Free Amended Complaint - District Court of Colorado - Colorado

Case 1:01-cv-01644-REB-CBS

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-cv-1644-REB-CBS CARTEL ASSET MANAGEMENT, INC. a Colorado corporation, Plaintiff, vs. OCWEN FINANCIAL CORPORATION, a Florida corporation; and OCWEN FEDERAL BANK FSB, a subsidiary of OCWEN FINANCIAL CORPORATION, and OCWEN LOAN SERVICING, LLC, Defendants.

THIRD AMENDED COMPLAINT AND JURY DEMAND

Cartel Asset Management, Inc. ("Cartel"), through its undersigned counsel, G.W. MERRICK & ASSOCIATES, LLC, for its Complaint against each of the Defendants alleges as follows:

I. 1.

Parties, Jurisdiction and Venue

Cartel is a Colorado corporation which maintains its principal

place of business within the State of Colorado. 2. Ocwen Financial Corporation ("OFC") is a Florida corporation

which maintains its principal place of business within the State of Florida. OFB owns all of the equity interest in Defendant Ocwen Federal Bank, FSB, and all of the membership interest in Defendant Ocwen Loan Servicing, LLC.

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3.

Ocwen Federal Bank, FSB ("OFB") is a federal savings bank

chartered and regulated by the Office of Thrift Supervision ("OTS"). In November of 2004, OFB filed an application with the OTS and initiated a process of voluntary dissolution. In June of 2005, the OTS approved OFB's plan of voluntary dissolution subject to certain conditions, including OFC's guarantee of timely and full payment of all of OFB's obligations, including OFB's litigation obligations to Cartel. 4. Ocwen Loan Servicing, LLC ("OLS") is a Delaware limited

liability company that maintains its principal place of business within the State of Delaware. 5. This court possesses subject matter jurisdiction to adjudicate the

claims set forth herein under the provisions of 28 U.S.C. §1332(a) as there is complete diversity between the parties, and the amount in controversy exceeds Seventy Five Thousand Dollars (75,000.00), exclusive of interest and costs. 6. U.S.C. §1391(a). Venue is proper in this judicial district under the provisions of 28

II. 7.

General Allegations

Cartel incorporates each of the allegations contained in Paragraphs

1-6 as if set forth in full here. 8. Following a jury trial in 2004, a jury in the federal court in Denver

determined that OFB had unlawfully stolen and misappropriated Cartel's valuable trade secret. The jury verdict awarded Cartel damages against OFB in the amount of $4.9 million (actual damages) and $3.9 million (punitive damages).

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9.

Following entry of judgment, the trial court, sua sponte, set aside

the judgment and reduced the damage award to $1 in actual damages and $1 in punitive damages. 10. On appeal to the United States Court of Appeals for the Tenth

Circuit, the appellate court: (i).affirmed the determination of liability against OFB for theft and misappropriation of Cartel's valuable trade secret, (ii) affirmed the determination that OFB illicitly benefited from the theft and misappropriation of Cartel's valuable trade secret, and (iii) affirmed the propriety of the award of punitive damages against OFB and in favor of Cartel. The Tenth Circuit reversed this Court's reduction in the damages to be awarded to Cartel, and the appellate court directed that this Court conduct a new trial on damages. 11. On or about June 28, 2005, in connection with an application of

OFB before the OTS for approval of OFB's Plan of Voluntary Dissolution, and for good and valuable consideration, OFC executed and delivered its Guaranty instrument (the "OFC Guaranty") in favor of the Guaranteed Parties (which includes Cartel). Under the terms of OFC Guaranty, OFC absolutely, unconditionally and irrevocably guaranteed the punctual payment, as and when due, of all amounts owed by OFB to Cartel. Further, OFC agreed to pay any and all and all expenses (including, without limitation, fees and expenses of counsel) incurred by Cartel in enforcing its rights under the OFC Guaranty. 12. On or about June 28, 2005, OFB and certain of OFC's subsidiaries

entered into an Assignment and Assumption Agreement (the "OLS Assignment"). Under the OLS Assignment OFB assigned to OLS, and OLS accepted, an assignment of all of OFB's liabilities (including its litigation liability to Cartel). Under the terms of the OLS

