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Date: 03-30-2013

Case Style: Chris Everett v. Artisan Manufacturing, LLC

Case Number: CJ-2012-6209

Judge: Mark Barcus

Court: District Court, Tulsa County, Oklahoma

Plaintiff's Attorney: Jeff M. Bonds, Christopher A. Barrow and Timothy Rogers

Defendant's Attorney: Julia Allen for Artisan Manufacturing, LLC and Sammie Mikel

Christopher Allen Barrow for Levi Noonkester and Randy Noonkester

Description: Chris Everett, Mandi Everett and Everett Machine, LLC sued Artisan Manufacturing, LLC and Sammie Mikel who, in turn, sued Randay Noonkester and Levi Noonkester on breach of contract theories.

Plaintiffs' Petition alleged:

1. Plaintiffs and the Defendant, Artisan Manufacturing, L.L.C., entered into that certain Asset Purchase Agreement dated May 1, 2012 (the “Agreement”) (attached hereto as Exhibit A), whereby Plaintiffs sold some, but not all of the business assets of Everett Machine, L.L.C, to Defendant.

2. Under the terms of the Agreement, the business assets sold to the Defendant were defined as “the tangible and intangible assets in Everett Machine, LLC, including, but not limited td, the goodwill of the Business but specifically excluding any real propertyor assetüZubject to any non-assignable lease, mortgage, lien or other encumbrance.

3 The assets excluded from the sale due to being “subject to any non-ssignab4 lease, mortgage, lien or other encumbrance,” were set out in Schedule I to the Agreement and include the following:

a. I Hwacheon CNC XV-1020A Vertical Machining Center SN: 0131;

b. 1 Hwacheon CNC XV-1020A Vertical Machining Center SN: 0134;

c. 1 Mazak Quick Turn 250 CNC Lathe, serial # 146789;

d. 1 Mazak V-655 Vertical Machining Center, serial # 146929 (collectively, the “Excluded Assets”).

4. Plaintiffs are the owners of the Excluded Assets.

5. Plaintiffs have allowed the Defendants the use and possession of the Excluded Assets, despite Plaintiff ownership, in order that Defendants may continue to do business and fulfill customer orders. Defendants have been allowed to use and possess the Excluded Assets as long as the Defendants made payments to the Plaintiffs equal to the amounts required under agreements Plaintiffs have with third parties secured by the Excluded Assets and as long as Defendants paid the amounts owed under the terms of the Asset Purchase Agreement between the parties.

6. Defendants are in breach of the Asset Purchase Agreement in that Defendants have wholly failed and refused to make payments of any kind to the Plaintiffs and therefore Plaintiffs are entitled to possession of the Excluded Assets.

7. Plaintiffs have repeatedly attempted to obtain payment from the Defendants to no avail and the Excluded Assets are wrongfully detained by the Defendants.

8. The value, as nearly as practicable of the Excluded Assets are as follows:

a. I Hwacheon CNC XV-1020A Vertical Machining Center SN: 0131 $50,000;

b. 1 Hwacheon CNC XV-1020A Vertical Machining Center SN: 0134 $50,000;

c. I Mazak Quick Turn 250 CNC Lathe, serial # 146789 $35,000;

d. 1 Mazak V-655 Vertical Machining Center, serial # 146929 $65,000.

9. The Excluded Assets were not taken by Defendants in execution on any order or judgment against the Plaintiffs, or for the payment of any tax, fine or amercement assessed against them, or by virtue of an order of delivery, or any other mesne or final process issued against said Plaintiffs.

WHEREFORE, Plaintiffs pray that this Court issue an order for delivery of the property and that this Court further issue an order to be delivered with the summons, ordering the Defendants not to conceal, damage or destroy the property or a part thereof and not to remove the property or a part thereof from the state or county, pending the hearing on Plaintiffs request for an order for delivery of the property, and for such other relief as the Court deems just and proper.

Defendants appeared, answered, counterclaim and asserted third party claims as follows:

1. Defendants admit in part those allegations made in paragraph one (1) but denies that “not all of the business assets” of Everett Machine, L.L.C. were sold to Defendant Artisan
Manufacturing.

