Free Notice of Filing Proposed Pretrial Order - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 As directed by the Court's Order dated January 2, 2008, the following is the 16 Amended Joint Proposed Pretrial Order to be considered and discussed at the Final 17 Pretrial Conference, which has not yet been set by the Court. 18 19 20 21 22 23 24 25 26 27 28
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Meritage Homes Corporation, et al., Case No. CV-04-0384-PHX-ROS Plaintiffs, v. Greg Hancock, et al., Defendants. AMENDED JOINT PROPOSED PRETRIAL ORDER

A.

TRIAL COUNSEL FOR THE PARTIES Plaintiffs: Grant Woods, Esq. Grant Woods, P.C. 1726 North Seventh Street Phoenix, Arizona 85006 Dan W. Goldfine Richard G. Erickson Snell & Wilmer L.L.P. One Arizona Center Phoenix, AZ 85004-2202

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Defendants Greg Hancock and J2H2: Robert M. Frisbee Susan L. Bostock Frisbee & Bostock, PLC 1747 East Morton Avenue Suite 108 Phoenix AZ 85020 STATEMENT OF JURISDICTION/VENUE. Jurisdiction in this case is based on federal question and supplemental jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367. Defendants dispute that there is any federal

8 jurisdiction. 9 10 11 This is a tort, breach of fiduciary duty, breach of contract, and unjust enrichment 12 action. Commencing almost day one of his employment as President of Meritage's 13 Hancock Communities division, Defendant Greg Hancock breached his contractual and 14 fiduciary duties owed to Plaintiffs (collectively herein, "Meritage") and was unjustly 15 enriched by secretly acquiring land for his own account through the Olympic ventures 16 while informing subordinates and others that he had no intent to acquire land for Meritage 17 because "he would not personally profit." Then, after quitting Meritage and leaving it 18 without sufficient land, Defendants Hancock and J2H2, LLC committed torts, breached 19 duties, and unjustly enriched themselves by wrongfully terminating Meritage's license, 20 selling land to a competitor, and colluding with and aiding Rick Hancock Homes 21 ("RHH") in opening a competing homebuilder ­ building similar homes at similar prices 22 right in the same development as Meritage's Hancock Communities, employing similar 23 marketing, and misrepresenting that RHH was part of Meritage. Meritage is seeking 24 damages. 25 Defendants: 26 When Meritage acquired Hancock Communities on May 30, 2001, the transaction 27 included an employment agreement with Greg Hancock, which specified his duties and 28
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C.

NATURE OF ACTION. Plaintiffs:

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compensation, including salary, bonuses and "earn-outs" determined by a formula. The Master Transaction Agreement required Meritage to timely advise Hancock as to the amount of possible earn-outs each year. The employment agreement also granted "carveouts" with certain restrictions for Hancock to engage in personal business activities. In addition, a License Agreement granted Meritage the right to use the names "Hancock Communities" and "Hancock Homes" provided that Meritage did nothing to diminish the commercial viability of the Hancock name. Hancock worked for Meritage from May 30, 2001, to March 3, 2003, when the conduct of Meritage executives finally caused Hancock to resign. From the beginning of the relationship, Meritage eviscerated and/or demeaned Hancock's management team, needlessly interfered with its operations, and harassed Hancock personally regarding various business and personal matters. Despite such interference and harassment,

Hancock cleaned up ineffective Meritage staff and projects, met or exceeded all mutually agreed upon performance goals, and made Meritage shareholders millions and millions of dollars during his twenty month tenure. There is not a single negative word about Hancock in the entirety of Meritage's records or public filings. Soon after Hancock's departure, in violation of the License Agreement, the Meritage executives secretly decided to take the Hancock name "dark in the market" so that he would have to "resurrect" his name after his non-compete expired. It also fired Rick Hancock, Greg's brother, and announced at a 2003 Christmas party that it would be changing the Hancock name to Meritage. Then, Meritage launched an extensive ad campaign to remove the Hancock name from all communities except two, which continued to use the name only to perpetuate this lawsuit. Meritage also failed to report timely to Greg Hancock regarding his 2003 earn-out despite earlier representations that the earn-out would be substantial even if he were no longer employed. Since Meritage was in breach of both the employment and the license agreement, Hancock cancelled the license to use his name. In retaliation, and because Rick Hancock wanted to go into homebuilding, Meritage commenced this lawsuit.
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Meritage will be unable to prove a single allegation of its numerous claims, as all are bald-faced lies. Nor will it be able to prove any damage whatever. Hancock will request costs and attorneys' fees when the jury vindicates him. D. JURY/NON-JURY. Plaintiffs' position: To save costs and time, Meritage is willing to try the matter before the bench. Meritage believes that the remaining Defendants have not asserted a jury demand in their answer or otherwise in compliance with Fed. R. Civ. P. 38. Rather, Defendants have informed Meritage that they believe they have adequately preserved their right to a jury trial by not objecting to Meritage's jury demand. At a minimum, Hancock has no right to a jury trial for the unjust enrichment claims under Arizona law, and these claims can be tried before the Court simultaneously with the jury trial. Defendant's position: Defendant Rick Hancock demanded a jury trial on the face of his Answer, Greg Hancock referred to a jury trial in each of answers and counterclaims, and Meritage asked for and the defendants agreed to a jury trial in the first proposed pretrial order in March, 2005. All of Meritage's motions in limine refer to a jury trial. Finally, Rule 38(d) envisions any party's right to rely on another party's jury demand to protect its right to jury trial. See, e.g. Partee v. Buch, 28 F.3d 636 (7th Cir. 1994): "[T]he plaintiff . . . was entitled to rely on the defendant's jury demand and was not required to file a separate jury demand on his own." Meritage should not even have raised this issue. E. CONTENTIONS OF THE PARTIES 1. Plaintiffs:

