Free Statement - District Court of Arizona - Arizona

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MATHEW & MATHEW, P.C. IVAN K. MATHEW (SBN: 011610) 3300 N. Central Avenue, Suite 1730 Phoenix, Arizona 85012 Tel: (602) 254-8088 / Fax: (602) 254-2204 E-mail: [email protected] Attorneys for Defendants RICKY LEE HANCOCK, BRENDA HANCOCK, RICK HANCOCK HOMES, L.L.C. and RLH DEVELOPMENT, L.L.C.
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

Meritage Homes Corporation, a Maryland Corporation, formerly d/b/a Meritage Corporation, Hancock-MTH Builders, Inc., an Arizona corporation, Hancock-MTH Communities, Inc., an Arizona corporation, and currently d/b/a Meritage Homes Construction, Inc., an Arizona corporation, and Meritage Homes of Arizona, Inc., an Arizona corporation, Plaintiffs, v. Ricky Lee Hancock and Brenda Hancock, husband and wife; Gregory S. Hancock and Linda Hancock, husband and wife, Rick Hancock Homes L.L.C., an Arizona limited liability company; RLH Development, L.L.C., an Arizona limited liability company; and J2H2, L.L.C., an Arizona limited liability company, Defendants. _________________________________________ Rick and Brenda Hancock, Defendants, Counterclaimants and Third-Party Plaintiffs, v. Meritage Homes Corporation, a Maryland Corporation, formerly d/b/a Meritage Corporation,
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CASE NO. CV-04-0384-PHX-ROS RICK AND BRENDA HANCOCKS' CONTROVERTING STATEMENT OF FACTS AND ADDITIONAL STATEMENT OF FACTS TO (1) PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT AND (2) COUNTERDEFENDANTS' AND THIRD PARTY DEFENDANTS' MOTION FOR SUMMARY JUDGMENT ON RICK AND BRENDA HANCOCKS' COUNTER-CLAIMS AND THIRD PARTY CLAIMS

(Assigned to the Hon. Roslyn O. Silver)

Filed 02/15/2007

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Hancock-MTH Builders, Inc., an Arizona corporation, Hancock-MTH Communities, Inc., an Arizona corporation, and currently d/b/a Meritage Homes Construction, Inc., an Arizona corporation, and Meritage Homes of Arizona, Inc., an Arizona corporation; Steven J. Hilton and Suzanne Hilton, husband and wife; John R. Landon and Debi Landon, husband and wife; Scott Keeffe and Vicky Keeffe, husband and wife; Roger Zetah and Jane Doe Zetah, husband and wife; and James Arneson and Zane Arneson, husband and wife, Third-Party Defendants.

Defendants, Rick and Brenda Hancock, represented by Ivan K. Mathew, hereby respond to Plaintiffs' December 15, 2006, Statement of Facts in Support of (1) Plaintiffs' Motion for Partial Summary Judgment, and (2) Counterdefendants' and Third-Party Defendants' Motion for Summary Judgment on Rick and Brenda Hancocks' Counter-Claims and Third-Party Claims.1

1.

The License Agreement, the Master Transaction Agreement, and Greg

Hancock's Employment Agreement are attached and incorporated herein as Exhibits 1, 2, and 3, respectively. ADMITTED.

2.

The License Agreement provides, in pertinent part: "Licensee 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." See Exhibit 1 at ¶ 4. ADMITTED. Hereinafter Defendants refer to Plaintiffs, Counterdefendants and Third-Party Defendants collectively as "Meritage."
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3.

Meritage has sold more than $117 million of homes throughout metropolitan

Phoenix under the name "Hancock" during the License Agreement period. See Declaration of Roger Zetah in Support of Meritage's Opposition to Greg Hancock's Motion for Stay and Request for Relief from Operation of Order, Exhibit 4 at ¶ 3. DENIED. Meritage has never used the name "Hancock" alone. (Deposition of Rick Hancock, p. 180, ll. 24-25, attached as Exhibit "18".)

4.

On several occasions in March 2004, the Hancocks promised this Court that they

would maintain the "status quo" and not use the name "Hancock" in a homebuilding business that competed against Meritage. In reliance on the Hancocks' promise, this Court entered an Order denying Meritage's Application for a Temporary Restraining Order. See Order at 3:925 (March 10, 2004). The Court found: "Although the Court is not presaging its ruling, as guidance, the parties should know that, on the face of the papers filed the Court would deny the TRO, but with specific conditions. Those conditions are that the Hancocks must maintain the status quo, consistent with the assertions made in their respective Responses . . . that they will not use the trademarks during the pendency of this litigation." See id. DENIED. Early on in an attempt to avoid litigation, the parties came to an agreement that Rick Hancock could use the name Rick Hancock Homes. (Deposition of Rick Hancock, p. 179, ll. 1-14, attached as Exhibit "18".) Just 2 months previously, in December 2003, Jim Arneson announced to all employees that Meritage would no longer be using the Hancock Communities name. (Declaration of Diane Haas, ¶¶ 1-3, attached as Exhibit "7".) This was reiterated in memos. (Exhibit #16.) Subsequently, Meritage reneged. The Court has been made aware of this previously. This is old news.

5.

Greg Hancock's own expert concedes that during the period of time that Greg

Hancock worked for the company, Meritage fully paid the earn-outs owed. See Expert Report

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of Eugene Cole on Greg Hancock Earn-Out Calculations, Exhibit 5 at 2; September 20, 2006 Deposition of Eugene Cole, Exhibit 6 at 126:18 to 128:19. 6. DENIED. Eugene Cole stated that there is money due to Greg Hancock. Greg Hancock is owed $2.5 million dollars. (Deposition of Eugene Cole, p. 80, ll. 7-8, attached as Exhibit "22".) Mr. Cole's testimony is taken out of context by Meritage. He merely states he is not opining on liability and causation questions. (Deposition of Eugene Cole, p. 125, ll. 2025, p. 126, l. 1, attached as Exhibit "22".) Meritage has not paid the earn-out owed to Greg Hancock.

6.

Paragraph 2 of the License Agreement states:

"Licensor hereby grants to

Licensee a personal, exclusive, nontransferable, nonassignable license to use the Licensed Marks during term of this Agreement." There is no language in the License Agreement that subjected Meritage's use of the Hancock name to Greg Hancock's discretion. See Exhibit 1 at ¶ 2. DENIED. The License Agreement allows Greg Hancock, as licensor, to terminate the License Agreement without notice for a breach of the Agreement. (License Agreement, ¶ 7.3. Exhibit "4".)

7.

Furthermore, Rick Hancock admitted that he obtained his brother's permission

to use "Rick Hancock Homes." See October 25, 2004 Deposition of Rick Hancock, Exhibit 7 at 165:22-24. DENIED. Rick Hancock did not admit that he discussed the name Rick Hancock

Homes with his brother. (Deposition of Rick Hancock, p. 167, ll. 11-16, attached as Exhibit "18".)

8.

