Red Star Mortgage Corporation v. Branch et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

E.D. Pa.December 6, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA RED STAR MORTGAGE CORPORATION, Plaintiffs, v. ALLEN BRANCH, ET AL. Defendants. Civil Action No.: 2:15-cv-06757 PLAINTIFF, RED STAR MORTGAGE CORPORATION’S MOTION TO DISMISS DEFENDANT, ALLEN BRANCH’S SECOND AMENDED COUNTERCLAIMS Plaintiff, RED STAR MORTGAGE CORPORATION (“Plaintiff” or “Red Star”) by and through its counsel, FELLHEIMER & EICHEN LLP, files this Motion to Dismiss Defendant, Allen Branch’s Second Amended Counterclaims (the “Third Dismissal Motion”) for reasons set forth in the accompanying Brief in Support of the Third Dismissal Motion, incorporated herein by reference pursuant to FED. R. CIV. P. 10(c). Plaintiff respectfully requests the Second Dismissal Motion be granted in the form submitted herewith. Respectfully submitted, Date: December 6, 2016 /s/John J. Jacko, III_ John J. Jacko, III PA Attorney ID No. 67477 Two Liberty Place South 16th Street, Suite 3401 Philadelphia, PA 19102 T: (215) 253-6634 Attorneys for Plaintiff RED STAR MORTGAGE CORPORATION Case 2:15-cv-06757-WB Document 124 Filed 12/06/16 Page 1 of 1 1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA RED STAR MORTGAGE CORPORATION, Plaintiffs, v. ALLEN BRANCH, ET AL. Defendants. Civil Action No.: 2:15-cv-06757 PLAINTIFF, RED STAR MORTGAGE CORPORATION’S BRIEF IN SUPPORT OF ITS MOTION TO DISMISS DEFENDANT, ALLEN BRANCH’S SECOND AMENDED COUNTERCLAIMS Plaintiff, RED STAR MORTGAGE CORPORATION, (“Plaintiff” or “Red Star”) by and through its counsel, FELLHEIMER & EICHEN LLP, files this Brief in Support of its Motion to Dismiss Defendant, Allen Branch’s1 Second Amended Counterclaims (the “Third Dismissal Motion”) and states as follows: I. FACTUAL AND PROCEDURAL BACKGROUND A. The Recent Relevant Procedural Posture of the Second Amended Counterclaims and This Third Dismissal Motion. This is Plaintiff’s third motion to dismiss a form of alleged counterclaims asserted by Allen Branch in this case. On October 28, 2016, Plaintiff filed its first Motion to Dismiss (Doc 115) (“First Dismissal Motion”) to Allen Branch’s Counterclaims which were directed at Plaintiff only. Thereafter, on November 11, 2016, Allen Branch filed his First Amended Answers (“Amended Answer”) to Plaintiff’s Third Amended Complaint and Defendant’s Second Amended Counterclaims (“Amended Counterclaims”)2 and Added Third Party Counter 1 Allen Branch is a pro se litigant in these proceedings. 2 A copy of which pleading is attached hereto as Exhibit A. Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 1 of 16 2 Defendant Gary Polao3 (Doc 123) in response to the Second Dismissal Motion (Doc 118). The only substantive changes between the First Amended Counterclaim (Doc 117) and the Second Amended Counterclaim (Doc 123) appears in ¶¶3 & 4 to Count I of the counterclaims wherein the phrases “or the prospect of Renaissance Properties LLC purchasing the distressed note” and “and others”, respectively, were added. Thereafter, without change to the factual substance or otherwise materially amending the original or first amended counterclaims against Plaintiff challenged in the First and Second Dismissal Motions (Docs 115 & 117) in any substantive way to address the defects identified in the first two dismissal motions, Allen Branch unartfully purports to “amend” the counterclaims to be against Plaintiff and its principal, non-party Gary Polao.4 The original Count I Counterclaim was changed from “Quantum Meruit” to now be retitled to be for “Breach of Contract” against Plaintiff and Mr. Polao. The factual substance of the “new” breach of contract counterclaim is the same as the original quantum meruit counterclaim, except that certain actions previously attributed to Plaintiff5 are now attributed to Mr. Polao. Compare, e.g., Counterclaim (Doc 114) Count I at ¶¶2, 3 & 6 with First Amended Counterclaim (Doc 117) and Second Amended Counterclaim (123) at ¶¶2, 3 & 6. Although Second Amended Counterclaim (Doc 123) Counts II & III, like its’ predecessor, are for an alternative claim of unjust enrichment and an accounting, respectively, against Plaintiff and Mr. Polao, they, like the original Counterclaim 3 No proof of service of process any summons or the “Amended Counterclaim” on Mr. Polao has been filed of record in this case. 4 Mr. Polao was not a named party to this action at the time that the Amended Counterclaims were filed. Pursuant to FED. R. CIV. P. 13(a)(1), counterclaims can only be asserted “against an opposing party.” It is therefore respectfully submitted that no proper counterclaim can be asserted against Mr. Polao in this action. 5 In the original and First Amended Counterclaim, Plaintiff is also identified as “Counter Defendant.” Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 2 of 16 3 (Doc 114) Counts II & III merely allege wrongful actions by the undefined “Counter Defendant”, not Mr. Polao, which can only be understood to reference Plaintiff.6 Allen Branch asserts these purported “claims” premised on his allegations of his request of Mr. “Polao for a referral fee”7. See also Second Amended Counterclaim at 15, ¶2. B. The Broader Procedural and Factual Background Relevant to the Second Amended Counterclaim and this Third Dismissal Motion. Plaintiff is a commercial real estate financial service and mortgage banking company in Pennsylvania that sued the defendants, inclusive of Allen Branch, for, inter alia, claims for nonpayment of a commission and related fees in connection with refinancing a real estate project known as the Market Station at Santa Fe Railyards (the “Railyard Project”) in Santa Fe, New Mexico. As a result of this dispute, Red Star initiated this action with a filing of a Complaint in the Court of Common Pleas for Delaware County, Pennsylvania on or December 15, 2015 (Doc 1 at pp. 44 of 80). Thereafter, on December 22, 2015 the action was removed to this Honorable Court by co-defendant, THOROFARE CAPITAL, INC. (“Thorofare”) (Doc 1). Thorofare then filed its Amended Notice of Removal (Doc 6) on December 30, 2015.8 Allen Branch filed his Answers (sic) to the Amended Complaint (Doc 14) pro se on January 19, 2016.9 In that Answer, Allen Branch factually confirmed and admitted that he: a. “[C]ontacted Red Star to discuss financing acting only as agent for Railyard Company LLC, the beneficial owner of Market Station ("Property"), located in 6 The allegations refer to Counter Defendant in the singular and this count’s ad damnum clause only seeks recovery from “against Counter Defendant.” 7 See Second Amended Answer (Doc 123) at 5, ¶38. 8 The Notice of Removal and Amended Notice of Removal are incorporated herein per FED. R. CIV. P. 10(c). The original Complaint and Amended Complaint were filed and served prior to removal while the case was still in the Pennsylvania Court of Common Pleas. 9 Allen Branch’s Answer to the Amended Complaint is incorporated herein per FED. R. CIV. P. 10(c). Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 3 of 16 4 Santa Fe, New Mexico and Xacattack LLC, f/k/a Renaissance Properties, LLC” (see Branch Answer at ¶ 15); b. Acted “in his capacity as agent and member of Railyard Company LLC” and that “he discussed with Gary Polao about obtaining a rate quote for the subject Property” (see Branch Answer at ¶ 17); c. Had an agency relationship with the “owner of the subject Property, Railyard Company LLC” (see Branch Answer at ¶ 18); d. “[E]mailed Red Star’s Gary Polao on November 15, 2012, soliciting financing information on the subject Property on behalf of the beneficial owner, Railyard Company LLC” (see Branch Answer at ¶ 20); and e. “[W]as acting within the scope as authorized agent of Renaissance Properties LLC and Railyard Company LLC” (see Branch Affirmative Defense at Sixth Affirmative Defense at ¶ 20). On January 21, 2016, Red Star filed a Sec. Am. Compl. (Doc 16)10 and served pursuant to FED. R. CIV. P. 5 and as specified in the Certification of Service attached thereto (Doc 16). On February 18, 2016, Red Star filed a Notice of Default (Doc 21)11 in which the Clerk was requested to enter a default against the Defaulted Defendants and Richard “Rick” Jaramillo (“Jaramillo”) for failure to respond to the Sec. Am. Compl. The Court sua sponte denied Plaintiff’s request on February 26, 2016 (Doc 32). Plaintiff then filed a Status Report with the Court on April 6, 2016 (Doc 35)12 and the Court thereafter directed entry of default against BRANCH REALTY COMMERCIAL ADVISORS, Xacattack and Jaramillo (Doc 37) on April 7, 2016. 10 The Sec. Am. Compl. omitted RAILYARD COMPANY, LIMITED LIABILITY COMPANY (“Railyard”) because it is a Chapter 11 debtor in a proceeding in the U.S. Bankruptcy Court for the District of New Mexico (Albuquerque) titled, In re Railyard Company, Limited Liability Company, Bankruptcy Petition No.: 15-12386-j11 (“Railyard Bankruptcy Proceeding”). This Court is respectfully requested to take judicial notice of the Railyard Bankruptcy Proceeding. FED. R. EVID. 201. Other than to omit Railyard and the corresponding claims against it, the substance of the claims against all other defendants in the Sec. Am. Compl. remained unchanged from the Amended Complaint. 11 The Notice of Default is incorporated herein per FED. R. CIV. P. 10(c). 12 The Status Report is incorporated herein per FED. R. CIV. P. 10(c). Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 4 of 16 5 On April 9, 2016, the Court issued its Order (Doc 39)13 entering default against Allen Branch. On April 29, 2016, Allen Branch filed his Motion to Vacate Default Judgment (Doc 48). On or about May 3, 2016, Plaintiff and Allen Branch entered into a Stipulation to Withdraw Motion and Vacate Default that was submitted by email to the Clerk’s office that same date for the Court’s consideration. Thereafter, the Court issued its Order dated May 4, 2016 (Doc 51)14 withdrawing Allen Branch’s Motion to Vacate Default Judgment (Doc 48) with prejudice and granting Allen Branch leave to file his “Answer to the Sec. Am. Compl. on or before May 6, 2016.” The May 4 Order specified that if Allen Branch filed an Answer by May 6th, then the default on the Sec. Am. Compl. would be vacated. If he failed to file an Answer by the date, however, then the default of the Amended Complaint would automatically remain of record. Allen Branch never filed any Answer to the Sec. Am. Compl., nor has Xacattack or Branch Realty Commercial Advisors ever filed any answer or response to the original Complaint, the Amended Complaint, or the Sec. Am. Compl. Without first filing a motion to seek leave to intervene under FED. R. CIV. P. 24 in the above-captioned action or including any proposed mandatory pleading setting out any defense (see FED. R. CIV. P. 24(c)), non-party, Michael Branch (Allen Branch’s father) filed his Motion to Set Aside Default of Branch Realty Commercial Advisors and for Leave to File Motion to Dismiss (Doc 47) (the “Unsuccessful Dismissal Motion”). In the Unsuccessful Dismissal Motion, Michael Branch claimed that good cause existed to set aside the default under FED. R. CIV. P. 55(c) because he claimed there was (a) no prejudice to Red Star, (b) that he had meritorious defenses of lack of jurisdiction and failure to state a claim under FED. R. CIV. P. 13 The April 9, 2016 Order is incorporated herein per FED. R. CIV. P. 10(c). 14 The May 4, 2016 Order is incorporated herein per FED. R. CIV. P. 10(c). Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 5 of 16 6 12(b)(6), and (c) that a failure to serve the Sec. Am. Compl. was not valid service of the Sec. Am. Compl. After Plaintiff filed its opposition response to the Unsuccessful Dismissal Motion (Doc 52)15, the Court issued is Order dated May 19, 2016 (Doc 56)16 denying the Unsuccessful Dismissal Motion without prejudice and granting leave to Plaintiff to file a Third Amended Complaint to join Michael Branch and Branch Realty, LLC as party defendants. Red Star filed its Third Amended Complaint (Doc 69) on June 9, 2016. Allen Branch then filed his Motion to Dismiss the Third Amended Complaint (Doc 85) on or about June 30, 2016, which Red Star opposed (Doc 86) on July 11, 2016. After supplemental briefing by the parties on that motion (Doc 110 & 111), the Court denied the motion in its Order dated October 6, 2016 (Doc 112). The Court has rendered default judgments against four of the defendants, but not as to Allen Branch, Richard Jarmillo or Thorofare Capital, Inc. On October 20, 2016, Allen Branch filed his Answers to Plaintiff’s Third Amended Complaint and Counterclaim (Doc 114).17 The Counterclaims purport to assert claims for quantum meruit, unjust enrichment and for an accounting. In the First Dismissal Motion (Doc 115) filed eight days later, Red Star sought dismissal of the repetitious quantum meruit and unjust enrichment counterclaims, as well as the claim for an equitable accounting, on the grounds that Allen Branch as failed to state claims on which relief can be granted pursuant to FED. R. CIV. P. 12(b)(6). Rather than oppose the First Dismissal Motion, Allen Branch apparently instead elected to file his First Amended Counterclaims (Doc 117) on November 11, 2016 as permitted 15 Plaintiff’s Opp. to the Unsuccessful Dismissal Motion is incorporated herein per FED. R. CIV. P. 10(c). 16 The May 19, 2016 Order is incorporated herein per FED. R. CIV. P. 10(c). 17 Curiously, Allen Branch in his Answer to the original complaint and now in his Amended Answer inexplicably claims that his consent to Thorofare’s removal of this case “was in error.” See Answer at 2, ¶14 and Amended Answer at 2, ¶14. Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 6 of 16 7 by Fed. R. Civ. P. 15(1)(B)18. Other than to change the title of Count I to be for “Breach of Contract” (from Quantum Meruit) and to purportly add Plaintiff’s principal, Gary Polao as “third party” and to substitute Mr. Polao in place of certain references to Plaintiff made in the original Counterclaim, the Amended Counterclaims are not substantively different than the prior original Counterclaims which it supersedes. Thereafter, Plaintiff filed its Second Dismissal Motion (Doc 118) on November 16, 2016. Allen Branch then filed his Second Amended Counterclaims (Doc 123) making no material amendments to address any deficiencies identified in the Second Dismissal Motion. Accordingly, this Third Dismissal Motion is filed to dismiss the Second Amended Counterclaims for failure to state a claim. II. LEGAL ARGUMENT A. The Pleading Standard on a Motion to Dismiss Pursuant to FED. R. CIV. P. 12(b)(6). Under Pennsylvania law, a party asserting a claim for breach of contract must specifically plead and “allege the following three elements: (1) the existence of a contract, including its essential terms; (2) a breach of duty imposed by the contract; and (3) resultant damages.” Nittany Nova Aggregates, LLC v. WM Capital Partners, LLC, 2016 WL 6248951, at *3 (M.D. Pa. Oct. 26, 2016). Moreover, “[i]t is a fundamental tenet of contract law that one who is not a party to a contract cannot be liable for breach of that contract.” Morgan Truck Body, LLC v. Fredrickson Distribution LLC, 2013 WL 4766331, at *4 (E.D. Pa. Sept. 5, 2013) (Knoll Gardner, J.), citing Electron Energy Corporation v. Short, 408 Pa.Super. 563, 567, 597 A.2d 175, 177 (1991). 18 “[L]eave to amend rests in the discretion of the Court, and a court is justified in denying a motion to amend on grounds of undue delay, bad faith, dilatory motive, prejudice, or futility.” Nayak v. Voith Turbo, Inc., 2015 WL 1605576, at *14 (M.D. Pa. Apr. 9, 2015), citing USX Corp. v. Barnhart, 395 F.3d 161, 166 (3d Cir. 2004). Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 7 of 16 8 The applicable plausibility pleading standard relating to claims unjust enrichment19 has recently been described as: The pleadings must contain sufficient factual allegations so as to state a facially plausible claim for relief. See, e.g., Gelman v. State Farm Mut. Auto. Ins. Co., 583 F.3d 187, 190 (3d Cir.2009). “‘A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). In deciding a Rule 12(b)(6) motion, the Court limits its inquiry to the facts alleged in the complaint and its attachments, matters of public record, and undisputedly authentic documents if the complainant’s claims are based upon these documents. See Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir.1994); Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993). David v. Neumann Univ., 2016 WL 1404153, at *2 (E.D. Pa. Apr. 11, 2016) (Robreno, J.) (dismissing unjust enrichment claim where the plaintiff failed “to allege how it would be unconscionable for the University to retain the tuition paid for classes that she attended”). A. The Breach of Contract Amended Counterclaim Should Be Dismissed Pursuant to FED. R. CIV. P. 12(b)(6) for Failure to State a Claim. In this case, defendant Allen Branch clearly does not assert facts to support the existence of a breach of contract claim against Red Star or Mr. Polao. Here, there are no facts pled to support any allegation that Red Star or Mr. Polao secured any benefit or payment from any alleged transaction to which Allen Branch vaguely claims to have “assimilated and provided current financial information” (Amended Counterclaims at 15, ¶4).20 In fact, in his Amended 19 Unjust enrichment is a synonym for quantum meruit. See Mitchell v. Moore, 729 A.2d 1200, 1202 n. 2 (Pa. Super. 1999) (“cause of action in quasi-contract for quantum meruit, a form of restitution, is made out where one person has been unjustly enriched at the expense of another”). A plaintiff must prove the same elements for quantum meruit and unjust enrichment. Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429, 447 (3d Cir. 2000), cited favorably in Ne. Fence & Iron Works, Inc. v. Murphy Quigley Co., 2007 PA Super 287, ¶ 9, 933 A.2d 664, 667 (2007). 20 Allen Branch should be judicially estopped from playing fast and loose with this Court in his attempts to assert Counterclaims and multiple Amended Counterclaims in which he claims Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 8 of 16 9 Answer (Doc 117) at 4, ¶32, Allen Branch specifically asserts that Red Star (not Mr. Polao) never issued any loan commitment to “Allen Branch or Renaissance, or to anyone for that matter.” Any purported, but unidentified “expenses” Allen Branch claims to have incurred (Second Amended Counterclaims at 15, ¶5) is not a benefit that was incurred by Red Star. Even the ad damnum clause for this claim only seeks relief against non-party, Mr. Polao and not Red Star, even though Red Star is otherwise identified in the claim allegations. Here, it is clear that Allen Branch recognizes that the March 5, 2013 email on which he relies cannot support any contractual claim for the payment of any commission since, among other things, the material terms to support any such alleged agreement are not whatsoever stated. This is especially true where, as here, the payment of any alleged commission was expressly contingent on whether “REI were to use Red Star’s program should they intend to buy their condo in the future” (Second Amended Answer (Doc 123) at 5, ¶38) and no facts to support the occurrence of any such contingency are pled. Additionally, although the email mentions a request for a commission, not even the amount of any such commission, either in dollar terms or as a percentage of a closed underlying transaction, is whatsoever identified. Thus, at best, all that Allen Branch identifies is an unenforceable agreement to agree as the essential terms of any such purported agreement are too uncertain to be enforceable. Moreover, the breach of contract belong to him personally, when he has unambiguously pled “that all communications between Plaintiff and Allen Branch, from the dates of September 24, 2012 to March 31, 2013 were under the auspices of Defendant Allen Branch acting as agent for Railyard Company LLC in order to obtain refinancing for Railyard’s leasehold mortgage.” See Answer (Doc 114) at 4, ¶32 and Amended Answer (Doc 117) at 4, ¶32 (emphasis added). See, e.g., Montrose Med. Grp. Participating Sav. Plan v. Bulger, 243 F.3d 773, 779-80 (3d Cir. 2001) (determining that judicial estoppel may be applied where 1) the party to be estopped must have taken two positions that are irreconcilably inconsistent, 2) the party to be estopped has change his position in bad faith, and 3) the employment of judicial estoppel is tailored to address the harm identified and no lesser sanction would adequately remedy the damage done by the litigant’s misconduct.). Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 9 of 16 10 Second Amended Counterclaim fails to identify the breach of any duty imposed by the alleged commission contract for any alleged failure to pay commission on any borrower actually delivered by Allen Branch. Omission of facts to support these elements of a breach of contract claim are fatal to the purported Second Amended Counterclaim which should be dismissed. Furthermore, the filing of any alleged Second Amended Counterclaims against Plaintiff’s principal, Gary Polao is nothing more than vexatious harassment of him since, among other things, 1) he was always plainly acting in his capacity as an officer of Red Star and never in his individual capacity, 2) he plainly was not a party to the alleged commission contract in his individual capacity, and 3) there is, as explained above, no factual basis pled to support the existence of any such alleged contract or related breach thereof by either Red Star or Mr. Polao. As Mr. Polao is not a party in this action, no counterclaim may lawfully be filed against him by Allen Branch. FED. R. CIV. P. 13(a)(1) (specifying that counterclaims can only be filed “against an opposing party”). Furthermore, Mr. Polao cannot be made a third-party defendant to this case as Allen Branch has not whatsoever complied with FED. R. CIV. P. 14 and the time to file such claims (which in this case expired 14 days after Allen Branch filed his Answer to the Amended Complaint (Doc 14) on January 19, 2016). At no time has Allen Branch ever sought this Court’s leave to file any third-party complaint against Mr. Polao, nor can he now as there is no lawful basis on which Mr. Polao can be personally joined as a third-party defendant in this action when any interaction he had with Allen Branch was in his capacity as an agent and officer of Red Star. “[W]hen an agent acts on behalf of a disclosed principal, the agent is not liable on a contract between the principal and a third party ‘unless the agent specifically agrees to assume liability.’” Morgan Truck Body, 2013 WL 4766331, at *4, citing In re Estate of Duran, Jr., 692 A.2d 176, 179 (Pa. Super. 