Marani Response
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Transcript of Marani Response
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ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
Dirk O. Julander, Bar No. 132313 [email protected] Andrea S. Paris, Bar No. 252621 [email protected] JULANDER, BROWN & BOLLARD 9110 Irvine Center Drive Irvine, California 92618 Telephone: (949) 477-2100 Facsimile: (949) 477-6355
Attorneys for Marani Brands, Inc., a Nevada Corporation
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
BODIE INVESTMENT GROUP, INC., a Delaware Corporation,
Plaintiff,
vs.
MARANI BRANDS, INC., a Nevada Corporation,
Defendant.
Case No. 8:14-cv-00308-JLS-AN
The Hon. Josephine L. Staton
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT AND COUNTERCLAIM
DEMAND FOR JURY TRIAL
Defendant Marani Brands, Inc., a Nevada Corporation (Defendant or
Marani) submits its Answers and Affirmative Defenses to the Complaint filed by
Plaintiff Bodie Investment Group, Inc. (Plaintiff) on or about March 3, 2014 (the
Complaint).
ANSWER
1. Defendant admits the allegations in paragraph 1 of the Complaint.
2. Defendant admits that provisions of the Convertible Note can trigger a
conversion price adjustment. Defendant denies that any such price adjustment was
triggered and further denies the remaining allegations in paragraph 2 of the
Complaint.
3. Defendant denies the allegations in paragraph 3 of the Complaint.
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 1 of 13 Page ID #:76
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2ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
4. Defendant lacks sufficient information regarding Plaintiffs alleged
error in calculation and therefore denies that and the remaining allegations in
paragraph 4 of the Complaint.
5. Defendant denies the allegations in paragraph 5 of the Complaint.
6. Defendant admits the allegations in paragraph 6 of the Complaint.
7. Defendant lacks sufficient information to admit or deny and therefore
denies the allegations in paragraph 7 of the Complaint.
8. Defendant admits the allegations in paragraph 8 of the Complaint.
9. Defendant admits the allegations in paragraph 9 of the Complaint.
10. Defendant admits the allegations in paragraph 10 of the Complaint.
11. Defendant admits that paragraph 2.1 of the Convertible Note provides a
mechanism to compute the conversion price for debt under the Note in substantially
the form as alleged in Paragraph 11 of the Complaint. To the extent paragraph 11 of
the Complaint does not accurately reflect that provision, Defendant denies the
allegations of that paragraph.
12. Defendant denies the allegations in paragraph 12 of the Complaint.
13. Defendant admits that Marani issued shares at a cost of $0.001 per
share to Eco Investment Properties. Other than expressly admitted herein,
Defendant denies the allegations contained in paragraph 13.
14. Defendant denies the allegations in paragraph 14 of the Complaint.
15. Defendant admits that Plaintiff converted its debt to stock but denies
the accuracy of the accounting set forth in paragraph 15 of the Complaint.
16. Defendant denies the allegations in paragraph 16 of the Complaint.
17. Defendant restates and incorporates its answers to the preceding
paragraphs above, as if set forth fully herein.
18. Defendant admits the allegations in paragraph 18 of the Complaint.
/ / /
/ / /
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 2 of 13 Page ID #:77
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3ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
19. Defendant admits that Plaintiff paid the amount of $100,000 as set forth
in the Convertible Note. Other than expressly admitted herein, Defendant denies the
allegations contained in paragraph 19 of the Complaint.
20. Defendant denies the allegations in paragraph 20 of the Complaint.
21. Defendant denies the allegations in paragraph 21 of the Complaint.
22. Defendant denies the allegations in paragraph 22 of the Complaint.
23. Defendant denies the allegations in paragraph 23 of the Complaint.
24. Defendant restates and incorporates its answers to the preceding
paragraphs above, as if set forth fully herein.
25. Defendant admits the allegations in paragraph 25 of the Complaint.
26. Defendant denies the allegations in paragraph 26 of the Complaint.
27. Defendant restates and incorporates its answers to the preceding
paragraphs above, as if set forth fully herein.
28. Defendant admits the allegations in paragraph 28 of the Complaint.
29. Defendant lacks sufficient information to admit or deny and therefore
denies the allegations in paragraph 29 of the Complaint.
30. Defendant denies the allegations in paragraph 30 of the Complaint.
31. Defendant lacks sufficient information regarding Plaintiffs alleged
error in calculation and therefore denies that and the remaining allegations in
paragraph 31 of the Complaint.
32. Defendant lacks sufficient information regarding Plaintiffs alleged
error in calculation and therefore denies that and the remaining allegations in
paragraph 32 of the Complaint.
