Jd Brothers Llc v. Liberty Asset Management Corporation et al

MOTION for Partial Summary Judgment

N.D. Cal.September 26, 2016

PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP JOSEPH W. COTCHETT (SBN 36324) jcotchett@cpmlegal.com NANCY L. FINEMAN (SBN 124870) nfineman@cpmlegal.com BRIAN DANITZ (SBN 247403) bdanitz@cpmlegal.com COTCHETT, PITRE & McCARTHY, LLP 840 Malcolm Road, Suite 200 Burlingame, CA 94010 Telephone: (650) 697-6000 Fax: (650) 697-0577 C. ALEX NAEGELE (SBN 255887) alex@canlawcorp.com C. ALEX NAEGELE A PROFESSIONAL LAW CORPORATION 95 S. Market Street, Suite 300 San Jose, CA 95113 Telephone: (408) 995-3224 Fax: (408) 890-4645 Attorneys for Plaintiffs UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA JD BROTHERS LLC, et al., Plaintiffs, vs. LIBERTY ASSET MANAGEMENT CORPORATION, et al., Defendants. Case No. 3:15-cv-01373-VC PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT Date: November 10, 2016 Time: 10:00 a.m. Judge: Hon. Vince Chhabria Dept.: Courtroom 4, 17th Floor Trial Date: June 12, 2017 Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 1 of 12 PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP NOTICE OF MOTION AND MOTION PLEASE TAKE NOTICE THAT on November 10, 2016 at 10:00 a.m., or as soon thereafter as counsel may be heard, in the Courtroom of United States District Court Judge Vince Chhabria, 450 Golden Gate Avenue, San Francisco, CA 94102, Plaintiff Wei “Wendy” Huang as Trustee of the Guo/Huang Family Trust (“Plaintiff” or the “Trust”) will, and hereby does, move this Court for Partial Summary Judgment pursuant to Federal Rule of Civil Procedure 56 on Plaintiff’s Breach of Contract claim against Defendant Benjamin Kirk (“Defendant” or “Kirk”) for breach of the April 21, 2011 Promissory Note between Kirk and the Trust as amended on June 21, 2012 and July 21, 2013. This Motion is brought on the ground that there is no genuine issue of material fact, and Plaintiff is entitled to judgment as a matter of law: Plaintiff performed all required contractual obligations under the subject loan agreements, and Defendant materially breached the loan agreements (1) by failing to pay interest on the $2 million loan amount; and (2) by failing to repay the $2 million loan. This Motion is based upon this Notice of Motion, the following points and authorities, the Declarations of Wendy Huang and Brian Danitz submitted herewith, the pleadings and other papers on file, and such other and further argument as may be presented at the hearing on this Motion. Dated: September 26, 2016 COTCHETT, PITRE & McCARTHY, LLP By: /s/ Nancy L. Fineman NANCY L. FINEMAN C. ALEX NAEGELE A Professional Law Corporation By: /s/ C. Alex Naegele C. ALEX NAEGELE Attorneys for Plaintiffs Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 2 of 12 PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP TABLE OF CONTENTS Page I. INTRODUCTION .............................................................................................................. 1 II. STATEMENT OF ISSUES ................................................................................................ 1 III. STATEMENT OF UNDISPUTED MATERIAL FACTS ................................................. 2 A. The April 21, 2011 Promissory Note ...................................................................... 2 B. The June 21, 2012 Amendment To Promissory Note ............................................. 3 C. The July 21, 2013 Amendment To Promissory Note ............................................. 3 D. Kirk Defaulted On The Trust’s Two Million Dollar Loan ..................................... 4 IV. ARGUMENT ...................................................................................................................... 4 A. Legal Standard ........................................................................................................ 4 B. Summary Judgment Is Warranted For Kirk’s Breach Of Contract ......................... 5 1. Existence of a Contract ................................................................... 5 2. Plaintiff’s Performance ................................................................... 6 3. Defendant’s Breach ......................................................................... 6 4. Plaintiff’s Damages ......................................................................... 6 V. CONCLUSION ................................................................................................................... 7 Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 3 of 12 PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC ii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP TABLE OF AUTHORITIES Page CASES Anderson v. Liberty Lobby, Inc. 477 U.S. 242 (1986) .................................................................................................................... 5 Celotex Corp. v. Catrett 477 U.S. 317 (1986) .................................................................................................................... 5 Amelco Electric v. City of Thousand Oaks 27 Cal 4th 228 (2002) ................................................................................................................. 5 Bay Area Roofers Health v. Sun Life Assur. Co. 73 F. Supp. 3d 1154 (N.D. Cal. 2014) ........................................................................................ 5 Careau & Co. v. Sec. Pac. Bus. Credit, Inc. 222 Cal. App. 3d 1371 (1990) .................................................................................................... 5 Epiphany, Inc. v. St. Paul Fire & Marine Ins. Co. 590 F. Supp. 2d 1244 (N.D. Cal. 2008) ...................................................................................... 5 FDIC v. Hyun 2013 U.S. Dist. LEXIS 90814 (N.D. Cal. June 26, 2013) .......................................................... 5 In re Exxon Valdez 484 F.3d 1098 (9th Cir. 2007) .................................................................................................... 6 Jadwin v. County of Kern 2010 U.S. Dist. LEXIS 30949 (E.D. Cal. Mar. 31, 2010) .......................................................... 6 RD Legal Funding, LLC v. Erwin & Balingit, LLP 2011 U.S. Dist. LEXIS 2137 (S.D. Cal. Jan. 10, 2011) .............................................................. 7 Reichert v. Gen. Ins. Co. 68 Cal. 2d 822 (1968) ................................................................................................................. 5 State Farm Fire & Cas. Co. v. Geary 699 F. Supp. 756 (N.D. Cal. 1987) ............................................................................................. 5 Trigg v. Arnott 22 Cal. App. 2d 455 (1937) ........................................................................................................ 5 Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 4 of 12 PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC iii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP STATUTES Cal. Civ. Code § 3289(a) ................................................................................................................ 7 Cal. Civ. Code § 3300 ..................................................................................................................... 6 Cal. Civ. Code § 3302 ..................................................................................................................... 6 RULES Fed. R. Civ. P. 56(a) ....................................................................................................................... 5 Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 5 of 12 PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Plaintiff Wendy Huang in her capacity as Trustee of the Guo/Huang Family Trust (“Plaintiff” or the “Trust”) seeks Summary Judgment on the Claim for Breach of Contract against Defendant Benny Kirk (“Defendant” or “Kirk”) for breach of the loan agreements between Kirk and the Trust. The undisputed facts show that on April 21, 2011 Kirk signed a Promissory Note in the principal amount of $2,000,000 (Two Million Dollars). Under the terms of the Promissory Note, Kirk was required to make monthly interest-only payments at an annualized rate of 4%, and to pay back the $2,000,000 loan in three months, on July 21, 2011. On June 21, 2012, Kirk signed an Amendment to Promissory Note that (1) extended the due date for the payment of the $2,000,000 Principal Amount to July 21, 2012; and (2) increased the interest rate for the monthly payments to an annualized rate of 5%. On December 31, 2012, Kirk made a single payment of $166,666.67 for the interest due through December 31, 2012; however, Kirk did not pay back the $2,000,000 Principal Amount. On July 21, 2013, Kirk signed the second and final Amendment to Promissory Note that (1) extended the due date for the payment of the $2,000,000 Principal Amount to December 31, 2013; and (2) increased the interest rate for the monthly payments to an annualized rate of 8%. Kirk did not make any further interest payments, and, admittedly, never paid back the $2,000,000 Principal Amount of the loan. Kirk breached the Promissory Note as amended and has admittedly failed to repay the debt owed. No defense or justification exists for the breach. Plaintiff is entitled to summary judgment on the cause of action for breach of contract for this breach. II. STATEMENT OF ISSUES 1. Whether the Court should grant partial summary judgment in favor of Plaintiff Wendy Huang as Trustee of the Guo/Huang Family Trust on Plaintiff’s Breach of Contract claim against Defendant Kirk for breach of the April 21, 2011 Promissory Note between Kirk and the Trust as amended on June 21, 2012 and July 21, 2013. Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 6 of 12 PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP 2. Whether Kirk is liable to the Trust for breaching the Promissory Note as amended for damages equal to Two Million Dollars ($2,000,000) in unpaid principal, plus $124,999.99 in unpaid interest, plus prejudgment interest. III. STATEMENT OF UNDISPUTED MATERIAL FACTS A. The April 21, 2011 Promissory Note On April 21, 2011, Wendy Huang, acting on behalf of the Guo/Huang Family Trust, wired Two Million Dollars to Defendant Benny Kirk. Declaration of Wei Huang (“Huang Decl.”) ¶ 2. That same day, Kirk signed a Promissory Note that he provided which stated: “FOR VALUE RECEIVED, I, Benny Kirk (Borrower) promise to pay THE GUO/HUANG FAMILY TRUST Revocable Trust (Lender) the sum of Two Million Dollars ($2,000,000) and interest at the yearly rate of 4% on the unpaid balance as specified below.” Id. ¶ 3; Huang Decl. Exhibit 1 (Promissory Note) at 1.1 The Notary’s form attached to the Promissory Note certifies that Benny Kirk signed the Promissory Note. Huang Decl. Exhibit 1 at 2. The Additional Optional Information section of the Notary form states that Kirk signed the Promissory Note in his individual capacity. Id. In his response to Plaintiffs’ Requests for Admission (“RFA”), Kirk admitted that he “signed a promissory note with Guo/Huang Family Trust to borrow $2 million.” Danitz Decl. Exhibit 1 (RFA 10). The Promissory Note and Notary form is attached as Exhibit 9 to the Third Amended Complaint (“TAC”). Dkt. 108-9. Kirk’s Answer to the TAC stated that Kirk had “no current reason to doubt its [the Promissory Note’s] authenticity, and allege[d] that the exhibit speaks for itself.” Danitz Decl. Exhibit 2 (Kirk Answer to TAC) at ¶ 108. The Promissory Note provided for monthly interest payments for a period of three months at an annualized rate of 4% of the Principal Amount, or $6,666.66 per month, or for “one lump payment” on July 21, 2011. Huang Decl. ¶ 4; Huang Decl. Exhibit 1; Dkt. 108-9. The Promissory Note provided that if Kirk “fails to make an installment payment when due or fails to comply with 1 “Huang Decl. Exhibit” refers to exhibits attached to the Declaration of Wendy Huang filed concurrently herewith. “Danitz Decl. Exhibit” refers to exhibits to the Declaration of Brian Danitz filed concurrently herewith. Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 7 of 12 PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP any other term of this promissory note, the loan will be considered in default.” Huang Decl. Exhibit 1; Dkt. 108-9. B. The June 21, 2012 Amendment To Promissory Note On June 21, 2012, Kirk signed a notarized Amendment To Promissory Note (“Amended Note”) that he provided. Huang Decl. ¶ 5; Huang Decl. Exhibit 2; Dkt. 108-14. In his response to Plaintiffs’ Requests for Admission, Kirk admitted that he “signed an amendment to the promissory note with the Guo/Huang Family Trust.” Danitz Decl. Exhibit 1 (RFA 12). The Amended Note is attached as Exhibit 14 to the TAC. Dkt. 108-14. Kirk’s Answer stated that Kirk had “no current reason to doubt its [the Amended Note’s] authenticity, and allege[d] that the exhibit speaks for itself.” Danitz Decl. Exhibit 2 at ¶ 138. The Amended Note summarized the terms of the original Promissory Note: 1) Principal Amount: $2,000,000.00 (Two Million Dollars) 2) Date: April 21, 2011 3) Due Date: July 21, 2011 4) Yearly interest rate: 4%. Huang Decl. ¶ 5; Huang Decl. Exhibit 2; Dkt. 108-14. The Amended Note “amended and/or supplemented” the Promissory Note as follows: 1) Borrower and Lender agree to extend the mature date to July 21, 2012. 2) Borrower and Lender agree the yearly interest rate modified to 5%. 3) ALL OTHER TERMS AND CONDITIONS SHALL REMAIN THE SAME. Huang Decl. ¶ 5; Huang Decl. Exhibit 2; Dkt. 108-14. C. The July 21, 2013 Amendment To Promissory Note On July 21, 2013, Kirk signed a second notarized Amendment To Promissory Note (“Second Amended Note”) that he provided. Huang Decl. ¶ 6; Huang Decl. Exhibit 3. The Second Amended Note is attached as Exhibit 15 to the TAC. Dkt. 108-15. Kirk’s Answer stated that Kirk had “no current reason to doubt its [the Second Amended Note’s] authenticity, and allege[d] that the exhibit speaks for itself.” Danitz Decl. Exhibit 2 at ¶ 140. Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 8 of 12 PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP The Second Amended Note summarized the terms the Amended Note: 1) Amended to Original Promissory Note, Dated April 21, 2011 2) Date: June 21, 2011 3) Due Date: July 21, 2012 4) Yearly interest rate: 5%. Huang Decl. ¶ 6; Huang Decl. Exhibit 3; Dkt. 108-15. The Second Amended Note “amended and/or supplemented” the original Promissory Note and the Amended Note as follows: 1) Borrower and Lender agree to extend the mature date to December 31, 2013. 2) Borrower and Lender agree the yearly interest rate modified to 8%. 3) ALL OTHER TERMS AND CONDITIONS SHALL REMAIN THE SAME. Huang Decl. ¶ 6; Huang Decl. Exhibit 3; Dkt. 108-15. D. Kirk Defaulted On The Trust’s Two Million Dollar Loan On December 31, 2012, Kirk made a single payment of $166,666.67 for interest from April 21, 2011 through December 31, 2012 (20 months). Huang Decl. ¶ 7. Kirk made no other interest payments. Kirk did not pay back the $2,000,000 Principal Amount when it was due on December 31, 2013. Huang Decl. ¶ 8. In 2014 and early 2015, Ms. Huang repeatedly demanded that Kirk pay back the $2,000,000 loan and accrued interest. Huang Decl. ¶ 9. However, Kirk, did not repay the loan. Huang Decl. ¶ 10. In his response to Plaintiffs’ Requests for Admission, Kirk admitted that he “has not paid back the $2 million that [he] borrowed from the Guo/Huang Family Trust.” Danitz Decl. Exhibit 1 (RFA No. 13). IV. ARGUMENT A. Legal Standard Partial summary judgment is appropriate if, viewing the evidence and drawing all reasonable inferences in the light most favorable to the nonmoving party, there are no genuine disputed issues of material fact, and the movant is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Fed. R. Civ. P. 56(a). A fact is “material” if it Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 9 of 12 PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP “might affect the outcome of the suit under the governing law,” and a dispute as to a material fact is “genuine” if there is sufficient evidence for a reasonable trier of fact to decide in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A party may move for summary judgment by “identifying each claim or defense—or the part of each claim or defense on which summary judgment is sought.” Fed. R. Civ. P. Rule 56(a). Partial summary judgment is available when the Court rules on some but not all claims or issues within a claim. Bay Area Roofers Health v. Sun Life Assur. Co., 73 F. Supp. 3d 1154, 1160, 1168 (N.D. Cal. 2014) (granting partial summary judgment on claim for breach of contract); State Farm Fire & Cas. Co. v. Geary, 699 F. Supp. 756, 759 (N.D. Cal. 1987). As with a motion for summary judgment under Rule 56(a), partial summary judgment is proper “if the movant shows that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Epiphany, Inc. v. St. Paul Fire & Marine Ins. Co., 590 F. Supp. 2d 1244, 1250 (N.D. Cal. 2008). B. Summary Judgment Is Warranted For Kirk’s Breach Of Contract “A promissory note is a contract in writing.” FDIC v. Hyun, 2013 U.S. Dist. LEXIS 90814, *4-5, 2013 WL 3245098 (N.D. Cal. June 26, 2013) (citing Trigg v. Arnott, 22 Cal. App. 2d 455, 457 (1937)). The essential elements of a breach of contract claim are: (1) existence of a contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach; and (4) resulting damages to the plaintiff. Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 Cal. App. 3d 1371, 1388 (1990) (citing Reichert v. Gen. Ins. Co., 68 Cal. 2d 822, 830, (1968)); see also Amelco Electric v. City of Thousand Oaks, 27 Cal 4th 228, 243 (2002). 1. Existence of a Contract It is undisputed that Kirk entered into the Promissory Note “FOR VALUE RECEIVED” and that Kirk agreed to pay interest on the $2,000,000 Principal Amount “on the 1st day of each month”. Huang Decl. ¶ 2; Huang Decl. Exhibit 1; Danitz Decl. Exhibit 1 (RFA No. 10). It is also undisputed that Kirk entered into two Amendments to Promissory Note, on June 21, 2012 and July 21, 2013, respectively, both of which increased the interest rate and extended the Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 10 of 12 PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP maturity date of the Promissory Note. Huang Decl. ¶¶ 5-6; Huang Decl. Exhibits 2, 3; Danitz Decl. Exhibit 1 (RFA No. 12). 2. Plaintiff’s Performance It is undisputed that Plaintiff fully performed when Ms. Huang wired the $2,000,000 Principal Amount of the loan on April 21, 2011. Huang Decl. ¶ 2; Huang Decl. Exhibit 1; Danitz Decl. Exhibit 1 (RFA 10). 3. Defendant’s Breach It is undisputed that Kirk defaulted on the Promissory Note by failing to make the required payments. Kirk made only one interest payment on December 31, 2012, for interest accrued through that date. Notwithstanding the fact that Kirk entered into a second Amendment to Promissory Note in July 2013 that raised the interest rate to 8% yearly and extended the maturity date of the Promissory Note to December 31, 2013, Kirk failed to make any further interest payment and, admittedly, has never repaid the $2,000,000 Principal Amount. Huang Decl. ¶¶ 7-10; Danitz Decl. Exhibit 1 (RFA 13). 4. Plaintiff’s Damages Plaintiff suffered and is entitled to damages. In California, the appropriate amount of damages for breach of contract “is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby . . . .” Cal. Civ. Code § 3300. “The detriment caused by the breach of an obligation to pay money only, is deemed to be the amount due by the terms of the obligation, with interest thereon.” Cal. Civ. Code § 3302. “[S]tate law applies to [a] claim for prejudgment interest under state law unless federal law preempts it.” In re Exxon Valdez, 484 F.3d 1098, 1101 (9th Cir. 2007); see also Jadwin v. County of Kern, 2010 U.S. Dist. LEXIS 30949, *45 (E.D. Cal. Mar. 31, 2010) (“Prejudgment interest is substantive for Erie purposes. . . . This makes California law applicable to prejudgment interest on Plaintiff’s state law claims.”) (citation omitted). Under California law, “[a]ny legal rate of interest stipulated by a contract remains chargeable after a breach thereof, as before, until the contract is superseded by a verdict or other new obligation.” Cal. Civ. Code § 3289(a); see, e.g., RD Legal Funding, LLC v. Erwin & Balingit, LLP, 2011 U.S. Dist. LEXIS 2137, *4 (S.D. Cal. Jan. 10, 2011). Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 11 of 12 PLAINITFF’S NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP Plaintiff is entitled to repayment of the Principal Amount of $2,000,000; plus $58,333.33 in accrued interest from January 2013 to July 2013 (7 months calculated at an annualized rate of 5%); plus $66,666.66 in accrued interest from August to December 2013 (5 months calculated at an annualized rate of 8%). Plaintiffs are also entitled to prejudgment interest from January 1, 2014 to the date of judgment at an annualized rate of 8%. V. CONCLUSION The undisputed evidence shows that Plaintiff performed all required contractual obligations under the loan agreements, and Defendant Benjamin Kirk materially breached the loan agreements (1) by failing to pay interest on the $2 million loan amount; and (2) by failing to repay the $2 million loan, and as a result, Plaintiff suffered damage. Accordingly, Plaintiff is entitled to judgment as a matter of law on Plaintiff’s breach of contract claim against Defendant Benjamin Kirk for breach of the April 21, 2011 Promissory Note as amended on June 21, 2012 and July 21, 2013. Respectfully submitted, Dated: September 26, 2016 COTCHETT, PITRE & McCARTHY, LLP By: /s/ Nancy Fineman NANCY L. FINEMAN C. ALEX NAEGELE A PROFESSIONAL LAW CORPORATION By: /s/ C. Alex Naegele C. ALEX NAEGELE Attorneys for Plaintiffs ATTESTATION OF FILING I, Nancy L. Fineman, hereby attest, pursuant to Northern District of California, Local Rule 5-1(i)(3) that concurrence to the filing of this document has been obtained from each signatory hereto. /s/ Nancy L. Fineman Case 3:15-cv-01373-VC Document 130 Filed 09/26/16 Page 12 of 12 DECLARATION OF BRIAN DANITZ IN SUPPORT OF PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP JOSEPH W. COTCHETT (SBN 36324) jcotchett@cpmlegal.com NANCY L. FINEMAN (SBN 124870) nfineman@cpmlegal.com BRIAN DANITZ (SBN 247403) bdanitz@cpmlegal.com COTCHETT, PITRE & McCARTHY, LLP 840 Malcolm Road, Suite 200 Burlingame, CA 94010 Telephone: (650) 697-6000 Fax: (650) 697-0577 C. ALEX NAEGELE (SBN 255887) alex@canlawcorp.com C. ALEX NAEGELE A PROFESSIONAL LAW CORPORATION 95 S. Market Street, Suite 300 San Jose, CA 95113 Telephone: (408) 995-3224 Fax: (408) 890-4645 Attorneys for Plaintiffs UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA, SAN FRANCISCO DIVISION JD BROTHERS LLC, et al., Plaintiffs, vs. LIBERTY ASSET MANAGEMENT CORPORATION, et al., Defendants. Case No. 3:15-cv-01373-VC DECLARATION OF BRIAN DANITZ IN SUPPORT OF PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT Date: November 10, 2016 Time: 10:00 a.m. Judge: Hon. Vince Chhabria Dept.: Courtroom 4, 17th Floor Trial Date: June 12, 2017 Case 3:15-cv-01373-VC Document 130-1 Filed 09/26/16 Page 1 of 2 DECLARATION OF BRIAN DANITZ IN SUPPORT OF PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP I, BRIAN DANITZ, declare as follows: 1. I am an attorney with the law firm of Cotchett, Pitre & McCarthy, LLP, counsel of record for Plaintiffs JD Brothers LLC and Wei “Wendy” Huang, both in her individual capacity and as Trustee of the Guo/Huang Family Trust, (collectively “Plaintiffs”). This Declaration is made in support of Plaintiff’s Motion for Partial Summary Judgment. I have personal knowledge of the facts set forth herein, and if called as a witness, I could and would testify competently thereto. 2. Attached hereto as EXHIBIT 1 is a true and correct copy of Defendant Benjamin Kirk’s Responses to JD Brothers’ First Set of Requests for Admission, dated and served by counsel on May 17, 2016. 