Appendix — Qureshi v. National Savings & Trust Co.

—)

NATIONAL SAVINGS

SECURITY NATIONAL

TELEPHONE CORPORA

AND TRUST COMPANY

Bead

pee

Supretie Gout: t 8,

FILE D>

APR 27 1986

JOSEPH F. SPANIOL, JR.

Ht q CLERK

yO THE UNTTED STATES

R TERM 1987

ye Petitioner

BANK Respondents

AMERICA

TION OF

Petition for writ

the United States

for the District

Sf certiorari to

SUPPLEMENTAL

Court of Appeals

APPENDIX

of Columbia Circuit

Mashuq A Qureshi,MD Pro Se

Sea ooO.Garlin Sprines Rd.

Suite 104

Virginia 22204

Arlington,

(703) 379-8030

TABLE OF CONTENTS

Subject

Order of District Court

Re: Ry Be phe Pear eer ar area

Judgment of District Court

Re: Security National Bank.....

Judgment of District Court

ee) eee ee ee ee

Memorandum of District Court

Re: Pees 6 os we wk ee eee

Order of District Court

ROS EGA 6-4 otk ses 6 eae ween 8

Memorandum & Report of U.S.

POMEPLEL COOGEE. + vide cs ss deans 6x

Order & Judgment of District Court

Re: eR ee gk te ee eae

Exhibit

Magistrate

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

yExhibit l

MASHUQ A. QURESHI, M.D., 5

PISiatci«Et, civil

Ws verre

)

NATIONAL SAVINGS & TRUST COMPANY, 2No.

Meche )82-3673

Defendants. ) FILED

)

FEB.10,1983

MEMORANDUM AND _ ORDER

This matter is before the court on

the motion of defendant NS&T Bank to dismiss

for failure to state a claim upon which

relief can be granted. For the purposes of

decinding such a motion, the court must take

as true all the allegations of the complaint.

Plaintiff alleges that he is the victim of

a scheme which defrauded him of some

$67,500. Although it is not immediately

clear from the pleadings, plaintiff appears

in fact to be complaining about two

separate transactions.

1. Sale-leaseback of telephone

equipment.

Plaintiff, a physician, was looking

for tax shelters when he engaged in a

questionable transaction in which he bought

telephone equipment from one Richard J.

Gordon for $47,500 and then promptly

leased the equipment back to Gordon.

The purchase price was financed by a

personal ioan from NS&T Bank to plaintiff,

secured by the equipment. Gordon shortly

thereafter skipped town, and is now

reportedly in federal prison in Connecticut.

Plaintiff argues that the bank is

liable to him for the-amount of the loan

because the bank knew about Mr. Gordon's

Shady background and had a duty to warn

"Medac General Partnership II", drawn on

the account of plaintiff with NS&T.

"Medac II" was a partnership controlled by

Mr. Gordon. Plaintiff gave the check to

Gordon, ostensibly to purchase shares in

Medac II. Instead, Gordon endorsed the check

over to “Medtronics, Inc.", yet another

Gordon creation, and deposited the check

with the Medtronics account at Security

National Bank, a co-defendant. Security

National Bank then, of course, presented

the check to the payor bank, NS&T, for

collection. After verifying the

authenticity of plaintiff's signature,

NS&T debited plaintiff's account in the

amount of $20,000.

Plaintiff argues strenuously that both

banks are liable to him in the full amount

of the check for having accepted what he

terms the improper endorsement of Mr. Gordon

on the check he intended to go to Medac II,

Meda ae irgzues plaintiff, did not even

have a bank account with NS&T until some

six week: later.

At least with respect to NS&T, plaintiff

again misconstrues the obligation of the

bank. As payor bank, NS&T had only to

verify the authenticity of the signature

of the drawer of the check, plaintiff.

NS&T was entitled to rely on the warranty

of Security National Bank that the

endorsement on the check was proper.

See D.C. Code §28:4-207 (1981). The

existance or absence of a Medac II account

at NS&T, at whatever time, is irrelevant to

this motion. Accordingly, plaintiff's

claims for the $20,000 lost on the check

to R.J. Gordon must also be dismissed.

In accordance with the foregoing,

it is this 10th day of February, 1983,

ORDERED that the motion of defendant

NS&T Bank to dismiss for failure to state

relief may be granted i

inted; and it 1 further

RDERED that plaintiff's claims

1 i t defendant NS&T Bank are hereby

nas Flannery

INITED STATES DISTRICT COURT

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

(Faniviv 2)

-

FILED JUL.26,1984

MASHUQ A. QURESHI, M.D.

