Free Motion to Dismiss - District Court of California - California

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EXHIBIT
612569.01/WLA 88888-74513-8-07/tew/tew

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UNITED STATES DISTRICT CO!.~j~ 30 PIT I~: I 7 NORTHERN DISTRICT OF O,~;, ~ .; .........

EASTERN Drv s ON 'i.,
SGS TOOLS COMPANY 55 South Main Street Munroe Falls, Ohio 44262, Plaintiff,
Vo

CASE NO, 5:04 CV1315 JUDGE: POLSTER DEFENDANT STEP TOOLS UNLIMITED, INC. d/b/a DESTINY TOOL'S ANSWER TO PLAINTIFF'S COMPLAINT AND COUNTERCLAIM

STEP TOOLS UNLIMITED, INC. d/b/a DESTINY TOOL 3232 De La Cruz BIvd., #C Santa Clara, CA 9505¢,
Defendant.

JURY TRIALDEMANDED

STEP TOOLS UNLIMITED, INC. d/b/a DESTINY TOOL 3232 De La Cruz Blvd., #C Santa Clara, CA 95054,
Counterclaimant,
Yo

SGS TOOLS COMPANY 55 South Main Street Munroe Falls, Ohio 44262, Counterdefendant.

STEP TOOLS UNLIMITED'S A~SWER

For its answer to flae complaint filed by Plaintiff SGS TOOLS COMPANY ("SGS") on July 13, 2004 [Docket No. 1], Defendant STEP TOOLS UNLIMITED, INC., also known as DESTINY TOOL ("DESTINY"), answers as follows, with each paragraph oft.he answer below responding to the corresponding numbered paragraph of the complaint:

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PARTIES 1. In answer to the allegations in paragraph no. 1 of the instant complaint, this

answering defendant is without knowledge sufficient to form a belief as to the truth of the allegations of this paragraph, and on that basis denies such allegations. 2. In answer to the allegations in paragraph no. 2 of the instant complaint, this

answering defendan~ admits that DESTINY is a corporation organized under the laws of the State of California, with its principal place of business located at 3232 De La Cruz Blvd., Santa Clara, California. JURISDICTION AND VENUE 3. In answer to the allegations in paragraph no. 3 of the instant complaint, this

answering defendsnt admits that this Court hss subject matter jurisdiction, in that this is an action for patent infringement arising under the United States Patent Laws at Title 35. 4. In answer to the allegations ia paragraph no. 4 of the instant complaint, this

answering defendant denies each and every allegation therein contained. 5. In answer to the allegations in paragraph no. 5 of the instant complaint, this

answering defendant denies that personal jurisdiction is properly placed in the Northern District of Ohio, denies that this answering defendant resides in this District, and denies that this answering defendant has and is committing acts of infringement in this district. PATENT INFRINGI~MENT 6. This answering defendant repeats and incorporates by reference its answers and

responses to paragraphs 1-5, as set forth above. 7. In answer to the allegations in paragraph no. 6 of the instant complaint, this

answering defendant admits only that U.S. Patent 5,049,009 ('~dhe '009 patent") issued on September 17, 1991, is titled "Improved Cutting Tool" and that a copy of the '009 patent is attached to the Complaint as Exhibit A, and that this answering defendant lacks knowledge or sufficient information to form a belief as to the troth of the remaining allegations of paragraph 6

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and therefore denies same. 8. In answer to the allegations in paragraph no. 7 of the instant complaint, this

answering defendant denies each and every allegation therein contained. 9. In answer to the allegations in paragraph no. 8 of the instant complaint, this

answering defendant admits ordy that the Viper end mills are being manufactured, used, and sold without permission or license ~rom SGS and The Weldon Tool Company, and deny that their manufacture, use, and sale infi~ge on the '009 patent and denies the remaining allegations set forth in paragraph 8. I 0. In answer to the allegations in paragraph no. 9 of the instant complaint, this answering defendant denies each and every allegation therein contained. 11. In answer to the allegations in paragrapti no. I 0 of the instant complaint, this answering defendant admits each and every allegation therein contained. 12. In answer to the allegations in paragraph no. 11 of the instant complaint, this answering defendant denies each and every allegation therein cor~tained. 13. In answer to the allegations in paragraph no. 12 of the instant complaint, this answering defendaut alleges it does not have sufficient knowledge or information to form a belief as to the allegations set forth therein as they relate to lkis defendant, and on said basis denies each and every allegation therein contained. .AFFIRMATIVE DEUENS~ES FIRST AF~TIVE D~EFENSE AS A SEPARATE AND AFF!RMATIVE DEFENSE TO THE CO!vI~PLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defenddnt asserts that plaintiff's complaint fa~s to state facts sufficient to constitute a cause of action against this answering defendant. ,SECOND AF~TIVE DEFENSE AS A SECOND SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that the Northern District Court of Ohio Lacks

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Personal Jurisdiction over this answering defendant. TIIIRD AFFIRMATIVE DEFENSE AS A THIRD SEPARATE AND AFFIRMATIVE DEFENSE TO qTqE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that upon information and belief, and as will likely .be supported by evidence after a reasonable oppormrtiIy for further investigation and discovery, that U.S. Patent No. 5,049,009 ('~he '009 Patent") is invalid for failure to comply v, fith the conditions and requirements for patentability specified in Title 35 U.S.C., including, but not limited to, 35 U.S.C. §§ 102, 103, and/or 112. FOURTH AFFIRMATIVE DEFENSE AS A FOURTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EAcH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that it has not infringed, contfibutodly infringed, and/or induced infringement of the '009 patent and is not liable for infringement thereof. FIFTH AFFIRMATIVE DEFENSE AS A FIFTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that upon information and belief, p/aintiffknew or should have known that the manufacture, use, or sale of the accused Viper model of answering defendant does not infringe any of the claims of the ~009.patent and nevertheless brought the present action against answering defendant for the purpose of wrongfully excluding answering defendant from the market for end mills; by initiating and maintaining the present action, pIainfi_ffhas engaged in patent misuse and vexatio~ litigation barring plaintiff from any relief herein. SIXTH AFFIRMATIVE DEFENSE AS A SIXTH SEPARATE AND AFFIRMATEiE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that the complaint is uncertain as to the dates durhng which it alleges that the answering defendant engaged in conduct for which it should be

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sanctioned in the manner prayed for in the complaint. SEVENTH AFFIRMATIVE DEFENSE AS A SEVENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that the complaint is uncertain as to whether plaintiff is alleging that he has suffered any injury as a result of this answering defendant's alleged wrongful or unlawful conduct. EIGHTH AFFIRMATIVE DEFENSE AS AN EIGHTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts.that because ~e complaint fails to state a claim upon which relief can be granted since, if such relief was granted, it would contravene this answering defendant's constitutional fight to substantive and procedural due process of law and equal protection under the law as preserved by the Fourteenth Amendment of the United States Constitution and the applieabIe provisions or the Constitution of the State of California, and would contravene the answering defendant's constitutional rights to protection against the baking of private propertY for public use without just compensation as preserved by the Fourteenth Amendment of the United States Constitution and the Constitution of the State of Ohio. NINTH AFFIRMATIVE DEFENSE AS A NINTH SEPARATE AND AFF!RMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that claims alleged in said complaint are barred, in whole or in part, by the Doctrine of Waiver. TENTH AF~TIVE DEFENSE AS A TENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that plaintiff has failed to join all indispensable parties.