33. Defendant denies the allegations in paragraph 33 of the Complaint.
34. Defendant denies the allegations in paragraph 34 of the Complaint.
35. Defendant denies the allegations in paragraph 35 of the Complaint.
/ / /
/ / /
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 3 of 13 Page ID #:78
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4ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
AFFIRMATIVE DEFENSES
FIRST AFFIRMATIVE DEFENSE
(Fails to State a Cause of Action)
1. The Complaint, and each cause of action contained therein, fails to state
facts sufficient to constitute a cause of action against Defendant.
SECOND AFFIRMATIVE DEFENSE
(Lack of Damages)
2. Plaintiff has not suffered any damages as a result of any action taken by
Defendant and is therefore barred from any recovery in this action.
THIRD AFFIRMATIVE DEFENSE
(Payment)
3. As set forth more fully in Defendants counterclaim, which is
incorporated herein by this reference, Defendant has paid to Plaintiff in full all
obligations arising from the agreements underlying Plaintiffs Complaint and
Plaintiff is therefore barred from any recovery in this action.
FOURTH AFFIRMATIVE DEFENSE
(Performance)
4. As set forth more fully in Defendants counterclaim, which is
incorporated herein by this reference, Defendant has fully performed any and all
contractual, statutory, and other duties required of them, except for those duties as to
which Defendant's performance has been excused.
FIFTH AFFIRMATIVE DEFENSE
(Failure to mitigate damages)
5. Plaintiff failed to mitigate the damages it is alleged to have suffered in
the Complaint. Thus, Plaintiffs damages, if any, were proximately caused or
increased by its own acts or failures to act and any judgment sustained herein by
Plaintiff must be reduced by the percentage and degree of fault by which Plaintiffs
failure to mitigate contributed to any damage allegedly suffered by Plaintiff.
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 4 of 13 Page ID #:79
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5ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
SIXTH AFFIRMATIVE DEFENSE
(Failure of Contractual Conditions)
6. Defendant is excused from any obligations, liability or duty of
performance under the purported contracts by reason of failures of conditions
precedent, conditions concurrent, and conditions subsequent.
SEVENTH AFFIRMATIVE DEFENSE
(Unjust Enrichment)
7. Plaintiff would be unjustly enriched if it were to recover upon any of its
claims, thus the Complaint, and each purported cause of action contained therein, is
barred.
EIGHTH AFFIRMATIVE DEFENSE
(Inequity)
8. Defendant alleges that it was impossible for it to perform the
obligations as alleged in the Complaint; accordingly, any recovery in this action
would be unjust and inequitable.
NINTH AFFIRMATIVE DEFENSE
(Plaintiffs Prior Breach)
9. Plaintiff breached its contracts with Defendant, and by reason of said
breach of contracts, Defendant has been excused of its duties to perform all
obligations thereunder.
TENTH AFFIRMATIVE DEFENSE
(Damages Caused By Plaintiff)
10. Despite Defendants performance of the obligations set forth in the
contracts alleged in the Complaint, Plaintiffs own conduct resulted in damages
Plaintiff now complains about, which damages could not have been avoided by
Plaintiffs performance.
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 5 of 13 Page ID #:80
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6ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
ELEVENTH AFFIRMATIVE DEFENSE
(Reasonableness and Good Faith)
11. Defendant acted reasonably and in good faith at all times, based on all
relevant facts and circumstances known by it at the time it so acted. Accordingly,
Plaintiff is barred from any recovery in this action.
TWELFTH AFFIRMATIVE DEFENSE
(Off Set)
12. Defendant is informed and believes and on that basis alleges that
Plaintiff intentionally manipulated Maranis stock price by publishing false
statements in public investor fora designed to lower Maranis stock price.
Defendant is further informed and believes and on that basis alleges that Plaintiff
has been exercising its conversion rights at issue in the Complaint in order to gain
from its unlawful market manipulation. Defendant is informed and believes and on
that basis alleges that Marani and all of its shareholders have suffered damage by
reason of Plaintiffs conduct. As such, the parties have mutual demands that co-
exist against each other. Therefore, the two demands are compensated so far as they
equal each other. Defendant has the right of offset if any amount of money is owed
to Plaintiff, which Defendant also denies, and Plaintiff is entitled only to the net
difference, if any, between the mutual demands.
THIRTEENTH AFFIRMATIVE DEFENSE
(Unclean Hands)
13. Plaintiff is guilty of wrongful conduct in connection with the
allegations contained in the Complaint. Defendant is informed and believes and on
that basis alleges that Plaintiff intentionally manipulated Maranis stock price by
publishing in public investor fora false or misleading statements of material fact,
which it knew or had reasonable ground to believe was false or misleading, designed
to lower Maranis stock price. Defendant is further informed and believes and on
that basis alleges that Plaintiff has been exercising its conversion rights at issue in
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 6 of 13 Page ID #:81
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7ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
the Complaint at the price(s) that were affected by his publication of false and
misleading statements and that it gained from its unlawful market manipulation.