3. Attached hereto as EXHIBIT 2 is a true and correct copy of Defendants Benjamin Kirk and Sunshine Valley, LLC’s Answer to Third Amended Complaint, filed as Docket No. 110 on June 23, 2016. I declare under penalty of perjury that the foregoing is true and correct. Executed this 26th day of September, 2016, at Burlingame, California. /s/ Brian Danitz BRIAN DANITZ ATTESTATION OF FILING I, Nancy L. Fineman, hereby attest, pursuant to Northern District of California, Local Rule 5-1(i)(3) that concurrence to the filing of this document has been obtained from each signatory hereto. /s/ Nancy L. Fineman Case 3:15-cv-01373-VC Document 130-1 Filed 09/26/16 Page 2 of 2 EXHIBIT 1 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 1 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 2 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 3 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 4 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 5 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 6 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 7 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 8 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 9 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 10 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 11 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 12 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 13 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 14 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 15 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 16 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 17 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 18 of 19 Case 3:15-cv-01373-VC Document 130-2 Filed 09/26/16 Page 19 of 19 EXHIBIT 2 Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 1 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 1 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W JESSE F. RUIZ [SBN. 77984] jfr@robinsonwood.com GABRIEL G. GREGG [SBN. 187333] ggg@robinsonwood.com ROBINSON & WOOD, INC. 227 N. 1st Street San Jose, California 95113 Telephone: (408) 298-7120 Facsimile: (408) 298-0477 Attorneys for Defendants BENJAMIN KIRK, LIBERTY ASSET MANAGEMENT CORPORATION, SUNSHINE VALLEY, LLC UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA, SAN FRANCISCO DIVISION JD BROTHERS LLC, et al., Plaintiffs, vs. LIBERTY ASSET MANAGEMENT CORPORATION, et al., Defendants. Case No. 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND Judge: Hon. Vince Chhabria Dept.: Ctrm. 4, 17th Floor Trial Date: June 12, 2017 Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 1 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 2 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 1 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W BENJAMIN KIRK ("Kirk") and SUNSHINE VALLEY, LLC ("Sunshine") hereby answer the Third Amended Complaint (the “Complaint”) of JD BROTHERS LLC (“JD Brothers”) and WENDY HUANG, as individual and trustee of the GUO/HUANG FAMILY TRUST (“Huang”; and along with JD Brothers, “Plaintiffs”) as follows: I. INTRODUCTION 1. In response to Paragraph 1 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 1 of the Complaint. 2. In response to Paragraph 2 of the Complaint, Kirk and Sunshine admit that Liberty Asset Management Corporation ("Liberty") is in bankruptcy and that Kirk is the Chief Executive Officer of Liberty. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 2 of the Complaint. 3. In response to Paragraph 3 of the Complaint, Kirk and Sunshine admit that Huang and Kirk first met in and around November of 2009. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 3 of the Complaint. 4. In response to Paragraph 4 of the Complaint, Kirk and Sunshine admit that “this investment was through a note and deed of trust to purchase property located at 722 Montgomery St., San Francisco, California.” Kirk and Sunshine admit that the Montgomery Property investment is not a security. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 4 of the Complaint. 5. In response to Paragraph 5 of the Complaint, Kirk and Sunshine deny that "Kirk never intended that Huang purchase the property" and that "Kirk falsely told Huang that the Montgomery property could not be purchased." Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 5 of the Complaint. 6. In response to Paragraph 6 of the Complaint, Kirk and Sunshine admit that the Montgomery Property investment is not a security. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 6 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 2 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 3 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 2 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 7. In response to Paragraph 7 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 7 of the Complaint. 8. In response to Paragraph 8 of the Complaint, Kirk and Sunshine admit that the purpose of HK Grace Building, LLC was to invest in the Geary Property, that JD Brothers and Sunshine were to be the members of HK Grace Building, LLC, and that JD Brothers was a passive minority investor and Sunshine was the Operating Manager. Kirk and Sunshine deny that the Geary Property investment was a security. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 8 of the Complaint. 9. In response to Paragraph 9 of the Complaint, Kirk and Sunshine admit that Kirk owned Sunshine. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 9 of the Complaint. 10. In response to Paragraph 10 of the Complaint, Kirk and Sunshine admit that the Guo/Huang Family Trust loaned $2,000,000 to Kirk. Except as expressly admitted herein, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, all other allegations contained in Paragraph 10 of the Complaint. 11. In response to Paragraph 11 of the Complaint, Kirk and Sunshine admit that JD Brothers invested in distressed property portfolio investment contracts with Liberty. Kirk and Sunshine admit that these investments were not securities. Except as expressly admitted herein, Kirk and Sunshine lacks knowledge and information sufficient to admit or deny, and therefore deny, all other allegations contained in Paragraph 11 of the Complaint. 12. In response to Paragraph 12 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 12 of the Complaint. 13. In response to Paragraph 13 of the Complaint, Kirk and Sunshine deny that "[n]one of the money invested by Plaintiffs have been returned." Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 13 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 3 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 4 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 3 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W II. JURISDICTION AND VENUE 14. In response to Paragraph 14 of the Complaint, Kirk and Sunshine do not believe that an answer is required to this paragraph because this paragraph states legal conclusions only. However, to the extent that an answer is required, Kirk and Sunshine deny that the Complaint sets forth a valid claim for violation of any of the federal laws cited in Paragraph 14 of the Complaint. For the avoidance of doubt, Kirk and Sunshine deny any other allegations, explicit or implicit, in Paragraph 14. 15. In response to Paragraph 15 of the Complaint, Kirk and Sunshine do not believe that an answer is required to this paragraph because this paragraph states legal conclusions only. However, to the extent that an answer is required, Kirk and Sunshine deny that the Complaint sets forth a valid claim for violation of any of the federal laws cited in Paragraphs 14 or 15 of the Complaint. For the avoidance of doubt, Kirk and Sunshine deny any other allegations, explicit or implicit, in Paragraph 15. 16. In response to Paragraph 16 of the Complaint, Kirk and Sunshine do not believe that an answer is required to this paragraph because this paragraph states legal conclusions only. However, to the extent that an answer is required, Kirk and Sunshine deny that the Complaint sets forth a valid claim for violation of any of the federal laws cited in Paragraphs 14, 15 or 16 of the Complaint. For the avoidance of doubt, Kirk and Sunshine deny any other allegations, explicit or implicit, in Paragraph 16. 17. In response to Paragraph 17 of the Complaint, Kirk and Sunshine admit to venue in this District. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 17 of the Complaint. 18. In response to Paragraph 18 of the Complaint, Kirk and Sunshine admit that intradistrict venue is proper in the San Francisco Division. III. THE PARTIES A. PLAINTIFFS 19. In response to Paragraph 19 of the Complaint, Kirk and Sunshine admit that plaintiff JD Brothers is a limited liability company organized and operating under the laws of the Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 4 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 5 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 4 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W state of California. Except as expressly admitted herein, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, all other allegations contained in Paragraph 19 of the Complaint. 20. In response to Paragraph 20 of the Complaint, Kirk and Sunshine admit that plaintiff Wei "Wendy" Huang presented herself as the operator and power of attorney for JD Brothers, and admit that Huang was also an individual investor. Except as expressly admitted herein, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, all other allegations contained in Paragraph 20 of the Complaint. 21. In response to Paragraph 21 of the Complaint, Kirk and Sunshine admit that Huang presented herself as Trustee of the Guo/Huang Family Trust. Except as expressly admitted herein, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, all other allegations contained in Paragraph 21 of the Complaint. B. DEFENDANTS 22. In response to Paragraph 22 of the Complaint, Kirk and Sunshine admit that Kirk is a citizen of California, admits that Kirk's name was formerly Tzu Ping Ko, admits that Kirk's legal name is now Benny Kirk, and admits that Kirk owned and served as Chief Executive Officer of Liberty. Kirk and Sunshine deny that Kirk used "aliases" including the names listed in Paragraph 22, but admit that some of these names may appear in records in various forms. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 22 of the Complaint. 23. In response to Paragraph 23 of the Complaint, Kirk and Sunshine admit that Kirk owned, managed and controlled a number of other companies including at least some of the companies listed in Paragraph 23. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 23 of the Complaint. 24. In response to Paragraph 24 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 24 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 5 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 6 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 5 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 25. In response to Paragraph 25 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 25 of the Complaint. 26. In response to Paragraph 26 of the Complaint, Kirk and Sunshine admit that Kirk filed the referenced declaration in the Bankruptcy Court, and allege that the declaration speaks for itself. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 26 of the Complaint. 27. In response to Paragraph 27 of the Complaint, Kirk and Sunshine admit that Gao had check signing authority over Liberty's bank accounts. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 27 of the Complaint. 28. In response to Paragraph 28 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 28 of the Complaint. 29. In response to Paragraph 29 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 29 of the Complaint. 