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STATE OF NEW MEXICO
COUNTY OF BERNALILLO
SECOND JUDICIAL DISTRICT COURT
SNA HOLDING AS,
Plaintiff and Counter-Defendant,
FILED IN MY OF
DISTRICT COURT CL
9 8 20153:23:4
James A
Robin W
v
No . D-202-CV-2014-016 67
SAFRAN NORTH AMERICA, LLC,
Defendant, Counter-Plaintiff, Third-Party Plaintiff, Cross-Defendant,
v
SAFRAN SOFTWARE SOLUTIONS
AS
Third-Party Defendant and Cross-Plaintiff.
FINDINGS
OF F CT
AND CONCLUSIONS
OF
LAW
1. The Court has jurisdiction over this matter.
2. All requested findings
of
fact and conclusions
of
law not contained herein are
expressly denied.
FINDINGS
OF F C
T
1. On September 5, 2014, Plaintiff SNA Holding
AS
filed a Motion for Partial
Summary Judgment on the Issues of Breach of Contract and Debt and Money Due on Loans.
2. In its Motion, SNA Holding sought damages for principal and interest owed by
Defendant SNA Software, LLC on 42 loans.
3. The first 17
of
these 42 loans were issued by Sarafan Software Solutions AS
( SSS , a Third Party Defendant and Counter Plaintiff, and are supported by
17
separate
promissory notes executed by Mr. Pisano on behalf
of
SNA Software, LLC.
4. The remaining 25 loans were issued by SNA Holding and were not supported by
any promissory notes . These
25
loans, however were requested by SNA Software and the
money was advanced.
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5.
No
other loans, other than these 42 loans, were at issue in SNA Holding's Motion.
6. On October 29 2014 SNA Software filed its Response to SNA Holding's Motion
for Partial Summary Judgment.
7. n Support
of
its Response to SNA Holding's Motion for Partial Summary
Judgment, SNA Software attached an affidavit (the Mfidavit ) of its majority owner, managing
member and chief executive officer, Nicholas Pisano.
8. SNA Holding filed its Reply in Support of its Motion for Partial Summary
Judgment on November
20 2014
.
9. Based on statements made in
Mr
Pisano' s Affidavit, this Court denied Plaintiff's
Motion for Partial Summary Judgment.
10. Continued discovery after the Partial Summary Judgment hearing SNA Holding and
SSS (the Movants ) filed Motion for Sanctions against SNA Software and Nicholas Pisano,
individually, on January 29, 2015 alleging that Mr. Pisano' s Affidavit contained false and or
perjuries statements. SNA Software filed its Response on February 13, 2015, and Movants
replied on March 3, 2015.
11. An evidentiary hearing on Movants' Motion for Sanctions was held on June
11, 2015 ( Evidentiary Hearing ) , at which time
Per
Arne Jensen testified for Movants, and
Nicholas Pisano testified on his own behalf and on behalf of SNA Software.
A Background
12. Nicholas Pisano owns
51
% of SNA Software and is also its managing member and
chief executive officer.
13. Mr. Pisano is a well-educated man, with a college degree and two masters degree
s
one obtained while he was in the military and the other obtained from Pepperdine University.
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14 At the Evidentiary Hearing, Mr. Pisano was placed under oath.
15
Mr. Pisano understood the obligations and implications of that oath at the Hearing.
Mr. Pisano also understood that the same obligations and implications applied to his sworn
Affidavit signed and filed in support of SNA Software's Response to the Motion for Partial
Summary Judgment.
B. Findings
Regarding
SNA
Software's
and Mr. Pisano's Allegations
of Forgery
16
In its Response to the Motion for Partial Summary Judgment, SNA Software
argued:
[a]side from the Original Note, the first
17
purported loans contained forged
signatures in the form of photocopies
of
a signature. These notes demonstrate that
someone crafted this evidence without the participation of the alleged signatory
Nicholas Pisano.
17 SNA Software further alleged: there also appears to be false testimony submitted in
favor of the forged documents -namely, affidavits that falsely claim under oath that Pisano
signed these documents.