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ELEVENTH AFFIRMATIVE DEFENSE AS AN ELEVENTH SEPARATE AND AFFIRMATIVE DEFENSE TO COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that that there is no basis for attorneys fees, expert witness fees and all other unspecified costs or expenses claimed by plaintiff. TWELFT~ AFFIRMATIVE DEFENSE AS A TWELFTH SEPARATE AND AFFIRMATIVE DEFENSE TO FIRST AMENDED ON FILE HEREIN, AND TO EACH ALLEGED'CAUSE OI~ ACTION CONTAINED TI-IEREIN, this answering defendant asserts that it ful.Iy complied with all statutes, regulations, rules, orders, directives, guidelines, industry standards, and other laws in effect at the time the conduct which allegedly gives rise to any injury is alleged to have occurred. THIRTEENTH AFFIRMATIVE DEFENSE AS A THIRTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF A..CTION CONTAINED THEREIN, this answering defendar~t asserts that at all relevant times it complied with all applicable federal, state or other regulations and standards governing its business practices. FOURTEENTH AFFIRMATIVE DEFENSE AS A FOURTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that the claims in plaintiff's complaint are uncertain in that it is impossible to determine fi'om the complaint which of the Viper model end rai!! products allegedly manufactured, distributed or sold by the answering defendant caused the injuries, losses, or damages alleged ha said complaint. FIFTEENTH AFFIRMATIVE DEFENSE AS A FIFTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO TIlE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED TH:EREIN, this answering defendant asserts that the relief plaintiff seeks rio]ares

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the responding defendant's right to protection from "excessive fines" ss provided in the Eighth Amendment of the United States Constitution and Article I, Seetioll 17, of the Constitution of the State of California, and violates the responding defendant's right to substantive due p~oeess as provided in the Fifth and Fourteenth Amendments of the United States Constitution and the Constitution of the State of Ohio. SIXTEENTH AFFIRMATIVE DEFENSE AS A SIXTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO ~ COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant denies that it engaged in any fraudulent business practice as alleged in the complaint. SEVENTEENTH AFFIRMATIVE DEFENSE AS A SEVh-2qTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that plaintiffhas failed to plead with specificity his allegations against the respofiding defendant, as required by the applicable Rules of Court and the Code of Civil Procedure. EIGHTEENTH AFFIRMATIVE DEFENSE AS AN EIGHTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, .AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this amwering defendant denies that it engaged in any unlawful business practice as alleged in the complaint. NINETEENTH AFFIRMATIVE DEFENSE AS A NINETEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant alleged that plaintiff's claims are barred by laches. '

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TWENTIETH AFFIRMATIVE DEFENSE AS A TWENTIETH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAI_N. T ON FILE HEILEIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that plaintiff's claims are barred by the Doc~ine of Estoppel. TWENTY-FIRST AFFIRMATIVE DEFENSE AS A TWENTY-FIRST SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that the complaint is uncertain as plaintiff failed to allege with reasonable specificity the specific conduct engaged in by this answering defendant that plaintiff believes entitles plaintiff to the relief sought by this eompl~t. TWENTY-SECOND AFFIRMATIVE DEFENSE AS A TWENTY-SECOND SEPARATE AND AFFIRMATIVE DEFENSE TO TEE ¯ COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts on information and belief, the claims for damages are barred, in whole or in part, due to SGS's failure to comply with the patent marking provisions. TWENTY-THIRD AFFIRMATIVE DEFENSE AS A TWENTY-THIRD SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that plaintiff's complaint and each and every claim therein, fails to state facts s'M'ficient to entitle plaintiffto the relief sought, or to any relief at all, against this answering defendant.

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COUNTERCLAIM FOR DECLARATORY RELIEF Defendant DESTINY TOOL through its attorneys, hereby alleges as follows: 1. This counterclaim is for a Declaratory Judgment declaring the '009 patent invalid,

unenforceable, and/or not infringed by DESTINY TOOL arising under the patent laws of the United States, 35 U.S.C. § 1, et seq., and the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, et seq., and for monopolization and attempted monopolization arising under Section 2 of the Sherman Act, Title 15, United States Code. 2. Jurisdiction of this Court over Count I of this Counterclaim is based upon 28

U.S.C. §§ 1331, 1338(a), 2201; and 2202, and upon Rule 13 of the Federal Rules of Civil Procedure. Jurisdiction of this Court over Count rl of this Counterclaim is based upon 15 U.S.C. § 4 (equitable relief), 15 U.S.C. § 15 (treble damage relief), 15 U.S.C. § 26 (equitable relief), and 28 U.S.C. §§ 1331 and 1337, and upon Rule 13 of the Federal Rules of Civil Procedure. 3. Venue in this Court is proper pursuant to 15 U.S.C. §§ 15, 22, and 26 and 28

U.S.C. § I391, and plaintiff, by virtue of having brought suit against DESTINY TOOL, has submitted itself to the jurisdiction of this Court. COUNT I. OF COUNTERCLAIM Declaration of Invalidity, Unenforceabilit); and Non-tnfr~'ngement 4. The allegations of paragraphs 1-3 are incorporated herein by reference as though fully set forth herein. 5. Plaintiff claims to be the owner of the "009 patent, the IMPROVED CUTTING

TOOL patent, and has brought suit against DESTINY TOOL herein for alleged infringement of said patent. 6. An actual case or controversy exists between plaintiffand DESTINY TOOL based

upon plaintiff having filed the Complaint against STEP TOOLS UNLIMITED, INC. d!b/a DESTINY TOOL. 7. Upon information and belief, and as vAll likely be supported by evidence after

reasonable opportunity for further investigation and discovery, the '009 patent is invalid, null,

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void, and/or unenforceable for failure to comply with the conditions and requirements for patentability specified in Title 35 U.S.C., including, but not limited to, 35 U.S.C. §§ 102, 103, and!or 112. 8. DESTINY TOOL has been injured and damaged by plaintiff's filing of the Complaint in the present case asserting a patent 1hat is invalid, unenforceable, and not infringed. WHEREFORE, Defender, DESTEqY TOOL prays that: 1. Plaintiff s Complaint be dismissed with prejudice and that judgment be entered for

