Free Response - District Court of Arizona - Arizona

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David B. Goldstein, SBN 003410 Holly L. Gibeaut, SBN 019786 2 HYMSON & GOLDSTEIN, P.C. 14646 N. Kierland Boulevard, Suite 255 3 Scottsdale, Arizona 85254 Telephone: 480-991-9077
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Attorneys for Plaintiff/Counterdefendant IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA TASER INTERNATIONAL, INC., an Arizona corporation, Plaintiff/Counterdefendant, vs. TASER'S RESPONSE TO DEFENDANT'S PROPOSED SUPPLEMENTAL FINDINGS OF FACT AND CONCLUSIONS OF LAW No. CV00-0945 PHX ROS

GERTRUDE HENNIGAN, as Administratrix of the Estate of Thomas 13 Hennigan,
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Defendant/Counterclaimant.

DEFENDANT'S FINDINGS OF FACT 3. Hennigan negotiated the agreement with Taser and informed Russell of its

terms. (Russell: 52)1 OBJECTION: The testimony of Russell was that Hennigan told Russell

what he, being Hennigan, understood the terms with Taser to be. (52:5-7).2 There is no evidence that Hennigan actually reached an agreement with Taser or understood its terms. In fact, this was disputed by Taser's own officers and

employees at the trial. Russell was not a part of any of the discussions between Taser and Hennigan and therefore cannot testify as to what the terms of any

Only the findings of fact to which Taser objects are set forth in this response.

References to the trial transcript are designated as follows: trial transcript page: 28 line numbers.
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agreement were, or even whether an agreement existed. (160:5-25). 6. The Air Taser worked on electromuscular disruption and is known as a stun

gun. (Stip #2) OBJECTION: The stipulation in the joint pretrial statement reads,

"Taser is in the business of manufacturing and marketing, among other items, stun guns, including electro-muscular disruption ("EMD") weapons known as the "Advanced Taser" and "X-26"." (See page 11 of the Joint Proposed Pretrial Order). The Air Taser is not an electro-muscular disruption ("EMD") weapon. Rick Smith testified during the trial as follows: Q: A: (368:1-4). 7. Because of an agreement with another manufacturer of electrical muscular BY MR. TRAGER: But also the Air Taser used just the ­ used the electro-muscular disabling method, didn't it? You're dead wrong, sir.

disruption products, relating to certain patent restrictions, Taser could not begin to sell its product to law enforcement agencies prior February 25, 1998. (Smith: 294; Exhibit 339, p. TAS 1930) OBJECTION: This is a mischaracterization of the testimony. Rick

Smith testified that Taser was under an agreement not to approach law enforcement agencies until February 25, 1998. (294:21-24). The agreement was a non-compete agreement with Electronic Medical Laboratories, Inc., dba Tasertron. (Exhibit 339 at TAS01935). There is no evidence that Tasertron distributed any electrical

muscular disruption products. 9. The terms of the agreement between Taser and Hennigan and Russell were: A. Law enforcement agency accounts which Hennigan or Russell were

working on were assigned to them as Hennigan International accounts. (Russell: 76-78; Hanrahan: 226; Exhibit 97).
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OBJECTION:

Accounts were never "assigned" to Hennigan. Exhibit 97,

an e-mail from Kathy Hanrahan to Thomas Hennigan, merely states that "our [Taser's] Sales group has implemented an account management program which tags accounts and departments you [Hennigan] or Buzz [Russell] are working with as "Hennigan International" accounts." Exhibit 97 does not assign perpetual

commissions to any accounts Hennigan or Russell were working with. Exhibit 97 only informs Hennigan that Taser had implemented a marketing management program. Russell testified that, to his knowledge, Taser "flagged" accounts that he was working with. (77:9-16). This does not amount to an "assignment" of accounts. All the Court took from Russell's testimony was that Hennigan provided Steve Tuttle with customer information ­ not that flagging accounts entitled Hennigan to perpetual commissions. (77:17-15 to 78:1-15). Finally, Kathy Hanrahan testified that "assignment" was used only to "describe that we [Taser] had actually put Hennigan's name next to one of our [Taser's] customer's accounts, or one of the leads, in our [Taser's] system, so that we [Taser] could identify that he [Hennigan] was working on it." (226:14-18). Ms. Hanrahan also testified that an account would not necessarily even be "assigned" to Hennigan International when Hennigan began to work with a lead. (222:1-11). Further, Rick Smith testified that any "assignment" of accounts was merely to coordinate the activities between Taser's distributors. (308:19-23). B. Commissions would be paid on all sales made to these assigned