18 In his Affidavit, Mr. Pisano testified that [a] majority of these notes submitted by
Plaintiffin support of the purported loans to SNA [Software] from original business partners SSS
were not signed nor authorized to be signed by myself. The photocopied signatures were not
authorized by me and I was not yet aware of these documents at the time that they were allegedly
executed.
19
Contrary to these sworn statements, Mr. Pisano had in fact electronically signed at
least 14 of the promissory notes and forwarded them in nine separate emails to Svein Blomso,
SSS's CEO at the time.
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20.
n
addition, contrary to the Affidavit and contrary to the arguments made at the
hearing on Movants' Motion for Partial Summary Judgment, at the evidentiary hearing SNA
Software's counsel stipulated that there is essentially no dispute that there are 17 promissory
notes for which Mr. Pisano and his wife authorized or executed in some format initially.
21.
n
addition to Counsel's stipulation, there was additional testimony that:
a. [a]llioans to [SSS] were done with a promissory note ; and
b. the 14 promissory notes contained in Exhibits 1-9 are listed as liabilities on
SNA Software's balance sheets.
22. This testimony was also contrary to the arguments made in opposition to the Motion
for Partial Summary Judgment. SNA Software and Mr. Pisano put forth two arguments in
defense o the perjury claim and sanctions request at issue during the Evidentiary Hearing
23. First, when confronted about these apparent contradictory statements, SNA
Software offered a new and never before made explanation for the prior allegations
o
forgery in
its Response to the Motion for Sanctions. It claimed, without any evidentiary support that
Pisano mailed original signed documents to Safran Software Solutions AS and it was his
understanding that these original signed documents would supersede and replace any
electronically signed or approved documents, and while it appears that there was in fact a
system for electronic signature . . . the original signed documents should have replaced and
superseded any electronically signed documents
.
24. At the Evidentiary Hearing, however, no evidence was presented that replacement
notes were ever sent and there were none included among the documents produced by SNA
Software. Mr. Pisano finally admitted in his live testimony that no such documents exist.
25 . Second, having stipulated that the allegedly forged promissory notes were not
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forged and were signed by Mr Pisano, at the hearing and through Mr Pisano, SNA Software
claimed that the term note for which the forgery and lack
of
authorization claim in his
Affidavit was made, refers to all 42 loans, including the 5 loans where no promissory notes
exist.
26. Notwithstanding this new argument, Mr. Pisano understood that his Affidavit was
prepared as evidentiary support for SNA Software's Response to the Motion for Partial
Summary Judgment in which SNA Software stated that the first 17 purported loans contained
forged signatures. (Emphasis added).
27. There were no signatures (forged or otherwise) in the documents supporting the
5
SNA Holding Loans. Accordingly, this new explanation is not credible.
28. When he signed his Affidavit and when he testified at the hearing on the Motion for
Sanctions, Mr Pisano understood the distinction between notes and loans, generally, and
more specifically, he understood the distinction between the promissory notes from SSS and the
other 5 loans from SNA Holding.
29. The promissory notes alleged by SNA Software and Mr. Pisano to have been
forged were those payable to SNA Software's original business partners SSS. Only the first
17
loans those supported by physical promissory notes- were from SSS; the loans without any
supporting promissory notes were from SNA Holding.
30. Additionally, Mr Pisano testified in his affidavit that the majority of the notes
had been forged, but later went on to express his concern that the remainder
of
th purporte
loans .
..
do not even have any such promissory note.
31. Mr. Pisano's testimony at the Evidentiary Hearing clearly contradicted his sworn
Affidavit.
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32. Mr. Pisano's testimony and demeanor before the Court was not credible.
C Findings regarding SNA Software's and Mr. Pisano's allegations
of
a
$910,500
cap
33. In its Response to SNA Holding's Motion for Partial Summary Judgment, SNA
Software stated that even under [the LLC Agreement] the most that was permitted to be given
under that agreement was
$910,500 such that, under Plaintiffs argument, the monies advanced
that exceeded the cap, would not be treated s loans, and in the absence of any other agreement,
would not be required to be repaid upon demand.
34. In his supporting Affidavit, Mr. Pisano testified that [t]he maximum total amount
of any loans permitted in the LLC Agreement was $910,500. Even if Plaintiff is attempting to
rely on that as a written document governing the terms, then the maximum principle sic] amount
authorized would be limited to $910,500 under that agreement.