Plaintiff mere ee Pe

82-3673

VSie

#2: SECURITY NATIONAL BANK Filed Jul.26,1984

Defendant James F.Davey,

wees NS NS SS SS SY SS “SS “SS

Clerk

JUDGMENT ON THE VERDICT

(For Defendant)

This cause having been tried by the

Court and a Jury, before the Honorable

Thomas A. Flannery Judge presiding

and the issues having been duly tried and

the Jury having rendered its verdict; now

therefore, pursuant to the verdict,

IT IS ORDERED, ADJUDGED AND DECREED

that the plaintiff Mahuq A. Qureshi, M.D.

Cake n tn

:

the detenda

and that

recover

th

ee

cos

e

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

) Filed

yAugust 30,1985

)

)James F.Davey,

Plaintiff )

)Clerk

TELEPHONE CORPORATION OF AMERICA)

YCIVIL

AKA TELCOA )

YNO. 82-3673

)

Exhibit 3

MASHUQ A. QURESHI, M.D.

Defendant

JUDGMENT ON THE VERDICT

(For Plaintiff)

This cause having been tried by the

Court and a Jury, before the Honorable

THOMAS A. FLANNERY , Judge presiding,

and issues having been duly tried and the

Jury having duly rendered its verdict; now,

therefore, pursuant to the verdict,

IT IS ORDERED, ADJUDGED AND DECREED

that the plaintiff

MASHUQ A. QURESHI, M.D.

have 11 cCOVe! of and fr the defendant

TELEPHON! ORPORATION OF AMERI( A, AKA | ~2

EL A ee i ee ee

the sum of

Seventeen Thousand,Four Hundred Forty Dollars

$17,440.00,

JAMES F. DAVEY, clerk

Dated: 8/30/85 By: =

Deputy Clerk

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

MASHUQ A. QURESHI, M.D., ) Exhibit 4

Plaintiff,

V.

TELEPHONE CORPORATION OF AMERICA,

=a

eo)

Defendant.

we oa a a a

>

2)

ev

-.

°

re

82-3673

FILED OCT.29, 1985

MEMORANDUM

This matter comes before the court

on defendant's motion for judgment

notwithstanding the verdict and in the

alternative, for a new trial or remittitur,

or plaintiff's motion for interest, costs,

attorney fees, and investigation fees, and

on defendant's motion to. strike plaintiff's

motion. For the reasons stated below, all

the above motions are denied.

This case came t

1985. On the evidence

sold various items to

including a MITEL SX-2

Cc

contract that reserved

o trial

presen

Richard

OO tele

onditional

title

equipment with defendant unti

was made.

Subsequently,

sale lease-back arrangement

pl

aintiff

whereby plaintiff bought the

telephone system from

it back to Gordon for

Gordon

use in

After Gordon's business fel]

repossessed, refurbished and

telephone equipment.

Plaintiff claimed that

repossession of the

telephone

Gordon was an unlawful

plaintiff's property.

NO

conve:

Defendant

with

ted - d

eferdant

Gor lon,

phone equipment

sales

in the

l full payment

engag

MITEL

and t

Gordon'

apart,

resold

defend

ed ina

Gordon

SX-200

hen leased

s orrice.

defendant

the

ant's

equipment from

sion o

f

claimed that

n.

—

1t

re

the

~~

—

es

facts

ncerning

iff’ s

ious facts

s purchase of

plaintiff's

jury

returne

ight

interest,

account

right to

ECOuUurt

Defendant seeks a different judgement,

a new trial, or a remittitur of the amount

awarded plaintiff. Most o!’ defendant's

arguments in favor of a new judgment or

trial, however, are misplaced in that they

attempt to show that by law defendant had

a security interest superior to plaintiff.

Such a finding is unnecessary given the

jury's verdict. As shown by the verdict

form, the jury found that defendant did

have a right to repossess and resell the

telephone equipment. The verdict form read:

Do you find that TelCOA had a right

to repossess and resell the telephone

equipment, but only to apply the

proceeds of the resale to both the

outstanding debt Gordon owed on the

MITEL SX-200 and telCOA's costs in

repossession and resale?

X

Yes

No

determine the process of deliberation that

led to this conclusion, obviously the jury

found that defendant had some sort of

security interest in the equipment that was

Superior to any interest plaintiff had in

preventing defendant's repossession.