Rick Hancock testified that defendants' goal was to usurp the goodwill that

Meritage purchased as part of its $88 million acquisition of the "Hancock Communities" and
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"Hancock Homes" business and trademarks. See Exhibit 7 at 49:2 to 50:20, 54:24 to 61:12, 68:4 to 71:20, 76:12 to 82:4, 102:20-24, and 181:1-22. DENIED. Rick Hancock wanted to use his name. He wanted to use the name Hancock which has been around for over 50 years. (Deposition of Rick Hancock, p. 69, ll. 1318, attached as Exhibit "18".) Not Hancock Communities which was founded in 1990 to Meritage. (Deposition of Rick Hancock. p. 48, ll. 9-10, attached as Exhibit "18".) Congress recognizes that there is utility in a person using his name as a formation of a business. AntiCyber Squatting Consumer Protection Act. 15 U.S.C. § 1125(d)(1)(B)(II). business name is presumed to be in good faith. Id. Use of one's

9.

Rick Hancock concedes that Meritage has signs for its "Hancock Communities"

all around the Sundance Community and in the near vicinity of the land in which Defendants seek to use the "Hancock" mark to sell similar homes. See Exhibit 7 at 118:10 to 120:13. In other words, Defendants want to use a similar name, Rick Hancock Homes, in the same market for the same product in which Meritage is using the marks "Hancock Homes" and "Hancock Communities." See id. DENIED. Missy Vallirie confirmed that the name "Hancock Communities" was no longer being used in the marketing of Meritage Homes. (Deposition of Missy Vallirie, p. 88, ll. 3-10, p. 111, l. 24-25, attached as Exhibit "17".) In 2004, Steve Hilton and John Landon communicated that they should take the name Hancock Communities "dark." (Memo dated September 8, 2003 attached as Exhibit "15".) (Declaration of Barbara Sorget-Stanton, ¶ 12, attached as Exhibit "21".) The name was abandoned. Missy Vallirie stated that the names of all the communities were changed from Hancock Communities to Meritage. Then after the lawsuit, the names of two communities were changed - one in the east most portion of the valley and one in the west most portion of the valley. Id. The purpose of this was to try to claim that the Hancock Communities name could be used throughout the entire valley by providing two geographic extreme points (west and east). Missy Vallirie stated that it made
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no sense to her for the names to be changed back to Hancock Communities. (Deposition of Missy Vallirie, p. 90, ll. 4-7, attached as Exhibit "17".) She also stated that this ruse was concocted to prohibit the use of the "Hancock" name by Rick and/or Greg Hancock. (Deposition of Missy Vallirie, p. 101, ll. 15-20, attached as Exhibit "17".) After the

announcement that the Hancock Community name was to be dropped, John Landon then changes the name back to Hancock Communities. (Deposition of Missy Vallirie, p. 78, ll. 2125, p. 79, ll. 1-13, attached as Exhibit "17".) Ironically, it was the Plaintiff who sought to use the name to create confusion by changing the name back to Hancock Communities, not viceversa.

10.

Defendants advertise its confusingly similar name in the same ways that

Meritage advertises its marks. See id. at 114:22 to 115:22 and 118:3-21. Defendants and Meritage are both marketing the same type of goods and services - namely single family homes, to the same consumers - single family homebuyers. (See Declaration of Larry Seay in Support of Renewed Application for Temporary Restraining Order with Notice Against Rick Hancock, Exhibit 8 at ¶¶ 3 and 16.) DENIED. The names are not confusing. There is no likelihood of confusion. Meritage admits that no consumers have been confused. (Deposition of Larry Seay, p.36, attached as Exhibit "6".) Meritage admits that no lenders were confused. (Deposition of Larry Seay, p. 37, attached as Exhibit "6".) Meritage admits that no subcontractors were confused. Thomas Wing, a

(Deposition of Larry Seay, pp. 36-37, attached as Exhibit "6".)

subcontractor, stated that he knows Rick Hancock Homes is different than Meritage and the Hancock Communities. (Declaration of Thomas Wing, ¶¶ 7-10, attached as Exhibit "8".) John Ahern, a lender, knows the difference between Meritage/The Hancock Communities and Rick Hancock Homes. (Declaration of John Ahern, ¶1-4, attached as Exhibit "12".) Kevin

O'Donnell, a mortgage lender, knows the difference between the Meritage/The Hancock Communities and Rick Hancock Homes. (Declaration of Kevin O'Donnell, ¶ 5, attached as
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Exhibit "11".) Title companies know the difference between Hancock Communities and Rick Hancock Homes. (Declaration of Michael D. Frakes, ¶ 7, attached as Exhibit "13".) Meritage informed current customers by a letter that "as part of a company wide branding program", Hancock Communities will now be known as "Meritage." (Letter from Ron French,

President, dated June 25, 2004, Exhibit "9".) One would have to be an "idiot" to not know the difference between Rick Hancock Homes and Meritage Homes. (Deposition of Michael Frakes, p. 15, ll. 14-25; p. 16, ll. 1-9; p. 22, ll. 2-9; p. 23, ll. 19-25; p. 24, l. 1; p. 42, ll. 9-14; p. 48, ll. 19-25; p. 49, ll. 1-8; p. 50, ll. 1-25; p. 51, l;. 1, 14-25, attached as Exhibit "19" and Deposition of Kevin O'Donnell, p. 50, ll. 3-25; p. 51, ll. 1-14, attached as Exhibit "20".) The names are not similar. Id. Rick Hancock does not advertise in a similar way. Meritage uses newspaper advertisements. (Declaration of Barbara Sorget-Stanton, ¶¶ 5-6, attached as

Exhibit "21".) Rick Hancock did not advertise in the newspaper. Meritage advertises on large billboards on I-10. (Deposition of Greg Hancock, p. 176, ll. 1-16, attached as Exhibit "24".) The billboard is not solely for the sale of Meritage Homes. It is also for the sale of two competitors. Id. Rick Hancock has a small billboard on a rural street on his land. Id. On the billboard that is used by Rick Hancock, it cannot be seen from the highway. Id. In addition, there is a disclaimer at the bottom of the billboard. Michael Frakes testified that he saw the Rick Hancock Homes billboard and knew there was a disclaimer. (Deposition of Michael Frakes, p. 17, ll. 3-25; p. 18, ll. 1-25; p. 19, ll. 1-25; p. 20, ll. 1-9; p. 22, ll. 2-9; p. 50, ll. 19-25 and p. 51, l. 1, attached as Exhibit "19", Declaration of Michael Frakes, attached as Exhibit "13".) In addition, all buyers are required to sign disclaimers acknowledging that there is no connection with Rick Hancock Homes to Meritage Homes or the Hancock Communities. Witnesses testified there is no confusion. Meritage admits that no consumers have been confused. (Deposition of Larry Seay, p. 36, attached as Exhibit "6".) Meritage admits that no lenders were confused. (Deposition of Larry Seay, p. 37, attached as Exhibit "6".) Meritage admits that no subcontractors were confused. (Deposition of Larry Seay, pp. 36-37, attached as Exhibit "6".) Thomas Wing, a subcontractor, stated that he knows Rick Hancock Homes is
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different than Meritage and the Hancock Communities. (Declaration of Thomas Wing, ¶¶ 710, attached as Exhibit "8".) John Ahern, a lender, knows the difference between Meritage/The Hancock Communities and Rick Hancock Homes. (Declaration of John Ahern, ¶1-4, attached as Exhibit "12".) Kevin O'Donnell, a mortgage lender, knows the difference between the Meritage/The Hancock Communities and Rick Hancock Homes. (Declaration of Kevin O'Donnell, ¶ 5, attached as Exhibit "11".) Title companies know the difference between Hancock Communities and Rick Hancock Homes. (Declaration of Michael D.