accounts, even though neither Hennigan nor Russell made the sale. (Hanrahan: 220-221; 226-227). In that connection, Ms. Hanrahan, at the time controller and today Chief Financial Officer, testified with respect to the meaning of Exhibit 230: "By that phrase, when you said: `Insuring you are listed as the appropriate rep for any order in which you have contributed,' you meant to insure that Mr. Hennigan would get ­ or Mr. Russell would get ­ his commission for sale that was made to one of their assigned
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accounts, even though they didn't personally take the order. A: That's true." (220-221) OBJECTION: Rick Smith testified that payment was only made to

Hennigan on accounts he or Russell actually worked on to directly procure the sale. (307:20-25 to 308:1-18). Even Kathy Hanrahan's testimony confirms that Hennigan was only paid for sales which he or Russell worked to directly procure. Personal order-taking is different than being the procuring cause. In her testimony, Ms. Hanrahan states that Hennigan is "listed as the appropriate rep for any order in which you have contributed." (220:22-25 to 221:1-4). This means that Hennigan had to do work, marketing the products in order to obtain payment on an order that may be placed by the law enforcement agency directly with Taser. The Maximizer program utilized by Taser was for the purpose of tagging an account to manage the potential and actual sales and to give the distributor the difference between the agency and distributor price if an order came direct to Taser but the distributor had done all of the foot work. (431:8-14). C. Commissions were calculated by the difference between sale price to

the law enforcement agency and the "distributor price" as shown in Taser's documents for each of the Taser products sold. (Hanrahan: 217; Sundberg: 431) OBJECTION: This statement must be clarified to reflect that Hennigan

was only to receive payment on orders he or Russell directly procured. D. On assigned accounts, Hennigan and Russell were entitled to receive

commissions on all sales made to such assigned accounts, regardless as to who made them, "as long as the account was active . . . ." (Russell: 91) OBJECTION: This statement was only what Russell thought he was

entitled to receive. It is not reflective of any arrangement between Taser and Hennigan. Russell's testimony was merely a recitation of what he said to Steve

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Tuttle and any response by Mr. Tuttle is hearsay. (91:13-25 to 92:1-23).3 E. To get an account assigned (also called "flagged" or "tagged")

Hennigan or Russell give Taser information as to the name of agency, the contact person, address and telephone number. (Russell: 76-78; Sundberg: 417-419). OBJECTION: A-D above. F. Once an account had received a demonstration (or had purchased) Taser incorporates all of the objections raised in sections

there was need for any further effort, because if the agency was interested in purchasing the product, it was usually a matter of waiting until money was available under the governmental budget process. (Russell: 157-158) OBJECTION: Sales to a law enforcement agency required more than

just a demonstration. Hennigan understood that selling was an ongoing process and required continual work. (338:19-24). For example, the sales to Charlotte

Mecklenburg Police Department required Stacie Sundberg of Taser to provide free training and many phone conversations with the trainers and sergeants before this agency made its first Taser purchases in 2002. (449:3-25 to 450:1-20). In later sales to the Charlotte Mecklenburg Police Department, Ms. Sundberg had to constantly call the agency, send free cartridges, and allow the agency's trainers to attend Taser's annual master instructor conference. (451:8-16). Selling to Miami, Florida also took a great deal of effort. The breakthrough came when Carl Walter, Vice President of Glock (a hand gun manufacturer) joined Taser as the Vice President of Sales, wrote a letter to the Miami Police Department. Ms. Sundberg then had to hand-hold Miami's training officer, Sergeant Gentry. Ms. Sundberg talked to Sergeant Gentry on a daily basis about policies, procedures, technical information, medical information and every news article in the media.

Taser renews its hearsay objection that it set forth during the trial regarding 28 Russell's testimony and Steve Tuttle's response on pages 91-92 of the trial transcript.
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Taser provided Miami with a pilot test and Taser's master instructors attended counsel meetings in Miami. Eventually, Miami made its purchase in 2003. (457 to 463) Sales to law enforcement agencies took more than just a demonstration. 10. Hanrahan testified that Hennigan and Russell were entitled to commissions

on all future sales to assigned accounts "as long as they worked on the account with our company." (Hanrahan: 228) OBJECTION: as follows: Q: Now, you also understood, did you not, that once an account had been assigned to Hennigan International, that account was to be theirs for the future for sales made to that account? That's not correct; it's only as long as they worked on the account with our company. Misstatement of the testimony. Kathy Hanrahan testified

