Free Response in Opposition to Motion - District Court of Arizona - Arizona

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Michael S. Rubin (#005131) David Bray (#014346) MARISCAL WEEKS MCINTYRE & FRIEDLANDER, PA 2901 North Central Avenue, Suite 200 Phoenix, Arizona 85012-2705 Robert R. Brunelli (#20070) Benjamin B. Lieb (#28724) SHERIDAN ROSS P.C. 1560 Broadway, Suite 1200 Denver, Colorado 80202-5141 Attorneys for Robert E. Moroney, LLC, Robert Moroney, and A Major Difference, Inc. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Erchonia Medical, Inc., et al. Plaintiffs, v. Miki Smith, et al. Defendants. Erchonia Medical, Inc. et al. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

No. CIV 02-2036-PHX-MHM ROBERT E. MORONEY, LLC'S CONSOLIDATED RESPONSE IN OPPOSITION TO ERCHONIA MEDICAL, INC.'S MOTION FOR SUMMARY JUDGMENT CONCERNING REM'S CLAIMS FOR CONVERSION AND VIOLATION OF ARIZONA CONSUMER FRAUD ACT, AND BRIMHALLS' MOTION FOR PARTIAL SUMMARY JUDGMENT

17 Plaintiffs, 18 v. 19 Miki Smith, et al. 20 Defendants. 21 22 23 24 25 26 27 v. Erchonia Medical, Inc., et al. Defendants. Robert E. Moroney, LLC, et al. Plaintiffs,

Robert E. Moroney, LLC ("REM") hereby responds to Erchonia Medical, Inc.'s 28 ("Erchonia") Motion for Summary Judgment Concerning REM's Claims for Conversion and Violation of the Arizona Consumer Fraud Act ("ACFA") ("Erchonia S.J. Motion"), Case 2:02-cv-02036-MHM Document 284 Filed 08/22/2005 Page 1 of 13

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and to John and Claudette Brimhall's ("Brimhall") Motion for Partial Summary Judgment concerning REM's ACFA and intentional interference with economic advantage claims ("Brimhall S.J. Motion"). For at least the following reasons, REM respectfully requests that the Court deny both Motions. I. INTRODUCTION In their Motions, Erchonia and Brimhall resort to select facts to support their claim for entitlement of summary judgment. When the complete record is examined, it is apparent that neither Erchonia or Brimhall are entitled to summary judgment. A. Erchonia And Brimhall Unlawful Actions To Convert REM's Quantum IV Laser

In approximately July 2002, Jeanne Winner contacted REM seeking to purchase 11 a new therapeutic laser product. (Erchonia's Comprehensive Separate Statement of Facts 12 in Support of Erchonia Medical, Inc.'s Motion for Summary Judgment Concerning REM's 13 Claims for Violation of Arizona Consumer Fraud Act and Conversion ("Erchonia 14 S.O.F."), ¶¶ 19 ­ 28.) At that time, REM's Quantum IV Laser product was not yet 15 available. (Id., ¶ 27.) Because Ms. Winner could not wait to get a new laser, she was 16 provided a loaner laser that belonged to Miki Smith. (Id., ¶¶ 29 ­ 32.) However, when 17 Ms. Winner received the loaner laser, it would not function. (Robert E. Moroney, LLC's 18 Response to Erchonia's Comprehensive Separate Statement of Facts and Support of 19 Erchonia Medical, Inc.'s Motion for Summary Judgment Concerning REM's Claims for 20 Conversion in Violation of Arizona Consumer Fraud Act ("REM Response to Erchonia 21 S.O.F."), ¶ 37(a).) Winner then attempted to contact Miki Smith by telephone, but reached 22 Steve Shanks because Shanks had taken Miki Smith's cell phone. (Id.) At that time, 23 Shanks told Winner that the loaner laser had been stolen from Erchonia. (Id.) In fact, the 24 laser was not stolen and belonged to Miki Smith. (Id.) Shanks also told Winner that, in 25 dealing with REM, she was dealing with dishonest people. (Id.) Shanks then convinced 26 Winner to provide the loaner laser to him, in exchange for another Erchonia laser product. 27 (Id.) 28

