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COME NOW Defendants FranklinSquires Companies, LLC, Hill Erickson, LLC and C. Rick
Koerber (hereinafter sometimes collectively referred to as the “Defendants”), by counsel, and file
this their Answer and Defenses and the Counter-Claim of Defendant Hill Erickson, LLC in response
to the Complaint of Plaintiff Nicholas Coughlin (hereinafter “Coughlin”), and in support thereof
FIRST DEFENSE
Pursuant to F.R.C.P. 12(b)(6), the Complaint of Coughlin fails to state a claim upon which
SECOND DEFENSE
parties, or a party or parties needed for a just adjudication, and Coughlin should be required to join
THIRD DEFENSE
AND NOW, without waiving the above and foregoing defenses, the Defendants answer the
2. Denied.
3. Admitted.
4. Defendants admit that C. Rick Koerber is an adult resident citizen of Utah. The
5. Denied.
6. The Defendants admit this Court has jurisdiction over the parties and subject matter
of this action. The remaining allegations of Paragraph 6 of the Complaint are denied.
7. Denied.
8. Denied.
9. Denied.
10. Denied.
11. Denied.
12. Denied.
13. Denied.
14. Denied.
15. The Defendants are without sufficient knowledge or information to form a belief as
to the truth of the allegations in the first sentence of Paragraph 15 of the Complaint and therefor
deny such allegations. On information and belief, Coughlin’s partner, Brian Cronin, contacted
Mr.Jeffrey H. Brantley and unsuccessfully attempted to negotiate the purchase of a home owned by
Mr. Brantley and his wife, Ashley C. Brantley, located at #2 St. Charles Place, Clinton, MS
(“Brantley Property”). The remaining allegations of Paragraph 15 of the Complaint are denied.
16. Denied.
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17. Denied.
18. The Defendants admit Hill Erickson, LLC purchased the Brantley Property on or
about March 31, 2006.The remaining allegations of Paragraph 18 of the Complaint are denied.
19. The Defendants admit that Hill Erickson, LLC purchased the Brantley Property for
denied.
20. Denied.
21. Denied.
22. Denied.
23. Denied.
24. Denied.
25. Denied.
In response to the unnumbered paragraph following Paragraph 25 beginning with the words
“WHEREFORE PREMISES CONSIDERED” the Defendants deny Plaintiff is entitled to the relief
AND NOW, after having answered the Complaint, paragraph by paragraph, and having
denied all liability in the premises, the Defendants further set forth the following affirmative
defenses:
FOURTH DEFENSE
Plaintiff’s claims are barred, in whole or in part, by Miss. Code Ann. §73-35-33 (1972, as
amended).
FIFTH DEFENSE
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Plaintiff’s claims are barred, in whole or in part, by the doctrines of waiver, estoppel, laches,
SIXTH DEFENSE
Plaintiff’s claims are barred, in whole or in part, by the principle of receipt and release.
SEVENTH DEFENSE
As a matter of fact and of law, Plaintiff has no claim against the Defendants.
EIGHTH DEFENSE
Defendants aver that any award of punitive damages to Plaintiff in this case would be in
violation of the constitutional rights and safeguards provided to the Defendants under the
Constitution of the State of Mississippi and the Constitution of the United States of America
including, without limitation, that there are no constraining limitations placed on a jury'
s discretion
in considering the imposition or amount of punitive damages, there are no meaningful trial court and
appellate review mechanisms to constitutionally confirm any punitive damage award, imposition
would allow a verdict tainted by passion and prejudice, and Plaintiff impermissibly seeks a punitive
damage award that bears an unconstitutional relationship to the alleged actual amount in question.
NINTH DEFENSE
constitutional rights under the Fourth, Fifth, Sixth, Eighth and Fourteenth Amendments to the United
States Constitution.
