Herbst Gaming, Inc. et al v. Insurcorp et al

Filing 54

ORDER GRANTING # 1 Motion to Withdraw Reference. FURTHER ORD GRANTING in part and DENYING in part # 8 Motion for Summary Judgment : The motion is granted with respect to transfer under § 542, professional negligence, breach of fiduciary duty, and bad faith, but denied with respect to intentional misrepresentation, negligent misrepresentation, and reformation. Signed by Judge Robert C. Jones on 12/29/2010. (Copies have been distributed pursuant to the NEF - DRM)

j *
.

.

-. - . .

Ft ( 1( ) ETRD NEE

j r jj g jk --- SE k I h A p) ' g

otsli' s r soa l gi'- g R s ' ài i
1 2
.

ggg 2 g 2 1 gg
SL FLjSp;! I Jgû q E s Rg y aja j rgF Ng x sg s DE t ?l

3

4 5
6

B % I N I ED STATES DI T R I T C O JT S C DIS R I T O F NEV A D A TC

I r ZANTE, C. ne m,
7 D e tr bo .

8
9

1 HERBST GAMm G,m C. tal, 0 e.
11
.

Pli tfs an if,
'

1 2

vs .

1 I SURCORP e a. 3N t 1,
1 4
15

De e da t. fn ns

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

3:0-v- 02 lRCJRAM 1 c 0 3- ORDER

l 6
Herbst Gaming, Inc. et al v. Insurcorp et al

Tbi c s i a a vesr pr c e ig,(e Adv. 0905 41GW Z) aiigoutofte s a e s n d ray o e dn s e No. - 0 , lsn h
Doc. 54

1 c n oldae Cha tr11ba kr ptyca e ofPli tfsa dot e s ('eI r Za t , nc, BK7 o s i td p e n u c s s an if n h r ,â n e n e I No. c

1 N- 9- 0 46GW Z) Dee da t Lo mi Co. ndLoo i Be eis Ic.c le tvey,too i' 8 0 57 . fn n s o s a m s n ft,n (olci l ç m s' ) 1 ha emo e frteCo r t wihdrw terfrnc ( ft ea vesr pr c e ig a dfr 9 v v d o h u to t a h eee e o h d ray o e dn ) n o

20 s mmayj dgme t Fortermonsgie heen,heCop tga t temotont wihdrw te u r u n. h es v n ri t r rns h i o t a h
21 rfrnc a dgrnstemotonfrs mmayj d me ti pat eee e n a t h i o u r u g n n r.
22 1. FA CT S A N l PR O C ED l R IST O R Y

23

Ac or ig t t eFis Ame d d Co pli t(T AC' , i rt 2 06 Pli tfsHe bs c d n o h r t n e m xn t ' pro o 0 ) an if r t

24 Ga ig lc.HGll kesde l c, - tJ ,lc.a dHGlM ar Twan,nc.(oleciey, m n ,n , -- i ,n .HG1S .o n , n a - k i I c l tv l 25 t- r s')prvie me ia is rnc t e ply e tr ug atuly-ns rd'prgrm,u de ll b t' o d d dc ln ua e o m o e s h o h t l i ue ' o a n r le f

Dockets.Justia.com

l whi h Her s pai an aggr gat m ont l pr m i m t a pr vi er w bo t en pai em pl yees' c bt d ee hy e u o od, b d o

2 me ia e pe s smiusc -a s de ucils a dote lmiains ( AC 123, No.35i dc l x n e n op y , d tb e, n h r i tto . F 1 ECF n 3 Adv. 0 - 5 41GW Z) l 20 7 Hebs s ic e t açeffnd d'pogrm, rwbih No. 9 0 0 . n 0 , r t w th d o s l-u e ' r a unde c s
4 an empl yerpaysf r isem pl yee' m edialexpensesdiecty w hie adm i i t rng t e polcy o ot os c rl l n se i h i

5 isel orengagi g a t id par.yt a m i itri.I . 24) Unde s c apr r a , n e ply r tf n hr t o d n se t (d ' . ! ruh o m a m o e

6 s m e i e pur ha e çsop l s ' i s r nc , r by a i s r rr i bur e t e e pl ye f r o tm s c s s st o s' n u a e whe e n n u e e m s s h m o r o

7 e pe s sa o eaprdeemie lmi.f .. x ne bv e tr n d i t(#)
8 9 A. The 2007 Polcy i l eary 2006,M r.Cr den,ar pr s nt tve ofDef nda tI s r om ,fr tcont ct d Her st nl u e e e ai e n n uc is ae b

1 a outc nvetngt as l-u dedprgrm fr20 7.(#.I ) Is rop prpae a dcrultd 0 b o ri o eff n o a o 0 f ' 25. n u c ! e rd n ic ae aReq e tfrprpos l(t FP', chi anoiesntt isla c c ni r t s lctofes f ra u s o o a t ' whi s tc e o n trn e a es o oii fr,o R) 1 so ls poiyfrsl-un e rou he lb,de tldsbiiy a dlf is rnc .ff' 27) 2 tp o s lc o eff d d p at na, ia lt, n ie n u a e tt ! . 1 Dee da tLoo i rs ond dt ls rop wihaq ot frc vea et beprvie b AI .f . 3 fn n m s ep e o n uc t u e o o rg o o d d y G (# 1 'I .l o a outAugu t2 06,ns ror rprsntdt Heb tta AI wa ofeiga:1 4 !29) n r b s 0 l u c p e e e e o rs b t G s rrn 12

I

1 mo W l mo t'sopls polc .f . 30) Su hapoiyc vescamst a aema ewihn 5 n s n b' t o s iy (#' . c ! lc o r li h t r d ti
16 t et el e- ont perod oft e polcy and t atar pai by t e adm i i tat rasl t as t r e hwvm h i h i h ed h n sr o ae h e

1 mo tsaûe tet evemo t c vea epeide pie .1 . 3 ) Tiou hls ror , bs 7 nb rh w l - nb o rg ro x rs (d t 0 . l g n uc p Her t ! r 1 a dM G e tr dit teso ls polc Cthe20 7Polc ', ovea et de whihbe a o 8n nee no h tp o s iy t 0 iy' c rg m r c g n n ) l J nuay 1 2007.1 .l 31 3 ) 9 a r, (d jl - 2 . !
20 Hebs ale e t a Al f ie t pr viec ve a ec nsse twih t eq ot . S ei . r t lg s h t G a ld o o d o r g o itn t h u e ( e d

21 ' 33 .Hebs ale e çgl J n ay e ray2007 A1 s re tto syis e ane qu t ta j ) r t lg s tby a u rl b u r , G u rpiiu l su d w oe h t
22 icu e tr sveydifrn fom (n ls fvoa l (ha l to ec nane i teorgia n ld d em ' r fee t r a d e s a rbe t n ) b s o ti d n b i n l 23 Quoe icudn bu notlmie t a 1 mont/zmont c nta ttr ta di n ticlde t,n l ig t i td o 2 hl h o rc em h t d o n u 24 ( rsrpton)c vea ei tea grg t . '(d..Mr Bilrarprsnttveo Dee da t p e ci i o rg n h g e ae 'I 4 . x a, e ee ai r fn n
2 Loom i, a ntf st id- ary pl n a m i i ta or a t m pt d t con e lt eerorr t e t a 5 s Pl i if h r p t a d n s r t , te e o c a b r a h r h n
Page 2 of 22

1 notf Plitfsofi.(#. ! 1 , .Fialy,nAprl20 7,aPat t a Hebs do sn tie tf iy anif t f !I 7 34) n l i i 0 ry h t r t e o d niy
2 i t e FA C pr s nt d Pl i tf sw ih aw rte c n r c t ha Pl i tfs be i ve pr vi e nh e e e a n if t it n o t a t t t a n if le d o d d t

3 c v rg co sse twihte(arir)a ce tdquot'frHebs t sgnao gwibAI .(d. o ea e n itn l h e ley c p e . e'o r to i ln t G 1
4 ' 3 ) Hebs sgne ta doc me t(#. 39. Hers ale e ie ec tdawrte ! 6 . r t i d b t u n .f . )1 b t lg s t x ue ! itn
5 c n r c- t e 2007 Po i y- t ati di notc os l r a a sgni g be a s i h d noty t e o ta t h lc b t d l ey e d t i n c u e t a e be n
6 pr vi ed w ih ori f r ed oft el t rquot ,a d t atD ef ndant knew t atH er stw asoper tng od t nom h ae en h e s h b ai

7 u de t e a s m pto t a t e wrte c nta ti wass g i g r pr s n e t e t r s o t e e ri r n r h s u i n b t b it n o r c t i n n e e e t d h e m f h a le

8 quoetepate ha neg tae .Se f.. t h ris d oitd ( e ' ) #
9 The a ountHer s waslabl t pay undert e 2007 Polcy bef r AI becam e labl f r m bt i eo h i oe G i eo

1 tsopl s'wa caldteAr ua Aggrg t Ata hme tPoit(: 0 lt o s' s le h m l e ae tc n n t
1l No.3 - ) n e 5 1.

' .2007Polc 6, '( ) iy ECF

i

c r otbec lult duntlt ee dofac ve ag pe i d, c us i e ua s am ac a e i h n o r e ro be a e t q l

12 tt e gr at roft ecum ul tve t t loft e M ont l Aggr gat Atachm entPoi t f rt e çh e e h ai oa h hy eet ns o h

1 Cove a ePe i d a dt eM i i um Agg e aeAta h e tPoit'(d..TheM ont l Ag r gae 3 r g ro n h n m r g t tc m n n . 1 ) ' hy g e t
1 A ta h e t ntwa c l ul t d f re c ca e d rm ont b m u t l i g t e nu be ofc ve e 4 t c m n Poi s a c ae o a h ln a h y li y n h m r o r d p

1 e ply e fragie monhbye c e plye ' rt f rhi o he c tgoy(igl o fmiy) 5 m o es o v n t a h m o es ae o s r r ae r sn e r a l . l (e i.5, .Atami i u , bs wa la l t p yteMii um Agge aeAta h e t 6 S e d 8) nm m Her t s ibe o a h nm rg t tc m n 1 Pontof$2,08,21 ( e i.5 .Hebs ale e teAAAP u de te2007Polc wa $ ,5 ,00 7i 2 2 .S e d ) r t lg s h n rh iy s 23 00
1 the1 007AAAP') whih i diae t a tem o t l va ito si emplye t tl i e c 8t$ 2 ', c n c ts h t h n h y ra in n o e oas n a h
19 cat gor ofcover ge ca sed t e cum ul tve t t l oft e M ont l A ggr gat Atachm e tPoi t ey a u h ai o as h hy eet n ns

20 t e ce dteM ii u Aggrg t Ata hme tPoit(' C !40) Baedonte2007 o x e h nm m e ae tc n n .TA .s h

,n a

21 uni e tfe Loom i r pr s nt tve i f r e a i e tftd l s r o p r pr s nt tve by e ai i d n ii d s e e e a i n o m d n d n ii n u c r e e e a i m ln

22 Fe r ay200 ta Hebs wa e tte t $1 4,00i ri bure e tund rte2007Polc .I. bu r 8 b t r t s nild o 9 0 n tm sm n e b iy (d 23 . 41. j)
24

l lhough Pl i tf sadm i si ns g t e2007 Polcy,t e copy oft e2007 polc Pl i tfs At a n if tgn h ih h i y a n if 25 have atached doesnotappeart be rany sgnat r s exeeptt ose ofA I , r pr sent tves. t oa i ue h G s e e ai

Pag 3 of 22 e

E

.

