOHIIHFWRQWKDWLQWHUIDFH0D\EHWKH\HYHQGURSSHG $3ODQH3HUIHFWLRQHPSOR\HHQDPHG.HQQHWK3RSSZKR DZUHQFKRQWKHKRUQIRUDOO,NQRZ,KDYHQRLGHDZKDW ZDVQRWDOLFHQVHGDLUFUDIWPHFKDQLFSHUIRUPHGWKHSULPDU\ KDSSHQHGWRWKHXQLWEXWWKHXQLWQRORQJHUIXQFWLRQHGDVD PDLQWHQDQFHZRUNRQsLJJHQVjVDLUFUDIW+HZDVDVVLVWHGE\ EDODQFH ZHLJKW LQ WKH WDLO IRRWHUl 'HIHQGDQWV DUJXH WKDW 'UHZ$QGHUVRQDQXQOLFHQVHGDSSUHQWLFHPHFKDQLF3RSS 'RQKDP VLPSO\ GRHV QRW SURYLGH DQ\ GLUHFW HYLGHQFH RI 0F/HDQHWDOY 1RV 1RV 0F/HDQHWDOY 2QWDULR/WGHWDO 2QWDULR/WGHWDO IOXWWHU'RQKDPDFFHSWHG3RSSj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jV WKHRU\ WKDW mLPSURSHU UHDWWDFKPHQWV RI WKH &KHURNHHjVVWDELODWRUVKRXOGEHEDODQFHGWREHWZHHQDQG VWDELODWRUFRXQWHUZHLJKWVLVDOVRDSUREDEOHFDXVHRIWKH LQFKSRXQGV RI IRUFH 3ODQH 3HUIHFWLRQjV 0DLQWHQDQFH IOXWWHUl :RUN5HSRUWLQGLFDWHVWKDW3RSSEDODQFHGWKHVWDELODWRUWR m/%6lZLWKRXWDPLQXVVLJQ2WKHUEDODQFHILJXUHV 3ODLQWLIIVDUJXHWKDWWKHVWUHQJWKRIWKHIDFWXDOEDVLVRIDQ RQWKHVDPHIRUPLQFOXGHDPLQXVVLJQZKHUHWKHUHVKRXOGEH H[SHUWjVRSLQLRQLVDQLVVXHIRUWKHMXU\DQGWKDWWKHH[SHUWVj RQH7KHPDLQWHQDQFHUHSRUWDOVRLQFOXGHVDQRWHWKDWm DOOHJHG FRQWUDGLFWLRQ ZDV QRW D YDOLG UHDVRQ WR GLVPLVV 7( >WDLO HQG@ +HDY\l +RZHYHU LQ KLV GHSRVLWLRQ 3RSS EHFDXVH ERWK H[SHUWV VWDWHG WKDW GHIHQGDQWVj QHJOLJHQFH UHIHUUHGWRRWKHUSDUWVWKDWKHEDODQFHGDVmWDLOKHDY\lZKHQ FUHDWHGWKHIOXWWHUWKDWFDXVHGWKHDFFLGHQW7KHGHIHQGDQWV WKH\ZHUHWREHEDODQFHGQHJDWLYHDQGKHOLNHZLVHUHIHUUHGWR DUJXHWKDW:LONHQjVRSLQLRQDERXWWKHLPSURSHUO\EDODQFHG KDYLQJEDODQFHGWKHVWDELODWRUmWDLOKHDY\l$OOHQ%DOODQG VWDELODWRUODFNVUHFRUGVXSSRUWDQGWKHUHIRUHFDQQRWHVWDEOLVK 'RQ:KLWHRI% %$LUFUDIWFHUWLILHGWKDWWKH\LQVSHFWHGWKH DJHQXLQHLVVXHRIFDXVDWLRQIRUWULDOWKRXJKWKH\VWLOOEHOLHYH VWDELODWRUDQGWKDWLWZDVSURSHUO\EDODQFHG WKDWLWVKRXOGEHFRQVWUXHGDVFRQWUDGLFWLQJnDQGWKXVIDWDOO\ XQGHUPLQLQJn'RQKDPjVWHVWLPRQ\ 3ODLQWLIIVUHWDLQHG5LFN:LONHQDVDQH[SHUWWRLQYHVWLJDWH