1997). In Pennsylvania, there is even “a strong presumption that it is Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 10 of 16 11 the intention of the contracting parties that the principal and not the agent should be a party to the contract.” Morgan Truck Body, 2013 WL 4766331, at *4, citing Viso v. Warner, 471 Pa. 42, 48, 369 A.2d 1185, 1188 (1977). Allen Branch has pled no facts to surmount the foregoing presumption, let alone any facts to whatsoever suggest that Mr. Polao was, in his individual capacity, agreeing to assume any liability. Even the emails on which Allen Branch relies expressly state and identify that following: Gary Polao, Managing Director RED STAR COMMERCIAL REAL ESTATE FUNDING See Second Amended Answer (Doc 123) at Exhibit A. A comparison of the original Counterclaims with the Amended Counterclaims make clear how Allen Branch is really attempting to assert his meritless “counterclaims” to retributively lash out against Red Star and its principal, Gary Polao as payback for this suit. Accordingly, the Second Amended Counterclaims should be dismissed. B. The Unjust Enrichment Second Amended Counterclaim Should Be Dismissed Pursuant to FED. R. CIV. P. 12(b)(6) for Failure to State a Claim. Although Allen Branch is now attempting to assert his unjust enrichment claim in the alternative to his meritless breach of contract claim, the unjust enrichment Second Amended Counterclaim should be dismissed for failure to state a claim. For the party seeking to recover on an unjust enrichment claim, they must plead fact evidencing that: (1) a benefit was conferred; (2) there was appreciation of such benefit; and (3) acceptance and retention of such benefit occurred under circumstances making it inequitable for the benefitting party to retain the benefit without restitution. Green Stripe, Inc. v. Berny's Internacionale, 159 F.Supp.2d 51, 56 (E.D. Pa. 2001) (Surrick, J.). The nature of the court’s examination of such claims has been described as follows: In determining if the doctrine applies, we focus not on the intention of the parties, but rather on whether the defendant has been Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 11 of 16 12 unjustly enriched. The elements of unjust enrichment are “benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value.” The most significant element of the doctrine is whether the enrichment of the defendant is unjust; the doctrine does not apply simply because the defendant may have benefited as a result of the actions of the plaintiff. Where unjust enrichment is found, the law implies a quasi-contract which requires the defendant to pay to plaintiff the value of the benefit conferred. In other words, the defendant makes restitution to the plaintiff in quantum meruit. Ne. Fence & Iron Works, Inc., 933 A.2d at 668-69, citing Lackner v. Glosser, 892 A.2d 21, 34 (Pa. Super. 2006), quoting AmeriPro Search, Inc. v. Fleming Steel Company, 787 A.2d 988, 991 (Pa. Super. 2001). In this case and for the reasons stated above relating to the lack of any breach of contract claim (incorporated herein by reference pursuant to FED. R. CIV. P. 10(c)), defendant Allen Branch clearly does not assert facts to demonstrate that Red Star or Mr. Polao secured any benefit or payment from any alleged transaction to which Allen Branch vaguely claims to have “assimilated and provided current financial information” (Second Amended Counterclaim at 15, ¶4).21 In fact, in his Amended Answer (Doc 123) at 4, ¶32, Allen Branch specifically asserts that Red Star (not Mr. Polao) never issued any loan commitment to “Allen Branch or Renaissance, or 21 Allen Branch should be judicially estopped from playing fast and loose with this Court in his attempts to assert Counterclaims which he claims belong to him personally, when he has unambiguously pled “that all communications between Plaintiff and Allen Branch, from the dates of September 24, 2012 to March 31, 2013 were under the auspices of Defendant Allen Branch acting as agent for Railyard Company LLC in order to obtain refinancing for Railyard’s leasehold mortgage.” Amended Answer (Doc 123) at 4, ¶32. See, e.g., Montrose Med. Grp. Participating Sav. Plan v. Bulger, 243 F.3d 773, 779-80 (3d Cir. 2001) (determining that judicial estoppel may be applied where 1) the party to be estopped must have taken two positions that are irreconcilably inconsistent, 2) the party to be estopped has change his position in bad faith, and 3) the employment of judicial estoppel is tailored to address the harm identified and no lesser sanction would adequately remedy the damage done by the litigant’s misconduct.). Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 12 of 16 13 to anyone for that matter.” Any purported, but unidentified “expenses” Allen Branch claims to have incurred (Second Amended Counterclaim at 15, ¶5) is not a benefit that was incurred by Red Star or Mr. Polao-let alone a benefit that either of them received “under circumstances making it inequitable for [either of them as] the benefitting party to retain the benefit” to support any such equitable quasi-contractual claim. Further, the email on which Allen Branch relies simply does not identify the material terms of the alleged agreement on which he claims his commission and, at best, all that Allen Branch identifies is an unenforceable agreement to agree as the essential terms of any such purported agreement are too uncertain to be enforceable. One court in this district described agreements to agree as follows: In Pennsylvania, an agreement is enforceable where the parties intend to conclude a binding agreement and “the essential terms of the agreement are certain enough to provide a basis for an appropriate remedy.” Northern Group, Inc., 1993 WL 488598, at *1 (emphasis added). “If the essential terms of the agreement are so uncertain that there is no basis for determining whether the agreement has been kept or broken, there is not an enforceable contract.” Linnet, 471 A.2d at 540. Once it is determined that the parties intended to be bound, certainty of terms is important only as a basis for determining the existence of a breach and for giving an appropriate remedy. Northern Group, Inc., 1993 WL 488598, at *1. ProtoComm Corp. v. Fluent, Inc., 1995 WL 3671, at *16 (E.D. Pa. Jan. 4, 1995) (Reed, J.). Even if arguendo the March 5, 2013 email were deemed to be an enforceable agreement (which it is not), it would constitute a written such agreement that would altogether bar any equitable claims for quantum meruit or unjust enrichment. Harold ex rel. Harold v. McGann, 406 F. Supp.2d 562, 578-79 (E.D. Pa. 2005) (“[T]he Supreme Court of Pennsylvania has held that “the quasi- contractual doctrine of unjust enrichment [is] inapplicable when the relationship between the parties is founded on a written agreement or express contract.”) (Brody, J.), citing Benefit Trust Life Ins. Co. v. Union Nat'l Bank of Pittsburgh, 776 F.2d 1174 (3d Cir.1985), quoting Schott v. Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 13 of 16 14 Westinghouse Elec. Corp., 436 Pa. 279, 259 A.2d 443, 448 (1969). Thus, dismissal of the unjust enrichment counterclaims is warranted in this case. C. The Accounting Second Amended Counterclaim Should Be Dismissed Pursuant to FED. R. CIV. P. 12(b)(6) for Failure to State a Claim. “An equitable accounting is improper where no fiduciary relationship exists between the parties, no fraud or misrepresentation is alleged, the accounts are not mutual or complicated, or the plaintiff possesses an adequate remedy at law.” Grill v. Aversa, 2014 WL 4672461, at *10 (M.D. Pa. Sept. 18, 2014), citing Buczek v. First National Bank of Mifflintown, 366 Pa.Super. 551, 531 A.2d 1122, 1124 (Pa. Super. 1987) (citing Ebbert v. Plymouth Oil Company, 348 Pa. 129, 34 A.2d 493 (1943); Shaw v. Newingham, 279 Pa. 180, 123 A. 783 (1924); Graham v. Cummings, 208 Pa. 516, 532, 57 A. 943, 949 (1904)); and Rock v. Pyle, 720 A.2d 137, 142 (Pa. Super. 1998). Here, in the absence of the assertion of any breach of contract Second Amended Counterclaim, it is clear that there can be no claim for a legal accounting.22 22 The test for “a legal accounting” requires proof that: (1) there was a valid contract, express or implied between the parties whereby the defendant received monies as agent, trustee or in any other capacity whereby the relationship created by the contract imposed a legal obligation upon the defendant to account to the plaintiff for the monies received by the defendant, or (b) if the relationship created by the contract between the plaintiff and defendant created a legal duty upon the defendant to account and the defendant failed to account and the plaintiff is unable, by reason of the defendant's failure to account, to state the exact amount due him, and (2) that the defendant breached or was in dereliction of his duty under the contract. Berger & Montague, P.C. v. Scott & Scott, LLC, 153 F. Supp. 2d 750, 754 (E.D. Pa. 2001) (Joyner, J.), citing Haft v. United States Steel Corp., 346 Pa. Super. 404, 499 A.2d 676 (1985); Daikuzono v. Surgical Laser Technologies, No. CIV.A. 96-0833, 1997 WL 52023 at *4 (E.D. Pa. February 3, 1997) (Ditter, J.). Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 14 of 16 15 Put simply, Allen Branch asserts no facts to whatsoever demonstrate the existence of any fiduciary relationship between he, on the one hand, and Red Star and Mr. Polao, on the other hand. Moreover, Allen Branch does not assert any Second Amended Counterclaim or facts to support any claim whatsoever suggesting the happenstance of any fraud or misrepresentation to support any claim for equitable accounting. In fact, he does not even identify any facts to show that any of the purported “proffered several projects” (Second Amended Counterclaim at 15, ¶3) or conditions precedent to which his Amended Counterclaims make reference, inclusive of any relating to RECREATIONAL EQUIPMENT INC. (“REI”) or LESSOR RAILYARD COMPANY LLC (id.) resulted in the consummation or closing on any transaction with respect to which any alleged, unspecified commission could or would be paid. Even if such facts existed, there are no factual averments to suggest that the Allen Branch does not already have the information about such transactions or that they are so complicated as to require an accounting. It is therefore respectfully submitted that there are no lawful grounds to support the assertion of any Second Amended Counterclaim for an equitable accounting and that dismissal of that counterclaim with prejudice is appropriate. Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 15 of 16 16 III. CONCLUSION For the foregoing reasons, Plaintiff respectfully requests that the Motion to Dismiss Defendant Allen Branch’s Second Amended Counterclaims be granted on the form of order submitted herewith. Respectfully submitted, Date: December 6, 2016 /s/John J. Jacko, III_ John J. Jacko, III PA Attorney ID No. 67477 Two Liberty Place South 16th Street, Suite 3401 Philadelphia, PA 19102 T: (215) 253-6634 Attorneys for Plaintiff RED STAR MORTGAGE CORPORATION Case 2:15-cv-06757-WB Document 124-1 Filed 12/06/16 Page 16 of 16 1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA RED STAR MORTGAGE CORPORATION, Plaintiff, v. ALLEN BRANCH, ET AL. Defendants. Civil Action No.: 2:15-cv-06757 ORDER AND NOW this ___________ day of _______________, 2016 upon consideration of Plaintiff, RED STAR MORTGAGE CORPORATION’s Motion to Dismiss Defendant Allen Branch’s Second Amended Counterclaims (“Third Dismissal Motion”) and any response thereto and oral argument, if any, it is hereby ORDERED and DECREED that that the Third Dismissal Motion is GRANTED and the Second Amended Counterclaims filed by Defendant Allen Branch are hereby DISMISSED with prejudice in their entirety. BY THE COURT: __________________________ , J. Case 2:15-cv-06757-WB Document 124-2 Filed 12/06/16 Page 1 of 1 1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA RED STAR MORTGAGE CORPORATION, Plaintiffs, v. ALLEN BRANCH, ET AL. Defendants. Civil Action No.: 2:15-cv-06757 CERTIFICATE OF SERVICE I, John J. Jacko III, certify that on the below date a true and correct copy of Plaintiff’s Motion to Dismiss Defendant Allen Branch’s Second Amended Counterclaims was served via ECF, to the extent the party is able to receive ECF filings, email and First Class, U.S. Mail upon the following: Trevor J. Cooney, Esquire ARCHER & GREENER, P.C. TCooney@archerlaw.com One Centennial Square, PO Box 3000 Haddonfield, NJ 08033-0968 Defendant Counsel for Defendant THOROFARE CAPITAL INC. Jeremy D. Mishkin, Esquire jmishkin@mmwr.com Peter Breslauer, Esquire pbreslauer@mmwr.com MONTGOMERY MCCRACKEN WALKER & RHOADS LLP 123 South Broad Street, 24th Floor Philadelphia, PA 19109-1029 Counsel for Branch Realty Commercial Advisors and “Branch Realty” Allen Branch Allenbranch@gmail.com 228 South St. Francis Drive, Building E Santa Fe, NM 87501 and 9651 Merion Circle NE Albuquerque, NM 87111 Defendant, pro se Richard “Rick” Jaramillo Rickxaramillo@yahoo.com 500 Market Street Santa Fe, NM 87501 and 215 Calle Roble Santa Fe, NM 87501 Defendant, pro se Case 2:15-cv-06757-WB Document 124-3 Filed 12/06/16 Page 1 of 2 2 XACATTACK, LLC f/k/a RENAISSANCE PROPERTIES LLC 228 South St. Francis Drive, Building E Santa Fe, NM 87501 Defendant BRANCH REALTY, LLC 228 South St. Francis Drive, Building E Santa Fe, NM 87501 Defendant Michael Branch 228 South