2. Defendants admits in part those allegations made in paragraph two (2) but further states that Plaintiffs misrepresented that a limited number of assets were subject to “lease, mortgage, lien or other encumbrance” when in fact Plaintiffs did not have title to the equipment purchased by Defendant Artisan,

3. Defendants deny those allegations made in paragraph three (3) and further state that the assets subject to lease, mortgage, lien or other encumbrance were not set forth in Schedule I as stated. Rather, that schedule only includes a listing of “secured liens” and does not include assets that were purportedly owned by Plaintiffs/Sellers but were in fact owned by others parties and/or entities.

4. Defendants deny those allegations made in paragraph four (4) and further state a Bill of Sale and Lease Agreement, signed by Plaintiffs, evidences that Plaintiffs are not the owners of the assets listed in paragraph four (4) of the Petition.

5. Defendants deny those allegations made in paragraph five (5) and further state that pursuant to agreement of the parties, Plaintiffs were to continue making payments for secured property to the lien-holders. Defendant Artisan has made payments payable to Plaintiffs for payment of these creditors and Plaintiffs diverted those funds and failed and refused to pay said monies to the respective lienholders.

6, Defendants deny those allegations made in paragraph six (6).

7. Defendants deny those allegations made in paragraph seven (7).

8. Defendants are without sufficient information to admit or deny those allegations in paragraph eight (8) but demands strict proof thereof.

9. Defendants deny those allegations in paragraph nine (9) but demands strict proof thereof.

AFFIRMATIVE DEFENSES

1. Failure to state a claim upon which relief can be granted;

2. Laches;

3. Waiver;

4. Estoppel;

5. Reformation;

6. Rescission;

7. Impossibility of performance;

8. Prevention of performance;

9. Unclean hands;

10. Plaintiffs breach of contract;

11. Breach of good faith and fair dealing in contracts;

12. Defendant(s) breach of contract or default was not willfiil;

13. Plaintiff has acted inequitably, unconscionably, oppressively and maliciously.

14. Accord and satisfaction;

15. Duress;

16. Failure of consideration;

17. Fraud;

18. Illegality; and

19. Indemnification.

FACTS COMMON TO ALL ALLEGATIONS

Defendant Artisan incorporates the above paragraphs by reference and further states as follows:

10. On or about May 15, 2012, Defendant Artisan Manufacturing entered into an agreement
to purchase the assets that constitute the business known as Everett Machine.

11. As part of the agreement, Plaintiffs guaranteed and indemnified Defendant Artisan from
certain liabilities incurred prior to May 1, 2012.

12. As part of the agreement, Plaintiffs warranted and guaranteed that Plaintiffs had clear title
to the equipment while Plaintiffs agreed
“to exonerate, indemnify, defend and hold harmless [Defendanti from and against any and all claims, damages, actions, judgments, costs and expenses (including without limitation, reasonable attorneys fees and court costs) of whatsoever nature arising out of or in connection with events or occurrences of the Business arising before the close of business on May 1, 2012.”

13. Shortly after Plaintiff took possession of the business, it came to Defendant Artisan’s attention that Plaintiffs owed substantial, undisclosed, tax debts that included levies on accounts receivables and assets.

14. After the closing of the transaction, despite the excluded liability for tax debt and indemnification, the IRS garnished approximately $40,000 from Defendant Artisan’s accounts receivables; thereby reducing Plaintiffs’ tax debt by Defendant’s involuntary payment(s).

15. On or about September, 2012, Defendant Artisan learned that the two pieces of equipment purportedly owned by Plaintiffs with a security lien and reflected in Schedule 1: (1) the 1997 Hwacheon and (2) the 1990 Mori Seiki Milling Machine, SN 2917, were not owned by Plaintiffs but are owned by SWR and WAM Investments, LLC (hereinafter “SWR”) and leased to Plaintiffs.

16. Also, on or about September 2012, Defendant leaned that ten (10) other pieces of equipment purportedly owned and sold by Plaintiffs were not owned by Plaintiffs but were instead owned by SWR and leased to Plaintiffs.

17. Defendants were presented the attached Lease agreement evidencing the equipment listed in exhibit A to the agreement was in fact leased to Plaintiffs pursuant to a lease agreement between SWR and Plaintiff Everett Machine, LLC. Such lease agreement is dated January 3, 2011 and set to expire on May 1, 2015. A copy of the lease agreement which expressly states the equipment is the “sole and exclusive property of Lessor [SWRJ,” executed by Plaintiffs, is attached hereto as Exhibit “A.”

