U.S. District CourtDistrict of Colorado (Denver)CIVIL ...



U.S. District CourtDistrict of Colorado (Denver)CIVIL DOCKET FOR CASE #: 1:05-cv-01233-LTBGreenberg & Associates, Inc. et al v. Cohen et alAssigned to: Judge Lewis T. BabcockCase?in?other?court:?Boulder County District Court, 05CV507Cause: 28:1332 Diversity-Property DamageDate Filed: 07/01/2005Date Terminated: 10/21/2008Jury Demand: BothNature of Suit: 380 Personal Property: OtherJurisdiction: DiversityDefendantKelley Lynch?a United States citizen residing in California and John Doe, Nos. 1-25represented?byKelley Lynch?C/o Phil Spector?Phil Spector International?686 South Arroyo Parkway?Penthouse Suite?Pasadena, CA 91105?Email: odzerchenma@?PRO SEDate Filed#Docket Text07/01/20051?NOTICE OF REMOVAL from Boulder County District Court, Case Number 2005CV507. ( Filing fee $ 250 Receipt Number 261197), filed by Robert Kory. (Attachments: #?1?Exhibit A#?2?Exhibit B, Part 1#?3?Exhibit B-Part 2-a#?4?Exhibit B, Part 2-b#?5?Exhibit B, Part 3#?6?Exhibit B, Part 4#?7?Exhibit B, Part 5#?8Exhibit B, Part 6#?9?Exhibit B, Part 7#?10?Exhibit B, Part 8#?11?Exhibit B, part 9#?12?Exhibit B, part 10#?13?Exhibit B, part 11#?14?Exhibit B, part 12#?15?Exhibit B, part 13#?16?Civil Cover Sheet and Supplement#?17?Civil Cover Sheet State Court)(bpm, ) Additional attachment(s) added on 7/5/2005 (bpm, ). Exhibits 1 through 10 to the State Court Complaint were attached on 7/14/05 (gms, ). (Modified on 7/14/2005 to indicate attachments added)(gms, ). (Entered: 07/05/2005)07/08/20052?Stipulated MOTION For Extension of Time to?Respond to Complaint?by Defendant Robert Kory. (Livingston, Randall) (Entered: 07/08/2005)07/11/20053?Minute ORDER granting?2?Dft Kroy's Stipulated Extension of Time to Respond to Complaint to and incl 8/1/05, by Chief Judge Lewis T. Babcock on 7/11/05. (erv, ) (Entered: 07/11/2005)07/15/20054?Docket Annotation Exhibits 1 through 10 to the State Court Complaint were added to the?1?Notice of Removal entry as they were inadvertently not attached at case opening. Text only entry - no document attached. (gms, ) (Entered: 07/15/2005)07/21/20055?Stipulated MOTION For Extension of Time to?Respond to Complaint?by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 07/21/2005)07/22/20056?Minute ORDER granting?5?Dft Cohen's Stipulated Motion for Extension of Time to Respond to Complaint to and incl 8/10/05 by Chief Judge Lewis T. Babcock on 7/22/05. (erv, ) (Entered: 07/22/2005)07/29/20057?Unopposed MOTION For Extension of Time to?File Pleadings in Response to Complaint?by Defendant Robert Kory. (Livingston, Randall) (Entered: 07/29/2005)08/02/20058?AMENDED COMPLAINT?and Jury Demand?against all defendants, filed by Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Exhibit Exhibit 1-2#?2?Exhibit Exhibit 3 - part 1 of 2#?3?Exhibit Exhibit 3 - part 2 of 2#?4?Exhibit Exhibit 4-5#?5?Exhibit Exhibit 6#?6?Exhibit EXhibit 7-10)(Chipman, David) (Entered: 08/02/2005)08/02/20059?Minute ORDER granting Dft Kory's Unopposed?7?Motion for Extension of Time to File Pleadings in Response to Complaint to 8/10/05, by Judge Lewis T. Babcock on 8/2/05. (gms, ) (Entered: 08/02/2005)08/09/200510?STATEMENT?Re: Due Date for Filing on Amended Complaint?by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 08/09/2005)08/10/200511?MINUTE ORDER: Pursuant to Defendant's Docketing Statement re:?10?Due Date for Filing on Amended Complaint, Defendants Cohen and Kory's responsive pleading to the Amended Complaint is due on or before August 19, 2005, by Judge Lewis T. Babcock on 8/10/05. (emksl, ) (Entered: 08/10/2005)08/18/200512?NOTICE of Entry of Appearance by Susan Ashlie Beringer on behalf of Leonard Cohen (Beringer, Susan) (Entered: 08/18/2005)08/19/200513?MOTION to Dismiss by Defendant Robert Kory. (Livingston, Randall) (Entered: 08/19/2005)08/19/200514?BRIEF in Support re?13?MOTION to Dismiss filed by Defendant Robert Kory. (Attachments: #?1?Affidavit Robert Kory)(Livingston, Randall) (Entered: 08/19/2005)08/19/200515?MOTION to Dismiss for Lack of Jurisdiction by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 08/19/2005) 08/19/200516?Proposed Pretrial Order by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 08/19/2005)08/19/200517?DECLARATION of?Leonard Norman Cohen?by Defendant Leonard Cohen. (Attachments: #?1?Exhibit Cohen Declaration Exhibit 1#?2?Exhibit Cohen Declaration Exhibit 2)(Beringer, Susan) (Entered: 08/19/2005)08/19/200518?DECLARATION of?Ashlie Beringer?by Defendant Leonard Cohen. (Attachments: #?1?Exhibit Part 1 to Exhibit A#?2?Exhibit Part 2 Exhibit A#?3?Exhibit B#?4Exhibit C#?5?Exhibit D#?6?Exhibit E#?7?Exhibit F)(Beringer, Susan) (Entered: 08/19/2005)08/23/200519?SUMMONS Returned Executed by all plaintiffs. Kelley Lynch served on 8/10/2005, answer due 8/30/2005. (Chipman, David) (Entered: 08/23/2005)08/30/200520?BRIEF in Opposition re?15?MOTION to Dismiss for Lack of Jurisdiction?or Alternatively, to Stay the Proceedings?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Exhibit Exhibit 1#?2Exhibit Exhibit 2 Part 1#?3?Exhibit Exhibit 2 Part 2#?4?Exhibit Exhibit 2 Part 3#?5?Exhibit Exhibit 2 Part 4#?6?Exhibit Exhibit 2 Part 5#?7?Exhibit Exhibit 2 Part 6#8?Exhibit Exhibit 2 Part 7#?9?Exhibit Exhibit 2 Part 8#?10?Exhibit Exhibit 2 Part 9#?11?Exhibit Exhibits 3 and 4#?12?Exhibit Exhibit 5#?13?Exhibit Exhibits 6 - 9#14?Exhibit Exhibits 10 - 12#?15?Exhibit EXhibit 13)(Chipman, David) (Entered: 08/30/2005)08/30/200521?CORPORATE DISCLOSURE STATEMENT?of Greenberg & Associates Securities, Inc. dba Agile Group?by Plaintiff Greenberg & Associates Securities, Inc.. (Chipman, David) (Entered: 08/30/2005)08/30/200522?CORPORATE DISCLOSURE STATEMENT?of Agile Group, LLC?by Plaintiff Agile Group, LLC. (Chipman, David) (Entered: 08/30/2005)08/30/200523?CORPORATE DISCLOSURE STATEMENT?of Tactical Allocation Services, LLC dba Agile Allocation Services, LLC?by Plaintiff Tactical Allocation Services, LLC. (Chipman, David) (Entered: 08/30/2005)08/30/200524?CORPORATE DISCLOSURE STATEMENT?of Greenberg & Associates, Inc. dba Agile Advisors Inc.?by Plaintiff Greenberg & Associates, Inc.. (Chipman, David) (Entered: 08/30/2005)09/09/200525?First MOTION for Extension of Time to File Response/Reply as to?13?MOTION to Dismiss?of Defendant Robert Kory?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Proposed Order (PDF Only) Proposed order)(Chipman, David) (Entered: 09/09/2005)09/12/200526?Minute ORDER granting Plaintiff's?25?Unopposed Motion for Extension of Time to Respond to the?13?MOTION to Dismiss?of Defendant Robert Kory?to 9/26/05, by Judge Lewis T. Babcock on 9/12/05. (emksl, ) (Entered: 09/12/2005)09/14/200527?REPLY to Response to Motion re?15?MOTION to Dismiss for Lack of Jurisdiction filed by Defendant Leonard Cohen. (Attachments: #?1?Affidavit Supplemental Declaration of Ashlie Beringer#?2?Exhibit A to Supplemental Declaration of Ashlie Beringer#?3?Exhibit B to Supplemental Declaration of Ashlie Beringer#?4Exhibit C to Supplemental Declaration of Ashlie Beringer#?5?Exhibit D to Supplemental Declaration of Ashlie Beringer#?6?Exhibit E to Supplemental Declaration of Ashlie Beringer#?7?Exhibit F to Supplemental Declaration of Ashlie Beringer#?8?Exhibit G to Supplemental Declaration of Ashlie Beringer#?9?Exhibit H to Supplemental Declaration of Ashlie Beringer#?10?Exhibit I to Supplemental Declaration of Ashlie Beringer)(Beringer, Susan) (Entered: 09/14/2005)09/15/200528?CERTIFICATE OF SERVICE re?27?Reply to Response to Motion,,, by Defendant Leonard Cohen (Beringer, Susan) (Entered: 09/15/2005)09/16/200529?MOTION to Deposit Funds?Under Federal Rule of Civil Procedure 67 for An Order Permitting the Deposit of Interpleaded Funds Into Registry of the Court?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Proposed Order (PDF Only) Proposed order)(Chipman, David) (Entered: 09/16/2005)09/20/200530?BRIEF in Opposition re?29?MOTION to Deposit Funds?Under Federal Rule of Civil Procedure 67 for An Order Permitting the Deposit of Interpleaded Funds Into Registry of the Court?filed by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 09/20/2005)09/21/200531?ORDER holding in abeyance Plaintiff's Motion?29?for an Order Permitting the Deposit of Interpleaded Funds into Registry and Defendant Cohen's?30?Opposition. The parties are directed to file status reports every 20 days until further order of Court. Signed by Judge Lewis T. Babcock on 9/21/05. (emksl, ) (Entered: 09/22/2005)09/26/200532?BRIEF in Opposition re?13?MOTION to Dismiss?of Defendant Robert Kory?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Exhibit Exhibit A - Part 1#?2?Exhibit Exhibit A - Part 2#?3Exhibit Exhibit A - Part 3#?4?Exhibit Exhibit A - Part 4)(Chipman, David) (Entered: 09/26/2005)09/26/200533?MOTION for Leave to?to File Surreply In Opposition to Defendant Leonard Cohen's Motion to Dismiss Plaintiffs' Amended Complaint with Jury Demand or, Alternatively, to Stay the Proceedings Pending the Central District of California's Decision to Compel Arbitration?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Proposed Order (PDF Only) Proposed order)(Chipman, David) (Entered: 09/26/2005)09/26/200534?SURREPLY re?33?MOTION for Leave to?to File Surreply In Opposition to Defendant Leonard Cohen's Motion to Dismiss Plaintiffs' Amended Complaint with Jury Demand or, Alternatively, to Stay the Proceedings Pending the Central District of California's,?15?MOTION to Dismiss for Lack of Jurisdiction?by Defendant Leonard Cohen?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Affidavit Attached Affidavit of Neal Greenberg)(Chipman, David) (Entered: 09/26/2005)09/27/200535?ORDER denying Plaintiff's?33?Motion for Leave to File a Surreply in Opposition to Defendant Leonard Cohen's Motion to Dismiss. Signed by Judge Lewis T. Babcock on 9/27/05. (emksl, ) (Entered: 09/27/2005)10/11/200536?STATUS REPORT by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 10/11/2005)10/11/200537?STATUS REPORT by Plaintiffs Greenberg & Associates Securities, Inc., Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Exhibit Exhibit A to Plaintiffs' Status Report)(Chipman, David) (Entered: 10/11/2005)10/11/200538?MOTION to?Petition to Compel Arbitration?by Defendant Leonard Cohen. (Attachments: #?1?Exhibit Ex. A to Defendant's Petition to Compel Arbitration#?2Exhibit Ex. B to Petition to Compel Arbitration#?3?Exhibit Ex. C to Petition to Compel Arbitration)(Beringer, Susan) (Entered: 10/11/2005)10/11/200539?MOTION to?Compel Arbitration?by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 10/11/2005)10/11/200540?DECLARATION of?Joel A. Feuer?regarding MOTION to?Compel Arbitration?39?by Defendant Leonard Cohen. (Attachments: #?1?Exhibit Ex. A to Declaration#?2Exhibit Ex. B to Declaration#?3?Exhibit Ex. C to Declaration#?4?Exhibit Ex. D to Declaration#?5?Exhibit Ex. E to Declaration#?6?Exhibit Ex. F to Declaration#?7Exhibit Ex. G to Declaration#?8?Exhibit Ex. H to Declaration#?9?Exhibit Ex. I to Declaration#?10?Exhibit Ex. J to Declaration#?11?Exhibit Ex. K to Declaration#?12Exhibit Ex. L to Declaration#?13?Exhibit Ex. M to Declaration#?14?Exhibit Ex. N to Declaration#?15?Exhibit Ex. O to Declaration#?16?Exhibit Ex. P to Declaration)(Beringer, Susan) (Entered: 10/11/2005)10/14/200541?REPLY to Response to Motion re?13?MOTION to Dismiss?the Amended Complaint?filed by Defendant Robert Kory. (Attachments: #?1?Exhibit Second Declaration of Robert Kory#?2?Exhibit C part 1#?3?Exhibit C part 2#?4?Exhibit C part 3#?5?Exhibit C part 4#?6?Exhibit D part 1#?7?Exhibit Exhibits D part 2, E and F)(Livingston, Randall) (Entered: 10/14/2005)10/18/200542?MINUTE ORDER: In Court (Status/Scheduling) Hearing set for 11/8/2005 at 09:30 AM in Courtroom A 201 before Chief Judge Lewis T. Babcock, by Judge Lewis T. Babcock on 10/18/05. (emksl, ) (Entered: 10/18/2005)10/19/200543?LETTER re:?38?MOTION to?Petition to Compel Arbitration,?40?Declaration,,?[attaching clearer copies of exhibits per court's request]?by Defendant Leonard Cohen. (Attachments: #?1?(Attachment) Exhibit A to Defendant Cohen's Petition to Compel Arbitration (Dckt No. 38)#?2?(Attachment) Exhibit C to Declaration of J. Feuer in Support of Defendant Cohen's Motion to Compel Arbitration (Dckt No. 40))(Beringer, Susan) (Entered: 10/19/2005)10/31/200544?STATUS REPORT by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 10/31/2005)10/31/200545?NOTICE of Entry of Appearance by R. Daniel Scheid on behalf of All Plaintiffs (Scheid, R.) (Modified on 11/1/2005 to add All Plaintiffs)(pap2, ). (Entered: 10/31/2005)10/31/200546?STATUS REPORT by all Plaintiffs. (Attachments: #?1?Exhibit Exhibit to Plaintiffs' Status Report)(Scheid, R.) (Modified on 11/1/2005 to correct filers to all plaintiffs) (gms, ). (Entered: 10/31/2005)10/31/200547?RESPONSE to Motion re?38?MOTION to?Petition to Compel Arbitration,?39?MOTION to?Compel Arbitration?filed by all Plaintiffs. (Attachments: #?1?Exhibit A to Response and Objection#?2?Exhibit B to Response and Objection#?3?Exhibit C to Response and Objection#?4?Exhibit D to Response and Objection#?5?Exhibit E to Response and Objection#?6?Exhibit F to Response and Objection#?7?Exhibit G to Response and Objection#?8?Exhibit H to Response and Objection#?9?Exhibit I to Response and Objection#?10?Exhibit J to Response and Objection#?11?Exhibit K to Response and Objection#?12?Exhibit L to Response and Objection#?13Exhibit M to Response and Objection#?14?Exhibit N to Response and Objection#?15?Exhibit O to Response and Objection#?16?Exhibit P to Response and Objection#?17?Exhibit Q to Response and Objection#?18?Exhibit R to Response and Objection#?19?Exhibit S to Response and Objection#?20?Exhibit T to Response and Objection)(Scheid, R.) (Modified on 11/1/2005 to correct filers to all plaintiffs and to correct description of Exhibit R) (gms, ). (Entered: 10/31/2005)10/31/200548?NOTICE of Entry of Appearance by Norman Sherab Posel on behalf of all plaintiffs (Posel, Norman) (Entered: 10/31/2005)11/01/200549?CERTIFICATE of Mailing/Service re?45?Notice of Entry of Appearance,?46?Status Report,?47?Response to Motion,,,,,?48?Notice of Entry of Appearance by Plaintiffs Greenberg & Associates Securities, Inc., Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Tactical Allocation Services, LLC, Agile Group, LLC. (Scheid, R.) (Entered: 11/01/2005)11/01/200550?Docket Annotation re:?46?Status Report. This docket entry was modified to correct the filers to all plaintiffs.?47?Response to Motion. This docket entry was modified to correct the filers to all plaintiffs and to correct the description of Exhibit R. Text only entry - no document attached. (gms, ) (Entered: 11/01/2005)11/01/200551?MOTION to Withdraw?of Attorneys David S. Chipman and Meghan W. Martinez as Counsel for Plaintiffs?by Plaintiff Agile Group, LLC. (Attachments: #?1?Notice of Withdrawal of David S. Chipman and Meghan W. Martinez#?2?Proposed Order (PDF Only))(Chipman, David) (Entered: 11/01/2005)11/02/200552?CERTIFICATE of Mailing/Service re?32?Brief in Opposition to Motion,,?33?MOTION for Leave to?to File Surreply In Opposition to Defendant Leonard Cohen's Motion to Dismiss Plaintiffs' Amended Complaint with Jury Demand or, Alternatively, to Stay the Proceedings Pending the Central District of California's,?34Surreply,,,?20?Brief in Opposition to Motion,,,?21?Corporate Disclosure Statement,?22?Corporate Disclosure Statement,?23?Corporate Disclosure Statement,?24Corporate Disclosure Statement by Plaintiffs Greenberg & Associates Securities, Inc., Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Tactical Allocation Services, LLC, Agile Group, LLC. (Scheid, R.) (Entered: 11/02/2005)11/02/200553?Minute ORDER granting?51?Motion to Withdraw. David S. Chipman and Meghan W. Martinez are allowed to withdraw as counsel for Plaintiffs herein, by Judge Lewis T. Babcock on 11/2/05. (emksl, ) (Entered: 11/02/2005)11/04/200554?NOTICE of Entry of Appearance?of Joel A. Feuer?by Susan Ashlie Beringer on behalf of Leonard Cohen (Beringer, Susan) (Entered: 11/04/2005)11/08/200555?Minute Entry for proceedings held before Chief Judge Lewis T. Babcock: Status Conference held on 11/8/2005. Oral Argument on Plaintiffs' Motion to Deposit Funds?29?is set Friday, December 16, 2005 at 9:00 a.m. (Court Reporter Gwen Daniel) (ltbcd) Modified on 11/9/2005 to correct date(emksl, ). (Entered: 11/08/2005)11/09/200556?Amended MOTION to Deposit Funds?Into the Registry of the Court Pursuant to Rule 67?(re:?29?) by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Proposed Order (PDF Only))(Scheid, R.) (Modified on 11/14/2005 to create a linkage) (gms, ). (Entered: 11/09/2005)11/14/200557?Docket Annotation re:?56?Amended MOTION to Deposit Funds?Into the Registry of the Court Pursuant to Rule 67. This docket entry was modified to create a linkage to the motion it amends, Doc #29. Text only entry - no document attached. (gms, ) (Entered: 11/14/2005)11/14/200558?ORDER granting Plaintiff's?56?Amended Motion to Deposit the interpleaded Funds into a Registry and denying Plaintiff's?29?Motion to Deposit Funds as Moot. Signed by Judge Lewis T. Babcock on 11/14/05. (emksl, ) Modified on 11/14/2005 to add linkage (emksl, ). (Entered: 11/14/2005)11/15/200559?BRIEF re?39?MOTION to?Compel Arbitration?by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 11/15/2005)11/15/200560?DECLARATION of?Joel A. Feuer?regarding Brief?62?by Defendant Leonard Cohen. (Attachments: #?1?Exhibit A to Supplemental Declaration of Joel A. Feuer#?2Exhibit B to Supplemental Declaration of Joel A. Feuer#?3?Exhibit C to Supplemental Declaration of Joel A. Feuer#?4?Exhibit D to Supplemental Declaration of Joel A. Feuer)(Beringer, Susan) (Modified on 11/17/2005 to change linkage from Doc 59 to 62)(gms, ). (Entered: 11/15/2005)11/16/200561?NOTICE of Change of Address?of Posel Law Offices?by Norman Sherab Posel (Posel, Norman) (Entered: 11/16/2005)11/16/200562?REPLY to Response to Motion re?39?MOTION to?Compel Arbitration?filed by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 11/16/2005)11/17/200563?Docket Annotation re:?60?Declaration. This docket entry was modified to change the linkage from Doc 59 to Doc 62. Text only entry - no document attached. (gms, ) (Entered: 11/17/2005)11/23/200564?NOTICE of Change of Address by Norman Sherab Posel. (emksl, ) (Entered: 11/23/2005)12/05/200565?ORDER granting defendant Kory's?13?Motion to Dismiss. Plaintiff's claims against Mr. Kory are dismissed. Signed by Judge Lewis T. Babcock on 12/5/05. (gms, ) (Entered: 12/05/2005)12/14/200566?RECEIPT for $2665.88 by Agile Allocation Svcs pursuant to?58?Order on Motion to Deposit Funds of 11/14/05, (gms, ) (Entered: 12/14/2005)12/14/200567?RECEIPT for $149,500.00 from Winchester Reserves pursuant to?58?Order on Motion to Deposit Funds of 11/14/05 (gms, ) (Entered: 12/14/2005)12/16/200568?Minute Entry for proceedings held before Judge Lewis T. Babcock : Motion Hearing held on 12/16/2005: Defendant's Motion to Compel Arbitration?43?is Taken Under Advisement. (Court Reporter Kara Spitler.) (emksl, ) (Entered: 12/16/2005)12/16/200569?AMENDED Minute Entry (Amending?68?) for proceedings held before Judge Lewis T. Babcock : Motion Hearing held on 12/16/2005: Motion?38?to?Petition to Compel Arbitration?filed by Leonard Cohen and?39?MOTION to?Compel Arbitration?filed by Leonard Cohen, are Taken Under Advisement. (Court Reporter Kara Spitler.) (emksl, ) (Entered: 12/16/2005)12/16/200570?ORDER taking under advisement Motions?38?and?39?pursuant to Minute Entry of 12/16/05. Text Only Entry - No Document Attached. (emksl, ) (Entered: 12/16/2005)12/20/200571?MOTION for Attorney Fees?and Other Costs?by Defendant Robert Kory. (Attachments: #?1?Exhibit A Declaration of Randall M. Livingston#?2?Exhibit B History Bill to the Court#?3?Exhibit C Practice Profile)(Livingston, Randall) (Entered: 12/20/2005)12/21/200572?MINUTE ORDER: Plaintiff's Response to the?71?MOTION for Attorney Fees?and Other Costs?filed by Robert Kory, due 1/10/06. Defendants Reply due 1/20/06, by Judge Lewis T. Babcock on 12/21/05. (emksl, ) (Entered: 12/21/2005)12/21/200573?ORDER denying Cohen's?38?and?39?Motion to Compel Arbitration. Signed by Judge Lewis T. Babcock on 12/21/05. (emksl, ) (Entered: 12/22/2005)01/05/200674?STIPULATION re?8?Amended Complaint,?to Answer or Otherwise Respond?by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 01/05/2006)01/06/200675?MINUTE ORDER granting the Joint Stipulation?74?to Extend Time for Defendant Cohen to Answer the Complaint: Leonard Cohen answer due 1/20/2006, by Judge Lewis T. Babcock on 1/6/06. (emksl, ) (Entered: 01/06/2006)01/10/200676?BRIEF in Opposition re?71?MOTION for Attorney Fees?and Other Costs?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Exhibit A to Response to Motion for Attorney Fees)(Scheid, R.) (Entered: 01/10/2006)01/17/200677?MOTION to Withdraw as Attorney by Defendant Leonard Cohen. (Attachments: #?1?Proposed Order (PDF Only) Order Permitting Withdrawal of Counsel)(Beringer, Susan) (Entered: 01/17/2006)01/18/200678?MINUTE ORDER granting?77?Motion to Withdraw as Attorney. Attorney Susan Ashlie Beringer and Joel A. Feuer terminated, by Judge Lewis T. Babcock on 1/18/06. (emksl, ) (Entered: 01/18/2006)01/18/200679?TRANSCRIPT of Hearing on Defendant Cohen's Motion to Compel Arbitration held on 12/16/05 before Judge Babcock. Prepared by: Kara Spitler. Pages: 1-27. (certified copy) Text Only Entry - Available in paper format at the Clerk's Office. (emksl, ) (Entered: 01/19/2006)01/19/200680?STIPULATION for Extension of Time by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Defendant Leonard Cohen. (Attachments: #?1?Proposed Order (PDF Only))(Scheid, R.) (Entered: 01/19/2006)01/20/200681?MINUTE ORDER granting the?80?Stipulation for Second Extension of Time to File a Responsive Pleading, filed by Greenberg & Associates, Inc. Second Amended Complaint due 2/10/06, by Judge Lewis T. Babcock on 1/20/06. (emksl, ) (Entered: 01/20/2006)01/20/200682?REPLY to Response to Motion re?71?MOTION for Attorney Fees?and Other Costs?Reply In Support of Motion for Attorney's Fees?filed by Defendant Robert Kory. (Livingston, Randall) (Entered: 01/20/2006)02/07/200683?ORDER denying?15?Motion to Dismiss for Lack of Jurisdiction . Signed by Chief Judge Lewis T. Babcock on 2/6/06. (erv, ) (Entered: 02/07/2006)02/08/200684?ORDER denying Defendant Robert Kory's?71?Motion for Attorney Fees,Signed by Judge Lewis T. Babcock on 02/08/06. (rlp, ) (Entered: 02/09/2006)02/10/200685?MOTION for Leave to?Amend Caption and to File Second Amended Complaint?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Exhibit 1 to Motion for Leave to Amend Caption and to File Second Amended Complaint#?2?Exhibit 1 to Second Amended Complaint#?3?Exhibit 2 to Second Amended Complaint#?4?Exhibit 3 to Second Amended Complaint - part 1#?5?Exhibit 3 to Second Amended Complaint - part 2#?6?Exhibit 4 to Second Amended Complaint#?7?Exhibit 5 to Second Amended Complaint#8?Exhibit 6 to Second Amended Complaint#?9?Exhibit 7 to Second Amended Complaint#?10?Exhibit 8 to Second Amended Complaint#?11?Exhibit 9 to Second Amended Complaint#?12?Exhibit 10 to Second Amended Complaint#?13?Exhibit 11 to Second Amended Complaint#?14?Proposed Order (PDF Only) to Motion for Leave to Amend Caption and File Second Amended Complaint)(Scheid, R.) (Entered: 02/10/2006)02/13/200686?MINUTE ORDER re:?85?MOTION for Leave to?Amend Caption and to File Second Amended Complaint?filed by Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, by Judge Lewis T. Babcock on 02/13/06. Defendants have until 03/05/06 to file a response, Plaintiff has until 03/15/06 to file reply.(rlp, ) Modified on 2/14/2006 to add deadlines to text(rlp, ). (Entered: 02/13/2006)02/14/200687?Docket Annotation re:?86?Order, modified text to include deadlines. Text only entry - no document attached. (rlp, ) (Entered: 02/14/2006)03/06/200688?RESPONSE to Motion re?85?MOTION for Leave to?Amend Caption and to File Second Amended Complaint?filed by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 03/06/2006)03/06/200689?RESPONSE to Motion re?85?MOTION for Leave to?Amend Caption and to File Second Amended Complaint?filed by Defendant Robert Kory. (Livingston, Randall) (Entered: 03/06/2006)03/15/200690?REPLY to Response to Motion re?85?MOTION for Leave to?Amend Caption and to File Second Amended Complaint?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Scheid, R.) (Entered: 03/15/2006)05/10/200691?ORDER granting in part and denying in part?85?Motion for Leave to Amend, plaintiffs' motion is GRANTED to the extent that it seeks to amend the first Amended Complaint to state new claims against Mr. Cohen, correct defects in the caption, and clarify introductory allegations; motion is DENIED to the extent that it seeks reconsideration of the previous order dismissing claims against Mr. Kory ; the plaintiffs shall, on or before May 24, 2006, file a Second Amended Complaint. Signed by Judge Lewis T. Babcock on 05/10/06. (rlp, ) PDF attachment added on 5/15/2006 to correct entry and attach PDF of Order (rlp, ). (Entered: 05/11/2006)05/15/200692?Docket Annotation re:?91?Order on Motion for Leave, Added PDF of Order of 05/10/06 to correct entry. Text only entry - no document attached. (rlp, ) (Entered: 05/15/2006)05/23/200693?AMENDED COMPLAINT?and Jury Demand?against all defendants, filed by Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Exhibit 1 to Second Amended Complaint and Jury Demand#?2?Exhibit 2 to Second Amended Complaint and Jury Demand#?3?Exhibit 3 to Second Amended Complaint and Jury Demand (part 1)#?4?Exhibit 3 to Second Amended Complaint and Jury Demand (part 2)#?5?Exhibit 4 to Second Amended Complaint and Jury Demand#?6?Exhibit 5 to Second Amended Complaint and Jury Demand#?7?Exhibit 6 to Second Amended Complaint and Jury Demand#?8?Exhibit 7 to Second Amended Complaint and Jury Demand#?9?Exhibit 8 to Second Amended Complaint and Jury Demand#?10?Exhibit 9 to Second Amended Complaint and Jury Demand#?11?Exhibit 10 to Second Amended Complaint and Jury Demand#?12?Exhibit 11 to Second Amended Complaint and Jury Demand)(Scheid, R.) (Entered: 05/23/2006)05/31/200694?Mail Returned as Undeliverable re: 92 Docket Annotation Addressed to Kelley Lynch. (rlp, ) (Entered: 05/31/2006)06/02/200695?Unopposed MOTION For Extension of Time to?Respond to the Second Amended Complaint?by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 06/02/2006)06/06/200696?MINUTE ORDER granting?95?Defendant Leonard Cohen's Unopposed Motion to Extend Time Within Which to Respond to Second Amended Complaint, up to and including June 30, 2006. Signed by Judge Lewis T. Babcock on 06/06/06. (rlp, ) (Entered: 06/06/2006)06/30/200697?Partial MOTION to Dismiss?Second Amended Complaint?by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 06/30/2006)06/30/200698?BRIEF in Support re?97?Partial MOTION to Dismiss?Second Amended Complaint?filed by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 06/30/2006)06/30/200699?MOTION for Joinder?Additional Party as Defendant to Counterclaims and Amend Caption?by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 06/30/2006)06/30/2006100?ANSWER to Amended Complaint?Counterclaims, and Jury Demand?by Leonard Cohen.(Livingston, Randall) (Entered: 06/30/2006)07/03/2006101?MINUTE ORDER: Plaintiffs have to and including July 18, 2006 to reply to Defendant Leonard Cohen's?99?Motion to Join Additional Party as Defendant to the Counterclaims and Amend Caption, by Judge Lewis T. Babcock on 07/03/06. (rlp, ) (Entered: 07/03/2006)07/07/2006102?Unopposed MOTION for Extension of Time to File Response/Reply as to?97?Partial MOTION to Dismiss?Second Amended Complaint,?100?Answer to Amended Complaint by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Scheid, R.) (Entered: 07/07/2006)07/10/2006103?MINUTE ORDER granting?102?Motion for Extension of Time to File Response/Reply re?99?MOTION for Joinder?Additional Party as Defendant to Counterclaims and Amend Caption. Reply due by 8/10/2006, by Judge Lewis T. Babcock on 07/10/06. (rlp, ) (Entered: 07/10/2006)07/17/2006104?NOTICE re?99?MOTION for Joinder?Additional Party as Defendant to Counterclaims and Amend Caption?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC (Scheid, R.) (Entered: 07/17/2006)07/18/2006105?MINUTE ORDER granting?99?Defendant Cohen's Motion for Joinder, by Judge Lewis T. Babcock on 07/18/06. (rlp, ) (Entered: 07/18/2006)07/20/2006106?Mail Returned as Undeliverable re:?101?Order Addressed to Kelly Lynch. (rlp, ) (Entered: 07/20/2006)07/20/2006107?AFFIDAVIT/RETURN of Service of?Answer to Second Amended Complaint, Counterclaims, and Jury Demand?upon Timothy Barnett on 07-19-2006, filed by Defendant Leonard Cohen (Livingston, Randall) (Entered: 07/20/2006)07/31/2006108?Mail Returned as Undeliverable re:?103?Order on Motion for Extension of Time to File Response/Reply Addressed to Kelley Lynch. (rlp, ) (Entered: 07/31/2006)07/31/2006109?Unopposed MOTION to Deposit Funds?Into the Registry of the Court Pursuant to Fed.R.Civ.P. 67?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Proposed Order (PDF Only))(Scheid, R.) (Entered: 07/31/2006)08/01/2006110?ORDER granting?109?Motion to Deposit Funds, Leave is granted to Plaintiffs', to deposit into the Registry of the Court $2014.90, which amount is the additional funds which are the subject of the Interpleader Claim in the Second Amended Complaint, Signed by Judge Lewis T. Babcock on 08/01/06. (rlp, ) (Entered: 08/01/2006)08/01/2006111?Mail Returned as Undeliverable re:?105?Order on Motion for Joinder Addressed to Kelley Lynch. (rlp, ) (Entered: 08/01/2006)08/10/2006112?ANSWER to?100?Cohen's Counterclaims?by Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, Timothy Barnett.(Scheid, R.) Modified on 8/11/2006 : this is answer to counterclaims in docket entry 100 (rlp2, ). (Entered: 08/10/2006)08/10/2006113?RESPONSE to Motion re?97?Partial MOTION to Dismiss?Second Amended Complaint?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Tomothy Barnett. (Scheid, R.) (Entered: 08/10/2006)08/10/2006114?DESIGNATION OF NON-PARTY?(ies) at Fault Pursuant to C.R.S. Sec. 13-21-111.5(3)(b)?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendant Timothy Barnett. (Scheid, R.) (Entered: 08/10/2006)08/11/2006115?Docket Annotation re:?113?Response to Motion,modified to add Barnett as filer in entry,?112?Answer to Complaint, modified to clarify entry and link to document 100. Text only entry - no document attached. (rlp2, ) (Entered: 08/11/2006)08/15/2006116?RECEIPT for $2014.90 by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC per entry?110?Order on Motion to Deposit Funds, (rlp2, ) (Entered: 08/15/2006)08/25/2006117?Unopposed MOTION For Extension of Time to?Reply in Support of Motion for Partial Dismissal of Second Amended Complaint?by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 08/25/2006)08/28/2006118?MINUTE ORDER granting?117?Defendant Cohen's Unopposed Motion to Extend Time to File Reply in Support of Motion for Partial Dismissal of the Second Amended Complaint, up to and including September 15, 2006, by Judge Lewis T. Babcock on 08/28/06. (rlp2, ) (Entered: 08/28/2006)08/28/2006119?Mail Returned as Undeliverable re:?116?Receipt Addressed to Kelley Lynch. (rlp2, ) (Entered: 08/29/2006)09/08/2006120?Mail Returned as Undeliverable re:?118?Order on Motion for Extension of Time, Addressed to Kelley Lynch. (rlp2, ) (Entered: 09/08/2006)09/15/2006121?REPLY to Response to Motion re?97?Partial MOTION to Dismiss?Second Amended Complaint?filed by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 09/15/2006)10/19/2006122?MOTION for Judgment on the Pleadings?as to Cohen's Second Through Eighth Counterclaims?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendant Timothy Barnett. (Scheid, R.) (Entered: 10/19/2006)10/19/2006123?BRIEF in Support re?122?MOTION for Judgment on the Pleadings?as to Cohen's Second Through Eighth Counterclaims?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendant Timothy Barnett. (Scheid, R.) (Entered: 10/19/2006)10/19/2006124?AFFIDAVIT re?123?Brief in Support of Motion,?122?MOTION for Judgment on the Pleadings?as to Cohen's Second Through Eighth Counterclaims?of R. Daniel Scheid?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendant Timothy Barnett. (Attachments: #?1?Exhibit A to Affidavit of R.Daniel Scheid#?2?Exhibit B to Affidavit of R. Daniel Scheid#?3?Exhibit C to Affidavit of R. Daniel Scheid#?4?Exhibit D to Affidavit of R. Daniel Scheid#?5?Exhibit E to Affidavit of R. Daniel Scheid#?6?Exhibit F to Affidavit of R. Daniel Scheid#?7?Exhibit G to Affidavit of R. Daniel Scheid#?8?Exhibit H to Affidavit of R. Daniel Scheid-part1#?9?Exhibit H to Affidavit of R. Daniel Scheid-part 2#?10Exhibit H to Affidavit of R. Daniel Scheid-part 3#?11?Deposition Excerpts I to Affidavit of R. Daniel Scheid#?12?Exhibit J to Affidavit of R. Daniel Scheid#?13Exhibit K to Affidavit of R. Daniel Scheid#?14?Exhibit L to Affidavit of R. Daniel Scheid#?15?Exhibit M to Affidavit of R. Daniel Scheid#?16?Exhibit N to Affidavit of R. Daniel Scheid#?17?Exhibit O to Affidavit of R. Daniel Scheid#?18?Exhibit P to Affidavit of R. Daniel Scheid#?19?Exhibit Q to Affidavit of R. Daniel Scheid)(Scheid, R.) (Entered: 10/19/2006)11/07/2006125?Unopposed MOTION for Extension of Time to File Response/Reply as to?123?Brief in Support of Motion,?122?MOTION for Judgment on the Pleadings?as to Cohen's Second Through Eighth Counterclaims,?124?Affidavit,,,,, by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 11/07/2006)11/08/2006126?MINUTE ORDER granting?125?Motion for Extension of Time to File Response/Reply re?122?MOTION for Judgment on the Pleadings?as to Cohen's Second Through Eighth Counterclaims?Response due by 12/6/2006, by Judge Lewis T. Babcock on 11/08/06.(rlp, ) (Entered: 11/08/2006)11/16/2006127?MOTION for Leave to?File Certificate of Review?by Defendant Leonard Cohen. (Attachments: #?1?Exhibit A#?2?Exhibit B)(Livingston, Randall) (Entered: 11/16/2006)11/17/2006128?Mail Returned as Undeliverable re:?126?Order on Motion for Extension of Time to File Response/Reply, Addressed to Kelley Lynch. (rlp, ) (Entered: 11/17/2006)11/17/2006129?MINUTE ORDER Plaintiffs have to and including December 7, 2006 to respond to Defendant Cohen's Motion to Accept Certificate or Review?127?. Defendant has to and including December 21, 2006 to reply, by Judge Lewis T. Babcock on 11/17/06. (rlp, ) (Entered: 11/17/2006)11/27/2006130?Mail Returned as Undeliverable re:?129?Order, Addressed to Kelly Lynch. (rlp, ) (Entered: 11/27/2006)12/04/2006131?ORDER granting in part and denying in part?97?Motion to Dismiss, the plaintiffs' claims for intentional interference with a prospective business relation, civil extortion, civil conspiracy, and violation of and conspiracy to violate COCCA are DISMISSED, Signed by Judge Lewis T. Babcock on 12/04/06.(rlp, ) (Entered: 12/04/2006)12/06/2006132?RESPONSE to Motion re?122?MOTION for Judgment on the Pleadings?as to Cohen's Second Through Eighth Counterclaims?filed by Defendant Leonard Cohen. (Attachments: #?1?Exhibit 1#?2?Exhibit 2)(Livingston, Randall) (Entered: 12/06/2006)12/07/2006133?RESPONSE to Motion re?127?MOTION for Leave to?File Certificate of Review?and Objection?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendants Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, Timothy Barnett. (Attachments: #?1?Exhibit A#?2Exhibit B#?3?Exhibit C#?4?Exhibit D#?5?Exhibit E#?6?Exhibit F#?7?Exhibit G#?8?Exhibit H#?9?Exhibit I)(Scheid, R.) (Entered: 12/07/2006)12/07/2006134?AFFIDAVIT re?133?Response to Motion,,?Exhibit A?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendants Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, Timothy Barnett. (Scheid, R.) (Entered: 12/07/2006)12/13/2006135?Unopposed MOTION For Extension of Time to File Reply in Support of?22?Motion for Judgment on the Pleadings by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendants Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, Timothy Barnett. (Attachments: #?1?Proposed Order (PDF Only))(Scheid, R.) Modified to correct motion event to add link on 12/14/2006 (rlp, ). (Entered: 12/13/2006)12/14/2006136?Docket Annotation re:?135?MOTION for Extension of Time to File Response/Reply. Modified to correct motion to add link on 12/14/2006 Text only entry - no document attached. (rlp, ) (Entered: 12/14/2006)12/15/2006137?MINUTE ORDER granting?135?Motion for Extension of Time to File Reply in Support of MOtion for Judgment on the Pleadings, reply due 01/16/07 by Judge Lewis T. Babcock on 12/15/06.(rlp, ) (Entered: 12/15/2006)12/18/2006138?Mail Returned as Undeliverable re:?131?Order on Motion to Dismiss, Addressed to Kelley Lynch. (rlp, ) (Entered: 12/19/2006)12/21/2006139?REPLY to Response to Motion re?127?MOTION for Leave to?File Certificate of Review?filed by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 12/21/2006)12/27/2006140?ORDER denying?127?MOTION for Leave to File Certificate of Review, Signed by Judge Lewis T. Babcock on 12/27/06.(rlp, ) (Entered: 12/27/2006)01/04/2007141?Mail Returned as Undeliverable re:?137?Order on Motion for Extension of Time to File Response/Reply Addressed to Kelley Lynch. (rlp, ) (Entered: 01/04/2007)01/16/2007142?REPLY to Response to Motion re?122?MOTION for Judgment on the Pleadings?as to Cohen's Second Through Eighth Counterclaims?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendants Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, Timothy Barnett. (Attachments: #?1?Exhibit A#?2?Exhibit B#?3?Exhibit C#?4?Exhibit D#?5?Exhibit E#?6?Exhibit F#?7?Exhibit G#?8?Deposition Excerpts H)(Scheid, R.) (Entered: 01/16/2007)01/23/2007143?Mail Returned as Undeliverable re:?140?Order on Motion for Leave Addressed to Kelley Lynch. (rlp, ) (Entered: 01/23/2007)01/23/2007144?ORDER granting?122?the counterclaim defendants' motion for judgment on the pleadings, Mr. Cohen's second (breach of fiduciary duty), third (fraud), fourth (negligent misrepresentation), fifth (professional negligence), sixth and seventh (aiding and abetting), and eighth (negligence) claims are DISMISSED. Signed by Judge Lewis T. Babcock on 01/23/07.(rlp, ) (Entered: 01/24/2007)02/06/2007145?Mail Returned as Undeliverable re:?144?ORDER Addressed to Kelley Lynch. (dln, ) (Entered: 02/06/2007)05/04/2007146?NOTICE of Entry of Appearance by Jay Stanley Horowitz on behalf of Leonard Cohen (Horowitz, Jay) (Entered: 05/04/2007)05/04/2007147?NOTICE of Entry of Appearance by Peter C. Forbes on behalf of Leonard Cohen (Forbes, Peter) (Entered: 05/04/2007)05/04/2007148?MOTION for Summary Judgment?As to Cohen's First Counterclaim?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendants Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, Timothy Barnett. (Scheid, R.) (Entered: 05/04/2007)05/04/2007149?BRIEF in Support re?148?MOTION for Summary Judgment?As to Cohen's First Counterclaim?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Affidavit #?2Exhibit A#?3?Exhibit B#?4?Exhibit C#?5?Exhibit D#?6?Exhibit E#?7?Exhibit F#?8?Exhibit G#?9?Exhibit H#?10?Exhibit I#?11?Exhibit J#?12?Exhibit K#?13?Exhibit L#14?Exhibit M#?15?Exhibit N#?16?Exhibit O#?17?Exhibit P#?18?Exhibit Q#?19?Exhibit R#?20?Exhibit S#?21?Exhibit T#?22?Exhibit U#?23?Exhibit V#?24?Exhibit W#25?Exhibit X#?26?Exhibit Y)(Scheid, R.) (Entered: 05/04/2007)05/10/2007150?MOTION to Amend/Correct/Modify?100?Answer to Amended Complaint?, defendant leonard cohen's amended counterclaims and jury demand?by Defendant Leonard Cohen. (Attachments: #?1?Proposed Document exhibit 1 - cohen's amended answer to second amended complaint, amended counterclaims and jury demand#?2?Exhibit exhibit a#?3?Exhibit exhibit b#?4?Exhibit exhibit c#?5?Exhibit exhbit d#?6?Exhibit exhibit e#?7?Deposition Excerpts exhibit f#?8?Exhibit exhibit g#?9?Exhibit exhibit h#?10?Exhibit exhibit i#?11?Exhibit exhibit j#?12?Exhibit exhibit k#?13?Exhibit exhibit l#?14?Exhibit exhibit m#?15?Exhibit exhibit n#?16Exhibit exhibit o#?17?Exhibit exhibit p#?18?Exhibit exhibit q#?19?Exhibit exhibit r#?20?Exhibit exhibit s#?21?Exhibit exhibit t#?22?Exhibit exhibit u#?23?Exhibit exhibit v#?24?Exhibit exhibit w#?25?Exhibit exhibit x#?26?Exhibit exhibit y#?27?Exhibit exhibit z#?28?Exhibit exhibit aa#?29?Exhibit exhibit bb#?30?Exhibit exhibit cc#?31?Exhibit exhibit dd#?32?Exhibit exhibit ee#?33?Exhibit exhibit ff#?34?Exhibit exhibit gg#?35?Exhibit exhibit hh#?36?Exhibit exhibit ii#?37?Exhibit exhibit jj#38?Exhibit exhibit kk#?39?Exhibit exhibit ll#?40?Exhibit exhibit mm#?41?Exhibit exhibit nn#?42?Exhibit exhibit oo#?43?Exhibit exhibit pp#?44?Exhibit exhibit qq#45?Exhibit exhibit rr#?46?Exhibit exhibit ss#?47?Exhibit exhibit tt#?48?Exhibit exhibit uu#?49?Exhibit exhibit vv#?50?Exhibit exhibit ww#?51?Exhibit exhibit xx#?52Exhibit exhibit yy#?53?Exhibit exhibit zz#?54?Exhibit exhibit aaa#?55?Exhibit exhibit bbb#?56?Exhibit exhibit ccc#?57?Exhibit exhibit ddd#?58?Exhibit exhibit eee#59?Exhibit exhibit fff#?60?Exhibit exhibit ggg#?61?Exhibit exhibit hhh#?62?Exhibit exhibit iii#?63?Exhibit exhibit jjj#?64?Exhibit exhibit kkk#?65?Exhibit exhibit lll#66?Exhibit exhibit mmm#?67?Exhibit exhibit nnn#?68?Exhibit exhibit ooo#?69?Exhibit exhibit 2#?70?Exhibit exhibit 3#?71?Proposed Order (PDF Only) proposed order)(Horowitz, Jay) (Entered: 05/10/2007)05/14/2007151?MINUTE ORDER re:?150?MOTION for Leave to File Amended?100?Answer to Second Amended Complaint, amended counterclaims and jury demand filed by Defendant Leonard Cohen. Plaintiffs and Counterclaim Defendants to file response by 6/4/07, Defendant to file reply by 6/14/07, by Judge Lewis T. Babcock on 5/14/07. (mrs, ) (Entered: 05/14/2007)05/16/2007152?MOTION to Stay re?148?MOTION for Summary Judgment?As to Cohen's First Counterclaim?