Free Motion for Summary Judgment - District Court of Arizona - Arizona

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

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, Counter-Claimants, and Third Party Plaintiffs, v. 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, 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 Case No. CV-04-0384-PHX-ROS (PROPOSED ORDER)

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(Assigned to the Honorable Roslyn O. Silver)

Snell & Wilmer L.L.P.

Case 2:04-cv-00384-ROS

Document 411-2

Filed 12/15/2006

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

wife; Roger Zetah and Jane Doe Zetah, husband and wife; and James Arneson and Zane Arneson, husband and wife, Third Party Defendants. Pursuant to Rule 56, Federal Rules of Civil Procedure, IT IS ORDERED:, 1. The doctrine of collateral estoppel bars all of the defendants' affirmative defenses related to breaches of the License Agreement, Greg Hancock's Employment Agreement, and the Master Transaction Agreement. 2. The terms "derogate" and "detract" in the License Agreement did not require Meritage to use the names "Hancock Communities" or "Hancock Homes," including any derivative thereof, during the term of the License Agreement. To the extent that any quantum of use requirement exists, Meritage exceeded that as a matter of law. 3. Greg Hancock's February 13, 2004 termination letter relieved Meritage of any future duties under the License Agreement. 4. Defendants' use of "Rick Hancock Homes" starting in June 2004, relieved Meritage of any future duties under the License Agreement. 5. Meritage fully paid all earn-outs owed to Greg Hancock under the Master Transaction Agreement and related agreements as a matter of law. 6. Greg Hancock's affirmative defense of constructive discharge fails as a matter of law because Greg Hancock testified under oath that his then-wife's conduct caused him to quit his job at Meritage. 7. There is no requirement in the License Agreement that Meritage obtain Greg Hancock's permission before changing how Meritage used the names "Hancock Communities" or "Hancock Homes," including any derivative thereof. 8. The use of the Hancock surname is not immune from liability. 9. The use of disclaimers is not a defense to a Lanham Act violation.

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Snell & Wilmer L.L.P.

Case 2:04-cv-00384-ROS

Document 411-22 - Filed 12/15/2006

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

10. Meritage did not abandon the names "Hancock Communities" or "Hancock Homes," including any derivative thereof, as a matter of law. 11. Rick and Brenda Hancock's counterclaims and third-party claims fail as a matter of law. 12. Rick Hancock believed that the Madrid contract had been executed and cancelled, and Rick and Brenda Hancock's fraudulent inducement and fraud claims fail as a matter of law. 13. Meritage's employee handbook did not grant Rick and Brenda Hancock contract rights and could be modified at will as a matter of law, and all of their breach of contract claims derived from it fail as a matter of law. 14. Rick and Brenda Hancock's damages for each of their claims are subject to the limitations provision of the Madrid contract and do not include any appreciation in the value of the Madrid home.

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1929428.1

Snell & Wilmer L.L.P.

Hon. Roslyn O. Silver United States District Judge

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Case 2:04-cv-00384-ROS Document 411-23 - Filed 12/15/2006 Page 3 of 3