St. Francis Drive, Building E Santa Fe, NM 87501 Defendant Steve Duran six2five4steve@aol.com 21 Entrada De Duran Santa Fe, NM 87506 Third Party Defendant Pro se David Duran Davidduran54@gmail.com 2 Bouquet Lane Santa Fe, NM 87506 Third Party Defendant Pro se FELLHEIMER & EICHEN LLP Date: December 6, 2016 /s/ John J. Jacko III John J. Jacko, III PA Attorney ID Nos. 67477 50 South 16th Street, Suite 3401 Philadelphia, PA 19102 T: (215) 253-6630 Attorneys for Plaintiff Red Star Mortgage Corporation Case 2:15-cv-06757-WB Document 124-3 Filed 12/06/16 Page 2 of 2 EXHIBIT A Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 1 of 27 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA RED STAR MORTGAGE CORPORATION, Plaintiff, V. 2:15-cv-06757-WB ALLEN BRANCH, Et. al Defendant. DEFENDANT ALLEN BRANCH AMENDED ANSWERS TO PLAINTIFF’S THIRD AMENDED COMPLAINT AND DEFENDANT’S SECOND AMENDED COUNTER CLAIMS COMES NOW, Defendant (hereinafter “Defendant Allen Branch”), in his individual capacity and for his Answer, Counter Claims, and added Third Party Counter Defendant Gary Polao to Plaintiff Red Star Mortgage Corporation, states as follows: THIS MATTER comes before the Court on: (i) the Plaintiff’s claim for breach of contract, or in the alternative, quantum meruit, conversion, tortious interference, or unjust enrichment. GENERAL ALLEGATIONS 1. Defendant Allen Branch lacks sufficient knowledge or information to form belief as to the truth of the allegation this paragraph and therefore DENIES them. 2. Defendant Allen Branch lacks sufficient knowledge or information to form belief as to the truth of the allegation this paragraph and therefore DENIES them. 1 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 1 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 2 of 27 3. Defendant Allen Branch lacks sufficient knowledge or information to form belief as to the truth of the allegation this paragraph and therefore DENIES them. 4. Defendant Allen Branch admits he is a member of Xacattack LLC but DENIES he is a principal of Branch Realty Commercial Advisors. Branch Realty Commercial Advisors is a sole proprietorship owned by his father, Michael Branch. 5. Defendant Allen Branch admits Xacattack LLC is a limited liability company. 6. Defendant Allen Branch admits “Branch Realty” is a real estate sole proprietor firm. 7. Defendant Allen Branch admits that Branch Realty Commercial Advisors “Branch Realty” is a sole proprietorship owned by Michael Branch. 8. Defendant Allen Branch admits that Railyard Company LLC is a limited liability company. 9. Defendant Allen Branch DENIES that any of the other named Defendants are contractually associated with Allen Branch. 10. Defendant Allen Branch lacks sufficient knowledge or information to form belief as to the truth of the allegation this paragraph and therefore DENIES them. 11. Defendant Allen Branch DENIES that any of the other named Defendants are contractually associated with Allen Branch. 12. The allegations of paragraph 12 are not directed to Defendant. 13. Defendant Allen Branch DENIES that Branch Realty LLC does business under the name of Branch Realty Commercial Advisors. 14. Defendant Allen Branch was in error in his Consent to Removal that Allen Branch is a principal of Branch Realty LLC. Allen Branch is not a member or principal of Branch Realty LLC. 15. Defendant Allen Branch DENIES the allegations in Paragraph 15 of the Complaint 2 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 2 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 3 of 27 16. Defendant Allen Branch admits that his standardized email tagline shows his real estate licensee address as required by the New Mexico Real Estate Commission. 17. The allegations of paragraph 12 are not directed to Defendant Allen Branch. 18. Defendant Allen Branch DENIES that a significant portion of the events giving rise to this lawsuit occurred in Pennsylvania. 19. Defendant Allen Branch lacks sufficient knowledge or information to form belief as to the truth of the allegation this paragraph and therefore DENIES them. 20. Defendant Allen Branch lacks sufficient knowledge or information to form belief as to the truth of the allegation this paragraph and therefore DENIES them. 21. Defendant Allen Branch lacks sufficient knowledge or information to form belief as to the truth of the allegation this paragraph and therefore DENIES them. 22. Defendant Allen Branch lacks sufficient knowledge or information to form belief as to the truth of the allegation this paragraph and therefore DENIES them. 23. Defendant Allen Branch admits that Plaintiff initially solicited Branch to provide financing on prospective properties in Santa Fe, New Mexico. 24. Defendant Allen Branch DENIES that on October 9, 2012 he acted “on behalf of himself as part owner…” but instead and at all times acted as agent for owner, Railyard Company LLC or Renaissance Properties LLC. 25. Defendant Allen Branch DENIES he borrower or sought to borrower funds on behalf of himself. Defendant Allen Branch admits he acted as agent and on behalf of Railyard Company LLC, provided detailed confidential and proprietary information on behalf of the actual prospective borrower, Railyard Company LLC. 3 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 3 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 4 of 27 26. Defendant Allen Branch DENIES that he ever sought funds for himself or on behalf of the “Branch Defendants.” Defendant Allen Branch only acted in the capacity of agent for Railyard Company LLC. 27. Defendant Allen Branch lacks sufficient knowledge or information to form belief as to the truth of the allegation this paragraph and therefore DENIES them. 28. Admit. 29. Defendant Allen Branch DENIES he acted for “himself and on behalf of Branch Defendants.” Branch admits he acted on behalf of Railyard Company LLC as agent in requesting a term sheet. 30. Defendant Allen Branch admits that he did NOT receive a “Term Sheet,” only “Indicative Terms” in an email for a loan that is under consideration. 31. Defendant Allen Branch DENIES that the December 6, 2012 email confirmed Railyard Company’s desire to refinance based on terms supplied by Plaintiff. Railyard’s partners had no desire to be personally responsible for loans terms supplied by Plaintiff. 32. Defendant Allen Branch DENIES that on or about August 7, 2013 Defendants Branch, Railyard and Renaissance entered into and signed a (“Consulting Agreement”) with Plaintiff Red Star. Branch admits that all communications between Plaintiff and Allen Branch, from the dates of September 24, 2012 to March 31, 2013 were under the auspices of Defendant Allen Branch acting as agent for Railyard Company LLC in order to obtain refinancing for Railyard’s leasehold mortgage. However during that period or any time after that date, no term sheet, loan application, nor any other type of loan commitment was issued by Plaintiff Red Star to Allen Branch or Renaissance, or to anyone for that matter. 4 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 4 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 5 of 27 33. Defendant Allen Branch DENIES that the Consulting Agreement between Renaissance Properties LLC and Plaintiff Red Star (“Consulting Agreement,” Plaintiff’s Exhibit B) includes, as parties to the agreement, the herein named defendants, nor Railyard Company LLC. Defendant Allen Branch admits that the “Consulting Agreement” between Plaintiff Red Star and Renaissance Properties LLC expired on August 6, 2015. 34. Defendant Allen Branch DENIES that subsequent to Renaisssance Properties LLC entering into a “Consulting Agreement” with Plaintiff Red Star that Plaintiff presented any refinance transaction on behalf of Defendant Allen Branch or Renaissance Properties LLC. 35. Defendant Allen Branch has no information or knowledge concerning the allegations in Paragraph 35 therefore DENIES each and every allegation. 36. Defendant Allen Branch has no information or knowledge concerning the allegations in Paragraph 36 therefore DENIES each and every allegation. 37. Defendant Allen Branch DENIES that Allen Branch, any “Branch Defendants,” or Railyard Company LLC entered into a Consulting Agreement and subsequently arranged for a telephone conference. 38. Defendant Allen Branch denies paragraph in its entirety. By the end March 2013, Branch had determined that Railyard Company LLC members were unwilling to act on any financing proposal or to have their retail anchor, Recreational Equipment Inc., purchase their own condo from Railyard and thus ended Branch’s agency relationship with Railyard to obtain financing for them. Branch instead asked Polao for a referral fee if REI were to use Red Star’s program should they intend to buy their condo in the future. (See emails 3/5/13-3/6/13) 39. Defendant Allen Branch DENIES that he was introduced or had any communication with Defendant Thorofare. Financing on behalf of Railyard Company LLC was dead. Beginning 5 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 5 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 6 of 27 on 3/25/13, Palao again began an email solicitation campaign to Branch offering other loan products. (See emails 3/25/13 - 7/25/13). Branch engaged with Palao about other various projects needing financing. On 7/29/13, Branch engaged Palao with the prospect of a third party purchasing Railyard’s note from Ambit (Railyard’s original leasehold mortgage holder). (see Branch email to Palao 7/29/13.) Soon afterwards, Branch began to resend Railyard’s tenant info to Palao in order for a separate entity, Renaissance Properties LLC, to procure a loan from Red Star for its own proprietary purposes (Renaissance Properties LLC has no affiliation with the other named defendants nor Railyard Company LLC). These prospective Red Star proceeds would be used to instead purchase Railyard Company LLC’s leasehold mortgage from Ambit (Railyard’s original leasehold mortgage holder). See email 8/6/13. A subsequent conference call between Branch and Palao determined that Red Star’s proposed loan to value was too low for Renaissance to act. (See subsequent email from Branch to Palao 8/7/13.) Palao advised Branch that Renaissance would need to carry secondary financing in order to make the deal work. (See email from Palao to Branch 8/8/13). This proposal effectively killed any prospect of Renaissance Properties LLC obtaining a loan from Red Star to purchase Railyard’s leasehold mortgage and thus ended the relationship between Branch and Red Star except for continued email solicitations by Palao to Branch. (See emails from Palao to Branch 9/5/13 - 3/31/14). In effect, Redstar Mortgage never submitted a loan term sheet to Allen Branch or Renaissance, never submitted a mortgage commitment, never submitted a loan application or rate quote, nor any released any funds to Allen Branch or Renaissance Properties LLC. Red Star is attempting to make a claim against Allen Branch for a loan brokerage commission, but no transaction between the Renaissance Properties, Allen Branch and Plaintiff Red Star Mortgage ever occurred. 6 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 6 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 7 of 27 40. Defendant Allen Branch has no information or knowledge concerning the allegations in Paragraph 35 therefore DENIES each and every allegation. 41. Defendant Allen Branch has no information or knowledge concerning the allegations in Paragraph 35 therefore DENIES each and every allegation. 42. Defendant Allen Branch has no information or knowledge concerning the allegations in Paragraph 35 therefore DENIES each and every allegation. 43. Admit. 44. Defendant Allen Branch has no information or knowledge concerning the allegations in Paragraph 35 therefore DENIES each and every allegation. 45. Defendant Allen Branch has no information or knowledge concerning the allegations in Paragraph 35 therefore DENIES each and every allegation. COUNT I Breach of Contract 46. Defendant Allen Branch incorporates its answers to paragraph 1 through 45 as if set forth fully herein. 