The price at which Defendant converts Plaintiffs debt into stock is dependent upon
the price of Marani stock as reflected in the market. Defendant is informed and
believes and on that basis alleges that Marani and all of its shareholders have
suffered damage by reason of Plaintiffs conduct. As such, Plaintiff is barred from
recovery by the doctrine of unclean hands and Plaintiffs alleged injuries resulting
from the prices at which it exercised its conversion rights directly relates to its
manipulation of Maranis stock prices.
FOURTEENTH AFFIRMATIVE DEFENSE
(Ratification)
14. Plaintiff has by its conduct, ratified the purported acts and/or omissions
of which Plaintiff now complains.
FIFTEENTH AFFIRMATIVE DEFENSE
(Consent)
15. Plaintiff, by itself or through its agents, consented to the acts and events
of which it now complains and Plaintiff is now barred from any recovery in this
action.
SIXTEENTH AFFIRMATIVE DEFENSE
(Statute of Limitations)
16. Plaintiffs Complaint and the allegations contained therein are barred
by the applicable statute of limitations including, but not limited to Code of Civil
Procedure, sections 337, 338, 339, 339(1), 343 and Civil Code section 3426.6.
SEVENTEENTH AFFIRMATIVE DEFENSE
(Impossibility/Excuse)
17. Defendant alleges that it was impossible for it to perform the
obligations alleged in the Complaint and that its performance was therefore excused.
Accordingly, Plaintiff is barred from any recovery in this action.
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 7 of 13 Page ID #:82
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8ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
EIGHTEENTH AFFIRMATIVE DEFENSE
(Estoppel)
18. Plaintiff is estopped from claiming that any portion of its promissory
note is now due and payable.
NINETEENTH AFFIRMATIVE DEFENSE
(Acquiescence/Waiver)
19. By its own conduct, Plaintiff is barred from recovery on the ground that
Plaintiff waived the claims alleged in the Complaint.
TWENTIETH AFFIRMATIVE DEFENSE
(Laches)
20. Plaintiff is barred from any relief and/or the recovery of any damages
under the doctrine of laches.
PRAYER
WHEREFORE, Defendant, Marani Brands, Inc. prays for judgment as
follows:
1. That the Complaint be dismissed and that Plaintiff take nothing
pursuant to its Complaint;
2. For costs of suit incurred herein, including reasonable attorney's fees;
and
3. For such other and further relief as the Court may deem just and proper.
COUNTERCLAIM
Defendant and Counterclaimant Marani Brands, Inc., a Nevada Corporation
(Marani) for its counterclaim against Plaintiff and Counterdefendant Bodie
Investment Group, Inc. (Bodie) alleges as follows:
/ / /
/ / /
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 8 of 13 Page ID #:83
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9ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
FIRST CLAIM FOR RELIEF
(Breach of Convertible Note)
36. On or about February 1, 2010, Marani entered into a Convertible Note
with Bodie whereby Bodie agreed to lend to Marani $100,000 for one year in
exchange for repayment of the principal with interest (the Note). According to the
terms of the Note, Bodie also had the option to convert the principal and interest due
under the Note into common stock of the company. A true and correct copy of the
Note is attached to the Complaint as Exhibit 1 (Dkt. No. 1). In conjunction
therewith, Marani and Bodie also entered into a Subscription Agreement providing
for specific terms relating to the conversion of debt into the companys stock. A
true and correct copy of the Subscription Agreement is attached to the Complaint as
Exhibit 2 (Dkt. No. 1) These parties also executed a Form of Common Stock
Purchase Warrant (the Warrant) as part of this transaction. A true and correct
copy of the Warrant is attached to the Complaint as Exhibit 3 (Dkt. No. 1)
37. Marani performed each of the obligations on its part to be performed
under the Note, the Subscription Agreement and the Warrant except those
obligations which have been excused, frustrated, or rendered impossible by the prior
breaches of Bodie.
38. Marani is informed and believes, and based thereon alleges, that Bodie
breached the Note, Subscription Agreement and Warrant in that:
a. Bodie sent conversion notices and received shares directly from
Maranis transfer agent without notice to and without obtaining approval from the
company for the transfers;
b. Bodie sent conversion notices and received shares directly from
Maranis transfer agent in excess of that required under the Note;
c. Bodie sent conversion notices and received shares directly from
Maranis transfer agent without accounting for all of the conversions with the
company;
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 9 of 13 Page ID #:84
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10ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
d. Bodie sent conversion notices and received shares directly from
Maranis transfer agent using improper accounting and conversion methods; and
e. Marani is informed and believes, and based thereon alleges, that
during Maranis performance under the Note, the Subscription Agreement and the
Warrant, Bodie was improperly shorting or manipulating Maranis stock in order to
increase the amount of common stock that would convert to Bodie in exchange for
its debt and under the Warrant.