A:

(228:8-13). Ms. Hanrahan did not testify that Hennigan was entitled to commission on all future sales. 12. It was understood by both Hennigan and Taser that it would probably take a

number of years to develop the law enforcement market, that this was a new product that law enforcement agencies would have to test and that budgetary constraints by these public agencies might prevent them from initially ordering significant numbers of these products even after they determined that the products represented a worthwhile purchase. (Russell: 54; 91; Taser 10-K, Exhibit 340 p. TAS 1998) OBJECTION: This statement is not supported by the testimony or

documentary evidence. Exhibit 340, Taser's Form 10-KSB for fiscal year ending December 31, 2002, states, "the decision-making process can take as long as a few weeks or as long as several years." (Exhibit 340 at TAS01998, emphasis supplied.) Rick Smith's testimony also supports the potential for short sales cycles. Significant sales to an agency could take a while but could also move very quickly because
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many of the orders did not have to wait for budgeted funds. Agencies, for example, could use drug forfeiture and other funds that would not require a budget. Indeed, the City of Sacramento purchased roughly 600-700 Taser units in June 2000 ­ four months after Rick Smith did a presentation and a training in March 2000. The Albuquerque Police Department also purchased within four months of a Taser presentation. (296:8-25 to 297:1-24). 13. If another sales person could sell to an account assigned to Hennigan

International during the period after the demonstration, while waiting for an agency to decide or to obtain budgeted funds, then the efforts of Russell and Hennigan would not have been rewarded for their efforts. OBJECTION: Hennigan has not established that any accounts were

"assigned" to him so as to prevent any other distributor from selling to that account. In fact, Rick Smith testified that prior to the December 23, 1999 offer letter, Taser never provided any protections to accounts Hennigan was working on. (315:5-12). Possible unfairness is not proof of an agreement. 14. Taser recognized the long lead times required to make a sale in another

similar situation in which Taser agreed with a Mr. Demilt, another distributor, that sales to certain agencies, made after his termination, were to be commissionable to him. Thus, Mr. Demilt testified: "There were special circumstances where I was directly involved with several large agencies that were several years in their procurement cycle on getting the necessary funding. And there was an agreement before termination that these individual sales would be commissionable." (Page 57 Demilt deposition) OBJECTION: There is no evidence as to what Mr. DeMilt's agreement

was with Taser. Further, any agreement Mr. DeMilt had with Taser, before his termination, related to some individual sales that would be commissionable. Nothing in Mr. DeMilt's testimony creates the inference that Mr. DeMilt was to receive perpetual commissions on any accounts.
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15.

Steve Tuttle, the liaison between Taser and Hennigan and Russell, informed

Russell that for Taser the "main thing" was selling ammunition to the agencies which had purchased the Taser products. (Russell: 63) OBJECTION: Misquote of the testimony. Russell did not testify that

Steve Tuttle said the "main thing" was selling ammunition. Russell testified as follows: Q: So going back now to your conversations with Mr. Tuttle, what were the reasons, as explained by him to you, for Taser wanting to make this exchange program [with the Tasertrons]? They wanted to get the Tasertrons off the market and put Air Tasers on the market. They wanted to get rid of them. Okay. Anything else that was said about that? ammunition or anything like that discussed? Anything about

A: Q: A:

We were always selling ammunition, and that was the main things. Once you give it to them, they have to buy the ammunition. They had to buy a certain amount of ammunition when we made the exchange, when they got the Taser, or the handle.

(63:8-20). Russell's testimony never indicated that Steve Tuttle told him anything regarding the sales of the amount of ammunition or that sales of ammunition were the "main thing." This may have been Russell's own understanding but there is no evidence that this statement was made by anyone at Taser or that Russell's understanding was correct. 16. Because Taser believed that its future profits lay in the ammunition sales,

Taser was willing to exchange its product for an older, competitor's product (the Tasertron) without cost so long as the ammunition was purchased. (Russell: 63) OBJECTION: This statement is completely unsupported by the

testimony. See the objection to No. 15 above. 17. For the reasons set forth in findings 15 and 16, it would be important to

Russell and Hennigan to have their right to future commissions on assigned accounts protected.
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OBJECTION: testimony or evidence.

This statement is irrelevant and not supported by any Whether or not ammunition sales were important to

Hennigan does not create a contract for perpetual commissions between Taser and Hennigan. 18. The documentary evidence is consistent with the testimony and proof of the

defendant as to the terms of the agreement. OBJECTION: This statement is false and unsupported by the evidence.