-- stay briefing schedule until briefing upon cohen's motion for leave to amend has been completed and that motion decided?by Defendant Leonard Cohen. (Attachments: #?1?Proposed Document proposed order)(Horowitz, Jay) (Entered: 05/16/2007)05/17/2007153?RESPONSE to Motion re?152?MOTION to Stay re?148?MOTION for Summary Judgment?As to Cohen's First Counterclaim?-- stay briefing schedule until briefing upon cohen's motion for leave to amend has been completed and that motion decided?MOTION to Stay re?148?MOTION for Summary Judgment?As to Cohen's First Counterclaim?-- stay briefing schedule until briefing upon cohen's motion for leave to amend has been completed and that motion decided?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Scheid, R.) (Entered: 05/17/2007)05/17/2007154?MINUTE ORDER re: Defendant and Plaintiff-on-Counterclaim Leonard Cohen's?152?Request (MOTION) to Stay the briefing upon Defendants-on-Counterclaims148?MOTION for Summary Judgment. All other parties to respond to this Motion on or before 5/27/2007, by Judge Lewis T. Babcock on 5/17/07. (mrs, ) (Entered: 05/17/2007)05/18/2007155?ORDER granting Defendant and Plaintiff-on-Counterclaim Leonard Cohen's?152?Request (Motion) to Stay the Briefing Schedule. Signed by Judge Lewis T. Babcock on 5/18/07.(mrs, ) (Entered: 05/18/2007)05/22/2007156?Mail Returned as Undeliverable re:?151?Order, Addressed to Kelley Lynch. (mrs, ) (Entered: 05/22/2007)05/25/2007157?Mail Returned as Undeliverable re:?154?Order, Addressed to Kelley Lynch. (gms, ) (Entered: 05/25/2007)05/29/2007158?Mail Returned as Undeliverable re:?155?Order on Motion to Stay Addressed to Kelley Lynch. (gms, ) (Entered: 05/29/2007)06/04/2007159?RESPONSE to Motion re?150?MOTION to Amend/Correct/Modify?100?Answer to Amended Complaint , defendant leonard cohen's amended counterclaims and jury demand. (Attachments: #?1?Exhibit A#?2?Exhibit B#?3?Exhibit C#?4?Deposition Excerpts D#?5?Exhibit E#?6?Exhibit F)(Scheid, R.) (Modified on 6/5/2007 to edit triplicated text)(erv, ). (Entered: 06/04/2007)06/05/2007160?Docket Annotation re:?159?Response to Motion, The Text was edited to correct Triplicative text that was pulled into the entry. Text only entry - no document attached. (erv, ) (Entered: 06/05/2007)06/11/2007161?MOTION for Extension of Time to File Response/Reply as to?150?MOTION to Amend/Correct/Modify?100?Answer to Amended Complaint?, defendant leonard cohen's amended counterclaims and jury demand by Defendant Leonard Cohen. (Attachments: #?1?Proposed Order (PDF Only) proposed order)(Horowitz, Jay) Modified on 6/12/2007 to delete duplicated text (mrs, ). (Entered: 06/11/2007)06/11/2007162?SUPPLEMENT/AMENDMENT to?161?MOTION for Extension of Time to File Response/Reply as to?150?MOTION to Amend/Correct/Modify?100?Answer to Amended Complaint?, defendant leonard cohen's amended counterclaims and jury demand by Defendant Leonard Cohen. (Horowitz, Jay) Modified on 6/12/2007 to delete duplicated text (mrs, ). (Entered: 06/11/2007)06/12/2007163?Docket Annotation re:?161?MOTION for Extension of Time to File Response/Reply as to?150?MOTION to Amend/Correct/Modify?100?Answer to Amended Complaint, defendant leonard cohen's amended counterclaims and jury demand. This docket entry was modified to delete duplicated text. Text only entry - no document attached. (mrs, ) (Entered: 06/12/2007)06/12/2007164?Docket Annotation re:?162?Supplement/Amendment, this docket entry was modified to delete duplicated text. Text only entry - no document attached. (mrs, ) (Entered: 06/12/2007)06/12/2007165?MINUTE ORDER GRANTING?161?Motion for Extension of Time to File Reply Brief in Support of?150?MOTION for Leave to Amend and the?162?Supplement to Request, Reply due by 6/21/2007, by Judge Lewis T. Babcock on 6/12/07.(mrs, ) (Entered: 06/12/2007)06/21/2007166?Mail Returned as Undeliverable re:?165?Order on Motion for Extension of Time to File Response/Reply Addressed to Kelley Lynch. (mrs, ) (Entered: 06/21/2007)06/21/2007167?REPLY to Response to Motion re?150?MOTION to Amend/Correct/Modify?100?Answer to Amended Complaint?, defendant leonard cohen's amended counterclaims and jury demand filed by Defendant Leonard Cohen. (Attachments: #?1?Exhibit exhibit 1 - cohen's amended answer, second amended counterclaims, jury demand#?2?Exhibit exhibit 2)(Horowitz, Jay) Modified on 6/22/2007 to delete duplicated text (mrs, ). (Entered: 06/21/2007)06/22/2007168?ORDER, Agile Group, LLC may file a sur-reply, no more than 10 pages within 10 days of the date of this Order. Cohen may file further reply, no more than 10 pages within 10 days thereafter. Signed by Judge Lewis T. Babcock on 6/22/07. (mrs, ) (Entered: 06/22/2007)06/22/2007169?Docket Annotation re:?167?Reply to Response to Motion, this docket entry modified to delete duplicated text. Text only entry - no document attached. (mrs, ) (Entered: 06/22/2007)07/02/2007170?SURREPLY re?150?MOTION to Amend/Correct/Modify?100?Answer to Amended Complaint?, defendant leonard cohen's amended counterclaims and jury demand?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Timothy Barnett (Attachments: #?1?Exhibit A)(Scheid, R.) Modified on 7/5/2007 to correct filers (mrs, ). (Entered: 07/02/2007)07/02/2007171?Mail Returned as Undeliverable re:?168?Order Addressed to Kelley Lynch. (mrs, ) (Entered: 07/02/2007)07/05/2007172?Docket Annotation re:?170?Surreply, this docket entry modifed to correct filers. Text only entry - no document attached. (mrs, ) (Entered: 07/05/2007)07/12/2007173?SURREPLY re?150?MOTION to Amend/Correct/Modify?100?Answer to Amended Complaint?, defendant leonard cohen's amended counterclaims and jury demand filed by Defendant Leonard Cohen. ATTACHED EXHIBITS ARE STRICKEN pursuant to Order dated 7/16/07.(Attachments: #?1?Exhibit A#?2?Exhibit B#?3Exhibit C#?4?Exhibit D)(Horowitz, Jay) Modified on 7/13/2007 to delete duplicated text generated by the system (mrs, ). Modified on 7/16/2007 (mrs, ). (Entered: 07/12/2007)07/16/2007174?ORDER re:?173?Surreply filed by Leonard Cohen. The attached exhibits are STRICKEN and will not be considered by the Court. Signed by Judge Lewis T. Babcock on 7/16/07. (mrs, ) (Entered: 07/16/2007)10/26/2007175?ORDER DENYING Cohen's?150?Motion for Leave to File His Amended Answer to Second Amended Complaint, His Amended Counterclaims, and His Jury Demand. Signed by Judge Lewis T. Babcock on 10/26/07.(mrs) (Entered: 10/29/2007)11/13/2007176?MOTION for Order to?establish briefing schedule upon plaintiffs' motion for summary judgment?by Defendant Leonard Cohen. (Attachments: #?1?Exhibit a, #?2Proposed Order (PDF Only))(Horowitz, Jay) (Entered: 11/13/2007)11/14/2007177?MINUTE ORDER GRANTING Defendant Leonard Cohen's?176?Motion for to Establish a Briefing Schedule Upon Plaintiffs' Motion for Summary Judgment. Defendant Cohen has up to and including 12/13/07 to file a response. Plaintiff Agile Group has up to and including 1/25/08 to file a reply, by Judge Lewis T. Babcock on 11/14/07.(mrs, ) (Entered: 11/14/2007)12/06/2007178?Unopposed MOTION for Extension of Time to File Response/Reply as to?148?MOTION for Summary Judgment?As to Cohen's First Counterclaim?to extend by one week the deadlines for the parties' filing of their remaining briefs?by Defendant Leonard Cohen. (Attachments: #?1?Proposed Order (PDF Only))(Horowitz, Jay) (Entered: 12/06/2007)12/07/2007179?MINUTE ORDER GRANTING Defendant Leonard Cohen's Unopposed?178?Motion to Extend by One Week the Deadlines for the parties' filing their remaining briefs upon Plaintiffs' Motion for Summary Judgment. Defendant Cohen has up to and including 12/20/07 to file a response. Plaintiffs have up to and including 2/1/08 to file a reply, by Judge Lewis T. Babcock on 12/7/07.(mrs, ) (Entered: 12/07/2007)12/20/2007180?RESPONSE to Motion re?148?MOTION for Summary Judgment?As to Cohen's First Counterclaim?filed by Defendant Leonard Cohen. (Attachments: #?1?Affidavit leonard cohen - exhibit a, #?2?Exhibit 1, #?3?Exhibit 2, #?4?Exhibit 3, #?5?Exhibit 4, #?6?Exhibit 5, #?7?Exhibit 6, #?8?Exhibit 7, #?9?Exhibit 8, #?10?Exhibit 9, #?11Exhibit 10, #?12?Deposition Excerpts 11, #?13?Exhibit 12, #?14?Exhibit 13, #?15?Exhibit 14, #?16?Exhibit 15, #?17?Exhibit 16, #?18?Exhibit 17, #?19?Exhibit 18, #?20Exhibit 19, #?21?Exhibit 20, #?22?Exhibit 21, #?23?Exhibit 22, #?24?Exhibit 23, #?25?Exhibit 24, #?26?Exhibit 25, #?27?Exhibit 26, #?28?Exhibit 27, #?29?Exhibit 28, #?30?Exhibit 29, #?31?Exhibit 30, #?32?Exhibit 31, #?33?Exhibit 32, #?34?Exhibit 33, #?35?Exhibit 34, #?36?Exhibit 35, #?37?Exhibit 36, #?38?Exhibit 37, #?39?Exhibit 38, #?40?Exhibit 39, #?41?Exhibit 40, #?42?Exhibit 41, #?43?Exhibit 42, #?44?Exhibit 43, #?45?Exhibit 44, part 1, #?46?Exhibit 44, part 2, #?47?Pages summary of exhibits 1-44, #?48?Affidavit jay horowitz, exhibit b)(Horowitz, Jay) (Entered: 12/20/2007)02/01/2008181?REPLY to Response to Motion re?148?MOTION for Summary Judgment?As to Cohen's First Counterclaim?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1Exhibit A)(Scheid, R.) (Entered: 02/01/2008)02/21/2008182?ORDER granting?148?Plaintiffs Motion for Summary Judgment as to Cohens First Counterclaim. Signed by Judge Lewis T. Babcock on 02/21/2008.(sah2, ) (Entered: 02/22/2008)04/02/2008183?Mail Returned as Undeliverable re:?182?Order on Motion for Summary Judgment Addressed to Kelley Lynch. (sah, ) (Entered: 04/02/2008)04/29/2008184?NOTICE of Entry of Appearance by Michelle Lorraine Rice on behalf of Leonard Cohen (Rice, Michelle) (Entered: 04/29/2008)04/29/2008185?MOTION for Summary Judgment by Defendant Leonard Cohen. (Rice, Michelle) (Entered: 04/29/2008)04/29/2008186?Exhibits in Support of?185?MOTION for Summary Judgment by Defendant Leonard Cohen. (Attachments: #?1?Exhibit A-2, #?2?Exhibit A-3, #?3?Exhibit A-4, #?4Exhibit A-5, #?5?Exhibit A-6, #?6?Exhibit A-7, #?7?Exhibit A-8, #?8?Exhibit A-9, #?9?Exhibit A-10, #?10?Exhibit A-11, #?11?Exhibit A-12, #?12?Exhibit A-13, #?13Exhibit A-14, #?14?Exhibit A-15, #?15?Exhibit A-16, #?16?Affidavit of Leonard Cohen, #?17?Exhibit B-1, #?18?Exhibit B-2, #?19?Exhibit B-3, #?20?Exhibit B-4, #21?Exhibit B-5, #?22?Exhibit B-6, #?23?Exhibit B-7, #?24?Exhibit B-8, #?25?Affidavit of Matthew Traub, #?26?Exhibit C-1, #?27?Exhibit C-2, #?28?Affidavit of Jarkko Arjatsalo, #?29?Exhibit D-1, #?30?Exhibit D-2, #?31?Exhibit D-3, #?32?Exhibit D-4)(Rice, Michelle) (Entered: 04/29/2008)04/30/2008187?MOTION to Withdraw as Attorney by Defendant Leonard Cohen. (Attachments: #?1?Proposed Order (PDF Only))(Horowitz, Jay) (Entered: 04/30/2008)04/30/2008188?NOTICE re?187?MOTION to Withdraw as Attorney by Defendant Leonard Cohen (Horowitz, Jay) (Entered: 04/30/2008)05/02/2008189?MINUTE ORDER granting?187?Motion to Withdraw as Attorney. Attorney Jay Stanley Horowitz terminated. Defendant Cohen will continue to be represented by Michelle Lorraine Rice of the Law Offices of Robert Kory by Judge Lewis T. Babcock on 05/02/2008.(sah, ) (Entered: 05/02/2008)05/05/2008190?NOTICE of Entry of Appearance by Andrew Wilson Myers on behalf of Leonard Cohen (Myers, Andrew) (Entered: 05/05/2008)05/05/2008191?NOTICE of Entry of Appearance by Jeffrey A. Chase on behalf of Leonard Cohen (Chase, Jeffrey) (Entered: 05/05/2008)05/06/2008192?MOTION to Withdraw as Attorney by Defendant Leonard Cohen. (Attachments: #?1?Proposed Order (PDF Only))(Forbes, Peter) (Entered: 05/06/2008)05/07/2008193?MINUTE ORDER granting?192?Motion to Withdraw as Attorney. Attorney Peter C. Forbes terminated. Defendant Cohen will continue to be represented by Michelle Lorraine Rice of the Law Offices of Robert Kory by Judge Lewis T. Babcock on 05/07/2008.(sah, ) (Entered: 05/07/2008)05/21/2008194?MOTION to Dismiss?Certain Remaining Claims Pursuant to Fed. R. Civ. P. 41(a)(2)?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendants Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, Timothy Barnett. (Attachments: #?1?Exhibit A)(Scheid, R.) (Entered: 05/21/2008)05/21/2008195?MOTION to Stay re?185?MOTION for Summary Judgment?Addressing Claims Subject to Rule 41(a)(2) Motion to Dismiss?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendants Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, Timothy Barnett. (Attachments: #?1?Proposed Order (PDF Only))(Scheid, R.) (Entered: 05/21/2008)05/21/2008196?RESPONSE to Motion re?185?MOTION for Summary Judgment filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendants Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, Timothy Barnett. (Scheid, R.) (Entered: 05/21/2008)05/21/2008197?MOTION for Attorney Fees?and Costs Against Cohen?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendants Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, Timothy Barnett. (Scheid, R.) (Entered: 05/21/2008)05/21/2008198?Mail Returned as Undeliverable re:?193?Order on Motion to Withdraw as Attorney, Addressed to Kelley Lynch. (sah, ) (Entered: 05/21/2008)05/21/2008199?BRIEF in Support re?197?MOTION for Attorney Fees?and Costs Against Cohen?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendants Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg, Timothy Barnett. (Attachments: #?1?Exhibit A, #?2?Exhibit B to Brief, #?3?Exhibit Exhibits C and C-1, #?4?Exhibit C-2 to Brief, #?5?Exhibit C-3 (1 of 2) to Brief, #?6?Exhibit C-3 (2 of 2) to Brief)(Scheid, R.) (Entered: 05/21/2008)05/22/2008200?MINUTE ORDER re:?194?Plaintiffs have filed a Motion to Dismiss Certain Remaining Claims and?197?Plaintiffs and Barnett have filed a Motion for Award of Attorneys Fees and Costs Against Cohen. Defendants have up to and including 6/11/2008 to file a response to both motions. Plaintiffs and Barnett have up to and including 6/21/2008 to file a reply to both motions by Judge Lewis T. Babcock on 05/22/2008. (sah, ) (Entered: 05/22/2008)05/22/2008201?ORDER granting?195?Plaintiffs Motion to Stay Briefing as to Portions of Defendant Cohens Summary Judgment Motion Addressing Claims Subject to Rule 41(a)(2) Motion to Dismiss. Signed by Judge Lewis T. Babcock on 05/22/2008.(sah, ) (Entered: 05/22/2008)05/30/2008202?Unopposed MOTION for Extension of Time to File Response/Reply as to?197?MOTION for Attorney Fees?and Costs Against Cohen?by Defendant Leonard Cohen. (Attachments: #?1?Proposed Order (PDF Only))(Myers, Andrew) (Entered: 05/30/2008)05/30/2008203?RESPONSE to Motion re?194?MOTION to Dismiss?Certain Remaining Claims Pursuant to Fed. R. Civ. P. 41(a)(2)?MOTION to Dismiss?Certain Remaining Claims Pursuant to Fed. R. Civ. P. 41(a)(2)?filed by Defendant Leonard Cohen. (Myers, Andrew) (Entered: 05/30/2008)06/02/2008204?MINUTE ORDER granting?202?Defendant Leonard Cohens Unopposed Motion for Twenty-Day Extension of Time to Respond to Plaintiffs Motion for Attorney Fees. Defendant has up to and including 7/1/2008 by Judge Lewis T. Babcock on 06/02/2008.(sah, ) (Entered: 06/02/2008)06/02/2008205?ORDER granting?194?Plaintiffs Motion to Dismiss Certain Remaining Claims Pursuant to FED. R. CIV. P. 41(a)(2). Plaintiffs First Claim for Relief (Defamation) (Against Cohen) is DISMISSED WITH PREJUDICE. Each party shall bear its own attorney fees and costs incurred with respect to this claim. Plaintiffs Second Claim for Relief (Commercial Disparagement) (Against Cohen) is DISMISSED WITH PREJUDICE. Each party shall bear its own attorney fees and costs incurred with respect to this claim. Plaintiffs Fourth Claim for Relief (Quantum Meruit/Unjust Enrichment) (Against Cohen) is DISMISSED WITH PREJUDICE. Each party shall bear its own attorney fees and costs incurred with respectto this claim. Plaintiffs Eighth Claim for Relief (Injunction) (Against Cohen) is DISMISSED WITH PREJUDICE. Each party shall bear its own attorney fees and costs incurred with respect to this claim. Plaintiffs Ninth Claim for Relief (Declaratory Judgment) (Against Cohen and Lynch) is DISMISSED WITH PREJUDICE. Each party shall bear its own attorney fees and costs incurred with respectto this claim. Cohen shall have up to and including 6/20/2008 to file a Reply to Plaintiffs Response to Cohens Motion for Summary Judgment?196?. Signed by Judge Lewis T. Babcock on 06/02/2008.(sah, ) (Entered: 06/02/2008)06/06/2008206?Mail Returned as Undeliverable re:?200?Order, Addressed to Kelley Lynch. (sah, ) (Entered: 06/06/2008)06/09/2008207?Mail Returned as Undeliverable re:?179?Order on Motion for Extension of Time to File Response/Reply, Addressed to Kelley Lynch. (pap, ) (Entered: 06/09/2008)06/09/2008208?Mail Returned as Undeliverable re:?189?Order on Motion to Withdraw as Attorney, Addressed to Kelley Lynch. (pap, ) (Entered: 06/09/2008)06/09/2008209?Mail Returned as Undeliverable re:?177?Order on Motion for Order, Addressed to Kelley Lynch. (pap, ) (Entered: 06/09/2008)06/20/2008210?REPLY to Response to Motion re?185?MOTION for Summary Judgment filed by Defendant Leonard Cohen. (Attachments: #?1?Affidavit of Claudia Jones)(Myers, Andrew) (Entered: 06/20/2008)06/21/2008211?Mail Returned as Undeliverable re:?204?Order on Motion for Extension of Time to File Response/Reply. Addressed to Kelley Lynch. (sah, ) (Entered: 06/23/2008)07/01/2008212?Mail Returned as Undeliverable re:?205?Order on Motion to Dismiss, Addressed to Kelley Lynch. (sah, ) (Entered: 07/01/2008)07/01/2008213?BRIEF in Opposition re?197?MOTION for Attorney Fees?and Costs Against Cohen?filed by Defendant Leonard Cohen. (Attachments: #?1?Exhibit A-1, #?2?Exhibit A-2, #?3?Exhibit A-3, #?4?Exhibit A-4, #?5?Exhibit A-5, #?6?Exhibit A-6, #?7?Exhibit A-7, #?8?Exhibit A-8, #?9?Exhibit A-9, #?10?Exhibit A-10, #?11?Exhibit A-11, #12?Exhibit A-12, #?13?Exhibit A-13, #?14?Exhibit A-14)(Rice, Michelle) (Entered: 07/01/2008)07/08/2008214?Unopposed MOTION for Extension of Time to File Response/Reply as to?197?MOTION for Attorney Fees?and Costs Against Cohen?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendants Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Greenberg & Associates Securities, Inc., Neal R. Greenberg. (Attachments: #?1?Proposed Order (PDF Only))(Scheid, R.) (Entered: 07/08/2008)07/09/2008215?MINUTE ORDER Granting?214?Motion for Extension of Time to File Response/Reply. Plaintiff has up to and including August 11, 2008 to file its reply. By Judge Lewis T. Babcock on 7/9/08.(psfcd) (Entered: 07/09/2008)08/11/2008216?REPLY to Response to Motion re?197?MOTION for Attorney Fees?and Costs Against Cohen?PLAINTIFF'S AND BARNETT'S REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS FEES AND COSTS AGAINST COHEN?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Exhibit A, #?2?Exhibit B, #?3Exhibit B-1, #?4?Exhibit C)(Scheid, R.) (Entered: 08/11/2008)08/22/2008217?MOTION to Strike Submit Limited Surreply to?216?Plaintiffs' Reply in Support of Motion for Attorney Fees or, Alternatively, to Strike Opinion Letter of Daniel M. Reilly by Defendant Leonard Cohen. (Attachments: #?1?Proposed Order (PDF Only), #?2?Proposed Order (PDF Only))(Myers, Andrew) Modified on 8/25/2008 to create linkage to Plaintiffs reply(sah, ). (Entered: 08/22/2008)08/22/2008218?Docket Annotation re:?217?MOTION to Strike?Submit Limited Surreply to Plaintiffs' Reply in Support of Motion for Attorney Fees or, Alternatively, to Strike Opinion Letter of Daniel M. Reilly. Entry modified to create linkage to Plaintiffs reply. Text only entry - no document attached (sah, ) (Entered: 08/25/2008)08/25/2008220?ORDER granting?217?Defendant Cohens Motion to Submit Limited Surreply to Plaintiffs Reply in Support of Motion for Attorney Fees or, Alternatively, to Strike Opinion Letter of Daniel M. Reilly. Defendant Cohen shall have up to and including 9/4/2008 to file a Surreply to Plaintiffs Reply in Support of Motion for Attorney Fees. Signed by Judge Lewis T. Babcock on 08/25/2008.(sah, ) (Entered: 08/26/2008)08/26/2008219?RESPONSE to Motion re?217?MOTION to Strike?Submit Limited Surreply to Plaintiffs' Reply in Support of Motion for Attorney Fees or, Alternatively, to Strike Opinion Letter of Daniel M. Reilly?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendant Timothy Barnett. (Scheid, R.) (Entered: 08/26/2008)09/04/2008221?SURREPLY re?197?MOTION for Attorney Fees?and Costs Against Cohen?to Plaintiffs' Reply in Support of Motion for Attorneys Fees?filed by Defendant Leonard Cohen. (Attachments: #?1?Exhibit A - Aisenberg rebuttal report)(Myers, Andrew) (Entered: 09/04/2008)09/05/2008222?ORDER. Plaintiffs Tenth Claim for Relief for Interpleader is DISMISSED, denying as moot?185?Defendant Cohens Motion for Summary Judgment as to Plaintiffs Tenth Claim for Relief for Interpleader The interpleaded funds currently in the Registry of the Courtincluding any accrued interest, less the Court Registry handling feeshall be disbursed to Defendant Cohen within ten days of the date of this Order; Each party shall bear its own attorney fees and costs related to this motion. Signed by Judge Lewis T. Babcock on 09/05/2008.(sah, ) (Entered: 09/05/2008)10/21/2008223?ORDER denying?197?Plaintiffs Motion for Award of Attorneys Fees and Costs Against Cohen. Signed by Judge Lewis T. Babcock on 10/21/2008.(sah, ) (Entered: 10/21/2008)PACER Service CenterTransaction Receipt04/01/2016 21:58:48PACER Login:sengdongmaClient Code:Description:Docket ReportSearch Criteria:1:05-cv-01233-LTBJuly 1, 2005Robert Kory files Notice of Removal.28 U.S.C. Section 1332(a)Entities organized under the State of Delaware … (with alleged places of business in ???)Cohen is a resident of CaliforniaRepresented by James S. Bailey & Randall M. Livingston, Bailey & Peterson, P.C. ColoradoDate Filed#Docket Text07/01/20051?NOTICE OF REMOVAL from Boulder County District Court, Case Number 2005CV507. ( Filing fee $ 250 Receipt Number 261197), filed by Robert Kory. (Attachments: #?1?Exhibit A#?2?Exhibit B, Part 1#?3?Exhibit B-Part 2-a#?4?Exhibit B, Part 2-b#?5?Exhibit B, Part 3#?6?Exhibit B, Part 4#?7?Exhibit B, Part 5#?8Exhibit B, Part 6#?9?Exhibit B, Part 7#?10?Exhibit B, Part 8#?11?Exhibit B, part 9#?12?Exhibit B, part 10#?13?Exhibit B, part 11#?14?Exhibit B, part 12#?15?Exhibit B, part 13#?16?Civil Cover Sheet and Supplement#?17?Civil Cover Sheet State Court)(bpm, ) Additional attachment(s) added on 7/5/2005 (bpm, ). Exhibits 1 through 10 to the State Court Complaint were attached on 7/14/05 (gms, ). (Modified on 7/14/2005 to indicate attachments added)(gms, ). (Entered: 07/05/2005)08/18/200512?NOTICE of Entry of Appearance by Susan Ashlie Beringer on behalf of Leonard Cohen (Beringer, Susan) (Entered: 08/18/2005)08/19/200517?DECLARATION of?Leonard Norman Cohen?by Defendant Leonard Cohen. (Attachments: #?1?Exhibit Cohen Declaration Exhibit 1#?2?Exhibit Cohen Declaration Exhibit 2)(Beringer, Susan) (Entered: 08/19/2005)Exhibits are Cohen’s signed agreements with GreenbergNot executed by me – thrown on the ground outside.08/23/200519?SUMMONS Returned Executed by all plaintiffs. Kelley Lynch served on 8/10/2005, answer due 8/30/2005. (Chipman, David) (Entered: 08/23/2005)09/16/200529?MOTION to Deposit Funds?Under Federal Rule of Civil Procedure 67 for An Order Permitting the Deposit of Interpleaded Funds Into Registry of the Court?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Proposed Order (PDF Only) Proposed order)(Chipman, David) (Entered: 09/16/2005)09/20/200530?BRIEF in Opposition re?29?MOTION to Deposit Funds?Under Federal Rule of Civil Procedure 67 for An Order Permitting the Deposit of Interpleaded Funds Into Registry of the Court?filed by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 09/20/2005)09/21/200531?ORDER holding in abeyance Plaintiff's Motion?29?for an Order Permitting the Deposit of Interpleaded Funds into Registry and Defendant Cohen's?30?Opposition. The parties are directed to file status reports every 20 days until further order of Court. Signed by Judge Lewis T. Babcock on 9/21/05. (emksl, ) (Entered: 09/22/2005)10/11/200536?STATUS REPORT by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 10/11/2005)DOCUMENT 36:IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 05-CV-01233-LTB-MJW GREENBERG & ASSOCIATES, INC., d/b/a Agile Advisors, Inc., a Delaware corporation; TACTICAL ALLOCATION SERVICES, LLC, d/b/a/ Agile Allocation Services, LLC, a Delaware limited liability company; AGILE GROUP, LLC, a Delaware limited liability company; GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a/ Agile Group, a Delaware corporation; and NEAL R. GREENBERG, a Colorado resident, Plaintiffs, v. LEONARD COHEN, a Canadian citizen residing in California; ROBERT KORY, a United States citizen residing in California; KELLEY LYNCH, a United States citizen residing in California and JOHN DOE, Nos. 1-25, Defendants. DEFENDANT LEONARD COHEN'S STATUS REPORT Pursuant to the Court's order of September 21, 2005, Defendant Leonard Cohen provides the following status report of the proceedings in the United States District Court for the Central District of California entitled, Leonard Norman Cohen, Petitioner v. Neal R. Greenberg, et al., Respondents, Case No. CV 05-6047 RSWL. In that case, Cohen sought an order compelling arbitration of (i) the purported claims that Neal Greenberg and his companies, known as the Agile Group, have asserted against Cohen in the action pending before this Court and (ii) Cohen's claims against Greenberg and the Agile Group that Cohen has asserted in a Statement of Claim filed with the NASD as the initial step in an arbitration proceeding.On October 3, 2005, the federal court in Los Angeles held a hearing on Cohen's First Amended Petition To Compel Arbitration and Greenberg and the Agile Group's motion to stay proceedings in deference to the action pending in this Court. At the hearing on October 3, 2005, the federal court announced its ruling from the bench. The court granted Greenberg and the Agile Group's motion to stay proceedings on the ground that the "first to file" rule applied and that the first filed action was before this Court. It denied Cohen's motion to compel arbitration as moot and without prejudice. Cohen respectfully contends that federal court in Los Angeles erred in applying the first to file rule. Cohen, however, has decided to file his motion to compel arbitration before this Court for resolution. Cohen intends to file the motion to compel this week. Accordingly, Cohen respectfully requests that the Court defer any ruling on the Agile Group's motion to deposit funds until it has ruled on Cohen's motion to compel arbitration. Date: October 11, 2005Respectfully submitted, s/S. Ashlie Beringer S. Ashlie Beringer GIBSON, DUNN & CRUTCHER LLP 1801 California Street, Suite 4200 Denver, CO 80202-2642 Telephone: (303) 298-5700 Fax: (303) 296-5310 E-Mail: gkerwin@ D.C. Box No. 18 Attorneys for Defendant Leonard CohenPacer Service CenterTransaction ReceiptFri Apr 1 22:18:50 2016Pacer Login:sengdongmaClient Code:Description:Image38-0Case Number:1:05-cv-01233-LTBBillable Pages:10Cost:1.00Pacer Service CenterTransaction ReceiptFri Apr 1 22:18:50 2016Pacer Login:sengdongmaClient Code:Description:Image38-1Case Number:1:05-cv-01233-LTBBillable Pages:7Cost:0.70Pacer Service CenterTransaction ReceiptFri Apr 1 22:18:50 2016Pacer Login:sengdongmaClient Code:Description:Image38-2Case Number:1:05-cv-01233-LTBBillable Pages:5Cost:0.50Pacer Service CenterTransaction ReceiptFri Apr 1 22:18:50 2016Pacer Login:sengdongmaClient Code:Description:Image38-3Case Number:1:05-cv-01233-LTBBillable Pages:23Cost:2.30Top of FormBottom of Form10/11/200538?MOTION to?Petition to Compel Arbitration?by Defendant Leonard Cohen. (Attachments: #?1?Exhibit Ex. A to Defendant's Petition to Compel Arbitration#?2Exhibit Ex. B to Petition to Compel Arbitration#?3?Exhibit Ex. C to Petition to Compel Arbitration)(Beringer, Susan) (Entered: 10/11/2005)10/11/200539?MOTION to?Compel Arbitration?by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 10/11/2005)IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 05-CV-01233-LTB-MJW GREENBERG & ASSOCIATES, INC., d/b/a Agile Advisors, Inc., a Delaware corporation; TACTICAL ALLOCATION SERVICES, LLC, d/b/a/ Agile Allocation Services, LLC, a Delaware limited liability company; AGILE GROUP, LLC, a Delaware limited liability company; GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a/ Agile Group, a Delaware corporation; and NEAL R. GREENBERG, a Colorado resident, Plaintiffs, v. LEONARD COHEN, a Canadian citizen residing in California; ROBERT KORY, a United States citizen residing in California; KELLEY LYNCH, a United States citizen residing in California and JOHN DOE, Nos. 1-25, Defendants. DEFENDANT LEONARD COHEN'S MOTION TO COMPEL ARBITRATIONTABLE OF CONTENTS Page I. INTRODUCTION ................................................................................................................... 1 II. FACTUAL BACKGROUND.................................................................................................. 5 III. THE AGILE GROUP IS CONTRACTUALLY OBLIGATED TO ARBITRATE THE DISPUTES BETWEEN THE PARTIES........................................................................ 7 A. Cohen and the Agile Group Are Parties To Written Arbitration Agreements In The Form Of The NASD Rules and In A Separate Agreement.................................................................................................................... 8 1. Greenberg Securities and Neal Greenberg, as NASD Members, Are Bound To Arbitrate Under NASD Rules.................................................. 8 a. Greenberg Securities and Neal Greenberg Admit That They Are Bound By The NASD Rules and Cohen is a Customer................ 9 b. Greenberg & Associates, Inc., d/b/a Agile Advisors, Inc.; TAS and Agile Group, LLC are bound by the NASD Rules............. 10 2. Cohen Has A Written Agreement With TAS to Arbitrate Before The NASD in Los Angeles ............................................................................ 14 B. The Parties' Broad Arbitration Agreements Cover the Issues in Dispute.................. 15 IV. CONCLUSION.......................................TABLE OF AUTHORITIES Page(s) CASES Ansari v. Qwest Communications Corp., 404 F.3d 1214 (10th Cir. 2005) ..........................................................................................................4 Brown v. Hyatt Corp., 128 F. Supp. 2d 697, 700 (D. Hawaii 2000).......................................................................................6 Chiron Corp. v. Ortho Diagnostic Systems, Inc., 207 F.3d 1126, 1130 (9th Cir. 2000) ..................................................................................................7 Dean Witter Reynolds, Inc, v. Byrd, 470 U.S. 213, 218 (1985)....................................................................................................................7 Farkar Co. v. R.A. Hanson Disc, 583 F.2d 68 (2nd Cir. 1978)..........................................................................................................4, 12 Homestake Lead Co. v. Doe Run Resources Corp., 282 F. Supp. 2d 1131, 1138 (N.D. Cal. 2003) ..................................................................................14 J.J. Ryan & Sons, Inc. v. Rhone Poulenc Textile, S.A., 863 F.2d 315 (4th Cir. 1988) ......................................................................................................15, 16 Kidder, Peabody & Co. v. Zinsmeyer Trusts P'ship, 41 F.3d 861, 863-64 (2d Cir. 1994) ....................................................................................................8 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 624 n.13 (1985)..........................................................................................................14 Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S.1, 24 (1983)...........................................................................................................................6 Multi-Financial Securities Corp. v. King, 386 F.3d 1364, 1367 (11th Cir. 2004) ........................................................................................2, 3, 7 Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 398 (1967)..............................................................................................................6, 14 Pritzker v. Merrill Lynch, 7 F.3d 1110 (3d Cir. 1993)................................................................................................................12 Prograph International v. Barhydt, 928 F.Supp. 983 (N.D. Cal. 1996) ....................................................................................................12 Roe v. Gray, 165 F.Supp. 2d 1164 (D.Colo. 2001)..................................................................................................4 Shearson/American Exp., Inc. v. McMahon, 482 U.S. 220, 226 (1987)....................................................................................................................6 Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (9th Cir. 1999) ............................................................................................................15 United Steelworkers of America v. Warrior & Gulf, 363 U.S. 574 (1960)..........................................................................................................................14 van't Rood v. County of Santa Clara, 113 Cal. App. 4th 549 (2003) ...........................................................................................................11Washington Square Securities v. Aune, 385 F.3d 432, 435(4th Cir. 2004) .......................................................................................................8STATUTES 9 U.S.C. § 2 6 9 U.S.C. § 4.............................................................................................................................................7 RULES NASD Rule 0120(g) ...............................................................................................................................8 NASD Rule 10101 ..................................................................................................................................7 NASD Rule 10301(a)..............................................................................................................................7 NASD Rule 2270(b) ...............................................................................................................................8MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Defendant Leonard Norman Cohen ("Cohen") requests that this Court grant an order compelling Plaintiffs Greenberg & Associates Securities, Inc., d/b/a/ Agile Group; Tactical Allocation Services, LLC, d/b/a/ Agile Allocation Services, LLC; Agile Group, LLC; Greenberg & Associates, Inc., d/b/a Agile Advisors, Inc. and Neal R. Greenberg (collectively the "Agile Group") to arbitrate: (i) The Agile Group's purported claims asserted against Cohen in an action now pending before this Court; and (ii) Cohen's claims against the Agile Group as alleged in his Statement of Claim filed with the NASD Dispute Resolution ("NASD").1 Cohen is an internationally known poet, songwriter and artist. Beginning in the mid- 1990's, he was a customer of the Agile Group which runs, under the consolidated group name, "Agile Group", an asset and investment management organization. The members of the Agile Group includes a securities broker-dealer, Greenberg & Associates Securities, Inc., d/b/a Agile Group ("Greenberg Securities"), as well as investment managers and advisors, Tactical Allocation Services, LLC ("TAS"), d/b/a/ Agile Allocation Services, LLC; Agile Group, LLC; and Greenberg & Associates, Inc., d/b/a/ Agile Advisors, Inc. Neal Greenberg is an owner, director and/or officer of each of the entities comprising the Agile Group. Cohen retained the Agile Group to assist him in creating an investment strategy that would preserve his assets for his retirement and to provide an estate for his children. FN 1 Declaration of Joel A. Feuer ("Feuer Decl."), Exh. A.As alleged in Cohen's Statement of Claim before the NASD, the Agile Group failed Cohen in numerous ways including (but not limited to): it designed an investment transaction that incurred millions of dollars in transaction costs thereby reducing the value of Cohen assets; it failed to implement investments that would be protected from the wrongdoing of Cohen's business manager; and it aided and abetted Cohen's business manager's tortious acts by making material misrepresentations and omissions to Cohen about the accounts that they were managing for his benefit. The Agile Group's breaches resulted in Cohen losing millions of dollars. Feuer Decl., Exh. A.Several months ago, prior to filing his Statement of Claim with the NASD, Cohen contacted the Agile Group, advised it of the bases for his claims against the Agile Group, and sought a voluntary resolution through mediation. In an attempt to sidetrack Cohen from pursuing his claims, the Agile Group first filed its own complaint in Colorado state court alleging essentially that Cohen has no legitimate claim against them and that Cohen's attempts to persuade them to mediate the dispute constitutes tortious conduct on his behalf. The case was removed to this Court.There are several grounds for this Court to order the Agile Group to arbitrate these claims: First, the Agile Group acknowledges that Greenberg Securities is a member of the NASD and that Neal Greenberg is an associated person under the NASD rules because he is an officer of Greenberg Securities.2 Because of these memberships, Greenberg Securities and Greenberg are governed by the NASD Rules, including Rule 10301(a) which obligate its members and their associated persons to arbitrate before the NASD all claims brought by a public customer arising out of the parties' relationship. See, e.g, Multi-Financial Securities Corp. v. King, 386 F.3d 1364, 1367 (11th Cir. 2004)("...the [NASD] Code serves as a sufficient written agreement to arbitrate [for purposes of the Federal Arbitration Act], binding its members to arbitrate a variety of claims with third-party claimants"). Cohen is a public customer of the members of the Agile Group, including Greenberg Securities. Second, TAS, Agile Group, LLC, and Greenberg & Associates, Inc., d/b/a/ Agile Advisors, Inc. are also bound under the NASD Rules under the legal theory of agency because (i) they have held themselves out as NASD members through the common use of the "Agile Group" name in their public advertisements and private communications and (ii) they have acted as the agents of Greenberg Securities in connection with the investment management business of Agile Group. As explained in detail in this Memorandum, the members of the Agile Group hold themselves out to the public as a single organization on their website, ,3 sharing the same business address, the same corporate officers, the same corporate organization and all doing business under the same corporate group name "Agile Group", the d/b/a of Greenberg Securities, the member of the NASD. The members of the Agile Group frequently use the same letterhead which advises the reader that "Agile