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Assignment, OLS absolutely, unconditionally and irrevocably agreed to punctually pay, as and when due, all amounts owed by OFB to Cartel. Further, OLS agreed to pay any and all and all expenses (including, without limitation, fees and expenses of counsel) incurred by Cartel in enforcing its rights under the OLS Assignment. 13. As a result of execution and delivery of the OFC Guaranty and the

OLS Assignment, each of OFC and OLS are jointly and severally liable with OFB to Cartel for all damages, losses, injuries, awards, costs and expenses owed to Cartel as a consequence of OFB's theft and misappropriation of Cartel's valuable trade secret.

III. Claim for Damages Against OFB (Theft and Misappropriation of Valuable Trade Secret) 14. Cartel incorporates each of the allegations contained in Paragraphs

1-13 as if set forth in full here. 15. The jury in the first case, and the Tenth Circuit on appeal, have

already determined, and affirmed that determination, that OFB is liable to Cartel for theft and misappropriation of Cartel's valuable trade secret. 16. As a direct and proximate consequence of OFB's theft and

misappropriation of Cartel's valuable trade secret, Cartel is entitled to recover from OFB all of the "benefit," unjust enrichment and/or ill-gotten gains derived from the theft and misappropriation of Cartel's valuable trade secret. 17. Very substantial benefit, unjust enrichment and ill-gotten gains

were derived from the theft and misappropriation of Cartel's valuable trade secret. The precise value derived substantially exceeds Seventy Five Thousand Dollars, and the precise amount will be proved at trial.

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18.

In addition, under the Colorado Trade Secret Act, Cartel is entitled

to recover from OFB Cartel's attorneys' fees and costs in prosecuting to judgment this claim for monetary damages. 19. All conditions precedent and subsequent to Cartel's right to initiate

and prosecute this claim for damages against OFB have been performed, waived or have otherwise occurred.

IV.

Claim for Damages Against OFC and OLS (OFC Guaranty and OLS Assignment) Cartel incorporates each of the allegations contained in Paragraphs

20.

1-19 as if set forth in full here. 21. Under the terms of the OFC Guaranty and the OLS Assignment,

OFC and OLS are each jointly and severally liable with OFB to Cartel for all amounts owed to Cartel (including attorneys' fees and costs) arising out of OFB's theft and misappropriation of Cartel's valuable trade secret. 22. All conditions precedent and subsequent to Cartel's right to initiate

and prosecute this claim for damages against OFB have been performed, waived or have otherwise occurred. WHEREFORE, Cartel respectfully prays that this Court enter judgment in its favor and against OFB, OFC and OLS, for the full amount of "benefit," unjust enrichment and ill-gotten gains derived from the theft and misappropriation of Cartel's valuable trade secret. Cartel further prays that it be awarded its attorneys' fees, expert witness fees, pre-judgment interest, moratory interest, post-judgment interest, costs of suit and such other and further relief to which it may be entitled.

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JURY DEMAND Cartel respectfully demands a trial by jury on all issues so triable. Dated: March 28, 2008.

s/ Glenn W. Merrick Glenn W. Merrick Brian S. Emeson G.W. MERRICK & ASSOCIATES, LLC 5445 DTC Parkway, Suite 912 Greenwood Village, Colorado 80111 Telephone: (303) 831-9400 Facsimile: (303) 771-5803 ATTORNEYS FOR PLAINTIFF

CERTIFICATE OF SERVICE I hereby certify that on the 28th day of March, 2008, a true and correct copy of the foregoing THIRD AMENDED COMPLAINT AND JURY DEMAND was electronically filed with the clerk of court using the CM/ECF System: Lino S. Lipinsky de Orlov, Esq. Sandra Wick Mulvany, Esq. McKENNA LONG & ALDERIDGE LLP 1875 Lawrence Street, Suite 200 Denver, Colorado 80202

s/ Dyanna M. Spicher

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