30. In response to Paragraph 30 of the Complaint, Kirk and Sunshine admit that Kirk and Gao had a close business and personal relationship during certain relevant times, and that they have a child together. Kirk and Sunshine admit that Kirk filed the referenced declaration in the Liberty bankruptcy, and allege that the declaration speaks for itself. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 30 of the Complaint. 31. In response to Paragraph 31 of the Complaint, Kirk and Sunshine admit that the relationship between Kirk and Gao was impacted in or around 2013. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 31 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 6 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 7 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 6 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 32. In response to Paragraph 32 of the Complaint, Kirk and Sunshine admit that Liberty had the address of 3218 Holt Ave., West Covina, California, and admits that Kirk is listed as president. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 32 of the Complaint. 33. In response to Paragraph 33 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 33 of the Complaint. 34. In response to Paragraph 34 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 34 of the Complaint. 35. In response to Paragraph 35 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 35 of the Complaint. 36. In response to Paragraph 36 of the Complaint, Kirk and Sunshine admit that according to the operating agreement, JD Brothers holds a 44.4% membership interest and Sunshine Valley, LLC owns the remainder. Kirk and Sunshine admit that HK Grace held the title to the Geary property. Kirk denies that he sold the Geary property in 2014, including without JD Brothers' knowledge or consent. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 36 of the Complaint. 37. In response to Paragraph 37 of the Complaint, Kirk and Sunshine admit that Sunshine is a limited liability company organized and operating under the laws of the state of California, and that Sunshine is owned and operated by Kirk. Kirk and Sunshine admit that Sunshine owned 55.6% of HK Grace. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 37 of the Complaint. 38. In response to Paragraph 38 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 38 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 7 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 8 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 7 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 39. In response to Paragraph 39 of the Complaint, Kirk and Sunshine do not believe that an answer is required to this paragraph because this paragraph states legal conclusions only. However, to the extent that an answer is required, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 39 of the Complaint. C. ALTER EGO ALLEGATIONS 40. In response to Paragraph 40 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 40 of the Complaint. 41. In response to Paragraph 41 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 41 of the Complaint. 42. In response to Paragraph 42 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 42 of the Complaint. 43. In response to Paragraph 43 of the Complaint, Kirk and Sunshine admit that Kirk owned all of the stock of Liberty. Kirk and Sunshine deny each and every remaining allegation contained in Paragraph 43 of the Complaint. 44. In response to Paragraph 44 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 44 of the Complaint. D. CONSPIRACY, AIDING AND ABETTING, AND CONCERTED ACTION 45. In response to Paragraph 45 of the Complaint, Kirk and Sunshine do not believe that an answer is required to this paragraph because this paragraph states legal conclusions only. However, to the extent that an answer is required, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 45 of the Complaint. 46. In response to Paragraph 46 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 46 of the Complaint. 47. In response to Paragraph 47 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 47 of the Complaint. D. UNNAMED PARTICIPANTS Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 8 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 9 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 8 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 48. In response to Paragraph 48 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 48 of the Complaint. IV. FACTUAL ALLEGATIONS A. THE SCHEME TO DEFRAUD 49. In response to Paragraph 49 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 49 of the Complaint. 50. In response to Paragraph 50 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 50 of the Complaint. 51. In response to Paragraph 51 of the Complaint, Kirk and Sunshine admit that at certain times Liberty had offices in Mountain View and West Covina, California. Kirk and Sunshine deny each and every remaining allegation contained in Paragraph 51 of the Complaint. 52. In response to Paragraph 52 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 52 of the Complaint. 53. In response to Paragraph 53 of the Complaint, Kirk and Sunshine admit that Kirk authorized certain filings in the In Re Gold River matter, and allege that the filings speak for itself. Kirk and Sunshine admit that Kirk authorized certain filings in Bankruptcy Court in the Liberty bankruptcy action, and allege that the filings speak for themselves. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 53 of the Complaint. 54. In response to Paragraph 54 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 54 of the Complaint. 55. In response to Paragraph 55 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 55 of the Complaint. 56. In response to Paragraph 56 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 56 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 9 of 42Case 3:15-cv-01373-VC Document 130-3 il 9/ 6/ 10 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 9 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 57. In response to Paragraph 57 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 57 of the Complaint. 58. In response to Paragraph 58 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 58 of the Complaint. 59. In response to Paragraph 59 of the Complaint, Kirk and Sunshine admit that Liberty was skilled in the acquisition and sale of distressed real estate and such representations were made to investors. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 59 of the Complaint. 60. In response to Paragraph 60 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 60 of the Complaint. 61. In response to Paragraph 61 of the Complaint, Kirk and Sunshine admit that Kirk answered certain questions relating to the Liberty bankruptcy proceeding, and allege that any record of such dialogue speaks for itself. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 61 of the Complaint. 62. In response to Paragraph 62 of the Complaint, Kirk and Sunshine admit that Kirk answered certain questions relating to the Liberty bankruptcy proceeding, and allege that any record of such dialogue speaks for itself. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 62 of the Complaint. 63. In response to Paragraph 63 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 63 of the Complaint. 64. In response to Paragraph 64 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 64 of the Complaint. 65. In response to Paragraph 65 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 65 of the Complaint. 66. In response to Paragraph 66 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 66 of the Complaint. 67. In response to Paragraph 67 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 67 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 10 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 11 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 10 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 68. In response to Paragraph 68 of the Complaint, Kirk and Sunshine admit that no investments have ever been registered as securities. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 68 of the Complaint. 69. In response to Paragraph 69 of the Complaint, Kirk and Sunshine admit that some lawsuits against defendants have been settled. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 69 of the Complaint. B. PLAINTIFFS' FIRST INVESTMENT: 722 MONTGOMERY STREET, SAN FRANCISCO 70. In response to Paragraph 70 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 70 of the Complaint. 71. In response to Paragraph 71 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 71 of the Complaint. 72. In response to Paragraph 72 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 72 of the Complaint. 73. In response to Paragraph 73 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 73 of the Complaint. 74. In response to Paragraph 74 of the Complaint, Kirk and Sunshine admit that Liberty was skilled in the acquisition and sale of distressed real estate and such representations were made to investors. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 74 of the Complaint. 75. In response to Paragraph 75 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 75 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 11 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 2 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 11 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 76. In response to Paragraph 76 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 76 of the Complaint. 77. In response to Paragraph 77 of the Complaint, Kirk and Sunshine acknowledge the exhibits referenced therein and attached to the Complaint, have no current reason to doubt their authenticity, and allege that the exhibits speak for themselves. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 77 of the Complaint. 78. In response to Paragraph 78 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 78 of the Complaint. 79. In response to Paragraph 79 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 79 of the Complaint. 80. In response to Paragraph 80 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 80 of the Complaint. 81. In response to Paragraph 81 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 81 of the Complaint. 82. In response to Paragraph 82 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 82 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 12 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 13 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 12 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 83. In response to Paragraph 83 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 83 of the Complaint. 84. In response to Paragraph 84 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 84 of the Complaint. C. PLAINTIFFS' SECOND INVESTMENT: 165 O'FARRELL STREET 85. In response to Paragraph 85 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 85 of the Complaint. 86. In response to Paragraph 86 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 86 of the Complaint. 87. In response to Paragraph 87 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 87 of the Complaint. 88. In response to Paragraph 88 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 88 of the Complaint. 89. In response to Paragraph 89 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 89 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 13 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 14 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 13 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 90. In response to Paragraph 90 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 90 of the Complaint. 91. In response to Paragraph 91 of the Complaint, Kirk and Sunshine deny that "Kirk told Huang that the O'Farrell property was 'still in process' and that it would be better to make another investment." Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 91 of the Complaint. 92. In response to Paragraph 92 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 92 of the Complaint. 