Olympic-Related Conduct a. Breach of Fiduciary Duty against Greg Hancock

Greg Hancock, as the President of Meritage's Hancock Division, was in a special relationship with Meritage giving rise to a fiduciary duty owed to his employer. Greg Hancock breached the duty owed to Meritage by, among other things, his secret
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involvement with the Olympic entities. To establish this claim, Meritage must prove by a preponderance of the evidence (1) that Greg Hancock beached the fiduciary duty owed to Meritage; (2) that Greg Hancock's breach was a cause of Meritage's damages; and (3) that Meritage suffered damages as a result of Greg Hancock's breach. See RAJI (Civil) 4th Commercial Torts 1D. The basic gist of this claim is that, while Greg Hancock was Meritage's President at the Hancock Communities division, he secretly conspired to control and buy about a thousand acres of land under the guise of the Olympic entities (e.g., Olympic Properties, Olympic Development, Riata West, Westwind) as well as efforts to buy several other large parcels of land, for which he effectively owned 60% and controlled for his own benefit and for the detriment of Meritage. The plan was that this land would ultimately be used to build homes in competition with Meritage or to be sold to Meritage at a higher effective price (which actually happened). He concealed his Olympic scheme from Meritage and extorted his subordinates in order to induce them not to disclose his scheme. At the same time, he intentionally failed to acquire land in the Phoenix area for Meritage, explaining to subordinates and land brokers that he had no intent to acquire land because he would not be at Meritage to profit personally. The evidence will further show that when his secret Olympic scheme faced potential detection, he attempted to "launder" his involvement in the land deals and entered into an arrangement so that the Olympic deals could move forward under another name and he would join them once his employment at Meritage terminated. At trial, Meritage is seeking monetary damages for Greg Hancock's breach of fiduciary duty. These damages include $23.3 million in lost profits due to Greg

Hancock's failure to obtain land, $4.2 million in additional out-of-pocket costs related to Westwind and Riata West, and $8.9 million in out-of-pocket costs in the form of compensation to Greg Hancock. Arizona law. b. Usurpation of Corporate Opportunities against Greg Hancock Meritage is also seeking punitive damages under

As explained in Section E.1.a, supra, Meritage will show that Greg Hancock
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usurped corporate opportunities in the form of land deals that he should have offered to Meritage (e.g., Riata West, Westwind, Fox Hunt, and Mystic). To establish this claim, Meritage is required to prove by a preponderance of the evidence, (1) that Greg Hancock was a senior executive at Meritage; (2) that Greg Hancock benefited from taking advantage of a corporate opportunity without first disclosing the opportunity to Meritage; and (3) that Greg Hancock's taking of the corporate opportunity resulted in lost opportunity and/or damaged Meritage. See Principles of Corporate Governance: Analysis and Recommendations §5.05. At trial, Meritage is seeking monetary damages for Greg Hancock's usurpation of corporate opportunities. These damages include $23.3 million in lost profits due to Greg Hancock's failure to obtain land, $4.2 million in additional out-of-pocket costs related to Westwind and Riata West, and $8.9 million in out-of-pocket costs in the form of compensation to Greg Hancock. Arizona law. c. Fraud in the Concealment against Greg Hancock Meritage is also seeking punitive damages under

Meritage will show that Greg Hancock committed fraud in the concealment. Greg Hancock actively concealed from Meritage his Olympic conduct even though he owed a duty of candor to Meritage under both his common law and contractual duties. As a result of his concealment and in reliance on a belief that Greg Hancock was not self-dealing and was doing his utmost to acquire land for Meritage, among other things, Meritage continued to compensate Greg Hancock, totaling $8.9 million in out-of-pocket payments. To establish this claim, Meritage must prove the following by clear and convincing evidence: (1) Greg Hancock concealed his Olympic business activities while employed by Meritage; (2) Greg Hancock was under a duty to refrain from concealing these competing business activities; (3) Greg Hancock's concealment was material; (4) Greg Hancock failed to reveal that which he knew he had a duty to reveal; (5) Greg Hancock intended that Meritage would act upon the concealment in the manner reasonably contemplated by Greg Hancock; (6) Meritage did not know contemporaneously about the
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matters Greg Hancock concealed; (7) Meritage relied upon the assumption that Greg Hancock had revealed all; (8) Meritage's reliance on Greg Hancock's conduct was reasonable and justified under the circumstances; and (9) as a result, Meritage was damaged. See RAJI (Civil) 4th Commercial Torts 24; Haisch v. Allstate Ins. Co., 197 Ariz. 606, 5 P.3d 940 (App. 2000). At trial, Meritage is seeking monetary damages for Greg Hancock's fraud in the concealment. These damages include $23.3 million in lost profits due to Greg Hancock's failure to obtain land, $4.2 million in additional out-of-pocket costs related to Westwind and Riata West, and $8.9 million in out-of-pocket costs in the form of compensation to Greg Hancock. Meritage is also seeking punitive damages under Arizona law. d. Breach of Contract against Greg Hancock

Meritage will show that Greg Hancock breached several contracts between himself and Meritage. With respect to the Olympic conduct, as a result of his employment agreement, the Master Transaction Agreement and the Management Agreement with Meritage, Greg Hancock had contractual duties to Meritage to devote substantially all of his time and efforts to Meritage, to acquire land on Meritage's behalf, not to work on Olympic-related conduct, not to commence activities that would compete against Meritage, and not to self-deal and usurp corporate opportunities. The evidence will show that Hancock did not comply with these duties and intentionally failed to do so. To prevail on these claims, Meritage must show by a preponderance of the evidence (1) that a valid contract existed between Meritage and Greg Hancock and (2) that Greg Hancock breached the contract. See RAJI (Civil) 4th Contract 2. At trial, Meritage is seeking monetary damages for Greg Hancock's breach of contract. These damages include

compensation paid to Greg Hancock in the amount of $8.9 million. e. Breach of Implied Covenant of Good Faith and Fair Dealing against Greg Hancock

Meritage will show that with respect to the Olympic-related conduct, Greg Hancock breached the implied covenant of good faith and fair dealing found within 28
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several contracts between himself and Meritage (i.e., Greg Hancock's employment agreement, the Master Transaction Agreement and the Management Agreement). It

violates the implied covenant of good faith and fair dealing in these agreements for the President of the Phoenix division to secretly scheme to acquire land for one's own account in order to benefit one's self while at the same time harming Meritage. To prevail on these claims, Meritage must show by a preponderance of the evidence (1) that a valid contract existed between Meritage and Greg Hancock and (2) that Greg Hancock breached the covenant of good faith and fair dealing found within the contract. See RAJI (Civil) 4th Contract 2. At trial, Meritage is seeking monetary damages for Greg Hancock's breach of the implied covenant of good faith and fair dealing found within the contracts entered into between Greg Hancock and Meritage. These damages include compensation paid to Greg Hancock in the amount of $8.9 million. f. Unjust Enrichment against Greg Hancock

Meritage will show that Greg Hancock was unjustly enriched. While he was secretly engaging in the wrongful conduct described in Section E.1.a-e, supra, he received payments from Meritage totalling $8.9 million for which he was unjustly enriched. In other words, if Greg Hancock had been up front with Meritage with respect to his Olympic conduct, Meritage would have terminated his employment and not paid him $8.9 million in compensation and earn-outs. To prevail on this claim, Meritage must prove by a preponderance of the evidence that Greg Hancock received a benefit that would be unjust for him to retain. See § 1, Restatement of the Law of Restitution (and comments). At trial, Meritage is seeking return of Greg Hancock's unjust enrichment in the amount of $8.9 million. Claims Related to the License Agreement and Setting Up a Competitor g. Breach of Contract against Greg Hancock