Frakes, ¶ 7, attached as Exhibit "13".) Meritage informed current customers by a letter that "as part of a company wide branding program", Hancock Communities will now be known as "Meritage." (Letter from Ron French, President, dated June 25, 2004, attached as Exhibit "9".) One would have to be an "idiot" to not know the difference between Rick Hancock Homes and Meritage Homes. (Deposition of Michael Frakes, p. 15, ll. 14-25; p. 16, ll. 1-9; p. 22, ll. 2-9; p. 23, ll. 19-25; p. 24, l. 1; p. 42, ll. 9-14; p. 48, ll. 19-25; p. 49, ll. 1-8; p. 50, ll. 125; p. 51, l;. 1, 14-25, attached as Exhibit "19" and Deposition of Kevin O'Donnell, p. 50, ll. 3-25; p. 51, ll. 1-14, attached as Exhibit "20".)

11.

Meritage's

employees

use

email

addresses

(i.e.,

[employee

name]@hancockcommunities.com) to communicate with subcontractors, lenders, and potential consumers. See Declaration of Larry Seay in Support of Meritage's Response to Defendant Rick Hancock and Rick Hancock Home L.L.C.'s Motion for Summary Judgment, Exhibit 9 at ¶ 2. Defendants and their employees are emailing subcontractors (and possibly lenders and potential consumers) using the [employee name]@hancockhomesaz.com domain address and causing confusion. See Exhibit 7 at 214:14 to 217:15. DENIED. "Possibly lenders or potential customers" is not an admissible fact. It is speculation without foundation. Rick Hancock for the sake of argument admits that Meritage used emails to communicate with subcontractors. Defendants deny that there is any confusion in the use of Rick Hancock Homes using a domain name ending in @hancockhomesaz.com.
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Don T. Kieffer, Land Manager of D.R. Horton-DietzCrane, Inc. gave a Declaration that there was no confusion as he knows Meritage and Rick Hancock are not related. (Declaration of Don T. Kieffer, ¶ 13, attached as Exhibit "32".)

12.

Defendants concede that the defendants' employees do not use the disclaimer on

all uses of the "Hancock" mark with respect to marketing new homes in the Sundance community. Exhibit 7 at 216:22 to 217:15. DENIED. There is no "Hancock" mark. There is a disclaimer on the billboard and there is a disclaimer when people come in and want to buy a home. Meritage acknowledges that Rick Hancock has disclaimers on his billboard. (Deposition of Larry Seay, pp. 133-134, attached as Exhibit "6".) There is a disclaimer on the telephone message service. Meritage acknowledges that Rick Hancock has disclaimers on phone recordings used to receive customer inquiries from the billboard. (Deposition of Larry Seay, p. 134, attached as Exhibit "6".)

13.

Defendants do not use disclaimers when it answers its main phone number. See

November 18, 2004 Deposition of Jim Arneson (Volume 2), Exhibit 10 at 9:3 to 10:22. DENIED. Meritage acknowledges that Rick Hancock has disclaimers on phone

recordings used to receive customer inquiries from the billboard. (Deposition of Larry Seay, p. 134, attached as Exhibit "6".)

14.

Even when a disclaimer is used, it is written in a small font that is extremely

difficult to read from the adjacent highway hundreds of feet away (which is where both Defendants' and Meritage's target customers are located). See September 7, 2004 Deposition of Larry Seay, Exhibit 11 at 133:21 to 134:3.

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DENIED. The Rick Hancock billboard cannot be seen at all from the highway. (See #10 above.) It is on a rural road. The billboard is on Rick Hancock's property. Second, when one goes off the highway onto Watson Road and comes to the Rick Hancock Homes, they can see a billboard which clearly has a disclaimer. It is not difficult to read. It is not small and confusing. Michael Frakes testified that he saw the Rick Hancock Homes billboard and knew there was a disclaimer. (Deposition of Michael Frakes, p. 17, ll. 3-25; p. 18, ll. 1-25; p. 19, ll. 1-25; p. 20, ll. 1-9; p. 22, ll. 2-9; p. 50, ll. 19-25 and p. 51, l. 1, attached as Exhibit "19", Declaration of Michael Frakes, attached as Exhibit "13".) Indeed, Mr. Frakes chastised

Plaintiff's lawyer for shrinking the photograph of the billboard to preclude him from reading the disclaimer at his deposition. Indeed, it is so effective that Meritage has gone out of its way to hide the disclaimer so that people who were testifying in this case were not shown the disclaimer. (Deposition of Michael Frakes, p. 56, ll. 2-25; p. 57, ll. 1-23, attached as Exhibit "19".)

15.

The disclaimer only disclaims an affiliation with "Meritage Homes/Hancock

Communities;" it is silent as to any affiliation with "Hancock Homes," a mark for which Meritage is also an exclusive licensee. See Exhibit 7 at 180:5-7. DENIED. "Hancock Homes" has not used any marketing efforts by Meritage Homes. (See #3 above.)

16.

Meritage has been using the name "Hancock" in association with one of its

product lines ­ the Hancock series homes ­ in Buckeye and elsewhere in the Phoenix metropolitan area, and "Hancock Communities" new homes built at the Sundance community in Buckeye and elsewhere in the Phoenix metropolitan area. See Exhibit 7 at 161:15 to 162:4. DENIED. There is no license to use the name "Hancock" alone. "Hancock Homes" is a federally registered trademark. (Declaration of Greg Hancock, ¶ 2, attached as Exhibit "2".) On May 30, 2001, Gregory Hancock entered into a License Agreement with Hancock MTH
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Builders, Inc. and Hancock MTH Communities, Inc. for the use of the "Hancock Communities" name. (License Agreement, Exhibit "4".) Indeed, the License Agreement has been terminated. (Plaintiffs' SOF #24.) Meritage announced the intent of the company to stop using a Hancock Community name. (Declaration of Diane Haas, ¶¶ 1-3, attached as Exhibit "7".) This was announced at a party. (Deposition of Desiree Coats, p. 80, ll. 8-25, attached as Exhibit "33".) There has been an abandonment of the Hancock Community's name. The announcement was made by the Chief Operating Officer of Meritage. Furthermore, Missy Vallirie stated that the name Hancock Communities ceased being used at Meritage. The resurrected use of the name "Hancock series" was concocted after the lawsuit and after Meritage learned from pleadings that Defendant claimed abandonment. (Deposition of Missy Vallirie, p. 101, ll. 15-20, attached as Exhibit "17".) In 2004, Steve Hilton and John Landon agreed that they needed to phase out the name Hancock Properties. This was, in fact, done. (Declaration of Barbara Sorget-Stanton, ¶ 11, attached as Exhibit "21".)