Hennigan offers no citation to either the trial transcript of admitted exhibits to support this statement. 22. Tuttle also wrote to Hennigan and Russell that you have "a great future at

Mecklenburg and others." (Exhibit 224) OBJECTION: This statement has no probative value. Hennigan and

Russell had to work to procure sales from law enforcement agencies, they were not entitled to payments on any sales they did not directly procure. See the objection to No. 9(B) above. 23. The above documents are consistent with the claims of the defendant

because they show that accounts were assigned, that sales did not have to be made personally by either Hennigan or Russell and that Hennigan was asked to make an investment in the New York Police account, which would only be consistent with the right to future income from sales to that account. OBJECTION: Exhibits 13, 14, 97, 100 and 224 do not demonstrate that

any accounts were "assigned" to Hennigan, that Hennigan did not have to actively work for sales, or that Hennigan had to make any significant investment in the New York Police Department. There is no evidence that Hennigan ever made any

monetary investment in the New York Police Department, such as a personal payment for units provided for free to New York Police Department. All prior objections are incorporated herein.
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24.

Smith's letter of December 23, 1999 to Hennigan, implicitly confirms the

prior agreement because he states: "As we discussed, we are adapting our sales and distribution strategy to accommodate the explosive growth expected from the new ADVANCED TASER M-Series. "Hence, it is necessary to look at how we have been distributing the AIR TASER and how this will fit with the ADVANCED TASER. As with any change there are positives and negatives." (Exhibit 316, emphasis supplied) OBJECTION: There is no evidence of any prior agreement, other than

Taser would pay Hennigan commissions on sales he or Russell actually procured through their direct work with the law enforcement agencies. No evidence was No

submitted to support an alleged agreement for perpetual commissions.

inference can be gleaned from Exhibit 316. When Rick Smith wrote Exhibit 316, Taser had no business relationship with Hennigan with respect to the M-26. When Mr. Smith wrote Exhibit 316 he was discussing launching a new product and an entirely new distribution program. (313:19-20). 25. Since Smith contended that Taser only agreed to pay Hennigan and Russell

if one of them actually made the sale and that there was no agreement giving any protection to the account (Smith: 306) and since the December 23, 1999, letter gives, for the first time, protection for six months with a 5% discount for any bidding and a 1 year 3% override in the event the bid were lost, there would be no "negatives" absent the prior agreement testified to by Russell. OBJECTION: Prior to sending the December 23, 1999 letter to Hennigan

(Exhibit 316), Taser never proposed any type of protection to Hennigan although there had been degrees of coordination regarding target accounts. (315:5-12). The negatives that Rick Smith refers to in Exhibit 316 were that "there would be more distributors, and hence more competition in the market place." (320:8-22). 27. When Taser informed Russell and Hennigan in July, 1999, that it would
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bring out an improved product called the M 26 or the Advanced Taser Russell and Hennigan introduced this product to their accounts and to potential accounts. (Russell: 100-101; Exhibit 268) OBJECTION: No evidence was admitted that supports this statement.

Neither pages 100-101 of the trial transcript nor Exhibit 268 support this statement. 29. On February 27, 1998, two days after the patent restrictions went off which

prohibited Taser from selling to law enforcement agencies, Hennigan had organized a meeting at the New York City Police Department firing range to demonstrate Taser's product ­ the Air Taser. (Smith, 293-294) OBJECTION: Taser was engaged in a non-compete agreement, not a

patent restriction. See objection to No. 7 above. 30. New York City was a very important police department because it is the

largest in the country (Smith, 295). Taser mentions that it has sold to New York City in its 2002 10K (Exhibit 340, p. 5). OBJECTION: Rick Smith testified that the New York City Police

Department was the largest "municipal agency" not that it was the largest agency in the country. (295:11-16). 31. Because prior to February 25, 2998, no police department had experience

with the Taser product, it was important to get police departments to use them. Mr. Russell made one of the first sales to a police department ­ Mecklenburg County Sheriff's Department in July 1998 (Russell, 79). OBJECTION: Misstates the testimony. Russell testified that the

Mecklenburg County Sheriff's Department was one of the first sales he and Hennigan made "without going through a budget problem." (79:3-11). 32. As a result of the use at the Mecklenburg County Sheriff's Department,