Meritage will show that Greg Hancock breached several contracts between himself and Meritage. The gist of this claim is that Greg Hancock granted, through the License Agreement and the Agreement of Purchase and Sale of Assets ("APSA"), Meritage an
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exclusive license to use the Hancock name, "Hancock Communities," "Hancock Homes" and any derivative names thereof. Through pretext and deceit, he wrongfully terminated the exclusive license in order to grant the Hancock license to RHH. Greg Hancock further breached his non-compete agreement not to engage in homebuilding until June 2006 by wrongfully terminating the license agreement, granting RHH a license to use the Hancock name right across the street from and in the same subdivision as Meritage's Hancock Communities, providing more than $300,000 in capital as seed money to RHH, providing financing to RHH so that RHH can buy land on which to sell homes in competition with Meritage, selling the same land to RHH and at below market prices, and advancing the costs of infrastructure so that RHH could compete against Meritage. To prevail on these claims, Meritage must show by a preponderance of the evidence (1) that a valid contract existed between Meritage and Greg Hancock and (2) that Greg Hancock breached the contract. See RAJI (Civil) 4th Contract 2. At trial, Meritage is seeking monetary damages for Greg Hancock's breach of contract. The license agreement, ASPA, and non-compete agreement were essential

components of the more than $80 million acquisition of the Hancock Communities business and assets, including the Sundance lots and the exclusive license. Meritage estimates that since the breach occurred half-way through the period of both agreements, the appropriate measure would be half of the contract price ­ or more than $40 million in contract damages. In the alternative, the exclusive right to use the Hancock name is equal to the goodwill that the name reflects. That goodwill was estimated as $19.5 million of the total contract price, and the contract damages reflecting the goodwill is $9.75 million. h. Breach of Implied Covenant of Good Faith and Fair Dealing against Greg Hancock

Meritage will show that Greg Hancock breached the implied covenant of good faith and fair dealing found within several contracts between himself and Meritage. With 26 respect to the RHH conduct, the contracts at issue are the license agreement, the ASPA, 27 and the non-compete. For the reasons stated above in Section 3.1.g, supra, Greg Hancock 28
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also breached the implied covenant of good faith and fair dealing in both the license agreement and non-compete. To prevail on these claims, Meritage must show by a preponderance of the evidence (1) that a valid contract existed between Meritage and Greg Hancock and (2) that Greg Hancock breached the covenant of good faith and fair dealing found within the contract. See RAJI (Civil) 4th Contract 2. At trial, Meritage is seeking monetary damages for Greg Hancock's breach of contract. The license agreement, ASPA, and non-compete agreement were essential

components of the more than $80 million acquisition of the Hancock Communities business and assets, including the Sundance lots and the exclusive license. Meritage estimates that since the breach occurred half-way through the period of both agreements, the appropriate measure would be half of the contract price ­ or more than $40 million in contract damages. In the alternative, the exclusive right to use the Hancock name is equal to the goodwill that the name reflects. That goodwill was estimated as $19.5 million of the total contract price, and the contract damages reflecting the goodwill is $9.75 million. i. Unjust Enrichment against Greg Hancock and J2H2, LLC

Meritage will show that Greg Hancock and J2H2, LLC were unjustly enriched. While Greg Hancock and J2H2, LLC were engaging in the wrongful conduct described in Sections E.1.g-k, supra, both received payments from RHH for the purchase of land. That amount is to be proven at trial. To prevail on this claim, Meritage must prove by a preponderance of the evidence that Greg Hancock and J2H2 received a benefit that would be unjust for Greg Hancock and J2H2 to retain. See § 1, Restatement of the Law of Restitution (and comments). At trial, Meritage is seeking monetary damages for Greg Hancock and J2H2's unjust enrichment in the amount of $12.15 million, which is half of the goodwill plus what Greg Hancock and J2H2 received from RHH. j. Conversion against Greg Hancock

Meritage will show that Greg Hancock is liable for the tort of conversion. The basic gist of the conversion claim is that Greg Hancock stole Meritage's exclusive right to use the Hancock name, "Hancock Communities," "Hancock Homes," and any derivative
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names thereto with respect to homebuilding in the Phoenix area. To establish conversion, Meritage must prove by a preponderance of the evidence (1) that Meritage had the right to immediate possession or control of the trade names; (2) that Greg Hancock intentionally exercised wrongful dominion or control over Meritage's property; and (3) that Greg Hancock's wrongful dominion or control was inconsistent with Meritage's rights causing Meritage damages. See Sharter v. Ulmer, 85 Ariz. 179, 333 P.2d 1084 (1959); Sears Consumer Fin. Corp. v. Thunderbird Prod., 166 ariz 333, 335, 802 P.2d 1032,1034 (Ariz. App. 1990). At trial, Meritage is seeking monetary damages for Greg Hancock's breach of contract. The license agreement and ASPA were essential components of the more than $80 million acquisition of the Hancock Communities business and assets, including the Sundance lots and the exclusive license. Meritage estimates that since the breach

occurred half-way through the period of both agreements, the appropriate measure would be half of the contract price ­ or more than $40 million in contract damages. In the alternative, the exclusive right to use the Hancock name is equal to the goodwill that the name reflects. That goodwill was estimated as $19.5 million of the total contract price. Meritage is also seeking punitive damages under Arizona law. k. Intentional Interference with the License Agreement against J2H2, LLC

Meritage will show that J2H2 is liable for the intentional interference with the license agreement and non-compete entered into between Meritage and Greg Hancock. 21 J2H2, LLC provided financing to RHH. Since its manager was Greg Hancock, it knew 22 that Greg Hancock had a non-compete with Meritage and a license agreement and that its 23 conduct intentionally induced a violation of his non-compete and license agreement. To 24 establish this claim, Meritage must prove by a preponderance of the evidence (1) that 25 Meritage had entered into a non-compete and license agreements with Greg Hancock; (2) 26 that J2H2 knew about the non-compete and license agreements; that J2H2 intentionally 27 interfered with Meritage's contractual relationship with Greg Hancock which caused a 28
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breach of that relationship; (3) that J2H2's conduct was improper; and (4) that Meritage suffered damages caused by the breach of Meritage's contractual relationship with the licensors. See RAJI (Civil) 4th Employment Law 14. At trial, Meritage is seeking monetary damages for J2H2's intentional interference with the license agreement and non-compete between Meritage and Greg Hancock. The non-compete agreement was an essential component of the more than $80 million acquisition of the Hancock Communities business and assets, including the Sundance lots and the exclusive license. Meritage estimates that since the breach occurred half-way through the period of both agreements, the appropriate measure would be half of the contract price or ­ more than $40 million in contract damages. Meritage is also seeking punitive damages under Arizona law. l. Lanham Act Violations Against Greg Hancock and J2H2, LLC