DES'lINT TOOL. 2. With respect ~o Count I of the Counterclaim, A. United States Patent No. ~009 be adjudged and decreed invalid and unenforceable. B. DESTINY TOOL be adjudged and decreed not to have infringed, contributorily infi-inged~ or induced others to infringe the claims of United States Patent No. '009. C. 'I~nis case be adjudged and decreed exceptional pursuant to 35 U.S.C. § 285 and DESTINY TOOL be awarded its costs and attorneys fees incurred in defending this action. 3. With respect to Count II of the Counterclaim, A. For compensatory damages in an amount to be proven at trial for plaintiff's violation of 15 U.S.C. § 2. B. For an order trebling the amount of compensatory damages awarded pursuant to 15 U.S.C. § 15. C. t~or an order granting permanent injunctive relief requiring plaintiff to refrain firom instituting objectively b~seless legal actions for the purpose of interfering with the business of DESTINY TOOL or o~ers. D. For an order granting further permanent injunctive relief as may be reasonably necessary or appropriate to eliminate the effects of plaintiff's violations of the antitrust laws and to restore effective competition in the manufacture, sale

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and distribution of carbide end mills. For the award to DESTINY TOOL of its costs and prejudgment baterest on all damages. 5. 6. For the award to DESTINY TOOL of its atiomey's fees. For such other and further relief as the Court deems meet and in the premises.

Dated: August 26, 2004

lbeloate@ropers,eom ROPER.S, MAJESKI, KOHN & BENTLEY 1001 Marshall Street Redwood City, CA 94063 Telephone: (650) 364-8200 Facsimile: (650) 780-1701 Attorneys for Defendant STEP TOOLS UNLIMITED, INC. dba DESTINY TOOL

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DEMAND FOR JURY DESTINY TOOLS requests a jury trial of all issues in this action so triable, as provided for by Rule 38(a) of the Federal Rules of Civil Procedure.

Dated: August 26, 2004 By:,, /, ~\~\, ~ k/fl \

[email protected] ROPERS, MAJESKI, KOHN BENTLEY 1001 Marshall Street Redwood City, CA 94063 Telephone: (650) 364-8200 Facsimile: (650) 780-1701 Attorneys for Defendant STEP TOOLS UNLIMITED, INC. dba DESTINY TOOL

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

CASE NAME: SGS TOOLS COMPANY v. STEP TOOLS UNLIMITED, INC. d!b/a/ DESTINY TOOL

ACTION NO.: 5:04 CV 1315
PROOF OF SERVICE

I am a citizen of the United States. My business address is 1001 MarshaI1 Street, Redwood City, CA 94063. 1 am employed in the County of San Marco where this service occurs. I am over the age of 18 years, and not a party to the within cause. I am readily familiar with my employer's normal business practice for collection and processing of cerrespondenee for mailing with the U.S. Postal Service, and that practice is that correspondence is deposited with the U.S. Postal Service the same day as the day of collection in the ordinary course of business. On the date set forth below, following ordinary business practice, I served a tree copy of the foregoing document(s) described as:
D£FENDANT STEP TOOLS UNLIMITED, INC. d/'bla DESTINY TOOL'S ANSWER TO PLAINTIFF'S COMPLAINT AND COUNTERCLAIM

[] [] []

(BY FAX) by transmitting via facsimile the document(s) listed above to the fax number(s) set forth below, or as stated on the attached service list, on this date before 5:00 p.m. (BY MAIL) I caused such envelope(s) with postage thereon fully prepaid to be placed in the United States mail at Redwood City, California, (BY PERSONAL SERVICE) I caused such envelope(s) to be delivered by hand fla_js date to the offices of the addressee(s). (BY OVERNIGHT DELIVERY) I caused such envelope(s) to be delivered to an overnight delivery carrier with delivery fees provided for, addressed to the person(s) on whom it is to be served. R. Eric Oaum Mark A. Watkins Ross M. Babbitt Hahn Loeser & Parks 1225 West Market Street Akron, Ohio 44313 Telephone: 330/864-5550 Voice Facsimile: 330/864-7986 Attorneys for Plaintiff

[]

(Federal) I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made. Executed on August 26, 2004, at Redwood California.
RI~DELL

27 28
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PROOF OF SERVICE

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UNITED STATES DISTRICT CO!.~[j~ 30 PIT 12; I 7 NORTHERN DISTRICT OF O.~:. ~ ; .... . ..;, EASTERN DIVISION , .. ~11~,~ ~

SGS TOOLS COMPANY 55 South Main Street Murtroe Falls, Ohio 44262, Plaintiff,
Vo

CASE NO. 5:04 CV1315 JUDGE: POLSTER DEFENDANT STEP TOOLS UNLIMITED, INC. d/b/a DESTINY TOOL'S ANSWER TO PLAINTIFF'S COMPLAINT AND COUNTERCLAIM

STEP TOOLS UNLIMITED, INC. d/b/a DESTLNY TOOL 3232 De La Cruz Blvd., #C Santa Clara, CA 9505, Defendant. STEP TOOLS UNLIMITED, INC. d/b/a DESTINY TOOL 3232 De La Cruz Blvd., #C Santa Clara, CA 95054,
Counterclaimant,
Vo

JURY TRIAL DEMANDED

SOS TOOLS COMPANY 55 South Main Street Mmlroe Falls, Ohio 44262,
Counterdefendant.

STEP TOOLS UNLIMITED'S ANSWER

For its answer to the complaint filed by Plaintiff SGS TOOLS COMPANY ("SGS") on July 13, 2004 [Docket No. 1], Defendant STEP TOOLS UNLIMITED, INC., also known as DESTINY TOOL ("DESTIN3~'), answers as follows, with each p~agraph of the answer be/ow responding to the corresponding numbered paragraph of the complaint:

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PARTIES 1. In answer to the allegations in paragraph no. ] of the instant complaint, this

answering defendant is without knowledge sufficient to form a belief as to the truth of the allegations of this paragraph, and on that basis denies such allegations. 2. In answer to the allegations in paragraph no. 2 of the instant complaint, this

answering defendant admffs that DESTINY is a corpora$ion organized under the laws of the State of California, with its principal place of business located at 3232 De La Cruz Blvd., Santa Clara, California. JURISDICTION AND VENUE 3. In answer to the allegations in paragraph no. 3 of the instant complaint, this

answering defendant admits that this Court has subject matter jurisdiction, in that this is an action for patent infringement arising under the United States Pment Laws at Title 35. 4. In answer to the allegations in paragraph no. 4 of the instant complaint, this

answering defendant denies each and every allegation therein contained. 5. In answer to the allegations in paragraph no. 5 of the instant complaint, this

answering defendant denies that personal jurisdiction is properly placed in the Northern District of Ohio, denies that this answering defendant resides in this District, and denies that this answering defendant has and is committing acts of infringement in this district. PATENT INFRINGEMENT 6. This answering defendant repeats and incorporates by reference its answers and

responses to paragraphs 1-5, as set forth above. 7. In answer to the allegations in paragraph no. 6 of the instant complaint, this

answering defendant admits only that U.S. Patent 5,049,009 ('~dae "009 patent") issued on September 17, 1991, is titled "Improved Curling Too]" and that a copy of the '009 patent is attached to the Complaint as Exhibit A, and that this answering defendant lacks knowledge or sufficient informS:ion to form a belief as to the truth of the remaining allegations ofpamgraph 6

