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  • Bernard Burkholder, et al  vs.  Thomas A MacDonald, et alOTHER (CIVIL) document preview
  • Bernard Burkholder, et al  vs.  Thomas A MacDonald, et alOTHER (CIVIL) document preview
  • Bernard Burkholder, et al  vs.  Thomas A MacDonald, et alOTHER (CIVIL) document preview
  • Bernard Burkholder, et al  vs.  Thomas A MacDonald, et alOTHER (CIVIL) document preview
  • Bernard Burkholder, et al  vs.  Thomas A MacDonald, et alOTHER (CIVIL) document preview
  • Bernard Burkholder, et al  vs.  Thomas A MacDonald, et alOTHER (CIVIL) document preview
  • Bernard Burkholder, et al  vs.  Thomas A MacDonald, et alOTHER (CIVIL) document preview
  • Bernard Burkholder, et al  vs.  Thomas A MacDonald, et alOTHER (CIVIL) document preview
						
                                

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FILED DALLAS COUNTY 9/23/2019 4:16 PM FELICIA PITRE DISTRICT CLERK Kevin Molden CAUSE NO. DC-19-11136 BERNARD BURKHOLDER AND IN THE DISTRICT COURT BLAKE BURKHOLDER, INDIVIDUALLY AND IN THEIR CAPACITY AS A LIMITED PARTNERS OF WESTERN DEVELOPMENT GROUP, LP, AND AS MANAGERS OF WESTERN DEVELOPMENT GROUP, GP, LLC Plaintiffs, V. mwmmwmmwmmwwmwmmwwmwmmw 192ml JUDICIAL DISTRICT THOMAS A. MACDONALD AND KAREN MACDONALD Defendants. AND WESTERN DEVELOPMENT GROUP, LP AND WESTERN DEVELOPMENT GROUP GP, LLC Nominal Defendants. DALLAS COUNTY, TEXAS DEFENDANTS THOMAS A. MACDONALD AND KAREN MCDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER AND SPECIAL EXCEPTIONS SUBJECT THERETO Come now, Defendants Thomas A. Macdonald and Karen McDonald (“Defendants”) Who file this their Special Appearance pursuant t0 Rule 120a of the TEXAS RULES OF CIVIL PROCEDURE for the sole purpose of obj ecting t0 the jurisdiction of this Court over them, as they are not subject to jurisdiction in Texas, and respectfully request that the Court dismiss them a DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 1 parties to this suit.1 DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE I. INTRODUCTION 1.01 This Court does not have jurisdiction over Defendants. Defendants attach their Declarations as Exhibit “A” and Exhibit “B” in support of this Special Appearance. Defendants are individual residing in the state of Oregon, have not purposefully availed themselves 0f the privileges and benefits 0f conducting business in Texas, and lack sufficient minimum contacts t0 subj ect them t0 jurisdiction in the state 0f Texas. Defendants d0 not maintain a principle place 0f business in Texas, have not designated a registered agent for service of process in Texas, do not have a mailing or telephone listing in Texas, do not advertise 0r solicit services in Texas, own n0 personal 0r real property in Texas, and do not maintain a residence in Texas. Simply put, Defendants do not do business in Texas and lack sufficient minimum contacts to subject them to personal jurisdiction here. Accordingly, this Court lacks personal jurisdiction over Defendants in Texas and any attempt t0 exercise jurisdiction over Defendants in Texas would offend traditional notions of fair play and substantial justice, and amount to a Violation of constitutional due process. 1.02 Plaintiffs fail t0 even allege basic jurisdictional facts in support 0f their claim against Defendants. Plaintiffs only alleged basis for jurisdiction is Defendants are partners 0f a 1 Defendants provide notice that this Special Appearance Will be amended in accordance With the provisions 0f Texas Rule 0f Civil Procedure 120a t0 verify the facts negating jurisdiction. Accord Dawson-Austin v. Austin, 968 S.W.2d 3 19, 322 (Tex. 1998) (holding an unverified special appearance preserves jurisdictional challenge and does not waive jurisdictional challenge; “Dawson—Austin did not enter a general appearance by filing an unsworn special appearance or by amending it it was overruled”). only after DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 2 Texas Partnership and/or members of a Texas Limited Liability Company are insufficient jurisdictional facts that would subj ect Defendants to jurisdiction in Texas. 