WKHDFFLGHQW,QKLVGHSRVLWLRQ:LONHQFRQFOXGHGEDVHGRQ ,9 WKHZRUNVKHHWQRWDWLRQWKHIDFWWKDW3ODQH3HUIHFWLRQjVVFDOHV ZHUH QHLWKHU FHUWLILHG QRU FDOLEUDWHG FRQWUDU\ WR &DQDGLDQ 7R GHIHDW VXPPDU\ MXGJPHQW SODLQWLIIVj H[SHUWV PXVW DYLDWLRQDXWKRULW\UHTXLUHPHQWVDQGKLVREVHUYDWLRQRI3ODQH HVWDEOLVK HLWKHU VHSDUDWHO\ RU WDNHQ WRJHWKHU WKDW WKHUH LV 3HUIHFWLRQjV PHFKDQLFV ZKR ZHUH QHLWKHU OLFHQVHG QRU VXEVWDQWLDOHYLGHQFHWKDWGHIHQGDQWVjQHJOLJHQFHFDXVHGWKH VXSHUYLVHG RQ D VWHSE\VWHS EDVLV WKDW WKH VWDELODWRU KDG FUDVK7XUQLQJILUVWWR:LONHQjVGHSRVLWLRQWKHGLVWULFWFRXUW EHHQLPSURSHUO\EDODQFHGWDLOKHDY\DQGVHSDUDWHGLQIOLJKW KHOGWKDWKHGLGQRWFLWHDUHJXODWLRQSURKLELWLQJDQXQOLFHQVHG :LONHQ DOVR WHVWLILHG WKDW 3RSS KDG FRUUHFWO\ UHFRUGHG WKH PHFKDQLFIURPVHUYLFLQJWKHSODQHWKDW3RSSKDGWHVWLILHG SRVLWLYHRUQHJDWLYHYDOXHVIRURWKHUHQWULHVDQGREVHUYHGWKDW WKDWKHEDODQFHGWKHVWDELODWRUmWDLOKHDY\lWKDW:LONHQGLG 3RSS DSSDUHQWO\ KDG QRW QRWLFHG WKH PLVVLQJ PLQXV VLJQ QRWWHVWWKHFDOLEUDWLRQRIWKHVFDOHV3RSSXVHGDQGWKDWQR GXULQJKLVGHSRVLWLRQZKLFKZRXOGKDYHmSRSSHGULJKWRXW HYLGHQFHLQGLFDWHGWKDWWKHQRQDSSURYHGUHSODFHPHQWSDUWVRU DWlDFRPSHWHQWPHFKDQLF:LONHQDOVRFULWLFL]HGWKHODFNRI ODFNRIPHFKDQLFOLFHQVLQJFDXVHGWKHFUDVK+RZHYHUWDNHQ GHWDLOLQ3RSSj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jVIDXOW\UHSDLUVFDXVHGLWWR IOXWWHUZDVQRW:LONHQjVDUHDRIH[SHUWLVHDQG'RQKDPZRXOG GHYHORSDHURG\QDPLFIOXWWHUZKLOHLQIOLJKW:LONHQIRXQG mEH EHWWHU SUHSDUHG WR WHVWLI\ DV IDU DV WKH H[WHQW DQG WKH HYLGHQFHRIIOXWWHULQSDUWVIURPWKHZUHFNDJH7KLVLQFOXGHG GHWDLOHG VLJQDWXUHl RI IOXWWHU ,Q KLV GHSRVLWLRQ 'RQKDP VWUDLQLQGXFHGSHUPDQHQWmVHWVlEHQWRUWZLVWHGSODFHVLQWKH FRQFXUUHGWKDWIOXWWHUKDGGHVWUR\HGWKHDLUFUDIWLQDSURFHVV PDWHULDORIWKHVWDELODWRUGDPDJHWRWKHKLQJHEHDULQJVDQG WDNLQJRQO\VHFRQGV+HLGHQWLILHGPDQ\RWKHUVLJQV RWKHUHYLGHQFHRIIOXWWHULQWKHUXGGHUDQGYHUWLFDOILQZKLFK