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and therefore denies same. 8. In answer to the allegations in paragraph no. 7 of the instant complaint, this

answering defendant denies each and every allegation therein contained. 9. In answer to the allegations in paragraph no. 8 of the instant complaint, this

answering defendant admits only that the Viper end mills are being manufactured, used, and sold without permission or license from SGS and The Weldon Tool Company, and deny that their manufacture, use, and sale infringe on the '009 patent and denies the remaining allegations set forth in paragraph 8. I 0. h answer to the allegations in paragraph no. 9 of the instant complaint, this answering defendant denies each and every allegation therein contained. 11. In anzwer to the allegations in paragrapti no. I0 of the instant complaint, this answering defendant admits each and every allegation therein contained. 12. In answer to the allegations ha paragraph no. I 1 of the instant complaint, this answering defendant denies each and every allegation therein contained. 13. In answer to the allegations in p~agraph no. 12 of the instant complaint, this answering defendant alleges it does not have sufficient knowledge or information to form a belief as to the allegations set forth therein as they relate to this defendant, and on said basis denies each and every allegation therein contained, AFFIRMATIVE DEFENS~ES FIRST AFFIRMATIVE DEFENSE AS A SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE H]3REIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defend~int asserts that plaintiff's complaint fails to state facts sufficient to constitute a cause of action against this answering defendant, ,SECOND AFFIRMATIVE DEFENSE AS A SECOND SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE I-IEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that the Northern District Court of Ohio Lacks

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Personal Jurisdiction over this answering defendant. THIRD AFFIRMATIVE DEFENSE AS A THIRD SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTA_INED THEREIN, this answering defendant asserts that upon information and belief, and as will likely be supported by evidence after a reasonable opportunity for fusther investigation and discovery, that U.S. Patent No. 5,049,009 ('~dae '009 Patent") is invalid for failure to comply v,~th the conditions and requirements for patentability specified in Title 35 U.S.C., including, but not limited to, 35 U.S.C. §§ 102, 103, and/or 112. FOI~T]t AFFIRMATIVE DEFENSE AS A FOURTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EAcH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that it has not infringed, contributorily infifnged, and/or induced inf~gement of the '009 patent and is not liable for infringement thereof. FIFTH AFFIRMATIVE DEFENSE AS A FIFTH SEPARATE AND AFFIRMATIVE DEFENSE TO TI-t]3 COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that upon information and belief, plaintiff knew or should have known that the manufacture, use, or sale of the accused Viper model of answering defendant does not infringe any of the claims of the ~009.patent and nevertheless brought the present action against answering defendant for the purpose of wrongfully excluding answering defendant from the market for end mills; by initiating and maintaining the present action, plaintiff has engaged in patent misuse and vexatious litigation barring plaintiff from any relief herein. SIXTH AFFIRMATIVE DEFENSE AS A SIXTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that the complaint is uncertain as to the dates during which it alleges that the answering defendant engaged in conduct for which it should be

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sanctioned in the manner prayed for in fl~e complaint. SEVENTH AFFIRMATIVE DEFENSE AS A SEVENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that the complaint is uncertain as to whether plaintiff is alleging that he has suffered any injury as a result of this answering defendant's alleged wrongful or unlawful eondu~t. EIGHTH AFFIRMATIVE DEI~ENSE AS AN E~IGHTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED TIZEREIN, this answering defendant asserts.that beeanse the complaint fails to state a claim upon which relief can be granted since, if such relief was granted, it would contravene this answering defendant's constitutional right to substantive and procedural due process of law and equal protection Lmder the law as preserved by the Fourteenth Amendment of the United States Constitution and the applicable provisions or the Constitution of the State of California, and would contravene the answering defendant's constitutional rights to protection against the taking ofprivat~ property for public use without just compensation as preserved by the Fourteenth Amendment of the United States Constitution and the Constitution of the State of Ohio. ~ AFFIRMATIVE DEFENSE AS A NINTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE FIEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that claims alleged in said complaint are barred, in whole or in part, by the Doctrine of Waiver. TENTH AFFIRMATIVE DEFENSE AS A TENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that plaintiff has failed to join all indispensable parties.

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ELEVENTH AFFIRMATIVE DEFENSE AS AN ELEVENTH SEPARA:I'E AND AFFIRMATIVE DEFENSE TO COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that that there is no basis for attorneys fees, expert witness fees and all other unspecified costs or expenses claimed by plaintiff. TWELFTH ~'ITVE DEFENSE AS A TWELFTH SEPARATE AND AFFIRMATIVE DEFENSE TO FIRST AMENDED ON FILE HEREIN, A_N-D TO EACH ALLEGED'CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that it fully complied with all statutes, regulations, rules, orders, directives, guidelines, industry standards, and other laws in effect at the time the conduct which allegedly gives rise to any in3ury is alleged to have occurred. THIRTEENTH AFFIRMATIVE DEFENSE AS A THIRTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF A..CTION CONTAINED THEREIN, this answering defendant asserts that at all relevant times it complied with all applicable federal, state or other regulations and standards governing its business practices. FOURTEENTH AFFIRMATIVE DEFENSE AS A FOURTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTA/NED THEREIN, this answering defendant asserts that the claims in plaintiff's complaint are uncertain in that it is impossible to determine fi'om the complaint which of the Viper model end mill products allegedly manlffactured, distributed or sold by the answering defendant caused the injuries, losses, or damages alleged in said complaint. FIFTEENTH AFFIRMATIVE DEFENSE AS A FIFTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED Tt~EREIN, ~s answering defendant asserts that the relief plaintiff" seeks violates

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the responding defendant's fight to protection from "excessive fines" as provided in the Eighth Amendment of the United States Constitution and Article I, Section 17, of the Constitution of the State of California, and violates the responding defendant's right to substantive due process as provided in the Fifth and Fourteenth Amendments of the United States Constitution and the Constitution of the State of Ohio. SIXTEENTH AFFIRMATIVE DEFENSE AS A SIXTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant denies that it engaged in any fraudulent business practice as alleged in the complaint. SEVENTEENTH AFFIRMATIVE DEFENSE AS A SEVENTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that pIaintiffhas failed to plead with specificity his allegations against the respofiding defendant, as required by the applicable Rules of Court and the Code of Civil Procedure. EIGHTEENTH AFFIRMATIVE DEFENSE AS AN EIGHTEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, .AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THERE/N, this amwering defendant denies that it engaged in any unlawful business practice as alleged in the complaint. NINETEENTH AFFIRMATIVE DEFENSE AS A NINETEENTH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAI~rT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAI"NED THEREIN, this answering defendant alleged that plaintiff's claims are barred by laches.

