Case 2:13-cv-02617-RDR-KGS Document 12-1 Filed 02/04/14 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS MARTIN MEISSNER, Plaintiff, v. BF LABS INC., Defendant. ) ) ) ) ) ) ) ) )

Case No. 13-2617-RDR-KGS

DEFENDANT BF LABS INC.S ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFFS COMPLAINT Defendant BF Labs Inc. (BF Labs) for its answer to Plaintiffs Complaint, states the following: Jurisdiction and Venue 1. BF Labs is without sufficient knowledge and information as to the truth of the allegations contained in paragraph 1 concerning Plaintiff Martin Meissners residence and therefore denies the same. 2. 3. BF Labs admits the allegations contained in paragraph 2 of the Complaint. BF Labs admits that it is registered and in good standing with the Kansas Secretary of State but denies the rest of the allegations contained in paragraph 3 of the Complaint. 4. BF Labs is without sufficient knowledge and information as to the truth of the allegations contained in paragraph 4 and therefore denies the same. 5. The allegations in paragraph 5 of the Complaint are legal conclusions to which no response is required. allegations. To the extent a response is required, BF Labs denies those

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6.

The allegations in paragraph 6 of the Complaint are legal conclusions to which no response is required. allegations. General Allegations To the extent a response is required, BF Labs denies those

7. 8. 9. 10. 11. 12. 13. 14.

BF Labs admits the allegations contained in paragraph 7 of the Complaint. BF Labs admits the allegations contained in paragraph 8 of the Complaint. BF Labs admits the allegations contained in paragraph 9 of the Complaint. BF Labs admits the allegations contained in paragraph 10 of the Complaint. BF Labs admits the allegations contained in paragraph 11 of the Complaint. BF Labs admits the allegations contained in paragraph 12 of the Complaint. BF Labs admits the allegations contained in paragraph 13 of the Complaint. BF Labs lacks knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 14 of the Complaint and, therefore, denies those allegations.

15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

BF Labs admits the allegations contained in paragraph 15 of the Complaint. BF Labs admits the allegations contained in paragraph 16 of the Complaint. BF Labs admits the allegations contained in paragraph 17 of the Complaint. BF Labs admits the allegations contained in paragraph 18 of the Complaint. BF Labs admits the allegations contained in paragraph 19 of the Complaint. BF Labs admits the allegations contained in paragraph 20 of the Complaint. BF Labs denies the allegations contained in paragraph 21 of the Complaint. BF Labs admits the allegations contained in paragraph 22 of the Complaint. BF Labs denies the allegations contained in paragraph 23 of the Complaint. BF Labs admits the allegations contained in paragraph 24 of the Complaint.

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25. 26. 27. 28.

BF Labs admits the allegations contained in paragraph 25 of the Complaint. BF Labs admits the allegations contained in paragraph 26 of the Complaint. BF Labs admits the allegations contained in paragraph 27 of the Complaint. BF Labs lacks knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 28 of the Complaint and, therefore, denies those allegations.

29. 30. 31. 32. 33. 34. 35. 36. 37.

BF Labs denies the allegations contained in paragraph 29 of the Complaint. BF Labs denies the allegations contained in paragraph 30 of the Complaint. BF Labs admits the allegations contained in paragraph 31 of the Complaint. BF Labs admits the allegations contained in paragraph 32 of the Complaint. BF Labs admits the allegations contained in paragraph 33 of the Complaint. BF Labs admits the allegations contained in paragraph 34 of the Complaint. BF Labs admits the allegations contained in paragraph 35 of the Complaint. BF Labs admits the allegations contained in paragraph 36 of the Complaint. BF Labs admits that consistent to what Plaintiff was told, months passed without shipment of the Bitcoin Miners.

38. 39.

BF Labs admits the allegations contained in paragraph 38 of the Complaint. BF Labs admits that its FAQ page on its website did say at some point in time what is quoted in paragraph 39 of the Complaint, but denies the remaining allegations contained in paragraph 39.

40. 41. 42. 43.