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During the telephone conversation between Ms. Winner and Shanks, Shanks discovered that Winner had ordered a Quantum IV Laser from REM. (Id., ¶ 37(b).) Shanks then told Winner that REM's Quantum IV Laser was not "FDA approved," that if Winner purchased the laser she and her husband, Dr. Winner, would get in trouble with the FDA and lose their investment in the laser. (Id.) Shanks represented to Winner that he had the authority to confiscate REM's Quantum IV Laser, and that he would turn it over to the FDA on her behalf. (Id.) Shanks later contacted Winner on several occasions to find out if Winner had yet received the Quantum IV Laser from REM. (Id. at ¶ 37(c).) During these conversations, Shanks reiterated his allegations that REM's Quantum IV Laser did not have "FDA approval," and that the Winner's would get in trouble with the FDA and lose their investment in the laser. (Id.) Shanks further represented to Winner that she did not have to pay REM for the Quantum IV Laser because it was not "FDA-approved." (Id. at ¶ 37(d).) Next, Winner attended a Brimhall certification seminar in Mesa, Arizona in August of 2002. While there, Winner was approached by Shanks who asked to speak with Winner in private. (Id.) Later Shanks met with Winner and showed to her various documents that he claimed to prove that Miki Smith had stolen money, laser products and a customer list from Erchonia, asserting that Smith was now using that stolen property and information with REM. (Id.) Based upon these misrepresentations, Shanks convinced Winner to help him obtain REM's Quantum IV Laser. (Id.) In other words, Shanks duped Winner to funnel the Quantum IV Laser from REM directly to Erchonia. Winner also met privately with Dr. John Brimhall at the Arizona certification seminar. (Id. at ¶ 37(e); Robert E. Moroney, LLC's Response to Statement of Facts in Support of Brimhall's Motion for Summary Judgment ("REM Response to Brimhall S.O.F.", ¶ 23.) At that time, Brimhall told winner that Moroney and Smith were thieves. (REM Response to Brimhall S.O.F., ¶ 23.) Brimhall also represented to Winner that he was working together with Shanks to obtain the Quantum IV Laser from REM, confirming

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to Winner that whatever Steve Shanks said was true. (Id.) Winner trusted Brimhall based on his notoriety. (Id.) Several weeks after the Arizona certification seminar, Winner received REM's Quantum IV Laser and immediately sent it to Shanks to turn over to the FDA. (REM Response to Erchonia S.O.F., ¶ 37(f); REM Response to Brimhall S.O.F., ¶ 19.) Winner never told REM that she intended to turn the Quantum IV Laser over to Erchonia or the FDA. (REM Response to Erchonia S.O.F., ¶ 37(f).) Shanks never turned the Quantum IV Laser over to the FDA. (Id., ¶ 45.) Instead, it was taken apart by Erchonia, rendering it useless. (Id.) B. Erchonia's Broad Distribution Of The Shock Hazard Memo

Erchonia next claims that Dr. Karen Kelly ("Kelly") was the only person outside 12 Erchonia to receive the October 11, 2002 memo drafted by George Leger that falsely states 13 that REM's IonCleanse product poses a shock hazard (the "Shock Hazard Memo"). 14 (Erchonia S.J. Motion, p. 7.) This assertion is categorically false. In fact, the evidence 15 shows that the Shock Hazard Memo, or its contents, were distributed to numerous 16 individuals outside of Erchonia, including to numerous Erchonia customers. 17 · 18 Shock Hazard Memo had been distributed to "less than three" customers. (REM 19 Response to Erchonia S.O.F., ¶ 64(a).) 20 · 21 of how Erchonia had distributed the Shock Hazard Memo, Erchonia admitted that 22 the Shock Hazard Memo had been distributed to Brimhall and Dr. Richard Amy 23 ("Amy"), as well as Kelly. (Id., ¶ 64(b).) Amy has admitted seeing the Shock 24 Hazard Memo. (Id.) In turn, Amy has admitted that the Shock Hazard Memo or 25 its contents, were provided to Don Rein ("Rein") and Jon Foster ("Foster"), 26 individuals involved in selling Erchonia's EB-305 Ionization footbath product. 27 (Id.) Amy concedes that Rein and Foster had access to the Shock Hazard Memo. 28 In response to REM's Interrogatory No. 1, which seeks a detailed description In a letter dated February 21, 2003, Erchonia's counsel represented that the