Meritage contends that Greg Hancock and J2H2 violated provisions of the Lanham Act. Specifically, based on the evidence set forth above in Sections 3.1.g-i, supra, Greg Hancock and J2H2 assisted and aided RHH, in using Meritage's trade dress in a manner that was likely to cause confusion among ordinary purchasers as to the source of Meritage's goods. Trade dress is the product's total image and overall appearance, and may include features such as logos, size, shape, color, color combinations, texture, or graphics. In other words, trade dress is the form in which a person presents a product or service to the market, its manner of display. See Ninth Circuit Model Civil Jury

Instructions 15.2. To prevail on this claim, Meritage must prove by a preponderance of the evidence (1) that Meritage's labeling and use of the Hancock name and sale practices and type of homes constituted trade dress which is distinctive; (2) that Meritage owns the trade dress and that the trade dress in non-functional; (3) that Greg Hancock and J2H2 assisted RHH in using Meritage's trade dress without the consent of Meritage in a manner that was likely to cause confusion among ordinary purchasers as to the source of Meritage's goods; (4) that Meritage was damaged by Greg Hancock and J2H2's infringement; and (5) that the conduct was in interstate commerce.
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See 15 U.S.C.

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§ 1125(a)(1). Further, Meritage will show that Greg Hancock and/or J2H2 also assisted Rick Hancock in violated the Lanham Act by engaging in false advertising in the form of false and/or misleading sales presentations to customers. During these presentations, RHH engaged in tactics and made statements that misled consumers into believing that RHH was part of Meritage. To prevail on the false advertising claim, Meritage must prove by a preponderance of the evidence that Greg Hancock and/or J2H2: (1) made a false or misleading statement in a commercial promotion; (2) that the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) that the deception was material (i.e., likely to influence potential customers); (4) that the conduct was in interstate commerce; and (5) that Meritage was injured by either the loss of sales or lessening of goodwill associated with its products. See Southworks, LLC v. Midwest Industrial Supply, 2007 U.S. Dist. LEXIS 15832 (D. Ariz. 2007) (No. 06-2141-PHXDGC); see also Bellsouth Adver. & Publ'g Corp. v. Lambert Publ'g, 45 F. Supp. 2d 1316 (SD Ala. 1999). At trial, Meritage is seeking monetary damages for Greg Hancock's and J2H2's violations of the Lanham Act. Meritage is seeking $5.1 million in Lanham Act damages caused by Defendants Greg Hancock's and J2H2, LLC's wrongful conduct in the form of the violator's profits. See 15 U.S.C. § 1117 (plaintiff claiming trade dress or false advertising under the Lanham Act is entitled to the violator's profits). m. State Unfair Competition Claim against Greg Hancock

Meritage will show that Greg Hancock deliberately assisted RHH in engaging in "palming off" homes as if they were homes built by Meritage. "Palming off" is a deliberate effort by a person to induce a purchaser to believe that his product is actually the product of another. Meritage is required to prove by a preponderance of the evidence that Greg Hancock and J2H2 assisted RHH in the sale of homes resulting in a likelihood of confusion or deception to the public that that the homes were actually built by Meritage. See Fairway Constructors, Inc. v. Ahern, 193 Ariz. 122, 970 P.2d 954 (Ariz.
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App. 1998); Parkway Baking Co. v. Freihofer Baking Co., 255 F.2d 641 (2nd Cir. 1958); Apollo Distribruting Co. v. Appollo Imports, Inc., 341 F. Supp. 455 (C.D.N.Y. 1972). At trial, Meritage is seeking monetary damages for Greg Hancock and/or J2H2's "palming off" in violation of Arizona's unfair competition law. As with the Lanham Act claim, Meritage believes it is entitled to money damages in an amount consistent with the jury instruction. n. Misappropriation of Trade Secrets against Greg Hancock

Greg Hancock colluded with his brother, both officers of Meritage and both had confidential relationships with Meritage ­ during which they acquired Meritage's valuable trade secrets how Meritage built and marketed a home. (In their employment agreements, both agreed that they acquired Meritage's trade secrets and agreed that they had a duty to maintain the confidentiality of trade secrets and not use them.) Then after leaving

Meritage, Greg Hancock assisted RHH in using these trade secrets to develop, build and market homes to its competitive advantage over Meritage. To successfully prove this claim, Meritage must prove by a preponderance of the evidence (1) that it possessed trade secrets; (2) that Greg Hancock acquired Meritage's trade secrets through one of the following ways: (a) through improper means, (b) through a confidential relationship, or (c) under other circumstances giving rise to a duty not to use or disclose the trade secret without Meritage's permission; (3) that Greg Hancock used or disclosed the trade secret without Meritage's permission; and (4) that it was harmed as a direct and proximate result of the use or disclosure of Meritage's trade secret or, alternatively, that Greg Hancock obtained a benefit from such use or disclosure. See A.R.S. § 44-401 et seq.; Enterprise Leasing Company of Phoenix v. Ehmke, 197 Ariz. 144, 3 P.3d 1064 (App. 1999). At trial, Meritage is seeking monetary and statutory damages for Greg Hancock's

misappropriation of trade secrets. o. Intentional Interference with Prospective Contractual Advantage against Greg Hancock

Meritage will show that Greg Hancock improperly interfered with Meritage's

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prospective contractual advantage with various homebuyers, including Sgt. Atkins and Kelly Brassfield, seeking to buy a home in Sundance from Meritage. To establish this claim, Meritage must show by a preponderance of the evidence that (1) Meritage had a prospective contractual advantage with homebuyers; (2) that Greg Hancock had knowledge of Meritage's prospective contractual advantage; (3) that Greg Hancock purposefully or intentionally harmed Meritage by preventing the contractual relationship from occurring; (4) that Greg Hancock acted with an improper motive or means in the interference; and (5) that Meritage suffered damages caused by the conduct of the defendants. See Fillmore v. Maricopa Water Processing Sys. Inc., 211 Ariz. 269, 120 P.3d 697 (App. 2005). At trial, Meritage is seeking monetary damages for Greg