35. Contrary to this sworn testimony, in an April 2009 e-mail
toMr.SteinarDalva.Mr.
Pisano stated that Section 7(c) of the LLC Agreement isn't a limitation but rather was converted
during our discussions from a minimum investment to a voluntary investment.
We
left
it
in the
contract under the recommendation
of
both of our attorneys as a means
of
indicating the type
of
investment that we anticipated. (Emphasis added).
36. Again, contrary to his sworn testimony, Mr. Pisano testified at the Evidentiary
Hearing that (1) loans could surpass $910,500; and (2) that he converted it to a voluntary
amount.
37. Mr. Pisano knew when he signed the LLC Agreement and later his Affidavit that
Section 7(c) of the LLC Agreement did not create a loan cap.
38. SNA Software's and Mr. Pisano's position at the Evidentiary Hearing is in direct
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contradiction to SNA Software ' s and Mr. Pisano's statements in the Response to SNA Holding ' s
Motion for Partial Summary Judgment and
Mr
Pisano' s supporting affidavit.
D. Findings regarding SNA Software's
and Mr.
Pisano's allegations of a
$37,000
payment
39. In its Response to the Motion for Partial Summary Judgment, SNA Software argued
that it had paid $37,000 toward the loan balance owed to SNA Holding.
40.
In support of this statement, SNA Software provided an American Express receipt
showing a payment
of
$37,000 paid to Croxus AS, which payment was sent on April 6 , 2012.
4l.
In his supporting Affidavit, Mr. Pisano also testified that SNA [Software] did make
a payment in 2012 when it had the projected money to do so.
42. On April
7,2012
Steinar Dalva sent an email to
Mr
Pisano.
43.
In this e-mail. Mr. Dalva requests payment on several invoices, including
$37,000
for work performed by a company named QSol.
44 .
Contrary to SNA Software's assertion in its Response to the Partial Motion for
Summary Judgment and Mr Pisano's Affidavit testimony, Mr. Pisano testified at the hearing that
the 37,000 payment made on April 16, 2012 was for the purpose
of
repaying Croxus (and
namely, Steinar Dalva) for advances made to pay the $37,000 QSol invoice.
45. The $37,000 invoice to QSol is not among the loans for which SNA Holding has
sued SNA Software.
46. Mr. Pisano and SNA Software knew that SNA Software had not been sued for the
$37,000
QSol invoice.
47.
Mr. Pisano and SNA Software therefore knew that SNA Software has neve r made
any payment toward the balance owed on the
42
loans that are the subject of SNA Holding' s
lawsuit.
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48. To the extent any findings of fact are conclusions oflaw, they are incorporated
therein by reference.
CONCLUSIONS
OF L W
1. Perjury is the making of a false statement, under oath or affirmation that the
witness knows to be untrue, which is material to the matter involved.
See State v. Gal/egos
1982-NMCA-062,
r2
, 644.P2d 545 (overruled on other grounds).
2. The fabrication of testimony is the highest level of misconduct and undermines
the fair and truthful presentation of the evidence.
3.
The court' s inherent power to sanction litigation misconduct authorizes the court
to fashion sanctions as severe as dismissing a party's case with prejudice or entering judgment
against a party and also includes imposing attorney's fees for the entire cost of litigation .
Anchondo v. nderson Crenshaw Assoc. LL
C
No. CV 08-202 RBIWPL, 2011 WL 4549279,
at *5 (D.N.M. Sept. 29, 2011).
4.
Sanctions that strike a party ' s pleadings, and therefore all claims and defenses,
may only be imposed as a sanction upon a showing of willfulness, bad faith or fault of the
disobedient party.
State
ex.
rei. King v. Advantageous Comm Servs.
20 14-NMCA-076, ,-r14.
5.
As a fraud on the court, perjury may warrant the sanction
of
dismissa1.
Montano
v.3City
of
Chicago 535 F.3d 558, 564 (7th Cir. 2008). Indeed, deliberate falsehoods may well
affect the dearest concerns of the parties . . . and may put the factfinder and parties to the
disadvantage, hindrance, and delay
of
ultimately extracting the truth by cross examination, by
extraneous investigation or other collateral means . PeIjury should be severely sanc
ti
oned in
appropriate cases.