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·

Rein and Foster subsequently distributed the Shock Hazard Memo, or its

contents, to actual or potential REM customers. Kelly was told that the IonCleanse posed a shock hazard by Rein. (Id., ¶ 64(c).) Similarly, Dr. Ronald Stellmacher has testified by declaration and deposition that Rein told him that the IonCleanse product posed a shock hazard during an Erchonia-sponsored seminar at which the EB-305 product was being offered for sale. (Id.) Douglas Baldwin has testified that Foster told him that the IonCleanse product posed a shock hazard, in the course of demonstrating the EB-305 product for sale. (Id.) · George Leger has testified that he filled out an FDA report form at the

request of Shanks or Debra Engolia, Shank's assistant, and ultimately gave it to Engolia. (Id., ¶ 64(d).) The report was subsequently sent by Erchonia to the FDA and was forwarded to REM by the FDA on or about October 25, 2002. (Id.) · On October 30, 2002, Shanks prepared a "Dear Erchonia Laser Owner"

letter. (Id., ¶ 64(e).) In that letter, Shanks asserts that REM's IonCleanse product is dangerous, attaching a copy of the Shock Hazard Memo. (Id.) The metadata for this letter indicates that Shanks completed drafting the letter on October 30, 2002 at 10:49 a.m., and that it was forwarded to Engolia at 11:50 a.m. Kelly's testimony is that she, or at least one of her customers, subsequently received this letter, indicating that the letter was actually distributed by Erchonia. (Id.) · Finally, REM has received numerous inquiries from customers concerning

a potential shock hazard for its IonCleanse product, inquiries apparently generated as a result of Erchonia's dissemination of the Shock Hazard Memo. (Id., ¶ 64(f).) There is no disputing that Erchonia has broadly distributed the Shock Hazard Memo. C. REM's Discovery Of Erchonia's Deceptive Statements Concerning The BioCleanse Product

Contrary to Erchonia's assertion, it was not until November 23, 2004, that REM 26 learned of facts sufficient to realize the basis for its claim for violation of the ACFA, 27 based upon statements or representations made by Erchonia relating to REM's purchase 28 of the BioCleanse product. At that time, REM obtained copies of memoranda authored -5Document 284 Filed 08/22/2005

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by George Leger. (REM's Response to Erchonia S.O.F, ¶ 71.) Through these memoranda, REM was able to ascertain that Leger, Erchonia's electrical design engineer, was not involved in designing the BioCleanse product. (Id.) This suspicion was later confirmed in discovery when Leger testified that he was not involved with the BioCleanse product until several months before it was discontinued. (Id.) This fact contradicted Erchonia's earlier representations that the BioCleanse product would be designed to Erchonia's high-quality standards. (Id.) Moreover, these memoranda revealed that the problems with the BioCleanse product design and construction were inherent in the design itself and uncurable. That is, contrary to Erchonia's ongoing representations, the problems with the BioCleanse product could not be solved. Based upon this new information, REM

promptly moved to amend its complaint to include its new claim under the ACFA. II. ARGUMENT Summary judgment is only appropriate if there are no genuine issues of material fact for trial and Erchonia and/or Brimhall are entitled to judgment as a matter of law. Block v. City of Los Angeles, 253 F.3d 410, 416 (9th Cir. 2001). The evidence, however, must be viewed in the light most favorable to REM. Id. Under this standard, the Court must deny both Erchonia's and Brimhall's Motions for Summary Judgment. A. REM Had An Immediate Right To Possession Of The Quantum IV Laser It Sold To Jeanne Winner