47. Defendant Allen Branch in his individual capacity DENIES any material breach of the Consulting Agreement. 48. Defendant Allen Branch lacks sufficient information regarding the specific nature of Plaintiff’s allegations and therefore DENIES them. 49. Defendant Allen Branch DENIES any material contractural breach with Plaintiff, and therefore DENIES the allegations set forth in Paragraph 49. 7 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 7 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 8 of 27 50. Defendant Allen Branch DENIES any material contractural breach with Plaintiff, and therefore DENIES the allegations set forth in Paragraph 50. 51. Defendant Allen Branch DENIES any material contractural breach with Plaintiff, and therefore DENIES the allegations set forth in Paragraph 49. COUNT II 52. Defendant Allen Branch incorporates its answers to paragraph 1 through 51 as if set forth fully herein. 53. Defendant Allen Branch lacks sufficient information regarding the specific nature of Plaintiff’s allegations and therefore DENIES them. 54. Defendant Allen Branch DENIES any unjust benefit accrued from Plaintiff. 55. Defendant Allen Branch DENIES Plaintiff provided valuable payment of money to Defendants and any unjust benefit accrued from Plaintiff. 56. Defendant Allen Branch DENIES knowingly accepting the valuable benefits from Plaintiff. 57. Defendant Allen Branch DENIES exercising bad faith and candor and admits no duty to provide complete and appropriate information on behalf of Railyard Company LLC. 58. Defendant Allen Branch DENIES any unjust benefit accrued from Plaintiff. 59. Defendant Allen Branch DENIES any unjust benefit accrued from Plaintiff. 60. Defendant Allen Branch DENIES any unjust benefit accrued from Plaintiff. 61. Defendant Allen Branch DENIES any unjust benefit accrued from Plaintiff. 62. Defendant Allen Branch DENIES any unjust benefit accrued from Plaintiff. 63. Defendant Allen Branch DENIES any unjust benefit accrued from Plaintiff. 8 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 8 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 9 of 27 64. Defendant Allen Branch DENIES any unjust benefit accrued from Plaintiff. WHEREFORE, Defendant Allen Branch respectfully requests that this Court enter judgment dismissing Plaintiff’s Third Amended Complaint as against Branch with prejudice, awarding attorneys’ fees and costs to Branch, and such other relief as the Court deems just. COUNT III 65. Defendant Allen Branch incorporates its answers to paragraph 1 through 64 as if set forth fully herein. 66. The allegations contained in Paragraph 66 call for a legal conclusion and, thus, no response is required. 67. Defendant Allen Branch was neither a borrower, nor a broker, nor a lender, nor took any valuable consideration from the Plaintiff. Therefore Defendant Allen Branch DENIES all the allegations in this paragraph. 68. The allegations contained in Paragraph 68 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Defendant Allen Branch, they are expressly denied. By way of further response, Allen Branch expressly denies receiving “valuable payment of money” from Red Star, that Red Star “incurr[ed] expenses” on Branch’s behalf, or that Red Star “conferred . . . financial benefits” upon Branch. 69. The allegations contained in Paragraph 69 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Defendant Allen Branch, they are expressly denied. 9 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 9 of 19Case 2:15-cv-06757-WB Document 124-4 il / 6/ 10 of 27 70. The allegations contained in Paragraph 70 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Defendant Allen Branch, they are expressly denied. 71. The allegations contained in Paragraph 71 call for a legal conclusion and, thus, no response is required. To the extent a response is required, these allegations are denied. By way of further response, Branch expressly denies that it owes any alleged “value”, “payment” or “damages” to Red Star. 72. Defendant Allen Branch lacks sufficient information regarding the specific nature of Plaintiff’s allegations and therefore DENIES them. 73. The allegations contained in Paragraph 73 call for a legal conclusion and, thus, no response is required. To the extent a response is required, Defendant Allen Branch is without knowledge or information sufficient to form a reasonable belief as to the truth of the allegations of this Paragraph concerning the nature of Red Star’s alleged “services.” To the extent the allegations suggest or imply any liability on the part of Branch, they are expressly denied. Branch also expressly denies that Red Star provided any alleged “services” to Branch. 74. The allegations contained in Paragraph 74 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Branch, they are expressly denied. 75. The allegations contained in Paragraph 74 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Branch, they are expressly denied. 76. The allegations contained in Paragraph 76 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Branch, they 10 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 10 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 11 of 27 are expressly denied. Branch also expressly denies that Red Star provided any alleged “benefits” to Branch. WHEREFORE, Defendant Allen Branch respectfully requests that this Court enter judgment dismissing Plaintiff’s Third Amended Complaint as against Branch with prejudice, awarding attorneys’ fees and costs to Branch, and such other relief as the Court deems just. COUNT IV CONVERSION 77. Defendant Allen Branch incorporates its responses to the allegations contained in Paragraphs 1-76 of Plaintiff’s Third Amended Complaint as if fully set forth herein. 78. The allegations contained in Paragraph 78 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Branch, they are expressly denied. 79. Defendant Allen Branch denies the allegations set forth in Paragraph 79. 80. The allegations contained in Paragraph 80 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Defendant Allen Branch, they are expressly denied. 81. The allegations contained in Paragraph 81 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Defendant Allen Branch, they are expressly denied. 82. The allegations contained in Paragraph 82 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Defendant Allen Branch, they are expressly denied. 11 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 11 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 2 of 27 83. The allegations contained in Paragraph 83 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Defendant Allen Branch, they are expressly denied. 84. The allegations contained in Paragraph 84 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Defendant Allen Branch, they are expressly denied. 85. The allegations contained in Paragraph 85 call for a legal conclusion and, thus, no response is required. To the extent the allegations suggest or imply any liability on the part of Defendant Allen Branch, they are expressly denied. WHEREFORE, Defendant Allen Branch respectfully requests that this Court enter judgment dismissing Plaintiff’s Third Amended Complaint as against Defendant Allen Branch with prejudice, awarding attorneys’ fees and costs to Branch, and such other relief as the Court deems just. AFFIRMATIVE DEFENSES As separate and distinct defenses to Plaintiff’s alleged causes of action, and each of them, Defendant Allen Branch, without conceding that it bears the burden of proof as to any of them, and without in any way admitting any of the allegations of the Third Amended Complaint, alleges as follows: 1. Plaintiff’s Third Amended Complaint fails to state a claim against Defendant Allen Branch upon which relief can be granted. 2. Plaintiff’s alleged claims against Defendant Allen Branch, in whole or in part, were not commenced within the time permitted by statute. 3. Plaintiff’s Third Amended Complaint fails because the Court lacks personal jurisdiction over Defendant Allen Branch. 12 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 12 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 13 of 27 4. Plaintiff’s alleged claims against Defendant Allen Branch are barred, in whole or in part, by the doctrine of laches. 5. Plaintiff’s alleged claims against Defendant Allen Branch are barred, in whole or in part, by the doctrine of estoppel. 6. Plaintiff’s alleged claims against Defendant Allen Branch are barred, in whole or in part, by the doctrine of waiver. 7. Plaintiff’s alleged claims against Defendant Allen Branch are barred, in whole or in part, by the doctrine of unclean hands. 8. Plaintiff’s alleged claims against Defendant Allen Branch are barred, in whole or in part, by Plaintiff’s failure to mitigate its damages. 9. Plaintiff’s alleged claims against Defendant Allen Branch are barred, in whole or in part, to the extent that the equities of Plaintiff’s claims do not merit recovery from or against Defendant Allen Branch. 10. Defendant Allen Branch is not responsible for the acts or omissions of Plaintiff or any other party in this action. 11. The acts complained of in the Third Amended Complaint were not committed by Defendant Allen Branch and/or for whose conduct Allen Branch is not otherwise responsible. 12. At all times referred to in the Third Amended Complaint, Defendant Allen Branch acted justifiably, lawfully, in good faith, with due care, and without negligence or improper motive, purpose or intent. 13. Assuming, solely for purposes of pleading this separate defense, that Plaintiff sustained any legally cognizable damages, such damages are not recoverable from Defendant Allen Branch because Defendant Allen Branch alleged conduct was not the proximate cause of any such damages. 14. Assuming, solely for purposes of pleading this separate defense, that Plaintiff sustained any legally cognizable damages, such damages are due to the actions and/or inactions of third parties over which Defendant Allen Branch has no control, and for which Defendant Allen Branch has no liability. 13 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 13 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 14 of 27 15. Plaintiff is barred from recovery as against Defendant Allen Branch, in whole or in part, because it has failed to allege, and cannot establish, that Plaintiff and Defendant Allen Branch are parties to any contract or agreement, whether oral or written that would be cause for damages. 16. Plaintiff is barred from recovery as against Defendant Allen Branch, in whole or in part, because it cannot establish that Defendant Allen Branch was under any duty and/or obligation to Plaintiff. 17. Plaintiff is barred from recovery as against Defendant Allen Branch, in whole or in part, because it cannot establish that Defendant Allen Branch breached any duty and/or obligation to Plaintiff. 18. Plaintiff is barred from recovery as against Defendant Allen Branch, in whole or in part, because it cannot establish that Defendant Allen Branch acted without any privilege or justification. 19. Plaintiff is barred from recovery as against Defendant Allen Branch, in whole or in part, because it cannot establish that Plaintiff conferred any cognizable benefit upon Defendant Allen Branch. 20. Plaintiff is barred from recovery of punitive damages as against Defendant Allen Branch because it has failed to allege, and cannot establish, valid grounds for recovery of such damages. 21. Defendant Allen Branch incorporates by reference any defenses asserted by any other party in this action not stated herein, and is entitled to all defenses under federal law, New Mexico lasw, Pennsylvania law, and other applicable law, and to require Plaintiff to prove each and every element of Plaintiff’s causes of action. 