The crux of defendant's concern,

therefore, must be with the jury' finding

that the security interest only allowed

defendant to apply the proceeds of the

resold equipment to the outstanding debt

on that equipment (plus costs in repossession

and resale), and not to the “open account"™

defendant sought to prove at trial. Close

review of the evidence presented at trial

shows that, viewed in a light most favorable

to plaintiff, there is a reasonable basis

for the jury's finding.

t ’

As a matter of law, the "article two'

security interest shown by defendant to

exist arose from the sale of the MITEL SX-

200; that security interest secured any

outstanding debt on that telephone

equipment, not on any cumulative debt owed

by Gordon to defendant. The parties agreed

that defendant initially sold the telephone

equipment to Gordon for $26,288. Plaintiff

introduced evidence that Gordon paid to

defendant accepted from Gordon $24,000 on

that debt (Plaintiff's Exhibit 19).

Evidence was also heard from John Eaglin,

director of operations: for defendant, that

repossession costs were approximately

$800-$1,000, refurbishing costs were

approximately $4,700-$4,800, and instaliment

costs were approximately $7,300-$7,400.

The jury, after deducting the debt still

owed defendant on the equipment, and after

weighing the reasonableness of the costs of

repossessing, refurbishing and reselling

ot o the awtf it [a

t

;

e ( I it ’ ntere t . 1etr¢ ; t ne t

? eet ti

’ ; "mf , l expe ‘ I f |

; r

.

» ~~ >

: } ‘ + mn} ; +

net rnins tni rpi oO Dp ; }

mm FT ] > 7 , ry > , ‘ > ]

CoO »Lle;re ( mpi LlanhcC € “ tn t t iaw A

to dispose of collateral after def:

D.C. Code Ann. §28:9-504. While t

exact computation of this amount must r

uncertain, it cannot be said as a

matter ot!

law that the jury was clearly in error

determining this amount.

Defendant's specific objecti

on ot

lin

the

second jury instruction is also misplaced

and insufficient grounds for a new

or new trial. It was clear to the

judgment

}ury

Since the debt was not yet fully paid,

valid title had passed from defendant t

Gordon. It was also clear (through the

that

no

Oo

pursuant to the

ensuing jury instructions dealt

e

two

VO]

whether a security

ibera n

I tv ter

ir y t

t } ecuf’ri

satistfact

it was still

ve a C laim

dable title

2-403(1).

transfer

t y ]

1on

to

of

All

nterest by

of such a

possible

the goods

title

doctrine.

the

with

interest existed, whether

4 security agreement existed,

ignificance such

I9FtTicie nine.

III. Conclusion

The defendant'

notwithstanding

the

Ss motion

verdict,

an d

outcomes would

for

Or

what

have under

judgment

in the

An appropr

Memorandum,

ror. Anterest. ¢€osts.

igation i likewise

ot jlefendant's

ff's motion, nd

ed.

Oder accompanies this

DISTRICT COURT

rs : AT

— =,

\ R .

)

) Civil Action

No 82-3673

TELEPHONE CORPORATION OF AMERICA)

) FILED

Defendant. )

)OLT. 29, 1985

Upon

motion for a

verdict, and in

trial or

interest, costs,

the oppositions

record herein,

29 * day of

ORDERED that

judgment

in the

consideration o!

the

remittitur,

strike

thereto,

October,

notwithstanding the

alternative,

f defendant's

judgment notwithstanding the

alternative, for a new

plaintiff's motion for

plaintiff's motion,

and the entire

it is, by the court, this

1985,

defendant's motion for

and

verdict,

for a new trial or

ORDERED that plaintiff s motion

ror interest, costs, attorney fees and

investigation fees is denied; and it is

further

ORDERED that defendant's motion to

strike plaintiff's motion for interest,

costs, attorney fees, and investigation fees

is denied.

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

MASHUQ A. QURESHI, M.D.

Fesintifcte, )

) Civil Action

V. )

) No 82-3673

RICHARD J. GORDON, et al.)

) FILED

Defendants )

) AUG 15, 1986

MEMORANDUM OPINION

AND

REPORT AND RECOMMENDATION

This matter comes before the United

States Magistrate based on Order of the

Court (Flannery, J.), dated December 13,

1985, for a hearing on damages allegedly

owed to the plaintiff, Dr. Mashuq A. Qureshi,

who has proceeded pro se in this litigation,

by Mr. Richard J. Gordon, the Court having

entered an Order on December 16, 1985,

determining that effective service had been

———

made on the defendant, Richard J. Gordon,

in California, pursuant to 13 D.C. Code

§423 et seq. (1981) and ordering the Clerk

of the Court to issue a default against Mr.

Gordon for his failure to appear and to

answer the complaint. i!

An evidentiary hearing was held before

the undersigned United States Magistrate

on February 13, 1986. Plaintiff appeared

pro se and gave testimony on his own

behalf. Also during the hearing the plaintiff

produced two (2) additional witnesses and

introduced seventeen (17) exhibits. The

defendant did not appear personally or

through counsel.