1.03 This Court should grant Defendants Special Appearance and dismiss them from this suit for two reasons: (1) mere membership in a Partnership or Limited Liability Company organized under Texas law is insufficient t0 confer jurisdiction (Texas, as well as states across the country, holds this to be insufficient); and (2) Plaintiffhas not plausibly alleged jurisdictional facts related specifically to Defendants in their Petition, much less multiple facts that would be sufficient t0 bring Defendants within the provisions of the Texas long-aim statute. It is Plaintiffs’ burden t0 allege facts sufficient to maintain jurisdiction, and they have failed to d0 so. 1.04 Finally, even if Plaintiffs had alleged facts sufficient to create a prima facia case 0f Defendants "doing business" in Texas, this allegation would be negated by the declarations 0f Defendants. For these reasons the exercise of jurisdiction over Defendants is improper and Defendants should be dismissed from this suit. II. ARGUMENT AND AUTHORITY A. Special Appearance Standard. 2.01 In order for a Texas court t0 exercise jurisdiction over a nonresident, two conditions must be met? The exercise ofjurisdiction must: (1) be authorized by the Texas long-arm statute; and (2) must comport With the due process guaranteed by the state and federal constitutions.3 Because the Texas long-arm statute “permits Texas courts t0 exercise jurisdiction t0 the fullest extent permissible under the federal constitutional requirements of due process,” a Texas court 2 Schlobohm v. Schapiro, 784 S.W.2d 355, 356 (TeX. 1990). 3 Id DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 3 may only exercise jurisdiction over a nonresident defendant if that defendant has “purposefully established the requisite minimum contacts With Texas, and the exercise ofjurisdiction comports with traditional notions of fair play and substantial justice.”4 Sufficient contacts exist When the nonresident defendant has “purposefully availed” himself 0f the “privileges and benefits 0f conducting business in the foreign jurisdiction.”5 2.02. Personal jurisdiction exists When the nonresident defendant’s minimum contacts “give rise to either specific 0r general jurisdiction.”6 While specific jurisdiction is established When the nonresident defendant’s alleged liability arises from or is related t0 the activities he conducted in the forum state, Texas has general jurisdiction over a defendant When his contacts with Texas are “continuous and systematic,” regardless 0f whether the cause 0f action arises from 0r is related to the defendants’ activities in Texas.7 2.03. Initially, the plaintiff carries the burden 0f pleading allegations that are sufficient to invoke personal jurisdiction over the nonresident defendant under the Texas long-arm statute.8 Then, the nonresident defendant has the burden of negating all grounds for personal jurisdiction that the plaintiff alleged in its petition.9 Due to the fact that the plaintiff “defines the scope and nature of the lawsuit, the defendant's corresponding burden to negate jurisdiction is tied to the allegations in the plaintiffs pleading.”10 4 Id. 5 BCM Software Belgium, N. V. v. Marchand, 83 S.W.3d 789, 795 (TeX. 2002). 6 Id. 7 Id. 8 Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007). 9 Id. 1° Kelly v. Gen. Interior C0nst., Ina, 301 S.W.3d 653, 658 (Tex. 2010). DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 4 B. Plaintiffs fail to carry their initial burden 0f pleading allegations sufficient t0 invoke personal jurisdiction over Defendants in the State 0f Texas. a. Plaintiffs fail to allege facts sufficient for general iurisdiction. 