18. Plaintiffs did not disclose the existence of the lease agreement but rather warranted they had ownership of the property.

19. In the purchase contract, Plaintiffs warranted that Plaintiffs were not in default and no default existed with respect to the secured property.

20. Upon information to Defendants, it is now apparent that at the time of the contract with Defendant on or about May
15, 2012, Plaintiffs were in default on the above described equipment lease with SWR.

21. Upon information to Defendants, it is now apparent that at the time of the contract with Defendant on or about May 15, 2012, Plaintiffs were in default to The Huntington National Bank with respect to the secured liens reflected in Schedule I.

22. Upon information to Defendants, it is now apparent that at the time of the contract with Defendant on May 15, 2012, Plaintiffs were in default to Citizens Security Bank & Trust Company with respect to the secured liens reflected in Schedule I.

23. SWR has made demand on Defendant Artisan to return the equipment or pay its value.

24. Defendant Artisan made payments to Plaintiffs that were to be made on payment of secured liens of the equipment as described in Schedule I of the asset-purchase agreement but Plaintiffs diverted those monies from the creditors and kept the payments individually.

25. Upon closing of the sale of the business on or about May 1, 2012, Defendant Artisan hired the following as employees of Defendant Artisan:

(1) Plaintiff Mandi Everett;

(2) Randy Noonkester, (Plaintiff Mandi Everett’s father); and

(3) Levi Noonkester (Plaintiff Mandi Everett’s brother)

26. For approximately three months after the closing of the transaction, pursuant to the asset- purchase agreement,
Defendant Artisan operated under the name of Plaintiffs’ former business, Everett Machine, LLC until such time as the purchase orders and other documents could be made in the name of Defendant Artisan.

27. Accordingly, during that time, payments were made payable to “Everett Machine, LLC.”

28. As part of the agreement between the parties, those payments during that transition period, were to be negotiated by Mandi Everett, an employee of Defendant Artisan, and former representative of Everett Machine, LLC and then immediately paid in fhll to Defendant Artisan Manufacturing until such time as the purchase orders and payments could formally be made to Artisan Manufacturing.

29. Rather than pay the full amount to Defendant Artisan, Plaintiff Mandi Everett diverted and converted funds from those payments to Plaintiffs individually; Plaintiff’s embezzlement is believed to be in excess of $50,000.

30. On or about October 26, 2012, Plaintiffs Mandi Everett and Chris Everett, Randy Noonkester and Levi Noonkester converted and stole property owned by Defendant Artisan Manufacturing that included tooling, a list of which is attached hereto as Exhibit “B” with an approximate value of $4500.

31. As a result the missing equipment, Defendants were unable to fulfill valuable, profitable contracts for clients.

FRAUD AND DECEIT BY PLAINTIFFS

Defendant(s) restate and re-allege all material allegations as if more fully set out arid
further state:

32. In the contract with Defendant Artisan, Plaintiffs warranted and guaranteed that Plaintiffs
had the authority to sell its/their assets and to carry on the Business.
33. Also in the purchase contract, Plaintiffs stated they had “good and marketable title to all
Business Assets to be transferred pursuant to this Agreement subject to any mortgage, lien or
other encumbrances.. .“

34. Also in the purchase contract, Plaintiffs warranted

“The Sellers’ Business Assets are not subject to any mortgage, deed of trust, lien, conditional sales agreement, encumbrance or charge, except for: (a) liens reflected on Schedule I as securing specified liabilities as of the Closing Date (with respect to which no default exists); and (b) liens for current taxes and assessments not in default; and (c) liens arising by operation of law or contract disclosed on Schedule 1 (Schedule J is entitled Liens arising by operation of law and reflects “none.”)

35. All other information, oral or written, communicated to Defendant(s) from Plaintiffs was
that Plaintiffs had title to the property transferred to Defendant(s).
36. As demonstrated by the Bill of Sale and Lease Agreement between Plaintiffs and SWR,
Plaintiffs’ statements they had title and ownership to the assets was a false representation of a
material fact.