BF Labs denies the allegations contained in paragraph 40 of the Complaint. BF Labs denies the allegations contained in paragraph 41 of the Complaint. BF Labs denies the allegations contained in paragraph 42 of the Complaint. BF Labs denies the allegations contained in paragraph 43 of the Complaint.

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44.

BF Labs admits that Plaintiffs mid-October demand letter said that any shipments would be refused, but denies the remainder of the allegations in paragraph 44 of the Complaint.

45.

Because Plaintiff has rejected receipt, BF Labs admits that Plaintiff has not received Bitcoin Miners from BF Labs and denies the remainder of the allegations in paragraph 45 of the Complaint.

46. 47. 48. 49. 50. 51. 52. 53. 54. 55.

BF Labs denies the allegations contained in paragraph 46 of the Complaint. BF Labs denies the allegations contained in paragraph 47 of the Complaint. BF Labs denies the allegations contained in paragraph 48 of the Complaint. BF Labs denies the allegations contained in paragraph 49 of the Complaint. BF Labs denies the allegations contained in paragraph 50 of the Complaint. BF Labs admits the allegations contained in paragraph 51 of the Complaint. BF Labs denies the allegations contained in paragraph 52 of the Complaint. BF Labs denies the allegations contained in paragraph 53 of the Complaint. BF Labs denies the allegations contained in paragraph 54 of the Complaint. BF Labs lacks knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 55 of the Complaint and, therefore, denies those allegations.

56. 57.

BF Labs denies the allegations contained in paragraph 56 of the Complaint. BF Labs admits that its website says that, but denies the remaining allegations contained in paragraph 57 of the Complaint.

58. 59. 60. 61.

BF Labs denies the allegations contained in paragraph 58 of the Complaint. BF Labs denies the allegations contained in paragraph 59 of the Complaint. BF Labs denies the allegations contained in paragraph 60 of the Complaint. BF Labs denies the allegations contained in paragraph 61 of the Complaint.

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62.

BF Labs denies the allegations contained in paragraph 62 of the Complaint. COUNT I: BREACH OF CONTRACT

63.

BF Labs incorporates by reference its responses to paragraphs 1 through 62 above as if fully set forth herein.

64.

BF Labs admits only that a contract existed and under that contract, Trademost was the purchaser even though the Order was in Plaintiffs name, and denies the remaining allegations in paragraph 64 of the Complaint.

65. 66. 67. 68. 69.

BF Labs denies the allegations in paragraph 65 of the Complaint. BF Labs denies the allegations in paragraph 66 of the Complaint. BF Labs denies the allegations in paragraph 67 of the Complaint. BF Labs denies the allegations in paragraph 68 of the Complaint. BF Labs denies the allegations in paragraph 69 of the Complaint. WHEREFORE, having fully answered Count I of Plaintiffs Complaint, Defendant BF

Labs requests judgment in its favor and against Plaintiff and dismissal of Plaintiffs Complaint with prejudice, for BF Labs costs and expenses incurred herein, and for such other and further relief as this Court deems just, proper, and equitable. COUNT II: FRAUD 70. BF Labs incorporates by reference its responses to paragraphs 1 through 69 above as if fully set forth herein. 71. BF Labs denies the allegations in paragraph 71 of the Complaint, including subparts a. through e. 72. 73. BF Labs denies the allegations in paragraph 72 of the Complaint. BF Labs denies the allegations in paragraph 73 of the Complaint. 5

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74. 75. 76. 77. 78. 79.

BF Labs denies the allegations in paragraph 74 of the Complaint. BF Labs denies the allegations in paragraph 75 of the Complaint. BF Labs denies the allegations in paragraph 76 of the Complaint. BF Labs denies the allegations in paragraph 77 of the Complaint. BF Labs denies the allegations in paragraph 78 of the Complaint. BF Labs denies the allegations in paragraph 79 of the Complaint. WHEREFORE, having fully answered Count II of Plaintiffs Complaint, Defendant BF