2.04. Plaintiffs fail to allege a colorable basis for suit in Texas against Defendants much less facts sufficient t0 confer general jurisdiction. Plaintiffs have the initial burden of pleading sufficient allegations to bring a nonresident defendant within the provisions of the Texas long-arm statute, and therefore it must plead enough facts t0 affirmatively demonstrate that the trial court 11 has personal jurisdiction over the defendant. 2.05 From the face of the pleading, it must be evident to the court that a defendant has 12 purposefully availed himself of the privileges and protections of conducting business in Texas. 2.06. Here, Plaintiffs judicially admit in their Petition for Judicial Expulsion that: 13 0 Defendants do not maintain a place of regular business in Texas; 14 0 Defendants have no designated agent in Texas; 0 Bernard Burkholder is a resident of Mississippi;15 0 Blake Burkholder is a resident of Mississippi;16 17 0 Thomas A. MacDonald is a resident of Oregon; 11 BCM Software, 83 S.W.3d at 795; Texas Dept. ofCriminal Justice v. Miller, 51 S.W.3d 583, 587 (TeX. 2001). 12 Kelly, 301 S.W.3d at 660-61; BMC Software, 83 S.W.3d at 795 (“Although not determinative, foreseeability is an important consideration in deciding Whether the nonresident defendant has purposefully established ‘minimum contacts’ with the forum state. However, a defendant should not be subj ect to a foreign court's jurisdiction based upon ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts.”) (internal citations omitted). 13 Plaintiff’ Petition for Judicial Expulsion at 1.03 14 Id. at 1.04 15 Id. at 1.02 16 Id. at 1.03 17 Id. at 1.04 DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 5 18 0 Karen MacDonald is a resident 0f Oregon. 2.07 As gleaned from Plaintiff’s Petition for Judicial Expulsion, the basis for personal jurisdiction over the Defendants appears t0 be that: 19 Western Development Group, LP is a Texas Limited Partnership. 20 Western Development Group GP, LLC is a Texas Limited Liability Company. Defendants are engaged and have engaged in business in Texas. Defendants have executed agreements, contracts, deeds, loans and other documents including, Without limitation, (i) the Partnership Agreement 0n behalf 0f the Texas Partnership (ii) the Regulations on behalf of the Texas General Partner, (iii) a Partnership Pledge Agreement on behalf of the Texas Partnership, (iv) loan agreements on behalf of the Texas Partnership and (V) deeds 0n behalf of the Texas Partnership; Defendants have organized and invested in a Texas limited partnership as a limited partner and currently each own a 24. 7 5% limited partnership interest in the Partnership (collectively 49.5%); Defendants have organized and invested in a Texas limited liability company as members and currently each own a 25% membership interest in the General Partner 18 Id. at 1.05 19 Id. 1.05 2° Id. 1.06 DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 6 0 The claims and controversies involved in this cause of action arise out of 0r relate to the Defendants contacts with the state 0f Texas with regard to the Partnership and General Partnership; and o Both the Partnership Agreement and the General Partner Regulations provide that such entities shall be governed by the laws 0f the state 0f Texas; and (f) both the Partnership Agreement, the General Partner Regulations and certificates filed with the Texas Secretary of State provide that their Registered Agent, Principal Place of Business and/or Principal Office are located in Dallas County, Texas.” 2.08 Plaintiffs attempt to exercise over the Defendants by Virtue of Western Development Group, LP and Western Development Group GP, LLC being registered in Texas is misplaced. In Texas, partnerships and limited liability companies considered t0 be citizen of the states in which one or more of its members are citizens.” 