39. As a direct and proximate result of the above described breaches,
Marani has suffered compensatory damages in a sum in excess of $100,000,
according to proof at the time of trial.
40. Pursuant to section 5.5 of the Note and Civil Code Section 1717
Marani is entitled to recover its attorneys fees in connection with Bodies breach of
the Note. Marani has retained Julander, Brown & Bollard to prosecute this
Counterclaim and has incurred, and continues to incur, reasonable attorneys fees
and costs that it is entitled to recover.
SECOND CLAIM FOR RELIEF
(Accounting)
41. Marani refers to and incorporates by reference the allegations of
paragraph 1 through 40 above as though fully set forth herein.
42. Marani is informed and believes and on that basis alleges that Bodie
received stock in excess of that required under the Note and Warrant. The
underlying transfers of stock from Marani and Bodie occurred over a period in
excess of two (2) years and involved numerous transactions and the transfer of
millions of shares of stock facilitated by a third party transfer agent. As such, the
amount of excess stock cannot be determined without an accounting.
43. Pursuant to section 5.5 of the Note and Civil Code section 1717 Marani
is entitled to recover its attorneys fees in connection with the accounting of excess
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 10 of 13 Page ID #:85
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11ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
stock transferred to Bodie. Marani has retained Julander, Brown & Bollard to
prosecute this Counterclaim and has incurred, and continues to incur, reasonable
attorneys fees and costs that it is entitled to recover.
THIRD CLAIM FOR RELIEF
(Declaratory Relief)
44. Marani refers to and incorporates by reference the allegations of
paragraph 1 through 43 above as though fully set forth herein.
45. An actual controversy has arisen and now exists between Bodie, on the
one hand, and Marani, on the other hand, regarding their respective rights, duties
and obligations pursuant to the Note, the Subscription Agreement, and the Warrant.
46. Marani alleges that Bodie has received excess stock under the Note and
Warrant insofar as:
a. Bodie sent conversion notices and received shares directly from
Maranis transfer agent without notice to and without obtaining approval from the
company for the transfers;
b. Bodie sent conversion notices and received shares directly from
Maranis transfer agent in excess of that required under the Note;
c. Bodie sent conversion notices and received shares directly from
Maranis transfer agent without accounting for all of the conversions with the
company;
d. Bodie sent conversion notices and received shares directly from
Maranis transfer agent using improper accounting and conversion methods; and
e. Marani is further informed and believes, and based thereon
alleges, that during Maranis performance under the Note, the Subscription
Agreement and the Warrant, Bodie was improperly shorting or manipulating
Maranis stock in order to increase the amount of common stock that would convert
to Bodie in exchange for its debt and under the Warrant.
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 11 of 13 Page ID #:86
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12ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
47. Marani is informed and believes, and based thereon alleges, that Bodie
denies these allegations and claims that it has not received excess stock.
48. A judicial determination is necessary and appropriate to determine the
respective rights, duties, and obligations of Bodie and Marani as set forth above.
PRAYER FOR RELIEF
WHEREFORE, Marani prays for judgment on its counterclaim against Bodie
as follows:
1. For compensatory damages according to proof;
2. For an accounting of the financial transactions between Marani, on the
one hand, and Bodie, on the other hand, to determine the amount of excess stock
transferred to Bodie under the Note and Warrant.
3. For a judicial determination of the controversy between Bodie, on the
one hand, and Marani, on the other hand, regarding their respective rights, duties
and obligations pursuant to the Note, the Subscription Agreement, and the Warrant.
4. For attorneys fees as requested herein;
5. For prejudgment and post-judgment interest upon all amounts awarded;
6. For costs of the suit herein; and
7. For such other and further relief as the Court may deem just and proper.
DATED: April 21, 2014 JULANDER, BROWN & BOLLARD By: Dirk O. Julander
Andrea S. Paris Attorneys for Marani Brands, Inc., a Nevada Corporation
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 12 of 13 Page ID #:87
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13ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
DEMAND FOR JURY TRIAL
Defendant and Counterclaimant, Marani Brands, Inc., demands a jury trial in
the above-captioned matter.
DATED: April 21, 2014 JULANDER, BROWN & BOLLARD By: Dirk O. Julander
Andrea S. Paris Attorneys for Marani Brands, Inc., a Nevada Corporation
Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 13 of 13 Page ID #:88