In its Summary Judgment Motion, Erchonia does not dispute that it has exercised 20 dominion and control over an REM Quantum IV Laser. Rather, Erchonia maintains that, 21 at the time that it took the laser from Jeanne Winner, REM did not have the right to 22 possession of that laser. (Erchonia S.J. Motion, p. 10). Erchonia's assertion is fallacious 23 for at least two reasons. First, as noted above, Shanks duped Winner into funneling the 24 Quantum IV Laser to Erchonia, effectively taking the Quantum IV Laser directly from 25 REM. Second, because Winner had not yet paid REM for the Quantum IV Laser, the title 26 thereto remained with REM. Douglas Motor Sales, Inc. v. Cy Owens, Inc., 109 S.E.2d 27 874, 891 (Ga. Ct. App. 1959). Further, under Georgia's Commercial Code, REM could 28

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have, at any time, had the laser returned for resale.1 Ga. Code Ann. § 11-2-710 (2004). As a matter of law, REM had a right of possession of the Quantum IV Laser product and Erchonia has interfered with that right. B. REM Has Standing, As A Competitor, To Bring A Claim Under the ACFA

In support of their respective motions for summary judgment, Erchonia and 6 Brimhall each argue that REM lacks standing to bring its claim for violation of the ACFA, 7 based upon Erchonia's dissemination of the Shock Hazard Memo and Brimhall's unlawful 8 actions to assist Erchonia in converting REM's Quantum IV Laser from Winner. 9 (Erchonia S.J. Motion, p. 12; Brimhall S.J. Motion, pp. 5 ­ 6.) This argument, however, 10 ignores the clear language of the ACFA, as well as prevailing public policy considerations 11 and, instead, relies on the absence of case law to support its position. Indeed, Erchonia 12 and Brimhall have failed to cite a single case, any section of the ACFA, or any legislative 13 history that expressly prohibits a competitor from bringing an action under the ACFA. 14 Erchonia and Brimhall also ignore the express language of the ACFA, which states 15 that "the provisions of this article shall not bar any claim against any person who has 16 acquired any monies or property, real or personal, by means of any practice declared to be 17 unlawful by this article." A.R.S. § 44-1533 (2004) (emphasis added). 18 competitor to bring such a claim comports with the trend in Arizona away from the 19 20 Mobile Home Sales, Inc., 521 P.2d 1119, 1121-22 (Ariz. 1974). Erchonia and Brimhall 21 22 23 24 25 26 27 28 In the case of a dispute involving right to possession of the Quantum IV Laser between REM and Jeanne Winner, under Georgia's conflict of law rules, Georgia law would apply. See e.g., Merrill Lynch, Pierce, Fenner & Smith v. Stidham, 506 F. Supp. 1182, 1185-86 (M.D. Ga. 1981) It also appears that REM had a claim against Jeanne Winner for depravation of possession of personalty, pursuant to O.C.G.A. § 51-10-1 (2004), among other claims. Other states with deceptive trade practice/consumer protection-related statutes have been interpreted to provide a competitor with standing to bring a claim. See, e.g., Hall v. Walter, 969 P.2d 224, 231 (Colo. 1998); Page & Wirtz Constr. Co. v. Solomon, 794 P.2d 349, 354 (N.M. 1990). -7Document 284 Filed 08/22/2005
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Allowing a

doctrine of caveat emptor toward caveat venditor.2 See generally, Sellinger v. Freeway

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have done nothing more than point to inapposite consumer-related cases. As such, their respective Motions must fail on the lack of standing issue. C. Evidence Supports All Of The Elements Of REM's ACFA Claim Against Erchonia Based Upon The Shock Hazard Memo