2.09 As the only partners and or members of either 0f these entities are citizens 0f Mississippi and Oregon, Plaintiff have not pleaded sufficient facts t0 demonstrate that there is personal jurisdiction over the Defendants. 2. 1 0 Similarly, Plaintiffs assertion that there is personal jurisdiction over the Defendants, by Virtue of their participation 0f membership in the foregoing entities is inaccurate and not consistent with Texas law. Courts both in Texas and across the nation hold that mere membership in a business entity is insufficient to confer general jurisdiction.” 21 Id. at 1.03 22 Harvey v. Gray WolfDrl'lling C0., 542 F.3d. 1077, 1080-81 (5th Cir. 2008); See also Carden v. Arkoma Assocs., 494 U.S. 185, 195—96, 110 S.Ct. 1015, 1021—22, 108 L.Ed.2d 157 (1990) 23 See Breckenridge Enterprises, Inc. v. Avio Alternatives, LLC, 3:08-CV-1782-M, 2009 WL 1469808 (ND. TeX. May DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 7 2.1 1. Rather, to obtain jurisdiction over a member 0f a business entity, a separate 24 minimum contacts test must be performed to determine if Defendants are “at home” in Texas. Plaintiffs do not and cannot allege such facts, and thus there is no general jurisdiction over Defendants in Texas. C. Plaintiff fails to allege facts sufficient t0 confer specific jurisdiction. 2.12. As stated above, there are no jurisdictional facts plead that would confer specific jurisdiction. In determining whether specific jurisdiction exists, the Court must conduct the minimum contacts analysis separately for each cause of action.” For specific jurisdiction to exist, the plaintiffs claim must arise out 0f 0r be related to those contacts.26 2.13. Here, the only contact with Texas Defendants have even tenuously related to this action is their alleged membership interest in Western Development Group, LP is a Texas Limited Partnership and/or Western Development Group GP, LLC is a Texas Limited Liability Company, which is insufficient to conferjurisdiction. Plaintiffs have not and cannot allege more. Defendants have committed no tort in Texas and did not conduct business in Texas related t0 this matter 2.14. This Court need only look at the face 0f the petition t0 unequivocally determine 27, 2009)(h01ding that members’ contact with Texas due t0 such member’s activities performed 0n behalf 0f an LLC were Within the scope 0f the “fiduciary shield doctrine” and, therefore, the court did not have personal jurisdiction); see also Mountain Funding, LLC v. Blackwater Crossing, LLC, N0. 3:05CV5 13-MU, 2006 WL 1582403, at *2 (W.D.N.C. June 5, 2006)(h01ding that since LLCS protect members from liability for company obligations, personal jurisdiction over an LLC does not immediately extend personal jurisdiction t0 its members); Clemend v. Lipson, 999 So. 2d 1072 (Fla. Dist. Ct. App. 2008)(holding that personal jurisdiction could not be extended over LLC managers when such managers acted only in the capacity of managers and there were no facts to support that the managers had engaged in independent torts.) 24 Breckenridge Enterprises, Ina, 2009 WL 1469808, at *4-5. 25 Id. at *2. 26 Id. DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 8 that there are no specifically alleged basis for personal jurisdiction over the Defendants, and that the Defendants should be dismissed as a party t0 this lawsuit. 