!
1 Ata Decem ber2008 m eetng bet een uni entfed Her s and l sur or r pr sent tves i w d ii bt n c p e e ai ,

2 H e bs fr tr a i e t a t e t nnsoft e 2007 Polc i s gn d we e dif r nt h n t os oft e r t is e lz d h t h e h iy t i e r fee t a h e h i I 3 quo et whi h i ha o a l a r e . (d. 44) n e I s r or r pr s nu tv i o r e t e Her s t o c t d r ly g e d 1 j . n u c p e e e ie n m d h bt

4 rpr s nttvet a a p oxi ael $7 9, 0 i e plye cam sma ei 2007 but ddurn e e e ai h t p r m t y 2 0 0 n m o e li dn , pai ig
5 t e tr tt ree m ont sof2008,wer notcover d,and t atHer s was al o notentted t a h is b h e e h bt s il o

6 $1 4, 00 r i bu s m e tf rc r an c ai sbot m ad a d pad i 2007 be a s t e 20 7 Polc 9 0 em r e n o e t i l m h en in , cue h 0 iy

7 di n t ove prs rptc drgsi tea grgat.(d. j4 ,46.Heb tale esta ti wa d o c r e ci im u n b g e e 1 j 4 ) rs lg h tbs s
8 c nta y t t e a r e e tbe w e n i a d Al a d t a l s r or ha i f c s o e a d a t d o rr o h g e m n t e t n G n h tn u c p d n a t p k n n ce

9 c nsse tywibHebs' undesa digoft ea re e ti tepa t(e î.! 45 47 . o itnl t r ts rtn n h g e m n n h s.S e W ! , )
10 11 B. The200: Polcy i

l m i - 007,Her s negotat d a new sop l s polcy t rough l s r or f r2008. n d2 bt ie t os i h nuc p o

1 He bs a re t i c e s t eSpe ii De uc i lz9om $ 5,00 t $1 0,00an t fa e't r e 2 r t ge d o n rae h c tc d tb e 70 o 00 d o s s r'h e l
1 e pl ye s a $4 0, 00 m e ni g t a t i w o l be t e c le tve d duc i l f r t e e t r e 3 m o e t 2 0 , a n b t h s u d h o l c i e tb e o b s h e

1 e ply e.(d.ï ) l rtr , r s' fx dc ss( rmim)a d 4 m o e s 1 ' 49 . n eun Heb ts ie o t p e u n j

woul notc a g , d hne

1 a dl sr opas rdHebs ofti.1 .!51.Loo i rprsntdt I szc r onDe e b r 5 n n u c r sue r t bs (d'l ) m s e ee e o n lrop cm e 1 26 200 ta ic ul maiti te2007prmim i e c a gefrtede ucil ice ss (d. 6 , 7 h tt o d nan b e u n x h n o h d tbe n ra e.l l 'I 2) Ba e onti t desa dig Hebs a tcpae ta isla iiyi 200 woul be 7 !5 . s d bs m rtn n , r t n ii td h tt iblt n 8 d
1 a pr xi a eyt es m ea isla iiyi 20 7,a di e e u e ane polc th : 008Polc ' 8 p o m t l h a s t ib lt n 0 n t x c t d w iy t e : 2 iy' )

1 i orab ut i200 .(d.j 53 5 ) 9n o Aprl 8 I j - 4 .
2 0 The2008 Poic aswrte a d e e ut d w a a 1 m ont / s m ont po i y t a c ve e iy itn n x c e s2 hl h lc h t o r d

21 pr s rpton dr gs i t e aggr gat ,asH er s had or gi aly antci at d t e 2007 Polcy w oul e ci i u nh ee bt in l ip e h i d

22 b , nda Hebs o c us e pe tdte2008Polc t be aswel(d. 55) Hebs c mplis e a s r t f o re x ce b iy o , l.1 j . r t o an
23 oft i change m ade wihoutisknow l dge att e s m e tm e i com pl i st att e 2007 Polcy di hs t t e ha it an h h id 24 zrhi i t e am ountt e empl yerm us pa i expens sf reach i di i ualem pl yee ' s sh h o t yn eo n vd o 25 bef r A1 becom es Ia l f rt e exces . oe G ib e o h s .
Page 4 of 22

'

j
:

'

I

!

I
!

l notc nti te esmetr s whihid srda de pe td.(e l..Hebs as co plis o an h s a em , c t e ie n x ce S e ' j r t lo m an , d
2 however t ati frs dicover d att e Decem ber2008 m eetng t att e s ecii and aggr gat ,b t l t s e h i h h p fc ee

l

I !
!

3 fcor tbea ou tt bemulile byten mbe ofe plye st deemieteMonhl at s t m n o tpid h u r m o e o tr n h ty
4A

I
! i

g eaeAt c me t ons u d rh 2 0 P lc h dice sd6 - 0 o e te a r gt t h n P it) n e te 0 8 oiy a n rae 5 8 % vrb c a

f tr . os

5 t de t e2007Polc ,e di gt la iiy o a p oxi ael $4,00,00 i 2008, ppr xi aey m rh i y la n o ib lt f p r m t y 0 0 n a o m tl .

i

6 $170 , 0 ofwhihwo l ha ebe n c v r dbyso ls u d rt e20 7 Polc ' f c o s (d. , 00 0 c ud v e o ee tp o s n e h 0 iy s a t r .1

7 !5 ) 6. 8

' Hebs aloalg sLoomi wa ne lge ti: 1 fiigt pr vd if r aint AI , r t s le e s s gi n n ( ) aln o o ie no m to o G

9 r quii g l r e l m p paym ent by H er s t A I i 2008 t pr ventw ihhol i g off t r e rn a g u s bto G n oe t dn uue

1 ri bts me t; nd()fiigt povd AI wihc ranhitrc l amsif r ainfr 0 em z e n s a 2 aln o r ie G t eti soia cli no m to o r
l1 appr xi at l tvem ont safe bei g notfed ofA l ' need f rt e i f nnaton,butr t er o m ey i h tr n ii Gs o h no i ah

1 a t m ptn t r ne ota e t e t r soft e c nta tw i A I , iho tH e bs ' kno l dge o 2 te i g o e g i t h e m h o r c t G w t u r ts w e b r

1 c nsntrs ligi a1 % prrim ice s i mi- 0 8 (#. !5 -59) 3 o e , eutn n 2 enu n rae n d 2 0 .f ' 7 . !
1 4 15 C. The Pr sentAdver ar Proceedi g e s' y n '

Pl i tfs ar each D ebt r i a cons ldat d Chapt r 11bankr pt y cas i t i Dit i t a n if e os n oi e e uc e n h s sr c .

l ( e I r Zant, n ,No.BK- -9-07 6GW Z) Plitfs e tr Hebs brug tteprsnt 6 S e n e eIc N 0 5 4. anifc bos r t o h h ee 1 adver ar pr ceedi g agai s Def ndant l s r or ,Loom i,and AI Lie I sur nce Co. s i g 7 sy o n nt e s nuc p s G fn a , un 1 o niec ussofa ton: l Tur o e ofPrpet t teEsaeUnde llU.. . 5 2.2) 8 n n a e ci () n v r o ry o h tt r SC 9 4 , (
1 Pr f s i n lNe lge ce e lge c ;( )Br a h ofConta t ( )Ne lge t 9 o e so a g i n m g i n e 3 e c rc;4 gi n
. .

!

I

I

20 Mirprs nttoico c ae e t ()Bra hofFiucayDuy ()Frudi telduc me t() se e e ai n e n, 5 e c ' d ir t; 6 a n h n e n' 7 ,
21 Fr udulnt pr s ntton conc am en ; 8)To to sBr a h oft el ple Cove a tofGo d a e Re e e a i / e l t ( riu e c h m id nn o

22 Faihan FaiDeaig;a d()Reor ainofConta tL e FAC, No. i Adv. 09t d r ln n 9 f m to . rc.s e ECF 35 n No.
2 050 1GW Z) Defnda t h vemove t wihdr w t er f r n eoft ea ve s r pr c e ig t 3 4. e ns a d o t a h e e e c h d ra . o e d n o y
2 t i Co r,whi h m o i n ope e t c pr s ntc s , o.3: 0- v- 0231 R CJ R A M . Al o,Loom i 4 hs u t c to n d h ee a e N 1c0 -s s

25 h smo e frs mmayj dgme t a v d o u r u n.
Page 5 of 22

.

I

1 I. 1 2

LEG A L STAN D A R D S A. W ihdraw aloft eR ef rence t h e

3

TheSuprmeCour h sr ldta aba k u tyco r tej dg sofwhihaeno e t a ue h t n r pc u t h u e cr t

4 afr e tepr tcinsoflf tnur a dird cil slr gie t j dge un e Aril II fod d h oe to ie e e n re u be aay v n o u s d r t e I of c

5 teCo siuton - an ote trfnalu gme t onmatesta iinal de ie byAril 11 h n tt i - c n ne i j d ns tr rd t ly cd d o tce 1
6 j dge,s c a c ntac diputs Se Dun o ev Unie Stts, F.d 11 7,l 1 (t Ci, u s u b s o r t s e . e m r . td ae 358 3 0 l 4 9h r 7 200 )(iigN. peieCo sr Co. Mar to PieLieCo.458U.. 0( 98 ).Con rs 4 ctn Pl ln n t. v. ah n p n , S 5 1 2) g es
8 a end d t e Ban r pt y Code t c nf r t t i nli g,d si gui h ng ç or ' ba k l t y m eh ku c o o o m o h s ln i tn s i ç e ' n n p c c
9 pr ceedi gs fom tnon- or ' pr ceedi gs.l . Congr sshas e um e at d whati cons der t be o n r s c e' o nd e n re t i so

I

:

1 c r prcedigs s ei.(iig 11U.. . 1 ()2), iha note u eatdnon-oe 0 o e o e n ,e d ctn SC 9 57b( )butt s n m r e cr
11 pr ceedi gs see i . t on- or ' pr ccedi gsar t os t attdo notdepe d on t e Bankr pt y o n, dt N c e' o n eh eh ' n h uc

1 Co ef rteie itnc a d. .c udprcedi a oh rc u t'd.(iigSe .> F .v 1 t1 2 d o h r x se e n . o l o e n n te o r. 1 ctn c Q ' C . n ' ' M 1 Bh .o Te mses 1 4F.d999 1 8(t Ci.1 97 . 3 d f a tr, 2 3 , 00 9b r 9 :
1 4 A b nkr pt y c ur m a he ra d fna l de e m i e b nkr p c c s s u de Til 1 a d a u c o t y a n i ly t r n a u t y a e n r te 1 n

1 prc e igsaiigun e Til 1 oraiigi acaeun e Til 11Seel U.. .j 1 7()1. 5 o e dn rsn d r te 1 rsn n s d r te . l SC ' ' b ( ) 5
1 A ba k u t y c ur m a be ra no - or pr c e i g butm us s bm i pr p s d tndi gsoff c 6 n r pc o t y a n c e o e dn tu t ooe i n at

) a dc ncu in of1w t tedsrc c u tfrfna deemiaindeno o.j1 c( ) The 7 n o lso s a o h itit o r o i l tr n to v ' 57()l.
l N i t Cic i ha a opt d t e Fit Cic i' r a oni g i di tnguihi g t r e t pesof 8 n h r u t s d e h f. r u t s e s n n s i s n h e y h

1 poc e igs ()tos E rsngu de'Til ll ()tos E i igi'ac s unde Til 1 ,a d 9 r e dn : 1 h e 4 ii n r' te '2 h e ' sn n' a e r te 1' n a , m
20 ( )t os t e ae t 'a c s un e Til 1 ,whih a et et r ecae ore ofc s sove whih 3 h e t l td o' a e d r te 1 c r h h e tg is a e r rc
.