TENTH DEFENSE
Any award of punitive damages in this case would violate the constitutional rights and
safeguards provided to the Defendants under the Due Process Clause of the Fourteenth Amendment
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and/or Fifth Amendment to the Constitution of the United States of American and/or under the Due
Process Clause of Article III, Section 14 of the Constitution of the State of Mississippi in that
punitive damages and any method of which they might be assessed are unconstitutionally vague and
ELEVENTH DEFENSE
The procedure and/or standards governing imposition of punitive damages are impermissibly
vague, arbitrary, improper and/or violate the Due Process Clause of the Fourteenth Amendment
and/or the Fifth Amendment of the Constitution of the United States and/or Article III, Section 14
TWELFTH DEFENSE
Any award of punitive damages in this case would violate the procedural and/or substandard
safeguards provided to the Defendants under the Fifth, Sixth, Eight and/or Fourteenth Amendments
to the Constitution of the United States and/or under Article III, Section 14 and 26 of the
Constitution of the State of Mississippi, in that punitive damages are penal in nature and,
consequently, the Defendants are entitled to the same procedural and substandard safeguards
THIRTEENTH DEFENSE
The Defendants need investigation and discovery to determine the extent of the defenses and
the extent of its affirmative claims, if any, and Defendants hereby reserve all defenses to be set forth
in amended pleadings, and all claims to be set forth in amended pleadings, pending investigation and
discovery.
AND NOW, after having fully answered the Complaint and having denied all liability in the
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premises, the Defendants pray that the Complaint will be dismissed with prejudice, with all costs
assessed against Coughlin and Defendant Hill Erickson, LLC asserts the following Counter-Claim
against Coughlin.
COUNTER-CLAIM
Defendant Nicholas Coughlin and in support thereof shows unto the Court the following:
Parties
1. Hill Erickson, LLC (“Hill Erickson”) is a limited liability company with its principal
3. This Court has jurisdiction over the parties to and subject matter of this action.
5. Franklin Squires Investments, LLC (“FSI”) is a company that, among other things,
trains people how to invest in real estate for themselves and for their own account according to the
FSI model.
6. Hill Erickson is a company that, among other things, purchases real estate purchase
such seller can demonstrate mastery of the model taught by FSI. In addition, before Hill Erickson
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will consider the purchase of a real estate purchase contract, the qualified seller of the contract must
himself or herself have actually entered into a binding contract with the real property seller.
qualified seller. In the event, Hill Erickson elects to purchase a real estate purchase contract, it will
enter into a written assignment agreement with the qualified seller by which Hill Erickson purchases
all the qualified seller’s rights in the real estate purchase contract.
9. Qualified sellers do not act as agents for Hill Erickson or FSI but act on their own
10. On information and belief, sometime in April 2005, Coughlin’s partner, Brian
Cronin (“Cronin”), unsuccessfully attempted to put under contract and purchase the Brantley
Property. While Cronin and Jeffrey H. Brantley exchanged offers and counter-offers, Cronin never
11. Sometime in late 2005 or early 2006, Cronin, who was a friend and/or acquaintance
Investments, LLC (“Greystoke”), and informed Sterling Freestone that the Brantley Property had not
been sold and was still available for purchase and that Mr. Brantley was motivated to sell. Cronin
was an acquaintance of Sterling Freestone and Stephen Freestone, the manager/member of Five
12. Sterling Freestone was interested in pursuing the purchase of the Brantley Property
and ultimately entered into a contract with Mr. Brantley on behalf of Greystoke. Sterling Freestone,
through Greystoke, worked towards the acquisition of the Brantley Property in conjunction with his
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$15,000.00 of any profit it received in connection with the Brantley Property as a referral fee and
14. Coughlin had been a predominantly part-time employee of FSI and held the position
of a call floor employee and had, on information and belief, worked at the same time as a part-time
employee of John Lowry and/or an entity owned by Lowry performing telemarketing services for
15. However, at no time pertinent hereto, was Coughlin, Cronin, or Sterling Freestone
qualified by Hill Erickson to sell real estate purchase contracts to Hill Erickson. Rather, Stephen
Freestone was the only qualified seller associated with the Brantley Property transaction and, as a
result, was the only person involved in the transaction that could present a proposed real estate
investment opportunity to Hill Erickson. However, at no time did Coughlin, Cronin, Sterling
Freestone, Greystoke, Stephen Freestone or Five Pillars act as an agent for Hill Erickson or in any
similar capacity.