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TWENTIETH AFFIRMATIVE ,DEFENSE AS A TWENTIETH SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLALNT ON FILE HEREIN, AaND TO EACH ALLEGED CAUSE OF ACTION CONTA_INED THEREIN, this answering defendant asserts that plaintiff's claims are barred by the Doctrine of Estoppel. TWENTY-FIRST AFFIRMATIVE DEFENSE AS A TWENTY-FIRST SEPARATE AND AFFIRMATIVE DEFENSE TO THE COlVIPLAINT ON FILE t-I-EREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts that the complaint is uncertain as plaintiff failed to allege with reasonable specificity the specific conduct engaged in by this answering defendant that plaintiff believes entitles plaintiff to the relief sought by this complaint. TWENTY-SECOND AFFIRMATIVE DEFENSE AS A TWENTY-SECOND SEPARATE AND AFFIRMATIVE DEFENSE TO THE "COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAINED THEREIN, this answering defendant asserts on information and belief, the claims for damages are barred, in whole or in part, due to SGS's failure to comply with the patent marking provisions.
TWENTY-THIRD AFFIRMATIVE DEFENSE AS A TWENTY-THIRD SEPARATE AND AFFIRMATIVE DEFENSE TO THE COMPLAINT ON FILE HEREIN, AND TO EACH ALLEGED CAUSE OF ACTION CONTAJ2qED THEREIN, this answering defendant asserts that plaintiff's complaint and each and every claim therein, fails to state facts sufficient to entitle plaintiffto the relief sought, or to any relief aI all, against this answering defendant.

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COLrNTERCLAIM FOR DECLARATORY RELIEF Defendant DESTINY TOOL through its attorneys, hereby alleges as follows: 1. This counterclaim is for a Declaratory Judgment declaring the '009 patent invalid,

unenforceable, and/or not infringed by DESTINY TOOL arising under the patent laws of the Urdted States, 35 U.S.C. § I, et seq., and the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, et seq., and for monopolization and attempted monopolization arising under Section 2 of the Sherman Act, Title 15, United States Code. 2. Jurisdiction of this Court over Coun~ I of this Counterclaim is based upon 28

U.S.C. §§ 1331, 1338(a), 2201; and 2202, and upon Rule 13 of the Federal Rules of Civil Procedure. Jurisdiction of this Court over Count IJ of this Counterclaim is based upon 15 U.S.C. § 4 (equitable relief), 15 U.S.C. § 15 (treble damage relief), 15 U.S.C. § 26 (equitable relief), and 28 U.S.C. §§ 1331 and 1337, and upon Rule 13 of the Federal Rules of Civil Procedure. 3. Venue in this Court is proper pursuant to 15 U.S.C. §§ !5, 22, and 26 and 2g U.S.C. § I391, and plaintiff, by virtue of having brought suit against DESTINY TOOL, has submitted itself to the jurisdiction of this Court.

COUNT I. OF COUNTERCLAIM Declaration of Invalidity, Unenforceabilit); and Non-Infringement 4. The allegations of paragraphs 1-3 are incorporated herein by reference as though fully set forth herein. 5. Plaintiff claims to be the owner of the "009 patent, the IMPROVED CUTI'ING

TOOL patent, and has brought suit against DESTINY TOOL herein for alleged infringement of said patent. 6. An actual case or controversy exists between plaintiffand DESTINY TOOL based upon plaintiff having f~ed the Complaint against STEP TOOLS UNLIMITED, INC. d/b/a DESTINY TOOL. 7. Upon information and belief, and as will likely be supported by evidence after

reasonable opportunity for further investigation and discovery, the '009 patent is invalid, null,

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void, and/or uncnforceable for failure to comply with the conditions and requirements for patentability specified in Title 35 U.S.C., including, but not limited to, 35 U.S.C. §§ 102, 103, and/or 112. 8. DESTINY TOOL has b~en injured and damag~ by plaintiff's filing of the Complaint in the present case asserting a patent lhat is invalid, unenforceable, and not irffringed: WHEREFORE, Defendant, DESTINY TOOL prays that: 1. Plaintiff's Complaint be dismissed with prejudice and that judgment be entered for

DESTINY TOOL. 2. With respect to Count I of the Counterclaim, A. United States Patent No. '009 be adjudged and decreed invalid and unenforceable. B. DESTINY TOOL be adjudged and decreed not to have infringed, contributorily infringed, or induced others to infringe the claims of United States Patent No. "009. C. 'l'his case be adjudged and decreed exceptional pursuant to 35 U.S.C. § 285 and DESTINY TOOL be awarded its costs and attorneys fees incurred in defending this action. 3. With respect to Count II of the Counterclaim, A. For compensatory damages in an amount to be proven at trial for plaintiff's violation of 15 U.S.C. § 2. B. For an order trebling the amount of compensatory damages awarded pursuant to I5 U.S.C. § 15. C. For an order granting permanent injunctive reIief requiring plaintiff to refrain from instituting objectively baseless legal actions for the purpose of interfering with the business of DESTINY TOOL or others. D. For an order granting further permanent injunctive relief as may be reasonably necessm'y or appropriate to eliminate the effects of plaintiff's violations of the antitrust laws and to restore effective competition in the manufacture, sale

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and distribution of carbide end mills. For the award to DESTINY TOOL of its costs and prejudgment interest on all damages. 5. For the award to DESTINY TOOL of its attorney's fees.

6. -. For such other and further relief as the Court deems meet and in the premises. Dated: August 26, 2004

By:~ [email protected] ROPERS, MAJESKI, KOHN & BENTLEY 1001 Marshall Street Redwood City, CA 94063 Telephone: (650) 364-8200 Facsimile: (650) 780-1701 Attorneys for Defendant STEP TOOLS UNLIMITED, INC. dba DESTINY TOOL

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DEMAND FOR 3-URY DESTINY TOOLS requests a jury trial ofal! issues in this action so triable, as provided for by Rule 38(a) of the Federal Rules of Civil Procedure.

Dated: August 26, 2004

ItAE2,~. ITELOATE [email protected] ROPERS, MAJESKI, KOHN & BENTLEY 1001 Marsha!l Street Redwood City, CA 94063 Telephone: (650) 364-8200 Facsimile: (650) 780-1701 Attorneys for Defendant STEP TOOLS UNLIMITED, INC. dba DESTINY TOOL

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1 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

CASE NAME: SGS TOOLS COMPANV v. STEP TOOLS UNLIMITED, INC. d!b/a/ DESTINY TOOL

ACTION NO.: 5:04 CV 1315
PROOF OF SERVICE

I am a citizen of the United States. My business address is 1001 Marshall Street, Redwood City, CA 94063. 1 am employed in the County of San Marco where this service occurs. I am over the age of 18 years, ~ztd not a party to the within cause. I am readily familiar with my employer's normal business practice for collection and processing of correspondence for mailing with the U.S. Postal Service, and that practice is that correspondence is deposited with the U.S. Postal Service the same day as the day of collection in the ordinary course of business. On the date set forth below, following ordinary business practice, I served a tree copy of the foregoing document(s) described as:
DEFENDANT STEP TOOLS UNLIMITED, INC. d!bla DESTINY TOOL'S ANSWER TO PLAINTIFF'S COMPLAINT AND COUNTERCLAIM