21 dititc ut ha es b e tmatr uidito pus a tt 28U. . .j1 3409: src o rs v u j c te j zs cin ru n o SC 3
28U.. .j1 7()deme c r pr c e igsa one t rsngu de tte11 SC 5 b f s o e o e dn s s t ii n r il , a
orarsi g i a case under tte 11,'and gi esa nonexhaustve ls oft pesofcor in n il 5 v i it y e pr ceedi gs.'A rsi g under'and 'arsi g i ' ar t r sofart Tbey ar t o oft e o n t in ' t i n n' e em . ew h

22
23

2 4
25

trec tgore o c s sove whihditit ou tha ej rs itonu de 28U. . . h e ae is f a e r c src c rs v u idci n r SC jl 3 () Th tidc ty nzn ld sc ssteae t'ac s u d rt l 1 .As 3 4b . e hr ae o icu e ae C ltd o' a e n e ie l r t
t e Fit Cic i ha e pl l e , h fh r u t s x a n d

Page 6 of 22

1 2

Congr s us d t e phr se tarsng under tte 1l' t descrbe t ose es e h a t ii il 'o ih pr ce di gs t at i vol e a caus of acton cr at d or det r i ed by a o en h n v e i ee em n sam t r pr vi i n oftte 11 ....The m eani g of'ars ng i 'pr ceedi gs t o y o so il n t ii n ' o n i l s cl ar buts em st bear f r ncet t osetadm i i t ai e'm a t r t at s es e , e o eee oh t n s r tv ' te s h

'

3

a ieonl i ba k u tyc s s I ot e wo ds d rsngi 'p oc e i gsa e rs y n n r p c a e . n h r r ,t ii n ' r e d n r a

'

4
5
'

to e ta ae n tb sd o a y rg te ge sy ce td b tte 1 ,b t h s h t r o ae n n ib x r sl rae y il 1 u ne etee s woul ha enoe itnc ousdeofteba krpty. v rh ls, d v xse e tl h nuc
Thec ur c n l de : çft epr c e i g doe n ti vok a s bs a tvergh cr a e o t o cu d $ h o e dn l s o n e u tni i t etd
by t e f der lbankr pt y I w and i onet atcoul exitout i e ofbankr pt y i i he a uca s h ds sd u c ts nota cor pr ce di g;i m ay be r l t d t t e bankr pt y becaus of is pot ntal e oen t e ae o h uc et ei efect but...i i an ç t erw ie r l t d'ornon- or pr ceedi g.' f> t s oh s ea e ceo n'

l

'

6 7

I r Easpo t s c .935F.d l ,1 76- 7( t Ci.1 91 (i to so itd)( uotngl r n e t r As o s, 2 071 0 7 9h r 9 ) cm in m te q i n e
8 ;

Woo ,825F.d 9 , 97 ( t Ci.l 87)(oo otso itdl. d 2 0 96- 5 b r 9 f m e m te ) 9

U pon m oto ors a s o t a diti tc u t a wih r w , n whoi ori pa q a y c s o i n u p n e s rc o r m y t d a i e n r n ae r
l0

pr c e i gunde j 1 7.11U. . .j l ( ) A dititc ur mus up n tm el motonwihcr w o e dn r5 S C 57 d . src o t t o i y i t la
11

4

a pr ce d ng i i d t r i e ' ha r s l ton oft e p oc e i g r quie c nsde a i n ofbot o e i f t eem n s t t e oui t b r e d n e r s o i r to h
1 2

tte 1land ot erl w soft eU nied St t sr gul tng or ani atonsoractvii saf ectng il ha h t a e e ai g zi i te f i 1 3 i t r t t com m er e.'1 . Thepary m ovi g f rwibdr w alhast e bur en ofper uason.SeeI n e sae c'd t no ta h d si n
1 4 .

r Fis Alinc Morg.Co.28 B. .8 4,90 ( . . l20 1. c r t la e t , 2 R 9 2 C D Ca. 0 )
.

15 A lhougb a banknl t y cour m ay nottnaly det nni e non- il 11 isues,t epre ence t pc t il en T te s h s l6

ofs c a is e doe notm a da e wih r w alo t c r f r nc . n r Vi ar l s Agenc , F. d u h n su s n t td a f b ee e e I e c s n . y 96 3
l7

949, ( t Ci.1 ) Rahe, tda a i ma daor tnc s srqurngmae il 953 7h r 996 . t rwih rw ls n t y t a e e ii i tra
1 8
consi er ton ofnon- ankr pt y f der ll w .'Sec.Far s,l 4 F. d at1 d ai b uc e aa ' m23 008. Putdil r nty, fk e l

1 9
tm andat r wihdr w ali r quied onl when t os i s esr quie t e i t r r t ton,asopposed l oy t a st r y h e s u e r h n e p eai

2 0
t m er applcaton,oftl non-il 11st t t ,orwben t e couztm ustunderakeanal s sof o e ii le tte a ue h ' t yi
21

si nii antopen and unr sol ed is esr gar i g t e non- il l1l w .' at954. Per i s ve g tc e v su e dn h tte a '1d. m si 22 23

wih rwali alwe , ve,torc us s own, 11U. . .j1 7d)whibadsrc c ur ' td a s lo d bowe rtf a e h ' ' SC 5 ( , c itit o t d tnniesbyc nsdeigth efcintus ofj diilrs ure ( hihi e ha c dwh nnonee n o i rn t e fi e e u ca e o c s w c s n n e e t

24

c r is e prdomiat)delya dc sst tepate , fr iyofban r ptya miitain, oe su s e n e, a n o t o h ris uniom t k u c d nsrto
25 Page 7 of 22 N

!

j

.

'

I
l t epr venton off rum s oppi g,and ot err l t d f ct r .' Far s,124 F. d atl008. hei o h n h e a e a o s 'Sec. m 3

2 3

B.

Rul 56c e ()

TheFed rlRulsofCiiPr c dueprviefrs mmayadudiainwbe the ea e vl o e r o d o u r j c to nt t

4 pl adi gs de osii ns ans er t i t rogat res,and adm isi nson tl ,t ge herw ib t e e n , p to , w s o n e r o i so ie o t th 5 am davis,i any,show t att er i no genui e i s e ast any m at ri lf ctand t att e pary i tf h h es n su o ea a hh ts

6 e tte t aj dgme ta amatroflw.' d. Ci.P.56c.Maeilfcsaetos whih nild o u n s te a 'Fe R. v () tra a t r b e c
7 m ay afectt eout om e oft e cas .See Ander on v.Lï crf Lobb ,I c. 477 U . .242,248 rb c h e s :y y n, S

8 ( 98 ) A diput a t amaeilfc i ge uiei teei s fiin e ie cef raraon bl 1 6. s e so tra a ts n n f h r s u fce t vd n o e s a e 9 j r t rtr averitf rtenonmo igpat. ei.A prncpa pur os ofs mmay uy o eun dc o h vn ry Se d iil p e u r 1 j dgme ti tt iolt a ddipos offctalyu s p ore cams'Ceoe Cor .v Catet 0u n s so s ae n s e a u l n u p td li . ltx p . r t, ' ll 47 U.. 7, -2 (1 86 . 7 S 31 323 4 9 ) 1 2 1 3
1 4 15

l dee miigs mmayj dgme tac u t e abu d n-hitngshe e: n tr nn u r u n, o r us s r e s fi c m W he tepat movigfrs mmayj dgme twoul be rteburenofpr ofa n h ry nou ru n d ah d ot
t i l i m us com e f nva d w ih evi encewhi h w oul entte i t adiect d ver i t ra , t t ortd c d il t o r e dc i t eevi encewentuncontovertd atti l l s ch acas ,tl m ovi g paryhast e fh d r e ra . n u e le n t h i ii lbur en of es a ls i g t e a sence ofa genui e i s e of f cton each i s e n ta d t b ih n h b n su a su m at ralt is cas . ei o t e

1 C. . .Tr np. ok r geCo.v Dar e Re t.I c, 3F.d47 , ( t Ci. )(iains 6 A R a s Br ea . d n ss, n .21 3 4 480 9h r2000 ctto
1 omitd .l c ntatwhe tenon ovigpat be r tebude ofpr vigtecam or 7 te ) n o r s, n h m n ry as h r n o n h li l d fns ,hemovigpat c nme tisbude i t owa s: 1 byprs nige ie c t ne ae 8 ee e t n ry a e t r n n w y () e e tn vd n e o g t
1 a e s nta ee e toft enon o i g p ry' c s ;o ( )byde onsr tngt a t enonmo i g 9 n se il lm n h m vn a t s ae r 2 m ta i h t h vn
20 pa t f ied t m ake ashow i g sufi intt est blsb an el m entess ntalt t atpary' case on ry al o n fc e o a i e e i oh ts

21 whi h t a pa t w ilbe rt e bur e ofpr o a ti l Se Ce otx Cor . 47 U . . t3 3 24. l c b t ry l a h dn o f t ra . e l e pz 7 S a 2 f

22 temovngpat fist me tisiiilbude ,s mmayj dgme tmus bede ida dtec ut h i ry al o e t nta r n u r u n t ne n h o r
23 ne d n tc nsde t e n nm ovi g pa t ' e i e c .Se Ad c e v S. . -. d:Co. 3 8 U . . e o o i rh o n ry s v d n e e i k s . H Ai u c ,9 S

2 1 4,1 9 60( 970 . 4 4 5- 1 )
25 l t e m ovi g pary m eet is i ii lbur en,t e burden t en s it t t e opposi g pary t fh n t s t n ta d h h h fs o h n to Page 8 of 22

1 es a ls a genui e i s e ofm at ralf ct See M at ushia El c.I dus.Co.v.Zenih Radi Cor . t b ih n su ei a . s ten t o p,

2 475U.. 4, ( 98 ) Toesa ls tee itnc ofafc a diput,heop osngpat S 57 586 1 6 . tbib h xse e a m l s e t p i ry
3 need notesabls a m at ralisue off c concl si el i is f vor l i s f i i ntt attt e t ib ei s at u v y n t a . t s u fc e h th
.