17.

Meritage has extensively advertised and conducted sales of homes operating

under the Hancock Communities mark. See Exhibit 8 at ¶ 7. DENIED. Meritage stopped advertising Hancock Community mark in 2006.

(Deposition of Missy Vallirie, p. 127, ll. 19-25; p. 128, ll.1-4, attached as Exhibit "17".) The memo of John Landon and Steve Hilton shows that Meritage plans were to stop using the Hancock Community name. On September 8, 2003, Steve Hilton and John Landon agreed

that they would take steps to stop using the Hancock name, three months prior to the termination of the License Agreement. (E-mail from Steven Hilton to John Landon dated September 8, 2003, attached as Exhibit "15"). Meritage wanted to have potential customers not associate the Hancock name with their project. They heavily advertised and stated

"Hancock Communities" is now Meritage. During 2004, Meritage ran and continues to run full page ads on a regular basis in the Arizona Republic announcing the name change from the

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Hancock Communities to Meritage. (Declaration of Rick Hancock, ¶ 12, attached as Exhibit "1".)

18.

All of the subdivision-related paperwork for these sales employed the Hancock

Communities name. See id. at ¶ 9. DENIED. Meritage stopped using the Hancock name. See #17 above. Missy Vallirie confirmed Rancho Bella Vista dropped the use of the Hancock Communities name. (Deposition of Missy Vallirie, pp. 127-128, attached as Exhibit "17".)

19.

Meritage had signs for its "Hancock Communities" all around the Sundance

Community and in the near vicinity of the land that defendant Rick Hancock Homes used the "Hancock" mark to sell tens of millions of dollars of similar homes and earn about $4.4 millions in net income profits through July 2006. See Exhibit 7 at 118:10 to 120:13; Exhibit 6 at 54:15 to 55:23. DENIED. Meritage could not use the name Hancock Communities as the license was terminated. Second, Meritage did not use the signs near the vicinity of Rick Hancock Homes. (Deposition of Greg Hancock, p. 176, ll. 1-16, attached as Exhibit "24".) Meritage's homes are south of I-10. Rick Hancock homes are north of I-10. Rick Hancock did not use the "Hancock" mark. He used Rick Hancock Homes with a disclaimer. (Deposition of Rick Hancock, p. 179, ll. 1-14, attached as Exhibit "18".)

20.

During the finalization of the release and severance on January 13, 2004, Rick

Hancock wrote and expressly stated that he knew that the Madrid contract had been cancelled. See January 13, 2004 letter from R. Hancock to S. Hilton, Exhibit 12. Specifically, in that letter, Rick Hancock wrote: "My release dated December 22, 2003 covers my proposed purchase contract on the home in the Madrid project. To be more specific, I agree that the

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contract has been cancelled and my deposit returned, and that neither of us have any further liability to the other in respect of this contract." See id. DENIED. The information to secure the release and severance of the Madrid contract is based on representations that the contract was not accepted. (Deposition of Brenda

Hancock, pp. 74-75, attached as Exhibit "34".) Rick and Brenda Hancock were never told that a written contract for the Madrid property had been accepted. Mr. Landon confirmed that Rick and Brenda Hancock never received the contract. (Deposition of John Landon, p. 108, ll. 4-8, attached as Exhibit "23".) The actual cancellation request was not executed by Rick and Brenda Hancock. It was executed by Roger Zetah who falsely claimed that it was being cancelled at the request of Rick and Brenda Hancock. (Deposition of Brenda Hancock, pp. 74-75, attached as Exhibit "34".) They did not authorize Mr. Zetah to cancel the contract. When Mr. Zetah's request to cancel the contract was made to Ms. Steinmeyer, a Meritage employee, she refused. (Declaration of Shari Mesicko, p. 170, ll. 2-9, attached as Exhibit "31".) So, Mr. Zetah cancelled it himself. (Declaration of Shari Mesicko, p. 171, l. 6, attached as Exhibit "31".)

21.

Meritage's employee handbook did not create contract rights for its employees

and expressly permitted Meritage to change its discounting policy without any notice. See Portions of November 2002 Employee Handbook, Exhibit 13 at 1-2. The employee handbook provided: No existing or past practice or procedure, and no representation, written or oral, express or implied, including, without limitation, those contained in this employee handbook are intended to create a contract between you and Meritage so as to alter the at will character of your employment. The provisions of the handbook have been developed at the discretion of management and except for its policy of employment "at will", may be amended or canceled at any time at Meritage's sole discretion. * * *

The guidelines set forth in this handbook are for informational purposes only. Since our employment policies, procedures, and benefits are subject to change by Meritage Corporation from time to time, with or without notice, due to
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economic or other consideration, they cannot be considered or otherwise relied upon as an employment contract. See id. (emphasis in original). DENIED. The Employee Handbook creates rights for its employees. DeMasse v. ITT Corp., 194 Ariz. 500, 509, 984 P.2d 1138, 1147 (1999), citing Leikvold v. Valley View Cmty. Hosp., 141 Ariz. 544, 548, 688 P.2d 170, 174 (1984); Arizona's Towing Professionals, Inc. v. State, 196 Ariz. 73, 77, 993 P.2d 1037, 1041 (App. 1999). There was a contract. There was an agreement. The contract provides that the contract supersedes all other agreements or understandings. Scott Keeffe, the designated broker for Meritage, accepted the contract and it is the understanding of Mr. Landon that it was an executed contract. John Landon conceded the contract should be honored. John Landon admitted that Scott Keeffe was an authorized officer. That he signed the contract and that it was his understanding that this constituted an acceptance of the contract. (Deposition of John Landon, p. 99, ll. 5-6; p. 108, ll. 4-8, attached as Exhibit "23".)

22.

The Madrid home remained publicly available for sale until March 10, 2004,

which is more than three months after Meritage terminated Rick Hancock's employment. See Declaration of Scott Keeffe in Support of Opposition to Rick Hancock's Motion for Leave to File Counterclaim, Add Claims Against Existing Third Party Defendants, and Add Third Parties, Exhibit 14 at ¶ 7. DENIED. There was an executed contract signed by the Hancocks and Meritage. (Exhibit "35".) The house was sold to Rick and Brenda Hancock. Id. The house was not publicly available for sale. It had been sold. The Hancocks are entitled to the benefit of their bargain. They need not pay a higher price for something which they bought at a lower price.

23.