Erchonia also argues that it should be entitled to summary judgment on REM's ACFA claim based upon the Shock Hazard Memo because there is allegedly no evidence supporting one or more elements of the claim. (Erchonia S.J. Motion, pp. 12 - 13.) This argument is based upon Erchonia's misapplication of the appropriate standard for proving this claim. At the outset, it is important to recognize that the standard that Erchonia cites does not come directly from the ACFA. Rather, it is a creature of case law and, as such, is naturally intertwined with the underlying facts of those cases. Even so, Erchonia has taken substantial liberty with regard to its interpretation of this standard. The actual elements of a claim under Section 14-1522 of the ACFA are "a false promise or misrepresentation made in connection with the sale or advertisement of merchandise and the hearer's consequent and proximate injury." Parks v. Macro-Dynamics, Inc., 591 P.2d 1005, 1008 (Ariz. 1979) (emphasis added). Further, the hearer must actually rely on the promise or misrepresentation, but such reliance need not be reasonable. Id. Using sleight of hand, Erchonia has conveniently inserted the term "Plaintiff" in place of "hearer" with regard to the above-referenced elements without providing any legal basis therefor. Based upon this modification of the claim, Erchonia then argues that REM has no evidence to support this claim as though REM must be the hearer. (See Erchonia S.J. Motion, p. 13.) In fact, REM does have evidence that at least one hearer, Dr. Ronald Stellmacher, was told of a shock hazard with REM's IonCleanse product, resulting in Dr. Stellmacher's purchase of Erchonia's EB-305 product over the IonCleanse. (REM's Response to Erchonia S.O.F., ¶ 64(c).) 3 Should Erchonia dispute whether there is evidence that others have, in fact, been provided with the Shock Hazard Memo, or its contents, then a question of material fact exists, thereby depriving Erchonia of the right to summary judgment. Block, 253 F.3d at -8Document 284 Filed 08/22/2005
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As broadly stated, the elements of an ACFA claim allow for a competitor to seek relief thereunder, and REM has presented evidence supporting such a claim. As such, Erchonia's and Brimhall's Motions for Summary Judgment on this issue must be denied.4 D. REM's ACFA Claim Relating To Its Purchase Of BioCleanse Products From Erchonia Is Not Barred By Statute Of Limitation

Erchonia next asserts that REM's other ACFA claim, relating to the purchase of 6 7 S.J. Motion, p. 14.) In support of this assertion, Erchonia implies that, based upon 8 problems with the BioCleanse product, Moroney should have brought this claim earlier 9 than March 7, 2005, when REM's Second Amended Complaint was filed. (Id.) However, 10 Erchonia does not assert exactly when this claim allegedly accrued. For this reason alone, 11 this portion of Erchonia's Summary Judgment Motion must fail because Erchonia has 12 failed to meet its burden of proof. Block, 253 F.3d at 416. 13 Under Arizona law, a defense based upon statue of limitation is generally 14 disfavored. Premium Cigars Int'l Ltd. v. Farmer-Butler-Leavitt Ins. Agency, 96 P.3d 555, 15 568 (Ariz. App. 2004), citing, Montano v. Browning, 48 P.3d 494, 496 (Ariz. App. 2002). 16 The determination of the date on which a claim accrues is a question of fact, centering on 17 the plaintiff's knowledge of the subject event and resultant knowledge of the subject event 18 and resultant injuries, whom the plaintiff believed was responsible, and plaintiff's 19 20 21 22 23 24 25 26 27 28 416. Erchonia also asserts that punitive damages are not warranted as a matter of law for REM's ACFA claim concerning Erchonia's distribution of the Shock Hazard Memo. Erchonia's argument is based upon the alleged "single act of delivering a copy of the memo at Dr. Kelly's request. . . ." (Erchonia S.J. Motion, p. 13.) REM's claim for punitive damages however, is not based upon this single event, but rather upon the totality of circumstances surrounding the distribution of the Shock Hazard Memo, as well as other unlawful actions. (See infra, pp. 2 ­ 5.) The totality of evidence shows that Shanks, the president of Erchonia, as well as others, clearly had an intent to do harm to REM and its business, warranting punitive damages. At a minimum, there is a genuine issue of material fact as to whether Erchonia had an evil mind, precluding Erchonia's request for summary judgment as a matter of law that punitive damages are not warranted in this action. Erchonia apparently does not dispute that REM has standing under the ACFA as it relates to the purchase of the BioCleanse products. -9Document 284 Filed 08/22/2005
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BioCleanse footbath products from Erchonia, is barred by statute of limitation.5 (Erchonia