:

I

4 camedfcu ldiput bes ownt rquieaj r orudget rs letepate 'difrng li a ta s e h o e r u y j o eov h ris fei
5 ver i nsoft e tut atti l' Tl El c.s'rk,Inc.v.Pac.El c.Cont act r ..ç',809 F. d so h r h ra .' B( e c ' . e r o s /$ n 1. 2

6 626, ( t Ci.1 87.I oh rwor s ten nmovigpat cnno a oi s mmayj dgme t 631 9h r 9 ) n te d ,h o n ry a t v d u r u n
7 by r l i g sol l on concl sor alegatonst atar unsuppored by f c ualdat .See Ta l r v. ey n ey uyl i b e t at a yo

8 Lit 88 F.d l 0,1 45(t Ci.1 89) lse d,teo posto mu tgobe on tea srins s, 0 2 04 0 9h r 9 . n ta h p iin s y d b seto
9 and alegatonsoft epl adi gsand s tf rh s ecii f ct by pr duci g com pet ntevi encet at li h en e o t p fc a s o n e d h

1 s o sage uieis ef rtilSe Fe . Ci . 56() CeotxCor .47 U.. t324. 0 hw n n su o ra. e d R. v P. e ; l e p , 7 S a ll Attes mmayj d me tsag , c ur' fncini nott weg tee ie c a d h u r u g n t e a o ts u to s o ib h vd n e n
'

12 det r i e t e t ut ,butt det nni e whet ert er i a ge ui e i s e f rt i l See Ander on,477 em n h r h oen h h e s n n s u o ra . s

1 U..a 2 9.Thee ie c ofteno mov nti çob beiv d, ndalusiibl ifr n e ae 3 S t4 vd n e h n a s t e le e a lj tta e n ee c s r t
14 t be dr w n i hi f vor.' at255. Buti t e evi ence oft e nonm ovi g pary i m er l o a n s a 'f#. fb d h n t s ey

l c lrbl o i notsgnfc ntyprbaie,ummayj dgme t ybega td. ei.a 249 5 . 5 ooa e r s i iia l o tv s r u n ma rne Se d t - 0
l6 HI.
1 7

A N A L Y SI S
A. W ihdraw aloft e Ref rence t h e

1 8

W ihdr w ali m andat r i t e isuesi t e adver ar pr ceedi g r quie m at ral ta s oy fh s nh sy o ner ei

1 cons der ton ofnon- ankr pt y f de all w . The ci i si t e FA C r quieonl t e 9 i ai b uc e r a am n h er yh 20 i t m r t ton ofbankrupt y 1 w and sat l w . Ther f r ,wihdraw ali notm andat r . The n e ea i ca tea eo e t s oy 21 Courtm a wihdr w t e r f r nce,bowever tf rcaus s ow n,'aherconsi erng efi i ncy y t a h eee , to eh ' di tc e

22 ( hibi e h nce whe n n-or is e prdomi ae,dea a dc sst tepate,u ior iy w c s n a d n o c e su s e n t) ly n o t o b ris n f m t
23 ofbankr pt y adm i it aton,t e pr venton off rum s oppi g,and ot err l t d f ct r . uc n sr i h e i o h n h eae a o s 24 Fis ,non- or i s esheaviy pr dom i at . Ei htoft e ri e causesofacton ar rt c e su le ne g h tn i e

25 com m on l w contactort r cl i s. Thes contactand t r cl i sar non- or ,tr lt d t ' a r o t am e r o t am e c e 'e a e o -

page 9 of 22

i
l
*

,

'

1 camsov rwbibtedititc ur ha j rs itont de 28U.. .â1 34b)b twhc te li e c h src o t s u idci m r SC 3 ( u ib b
2 bankrupt y courtcannottnaly det r i ebeca se t ey ar notcr at d ordet r i ed by Til 1l c i l em n ub e ee em n te

3 a d a e n ta m i i ta i e ba kr pty m a t r . I r f'-ptr As o s , F. d a 1 7* 77. n r o d n s r tv n u c te s See n e cç ?' s c . 935 2 t 0 //
4 Onl one causeofactt çars sunder't e bankr pty code t e cl i f rt r overofpr pery y im s ie 'b uc - h am o un ot

5 pu s a tt llU. . . 5 2 a dLoomi a gu st a t i cam i i v ld, c us Pli tfs ru n o SC j 4 - n s r e h t h s li s n a i be a e a n if
6 seek t f r e a t id pary t t r overpr pery t att ey do notown. Loom i cor ecty not st at o o c br t o un o th h s rl eh 7 alhougb abankrupt y courthast e powert det r i e whehe pr pery bel ngst a de t rand t c h o em n tr o t o o bo 8 t f r e a t id par y t t r s ch pr pery overt t e bankrupt y esat ,pr per y owed t butnot o oc hr t o un u ot oh c te o t o

9 owne b t ede t ri nots b e tt at r o e pr c e i gunde 9 5 2. eI r Kicai , l d y h b o s u jc o un v r o e dn r 4 Se n e n d 9 7

I

1 F.d l 6 ,l1 4-65( t Ci.1 90.TheNit Cic i' sae e to ti is ei fil cla. 0 2 12 6 9b r 9 ) n h ruts ttm n n hs su s ary e r
11 n e fr tc us o a ton a t m pt t r c s t e b e c ofco ta ta d t r c a m s a a is a e f c i te s o e a t h r a h n rc n o t li s

1 c ns ldae ,hy rdcam frtr o e ofprpet unde â5 2.l i cla fom teFAC ta 2 o oi td b i li o u n v r o ry r 4 ts e r r h bt
1 Pl i tfsdo notseek tl t ansf rofany pr pery t ey ow n,butr t ers ek dam ages i conlact 3 a n if le r e o th ab e n

1 a dtr.Unls a duntlPlitfsobti aj d me ti terfvo,teea ount donote e 4 n o t es n i anif an u g n n h i a r h s m s vn

1 con ttt aj dgme td btmuc ls pr pet s be tt tr ov rt de j5 2.Fu temor, 5 siue u n e , h es o ry u j c o un e m r 4 rh r e
l6 sever loft e cl i sar i t ntonalt rst atcoul pot ntaly s ppoM punii e dam agesf r a h am e n e i ot h d e il u tv a

1 a o et ev le o t epr pe t s ug ti t e 95 2 mr ove cam , ve i t a cam wee 7 b v h a u f h o ry o h n h 4 n r li e n f h t li r
1 l gii a e. The tr tf c o t e e o e we g sve y he viy i f voro w ib r w al 8 e tm t is a t r h r f r i h r a i n a f td a .
1 9 Second,t e Courts decii n t wihdr w t e r f r nce w ilsave tm e a d m oney, h ' so o t a h e e e l in

2 be a s nea l a 1oft e cl i si t e a v r a y pr ce di g a e n n- or a d wil ve t be 0 c u e ry l h a m n b d e s r o e n r o c e n l ha o
2 1 fnaly det r i ed de novo by t e Cour afera s cond r und ofbrefng i r sponse t t e i l em n h tt e o i ne ob 22 bankrupt y cour ' evenm alr com m endaton. Tbid,t e unior iy ofbanknl t y c ts e i rh fmt pc

23 a m i i ta i n i noth a iy i plc t d. A n f urh,t e e i no i di a i n off r m s o pi g. d n sr to s e v l m iae d o t h r s n c to ou b p n
24 Albough m andat r wihdr w aldoesnotappl ,t ef ct r wei h heaviy i f vorofper i sve t oy t a y h a os g l na m si 25 w ihdr w al ta.
Page 1 of 22 0

1
i

' Plitfsi terç i ie Re po s 'saeta te donotobe tt wih rwa anif n b i s m td s n e' tt h th y L j c o td a l

2 ç rvie ,h we e,ta ()a1pa t sc nsntt tej rs ito ofteDititCou ta da re ' o d d o v r h t a I ri o e o h u idcin h src r n g e p e
3 ta tea vesr prc e igma beflya dfnal aj diae i teDititCou ta d() h th d ray o e dn y ul n i ly du c td n h src r, n b
4 ca ii aton i pr vi e a t t ee tntt whib t er fr nc wil wihd a n. t e p. lrtc i s o d d s o h x e o c h e e e e l be t r w ' ' s 'R

I
!

5 2:9-21 ECFNo. . 1, 2)
6 The Cou t n s ts y t e s c n c n ii n s m pl by notng t a t e e tr a v r a y c s r ca a i f h e o d o d to i y i h t b n ie d e s r a e

7 wil ewi da n Th irt o dt niu cerb t p er t b stsid.Frttep ris lb t rw . e isc n io s n la u a p aso e aife is,h ate h i
8 ne dno c nsntt s be tmatrj rs iton.Su jc matrj rs ito i t epo e ofac ur e t o e o u j c te u idci be t te u idcin s h w r ot
9 t heart e m aterbef r i. l eiherexit asa m a t rofl w ori doesnot ' her i doesnot o h t oe t t t ss te a t .W e t

I

) e ittepa te cnno ce t ibyc ns nt l e it i ti c s und r28U. . .j1 3 .I i i 0 xs,h ris a t rae t o e . t xss n hs a e e SC 3 4 ts n

,

11 fc tedititc ur is l ta ha orgialuiditonov ra1ba krptymatr.The a t h src o ttef h t s i n j rs ci e l n u c tes
12 ba kr pt y courti an ar oft e diti tcour t w hi h m ostm atersi ba kr pt y ar n uc s m h sz c to c t n n uc e 13 a t m atcaly r f red;bence,t e pr s ntm oton t wihdr w t e r f r nce. uo i l eer h ee i o t a b eee

1 4

Se o d, r a sPlitfsme np ro a!u iditon.ButPlitfsne dno c ndiin c n peh p anif a es n j rs ci anif e t o to

l tera quis e c t teprs n moto o Defnda t's bmisont i pes na j rs iton. 5 h i c e c n e o b e e t in n e ns u si o n ro m u idci 1 Defnda t ha es bmitdt i peron m jus ito a amate o 1w b jln teprsnt 6 e ns v u te o n s a tidcin s tr f a y iig b ee
17 m oton wih t e Court w hi h actcons iut d a gener lappe r nce- t sa not i g of i th c tt e a aa o y hn

1 D e e d nt 'a pe r nc si t e ba knl t y c ur. 8 fn a s p aa e n h n pc o t

l 9

Thid, r a sPlitfsme nt syta te donoto j c t wihdr wal(ot r peh p anif a o a h th y b e to t a n

20 tuiditon' inoote pat obe t.l ti i wha Plitfsme n,hec n iini stsid j rs ci ') f h r ry j cs f hs s t anif a t o dto s aife
21 becauset e tm e t r s ond t t e pr sentm oton has l ng e pied,and t enonm ovi g b i o ep oh e i o xr h n

22 Defnda t,ns r op.a dAI LieIs Co.ha eno obe tdt i. e ns I uc r n G f n . , v t jce o t
23
24

B.

Sum m ar Judgm ent y

Loom i pr nci aly ar ues t atHer s cannothave r led on anyt i g Loom i r pr s nt d sipl g h bt ei hn s e ee e

25 wih r s ectt t epolcy negotatonsort e quot si pr vi ed,becaus H er s di noteven t ep oh i ii h e t od e bt d Page l1of 22

l know t atLoom i waspr vi i g l sur om is quot s. Butt e de osii n ofN i hol sM a t ew h s o dn n c t e h p to ca th

2 Os , h V i e Pr s de to Hum a Re ou c s f rHe bs i di a e ,c nta y t Loo i ' a te c e i n f n s r e o r t n c t s o rr o m s
3 r pr sent tonsoft att s i ony,t a O s wasf ly awar ofLoom i 'r l i asss i g I slcom e e ai h e tm ht a ul e s o e n itn n tr

.