Labs requests judgment in its favor and against Plaintiff and dismissal of Plaintiffs Complaint with prejudice, for BF Labs costs and expenses incurred herein, and for such other and further relief as this Court deems just, proper, and equitable. COUNT III: NEGLIGENT MISREPRESENTATION 80. BF Labs incorporates by reference its responses to paragraphs 1 through 79 above as if fully set forth herein. 81. 82. 83. 84. 85. 86. 87. BF Labs denies the allegations in paragraph 81 of the Complaint. BF Labs denies the allegations in paragraph 82 of the Complaint. BF Labs denies the allegations in paragraph 83 of the Complaint. BF Labs denies the allegations in paragraph 84 of the Complaint. BF Labs denies the allegations in paragraph 85 of the Complaint. BF Labs denies the allegations in paragraph 86 of the Complaint. BF Labs denies the allegations in paragraph 87 of the Complaint. WHEREFORE, having fully answered Count III of Plaintiffs Complaint, Defendant BF Labs requests judgment in its favor and against Plaintiff and dismissal of Plaintiffs Complaint

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with prejudice, for BF Labs costs and expenses incurred herein, and for such other and further relief as this Court deems just, proper, and equitable. COUNT IV: KANSAS CONSUMER PROTECTION ACT (DECEPTIVE ACTS) 88. BF Labs incorporates by reference its responses to paragraphs 1 through 87 above as if fully set forth herein. 89. 90. 91. 92. BF Labs denies the allegations in paragraph 89 of the Complaint. BF Labs denies the allegations in paragraph 90 of the Complaint. BF Labs denies the allegations in paragraph 91 of the Complaint. BF Labs denies the allegations in paragraph 92 of the Complaint. WHEREFORE, having fully answered Count IV of Plaintiffs Complaint, Defendant BF Labs requests judgment in its favor and against Plaintiff and dismissal of Plaintiffs Complaint with prejudice, for BF Labs costs and expenses incurred herein, and for such other and further relief as this Court deems just, proper, and equitable. COUNT V: KANSAS CONSUMER PROTECTION ACT (UNCONSCIONABLE ACTS) 93. BF Labs incorporates by reference its responses to paragraphs 1 through 92 above as if fully set forth herein. 94. 95. BF Labs denies the allegations in paragraph 94 of the Complaint. BF Labs denies the allegations in paragraph 95 of the Complaint, including subparts a. through b. 96. 97. BF Labs denies the allegations in paragraph 96 of the Complaint. BF Labs denies the allegations in paragraph 97 of the Complaint. WHEREFORE, having fully answered Count V of Plaintiffs Complaint, Defendant requests judgment in its favor and against Plaintiff and dismissal of Plaintiffs Complaint with 7

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prejudice, for BF Labs costs and expenses incurred herein, and for such other and further relief as this Court deems just, proper, and equitable. 98. Defendant BF Labs denies each and every allegation contained in Plaintiffs Complaint not specifically admitted herein, and denies that Plaintiff is entitled to any of the relief prayed for in the WHEREFORE clause of Plaintiffs Complaint. AFFIRMATIVE DEFENSES 1. Plaintiffs claims are barred as Plaintiff accepted the terms of the pre-order and understood that all sales were final and that there was a backlog of orders and production and delivery of any order may take two months or longer. 2. Plaintiffs claims are barred because BF Labs FAQ website states it reserves the right to handle refund requests on a case by case basis and pre-ordered products are nonrefundable as is clearly stated at the time of purchase. 3. Plaintiffs Complaint fails to state a claim because BF Labs has complied with United States Federal Trade Commission rules and regulations. 4. Plaintiffs claims are barred because Plaintiff understood that Bitforce SC (ASIC) deliveries may take two month or more after order. 5. Plaintiffs claims are barred because Plaintiff expressly agreed to a pre-order arrangement, knowing delay would be two months or longer and BF Labs was unable to make any representation regarding the length of delay. 6. Plaintiffs claims are barred because BF Labs exercised reasonable care to prevent and promptly correct any delay that Plaintiff complains of. 7. 8. Plaintiffs claims are barred for his revocation of acceptance of goods. Plaintiffs claims are barred by the rejection of goods.

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9. 10.