[] [] [] []

(BY FAX) by transmitting via facsimile the document(s) listed above to the fax number(s) set forth below, or as stated on the attached service list, on this date before 5:00 p.m. (BY MAIL) I caused such envelope(s) with postage thereon fu!ly prepaid to be placed in the United States mail at Redwood City, Califomia. (BY PERSONAL SERVICE) I caused such envelope(s) to be delivered by hand this date to the offices of the addressee(s). . (BY OVERNIGHT DELIVERY) I caused such envelope(s) to be delivered to an overnight delivery carrier with delivery fees provided for, addressed to the person(s) on whom it is to be served. R. Eric Gaum Mark A. Watkins Ross M. Babbitt Hahn Looser & Parks 1225 West Market Street Akron, Ohio 44313 Telephone: 330/864-5550 Voice Facsimile: 330/864-7986 Attorneys for Plaintiff

[]

(Federal) I deelare that l am employed in the offiee ofa member ofthe bar of this court at whose direction the service was made. Executed on August 26, 2004, at Redwood California.
RIEDELL

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EXHIBIT 2
612569.01/WLA 88888-745/3-8-07/tew/tew

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Document Retrieval Result
Lemieux v. Central Oil Field Supply Co. of Logan Not Reported in N.E.2d, 1990 WL 128277 Ohio App.,1990. Sep 07, 1990 I-I Not Reported in N.E.2d, 1990 WL 128277 (Ohio App. 11 Dist.) Only the Westlaw citation is currently available.

Wesl;[aw.

CHECK OHIO SUPREME COURT RULES FOR REPORTING OF OPINIONS AND WEIGHT OF LEGAL AUTHORITY. Court of Appeals of Ohio, Eleventh District, Ashtabula County. James M. LEMIEUX, Esq., Plaintiff-Appellant,
V.

CENTRAL OIL FIELD SUPPLY CO. OF LOGAN, Defendant-Appellee. No. 89-A-1479. Sept. 7, 1990. Civil Appeal from Ashtabula County Court, Eastern Division, Case No. 89 CVH 50. James M. Lemieux, pro se. Richard M. Wallar, Logan, for defendant-appellee. Before CHRISTLEY, P.J., and MAHONEY and FORD, JJ. OPINION FORD, Judge. ¯ 1 Appellant, James M. Lemieux, brought suit against Central Oil Field Supply Co. of Logan alleging abuse of process based upon a suit filed by appellee against appellant for professional negligence. Appellee filed a motion for summary judgment arguing that appellant admitted, in a response to the request for admissions, that none of his property was seized as a result of the prior action. Appellant, in his brief in opposition, did not deny this statement but rather argued that his obligation to pay legal fees to defend the suit constituted a "seizure of property." The trial court, relying upon the Ohio standard for malicious prosecution announced in Crawford v. Euclid Natl. Bank (1985), 19 Ohio St.3d 135, and reaffirmed in Hawley v. Ritley (1988), 35 Ohio St.3d 157, granted summary judgment for appellee. Appellant, objecting in a timely fashion, raised the following three assignments of error: "1. The trial court erred in granting the defendant-appellee's motion for summary judgment when the court agreed that the fourth element for malicious prosecution under Ohio Law which is based on the English Rule required an arrest and/or seizure of property. "2. The trial court erred in granting the defendant-appellee's motion for summary judgment when the plaintiffappellant satisfied the Ohio court's substantial deprivation exception rule. "3. The trial court erred in granting the defendant-appellee's motion for summary judgment when it failed to consider a public policy approach to effectuate judicial economy and minimize the multiplicity of malicious prosecution suits." All three assignments challenge the trial court's interpretation and application of the fourth element of Crawford, supra, and as such will be addressed together. In Crawford, the court held that in order to establish a malicious prosecution claim, the plaintiff must show " * ¯ * (4) seizure of the plaintiff's person or property during the course of the prior proceedings." Crawford, supra, at 139. (The courts have applied the same standards enunciated in Crawford, supra, when analyzing both abuse of process claims and malicious prosecution actions.) Recently, this court in Eastlake v. Rakauskas (Jan. 12, 1990), Lake App. No. 88-L-13-208, unreported,

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examined the dictates of Crawford, specifically in application to the fourth element requiring a seizure. In Rakauskas, the court concluded: " * * * [W]e feel we are still bound by the existing state of the law in Ohio which requires a seizure of person or property. Until such time as the legislature interdicts or the Supreme Court clarifies or revises its position, we are duty bound to affirm." Id. at 7. While the underlying facts in this cause appear to provide a compelling predicate to re-examine the "seizure" requirement announced in Crawford, in light of appellant's second and third assignments, this writer, while not enamored with the rule in Ohio on this subject, together with this court, is duty bound to comply with the pronouncement of the superior court of this state. ¯ 2 We note the trial court's reference to "a technical failure of evidence" regarding the state of the record in this case at the time of the granting of summary judgment. The response to appellee's request for admission, in which appellant admitted that some of his property was seized, was submitted to appellee on May 4, 1989, but was not filed in the trial court until October 27, 1989, twenty-six days after the~ notice of appeal was filed in this case. Civ.R. 56(C) provides that in considering a summary judgment motion, no evidence except the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence in the pending case, and written stipulations of facts, if any, timely filed in the action may be considered. This court, in Molden v. Davey Tree Company (Aug. 3, 1990), Trumbull App. No. 89-T-4201, unreported, analyzed the dictates of Civ.R. 56(C). While stating that "the rule is far more stringent in its dictates relating to the manner in which such evidence should be presented to the trial court," the court noted the exception announced in Rodger v. McDonald's Restaurants of Ohio, Inc. (1982), 8 Ohio App.3d 256, in the first paragraph of the syllabus. "When ruling on a motion for summary judgment, a trial court may consider documents other than those specified in Civ.R. 56(C) in support of the motion when no objection is raised by the party against whom the motion is directed." Molden, supra, at 5-6. (Emphasis in original.) In the underlying cause, no supporting matter in favor of or contra to the motion was filed by either party. However, it is clear that the appellant conceded, in his memorandum contra, that there was no seizure of his property, although he contends that an exception should be engrained in the law for special damages in the nature of attorney's fees consistent with his views of Shore, Shirley and Co. v. Kelley (1988), 40 Ohio App.3d 10. Generally, as noted in Molden, supra, matter contained in a party's memorandum or brief is not deemed of a proper character to serve as a basis for summary judgment. Nevertheless, we agree with the trial court's conclusion since the pleadings here demonstrate that there was "no seizure" of appellant's property, and that he is only seeking redress for attorney's fees incurred in defending the original action against him brought by appellee sounding in professional negligence. (Additionally, even though there is independent material to support the trial court's decision, we make note of appellant's concession in his memorandum before the trial court that there was "no seizure" of his property.) Given the state of the pleadings in this cause and the holding enunciated in Crawford, supra, it is evident that there is no genuine issue of material fact as a matter of law since such special damages are not recognized as an exception to the seizure requirement by the Ohio Supreme Court. Parenthetically, we would remind appellant to comply prospectively with our local appellate rules regarding proper brief format. ¯ 3 For the foregoing reasons, the judgment of the trial court is affirmed.