BF
Freight Sys. Inc. v. NL.R.B. 510 U.S . 317, 323 (1994) .
6. Mr. Pisano understood the obligations and implications inherent in sweari ng to
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tell the truth, both in his affidavit and in his testimony at the hearing on the Motion for Sanctions.
7 Mr. Pisano, as a non-party providing false testimony to the Court, may be
sanctioned individually because (1) as the majority member
of
SNA Software, he had a
substantial interest in the outcome of the litigation and (2) he substantially participated in the
summary judgment and sanctions proceedings in which he interfered . n hondo 2011 W
4549279,
at
*4.
8. Mr. Pisano provided false testimony to the Court by way
of
his Sworn Mfidavi
t
9. Mr . Pisano knew his statements were untrue.
10
Mr. Pisano's Mfidavit was material to the matter before the Court. Specifically,
the Court relied on his Affidavit in denying the Plaintiffs Partial Motion for Summary
Judgment.
11
Neither SNA Holding nor SSS forged the 17 promissory notes supporting the first
17 loans from SSS.
12 At the time SNA Software filed its Response to SNA Holding' s Motion for Partial
Summary Judgment and Mr. Pisano attested to his supporting Mfidavit, SNA Software and Mr
Pisano knew that Movants did not forge the promissory notes.
13 The Court accordingly finds by clear and convincing evidence that SNA Software
unfairly hampered SNA Holding' s presentation of its claims or defenses and interfered with the
judicial system' s ability to impartially adjudicate this matter by kno
wi
ngly and intentionally
misrepresenting material facts and thereby committed a fraud on this Court when it stated in its
Response to SNA Holding' s Motion for Partial Summary Judgment:
a. Plainti
ff
has only attached 21 promissory notes, many of which appear to be
forged with the photocopied signature
of
Nicholas Pisano ;
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b Aside from the Original Note, the first 17 purported loans contain forged
signatures in the form
o
photocopies
o
a signature. These notes demonstrate
that someone crafted this evidence without the participation
o
the alleged
signatory Nicholas Pisano ; and
c
Further, here there also appears to be false testimony submitted in favor
o
the forged documents. Plaintiff has attached affidavits that falsely claim
under oath that Pisano signed these documents .
14 Additionally, SNA Software and Mr. Pisano in Mr. Pisano's affidavit supporting
SNA Software's Response to SNA Holding's Motion for Partial Summary Judgment lied to the
court, and thereby committed perjury, when he stated:
a A majority o the notes submitted by Plaintiff in support o the purported
loans to SNA [Software] from original business partner SSS were not
signed nor authorized to be signed by myself. The photocopied signatures
were not authorized by me and I was not yet aware o these documents at
the time that they were allegedly executed ; and
b. The Maximum total amount o any loans permitted in the LLC
Agreement was $910,500. Even i Plaintiff is attempting to rely on that as
a written document governing the terms, then the maximum principle [si
c]
amount authorized would be limited to $910,500 under that agreement.
15
The Court finds SNA Software's and Mr. Pisano ' s arguments and testimony that
the electronically-signed promissory notes were to be superseded by original notes to be not only
incredible and refuted by the overwhelming weight o the evidence, but also contrary to their
previous arguments and attestations.
16 Accordingly, the Court finds by clear and convincing evidence that SNA Software
again attempted to unfairly hamper SNA Holding's presentation
o
its claims and to interfere
with this Court's ability to impartially adjudicate this matter, and therefore did commit a fraud on
this Court it stated:
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a Pisano mailed original signed documents to Safran Software Solutions
AS and it was his understanding that these original signed documents
would supersede and replace any electronically signed or approved
documents ;
b Pisano truthfully stated that he did not believe he had ever created such
an
electronic signature ; and
c Therefore, while it appears that there was in fact a system for electronic
signature, however, the original signed documents should have replaced
and superseded any electronically signed documents
17 . SNA Software's and Mr Pisano' s stipulation at the beginning
of
the Evidentiary
Hearing that
Me
Pisano had signed or authorized
an
electronic signature on the
17
promissory
notes was a
p r s
admission that they had misled the Court regarding the alleged forge ry
of
the
promissory notes.