'

4 wibobti i gi sza c quotsf rHebs.( e Os De . 1 -1 ,J ne4, 0, No. t an n n tr n e e o r t S e a p 78:4 8 u 201 ECF 8

5 Ex.A) Eve i Hebs ha h dnoie Loo i wa poviigtequoe t Is ror t a . nf r t d a d a m s s r dn h ts o n u c p h t
6 l str or w assubs quenty pr vi i g t Her st Her s stl coul ha e r led on Loom i ' n lc p e l o dn o b , b t il d v e i s 7 r pr s nt tons becausea pli tf m ay r l on st t m ent m a ei diecty t hi .I r Am. e e e ai , a n if ey ae s d nr l o m ne

8 Co t Cor .Lic l Sav (: oanSe . ii.79 F. n 1 p/ n on .fL c L tg, 4 Supp.1 24,1 6 ( . i.1 92)(tndie t 4 4 5 D Arz 9 d rc i
9 r lan ema b s o ni apr f s i na ne lg nc c s whe epur hm e sa et ef r s e bl e i c y e h w n o e so l g ie e a e r c s r r h o e e a e

I

I l rcpint o adec d ntswor .)Kaumanv isttCtr .75 A.d l 88,11 5( .. ) 0 e i e s f fn a ' k'; f ' .- a )# , 4 2 1 9 N J 2000
11 (tn ie tr la c al wsapli tf t pr veafa da to whe h ors ehe r asaem e tnot ' d r c e in e lo l an if o o r u c in n e h a d tt n
1 f' m t epary t atdefauded hi orherbutfom t atpary' agentor9om s m eone t whom 2 zo h th r m rh ts o o 13 t e pary com m uni at d t e f l e sat m entw ih t e i t nton t att e vi tm heari,r l on i, h t c e h as t e t h ne i h h ci t ey t

I

I

.

1 an a tt hi o he derm e t' ;s eas Belv Camer nM e dowsLa d Co , F.d 1 78, 4 d c o s r r ti n .l e lo l . ' oa n . 669 2 2

l

1 1 83 8 (t Ci.1 82 (e esngadititc ur' grntofs mmayj dgme tonafd rl 5 2 - 4 9b r 9 ) rv ri src o ts a u ru n e ea
1 s c rte fa d cam wh r pli tfss o e aque tonofmae ilf c a t i d r c r la c l 6 e u iis r u li e e an if h w d si tra a t s o n ie t ein e ; l Bl c i v Bar ac ,52 F.d 89l 907( t Ci.1 5)(ppr vi gt ei die tr la c t e r i 7 a ke . r k 4 2 , 9 h r 97 a o n h n rc ein e h o y n

:

l

1 tesc rtesfa dc ntxt.Alho ghteNe a aSu rmeCou t snota p a t ha e 8 h e u ii ru o e ) t u h v d p e r doe p er o v
1 a d e s d t e is e t e Ca io i Supr m e Cour ha a pr ve t e t e r : 9 d rse h su ,h lf m a e t s p o d h h oy

I

I

20
21 22

( )dee da tsmirprsntton ma bea lmme it ca s' ofaplitf s A fn n ' se ee ai y n e dae u e' i anif ij r pr d cig c ndu t e e to gh te d fnda t di n t ma e te nup o u n o c v n h u h ee n d o kh
m ir pr s nt ton diecty t t e pl i tf,and eve t ough t epl i tf neverhear se e e a i r l o h a n if nh h a n if d orr ad t epr cie wor soft e m ir pr sent ton. e h es d h se e a i TheRes at m entSecond ofTorssat st eprnci l ofi diectr lancet i te t t e h i pe n r ei hs

. '

2 3
24

pe unir Is t a ote wbo a t i j siibl rlanc u on i l te c ay o s o n h r cs n u tfa e ei e p t f h
m ir pr s nt ton,albough notm ade diecty t t e ot er,i m ade t a t id per on se e e a i t r l oh h s o hr s and t e m akeri t ndsorhasr ason t expe tt atis t r s wilbe r peat d oris h ne e o c h t em l ee t

wa :t e ma e o a fad ln mirprsnain i s bett l bl fr yt n k r f ru ue t se ee tt s u jc o i ii o o ay
s bsa cec m m uniae t t eot e , ndt a i wilnfue c hi E rhe !c nduc u tn o c td o b h r a h t t l i l n e s o r o t i t eta s c in ort peofta s c i n i v l e . ( e t2d Tors j53 . n h r n a to y r n a to n o v d ' R s. ' t, 3 )
Page l2 of 22

l

25

.
!

'

i ! ! r !

1 2

Consit ntwih t eRes at m entpos ton,t i courthasl ng r cogni ed t at se th te ii h s oe zh ar pr s nt ton m a bea to a l e en t o gh i wa not a edie ty t t e p r y e e e ai y c in b e v h u t s m d r c l o h a t s eki g r cover . ene y

3 Miknv Was r an,2 Ca. r2d1 ,11 (993 * e alo37Am. u . Fr u Jn r i . se m 3 lRpt. 01 9 1 ) s e s , J r 2d a d #
4 De etâ2 0( 01 ) ci 4 2 0.

5
6

1 .

Tur ove ofPr pe t t t eEsaeUnde 11U.. . 5 2 nr o ry o h tt r SC j 4

Asdicus ed,su ra,t er i no vald cl i f rt a sf ri t i cas . n e ot e cl i sar ss p b es i am o rn e n h s e h r am e

7 aI c n r c -ort r- as d, nd t e c a m f rta s e i i he e ty p e i a e o t e t e r t a 1 o ta t o tb e a h l i o r n f r s n r n l r d c t d n h h o y b t

8 Plitfst wn'ap tnta f tr j dgme tono eormoeoftos ote cli s Plitfs anif ' ' oe il uue u o n n r h e b r am . anif 9 c re tyha enovetdrghti tevaueofa ys c potntaj dgme ta de e i e e tal u rnl v se i n h l n u h e ilu n, n v n f v nu ly

1 obtie ,s c aj dpne t lmeeyc n tmt ad btnotpopet owne byPlitfsta 0 an d u b u n wil rl o si e e , r ry d anif b t
ll wo l beta sea l un e j5 2. 17r Kic i,91 F.da 1 6 -65.TheCou'ga t u d rn frbe d r ' 4 See c n ad 7 2 t 1 4 l rns t 1 s mmayj dgme to tl Grtc us o a ton. 2 u ru n n le s a e f ci
1 3 2. Pr f s i nal e lge c o e so N g i n e

.

! i '
1

1 4 1 5

Th ee e t ofaca s ofa to i tr frpofsina ne lge c ae: l e lm ns u e cin n o t o r e so l gi n e r ()
t e dut of t e pr f ssonalt us s cb skil pr dence,and dii ence as ot er h y h oe i o eu l, u lg h

1 6
17

me besofhi pr fsinc mm o l po ss a de ecie;()t ebra hofta mr s o eso o ny se s n x r s 2 h e c h t dut ;()apr xi ae c uslc nn cin bewe n tene lg ntco d c a d t e y3 o m t a a o e to t e h gie n u t n h rs lig ij l a d ()a ta ls orda a er s lig 9o tepr fsina' eutn nuy n 4 cu l o s m g e utn m h o eso ls
neglgence. i ' ' .

Sor n onv Paviows i5 lP.d851 853( e .1 78 (iigPr se,T eLaw o Tors930, e s . lk k, 8 2 , N v 9 ) ctn o s r h ft
atl 3 ( t e .1 71 * ## v Nàe ,49IP.d 433( a.1 71 ) 4 4 h d 9 ) #u . n , 2 C I 9 ).

h'
.
'

l8 19

Pli tfja lg te we eda a e b : 1 l s r om ' pr fs inal glge c i an if le e h y r m g d y ( ) n u c s o e so ne i n e n
20

c mmuniaigwibPlitfsa dnc otaigo terb hafa d()Loomi'untmeya d o c tn t anif n g itn n h i e l; n 2 s iln
21

i accur t pr cessi g ofPl i tfs'cl i sundert ePolci sand f iur t notf Pl i tff t ati n ae o n a n if a m h ie a l e o iy a n i s h t
22

ddn' beiv t e h d a e uaei f nna in c nc r i gt ePolcis a m i ita in.( A C i t le e h y a d q t n o to o e n n h i e ' d n sr to F
23

j 66 67.Plitfsfrhe algeta A1 i Ia l f rtene lge c ofLo mi, au e ! - ) anif u t r le b t G s ibe o h gi n e o s bec s
24

Loomi wa acigasA1 ' a e t(d.l ) s s tn G S g n .l j68 .
25

Loom i ar ues t atPl i tf hasnotes ablshed t atLöom i owed any dut i a sg h a n if ti h s yn

Pa e l of 22 g3

!
;
I

(
i

.

'

I
1 ; i 1 pr fs ina c pa iy, ca s teewasnoc nta tbe e nHebs a dLoomi. eWar b odt o e so l a ct be u e b r o rc - e r t n s Se mr 2 v Bln h r ,69 P.d 1 8 ,1 85( e .1 8 )( fimigs mmayj d me to apr fs ina . a c a d 2 2 2 2 2 N v 9 4 afr n u r u g n n oe so l
3 m al r ctce cl i wher t er wasno i s e ofm at ralf ctt atno contactexi t d behveen t e p a i am eh e su ei a h r se h

4 pli tf a dt ede e da t (t i t ec nta m a r ltons i c e tngadut ofduec r upo a an if n b f n n ) tt s h o r c l eai h p r ai I . y ae n n

5 atr e g hchi)t eprmayesnta t arc veyf rlga maprcie . ,ntea snc of ton y w i s h i r se ilo e o r o e l l a tc . . l b b e e
6 a contact aldut t pl i tf st peror t e actwhi h pl i tf saleged as aca se oft ei ru y o an if o f m h c a n if l u hr 7 dam ages,t e courtcoul pr pery Gnd t att er wasno genui e isueofm at ralf ct' h dol h he ns e i a .'

8 ( iainsa ditral ainmalso itdl. ctto n nen quotto rt m te )
9 Her ,i i notdi put d t atH er sthad no contactw i. Loom i w ih r s ectt t e e ts seh b r t h s t ep o h

. I

10 negotaton oft e Polci s. Ther wasalegedl a contactt admi i t rt c Poici s,but ii b ie e l y ro n se h ie 11 Pl i tf sdo notalege'm pr peradm i itaton oft e Polci s They alegeprc er a n if lio n sr i h i e. l w 12 adm i itaton ofpolci st athad been neglgenty orfaudul nty negotat d. n eCour n sr i ie h il r el ie t

1 teeoegrnt s mm ayj dgme tt Loo i ont i c us ofa ton. 3 h rfr a s u r u n o m s h s a e ci
14 3. Breach of Cont act r

1 5

Pl i tfsalege t ati s r or br ached an or lagr em entçt negotat and m anage a n if l h n u c p e ae 4o ie

1 Pl i tf s'em pl yee healh i sur nce beneft polci s'because i f ied t negotat t e polci s 6 a n if o tn a is i e ' t al o ieh ie 17 i accor ance w ih Pl i tf s's ecii atons,com m uni at m at ralchangest t e Polci s,and n d t an if p fc i ce ei oh ie

l pr p ryrviw tePolcisprort Plitfs e e utonofte t e s r a c rc .( AC 8 o e l e e h i e i o anif' x c i h m o n u e cu a y F 1 ! 7 ,76 .Mov ns Loomi,aenoti plc tdbyti c us ofa ton. 9 !4 ) a t, sr m iae hs a e ci
20 4. M i repres nt ton and Conceal ent s e ai m

21

Pli tfsa lg bot i tntona mir pr s n ai n ( o m on 1w fau )a dne lge t an if le e b n e i l se e e t to c m a r d n gi n

22 m ir pr sent ton. Nevada' punii e dam ages sat t i cl desSconceal ent'undert e se e ai s tv t ue n u t m' h

23 deiiinoffau .S e.t? i?l1 Sulv n,1 P.d433, 1( ev. 6)(iigNe .Re . fnto z d e l/p 'v'' lia 38 3 ? g( . 45 N 200 ctn v v
24 St t j42.012 ) a. ' 0 ( ).
25 // /
Page 1 of 22 4 .

i
I

I
1 a. l t ntonalM i repr sent ton ne i s e ai

.