1/ It is noted that the Court referred the

matter to the Magistrate even prior to the

Clerk entering the default.

i l it r i i ‘ Ww

hearing notes, the exhibits received in

evidence and the entire court record. Also

extensive legal research has been conducted

on the subject of equipment leases and the

method for computation of damages for breach

thereof of rental payment obligations during

theterm of the lease. Based upon this review,

the Magistrate enters the following findings

»f fact and conclusions of law.

For the reasons set forth hereinafter,

the Magistrate recommends judgment be

entered against the defendant, Richard J.

Gordon, and for the plaintiff, in the sum

of ONE HUNDRED FIFTY THOUSAND, NINE HUNDRED

THIRTY-FOUR DOLLARS AND FOURTEEN CENTS

($150,934.14) as the appropriate quantum of

lamages in this case as of September 1, 1986.

GENERAL BACKGROUND

Dr. Mashuq A. Qureshi seeks $67,500 in

——=—aag————x&mx

oe

ate

had

Atte

Mr

—

orni

the

tive

», on

ent

rd

Fr

puni

Gordon had

}

and distinct cont

entered in 1981.

r several unsucce

Gordon, who curr

a, both certified

Court (Flannery,

service had been

February 6, 1986,

ered a default ag

Gordon for his

Qu

igainst

ecurity

) f

National

America

’

reshi’'s original

Savings &

National Bank and

(TELCOA) for th

4

tive damage ; ,

ts tro the

», an individual

veral busine

ireshi has alleged

breached two (2)

racts in which

ssful attempts to

ently resides in

and registered

J.) found that

made on Mr Gordon.

the Clerk of the

ainst the defendant,

failure to answer!

complaint was tiled

Trust Company(NS&T),

Telephone Corporation

eir alleged (FN #2...)

; NJ em

ie amended complaint (Docket No.141).

Thereafter the evidentiary hearing was held

on February 13, 1986, pursuant to the Order

of the United States Magistrate of January

20, 1986, furnishing notice thereof, which

was mailed to Richard J. Gordon, c/o Pacific

Financial Institute, Suite #600, 10100 Santa

Monica Boulevard, Los Angeles, California,

90067, both by First Class Mail and Certified

Mail, return receipt requested, addressee

only (Docket NO. 137). The certified letter

was returned "notify sender of new address:

fcc wel

involvement in the business dealings between

Dr. Qureshi and Richard J. GOrdon. On April

20, 1983, Dr. Qureshi filed an amended

complaint, pursuant to an Order of the Court,

filed April 13, 1983, to add Richard J. Gordon

as a defendant. This report and recommendation

concerns on Dr.Qureshi's claims against Richard

i}, Gordon on the amended complaint.

-_ 5 an

DU

hy

u

pa

sSiness

esiden

Dr

lares l

irtners

reshi).

rtners

‘

t

lp

il

oo

the

rk East

#806

ifornia 90067".

t wa t returned.

tha t wa forwarded by

vice t the defendant and

eegille v ann, 544 F.2d

.

0! FACTS

reshi, who currently

h Carlin Springs Road,

testified that in the

negotiated several

Mr Richard J. Gordon,

Gordon Corporation."

reed to purchase two (2)

ip, the Medac General

stimony of Dr. Mashuq A.

purchase of the two (2)

on or about April 1, 1981,

aii

Dr. Qureshi gave Mr. Gordon a check for

$20,000.00, drawn on Dr. Qureshi's MAQ

Associates' account at NS&T in Washington,

D.C. (Dr. Qureshi's testimony and Plaintiff's

Exhibit #1).

ss On or about April 2, 1981, Mr. Gordon

deposited the check in an account held

by Medtronics, Inc. at the Security National

Bank (SNB) in Washington, D.C. as evidenced

by the endorsement on the back of the check.

(Plintiff's Exhibit #1). Robert D. Willey,

Jr., Vice-President of NS&T, also testified

that the check was, in fact, deposited in

the Medtronics, Inc.'s account at NS&T.

Dr. Qureshi testified that Medtronics, Inc.

was another company run by Mr. Gordon

4. Security National Bank (SNB) returned

the check to NS&T made payment on the check.

(Testimony of John N. Littlewood, Senior

Vice-President of SNB)

Da Both Dr. Qureshi and Mr. Willey testified

that the Medac General Partnership II

account was not opened by Richard J. Gordon

until May 26, 1981. Mr. Gordon had the sole

authority to sign checks for the partnership

account as Managing Partner. (Plaintiff's

Exhibit #2).

