SNA_Finding of Fact and Law.pdf

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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.



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.



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.



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



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.



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



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.



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



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 ;



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:



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 ;



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 ;



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



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



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.



IT IS SO ORDERED

}

.

.

. .

. ' .

' , ' . .

C . S H A N N J m f A C )

ISTRICT

: URT.JtJDGE

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