2
3

The e e e t ofi t n i n l i r pr s nt ton i N e a a a e: l m n s n e to a m s e e e a i n v d r
1. A f l e r pr sent ton m adeby t e def nda t a s e e ai h e n;

4
5

2.Dee da tskno ld eorbeifta terpr snaini fle(ris fiint fn n ' w e g le h th e e e tto s as o n u fce b ssf rma ig t erpr s nttonl a i o k n h e e e ai ;
3. D ef ndantsi t nton t i duce t e pl i tf t actort r f ai fom actng i e ' ne i o n b a n if o o er n r in r lance upon t e m ir pr s nu ton; ei h se e e i

6

7
8

4.Plitf'j siibl r la c u ontemirprsntton;a d an ifs u tfa e ein e p h se e e ai n
5. D am age t t e pl i tf r s li g f om s ch r lance. o b a n if e u tn r u e i

9 Bulm a ,f c v Ne . l,8 5P.d 588 5 2 ( e .1 92 .Unde Rul 90,, ic m sa c s b n ui . . v Bel 2 2 ? ,9 N v 9 ) r e ) cr u tn e

1 c nsi tngfa dormitkemus besae wihpatcuaiy Fe . Ci. 9 8.n i ha 0 o tm i r u sa t ttd t ri lrt. d R. v P. 0 ss
11 be n c ns r ed t r qu r a pl i tf t t t t pr c s l t e tm e, a e a d nat r oft e e o tu o e ie an if o t a e e i ey h i pl c n s ue h
1 m i l adi g st t m ent ,m ir pr s nt tons and s ecii ac sofFaud.'Kapl n v.Rose,49 F. d 2 se n ae s se e e a i p fc t ' a 3

1 1 6 ,1 70(t Ci.1 9 ) A plitf mus pladfcss c ast ebo g tahous 9o 3 3 3 3 9h r 9 4 . anif t e a t u h t u h h em
1 def ndant t att e def ndantas ur d hi t ati wasi pe f cts a e,and t ati f ctt e house 4 e ,b b e se mh t n re h p b na h

l mr e outt beb itonaIndfl .... Wa s aw v Xoma Cog ,7 F.d 9 5, ( t Ci 5 n d o ul a il ' r h . ' r 4 3 5 960 9 h r

l l )( u tn l r GlnFe , n .Se . tg.42F.d1 4l 1 48(t Ci.1 )(nba c) 6 996 q oig n e e d I c c Lii , 3 5 , 5 9h r 994 e n l.
17 Thepl i tf m ustal o tsetf rh an expl naton ast w by t e s at m entorom i s on com pl i ed a n if s t ot ai o h te si an

1 ofwa f lea dm iia ig. ,7r Gln e Se . t , F.da 1 48.Asdic s e ,Lo m i' 8 s a s n se d n ' J c e F d c Lil 42 3 t 5 '? f su sd o s
1 la iiy on mi r pr s nt ton cl i s i no pr c ude m e e y b vim e oft e f c t a H e bs ' 9 i b lt se e e a i am s t e l d r l y l ' h a t h t r ts 20 r la c on Loom i 'ale e m i r pr s nt tonswa i die t s l ng a Loom i kne is ei n e s lg d s e e t a i s n r c, o o s s wt
21 sat m ent woul be r led on a t id pary. te s d ei hr t

2 2

Plitfsalg ta AI a dLoomi, A1 ' a e t( )itnton lyc nc ald tat an if le e h t G n s as G s g n: 1 ne i al o c e h

23 Loom i ha f ie t tm e y a d c m pl t l p oc s t e pa m e tofa 1c a m sdu unde t e s d ald o i l n o cey r e s h y n 1 li e rh

24 Polce '2)itntonal con e ldta tete elaeicrae' m i prmie frte2008 iis ( ne i ly c ae h t h ç v rt n e s'Loo s o s d o h , l 25 Poiyiclde onl txe c ssa dno a grgaecai sc ss ( )afimaieymirpesntd lc n u d y i d o t n t g e t l m o t; 3 tr tv l se r e e
Page l of 22 5

.
E

.

.

i
! !
: !

1 t a t e 200 Polc wa f r 1 m ont / 5 m ont c ve a e a d c n a ne pr s rp i n c ve a e i h th 7 iy s o 2 hl h o r g n o t i d e c i to o r g n

2 b t tes e ii a dtea re ae; nd()afnnaieymirprs ntdta te2 08Polc ob h p cfc n h g g t a 4 fi tv l se e e e h tb 0 iy
a n if m i it h 3 woul noti cr as Pl i tfs't t lcoss, ie. t atPl i tf s'm axi um labiiy undert e 2008 d n e e an if o a t . ,h '
.

4 Plnwoul be$2350,00.FAC ll1 4 06) a d ,0( l 0- . !
5 Loom i a gu s t a M r Os , r s ' V i e Pr s de tofHum a Re our e , i n d t e s r e h t . a He b ts c e i n n s e s sg e b

6 2007 Polc w ihou r a i g i,a d t a he r le s l l on l s r o ,who pr s n e t e w rte iy t t e d n t n h t eid oe y n u c m e e t d h it n

7 doc me tt hi .Loomi ague tEl mo tLoomi rprs ne ta iwa a l t manante u no m s r sçat s, s e ee td h tt s be o iti h

i

8 ref t Pli. vnhnii niuett ep vu)as e t sm.(o aso h ocsEet , s dpt h t (eisrewr h ae' t t r e ie e t u s d ah r o t e e 'M .
9 Su m . .21:7 28 ECFNo.8) A plitm srla c onsae e t mus bej siibl t m J 2- , . ani ein e ttm ns t u tfa e o
1 s ppor a c a m f rfa d. H e e,i i notd s ut d t atLoom i 'r pr s n a i nst Pl i tf swe e 0u t li o r u r ts ip e h s e e e t to o a n if r
11 i diect and t atl s r om deal diecty wih Pl i tfsand pr sent d t edocum ent f rsi ni g. nr, h nuc t r l t a n if e eb so g n 1 n er i a ques i n off ctast wbet erH er stsr lanceon I s tcom ' r pr s nt tonsup t 2 es to a o h b ' ei n tr s e e e ai o

' j
'

I

1 a dicu igtemo e t sglngweej siibl wbe Hebs, s pbitc tda tr ha te 3 n n ldn h m n of i i r u tfa e n r ta o siac co, d h
l4 wrten contacti fr ntofi when i s gned and t atcontacti cl ded m at ralt r sdif re t it no t ti h r nu e i e m fe n

1

1 fo wha h dbe nprviusya re .A raona lj r c uddeemieta Hebsj siibl 5 rm t a e e o l ge d e s be u y o l tr n h t r tu tfa y
l 6 r led on i s r or ' s a em ent atsi ni g st t m ent s ch astt i coneactyou ar aboutt ei n u c p s tt s gn ae su th s e o

1 sgnco tistetr sprviusya re t . A ra o a l j r c ul as fit fn j siibl 7 i nan h em e o l g e d o' e s n b e u y o d lo alo id u tfa e '
18 r lance undert ese cicum sances. ei h r t 19 A lhough t er i no alegaton t ata Loom i r pr s nt tve everm ade any such t h es lib s e ee ai

20 sat m ent Her s aleges t ati si ne t e agr e ent underas um ptonsbas d on te , bt l h t g dh em s s i e 2 1 r pr s nt tonsm ade t i f om I s r or t atorgi at d w ih Loom i . Her s alo alegest at c e e ai o t r n uc p h in e t s bt s l h 22 Loom i knew t er was an er ori t e wrten contactand t ati afi natvel conceal d t i s he r nh it r h t tn i y e hs

23 fc fom Hebs.A raona l j r c ul fndta Hebs idie tya dj siibl rle onte atr r t e s be u y o d i h t r t n rcl n u tfa y eid h
24 a fnna i e sa e en sm a eby Loom i co c r i g t e t nns o t e 2007 Polc , nd t a f i tv t t m t d s n enn h e fh iy a h t
25 alhough onl l s r om af i natvel m ir pr s nt d t e cont nt oft e 2007 polcy atsgni g, t y n uc fn i y s e e e e h es h i in Page 16 of 22

1 Loom i i t ntonaly conceal d fom i s r or and H er stt e f ctt att e wrten polcy s ne i l e r n uc p b hab h it i 2 dif r d fom t e pr vi usquot i gave t l s r or f rt e useoft id par i ss cb asHer s . fe e r h e o et o nuc p o h hr te u bt 3 Ther r m ai sa ques i n off ctast w het erI s r or ,Loom i ,orbot ar labl f r ee n to a o h n uc p s h ei eo

4 itnto a mirprsntton.Loomi ha notme isbude ons mmayj d me tt s o a ne in l se e e ai ss tt r n u r u g n o h w
5 l ck ofam at ralques i n off cton t i poi t l si pl ar ues t atis i vol em entwas a ei to a hs n. t m y g h tn v

6 idie twhihi ofnoi p r,a dta Mr Os c nno ha ej siibl rledonrprsntton n rc, c s m o t n h t . a a t v u tfa y ei e ee ai s
7 t athe woul have known wer f le had he r ad t e agr em ent bef r sgni g t em ,wbi h i a h d e as eh e s oe i n h cs

8 que to offc.TheCou t niss mm ayj d me tonti c us ofa ton. sin a t r de e u r u g n hs a e ci
9 b. N eglgentM i represent ton i s ai

1 0

Thetr ofne lge t se rsnttoni Ne a ai deie byteResae e t( e o d) o t gi n mirp ee ai n v d s fn d h ttm n S c n

l1 ofTors: t

1 2
13

l BilSte me Motr, n .v Fis Nat Ba ko Ne ada,94Ne .1 1 n l rm l os I c . rt ' n f v l v 3, 1 4, 5P.d938, 0(97 )wea optdteResae e t( e ond) Torsj55 3 57 2 94 1 8 , d e h ttm n S c of t 2
def ii n oft e t rtofneglgentm i r pr sent ton: m to ho i s e e ai

( )Onewho>i t ec u s ofh sbusne s pr f s i n o e pl y e t o i 1 n l o re i i s > o e so r m o m n , r n l
15 any ot er acton i whi b he has a pecuni r i t r s , s pples f l e h in c ay n e e t u i a s i f r aton f r t e gui ance of ot er i t ei busness tans ctons, i nom i o h d hsnhr i r ai s

s be tt la iiy frpe unir ls c usd t te b tei j siibl u jc o iblt o c ay o s a e o h m y h r u tta e
r la c up n t e i f r a i n,i he f is t exe cie r a o a l c r or e i n e o h n o m to f al o r s e s n be ae c m pe e c i o t i i g o c m m un c tng t e i f r a i n. o tn e n b an n r o i a i b n o m to

Bar ete v Re oAi, n ,956P.d 1 82,1 87t e .1 9 )(uotngResae e t( e o d)of m tlr . n rl c 2 3 3 ' v 98 q i N ttm n S c n

Tors(552( ).Onefdeaj d e rlngonacaefom ti Dititha en meae te t ' 1) e rlu g , ui s r hs src, s u rtd h
el m ent ' e s.