22. Defendant Allen Branch Answer with Affirmative Defenses is based on currently available information. Defendant Allen Branch explicitly reserves the right to revise, amend and/or supplement its Answer and/or Affirmative Defenses during the course of this litigation. WHEREFORE, Defendant Allen Branch respectfully requests that this Court enter judgment dismissing Plaintiff’s Third Amended Complaint as against Defendant Allen Branch with prejudice, awarding attorneys’ fees and costs to Defendant Allen Branch, and such other relief as the Court deems just. 14 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 14 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 15 of 27 COUNTERCLAIMS COUNT I BREACH OF CONTRACT AGAINST THIRD PARTY GARY POLAO 1. Counter claimant Allen Branch incorporates its responses to the allegations contained in Paragraphs 1-76 of Plaintiff’s Third Amended Complaint as if fully set forth herein. 2. On or about March 5, 2013 after learning that Railyard Company LLC was no longer interested in refinancing its leasehold mortgage, Gary Polao engaged Allen Branch to procure other loans for placement. See 3/5/2013 email Paleo to Branch. 3. In the course of this engagement, Counter claimant Allen Branch, proffered several projects to Polao, including the prospect of Recreational Equipment Inc. (REI) purchasing their leasehold estate from Railyard Company LLC or the prospect of Renaissance Properties LLC purchasing the distressed note. 4. In the course of this engagement, Counter claimant Allen Branch assimilated and provided current financial information and other proprietary information concerning the Lessor Railyard Company LLC and REI, and others to Red Star Mortgage for the purposes of the providing a Single Tenant NNN Loan to REI or Renaissance Properties LLC. 5. In the course of this engagement, Counter claimant Allen Branch induced expenses and provided services to Red Star who then used said information to solicit lenders for its own benefit. 6. By providing valuable payment of services to Polao and incurring expenses as alleged herein, Counter claimant Allen Branch conferred, among other things, financial benefits upon Counter Defendant, for which Branch has not been properly compensated. 15 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 15 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 16 of 27 7. Counter Defendant has not paid Counter claimant Allen Branch a fair and reasonable value of Branch’s services, the value of which will be proved at trial on this matter. Wherefore, Counter claimant Allen Branch prays for judgment in it favor against Defendant Polao for general damages in an amount to be proven at trial, for pre judgment interest at the maximum rate permitted by law, for the cost of suit incurred herein; and for other such costs deemed reasonable. CAUSE OF ACTION IN THE ALTERNATIVE UNJUST ENRICHMENT AGAINST RED STAR MORTGAGE AND GARY POLAO 8. Counter claimant Allen Branch incorporates its responses to the allegations contained in Paragraphs 1-76 of Plaintiff’s Third Amended Complaint as if fully set forth herein. Pursuant to FED. R. CIV. P. 8(d), Counter Claimant Allen Branch claims in the alternative to Count I. 9. Counter Defendant has unjustly benefitted from Counter Claimant Allen Branch, work and labors without ever compensating it for any of it. 10. By providing valuable payment of money to Counter Defendant and incurring expenses as alleged herein, Counter Claimant Allen Branch conferred, among other things, financial benefits upon the Counter Defendant, jointly and severally, for which Counter Claimant Allen Branch has not been properly compensated and with respect to which Counter Claimant Allen Branch maintains a reasonable expectation of payment from the Counter Defendant. 11. Counter Defendant knowingly accepted the valuable benefits rendered to them by Counter Claimant Allen Branch. 16 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 16 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 17 of 27 12. As an actual and proximate result of Counter Defendant’s failures to exercise its good faith and candor in timely and honestly providing complete and appropriate information necessary to calculate and pay the amounts and commissions due Branch, Counter Defendant breached the March 5, 2013 agreement and Counter Defendant’s duties and/or obligations to Counter Claimant Allen Branch. 13. As a result, Counter Defendant unjustly received a benefit from Branch because it took Branch’s efforts, work and labors without providing any compensation to him. 14. The reasonable value of the benefits Counter Claimant Allen Branch conferred shall be determined at trial. 15. Counter Defendant has therefore appreciated, accepted, and retained all benefits and amounts due Counter Claimant Allen Branch and all payments and commissions due it under the agreement. Wherefore Counter Claimant Allen Branch prays for judgment in his favor against Counter Defendant for all amounts due; for prejudgment interest a the maximum rate permitted by law; for the cost suit herein; and for other and further relief as the Court may deem just and proper. THIRD CAUSE OF ACTION FOR AN ACCOUNTING AGAINST RED STAR MORTGAGE AND GARY POLAO 8. Counter claimant Allen Branch incorporates its responses to the allegations contained in Paragraphs 1-76 of Plaintiff’s Third Amended Complaint as if fully set forth herein. 9. Counter Defendant expended certain costs and may have received certain sums in connection with its services provided to Thorofare Financial and Railyard Company LLC, a 17 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 17 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 18 of 27 portion of which is due to Counter Claimant Allen Branch pursuant to the March 5, 2013 agreement. 10. Counter Defendant has access to such information and has not provided Counter Claimant Allen Branch with the same through discovery, as requested numerous times and by request of the Court. 11. As a proximate result of Counter Defendant’s failure to provide an accounting, an order from the Court is required to provide a full accounting of any compensation and work conducted in connection with Thorofare and Railyard Company LLC. Wherefore Counter Claimant Allen Branch prays for judgment in his favor against Counter Defendant; for an account between Red Star and Allen Branch; for payment to Branch of the amount due from Counter Defendant as a result of the accounting; For prejudgment interest a the maximum rate permitted by law; for the cost suit herein; and for other and further relief as the Court may deem just and proper. Respectfully submitted: /s/ Allen Branch, Defendant, Pro Se 18 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 18 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 19 of 27 CERTIFICATE OF SERVICE The undersigned hereby certifies that Plaintiff is being served with a copy of this MOTION via electronic mail to (email on file): FELLHEIMER & EICHEN LLP Alan J. Jacko, III Two Liberty Place 50 South 16th St. Set 3401 Philadelphia PA 19102 Attorneys for Plaintiff on December 2, 2016. By: /s/ Allen Branch 9651 MERION CIR NE ALBUQUERQUE NM 87111 19 Case 2:15-cv-06757-WB Document 123 Filed 12/02/16 Page 19 of 19Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 20 of 27 EXHIBIT A 9/24/12 Gary Polao emails From: GARY POLAO [mailto:gpolao@gmail.com] Sent: Thursday, September 20, 2012 5:34 PM To: 'ATHOMASBRANCH@YAHOO.COM' Subject: Santa FE, NM CMBS Refinance - Shopping Ctr / Office / RED STAR COMMERCIAL FUNDING Importance: High Hi Allen, It was nice speaking with you this afternoon about financing for your 65,000 SF Santa Fe, NM retail shopping center and 26,000 SF Office Building. We would look to place these refinance loans into our upcoming CMBS/Conduit securitization pool. We are interested in these assets at stabilization (80-85% occ minimum) but could begin underwriting and due diligence right away. We'll also look at the sale/lease-back structure for the GSA State Leased Office as it may be a fit for a Private Placement Bond Offering. 9/25/12 Gary Polao emails Thank you Allen! This confirms receipt of your package and we are reviewing it. Will you be sending over the 26,000 SF Office Building that you mentioned to refinance out of your PNC Bank Loan? If you can it may be helpful in considering both financing opportunities and in our general review of the Santa Fe market. We are looking to fill an upcoming CMBS securitization pool with a mix of assets specifically including retail/office. Best Regards, -Gary 9/25/12 Allen Branch emails Is funding this loan by the CMBS subject to an IPO? What is the time frame on this? I can pool a sizable local asset basket in short order. Do you offer a correspondent fee? Best, Allen 9/25/12 Gary Polao emails GARY POLAO Attachments9/25/12 to me Allen, The conduit pool is self-funded from our affiliate which is a major institutional capital fund, loans are then sold/securitized within the CMBS market at various intervals throughout the year. Our capabilities are unlimited in scope, asset type and deal size. Red Star would be interested in a referral relationship with you to source purchase/refinance transactions on all income producing commercial real estate - (including new construction) focus on Multi-family for which we originate debt thru Fannie Mae, FHA-HUD and Conduit platforms. On deals where you do not have a financial interest, we can pay referral fee's as appropriate. Thanks for asking. Gary Polao, Managing Director RED STAR COMMERCIAL REAL ESTATE FUNDING Multi-Family Housing & Healthcare Lender l CMBS Conduit (610) 578-0715 Direct (610) 578-0716 Fax E-Mail: gpolao@gmail.com 9/27/12 Allen Branch emails ATTACHMENT 9/28/12 Allen Branch emails ATTACHMENT 9/28/12 Allen Branch emails ATTACHMENT 9/29/12 Gary Polao emails Thanks Allen! Once I get the detailed Rent Roll, we'll commence our review. Please send as soon as you have it. Usually we like to see minimum loans around $3MM for a conduit execution but I think we can fit this in. I had in my notes the office est. value at $8MM and $5.5MM in debt, is SW Plaza II the same transaction that we had originally spoke about? Look forward to working with you. Have a nice weekend! Gary Polao, Managing Director RED STAR COMMERCIAL REAL ESTATE FUNDING Multi-Family Housing & Healthcare Lender l CMBS Conduit (610) 578-0715 Direct (610) 578-0716 Fax E-Mail: gpolao@gmail.com 10/3/12 Allen Branch emails Allen Branch 10/3/12 to GARY Any luck pricing the loan? 10/4/12 Gary Polao emails GARY POLAO 10/3/12 to me Allen, We have questions and trying to fully understand all the moving parts of this deal, e.g. lease commencement, dates, condo aspects, the Tax Credits and more. I'd like to suggest we have a conference call tomorrow morning (Eastern Time) wherein, we can ask questions and get a better handle on Market Station. Also - If you want to send me the Rent Roll on SOUTHWEST PLAZA, we may have time to review this one as well. Let me know a good time before 11:30AM EST, ASAP. Thanks! Gary Polao, Managing Director 10/5/12 Gary Polao emails GARY POLAO 10/5/12 to me Allen, Please suggest a few dates/times when you can be available for a conference call and discussion on Market Station….? I need to coordinate with my team as I expect to have our conduit underwriter and analyst participating. Thanks, Gary Polao, Managing Director RED STAR COMMERCIAL REAL ESTATE FUNDING Multi-Family Housing & Healthcare Lender l CMBS Conduit (610) 578-0715 Direct (610) 578-0716 Fax E-Mail: gpolao@gmail.com 10/5/12 Gary Polao emails GARY POLAO 10/5/12 to me Allen, I have CONFIRMED Tuesday, 10/9/12 at 10:00 AM MST, which is 12:00 Noon Eastern time for us. We'll either call you or I will Email a dial in number. Thanks and look forward to it! Gary Polao, Managing Director 1 Case 2:15-cv-06757-WB Document 123-1 Filed 12/02/16 Page 1 of 7Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 2 27 10/9/12 Gary Polao emails GARY POLAO 10/9/12 to me Hi Allen, Regarding Market Station at Santa Fe Railyards and from our conference call this morning, Mike and I wanted to re-iterate our interest and also review the list of additional information needed to further consider your loan refinancing request. Please send: Ground Lease - with all Amendments Details of property taxes / CAM breakout