Plaintiffs alleged damages request cannot be sustained as unconscionable. Each and every claim contained in Plaintiffs Complaint fails to state a claim upon which relief can be granted.

11.

Plaintiffs claims for damages are barred in whole or in part because Plaintiff has suffered no damages.

12.

Plaintiffs claims are barred in whole or in part based on the doctrine of election of remedies.

13.

Plaintiffs claims are barred by reason of Plaintiffs breaches or failures to perform conditions precedent or subsequent.

14.

Plaintiffs claims are barred for the reason that any actions or inactions of BF Labs were economically justified.

15. 16.

Plaintiffs claims are barred by reason of Plaintiffs unclean hands. Plaintiffs alleged damages, which are denied, were caused by intervening and superseding acts over which BF Labs had no control or right of control, thereby barring or diminishing plaintiffs alleged right of recovery.

17.

The damages claimed by Plaintiff are not recoverable, in whole or in part, under Kansas or federal law.

18.

Plaintiff has failed to plead fraud or other intentional misconduct with sufficient particularity.

19.

Plaintiffs claims are barred by a prior settlement and/or release of those claims or are barred to the extent Plaintiff entered into an accord and satisfaction or otherwise compromised his claims.

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20.

In further answer to Plaintiffs Petition and by way of Affirmative Defense, Defendant adopts all Affirmative Defenses available to it under the Kansas Uniform Commercial Code or Federal Trade Commission regulations.

21.

Defendants actions were neither the cause in fact nor the proximate cause of Plaintiffs injuries, if any.

22.

Defendant is entitled to the benefit of all defenses and presumptions contained in, or arising from, any product liability act and/or Kansas Uniform Commercial Code.

23.

The alleged damages sustained by Plaintiff were the result of Plaintiffs own comparative fault or any other fault pursuant to K.S.A. 60-258a and, accordingly, Plaintiff is barred from recovery or limited in their recovery.

24.

Plaintiffs alleged damages and injuries were directly and proximately caused by the superseding intervening acts and conduct of others over whom Defendant has no control, thereby precluding Plaintiff from any recovery from Defendant.

25.

Plaintiffs claims are barred, in whole or in part, by the equitable doctrines of waiver and estoppel.

26. 27. 28. 29.

Plaintiffs claims are barred by the doctrine of justification. Plaintiffs claims are barred, in whole or in part, by the doctrine of ratification. Plaintiffs claims are barred by all applicable statutes of limitation. Plaintiff has failed to mitigate his damages, if any, or otherwise take reasonable steps to minimize or prevent the damages Plaintiff claims to have suffered. Plaintiff also, once it realized a claim existed, was under an obligation to minimize its alleged loss, if any. As a result, any recovery against Defendant should be barred, reduced, or offset accordingly.

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30.

Plaintiffs damages should be reduced as an offset by any amount received by any other payment to mitigate damages.

31.

BF Labs reserves the right to amend its Answer to assert additional defenses, affirmative or otherwise, that may arise or become known through the course of further investigation or discovery. WHEREFORE, having fully answered Plaintiff Martin Meissners Complaint, Defendant

BF Labs Inc. respectfully requests that this Court enter judgment in its favor and against Plaintiff, dismiss Plaintiffs Complaint with prejudice, and award BF Labs its costs, expenses and attorneys fees incurred herein, and for such other and further relief as the Court deems just, proper, and equitable. Respectfully submitted,

James M. Humphrey KS Fed. #70664 Michael S. Foster KS #24011 Polsinelli PC 900 W. 48th Place, Suite 900 Kansas City, Missouri 64112-1895 Telephone: (816) 753-1000 Facsimile: (816) 753-1536 jhumphrey@polsinelli.com mfoster@polsinelli.com Attorneys for Defendant BF Labs Inc.

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CERTIFICATE OF SERVICE I hereby certify that on ________________, 2014, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which sent notification of such filing to the following: Robert F. Flynn The Flynn Law Firm, P.C. 1150 Grand Blvd., Suite 300 Kansas City, MO 64106-2303 Attorneys for Plaintiff

Attorney for Defendant

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