Group" is a member of the NASD. They have acted as agents of Greenberg Securities by providing investment advise to Cohen under the cover of Greenberg Securities letterhead. In filings with the Securities & Exchange Commission ("SEC"), TAS has admitted that it and the other members of the Agile Group areFN 2 The NASD defines "associated person" as: "A person engaged in the investment banking or securities business who is directly or indirectly controlled by an NASD member, whether or not this person is registered or exempt from registration with NASD. Every sole proprietor, partner, officer, director, or branch manager of any NASD member." See (glossary of terms). Feuer Decl., Exh. B. Greenberg is registered under NASD rules and is a principal of the Agile Group.3 Feuer Decl., Exh. C.under common control.4 Moreover, Greenberg Securities, the NASD member, holds them out as its agents in connection with its business. Federal law allows a court to require a non-signatory to an arbitration agreement to arbitrate claims against it based upon the fact that it was acting and operating as the agent of a person or entity that agreed to arbitrate the claims. See e.g., Farkar Co. v. R.A. Hanson Disc, 583 F.2d 68 (2nd Cir. 1978) (sales agent subsidiary bound by arbitration agreement with third party signed by corporate parent). Finally, Cohen and TAS are parties to a written arbitration agreement that requires the parties to arbitrate all claims arising our of their relationship before the NASD. TAS incorrectly contends that the scope of the arbitration provisions in the written arbitration agreement are limited and do not apply to the Agile Group's claims. TAS also incorrectly contends that the arbitration agreements were superseded by new agreements even though they were never signed by Cohen or anyone acting on his behalf. As shown in this Memorandum, TAS is mistaken in its construction of the arbitration agreements and their effect. Accordingly, Cohen requests that this Court order each of the members of the Agile Group to arbitrate their purported claims and Cohen's claims before the NASD. Cohen originally asked this Court to dismiss this action or to stay it pending the resolution of a Petition to Compel Arbitration against the Agile Group that Cohen filed in the United States District Court for the Central District of California. Cohen commenced that action because under applicable Tenth Circuit law, this Court could not compel the Agile Group to arbitrate their claims in Los Angeles, only in a location with the district of Colorado. Ansari v. Qwest Communications Corp., 404 F.3d 1214 (10th Cir. 2005); and see Roe v. Gray, 165 F.Supp. 2d 1164 (D.Colo. 2001). In response to Cohen's Petition to Compel Arbitration in federal court in Los Angeles, the Agile Group filed a motion to stay the proceedings in federal court in Los Angeles, relying upon the "first to file" rule and pointing out that the action was first filed in Colorado state court and then removed to this Court prior to Cohen commencing the action in Los Angeles federal court. Cohen urged that the first to file rule did not apply because Cohen could not obtain from this Court the relief he sought: an order compelling Agile Group to arbitrate their claims in Los Angeles. Under the holdings of Ansari and Roe, Cohen believed that it should seek its relief in the district in which the parties had agreed to arbitrate.On October 3, 2005, the federal court in Los Angeles granted the Agile Group's motion to stay the action in Los Angeles in deference to the fact that this action was the first filed. The federal court denied the petition to compel arbitration as moot and without prejudice.Cohen maintains that the order of the federal court in Los Angeles is erroneous. Nevertheless, following the implied directions of the Los Angeles federal court, Cohen has decided to petition this Court for an order compelling arbitration of the claims asserted by Agile Group against Cohen and Cohen's claims against the Agile Group. Cohen seeks an order compelling the Agile Group to arbitrate all claims before the NASD without reference to the place of arbitration. The NASD can then determine the place of arbitration by virtue of its rules and policies.Feuer Decl., Exh. D.FRAUD UPON COLORADO AND CENTRAL CALI COURTSII. FACTUAL BACKGROUND Cohen was introduced to the Agile Group in or about 1996 in connection with efforts by Cohen and his then business manager, Kelly Lynch, to try to transform some of his current royalty-producing assets in a manner that would reduce his potential tax liability associated with the assets and to provide for investments that would fund his retirement and provide money for his children after his death. Cohen received tax advice, estate planning advice and investment advice from the Agile Group and placed his money with the Agile Group.In the fall of 2004, when Cohen learned that he had suffered staggering losses of millions of dollars in some of the accounts for which the Agile Group was responsible. Cohen, through his counsel, alleged that the Agile Group was liable to Cohen as a result of its tortious acts and omissions and breaches of contractual, legal and professional duties. Cohen subsequently attempted to resolve the matter through mediation, but the Agile Group rebuffed Cohen's settlement overtures and instead preemptively filed the Colorado action. The nature of Cohen's claims against the Agile Group are set forth in the Statement of Claim and include breach of contract, misrepresentation and negligence. All of the claims arise out of Cohen's relationship with the Agile Group in connection with its business of advising him, managing his assets and investments, and maintaining his accounts. Feuer Decl., Exh. A.AGILE PUT THESE FUNDS BEFORE THE COURT TO PRESSURE LYNCH. GREENBERG WAS HYSTERICAL IN THE FALL OF 2004 AND CONTINUOUSLY URGED LYNCH TO BE “REASONABLE” WITH COHEN.In the pending action in this Court, the Agile Group alleges five separate causes of action against Cohen, including civil conspiracy, outrageous conduct, civil extortion, defamation and a claim for interpleader for the purpose of determining entitlement to certain funds that the Agile Group manages.5 The Agile Group bases these claims on Cohen's alleged misconduct in connection with his efforts to recover the millions of dollars of losses that resulted from the Agile Group's professional misconduct. Feuer Decl., Exh. A.While Cohen vigorously denies the Agile Group's allegations, they should be arbitrated pursuant to the parties' agreement to arbitrate, rather than litigated in federal court.5 As to the interpleader claim, the Agile Group joined Lynch on the basis that she claims entitlement to certain funds at issue. Any claim by the Agile Group against Lynch, who acted as either the purported (albeit faithless) agent of Cohen or as a purported customer of the Agile Group is also subject to arbitration under NASD member rules.III. THE AGILE GROUP IS CONTRACTUALLY OBLIGATED TO ARBITRATE THE DISPUTES BETWEEN THE PARTIES FRAUD RE. FEDERAL ARBITATION ACT. INTEFERENCE WITH COMMERCE.The Federal Arbitration Act ("FAA") is applicable where, as here, the contract containing an agreement to arbitrate "evidenc[es] a transaction involving commerce." 9 U.S.C. § 2. The "involving commerce" language is not to be construed narrowly, see Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 401 n.7, 87 S.Ct. 1801 (1967), and contracts involving interstate management of securities fall squarely within the purview of the FAA. See, e.g., Brown v. Hyatt Corp., 128 F. Supp. 2d 697, 700 (D. Hawaii 2000).The United States Supreme Court has recognized that the FAA established a strong federal public policy in favor of arbitration, Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S.1, 24, 103 S.Ct. 927 (1983), that requires courts to "rigorously enforce agreements to arbitrate." Shearson/American Exp., Inc. v. McMahon, 482 U.S. 220, 226, 107 S.Ct. 2332 (1987). Indeed, by its very terms, the FAA "leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." Chiron Corp. v. Ortho Diagnostic Systems, Inc., 207 F.3d 1126, 1130 (9th Cir. 2000) (emphasis in original) (quoting Dean Witter Reynolds, Inc, v. Byrd, 470 U.S. 213, 218 (1985)). As such, the court "shall make an order directing the parties to proceed to arbitration" 9 U.S.C. § 4 (emphasis added), upon determination that (1) a valid arbitration agreement exists, and (2) the agreement encompasses the dispute at issue. Chiron Corp., supra, 207 F.3d at 1130.A. Cohen and the Agile Group Are Parties To Written Arbitration Agreements In The Form Of The NASD Rules and In A Separate Agreement 1. Greenberg Securities and Neal Greenberg, as NASD Members, Are Bound To Arbitrate Under NASD Rules….THE ALTER EGO. TH WAS THE ALLEGED CUSTOMER. WERE ALL OF GREENBERG’S FINANCIAL STATEMENTS TO TH EVIDENCE OF MAIL FRAUD, ETC?The Agile Group certainly views Cohen as a customer. Their First Amended Complaint begins with the allegation: This action presents a remarkable situation in which a Colorado broker-dealer and investment advisor...is compelled to seek legal recourse against one of its own clients." (emphasis added)Similarly the correspondence between Greenberg, the associated person of Greenberg Securities (and the other members of the Agile Group) and Cohen shows that Greenberg Securities and the Agile Group considered Cohen as customer. Thus, Greenberg's e-mail to Cohen of June 18, 2002 begins: Dear Leonard, Due to the unstable markets of late, I wanted to take some time to review how we are handling your investments at this time. In general, we move your investments between money markets and stocks and bonds.... Feuer Decl., Exh. G.Likewise, in an undated memo on Greenberg Securities letterhead, Neal Greenberg advised Cohen on Estate Tax Issues, again reflect a customer relationship with Cohen. Feuer Decl., Exh. H.In sum, there is an enforceable arbitration agreement under the NASD Rules between Cohen the customer, on the one hand, and Greenberg Securities and Neal Greenberg the NASD members, on the other hand, to arbitrate their disputes arising out of the business of Greenberg Securities and Neal Greenberg before the NASD.Much of the correspondence between the Agile Group and Cohen was by e-mail and sent by Neal Greenberg using the e-mail address @ so that there was no designation indicating which member of the Agile Group was sending the e-mail. Because they act together – TAS and Greenberg & Associates managing investments and buying and selling securities through Greenberg Securities – there was no need to separate out the entities in the e-mails. Feuer Decl., Exh. G.Cohen Has A Written Agreement With TAS to Arbitrate Before The NASD in Los Angeles Cohen and TAS – a member of the Agile Group – entered into an Investment Advisory Agreement ("Investment Agreement"), pursuant to which TAS was to provide financial advisory and management services to Cohen and which, notably, contain arbitration clause. The Investment Agreements contains arbitration provisions, which state, "[a]ny dispute or controversy rising out of or relating to this Agreement . . . or any breach of this Agreement . . . or with respect to the relationship between [TAS] and [Cohen] shall be settled by final and binding arbitration to be held in Colorado in accordance with the rules in effect of the NASD Arbitration Association." (emphasis added) See Feuer Decl. ?14, Exh. M. 77 In the Los Angeles action, Cohen relied upon similar agreements providing for arbitration in Los Angeles, Feuer Decl., Exh. P. Cohen is not insisting in this motion that the parties arbitrate in Los Angeles, only that the arbitration be held before the NASD as agreed upon.…Clearly Cohen's claims as articulated in the Statement of Claim fall within the provisions; all concern Cohen's business relationship with the Agile Group. In brief, Cohen alleges that the Agile Group's advice resulted in losses of millions of dollars because they structured transactions to have millions in transaction costs, created an investment vehicle for Cohen's benefit that was not designed to protect the funds in the accounts they managed from being taken by Cohen's business manager and they made material misrepresentations and omissions to Cohen regarding the transactions in his accounts and the accounts for his benefit and the value of such accounts. Feuer Decl., Exh. A.The Agile Group's tort claims against Cohen – civil conspiracy, outrageous conduct, civil extortion, defamation and interpleader – arise out of Cohen's conduct when he confronted the Agile Group with charges that their mishandling of his securities accounts resulted in the loss of millions of dollar and are thus arbitrable. As to the Agile Group's interpleader claim which seeks to resolve entitlement to certain funds managed by the Agile Group for Cohen, it too is subject to arbitration because it arises in connection with money held in accounts managed by Agile Group and to which Cohen makes a claim.CONCLUSION Pursuant to both (1) the parties' express agreement to arbitrate before the NASD and (2) the arbitration requirements imposed by the NASD on its members and their agents, each member of the Agile Group, including Neal Greenberg, is bound to arbitrate the present dispute before the NASD. Accordingly, Petitioner Cohen respectfully requests that his Petition to Compel Arbitration before the NASD be granted. Date: October 11, 2005 Respectfully submitted, s/Ashlie Beringer S. Ashlie Beringer GIBSON, DUNN & CRUTCHER LLPaberinger@Attorneys for Defendant Leonard Cohen10/11/200540?DECLARATION of?Joel A. Feuer?regarding MOTION to?Compel Arbitration?39?by Defendant Leonard Cohen. (Attachments: #?1?Exhibit Ex. A to Declaration#?2Exhibit Ex. B to Declaration#?3?Exhibit Ex. C to Declaration#?4?Exhibit Ex. D to Declaration#?5?Exhibit Ex. E to Declaration#?6?Exhibit Ex. F to Declaration#?7Exhibit Ex. G to Declaration#?8?Exhibit Ex. H to Declaration#?9?Exhibit Ex. I to Declaration#?10?Exhibit Ex. J to Declaration#?11?Exhibit Ex. K to Declaration#?12Exhibit Ex. L to Declaration#?13?Exhibit Ex. M to Declaration#?14?Exhibit Ex. N to Declaration#?15?Exhibit Ex. O to Declaration#?16?Exhibit Ex. P to Declaration)(Beringer, Susan) (Entered: 10/11/2005)10/19/200543?LETTER re:?38?MOTION to?Petition to Compel Arbitration,?40?Declaration,,?[attaching clearer copies of exhibits per court's request]?by Defendant Leonard Cohen. (Attachments: #?1?(Attachment) Exhibit A to Defendant Cohen's Petition to Compel Arbitration (Dckt No. 38)#?2?(Attachment) Exhibit C to Declaration of J. Feuer in Support of Defendant Cohen's Motion to Compel Arbitration (Dckt No. 40))(Beringer, Susan) (Entered: 10/19/2005)Exhibits Attached to 431(Attachment) Exhibit A to Defendant Cohen's Petition to Compel Arbitration7 pages371 kb2(Attachment) Exhibit C to Declaration of J. Feuer in Support of Defendant Cohen8 pag10/31/200544?STATUS REPORT by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 10/31/2005)IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 05-CV-01233-LTB-MJW GREENBERG & ASSOCIATES, INC., d/b/a Agile Advisors, Inc., a Delaware corporation; TACTICAL ALLOCATION SERVICES, LLC, d/b/a/ Agile Allocation Services, LLC, a Delaware limited liability company; AGILE GROUP, LLC, a Delaware limited liability company; GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a/ Agile Group, a Delaware corporation; and NEAL R. GREENBERG, a Colorado resident, Plaintiffs, v. LEONARD COHEN, a Canadian citizen residing in California; ROBERT KORY, a United States citizen residing in California; KELLEY LYNCH, a United States citizen residing in California and JOHN DOE, Nos. 1-25, Defendants. DEFENDANT LEONARD COHEN'S STATUS REPORT Pursuant to this Court's Order of September 21, 2005, Defendant Leonard Cohen provides the following status report. There have been no significant developments in this action or in the related proceedings in the United States District Court for the Central District of California entitled, Leonard Norman Cohen, Petitioner v. Neal R. Greenberg, et al., Respondents, Case No. CV 05-6047 RSWL, since the date of Cohen's last status report filed on October 11, 2005.Date: October 31, 2005 Respectfully submitted, s/S. Ashlie Beringer S. Ashlie Beringer GIBSON, DUNN & CRUTCHER LLP 1801 California Street, Suite 4200 Denver, CO 80202-2642 Telephone: (303) 298-5700 Fax: (303) 296-5310 E-Mail: aberinger@ Attorneys for Defendant Leonard Cohen11/04/200554?NOTICE of Entry of Appearance?of Joel A. Feuer?by Susan Ashlie Beringer on behalf of Leonard Cohen (Beringer, Susan) (Entered: 11/04/2005)11/15/200559?BRIEF re?39?MOTION to?Compel Arbitration?by Defendant Leonard Cohen. (Beringer, Susan) (Entered: 11/15/2005)DEFENDANT LEONARD COHEN'S REPLY BRIEF IN FURTHER SUPPORT OF HIS PETITION AND MOTION TO COMPEL ARBITRATIONTHE CLAIMS BELONGED TO TH. The Agile Group's Argument That Cohen Does Not Have Standing To Complain About Accounts In The Name Of Traditional Holdings Is Irrelevant To The Issue Of Arbitration The Agile Group urges that Cohen does not have standing to assert the claims he alleged against the Agile Group in his Statement of Claim before the NASD on the basis that those claims belong to an entity known as Traditional Holdings, LLC. Although the Agile Group's analysis is wrong, more importantly, it is irrelevant to the issue of whether arbitration should be compelled. Cohen's standing to assert the claims is a procedural issue that can be resolved by the arbitrator. See Aluminum Brick & Glass Workers Int'l Union v. AAA Plumbing Pottery Corp., 991 F.2d 1545, 1550 (11th Cir. 1993) (defense of standing goes to the merits of the dispute or questions of procedure that should be left to the arbitrator); Howsam v. Dean Witter Reynolds, Inc, 537 U.S. 79, 82-85, 123 S.Ct. 588 (2002) (in enforcing an arbitration provision, courts will only determine limited gateway issues that do not concern the procedure or merits of the dispute); John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557, 84 S.Ct. 909 (1964) ("Once it is determined . . . that the parties are obligated to submit the subject matter of a dispute to arbitration, 'procedural' questions which grow out of the dispute and bear on its final disposition should be left to the arbitrator").1ALL CLAIMS AT ISSUE ARE COVERED BY THE BROAD LANGUAGE CONTAINED WITHIN THE TAS AGREEMENT AND THE NASD RULES All claims at issue here, whether cast in tort or contract, stem from Cohen's allegations that the Agile Group was responsible for his losses of millions of dollars. Cohen's claims, that he first discovered and brought to Plaintiffs' attention in the fall of 2004 and ultimately filed with the NASD, include: breach of contract, breach of the implied covenants of good faith and fair dealing, breach of fiduciary duty, fraud, negligent misrepresentations and negligence. See Feuer Decl., Exh. A. All of these claims are based on the Agile Group's misconduct that led to Cohen's losses, including (1) its negligent misrepresentations concerning the sale of Cohen's three royalty-producing assets (2) its permitting Lynch to loot Cohen's accounts and (3) its misrepresentations concerning the status and balance of Cohen's accounts and omissions regarding Kelley Lynch's substantial withdrawals.The Agile Group's claims, which include civil extortion, civil conspiracy, defamation and outrageous conduct, purportedly arose when Cohen first informed Plaintiffs of his claims against them and sought to settle them through mediation. Indeed, the gravamen of Plaintiffs' complaint is that Cohen (and his co-defendant Kory) defamed their professional competence and attempted to extort them into settling Cohen's claims against them.The Broad Language Of The TAS Agreement Is Not Limited To Any Specific Account And Covers All The Claims At Issue The language of the TAS agreement's arbitration clause is sweeping in scope as it applies to "[a]ny dispute or controversy rising out of or relating to this Agreement . . . or any breach of this Agreement . . . or with respect to the relationship between TAS and Client [Cohen] shall be settled by final and binding arbitration . . . " (emphasis added) See Feuer Decl., Exh. M. The second sentence of the Agreement further reveals its breadth: "The purpose of this Agreement is for TAS to evaluate and manage the portfolio of Client's assets among specified mutual funds and/or variable annuity accounts registered in the Client's name and to arrange for all necessary transfers to keep the portfolio aligned with TAS's determination of investment values." Id.Plaintiffs' argument that the TAS Agreement's arbitration clause applies only to a specific account is contrary to this plain language, and there is nothing else on the face of the Agreement – which the Agile Group itself drafted – that could in any way support such a limited reading.V. CONCLUSION For the reasons discussed above and in Cohen's initial moving papers, Cohen respectfully requests that this Court issue an Order Compelling Plaintiffs to submit to arbitration before the NASD.11/15/200560?DECLARATION of?Joel A. Feuer?regarding Brief?62?by Defendant Leonard Cohen. (Attachments: #?1?Exhibit A to Supplemental Declaration of Joel A. Feuer#?2Exhibit B to Supplemental Declaration of Joel A. Feuer#?3?Exhibit C to Supplemental Declaration of Joel A. Feuer#?4?Exhibit D to Supplemental Declaration of Joel A. Feuer)(Beringer, Susan) (Modified on 11/17/2005 to change linkage from Doc 59 to 62)(gms, ). (Entered: 11/15/2005)IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 05-cv-01233-LTB-MJW GREENBERG & ASSOCIATES, INC., d/b/a Agile Advisors, Inc., a Delaware corporation; TACTICAL ALLOCATION SERVICES, LLC, d/b/a/ Agile Allocation Services, LLC, a Delaware limited liability company; AGILE GROUP, LLC, a Delaware limited liability company; GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a/ Agile Group, a Delaware corporation; and NEAL R. GREENBERG, a Colorado resident, Plaintiffs, v. LEONARD COHEN, a Canadian citizen residing in California; ROBERT KORY, a United States citizen residing in California; KELLEY LYNCH, a United States citizen residing in California and JOHN DOE, Nos. 1-25, Defendants. SUPPLEMENTAL DECLARATION OF JOEL A. FEUER IN SUPPORT OF DEFENDANT LEONARD COHEN'S MOTION TO COMPEL ARBITRATION SUPPLEMENTAL DECLARATION OF JOEL A. FEUER I, Joel A. Feuer, declare: 1. I am an attorney licensed to practice law in the State of California, and I have been admitted pro hac vice to practice before this Court in the above matter. I am a partner in the firm of Gibson, Dunn & Crutcher LLP, counsel for Petitioner and Defendant Leonard Norman Cohen. I make this declaration in further support of Cohen's Petition and Motion For An Order Compelling Arbitration and his Motion to Compel Arbitration. The facts stated in this declaration are from my personal knowledge, and if called as a witness, I would and could testify competently thereto. 2. On or about August 24, 2005, I received a letter from NASD Dispute Resolution regarding the Statement of Claim that I had caused to be filed on behalf of Leonard Cohen against the members of the Agile Group. A copy of the letter is attached as Exhibit C to the Agile Group's Opposition to Cohen's Motion To Compel Arbitration. The letter advised me of two "deficiencies" regarding the Statement of Claim. The first was that the NASD required the original of the Uniform Submission Agreement, a form the NASD requires, executed by Mr. Cohen. I had only sent copies. I have since provided the NASD with the original NASD Uniform Submission Agreement executed by Mr. Cohen. The second deficiency was that, according NASD records, three of the five respondents named in the Statement of Claim, Agile Group, LLC, Tactical Allocation Services LLC and Greenberg & Associates, Inc. were not members of the NASD. The NASD indicated that it could assert jurisdiction over these parties pursuant to a court order compelling arbitration. On or about September 6, 2005 and again on October 5, 2005, I sent letters to the NASD regarding the proceedings to compel arbitration pending in the United States District Court for the Central District of California. Prior to sending each letter, I orally advised the NASD administrator, Ms. Andrade, of the status and was advised that, pending the outcome of Cohen's efforts to compel arbitration, the NASD would not dismiss the claims against the nonNASD members. Copies of my letters to Ms. Andrade are attached hereto as Exhibits A and B. 4. After reviewing the Agile Group's Opposition arguments regarding the status of Cohen's Statement of Claim before the NASD, I called Ms. Andrade's office at the NASD and requested that the NASD provide me with a letter describing the current status of Cohen's arbitration against the Agile Group members. Attached hereto as Exhibit C is a letter dated November 3, 2005 from Ms. Katrina Key advising me that the "matter remains pending" on the NASD's docket. 5. Attached hereto as Exhibit D is a copy of the General Instructions and Glossary of Terms for Form ADV as published by the Securities & Exchange Commission and found at about/forms/formadv-instructions.pdf. The Glossary of Terms starting on page 27 of this Declaration includes the definitions of terms for "Advisory Affiliate" and "Control," which are referred to in the Reply Brief, filed with this Declaration. I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. Executed this 15th day of November, 2005 at Los Angeles, California. s/Joel A. Feuer JOEL A. FEUER Document Number:?603 pages14 kb?AttachmentDescription1Exhibit A to Supplemental Declaration of Joel A. Feuer3 pages57 kb2Exhibit B to Supplemental Declaration of Joel A. Feuer3 pages76 kb3Exhibit C to Supplemental Declaration of Joel A. Feuer2 pages32 kb4Exhibit D to Supplemental Declaration of Joel A. Feuer25 pages1.0 mbExhibit A – Letter to NASD (Los Angeles)Exhibit B – Letter to NASD (Los Angeles)Exhibit C – NASD Letter to Joel Feuer (Gibson Dunn, Los Angeles)Exhibit D – NASD Forms12/14/200566?RECEIPT for $2665.88 by Agile Allocation Svcs pursuant to?58?Order on Motion to Deposit Funds of 11/14/05, (gms, ) (Entered: 12/14/2005)12/14/200567?RECEIPT for $149,500.00 from Winchester Reserves pursuant to?58?Order on Motion to Deposit Funds of 11/14/05 (gms, ) (Entered: 12/14/2005)12/21/200573?ORDER denying Cohen's?38?and?39?Motion to Compel Arbitration. Signed by Judge Lewis T. Babcock on 12/21/05. (emksl, ) (Entered: 12/22/2005)BABCOCK ORDER RE. COHEN’S MOTION TO COMPEL ARBITRATIONORDER IS REPLETE WITH FRAUDIN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Lewis T. Babcock, Chief Judge Civil Case No. 05-cv-01233-LTB-MJW GREENBERG & ASSOCIATES. INC., d/b/a Agile Advisors, Inc. a Delaware corporation, TACTICAL ALLOCATION SERVICES, LLC, d/b/a Agile Allocation Services, LLC, a Delaware limited liability company, AGILE GROUP, LLC, a Delaware limited liability company, GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a Agile Group, a Delaware corporation, and NEAL R. GREENBERG, a Colorado resident, Plaintiffs, v. LEONARD COHEN, a Canadian citizen residing in California, KELLEY LYNCH, a United States citizen residing in California, and JOHN DOE, Numbers 1-25, Defendants. ______________________________________________________________________________ ORDER ______________________________________________________________________________ The defendant Leonard Cohen moves for an order compelling arbitration of the plaintiffs’ claims against him. The parties have provided briefs, exhibits, and oral arguments. For the reasons stated below, I DENY the motion. I. Allegations The allegations of the Amended Complaint are substantially the following. In 1997, Mr. Cohen, a resident of California, retained the plaintiffs, directed by the plaintiff Neal Greenberg and headquartered in Boulder, Colorado, to create for him charitable trusts and to manage the assets placed into those trusts. Mr. Cohen allegedly drew extravagant sums from the trusts, depleting the principal amounts and impeding the plaintiffs’ efforts successfully to invest the funds in profitable ventures. The defendant Kelley Lynch, Mr. Cohen’s manager, oversaw and had power of attorney over all of Mr. Cohen’s financial dealings. Mr. Greenberg allegedly warned Ms. Lynch and Mr. Cohen on occasions that Mr. Cohen was spending too much and, absent a change of habit, would become destitute.In October, 2004, Mr. Cohen and Ms. Lynch allegedly parted ways and began to issue competing directives to the plaintiffs. They each blamed the other for Mr. Cohen’s financial distress. Mr. Cohen claimed that Ms. Lynch had deprived him of substantial sums of money. Thereafter, Mr. Cohen and his personal attorney, Robert Kory, allegedly conspired to extort the lost sums from the plaintiffs by tarnishing the plaintiffs’ reputation, asserting spurious claims, and coercing a settlement from the plaintiffs’ insurance carrier. This they intended to accomplish using Mr. Cohen’s fame as a prominent recording artist to publish defamatory statements about the plaintiffs. They tried to compel Ms. Lynch to participate in their project by, among other tactics, having her arrested on false pretenses and initiating proceedings to deprive her of her children. The Amended Complaint does not indicate that this purported thuggery was effective.Mr. Kory, acting on Mr. Cohen’s behalf, sent an allegedly defamatory demand letter to Mr. Greenberg’s attorney, wrongly accusing the plaintiffs of fraud and various breaches of fiduciary duty. After the plaintiffs filed this lawsuit, Messrs. Cohen and Kory allegedly published defamatory statements on Mr. Cohen’s web site, blaming the plaintiffs for the lost monies, asserting that the plaintiffs had wrongfully permitted Ms. Lynch to withdraw unauthorized sums, and asserting that the plaintiffs had provided Mr. Cohen with fraudulent accounting records.Mr. Cohen and Ms. Lynch now dispute entitlement to the funds remaining in the trusts. Each seeks immediate acquisition of the funds. The plaintiffs have filed an interpleader actionagainst both Mr. Cohen and Ms. Lynch and assert additional claims against Mr. Cohen for civil conspiracy, outrageous conduct (emotional distress), civil extortion, and defamation.II. Evidentiary Materials Mr. Cohen asks this Court to enforce an arbitration clause contained in a January, 1997 services agreement (“1997 Agreement”) to which he and the plaintiff Tactical Allocation Services, LLC (“Tactical”) were parties. That clause states, Any dispute or controversy rising out of or relating to this Agreement, any document or instrument delivered pursuant to, in connection with, or simultaneously with this Agreement or any breach of this Agreement or such documentation or instrument, or with respect to the relationship between TAS and Client shall be settled by final and binding arbitration to be held in Boulder, Colorado in accordance with the rules in effect of the NASD Arbitration Association. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction, and the parties irrevocably consent to the jurisdiction of the Colorado courts for this purpose.The plaintiffs respond that a series of February 26, 2002 agreements, signed by Ms. Lynch on Mr. Cohen’s behalf, supersede the 1997 Agreement and control here. One of the 2002 agreements (“Tactical Agreement”), ostensibly between Mr. Cohen and Ms. Lynch as “CLIENT” and Tactical as “ADVISER,” provides, This Agreement supersedes and replaces, in its entirety, all previous investment advisory agreement(s) between the parties. To the extent not inconsistent with applicable law, this Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. In addition, to the extent not inconsistent with applicable law, the venue (i.e. location) for the resolution of any dispute or controversy between ADVISER and CLIENT shall be the County of Boulder, State of Colorado.Tactical Agreement ? 20. The arbitration clause of the Tactical Agreement provides, Subject to the conditions and exceptions noted below, and to the extent not inconsistent with applicable law, in the event of any dispute pertaining to ADVISER’s services under this Agreement, both ADVISER and CLIENT agree to submit the dispute to arbitration in accordance with the auspices and rules of the American Arbitration Association (“AAA”), provided that the AAA accepts jurisdiction. ADVISER and CLIENT understand that such arbitration shall be final and binding, and that by agreeing to arbitration, both ADVISER and CLIENT are waiving their respective rights to seek remedies in court, including the right to a jury trial. CLIENT acknowledges and agrees that in the specific event of non-payment of any portion of Adviser Compensation pursuant to paragraph 2 of this Agreement, ADVISER, in addition to the aforementioned arbitration remedy, shall be free to pursue all other legal remedies available to it under law, and shall be entitled to reimbursement of reasonable attorneys fees and other costs of collection. Tactical Agreement ? 15Paragraph 2, referenced in the arbitration clause, sets forth the principles and formulae by which Tactical’s compensation is to be determined and paid. “Adviser’s services,” described at length over several paragraphs, are summarized as responsibility “for the investment and reinvestment of those assets of the CLIENT designated by the CLIENT to be subject to the ADVISER’S management.” Tactical Agreement ? 1(a). The Tactical Agreement contains numerous ancillary provisions, including various acknowledgments, promises, and liability waivers by the CLIENT; the ADVISER’s promise to provide to the CLIENT periodic reports; and provisions for termination and assignment of the agreement and severability of its provisions.A second February 26, 2002 agreement (“G&A Agreement”) by and between Mr. Cohen and Ms. Lynch as “CLIENT” and the plaintiff Greenberg & Associates, Inc. (“G&A”) as “PLANNER,” requires G&A to “provide CLIENT with some or all of the following services: estate planning, tax planning, retirement planning, insurance advice, and investment advice.” G&A Agreement ? 1. Like the Tactical Agreement, the G&A Agreement “supersedes and replaces, in its entirety, all previous financial planning agreement(s) between the parties, and is governed by Colorado law. G&A Agreement ? 7. Resolutions of all disputes is to occur in Boulder, ColoradoThe G&A Agreement contains an arbitration clause, which states,Subject to the conditions and exceptions noted below, and to the extent not inconsistent with applicable law, in the event of any dispute pertaining to PLANNER’s services under this Agreement, both PLANNER and CLIENT agree to submit the dispute to arbitration in accordance with the auspices and rules of the American Arbitration Association (“AAA”), provided that the AAA accepts jurisdiction. PLANNER and CLIENT understand that such arbitration shall be final and binding, and that by agreeing to arbitration, both PLANNER and CLIENT are waiving their respective rights to seek remedies in court, including the right to a jury trial. CLIENT acknowledges that he/she/it has had a reasonable opportunity to review and consider this arbitration provision prior to the execution of this Agreement. G&A Agreement ? 5. Like the Tactical Agreement, the G&A Agreement contains provisions other than those circumscribing the services G&A is to provide.The Tactical Agreement and the G&A Agreement each contain separate signature lines for Ms. Lynch and Mr. Cohen. In each agreement, the signature line for Ms. Lynch contains a signature, apparently hers, and the line for Mr. Cohen is blank. By affidavit, Mr. Greenberg explains, Over the years, Mr. Cohen has routinely designated Kelley Lynch to represent his interests and convey his instructions with regard to his investment accounts managed by [Tactical]. In addition, we accepted Ms. Lynch’s signature on Mr. Cohen’s two new customer agreements in February 2002 (one for [Tactical] and one for G&A) because of this standing practice, and because we were then in possession of a broad and durable power of attorney Mr. Cohen previously had granted Ms. Lynch. Ms. Lynch was also the secondary trustee on one of the Cohen trust accounts – the Cohen Family Trust – which gave her additional authority to issue instructions in Mr. Cohen’s absence. The “Client” on each new 2002 contract was identified as “Kelley Lynch and Leonard Cohen.” It is my recollection that this recognized their relatively interchangeable execution of account documentation on Mr. Cohen’s behalf.Greenberg Affidavit, ? 5.Mr. Greenberg avers that the Tactical and G&A Agreements were among a series of contracts that Tactical and G&A utilized early in 2002, intending to supersede all existing contracts with clients. The new contracts “contain limited arbitration provisions that stipulate venue in Colorado and AAA arbitration.” Greenberg Affidavit, ? 4.Mr. Cohen has submitted an abundance of materials intended to demonstrate that the plaintiffs are bound by the rules of the National Association of Securities Dealers, Inc. (“NASD”) to arbitrate their claims before the NASD’s dispute resolution entity. As the plaintiffs concede, Greenberg & Associates Securities, Inc. is a member of the NASD. Mr. Cohen argues that the other plaintiffs also come under NASD arbitration rules by principles of agency and corporate veil piercing. However, the plaintiffs have produced a letter from the NASD, mailed to Mr. Cohen after Mr. Cohen filed an arbitration complaint against the plaintiffs in an NASD venue in Los Angeles, California, denying that the NASD has jurisdiction over Agile Group, LLC, Tactical, and G&A. The letter indicates that the NASD is willing to arbitrate Mr. Cohen’s claims if Mr. Cohen provides a pre-dispute agreement to arbitrate or a court order mandating arbitration.In light of the NASD’s declination, I will not consider the materials Mr. Cohen has produced concerning the inter-relations among the plaintiffs and their purported connections to the NASD. First, I will not second-guess the NASD’s evaluation of the limits of its own jurisdiction. Second, the claims Mr. Cohen has asserted in his arbitration complaint are not before me; the existence of Mr. Cohen’s arbitration claims in California does not affect the narrow question I must answer hereWE JOINTLY OWNED IT? SO WHAT IS GOING ON?The plaintiffs proffer a limited partnership agreement (“ASF Agreement”) governing an entity known as Agile Safety Fund, LP (“ASF”). On February 26, 2002, Ms. Lynch signed the ASF Agreement on behalf of an entity known as Traditional Holdings, LLC (“Traditional”). Mr. Greenberg avers, and Mr. Cohen does not dispute, that Ms. Lynch and Mr. Cohen jointly owned Traditional; that Traditional subscribed to ASF as a limited partner and invested significant portions of its assets in ASF; that this arrangement effectuated the plaintiffs’ investment plan for Mr. Cohen’s assets; and that all was performed pursuant to the Tactical and G&A Agreements. Indeed, in his complaint to the NASD, a copy of which he has provided, Mr. Cohen alleged that Traditional was created to hold and invest his assets for his benefit during his lifetime, that he gave Ms. Lynch authority to manage Traditional, and that he was aware of Traditional’s investment in ASF. The ASF Agreement contains no arbitration clause. It requires that any action or proceeding arising out of it “must be commenced and prosecuted in the State of Colorado.” ASF Agreement §14.06. It provides that the partners may enforce the rights and obligations contained in it “by specific performance, injunction or other equitable remedy” and “in equity as well as at law or otherwise.” ASF Agreement §14.12(b).III. Discussion I first must determine which, if any, arbitration agreement controls. I can resolve this fact question based upon the materials the parties have provided. Second, I must determine whether the plaintiffs’ claims come under the governing arbitration clause. That question I resolve as a matter of law. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S. Ct. 588, 154 L. Ed. 2d 491 (2002). As an initial matter, I note that no plaintiffs other than Tactical were parties to the 1997 Agreement.A. Which agreement governs The plaintiffs assert that the Tactical and G&A Agreements expressly supersede the 1997 Agreement. Mr. Cohen points out that he never signed the 2002 Agreements and contends that Ms. Lynch acted on her own behalf, without his authority, when she signed. Both parties have focused on the question of Ms. Lynch’s actual authority. The parties have not stipulated whether Colorado or California law applies. However, both Colorado and California courts have recognized the doctrine of apparent authority in recent decisions. Rush Creek Solutions, Inc. v. Ute Mountain Ute Tribe, 107 P.3d 402 (Colo. App. 2004); Seneca Ins. Co. v. County of Orange, 13 Cal. Rptr. 3d 1 (Cal. App. 2004). In Rush Creek Solutions, the Colorado Court of Appeals ruled that, in the absence of express authority, a purported principal may be bound by the actions of his agent when his written or spoken words or other conduct “causes a person to believe that the principal consents to have the act done on his behalf by a person purporting to act for him.” Rush Creek Solutions, 107 P.3d at 407. The court held that an agent who at all times was authorized to enter into contracts on behalf of a Native American tribe had apparent authority to waive sovereign immunity for the tribe because nothing appeared in the authorization to limit the agent’s exercise of authority. Id. In Seneca Ins. Co., the California Court of Appeal stated that a principal is liable for the act of an ostensible agent if: 1) the person dealing with the agent does so with a reasonable belief in the agent’s authority; 2) the belief is generated by some act or neglect of the principal sought to be charged; and 3) the third person in relying on the agent's apparent authority is not guilty of negligence. Seneca Ins. Co., 13 Cal. Rptr. 3d at 6.COHEN WAS TRAVELINGMs. Lynch had apparent authority to sign the 2002 Agreements on Mr. Cohen’s behalf under both Rush Creek Solutions and Seneca Ins. Co.. As Mr. Greenberg stated in his affidavit and Mr. Cohen alleged in his NASD complaint, Mr. Cohen granted to Ms. Lynch the authority to oversee and manage the investment of his assets. The plaintiffs possessed a durable power of attorney that Mr. Cohen had granted to Ms. Lynch. Mr. Cohen designated Ms. Lynch the secondary trustee of one of his trusts, granting to her ostensible authority to issue instructions in his absence. He allowed Ms. Lynch for several years to execute on his behalf documents that the plaintiffs tendered. By all of this conduct, Mr. Cohen caused the plaintiffs reasonably to believe that Ms. Lynch had authority to execute agreements on his behalf. Mr. Cohen in no way expressed to the plaintiffs limitations on Ms. Lynch’s authority and the plaintiffs demonstrated no negligence by relying upon the long-standing practice. See also, Garrison v. Superior Court, 33 Cal. Rptr. 3d 350 (Cal. App. 2005) (daughter had authority to enter into an arbitration agreement on mother’s behalf where mother granted daughter a durable power of attorney without limitations on the exercise of authority).LYNCH HAD UNFETTERED ACCESS TO NOTHINGThough the signature lines over Mr. Cohen’s name remain blank, it is not reasonable to infer that Ms. Lynch signed the documents solely on her own behalf. Both the Tactical Agreement and the G&A Agreement identify Mr. Cohen and Ms. Lynch as the CLIENT. And, as Mr. Cohen alleged in his NASD complaint, the purpose of the arrangement was to manage his assets for his benefit. Indeed, the wrongs he supposes the plaintiffs to have committed consist primarily of allowing Ms. Lynch unfettered access to his assets, which the plaintiffs managed pursuant to the Tactical, G&A, and ASF Agreements.Mr. Cohen cites Homestake Lead Co. of Missouri v. Doe Run Resources Corp., 282 F. Supp. 2d 1131 (N.D. Cal. 2003) for the proposition that the arbitration clause in the 1997 Agreement survived the execution of the 2002 Agreements. An arbitration provision in a contract survives the termination of that contract unless the parties expressly or clearly imply an intent to override this presumption. Riley Mfg. Co., Inc. v. Anchor Glass Container Corp., 157 F.3d 775, 781 (10th Cir. 1998); GATX Management Services, LLC v. Weakland, 171 F. Supp. 2d 1159, 1164 (D. Colo. 2001); Encore Productions, Inc. v. Promise Keepers, 53 F. Supp. 2d 1101, 1108 (D. Colo. 1999). Here, the parties have expressly overridden the presumption of continuity. Both 2002 Agreements expressly “supersede[] and replace[], in [their] entirety, all previous investment advisory agreement(s) between the parties.” Homestake Lead is not contrary. In that case, the court concluded that an arbitration clause survived a subsequent agreement, which expressly incorporated the prior agreement and excepted the arbitration clause from replacement. The court concluded that the parties did not intend to supersede the arbitration clause. Homestake Lead, 282 F. Supp. 2d at 1142-1143. The Tactical and G&A Agreements control here. By their express terms, they supersede the 1997 Agreement.B. Whether the claims come under the agreement “To determine whether a particular dispute falls within the scope of an agreement's arbitration clause, a court should undertake a three-part inquiry.” Cummings v. Fedex Ground Package System, Inc., 404 F.3d 1258, 1261 (10th Cir. 2005). First, recognizing there is some range in the breadth of arbitration clauses, a court should classify the particular clause as either broad or narrow. Next, if reviewing a narrow clause, the court must determine whether the dispute is over an issue that is on its face within the purview of the clause, or over a collateral issue that is somehow connected to the main agreement that contains the arbitration clause. Where the arbitration clause is narrow, a collateral matter will generally be ruled beyond its purview. Where the arbitration clause is broad, there arises a presumption of arbitrability and arbitration of even a collateral matter will be ordered if the claim alleged implicates issues of contract construction or the parties' rights and obligations under it. Id. (emphasis original), quoting Louis Dreyfus Negoce S.A. v. Blystad Shipping & Trading Inc., 252 F.3d 218, 224 (2d Cir. 2001), cert. denied, 534 U.S. 1020, 122 S. Ct. 546, 151 L. Ed. 2d 423 (2001). In Cummings, the court interpreted a clause that subjected to arbitration disputes arising out of termination of the contract “but no others.” Cummings, 404 F.3d at 1260. The court concluded, “[T]he parties clearly manifested an intent to narrowly limit arbitration to specific disputes regarding the termination.” Id. at 1262. Here, as in Cummings, the Tactical and G&A Agreements address matters not encompassed within the arbitration clauses; the scope of the Agreements and the scope of the arbitration clauses are not contiguous. The parties agreed to arbitrate disputes pertaining to the plaintiffs’ services but not all disputes arising out of the Agreements. Gelco Corp. v. Baker Industries, Inc., 779 F.2d 26, 28 (8th Cir. 1985). I therefore find and conclude that the parties manifestly intended narrowly to limit the scope of the arbitration clauses. Evidence external to the Agreements commends this conclusion. The 2002 arbitration clauses are considerably more circumscribed than the clause contained in the 1997 Agreement, which required arbitration of “[a]ny dispute or controversy rising out of or relating to this Agreement, any document or instrument delivered pursuant to, in connection with, or simultaneously with this Agreement or any breach of this Agreement or such documentation or instrument, or with respect to the relationship between” Tactical and Mr. Cohen. Also, the ASF Agreement, which Ms. Lynch signed on Mr. Cohen’s behalf on February 26, 2002, expresslyreserves to ASF partners all legal and equitable remedies and contemplates the filing of actions and proceedings. All of these provisions are consistent with Mr. Greenberg’s objective, expressed in his affidavit, of limiting the disputes that the plaintiffs would be required to arbitrate. “Under a narrow arbitration clause, a dispute is subject to arbitration only if it relates to an issue that is on its face within the purview of the clause, and collateral matters will generally be beyond its purview.” Cummings, 404 F.3d at 1262. The plaintiffs’ claims in this case – for allegedly tortious conduct in which Mr. Cohen engaged – are collateral to the plaintiffs’ provision of services, which constitutes the only arbitrable subject matter. Id. at 1262. Accordingly, it is ORDERED that: 1) Mr. Cohen’s motion to compel arbitration [38, 39] is DENIED. Dated: December 21 , 2005, in Denver, Colorado. BY THE COURT: s/Lewis T. Babcock Lewis T. Babcock, Chief JudgeLYNCH NOT SERVED THIS AMENDED COMPLAINTHAS NOT PURCHASED THIS AMENDED COMPLAINT AND HAS NO INTENTION OF DOING SO. THIS WAS AMENDED AFTER THE ENTRY OF DEFAULT JUDGMENT IN LA CONFIDENTIAL.05/23/200693?AMENDED COMPLAINT?and Jury Demand?against all defendants, filed by Greenberg & Associates Securities, Inc., Neal R. Greenberg, Greenberg & Associates, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Exhibit 1 to Second Amended Complaint and Jury Demand#?2?Exhibit 2 to Second Amended Complaint and Jury Demand#?3?Exhibit 3 to Second Amended Complaint and Jury Demand (part 1)#?4?Exhibit 3 to Second Amended Complaint and Jury Demand (part 2)#?5?Exhibit 4 to Second Amended Complaint and Jury Demand#?6?Exhibit 5 to Second Amended Complaint and Jury Demand#?7?Exhibit 6 to Second Amended Complaint and Jury Demand#?8?Exhibit 7 to Second Amended Complaint and Jury Demand#?9?Exhibit 8 to Second Amended Complaint and Jury Demand#?10?Exhibit 9 to Second Amended Complaint and Jury Demand#?11?Exhibit 10 to Second Amended Complaint and Jury Demand#?12?Exhibit 11 to Second Amended Complaint and Jury Demand)(Scheid, R.) (Entered: 05/23/2006)05/31/200694?Mail Returned as Undeliverable re: 92 Docket Annotation Addressed to Kelley Lynch. (rlp, ) (Entered: 05/31/2006)06/30/200697?Partial MOTION to Dismiss?Second Amended Complaint?by Defendant Leonard Cohen. (Livingston, Randall) (Entered: 06/30/2006)KL EMAIL ADDRESS AT THIS TIME WAS ALLEGEDLY TSERINGMAUNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 05-cv-01233-LTB-MJW NATURAL WEALTH REAL ESTATE, INC., d/b/a Agile Advisors Inc. a Colorado corporation; TACTICAL ALLOCATION SERVICES, LLC, d/b/a Agile Allocation Services, LLC, a Colorado limited liability company; AGILE GROUP, LLC, a Delaware limited liability company; GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a Agile Group, a Colorado corporation; and NEAL R. GREENBERG, a Colorado resident, Plaintiffs v. LEONARD COHEN, a Canadian citizen residing in California; KELLEY LYNCH, a United States citizen residing in California; and JOHN DOE, Nos. 1-25. Defendants and LEONARD COHEN, a Canadian citizen residing in California Counterclaim Plaintiff v. TIMOTHY BARNETT, a Colorado citizen Counterclaim Defendant. DEFENDANT COHEN’S MOTION FOR PARTIAL DISMISSAL OF THE SECOND AMENDED COMPLAINT Defendant Leonard Cohen (“Cohen”), by and through counsel, Bailey & Peterson, A Professional Corporation, pursuant to Fed.R.Civ.P. 12(b)(6), and for the reasons and authorities stated in Defendant Cohen’s Memorandum Brief in Support of Motion for Partial Dismissal of the Second Amended Complaint, filed contemporaneously herewith and incorporated herein by this reference, moves the Court to dismiss for failure to state a claim upon which relief can be granted Plaintiffs’ Third Claim for Relief (interference with prospective business advantage), Fifth Claim for Relief (civil extortion), Sixth Claim for Relief (conspiracy), Seventh Claim for Relief (violation of Colorado Organized Crime Control Act), Eighth Claim for Relief (injunction), and Ninth Claim for Relief (declaratory judgment). WHEREFORE, Defendant Leonard Cohen prays that the Court dismiss the Third, Fifth, Sixth, Seventh, Eighth, and Ninth Claims for Relief from the Second Amended Complaint for failure to state claims upon which relief can be granted, without leave to amend. DATED this 30th day of June, 2006. Respectfully submitted, BAILEY & PETERSON, A Professional Corporation s/ Randall M. Livingston James S. Bailey, Jr. Randall M. Livingston 1660 Lincoln Street, Suite 3175 Denver, Colorado 80264 Telephone: (303) 837-1660 Facsimile: (303) 837-0097 E-mail: bailey@b-p- livingston@b-p- ATTORNEYS FOR DEFENDANT LEONARD COHEN Case 1:05-cv-01233-LTB Document 97 Filed 06/30/06 USDC Colorado Page 2 of 3 3 CERTIFICATE OF SERVICE I hereby certify that on this 30th day of June, 2006, I served true and correct copies of the foregoing DEFENDANT COHEN’S MOTION FOR PARTIAL DISMISSAL OF THE SECOND AMENDED COMPLAINT electronically on the following: R. Daniel Sheid dan@ Sherab Posel poselaw@ Kelley Lynch tseringma@ s/ Linda J. Simmons 07/31/2006109?Unopposed MOTION to Deposit Funds?Into the Registry of the Court Pursuant to Fed.R.Civ.P. 67?by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC. (Attachments: #?1?Proposed Order (PDF Only))(Scheid, R.) (Entered: 07/31/2006)08/01/2006110?ORDER granting?109?Motion to Deposit Funds, Leave is granted to Plaintiffs', to deposit into the Registry of the Court $2014.90, which amount is the additional funds which are the subject of the Interpleader Claim in the Second Amended Complaint, Signed by Judge Lewis T. Babcock on 08/01/06. (rlp, ) (Entered: 08/01/2006)1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 05-CV-01233-LTB-MJW NATURAL WEALTH REAL ESTATE, INC., d/b/a Agile Advisors Inc., a Colorado corporation; TACTICAL ALLOCATION SERVICES, LLC, d/b/a Agile Allocation Services, LLC, a Colorado limited liability company; AGILE GROUP, LLC, a Delaware limited liability company; GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a Agile Group, a Colorado corporation; and NEAL R. GREENBERG, a Colorado resident, Plaintiffs, v. LEONARD COHEN, a Canadian citizen residing in California; KELLEY LYNCH, a United States citizen residing in California; and JOHN DOE, NOS. 1-25, Defendants. and LEONARD COHEN, a Canadian citizen residing in California; Counterclaim Plaintiff, v. TIMOTHY BARNETT, a Colorado citizen, Counterclaim Defendant. PLAINTIFFS’ UNOPPOSED MOTION FOR LEAVE TO DEPOSIT ADDITIONAL FUNDS INTO THE REGISTRY OF THE COURT PURSUANT TO Fed.R.Civ.P. 67 Plaintiffs Natural Wealth Real Estate, Inc., d/b/a Agile Advisors Inc.; Tactical Allocation Services, LLC, d/b/a Agile Allocation Services LLC; Agile Group, LLC; Greenberg & Associates Securities, Inc., d/b/a Agile Group; and Neal R. Greenberg (“Plaintiffs”), through Case 1:05-cv-01233-LTB Document 109 Filed 07/31/06 USDC Colorado Page 1 of 3 2 undersigned counsel, respectfully request, pursuant to Fed.R.Civ.P. 67 and Local Civil Rule 67.2, that the Court issue an order permitting the deposit of additional funds into the registry of the Court. 1. On November 14, 2005, this Court entered an Order allowing Plaintiffs’ to deposit interpleaded funds into the Registry of the Court in the amount of $152,165.88. On December 12, 2005, Plaintiffs’ deposited that amount into the Registry of the Court, per the Court’s Order. 2. Upon finalization of the Traditional Holdings, LLC accounting statements, Plaintiffs’ have determined that additional funds, in the amount of $2,014.90 are still being held by Traditional Holdings, LLC. This amount represents the remainder of the funds invested by Traditional Holdings, LLC in the Agile Safety Fund. Defendants Leonard Cohen and Kelley Lynch both claim rights to these interpleaded funds. Plaintiffs request that the Court enter an Order allowing the deposit of these additional funds, which are the subject of the Interpleader Claim in the Second Amended Complaint. 3. Through this Motion, Plaintiffs are providing notice to every other party as Fed.R.Civ.P. 67 requires. Defendant Lynch has filed no objection to Plaintiffs’ previous Motions to deposit the funds at issue. Counsel for Defendant Cohen has indicated that they have no objection to the deposit of these additional funds. WHEREFORE, Plaintiffs respectfully request that this Court issue an order permitting deposit of the additional $2,014.90 of interpleaded funds into the Registry of the Court. Case 1:05-cv-01233-LTB Document 109 Filed 07/31/06 USDC Colorado Page 2 of 3 3 DATED: July 31, 2006. Respectfully Submitted, s/R. Daniel Scheid R. Daniel Scheid LEWIS SCHEID, LLC 2300 15th Street, Suite 320 Denver, CO 80202 Telephone: (303) 534-5040 ext. 202 Facsimile: (303) 534-5039 E-mail: dan@ Sherab Posel POSEL LAW OFFICES 5468 Fall Clove Road DeLancey, NY 13752 Telephone: (845) 676-4034 E-mail: poselaw@ ATTORNEYS FOR PLAINTIFFS AND COUNTERCLAIM DEFENDANT CERTIFICATE OF SERVICE I hereby certify that on July 31, 2006, I electronically filed the foregoing PLAINTIFFS’ MOTION FOR LEAVE TO DEPOSIT ADDITIONAL FUNDS INTO THE REGISTRY OF THE COURT PURSUANT TO Fed.R.Civ.P. 67 with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following: Randall M. Livingston (livingston@b-p-) I hereby certified that I served the foregoing document on the following non CM/ECF participants by e-mail and U.S. First Class Mail, postage prepaid to the following: Kelley Lynch 2648 Mandeville Canyon Road Los Angeles, CA 90049 tseringma@ s/R. Daniel Scheid Case 1:05-cv-01233-LTB Document 109 Filed 07/31/06 USDC Colorado Page 3 of 3 1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 05-CV-01233-LTB-MJW NATURAL WEALTH REAL ESTATE, INC., d/b/a Agile Advisors Inc., a Colorado corporation; TACTICAL ALLOCATION SERVICES, LLC, d/b/a Agile Allocation Services, LLC, a Colorado limited liability company; AGILE GROUP, LLC, a Delaware limited liability company; GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a Agile Group, a Colorado corporation; and NEAL R. GREENBERG, a Colorado resident, Plaintiffs, v. LEONARD COHEN, a Canadian citizen residing in California; KELLEY LYNCH, a United States citizen residing in California; and JOHN DOE, NOS. 1-25, Defendants. and LEONARD COHEN, a Canadian citizen residing in California; Counterclaim Plaintiff, v. TIMOTHY BARNETT, a Colorado citizen, Counterclaim Defendant. ORDER PERMITTING THE DEPOSIT OF INTERPLEADED FUNDS INTO THE REGISTRY OF THE COURT THIS MATTER comes before the Court on Plaintiffs’ Unopposed Motion for Leave to Deposit Additional Funds Into the Registry of the Court Pursuant to Fed.R.Civ.P. 67 (Doc ____). The Court has reviewed the Motion and being fully advised thereon, hereby Case 1:05-cv-01233-LTB Document 109-1 Filed 07/31/06 USDC Colorado Page 1 of 2 2 ORDERS that Plaintiffs’ Motion is GRANTED. Leave is granted to Plaintiffs’, under Federal Rule of Civil Procedure 67 and Local Civil Rule 67.2, to deposit into the Registry of the Court $2014.90, which amount is the additional funds which are the subject of the Interpleader Claim in the Second Amended Complaint. DATED: ________________________, 2006 BY THE COURT: ______________________________ Lewis T. Babcock, Chief Judge Case 1:05-cv-01233-LTB Document 109-1 Filed 07/31/06 USDC Colorado Page 2 of 208/15/2006116?RECEIPT for $2014.90 by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC per entry?110?Order on Motion to Deposit Funds, (rlp2, ) (Entered: 08/15/2006)10/19/2006123?BRIEF in Support re?122?MOTION for Judgment on the Pleadings?as to Cohen's Second Through Eighth Counterclaims?filed by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC, Counter Defendant Timothy Barnett. (Scheid, R.) (Entered: 10/19/2006)I hate to ask the obvious.? What do the emails to Cohen from Greenberg have to do with TH?? Nothing.? I asked repeatedly for profit/loss for each entity.? Is that a crime?? I allegedly owned part of TH.? This document, which I don't need to go all the way through is extremely importantly and they are all lying.? As I have repeatedly said - as of 2002,, this was pre-meditated - RIGHT DOWN TO ASKING ME to execute the POA, having me execute documents while Cohen traveled to India, etc.? What were they scared of?? IRS.? The $1 million and $7 million INADVERTENT 1099s.? This is what they all came up with and this is why I decided to go to IRS.? By the fall of 2004, I felt I had enough evidence.1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 05-CV-01233-LTB-MJW NATURAL WEALTH REAL ESTATE, INC., d/b/a Agile Advisors Inc., a Colorado corporation; TACTICAL ALLOCATION SERVICES, LLC, d/b/a Agile Allocation Services, LLC, a Colorado limited liability company; AGILE GROUP, LLC, a Delaware limited liability company; GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a Agile Group, LLC, a Colorado corporation; and NEAL R. GREENBERG, a Colorado resident, Plaintiffs, v. LEONARD COHEN, a Canadian citizen residing in California; KELLEY LYNCH, a United States citizen residing in California; and JOHN DOE, NOS. 1-25, Defendants, and LEONARD COHEN, a Canadian citizen residing in California; Counterclaim Plaintiff, v. TIMOTHY BARNETT, a Colorado citizen, Counterclaim Defendant. PLAINTIFFS’ AND BARNETT’S MEMORANDUM IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS AS TO COHEN’S SECOND THROUGH EIGHTH COUNTERCLAIMS Plaintiffs Natural Wealth Real Estate, Inc. (“Natural Wealth”); Tactical Allocation Services, LLC (“TAS”); Agile Group, LLC; Greenberg & Associates Securities, Inc. (“Greenberg Securities”); Neal R. Greenberg (“Greenberg”) and Counterclaim Defendant Timothy Barnett (“Barnett”) (collectively, “Counter-Defendants”), by undersigned counsel, pursuant to Fed.R.Civ.P. 12(c), submit their Memorandum in Support of Motion for Judgment on the Pleadings as to Cohen’s Second Through Eighth Counterclaims. I. INTRODUCTION By this motion, Counter-Defendants seek dismissal of each tort Counterclaim brought by Defendant Leonard Cohen (“Cohen”). The grounds for dismissal are: (a) application of the economic loss rule to the negligence, breach of fiduciary duty, and fraud claims (Second through Fourth and Sixth through Eighth Claims); (b) failure to plead fraud with particularity (Third and Seventh Claims); (c) failure to sufficiently plead fraud as a matter of law (Third and Seventh Claims); (d) failure to plead the existence of a third party transaction necessary to sustain a negligent misrepresentation claim (Fourth Claim); and (e) failure to file a certificate of review necessary to bring the professional negligence, negligence, and fiduciary duty claims. (Second, Fifth, Sixth, and Eighth Claims). II. LEGAL STANDARD UNDER RULE 12(c) After an answer has been filed,1 a party may move for judgment on the pleadings under Rule 12(c) and (h)(2). Steele v. Federal Bur. of Prisons, 355 F.3d 1204, 1212 n. 4 (10th Cir. 2003). A Rule 12(c) motion applies the same standard as a Rule 12(b)(6) motion to dismiss. Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1160 (10th Cir. 2000). In reviewing such motion, the Court must accept all well-pled allegations as true and view those allegations in the light most favorable to the nonmoving party. Id.; Colo. Nat’l Bank of Denver v. Adventura Assoc., 757 F.Supp. 1167, 1170 (D. Colo. 1991). However, the Court need only accept the non-movant's “well-pleaded factual contentions, not his conclusory allegations.” Full Draw Prod. v. Easton Sports, Inc., 85 F.Supp. 2d 1001, 1005 (D. Colo. 2000). Dismissal is proper when “it is evident from the [counterclaim] that the [counterclaim] defendant is not liable to the [counterclaim] plaintiff.” Colo. Nat’l Bank, 757 F. Supp. at 1170. 1 Cohen filed his counterclaims on June 30, 2006. Counter-Defendants filed their Reply to Cohen’s Counterclaims on August 10, 2006. Although the Court should limit its review to the four corners of the counterclaims, it may consider unattached documents that: (a) appear in the record of the case (Porous Media Corporation v. Pall Corporation, 186 F. 3d 1077, 1079 (8th Cir. 1999)); or (b) are referred to in the counterclaims and are central thereto, so long as authenticity is undisputed. GFF Corp. v. Assoc. Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997). If the rule were otherwise, “a [party] with a deficient claim could survive a motion to dismiss simply by not attaching a dispositive document upon which the [party] relied.” Id. at 1385. Where the counterclaim refers to a document and the document is central to the party’s claim, “the [claimant] is obviously on notice of the document’s contents . . . .” Id.; See also, Robinson v. Board of Regents of the Univ. of Colo., 390 F. Supp. 2d 1011, 1015 (D. Colo. 2005). Counter-Defendants have attached as Exhibits A-Q certain documents (including contracts) that are referenced in, relied upon, or otherwise central to Cohen’s counterclaim allegations. There should be no dispute as to their authenticity. Indeed, Cohen has admitted the execution of various contracts in his Answer,2 and the Court has previously ruled on the validity and applicability of many of these same documents.III. SUMMARY OF COUNTERCLAIM ALLEGATIONS A. GENERAL ALLEGATIONS Parties. Counter-Plaintiff Cohen is a Canadian citizen. Countercl. ? 1. CounterDefendant Greenberg is a Colorado citizen and a principal of each corporate Counter-Defendant. Id. ? 2. Counter-Defendant Barnett is also a Colorado citizen and a vice-president of TAS. Id. 2 See, e.g. Cohen Answer at ? 72 (admits signing Durable Power of Attorney dated January 31, 2002). See also, Counterclaims ? 17 (admits investment of Traditional Holdings’ funds into the Agile Safety Fund); ? 54 (admits entering into “written agreements”). 3 See, Greenberg & Associates v. Cohen, 2005 WL 3527294 (D. Colo. Dec. 21, 2005) **2-6. In Cohen’s memorandum briefs addressing the arbitrability issues resolved by this Court’s Dec. 21, 2005 Order, Cohen freely discussed the written contracts between the parties, without challenging authenticity. See, e.g. Cohen’s Reply Brief in Further Support of His Petition and Motion to Compel Arbitration (Nov. 15, 2005) pp. 8-9. Each corporate Counter-Defendant (Natural Wealth, TAS, Agile Group, LLC, and Greenberg Securities) has its principal place of business in Colorado. Id. ?? 4-7. Cohen does not allege that any Counter-Defendant acted as an agent or alter ego of the other. Nonetheless, the corporate Counter-Defendants are collectively referred to – without supporting basis – as “the Agile Group.” 4 Id. Cohen’s Sale of Assets (1997). Before 1997, Cohen had three royalty-producing assets: LCSMI, Artist Royalties, and Writer’s Royalties. Id. ? 9. Greenberg allegedly “worked with” Cohen’s manager, Kelley Lynch (“Lynch”), and a lawyer/tax professor, Richard Westin (“Westin”), to sell LCSMI in 1997. Id. ? 10. Cohen does not specify, however, any manner in which Greenberg purportedly did so. Id. Nor does he allege any deficiency in whatever Greenberg purportedly did. Id. The proceeds of the 1997 sale were used to fund two Trusts allegedly “administered” by Greenberg and “the Agile Group.” Id. ? 11. Cohen does not allege any deficiency in their administration or performance. 5 Id. Cohen’s Sale of Assets (2001). Cohen also alleges that Greenberg “worked with” Lynch and Westin to sell the Artist Royalties in 2001. Id. ? 12. Once again, Cohen does not specify any manner in which Greenberg purportedly did so. Id. The sales price for the Artist Royalties was $8 M. Id. ? 13. The unidentified “transaction costs” purportedly exceeded $3 M. Id. Although Cohen does not allege that any Counter- 4 As seen below, the manner in which this collective term is consistently used throughout the counterclaims in an effort to allege collective duties or conduct is misleading and inappropriate. 5 LYNCH WAS NOT A CLIENTA sample copy of one of at least 30 Investment Advisory Agreements executed between TAS, as ADVISER, and Cohen, Lynch, and/or the Trusts, as CLIENTS, between January 1997 and late 2001, is attached hereto as Exh. A. See also, Pl. Memo in Opposition to Def. Leonard Cohen’s Motion to Dismiss Pl.’s Am Cmplt or, Alternatively, to Stay to Proceedings, Exh. 2 (entire set of pre-2002 TAS Agreements). INTERESTING THAT THIS OCCURRED, WHILE COHEN WAS IN INDIA, AND I WAS ASKED TO EXECUTE A POAEach pre-2002 TAS Agreements was later superseded and replaced by the February 26, 2002 Investment Advisory Agreement executed between TAS, as ADVISER, and Cohen and Lynch, as CLIENTS. Infra § V.A (Exh. O); See also, Greenberg & Associates v. Cohen, 2005 WL 3527294 (D. Colo. Dec. 21, 2005) **2-6. Defendant made a “recommendation to sell” the Artist Royalties (or was ever retained or compensated in any manner regarding such sale), he contends that such a recommendation was negligent. Id. ? 15. Among other things, Cohen alleges that Greenberg and the corporate Counter-Defendants “did not explain the transaction to Cohen.” Id. Cohen does not specify, however, the source of any purported duty to do so. Id. He also ignores his prior consummation of a similar sale transaction in 1997. Id. ? 10. NEXUS $5 MILLION FRAUD IN KORY’S JANUARY 2005 MEMORANDUM. THIS IS ALL PRE-MEDITATED.Nonetheless, Cohen contends that, as a consequence of such alleged negligence, he sold an asset worth $8 M - but received only $5 M. Id. ? 16. Cohen does not identify any particular “transaction cost” that should not have been incurred. Id. NOTHING WAS PLACED IN KENTUCKY AND LYNCH CONTROLLED NOTHINGNor does he allege that any Counter Defendant caused or received the benefit of any such item. Id. Cohen’s Creation of Traditional Holdings. The net proceeds of the 2001 sale (about $5 M) were placed in a Kentucky entity, Traditional Holdings, LLC, controlled by Lynch.6 Id. ? 14. Cohen alleges that this transaction occurred “at the recommendation of Greenberg and the Agile Group, with support of Westin.” Id. THE PROCEEDS WENT TO GREENBERG – NOT LYNCH OR THIn turn, Traditional Holdings issued a private annuity contract to Cohen.7 Id. Through a structure that Greenberg, “the Agile Group,” and Westin purportedly “designed,” Lynch received control over the Traditional Holdings assets that were to fund the annuity.8 Id. Cohen does not specify any manner in which Greenberg or “the Agile Group” purportedly recommended or designed such structure. Id. In fact, the Counterclaims acknowledge that it was Cohen and Westin who “established” the structure. Id. However, they 6 Traditional Holdings’ Articles of Organization and Operating Agreement previously executed by Cohen in December 2000 are attached hereto as Exhs. B and C, respectively. See also, Sec. Am. Compl. ? 56 (Exh. 3). Cohen was a co-member and co-manager of Traditional Holdings. 7 The Private Annuity Agreement previously executed by Cohen in Dec. 2000 is attached hereto as Exh. D. See also, Sec. Am. Compl. ? 62 (Exh. 4). 8 The Durable General Power of Attorney executed by Cohen in Jan. 2002 that gave Lynch unlimited authority over Cohen’s business and financial affairs is attached hereto as Exh. E. See also, Sec. Am. Compl. ? 72 (Exh. 5); See also, Traditional Holdings’ Operating Agreement (Exh. C). …somehow did so “without Cohen’s knowledge or consent.” Id.; Cf., supra, fns. 6-8 (and Exhs. BE attached). FASCINATING ARGUMENT PARTICULARLY AS COHEN BORROWED OR CAUSED TO BE EXPENDED OVER $8 MILLIONCohen alleges that the structure was “so poorly designed” that his manager (Lynch) could steal Traditional Holdings’ funds. Id. ? 16. COHEN SIGNED ALL DOCUMENTS, A STOCK CERTIFICATE SHOWING HIS SHARE WAS .5%, AND LYNCH HAD WESTIN CLARIFY ALL OF THIS IN HIS MARCH 6, 2002 LETTERS TO LYNCH & COHEN.Despite his status as co-member and co-manager, and his voluntary execution of the relevant transaction documents (supra fns. 6-8), Cohen claims that he did not understand the structure and ownership of Traditional Holdings until late 2004. Id. ? 52. COHEN SIGNED THE ORIGINAL DOCUMENT AUTHORIZING HIS PERSONAL TRANSACTION FEES. LYNCH FAXED IT TO GREENBERG. WHY HASN’T GREENBERG MENTIONED THAT?Had he understood the structure, costs, and risks, he allegedly would not have gone forward with “the transaction.” Id. Investment of Traditional Holdings’ Assets. Traditional Holdings’ funds were invested in the Agile Safety Fund.9 Id. ?? 14, 17. It was these invested funds that were to be used to fund Traditional Holdings’ private annuity obligation to Cohen. Id. ? 14. Cohen alleges that he expected to receive “regular reports” from “the Agile Group” regarding the status of these investments. Id. He also alleges that Greenberg and “the Agile Group” knew that Cohen wanted such reports to be accurate and complete. Id. Traditional Holdings’ Withdrawal of Assets. Conceding that Lynch “controlled” Traditional Holdings’ assets (id. ? 14), Cohen alleges that she requested “the Agile Group” to create an account from which Traditional Holdings could access its funds that would be withdrawn from the Agile Safety Fund. Id. ? 18-9. During 2002 to 2004, Lynch did, in fact, cause Traditional Holdings to make withdrawals from the Agile Safety Fund. Id. ?? 20, 23-4, 27, 40-1. Lynch represented to “the Agile Group” that certain of these withdrawals were loans that she would pay back. Id. ? 21-2. She allegedly told “the Agile Group” that there was no need to ??????9 The Limited Partnership Agreement and the related Subscription Agreement, each of which were signed by Lynch on behalf of Traditional Holdings pursuant to the Power of Attorney, are attached hereto as Exhs. F and G, respectively. See also, Sec. Am. Compl. ? 74; The Confidential Private Placement Memorandum for the Agile Safety Fund, also signed by Lynch on behalf of Traditional Holdings (acknowledging receipt thereof), is also attached hereto as Exh. H. At all relevant times, the relationship between Agile Group, LLC, as General Partner of the Agile Safety Fund, and Traditional Holdings and/or its individual members (Lynch and Cohen), as Limited Partner, were governed by the terms and provisions of the Limited Partnership Agreement, Subscription Agreement, and PPM. report to Cohen any decline in value of the Traditional Holdings account as a result of such withdrawals. Id. ? 21. GREENBERG IS THE INDIVIDUAL WHO DETERMINED THAT THE LOANS SHOULD BE TREATED AS ASSETS. HE ALSO PREPARED FINANCIAL STATEMENTS. Thus, she allegedly directed “the Agile Group” not to report these loans or withdrawals to Cohen.10 Id. ? 22. On January 16, 2004, during the same time that these loans or withdrawals were purportedly being concealed, a warning letter was sent to Cohen (with a copy to Lynch) advising of the remaining balance, the rate of spending, and the potential consequences of such spending. Id.11 ? 24. Cohen acknowledges that follow-up efforts were also made to verify receipt of the letter and arrange a meeting with Cohen. Id. ?? 25-26. Later, during the same time that these loans or withdrawals were still purportedly being concealed, another warning letter was sent to Cohen and Lynch again advising them of the remaining balance, the rate of spending, and Lynch’s prior directions concerning the preparation of financial statements.12 Id. ? 27. In fact, throughout the entire time frame relevant to the counterclaims, Cohen acknowledges that numerous other reports were also sent to Cohen, on a regular monthly basis, itemizing all loans and withdrawals.13 Id. ?? 37, 47. Cohen alleges no deficiency concerning these other written monthly statements. Id. He simply claims that he never “requested or even knew about them.” Id. Nonetheless, Cohen alleges that, beginning in mid-December 2001, “the Agile Group” began to send “monthly portfolio performance reports” by email to Cohen. Id. ?? 29-35, 43-4, 10 WHAT DOES MY REQUEST FOR INFORMATION HAVE TO DO WITH COHEN, THE EMAILS HE AND GREENBERG AGREED TO, OR THE FINANCIAL STATEMENTS SENT? I WAS ENTITLED TO INFORMATION.I COULD NEVER GET THE LOSS/GAIN PER ENTITY. THAT WAS RELEVANT RE. PROFIT AND LOSS SHARING. THIS INFORAMTION WAS CO-MINGLED.In fact, such directions related solely to the monthly email reports described later in Cohen’s counterclaims (discussed below). See, e.g. Lynch emails to T. Barnett (dated Sept. 27, 2002) (Exh. I attached hereto) (“with respect to the monthly [email] statements, could I simply have a recap (and not details) of the total amount per entity and loss/gain per entity. Not the details that are also contained in the individual statements.”) 11 A copy of the January 16, 2004 letter is attached hereto as Exh. J. See also, Sec. Am. Compl. ? 91 (Exh. 7). 12 A copy of the June 25, 2004 letter is attached hereto as Exh. K. See also, Sec. Am. Compl. ? 93 (Exhibit 8). 13 Copies of samples of these monthly reports are attached hereto as Exh. L. See, Sec. Am. Compl. ?? 75-76 (Exh. 6); See also, Exh. F hereto (last page) (written notice of record address per LPA § 14.01). Each monthly email was sent: (a) in a format reviewed and directed by Lynch, (id. ?? 21- 2, 48); and (b) “per Lynch’s instructions.”14 Id. ? 49. During 2002, these emails confirmed Traditional Holdings’ withdrawals by amount and purpose. Id. ? 33. At some later point, however, Cohen alleges that “the Agile Group stopped copying Cohen on email confirmations as to withdrawals or stopped sending them altogether.” Id. ? 34: See also, supra fn. 10 (re Lynch’s Sept. 27, 2002 directions – prior to commencement of any of the alleged “unauthorized” withdrawals). Despite the numerous other monthly reports (id. ?? 37, 47), Cohen alleges that he was never made aware of the withdrawals that Lynch caused Traditional Holdings to make “beginning in January 2003.” Id. ? 36. Cohen further alleges that such withdrawals occurred without his permission.15 Id. Thus, Cohen alleges that the Agile Group “cultivated” Cohen’s purported reliance on the brief monthly emails as the “primary form” of informing him about the status and value of his accounts. Id. ? 37-9, 45. THIS IS NOT WHAT GREENBERG’S IRS DANGER WARNING LETTERS STATE.Because these monthly emails were prepared in the format instructed by his own agent (Lynch), they did not report shareholder loans. Id. ?? 39, 48-9. Cohen concedes, however, that the shareholder loans were specifically itemized in the other periodic statements sent by mail addressed to Cohen. Id. ? 47; supra, fn. 13. Each statement was sent to the designated record address for Traditional Holdings. See, e.g. Exh. F (signature page to LPA and subsequent email from K. Lynch to T. Barnett dated June 30, 3003); Exh. L. Despite all of these other communications (monthly statements and warning letters), Cohen alleges that the monthly emails - directed by his agent - “misled” Cohen into believing his accounts were worth more than they were, and failed to advise him of loans Lynch was making to herself. Id. ? 48-9, 51. 14 A copy of a sample monthly email is attached hereto as Exh. M. See also, Sec. Am. Compl. ? 77(e) (Exh. 6). 15 Cohen’s Counterclaims do not identify the date or amount of funds withdrawn by Lynch that purportedly occurred without Cohen’s knowledge or permission. Id. ?? 56; see infra, §V.B.1. (failure to plead fraud with particularity). B. CLAIMS FOR RELIEF Distilled to their essence, Cohen’s counterclaims are based upon: (a) his authorized agent’s exercise of her well-documented right and authority to withdraw Traditional Holdings’ funds from the Agile Safety Fund; (b) Counter-Defendants’ alleged failure to inform Cohen of the withdrawals; and/or (c) Counter-Defendants’ alleged failure to accurately report the status and value of Traditional Holdings’ account. The counterclaims are asserted despite the fact that Lynch was the 99.5% owner of Traditional Holdings and held a broad durable power of attorney executed by Cohen, and multiple letters and reports were sent to Cohen and his agent (Lynch) providing clear notice and warning of the rapid depletion and remaining balance of Traditional Holdings’ account. See, Exhs. B, E, J, K, and L. 1. Breach of Contract. Cohen asserts a claim for breach of written and oral agreements against “the Agile Group.” Id. ?? 53-6 (First Claim). The alleged contract duties include: (a) to “faithfully protect” funds and assets; (b) to “exercise prudence” in handling funds; (c) to “faithfully report” all transactions; (d) to “bring to Cohen’s attention” any activities or transactions contrary to Cohen’s interest; and (e) to “take reasonable care” in protecting capital. Id. ? 