18
The Court finds Respondents' argument and testimony that the allegations of
forgery applied to the 25 SNA Holding Loans, and not to the 17 SSS promissory notes, to be
incredible and contrary to their prior arguments and attestations.
19 Me Pisano's, and therefore SNA Software's, intent in his Mfidavit regarding the
forged notes was limited only to the 17 promissory notes from SSS-and not the remaining 25
loans from SNA Holding.
20. Accordingly,
Me
Pisano and SNA Software by and through Mr. Pisano' s
testimony, committed perjury and fraud on the court at the Evidentiary Hearing when, contrary
to the overwhelming evidence as well as their own prior statements, Mr. Pisano testified:
a
My
affidavit said there were three photocopied signatures I did not
authorize.
In
fact,
Me
Pisano had alleged that the majority
of
the
promissory notes had not been authorized by him ;
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b
The notes he claimed to have been forged were, in fact, those in support
of
the 25 SNA Holding Loans, rather than the
17
SSS Loans, because the
total
41
(or 42) loans constitute a note. They are a promissory note. All
loans and
all
money transferred to SNA Software constitutes a note ; and
c But what I meant by this is that the majority of the purported notes are
not covered by promissory notes. And just by looking at their own case,
Nos .
23
through
41
that they have - that they have presented, don't have
promissory notes.
21 t
was SNA Software's and Mr. Pisano's intent to assert that the limit
of
their loan
obligation to SNA Holding and therefore SNA Holding's
recovery is
only $910,500.
22. However, SNA Software and Mr. Pisano knew as at the time the LLC Agreement
was signed that the $910,500 referenced in Section7(c)
of
the LLC Agreement was not a cap,
but rather merely indicated the voluntary investment anticipated by the parties.
23. The Court finds SNA Software's and
Mr
Pisano's argument that it is only the
LLC Agreement, and not Respondents, that state there is a $910,500 cap against the great weight
and preponderance
of
the evidence.
24. Accordingly, the Court finds by clear and convincing evidence that SNA
Software, in an effort to unfairly hamper SNA Holding's presentation
of
its claims or defenses
and to interfere with the judicial system's ability to impartially adjudicate this matter, did
knowingly and intentionally misrepresent material facts and thereby committed a fraud on this
Court when
it
stated in its Response to SNA Holding ' s Motion for Partial Summary Judgment:
a
SNA Holding cannot rely on the LLC Agreement [for terms governing
42 loans] where these monies would have exceeded any authorization
under that agreement, which capped any loans to SNA [Software] at
$910,500 ;
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b But even under [the LLC Agreement] the most that was permitted to be
given under that agreement was $910,500. Therefore, under
Plaintiffs
argument, the monies that exceeded this would not be treated
as
loans, and
in the absence
of
any other agreement, would not be required to be repaid
upon demand.
25. Mr. Pisano and SNA Software, by and through Mr. Pisano's sworn affidavit,
further committed perjury when he stated:
The maximum total amount
of
any loans permitted in
the LLC Agreement was $910,500. Even if Plaintiff is attempting to rely
on
that
as
a written
document governing the terms, then the maximum principle [sic] amount authorized would be
limited to $910,500 under that agreement.
26. Finally, Mr. Pisano, and therefore SNA Software, again lied at the hearing
on
the
Motion for Sanctions when he admitted that, in fact, no cap applies.
27. The Court, therefore, finds that SNA Software and Mr. Pisano committed perjury
and fraud on the court.
28. The $37,000 payment SNA Software claimed was made to partially satisfy the
loans at issue on SNA Holding's Motion for Partial Summary Judgment was,
in
fact, made to
satisfy
an
invoice from Croxus for work performed by QSol.
29. SNA Software and r. Pisano knew that the $37,000 payment was in satisfaction
of
the QSol invoice at the time they alleged that they had paid money toward the 42 loans at
issue. SNA Software and Mr. Pisano also knew that the QSol invoice was not among the 42
loans at issue in SNA Holding's lawsuit.