93. In response to Paragraph 93 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 93 of the Complaint. 94. In response to Paragraph 94 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 94 of the Complaint. 95. In response to Paragraph 95 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 95 of the Complaint. 96. In response to Paragraph 96 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 96 of the Complaint. 97. In response to Paragraph 97 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 97 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 14 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 15 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 14 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W D. PLAINTIFFS' THIRD INVESTMENT: 166 GEARY STREET 98. In response to Paragraph 98 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 98 of the Complaint. 99. In response to Paragraph 99 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 99 of the Complaint. 100. In response to Paragraph 100 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 100 of the Complaint. 101. In response to Paragraph 101 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 101 of the Complaint. 102. In response to Paragraph 102 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 102 of the Complaint. 103. In response to Paragraph 103 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 103 of the Complaint. 104. In response to Paragraph 104 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 104 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 15 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 16 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 15 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 105. In response to Paragraph 105 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 105 of the Complaint. 106. In response to Paragraph 106 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 106 of the Complaint. 107. In response to Paragraph 107 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 107 of the Complaint. 108. In response to Paragraph 108 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 108 of the Complaint. 109. In response to Paragraph 109 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 109 of the Complaint. E. HK GRACE BUILDING LLC: A JOINT VENTURE 110. In response to Paragraph 110 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 110 of the Complaint. 111. In response to Paragraph 111 of the Complaint, Kirk and Sunshine admit that HK Grace Building LLC was formed to hold the Geary property, that the "H" in HK stands for Wendy Huang, and the "K" for Benny Ko/Kirk, and that the agreement was for Sunshine to hold a 55.6% membership interest and JD Brothers to hold a 44.4% membership interest. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 111 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 16 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 17 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 16 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 112. In response to Paragraph 112 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 112 of the Complaint. 113. In response to Paragraph 113 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 113 of the Complaint. 114. In response to Paragraph 114 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 114 of the Complaint. 115. In response to Paragraph 115 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 115 of the Complaint. 116. In response to Paragraph 116 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 116 of the Complaint. 117. In response to Paragraph 117 of the Complaint, Kirk and Sunshine deny that the Geary investment was a security. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 117 of the Complaint. 118. In response to Paragraph 118 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 118 of the Complaint. 119. In response to Paragraph 119 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 119 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 17 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 18 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 17 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 120. In response to Paragraph 120 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 120 of the Complaint. 121. In response to Paragraph 121 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 121 of the Complaint. 122. In response to Paragraph 122 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 122 of the Complaint. 123. In response to Paragraph 123 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 123 of the Complaint. 124. In response to Paragraph 124 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 124 of the Complaint. 125. In response to Paragraph 125 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 125 of the Complaint. 126. In response to Paragraph 126 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 126 of the Complaint. 127. In response to Paragraph 127 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 127 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 18 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 19 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 18 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W F. HUANG DISCOVERS THE GEARY PROPERTY HAS BEEN SOLD WITHOUT JD BROTHERS' KNOWLEDGE OR CONSENT 128. In response to Paragraph 128 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 128 of the Complaint. 129. In response to Paragraph 129 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 129 of the Complaint. 130. In response to Paragraph 130 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 130 of the Complaint. 131. In response to Paragraph 131 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 131 of the Complaint. 132. In response to Paragraph 132 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 132 of the Complaint. 133. In response to Paragraph 133 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 133 of the Complaint. 134. In response to Paragraph 134 of the Complaint, Kirk and Sunshine admit that Kirk answered certain questions relating to the Liberty bankruptcy proceeding, and allege that any record of such dialogue speaks for itself. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 134 of the Complaint. / / / / / / / / / / / / Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 19 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 20 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 19 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W G. JD BROTHERS HAS NOT RECEIVED ANY MONEY FROM ITS INVESTMENT IN THE GEARY PROPERTY 135. In response to Paragraph 135 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 135 of the Complaint. 136. In response to Paragraph 136 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 136 of the Complaint. H. THE $2 MILLION PERSONAL LOAN HAS NOT BEEN REPAID 137. In response to Paragraph 137 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 137 of the Complaint. 138. In response to Paragraph 138 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 138 of the Complaint. 139. In response to Paragraph 139 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 139 of the Complaint. 140. In response to Paragraph 140 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 20 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 21 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 20 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 140 of the Complaint. 141. In response to Paragraph 141 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 141 of the Complaint. I. JD BROTHERS' PORTFOLIO INVESTMENT 142. In response to Paragraph 142 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 142 of the Complaint. 143. In response to Paragraph 143 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 143 of the Complaint. 144. In response to Paragraph 144 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 144 of the Complaint. 145. In response to Paragraph 145 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 145 of the Complaint. 146. In response to Paragraph 146 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 146 of the Complaint. 147. In response to Paragraph 147 of the Complaint, Kirk and Sunshine acknowledge the exhibit referenced therein and attached to the Complaint, have no current reason to doubt its authenticity, and allege that the exhibit speaks for itself. Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the remaining allegations in Paragraph 147 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 21 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 22 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 21 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 148. In response to Paragraph 148 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 148 of the Complaint. 149. In response to Paragraph 149 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 149 of the Complaint. J. LIBERTY FILES FOR BANKRUPTCY 150. In response to Paragraph 150 of the Complaint, Kirk and Sunshine admit that on March 21, 2016, Liberty filed for bankruptcy in the United States Bankruptcy Court, Central District of California, Los Angeles Division, Case No. 2:16-bk-13575-TD. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 150 of the Complaint. 151. In response to Paragraph 151 of the Complaint, Kirk and Sunshine admit that Kirk alleged in the bankruptcy action that Gao would not let him have access to documents. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 151 of the Complaint. 152. In response to Paragraph 152 of the Complaint, Kirk and Sunshine admit that a private investigator filed a declaration in support of an emergency motion for the turnover of property, and allege that the declaration speaks for itself. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 152 of the Complaint. 153. In response to Paragraph 153 of the Complaint, Kirk and Sunshine admit that a private investigator filed a declaration in support of an emergency motion for the turnover of property, and allege that the declaration speaks for itself. Except as expressly admitted herein, Kirk and Sunshine deny each and every allegation contained in Paragraph 153 of the Complaint. V. TOLLING OF THE STATUTE OF LIMITATIONS 154. In response to Paragraph 154 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 154 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 22 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 3 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 22 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W VI. CLAIMS FIRST CLAIM VIOLATION OF SECTION 12(a)(1) OF THE SECURITIES ACT OF 1933 (Against Liberty, Kirk, and Gao by Plaintiff JD Brothers) 155. In response to Paragraph 155 of the Complaint, Kirk and Sunshine incorporate herein their responses to paragraphs 1 through 154 above as though set forth fully herein. 156. In response to Paragraph 156 of the Complaint, Kirk denies each and every allegation contained in Paragraph 156 of the Complaint. Sunshine is not named in the First Claim, so is not required to either admit or deny the allegations contained in Paragraph 156 of the Complaint. 157. In response to Paragraph 157 of the Complaint, Kirk denies each and every allegation contained in Paragraph 157 of the Complaint. Sunshine is not named in the First Claim, so is not required to either admit or deny the allegations contained in Paragraph 157 of the Complaint. 158. In response to Paragraph 158 of the Complaint, Kirk denies each and every allegation contained in Paragraph 158 of the Complaint. Sunshine is not named in the First Claim, so is not required to either admit or deny the allegations contained in Paragraph 158 of the Complaint. 