1 arprsnttonta i fle 2 ta terprsnttonwasma ei t ec tre ) e ee ai h t s as ; ) h t h e ee ai d n h ozs
21

oft e def ndants busi es ori any acton i whi h hehasa pecuni r i t r s ' h e ' ns n in c ay neet ,

3)t er pr s nttonwasf rt eguia ceofo h r i t erbusne sta s ci ns b e e e ai o h dn t e s n b i i s r n a to ;

4)terprsnttonwasj siibl rle upo ;5 ta s c rla c rs le i h e e e ai u tfa y eid n ) h t u h ein e eutd n pe unir I s t t er l igpa t ;a d 6)t a t ede e da tf ie t e ecie c a y o s o h ey n ry n h t h f n n ald o x r s
23

r asonabl car orcom pet nce i obt i i g orcom m uni atng t e i f nnaton. e ee e n ann c i b no i

2 G. .fa Ve asLt . 'hi 1 Si on.? p.Gl . J?.460 F.Su p. 1 46,1 6 ( . . 4 # s g d P s p J m Pw . p . ?c, p 2d 2 2 2 D Nev

25 20 6)( zr, ..Ne lg ntmirpe e ttonmus as bepldwihpa-culrt. d.R. v. 0 E a J) g ie se rs nai t lo e t li a iy Fe Ci t
Page l7 of 22

. '
.

l P.9() b.
2 Pl i tf sa l ge l s r or a d Loom i ha ape u i r i t r s i t e Polc e a d a n if le n u c p n sd c nay neetn b iis n

3 br a he t erdu@ t obai a d c m m u iat ac u at i f r ai n a o tt ePo iist ec d h i o tnn o n c e c r e n o m to b u h lce o

4 Plitfs ( AC !18 -81.Plitfsf rhe ale eta AI i la l f rtcn glg nc of anif.F , 0 ) anif ut r lg h t G s ib e o b e ie e 5 Loomi, c us Loomi wa a tngasA1 ' a e t(d. 8 ) Fortes mermonsteCo r s be a e s s ci G s g n.1 ! 2 . h a es h ut

6 de iss mmayj d me tontefa dcai ,ide isionti cai . ne u r u g n h ru l m t ne t hs l m
7 8 E ve? contactgi es rse t a dut nott actar ir rl orunf il t t e det i entoft e y r v io y o b ta iy a ry o h rm b
9

5.

B r ach ofFi uci ry D ut and TortousBreach oft e Im pled C ovenantof e da y i h i G ood Faih and Fai D ealng t r i

ote pat. lonv He r 1 3P.d420, ( ev. 7) Bra ho ti duyi atl difrnt h r ry Nes . e , 6 3 427 N 200 . e c f bs t s o4 fee
10

i nauefom acam f rbra hofc nta tSe I s Co.fteWetv Gis nTieCo.I c, n tr r li o e c o rc. e n . o h s . b o r ,n .
11

1 4 P.d 698, 2 t e . 06) A ba f ih cam i pr diatdon t ea us ofatduca y 33 70 ' v 20 . N d at li s e c e h be i ir
1 2

r l tonshi e itng bet een pa test cert i ki dsofcontact ;i doesnotarse sm pl f om a ea i p x si w ri o an n r st i i yr l3 pari ul ry er egi us orw ilulbr acb ofa contact asltgant oftn i pl by r texi el tc a l o lf e r , ii s e m y el v y
1 4

pl adi g ba f ih a o g w ih ne ry e e y br a h ofc nlac c a m : e n d at ln t al v r ec o z t li
15

1 6

A lhoug e e ycon r c c nt i sa i ple c ve a tofg o f ih a d f i de lng, t h vr ta t o a n n m i d o n n o d at n ar ai a a ton i t r f rbr a h of heco e a ta ie on y t n r r an e c ptona ca e ' n ci n o t o e c t v n n rs s l t a e d x e i l s s' i w hen t e e i a s eci lr ltonshi bet een t e vi tm and t rteas r A s eci l h r s p a ea i pw h ci o f o. pa

1 7
1 8

rlt n hgit h rceie b ee e t o p bl itr s, d t in a dtd cay eai s i s s aa trz d y lm n s f u i nee ta h so ,n i u ir o c c
r s onsbily.'Exam pl sofs eci l el tonshi si cl det os benveeni s r r and e p i lt ' e p ar ai p nu be nu es

i s r ds pa t e sofpa e s i s a d ga c ie sa d fa c ie s Ea h oft e c n u e , rn r c rhp , n n h s e n rn h s r . c hs
r l tonshi s s ar s ta s eci l el m ent of r lance' com m on t part er hi , e ai p he t p a e ei ' o nsp

l 9
20 21

is rn e a dfa c iea re e t.W eh v rc g ie ta i te esmain n ua c , n rn hs je m ns a e e o nz d h t n b s i t s o
i vol i ga e e e t fr la c ,he ei ane d t x r t c t e we k fom t ei s ls n v n n lm n o el n e t r s e o ç o e t h a r h n u t p oft es r nger'hati notadequat l m etbyor i ar contactdam ages.I addii n, h to 't s ey dn y r n to w e have ext nded t e t r r m edy t ce t i siuatons i whi h one pa t hol s e h ot e o ra n t i n c ry d çvasl s perorbar ai i g pow er' ' ty u i g nn .'

22 I . fomotsomitd) Th W a bigtnSupemeCou'ba sm ial de ci e tebadfih d (o e te . e s n o r z s i lry szb d h t at
23 t r a tt e i t n i nala us ofa fdu i r r l tons i . K ik v M t z ïi I s Co. 951 P. d o t s 'h n e to be i c a y e a i h p ' r . . ' r' n . , ' lk 2

24 l1 4,1 26( a h.1 ) Ac or igl,temos co mona da prpraetresofba fih 2 1 W s 998. c dn y h tm n p o it ag t d at 25 camsaeis rr. e eg.Alsat /7.Co. .Mill 2l P.d31 3 4t e . 09) li r n u esSe . . , lt e /N v le' 2 3 8, 2 ' v 20 . . , N
Pa e 1 o 22 g 8f

j

:

i
i

1

Pl i tfs alege l s lcom owed t em a fducir dut ast ei br kerand agenti a n if l n tr h i ay y h r o n

2 a viig, negotatng,and m anagi g t e Polci s t atLoom i owed t em a fducir dut asa d sn ii nh i e,h s h i ay y
3 t id-pa t a mi itaor a dt a AI owe atdu ir d t a t ei i s r rb t die tya d h r ry d n sr t , n b t G ' d i ca y u y s b r n u e o h r c l n
.
'

! I I

4 tr ua isi s r nc a e t Loo i.( AC ! 87 90) Pli tfsa gu tatt efc sal g d ho h t n u a e q n , m s F ! - . an if r e h h a t le e
' ' ' '

.

5 c nsi t bra he ofalDee da t td cayd te.(d.I91.Plitfsaloagueta AI o tm e e c s l fn ns i u ir uis I J ) anif s r h t G
6 a l Lo m i, asAI , a e t we e i a s perorortu t d poston w ih r s e tt Pl i tf sa d fd o s G s g n, r n u i r se ii t e p c o a n if n
.

7 br a he t e rdu i sofgood f i by e ga i g i t e a t de aie i t e FA C , pec fc lyz e c d h i te at h n gn n h c s t ld n h s ii a l by

j
p

8 9

ma igmae ilmirprsntto sa domisons (d. l1 6-1 . kn tra se ee ain n si .1 j! 1 9)
Pli tfsba es fiîntyale e ti cli asa ans AI t s r i eamoton t an if v u fc e l 1g d b s am g i t G o u vv io
.

'

i

10 dim i s. n ey speciicaly alege t atA1 was t ei i sur r and t atLoom i ,who m ade cerai ss tll h G b r n e, h s tn 11 m i r pr sent tonst Pl i tf s wasA 1 ' agent They al o alege t atLoom i isel was a s e e a i o a n if , Gs . slh st f 1 f duci r because i wast e t id- ary adm i i tat roft ePolci s.A I and l s rcom 2 i ay t h hr p t n sr o h ie G nu 1 pl usi l br ached t ei dut ofgood f ib by pr se tng f rexecuton a polcy t atdi not 3 a by e àr y at e ni o i ih d 2 1 i
!

1

1 r te tt e pr vi usne ota i ns w ibou m a i g t i f ct ns i u us y k o n be o e 4 el c b e o g i to , t t k n h s a co p c o l n w fr
15 executon,and t en f ii g vol nt rl t r f r t e coneactt r fectt eorgi ali t ntoft e i h a ln u a iy o e o m h o el h i n n e h

î

:

1 pa- e . 6 lis t
1 7 Loom i asa mer pl n adm i i tat r bowever wasa fduci z onl w ih r spectt s ea n sr o , , i ay y t e o

l ad i it aton o t e Polc e ie. t epa m e to de i lofcl i s t Pl i tfs 8 m nsr i f h iis . , h y n r n a am o an if' l e pl y e n tne otato and cx c lo oft e . Pl i tf s d nota l ge a y da a evi t e 9 m o e s o g i in -c u / n h m a n if o le n m g a h 20 a m i ita i n ofcl i su d rt e t xtoft e polc e as wr te ,buto l vi t ene ota i n a d d n sr to am n e h e h iis it n n y a h g i to n
21 executon oft e polci sbcf r t ey w enti t efcct l ot erwor s Pl i tf salege dam age i h ie oe h no f . n h d , an if l

22 r s li g fom t eprw c a m i ita i n oft e Polc es polc e t a d d notpr pe l r fec t e e u tn r h t r d n sr to h ii iis h t i o ry e l t h 23 i t nto t e pa te ort e r pr s nt tonsm a e by Loo i a d o he s Loo i 'fdu i r dut n e f h ri s b e e e a i d m s n t r . m s i c a .y y
24 f ihf ly t adm i i t rt e Polci sdi notext nd t Gghtng Her s ' batl sw ih r spectt t e at u l o n se h ie d eo i b t s te t e oh

25 ve y va i iy o t e Polci sc ' e Alhoug Loom i m a be labl f rm ir pr s nt ton b s d r ld t f h i e a ant . t h s y i e o se e e a i a e
Page l of 22 9