The Hancocks concede that they took no steps to acquire the Madrid home after

learning that Meritage would not abide by the Madrid contract with the 10% discount. See September 8, 2006 Deposition of Brenda Hancock, Exhibit 15 at 97:8 to 99:15. Brenda and
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Rick Hancock's home in the Grayhawk neighborhood of North Scottsdale that they remained in has appreciated hundreds of thousands of dollars since deciding not to pursue a home in the Madrid subdivision. See id. at 103:1 to 104:9. DENIED. There was an executed contract signed by the Hancocks and Meritage. (See #22 above.) No additional steps needed to be taken. They had purchased the house. The house was not publicly available for sale. It had been sold. The Hancocks are entitled to the benefit of their bargain. They need not pay a higher price for something which they bought at a lower price. The fact that one asset has appreciated does not preclude the Hancocks from getting the appreciation on the second asset. There is no reference by Meritage to a fact that Mr. and Mrs. Hancock were going to sell the Grayhawk house.

24.

On February 13, 2004, Greg Hancock, through his attorney, wrote Meritage's

attorney terminating the License Agreement and instructing Meritage to remove the "Hancock" name from all of Meritage's advertising. See February 13, 2004 Letter from J. Titus to S. Pidgeon, Exhibit 16 at 2. ADMITTED. The License Agreement was terminated. Meritage had no rights to the "Hancock Communities" or "Hancock Homes" name.

25.

In June 2004, defendants opened Rick Hancock Homes and its homebuilding

business right in the same subdivision as Meritage's Hancock Communities, thereby deliberately violating this Court's Order and breaching the promise the Hancocks made to this Court. See Exhibit 7 at 118:10 to 120:13; Order at 3:9-25 (March 10, 2004). DENIED. Rick Hancock Homes does not operate in the same subdivision as Meritage. Meritage is on the south side of I-10. (See # 19 above.) Rick Hancock Communities is on the north side. There is no Meritage Hancock Community. Meritage stopped using the Hancock Community name. (See #17 above.) Furthermore, a tentative settlement agreement had been reached between Meritage and Rick Hancock, then Meritage reneged. This is an attempt to
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smear Rick Hancock. The Court was made aware of the use of the name in 2004. This is old news.

26.

Unlike defendant Rick Hancock's intent in choosing the mark Rick Hancock

Homes, there is no evidence in the record that the third parties intended to confuse and freeride on Meritage's goodwill and in selecting their similar marks. See Exhibit 7 at 49:2 to 50:20, 54:24 to 61:12, 68:4 to 71:20, 76:12 to 82:4, 102:20-24, and 181:1-22. DENIED. Objection. This is an argument not a fact. Rick Hancock testified under oath that he did not intend to confuse. (Deposition of Rick Hancock, p. 99, ll. 4-25, attached as Exhibit "18".) There are disclaimers. The use of one's name is presumed to be in good faith. Anti-Cyber Squatting Consumer Protection Act. 15 U.S.C. § 1125(d)(1)(B)(II).

27.

While acknowledging that work was stressful, Greg Hancock testified under

oath that his then-wife's conduct was so intolerable that it caused him to quit. See September 30, 2003 Deposition of Greg Hancock in Hancock v. Hancock, No. 2002- 001002, Exhibit 17 at 8:22 to 13:24. DENIED. Objection. The use of the divorce deposition in this case is not allowed. It is not admissible evidence. Rick Hancock was not at the divorce deposition. Greg Hancock states in his deposition in this case that he was forced to quit. Meritage took steps to force Greg Hancock to quit. Greg Hancock denied in his deposition in this case that he quit because of his wife. (Deposition of Greg Hancock, pp. 146-147, attached as Exhibit "24".)

28.

Greg Hancock also testified that he quit because Meritage was not paying him

enough. See id. at 30:2-21. DENIED. Objection. The use of the divorce deposition in this case is not allowed. It is not admissible evidence. Greg Hancock testified that he quit because he was forced to quit.

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Meritage made it intolerable for him to work there. (Deposition of Greg Hancock, pp. 146147, attached as Exhibit "24".)

ADDITIONAL STATEMENT OF FACTS

29.

Rick Hancock Homes is the new homebuilding company of which Rick

Hancock and Brenda Hancock are shareholders. (Declaration of Rick Hancock ¶ 1, attached as Exhibit "1".) 30. Rick Hancock has been in the homebuilding business for 20 years. (Declaration

of Rick Hancock, ¶ 2, attached as Exhibit "1".) 31. Rick Hancock's father was a homebuilder. His brother, Gregory Hancock, was

a homebuilder. (Declaration of Rick Hancock, ¶¶ 3 and 4, attached as Exhibit "1".) 32. "Hancock Homes" is a federally registered trademark. (Declaration of Greg

Hancock, dated January 9, 2007, ¶ 2, attached as Exhibit "2".) 33. The name Hancock Homes is registered to Gregory Hancock; not Meritage; not

its subsidiaries, Hancock MTH Builders, Inc. and Hancock MTH Communities, Inc. (Declaration of Greg Hancock, ¶ 3, attached as Exhibit "2".) 34. On or about May 7, 2001, Gregory Hancock sold his companies, HC Builders

and Hancock Communities, LLC to Meritage. (Master Transaction Agreement, attached as Exhibit "3".) 35. On May 30, 2001, Gregory Hancock entered into a License Agreement with

Hancock MTH Builders, Inc. and Hancock MTH Communities, Inc. for the use of the "Hancock Communities" name. (License Agreement, attached as Exhibit "4".) 36. Greg Hancock retained the exclusive right, title and interest to the Hancock

Communities name. (License Agreement, ¶ 3.4, attached as Exhibit "4".)

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37.

Hancock MTH Builders, Inc. and Hancock MTH Communities, Inc., have

limited permissive use of the Hancock Communities name. (License Agreement, ¶ 3.5, attached as Exhibit "4".) 38. Meritage is not and never has been an owner of the Hancock Communities

trademark. (License Agreement, ¶ 3.4, attached as Exhibit "4".) 39. The License Agreement provides that the license is not transferable. (License

Agreement, ¶ 2, attached as Exhibit "4".) 40. The License Agreement by its own terms expires in May, 2007 or upon

termination. (License Agreement, ¶ ¶ 5 and 8.1, attached as Exhibit "4".) 41. The License Agreement allows Greg Hancock, as licensor, to terminate the

License Agreement without notice for a breach of the Agreement. (License Agreement, ¶ 7.3. attached as Exhibit "4".) 42. The License Agreement was terminated on February 13, 2004. (Letter dated

February 13, 2004, attached as Exhibit "5".) 43. After the acquisition of assets of the Hancock Communities on May 10, 2001,

Greg Hancock joined the new company as President of Hancock-MTH Communities, Inc. and Rick Hancock became Vice-President of the Hancock-MTH Communities, Inc. (Declaration of Rick Hancock, ¶ 5, attached as Exhibit "1".) 44. The relationship deteriorated in March 2003. Greg Hancock left Hancock-MTH

Homes as the relationship had deteriorated. (Declaration of Rick Hancock, ¶ 6, attached as Exhibit "1".) 45. Although the License Agreement has been revoked, the licensee still continues

to utilize the Hancock Communities name. (Declaration of Rick Hancock, ¶ 7, attached as Exhibit "1".) 46. In 2003, Rick Hancock continued to work at Meritage. (Declaration of Rick

Hancock, ¶ 10, attached as Exhibit "1".)