6. Dr. Qureshi testified that shortly

thereafter Richard J. Gordon left town and

never gave Dr. Qureshi his two partnership

shares or any other evidence of a ownership

interest in the partnership.

ae Dr. Qureshi and Mr. Gordon also agreed

to a sale and lease back arrangement

concerning a MITEL SX-200 Computerized

Telephone System. (Dr. Qureshi's testimony).

According to the terms of the agreement,

negotiated in March, 1981, Dr. M.A. Qureshi

would purchase the equipment from Richard

J. Gordon for $47,500.00 and then Dr.

Qureshi would rent the same equipment back

. ! R ~ . °

to the R. j. Gordon Corporation" at

$1,400.00 per month plus applicable taxes

per month. The’ equipment lease agreement,

dated March 19, 1981, was to run for one-

hundred and twenty (120) months.

This agreement was signed by Dr. M.A.

Qureshi, as lessor, and by R.J. Gordon,

President, The R. j. Gordon Corporation,

lessee, 4231 42nd Street, N.W., Washington,

D.C. 20016. 3/

(Dr. Qureshi's testimony; plaintiff's

exhibit #5).

8. On or about April 1, 1981, Dr. Qureshi

gave Mr. Gordon a check in the amount of

3/ The evidence establised that #The R. j.

Gordon Corporation" was in fact R. J. Gordon

and that he dominated its activities.

Thus, the Court is justified in piercing the

corporate veil and imposing liability directly

on Richard J. Gordon. See Plaintiff's (FN#3...)

| rena

- 4 wt. .

$47,500.00. Sf payable to The R. j. Gordon

Corporation” with the notation, "Purchase:

MITEL SX-200 Telephone System", drawn on

(...FN#3)

Exhibit #17, letter by R. J. Gordon, in which

refers to "my company", R. j. Gordon & Company.

See also Transcript at trial on August 28,1985,

filed July 8, 1986, testimony of Kenneth

Schwarzwald of TELCOA at pages 398, 406, 409,

410, 413 and 423A, all indicating that Richard

J. Gordon and R. j. Gordon & Company were

treated as one and the same.

4/ Plaintiff's Exhibit #12 indicates that

the cost of the system was $55,000.00.

Exhibit #12, an invoice to Dr. Qureshi, not

only purportedly indicates that Dr. Qureshi

purchased the system directly from TELCOA

instead of from Richard J. Gordon, but also

indicates a bill date of January 9, 1981, a

date long before the purchase order was even

(FN #4...)

- 10 -

a

a

Dr. Qureshi's MAQ Associates’ Telephone

System", drawn on Dr. Qureshi'’s MAQ

Associates’ account at NSAT. (Plaintiff's

Exhibit #3).

(... FN #4)

signed and before the loan arrangement was

set up. (See Plaintiff's Exhibits ## 3, 5

and 17). The document purportedly signed

by Joyce Francala, an employee of TELCOA,

and by Mr. Gordon, neither of whom testified

at the hearing. It thus appears that Mr.

Gordon may have represented himself as the

agent for Dr. Qureshi, perhaps without his

knowledge. Moreover, during the trial

against TELCOA in this case, Kenneth

Schwarzwald, the Chief Executive Officer fot

TELCOA, testified that the document was not

signed by an authorized agent of TELCOA and,

in fact, Ms. Francella's name was spelled

incorrectly on the document. (FN #4 ...)

= 11 -

reenact

evidenced by the endorsement on the back

of the $47,500.00 check, Mr. Gordon

deposited the check into "The R. j. Gordon

Corporation" account (Account Number

#0614701001) on or about April 2, 1981.

(Plaintiff's Exhibit #3). Mr. Willey also

testified that NS$T honored the check on

or about April 3, 1981.

(...FN #4)

(Trial Transcript at 397-398, filed July 8,

1986). He further testified that the purchase

price by Mr. Gordon was $24,800.00 plus tax.

(Trial Transcript at 394, 403, filed July 8,

1986). It appears that TELCOA apparently

repossessed the equipment because of a dispute

between it and Mr. Gordon over the payment of

taxes. Mr Gordon stated in his August 23,

1985 letter that the equipment was sold to

Dr.Qureshi at a retail price of $47,500.00.

ler t pay Richar J. Gordon,

iccording to the testimony of Dr. Qureshi,

he borrowed $47,‘ from NS&T, using the

Equipment Lease Agreement between himself,

7 j 1 ry i Cc - °

1s lessor, and the R. j. rdon Corporation,

as lessee, as well as the telephone equipment

itself as collateral.