Hancock's intentional interference with Meritage prospective contractual advantage. Meritage is also seeking punitive damages under Arizona law. 2. Defendants:

Olympic Properties While all of the allegations made by Meritage in this lawsuit are untrue, Greg Hancock has called this topic Meritage's "Big Lie." Early discovery demonstrated that Greg Hancock did not violate any of his restrictive covenants by assisting Rick Hancock in his homebuilding business, or in any way breached any other obligation to Meritage. Therefore, in its second amended complaint, Meritage or its attorneys concocted the "Olympic Properties" claim. The claim's linchpin, without which every other claim flowing from it fails, is that Greg Hancock was obligated to give Meritage first opportunity to become involved in David Cornwall's property acquisition project in early 2001, a project then known as Olympic Properties. Never mind, says Meritage, that it wasn't the type of project in which it normally became engaged, or that Greg Hancock was not involved in any way when it came to fruition, or that Meritage ultimately invested in the project at the same price as Hancock could have. Greg Hancock's employment agreement entitled him to engage personally in "passive" investments of up to 25% in "any land banking or land development project."
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That would have been precisely the case had Olympic ever bought any property or developed any land - - it did neither. Meritage's linchpin is further demolished by the fact that any obligation on the part of Hancock to give Meritage first opportunity at any investment was given up by Meritage in pre-purchase contract negotiations. On March 21, 2001, Meritage wanted employment contract language which said, "Employee may engage in land banking and land development only if Employee first presents the opportunity to the Board of Directors of Parent and provides Parent with the right to pursue the opportunity itself." This language was drafted by Snell & Wilmer's Dan Mahoney and sent in an Email with copies to Meritage's CF Larry Seay and CEO Steve Hilton. The language was deleted by Snell & Wilmer's Steve Pidgeon. One need not wonder why Meritage did not disclose either the Email or the draft language in its pretrial disclosures. The truth of the Olympic matter is as follows: Olympic never bought or developed any property, obtaining only options, and Hancock withdrew from Olympic before it was able to close the purchase of any property whatever. Olympic Properties, LLC, was formed on 6/29/01, with David Cornwall