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47.

On December 2, 2003, when Rick Hancock and his wife were expecting a child,

he was terminated by Steve Hilton, Co-CEO of the Meritage companies. (Declaration of Rick Hancock, ¶ 11, attached as Exhibit "1".) 48. Meritage implemented, without Greg Hancock's permission, a re-branding

program of the Hancock Communities as Meritage, effective in 2004. (Declaration of Greg Hancock, ¶ 5, attached as Exhibit "2".) 49. MTH Hancock Communities specifically undertook and agreed not to use the

License Marks in any manner whatsoever which, directly or indirectly, would derogate or detract from the Licensed Marks repute, value, marketability, degree of public recognition or popularity. (License Agreement ¶ 4, attached as Exhibit "4".) 50. The purpose of the name change was so that people would recognize that

Meritage Homes are being built by a large national homebuilder. (Deposition of Larry Seay, pp. 83-84, attached as Exhibit "6".) 51. Meritage does not want their potential customers in Buckeye, Arizona, which

coincidentally happens to be the place where Rick Hancock wants to build homes, to know that their homes are being built by a large national company. Meritage sought to confuse customers by changing Sundial Community to Hancock Communities. (Deposition of Missy Vallirie, p. 88, ll. 3-10, attached as Exhibit "17".) 52. During December 2003, at the Meritage Christmas party, Jim Arneson, Chief

Executive Officer of the Hancock Communities, announced to all employees that Meritage planned to abandon the use of the Hancock Communities name. (Declaration of Diane Haas, ¶¶ 1-3, attached as Exhibit "7".) 53. Meritage informed its vendors/trade subcontractors that the "Hancock

Communities" name would be changed to the Meritage brand name. (Declaration of Thomas Wing, ¶¶ 4 and 5, attached as Exhibit "8".)

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54.

During 2004, Meritage ran and continues to run full page ads on a regular basis

in the Arizona Republic announcing the name change from the Hancock Communities to Meritage. (Declaration of Rick Hancock, ¶ 12, attached as Exhibit "1".) 55. On or about June 25, 2004, Meritage informed its customers that they were

changing the name of the Hancock Communities to Meritage. (Letter from Ron French, President, dated June 25, 2004, attached as Exhibit "9".) 56. The disclaimer states: "Not affiliated with `Meritage Homes/Hancock

Communities.'" (Deposition of Larry Seay, pp. 133-134, attached as Exhibit "6".) 57. Meritage acknowledges that Rick Hancock has disclaimers on his billboard.

(Deposition of Larry Seay, pp. 133-134, attached as Exhibit "6".) 58. Meritage acknowledges that Rick Hancock has disclaimers on phone recordings

used to receive customer inquiries from the billboard. (Deposition of Larry Seay, p. 134, attached as Exhibit "6".) 59. According to the U.S. Census Bureau, the name Hancock is the 546th most

common surname in America. (Attached to the Declaration of Ivan K. Mathew as Exhibit "5", attached as Exhibit "10".) 60. The number of companies using the Hancock name in Arizona is numerous.

(List of businesses using "Hancock" in their name maintained by the Arizona Corporation Commission attached to the Declaration of Ivan K. Mathew as Exhibit "4", ¶ 6, attached as Exhibit "10".) 61. Many companies in Arizona use the Hancock name in conjunction with real

estate or development ventures. (List of businesses using "Hancock" in their name maintained by the Arizona Corporation Commission attached to the Declaration of Ivan K. Mathew as Exhibit "4", attached as Exhibit "10".) 62. Meritage has not done anything to enforce the Hancock trademark against Mark

Hancock Development Corporation. (Deposition of Larry Seay, pp.142-143, attached as Exhibit "6".)
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63.

Meritage has not done anything to enforce the Hancock trademark against

Hancock Building Company, Inc. (Deposition of Larry Seay, p.143, attached as Exhibit "6".) 64. Meritage has not done anything to enforce the Hancock trademark against

Trevor Hancock Realty, Inc. (Deposition of Larry Seay, pp.143-144, attached Exhibit "6".) 65. Meritage has not done anything to enforce the Hancock trademark against

Hancock Contracting, Inc. (Deposition of Larry Seay, p.144, attached as Exhibit "6".) 66. Meritage has not done anything to enforce the Hancock trademark against

Hancock Materials, Inc. (Deposition of Larry Seay, p.144, attached as Exhibit "6".) 67. Meritage has not done anything to enforce the Hancock trademark against

Charlie Hancock Building, Inc. (Deposition of Larry Seay, p.144, attached as Exhibit "6".) 68. Meritage has not done anything to enforce the Hancock trademark against John

Hancock Real Estate Finance, Inc. (Deposition of Larry Seay, p.145, attached as Exhibit "6".) 69. Meritage has not done anything to enforce the Hancock trademark against John

Hancock Realty Equities, Inc. (Deposition of Larry Seay, p.145, attached as Exhibit "6".) 70. Meritage has not done anything to enforce the Hancock trademark against John

Hancock Leasing Corporation. (Deposition of Larry Seay, p.145, attached as Exhibit "6".) 71. Meritage has not done anything to enforce the Hancock trademark against R.J.

Hancock Construction, LLC. (Deposition of Larry Seay, p.145, attached as Exhibit "6".) 72. Meritage has not done anything to enforce the Hancock trademark against

Hancock High Country Homes, LLC. (Deposition of Larry Seay, p.145, attached as Exhibit "6".) 73. Meritage has not done anything to enforce the Hancock trademark against

Trevor Hancock Construction. (Deposition of Larry Seay, p.144-145, attached as Exhibit "6".) 74. Hancock Building Associates uses the internet domain name

www.HancockBuilders.com. (Declaration Ivan K. Mathew, ¶ 2, attached as Exhibit "10".)

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75.

Hancock

Homes

of

Utah

uses

the

internet

domain

name

www.HancockHomesInc.com. (Declaration of Ivan K. Mathew, ¶ 3, attached as Exhibit "10".) 76. Hancock Enterprises, LLC uses the internet domain name www.Hancock1.com.

(Declaration Ivan K. Mathew, ¶ 4, attached as Exhibit "10".) 77. The internet domain name Hancock1.com is utilized by an Arizona builder.

(Declaration of Ivan K. Mathew, ¶ 4, attached as Exhibit "10".) 78. Construction work at the Hancock ­ MTH Communities was performed under

Rick Hancock's license as a general contractor. (Declaration of Rick Hancock ¶ 13, attached as Exhibit "1".) 79. Larry Seay, CFO for Meritage, was asked at his deposition what concerns that

Meritage had with Rick Hancock using the Hancock name. (Deposition of Larry Seay, pp. 3536, attached as Exhibit "6".) 80. Meritage put forth concerns that people would buy homes and think they were

getting a Meritage warranty, causing Meritage to have liability for homes built by Rick Hancock Homes, Inc. (Deposition of Larry Seay, pp. 35-36, attached as Exhibit "6".) 81. Meritage conceded they were not really a concern, because Meritage would

never perform warranty work on a home that they did not build. (Deposition of Larry Seay, pp. 35-36, attached as Exhibit "6".) 82. If Meritage were to get a call from a consumer complaining of a home repair

problem, all Meritage need do is say that they did not build the home. (Deposition of Larry Seay, pp. 35-36, attached as Exhibit "6".) 83. New homeowners at Rick Hancock Homes will be given a homeowners packet.