159. In response to Paragraph 159 of the Complaint, Kirk denies each and every allegation contained in Paragraph 159 of the Complaint. Sunshine is not named in the First Claim, so is not required to either admit or deny the allegations contained in Paragraph 159 of the Complaint. SECOND CLAIM VIOLATION OF SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934, RULE 10b-5 and 15 U.S.C. § 77o (Against All Defendants by Plaintiffs JD Brothers) 160. In response to Paragraph 160 of the Complaint, Kirk and Sunshine incorporate herein their responses to paragraphs 1 through 159 above as though set forth fully herein. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 23 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 24 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 23 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 161. In response to Paragraph 161 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 161 of the Complaint. 162. In response to Paragraph 162 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 162 of the Complaint. 163. In response to Paragraph 163 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 163 of the Complaint. 164. In response to Paragraph 164 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 164 of the Complaint. 165. In response to Paragraph 165 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 165 of the Complaint. 166. In response to Paragraph 166 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 166 of the Complaint. 167. In response to Paragraph 167 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 167 of the Complaint. THIRD CLAIM VIOLATIONS OF THE RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT (Against All Defendants by All Plaintiffs) 168. In response to Paragraph 168 of the Complaint, Kirk and Sunshine incorporate herein their responses to paragraphs 1 through 167 above as though set forth fully herein. 169. In response to Paragraph 169 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 169 of the Complaint. 170. In response to Paragraph 170 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 170 of the Complaint. 171. In response to Paragraph 171 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 171 of the Complaint. 172. In response to Paragraph 172 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 172 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 24 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 25 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 24 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 173. In response to Paragraph 173 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 173 of the Complaint. 174. In response to Paragraph 174 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 174 of the Complaint. 175. In response to Paragraph 175 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 175 of the Complaint. 176. In response to Paragraph 176 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 176 of the Complaint. 177. In response to Paragraph 177 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 177 of the Complaint. 178. In response to Paragraph 178 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 178 of the Complaint. 179. In response to Paragraph 179 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 179 of the Complaint. 180. In response to Paragraph 180 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 180 of the Complaint. 181. In response to Paragraph 181 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 181 of the Complaint. 182. In response to Paragraph 182 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 182 of the Complaint. 183. In response to Paragraph 183 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 183 of the Complaint. FOURTH CLAIM FRAUD AND AIDING AND ABETTING AND CONSPIRACY (Against All Defendants by All Plaintiffs) 184. In response to Paragraph 184 of the Complaint, Kirk and Sunshine incorporate herein their responses to paragraphs 1 through 183 above as though set forth fully herein. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 25 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 26 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 25 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 185. In response to Paragraph 185 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 185 of the Complaint. 186. In response to Paragraph 186 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 186 of the Complaint. 187. In response to Paragraph 187 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 187 of the Complaint. 188. In response to Paragraph 188 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 188 of the Complaint. Kirk and Sunshine deny each and every allegation contained in Paragraph 188 of the Complaint. 189. In response to Paragraph 189 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 189 of the Complaint. 190. In response to Paragraph 190 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 190 of the Complaint. 191. In response to Paragraph 191 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 191 of the Complaint. 192. In response to Paragraph 192 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 192 of the Complaint. 193. In response to Paragraph 193 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 193 of the Complaint. FIFTH CLAIM NEGLIGENT MISREPRESENTATION (Against Defendant Liberty and Kirk by All Plaintiffs) 194. In response to Paragraph 194 of the Complaint, Kirk and Sunshine incorporate herein their responses to paragraphs 1 through 193 above as though set forth fully herein. 195. In response to Paragraph 195 of the Complaint, Kirk denies each and every allegation contained in Paragraph 195 of the Complaint. Sunshine is not named in the Fifth Claim, so is not required to either admit or deny the allegations contained in Paragraph 195 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 26 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 27 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 26 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 196. In response to Paragraph 196 of the Complaint, Kirk denies each and every allegation contained in Paragraph 196 of the Complaint. Sunshine is not named in the Fifth Claim, so is not required to either admit or deny the allegations contained in Paragraph 196 of the Complaint. 197. In response to Paragraph 197 of the Complaint, Kirk denies each and every allegation contained in Paragraph 197 of the Complaint. Sunshine is not named in the Fifth Claim, so is not required to either admit or deny the allegations contained in Paragraph 197 of the Complaint. SIXTH CLAIM BREACH OF FIDUCIARY DUTY AND AIDING AND ABETTING BREACH OF FIDUCIARY DUTY (Against All Defendants by JD Brothers and Huang) 198. In response to Paragraph 198 of the Complaint, Kirk and Sunshine incorporate herein their responses to paragraphs 1 through 197 above as though set forth fully herein. 199. In response to Paragraph 199 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 199 of the Complaint. 200. In response to Paragraph 200 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 200 of the Complaint. 201. In response to Paragraph 201 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 201 of the Complaint. 202. In response to Paragraph 202 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 202 of the Complaint. 203. In response to Paragraph 203 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 203 of the Complaint. 204. In response to Paragraph 204 of the Complaint, Kirk and Sunshine lack knowledge and information sufficient to admit or deny, and therefore deny, the allegations in Paragraph 204 of the Complaint. 205. In response to Paragraph 205 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 205 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 27 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 28 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 27 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 206. In response to Paragraph 206 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 206 of the Complaint. 207. In response to Paragraph 207 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 207 of the Complaint. SEVENTH CLAIM BREACH OF CONTRACT (Against Defendants Liberty, HK Grace, and Kirk by All Plaintiffs) 208. In response to Paragraph 208 of the Complaint, Kirk and Sunshine incorporate herein their responses to paragraphs 1 through 207 above as though set forth fully herein. 209. In response to Paragraph 209 of the Complaint, Kirk acknowledges the exhibits referenced therein and attached to the Complaint, has no current reason to doubt their authenticity, and alleges that the exhibits speak for themselves. Kirk denies the remaining allegations in Paragraph 209 of the Complaint. Sunshine is not named in the Seventh Claim, so is not required to either admit or deny the allegations contained in Paragraph 209 of the Complaint. 210. In response to Paragraph 210 of the Complaint, Kirk denies each and every allegation contained in Paragraph 210 of the Complaint. Sunshine is not named in the Seventh Claim, so is not required to either admit or deny the allegations contained in Paragraph 210 of the Complaint. 211. In response to Paragraph 211 of the Complaint, Kirk denies each and every allegation contained in Paragraph 211 of the Complaint. Sunshine is not named in the Seventh Claim, so is not required to either admit or deny the allegations contained in Paragraph 211 of the Complaint. 212. In response to Paragraph 212 of the Complaint, Kirk denies each and every allegation contained in Paragraph 212 of the Complaint. Sunshine is not named in the Seventh Claim, so is not required to either admit or deny the allegations contained in Paragraph 212 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 28 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 29 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 28 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W EIGHTH CLAIM ACCOUNTING (Against Defendant HK Grace by Plaintiff JD Brothers) 213. In response to Paragraph 213 of the Complaint, Kirk and Sunshine incorporate herein their responses to paragraphs 1 through 212 above as though set forth fully herein. 214. In response to Paragraph 214 of the Complaint, neither Kirk nor Sunshine are named in the Eighth Claim, so are not required to either admit or deny the allegations contained in Paragraph 214 of the Complaint. 215. In response to Paragraph 215 of the Complaint, neither Kirk nor Sunshine are named in the Eighth Claim, so are not required to either admit or deny the allegations contained in Paragraph 215 of the Complaint. 216. In response to Paragraph 216 of the Complaint, neither Kirk nor Sunshine are named in the Eighth Claim, so are not required to either admit or deny the allegations contained in Paragraph 216 of the Complaint. 217. In response to Paragraph 217 of the Complaint, neither Kirk nor Sunshine are named in the Eighth Claim, so are not required to either admit or deny the allegations contained in Paragraph 217 of the Complaint. 218. In response to Paragraph 218 of the Complaint, neither Kirk nor Sunshine are named in the Eighth Claim, so are not required to either admit or deny the allegations contained in Paragraph 218 of the Complaint. NINTH CLAIM FRAUDULENT TRANSFER (Cal. Civil Code § 3439.04) (Against All Defendants by All Plaintiffs) 219. In response to Paragraph 219 of the Complaint, Kirk and Sunshine incorporate herein their responses to paragraphs 1 through 218 above as though set forth fully herein. 220. In response to Paragraph 220 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 220 of the Complaint. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 29 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 30 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 29 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W 221. In response to Paragraph 221 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 221 of the Complaint. 222. In response to Paragraph 222 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 222 of the Complaint. 