owning 75% and Hancock owning 25%, its stated purpose to invest in and hold real estate for investment. The public filing shows Hancock as owning more than 20%. Attorney Kurt Brueckner drafted the formation documents to comport with Hancock's employment restrictions. Because Hancock was able to bear more of the start-up expenses of Olympic than could Cornwall, he also got an option to increase his Olympic ownership after his Meritage restrictions expired. Brueckner also carefully drafted the Option Agreement so that Hancock could not exercise the option until after 6/2/04 ­ the expiration date of the covenant ­ but that prior to June 2, 2004, Hancock would have no right to acquire any additional Units of Olympic, or any other rights whatsoever with respect to Olympic, by virtue of the Option Agreement. The option agreement also provided that Cornwall could cancel it unilaterally at any time, so the option was doubly contingent.
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Over the summer of 2001 Cornwall, not Hancock, negotiated options for Olympic on land which, after Hancock withdrew from Olympic, became known by the names Westwind and Riata. Olympic sought financing with Devon Properties, but because of 911-01 the financing fell through on 11/16/01. Olympic and Devon exchanged drafts of numerous possible contractual arrangements, but none were ever signed. After 11/16/01 Hancock was out of Olympic and everything that had to do with it, according to Dave Cornwall. Hancock's "formal" withdrawal was documented by an Olympic manager's meeting and by letter of 6/26/02 to Hancock whereby Cornwall returned Hancock's investment money and said: As a result of the loss of our primary financial partner, Devon Properties, we were unable to proceed as planned with Olympic Properties. No property or assets of any kind were even purchased. * * * I will be filing a final tax return for Olympic for the year 2001, and dissolving the LLC. As you know, Olympic has no debt, or assets of any kind. Olympic Properties and its unfunded and unutilized development arm, Olympic Development, show no property owned and no income earned on their tax returns. After Hancock left Olympic, Cornwall kept working on the Westwind and Riata projects and found financing through Taro Properties (Larry Cox), which did land banking for Meritage and Hancock. In the "no good turn goes unpunished" category, Hancock introduced Cornwall to Steve Hilton at Cornwall's request. This resulted in partnerships between Cornwall, Taro and Meritage prior to Hancock leaving Meritage. On 12-30-02 Meritage purchased its interest in Riata, Westwind and EP-The King from Cornwall and Taro. When Greg Hancock left employment with Meritage in March, 2003, he had not been told by Meritage or Cornwall of the Westwind/Riata/EP-King transaction, properties which if purchased for home construction rather than investment would have been within his jurisdiction as president of Hancock Communities. When Cornwall formed Cavalier (Olympic's successor), and found financing through Taro, he assigned the property options held by Olympic to Cavalier, and from
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Cavalier to the Westwind and Riata entities. Hancock had no interest whatever in any of them. The options were assigned to Westwind and Riata at the same price for which Olympic originally obtained them. The first balance sheet for Westwind, showing the partnership's capital investment, demonstrates land cost of about $12,300 per acre, a price virtually the same as Olympic's original option price. Meritage later bought some of the Westwind property for its own account, paying about $35,100 per acre, for a profit to itself and its partners of $23,000 per acre. The Westwind/Riata/EP-King land was not the type of real estate purchase which Meritage usually made for home building, its usual goal not to purchase land for long term development: "We typically option or purchase land only after the necessary entitlements have been obtained so that development or construction may begin as market conditions dictate. There is no Meritage corporate document which is critical of Greg Hancock regarding any element of its partnership with Cornwall and Cox in Westwind/Riata/EPKing. Neither Meritage's original complaint or its first amended complaint make any mention of Westwind/Riata/EP-King. They are not mentioned until Meritage's Second Amended Complaint, filed on April 15, 2005. Greg Hancock's Job Performance Meritage's claims regarding Greg Hancock's alleged failures in his job performance are also made up of whole cloth., and a sad parlay of the "Big Lie." Meritage persists unabashedly in these thoroughly impeached claims even though there is not a single mention of Hancock's claimed shortcomings in the entirety of Meritage's corporate documents or public filings. Exhibit A to Greg Hancock's Employment Agreement specifically describes his duties with regard to running Hancock Communities. It gives Meritage, not Hancock, the right to control decisions regarding land acquisition and expansion into new product or market areas.
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EXHIBIT B to the Employment Agreement describes the calculations used to determine Hancock's right to performance bonuses generally, and sets specific monetary goals for the first seven months of his employment. Subsequent to that first period, business plans agreed upon between Hancock and Meritage governed the amount of the bonus that Hancock and his eligible employees could earn. Hancock and all of Hancock's eligible employees earned 100% of their available bonuses during the entire time Hancock was employed with Meritage. In the entirety of Meritage's records, including Hancock's personnel file, and Meritage's board minutes, budget committee minutes, and publicly filed submissions, there is not a single negative word regarding Hancock's job performance. Since no documents or testimony from its co-CEOs and CFO could provide any evidence that Hancock's job performance was deficient, Meritage hired an expert, Greg Curry of Navigant Consulting, to attempt to establish the allegations in its complaint that Hancock did not perform his job adequately. In one effort to establish monetary damage supposedly caused by Greg Hancock, Curry compared the performance of two other building companies, American Standard and Pulte, to that of Hancock Communities. Curry conceded, however, that such a comparison was not the standard by which Hancock's performance was measured. Greg Hancock's successor as the president of Hancock Communities, Ron French, agreed that Curry's company comparison approach would be unfair and not the measure of Hancock's job performance. Curry also asserts that Hancock's performance in acquiring land for Meritage's homebuilding was inadequate. For example, he states, "As of June 2001 [the date of Meritage's purchase of Hancock Communities], there were 934 lots available-for-sale as part of the Hancock communities that Meritage purchased. Fifteen (15) months later, the available lots Meritage had to sell had dropped in half, to 449." The statement is a complete fabrication, as proven by Meritage's internal documents relating to its purchase of Hancock, its lot development reports, and its public filings:
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a. Meritage stated in an offering circular touting bonds sold to the public for the Hancock purchase, "At March 31, 2001, Hancock had 4,647 lots on which homes could be built under its control; b. The Hancock Communities Project Lot Status Report dated 5/31/01 [the date Meritage purchased Hancock Communities] shows a total inventory of 6,991 lots, including 4,674 remaining to sell, and 2,327 lots purchased under rolling options; c. One year later, on 5/31/02, there was a total inventory of 6,860 lots, including 3,926 remaining to sell and 2,934 controlled under rolling options; d. On March 6, 2002, Meritage's Board of Directors were told, "Steve [Hilton] noted that although our business continues to be soft in our high-end Monterey/Scottsdale product [Hilton's division], business in our more moderately priced Hancock/Meritage [Greg Hancock's division] product remains good"; e. On 7/31/02 there were not 449 lots available (as claimed by Curry), but rather a total of 7,170, including 4,151 remaining to sell and 3,019 under rolling options; f. In its Form 10-K report to the SEC for the fiscal year ended 12/31/02 Meritage stated that it had over 10,000 home sites remaining to sell in its Arizona Hancock product; and g. Finally, just eight days before Hancock's employment with Meritage was terminated, there were 8,814 lots, including 7,360 remaining to sell and 1,454 under rolling options. On one occasion Meritage co-CEO John Landon vetoed a land purchase recommended by Hancock which would have added about 800 lots. Hancock continually maintained an inventory of lots sufficient for three to five years' future sales at about 1,500 home sales per year. During the entire time Hancock was at Meritage, Meritage crowed in public about its financial success, spectacular sales performance and substantial backlog of sales. The License Agreement On May 30, 2001, Meritage subsidiaries Hancock-MTH Builders, Inc., and
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Hancock-MTH Communities, Inc. entered into a License Agreement with Greg Hancock whereby Meritage obtained the right to use the names "Hancock Homes" and "Hancock Communities" for 6 years "in strict compliance with this agreement." "Hancock Homes" is a trademark registered to Greg Hancock and the License Agreement preserves to him the exclusive right, title and interest to both it and the name "Hancock Communities." The License provides: [Hancock] and [Meritage] each acknowledge that the Licensed Marks have acquired a valuable secondary meaning and goodwill with the public, with a reputation of highest quality and performance. Accordingly, [Meritage] undertakes and agrees not to use the Licensed Marks in any manner whatsoever which, directly or indirectly, would derogate or detract from the Licensed Mark's repute, value, marketability, degree of public recognition or popularity. (Emphasis supplied.) Meritage's co-CEO, Steven Hilton, reviewed the License Agreement during its drafting, believed it to be adequate as to form and content, and testified that he would "live by the agreement as it stands." On September 8, 2003, six months after Greg Hancock left employment with Meritage, and four and a half years before the License Agreement was due to expire, Hilton sent an Email to Co-CEO John Landon re the "Hancock Name:" John: You may want to begin considering how we are going to transition the "Hancock Communities" name to "Meritage Homes." We have the rights to the name for 6 years. I think the name should be dark in the market for at least 1 year or maybe 2 prior to the expiration of our license so that we do not waste advertising dollars on a name that Greg may resurrect immediately following our license. Therefore we should consider a plan to phase out the name over the next 18 months. What do you think? Neither Hilton's suggestion nor the Email itself was disclosed to Greg Hancock until the discovery phase of this case. Both the suggestion and the Email were acted upon immediately - at the 2003 Meritage Christmas party Interim President Jim Arneson announced to the partygoers the fact of the name change, to the surprise of Desiree Coats, Meritage's head of advertising (Exh. 4, p. 80). On December 9, 2003, new Hancock President Ron French sent an Email
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to Coats which in part said, "Please start the agency thinking about the change of Hancock to Meritage. John [Landon] wants to accomplish this ASAP." On May 20, 2004, the Martz Agency, through Barb Sorget, issued a "Creative Brief" regarding the "Meritage Home Name Change Campaign", stating that Meritage "bought Hancock Communities about 3 years ago and are ready to change the name from Hancock Communities to Meritage Homes." Had she known of the terms of the License Agreement and the "go dark" Email she would not have undertaken the name change campaign. On June 18, 2004, Meritage and the Martz Agency conferred regarding the campaign, and said, "[Meritage] requested Agency to revise the release so that it focuses more on Meritage and less on Hancock," and "Client informed Agency that the Hancock name will be maintained as a community series at Sundial at Rancho Bella Vista and Sundial at Sundance." Rancho Bella Vista is on the far East edge of the Phoenix area, and Sundial at Sundance is in the far West. On July 1, 2004, CFO Larry Seay sent an Email to virtually everyone at Meritage stating "that going forward they should [use] the new names and stop using the old Hancock names (except of course in a couple of marketing instances as we have discussed)." The "couple of the marketing instances" were in fact maintained for the

