Free Answer to Complaint - District Court of California - California

Case 5:08-cv-00248-PVT

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CHRISTOPHER E. SCHUMB - 116828 LAW OFFICES OF CHRISTOPHER SCHUMB 10 Almaden Blvd., Suite 1250 San Jose, California 95113 Telephone: (408) 271-3245 Facsimile: (408) 289-1509 Attorneys for Defendant BOULEVARDS NEW MEDIA, INCORPORATED

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IN THE UNITED STATES DISTRICT COURT IN AND FOR THE NORTHERN DISTRICT OF CALIFORNIA
JOHNATHAN BRANT FINLEY, Plaintiff, vs. DAN PULCRANO and BOULEVARDS NEW MEDIA, INCORPORATED, Defendants.
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No. C 08-00248 PVT

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ANSWER TO COMPLAINT (JURY TRIAL DEMANDED)

Defendant BOULEVARDS NEW MEDIA, INCORPORATED, ("BNM") by its 17 attorney, Christopher E. Schumb, answer the Complaint herein as follows: 18 19 20 2. 21 truth of the allegations contained in Paragraph I of Section II of the Complaint. 22 Deny that it has knowledge or infonnation sufficient to fonn a belief as to the

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Deny that it has knowledge or infonnation sufficient to fonn a belief as to the

truth of the allegations contained in Section I of the Complaint.

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Admit the allegations contained in Paragraph 2 of Section II, with the

exception of BNM's office location, which is denied. Deny the allegations contained in Paragraph I of Section III that the District

Court of Travis County, Texas has jurisdiction over defendants; Deny that it has knowledge or infonnation sufficient to fonn a belief as to the

truth of the allegations contained in Paragraph 1 of Section III of the Complaint.

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Deny that it has knowledge or infonnation sufficient to fonn a belief as to the

2 truth of the allegations contained in Paragraph 1 of Section III of the Complaint that 3 4 5 6 7 PULCRANO engaged in any scheme to gain control of mrmovietime.com. 7. Admit the allegations contained in Paragraph 1 of Section III that one

agreement did contemplated that MMT would obtain authorization to conduct business in Texas. 8. Admit the allegations contained in Paragraph 1 of Section III that BNM has a

8 business that operates websites that "cover" cities in Texas. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9. Deny the allegations contained in Paragraph 1 of Section III that BNM has

several employees in Texas. 10. Deny the allegations contained in Paragraph 2 of Section III that the exercise

of personal jurisdiction by Texas courts would comport with the traditional notions of fair play and substantial justice. 11. Admit the allegations contained in Paragraph 3 of Section III that the amount

in controversy exceeds minimum jurisdictional amount of Texas courts. 12. Deny the allegations contained in Paragraph 4 of Section III that venue is

proper, or that any events or omissions occurred that gave rise to Plaintiff s claims. 13. Admit the allegations contained in Paragraph 1 of Section IV of the Complaint

that Plaintiff was operating a sole proprietorship known as mrmovietimes, and additionally that Plaintiff was operating illegally, operating the web site using stolen intellectual property for which Plaintiff had obtained no license, and which was the subj ect of threatened litigation by the owner of the intellectual property. 14. 15. Admit the allegations contained in Paragraph 2 of Section IV of the Complaint. Admit the allegations contained in Paragraph 3 of Section IV of the Complaint

to the extent that Pu1crano and Plantiff discussed the fonnation of a new entity, and that there was an agreement that Pu1crano would be CEO. 16. Deny that it has knowledge or infonnation sufficient to fonn a belief as to the

truth of the allegations contained in Paragraph 4 of Section IV of the Complaint that

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PULCRANO offered to sell Finley stock in MMT and provide Finley with options to
2 purchase more stock in MMT if Finley would put his sole proprietorship into NIMT.
3 4 17. Deny that it has knowledge or information sufficient to form a belief as to the

truth of the allegations contained in Paragraph 4 of Section IV of the Complaint that

5 "Pu1crano promised that Finley would be hired by the new entity" for three years at a salary 6 of $3,000 per month plus 40% of profits in the Corporation. 7 18. Deny the allegation in Paragraph 4 of Section IV of the Complaint that