37. Plaintiffs knew they did not own property; and thus, could not sell it.

38. Plaintiffs knew they were in default on the equipment with The Huntington National
Bank and Citizens National Bank; were in default with SWR; and had substantial tax liens not
disclosed in the asset-purchase agreement.

39. As part of the contract between Plaintiffs and Defendant Artisan, Plaintiffs warranted and guaranteed that
“to the best knowledge of [Plaintiffsj SeIJ.ers, there is no administrative, legal or governmental (including any federal, state, county or local agency, division or department) action, proceeding or investigation pending or threatened against or involving any of them or any of the Business Assets which, if determined adversely, could materially and adversely affect the Business taken as a whole, except as disclosed on Schedule G. None of the Sellers, Everett Machine, LLC or the individual Sellers, is in violation of any order, judgment, injunction or decree outstanding against any of them, the effect of which would be materially adverse to the Business taken as a whole.”

40. Schedule G, as referenced above, is entitled “potential litigation” and reflects “NONE.”

41. Also included in the contract, Plaintiffs warranted and guaranteed that
“As of the date of such financial statements, neither the Sellers nor Everett Machine, LLC had any liabilities or obligations (absolute, accrued, contingent or otherwise) material to Sellers, taken as a whole, which were not reflected on such financial statements or otherwise disclosed herein.”

42. Plaintiffs knew that they had substantial undisclosed tax liability with notice of
garnishments and levies by the Internal Revenue Service that would be materially adverse to the
business and undisclosed on the tax returns.

43. Plaintiffs concealed and failed to disclose the substantial tax liability and other liabilities.

44. Plaintiffs concealed and failed to disclose they were in default with lieitholders and
lessors.

45. Plaintiffs concealed and failed to disclose that equipment was owned by a third-party and
subject to a lease agreement.

46. Plaintiffs made the false representations with the intention that they be acted upon by
Defendant.

47. Defendant reasonably relied upon these false representations in executing the asset-
purchase agreement and payment of ifinds to Plaintiffs.

48. As a result of the false and misleading information, Defendant(s) were fraudulently
induced to enter into an agreement with Plaintiffs and pay Plaintiff monies.

49. Defendant(s) have been damaged by the false representations of Plaintiff.

50. Plaintiffs acted in reckless disregard of the rights of Defendant(s).

51. Plaintiffs acted intentionally and with malice.

BREACH OF CONTRACT BY PLAINTIFFS

Defendant(s) restate and re-allege all material allegations as if more frilly set out and further state:

52. As part of the purchase agreement, Plaintiffs agreed to assign to Defendant Artisan all of Plaintiffst right, title and interest in and to those contracts by and between the Plaintiffs Sellers and any other third party related to the operation of Everett Machine, LLC.

53. After the closing of the transaction, Defendant Artisan learned that the assets that Plaintiff represented they owned and listed in Schedule I were in fact leased to Plaintiffs by SWR and WAJvI Investments, LLC. That lease contract was not disclosed to Defendant(s).

54. Plaintiffs breached the contract with Defendant Artisan by failing to assign or even disclose the lease contract between Plaintiffs and SWR for the equipment reflected in the Bill of Sale and Lease Agreement executed by Plaintiffs.

55. Also as part of the agreement, Plaintiffs agreed to perform or discharge the liabilities of the Business arising on or before the close of business on May 1, 2012.

56. Also as part of the agreement, Plaintiffs agreed that
“[Plaintiff] Everett Machine, LLC and the individual Sellers [Plaintiff Mandi Everett and Plaintiff Chris Everett], shall be jointly and severally responsible for any liabilities incurred prior to May 1, 2012, and omitted from disclosure.”

57. Plaintiffs concealed and failed to disclose substantial liabilities and there are likely other
undisclosed liabilities accrued by Plaintiffs prior to May 1, 2012 that have yet to be determined.

58. Plaintiffs breached the contract by failing to assume the tax liability accrued before May
1, 2012 that resulted in the Internal Revenue Service garnishing the accounts receivables of
Defendant Artisan Manufacturing.

59. As a result of Plaintiffs’ breaches, Defendant Artisan has suffered damages as a direct
result of those breaches.

CONVERSION BY PLAINTIFFS and TIURD-PARTY DEFENDANTS RANDY
NOONKESTER and LEVI NOONKESTER

Defendants restate and re-allege all material allegations as if more fUlly set out and fhrther state:

60- Defendant(s) were the owners of and possessed materials, supplies and tooling equipment.

