Case 3:06-cv-00288-HTW-LRA Document 2 Filed 06/05/2006 Page 1 of 13

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI
JACKSON DIVISION

NICHOLAS COUGHLIN PLAINTIFF

VS. CIVIL ACTION NO. 3:06CV288-HTW-JCS

FRANKLINSQUIRES COMPANIES, LLC;

HILL ERICKSON, LLC AND C. RICK KOERBER DEFENDANTS

ANSWER, DEFENSES AND COUNTER-CLAIM

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

state the following:

FIRST DEFENSE

Pursuant to F.R.C.P. 12(b)(6), the Complaint of Coughlin fails to state a claim upon which

relief could be granted against the Defendants.

SECOND DEFENSE

Coughlin has failed to join a necessary or indispensable party, or necessary or indispensable

parties, or a party or parties needed for a just adjudication, and Coughlin should be required to join

said party or parties pursuant to F.R.C.P. 17 and 19.

THIRD DEFENSE

AND NOW, without waiving the above and foregoing defenses, the Defendants answer the

Complaint of Coughlin, paragraph by paragraph, as follows:

1. On information and belief, admitted.

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2. Denied.

3. Admitted.

4. Defendants admit that C. Rick Koerber is an adult resident citizen of Utah. The

remaining allegations of Paragraph 4 of the Complaint are denied.

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

approximately $3,750,000.00. The remaining allegations of Paragraph 19 of the Complaint are

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

prayed for or any relief whatsoever.

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,

ratification and/or election.

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

Imposition of punitive damages in this case would constitute a violation of Defendants’

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

not rationally related to legitimate government interests.

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

of the Constitution of the State of Mississippi.

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

accorded to criminal defendants.

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

Hill Erickson, LLC, by counsel, submits this Counter-Claim against Plaintiff/Counter-

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

place of business in Provo, Utah.

2. Nicholas Coughlin (“Coughlin”) is an adult resident citizen of the First Judicial

District of Hinds County, Mississippi.

Jurisdiction and Venue

3. This Court has jurisdiction over the parties to and subject matter of this action.

4. Venue is proper in this Court.

Background and Factual Allegations

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

contracts from qualified sellers for qualified properties.

7. Among the criteria used by Hill Erickson to determine a seller’s qualification is if

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.

8. Hill Erickson is not bound to accept any purchase opportunity presented to it by a

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

account and pursuant to their own interests.

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

entered into a binding contract to purchase the Brantley Property.

11. Sometime in late 2005 or early 2006, Cronin, who was a friend and/or acquaintance

of Jeffrey H. Brantley, approached Sterling Freestone, the managing member of Greystoke

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

Pillars Investments, LLC (“Five Pillars”).

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

brother, Stephen Freestone, through Five Pillars.

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13. On information and belief, Greystoke offered to pay Cronin approximately

$15,000.00 of any profit it received in connection with the Brantley Property as a referral fee and

Cronin agreed to accept such payment.

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

clients unrelated to FSI.

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

and incorporated herein by reference.

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

form of bridge loan interest, among other things.

COUNT I

Slander of Title

20. Hill Erickson realleges and incorporates herein by reference each and every preceding

paragraph as if fully set forth herein.

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

a release of the lis pendens.

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

Tortious Interference with Contract

23. Hill Erickson realleges and incorporates herein by reference each and every preceding

paragraph as if fully set forth herein.

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

contractual relations of Hill Erickson.

COUNT III

Interference with Prospective Business Advantage

26. Coughlin realleges and incorporates herein by reference each and every preceding

paragraph as if fully set forth herein.

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

prospective business advantage of Hill Erickson.

WHEREFORE, PREMISES CONSIDERED, Hill Erickson demands judgment against

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

and investigation into the wrongs perpetrated by Coughlin on Hill Erickson.

Respectfully submitted this the 5th day of June, 2006.

FRANKLIN SQUIRES COMPANIES, LLC; HILL

ERICKSON, LLC AND C. RICK KOERBER

BY: s/Eddie J. Abdeen (MSB#9321)

ONE OF THEIR ATTORNEYS

ATTORNEYS FOR DEFENDANTS

FRANKLIN SQUIRES COMPANIES, LLC;
HILL ERICKSON, LLC AND C. RICK KOERBER:

EDDIE J. ABDEEN, ESQ. (MSB #9321)

Attorney at Law
Post Office Box 2134
Madison, Mississippi 39130
Telephone: 601-607-4750
Facsimile: 601-427-0040

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R. PAUL RANDALL, JR., ESQ. (MSB # 99960)

Willoughby, McCraney & Randall, PLLC
451 Northpark Drive, Suite A
Ridgeland, Mississippi 39157
Telephone: 601-956-2615
Facsimile: 601-956-2642

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:

Xavier M. Frascona, Jr., Esq.

Matthew Hetzel, Esq.
Frascogna Courtney, PLLC
P.O. Box 23126
Jackson, MS 39225-3126

BY: s/Eddie J. Abdeen (MSB#9321)

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