(Dr. Qureshi's testimony; Mr. Willey's

testimony and Plaintiff's Exhibits ## 9,

lO and 11).

ike Subsequently, Dr. Qureshi assigned all

of his interest in the lease to NS&T for so

long as Dr. Qureshi was indebted to the

bank. (Dr. Qureshi's testimony; Mr. Willey's

testimony and Plaintiff's Exhibit #6).

As required by the Equipment Lease Agreement

the R. j. Gordon Corporation consented to

the assignment of the lease and agreed to

make all one-hundred and twenty (120) payments

directly to NS&T. The consent to assignment

of the lease was attested to by Ms. Phyllis

H. Archer, Mr. Gordon's former secretary and

bookkeeper. (Dr. Qureshi's testimony;

Mr. Willey's testimony, Plaintiff's Exhibit

#7; and Trial Transcript at 389, filed July

8, 1986).

Las The assignment of the lease was also

placed on the public record in Fairfax

County, Virginia. (Mr. Willey's testimony;

Plaintiff's Exhibit #8). In the financing

statement, Dr. Qureshi is designated to

secured party and the R. j. Gordon Corporation

is designated as debtor (Plaintiff's

Exhibit #8). Financing statements were

also filed covering NS&T's secured party

interest in the lease and the telephone

equipment. (Plaintiff's Exhibits ##9 and 10).

13. Although the lease agreement and the

consent to assignment of the lease state

that R. j. Gordon Corporation's monthly

rental payment was $1,400.00, the Equipment

Lease Agreement termed this sum as an

- 14 -

'

wo? Dd

' »

estimated rental.

Dr. Qureshi testified that the true rental

payments were $1,050.00 per month. The

United States Magistrate accepts the

$1,050.00 as the correct payment because

the $1,400.00 was an estimated rental

amount.

14. The Magistrate closely observed the

plaintiff, Dr. Mashuq A. Qureshi, during the

hearing on damages and found him to be a

credible witness. His testimony was fully

consistent throughout and he appeared most

Sincere in his factual testimony. Further,

the exhibits he offered in evidence were

fully consistent with his oral testimony and

corroborated his testimony in all intrinsic

details. Further, the testimony as to how

Richard J. Gordon had handled the checks

5/In the terms and conditions of the lease,

it-is indicated that the rental amount listed

was subject to change under certain conditions.

See Plaintiff's Exhibit #5.

- :> ain

. ; 6 /

in issue and the accounts involved. —

CONCLUSIONS OF LAW

Bs In light of the defendant Richard J.

Gordon's failure ot appear and failure to

respond to the pleadings in any manner,

default judgment can be properly entered

against him. Federal Rules of Civil

Procedure, Rule 55. See also Jackson Vv.

6/ A copy of this Report and Recommendation

shall be sent to Richard J. Gordon at the

latest address indicated in the text by

both first class mail and certified mail,

return receipt requested, deliver to

addressee only. Should he object to the

findings of fact, the conclusions of law,

or the RECOMMENDATION, he shall file

OBJECTIONS no later than 4:00 P. M.,

August 27, 1986.

Beech, 636 F.2d 831 (D.C. Cir. 1980);

Al-Kazemi v. General Acceptance &

Investment Corporation et al., Dist. Ct.,

D.C. C.A. No. 85-3465, April 22, 1986, 114

W. L. R. 1577 (August 4, 1986). From

Plaintiff's Exhibits ##17 and 17A, and

their contents, it is clear that Mr. Gordon

has had some notice of this controversy, at

least as to the telephone equipment system.

2. The United States Magistrate finds

that Dr. Qureshi is entitled to recover

$20,000 for defendant Richard J. Gordon's

for two (2) shares of the Medac II General

Partnership. Under 28 D.C. Code §3302,

Dr. Qureshi is entitled to interest from

April 1, 1981 to date at the rate of six

(6) percent per annum.

Thus, as to this matter, Dr. Qureshi is

entitled to $26,400.00 as of August 1, 1986,

representing $20,000.00 as principal, plus

interest of $1,200 per annum, or $100.00

- 17 -

Further, th nited State Magistrate

finds that Richard J. Gordon is liable for

834.14 due to his breach of the second

contract with Dr. Qureshi in failing to

make the monthly payments pursuant to the

Equipment Lease Agreement at issue in this

case. This amount reflects the one-hundred

and eighteen (118) rental payments discounted

to present value as of the date Dr. Qureshi

was entitled to declare a default and

accelerate ail of the rental payments due

under the lease.