61. On or about October 26, 2012, Plaintiffs and Defendant Levi Noonkester and Defendant Randy Noonkester jointly and unlawfUlly, without the consent of Defendant, intentionally took and converted such tooling and other property to their own use.

62. The value of the property converted by Plaintiffs and Third-party Defendants Randy Noonkester and Levi Noonkester is estimated at $4500.

63. As a result of the conversion, Defendant(s) were damaged and are entitled to compensation for the value of the property with interest from the time of conversion and a fair compensation for the time, money and attorney fees expended by Defendants in pursuit of the converted property.

64. The conversion by Third-party Defendants arises out of the transaction and occurrence(s)
that is the subject matter of this action and concerns the property that is the subject matter of this
action.

65. As described in the above paragraphs, Plaintiff Mandi Everett, as a representative of
Everett Machine, diverted and converted funds from payments directed to Defendant Artisan in
an amount believed to be in excess of $50,000.

66. As a result of that conversion, Defendants have been damaged.

RESCISSION AND RELIEF

Defendants restate and re-allege all material allegations as if more fUlly set out and fUrther state:

67. Plaintiffs have con-mitted fraud by making false statements described above and concealment of the truth as to whom actually owned the equipment transferred and the liabilities that existed.

68. Plaintiffs have committed fraud by promising to indemnify Defendants from Plaintiffs’ tax liability without any intention of indemnifying Defendants.

69. Plaintiffs have committed fraud by remaining silent when they had a duty to speak and and disclose to Defendants that SWR was inquiring about the location of its equipment leased to Plaintiff and about the substantial liability affecting the business.

70. Plaintiffs have committed fraud by intending to deceive Defendants in order to relieve themselves of huge tax debt and liabilities.

71. The fraudulent acts and above intended to deceive Defendants in order to influence Defendant Artisan to enter into the contract.

72. Defendants relied on those fraudulent statements in entering into the asset-purchase
agreement and payments to Plaintiffs.

73. Defendant was prevented from performance by the acts of Plaintiffs.

74. The unconscionable and oppressive acts of Plaintiff constitute extenuating circumstances
and provide sufficient grounds, for rescission, equitable relief and excuse of performance, by
Defendant(s).

PRAYER FOR RELIEF

WHEREFORE, Defendant(s) prays that the Plaintiffs take nothing by way of its Petition filed herein; FURTHER the Defendant(s) pray that the Court grant the Defendant(s) a judgment on their counterclaims and cross-claims against Third-Party Defendants in excess of $10,000.00 as and for actual damages and in excess of $10,000 as and for punitive damages against Plaintiff. FURTHER, The Defendant(s) pray that the Court in equity rescind all contracts between the parties and excuse performance thereof FINALLY, the Defendant(s) pray for an award of attorney fees and costs in this action.

Plaintiffs responded to Defendants Counterclaim as follows:

A.

Answer

10. Plaintiffs admit that they entered into an Asset Purchase Agreement with Artisan Manufacturing, LLC, on or about May 15, 2012, but the Asset Purchase Agreement was executed by the parties in October of 2012. Plaintiffs deny the remaining allegations set forth in paragraph 10 of Defendants’ Counterclaims.

11. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 11 of Defendants’ Counterclaims.

12. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 12 of Defendants’ Counterclaims.

13. Plaintiffs deny the allegations set forth in paragraph 13 of Defendants’ Counterclaims.

14. Plaintiffs admit that certain accounts receivables of Everett Machine, LLC were levied by the Internal Revenue Service, but expressly deny that it happened before the execution of the Asset Purchase Agreement between Plaintiffs and Artisan Manufacturing, LLC. Furthermore, Plaintiffs and Defendants entered into an oral agreementlcontract for which the amounts levied by the IRS would be deducted from the Purchase Price set forth in the Asset Purchase Agreement. Plaintiffs deny the remaining allegations set forth in paragraph 14 of Defendants’ Counterclaims.