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diligence in pursuing the claim. Premium Cigars, 96 P.3d at 568. A genuine issue of material fact as to when a claim accrued precludes summary judgment based upon a statute of limitation. Ness v. Western Sec. Life Ins. Co., 174 Ariz. 497, 500 (Ariz. App. 1992). REM could not appreciate the basis for its ACFA claim based upon the purchase of BioCleanse units until approximately four months prior to filing of REM's Second Amended Complaint. As set forth above, on November 23, 2004, REM first obtained copies of Leger's memoranda. These memoranda shed an unvarnished and insider perspective on the inherent problems with the BioCleanse product design that was previously unavailable to REM. Upon reviewing these memoranda, it became apparent that Erchonia had not utilized Leger, Erchonia's electrical engineer, to design the BioCleanse product6 and that, contrary to Erchonia's representations, the problems with the BioCleanse product design and construction were inherent in the design itself and not curable. (REM Response to Erchonia S.O.F., ¶ 71.) Based on this knowledge, REM realized that Erchonia's previous statements to REM concerning the BioCleanse product were, in fact, false and/or misleading. (Id.) REM then promptly moved to amend its Complaint to include this new claim. (Id.) Erchonia will, undoubtably, argue that REM should have known that Erchonia's statements concerning the BioCleanse were false and/or misleading at the time that REM initially experienced the problems with individual BioCleanse units. However, simply because there were problems with the units does not render Erchonia's statements false and/or misleading. For example, Erchonia's representation to REM that the BioCleanse would be designed to Erchonia's high-quality standards is not necessarily misleading or false had Erchonia utilized the expertise of its electrical engineer, Mr. Leger, to design the product. REM had no way to know that Leger was not involved in that design process until it received the Leger memos. Similarly, although REM had the BioCleanse product evaluated by Hans Becker and Paul DeAngelis, these evaluations were not made in the REM's suspicions were later confirmed by Leger's testimony that he was not involved with the BioCleanse product until shortly before the product was discontinued by Erchonia. (REM Response to Erchonia S.O.F., ¶ 71.) -10Document 284 Filed 08/22/2005
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context of Erchonia's representations to REM. (Id.) Therefore, Becker and DeAngelis did not opine as to the veracity of Erchonia's statements. (Id.) REM itself had no expertise to make such a determination. (Id.) Finally, Erchonia's continuing misrepresentations that it would resolve the problems with the BioCleanse product prevented REM from realizing that it was being misled. (Id.) It would be inequitable to allow Erchonia to avoid the consequences of its own fraud under these circumstances. At a minimum, a genuine issue of material fact exists as to when REM's ACFA claim relating to the purchase of BioCleanse units accrued, precluding summary judgment for Erchonia on this issue. E. REM Suffered Damage As A Result Of Brimhall's Actions To Convert REM 's Quantum IV Laser

Brimhall next asserts that REM suffered no damages as a result of his assistance 11 12 is based upon the allegation that REM refused to accept tendered payment from Winner 13 for the Quantum IV Laser. (Id.) Actually, Winner's offer to pay REM for the Quantum IV 14 Laser was meant as an accord and satisfaction of the entire dispute between REM and 15 Winner concerning the Quantum IV Laser and the second loaner laser provided to Winner 16 by REM, a forbearance REM could not accept. (REM Response to Brimhall S.O.F., ¶ 30.) 17 Had REM accepted this offer, REM would have been precluded from recovering from 18 Winner for the second loaner laser. See e.g., Neal H. Howard & Assoc., P.C., v. Carey 19 & Danis, LLC, 244 F. Supp.2d 1344, 1347 (M.D. Ga. 2003) (reciting Georgia law 20 concerning doctrine of accord and satisfaction). 21 Brimhall's assertion that REM "refused to accept tendered payment from 22 Jeanne Winner for the laser . . ." is an inaccurate oversimplification. In fact, Winner has 23 24 25 26 27 28 Brimhall correctly surmises that REM's claim entitled "Intentional Interference with Prospective Economic Advantage" is directed to a species of the broader tort for interference with contract. (Brimhall S.J. Motion, p. 7; "The elements of [an interference with contract claim] are strikingly similar to the claim made by REM in the present action.") As such, Brimhall's argument that there is no evidence showing Brimhall interfered with any "prospective" economic advantage is moot. As set forth in its Complaint, REM's claim for relief is based upon Brimhall's intentional interference with the contractual relationship or business expectancy between REM and Jeanne Winner, causing Winner to breach her agreement with REM to pay for the Quantum IV Laser converted by Erchonia. -11Document 284 Filed 08/22/2005
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to convert REM's Quantum IV Laser.7 (Brimhall S.J. Motion, pp. 6 and 8.) This assertion