According to Term and Condition Number 2]

of the Equipment Lease Agreement signed by

Richard J. Gordon and Dr. Qureshi,

7/ If the judgment is not formally entered

until September 1, 1986, the sum shculd be

increased by $100.00 so that the total

would be $26,500.00.

due within ten (10) days after the lessee

failed to pay any monthly rent. Tite lease

was executed on March 19, 1981. Dr. Qureshi

testified that Mr. Gordon made only two (2)

payments of $1,050.00 each for a total of

92,100.00. The United States Magistrate

concludes that this payment covered the

rent for two (2) months, March 19, 198]

through May 19, 1981. With ten (10) day

allowance for payment from May 19, 1981,

the Magistrate concludes that all rents

became due and payable on May 29, 1981. -

However, for ease of initial calculation the

Magistrate will make a minor adjustment

and will use the date of June l, 1981 as

the starting date for the computations

hereinafter made.

4, [If reasonable, rental acceleration

clauses in agreements involving equipment

leases have been inforced by several courts.

pee, e. g. walter E. Heller & Company v.

{

Video Innovations, Inc., 7 FF. 22 30 ¢€2¢4

Cir. 1984). It is necessary, however, to

discount future rentals to present value.

See, Heller Financial, Inc. v. Burry, 633

F. Supp. 706 (N.D. I11 1986). See also

Lake River Corp. v. Carborundum Co., 7/69

F.2d 1284, 1290 (7th Cir. 1985) relied on

in Heller Financial, Inc., that it would be

wrong to accelerate payment of all future

rentals without any discount to present

value, which would be more in the nature of

a penalty, not to be enforced, rather than

as liquidated damages. Cf. Davy v.

Crawford, 147 F. 2d 574 (D.C. Cir. 1945).

In the case at bar, Richard J. Gordon, as

a result of piercing the corporate veil

' has been

of "The R. j. Gordon Corporation'

determined to be liable for one hundred and

eighteen (118) monthly rental payments

until March 19, 1991, which would total

$123,900.00. But it would be inappropriate

to give Dr. Qureshi the sum of $123,900

now in September, 1986, when had the

Equipment Lease Agreement been fully

performed, he would not have received this

total sum until March 19, 1991. Thus,

this sum must be discounted to present value.

Since Dr. Qureshi had the right to declare

a default as of June 1, 1981, we have

chosen that date as the date when all the

rent became due and the date to which the

$123,900.00 sum should be discounted.

Discounting at six (6) percent, compounded,

per annum back from March 19, 1991 to June

1, 1981 gives us a present value as of

that date of $67,576.38, which is set out

in table below:

——————

March 19, Discount

1991 $123,900.00 x .06 $7,434.00

1990 116,466.00 x .06 6,987.96

1989 109,478.04 x .06 6,568.68

1988 102,909.36 x .06 6,174.56

1987 G6,734.80 x .06 5,804.08

1986 90,930.72 x .06 5,455.84

1985 85,474.88 x .06 5,128.49

1984 80,346.31 x .06 4,820.77

1983 fa,ens.a4 x .U6 ee 2 ee

1982 70,994.01 x .06 3,417.71(9months,

18 days)

$56,323.62

June l,

1981 $ 67,576.38 ($123,900 - $56,323.62

= $67,576.38).

For an excellent discussion of this approach,

see In Re United American Financial Corp.,

55 B. R. 117 (Bkrtcy. 1985) and authorities

cited therein.

Next, interest at six (6) percent per annum

must be computed back under 28 D.C. Code

§3302 from June 1, 1981 until September

1, 1986. With prejudgment interest

computed on the sum of $67,576.38, the

total comes to $91.788.93. The computation

is set foth in the following table:

Interest Balance

1981-1982 $4,054.58 $71,630.96

1982-1983 4,297.86 75,928.82

1983-1984 4,555.73 80,484.55

1984-1985 4,829.07 S3,352.62

1985-1986 5,118.82 90,432.44

(3 Months

June-Sept. )

If we use a thirty (30) day month add

back in three (3) days for May 29 to June l,

at a daily interest rate of $15.07 this would

give us an additional sum of $45.21, for a

total sum of $91,834.14.

a Although Dr. Qureshi received an award

from TELCOA in his suit against it in the

amount of $17,440.00 the United States

- 23 -

Magistrate concludes that that amount should

not be used asa set-off against the amount

Dr. Qureshi is to awarded against Richard

J. Gordon. Mr Gordon and TELCOA committed

two separate and distinct wrongs against

Dr. Qureshi. TELCOA wrongfully repossessed

the telephone equipment and precluded Dr.

Qureshi from repossessing the equipment as

he was entitled todo as a secured party

with priority. See D.C. §28:9-501- 28:9-504.