16. On or about January 26, 2006, Sterling Freestone, for and on behalf of
(“Greystoke”), contracted to purchase the Brantley Property. A copy of such contract is attached
hereto as Exhibit A and incorporated herein by reference. Thereafter, on or about February 1, 2006,
Greystoke sold its contractual rights for a fee through an assignment of its real estate purchase
contract on the Brantley Property to Five Pillars. A copy of such assignment is attached hereto as
Exhibit B and incorporated herein by reference. On March 30, 2006, Five Pillars sold its contractual
rights for a fee through an assignment of its real estate purchase contract on the Brantley Property
to Hill Erickson, LLC (“Hill Erickson”), who subsequently consummated the purchase of the
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Brantley Property as evidenced by the March 31, 2006 warranty deed, attached hereto as Exhibit C
17. At the time Hill Erickson purchased the Brantley Property it had no actual or legal
notice of any lien or other legal consideration that would cause it not to enter into the transaction.
18. On or about April 26, 2006, Hill Erickson contracted to sell the Brantley Property to
C. Rick Koerber, individually. Because of Coughlin’s knowledge of the FSI real estate model,
Coughlin knew that the purchaser of the Brantley Property would do so with short term bridge
financing at interest rates that greatly exceeded the interest rate that would be paid by the ultimate
purchaser through permanent financing and that other fees and costs would be implicated as well.
19. On or about April 25, 2006, Coughlin wrongfully, maliciously, and without legal
right filed a lis pendens notice against and/or in relation to the Brantley Property owned by Hill
Erickson, thereby disparaging Hill Erickson’s title thereto. Coughlin’s lis pendens notice has
precluded Hill Erickson from refinancing and/or restructuring the bridge financing on the Brantley
Property and/or from selling such property, thereby causing Hill Erickson to sustain damages in the
COUNT I
Slander of Title
20. Hill Erickson realleges and incorporates herein by reference each and every preceding
21. Coughlin maliciously filed his lis pendens notice in relation to the Brantley Property
owned by Hill Erickson at a time Coughlin knew such notice was inoperative and/or otherwise
invalid, thereby disparaging Hill Erickson’s title thereto. Coughlin has no legitimate interest in the
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Brantley Property and filed the lis pendens with a view towards causing Hill Erickson to incur
additional bridge financing interest and lost profits on the sale of the property, among other things,
as part of an effort to wrongfully attempt to force Hill Erickson to pay money to Coughlin to obtain
22. As a proximate consequence of such wrongful conduct, Hill Erickson has suffered
damages and is entitled to full compensatory relief, as well as punitive or exemplary damages and
attorneys fees as a result of Couglin’s gross, reckless and/or intentional slander of title.
COUNT II
23. Hill Erickson realleges and incorporates herein by reference each and every preceding
24. Coughlin has tortiously interfered with the contractual relations of Hill Erickson.
25. As a proximate consequence of such wrongful conduct, Hill Erickson has suffered
damages and is entitled to full compensatory relief, as well as punitive or exemplary damages and
attorneys fees as a result of Coughlin’s gross, reckless and/or intentional interference with the
COUNT III
26. Coughlin realleges and incorporates herein by reference each and every preceding
27. Coughlin has tortiously interfered with the prospective business advantage of Hill
Erickson.
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28. As a proximate consequence of such wrongful conduct, Hill Erickson has suffered
damages and is entitled to full compensatory relief, as well as punitive or exemplary damages and
attorneys fees as a result of Coughlin’s gross, reckless and/or intentional interference with the
Coughlin for compensatory damages in an amount to be proven at trial, plus punitive damages in an
amount to be assessed by the Court. Hill Erickson further demands an award of all court costs,
attorney fees and pre-judgment and post-judgment interest. Hill Erickson further requests that it be
awarded any other relief to which it is entitled in the premises, based on the claims pled or on any
other theories available under the facts and the law, and after completion of all necessary discovery
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CERTIFICATE OF SERVICE
I hereby certify that on June 5, 2006, I electronically filed the foregoing with the Clerk of the
Court using the ECF System which sent notification of such filing to the following:
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