# Appendix — Qureshi v. National Savings & Trust Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_1761%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1988 - **Citation:** 487 U.S. 1207 ## Text —) 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 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_1761%3A2. Public record. Not legal advice.