purpose of this lawsuit. Meritage then changed the names of all but the two "Hancock Communities" to "Meritage Homes;" which Hilton testified resulted in making the Hancock Communities name "less visible." On May 26, 2005, the Hancock name was also removed from Sundance, the development which Meritage alleges was being impacted by Rick Hancock Homes. Barb Sorget conducted an advertising analysis of the advertising and re-naming campaign her agency accomplished for Meritage. Her conclusion is that, "The decrease in exposure of the Hancock Communities name within newspaper advertising from January 2000 to June 2004 reduces its name awareness and market recognition and will have a
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diminished effect on its future marketability, value and degree of public recognition." Meritage did not seek or receive permission from Greg Hancock to make the name and advertising changes. Under the License Agreement, the Licensor (Greg Hancock) may terminate the agreement by giving written notice or " to immediately terminate this Agreement without prior notice if Licensee, its employees or agents shall breach any provision of this Agreement or the Master Transaction Agreement" On February 13, 2004, by letter from his counsel, Greg Hancock terminated the License Agreement. The stated grounds for termination were Meritage's failure to provide an accounting of Hancock's earn-out, as it was obligated to do under the MTA. That Hancock was entitled to expect an earn-out is demonstrated by CFO Larry Seay's letter of January 8, 2003, where he said that even if Hancock "was not with the company" he would receive an earn-out of over $800,000. On February 23, 2004, Meritage's counsel, Steve Pidgeon, replied in pertinent part: It amazes me the positions you are willing to posit on behalf of your client. And it's unfortunate. You used to be a find and balanced counselor. * * * Meritage views this as a clear attempt to interfere with its business, as an anticipatory breach of critical agreements, and as an attempt, quite frankly, at extortion, by your clients and you personally. Your clients have until the end of today, Monday at 5:00 p.m., to withdraw their threats, drop the use of the Hancock name * * * and agree that they will adhere to their agreements. This needs to be in writing, signed by them, not you, and faxed to Larry Seay at Meritage. They are not going to like the alternative. Neither are you. When the Hancocks refused to bow to extortion, Meritage filed this suit on February 24, 2004, claiming as its grounds for federal jurisdiction its right to the Hancock

21 name under the License Agreement, subject matter jurisdiction under the Lanham Act, 22 and unfair competition with regard to the Hancock name. 23 There is no credible testimony controverting Hancock's contention that Meritage's 24 phasing out and discontinuing of the use of the Hancock name violated the License 25 Agreement. 26 Rick Hancock Homes 27 There is no evidence whatever that Greg Hancock assisted Rick Hancock in his 28
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homebuilding business. Greg Hancock, through a company called Watson & I-10, LLC, did land banking for the development, which he was entitled to do under his employment agreement. Meritage claims that J2H2 sold Rick Hancock the land at lower than market prices. Defendant J2H2 has no involvement whatever in the entire dispute. But even if Greg Hancock had given away his property, that was his decision. Finally, since Meritage breached the license agreement, and the Court has ruled as a matter of law that there was no confusion, Greg Hancock in no way assisted a competitor in unfair competition as a matter of law. Damages When Meritage filed this lawsuit, its damage claim said that it had lost $44 million dollars because of the illegal activities of the defendants. As shown, it could not have suffered any damage from the Olympic Properties matter. As shown, it could not have suffered damage from Greg Hancock's alleged failure to supply sufficient lots. Since there is no evidence that Greg helped Rick Hancock in any way, Meritage cannot have suffered damage because of anything Greg did. And, because of facts and/or market conditions during relevant times, Meritage could not have suffered any damage from Rick Hancock's competition if he had violated the law. The following are the facts regarding Rick Hancock Homes' development at Sundance: a. As of 2-24-04, when Meritage first filed this case, Rick Hancock owned no property at Sundance and had not yet pounded a nail; b. Rick Hancock did not place earnest money on Parcel 7 at Sundance until September, 2004, and it did not close escrow on the parcel until December, 2004; c. Rick Hancock did not receive a financing commitment for the project until March, 2005, and no lots on which to build houses were taken down from the land banker until that month; d. Rick Hancock never engaged in interstate commerce in any way; e. This lawsuit, together with market conditions, has basically put Rick
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Hancock out of business. There is no testimony or other evidence that anything the Hancocks did or failed to do has caused Meritage to lose a single sale. Instead, the testimony of Seay, Landon, Hilton, and Roger Zetah, the Hancock Communities' CFO, is that Meritage sold every house it could build as quickly as it could build them in the Sundance subdivision. In fact, Meritage and all other builders at Sundance had to conduct auctions since there were more buyers than homes available There has been no disclosure of any claimed damages or loss to the SEC pursuant to Sarbanes-Oxley or to any other public oversight body, even though in Meritage's Disclosure Statement and in Verifications to its complaints, Larry Seay declared under oath that at about the time it filed this lawsuit Meritage had suffered over $44 million in damages. Ron French, who was trained about Sarbanes-Oxley, precisely summarized the state of Meritage's claim for damages by testifying that either Meritage suffered no damage or it broke the Sarbanes-Oxley law. The former is obviously the case. F. STIPULATIONS AND UNDISPUTED FACTS

Greg Hancock's Olympic Conduct 1. Meritage purchased the Hancock Communities homebuilder business and its assets from Greg Hancock and American West to expand its market presence in Arizona on May 7, 2001 with a closing date of May 31, 2001. 1.1. This transaction is reflected in a number of agreements dated May 2001 including, but not limited to, the Master Transaction Agreement ("MTA"), the License Agreement, the Agreement of Purchase and Sale of Assets ("APSA"), and various Employment Agreements.

2.

See Parties Disputed Contentions of Disputed Facts, infra. 2.1. See Parties Disputed Contentions of Disputed Facts, infra.

3.

See Parties Disputed Contentions of Disputed Facts, infra. 3.1. 3.2. The Hancock Communities management team was led by Greg Hancock. Meritage and Greg Hancock agreed that Greg Hancock would become President of Meritage's Hancock Communities division.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 5. 4.

3.3.

Other members of the Hancock Communities management team included Jim Arneson, Ken Krause, and Rick Hancock, and Desiree Coats.