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never offered to simply pay REM for the Quantum IV Laser without condition. (REM Response to Brimhall S.O.F., ¶ 30.) Therefore, REM has suffered damages of at least $10,030.00, the value of the Quantum IV Laser. (Id.) At a minimum, there is a genuine issue of material fact as to whether REM has suffered damages as a result of Brimhall's unlawful conduct, precluding summary judgment for Brimhall as to REM's claims for interference with contract and violation of the ACFA. III. CONCLUSION For the foregoing reasons, REM respectfully requests that the Court deny Erchonia Medical Inc.'s Motion for Summary Judgment Concerning REM's Claims for Conversion and Violation of the Arizona Consumer Fraud Act and John and Claudette Brimhall's Motion for Partial Summary Judgment concerning REM's ACFA and intentional interference with economic advantage claims. Erchonia and Brimhall have failed their burden to show that they are entitled to summary judgment on any of these claims.

Dated: August 22, 2005

Respectfully submitted,

By:

s/ David Bray Michael S. Rubin David Bray MARISCAL WEEKS MCINTYRE & FRIEDLANDER, PA Robert R. Brunelli Benjamin B. Lieb SHERIDAN ROSS P.C. Attorneys for Robert E. Moroney, LLC, Robert Moroney, and A Major Difference, Inc.

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CERTIFICATE OF SERVICE I hereby certify that on August 22, 2005, 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 those attorneys registered with CM/ECF: Gregory L. Miles Lori A. Curtis DAVIS MILES, PLLC P.O. Box 15070 Mesa, Arizona 85211-3070 Steven Plitt Timothy R. Hyland Dominic L. Verstegen KUNZ, PLITT HYLAND DEMLONG & KLEIFIELD A Professional Corporation 3838 North Central Avenue, Suite 1500 Phoenix, Arizona 85012 Attorneys for John W. Brimhall and Claudette Brimhall Ira M. Schwartz Michael A. Cordier DECONCINI MCDONALD YETWIN & LACY, P.C. 7310 N. 16 th Street, Suite 330 Phoenix, Arizona 85020 Attorneys for Erchonia Medical, Inc., George Leger and Gina Leger, Steven Shanks and Debbie Sue Shanks, Kevin Tucek and Carolyn Tucek Ray K. Harris FENNEMORE CRAIG, P.C. 3003 North Central Avenue, Suite 2600 Phoenix, Arizona 85012-2913 Attorney for Richard Amy and Deborah Amy Bradley R. Jardine, Esq. Michael Warzynski, Esq. JARDINE, BAKER, HICKMAN & HOUSTON, P.L.L.C. 3300 North Central Avenue, Suite 2600 Phoenix, Arizona 85012 Attorneys for Erchonia Medical, Inc. Scott A. Salmon, Esq. THE CAVANAGH LAW FIRM 1850 North Central Avenue, Suite 2400 Phoenix, Arizona 85004-4527 Attorney for George Gonzales and Lorena Guzman Gordon S. Bueler, Esq. 1300 N. McClintock Drive, Suite B-4 Chandler, Arizona 85226 Attorney for Miki Smith and KMS Marketing, Inc. _______________________________

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