1 on Pl i tfs i die tr la c on Loom i 's a e e t t l szc m c n e ni g t epolcyqu t s a n if ' n r c e i n e s t t m n s o n tr o o c r n h i oe , 2 a d a t o gh t ef ct h tLoomi w a alo t e a m i i ta oro t e Polci sm a a gr v t s c a n lh u h a t a s s s h d ns rt f b i e y g a ae u h
3 cl i ,Loom i i notlabl f rbad f ih ast t e negotaton and executon oft e polci s am ss i eo at oh ii i h ie

4 b c u e i wasno a fduc a y i t i r g r . N o a r e e t wrte orot e v s ,i a l ge t ea s t t i ir n h s e a d g e m n , itn h n i e s le d o 5 ha e e it d be w e n Pl i tfsa d Lo m i f ra s sa c i o t i i g c v r ge.n i wast e v x s e t e a n if n o s o s itn e n b an n o e a s h

6 s l duyofI s rop.TheCou-teeor ga t Loomi'motonf rs mmayj dgme ta oe t n u c r l h rf e rns t s i o u ru ns
7 agai s t ese caus s ofacton. nth e i 8 9 6. Fraud i t e lnducem ent nh

Pl i tfs alege Der nda t pur os l m ir pr s nt d t e t nnsoft e Polci st i duce a n if l e n s p ey se e e e h e b ie on

1 Plitfst e e ut te b tligPlitfs ()te20 7Polc wa a1 mont/ smont 0 anif o x c e h m y eln anif: 1 h 0 iy s 2 bl h
11 polc t a c vee pr s rptonsi bot t es e ii a d t ea gr g t ; d ( )t ec a g st t e iy h t o rd e c i i n h h p cfc n h g e ae an 2 h h n e o h
1 2 08 Polc w o l noti c ud a i c e s i t t lc ss s c t a Pl i tf s la iiy woul n t 20 iy u d n l e n n r a e n o a o t , u h h t a n if ' i b lt do

1 e c e $2,50,0 .( AC M 8* 97 .ls fra ti cli i me ntt beditn tfom te 3 xed 3 00 F ) n oa s hs am s a o sic r h
1 m ir pr s nt to cl i sa r a y a dr s e ,i c ns iu e a d f ns t e f r e e tofa c nta t 4 s e e e a i n a m te d d e s d t b tt t s e e e o n o c m n o rc ,
1 nota s par t caus ofacton,and t e pr s ntm ovant Loom i,i notaleged t have been a 5 e ae e i h ee , ss l o

I

1 pa t t t e Po i i s buta t id- a t a m i i ta oroft e ,a s l c e by t e pa te i t e 6 ry o h lc e , h r p ry d n sr t h m s e e t d h ri s n h 1 Polci s n e e o e t e Co r ne d no a dr s t i c ai a t i tm e. 7 i e . rfr,h u t e t d es b s l m t hs i
18 7. Ref rm at on ofContr ct o i a

l 9

Re onna i n ofa c n r c i a a pr pr a e e uia l r m e y i t e ca e off a d o f to o ta t s n p o i t q t b e e d n b s ru r

20 m i t ke. W ih r s ectt faud: sa t ep or

21
22 23

m i r p e e t to a t t eco t nt ore f c o a wrtng e i e c ng orembody ng s e r s n a in s o h n e s fe t f ii v d n l i i whol ori par an agr em ent t e courtatt e r questoft er ci intm ayr f r n ent e ,h he h e pe eo m t e w rtng t expr s t e t r s oft e agr em entasass rtd, h ii o es h em h e ee

l ap r ' ma iett no a sn i id c db teoh r a t' fa d ln f at s nfsai f se ts n u e y h te j ry s ru ue t y o

()iterciin wa j siidi rligontemirprsntton, nd a f h e pe t s u tfe n eyn h se ee ai a
24

( )e c ptt t eextnrta rghsoft idpariss c a good f ihpur h s r f r b x c o h c h t i t h r te u h s at c a es o
25 val ew ilbe unf il afect d. ul ary f e

Page 20 of 22

e

!
!

1 Rettme t( e ond ofConea t jl ( 981; e NOLM LLC v C?..o clr ,1 P.d sae n S c ) cs 66 1 )s e . 1y f a k 00 3 /
2 658 6 1( e . 4)( u tn i..t eo naini moebra l a aia l frfa d lnt , 6 N v 200 q o ig d4 t fn to s r o dy v lbe o ru ue R

3 mirprsnttonta frmitk .' sae e t( e t d)ofConta t j1 c ta( 981 se ee ai h n o sa e'Re ttm n S cm rcs 66 m . 1 )
4 (iigi.j1 5) W ihrs e tt mitke: ctn d 5 . t ep c o sa
5
6

7
8 9 l0

Thepr vi c ofr f nna i n i t m a e awr tng e pr s t e a e m e tt a o n e e o to s o k ii x e s h p e n h t t e pari s i t nded i s oul . Undert erul sat d i t i Secton,r f r aton i h te n e th d h e t e n hs i eom i s avaiabl when t e partes havi g r ached an agr em entand havi g t en atem pt d le h i, n e e nh t e t r d c i t w rtng, a l o e pr s i c r e ty i t ewr tng.The rm i t kei one o e u e t o ii f i t x e s t o r c l n h ii i sa s a t e pr s i n-one t a r l t s t t e c n e t or e f c o t e wrtn t ati s o x e so h t eae o h o t n s fe t f h ii g h s i t nded t expr sst ei agr em ent-and t e appr prat r m edy i r f r aton of ne o e hr e h o iee s eo m i t atwrtng pr pery t r fectt ei agr em ent Fort e nle sat d i t i Secton t h ii o l o el h r e . h l t e n hs io be i voked,t er f r ,t er m usthave been s m e agrem entbet een t e partes n h eoe h e o w h i pr ort t ewrtng.Theproragr em entneed not however bccom pl t and cerai i o h ii i e , , ee tn enough t be a cont act o r.

Rettme t( e o d ofConrcsj1 5c ta( 9 1. sae n S c n ) ta t 5 m . 1 8 )
11 12 l3
1 4

Pl i tf sar ue t att ey ar entte t a r f nnaton oft e Polci s t accur t l r fect a n if g h h e il d o e o i h ie o a ey e l -

teitntoftepate .FAC jl1 3 29 .n i c us ofa toni srngl s ppore o tefcs h ne h ris ( l 2 - ) s a e ci s to y u td n h a t !
' aleged unde eihera fr ud orm it ke t eor . The f ct aleged m akepl usi l eihe t at l rt a sa h y as l a be t r h

1 I

D ef nda t i t nto aly c nc a e t e c nt nt oft e m ii g,ort a al pa te w e e i nor ntof e n s n e in l o e ld h o e s h tn h t l ri s r g a
l5 t econt ne oft e wrtngsand t att e w rtng di notacctr t l r fectt eproragr e e tand h e h ii hh ii d ta e y e l h i em n l6

t e i t ntoft e pm i s h ne h e.
17

Loo i a gu st a He bs i n te tte t r f r a i n be a s t e e wa no m i t ke or m s r e h t r t s o n il d o e o m to c u e h r s sa 1 8 fa d. Loo i s ppo t t i c nc us on by no i g t a t et r soft e wrte c nta twe e ru m s u rs h s o l i tn h t h e m h it n o r c r
19 unam bi uous. Thi i r l vantt i t r r t ton oft e contactas wrten,buti i i apposie t g s s ee o ne p ea i h r it ts n to 20 det r i aton ofa cl i f requiabl r f r aton based on faud orm i t ke. l s es ofFaud and em n i am o t e eom i r sa su
2l

m it ke afectt evaldiy oft econtactasw rten and a e t er f r a t cedentt t e contacts sa fh it h r it r h eoe n e oh r' 22

i t m r t ton. The qu si n i notwhe he t e t nnsoft e wrte a r e e t e e c n u i g or n e ea i e to s t rh e h i n g e m n w r o f sn l
23

a bi u us but he he Loom i i t nto a l c n e l d t e c nta ts t r sf om ,o m go , w t r s n e i n ly o c a e h o r c ' e m r r
24 m ir pr s nt d t em t ,H er st orw het erbot par i swer i nor ntofw hatt e wrten sc e e e h o b, h h te eg a h it
25 agr em entsat d. e te Page 21of 22

i
1 !
l
i
!
'
.

.

'

.

l

Fi aly,Loom i ar ues t atr o r aton i notappr prat be a se M r.os tf ied t nl sg h emi s o i e cu a 'a l o

I

!

:

2 m eethi af i natvedut t r a t e Polci sbef r he si ned i and/ rr com m ended i f r s fn i y o ed h ie oe g t oe to 3 exec ton.'( o. u i 'M tSumm. 23:3 2 ) l a lat sae fiuet ra ac nr c wheetee J. 2 - 4 . n te s one tt,alr o e d o ta t r h r h u ce 4 i a o poruniy t do s a d wihouta s m c e te c s w ilpr ventt e equi bl r m edy of sn p t t o on t u in x u e l e

2
!

i i r
!
.

i

5 r fr aino acai ofu iaea mitke Shedo v Har os ,1 0S. .d898 900( a. eo m to n l m n ltrl sa . l n . g e 0 E2 ,G
6 1 57) Howe e ,t re onnai n o a a r e e tc n bea a de i onepa t h sk ow ldg t a 9. v r t l f to f n g e m n a E w r df ry a n e e h t
7 t e o h rpa t s f e sf o aunia e a m i t ke. Gr be v Coms oc Ba k, P. d 11 2, h t e ry u f r r m ltr l sa ' a r . ' t k n 905 2 1

:

i '
!

8 11 6( e .1 95 (iigGc. Com. .Le iz 71 P.d1 57( rz. . 1 N v 9 ) ctn Pac. v vt, 6 2 0 A i CtApp.1 86).Hebs 9 ) rt
9 aleges t atLopm i knew i w asoper tng unde a m i t ke ast t e cont nt oft e2007 Polcy. l h s t ai r sa ob es h i

I
(

i :
l
!

1 Loo i ha no ne ae ti algainwihe ie ce TheCo r de iss mmayj d me ton 0 m s s t g td hs le to t vd n . u t ne u r u g n
11 t i caus ofacton. bs e i 12 c o x c t- sl x vo

!

!
i

1 3

I I HEREBY oloElEo ta teMotont w ih rw Reee c (,Fxo 1 i Ts t t h tb i o td a frn e Ec )s
.

i
:

1 GRANTED. 4 1 5 I I FIRTHER ORDERED t a t eM otonf rSumma' J dgm e t( CF No.8 i TS J h th io lu y nE )s

i

i
I i :
1 !
.

1 GR AN TED i pa ta d D EN I D i pa t Them oto i g a t d wih r s e tt t a s e unde 6 n rn E n r. in s r n e t e p c o r n f r r

1 j5 2,pr f s i na ne lge ce br a b o fduca ydu y a dba f ih, de id wihr s ec t 7 ' 4 o e so l g i n , e c f i ir t , n d at but n e t e p t o
18 i t ntonalm ir pr s nt ton,neglgentm ir pr s nt ton,and r f nnaton. ne i se e e a i i se e e a i eo i 19 I I SO ORDERED . TS

20
21

D a e : Decem ber29, 0 td 201
'

22
23

R0B U nied t

T C .J N ES O esD iti tJudge s rc

'

24
25

Page 22 of 22