(Declaration of Rick Hancock ¶ 14, attached as Exhibit "1".) 84. Inside that packet, there are detailed instructions on what homeowners must do

to receive the benefits of the warranty, including a phone number that they should call. (Declaration of Rick Hancock ¶ 15, attached as Exhibit "1".)
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85.

Rick Hancock has not, and will not, be giving Meritage's phone number to his

customers. (Declaration of Rick Hancock, ¶ 16, attached as Exhibit "1".) 86. People buy homes based upon location, floor plans, amenities and price.

(Declaration of Kevin O'Donnell, ¶ 6, attached as Exhibit "11".) 87. Meritage admits that no consumers have been confused. (Deposition of Larry

Seay, p.36, attached as Exhibit "6".) 88. Meritage admits that no lenders were confused. (Deposition of Larry Seay,

pp.37, attached as Exhibit "6".) 89. Meritage admits that no subcontractors were confused. (Deposition of Larry

Seay, pp. 36-37, attached as Exhibit "6".) 90. Thomas Wing, a subcontractor, stated that he knows Rick Hancock Homes is

different than Meritage and the Hancock Communities. (Declaration of Thomas Wing, ¶¶ 710, attached as Exhibit "8".) 91. John Ahern, a lender, knows the difference between Meritage/The Hancock

Communities and Rick Hancock Homes. (Declaration of John Ahern, ¶1-4, attached as Exhibit "12".) 92. Kevin O'Donnell, a mortgage lender, knows the difference between the (Declaration of Kevin

Meritage/The Hancock Communities and Rick Hancock Homes. O'Donnell, ¶ 5, attached as Exhibit "11".) 93.

Title companies know the difference between Hancock Communities and Rick

Hancock Homes. (Declaration of Michael D. Frakes, ¶ 7, attached as Exhibit "13".) 94. Meritage informed current customers by a letter that "as part of a company wide

branding program", Hancock Communities will now be known as "Meritage." (Letter from Ron French, President, dated June 25, 2004, attached as Exhibit "9".) 95. On September 8, 2003, Steve Hilton and John Landon agreed that they would

take steps to stop using the Hancock name, three months prior to the termination of the

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License Agreement. (E-mail from Steven Hilton to John Landon dated September 8, 2003, Exhibit "15"). 96. After changing all of the communities from Hancock to Meritage, a decision

was made to change back the Eastern most and Western subdivisions back to Hancock. (Deposition of Missy Vallirie, p. 88, ll. 3-10, attached as Exhibit "17".) 97. This diminished the name recognition. (Declaration of Barbara Sorget-Stanton,

pp. 8 and 11, attached as Exhibit "21".) 98. Michael Frakes testified that he saw the Rick Hancock Homes billboard and

knew there was a disclaimer. (Deposition of Michael Frakes, p. 17, ll. 3-25; p. 18, ll. 1-25; p. 19, ll. 1-25; p. 20, ll. 1-9; p. 22, ll. 2-9; p. 50, ll. 19-25 and p. 51, l. 1, attached as Exhibit "19", Declaration of Michael Frakes, attached as Exhibit "13".) 99. Indeed, it is so effective that Meritage has gone out of its way to hide the

disclaimer so that people who were testifying in this case were not shown the disclaimer. (Deposition of Michael Frakes, p. 56, ll. 2-25, p. 57, ll. 1-23, attached as Exhibit "19".) 100. In 2003 and earlier, the name "Hancock" was previously used in connection with the marketing of the Hancock Communities. regarding name change, attached as Exhibit "16".) 101. On July 1, 2004, "Hancock Communities" changed to Meritage. internal Meritage e-mails regarding name change, attached as Exhibit "16".) 102. Missy Vallirie testified there was no legitimate marketing reason for this and it was merely to preclude the Hancocks from using their name. (Deposition of Missy Vallirie, pp. 91 and 101, attached as Exhibit "17".) 103. The License Agreement provides that the use of the Hancock names shall not be diminished in any capacity. (License Agreement, attached as Exhibit "4".) 104. At the deposition of Steve Hilton, Co-Chief Executive Officer of the Meritage Corporation, Mr. Hilton admitted that Meritage stopped using the Hancock name without the (Various (Various internal Meritage e-mails

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permission of Greg Hancock. (Deposition of Steve Hilton, p. 68, l. 16-25; p. 69, l. 1-4, attached as Exhibit "14".) 105. He also admitted the cessation of the use of the Hancock Communities name resulted in diminution of the public recognition of the name of Hancock Communities. Id. at pg. 70, ll.15-19. (Deposition of Steve Hilton, p. 70, attached as Exhibit "14"). 106. The letter terminating the License Agreement stated, "Further, in view of your client's repeated breaches of the Master Transaction Agreement, pursuant to Section 7.3 of the License Agreement dated May 30, 2001, your client's license to use the "Licensed Marks," "Hancock Homes" and "Hancock Communities" is hereby terminated immediately. Demand is further made, pursuant to Section 8.1 of the License Agreement, that your client transfer and assign to my client any right, title and interest to the Licensed Marks which your client may have acquired as a result of its activities under the License Agreement." 107. Meritage placed numerous full-page newspaper advertisements in the Arizona Republic which announced the re-branding of Hancock communities to Meritage. They did so weekly over many weeks. 108. Not used. 109. Not used. 110. At the deposition of Ronald French, the President of Meritage in Arizona, he admitted that the Hancock Community name had been dropped. 111. Subsequently, after his deposition, after he realized that the name had been abandoned he started to use the name Hancock again. 112. In an attempt to cubbie-hole the name, the Hancock name was used in advertising in the Easternmost subdivision and the Westernmost subdivision. (Deposition of Missy Vallirie, p. 90, Exhibit "17".) 113. Purchasers must sign and acknowledge a disclaimer which states "Buyer hereby acknowledges and understands that Seller, Rick Hancock Homes, is not affiliated with Meritage and/or Hancock Communities."
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114. One would have to be an "idiot" to not know the difference between Rick Hancock Homes and Meritage Homes. (Deposition of Michael Frakes, p. 15, ll. 14-25; p. 16, ll. 1-9; p. 22, ll. 2-9; p. 23, ll. 19-25; p. 24, l. 1; p. 42, ll. 9-14; p. 48, ll. 19-25; p. 49, ll. 1-8; p. 50, ll. 1-25; p. 51, l;. 1, 14-25, attached as Exhibit "19" and Deposition of Kevin O'Donnell, p. 50, ll. 3-25; p. 51, ll. 1-14, attached as Exhibit "20".) 115. On December 8, 2004, Greg Hancock terminated the License Agreement thereby precluding Meritage from using the Hancock Communities name. 116. When asked at her deposition under oath, about the appropriateness of reverting back to Hancock Communities at two subdivisions, Missy Vallirie stated "my personal opinion, no, I didn't think that was the right thing to do." (Deposition of Missy Vallirie, p. 91, attached as Exhibit "17".) 117. Hancock is using a disclaimer in marketing channels and telephone contacts. A home is a high-dollar purchase and the degree of care likely to be exercised by a reasonably prudent consumer is very high. It is not an impulse purchase. Hancock's intent in selecting the mark is that it is his own name and that of his family. (Deposition of Rick Hancock, p. 177, ll. 12-19, attached as Exhibit "18".) 118. Meritage has never used the name Hancock Homes. Hancock, p. 180, ll. 24-25, attached as Exhibit "18".) 119. Eugene Cole stated that Greg Hancock is owed approximately $2.5 million dollars. (Deposition of Eugene Cole, p. 80, l. 728, attached as Exhibit "22".) 120. Meritage was going to phase out the Hancock Communities name in 18 months. (See Exhibit #15.) 121. John Landon admitted that Scott Keeffe was an authorized officer. That he signed the contract and that it was his understanding that this constituted an acceptance of the contract. (Deposition of John Landon, p. 99, ll. 5-6; p. 108, ll. 4-8, attached as Exhibit "23".) 122. Mr. Landon confirmed that Rick and Brenda Hancock never received the contract. (Deposition of John Landon, p. 108, ll. 4-8, attached as Exhibit "23".)
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(Deposition of Rick