8 "Pu1crano represented that the Corporation would have its own bank account, its own tax-id 9 number and, in general, that the Corporation would be run as a separate entity from 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Pulcranos's other business ventures." 19. Admit the allegation in Paragraph 4 of Section IV of the Complaint that

"Pulcrano also represented that his extensive contacts in the media and advertising world would greatly enhance the value of the mnnovietimes enterprise." 20. Deny the allegations in Paragraph 4 of Section IV of the Complaint that any

misrepresentations occurred, in Texas or elsewhere. 21. Deny that it has knowledge or information sufficient to form a belief as to the

truth of the allegations contained in Paragraph 5 of Section IV of the Complaint that "In reliance on the representations of Pu1crano, Finley agreed to give up 100% fo his ownership interest in the business of mnnovietimes.com to the new entity, in exchange for a 15%-40% stake (depending on his exercise of options) in the Corporation." 22. Admit the allegation in Paragraph 5 of Section IV of the Complaint that in

June 2004, PULCRANO and Finley signed the closing documents for the transaction in Austin, Texas. 23. Deny the allegation in Paragraph 6 of Section IV of the Complaint that "over

the next three years, Finley diligently worked to grow the business of mnnovietimes.com." 24. Admit the allegation in Paragraph 6 of Section IV of the Complaint that

"Advertising revenue grew from approximately $1,200 per month in early 2004 to a high of approximately $42,000 per month by July 2007."

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Deny the allegation in Paragraph 7 of Section IV of the Complaint that

2 "[d]espite Finely's efforts and success, Boulevards continued to maintain complete control 3 over all revenues and profits of the enterprise and has never acted to place the enterprise into 4 5 6 the Corporation which remains and empty shell." 26. Deny the allegation in Paragraph 7 of Section IV of the Complaint that "the

Corporation has held, at most, one board meeting over three years ago, has never appointed a

7 third director, has never held a shareholder's meeting." 8 27. Admit the allegation in Paragraph 7 of Section IV of the Complaint that

9 "Boulevards' accounting personnel manage, with Plaintiffs full knowledge and agreement, 10 11 12 13 14 15 mnnovietimes.com' s advertising revenue and that this advertising revenue flows into Boulevards' bank accounts where it was commingled with non-mnnovietimes assets." 28. Deny the allegation in Paragraph 7 of Section IV of the Complaint that

"[d]espite Finley's requests, defendants had no response to explain why Boulevards was commingling mnnovietimes' funds." 29. Admit the allegation in Paragraph 7 of Section IV of the Complaint that

16 "Pulcrano never obtained a tax identification number or bank account for Mr.MovieTimes, 17 18 19 20 21 22 23 24 25 26 27 28 32. Inc." All of this was done with Plaintiffs knowledge and agreement. 30. Admit the allegation in Paragraph 7 of Section IV of the Complaint that

Finley was being paid by Boulevards. 31. Deny the allegation in Paragraph 7 of Section IV of the Complaint that

"Pulcrano and Boulevards have also refused to provide Finley with infonnation concerning the income, expenses and financial status fo the mnnovietimes.com enterprise." In fact, Plaintiff has always had full access to the accounting, and has logged on the accounting system three hundred and sixty-three (363) times between July 2004 and January 2008 to review accounting infonnation, and has had full access to all accounting infonnation and personnel.
WITH RESPECT TO COUNT 1

Defendant incorporates its admissions and denials to the allegations contained

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in Section IV of the Complaint in response to Paragraph 1 of Count 1 of Section V of the 2 3 4 Complaint. 33. Denies the allegations set forth in Paragraph 2 of Count 1 of Section V of the

Complaint that" ...Boulevards offered and sold securities in the Corporation to Finley by

5 means of an untrue statement of material fact and an omission to state a material fact 6 necessary in order to make the statements made, in light of the circumstances under which 7 8 9 10
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there were made, not misleading." 34. Denies the allegation in Paragraph 3 of Count 1 of Section V of the Complaint

that "in addition or in the alternative, to the extent Boulevards is the offeror or seller, Pulcrano is responsible as a control person and/or aider." WHEREFORE, defendant demands judgment dismissing Count 1 of the Complaint. WITH RESPECT TO COUNT 2 35. Defendant incorporates its admissions and denials to the allegations contained