15. Plaintiffs deny the allegations set forth in paragraph 15 of Defendants’ Counterclaims.

16. Plaintiffs deny the allegations set forth in paragraph 16 of Defendants’ Counterclaims.

17. Plaintiffs deny the allegations set forth in paragraph 17 of Defendants’ Counterclaims.

18. Plaintiffs deny the allegations set forth in paragraph 18 of Defendants’ Counterclaims.

19. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 19 of Defendants’ Counterclaims.

20. Plaintiffs deny the allegations set forth in paragraph 20 of Defendants’ Counterclaims.

21. The assets secured by The Huntington National Bank were explicitly excluded from the Asset Purchase Agreement. As such, Plaintiffs deny the allegations set forth in paragraph 21 of Defendants’ Counterclaims.

22. The assets secured by Citizens Security Bank & Trust Company were explicitly excluded from the Asset Purchase Agreement. As such, Plaintiffs deny the allegations set forth in paragraph 22 of Defendants’ Counterclaims.

23. Plaintiffs are without sufficient information to admit or deny the allegations contained in paragraph 23 of Defendants’ Counterclaims and, therefore, deny the same.

24. Plaintiffs deny the allegations set forth in paragraph 24 of Defendants’ Counterclaims.

25. Plaintiffs admit the allegations set forth in paragraph 25 of Defendants’ Counterclaims.

26. Plaintiffs admit that work-in-progress purchase orders were in Everett Machine, LLC’s name, but all payments were signed over to Artisan Manufacturing, LLC. Plaintiffs deny the remaining allegations set forth in paragraph 26 of Defendants’ Counterclaims.

27. Plaintiffs admit that work-in-progress purchase orders were in Everett Machine, LLC’s name, but all payments were signed over to Artisan Manufacturing, LLC. Plaintiffs deny the remaining allegations set forth in paragraph 27 of Defendants’ Counterclaims.

28. Plaintiffs admit that work-in-progress purchase orders were in Everett Machine, LLC’s name, but all payments were signed over to Artisan Manufacturing, [[C. Plaintiffs deny the remaining allegations set forth in paragraph 28 of Defendants’ Counterclaims.

29. Plaintiffs deny the allegations and legal conclusions set forth in paragraph

29 of Defendants’ Counterclaims.

30. Plaintiffs deny the allegations and legal conclusions set forth in paragraph

30 of Defendants’ Counterclaims.

31. Plaintiffs deny the allegations set forth in paragraph 31 of Defendants’ Counterclaims.

32. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 32 of Defendants’ Counterclaims.

33. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 33 of Defendants’ Counterclaims.

34. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 34 of Defendants’ Counterclaims.

35. Plaintiffs are without sufficient information to admit or deny the allegations contained in paragraph 35 of Defendants’ Counterclaims and, therefore, deny the same.

36. Plaintiffs deny the allegations and legal conclusions set forth in paragraph

36 of Defendants’ Counterclaims.

37. Plaintiffs deny the allegations set forth in paragraph 37 of Defendants’ Counterclaims.

38. The assets secured by The Huntington National Bank and Citizens Security Bank & Trust Company were explicitly excluded from the Asset Purchase Agreement. Plaintiffs deny the remaining allegations set forth in paragraph 38.

39. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 39 of Defendants’ Counterclaims.

40. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 40 of Defendants’ Counterclaims.

41. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 41 of Defendants’ Counterclaims.

42. Plaintiffs deny the allegations set forth in paragraph 42 of Defendants’ Counterclaims.

43. Plaintiffs deny the allegations set forth in paragraph 43 of Defendants’ Counterclaims.

44. Plaintiffs deny the allegations set forth in paragraph 44 of Defendants’ Counterclaims.

45. Plaintiffs deny the allegations set forth in paragraph 45 of Defendants’ Counterclaims.

46. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
46 of Defendants’ Counterclaims.

47. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
47 of Defendants’ Counterclaims.

48. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
48 of Defendants’ Counterclaims.

49. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
49 of Defendants’ Counterclaims.

50. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
50 of Defendants’ Counterclaims.

51. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
51 of Defendants’ Counterclaims.

52. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 52 of Defendants’ Counterclaims.

53. Plaintiffs deny the allegations set forth in paragraph 53 of Defendants’ Counterclaims.

54. Plaintiffs deny the allegations set forth in paragraph 54 of Defendants’ Counterclaims.

55. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 55 of Defendants Counterclaims.