54(a)-(e). (emphasis added). The alleged breaches include: (a) “permitting” Lynch to withdraw funds; (b) failing to “communicate with Cohen directly” to advise him of Lynch’s conduct; (c) “failing to report accurately and completely” to Cohen; (d) “failing to follow Cohen’s directions and instructions;” and (e) “misrepresenting the value” of the assets in his account. Id. ? 55(a)-(f). As damages, Cohen seeks recovery of economic loss (i.e., amounts withdrawn by Lynch and not reported to him). Id. ? 56. 2. Tort Claims. Despite Cohen’s clear and unequivocal assertion that Counter-Defendants’ alleged duties to properly protect, handle, and issue reports concerning Traditional Holdings’ assets were the subject of contract (including alleged contract duties to exercise prudence, reasonable care, and report accurately and completely), he asserts several tort claims based upon purported breaches of these exact same contract duties. Breach of Fiduciary Duty. Cohen asserts a fiduciary duty claim against Greenberg, Barnett, and “the Agile Group.” Id. ?? 57-62 (Second Claim). As to the alleged duties owed, Cohen contends that Counter-Defendants were entrusted with “conserving and caring for (Cohen’s) assets” and engendered Cohen’s reliance upon them “to hold his assets safely, obtain information regarding his assets, and report (such) information accurately to him.” Id. ? 59; Cf. ? 54 (same alleged duties used to support breach of contract claim). Cohen alleges that CounterDefendants breached these duties, causing economic loss. Id. ?? 60-1. Fraud/Negligent Misrepresentation. Cohen asserts fraud and negligent misrepresentation claims against Greenberg, Barnett, and “the Agile Group.” Id. ?? 63-9 (Third Claim); 70-78 (Fourth Claim). The alleged misrepresentations were the monthly email reports. Id. ?? 64, 71. Cohen alleges that the reports were prepared with knowledge of falsity, reckless disregard for truth, or negligence (i.e. lack of reasonable care). Id. ?? 64, 74; Cf. ?? 54-5 (same alleged duties – and purported breaches thereof – used to support breach of contract claim). Aiding and Abetting Breach of Fiduciary Duty. Cohen asserts a claim against Greenberg, Barnett, and “the Agile Group” for aiding and abetting Lynch’s breach of her fiduciary duties owed to Cohen. Id. ?? 86-92 (Sixth Claim). The alleged breach committed by Lynch was the withdrawal of funds from Traditional Holdings, and her personal use of such funds. Id. ? 88. ???? LYNCH’S BREACH OF WHAT?Cohen alleges that Counter-Defendants “knowingly participated” in Lynch’s breach in various respects, which involved either: (a) the monthly email reports; (b) the non-acquisition of documentation regarding Traditional Holdings’ loans; and/or (c) the purported sending of warning letters and financial reports only to Lynch. Id. ? 89(a)-(e)); Cf. ?? 54-5 (same alleged duties – and purported breaches thereof – used to support breach of contract claim). Aiding and Abetting Fraud. Cohen asserts a claim against Greenberg, Barnett, and “the Agile Group” for aiding and abetting the fraud perpetrated by Lynch on Cohen. Id. 93-99 (Seventh Claim). Lynch allegedly committed fraud by concealing and/or failing to document her shareholder loans, failing to forward copies of correspondence regarding concerns as to the rate of withdrawals, and editing monthly emails. Id. ? 95. Cohen alleges that Counter-Defendants “knowingly participated” in Lynch’s fraud in the same manner that they purportedly aided her breach of fiduciary duty. Id. ? 96 (a)-(e) (same allegations as ?89 (a)-(e)); Cf. ?? 54-5. Negligence. Cohen asserts a negligence claim against Greenberg, Barnett, and “the Agile Group.” Id. ?? 100-105 (Eighth Claim). The source of the alleged tort duty is that CounterDefendants purportedly undertook to advise Cohen regarding the status of his accounts “independent of any contract or agreement.” Id. ?101. The manner in which they purportedly did so was the monthly email reports. Id. ?? 48-9; 102; Cf. ?? 54-5 (same alleged duties – and purported breaches thereof – used to support breach of contract claim). Cohen again alleges that Counter-Defendants were negligent in the preparation of the emails, causing economic loss. Id. ?? 103-4; Cf. ? 74 (same allegation used to support negligent misrepresentation claim). Professional Negligence. Cohen asserts a professional negligence claim against “the Agile Group.” Id. ?? 79-85 (Fifth Claim). The first alleged duty is premised on the assertion that the corporate Counter-Defendants undertook to “advise” Cohen regarding his royalty producing assets, and therefore owed a duty “to make reasonable recommendations.” Id. ? 80. Cohen alleges that the purported “recommendation to sell” the Artist Royalties (in 2001) was negligent for various reasons. Id. ?? 15, 81. The second alleged duty is premised on the assertion that the corporate CounterDefendants undertook to “structure the sale” of the royalty producing assets (in 2001), and therefore owed a duty to do so in a manner that “benefited Cohen and not Lynch.” Id. ? 82. Cohen alleges that the “execution of (the) recommendation” and “structure of the sale” was negligent for various reasons.16 Id. ? 83. IV. CHOICE OF LAW A. LEGAL STANDARDS FOR CHOICE OF LAW ANALYSIS Colorado has adopted Restatement (Second) Conflicts of Law for tort actions. ITT Specialty Risk Serv. v. Avis Rent A Car Sys., Inc., 985 P.2d 43, 47 (Colo. Ct. App. 1998). Under the Restatement, this Court must consider a general list of policy factors set forth in § 6,17 together with lists of particularized factors depending on the specific area of law at issue. The particularized contacts to be considered for tort claims include: (i) the place where the injury occurred; (ii) the place where the conduct causing the injury occurred; (iii) the domicile, residence, nationality, place of incorporation, and place of business of the parties; and, 16 Since these allegations relate solely to the sale of the Artist Royalties (id. ?? 81, 83), the professional negligence claim relates solely to Cohen’s sale of assets in 2001. The 2001 sale occurred prior to the execution of the Feb. 2002 contracts with TAS, Natural Wealth, and Agile Group, LLC. See, Exhs. F, G, O, and P. It also occurred prior to Traditional Holdings’ investment of assets in, and withdrawal of assets from, the Agile Safety Fund. As a result, Counter-Defendants have not asserted the application of the economic loss rule to this claim. In fact, CounterDefendants vigorously deny that there ever existed any contract pursuant to which it owed any duty to perform any services with regard to the 2001 sale or the prior creation or structuring of Traditional Holdings. CounterDefendants also deny having performed any services related thereto. Dismissal of this professional negligence claim remains appropriate, however, due to Cohen’s failure to file a certificate of review as required by C.R.S. § 13- 20-602. Infra § V.D. To the extent, however, that Cohen’s noncompliance with C.R.S. § 13-20-602 does not mandate immediate dismissal, Counter-Defendants would intend to submit a further Rule 56 motion concerning this claim. 17 The § 6 factors include: (a) the needs of the interstate and international systems; (b) the relevant policies of the forum state; (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issues; (d) the protection of justified expectations; (e) the basic policies underlying the particular field of law; (f) certainty, predictability, and uniformity of result; and, (g) ease in the determination and application of the law to be applied. Rest.2d Confl. § 6 (1971). (iv) the place where the parties’ relationship is centered. Rest.2d Confl. §§ 145(2) (torts), 148(2) (fraud); Hamilton v. Cunningham, 880 F.Supp. 1407, 1413 (D. Colo. 1995); Dworak v. Olson Constr. Co., 551 P.2d 198, 200 (Colo. 1976). The comments to Restatement § 145 give direction regarding particularized factors that carry more or less weight for specific torts. Where the primary purpose of the tort rule involved is to deter or punish conduct, the state where the conduct took place must be the state of dominant interest. Rest.2d Confl. § 145, cmt. c. For torts such as fraudulent misrepresentation, the place of injury is much less significant. Id. cmt. f. Restatement § 148 provides additional rules which specifically address fraud and misrepresentation claims. Where misrepresentations and reliance take place in different states, the following factors are considered: (1) where plaintiff acted in reliance on the representations; (2) where plaintiff received the representations; (3) where defendant made the representations; (4) domicile, residence, nationality, place of incorporation and places of business of parties; and (5) where any tangible subject of the transaction was situated. Rest.2d Confl. § 148(2). B. COLORADO LAW APPLIES TO COHEN’S TORT COUNTERCLAIMS Cohen alleges tort claims for fraud, negligent misrepresentation, negligence, and breach of fiduciary duty. The claims are based upon alleged conduct related to the investment, management, and/or reporting of Traditional Holdings’ assets. Unlike Plaintiffs’ claims against Cohen, these claims do not involve injury to reputation, disparagement, or interference with contract. See, Pl. Resp. to Def. Cohen’s Motion for Partial Dismissal of the Sec. Am. Compl. (Aug 10, 2006) § III. B. (pp. 10-13). Rather, Cohen’s counterclaims seek to impose liability based upon alleged deficiencies in the performance of professional services. Where torts of this kind are involved, the location of the alleged conduct (i.e., the place where the services are performed) is the most important contact. See, Trierweiler v. Croxton & Trench Holding Corp., 90 F.3d 1523, 1536 (10th Cir. 1996) (discussing attorney malpractice). Colorado has a particular interest in applying its law to the professional negligence, negligence, and fiduciary duty claims because Colorado requires a certificate of review to be filed as a condition precedent to the pursuit of such claims against licensed professionals (while California does not). Id. at 1536 (applying law of Colorado, rather than Michigan, for same reason); infra § V.D. (failure to file certificate of review as required by C.R.S. § 13-20-602). In this case, each Counter-Defendant is domiciled or has its principal place of business in Colorado. Countercl. ?? 2-7. The services rendered to Traditional Holdings, Cohen and/or Lynch under the parties’ contracts (and thus, all services that are the subject of the counterclaim allegations) were rendered in Colorado. The information related to these services, including all letters and reports referenced in Cohen’s counterclaims, were generated in and sent from Colorado. BY SONYTraditional Holdings’ assets were sent to Colorado to be managed by Colorado entities who performed their services in Colorado, and were paid fees in Colorado. Thus, the place where the parties’ relationship was centered was Colorado. See also, Pl. Resp. to Def. Cohen’s Motion for Partial Dismissal of the Sec. Am. Compl. § III.B. (p. 13). Unlike Plaintiffs’ claims against Cohen, there is not one clearly ascertainable place of alleged injury. Cohen is a Canadian citizen, and Traditional Holdings was a Kentucky LLC. Countercl. ? 1; See Exhs. B and C. Nor does Cohen allege the location where he received or purportedly relied upon the “monthly emails.” Cohen’s own emails indicate that he often received and/or accessed his emails while traveling out of the country.18 18 See, e.g., January 18, 2003 email from L. Cohen to T. Barnett (Exh. N attached) (indicating Cohen’s location as “in bombay”). Based upon the principles and factors of Restatement §§ 145 and 148, Colorado has the “most significant relationship” to Cohen’s tort counterclaims.19 V. COHEN’S SECOND THROUGH EIGHTH CLAIMS SHOULD BE DISMISSED A. THE NEGLIGENCE, BREACH OF FIDUCIARY DUTY, AND FRAUD CLAIMS ARE BARRED BY THE ECONOMIC LOSS RULE The economic loss rule limits tort liability when a contractual relationship exists between the parties. Town of Alma v. Azco Const., Inc., 10 P.3d at 1262-64. Such limitation is appropriate because nonperformance can be adequately addressed by the parties during the bargaining process. Id. Limiting tort remedies holds parties to the terms of their bargain, and ensures predictability in commercial transactions.20 Id. The key to determining the availability of a contract or tort action lies in determining the source of the duty that forms the basis of the action. Id. A breach of a duty arising under the provisions of a contract must be redressed under the contract, and a tort action will not lie. Id. 1262. To support a tort action, a duty allegedly breached must arise independently of any contract duties. Id.; Grynberg v. Agri Tech, Inc., 10 P.3d 1267, 1268 (Colo. 2000); Elrich v. Menezes, 981 P.2d at 983; Robinson Helicopter Co., Inc. v. Dana Corp., 102 P.3d at 273-74. 19 As seen below, Counter-Defendants seek dismissal of Cohen’s negligence, breach of fiduciary duty, and fraud claims based upon the economic loss rule. Infra §V.A. There is no conflict, however, between the law of Colorado and California concerning the applicability of this rule. Id.; See, e.g., Town of Alma v. Azco Const., Inc., 10 P.3d 1256, 1262-64 (Colo. 2000); Tuchman v. Pell Rudman Trust Co., 245 F.Supp. 2d 1156, 1159 (D. Colo. 2003); Elrich v. Menezes, 981 P.2d 978, 983 (Cal. 1999); Robinson Helicopter Co., Inc. v. Dana Corp., 102 P.3d 269, 272- 74 (Cal. 2004) (discussed infra at § V. A.) Thus, in evaluating whether the negligence, fiduciary duty, and fraud claims are barred by the economic loss rule, no choice of law analysis may even be required. See, e.g. Air Prods. and Chem., Inc. v. Eaton Metal Prods. Co., 272 F.Supp. 2d 482, 490 (E.D. Penn 2003) (determining whether economic loss rule in three different jurisdictions conflicted before application of the rule). Rather, the application of the law of either Colorado or California should result in the dismissal of such claims. 20 The California Supreme Court has also adopted the economic loss rule. Aas v. Superior Court, 12 P.3d 1125, 1135 (2000) (“A person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations”). Thus, breaches of contractual promises will generally be enforced only through contract law. Id. Conduct amounting to a breach of contract becomes tortious “only when it also violates a duty independent of the contract arising from principles of tort law.” Robinson Helicopter, 102 P.3d at 274. Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 15 of 32 16 The fundamental distinction in cases allowing or not allowing tort claims in addition to claims for breach of contract is not that the common law recognized a duty of care that is independent generally of duties that may be bargained for in contract, but whether the duty of care recognized in common law truly is, in a particular case, independent of the duties the parties have, in fact, allocated to each other in contract. The court in Grynberg articulated this distinction succinctly in distinguishing cases where courts had allowed a plaintiff to maintain a tort action for purely economic losses independently of a claim for breach of contract: In those cases, the duty asserted by the parties alleging negligence arose from an independent duty of care recognized under the common law but not contemplated under the terms of the contract. Tuchman v. Pell Rudman Trust Co., 245 F. Supp. 2d at 1159 (citing Grynberg v. Agri Tech, Inc., 985 P.2d 59, 62 (Colo. Ct. App. 1999)) (emphasis added). Thus, if the contractual obligation is the “same as or subsume[s] the duties of care imposed by law, then the duty of care imposed in tort is no longer ‘independent’ of that agreed to in contract.” Tuchman, 245 F. Supp. 2d at 1159; Elrich, 981 P.2d at 98-4. In this case, Cohen’s Counterclaims allege deficiencies in the performance of services rendered pursuant to specific contractual relationships. The scope of the duties owed, including all applicable limitations, is governed by the relevant terms and provisions of these contracts. The parties who owed such duties, and the parties to whom such duties were owed, are also governed by these contracts. As recognized by the Colorado Supreme Court, limiting CounterDefendants’ duties to the terms and provisions of these contracts is necessary to meet the expectations of the parties. Town of Alma, 10 P.3d at 1262-64. WTF? WHERE IS THE COURT OBTAINING JURISDICTION TO EVEN CONSIDER TH INFORMATION?In that regard, this Court has recognized that the relationship between Traditional Holdings, as Limited Partner, and Agile Group, LLC, as General Partner of the Agile Safety Fund, was governed by the Limited Partnership Agreement (and the related Subscription Agreement) executed on Feb. 26, 2002. See, Exhibits F and G; Greenberg & Associates, Inc. v. Cohen, 2005 WL 3527294 (D. Colo. Dec. 21, 2005) *6-8. Other contracts that governed the Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 16 of 32 17 various services rendered thereunder (during the time they were applicable) were: (a) the Feb. 26, 2002 Investment Advisory Agreement between TAS, as ADVISER, and Cohen and Lynch, as CLIENTS (Exh. O attached); (b) the Feb. 26, 2002 Financial Planning Agreement between Greenberg & Associates, Inc. (n/k/a Natural Wealth), as PLANNER, and Cohen and Lynch, as CLIENTS (Exh. P attached); and (c) the Investment Advisory Agreements executed between TAS, as ADVISER, and Cohen and Lynch, as CLIENTS prior to Feb. 26, 2002, which were later superseded and replaced by the Feb. 26, 2002 TAS Agreement. (supra, fn. 5 and Exh. A attached). Greenberg & Associates, Inc. v. Cohen, 2005 WL 3527294 (D. Colo. Dec. 21. 2005) **2-6. The terms and provisions of these agreements defined the duties owed with respect to the services rendered thereunder, and the parties who owed them. No tort duties arose independently from these contracts. No tort claim may be asserted against any Counter-Defendant for the breach of any duty allocated to a specific party pursuant to such contracts. 1. Negligent Misrepresentation and Negligence Cohen asserts a negligent misrepresentation claim based upon Counter-Defendants’ alleged negligence in obtaining or communicating the information contained in the “monthly email reports.” Countercl. ?? 71, 74 (Fourth Claim). Cohen also asserts a separate negligence claim based upon the same alleged negligence in the preparation of these same emails. Id. ? 103 (Eighth Claim). Both of these claims allege that Counter-Defendants failed to meet a tort duty of care concerning the preparation and issuance of reports concerning Traditional Holdings’ investments with the Agile Safety Fund. However, Cohen’s breach of contract claim specifically alleges that Cohen and “the Agile Group” entered into written and oral agreements that included, among their terms, the duty to “faithfully report all transactions;” to “bring to Cohen’s attention” Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 17 of 32 18 various activities or transactions; and to take “reasonable care” in protecting Cohen’s capital from any type of action causing loss. Id. ? 54 (c)-(e). Cohen also alleges that “the Agile Group” breached these duties by “failing to report accurately and completely to Cohen” regarding the Traditional Holdings account. Id. ? 55(d). In fact, any duties actually owed by “the Agile Group” concerning the preparation and issuance of reports concerning Traditional Holdings’ assets were specifically allocated to Agile Group, LLC under the terms of the Limited Partnership Agreement and the Subscription Agreement. See, Limited Partnership Agreement (Exh. F) §§ 3.02(m); 3.04(a); 3.07(b); 14.01;21 Subscription Agreement (Exh. G) §§ 2.04, 3.02, 3.15.22 These provisions describe the types of 21 The Limited Partnership Agreement provides that Agile Group, LLC’s powers and duties as General Partner of the Agile Safety Fund include the following: Section 3.02. Powers of the General Partner . . . the General Partner shall have the right, power, and authority, on behalf of the Partnership: . . . (m) To prepare, or cause to be prepared . . . and deliver any and all instruments to effectuate the business of the Partnership, including but not limited to, annual and/or interim reports, a copy of which shall be delivered to each Partner, as provided in Section 3.07 and 13.04 hereof; . . . (emphasis added) Section 3.04. Liability and Indemnification. (a) The General Partner shall not be liable to the Partnership or the Limited Partners for any action taken or omitted to be taken in connection with the business or affairs of the partnership so long as such entity acted in good faith and is not found to be guilty of gross negligence or willful misconduct with respect thereto. (emphasis added) Section 3.07. Duty to Keep Books, Financial and Tax Reports . . . (b) The General Partner shall cause to be prepared and distributed to each Partner as soon as practicable following each Fiscal Year an annual financial statement prepared in accordance with U.S. generally accepted accounting principles . . . . (emphasis added) Section 14.01. Address and Notices. The address of each Partner for all purposes shall be the address set forth on the signature page of the Agreement or such other address of which the General Partner has received written notice. (emphasis added) 22 The Subscription Agreement further provides as follows: 2.04 Representations and Warranties by the Subscriber. The Subscriber represents and warrants to the General Partner that: (a) The Subscriber is acquiring the interests for the Subscriber’s own account . . . (c) the Subscriber has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of investing in the Partnership, and all information that the Subscriber has provided concerning the Subscriber, the Subscriber’s financial position, and knowledge of financial and business matters is true, correct, and complete . . . (emphasis added) (h) . . . the person signing this Agreement on behalf of [the Subscriber] has been duly authorized by such entity to do so. (emphasis added) Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 18 of 32 19 reports which Agile Group, LLC had a duty to deliver or distribute to the Limited Partner (i.e. Traditional Holdings); the relevant address of the Limited Partner for purposes of such reports; the scope of the duty owed by Agile Group, LLC (good faith); the agreed limitations on liability (i.e. gross negligence or willful misconduct required); and the Limited Partner’s specific agreement to indemnify and hold Agile Group, LLC harmless for any false representation made to Agile Group, LLC in any document furnished to the General Partner (including directions given concerning such reports). Id. These provisions concerning reports to Limited Partners were further described and disclosed to Traditional Holdings in the Confidential PPM. See, Confidential PPM (Exh. H) pp. 6 (Reports to Limited Partners); 7 (Limitation of Liability and Indemnification); Exh. A, p. 8 (Reports to Limited Partners). In BRW, Inc. v. Dufficy & Sons, Inc., 99 P.3d 66 (Colo. 2004), the Colorado Supreme Court discussed the application of the economic loss rule to a similar claim of negligence and/or negligent misrepresentation. The court stated that “the contract [between the parties] contained the duty to carefully and non-negligently report on the Project's status. Because [plaintiff] alleges that [defendant] breached this duty, and the duty is contained in the interrelated contracts, the economic loss rule bars the negligent misrepresentation claim.” Id. at 75. The court distinguished Keller v. A.O. Smith Harvestore Prod. Inc., 819 P.2d 69 (Colo. 1991): In Keller, we held that “a contracting party's negligent misrepresentation of material facts prior to the execution of an agreement may provide the basis for an independent tort claim.” 819 P.2d at 72 (emphasis added). In contrast, the alleged negligent misrepresentation complained of in this case occurred during 3.02. Addresses and Notices. The address of each party for all purposes shall be the address set forth on the first page of the Agreement or on the signature page annexed hereto, or such other address of which the other parties have received written notice (emphasis added) . . . . 3.15 Indemnity. The undersigned agrees to indemnify and hold harmless the General Partner and the Partnership and each other person, if any, who controls such entity . . . against any and all loss, liability, claims, damages, and expenses whatsoever . . . arising out of or based upon any breach or failure by the undersigned to comply with any representation, warranty, covenant, or agreement made by the undersigned herein, or in any other document furnished by the undersigned to any of the foregoing in connection with this Agreement. (emphasis added) Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 19 of 32 20 performance, by which time the parties had bargained for the allocation of risks, duties, and remedies. BRW, Inc., 99 P.3d at 75.23 Cohen’s negligence and negligent misrepresentation claims are both premised upon the purported existence of a tort duty concerning the issuance of reports as to Traditional Holdings’ investments in the Agile Safety Fund. Those same duties are specifically alleged in Cohen’s breach of contract claim and are governed by the Limited Partnership Agreement and Subscription Agreement. As in BRW v. Dufficy, the alleged misrepresentations (i.e., the monthly emails) purportedly occurred during performance of the applicable contracts – not prior to execution. Thus, Cohen’s negligence and negligent misrepresentation claims are barred. 2. Fiduciary Duty/Aiding and Abetting Breach of Fiduciary Duty Cohen asserts a breach of fiduciary duty claim based upon Counter-Defendants’ alleged failure to properly conserve, care for, and issue accurate reports concerning Traditional Holdings’ assets. Countercl. ? 59 (Second Claim). Cohen also asserts a separate claim for aiding and abetting Lynch’s breach of fiduciary duties based upon alleged deficiencies as to the manner in which: (a) Lynch was permitted to withdraw funds; and (b) such withdrawals were reported to Cohen. Id. ? 89. Both of these claims allege that Counter-Defendants failed to meet professional duties concerning the protection, handling, or issuance of reports concerning Traditional Holdings’ assets. However, Cohen’s breach of contract claim specifically alleges that Cohen and “the Agile Group” entered into written and oral agreements that included these same duties. Id. ?? 54(a)-(e); Supra § III.B.1 (including duties to “faithfully” protect; exercise “prudence” in 23 Nor does California recognize any claim based in negligence for breach of contractual duties. Rather, when the duties underlying the contract are breached, a tort may also lie only in specific circumstances, such as where the tort is one based in fraud or deceit, or where the party engaged in intentional conduct. Elrich, 981 P.2d at 984; Robinson Helicopter Co, Inc., 102 P.3d at 273. “Focusing on intentional conduct gives substance to the proposition that a breach of contract is tortious only when some independent duty arising from tort law is violated.” Id. … handling; “faithfully” report; and take “reasonable care” in protecting). Once again, any duties actually owed by “the Agile Group” concerning Traditional Holdings’ requests for withdrawals and/or the preparation and issuance of reports were specifically allocated to Agile Group, LLC under the terms of the Limited Partnership Agreement and the Subscription Agreement. See, Limited Partnership Agreement (Exh. F) §§ 3.04(a), 7.01, 7.02, 7.03;24 Subscription Agreement (Exh. G) § 3.15;25 See also, supra fns. 20 and 21 (with regard to issuance of reports). These provisions describe Traditional Holdings’ right, as a Limited Partner, to make withdrawals; Agile Group, LLC’s obligation, as the General Partner, to pay such withdrawals; certain limited circumstances (not applicable here) in which the Limited Partner may not withdraw its funds; other limited circumstances (not applicable here) in which Agile Group, LLC may suspend such withdrawals; the scope of the duty owed by the 24 The Limited Partnership Agreement provides, inter alia, the following rights and duties with regard to the withdrawal of funds by a Limited Partner: Section 3.04. Liability and Indemnification. (o) The General Partner shall not be liable to the Partnership or the Limited Partners for any action taken or omitted to be taken in connection with the business of affairs of the partnership so long as such entity acted in good faith and is not found to be guilty of gross negligence or willful misconduct with respect thereto. (emphasis added) Section 7.01. Permissible Withdrawals. A Limited Partner may withdraw all or any of the value in such Limited Partner’s Capital Account in the manner and to the extent provided in Section 7.02 below. (emphasis added) Section 7.02. Withdrawal Procedure. . . . Partial withdrawals may not be made by any Limited Partner if they would reduce a Limited Partner’s capital account balance below $50,000, unless the General Partner consents . . . . The following provision shall apply to withdrawals: (a) A Limited Partner who requests a withdrawal of less than ninety (90%) percent of the value of such Limited Partner’s Capital Account shall be paid within 30 days after the applicable Withdrawal Date. (emphasis added) Section 7.03. Suspension of Payment of Withdrawals. The Partnership may suspend or postpone the payment of any withdrawals from Capital Accounts . . . (a) [not applicable]; (b) [not applicable]; (c) for such other reasons or for such other periods as the General Partner may in good faith determine (including but not limited to in the event that Limited Partners, in the aggregate, request withdrawals of twenty-five (25%) percent or more of the Partnership’s Capital Accounts as of any date of withdrawal). (emphasis added) 25 The pertinent text of Section 3.15 and other provisions of the Subscription Agreement are set forth in fn. 21 above. Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 21 of 32 22 Agile Group, LLC (good faith); the agreed limitations on liability (i.e. gross negligence or willful misconduct required); and the Limited Partner’s specific agreement to indemnify and hold Agile Group, LLC harmless for any false representation made in any document furnished to the General Partner (including requests for withdrawals). These provisions concerning requests for withdrawals were further described and disclosed to Traditional Holdings in the Confidential PPM. See, Confidential PPM (Exh. H) pp. 2-3 (Withdrawals); 7 (Limitation of Liability and Indemnification); Exh. A pp. 3-4 (Withdrawals from Capital Accounts). In Tuchman v. Pell Rudman Trust Co., N.A., the District Court for Colorado discussed the application of the economic loss rule to breach of fiduciary duty and negligence claims virtually identical to those asserted here by Cohen. 245 F. Supp. at 1157. There, plaintiff had alleged violations of professional tort duties arising out of investment services provided by a trust company. Id. The services were provided under a Client Services Agreement that prescribed certain obligations and standards of care that would apply to the handling of plaintiff’s investments. Id. The court applied the economic loss rule to bar plaintiff’s fiduciary duty and negligence claims. Id. In doing so, the court rejected plaintiff’s argument that “because Colorado tort law imposes professional and fiduciary duties of care on financial advisors/brokers…independently of any duties an advisor/broker may assume in contract” he was entitled to maintain both an action for breach of the services contract and actions for negligence and breach of fiduciary duty. Id. In rejecting the argument, the court stated: Plaintiff misapprehends what the state Supreme Court meant by “independent” in Azco. The mere fact that independent duties exist as a matter of law does not mean that, once a broker/advisor enters into a contractual relationship with a client, those duties remain “independent” of those assumed and allocated by the contract. The salient inquiry is into the nature of the obligations assumed: if they are the same as or subsume the duties of care imposed by law, then the duty of care imposed in tort is no longer “independent” of that agreed to in contract. Id.; See also, Micale v. Bank One N.A., 382 F. Supp. 2d 1207, 1220-21 (D. Colo. 2005) (economic loss rule barred fiduciary duty and negligence claims where Investment Advisory Account Agreement encompassed same duties and obligations alleged as basis for tort claims). Cohen’s fiduciary duty claims are premised upon the purported existence of professional tort duties that are the same as or subsumed by the contract duties alleged in Cohen’s breach of contract claim, and governed by the Limited Partnership Agreement and Subscription Agreement. Cohen cannot assert a right to recover in tort for these same matters. See, Monroe Property, LLC v. Bachelor Gulch Resort, LLC, 374 F. Supp. 2d 914, 922 -923 (D. Colo. 2005). 3. Fraud/Aiding and Abetting Fraud Cohen asserts a fraud claim based upon allegations that Counter-Defendants knowingly or recklessly disseminated or approved false or incomplete statements contained in the monthly email reports. Countercl. ? 64 (Third Claim). Cohen also asserts a separate claim for aiding and abetting Lynch’s fraud based upon the same conduct described in the aiding and abetting fiduciary duty claim. Id. ? 96(a)-(e) (Seventh Claim); Cf. ? 89(a)-(e) (Sixth Claim). Each tort claim based upon the monthly email reports simply restates Cohen’s breach of contract claim. Id. ?? 54(c)-(e) (duty to “faithfully report”); 55(d) (failure to “report accurately and completely”). These alleged duties are governed by the Limited Partnership Agreement and the Subscription Agreement. Supra § V.A.1; fns. 21-22. Similarly, each aiding and abetting claim concerns matters related to the protection, handling, and/or issuance of reports concerning Traditional Holdings’ assets. These are the same matters that are the subject of Cohen’s breach of contract claim. Id.; see also, ?? 54(a)-(b) (duties to “faithfully protect;” “exercise prudence” in handling); 55(a)-(b) (“permitting” withdrawal of funds). These alleged duties are also governed by the Limited Partnership Agreement and Subscription Agreement. Supra § V.A.2; fns. 24-25. Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 23 of 32 24 Although no Colorado court appears to have ruled on the issue of whether fraud can be precluded by the economic loss rule, the fraud claims asserted by Cohen fall squarely within the same policy considerations. Cohen’s fraud claims allege facts that occurred during the performance of the parties’ contracts. They did not occur prior to execution, and thus, did not fraudulently induce the execution of the contracts. Like the other tort claims asserted by Cohen, the allegations of misconduct merely relabel the breach of contract claims. Other states have consistently applied the economic loss rule to bar fraud and fraudulent non-disclosure claims. See e.g., Grynberg v. Questar Pipeline Company, 70 P.3d 1, 10-14 (Utah 2003); Excess Risk Underwriters, Inc. v. Lafayette Life Insur. Co., 208 F.Supp. 2d 1310, 1316 (S.D. Fla. 2002); Reilly Foam Corp. v. Rubbermaid Corp., 206 F.Supp. 2d 643, 658-59 (E.D. Penn. 2002); Bracco Diagnostics, Inc. v. Bergen Brunswig Drug Col, 226 F.Supp. 2d 557, 563 (D.N.J. 2002); General Elec. Co. v. Latin Am. Imports, S.A., 214 F.Supp. 2d 758,762 (W.D. Ky. 2002). In these states, the economic loss rule mandates that if the alleged fraud is connected to an act of performance under the contract, the claim is barred. General Elec., 214 F.Supp. 2d at 764. 26 Cohen’s fraud claims are premised upon purported violations of tort duties that are the same as or subsumed by the relevant contracts. The alleged misrepresentations were acts of performance – not inducement. Thus, the fraud claims should be barred. 26 Under California law, where the wronged party alleges purely economic loss, only intentional conduct violating a duty “completely independent” from the putative defendant’s contractual duty will support a tort claim. Elrich, 981 P.2d at 984. California courts will parse out the allegations of a fraud and intentional misrepresentation claim to determine if the economic loss rule applies. Cf. Robinson Helicopter, 102 P.3d at 274-75 (“[w]e hold the economic loss rule does not bar Robinson’s fraud and intentional misrepresentation claims because they were independent of Dana’s breach of contract”). Unlike the contract in Robinson, which concerned only the sale of goods, CounterDefendants’ reporting obligations in this case were governed by the parties’ contracts. THE FRAUD CLAIMS ARE NOT SUFFICIENTLY PLED 1. Cohen’s Fraud Allegations Lack the Requisite Particularity. In all averments of fraud, the circumstances constituting fraud must be alleged with particularity. Fed. R. Civ. P. 9(b).27 Specifically, a plaintiff must: (a) identify the particular defendants with whom the plaintiff dealt; (b) designate the occasion(s) on which the fraudulent statements were made, and by whom; and (c) describe what misstatements or half-truths were made, and how. Saine v. A.I.A., Inc., 582 F.Supp. 1299, 1303 (D. Colo. 1984); See also, Ambraziunas v. Bank of Boulder, 846 F.Supp. 1459, 1462 (D. Colo. 1994). Cohen’s fraud allegations contained in his aiding and abetting claim are also subject to the heightened standards of Rule 9(b). In re Storage Technology Corp. Securities Litigation, 147 F.R.D. 232, 235 (D. Colo. 1993) (because fraud is an essential element of an aiding and abetting claim, that element must be pled with particularity). Here, Cohen has failed to properly identify the specific Counter-Defendants who allegedly made the purported misrepresentations. Agile Group, LLC was the sole CounterDefendant who: (a) was a General Partner of the Agile Safety Fund; (b) was a party to the Limited Partnership Agreement and Subscription Agreement; and (c) owed any duties with regard to the protection, handling, or issuance of reports concerning Traditional Holdings’ assets. Since there are no allegations of alter ego or agency relationships, the inclusion of all corporate Counter-Defendants within the single misleading term (“the Agile Group”) fails to meet the heightened standards of Rule 9(b). Cohen has also failed to identify the specific time or content of the allegedly false representations. Rather, his fraud claim is based upon unidentified “false statements” contained in unidentified “monthly emails.” See, e.g. Countercl. ? 64. The only paragraphs of the General 27 The dismissal of a claim for failing to satisfy Rule 9(b) is treated as a dismissal under Rule 12(b)(6) for failure to state a claim. Brooks v. Bank of Boulder, 911 F.Supp. 470, 473 (D. Colo. 1996). Allegations which identify the date or content of any “monthly emails” are ?? 29, 31 and 32. None of these paragraphs identify a “fraudulent statement.”28 Because Cohen’s own pleadings have generated inconsistencies, it is critical that each monthly email that contained a purported misrepresentation be identified with particularity. It is further critical that Cohen be required to allege, in good faith, each withdrawal that purportedly occurred without his knowledge or permission. For example, Cohen first alleges that Lynch made withdrawals without Cohen’s knowledge and permission “beginning in January 2003.” Id. ? 36. Later, however, he acknowledges that certain of those withdrawals did occur with his knowledge and permission. Id. ? 41 (acknowledging his awareness of withdrawals to purchase real estate in the amount of $592,000).29 Yet, Cohen also alleges that unauthorized withdrawals dissipated Traditional Holdings’ funds from $4.7 M in December 2001 (over a year prior to the alleged commencement of unauthorized withdrawals) to less than $150,000 in October 2004. Id. If this Court determines that Cohen’s fraud claims are not barred by the economic loss rule, he should be required to identify the date and content of each “monthly email” during 2003 and 2004 in which he claims a misrepresentation or non-disclosure occurred. He should also be required to allege, in good faith, each withdrawal that he claims he did not: (a) authorize; 30 (b) know about; or (c) ultimately receive and/or use for his own benefit. He should also limit his allegations to the sole party with whom Traditional Holdings had a relationship concerning the invested funds (i.e. Agile Group, LLC). 