CHRISTLEY, P.J., and MAHONEY, J., concur. Ohio App.,1990. Lemieux v. Central Oil Field Supply Co. of Logan Not Reported in N.E.2d, 1990 WL 128277 (Ohio App. 11 Dist.) END OF DOCUMENT (C) 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.

Help © 2007 West

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Positive As of: Aug 09, 2007 Ralph J. Luciani, individually and as next friend of Mathew and Michael Luciani, Plaintiff- Appellant, v. F. Joseph Schiavone; F. Joseph Schiavone Company, L.P.A., Defendants - Appellees.

No. 98-4463
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT 2000U.S. App. LEXIS 5842 March 24, 2000, Filed NOTICE: [*1] NOT RECOMMENDED FOR plaintiffs claims for abuse of process, malicious prosecuFULL-TEXT PUBLICATION. SIXTH CIRCUIT RULE tion, and intentional infliction of emotional distress. 28(g) LIMITS CITATION TO SPECIFIC SITUATIONS. PLEASE SEE RULE 28(g) BEFORE CITING OVERVIEW: Plaintiff sued defendant for abuse of IN A PROCEEDING IN A COURT IN THE SIXTH process, malicious prosecution, and intentional infliction CIRCUIT. IF CITED, A COPY MUST BE SERVED of emotional distress in connection with plaintiffs conON OTHER PARTIES AND THE COURT. THIS NO- tentious divorce from his wife. Defendant, an attorney, TICE IS TO BE PROMINENTLY DISPLAYED IF filed a separation action in Ohio on behalf of plaintiffs THIS DECISION IS REPRODUCED. wife, even though defendant knew wife had previously filed and dismissed a petition for divorce in New MexSUBSEQUENT HISTORY: Reported in Table Case ico, the wife's domicile state. Ultimately, the Ohio action Format at: 2000 U.So App. LEXIS 13074. was dismissed and the parties were divorced in New Mexico. The district court granted defendant summary PRIOR HISTORY: ON APPEAL FROM THE judgment as to all claims. On appeal, the court agreed, UNITED STATES DISTRICT COURT FOR THE except as to the claim of abuse of process. A genuine SOUTHERN DISTRICT OF OHIO. 97-00272. issue of fact existed as to whether defendant filed the Beckwith. 11-3-98. Ohio separation petition to settle issues not properly beLuciani v. Schiavone, 210 F.3d 372, 2000 U.S. App. fore the Ohio court, such as child custody, or to force plaintiff to acquiesce in the Ohio court's jurisdiction. The LEXIS 13074 (6th Cir. Ohio, 2000) court affirmed in part and reversed in part. DISPOSITION: District court's grant of summary judgment on the malicious prosecution and intentional OUTCOME: The court affirmed the district court's infliction of emotional distress claims affirmed. Court grant of summary judgment as to plaintiffs claims of reversed its grant of summary judgment on the abuse of malicious prosecution and intentional infliction of emoprocess claim and remanded. tional distress, because plaintiff failed to meet the eleCASE SUMMARY:

ments of those claims. The court reversed summary judgment on plaintiffs abuse of process claim and remanded for trial.
LexisNexis(R) Headnotes

PROCEDURAL POSTURE: Plaintiff sought review of the United States District Court for the Southern District of Ohio's grant of summary judgment to defendant as to

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2000 U.S. App. LEXIS 5842, *

Civil Procedure > Summary Judgment > Appellate Review > Standards of Review Civil Procedure > Summary Judgment > Standards > Geueral Overview Civil Procedure > Appeals > Standards of Review > De Novo Review [HN1] An appellate court reviews a grant of summary judgment de novo. Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c). Civil Procedure > Summary Jndgment > Burdens of Production & Proof> General Overview Civil Procedure > Appeals > Standards of Review > De Novo Review [HN2] An appellate court views the facts and the reasonable inferences that can be drawn therefrom in the light most favorable to the movant. If he fails to establish the existence of an essential element of his case on which he has the burden of proof, Fed. R. Cir. P. 56(c) mandates summary judgment. Civil Procedure > Remedies > Damages > General Damages Torts > Inteutional Torts > Abuse of Process > Elements Torts > Intentional Torts > Malicious Prosecution > General Overview [HN3] Under Ohio law, in order to succeed on an abuse of process claim, a plaintiff must show (1) that a legal proceeding has been set in motion in proper form and with probable cause; (2) that the proceeding has been perverted to attempt to accomplish an ulterior purpose for which it was not designed; and (3) that direct damages have resulted from the wrongful use of process. Crimiual Law & Procedure > Criminal Offenses > Weapons > Use > Simple Use > Elements Torts > Intentional Torts > Malicious Prosecution > General Overview [HN4] Typically, process is abused by an attempt to obtain a collateral advantage that is not properly involved in the proceeding at issue by using the proceeding as a weapon. For abuse of process to occur there must be use of the process for an immediate purpose other than that for which it was designed and intended.

Torts > Intentional Torts > Abuse of Process > Geueral Overview Torts > Intentional Torts > Malicious Prosecation > General Overview [HN5] Generally, if a suit is instituted in an attempt to settle a case, there is no abuse of process. This general rule does not apply if the attempt to settle involves issues that are not properly before the court. Torts > Intentional Torts > Malicious Prosecution > General Overview [HN6] Simply, abuse of process occurs where someone attempts to achieve through use of the court that which the court is itself powerless to order. Civil Procedure > Appeals > Reviewability > General Overview Governments > State & Territorial Governments > Claims By & Agabtst Torts > Intentional Torts > Malicious Prosecution > General Overview [HN7] Under Ohio law, an attorney is not liable to a third party for his performance as an attorney unless the party is in privity with his client. Even if the third party is not in privity with his client, the attorney is not immune from liability if he acted maliciously. Civil Procedure > Dismissals > Volnntary Dismissals > Stipulations Torts > Intentional Torts > Malicious Prosecution > General Overview [HNS] Under Ohio law, a voluntary dismissal of a claim does not operate as an adjudication on the merits for purposes of a malicious prosecution action. Civil Procedure > Dismissals > Voluntary Dismissals > Notices > Two-Dismissal Rule Torts > Iutentional Torts > Malicious Prosecution > General Overview [HN9] The two-dismissal rule specifically provides that only a notice of dismissal can operate as an adjudication on the merits, and a number of Ohio courts have held that the rule applies only to unilateral notices of dismissal filed by the plaintiff.