56. Plaintiffs submit that the terms of the Asset Purchase Agreement speak for themselves. Plaintiffs deny the allegations set forth in paragraph 56 of Defendants’ Counterclaims.

57. Plaintiffs deny the allegations set forth in paragraph 57 of Defendants’ Counterclaims.

58. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
58 of Defendants’ Counterclaims.

59. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
59 of Defendants’ Counterclaims.

60. Plaintiffs admit Defendants owned certain assets transferred under the Asset Purchase Agreement. Plaintiffs deny the remaining allegations and legal conclusions set forth in paragraph 60 of Defendants’ Counterclaims.

61. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
61 of Defendants’ Counterclaims.

62. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
62 of Defendants’ Counterclaims.

63. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
63 of Defendants’ Counterclaims.

64. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
64 of Defendants’ Counterclaims.

65. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
65 of Defendants’ Counterclaims.

66. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
66 of Defendants’ Counterclaims.

67. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
67 of Defendants’ Counterclaims.

68. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
68 of Defendants’ Counterclaims.

69. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
69 of Defendants’ Counterclaims.

70. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
70 of Defendants’ Counterclaims.

71. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
71 of Defendants’ Counterclaims.

72. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
72 of Defendants’ Counterclaims.

73. Plaintiffs deny the allegations and legal conclusions set forth in paragraph
73 of Defendants’ Counterclaims.

74. Plaintiffs deny the allegations set forth in paragraph 74 of Defendants’ Counterclaims.

75. Plaintiffs deny the allegations set forth in the Defendants’ prayer for relief contained in Defendants’ Counterclaims.

76. Plaintiffs deny that Defendants are entitled to any of the relief they seek in their Counterclaims.
77. Plaintiffs deny each and every allegation not specifically
78. Plaintiffs reserve the right to revise, amend and/or Answer to Defendants’ Counterclaims to include any additional admissions or denials as it deemed warranted.

B.

Defenses & Affirmative Defenses

For its defenses and affirmative defenses to the allegations contained in Defendants’ Counterclaims, Plaintiffs state as follows:

1. Defendants’ Counterclaims fail to state any claim against Plaintiffs for which relief can be granted.

2. Defendants’ claims, if any, fail because Defendants breached their contract with Plaintiffs.

3. Defendants’ claims, if any, are barred by applicable statutes of limitations and the doctrines of waiver, laches and/or estoppel.

4. Defendants’ claims, if any, are barred by the doctrine of unclean hands.

5. Defendants’ claims, if any, are barred by accord and satisfaction.

6. Defendants’ claims, if any, are barred by failure of consideration.

7. Defendants’ claims, if any, are barred by fraud.

8. Defendants’ claims, if any, are barred by payment and release.

9. Defendants’ claims, if any, are barred by having failed to mitigate the damages, if any, they allege to have suffered.

10. The proximate cause of Defendants’ alleged damages, if any, was their own negligence, breaches of the contract with Plaintiffs, intervening acts, conditions, circumstances and/or the acts or omissions of third parties over whom Plaintiffs exercised no control. Defendants have suffered no damages as a result of any act or omission by the Plaintiffs.

11. Defendants’ claims, if any, are barred by their own admissions and conduct.

12. Defendants failed to fully perform all of their duties and obligations to Plaintiffs.

13. Defendants’ Counterclaims, if any, are barred in whole or in part because their Counterclaims fail to comply with the jurisdictional pleadings requirements of 12 OS. 2011, § 2008 and 2009.

14. Defendants’ Counterclaims, if any, are barred by the doctrine of acquiescence.

15. If there are any material allegations which Plaintiffs have not denied and which adversely affects Plaintiffs’ rights, Plaintiffs here and now deny them.

16. Plaintiffs expressly reserve the right to add defenses and affirmative defenses.

C.

Prayer

WHEREFORE, having fully answered, Plaintiffs respectfully prays that Defendants take nothing by way of their Counterclaims, that Defendants’ Counterclaims against Plaintiffs be dismissed, that Plaintiffs recover their reasonable and necessary attorneys’ fees and costs and that the Court grant Plaintiffs such other and further relief as It deems appropriate.

Outcome: Settled and mutually dismissed by all parties.

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