28 For example, ? 29 describes a Dec. 18, 2001 email to Cohen which reported a $7.5 M balance “amongst all accounts.” Id. ? 29. There is no allegation that this statement was inaccurate. In fact, Cohen later contends that Lynch’s unauthorized withdrawals did not begin until January 2003 – over a year later. Id. ? 36. Similarly, ? 31 describes a March 12, 2002 email reporting “two large disbursements” which Cohen acknowledges he had requested and was “already aware.” Id. ?31. Finally, ? 32 describes a March 18, 2002 email in which Greenberg proposed a practice of sending a confirmation email every time a disbursement report is made. Id. ? 32. Later, however, Cohen’s own agent (Lynch) directed otherwise. Id. ?? 48-49. 29 In addition, Cohen expected to spend several hundred thousand dollars per year just to cover his ordinary living expenses and pay taxes. See, e.g. April 13, 2001 letter from N. Greenberg to L. Cohen (Exh. Q attached). 30 By virtue of the Durable General Power of Attorney and Lynch’s status as 99.5% owner of Traditional Holdings, there is not a single withdrawal that Lynch did not have authority to make. In short, Cohen’s fraud allegations are not remotely sufficient to meet the heightened pleading requirement of Rule 9(b). Koch v. Koch Indus., Inc., 203 F.3d 1202, 1237 (10th Cir. 2000) (statement that alleged misrepresentations were made “during 1982 and continuing to the present time;” recitation that the Defendants “fail[ed] to disclose the ownership, condition and true value of assets and property;” and failure to identify any specific Defendant who made alleged misrepresentations or omissions resulted in dismissal pursuant to Rule 9(b)); see also, Rosales v. AT & T Info. Sys. Inc., 702 F.Supp. 1489, 1499 (D. Colo. 1988). 2. Has Failed to Sufficiently Plead Reliance and Scienter. Even if Cohen attempts to replead his fraud claims with requisite particularity, such claims still fail as a matter of law. Traditional Holdings executed contracts (and received a PPM) describing the reports to be distributed by Agile Group, LLC. See, Exh. F, G, and H. The contracts specified the address of record to which such reports were to be sent. Exh. F and G. Thus, Cohen was on notice of the existence of such reports, and the manner in which they were being distributed. He cannot, therefore, allege that he reasonably relied exclusively upon the monthly emails. See, e.g., Doehla v. Wathne Limited, Inc., 1999 WL 566311 (S.D.N.Y.) *11. Similarly, Cohen has not alleged – and cannot allege – the requisite degree of scienter to sustain his fraud claims. He acknowledges that numerous reports were sent by mail, on a regular monthly basis, itemizing all loans and withdrawals from the Agile Safety Fund. Countercl. ?? 37, 47. At least two warning letters were also sent to Cohen in January and June 2004. Id. ?? 24, 27. These reports were sent to Cohen throughout the time that Counter-Defendants had the purported intent of concealing such transactions from Cohen. Thus, there is no plausible basis upon which Cohen can allege facts giving rise to the requisite “strong inference” of fraudulent intent. Cohen has not – and cannot – allege facts showing that Counter-Defendants: (a) had any possible motive or intent to deceive or mislead Cohen; (b) engaged in conscious misbehavior or Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 27 of 32 28 recklessness;31 or (c) could – or did – receive any possible benefit from doing so. See, e.g. Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128-29 (2d. Cir. 1994); Powers v. British Vita, PLC, 57 F.3d 176, 184 (2d Cir. 1995). Nor can Cohen allege that Counter-Defendants intended Cohen to rely exclusively on the monthly emails. In short, Cohen has not – and cannot – sufficiently plead the necessary elements of his fraud-based claims. C. THE NEGLIGENT MISREPRESENTATION CLAIM SHOULD BE DISMISSED FOR FAILURE TO PLEAD A THIRD PARTY TRANSACTION If this Court determines that the negligent misrepresentation claim is not barred by the economic loss rule, the claim must still be dismissed. Cohen has not alleged that the purported misrepresentations were provided to him for his use in a business transaction with a third party. The law in this jurisdiction is clear that a plaintiff must plead and prove a third-party transaction to state a claim for negligent misrepresentation. Snoey v. Advanced Forming Tech., Inc., 844 F.Supp. 1394, 1400 (D. Colo. 1994) (dismissing plaintiff’s claim where alleged negligent misrepresentations occurred only in connection with his relations with the defendants and not a third party); See also, Colo. Nat’l Bank of Denver v. Adventura Assoc., L.P., 757 F.Supp. 1167, 1172-73 (D. Colo. 1991); Rosales v. AT & T Information Sys. Inc., 702 F.Supp. at 1500. In Adventura Assoc., this Court detailed the rationale behind such a rule by stating that the “claim of (negligent) misrepresentation is limited by this requirement because for most pecuniary damages resulting out of business transactions there are adequate remedies under the law of sales and contract….” Id. The Court also relied on Colorado Jury Instruction 9:3B(3), which explicitly requires a finding that “[t]he defendant gave the information to the plaintiff for 31 Cohen’s aiding and abetting claims are based solely upon allegations of knowing conduct. Id. ?? 89, 96. Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 28 of 32 29 the (guidance) (use) of the plaintiff in a business transaction with a person other than the defendant.” Id. at 1173 (citing Colo. Jury Instruc. Civ.3d 9:3B) (emphasis added). Here, Cohen has failed to allege that the purported misrepresentations contained in the “monthly e-mails” were provided to him for guidance or use in a business transaction with a third party. In fact, Cohen specifically alleges that Counter-Defendants “gave the information to Cohen for his guidance and use in a business transaction or transactions.” Countercl. ? 73. (emphasis added). It is further clear from the General Allegations that Cohen did not rely on the “monthly e-mail” misrepresentations for any purpose other than to monitor his own portfolio. Id. ?? 47, 51, 68.32 Due to the absence of a third party transaction, Cohen’s claim for negligent misrepresentation is deficient as a matter of law. D. THE PROFESSIONAL NEGLIGENCE, NEGLIGENCE, AND FIDUCIARY DUTY CLAIMS ARE BARRED BY COHEN’S FAILURE TO COMPLY WITH C.R.S. § 13-20-602 C.R.S. § 13-20-602(1)(a) provides: In every action for damages . . . based upon the alleged professional negligence of . . . a licensed professional, the plaintiff’s or complainant’s attorney shall file with the court a certificate of review for each . . . licensed professional named as a party, as specified in subsection (3) of this section, within sixty days after the service of the complaint, counterclaim or cross-claim against such person unless the court determines that a longer period is necessary for good cause shown. (emphasis added) 32 For example, the Counterclaims allege that: (a) “Cohen . . . relied solely on the monthly email investment reports . . . for understanding the value of his portfolio . . .” Id. ? 47. (emphasis added) (b) “The Agile Group’s misrepresentations and omissions in its monthly . . . emails to Cohen misled Cohen into believing that the accounts were worth more . . .” Id. ? 51. (emphasis added) (c) “Cohen has suffered damages in that, he relied on the false and misleading statements . . . and that reliance impaired Cohen’s ability to make decisions regarding the purchase, sale, or value of the securities in his portfolio with the Agile Group. Id. ? 68. (emphasis added) Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 29 of 32 30 Under subsection (4), the failure to file a certificate of review in accordance with this section shall result in the dismissal of the…counterclaim.” C.R.S. § 13-20-602(4) (emphasis added). At ?? 2-3 of the Counterclaims, Cohen alleges that Greenberg and Barnett each “holds a license as an investment advisor.” Countercl. ?? 2-3. Although not specifically alleged in the counterclaims, Natural Wealth, TAS, and Agile Group, LLC are Colorado registered investment advisors. See, Sec Am. Cmpl ?? 1-3. In addition, Greenberg Securities is a “K-1 Limited Business broker-dealer.” Id. ?4. As his Fifth Claim, Cohen asserts a claim for “professional negligence” against each Counter Defendant. Id. ?? 79-85. The claim is based upon their alleged failure to: (a) make “reasonable recommendations regarding the royalty-producing assets;” or (b) structure the sale of the royalty-producing assets “in a manner that benefited Cohen and not Lynch.” Id. ?? 80, 82; Supra § III.B.2. C.R.S. § 13-20-602(1)(a) applies to all claims against licensed professionals wherein expert testimony is required to establish the scope of the professional’s duty or the failure to meet that duty. See, Martinez v. Badis, 842 P.2d 245 (Colo. 1992). Thus, the statute does not apply solely to claims designated as “professional negligence.” Rather, it applies to all claims “which require proof of professional negligence as a predicate to recovery, whatever the formal designation of the claim might be.” Id. at 251 (emphasis added). In that regard, Colorado courts have determined that “except in clear and palpable cases,” expert testimony is necessary to establish the standards of acceptable professional conduct. Boigegrain v. Gilbert, 784 P.2d 849, 850 (Colo. App. 1989); Williams v. Boyle 72 P.3d 392, 397 (Colo. App. 2003) (“expert testimony is required to establish prima facie case of professional negligence in the great majority of cases”). Unless the alleged misconduct concerns subject matter within the common knowledge or experience of an ordinary person, both the Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 30 of 32 31 standard of care and the defendant’s failure to meet that standard must be established by expert opinion testimony. Tracz v. Charter Centennial Peaks Behavioral Health Systems, Inc., 9 P.3d 1168, 1173 (Colo. App. 2000). In this case, Cohen has asserted claims against registered investment advisors and a licensed broker/dealer concerning duties or services that were purportedly “assumed” by those entities. Lay persons are not generally knowledgeable as to standard industry practice or other standards of care that govern the conduct and responsibilities of registered investment advisors or broker/dealers. Thus, expert testimony will be required in order for Cohen to establish his prima facie case. Cohen was required, therefore, to file a certificate of review as to all claims requiring such testimony (i.e. professional negligence, negligence, and fiduciary duty). Cohen filed and served his Counterclaim on June 30, 2006. Pursuant to C.R.S. § 13-20- 602, Cohen had 60 days (i.e. until August 29) to file a certificate of review. Counter-Defendants placed Cohen on notice in their Reply that he was required to file such certificate. See, Reply to Cohen’s Counterclaims, Affirmative Defenses, ? 28 (p. 37). Cohen has had more than adequate time to comply. His failure to do so mandates immediate dismissal. VI. CONCLUSION Based on the foregoing, Counter-Defendants request that Cohen’s Second through Eighth Counterclaims be dismissed pursuant to Fed. R. Civ. P. 12(c). DATED: October 19th, 2006. Respectfully submitted, s/R. Daniel Scheid R. Daniel Scheid LEWIS SCHEID LLC 2300 Fifteenth Street, Suite 2300 Denver, CO 80202 Telephone: (303) 534-5040 Facsimile: (303) 534-5039 Email: dan@ Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 31 of 32 32 Sherab Posel POSEL LAW OFFICES 5468 Fall Clove Road DeLancey, NY 13752 Telephone: (845) 676-4034 Email: poselaw@ ATTORNEYS FOR PLAINTIFFS AND COUNTERCLAIM DEFENDANT CERTIFICATE OF SERVICE I hereby certify that on October 19th, 2006, I electronically filed the foregoing PLAINTIFFS’ AND BARNETT’S MEMORANDUM IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS AS TO COHEN’S SECOND THROUGH EIGHTH COUNTERCLAIMS with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following: Randall M. Livingston (livingston@b-p-) I hereby certified that I served the foregoing document on the following non CM/ECF participants by e-mail and U.S. First Class Mail, postage prepaid to the following: Kelley Lynch 2648 Mandeville Canyon Road Los Angeles, CA 90049 tseringma@ s/R. Daniel Scheid Case 1:05-cv-01233-LTB Document 123 Filed 10/19/06 USDC Colorado Page 32 of 3205/10/2007150?MOTION to Amend/Correct/Modify?100?Answer to Amended Complaint?, defendant leonard cohen's amended counterclaims and jury demand?by Defendant Leonard Cohen. (Attachments: #?1?Proposed Document exhibit 1 - cohen's amended answer to second amended complaint, amended counterclaims and jury demand#?2?Exhibit exhibit a#?3?Exhibit exhibit b#?4?Exhibit exhibit c#?5?Exhibit exhbit d#?6?Exhibit exhibit e#?7?Deposition Excerpts exhibit f#?8?Exhibit exhibit g#?9?Exhibit exhibit h#?10?Exhibit exhibit i#?11?Exhibit exhibit j#?12?Exhibit exhibit k#?13?Exhibit exhibit l#?14?Exhibit exhibit m#?15?Exhibit exhibit n#?16Exhibit exhibit o#?17?Exhibit exhibit p#?18?Exhibit exhibit q#?19?Exhibit exhibit r#?20?Exhibit exhibit s#?21?Exhibit exhibit t#?22?Exhibit exhibit u#?23?Exhibit exhibit v#?24?Exhibit exhibit w#?25?Exhibit exhibit x#?26?Exhibit exhibit y#?27?Exhibit exhibit z#?28?Exhibit exhibit aa#?29?Exhibit exhibit bb#?30?Exhibit exhibit cc#?31?Exhibit exhibit dd#?32?Exhibit exhibit ee#?33?Exhibit exhibit ff#?34?Exhibit exhibit gg#?35?Exhibit exhibit hh#?36?Exhibit exhibit ii#?37?Exhibit exhibit jj#38?Exhibit exhibit kk#?39?Exhibit exhibit ll#?40?Exhibit exhibit mm#?41?Exhibit exhibit nn#?42?Exhibit exhibit oo#?43?Exhibit exhibit pp#?44?Exhibit exhibit qq#45?Exhibit exhibit rr#?46?Exhibit exhibit ss#?47?Exhibit exhibit tt#?48?Exhibit exhibit uu#?49?Exhibit exhibit vv#?50?Exhibit exhibit ww#?51?Exhibit exhibit xx#?52Exhibit exhibit yy#?53?Exhibit exhibit zz#?54?Exhibit exhibit aaa#?55?Exhibit exhibit bbb#?56?Exhibit exhibit ccc#?57?Exhibit exhibit ddd#?58?Exhibit exhibit eee#59?Exhibit exhibit fff#?60?Exhibit exhibit ggg#?61?Exhibit exhibit hhh#?62?Exhibit exhibit iii#?63?Exhibit exhibit jjj#?64?Exhibit exhibit kkk#?65?Exhibit exhibit lll#66?Exhibit exhibit mmm#?67?Exhibit exhibit nnn#?68?Exhibit exhibit ooo#?69?Exhibit exhibit 2#?70?Exhibit exhibit 3#?71?Proposed Order (PDF Only) proposed order)(Horowitz, Jay) (Entered: 05/10/2007)08/15/2006116?RECEIPT for $2014.90 by Plaintiffs Greenberg & Associates Securities, Inc., Neal R. Greenberg, Natural Wealth Real Estate, Inc., Tactical Allocation Services, LLC, Agile Group, LLC per entry?110?Order on Motion to Deposit Funds, (rlp2, ) (Entered: 08/15/2006)12/04/2006131?ORDER granting in part and denying in part?97?Motion to Dismiss, the plaintiffs' claims for intentional interference with a prospective business relation, civil extortion, civil conspiracy, and violation of and conspiracy to violate COCCA are DISMISSED, Signed by Judge Lewis T. Babcock on 12/04/06.(rlp, ) (Entered: 12/04/2006)IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Lewis T. Babcock, Chief Judge Civil Case No. 05-cv-01233-LTB-MJW NATURAL WEALTH REAL ESTATE, INC., d/b/a Agile Advisors, Inc. a Colorado corporation, TACTICAL ALLOCATION SERVICES, LLC, d/b/a Agile Allocation Services, LLC, a Colorado limited liability company, AGILE GROUP, LLC, a Delaware limited liability company, GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a Agile Group, a Colorado corporation, and NEAL R. GREENBERG, a Colorado resident, Plaintiffs and Counterclaim Defendants, v. LEONARD COHEN, a Canadian citizen residing in California, Defendant and Counterclaim Plaintiff, and KELLEY LYNCH, a United States citizen residing in California, and JOHN DOE, Numbers 1-25, Defendants, v. TIMOTHY BARNETT, a Colorado citizen, Counterclaim Defendant. ______________________________________________________________________________ ORDER ______________________________________________________________________________ The defendant, Leonard Cohen, moves for partial dismissal of the Second Amended Complaint of the plaintiffs. This motion is the latest of a plethora filed in this case during its nascency. Though the ink is barely dry on the plaintiffs’ reply to Mr. Cohen’s counterclaims, this Court has previously disposed of a motion to compel arbitration, a motion to dismiss, a motion Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 1 of 18 2 for attorney fees, and a motion for leave to file a second amended complaint. The pending motion is adequately briefed and oral argument will not materially aid its resolution. The attorneys, apparently unable to agree on anything, also dispute the propriety of a certificate of review, which Mr. Cohen proffers pursuant to Colo. Rev. Stat. § 13-20-602. Mr. Cohen has filed a motion for leave to file the certificate. The plaintiffs and Timothy Barnett move for judgment on the pleadings dismissing several of Mr. Cohen’s counterclaims in part on the ground that a certificate is lacking. Briefing of these motions is not yet complete and this latest demonstration of fractiousness must be addressed in yet another, subsequent order. I. Plaintiffs’ allegations The allegations of the Second Amended Complaint, stripped of extraneous and salacious content, are substantially the following. In 1996, Mr. Cohen, a resident of California, retained the plaintiff Tactical Allocation Services, LLC (“Tactical”), directed by the plaintiff Neal Greenberg and headquartered in Boulder, Colorado, to invest for him the assets placed into three charitable trusts. The assets derived from sales of Mr. Cohen’s intellectual property and were intended to provide long-term financial support for him. However, Mr. Cohen allegedly drew extravagant sums from the trusts, depleting the principal amounts and impeding the plaintiffs’ efforts successfully to invest the funds in profitable ventures. The defendant Kelley Lynch, Mr. Cohen’s manager, oversaw and had power of attorney over all of Mr. Cohen’s financial dealings. Mr. Greenberg allegedly warned Ms. Lynch and Mr. Cohen on occasions that Mr. Cohen was spending too much and, absent a change of habit, would become destitute. Ms. Lynch and Mr. Cohen dismissed Mr. Greenberg’s forecasts. In April, 2001, Mr. Cohen sold additional intellectual property. Upon the advice of a tax Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 2 of 18 3 attorney, Richard Westin, who is not a party to this case, Mr. Cohen conveyed the intellectual property to an entity of his creation, called Traditional Holdings LLC, in which he held a one percent interest. Ms. Lynch controlled Traditional Holdings with a 99% ownership interest. Traditional Holdings sold the intellectual property to Sony Music International and received from Sony the proceeds. It then served as an annuity for Mr. Cohen, under Ms. Lynch’s management. This arrangement enabled Mr. Cohen to benefit financially from the sale without suffering adverse tax consequences. Mr. Westin advised Mr. Cohen that Ms. Lynch’s controlling interest, though favorable for tax purposes, gave her considerable discretion over Mr. Cohen’s affairs. Mr. Cohen allegedly indicated that he trusted Ms. Lynch. None of the plaintiffs were involved in the creation or management of Traditional Holdings. Traditional Holdings hired the plaintiffs to invest its assets, an amount approaching five million dollars. The plaintiff Agile Group LLC was commissioned to perform the service. It allegedly kept Mr. Cohen and Ms. Lynch apprised of its efforts by means of monthly statements and other communications. Similarly, Tactical communicated monthly with Mr. Cohen concerning the assets under its management. Mr. Cohen instructed the plaintiffs to follow Ms. Lynch’s directions concerning management of Traditional Holdings’ assets. Purportedly at Mr. Cohen’s direction and on his behalf, Ms. Lynch continued to make unsustainable withdrawals from the trusts and from Traditional Holdings. By January 16, 2004, Ms. Lynch had reduced Traditional Holdings’ assets to $2.1 million. Mr. Greenberg admonished Mr. Cohen, by letter of that date, to slow his diminution of the funds, to no avail. By June 25, 2004, Mr. Cohen had withdrawn an additional $1,170,000 from Traditional Holdings. Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 3 of 18 4 In October, 2004, Mr. Cohen and Ms. Lynch allegedly parted ways and began to issue competing directives to the plaintiffs. Each blamed the other for Mr. Cohen’s financial distress. Mr. Cohen claimed that Ms. Lynch had deprived him of substantial sums of money. Thereafter, apprising as slim their chances of recovering money from Ms. Lynch, Mr. Cohen and his personal attorney, Robert Kory (previously dismissed from this case for lack of personal jurisdiction), allegedly conspired with two other persons, Steve Lindsay and Betsy Superfon, to extort the lost sums from the plaintiffs. This they attempted by asserting spurious claims and demanding that the plaintiffs elicit a settlement from their insurance carrier or submit to private mediation. They tried to compel Ms. Lynch to participate in their project by, among other tactics, having her arrested on false pretenses and paying paroled convicts to make false accusations against her son. However, rather than cooperating with Messrs. Cohen and Kory, Ms. Lynch informed the plaintiffs of the scheme and documented for them Mr. Cohen’s chicanery. The plaintiffs then filed their complaint in this case. Mr. Kory, acting on Mr. Cohen’s behalf, sent a demand letter to Mr. Greenberg’s attorney, wrongly accusing the plaintiffs of fraud and various breaches of fiduciary duty. After the plaintiffs filed this lawsuit, Messrs. Cohen and Kory allegedly used Mr. Cohen’s fame as a prominent recording artist to publish defamatory statements about the plaintiffs. They posted their calumnies on Mr. Cohen’s web site and submitted them to the press, blaming the plaintiffs for the loss of the monies. The Second Amended Complaint delineates ten claims. These are defamation; commercial disparagement; interference with prospective business advantage; unjust enrichment; civil extortion; civil conspiracy; violation of the Colorado Organized Crime Control Act, Colo. Rev. Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 4 of 18 5 Stat. § 18-17-101 et seq. (“COCCA”); injunctive relief; declaratory judgment; and interpleader, against Ms. Lynch and Mr. Cohen, to determine rightful ownership of the remaining Traditional Holdings funds. II. Discussion Mr. Cohen moves for dismissal of all but the plaintiffs’ defamation, commercial disparagement, unjust enrichment and interpleader claims. I must first determine whether California or Colorado law governs the challenged claims. A. Choice of law A federal court sitting in diversity must apply the choice-of-law provisions of the forum state. Shearson Lehman Bros., Inc. v. M & L Investments, 10 F.3d 1510, 1514 (10th Cir. 1993). Colorado has adopted the “most significant relationship test” of Restatement (Second) Conflicts of Laws (1971) for tort actions. Hawks v. Agri Sales, Inc., 60 P.3d 714, 715 (Colo. Ct. App. 2001). The Restatement generally provides, (1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6. (2) Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered. These contacts are to be evaluated according to their relative importance with respect to the particular issue. Restatement (Second) of Conflicts of Laws § 145 (1971). Reference to the factors identified in Section 145(2) alone does not dispose of the Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 5 of 18 6 question. The plaintiffs suffered alleged injury predominantly in Colorado, where they reside. Mr. Cohen engaged in the allegedly tortious conduct in California, where he resides. Mr. Cohen and Traditional Holdings engaged the plaintiffs in Colorado to manage Mr. Cohen’s assets for his benefit in California. The comments to Section 145 provide additional guidance. Comment c states, inter alia, [T]he interest of a state in having its tort rule applied in the determination of a particular issue will depend upon the purpose sought to be achieved by that rule and by the relation of the state to the occurrence and the parties. If the primary purpose of the tort rule involved is to deter or punish misconduct, as may be true of rules permitting the recovery of damages for alienation of affections and criminal conversation, the state where the conduct took place may be the state of dominant interest and thus that of most significant relationship... . On the other hand, when the tort rule is designed primarily to compensate the victim for his injuries, the state where the injury occurred, which is often the state where the plaintiff resides, may have the greater interest in the matter. And the Restatement explains that the relative importance of the factors varies according to the tort involved. Comment f states, inter alia, In situations involving the multistate publication of matter that injures the plaintiff’s reputation... or causes him financial injury... or invades his right of privacy... the place of the plaintiff’s domicile, or on occasion his principal place of business, is the single most important contact for determining the state of the applicable law. The substance of the plaintiffs’ interference with prospective business advantage claim is that Mr. Cohen disparaged them in media accessible in multiple states and thus encouraged potential clients to look elsewhere for service. Mr. Cohen’s multi-state publication of matter, which allegedly caused financial injury to the plaintiffs, is most closely analogous to commercial disparagement or defamation. Indeed, the same allegations predicate the plaintiffs’ defamation, commercial disparagement, and interference with prospective business advantage claims. As the comments to Section 145 suggest, and as Section 150 makes explicit, Colorado – the state of Mr. Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 6 of 18 7 Greenberg’s domicile and the corporate-plaintiffs’ principal place of business – has the most significant relationship to the alleged wrongdoing. Restatement (Second) of Conflicts of Laws § 150 (1971). The plaintiffs’ claims for civil extortion and civil conspiracy rest upon Messrs. Cohen’s and Kory’s alleged secret plot to force the plaintiffs into mediation by threatening publicly to assert spurious claims. Civil extortion in California (Colorado has recognized no such claim) constitutes a cause of action for the recovery of money obtained by the wrongful threat of criminal or civil prosecution. Fuhrman v. California Satellite Systems, 231 Cal. Rptr. 113, 122 (Cal. Ct. App. 1986), overruled on other grounds, Silberg v. Anderson, 786 P.2d 365 (Cal. 1990). “It is essentially a cause of action for moneys obtained by duress, a form of fraud.” Id. Not all unjust extractions are cognizable. The Restatement admonishes, The threat of beginning a civil action to enforce a claim, if made in good faith and unaccompanied by threatened seizure of property of the person or by other oppressive circumstances, is not duress and, if payment is made without mistake of fact, there can be no restitution even though the claim is baseless and the claimant is unreasonable in believing that it has validity. Restatement (First) of Restitution § 71 cmt. b (1937). Properly viewed, then, the gravamen of the plaintiffs’ claim is not the unwarranted payment by them in response to a threat of litigation but rather the bad faith of Mr. Cohen in threatening suit. Thus, California, the state in which Mr. Cohen allegedly acted, possesses the dominant interest and its law applies to this claim. The conspiracy claim allows joint recovery of damages against all defendants who united or cooperated in inflicting a tortious wrong – here, civil extortion – against the plaintiffs. Mox, Inc., v. Woods, 262 P. 302, 303 (Cal. 1927); More v. Johnson, 568 P.2d 437, 439-440 (Colo. 1977). “A conspiracy cannot be alleged as a tort separate from the underlying wrong it is Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 7 of 18 8 organized to achieve.” Applied Equipment Corp. v. Litton Saudi Arabia Ltd., 869 P.2d 454, 459 (Cal. 1994). “A bare agreement among two or more persons to harm a third person cannot injure the latter unless and until acts are actually performed pursuant to the agreement. Therefore, it is the acts done and not the conspiracy to do them which should be regarded as the essence of the civil action.” Id. at 457. The California Supreme Court discerned from these principles a clear distinction between criminal and civil conspiracy. “The gist of the crime of conspiracy is the agreement to commit the unlawful act, while the gist of the tort is the damage resulting to the plaintiff from an overt act or acts done pursuant to the common design.” de Vries v. Brumback, 349 P.2d 532, 536 (Cal. 1960) (citations omitted). Similarly, the Colorado Supreme Court has stated, “The essence of a civil conspiracy claim is not the conspiracy itself, but the actual damages resulting from it.” Jet Courier Service, Inc. v. Mulei, 771 P.2d 486, 502 (Colo. 1989). Thus, Colorado, the state where the plaintiffs here reside and allegedly suffered injury, is the state with the dominant interest. The COCCA claim must be analyzed under the Colorado statute that predicates it; the parties do not identify an analogous California statute. The parties agree that the claims for injunctive and declaratory relief are procedural, and therefore governed by federal law. B. The claims 1. Interference with prospective business advantage Colorado recognizes the tort of intentional interference with a prospective business relation and defines the tort with reference to the Restatement (Second) of Torts (1979). Amoco Oil Co. v. Ervin, 908 P.2d 493, 500 (Colo. 1995). Section 766B of the Restatement provides, One who intentionally and improperly interferes with another’s prospective contractual Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 8 of 18 9 relation (except a contract to marry) is subject to liability to the other for the pecuniary harm resulting from loss of the benefits of the relation, whether the interference consists of (a) inducing or otherwise causing a third person not to enter into or continue the prospective relation or (b) preventing the other from acquiring or continuing the prospective relation. Demonstration of the tort requires a showing of intentional and improper interference preventing formation of a contract. Amoco Oil Co., 908 P.2d at 500. Mr. Cohen challenges as inadequate the plaintiffs’ allegations of protected relationships. The plaintiffs have identified two prospective clients who declined to engaged the plaintiffs after referencing Mr. Cohen’s alleged calumnies, which they had read. One reneged on a prior pledge to invest with the plaintiffs after her accountant discovered Mr. Cohen’s press release on the internet. The other was referred to the plaintiffs by a current client before finding the press release on the internet. Taking these allegations as true, as I must at this stage, I find that the plaintiffs have alleged a “reasonable likelihood or probability that a contract would have resulted.” Klein v. Grynberg, 44 F.3d 1497, 1506 (10th Cir. 1995), cert. denied, 516 U.S. 810, 116 S. Ct. 58, 133 L. Ed. 2d 22 (1995). See Duran v. Clover Club Foods Co., 616 F. Supp. 790, 794 (D. Colo. 1985); Behunin v. Dow Chemical Co., 650 F. Supp. 1387, 1393 (D. Colo. 1986). Citing Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d 937 (Cal. 2003), Mr. Cohen next argues that the claim fails for failure to plead that he acted for the purpose of interfering with a particular relationship of which he had knowledge. However, as I determined above, Colorado, not California law applies to this claim. Furthermore, the Korea Supply court held, We conclude that the tort of intentional interference with prospective economic advantage does not require a plaintiff to plead that the defendant acted with the specific intent, or purpose, of disrupting the plaintiff's prospective economic advantage. Instead, to satisfy the intent requirement for this tort, it is sufficient to plead that the defendant knew that the interference was certain or substantially certain to occur as a result of its action. Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 9 of 18 10 Id. at 949-950. The parties have identified no Colorado cases explicating the requisite intent. However, the Restatement, which the Colorado courts have adopted, accords with the Korea Supply decision. “The interference with the other’s prospective contractual relation is intentional if the actor desires to bring it about or if he knows that the interference is certain or substantially certain to occur as a result of his action.” Restatement (Second) of Torts § 766B cmt. d (1979). The Restatement goes on to explain that a defendant’s purpose goes to the question whether any interference was improper. One [factor] is the actor’s motive and another is the interest sought to be advanced by him. Together these factors mean that the actor’s purpose is of substantial significance. If he had no desire to effectuate the interference by his action but knew that it would be a mere incidental result of conduct he was engaging in for another purpose, the interference may be found to be not improper. Ibid. The end for which Mr. Cohen acted when he released his statement on the internet and to the press does not commend a finding of impropriety. The plaintiffs allege that Messrs. Cohen and Kory kept their assertions secret as they attempted to force the plaintiffs to submit a claim to their insurer. Only after the plaintiffs filed this pre-emptive suit did Mr. Cohen respond publicly with his version of events. Even assuming, as I must, that Mr. Cohen’s public assertions were defamatory and untrue, I am left with no grounds on which to find that any interference with the plaintiffs’ prospective business relations was anything other than incidental to his purpose. The plaintiffs allege that Mr. Cohen’s invariable purpose has been to obtain from them the monies he could not obtain from Ms. Lynch. Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 10 of 18 11 The Restatement cautions that other factors bear upon the degree of impropriety and refers to Section 767. To determine whether the defendant acted improperly, a court is to consider: (a) the nature of the actor’s conduct, (b) the actor’s motive, (c) the interests of the other with which the actor’s conduct interferes, (d) the interests sought to be advanced by the actor, (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other, (f) the proximity or remoteness of the actor’s conduct to the interference and (g) the relation between the parties. Krystkowiak v. W.O. Brisben Companies, Inc., 90 P.3d 859, 873 (Colo. 2004) (citing Restatement (Second) of Torts § 767 (1979)). Nothing in the Second Amended Complaint indicates that Mr. Cohen persuaded or intimidated prospective clients into rejecting the plaintiffs’ services. Krystkowiak, 90 P.3d at 874. Nowhere do the plaintiffs allege that Mr. Cohen used or threatened physical violence, fraud, or civil or criminal prosecution against their prospective clients. Amoco Oil Co., 908 P.2d at 502. To the extent that Mr. Cohen’s motives and interests can be discerned from the allegations, it appears that he was attempting to refute the plaintiffs’ allegations and to strong-arm the plaintiffs into mediating his purportedly spurious claims. And Mr. Cohen compromised the plaintiffs’ reputation only after they first filed suit against him. The claim for intentional and improper interference must be dismissed. 2. Civil extortion California recognizes the tort of civil extortion and defines it as “the recovery of money obtained by the wrongful threat of criminal or civil prosecution.” Fuhrman, 231 Cal. Rptr. at 122. “To be actionable the threat of prosecution must be made with the knowledge of the falsity of the claim.” Id. Also, the plaintiff must have paid the money demanded. Id. Expenditures of Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 11 of 18 12 attorney fees do not constitute actual damages for the purpose of establishing the tort. Id. The plaintiffs allege that the scheme concocted by Messrs. Cohen, Kory, and Lindsay and Ms. Superfon failed when Ms. Lynch exposed their plot. The plaintiffs did not accede to Mr. Cohen’s demands for repayment. Nor do they allege that they submitted a claim to their insurer. They claim only to have expended corporate resources providing information about Traditional Holdings’ investments to Mr. Cohen – an effort, they concede, that they undertook to be cooperative, not in response to undue threats – and to have paid attorney fees prosecuting this action. The claim for civil extortion must be dismissed. 3. Civil conspiracy The plaintiffs must allege the five elements of a civil conspiracy claim. “There must be: (1) two or more persons, and for this purpose a corporation is a person; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more unlawful overt acts; and (5) damages as the proximate result thereof.” Jet Courier Service, 771 P.2d at 502. “The essence of a civil conspiracy claim is not the conspiracy itself, but the actual damages resulting from it.” Id. The conspiracy claim fails for two reasons. First, the unsuccessful extortion attempt by Messrs. Cohen, Kory, and Lindsay and Ms. Superfon – the alleged unlawful overt act – does not serve. “[C]onspiracy is a derivative cause of action that is not actionable per se.” Double Oak Const., L.L.C. v. Cornerstone Development Intern., L.L.C., 97 P.3d 140, 146 (Colo. App. 2003). “If the acts alleged to constitute the underlying wrong provide no cause of action, then there is no cause of action for the conspiracy itself.” Id. The alleged civil extortion provides no cause of action because civil extortion in not recognized in Colorado and, in any event, the plaintiffs did Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 12 of 18 13 not accede to Mr. Cohen’s demands. Messrs. Cohen’s and Kory’s scheme to publish libelous defenses of their conduct might predicate a distinct conspiratorial objective. However, this purported scheme lacks the requisite numerosity of participants because an agent – Mr. Kory here – “cannot be held liable for conspiracy with his principal where the agent acts within the scope of his authority and do not rise to the level of active participation in a fraud.” Astarte, Inc. v. Pacific Indus. Systems, Inc., 865 F. Supp. 693, 708 (D. Colo. 1994). Mr. Kory’s alleged participation in the published defense of his client, whether or not that defense was true in all respects, was well within the scope of his authority as an attorney. Because Mr. Lindsay and Ms. Superfon are not alleged to have participated in the scheme to defame the plaintiffs, Mr. Cohen is not alleged to have conspired with anyone for that purpose. Second, the plaintiffs have alleged no damages. Conceding that they made no payments in response to the threats of litigation, the plaintiffs nevertheless propose three categories of damages. First, they claim to suffered injury to their reputation. However, any such injury resulted not from the failed extortion attempt, which the plaintiffs allege Mr. Cohen veiled in secrecy, but rather from the subsequent alleged defamation. Second, they allege that they diverted corporate resources in order to respond to Messrs. Cohen’s and Kory’s demands for information concerning Traditional Holdings in the weeks following Ms. Lynch’s dismissal. However, nothing in the Second Amended Complaint indicates that the plaintiffs undertook these efforts as a result of the extortion attempt. Indeed, the Second Amended Complaint proclaims that Mr. Kory extolled the plaintiffs’ voluntary cooperation in the aftermath of the Cohen-Lynch separation. Third, the plaintiffs assert that they may recover attorney fees expended in defense of Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 13 of 18 14 Mr. Cohen’s advances. However, attorney fees are recoverable as damages only when they accrue in litigation with a third party that naturally and probably results from the defendant’s wrongful act. Stevens v. Moore and Co. Realtor, 874 P.2d 495, 496 (Colo. App. 1994). Absent this or some other exception, Colorado adheres to the American Rule, under which each party bears its own fees. Bunnett v. Smallwood, 793 P.2d 157, 160, 163 (Colo. 1990); Double Oak Const., 97 P.3d at 150. 