See Parties Disputed Contentions of Disputed Facts, infra. 4.1. 4.2. 4.3. 4.4. 4.5. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

See Parties Disputed Contentions of Disputed Facts, infra. 5.1. Greg Hancock agreed that he would devote substantially all of his time and efforts to his duties as President of Meritage's Hancock Communities division. 5.1.1. 5.1.2. 5.2. 5.3. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

Greg Hancock agreed to diligently perform the duties associated with being President. Greg Hancock agreed to comply with Meritage's policies and guidelines established for Meritage's senior executives. Greg Hancock also agreed that until May 31, 2006, that he would "not, directly or indirectly, either as an employee, partner, owner, lender, director, director, advisor or consultant or in any other capacity or through any entity . . . engage in any homebuilding business within 100 miles of any [Meritage] project." Greg Hancock also agreed that until May 31, 2004, that he would "not, directly or indirectly, either as an employee, partner, owner, lender, director, advisor or consultant or in any other capacity or through any entity engage in any . . . land banking or land development business within 100 miles of any [Meritage] project." 5.5.1. To the three-year non-compete only, there was an exception that Greg Hancock "may be a passive investor, owning up to 25%, of any land banking or land development project." See Parties Disputed Contentions of Disputed Facts, infra.

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5.4.

5.5.

5.5.2. 6.

See Parties Disputed Contentions of Disputed Facts, infra. 6.1. Greg Hancock is considered by many an expert in identifying land for homebuilders in the Phoenix area.

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1 2 3

6.2.

Meritage purchased the Hancock Communities business and hired Greg Hancock as its President because of this expertise, along with other reasons including the reputation and good will of the Hancock name in homebuilding in the Phoenix market. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

6.3. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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6.4. 7.

See Parties Disputed Contentions of Disputed Facts, infra. 7.1. See Parties Disputed Contentions of Disputed Facts, infra. 7.1.1. 7.1.2. 7.1.3. 7.1.4. 7.1.5. 7.2. 7.3. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

See Parties Disputed Contentions of Disputed Facts, infra. Also on June 20, 2001, the attorneys applied for an Employer Identification number with the IRS for Olympic Properties, LLC ("OP"). See Parties Disputed Contentions of Disputed Facts, infra. 7.4.1. 7.4.2. 7.4.3. Greg Hancock owned 25% of OP. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. 7.4.3.1. See Parties Disputed Contentions of Disputed Facts, infra. 7.4.4. 7.4.5. 7.4.6. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

7.4.

7.5.

See Parties Disputed Contentions of Disputed Facts, infra. 7.5.1. See Parties Disputed Contentions of Disputed Facts, infra.

7.6.

See Parties Disputed Contentions of Disputed Facts, infra. 7.6.1. See Parties Disputed Contentions of Disputed Facts, infra.

7.7.

See Parties Disputed Contentions of Disputed Facts, infra.
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1 2 3 4 5 6 7.8. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 7.9.

7.7.1. 7.7.2. 7.7.3. 7.7.4.

See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. 7.7.4.1. See Parties Disputed Contentions of Disputed Facts, infra.

See Parties Disputed Contentions of Disputed Facts, infra. 7.8.1. 7.8.2. OP sought Devon's assistance in financing the purchase and development of the Westwind land. Westwind is a large parcel of land about five miles from Meritage's Hancock Communities developments and other land owned by Greg Hancock in Buckeye. See Parties Disputed Contentions of Disputed Facts, infra.

7.8.3.

See Parties Disputed Contentions of Disputed Facts, infra. 7.9.1. On August 3, 2001, Greg Hancock treated Robert Rodgers, David Cornwall and two of Devon's brokers to dinner at Mastro's Restaurant. 7.9.1.1. See Parties Disputed Contentions of Disputed Facts, infra. 7.9.1.2. Greg Hancock paid $2,067.67 dinner, later obtaining reimbursement from OP funds provided by Devon. 7.9.2. See Parties Disputed Contentions of Disputed Facts, infra. 7.9.2.1. See Parties Disputed Contentions of Disputed Facts, infra. 7.9.2.2. See Parties Disputed Contentions of Disputed Facts, infra. 7.9.2.3. See Parties Disputed Contentions of Disputed Facts, infra. 7.9.3. See Parties Disputed Contentions of Disputed Facts, infra. 7.9.3.1. See Parties Disputed Contentions of Disputed Facts, infra. 7.9.3.2. See Parties Disputed Contentions of Disputed Facts, infra. 7.9.3.3. See Parties Disputed Contentions of Disputed Facts, infra.

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7.9.4.

See Parties Disputed Contentions of Disputed Facts, infra. 7.9.4.1. See Parties Disputed Contentions of Disputed Facts, infra. 7.9.4.2. See Parties Disputed Contentions of Disputed Facts, infra. 7.9.4.3. See Parties Disputed Contentions of Disputed Facts, infra.

7.10. See Parties Disputed Contentions of Disputed Facts, infra. 7 7.10.1. 8 7.10.2. 9 7.11. See Parties Disputed Contentions of Disputed Facts, infra. 10 7.12. See Parties Disputed Contentions of Disputed Facts, infra. 11 7.12.1. 12 7.12.2. 13 7.12.3. 14 7.12.4. 15 8. 16 8.1. 17 8.2. 18 8.3. 19 9. 20 9.1. 21 9.2. 22 9.2.1. 23 9.3. 24 9.4. 25 10. 26 10.1. See Parties Disputed Contentions of Disputed Facts, infra. 27 10.2. See Parties Disputed Contentions of Disputed Facts, infra. 28
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See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

See Parties Disputed Contentions of Disputed Facts, infra. Greg Hancock immediately owned 25% of OD. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

See Parties Disputed Contentions of Disputed Facts, infra.

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10.3. See Parties Disputed Contentions of Disputed Facts, infra. 10.4. See Parties Disputed Contentions of Disputed Facts, infra. 10.5. See Parties Disputed Contentions of Disputed Facts, infra. 10.6. See Parties Disputed Contentions of Disputed Facts, infra. 10.6.1. See Parties Disputed Contentions of Disputed Facts, infra.

10.7. See Parties Disputed Contentions of Disputed Facts, infra. 11. See Parties Disputed Contentions of Disputed Facts, infra. 11.1. See Parties Disputed Contentions of Disputed Facts, infra. 11.1.1. 11.1.2. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

11.2. See Parties Disputed Contentions of Disputed Facts, infra. 11.2.1. 12. See Parties Disputed Contentions of Disputed Facts, infra.

See Parties Disputed Contentions of Disputed Facts, infra. 12.1. See Parties Disputed Contentions of Disputed Facts, infra. 12.1.1. 12.1.2. 12.1.3. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra.

12.2. See Parties Disputed Contentions of Disputed Facts, infra. 12.3. See Parties Disputed Contentions of Disputed Facts, infra. 12.4. See Parties Disputed Contentions of Disputed Facts, infra. 12.4.1. 12.4.2. 12.4.3. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. See Parties Disputed Contentions of Disputed Facts, infra. 12.4.3.1. See Parties Disputed Contentions of Disputed Facts, infra. 12.4.3.2. See Parties Disputed Contentions of Di