223. In response to Paragraph 223 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 223 of the Complaint. 224. In response to Paragraph 224 of the Complaint, Kirk and Sunshine deny each and every allegation contained in Paragraph 224 of the Complaint. VII. PRAYER FOR RELIEF Kirk and Sunshine admit that Plaintiffs are requesting the specified relief, but deny that Plaintiffs are entitled to the specified relief or any other relief. AFFIRMATIVE DEFENSES Kirk and Sunshine (the "Kirk Defendants") allege the following affirmative defenses and reserve the right to assert additional affirmative defenses as appropriate. FIRST AFFIRMATIVE DEFENSE (Failure to State Cause of Action) 1. Plaintiffs fail to state a claim against the Kirk Defendants upon which relief can be granted. SECOND AFFIRMATIVE DEFENSE (Lack of Standing) 2. Plaintiffs' claims are barred, in whole or in part, because Plaintiffs lacks standing to assert claims in this action. THIRD AFFIRMATIVE DEFENSE (Improper Venue) 3. Venue in this Court is not proper to the extent Plaintiffs' allegations arise out of violations in countries other than United States. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 30 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 31 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 30 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W FOURTH AFFIRMATIVE DEFENSE (Acts Outside the United States) 4. Plaintiffs' claims are barred, in whole or in part, to the extent that acts and conduct alleged in the Complaint occurred outside the United States FIFTH AFFIRMATIVE DEFENSE (No Private Right of Action) 5. Plaintiffs' claims are barred, in whole or in part, because there is no private right of action. SIXTH AFFIRMATIVE DEFENSE (No Securities) 6. Plaintiffs' claims are barred, in whole or in part, because none of the investments set forth in the Complaint qualify as securities. SEVENTH AFFIRMATIVE DEFENSE (No Securities) 7. Plaintiffs' claims are barred, in whole or in part, because none of the investments set forth in the Complaint qualify as securities. EIGHTH AFFIRMATIVE DEFENSE (True Statements) 8. Plaintiffs' claims are barred, in whole or in part, because with respect to those statements with respect to which liability is asserted, the Kirk Defendants had, after reasonable investigation, reasonable ground to believe and did in good faith believe, at the time those statements were made and at all relevant times, that the statements were true, and not misleading and/or that there was no omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading. NINTH AFFIRMATIVE DEFENSE (Plaintiffs' Conduct) 9. Plaintiffs' claims are barred, in whole or in part, by Plaintiffs' own conduct. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 31 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 32 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 31 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W TENTH AFFIRMATIVE DEFENSE (Contributory Fault) 10. Plaintiffs' claims are barred, in whole or in part, or reduced on the grounds that Plaintiffs were solely or contributorily at fault for the damages claimed. ELEVENTH AFFIRMATIVE DEFENSE (Comparative Fault) 11. Plaintiffs' claims are barred, in whole or in part, by the comparative fault of Plaintiffs and/or Persons Acting on Behalf of Plaintiffs. TWELFTH AFFIRMATIVE DEFENSE (Acts of Others) 12. Plaintiffs' claims are barred, in whole or in part, because the damages alleged in the Complaint were caused by the acts or omissions of others. THIRTEENTH AFFIRMATIVE DEFENSE (Bad Faith) 13. Plaintiffs' claims are barred, in whole or in part, by Plaintiffs' bad faith. FOURTEENTH AFFIRMATIVE DEFENSE (Misrepresentations) 14. Plaintiffs' claims are barred, in whole or in part, by Plaintiffs' misrepresentations to the Kirk Defendants. FIFTEENTH AFFIRMATIVE DEFENSE (Fraud) 15. Plaintiffs' claims are barred, in whole or in part, by their own acts of fraud. SIXTEENTH AFFIRMATIVE DEFENSE (Breach of Fiduciary Duty) 16. Plaintiffs' claims are barred, in whole or in part, by Plaintiffs' breaches of fiduciary duties. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 32 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 33 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 32 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W SEVENTEENTH AFFIRMATIVE DEFENSE (Unclean Hands) 17. Plaintiffs' claims are barred, in whole or in part, by the doctrine of unclean hands. EIGHTEENTH AFFIRMATIVE DEFENSE (Violation of Public Policy) 18. Plaintiffs' claims are barred, in whole or in part, due to Plaintiffs' acts in violation of public policy. NINETEENTH AFFIRMATIVE DEFENSE (Illegality) 19. Plaintiffs' claims are barred, in whole or in part, by Plaintiffs' illegal acts. TWENTIETH AFFIRMATIVE DEFENSE (In Pari Delicto) 20. Plaintiffs' claims are barred, in whole or in part, by the doctrine of in pari delicto. TWENTY-FIRST AFFIRMATIVE DEFENSE (The Kirk Defendants’ Good Faith) 21. Plaintiffs' claims are barred, in whole or in part, because the Kirk Defendants’ acts and omissions were reasonable, conducted in good faith, or based upon good cause. TWENTY-SECOND AFFIRMATIVE DEFENSE (Safe Harbor) 22. Plaintiffs' claims are barred, in whole or in part, because the Kirk Defendants’ alleged conduct is protected by statutory safe harbor provisions. TWENTY-THIRD AFFIRMATIVE DEFENSE (Lack of Intent or Fault) 23. Plaintiffs' claims are barred, in whole or in part, because the Kirk Defendants did not act with the requisite degree of intent or fault. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 33 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 4 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 33 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W TWENTY-FOURTH AFFIRMATIVE DEFENSE (Fraud in the Inducement) 24. Plaintiffs' claims are barred, in whole or in part, by Plaintiffs' fraud in the inducement. TWENTY-FIFTH AFFIRMATIVE DEFENSE (Breach of Contract) 25. Plaintiffs' claims are barred, in whole or in part, by Plaintiffs' breaches of contract. TWENTY-SIXTH AFFIRMATIVE DEFENSE (Lack of Agreement) 26. Plaintiffs' claims are barred, in whole or in part, on the ground that the alleged agreements were not a product of a meeting of the minds. TWENTY-SEVENTH AFFIRMATIVE DEFENSE (Mutual Mistake) 27. Plaintiffs' claims are barred, in whole or in part, on the grounds of mutual mistake. TWENTY-EIGHTH AFFIRMATIVE DEFENSE (Indefiniteness) 28. Plaintiffs' claims are barred, in whole or in part, on the ground that the terms of agreement alleged in the Complaint are too indefinite to be enforced. TWENTY-NINTH AFFIRMATIVE DEFENSE (Failure of Consideration) 29. Plaintiffs' claims are barred, in whole or in part, by failure of consideration. THIRTIETH AFFIRMATIVE DEFENSE (Parol Evidence Rule) 30. Plaintiffs' claims are barred, in whole or in part, under the parol evidence rule. THIRTY-FIRST AFFIRMATIVE DEFENSE (Statute of Frauds) 31. Plaintiffs' claims are barred, in whole or in part, by the applicable statute of frauds. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 34 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 35 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 34 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W THIRTY-SECOND AFFIRMATIVE DEFENSE (Undue Influence) 32. Plaintiffs' claims are barred, in whole or in part, because of Plaintiffs' undue influence on the Kirk Defendants. THIRTY-THIRD AFFIRMATIVE DEFENSE (Unconscionability) 33. Plaintiffs' claims are barred, in whole or in part, because of the unconscionability of the alleged agreements. THIRTY-FOURTH AFFIRMATIVE DEFENSE (Modification) 34. Plaintiffs' claims are barred, in whole or in part, on the ground that the terms of the alleged agreements were materially modified so as to relief the Kirk Defendants of any obligations. THIRTY-FIFTH AFFIRMATIVE DEFENSE (Accord and Satisfaction) 35. Plaintiffs' claims are barred, in whole or in part, by accord and satisfaction. THIRTY-SIXTH AFFIRMATIVE DEFENSE (Payment) 36. Plaintiffs' claims are barred, in whole or in part, by the Kirk Defendants’ payment. THIRTY-SEVENTH AFFIRMATIVE DEFENSE (Waiver) 37. Plaintiffs' claims are barred, in whole or in part, by the doctrine of waiver. THIRTY-EIGHTH AFFIRMATIVE DEFENSE (Release) 38. Plaintiffs' claims are barred, in whole or in part, by Plaintiffs' release of claims. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 35 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 36 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 35 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W THIRTY-NINTH AFFIRMATIVE DEFENSE (Consent) 39. Plaintiffs' claims are barred, in whole or in part, on the grounds that Plaintiffs consented to the acts of the Kirk Defendants alleged in the Complaint. FORTIETH AFFIRMATIVE DEFENSE (Equitable Estoppel) 40. Plaintiffs' claims are barred, in whole or in part, by the doctrine of equitable estoppel. FORTY-FIRST AFFIRMATIVE DEFENSE (Failure to Properly Plead Fraud) 41. Plaintiffs' claims are barred, in whole or in part, by Plaintiffs' failure to properly plead fraud with particularity. FORTY-SECOND AFFIRMATIVE DEFENSE (Lack of Reliance) 42. Plaintiffs' claims are barred, in whole or in part, because Plaintiffs did not rely on the alleged misrepresentations by the Kirk Defendants. FORTY-THIRD AFFIRMATIVE DEFENSE (Authorization) 43. Plaintiffs' claims are barred, in whole or in part, because Plaintiffs authorized the conduct claimed in the Complaint. FORTY-FOURTH AFFIRMATIVE DEFENSE (Ratification) 44. Plaintiffs' claims are barred, in whole or in part, due to Plaintiffs' ratification of the conduct alleged in the Complaint. FORTY-FIFTH AFFIRMATIVE DEFENSE (Business Judgment Rule) 45. Plaintiffs' claims are barred, in whole or in part, under the Business Judgment Rule. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 36 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 37 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 36 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W FORTY-SIXTH AFFIRMATIVE DEFENSE (Business Necessity) 46. Plaintiffs' claims are barred, in whole or in part, because all acts of the Kirk Defendants affecting the terms and/or conditions of Plaintiffs' alleged employment were done in good faith and as a result of business necessity. FORTY-SEVENTH AFFIRMATIVE DEFENSE (Statute of Limitations) 47. Plaintiffs' claims are barred, in whole or in part, by the applicable statute of limitation. FORTY-EIGHTH AFFIRMATIVE DEFENSE (Predicate Acts) 48. Plaintiffs' RICO claims are barred, in whole or in part, because of Plaintiffs' failure to allege qualifying predicate acts. FORTY-NINTH AFFIRMATIVE DEFENSE (No Pattern of Activity) 49. Plaintiffs' RICO claims are barred, in whole or in part, because there is no pattern of activity among the Kirk Defendants sufficient to comply with RICO. FIFTIETH AFFIRMATIVE DEFENSE (Truth) 50. Plaintiffs' claims are barred, in whole or in part, by virtue of the truth of the Kirk Defendants’ assertions. FIFTY-FIRST AFFIRMATIVE DEFENSE (Privilege and Justification) 51. Plaintiffs' claims are barred, in whole or in part, because the alleged actions complained of were at all times privileged and justified. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 37 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 38 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 37 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W FIFTY-SECOND AFFIRMATIVE DEFENSE (Qualified and Conditional Privilege) 52. Plaintiffs' claims are barred, in whole or in part, because the Kirk Defendants’ alleged statements were protected by qualified and conditional privilege. FIFTY-THIRD AFFIRMATIVE DEFENSE (Opinion) 53. Plaintiffs' claims are barred, in whole or in part, because the Kirk Defendants’ alleged statements are protected by the right to express opinions and make fair comment. FIFTY-FOURTH AFFIRMATIVE DEFENSE (Protected Communication) 54. Plaintiffs' claims are barred, in whole or in part, because the communications were protected. FIFTY-FIFTH AFFIRMATIVE DEFENSE (Constitutional Rights) 55. Plaintiffs' claims are barred, in whole or in part, because the Kirk Defendants’ alleged statements are protected by free speech rights under the United States Constitution and the Constitution of the State of California. FIFTY-SIXTH AFFIRMATIVE DEFENSE (Unjust Enrichment) 56. Plaintiffs' claims are barred, in whole or in part, because Plaintiffs would be unjustly enriched. FIFTY-SEVENTH AFFIRMATIVE DEFENSE (Lack of Compensable Injury or Damages) 57. Plaintiffs' claims are barred, in whole or in part, because injuries and damages as alleged in the Complaint are not compensable. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 38 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 39 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 38 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W FIFTY-EIGHTH AFFIRMATIVE DEFENSE (Damages Not Proximately Caused) 58. Plaintiffs' claims are barred, in whole or in part, because damages alleged by Plaintiffs in the Complaint were not proximately caused by the Kirk Defendants. FIFTY-NINTH AFFIRMATIVE DEFENSE (No Harm to Property or Business) 59. Plaintiffs' RICO claims are barred, in whole or in part, because there has been no harm to Plaintiffs' property or business. SIXTIETH AFFIRMATIVE DEFENSE (Speculative Damages) 60. Plaintiffs' claims are barred, in whole or in part, because any damages sought are speculative and uncertain. SIXTY-FIRST AFFIRMATIVE DEFENSE (Failure to Mitigate) 61. Plaintiffs' claims are barred, in whole or in part, by Plaintiffs' failure to make reasonable efforts to mitigate his damages. SIXTY-SECOND AFFIRMATIVE DEFENSE (Setoff) 62. Plaintiffs' claims are set off, in whole or in part, by the Kirk Defendants’ damages caused by Plaintiff. SIXTY-THIRD AFFIRMATIVE DEFENSE (Punitive or Exemplary Damages) 63. Plaintiffs' claims are barred, in whole or in part, because the Complaint fails to allege facts sufficient to allow recovery of punitive or exemplary damages from the Kirk Defendants. Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 39 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 40 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 39 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W SIXTY-FOURTH AFFIRMATIVE DEFENSE (Unconstitutionality of Punitive or Exemplary Damages) 64. Plaintiffs' demand for punitive damages violates the Kirk Defendants’ rights to protection from excessive fines as provided by the Eighth Amendment of the United States Constitution and article I section 17 of the Constitution of the State of California, and violates the Kirk Defendants’ rights to substantive due process provided in the Fifth and Fourteenth Amendments of the United States Constitution and in the Constitution of the State of California. SIXTY-FIFTH AFFIRMATIVE DEFENSE (Attorneys’ Fees) 65. Plaintiffs' claims for attorneys’ fees are not permissible. SIXTY-SIXTH AFFIRMATIVE DEFENSE (Laches) 66. Plaintiffs' claims are barred, in whole or in part, by the doctrine of laches. SIXTY-SEVENTH AFFIRMATIVE DEFENSE (Spoliation of Evidence) 67. Plaintiffs' claims are barred, in whole or in part, to the extent that Plaintiffs removed, destroyed or in any way altered evidence. SIXTY-EIGHTH AFFIRMATIVE DEFENSE (Lack of Particularity; Reservation of Defenses) 68. Plaintiffs' claims are barred, in whole or in part, because Plaintiffs do not describe causes of action asserted against the Kirk Defendants with sufficient particularity. The Complaint does not describe the causes of action sufficiently to enable the Kirk Defendants to determine all defenses they may have to Plaintiffs' claims. the Kirk Defendants reserve the right to assert all defenses which may be pertinent to the Complaint once the precise nature of Plaintiffs' claims is ascertained. / / / / / / / / / Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 40 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 41 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 40 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W PRAYER Wherefore, Kirk and Sunshine pray as follows: 1. That Plaintiffs take nothing by the Complaint and that the Complaint be dismissed with prejudice. 2. That Kirk and Sunshine be awarded their reasonable attorneys fees. 3. That Kirk and Sunshine be awarded their costs of suit. 4. That Kirk and Sunshine be granted such other and further relief as the Court determines is just and proper. Dated: June 23, 2016 ROBINSON & WOOD, INC. By: /s/Jesse F. Ruiz JESSE F. RUIZ Attorneys for Defendants BENJAMIN KIRK, LIBERTY ASSET MANAGEMENT CORPORATION, SUNSHINE VALLEY, LLC Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 41 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 42 of 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1073427 41 3:15-cv-01373-VC DEFENDANTS BENJAMIN KIRK AND SUNSHINE VALLEY, LLC'S ANSWER TO THIRD AMENDED COMPLAINT; JURY DEMAND R O BI N SO N & W O O D , IN C . A TT O R N EY S A T LA W DEMAND FOR JURY TRIAL In accordance with Rule 38(b) of the Federal Rules of Civil Procedure, Kirk and Sunshine hereby demand a trial by jury of any issues so triable by right. Dated: June 23, 2016 ROBINSON & WOOD, INC. By: /s/Jesse F. Ruiz JESSE F. RUIZ Attorneys for Defendants BENJAMIN KIRK, and SUNSHINE VALLEY, LLC Case 3:15-cv-01373-VC Document 110 Filed 06/23/16 Page 42 of 42Case 3:15-cv-01373-VC Document 130-3 Filed 09/26/16 Page 43 of 43 DECLARATION OF WEI “WENDY” HUANG IN SUPPORT OF PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP JOSEPH W. COTCHETT (SBN 36324) jcotchett@cpmlegal.com NANCY L. FINEMAN (SBN 124870) nfineman@cpmlegal.com BRIAN DANITZ (SBN 247403) bdanitz@cpmlegal.com COTCHETT, PITRE & McCARTHY, LLP 840 Malcolm Road, Suite 200 Burlingame, CA 94010 Telephone: (650) 697-6000 Fax: (650) 697-0577 C. ALEX NAEGELE (SBN 255887) alex@canlawcorp.com C. ALEX NAEGELE A PROFESSIONAL LAW CORPORATION 95 S. Market Street, Suite 300 San Jose, CA 95113 Telephone: (408) 995-3224 Fax: (408) 890-4645 Attorneys for Plaintiffs UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA JD BROTHERS LLC, et al., Plaintiffs, vs. LIBERTY ASSET MANAGEMENT CORPORATION, et al., Defendants. Case No. 3:15-cv-01373-VC DECLARATION OF WEI “WENDY” HUANG IN SUPPORT OF PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT Date: November 10, 2016 Time: 10:00 a.m. Judge: Hon. Vince Chhabria Dept.: Courtroom 4, 17th Floor Trial Date: June 12, 2017 Case 3:15-cv-01373-VC Document 130-4 Filed 09/26/16 Page 1 of 4 DECLARATION OF WEI “WENDY” HUANG IN SUPPORT OF PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP I, WEI HUANG, declare as follows: 1. I am a named Plaintiff in this lawsuit both in my individual capacity and as the Trustee of the Guo/Huang Family Trust. I submit this Declaration in support of Plaintiff’s Motion for Partial Summary Judgment. I am over 18 years of age. I have personal knowledge of the facts set forth herein, and if called as a witness, I could and would testify competently thereto. 2. On April 21, 2011, in my capacity as Trustee of the Guo/Huang Family Trust (the “Trust”), I wired $2,000,000.00 (Two Million Dollars) for the benefit of Benjamin Kirk (“Kirk”) in his individual capacity. 3. On April 21, 2011, Kirk signed a Promissory Note, which he provided, for the Two Million Dollars that I had loaned to Kirk on behalf of the Trust. I personally witnessed Kirk sign the Promissory Note (the “Promissory Note”) and I personally witnessed the Notary certify Kirk’s signature. After Kirk signed the Promissory Note, I retained the original Promissory Note and Notary certification. The original Promissory Note and Notary certification are still in my possession. My attorneys and I attached a true and correct copy of that Promissory Note and Notary certification as Exhibit 9 to the Third Amended Complaint filed in this matter. A true and correct copy of that Promissory Note and Notary certification is attached as EXHIBIT 1 to this Declaration. 4. As set forth in the Promissory Note, the loan to Kirk was for three months and I expected to be paid back by July 21, 2011. 5. On June 21, 2012, Kirk signed an Amendment To Promissory Note, that he provided. The Amendment To Promissory Note summarized the terms of the original Promissory Note, extended the due date for payment of the $2,000,000 principal amount of the loan from July 21, 2011 to July 21, 2012, and increased the interest rate from 4% to 5%. After Kirk signed the Amendment To Promissory Note before a Notary, the Notary personally delivered a copy of the notarized Amendment To Promissory Note to me for my records. My attorneys and I attached a true and correct copy of that notarized Amendment To Promissory Note dated June 21, 2012 as Exhibit 14 to the Third Amended Complaint filed in this matter. A true and correct copy of that notarized Amendment To Promissory Note dated June 21, 2012 is attached as EXHIBIT 2 to this Case 3:15-cv-01373-VC Document 130-4 Filed 09/26/16 Page 2 of 4 DECLARATION OF WEI “WENDY” HUANG IN SUPPORT OF PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP Declaration. 6. On July 21, 2013, Kirk signed a second Amendment To Promissory Note, that Kirk provided, which summarized the terms of the original Promissory Note and the terms of the first Amendment to Promissory Note. The second Amendment To Promissory Note extended the due date for payment of the $2,000,000 principal amount of the loan from July 21, 2012 to December 31, 2013 and increased the interest rate from 5% to 8%. After Kirk signed the Amendment To Promissory Note before a Notary, the Notary personally delivered the original notarized second Amendment To Promissory Note to me for my records. I still have the original notarized second Amendment To Promissory Note in my possession. My attorneys and I attached a true and correct copy of that notarized Amendment To Promissory Note dated July 21, 2013 as Exhibit 15 to the Third Amended Complaint filed in this matter. A true and correct copy of that notarized Amendment To Promissory Note dated July 21, 2013 is attached as EXHIBIT 3 to this Declaration. 7. On December 31, 2012, Kirk made a single payment of $166,666.67 for interest from April 21, 2011 through December 31, 2012 (20 months). Kirk made no other interest payments. 8. Kirk did not pay back the $2,000,000 Principal Amount when it was due on December 31, 2013. After December 31, 2012, Kirk made no further interest payments. 9. In 2014 and early 2015, I repeatedly demanded that Kirk pay back the 2,000,000 loan and accrued interest. 10. Kirk never paid back the Two Million Dollars that I loaned to Kirk on behalf of the Trust. I declare under penalty of perjury that the foregoing is true and correct. Executed this 26th day of September, 2016, at Burlingame, California. /s/ Wei Huang WEI “WENDY” HUANG Case 3:15-cv-01373-VC Document 130-4 Filed 09/26/16 Page 3 of 4 DECLARATION OF WEI “WENDY” HUANG IN SUPPORT OF PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT; Case No. 3:15-cv-01373-VC 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES COTCHETT, PITRE & MCCARTHY, LLP ATTESTATION OF FILING I, Nancy L. Fineman, hereby attest, pursuant to Northern District of California, Local Rule 5-1(i)(3) that concurrence to the filing of this document has been obtained from each signatory hereto. /s/ Nancy L. Fineman Case 3:15-cv-01373-VC Document 130-4 Filed 09/26/16 Page 4 of 4 EXHIBIT 1 Case 3:15-cv-01373-VC Document 130-5 Filed 09/26/16 Page 1 of 3 Case 3:15-cv-01373-VC Document 130-5 Filed 09/26/16 Page 2 of 3 Case 3:15-cv-01373-VC Document 130-5 Filed 09/26/16 Page 3 of 3 EXHIBIT 2 Case 3:15-cv-01373-VC Document 130-6 Filed 09/26/16 Page 1 of 2 Case 3:15-cv-01373-VC Document 130-6 Filed 09/26/16 Page 2 of 2 EXHIBIT 3 Case 3:15-cv-01373-VC Document 130-7 Filed 09/26/16 Page 1 of 2 Case 3:15-cv-01373-VC Document 130-7 Filed 09/26/16 Page 2 of 2