Unpublished Disposition, 928 F.2d 1137 (9th Cir. 1991)

MEMORANDUM^** 

McKee & Associates Investment Real Estate, Inc. and Robert McKee appeal the district court's judgment, following a bench trial, in favor of Sharon Kelly, the personal representative of Wilda Ford.

The district court found McKee jointly and severally liable, pursuant to Or.Rev.Stat. Sec. 59.115(3) (1989), for his involvement in the unlawful sale of unregistered securities to Wilda Ford. In this appeal, McKee does not challenge the illegality of the transaction. He argues instead that his nexus to the sale was insufficient to impose liability and that his alleged ignorance satisfied the affirmative defense requirements set forth in the statute.

The district court's findings are reviewed for clear error. Kruso v. International Tel. & Tel., 872 F.2d 1416, 1421 (9th Cir. 1989), cert. denied, 110 S. Ct. 3217 (1990).

Section 59.115(3) of the Oregon Statutes provides:

Every person who directly or indirectly controls a seller liable under subsection (1) of this section, every partner, officer, or director of such seller, every person occupying a similar status or performing similar functions, and every person who participates or materially aids in the sale is also liable jointly and severally with and to the same extent as the seller, unless the nonseller sustains the burden of proof that the nonseller did not know, and in the exercise of reasonable care, could not have known, of the existence of the facts on which the liability is based. Any person held liable under this section shall be entitled to contribution from those jointly and severally liable with that person.

In interpreting this statute, the Oregon Supreme Court has made clear that:

"Participate" and "materially aids" are separate concepts, not synonyms. A person may participate without materially aiding or materially aid without participating. Whether one's assistance in the sale is "material" does not depend on one's knowledge of the facts that make it unlawful; it depends on the importance of one's personal contribution to the transaction.

Prince v. Brydon, 307 Or. 146, 764 P.2d 1370, 1371 (1988).

The unlawful sale of the securities to Ford was made in McKee's offices by Hans Tietz, a broker licensed under the auspices of one of McKee's companies. It was only through McKee that Tietz had the credibility and base necessary to induce the sale. Further, Ford's check 1) named McKee as a payee, 2) was deposited into McKee's bank account, and 3) was reflected in a ledger McKee was keeping for the project. McKee paid $5,000 of Ford's check to himself as a "public relations fee."

The finding that McKee's contributions materially aided the sale of the securities is supported by the record. The finding is not clearly erroneous.

McKee argues that his lack of knowledge regarding the security sale satisfied the requirements of the affirmative defense set forth in Or.Rev.Stat. Sec. 59.115(3). We reject the argument. The Oregon Supreme Court has noted the evidentiary effect of the statute. Prince, 764 P.2d at 1372.

AFFIRMED.