VXSSRUWLQJWKDWWKHVLV,QSDUWLFXODUKHQRWHGWKHORVVRIWKH ZHUH QRW DWWULEXWDEOH WR WKH FUDVK LWVHOI :LONHQ GHVFULEHV VWDELODWRUWLSVGXHWRRVFLOODWLRQLQWKHKRUL]RQWDOSRUWLRQRI IOXWWHUDVDmGHVWUXFWLYHKDUPRQLFHYHQWWKDWYLUWXDOO\GHVWUR\V WKHWDLOVLJQVRIEHQGLQJLQWKHVWDELODWRUVWDUFUDFNVRQWKH WKH LQWHJULW\ RI WKH FRQWUROl ,W GHYHORSV UDSLGO\ DQG FDQ UXGGHUjV WUDLOLQJ HGJH WKH IDFW WKDW ZKDW KH WRRN WR EH WKH GHVWUR\DSDUWVRRQDIWHURQVHW,QsLJJHQVjVSODQH:LONHQ EDODQFHZHLJKWFDPHRIILQIOLJKWGHVSLWHLWVEHLQJGHVLJQHGWR EHOLHYHVWKDWIOXWWHUEHJDQMXVWSULRUWRWKHDLUFUDIWjVEUHDNLQJ ZLWKVWDQGYHU\KLJKSUHVVXUHWKHIDLOXUHRIWKHFHQWHUILWWLQJV XS DIWHU LW KDG PDGH D ULJKW WXUQ LQ UHVSRQVH WR D WUDIILF DQGGHIRUPDWLRQRIWKHWDLOILQ DGYLVRU\7KHVWDELODWRUWLSVHQKDQFHGWKHIOXWWHUFDXVLQJWKH VWDELODWRUWRIDLOILUVWIROORZHGE\WKHUXGGHUDQGWKHQWKH 'RQKDPEHOLHYHGWKHRUGHULQZKLFKWKHSODQHj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mWDLOWLSIDLULQJl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mORVV RI DGHTXDWH VWUXFWXUDO DWWDFKPHQW RI WKH FDXVHRIWKHIOXWWHUDQG3ODQH3HUIHFWLRQGLGQRWVHUYLFHWKH >)LEHUJODV@ VXSSRUW VWUXFWXUH IRU WKH UXGGHU KRUQ EDODQFH FDEOHVLWLVVSHFXODWLYHWRDWWULEXWHWKHFUDVKWRDQ\QHJOLJHQFH ZHLJKW WR WKH WRS RI WKH UXGGHUl FDXVHG E\ mPHFKDQLFDO RQWKHSDUWRI3ODQH3HUIHFWLRQHPSOR\HHV:LONHQDWWHVWHG FKHPLFDORUDFRPELQDWLRQRIERWKHIIHFWVl,QRWKHUZRUGV WKDWKHGLGQRWNQRZZKHWKHUWKHFDEOHWHQVLRQZDVSURSHU DORRVHEDODQFHZHLJKWLQGXFHGIOXWWHUWKDWGHVWUR\HGWKHUHVW GLG QRW NQRZ ZKHWKHU WKH FDEOHV KDG EHHQ DGMXVWHG DQG RIWKHDLUFUDIW2VFLOODWLRQRIWKHILQDQGUXGGHUZRXOGKDYH DJUHHGWKDWWKHPDLQWHQDQFHSDSHUZRUNGLGQRWLQGLFDWHWKDW FDXVHGWKHVWDELODWRUWRIDLO7KH176%jVFUDVKLQYHVWLJDWLRQ 3ODQH3HUIHFWLRQHPSOR\HHVKDGWRXFKHGWKHFDEOHVKRZHYHU UHSRUWGLGQRWSUHVHQWDQ\FRQFOXVLRQVDERXWWKHSUHVHQFHRI 3RSSjV WHVWLPRQ\ DSSHDUV WR LQGLFDWH WKDW WKH FDEOHV ZHUH IOXWWHUHYHQWKRXJKLWGLVFXVVHGIDLOXUHVWKDWZHUHVLJQVRI