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in Section IV of the Complaint in response to Paragraph 1 of Count 2 of Section V of the Complaint. 36. Complaint. WHEREFORE, defendant demands judgment dismissing Count 2 of the Complaint WITH RESPECT TO COUNT 3 37. Defendant incorporates its admissions and denials to the allegations contained Denies the allegations set forth in Paragraph 2 of Count 2 of Section V of the

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in Section IV of the Complaint in response to Paragraph 1 of Count 3 of Section V of the Complaint. 38. Complaint. WHEREFORE, defendant demands judgment dismissing Count 3 of the Complaint. WITH RESPECT TO COUNT 4 39. Denies the allegations set forth in Count 4 of Section V of the Complaint. Denies the allegations set forth in Paragraph 2 of Count 3 of Section V of the

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WITH RESPECT TO SECTION VI
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 41. 40. Denies the allegations set forth in Section VI of the Complaint.


AFFIRMATIVE DEFENSES

FOR A FIRST AFFIRMATIVE DEFENSE, defendant ALLEGES that the

Complaint is barred by the Statute of Limitations as provided in the California Code of Civil Procedure §§338 and 339. 42. FOR A SECOND AFFIRMATIVE DEFENSE, defendant ALLEGES that the

Complaint fails to state facts sufficient to state a claim against BNM. 43. FOR A THIRD AFFIRMATIVE DEFENSE, defendant ALLEGES that

Plaintiff is guilty of "unclean hands"in the matters set forth in the Complaint, which conduct extinguishes the rights to equitable relief in this action. 44. FOR A FOURTH AFFIRMATIVE DEFENSE, defendant ALLEGES that

Plaintiff is guilty of "latches" in the matters set forth in the Complaint, which conduct extinguishes the rights to equitable relief in this action. 45. FOR A FIFTH AFFIRMATIVE DEFENSE, defendant ALLEGES that by and

through his ongoing and continuous employment with and position as an officer of MMT, plaintiff has ratified the conduct alleged in the Complaint, and is thus barred from recovery for any causes of action sought. 46. FOR A SIXTH AFFIRMATIVE DEFENSE, defendant ALLEGES that the

plaintiff has waived any and all claims in the Complaint. 47. FOR A SEVENTH AFFIRMATIVE DEFENSE, defendant ALLEGES that the

plaintiff has failed to mitigate any of the damages sought in the Complaint. 48. FOR AN EIGHTH AFFIRMATIVE DEFENSE, defendant ALLEGES that it

duly perfoffiled, satisfied and discharged all duties and obligations it may have owed to the plaintiff arising out of any and all agreements, representations or contracts made by them or on behalf of MMT, and this action is, therefore, barred by the provisions of California Civil Code § 1473. 49. FOR A NINTH AFFIRMATIVE DEFENSE, defendant ALLEGES that

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plaintiff has delayed in giving notice of rescission and received substantial benefits under the

2 contract, and defendant has suffered substantial prejudice arising out of the delay within its
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meaning of California Civil Code § 1693.

PRAYER FOR RELIEF
WHEREFORE, defendants pray for relief as follows:

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Plaintiff take nothing under his complaint. Defendant Boulevards New Media be awarded its fees and costs incurred in


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defending this matter.
3. Interest at the legal rate. Such other and further relief which the court may deem proper.

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DATED: February 4,2008

LAW OFFICE OF CHRISTOPHER SCHUMB

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By:

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, CHRISTOPHER E. SCHUMB Attorneys for Defendant, BOULEVARDS NEW MEDIA, INCORPORATED

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DEMAND FOR JURY TRIAL
Defendant Boulevards New Media hereby notifies this Court and the other parties hereto of its request and intent to have this matter heard before a jury. DATED: February 4, 2008 LAW OFFICE OF CHRISTOPHER SCHUMB By: ..,; . CHRISTOPHER E. SCHUMB = ' . Attorneys for Defendant, BOULEVARDS NEW MEDIA, INCORPORATED

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