Condo Association Documents REO schedule for borrowers, please include profile/overview of holdings, development experience, etc. Thank you - we look forward to continued review, followed by a fully underwritten financing proposal. -Gary 10/11/12 Allen Branch emails Allen Branch 10/11/12 to GARY Gary, Im on it but some doc amendments are scattered amongst attorneys. Will have by tomorrow. Best, Allen 10/16/12 Allen Branch emails Allen Branch 10/16/12 to GARY Gary, Did you receive all the docs requested? Rick was the one collecting from the attnys. Sent from Allen Branch's iPhone5 10/16/12 Gary Polao emails GARY POLAO 10/16/12 to me Allen, No, I have not received anything. Gary Polao, Managing Director 10/18/12 Gary Polao emails GARY POLAO 10/18/12 to me Allen, Do you have an idea as to when you will be able to send the information we are waiting for? Thank you, Gary Polao, Managing Director 10/18/12 Rick Jaramillo Emails rick jaramillo Attachments10/18/12 to gpolao, me We have a closing book that needs to be scanned all documents that you have requested are contained within the book. Rick 10/19/12 Allen Branch emails Allen Branch Attachments10/19/12 to GARY I am not the custodian of docs so I am getting these to you as I get them 👾 Sent from Allen Branch's iPhone 4 Begin forwarded message: 10/23/12 Gary Polao emails GARY POLAO 10/23/12 to me, rick Allen, Rick: Confirming that we have received two (2) pdf's from you… first amendment to the Ground Lease and an Estoppel Cerificate. Waiting on the items below, please let us know when we can expect this information, as we can't proceed further on the file until we have this. Please send at the same time all together when you have it ready. Thank you! Gary Polao, Managing Director 10/30/12 Rick Jaramillo Emails rick jaramillo Attachments10/30/12 to me, GARY Gary, See attached pdf files containing First Amendment to Ground Lease and Condominium Documents. If you need anything else please contact me. Respectfully, Rick Jaramillo Principal Member Railyard Co. LLC Gary Polao emails Thanks Rick - we will begin to review the documents. As per the checklist we still would like to receive some sponsorship information. e.g. : REO schedule, Holdings/Profile/Development experience, etc. Please advise when you aniticpate being able to send over? Please send: Ground Lease - with all Amendments Details of property taxes / CAM breakout Condo Association Documents REO schedule for borrowers, please include profile/overview of holdings, development experience, etc. Gary Polao, Managing Director 11/13/12 Gary Polao emails GARY POLAO 11/13/12 to rick, me Hi Rick and Allen: Again, I'd like to reiterate our strong interest in providing this $12,000,000 loan for Market Station @ Railyards. We are in receipt of the ground lease and condo documents, but will need your assistance in abstracting and summary of this information to save time. Once we can obtain internal credit committee approval, the only due diligence remaining will be third party reports and legal review leading to a fast closing! Please provide update at to lease status of Wood Pizzeria, Boba Tea Co, and Ringside Lounge. Where do these leases stand? When are the start dates? Please provide new budget with revised ground rent. Please confirm who controls the condo association. Given this has been sitting for a while, please provide a written story of the series of events with this project (start dates, equity paydown in exchange for ownership, when forbearance began, what dollars are needed for to complete the project (sources and uses), etc….We need to fully understand the series of events that have occurred since project start, and I want to be clear if we are looking at a DPO or rather a Re-Cap whereby lender becomes equity holder. Please provide combined NW and Liquidity of the principals who will be signing on the carve-outs. Thanks, -Gary 2 Case 2:15-cv-06757-WB Document 123-1 Filed 12/02/16 Page 2 of 7Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 2 27 11/15/12 Allen Branch emails Allen Branch 11/15/12 to GARY 1 Boba tea is no longer pending. 2 wood fired pizza lease still pending. Start date Jan 1. Ringside; lease executed; plans being drawn. 3 will provide revised budget. 4 Railyard co Llc has majority vote of condo assoc 5 will provide sources and uses. We are looking at selling REI their own condo for $10mm. Can you price a loan to them under this scenario? We would use proceeds to pay off our note. Sent from my iPad 11/27/12 Gary Polao emails GARY POLAO 11/27/12 to me Allen - Please let me know your thoughts on this prospective refinancing, have you decided on a different approach? Just curious on status and your motivation - it's been months since we first discussed the deal and you mentioned sending certain items below - highlighted? Please read all the way down. Thanks for update. It's almost the end of year and we want to focus our time and prioritize those transactions that need to close. Gary Polao, Managing Director 11/27/12 Allen Branch emails Allen Branch 11/27/12 to GARY, Rick Gary, We are still looking for financing but it seems that you are doing a full underwriting and we still haven't even been quoted a rate or a pro forma term sheet. You would think you have enough information to at least price this loan... A term sheet with contingent requirements would be helpful. Best, Allen Branch 11/28/12 Gary Polao emails GARY POLAO 11/28/12 to me, Rick Hi Allen, Absolutely we have enough information to price the loan and I did not realize that the "rate" was your primary concern. We do tend to complete a lot of due diligence up-front for CMBS/conduit loans, I understand that can be frustrating however please keep in mind….we underwrite and obtain a full credit committee approval. When a formal Term Sheet/Application is issued it's really a lending commitment and provides borrowers with CERTAINTY of closing (subject only to an appraisal). This is very important in today's commercial lending environment. Having said that - Below please find our Indicative Terms: I think you will be quite pleased! NON-RECOURSE 70% LTV 10 yr Swaps + 260 bps (4.18% Fixed Rate) 10 yr Fixed Rate and Term 25 year amortization Fast Closing typically 45 days from Application. My analyst feels that we will still need to finish making an accurate assessment/underwriting of the collateral and be clear on the history, sponsorship and issues related to the asset from inception to where we are today. Thank you! Gary Polao, Managing Director 12/5/12 Allen Branch emails Allen Branch 12/5/12 to Rick you were cc'd on this... ---------- Forwarded message ---------- From: GARY POLAO Date: Wed, Nov 28, 2012 at 11:39 AM Subject: RE: Market Station @ Santa Fe Railyards - TERMS To: Allen Branch , Rick Jaramillo 12/5/12 Gary Polao emails GARY POLAO 12/5/12 to me, Rick Gentlemen, Kindly advise where we are and what I can do to help advance us towards a formal, investor loan commitment/funding? We didn’t receive any reply to our Email communication of 11/28/12. Thanks guys! Gary Polao, Managing Director 12/6/12 Allen Branch emails Allen Branch 12/6/12 to GARY, Rick We are still interested in the refi but one of the partners does not want recourse on the carve outs. The 70% LTV is going to be a challenge. 👾 Sent from Allen Branch's iPhone 4 12/11/12 Gary Polao emails GARY POLAO 12/11/12 to me, Rick We may be able to get to 75% LTV. It partly will depend on the NW and Liquidity of sponsorship, and also of ownership structure. My CMBS Analyst and I do not like negotiating deal terms prior to fully underwriting and understanding a deal. I don’t think any legitimate capital source would do that until completely vetting and internally reviewing for securitization approval. When we issue a formal term sheet/commitment, it is typically subject only to an appraisal. As it stands now, this request is too preliminary we never received a lot of information requested and it's going stale. I really was hoping to be able to work with you on this and other conduit financings, but it's just too preliminary right now and there does not seem to be any real motivation to get it done, everyone in my office is extremely busy, we just can't keep following up and chasing this. If anything changes guys, please let us know…. Thank you. Gary Polao, Managing Director 3 Case 2:15-cv-06757-WB Document 123-1 Filed 12/02/16 Page 3 of 7Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 2 27 1/6/13 Gary Polao emails GARY POLAO 1/6/13 to GARY MULTI-FAMILY LOANS MAJOR MARKET CORE PROGRAM Red Star Commercial Real Estate Funding Corp. is directly underwriting, screening and originating multi-family apartment loans for an International Institutional Real Estate Fund seeking to deploy discretionary debt capital. Providing loans for the purchase or refinance of select multi-family commercial real estate in the select markets identified below: Multi-Family Core Market Loan Program - NOW LENDING aggressively in these markets ONLY: (Similar Loan Programs available in all 50 States!) This is NON-Agency, On-Book balance sheet financing and will be funded and serviced throughout the loan in-house. PHILADELPHIA, WASHINGTON, D.C., NEW YORK CITY & LONG ISLAND, NY, BOSTON, CHICAGO, MINNEAPOLIS, DENVER, SAN DIEGO, LOS ANGELES, ORANGE COUNTY, SAN FRANSICO, SACRAMENTO, SEATTLE, PORTLAND. Minimum Loan Amount $500,000 - No Programmatic Maximum 75% LTV 5-7-10 Year Initial Fixed Rate Term No Balloon - re adjusts at term end 30 Year Full Amortization NON-RECOURSE FIXED RATE 3.50% *changes daily as of 1-2013 Even Lower Rates possible for loan amounts over $5 million Borrower friendly program Streamlined, Easy Application Process with minimal paperwork No Tax Returns Required Fast Closing - Entity or Individual We are closing loans in as little as 3 weeks! For more information, contact us at 1-610-578-0715 or Email: gpolao@gmail.com RED STAR MORTGAGE CORPORATION 1/16/13 Gary Polao emails GARY POLAO 1/16/13 to GARY SINGLE TENANT NNN LEASE FINANCING National Lender Providing Debt for Net Leased Purchase-Refinance Transactions S&P/MOODY’S RATED B (INVESTMENT GRADE) National Program for Owner-Occupied or Investor Red Star Mortgage Corporation has a specific niche in Single Tenant Commercial Real Estate Lease Financing. Backed by a strong institutional corporate sponsor and fund, we are committed to getting the job done by providing you with essential capital for investors and owners. Call for your specific tenant/situation. This is our Target Strike Zone: · Single Tenant Properties (owner occupied or credit tenant) · Loan Size $1MM - $50MM · LTV 75% · Rates ~300 bps over corresponding T-Bill/SWAPS · Terms up to 10 years (prefer longer term loans) · Amortization up to 30 years (prefer 25 years) · Non-Recourse · Residual values will be important when underwriting the deals · General Purpose Real Estate (Retail, Office, Warehouse, Industrial, Medical Office) · Location - targeting areas with > 200,000 population At this time, we are not providing financing for restaurants, hospitality or gas stations and no construction loans. Generally seeking quality stabilized, class A & B type properties and credit worthy borrowers. Please contact me with questions. Thank you. 610-578-0715 Gary Polao, Managing Director 1/29/13 Allen Branch emails Allen Branch 1/29/13 to GARY Gary, What if we carved out REI as a single tenant NNN condo. Beginning Sept 2013, REI has annual income of $659,010 and an NOI of $616,000. On a 6% CAP it is valued at $10.266mm. Can you price this loan and determine loan amount? You still have the lease. Can you send a checklist needed to underwrite this? Best, Allen Branch 505.920.9900 1/30/13 Allen Branch emails ALLEN BRANCH Attachments1/30/13 to GARY 2 Attachments (REI LEASE) 2/1/13 Gary Polao emails GARY POLAO 2/1/13 to me Allen, We are working on some REI financing options as discussed. I know you told me that you do not have any financials, unfortunately they are not disclosed on their website or via S&P, Moody's ; Is there any way, since they will likely be the BUYER that we could request 3-4 years financials and interim statements so that we can shadow credit rate the company? Perhaps you can inquire through your leasing contact? With acceptable financials, I will be able to provide a non-recourse formal written loan commitment. still working another angle on your behalf to get this done. FYI. Thanks and please advise… -Gary Gary Polao, Managing Director 2/5/13 Allen Branch emails Allen Branch 2/5/13 to GARY Will D&B work? 