4. COCCA Colo. Rev. Stat. § 18-17-104(3) provides, “It is unlawful for any person employed by, or associated with, any enterprise to knowingly conduct or participate, directly or indirectly, in such enterprise through a pattern of racketeering activity or the collection of an unlawful debt.” To state a primary violation of COCCA section 104(3), a plaintiff is required to prove the defendant (1) through the commission of two or more predicate acts (2) which constitute a pattern (3) of racketeering activity (4) directly or indirectly conducted or participated in (5) an enterprise and (6) the plaintiff was injured in its business or property by reason of such conduct. F.D.I.C. v. Refco Group, Ltd., 989 F. Supp. 1052, 1074 (D. Colo. 1997). Mr. Cohen argues that the Second Amended Complaint fails adequately to allege the existence of an enterprise, predicate acts, and injury. The plaintiffs’ COCCA claim fails for the same reasons that their conspiracy claim miscarried: they allege that they did not succumb to Mr. Cohen’s machinations. The ill effects of Mr. Cohen’s litigation threats and the purported conspirators’ attempts to secure Ms. Lynch’s perjurious cooperation were limited to the plaintiffs’ expenditures of attorney fees. Civil remedies for violations of COCCA are available only to a person “injured by reason of” a violation. Colo. Rev. Stat. § 18-17-106(7). The plaintiffs are required to allege that one or more injuries resulted Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 14 of 18 15 from each of the predicate acts. Floyd v. Coors Brewing Co., 952 P.2d 797, 803 (Colo. App. 1997), rev’d on other grounds, 978 P.2d 663 (Colo. 1999). They have alleged no damage resulting to them from the predicate acts. Again, the plaintiffs reference the injury to their reputation resulting from Mr. Cohen’s calumny. They rightly identify the defamation as the source of any damages they have suffered. However, the published statements were not part of – indeed, were inconsistent with – any pattern of racketeering activity. Indeed, the allegations are that Messrs. Cohen and Kory reversed their tactics – changing from secret extortion to public declamation – after the extortion scheme failed. Subsection 4 of Section 18-17-104 makes it unlawful to “conspire or endeavor” to violate Subsection 3. Citing People v. Young, 694 P.2d 841 (Colo. 1985) and New Crawford Valley, Ltd. v. Benedict, 877 P.2d 1363 (Colo. App. 1993), the plaintiffs argue that Mr. Cohen violated Subsection 4 by his mere attempt to violate Subsection 3. However, as the New Crawford Valley court made clear, civil remedies for conspiracies and attempts under Subsection 4 are available only to those who have suffered actual damages. New Crawford Valley, 877 P.2d at 1374. As explained above, the plaintiffs have not satisfied this requirement. 5. Injunction Mr. Cohen asks me to dismiss the injunction claim because it constitutes a prayer for prior restraint of his speech. Citing New York Times Co. v. United States, 403 U.S. 713, 91 S. Ct. 2140, 29 L. Ed. 2d 822 (1971) he notes that injunctions against future speech are disfavored under the First Amendment. The plaintiffs respond that defamation is properly enjoined because it is not protected speech. They also point out that Mr. Cohen already published the speech and Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 15 of 18 16 that an injunction would merely prohibit him from repeating the alleged calumny. When constructed narrowly to restrain only unprotected speech, injunctions against the assertion of factual claims do not impermissibly infringe upon First Amendment rights. United States v. Bell, 414 F.3d 474, 484 (3d Cir. 2005); United States v. Kaun, 827 F.2d 1144, 1150, 1151-1152 (7th Cir. 1987); United States v. White, 769 F.2d 511, 517 (8th Cir. 1985). See also B. Willis, C.P.A., Inc. v. Goodpaster, 183 F.3d 1231, 1233-1234 (10th Cir. 1999), cert. denied, 528 U.S. 1046, 120 S. Ct. 581, 145 L. Ed. 2d 483 (1999). A defamatory statement of fact not touching a matter of public concern or a public figure does not enjoy the First Amendment protection identified in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964). Quigley v. Rosenthal, 327 F.3d 1044, 1057-1061 (10th Cir. 2003), cert. denied, 540 U.S. 1229, 124 S. Ct. 1507, 158 L. Ed. 2d 172 (2004). See Gertz v. Robert Welch, Inc., 418 U.S. 323, 340, 94 S. Ct. 2997, 41 L. Ed. 2d 789 (1974). It is equally well settled that speech on matters calculated to redress a personal grievance does not involve a matter of public concern. Salehpoor v. Shahinpoor, 358 F.3d 782, 788 (10th Cir. 2004), cert. denied, 543 U.S. 812, 125 S. Ct. 47, 160 L. Ed. 2d 16 (2004). Mr. Cohen replies that the Second Amended Complaint’s prayer is too broad; it does not merely ask me to forfend the repetition of defamatory speech but rather seeks the suppression of any statements about the plaintiffs that do not meet with the plaintiffs’ prior approval. While the scope of the requested injunction is, no doubt, unduly ambitious, the proper response is not dismissal of the entire claim. Assuming the plaintiffs’ allegations to be true, I find it possible to craft a constitutional injunction in response to the plaintiffs’ prayer and I will not dismiss this cause of action. Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 16 of 18 17 6. Declaratory judgment Mr. Cohen asks me to exercise my discretion to dismiss the plaintiffs’ declaratory judgment claim. He argues that the requested declarations concerning the plaintiffs’ lack of involvement in the management of Traditional Holdings and Ms. Lynch’s authority, as attorney in fact, to manage his assets, constitute procedural fencing and are best understood as affirmative defenses to his own counterclaims. Citing St. Paul Fire and Marine Insurance Co. v. Runyon, 53 F.3d 1167, 1169 (10th Cir. 1995), he argues that declaratory judgment would not settle the controversy, would not clarify the legal relations at issue, and is requested merely for procedural fencing, and that resolution of these issues in the context of his own counterclaims would be more effective. Mr. Cohen misapprehends the plaintiffs’ allegations. Foundational to the charges of the Second Amended Complaint is the assertion that Mr. Cohen accused the plaintiffs of violating duties that they did not owe. Clarifying what obligations, if any, the plaintiffs owed to Mr. Cohen to protect him against mismanagement of Traditional Holdings will clarify the legal relations of the parties and assist in settling the controversy at the center of this action. Furthermore, because these questions bear upon the plaintiffs’ claims as well as Mr. Cohen’s counterclaims, I am not convinced that the plaintiffs request declaratory judgment as a procedural fencing device. The controversy is definite and concrete, touching the legal relations of the parties. 28 U.S.C. § 2201(a); Kunkel v. Continental Cas. Co., 866 F.2d 1269, 1273 (10th Cir. 1989). A live need exists for a declaration of the plaintiffs’ rights and duties. State Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979, 983-984 (10th Cir. 1994). I decline to dismiss the declaratory judgment claim. Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 17 of 18 18 Accordingly, it is ORDERED that: 1) Mr. Cohen’s motion to dismiss is GRANTED in part and DENIED in part; and 2) the plaintiffs’ claims for intentional interference with a prospective business relation, civil extortion, civil conspiracy, and violation of and conspiracy to violate COCCA are DISMISSED. Dated: December 4 , 2006, in Denver, Colorado. BY THE COURT: s/Lewis T. Babcock Lewis T. Babcock, Chief Judge Case 1:05-cv-01233-LTB Document 131 Filed 12/04/06 USDC Colorado Page 18 of 1812/20/2007180?RESPONSE to Motion re?148?MOTION for Summary Judgment?As to Cohen's First Counterclaim?filed by Defendant Leonard Cohen. (Attachments: #?1?Affidavit leonard cohen - exhibit a, #?2?Exhibit 1, #?3?Exhibit 2, #?4?Exhibit 3, #?5?Exhibit 4, #?6?Exhibit 5, #?7?Exhibit 6, #?8?Exhibit 7, #?9?Exhibit 8, #?10?Exhibit 9, #?11Exhibit 10, #?12?Deposition Excerpts 11, #?13?Exhibit 12, #?14?Exhibit 13, #?15?Exhibit 14, #?16?Exhibit 15, #?17?Exhibit 16, #?18?Exhibit 17, #?19?Exhibit 18, #?20Exhibit 19, #?21?Exhibit 20, #?22?Exhibit 21, #?23?Exhibit 22, #?24?Exhibit 23, #?25?Exhibit 24, #?26?Exhibit 25, #?27?Exhibit 26, #?28?Exhibit 27, #?29?Exhibit 28, #?30?Exhibit 29, #?31?Exhibit 30, #?32?Exhibit 31, #?33?Exhibit 32, #?34?Exhibit 33, #?35?Exhibit 34, #?36?Exhibit 35, #?37?Exhibit 36, #?38?Exhibit 37, #?39?Exhibit 38, #?40?Exhibit 39, #?41?Exhibit 40, #?42?Exhibit 41, #?43?Exhibit 42, #?44?Exhibit 43, #?45?Exhibit 44, part 1, #?46?Exhibit 44, part 2, #?47?Pages summary of exhibits 1-44, #?48?Affidavit jay horowitz, exhibit b)(Horowitz, Jay) (Entered: 12/20/2007)GO THROUGH COHEN’S DECLARATION WORD BY WORDCohen Affidavit – Exhibit A – Response to Motion ….EXHIBIT A IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 05-CV-01233-LTB-MJW NATURAL WEALTH REAL ESTATE, INC., d/b/a Agile Advisors, Inc., a Colorado corporation; TACTICAL ALLOCATION SERVICES, LLC, d/b/a Agile Allocation Services, LLC, a Colorado limited liability company; AGILE GROUP, LLC, a Delaware limited liability company; GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a Agile Group, a Colorado corporation; and NEAL R. GREENBERG, a Colorado resident, Plaintiffs, v. LEONARD COHEN, a Canadian citizen residing in California; KELLEY LYNCH, a United States citizen residing in California; and JOHN DOE, Nos. 1-25, Defendants. and LEONARD COHEN, a Canadian citizen residing in California, Counterclaim Plaintiff, v. TIMOTHY BARNETT, a Colorado citizen, Counterclaim Defendant. AFFIDAVIT OF LEONARD COHEN State of California ) ) ss.: County of Los Angeles ) Leonard Cohen, being first duly sworn, states as follows: 1. I am a defendant in this case and I also am the plaintiff-on-counterclaim in this case. I submit this affidavit in accordance with F.R.Civ.P. 56(e) in opposition to the Motion For Summary Judgment filed on behalf of defendants-on-counterclaim (jointly “the Agile Group” or “Greenberg”). I make this affidavit upon personal knowledge. I am competent to testify to the matters stated in this affidavit. Many of the exhibits attached to and incorporated into this affidavit are e-mails sent by me or received by me and I attest to the authenticity of those emails. However, I also have attached to this affidavit, and incorporated into it, as exhibits, documents which are exhibits to the Motion For Summary Judgment, including documents I never saw or was told about before October, 2004 when I first began to learn of the wrongful actions of Kelley Lynch (“Lynch”) and Greenberg’s role in connection with those actions which gives rise to this lawsuit. By referring to these documents, and attaching them as exhibits, I am not admitting their authenticity and I refer to them only to facilitate my discussion of the facts. 2. I am and have been a songwriter and musical performing artist for the past forty years. Over the course of my career, I have created a body of over 130 published, copyrighted songs as well as fourteen record albums that have generated substantial publishing, songwriter and record royalties. 3. Having devoted my life to artistic and creative endeavors, I often have relied upon others, including business managers, lawyers and financial advisors, to manage the business aspects of my career including the negotiation of recording agreements, the management of investments and financial affairs, and the handling of tax matters. 4. Notwithstanding my reliance upon others for performing the tasks of negotiation, management and investment, it has been my practice to stay informed about my financial affairs by asking my legal, financial and business advisors to provide me with regular and freCase 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 2 of 34 — 3 — quent summaries of financial matters such as, by way of illustration, bank balances and withdrawals. As detailed below, in connection with my decision in 2001 to entrust more than $7 million of my retirement savings to plaintiff and defendant-on-counterclaim Greenberg’s management, in connection with my further agreement that Greenberg could invest about $4 million of those funds in one of his mutual funds, and in connection with my decision to continue between 2002 and 2004 to leave those funds invested with Greenberg and managed by him, I obtained Greenberg’s agreement, commitment and promise to send me regular monthly e-mails summarizing the status of my accounts, and I obtained his agreement, commitment and promise to obtain my written consent before permitting any withdrawals from my accounts. I told Greenberg that safety and security of my savings was my primary objective. I continued to use Greenberg’s investment and money management services for more than two years. During that period, I relied on Greenberg’s regular e-mail communications as his direct and repeated assurance to me that he personally was protecting my accounts and that no one, including Kelley Lynch (“Lynch”), could access my accounts without my consent. 5. I first engaged Lynch as an assistant for business matters in or about 1988 following the death of Martin Machat, Esq. (“Machat”), my lawyer of 20 years. Lynch had worked as a paralegal in Machat’s office and had knowledge of my complex recording and publishing agreements. During the ensuing years in which she worked for me, Lynch’s role evolved into a role akin to a business manager, a position that she held until I terminated her employment for cause on or about October 20, 2004. I terminated her immediately at that point upon learning that she had embezzled funds from my personal checking accounts at City National Bank (“CNB”). Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 3 of 34 — 4 — 6. I first considered retiring from my musical career after my world tour of 1993. In or about late 1994, I decided that I would take a sabbatical from my song writing and recording career and I enrolled in a Zen monastery for a period of time. Once enrolled, I continued as a student and monk for more than five years. During that period, I began planning for my retirement and for my estate. 7. In or about 1996 Lynch introduced me to Greenberg, whom she presented as an estate planner, financial advisor and money manger of good reputation and considerable skill. I met Greenberg and thereafter agreed to engage him to review my financial assets, which largely consisted of royalty revenues from my accumulated works, and to review with me, and to devise a plan for me to satisfy, my financial objectives for retirement and estate planning. 8. During the next several years, I hired Greenberg as a financial advisor and estate planner, and he delivered to me what was supposed to be a retirement, tax and estate plan built around the sale of my copyrights and record royalties. The plan provided for investment of the proceeds of those sales in various entities that I was led to believe were legal, safe, prudent and well accepted by the financial community. I believed, based on Greenberg’s credentials, and Greenberg’s descriptions of himself, his experience and his investment approach that I had hired a highly qualified investment professional to prepare and execute a plan that would allow me to monetize my life’s work, secure my retirement, provide for my children on my death and achieve certain of my charitable objectives. 9. In my discussions with Greenberg, I expressed concern about the relative uncertainty of a royalty stream versus what I thought might be more reliable income derived from the sale of my copyrights and the investment of the sale proceeds. Greenberg expressed concern about tax liabilities related to these royalty assets in my estate and about the problems Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 4 of 34 — 5 — that these assets might pose for my children on my death. Greenberg advised, and we agreed upon, a strategy for the sale of certain copyrights and the reinvestment of the proceeds in what I was led to believe were secure entities that would preserve the proceeds of any sales to fund my retirement and, on my death, provide a significant estate for my children. 10. In or about 1996 I met with Greenberg at my home, a duplex located in a modest neighborhood of Los Angeles. I showed him that I occupied the top floor of the duplex and my daughter occupied the ground floor, which also served as my office. I also explained to Greenberg that I did not anticipate a need for a great deal of monthly income to fund my retirement as I always had observed a modest lifestyle and had no plans to change. 11. One step in executing the plan for my retirement advised by Greenberg was the sale of Stranger Music, Inc. (“SMI”), the company which owned my catalog of song copyrights. A music lawyer in New York, Peter Shukat, negotiated and concluded the sale of SMI to SONY/ATV, the music publishing affiliate of SONY Records, Inc, which has been my record company from the beginning of my career when it was known as CBS Records., Inc. 12. Based on Greenberg’s advice, in late 1996 and with the help of legal counsel, I set up several trusts, including the Cohen Charitable Remainder Trust (“CCRT”) and the Sabbath Day Trust (“SDT”), to conclude, and to receive the proceeds of, the SMI sale. In connection with the sale that closed in 1997, I deposited approximately $900,000 in the CCRT, $500,000 in the SDT, and the balance, after making about $500,000 in charitable gifts, in the Cohen Family Trust (“CFT”). I agreed with Greenberg that he would manage the investment of the funds in the two charitable remainder trusts, while Dean Witter continued to hold the funds in the CFT. Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 5 of 34 — 6 — 13. During this period I developed a trust and confidence in Greenberg. He told me that he understood my desire for safety and prudence in investment and he promised to serve as the guardian of my financial assets as he developed and implemented my retirement plan. Based in part on these assurances, I felt comfortable extending my sabbatical at the Mount Baldy Zen center, where I lived through the end of 1999 or early 2000. Greenberg solicited management of the funds in the CFT and I agreed to move those accounts to his management. Greenberg told me that his investment strategy was among the safest available and that my funds would be safer with him than with Dean Witter. 14. Greenberg also offered to develop a comprehensive estate plan for me as he held himself out as having substantial expertise in that field. I agreed to retain him to develop and implement my estate plan. He told me that I had substantial illiquid assets that would result in large taxes to my children when they inherited my estate. Based in part on these concerns, as well as my own concerns about the future of the music industry, we began examining additional steps in my retirement plan, namely the sale of my record royalties. I asked Lynch to retain a law firm in New York, Grubman, Indursky & Schindler, LLP, to open negotiations with SONY Records about whether SONY would buy my record royalties and, if so, what they would pay. 15. In or about the summer of 1998, I learned that SONY might pay as much as $8 million for the record royalties and that SONY would pay $1 million immediately as an advance on the sale. I also learned that the sale of record royalties was a more complex matter than the sale of the stock of SMI. Greenberg, as my estate planner, and Richard Westin, Esq. (“Westin”), who I understood to be a tax lawyer, worked out several alternative plans. They in turn engaged in discussions with SONY as well as with the Grubman lawyers about how the sale of the record royalties could be accomplished. Toward the end of 2000, I understood that Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 6 of 34 — 7 — Greenberg had proposed and Westin had endorsed a structure that would be acceptable to SONY and would serve the tax planning and estate planning objectives that Greenberg advised me were essential for my benefit. 16. In November 2000 I received a letter from Westin which outlined a structure for the sale of the record royalties that Westin said was approved by Greenberg and SONY. See Plaintiff’s Second Amended Complaint Exh. 1, LC 00053 to LC 00055. I understood that I would transfer my record royalties to a new company that would be owned 99% by my adult children, Adam and Lorca, that the new entity would sell the record royalties to SONY, that the proceeds of the sale, after legal fees and a 15% commission to Lynch, would remain in the new entity, and that those proceeds would fund my retirement while I was alive and then pass to my children free of estate tax when I died. I approved the transaction subject to assurances from Westin, including a legal opinion, that it was safe and legal. Westin assured me that the transaction, called a private annuity, was safe, legal and routinely used to enable parents with income producing property to convey that property to their children. Westin agreed to provide a legal opinion to me, and he asked that I authorize him to retain Greenberg to be part of structuring the private annuity transaction. I did so. 17. In or about December 2000, Westin prepared a set of documents for me to sign in order to implement the annuity transaction. In reliance on the documents presented to Lynch, as drafted by Westin, I had confidence that Westin and Greenberg were looking out for my interests and would protect me fully by providing, as promised, an estate plan that paid income to me during my lifetime and passed a substantial estate to my children on my death. 18. In or about April 2001, I learned that Traditional Holdings, LLC (“THLLC”), the entity set up as the vehicle for my estate plan, had concluded the sale of my reCase 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 7 of 34 — 8 — cord royalties to SONY. I also understood that the proceeds of the sale were deposited in money market accounts at TD Waterhouse, while I decided whether or not the funds would be managed by Greenberg who then was, and had been, managing the funds in the SDT and CCRT. 19. Over the next several months, I had a series of conversations with Lynch and with Greenberg regarding the investment management of the funds in the name of THLLC. I told Greenberg that I was interested first in safety and only secondarily in profits, as these funds represented a great deal of the value of my life’s work. Greenberg told me that he understood and that he would proceed in a prudent course. Based on Greenberg’s solicitations and his repeated assurances of his understanding of my preference for safety and security, I agreed that the funds in money market accounts in the name of THLLC at TD Waterhouse would be managed by Greenberg. I believe that, in or about September, 2001 I authorized transfers of these THLLC funds to accounts under Greenberg’s management. 20. By mid-November 2001, I was concerned that I was not receiving reports from Greenberg about the status of my accounts. I asked Lynch to arrange a meeting for me with Greenberg and a meeting was planned for November 2001 during one of Greenberg’s trips to Los Angeles. Although that meeting did not occur, I did speak with Greenberg confirming that I had asked Lynch to request from him monthly e-mail reports to be sent directly to me as the owner of the accounts with a copy to her. 21. On or about December 18, 2001 I received an e-mail report from Greenberg in which, in accordance with our agreement that he would regularly report directly to me, he summarized the status of my accounts. In particular, Greenberg there summarized the total value of all my accounts under his management, which he reported was $7,504,000; his report also summarized profits earned over the past few months. See Exhibit 1. Greenberg also suggested Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 8 of 34 — 9 — that I consider moving my funds out of money market accounts and into a new pooled investment account that he said that he was creating with his other clients. He assured me that safety was his first priority in management of my money. Even though my money was nominally in accounts in the names of several entities established as part of the estate plan that Greenberg had set up for me (i.e., the SDT, the CCRT and THLLC), he referred to the money in all of these entities then, and in every e-mail report he made directly to me thereafter, as “your money”. At all times Greenberg led me to believe that the funds in those entities was mine and that he, Greenberg, viewed the funds as mine for whose disposition and maintenance he would be accounting to me directly and personally. 22. I responded by e-mail to Greenberg on December 21, 2001, thanked him for his efforts on my behalf and said I looked forward to seeing him. See Exhibit 2. In early January, I spoke with Greenberg and asked him how much he thought I could spend annually and maintain the capital in my accounts for my children. In his e-mail report to me of January 9, 2002, he told me that my account value was $7,415,000, and that my annual budget for spending therefore could be about $420,000 per year. He stated that he was basing this estimate on an estimated 6% return from which I concluded that all of the income from the $7 million would be available for my personal support, if I needed it, and the principal would be retained for my children. See Exhibit 3. Greenberg suggested that we have dinner next time he was in Los Angeles and I responded that same day on January 9 that I appreciated the update and would look forward to having dinner with him. See Exhibit 4. 23. On February 8, 2002 Greenberg sent me a third monthly report, but without a total account balance. See Exhibit 5. I sent him an e-mail on February 11, 2002 with my personal phone number and asked that he call me. See Exhibit 6. We spoke on or about February Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 9 of 34 — 10 — 12 and I asked that all future e-mail reports to me have account balances for all my accounts and that he itemize all withdrawals from my accounts. He agreed and he also reiterated his request that I agree to invest the funds in the name of THLLC in his mutual fund called Agile Safety Fund, LP (“ASF”). I agreed to go forward with an investment in ASF provided that he continue to include all account balances and to identify all account withdrawals in his monthly e-mail reports to me. As a part of Exhibit O to his Motion for Summary Judgment, Greenberg has included an e-mail exchange dated February 13, 2002 between himself and Lynch. This e-mail, which I never had seen prior to its inclusion as part of Exhibit O, confirms that Greenberg reported to Lynch the oral agreements that he and I had reached that I would proceed with the investment in ASF and he would include account withdrawals on his monthly e-mail reports to me. See Exhibit 7. 24. Greenberg did not tell me in February, 2002 or at any other time, that my investment in ASF required that I sign contract documents specifically pertaining to ASF or that Greenberg’s agreed method of reporting and accounting to me in the future concerning the ASF investment would vary from the method of accounting and reporting by e-mail that he had agreed to furnish concerning all of my other investments. Greenberg never sent me copies of the documents identified as the Subscription Agreement and the Limited Partnership Agreement pertaining to ASF and identified as Exhibits J and I to the Motion For Summary Judgment, nor did he ever discuss those documents with me. 25. On March 12, 2002 Greenberg sent me the fourth monthly report on all of my accounts which included the account in the name of THLLC as well as the three trust accounts. Greenberg reported total assets of $6,399,259. See Exhibit 8. I was surprised and concerned by this report as I thought I had a larger balance in part because I thought I had netted $7 Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 10 of 34 — 11 — million from the SONY artist royalty sale. See Exhibit 9. I responded to Greenberg by e-mail from India that same day and asked for a review of the account balances in all of my accounts and a clarification concerning the total account balances. I asked that we speak by phone on Monday March 18th and he responded on Saturday March 16th that we would speak by phone. See Exhibit 10. He also sent an e-mail dated Saturday March 16th with his explanation of why the net proceeds from the SONY sale were less than I thought that they were and he asked how he could reach me on Monday in India. See Exhibit 11. I responded that same day that I was back in Los Angeles, and we arranged by e-mail to speak on Monday March 18th by telephone. See Exhibit 12. 26. On Monday March 18, 2002, I spoke with Greenberg by phone and reiterated to Greenberg that I wanted to have an e-mail confirmation report of every withdrawal from my accounts. I also reiterated to him that I was relying on him as the guardian of my accounts. I emphasized that the best way to reach me was by e-mail or by phone, as I was rarely if ever at Lynch’s office, which had become the principal place of business for a greeting card company which Lynch had established for herself. I told him that, given my travels, e-mails were the best way to allow me to stay informed about my accounts both as to account balances and as to account withdrawals. He agreed that he would send me e-mail confirmations of every withdrawal from my accounts and he agreed to keep sending me monthly e-mail performance reports, to call me if necessary, as I had given him my home number, and to meet periodically to review my investment objectives. I asked that he confirm with Lynch that he would be e-mailing confirmations of all withdrawals from my accounts to keep the records clear and to keep all of us informed. He promised to do so and copied me that afternoon on an e-mail to Lynch in which he told her he would provide an e-mail confirmation as to each disbursement from my accounts unCase 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 11 of 34 — 12 — der his management. See Exhibit 13. Lynch acknowledged her understanding of this arrangement that same day by e-mail, agreeing that would be the procedure among the three of us. See Exhibit 14. I understood these communications to be a confirmation of my agreement with Greenberg as to how he would keep me informed at all times about the status of my accounts and how he would not permit any withdrawals from my account without my consent. I understood these e-mail reports as the cornerstone of my ability to control spending from my accounts as he had advised. I also understood from these e-mail reports that I had a reliable and prudent plan in place to oversee my accounts. Greenberg never told me, at this time or at any other time, until after October, 2004, either directly or by e-mail, that there were other reports about my accounts, that he would be, or was, preparing, that I could not rely upon the e-mail reports he was sending me, or that the e-mail reports were false and incomplete and, for example, did not reflect the withdrawals that he agreed that they would reflect. To the contrary, Greenberg assured me that the e-mail reports, with account balances, account withdrawals and performance summaries, were all that I needed to receive and to review in order to monitor and control my accounts. Based on these promises, I agreed that additional THLLC funds could be invested in ASF as Greenberg had requested. 27. On Monday April 1, 2002 Greenberg copied me on an e-mail to Lynch confirming a $5,000 disbursement to Richard Westin. See Exhibit 15. I e-mailed Greenberg that same day to ask about this disbursement and to ensure that Greenberg knew that I was reviewing and relying upon all the e-mails sent to me under this agreed protocol. See Exhibit 16. Greenberg responded with a detailed explanation of this $5,000 payment. See Exhibit 16. These emails assured me that I had an effective set of controls in place with Greenberg to protect my accounts. Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 12 of 34 — 13 — 28. On Tuesday April 16, 2002 Greenberg sent me an e-mail as to my accounts for March. He reported total account balances of $6,317,697 and he also reported in detail on a disbursement for taxes in the amount of $71,000. He extolled the work of Lynch and Westin in setting up THLLC as a tax savings structure and otherwise led me to believe that all the accounts were in good order and the investment structure was safe and secure. See Exhibit 17. I thanked him by e-mail that same day for his skillful efforts on my behalf and to let him know again that I was relying upon his oversight. See Exhibit 18. 29. On Tuesday May 14, 2002 Greenberg sent me an e-mail report of account performance for April. See Exhibit 19. In that e-mail he listed disbursements from the various accounts under his management, including the CRT, THLLC and the CFT accounts and listing “management fees” payable to a company named “Greenberg & Associates (TAS).” Id. I responded that same day asking him to explain to me the various entities and the various payments to which he referred in his e-mail. See Exhibit 20. I had not fully understood the different entities under his management and I also was alarmed at the scope of the disbursements. In my email response to Greenberg on that same day of May 14, 2002, I told him I was alarmed and asked for guidance on my budget and spending. Id. 30. On Wednesday May 15, 2002 Greenberg responded by e-mail to my questions and clarified several matters referred to in his earlier e-mails. See Exhibit 21. First, he explained that “CRT” and “Sabbath Day” referred to trusts set up by me and under his management. Second, he explained that “TAS” was the name of a firm owned mostly by him and he described this as the company that “manages your money.” Greenberg’s e-mail confirmed for me that Greenberg, through this company named TAS, was taking personal responsibility as the guardian of all of my accounts, including the trust accounts and the THLLC account, as he had Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 13 of 34 — 14 — assured me in the past. Greenberg further advised that I could budget spending of about $360,000 per year, which provided assurances to me that he understood that I was at all times concerned about limits on spending. Id. 31. Greenberg did not tell me in May, 2002, or at any other time, that TAS’s involvement in managing my accounts meant that there was a specific contract between me and TAS providing for a method of accounting and reporting which superseded or altered Greenberg’s agreed method of accounting to me and reporting on my investments. Greenberg never sent me a copy of the document captioned “Investment Advisory Agreement”, a copy of which is Exhibit N to the Motion For Summary Judgment. He never mentioned that a new contract had been signed with TAS to replace previous contracts that I had signed years earlier for estate planning and money management services. 32. On Thursday May 30, 2002, Greenberg sent me a long e-mail that purported to explain Lynch’s role in THLLC and provided assurances to me that Greenberg was overseeing THLLC’s operation from the financial side “to ensure that the company is properly run and that its structure is maintained precisely.” See Exhibit 22. In that e-mail Greenberg explained in some detail payments to be made by THLLC to Lynch. I understood from this e-mail that some modest payments to Lynch were necessary for THLLC to comply with IRS requirements and that Greenberg was carefully monitoring those payments. I also understood from Greenberg that Lynch’s participation in THLLC was entirely for my benefit in that THLLC was established as a legal tax and estate planning device to hold the proceeds of the sale of my artist royalties. In that regard, Greenberg wrote: In summary, Kelley’s [Lynch] participation in Traditional Holdings legitimizes the structure. She invests in the entity (through the promissory note) and as she is not related to you, this also strengthens the legitimacy Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 14 of 34 — 15 — of Traditional Holdings. Kelley is given the money to repay the promissory note, to pay taxes on the money she receives for the promissory note, and receives a small salary which also helps and was built into the structure intentionally for this reason. Greenberg then describes proposed payments to Lynch totaling about $47,000: Both Richard [Westin] and I feel that these payments (for 2000 and 2001) should be made immediately and according to Richard the payments for 2002 should be made in June and then Kelley will repay the promissory note in December. I would like to make the disbursements for the combined 2000/2001 years as they are well overdue, and then make the disbursements for 2002 in June. 33. This explanation of Lynch’s role in THLLC was consistent with my earlier understanding that she was participating in THLLC only for certain legal purposes, that she would be paid a small amount by THLLC for the limited tasks that she agreed to perform and that THLLC had been formed and would be operated principally for my benefit, secondly for the benefit of my children and not at all for the benefit of Lynch. This e-mail reconfirmed for me, as well, that, as the principal intended beneficiary of the THLLC arrangement, I was the equivalent of the owner of the funds held in the name of THLLC and that Greenberg had assumed the responsibility to guard those funds for me, even to the point of explaining one payment due Lynch which was in the small amount of $3,013.70. See Exhibit 22. 34. On June 18, 2002 Greenberg sent me a report for May and addressed my continuing concerns for safety. He asserted that his investment strategy was as safe as possible, and much safer than other strategies. He acknowledged that I “…(and Kelley [Lynch] on [my] behalf) have asked if bonds or treasury bills would be a better place to invest.” This statement provided additional confirmation to me that Greenberg understood my concern for safety of my investments and that he understood that I had communicated that concern to Lynch, who was charged with protecting my investments as well. See Exhibit 23. I responded by e-mail the next Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 15 of 34 — 16 — day thanking him for the report. See Exhibit 24. He responded with an assurance that we soon would speak again by phone. Id. During our later calls and e-mails, Greenberg never mentioned that his regular e-mail reports to me were incomplete and inaccurate or that other reports existed for my review. 35. On July 15, 2002 following my reading of an alarming prediction in the press by George Soros about the economy, I sent an e-mail to Greenberg asking “What is the safest possible position? No profits. Just safety.” See Exhibit 25, p 2. Greenberg responded by e-mail that same day to the effect that my funds were in United States treasury securities and money market accounts, and that my accounts had actually been profitable in June 2002 despite large losses in the public equity markets. See Exhibit 25, p 1. I thanked him by e-mail for “the good fence” he had built around my investments and he responded by e-mail that he understood my safety concerns because many of his clients were retirees. See Exhibit 26. 