2.15. For these reasons, Texas has neither general nor specific jurisdiction over the Defendants, Defendants do not have minimum contacts with Texas sufficient to establish jurisdiction over them in the State 0f Texas, and therefore Defendants respectfully submit that this Court should grant this Special Appearance and dismiss Defendants from this lawsuit. III. RESERVATION OF RIGHTS 3.01. This Special Appearance t0 contest the court's assertion of personal jurisdiction over Defendants is filed prior to any other plea, pleading, or motion Defendants will file in this proceeding — including, but not limited to, their Original Answer detailed below. Any such pleadings filed hereafter, including the below sections containing Defendants Original Answer, are strictly conditioned upon, Without waiver of, and subject to the above Special Appearance, until the issue of personal jurisdiction over Defendants is resolved. IV. GENERAL DENIAL 4.01. This General Denial is being filed subject t0, and Without waiver 0f, Defendant’s Special Appearance, above. Pursuant to Rule 92 ofthe TEXAS RULES OF CIVIL PROCEDURE, Defendants generally deny each and every, all and singular, allegations contained in the live petition filed in this lawsuit by Plaintiffs. Plaintiffs in the above-styled and numbered cause, along with any other pleading seeking affirmative relief subsequently filed by Plaintiffs in this lawsuit, Whether amended, supplemental, and/or otherwise, and Defendants hereby demand strict proof thereof by a preponderance 0f the credible evidence. DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 9 V. AFFIRMATIVE AND OTHER DEFENSES 5.01. Subject to, and Without waiver 0f, Defendants’ Special Appearance, Defendants assert the following affirmative defenses: 0 Plaintiffs have failed t0 state a claim against Defendants on Which relief can be granted. o Plaintiffs’ claims are barred, in whole 0r part, under the economic loss doctrine. o Plaintiffs’ claims are barred by judicial estoppel. o Plaintiffs’ claims are barred, in Whole or part, under the Fiduciary Shield Doctrine. 0 Defendants assert the affirmative defense of equitable estoppel. 0 Defendants assert that the Court does not have subj ect matter jurisdiction. 0 Defendants reserve the right t0 assert other affirmative and other defenses as discovery warrants. VI. PRAYER WHEREFORE, PREMISES CONSIDERED, Defendants pray that this Court set Defendants’ Special Appearance for hearing as early as practical, sustain Defendants’ Special Appearance, and that this entire proceeding be dismissed for want ofjurisdiction over Defendants. Subj ect to and Without waiving Defendants Special Appearance, Defendants pray that Plaintiffs take nothing from this action and grant Defendants any and all relief they may show themselves entitled in law 0r equity. DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 10 Respectfully submitted, COX L.L.P. /s/ Jas Braich CLINTON V. COX StateBar No. 24040738 ccox@coxpllc.com JAS BRAICH StateBar No. 24033 1 98 jbraich@coxpllc.com 7859 Walnut Hill Lane, Suite 3 10 Dallas, Texas 75230 214-444-7050 469-340-1884 [Fax] ATTORNEYS FOR DEFENDANT CERTIFICATE OF SERVICE Ihereby certify that a true and correct copy of the foregoing document has been served in accordance With the TEXAS RULES OF CIVIL PROCEDURE 0n the 23rd day of September, 2019 t0 all /s/ Jas Braich JAS BRAICH DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 11 EXHIBIT A CAUSE NO. DC-19-11136 BERNARD BURKHOLDER AND IN THE DISTRICT COURT BLAKE BURKHOLDER, INDIVIDUALLY AND IN THEIR CAPACITY AS A LIMITED PARTNERS OF WESTERN DEVELOPMENT GROUP, LP, AND AS MANAGERS OF WESTERN DEVELOPMENT GROUP, GP, LLC Plaintiffs, V. mwmmwmmwmmwwmwmmwwmwmmw 192ml JUDICIAL DISTRICT THOMAS A. MACDONALD AND KAREN MACDONALD Defendants. AND WESTERN DEVELOPMENT GROUP, LP AND WESTERN DEVELOPMENT GROUP GP, LLC Nominal Defendants. DALLAS COUNTY, TEXAS DECLARATION OF THOMAS A. MACDONALD State 0f Oregon WWW County 0f Lake County 1. My name is Thomas A. Macdonald. My address is P.O. BOX 87, Summer Lake, Oregon. I am over 18 years of age and am fully competent to make this Declaration and testify. I am of sound mind and have never been convicted of any felony or crime of moral turpitude. The facts stated in this Declaration are Within my personal knowledge and are true and correct: DECLARATION OF THOMAS A. MACDONALD 2. I have read Defendant Special Appearance and Original Answer Subject Thereto (the “Special Appearance”). The facts set forth in the Special Appearance are based 0n my personal knowledge and are true and correct. 