In addition, Mr. Gordon, in allowing the

repossession to occur by not protecting the

collateral, engaged in wrongful conduct

and should not be permitted to benefit from

that wrong. Cf. First Pennsylvania Banking

and Trust Co. v. Liberati, 422 A. 2d 1074

(Pa. 1980). Thus, Dr. Qureshi is entitled

to full recovery from both TELCOA and

from Richard J. Gordon and Mr. Gordon is

not entitled to the benefit of any setoff.

Eee Les mall - sé

ane oe cmnrirts —

a, 7

7

i . es : - =

oe Ee, 0 cgi

Seas es neti -_

6. Further, based on the several indicia

of fraud in Richard J. Gordon's activities

in his dealings with Dr. Qureshi, the

United States Magistrate concludes that

Dr. Qureshi is entitled to recover punitive

damages. Based on the initial partnership

transaction involving the purported

purchase of two (2) shares of Medac II

General Partnership for $20,000.00, the

telephone equipment system, and the other

circumstantial evidence of fraud, the

Magistrate concludes that the additional

sum of $25,000 as punitive damages is a

reasonable sum.

Mr. Gordon's activities were in callous and

wanton disregard of Dr. Qureshi's rights in

investing in Mr. Gordon's business

enterprises. See Al-Kazemi v. General

Acceptance & Investment Corporation, et. al

supra. See also Rainbolt v. Johnson, 669

F.2d 767, 769 (D.C. Cir. 1981),

o~ 26

OT

Tr)

si

~

ptember -

nNment

nteh< —_

ii

ng, the Magistrate

is entitled to

yject judgment to be

1986:

iartnership

$ 26,500.00

Lease Rental

Rents

sent value, plus six

ium from June l, 1981

to May 29, 1981

additional days

this

per day,

reasing the total

91,834.14

25,000.00

ind attorneys' fees

7,600.00

$150,934.14

Based on the above calculations, it is

hereby RECOMMENDED that a default judgment

be entered on or about September 1, 1986

in the total sum of $150,934.14.

August 15, 1986

Date

ARTHUR L. BURNETT, SR.

United States Magistrate

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

MASHUQ A. QURESHI, M.D.,

Plaintiff, Civil Action

7 2

RICHARD J. GORDON, et al.,

FILED

)

)

)

)

) No. 82-3673

)

)

Defendants. )

)

AUG. 26, 1986

ORDER AND JUDGMENT

This matter comes before the court

pursuant to the Memorandum Opinion and

Report and Recommendation of the United

States Magistrate regarding damages owed

plaintiff. This court ordered the Magistrate

on December 13, 1985 to conduct an

investigation regarding damages after it

was determined that service had been made

on defendant. Default was entered against

defendant on February 6, 1986. The

Magistrate then conducted a hearing and

received documentary and oral evidence.

Plaintiff testified on his own behalf, but

defendant continues not to appear personally

or by counsel.

The court has carefully considered

the excellent report and recommendation

of the Magistrate. Plaintiff has established

two transactions for which he is entitled to

damages. The Matistrate had computed the

present value of each amount on the date

when plaintiff was entitled to payment

from defendant. Interest from the date

until the present has been added, as well

as punitive damages and costs and fees.

The court concludes that all these amounts

are justified.

The court adds $100 to the recommended

amount to take account of interest accrued

during the month of August 1986 on the

delinquent repayment of $20,000 to plaintiff.

a

Therefore, upon consideration of

the Magistrate's report, and the entire

record herein, it is, by the court,

this oO in day of August, 1986.

ORDERED, ADJUDGED and DECREED that

plaintiff is entitled to a judgment of

$151,034.14 from defendant, to be paid no

later than September 1, 1986.

Thomas Flannery

UNITED STATES DISTRICT COURT

IN THE

SUPREME COURT OF THE” UNITED STATES

OCTOBER TERM 87

MASHUQ A. QURESHI, M.D.

Vv.

NATIONAL SAVINGS AND TRUST COMPANY

et al

PROOF OF SERVICE

The petitioner certifies under the penalty

of perjury that on 05/19/88,3 copiesof this sup

appendix were mailed postage prepaid first

class to:

1) PAUL BENNET BRAN ESQ;

Melrod, Redman &: Gartlan

1801 K Street, N.W., Suite 1100K

Washington, D.C.; 20006.

2) CHARLES H. ACKER ESQ.

COLLINS & ACKER

1825 K Street, N.W.

Washington, D.C. 20006

3) STANLEY LIPSHULTZ ESQ.

Lipshultz & Hone,

Montgomery Center

8630 Fenton Street

Silver Spring, Maryland 20910 _ a

Ax.

MASHUQ A. QURE

HI, M.D.

Petitioner

611 So. Carlin Springs Rd.

Arlington, Virginia 22204

(703) 379-8030