36. On July 19, 2002, Greenberg sent me an e-mail summary for June performance, reporting total assets in all accounts of $5,876,435. He also reported $68,700 in trust distributions and a $44,000 “promissory note” payment. See Exhibit 27. I responded by e-mail that same day asking: “What is a promissory note payment?” See Exhibit 28. He referred me to the e-mail that he had sent me on May 30. I had read that e-mail but had not understood it as a request for authorization of payments to Lynch. He asked by e-mail on July 19 if I authorized these particular payments. See Exhibit 29. I responded by saying, based on my understanding of the May 30 e-mail, that I approved these particular payments to Lynch, but I also thought that, other than routine payments, no one could withdraw funds from my account, without my written consent, so I further asked “Where do I sign?” See Exhibit 29. Greenberg and I later spoke and I asked whether my written consent was required for such a promissory note payment; I told him Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 16 of 34 — 17 — that I thought that my written consent was legally required for any payment from the THLLC account. Greenberg told me that he thought so too and would look into the matter and get back to me. 37. On July 22, 2002 Greenberg responded by e-mail to my questions about the requirement of my written consent for payments from my accounts under his management, including the THLLC account. See Exhibit 30. He told me that he had sent documentation to me care of Lynch for my signature as to the Promissory Note payment in order to avoid any misunderstanding in the future, although written consent technically might not be required for the promissory note payment because that particular form of payment had been called for by documentation earlier prepared by Westin. Notably, however, Greenberg assured me that: “Your signature is always required except when the monies are being sent directly to your Leonard Cohen/City National Bank account”. See Exhibit 30 (emphasis supplied). I understood from this e-mail that Greenberg was providing written confirmation to me that no one could withdraw funds from my accounts without my personal written consent. This was consistent with my directions to him and my understanding of our agreement as to his authority as my investment manager. I reiterated to him that I did not want anyone to be able to withdraw funds from any of my accounts without my personal consent and he agreed that I had that control over my accounts. 38. Over the ensuing 26 months from August, 2002 to October, 2004, I received regular monthly e-mail reports from either Neal Greenberg or from defendant-on-counterclaim Tim Barnett (“Barnett”) acting on behalf of Greenberg. See Exhibit 31. Each of these e-mails was directly to me and summarized the status of my accounts, purportedly reporting the aggregate account balance for all my accounts as we had agreed and purportedly reporting on all withCase 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 17 of 34 — 18 — drawals or disbursements from each of my accounts as we also had agreed. In many of the emails, Greenberg reported no withdrawals. Where withdrawals were reported, they were limited to tax payments, fees paid to TAS or distributions to me from the charitable trusts which I had been told were required by the trust documents. Further, each of the e-mail reports showed an account balance of over $5 million. There were no reports of any shareholder “loans”. There were no requests for my consent to any withdrawals or loans. Based on the agreements reached by telephone and confirmed by e-mail between Greenberg and me regarding his control and his reporting on all of my accounts, including the trust accounts and the THLLC accounts, and based on my long standing relationship of trust and confidence in him personally as my exclusive financial advisor to whom I had entrusted my life savings, I relied on and accepted without question Greenberg’s e-mails between August, 2002 and October, 2004 as complete and accurate summaries of the status of my accounts. I relied on the e-mails for confirmation of the fair market value of my account balances, the disclosure of withdrawals or lack of withdrawals from the accounts and the assurance of protection by my account custodian. Greenberg’s e-mails contained nothing to suggest that the information about my accounts which was reported on them was incomplete and his e-mails contained no indication that there were other documents that I must consult in order to understand the true state of my accounts. Further, during the period of August, 2002 to October, 2004, Greenberg never called me or e-mailed me to request my consent to any withdrawals being made by Lynch. Greenberg never provided any hint of information in any of his e-mails to me that Lynch was withdrawing funds from any of my accounts, much less withdrawing funds at a rate which depleted nearly the entire account balance in the accounts in the name of THLLC. Had Greenberg ever mentioned in any of these e-mails that Lynch was withdrawing funds from my accounts or had he ever mentioned that there were other reports that Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 18 of 34 — 19 — I needed to consult, I would have thereby known of Lynch’s improper withdrawals and I would have terminated her services and terminated my relationship with Greenberg and the Agile Group and preserved my life savings. 39. In mid October, 2004, I received information from an employee of Lynch that I should look into my accounts at City National Bank (“CNB”). I subsequently investigated those accounts and learned that Lynch had been withdrawing substantial sums from them. I then met with Lynch, and Lynch ultimately admitted that she had taken funds from my bank accounts without my consent. I terminated her services on or about October 21, 2004 and asked that she meet with a lawyer representing me to address the situation. 40. Immediately after I fired Lynch, I made several attempts to contact Greenberg by telephone at the Agile Group’s offices in Boulder, Colorado. I finally reached Greenberg at his residence in New York City. In a telephone call on Friday, October 22, 2004, I advised Greenberg that I had just learned that Lynch had taken substantial funds from my CNB bank accounts. I told him that I had terminated her and I hoped she would admit what had happened and work out a plan for restitution. 41. I spoke again to Lynch the following day to again ask that she meet with my lawyer. She reported that Greenberg had called her shortly after I spoke with him. 42. I called Greenberg again and reached him the following day, Sunday, October 24th. I asked him why he called Lynch to discuss with her my confidential discussion with him. He told me that he had been taught that in such circumstances, he should support both sides. I asked him how there could be two sides. With some concern about the status of my accounts under Greenberg’s management, I asked Greenberg to confirm that $5 million remained in my accounts under his management, as was indicated in his August 31, 2004 e-mail sent to me Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 19 of 34 — 20 — in accordance with the agreed method of reporting. To my shock and total disbelief, Greenberg told me that he could not tell me the status of the account in the name of THLLC. He further told me, for the first time in any of our communications together, that, in his view, Lynch owned THLLC and he could not talk to me about that account. I asked Greenberg how at this crucial moment he could suggest this characterization of THLLC which was inconsistent with our email communications and discussions for the last more than two years. I asked him how he could have sent me so many e-mails reporting on my account balances — which always exceeded $5,000,000 — and assuring me there were no withdrawals other than withdrawals approved by me. I asked point blank that Greenberg confirm my $5 million account balance. He refused to respond. He told me that he would talk with his lawyers before discussing the matter further with me. 43. I spoke again with Lynch the next day about arranging a meeting with my lawyer and I told her that I had arranged that Westin come to Los Angeles. To my surprise and chagrin, she told me that Greenberg had again called her and told her that I was “freaked out.” She also told me that Greenberg had assured her that she owned THLLC. Based on Lynch’s statements, I began to suspect that Greenberg had been dishonest with me and not the guardian of my accounts that he had agreed to be. Out of what turned out to be false hope, I continued to hope that Greenberg would tell me that a sum in the magnitude of $5 million remained invested in my accounts. 44. On or about October 26, 2004, I sent an e-mail request to Barnett regarding the performance of my accounts in September. I asked for confirmation that there was more than $5 million in my accounts. See Exhibit 32. Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 20 of 34 — 21 — 45. Shortly thereafter, I reached Greenberg again by telephone. He said that he had spoken with Westin. I asked Greenberg to confirm that there was more than $5 million in my accounts as indicated in the e-mail received from Barnett as recently as September 30, 2004, less than sixty days previously. See Exhibit 33. Greenberg admitted that Lynch had withdrawn most of the funds and he said that he would have to check the accounts to tell me exactly what remained. Greenberg had no explanation for this loss of millions of dollars from my accounts. I told Greenberg of my anger and disappointment. 46. On October 29, 2004, Barnett responded to my inquires and admitted to me that the balance in the THLLC account had been eroded from an initial $4.7 million as of September 2002 to $150,000 as of October, 2004. Barnett’s statements to me established that all the e-mails sent by Greenberg, and sent by Barnett himself, as Greenberg’s proxy, since mid 2002 were lies. 47. In mid-November, 2004 I hired Robert Kory, Esq. (“Kory”) as my lawyer to investigate what had happened to my life savings. Kory contacted Greenberg and thereafter received some account information and copies of some e-mail communications between Greenberg, Lynch and Westin. 48. In or about February, 2005, I reviewed some of the e-mails and other communications Kory had received from Greenberg and from counsel to Lynch. Among those documents were two letters, one dated January 16, 2004 and the other dated June 24, 2004 in which Greenberg wrote on Greenberg & Associates, Inc letterhead to me c/o Lynch’s address and warned of “excessive spending”, “improper accounting for Traditional Holdings”, and “potentially dire financial consequences” if spending were not curtailed. See Exhibit 34. I never received these letters on the days they purportedly were written and sent. The first time I saw Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 21 of 34 — 22 — these letters was in Kory’s office in or about February, 2005, several months after I learned that Lynch had systematically looted my accounts that Greenberg had assured me were safe. 49. After I was shown the two “warning letters”, I compared them with e-mails from Greenberg which had been sent the month before and the month after the date stated on each letter. See Exhibits 35 and 36. In each case the e-mails sent directly to me (e.g. e-mails dated December 29, 2003 and January 27, 2004 as well as e-mails dated June 3, 2004 and July 21, 2004) assured me that my accounts had balances in excess of $5 million. Greenberg made no mention in those e-mails of any “over spending”, “improper accounting” or “dire financial consequences”. These “warning letters” were surprising to me for many reasons, including the following: First, Greenberg and I had agreed upon an arrangement and had established a practice of communication by e-mail and telephone so Greenberg knew how to reach me quickly and directly; Second, I had specifically given Greenberg my personal telephone number and asked him to call me about any serious matters relating to my investments and he had agreed to do so; Third, I knew that Greenberg visited Los Angeles periodically, but he had never visited me personally to advise me of any “dire circumstances”; Fourth, I was shocked, given all my discussions with Greenberg and my thanks for the “good fence” he seemed to have built, that he would not make an effort to reach out to me. It seemed to me that, at the very least, given my long standing trust and confidence in Greenberg, he would have attached these purported “warning letters” to an e-mail, copied contents of the letters into e-mails, mentioned the existence of the letters in his monthly e-mails, or even called me at home as he had in the past about far less urgent matters. Greenberg had done none of these things. Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 22 of 34 — 23 — 50. I have seen that portion of the Agile Group’s Motion For Summary Judgment, pp. 3, 28, in which the Agile Group asserts that I “admitted” that I received the “two warning letters” in the normal course. This is not so. I never received the “warning letters” nor have I ever made such an “admission”. 51. Kory showed me an e-mail that he had received from Greenberg’s companies, allegedly sent by Barnett to Lynch on or about February 3, 2004, ostensibly to confirm my alleged receipt of the January 16, 2004 “warning letter” (See Exhibit 37), and including Lynch’s alleged response that I was traveling and did not know when I would be back. Barnett had not copied me on his e-mail to Lynch; Lynch had not copied me on her e-mail response to Barnett. In short, Greenberg knew how to reach me with e-mails that presented a false picture of my accounts under his management — as he did by e-mails dated December 29, 2003 and January 27, 2004 — but he and his employees were suddenly incapable of reaching me by e-mail or telephone when he allegedly sought to warn me that my financial situation had become “dire”. Not only did Barnett not e-mail me directly to confirm receipt of the “warning letter”, Barnett told Lynch that Greenberg had no plans to visit Los Angeles where he could warn me personally about my “dire situation”. Id. Thus, all I received was the reassuring e-mail that I had $5.2 million in my accounts, that Greenberg was beating the markets and that there had been and were no withdrawals. See Exhibit 35. 52. In or about February, 2005, Kory showed me an e-mail he sent to Sherab Posel, Esq. (“Posel”), counsel to Greenberg, in which Kory outlined legal claims I had against Greenberg which were supported by, among other things, Greenberg’s having regularly sent me false e-mails assuring me that at all times my accounts had assets with a market value of over $5 million, when, in fact, Greenberg knew that my accounts were being systematically depleted. I Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 23 of 34 — 24 — understood from communications received by Kory from Posel that Greenberg ostensibly desired to participate in a confidential mediation of my claims. I was agreeable to doing so. 53. In or about April 2005 I read a letter that Kory sent to Posel summarizing my claims against Greenberg based substantially upon the history of Greenberg’s having misled me about my accounts through false e-mails. See Plaintiffs’ Opposition to Kory’s Motion to Dismiss, September 26, 2005, Exh. A Docket 32. 54. In or about May, 2005 I agreed to attend what I expected to be a confidential mediation in Denver, Colorado. 55. On or about June 3, 2005 I learned that Posel had drafted a complaint against Kory and me alleging that we were attempting to extort an insurance settlement from Greenberg and that we had attempted to solicit perjured testimony from Lynch. On learning of this draft complaint, and these outrageous and absurd allegations, I declined to travel to Colorado, even though, for whatever purpose, Posel was stating that he still wanted to have a meeting in Colorado. See Exhibit 38. 56. On or about the morning of June 9, 2005, I learned that David Chipman, Esq., another lawyer representing Greenberg, had sent an e-mail to Kory. Chipman also stated that Greenberg still sought mediation. 57. On or about the evening of June 9, 2005, it became obvious that Posel’s and Chipman’s statements concerning Greenberg’s interest in mediation were false in that a fan of mine reported that Greenberg already had filed a lawsuit against Kory and me on June 5 and Greenberg and his lawyers had issued a press release about their lawsuit on June 9, 2005, before I was even served with a copy of the lawsuit. The press release summarized Greenberg’s allegaCase 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 24 of 34 — 25 — tions that I was engaged with Kory in extortion, subornation of perjury and insurance fraud against Greenberg. See Exhibit 39. 58. Over the next several days, I received many requests for information about the Greenberg law suit from my friends and fans. In response to the press release issued by Greenberg and his lawyers, on or about June 14, 2005 Kory posted a denial of Greenberg’s charges in the forum section of the more or less official fan website for persons who like my work and who closely follow it. See Exhibit 40, p. 9 of 11. 59. In or about late June 2005, I hired counsel to defend me against Greenberg’s claims and to assert my claims against Greenberg through arbitration before the National Association of Securities Dealers. During the course of the proceedings related to my request for arbitration which then took place, I learned for the first time that Lynch allegedly had signed a series of contracts allegedly on behalf of herself and allegedly on my behalf for financial management services provided by Greenberg and his companies. I never had seen any of those contracts, including the series of four contracts ostensibly entered into with several Greenberg companies and all dated on or about February 26, 2002. See Exhibit 41. 60. In or about August, 2005, I learned that Greenberg had amended his complaint against me and had added charges of defamation based upon Kory’s statement posted on denying the charges asserted by Greenberg and made public by Greenberg through Greenberg’s press release trumpeting his claims filed against me. 61. On or about August 15, 2005, I filed a complaint against Lynch and Westin in the Los Angeles Superior Court. Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 25 of 34 — 26 — 62. Over the next eighteen months, Greenberg’s lawyers and my lawyers filed pleadings in court concerning, among other things, the possible dismissal of some or all of one parties’ claims against the other. 63. During the course of these proceedings, I saw pleadings, and for the first time saw documents, filed on behalf of Greenberg and asserting that Greenberg owns several ostensibly separate financial and investment management companies that are all controlled by him, but allegedly have separate legal authority. I also saw pleadings in which Greenberg claimed that Lynch allegedly had signed contracts, allegedly on my behalf, with several of Greenberg’s allegedly separate companies, including TAS — the one company whose name Greenberg had mentioned to me in one of his e-mails in 2002, as the company through which he was “managing” my money. Some of these alleged contracts referred to two other companies named Greenberg & Associates, Inc. and Greenberg & Associates Securities, Inc. I also received Greenberg’s pleadings or saw documents produced by Greenberg’s counsel claiming that there were, allegedly, separate contracts with ASF and that that purported entity itself allegedly was managed by the Agile Group. I further learned that Greenberg was asserting that these contracts, none of which I had read or seen, exonerated him from his agreements and commitments to me to send me accurate reports of my accounts by e-mail, to notify me by e-mail of each and every withdrawal from my accounts and to obtain my written consent before permitting any withdrawals from my accounts. 64. When Greenberg orally and by e-mail made his agreements with me to keep me apprised of my accounts by monthly e-mail reports, he said nothing to suggest that I could not rely on his e-mail reports as complete and accurate. To the contrary, when I asked about my accounts, Greenberg both told me and wrote me in effect that he personally controlled the comCase 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 26 of 34 — 27 — panies providing money and investment management services and that he personally would oversee and protect my accounts and would provide a complete and accurate summary of all my account balances in one monthly e-mail. Had Greenberg ever told me that he was not overseeing my investments, I would have ended the relationship and withdrawn all monies entrusted to his custody. Had Greenberg ever told me that some portion of my accounts would be managed by one entity, and another portion by yet another entity, and that no portion of my accounts at all would be managed by him, and that Greenberg’s agreed-to e-mail reports to me were meaningless (in addition to being misleading), and that my contractual rights were limited to whatever might be stated in one or another contract with one or another ostensibly separate entity I never had seen or been told about, I would have immediately ended the relationship with Greenberg in its entirety. 65. Since the commencement of the litigation with Greenberg, I have seen pleadings filed on behalf of Greenberg in which Greenberg, in effect, has contended that he was justified in not questioning the reasons for, or preventing, Lynch’s withdrawals from my accounts based on a Power of Attorney that I had signed in January 2002 prior to a one month trip to India so that Lynch could handle my affairs in case of emergency. I was shocked by this contention because I specifically had discussed with, and had obtained commitments from, Greenberg (and Lynch also, for that matter) that I would be advised by e-mail of any withdrawals from my accounts. See Exhibit 14. I specifically told Greenberg that I personally — not through Lynch or anyone else — wanted notice of any withdrawal from my accounts and I wanted to approve in writing all withdrawals, other than nominal withdrawals or withdrawals required by the trust instruments. I knew that Greenberg understood, accepted and agreed to these instructions Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 27 of 34 — 28 — (at least he claimed to have agreed) because he confirmed orally and by e-mail that he would follow my instructions and, indeed, he appeared to be following my instructions. See Exhibit 30. 66. The contracts that Greenberg now wields as a defense to my claims that he breached his agreements with me to report upon my accounts by e-mail and to not permit withdrawals not specifically approved by me allegedly were signed by Lynch in late February, 2002. However, when I agreed to let Greenberg invest my money in ASF and he agreed that I personally would receive monthly e-mails with account balances and itemized withdrawals, and that he would require my written consent before permitting any withdrawal, Greenberg never said that his agreement to send me these e-mails reports was inconsistent with and differed from reporting obligations or other duties that he had under contracts through which he was providing ongoing financial management and estate planning services to me. See Exhibits 12-29. Rather, Greenberg agreed to my requests and seemed to be performing as agreed by sending me e-mail summaries of my accounts every month from March 2002 to October, 2004. See Exhibit 31. I relied on those e-mails as providing an accurate summary of my account balances and an accurate summary of any withdrawals, based on Greenberg’s oral and written promises, commitments and agreements to keep me fully informed about my accounts by e-mail and to obtain my written consent on all withdrawals. 67. During the course of this litigation, I have seen for the first time some emails exchanged between Lynch and Greenberg concerning her alleged personal need to withdraw money from THLLC for her own use, and e-mails between Lynch and Barnett concerning monthly e-mail reports that they were collaborating in preparing for my consumption. Through review of those e-mails, I learned that Greenberg was told that Lynch was “borrowing” from THLLC for her own account and I learned that Lynch was asking Greenberg to help her hide the Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 28 of 34 — 29 — fact that she was doing so. For example, in an e-mail to Greenberg dated January 23, 2003, Lynch writes to Greenberg that she needs to borrow $100,000 from THLLC, and that she already had taken another personal loan, and she asks that the withdrawals be treated as “Shareholder loans and not be deducted when Leonard receives his e-mails.” See Exh. 42. Through review of e-mails between Lynch and Barnett, I also learned that Barnett sent drafts of the monthly e-mail reports which were to be sent to me, to Lynch before Agile Group sent those e-mail reports in final form to me. Barnett then apparently edited the e-mails jointly with Lynch to conceal from me facts that Greenberg had agreed would be reported to me. For example, on February 20, 2003 in an e-mail between Barnett and Lynch marked “January 2003 Performance Draft” Lynch tells Barnett not to report a $100,000 withdrawal taken by her and Lynch states that the $100,000 “should be listed as a Shareholder Loan and not deducted [from the account balance]”. See Exhibit 42. Barnett responds on February 21st by e-mail: “Of course, I am happy to list the transaction activity any way you like.” Id. In the actual e-mail sent to me by Greenberg regarding “January 2003 Performance”, there is no mention of either a $100,000 withdrawal by Lynch or a $100,000 shareholder loan to Lynch. Id. p. 1 and 2. Greenberg hid from me these transactions involving Lynch despite Greenberg’s explicit agreement to notify me of all withdrawals from my accounts in his monthly e-mails to me and to obtain my consent for withdrawals. E-mails between Lynch and Barnett reflect a similar intentional effort to hide what allegedly were loans made to Lynch in April. In this instance, the amounts in question are $25,000 and $150,000 and Barnett tells Lynch that he has decided to characterize these withdrawals as “shareholder loans”. See Exhibit 42. These e-mails demonstrate that Greenberg was exploiting my reliance on his emails to deceive me by providing me with false summaries that indicated I had money in my acCase 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 29 of 34 — 30 — counts that I did not have. These e-mails show that Greenberg, his staff and his companies worked with Lynch to hide from me Lynch’s withdrawals from my accounts. 68. During the course of the litigation of claims and counterclaims between me and Greenberg, I have seen documents allegedly reflecting that Greenberg had prepared and sent to me, c/o Lynch’s greeting card company office, summary financial statements of my accounts, including the THLLC account. I never had seen these documents, which are captioned “Unaudited Financial Statements for THLLC,” until, during 2005, I saw several copies produced by Greenberg’s counsel. Copies are attached as Exhibit S to the Motion For Summary Judgment. 69. Upon examination of the documents captioned “Un-audited Financial Statements for Traditional Holdings, LLC” I noted that these documents allegedly were prepared by the allegedly separate Agile Group companies named TAS and Greenberg & Associates, Inc. I also noted that these documents report a series of shareholder “loans” that total in the millions of dollars. I was shocked by these documents because Greenberg made no mention of any “shareholder loans” in his monthly e-mails to me despite his promise to obtain my consent for any withdrawal of funds from my accounts. I was also troubled because Barnett admitted in an email he sent after October, 2004 to Lynch, on which Kory and I were copied, that Greenberg had “incomplete documentation and no actual evidence of the loans,” and that they were unable to identify the beneficiaries of the loans. See Exhibit 43. Greenberg never mentioned to me that these “Un-audited Financial Statements for Traditional Holdings, LLC” existed, much less that they had been regularly sent to Lynch’s office. 70. Following the production of some documents by counsel for Greenberg, I also saw for the first time what appear to be summary reports on the profits and losses of THLLC’s alleged investment in ASF as reported by a CPA firm. These profit and loss stateCase 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 30 of 34 — 31 — ments state that they were prepared by Yulish and Associates, CPA, and these statements allegedly were sent to Lynch by Michael Brady from Agile Safety Group. See Exhibit R to Motion For Summary Judgment. On review of these statements, I saw that Yulish and Associates showed millions of dollars of “withdrawals” from the THLLC accounts, not as shareholder “loans” but as “distributions”. I was shocked that Greenberg, as the CEO of Agile Safety Group (allegedly the manager of ASF), had not mentioned in his monthly e-mails to me any withdrawals from my THLLC accounts, as shown by the Yulish reports. 71. On review of documents produced by Greenberg, I also have confirmed that TAS, the company which Greenberg identified as the company through which he managed my money, had the opportunity to approve, or to stop, each and every withdrawal of funds from the THLLC accounts which Lynch made without my consent. While Greenberg allegedly had arranged for my money in THLLC to be invested with ASF, Lynch apparently was unable to withdraw funds directly from ASF. Each withdrawal evidently involved an interim step, which involved an account THLLC maintained at a company named Rydex. See Exhibit O to Motion for Summary Judgment, e.g. AG 14248, AG 14238, AG 14177. Each of the THLLC account statements for the Rydex account which have been produced by Greenberg show that TAS was at all times the “financial advisor” of this Rydex account. See Exhibit 44. These statements are consistent with Greenberg’s statement that TAS was managing my money. The statements establish that, upon each request made by Lynch for the withdrawal of funds from ASF, the funds were not sent directly to Lynch but, instead, were deposited in the THLLC Rydex account, which at all times was under the control of TAS, which was in a position to prevent the making of distributions to Lynch. Id. Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 31 of 34 — 32 — 72. In preparation of this Affidavit, I also have reviewed e-mails included as part of Exhibit O to the Motion for Summary Judgment. Each of these e-mails purports to be a request from Lynch to Greenberg, or a response to a Lynch e-mail from Greenberg, Barnett or Ms. Robertson, another Greenberg employee. I never had seen any of these e-mails until they were produced among the exhibits allegedly supporting the Motion For Summary Judgment. These emails are notable for various reasons, including the following. 73. First, these e-mails, if accurate, indicate that Lynch obtained her unauthorized withdrawals from THLLC, not from ASF, but from the Rydex money market account which was at all times ostensibly managed by TAS. Numerous e-mails between Barnett and Lynch show that Barnett arranged for funds to be deposited into a Rydex money market account to enable Lynch to withdraw those funds. Barnett also was apparently assisting Lynch in the budgeting of her withdrawals from ASF to fund the THLLC money market investment account in such a manner that Lynch had $300,000 per quarter available for her to spend by writing checks on the linked Rydex checking account. See Exhibit O to Motion for Summary Judgment AG 12645, e-mail dated June 29, 2004. 74. Second, e-mails included in Exhibit O indicate that the Agile Group allowed Lynch to commingle SDT funds with THLLC funds by depositing distributions that should have gone directly to me from SDT, into the THLLC Rydex account. See Exhibit O, e-mail dated April 22, 2004, AG 13962. As a result of these e-mails, I have learned that Greenberg, who managed all of my accounts, allowed Lynch to withdraw funds without my consent not only from THLLC, but also from the SDT and to depict the withdrawals as shareholder “loans” which, for that matter, were never disclosed to me. Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 32 of 34 — 33 — 75. Third, these e-mails reflect Lynch discussing with Greenberg keeping secret her withdrawals from the THLLC Rydex account and the SDT account. 76. Fourth, these e-mails reveal that Greenberg and Lynch were planning to obtain additional funds from me by persuading me to sell my last remaining royalty asset, my interest as a songwriter in my songs. That royalty interest provides me with the so-called writer’s share of performance and mechanical royalties. According to the e-mails they have produced, Lynch and Greenberg sought to persuade me to sell those royalties for $5 million. The e-mails in Exhibit O indicate that Lynch and Greenberg intended to use those funds to hide the fact that the THLLC account had been depleted. See Exhibit O. 77. Based on the information revealed by Greenberg since I learned that he had permitted, if not assisted, Lynch to loot my accounts under his management, it is clear that Greenberg intentionally kept from me the actual facts as to the status of my accounts under his management and that he intentionally deceived me as to the true status of my accounts. Despite Greenberg’s promises, commitments and agreements, both orally and as confirmed by e-mails, that he would obtain my consent before any withdrawals, he allowed Lynch to withdraw millions of dollars from my accounts without my knowledge, let alone my written consent. Despite Greenberg’s promises, commitments and agreements, both orally and in writing, to tell me about each withdrawal from my accounts, he failed to mention any withdrawals, other than nominal withdrawals and non-discretionary withdrawals, and he led me to believe there were no such material or discretionary withdrawals. Greenberg breached his promises, commitments and agreements, not once, but every month for over two years by sending false e-mail reports that lulled me into believing that my accounts were safe, when, in fact, Greenberg facilitated, permitted and possibly aided Lynch in the looting of my accounts and in the concealment of the true facts about Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 33 of 34 — 34 — my accounts — all in violation of his contractual understandings with me to tell me the truth, keep me informed and allow withdrawals from my accounts only if I had consented to the same in writing. Leonard Cohen Subscribed to and sworn before me this ________ day of December, 2007. Notary Public My commission expires: Case 1:05-cv-01233-LTB Document 180-1 Filed 12/20/07 USDC Colorado Page 34 of 3409/05/2008222?ORDER. Plaintiffs Tenth Claim for Relief for Interpleader is DISMISSED, denying as moot?185?Defendant Cohens Motion for Summary Judgment as to Plaintiffs Tenth Claim for Relief for Interpleader The interpleaded funds currently in the Registry of the Courtincluding any accrued interest, less the Court Registry handling feeshall be disbursed to Defendant Cohen within ten days of the date of this Order; Each party shall bear its own attorney fees and costs related to this motion. Signed by Judge Lewis T. Babcock on 09/05/2008.(sah, ) (Entered: 09/05/2008)IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO LEWIS T. BABCOCK, JUDGE Civil Case No. 05-cv-01233-LTB NATURAL WEALTH REAL ESTATE, INC., a/k/a Greenberg & Associates, Inc., d/b/a Agile Advisors, Inc. a Colorado corporation; TACTICAL ALLOCATION SERVICES, LLC, d/b/a Agile Allocation Services, LLC, a Colorado limited liability company; AGILE GROUP, LLC, a Delaware limited liability company; GREENBERG & ASSOCIATES SECURITIES, INC., d/b/a Agile Group, a Colorado corporation; and NEAL R. GREENBERG, a Colorado resident, Plaintiffs and Counterclaim Defendants, v. LEONARD COHEN, a Canadian citizen residing in California; KELLEY LYNCH, a United States citizen residing in California; and JOHN DOE, Numbers 1-25, Defendants, and, LEONARD COHEN, a Canadian citizen residing in California, Counterclaim Plaintiff, v. TIMOTHY BARNETT, a Colorado citizen, Counterclaim Defendant. ______________________________________________________________________________ ORDER ______________________________________________________________________________ This matter is before me on Defendant, Leonard Cohen’s, Motion for Summary Judgment as to Plaintiffs’ Tenth Claim for Relief for Interpleader [Docket # 185], Plaintiffs’ response [Docket # 196], and Cohen’s reply [Docket # 210]. Oral arguments would not materially assist Case 1:05-cv-01233-LTB Document 222 Filed 09/05/08 USDC Colorado Page 1 of 3 2 the determination of this motion. The allegations in this case are adequately noted in prior orders of this Court, and I need not repeat them here. After several years of litigation, each claim and counterclaim in this case—with the exception of Plaintiffs’ interpleader claim now at issue—has been dismissed. Plaintiffs’ interpleader claim concerns approximately $154,000 in funds (“the funds”) belonging to Traditional Holdings LLC, an investment entity created by Cohen and Defendant Lynch for purposes of managing Cohen’s assets. Plaintiffs disavowed any interest in the funds, but requested interpleader for purposes of settling the conflicting positions of Cohen and Lynch regarding ownership of the funds. Plaintiffs paid the funds into the Registry of the Court pending resolution of this issue. On May 12, 2006, the Superior Court of California, County of Los Angeles, ruled on the issue of ownership of the funds, and entered default judgment in favor of Cohen and against Lynch in the amount of $7.3 million in damages and interest. See Judgment, Cohen v. Lynch, Los Angeles Superior Court Case No. BC 338322 (May 12, 2006) [Docket # 186-16]. In rendering judgment, the California court declared Lynch was “not the owner of any assets in Traditional Holdings, LLC” and any interest Lynch had in “any other entity related to Cohen . . . she [held] as trustee for Cohen’s equitable title.” The California court enjoined Lynch from interfering with Cohen’s right to receive any such funds or property or in any other way exercising control over any funds or property related to Cohen. The California court ruling was not appealed and is now final. Case 1:05-cv-01233-LTB Document 222 Filed 09/05/08 USDC Colorado Page 2 of 3 3 The final judgment of the California court settles the dispute between Lynch and Cohen over ownership of the interpleaded funds. As Plaintiffs are no longer exposed to multiple liability, Plaintiffs’ interpleader claim is now moot. See FED. R. CIV. P. 22(a)(1). When the dispute underlying an interpleader claim is mooted, the interpleader claim should be dismissed. See Oldcastle Materials, Inc. v. Rohlin, 343 F. Supp. 2d 762, 787 (N.D. Iowa 2004); Burningtree v. Holland, 760 F. Supp. 118, 119 (E.D. Mich. 1991). Accordingly, IT IS ORDERED that: 1. Plaintiffs’ Tenth Claim for Relief for Interpleader is DISMISSED; 2. Defendant Cohen’s Motion for Summary Judgment as to Plaintiffs’ Tenth Claim for Relief for Interpleader [Docket # 185] is DENIED AS MOOT; 3. The interpleaded funds currently in the Registry of the Court—including any accrued interest, less the Court Registry handling fee—shall be disbursed to Defendant Cohen within ten days of the date of this Order; 4. Each party shall bear its own attorney fees and costs related to this motion. Dated: September 5 , 2008. BY THE COURT: s/Lewis T. Babcock Lewis T. Babcock, Judge Case 1:05-cv-01233-LTB Document 222 Filed 09/05/08 USDC Colorado Page 3 of 3 ................
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