3. I am an individual residing in the state of Oregon. 4. I have never resided in Texas. 5. I conduct n0 business in Texas and have n0 clients in Texas. 6. I am not required to and do not maintain any agent for service of process in the State 0f Texas. 7. I d0 not own or lease any interest in any real estate, warehouse, 0r other real property in the State of Texas. 8. Ihave n0 agents or employees in the State 0f Texas. 9. Ihave not entered into any contracts in the State 0f Texas that are t0 be performed, in whole or in part, in the State of Texas. 10. I d0 not have a mailing addresses or telephone listings in the State 0f Texas. 11. I d0 not conduct any advertising, solicitation, service or sales activities in the State of Texas. 12. I do not maintain an office or principle place 0f business in Texas. 13. I have not previously, at any point in time, subj ected myself to the personal jurisdiction 0f the courts of the State of Texas. Ihave never filed a lawsuit in Texas. Ihave never sought the enforcement 0f a judgment in Texas. 14. By making this Declaration, I am, in no way, attempting to subject myself to the personal jurisdiction of the Court or any court in Texas. This Declaration is subject t0 and DECLARATION OF THOMAS A. MACDONALD WwaivinganySpecialAppwm Ideclueundupemltyofpeljmyufiefingohgis madm THOMAS A. MACDONALD DMNHON OF moms A. W EXHIBIT B CAUSE NO. DC-19-11136 BERNARD BURKHOLDER AND IN THE DISTRICT COURT BLAKE BURKHOLDER, INDIVIDUALLY AND IN THEIR CAPACITY AS A LIMITED PARTNERS OF WESTERN DEVELOPMENT GROUP, LP, AND AS MANAGERS OF WESTERN DEVELOPMENT GROUP, GP, LLC Plaintiffs, V. mwmmwmmwmmwwmwmmwwmwmmw 192ml JUDICIAL DISTRICT THOMAS A. MACDONALD AND KAREN MACDONALD Defendants. AND WESTERN DEVELOPMENT GROUP, LP AND WESTERN DEVELOPMENT GROUP GP, LLC Nominal Defendants. DALLAS COUNTY, TEXAS DECLARATION OF KAREN MACDONALD State 0f Oregon WWW County 0f Lake County 1. My name is Karen Macdonald. My address is P.O. Box 87, Summer Lake, Oregon. I am over 18 years 0f age and am fully competent to make this Declaration and testify. I am of sound mind and have never been convicted 0f any felony 0r crime of moral turpitude. The facts stated in this Declaration are Within my personal knowledge and are true and correct: DECLARATION OF KAREN MACDONALD 2. I have read Defendant Special Appearance and Original Answer Subject Thereto (the “Special Appearance”). The facts set forth in the Special Appearance are based 0n my personal knowledge and are true and correct. 3. I am an individual residing in the state of Oregon. 4. I have never resided in Texas. 5. I conduct n0 business in Texas and have n0 clients in Texas. 6. I am not required to and do not maintain any agent for service of process in the State 0f Texas. 7. I d0 not own or lease any interest in any real estate, warehouse, or other real property in the State of Texas. 8. Ihave n0 agents or employees in the State 0f Texas. 9. Ihave not entered into any contracts in the State 0f Texas that are t0 be performed, in whole or in part, in the State of Texas. 10. I d0 not have a mailing addresses or telephone listings in the State 0f Texas. 11. I d0 not conduct any advertising, solicitation, service or sales activities in the State of Texas. 12. I do not maintain an office or principle place 0f business in Texas. 13. I have not previously, at any point in time, subj ected myself to the personal jurisdiction 0f the courts of the State of Texas. Ihave never filed a lawsuit in Texas. Ihave never sought the enforcement 0f a judgment in Texas. 14. By making this Declaration, I am, in no way, attempting to subject myself to the personal jurisdiction of the Court or any court in Texas. This Declaration is subject t0 and DECLARATION OF KAREN MACDONALD DECLARAM OF KAREN MACDONALD