👾 Sent from Allen Branch's iPhone 4 2/19/13 Gary Polao emails GARY POLAO 2/19/13 to me Allen, We are working with a new corporate investor/lender program and CAN finance the REI condo deal either as a sale/leaseback to them OR a NNN leased purchase to an investor-buyer. WE WOULD NOT NEED THEIR FINANCIALS. Bring me the scenario when you figure out how it will be structured and we'll get it done! Offering extremely attractive terms right now…high 3%'s-low 4%'s Fixed Rates!!!!! We'll also Now be able to look at the Office Building property you wanted to refinance, interested???? This is a non-agency, balance sheet loan offering it is not securitized. Let me know your thoughts… Gary Polao, Managing Director 4 Case 2:15-cv-06757-WB Document 123-1 Filed 12/02/16 Page 4 of 7Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 2 27 2/28/13 Gary Polao emails GARY POLAO 2/28/13 to me Just to let you know … We CAN finance the REI transaction! and we are interested. IF REI Stores is the buyer, we'll need their financials for 3 years. IF an investor buys the NNN, we'll get financials on the investor ONLY and use the Lease as a source of income. It would be recourse to the investor. Excellent pricing, 10YR term in mid 4%'s fixed rate, 25YR AM, 75% + LTV if meets DSC. Let me know if anything happens? Oh and your office building with government tenants, have new program - send me a package! Our investors are looking for quality deals right now and getting VERY aggressive!!!!! Gary Polao, Managing Director 2/28/13 Allen Branch emails Allen Branch 2/28/13 to GARY Thx..I am working on it... 👾 Allen Thomas Branch 3/5/13 Allen Branch emails Allen Branch 3/5/13 to GARY REI is back on looking at a purchase. I fwd your info to them. If they use you I would ask for a referral fee... Deal? 👾 Allen Thomas Branch 3/6/13 Gary Polao emails GARY POLAO 3/6/13 to me sure Allen. How about sending us some other deals for purchases or refinances…or for clients? You had a few other office properties as I recall. Rates are very low, we can look at all asset types. 3/25/13 Gary Polao emails GARY POLAO 3/25/13 to GARY Commercial Real Estate Capital Markets - Special Small Balance Non-Recourse Conduit Program $1 Million - $10 Million Loan Program Loan terms Product: Non-recourse, fixed-rate loans on stabilized commercial properties Loan size: $1 million - $10 million (Higher sizes available deal-by-deal) Property types: Office, light industrial, retail, multifamily, shopping centers, manufactured home communities (MHC), self-storage facilities, Warehouse, Single Tenant Credit Rated NNN's - Inquire about other asset types. Locations: Continental U.S. with populations greater than 50,000 in a five-mile radius and generally located within top 200 MSA’s Term: 5 and 10 years; 30 year amortization Interest rate spread: Quoted over corresponding swap rate; based on property type, quality, loan size, terms, characteristics, and credit quality Maximum LTV: 75% 5/1/13 Gary Polao emails GARY POLAO 5/1/13 to GARY Commercial Real Estate Capital Markets $1 Million - $10 Million Loan Program Loan terms Product: Non-recourse, fixed-rate CMBS loans on stabilized commercial properties Loan size: $1 million - $10 million (Higher sizes available deal-by-deal) Property types: Office, light industrial, retail, multifamily, shopping centers, manufactured home communities (MHC), self-storage facilities, Warehouse, Single Tenant Credit Rated NNN's - Inquire about other asset types. Locations: Continental U.S. with populations greater than 50,000 in a five-mile radius and generally located within top 200 MSA’s5/1/13 Gary Polao emails GARY POLAO 5/1/13 to GARY Commercial Real Estate Capital Markets $1 Million - $10 Million Loan Program Loan terms Product: Non-recourse, fixed-rate CMBS loans on stabilized commercial properties Loan size: $1 million - $10 million (Higher sizes available deal-by-deal) Property types: Office, light industrial, retail, multifamily, shopping centers, manufactured home communities (MHC), 6/3/13 Gary Polao emails GARY POLAO 6/3/13 to GARY Red Star Mortgage Corp. is a National Commercial Real Estate Lender and Mortgage Banking origination firm. We provide the ABSOLUTE LOWEST RATES, longest terms, conventional and private, CMBS/conduit, Single Tenant NNN Bond Placement, Fannie Mae DUS, FHA/HUD, Multi-Family, Healthcare Programs are all part of our platform. We provide structured debt financing/JV equity investments for Multi-Family & Commercial properties. Acquisition, refinance, construction, bridge and permanent loans. Red Star’s deep lending capabilities and unparalleled financing expertise, enables the firm to provide customized financing solutions in the ever-changing capital markets. We are able to execute on almost ANY property type, loan amount and borrower scenario! At this time, we are Interested in reviewing Financing Requests for the following: Multi-Family Apartments - Loans from $100K to $100 Million AND Low 3%'s fixed rates. Office Buildings, Single & Multi-Tenant Anchored Retail (Prefer Grocery/National Tenants) Shopping Centers, Strip Centers, Free Standing Commercial Buildings SINGLE TENANT NNN (credit-investment grade) NON-RECOURSE FROM $1M & UP. Multi-Tenant NNN Leased - Special Conduit Program $1-$10 Million Student Housing Projects Healthcare: Assisted Living Facilities, Skilled Nursing - Senior Housing - IL WAREHOUSE and INDUSTRIAL - OWNER OCCUPIED or INVESTOR Properties Please contact us today for more information and to discuss your scenario and lending needs. Special programs for the Self Employed - Stated Income - Credit Scores as low as 600 Accepted! You will be glad you did! # # # # Gary Polao, Managing Director RED STAR COMMERCIAL REAL ESTATE FUNDING Multi-Family Housing & Healthcare Lender l CMBS Conduit (610) 578-0715 Direct (610) 578-0716 Fax E-Mail: gpolao@gmail.com For more information, contact us at 1-610-578-0715 or E-mail: gpolao@gmail.com RED STAR MORTGAGE CORPORATION ® 7/25/13 Gary Polao emails GARY POLAO 7/25/13 to GARY Commercial Real Estate Capital Markets $1 Million - $10 Million Loan Program Loan terms Product: Non-recourse, fixed-rate CMBS loans on stabilized commercial properties Loan size: $1 million - $10 million (Higher sizes available deal-by-deal) 7/27/13 Allen Branch emails Allen Branch 7/27/13 to GARY Ok, we'll do. Ill get you something by Monday. Were you able to see the other assets that are available to pool? 5 Case 2:15-cv-06757-WB Document 123-1 Filed 12/02/16 Page 5 of 7Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 2 27 7/29/13 Allen Branch emails Allen Branch Attachments7/29/13 to GARY Gary, Attached is the a summary sheet on Market Station at the Railyards. The original balance on the note was $14mm. It could potentially be purchased for $9mm. Please let me know what info you will need... 7/29/13 Allen Branch emails Allen Branch Attachments7/29/13 to GARY replace previous attachment with this revised PDF (corrected number of REI and Go Wireless stores) 8/1/13 Allen Branch emails Coyote Building - Santa Fe NM Allen Branch Attachments8/1/13 to GARY see attached 8/5/13 Gary Polao emails RE: Market Station Note Purchase - Santa Fe NM Inbox x GARY POLAO Attachments8/5/13 to me Hi Allen, I have had additional discussions with our investor and am ready to introduce you to the funds principals in a conference call ASAP. A proof of funds letter can be generated which you can attach with your offer. The investor would have the capability of closing the transaction before the end of THIS MONTH. We will all do what we can to help you get the DPO approved. In order to facilitate the introductory call and further our discussions, it will be necessary for us to formally represent Renaissance Properties LLC - with regard to securing the financing. Please approve the attached and return to me at your earliest convenience. Thank you and best regards, Gary 8/6/13 Allen Branch emails Allen Branch Attachments8/6/13 to GARY Did you receive this yesterday? Im having trouble w my email.... ---------- Forwarded message ---------- From: Allen Branch Date: Mon, Aug 5, 2013 at 3:51 PM Subject: Red Star - Renaissance Properties Fee Agreement To: GARY POLAO Please see attached. (RED STAR RENAISSANCE PROP AGREEMENT) 8/7/13 Gary Polao emails Market Station @ Railyards - DPO Bridge Loan 8.7.13 Inbox x GARY POLAO Attachments8/7/13 to me Hi Allen: Please see attached. Thank you. Gary Polao, Managing Director 8/7/13 Allen Branch emails Re: Conference Call - CONFIRMED Today at 4:45PM EASTERN TIME (In one hour) Allen Branch 8/7/13 to GARY You gotta get that LTV up 👾 Allen Thomas Branch 8/8/13 Gary Polao emails GARY POLAO Attachments8/8/13 to me Allen, Please see attached Proof of Funds (POF) to help get you get started in negotiating the DPO lower / having ambit take a $2 - $3MM second. Let us know how you make out. Regards, Gary Polao, Managing Director 9/5/13 Gary Polao emails NO DOC, STATED INCOME COMMERCIAL REAL ESTATE LENDER - All Property Types, Great Terms! Inbox x GARY POLAO 9/5/13 to GARY RED STAR MORTGAGE CORPORATION STATED INCOME, NO DOCUMENTATION COMMERCIAL REAL ESTATE LOAN PROGRAM PERFECT FOR SELF-EMPLOYED BORROWERS, NO PROOF OF INCOME REQUIRED, NO GLOBAL DEBT SERVICE COVERAGE REQUIREMENTS. STREAMLINED EASY PROCESS FROM APPLICATION TO CLOSING - CREDIT REPORT, PROPERTY APPRAISAL & CLOSING IN 30 DAYS! 11/4/13 Gary Polao emails COMMERCIAL ASSET BASED LENDING FUND - Fast Close Bridge Loans from $2MM Inbox x GARY POLAO 11/4/13 to GARY RED STAR MORTGAGE CORPORATION COMMERCIAL REAL ESTATE ASSET BASED LENDING FUND REAL ESTATE FINANCING PROGRAM Lender Profile.................................... Red Star Mortgage Corporation ("Red Star") is a real estate finance company focused on originating commercial real estate loans. Red Star is currently deploying capital through our Asset Based Lending Fund, an investment partnership capitalized exclusively by private investors. 6 Case 2:15-cv-06757-WB Document 123-1 Filed 12/02/16 Page 6 of 7Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 2 27 1/9/14 Gary Polao emails NO DOC / STATED INCOME COMMERCIAL LENDER - Great Alternative to Banks in 2014! Inbox x GARY POLAO 1/9/14 to GARY RED STAR MORTGAGE CORPORATION NO DOCUMENTATION / STATED INCOME COMMERCIAL REAL ESTATE LOAN PROGRAM ABSOLUTELY PERFECT FOR SELF-EMPLOYED BORROWERS. NO PROOF OF INCOME REQUIRED! NO PERSONAL OR GLOBAL DEBT SERVICE COVERAGE REQUIREMENTS. STREAMLINED PROCESS FROM APPLICATION TO CLOSING - CREDIT REPORT, PROPERTY APPRAISAL & CLOSING IN 30 DAYS! APARTMENTS, MIXED-USE, OFFICE, RETAIL CENTERS, WAREHOUSE, SELF-STORAGE, AUTOMOTIVE SERVICES, GENERAL PURPOSE PROPERTIES. **** Also lending on 1-4 unit Investor Properties - SFR’s, Condo, Duplex. (Non Owner-Occupied Only) **** Lending Guidelines Documentation NO Tax returns, NO w-2’s, NO proof of income is required. Credit & Appraisal. Loan Amounts $100,000 - $2,500,000 Loan Purpose • Purchase • Refinance (rate/term & UNLIMITED CASH OUT OK) Property Types Class I: multifamily (5+ units) & mixed-use & 1-4 Unit Investor Property 3/31/14 Gary Polao emails NEWLY REVISED: NO DOC, STATED INCOME COMMERCIAL LOAN - MAX LIMIT RAISED TO $5,000,000! Inbox x GARY POLAO 3/31/14 to GARY NO DOC, STATED INCOME COMMERCIAL LOANS to $5,000,000! 2nd Quarter 2014 - Program Update NEWLY REVISED FOR 2ND QUARTER 2014 TRANSACTIONS! SEND US YOUR DEALS! *** NO DOC MAX LOAN AMOUNTS RAISED TO $5,000,000 MAX AND 75% LTV *** Multi-Family, Mixed-Use, Office, Retail, Strip Centers, Warehouse, Self-Storage Facilities, 7 Case 2:15-cv-06757-WB Document 123-1 Filed 12/02/16 Page 7 of 7Case 2:15-cv-06757-WB Document 124-4 Filed 12/06/16 Page 2 27