30. The Court, therefore, finds by clear and convincing evidence that SNA Software,
in an effort to unfairly hamper SNA Holding's presentation
of
its claims or defenses and to
interfere with the judicial system's ability to impartially adjudicate this matter, did knowingly
and intentionally misrepresent material facts and thereby committed a fraud on this Court, when
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it stated that SNA [Software] did make payments toward a loan in 2012 and represented the
$37,000 payment to Croxus as a payment toward its debt to SNA Holding.
31. Additionally, Mr. Pisano and SNA Software lied, and therefore perjured themselves ,
when Mr Pisano stated in his sworn affidavit that SNA [Software] did make a payment in 2012
when it had the projected money to do so, also misrepresenting that the $37,000 payment to
Croxus had been made to satisfy part
of
its debt to SNA Holding.
32. SNA Software 's and Mr. Pisano's perjury was not the result
of
inadvertence or lapse
memory. Rather, the evidence offered by Plaintiff as well as Respondents' own
inconsistencies evince willfulness, bad faith, and fault on the part
of
both SNA Software and Mr.
Pisano.
See State ex
reI.
Kingv. Advantageous Comm. Servs.
LLC, 20 14-NMCA-076,
14
33. The Court finds by clear and convincing evidence that SNA Software's and Mr.
Pisano's
multiple and continued misrepresentations in SNA Software' s various motions, Mr.
Pisano's
Mfidavit, and Mr. Pisano's testimony at the Evidentiary Hearing demonstrate a willful
intent to obfuscate the truth.
34. Respondents lied to the Court in order to create a fact question so as to defeat SNA
Holding's Motion for Partial Summary Judgment, and SNA Software' s and Mr. Pisano ' s perjury
did, in fact, have this effect when the Motion for Partial Summary Judgment was denied at the
hearing on February 2, 2015 based on Mr. Pisano's Mfidavit. SNA Holding has therefore been
prejudiced and has been required to expend substantial sums to bring this motion to prevail when
it may have prevailed but for Respondents' false statements.
35. The imposition
of
the harshest
of
sanctions when a party has perjured itselfis
consistent with well-established law reaching the highest court in the nation . Se e ABH Freight
Sys . Inc. v NL R .B. 510 U.S. 317, 329 (1994) (J. Scalia, concurring) ( The principle that a
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perjurer should not be rewarded with a judgment even a judgment otherwise
deserved where
there is discretion to deny it, has a long and sensible tradition in the common law. ); Oliver v
Gramley 200 F.3d 465, 465 (7th Cir. 1999) ( But
we
do not think that such consideration
[of
lesser sanctions] is necessary in a case in which the plaintiffs fraud is criminal in character and
would
if
undetected destroy a legitimate and dispositive defense. Such behavior is so egregious ,
inexcusable, and destructive that no lesser sanction than dismissal [or default judgment] could be
adequate. ).
36. The Court finds that, in addition to striking pleadings and a multitude of other
sanctions, it is within the Court's power to issue monetary sanctions against in the form
of
attorneys' fees. See Anchondo 2011
WL
454929, at 5 ( The court's inherent power to sanction
litigation misconduct authorizes the court to fashion sanctions as severe as .. . entering judgment
against a party and also includes imposing attorney's fees for the entire cost
of
litigation. ).
37. Pursuant to the Court' s inherent authority to control the proceedings before the Court
and based on its findings
of
fact herein the Court finds that sanctions in the following form are
all appropriate:
a. The Court hereby strikes SNA Software's Response to SNA Holding's
Motion for Partial Summary Judgment.
b. SNA Holding's Motion for Partial Summary Judgment is granted.
c.
SNA Software shall pay all of SNA Holding's attorneys' fees related to
the Motion for Partial Summary and all of Respondent's attorneys' fees
related to the Motion for Sanctions.
d.
Mr. Pisano is precluded from testifying in any further proceedings before
the Court, including the trial on the merits of all outstanding claims and
disputes between the parties.
38. To the extent any conclusions
of
law are findings
of
fact, they are incorporated
herein by reference.
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IT IS SO ORDERED
}
.
.
. .
. ' .
' , ' . .
C . S H A N N J m f A C )
ISTRICT
: URT.JtJDGE