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

123. Meritage threatened to sue Greg Hancock. (Deposition of Greg Hancock, p. 145, ll. 7-15, attached as Exhibit "24".) 124. Meritage threatened to fine Greg Hancock. (Deposition of Greg Hancock, pp. 145-146, attached as Exhibit "24".) 125. Meritage made personnel changes of Greg Hancock's subordinate without telling him. (Deposition of Greg Hancock, pp. 147-148; p. 149, ll. 12-25, attached as Exhibit "24".) 126. Meritage's Co-CEO's would have meetings with Greg Hancock's subordinate without telling him in discussions on what was going on. (Deposition of Tamara MacDonald, p. 78, ll. 4-18, attached as Exhibit "25".) 127. The signs cannot be read from the highway. (Deposition of Greg Hancock, p. 176, ll. 1-4, attached as Exhibit "24".) 128. Meritage has three billboards including one where it advertises with three other builders. (Deposition of Greg Hancock, p. 176, ll. 10-16, attached as Exhibit "24".) 129. Meritage failed to disclose the executed contract. (Deposition of John Landon, p. 108, ll. 4-8, attached as Exhibit "23".) 130. The former controller of Meritage testified that the only way the purchase contract can be cancelled is if Meritage first sends the request for cancellation to the buyer and the buyer cancels with his or her signature. (Deposition of Shari Mesicko, p. 169, ll. 8-14, Exhibit "26".) 131. Meritage knew where to locate Rick and Brenda Hancock as he was a former employee. They did not. (Deposition of Roger Zetah, p.166, ll. 2-14, attached as Exhibit "27".) 132. The earnest money of Rick and Brenda Hancock was accepted on November 21, 2003 and deposited five days later on November 25, 2003. (See Exhibit #5 to Deposition of Steve Hilton's second deposition, attached as Exhibit "28".)

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133. Ron French and Jerry Lilly both reviewed the contract and noted that Scott Keeffe was the one authorized to accept the contract and he was the designated agent to accept the contract. (Deposition of Jerry Lilly, p. 83, l. 14 to p. 84, l. 7, attached as Exhibit "29".) (Deposition of Ron French, p. 134, l. 19 through p. 135, l. 4, attached as Exhibit "30".) 134. The signature of Scott Keeffe signified that the contract was accepted. (Deposition of Ronald French, p. 146, ll. 8-11, attached as Exhibit "30".) 135. Jerry Lilly, the real estate agent employed by Meritage, stated that the contract was signed and it was his understanding that Rick Hancock should have been sold the house. (Deposition of Jerry Lilly, p. 83, l. 16 through p. 84, l. 7; p. 85, l. 23 through p 86, l. 4, attached as Exhibit "29".) 136. Roger Zetah requested Scott Keeffe's office to cancel the contract. Mr. Keeffe's office refused to do so. (Deposition of Shari Mesicko, p. 170, ll. 2-9, attached as Exhibit "26".) 137. Indeed, Scott Keeffe never canceled the contract. 138. Roger Zetah admitted that Meritage attempted to cancel the contract but without Rick and Brenda Hancock's knowledge. (Deposition of Roger Zetah, p. 162, ll. 15-20, attached as Exhibit "27".) 139. The notice of cancellation was back dated. The notice of cancellation states it was cancelled on December 8. This is false. Roger Zetah signed the cancellation notice on December 9 or later as Shari Mesicko retrieved it on December 9 or later. (Declaration of Shari Mesicko, ¶ 3, attached as Exhibit "31".) 140. The area above Roger Zetah's name contains the designation "Signed this ___ day of ____." This was left blank by Mr. Zetah. A jury could find that the document was not signed on December 8. (See Exhibit #11 to Deposition of Steve Hilton's second deposition, attached as Exhibit "28".) 141. The execution of the contract was not inadvertent. (Declaration of Greg Hancock, dated February 8, 2007, attached as Exhibit "36").
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RESPECTFULLY SUBMITTED this 15th day of February, 2007.

MATHEW & MATHEW, P.C

By: /s/Ivan K. Mathew Ivan K. Mathew, Attorneys for Ricky Lee Hancock, Brenda Hancock, Rick Hancock Homes, L.L.C. and RLH Development, L.L.C. CERTIFICATE OF SERVICE Meritage v. Hancock, et al. Case No. CV 04 00384 ROS

I hereby certify that on February 15, 2007, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Dan W. Goldfine Richard G. Erickson Adam Lang Snell & Wilmer, LLP One Arizona Center 400 E. Van Buren Phoenix, AZ 85004-2202 e-mail: [email protected] Attorneys for Plaintiffs and Counterdefendants and Third Party Defendants Steve Hilton and John Landon Timothy J. Burke Fennemore & Craig, P.C. 3003 N. Central Avenue, Suite 2600 Phoenix, AZ 85012 e-mail: [email protected] Attorneys for Third Party Defendant, Snell & Wilmer, LLP Robert M. Frisbee Frisbee & Bostock 1747 E. Morten Avenue, Suite 108 Phoenix, AZ 85020 e-mail: [email protected] Attorneys for Defendant Gregory Hancock

Grant Woods Grant Woods, P.C. 1726 N. Seventh Street Phoenix, AZ 85006 e-mail: [email protected] Attorneys for Plaintiffs and Counterdefendants and Third Party Defendants Steve Hilton and John Landon

s/Karen Gawel
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