Torts > Iutentional Torts > httentional Infliction of Emotional Distress > Eletneuts [HNI0] To establish a claim for intentional infliction of emotional distress, a plaintiff must show that (1) defendant intended to cause him serious emotional distress; (2)

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2000 U.S. App. LEXIS 5842, *

defendant's actions were extreme and outrageous; and (3) these actions were the proximate cause of plaintiff's serious emotional distress.

to Dr. Luciani. Mr. Schiavone is a lawyer who has been practicing for approximately 20 years, and about half his practice is devoted to domestic relations. The letter announced Mrs. Luciani's intention to move to Ohio and COUNSEL: For RALPH J. LUCIANI, Plaintiff- Appel- seek a divorce and it outlined a proposal for custody, lant: Donald J. Mooney, Jr., Benesch, Friedlander, support, and division of the family property. Dr. Luciani Coplan & Arouoff, Cincinnati, OH. promptly rejected the proposal after receiving the letter. On November 1, 1996, Mrs. Luciani's attorney, For RALPH J. LUCIAN1, Plaintiff- Appellant: Gail E. Stephen Quintana, filed a Petition for Dissolution of Sindell, Craig P. Kvale, Larry E. Harkenrider, Kaufman Marriage on her behalf in New Mexico. In this action, & Cumberland, Cleveland, OH. Mrs. Luciani alleged that she and her husband were resiFor F. JOSEPH SCHIAVONE, F. JOSEPH dents of Bernalillo County, New Mexico, giving the SCHIAVONE COMPANY, L.P.A., Defendants - Appel- court jurisdiction. She sought a divorce on the grounds of incompatibility and asserted claims for custody, child lees: John W. Hust, Michael E. Maundrell, Schroeder, support, and division of property. In accordance with Maundrell, Barbiere & Powers, Cincinnati, OH. New Mexico law, the court issued a Temporary DomesJUDGES: BEFORE: SUHRHEINRICH, COLE, and tic Order that, among other things, prevented either parent from taking the children out of state without written GIBSON, " Circuit Judges. consent from the other. * The Honorable John R. Gibson, Circuit Judge of the United States Court of Appeals for the Eighth Circuit, sitting by designation. ['2] OPINION BY: JOHN R, GIBSON OPINION JOHN R. GIBSON, Circuit Judge. Dr. Ralph Luciani appeals the district court's grant of summary judgment against him and his two children on their claims of abuse of process, malicious prosecution, and intentional infliction of emotional distress. Dr. Luciani bases these claims on F. Joseph Schiavone's actions during a contentious breakup of the Luciani marriage. We reverse in part, affirm in part, and remand for further proceedings. Mrs. Luciani had been seeing a therapist, Audrey Worrell, who encouraged her to return to Ohio to take advantage of her support system of family and friends. According to Mrs. Luciani, ['4] Mr. Quintana had advised her that the order preventing removal of the children would no longer be in effect if the divorce case were no longer pending. Pursuant to her request, Mr. Quintana dismissed the New Mexico action on November 7. That same day, Mrs. Luciani took the boys out of school and took them to Ohio without informing Dr. Luciani. Mrs. Schiavone met them at the airport and drove them to the Schiavone home, where they lived until they later returned to New Mexico. During Mrs. Luciani's first week in Ohio, she enrolled the children in school and joined a church. Prior to November 7, Mrs. Luciani and Mr. Schiavone had discussed the dismissal of the New Mexico dissolution action. Mr. Schiavone knew that she could not leave New Mexico with the children while the case was pending. The night that she arrived at the Schiavone home, Mr. Schiavone told her that he had done some research and felt comfortable that she would be protected. He knew that she wanted to end the marriage and had no desire to reconcile, but he advised her to file for a legal separation because she could not seek a divorce in Ohio until she had lived there for six months. Mr. Schiavone told her that there ['5] would be some jurisdictional issues involved in the case and that they needed to go to his office in the morning and file the separation action. The day after Mrs. Luciani and the boys arrived, Mr. Schiavone filed a legal separation action in Ohio on her behalf. In the complaint, Mrs. Luciani gave her mother's address in Middletown, Ohio as her address and gave her

Dr. Luciani married his wife Karen in 1984 at the Schiavone home in Ohio. Mrs. Luciani and Joan Schiavone are like sisters and are best friends, and the Schiavones stood up for the Lucianis at the wedding. The Lucianis lived in Ohio for a time during their marriage, but finally settled in Albuquerque, New Mexico in 1988. They have two sons: Michael, born in 1986, and Mathew, born in 1987. Because Mrs. Luciani has family and friends living in Ohio, she and the children visited yearly after moving to Albuquerque.
The Lucianis were having serious marital problems at least as early as 1992. During an October 1996 trip to Ohio, Mrs. Luciani sought Mr. Schiavone's advice and assistance in preparing a letter which she ['3] later gave

Case 5:07-cv-03117-JF

Document 15-2

Filed 08/09/2007

Page 35 of 64
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prior address in Albuquerque, New Mexico as Dr. Luciani's address. The complaint alleged that the Lucianis were incompatible and that Dr. Luciani had been guilty of gross neglect of duty and of extreme cruelty. It also alleged that Dr. Luciani, unless restrained by a court order, might strike, abuse, harass, stalk, threaten or injure Mrs. Luciani or might remove the Luciani children from Ohio. Mrs. Luciani sought a decree of legal separation, temporary and permanent sole residential parent status, temporary and permanent child support, temporary and permanent spousal support, an equitable division of the Lucianis' real and personal property, and a temporary restraining order. Mr. Schiavone signed the complaint as Mrs. Luciani's attorney. Mrs. Luciani's affidavit, which accompanied the complaint, stated that she and Dr. ['6] Luciani were natural parents of the children, that the children were in her physical custody, and that she had always provided at least one-half or more of their daily care. She stated that she had moved oul of the marital residence on or about November 7, 1996, and again gave her mother's Middletown, Ohio address as her address. Mrs. Luciani alleged that Dr. Luciani might attempt to remove the children from Ohio and refuse to allow her to see them or communicate with them. She further stated that the interests of the children were best served by allowing them to remain in her physical custody, and requested an order disallowing unsupervised visitation in Ohio and visitation outside of Ohio during the pendency of the action. In a form affidavit that also accompanied the complaint, Mrs. Luciani averred that she and the children had lived at the Middletown, Ohio address since on or about November 7, 1996. On the reverse side of this affidavit, she circled the words "have not" to complete a statement that read as follows: "I have not participated as a party, witness or in any other capacity in litigation concerning the custody, allocation of parental rights and responsibilities, or designation ['7] of residential parents of the above named child(ren) in this or any other state in the past five years." She also circled "do not" to complete the following statement: "I do not have knowledge of any custody or parenting proceeding concerning the child(ten) in a court of this or any other state." On November 8, the Ohio court granted temporary residential parent status to Mrs. Luciani and prohibited unsupervised visitation and visitation outside of Ohio between Dr. Luciani and the children. It also granted child support in the sum of $ 588.43 per week, commencing on the first Friday