Major Cash informed Russell, who in turn informed Taser, that the Air Taser had been a big success in controlling the jail population. (Russell, 80-86) A quotation from Major
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Cash with respect to the use of the Air Taser appeared in Taser's brochure promoting its later product called the M26, or Advanced Taser. (Exhibit 52) OBJECTION: Any testimony as to the success of the Air Taser as relayed

by Major Cash is hearsay and was ruled hearsay during the trial. (83-84). There is no evidence that Taser ever received any benefit from Major Cash's quote or that Major Cash's quote ever resulted in any sales. 33. Smith, Taser's CEO, wanted to establish a data base whenever a Taser was

used. The first such case occurred from a sale made by Russell to the Wilmington, North Carolina Police Department, and this information was placed in the Taser data base. (Russell: 134; 137) OBJECTION: There is no evidence that the first entry into the database

was from Russell. Russell only testified that the Wilmington Police Department incident was the first one he ever submitted to Taser for submission into the database. (134:1-16). 34. Russell demonstrated and manned a booth for five days at the West

Virginia mock prison riot (Russell: 131-132) OBJECTION: There is no evidence that Russell's attendance at the

Mock Prison riot ever resulted in any sales of Taser's products, was the causal link to any sales, or that Taser benefited from Russell's attendance. 35. Russell helped man for four days the booth at the International Association

of Chiefs of Police Conference (Russell: 141) OBJECTION: There is no evidence that Russell's attendance at the

conference ever resulted in any sales of Taser's products, was the causal link to any sales, or that Taser benefited from Russell's attendance. 36. Hennigan and Russell demonstrated the Taser product to many different

law enforcement agencies, of which 33 of them have purchased from Taser. (Exhibit 268)
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OBJECTION:

There is no evidence that the demonstrations resulted in

any sales of Taser's products, was the causal link to any sales, or that Taser benefited from these demonstrations. Some of the purchases by the 33 agencies were made long after Taser terminated Hennigan. 37. When the M26, or Advanced Taser, was introduced in September 1999,

Russell sent brochures and CDs promoting this new development to all of his clients and potential clients (Russell: 138) OBJECTION: There is no evidence that Russell's sending of the

brochures and CDs ever resulted in any sales of Taser's products, was the causal link to any sales, or that Taser benefited from Russell's action. 38. All of the contact information at the accounts solicited by Russell and

Hennigan were given to Taser, and Taser could have given this information to another distributor after terminating Hennigan and Russell (Sundberg: 419.) OBJECTION: The fact that Taser had all of this contact information

does not mean that it gave it to anyone else. Hennigan has the burden of proof to show that Taser distributed the information it obtained from Hennigan to others and Hennigan has not meet his burden of proof. 40. Tuttle acted as the liaison between Taser and Russell and Hennigan and

Russell referred to Tuttle as his "go to" person. (Russell: 57) OBJECTION: Steve Tuttle taking contact information and sending

marketing letters for Hennigan does not equate to him acting as the liaison between Hennigan and Taser. 41. Exhibit 230 shows that Tuttle was involved with the commissions which

Hennigan and Russell were to receive because on April 30, 1999, Hanrahan writes that she is "forwarding a copy of this to Steve Tuttle for his assistance in ensuring you are listed as the appropriate Rep for any order in which you have contributed." OBJECTION: Forwarding of an e-mail to Steve Tuttle does not
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demonstrate that Mr. Tuttle was involved in the payment of commissions to Hennigan. 42. Tuttle wrote in December, 1998, that Hennigan and Russell have "a great

future at Mecklenberg and others." OBJECTION: 44. See objection to No. 21.

Russell, in September, 1998, informed Tuttle that he was willing to work

for Taser "as long as the accounts that I have developed were protected, and I would get the revenue off of them, as long as the account was active . . . ." and Tuttle replied "I know that." (Russell: 91, 92) OBJECTION: 47. See objection to No. 9(D).

For sales made prior to termination during the years 1998 and 1999, exhibit

350 shows an amount due of $12,061.16. OBJECTION: Taser does not concede that the amounts in Exhibit 350

are correct or that commissions due to Hennigan for any time period. See Taser's Response To Defendant's Memorandum In Opposition To Motion To Dismiss Counterclaims, dated November 18, 2004, for a further explanation of Taser's objections to the Estate's claim to $9,006.26. 48. The stipulation between the parties pursuant to which exhibit 350 was

admitted shows that plaintiff claims that the amount set forth in Exhibit 350 for this period should be reduced by $2,460.90. OBJECTION: No. 47. 49. $9,600.26. OBJECTION: 51. See objection to No. 47. There is therefore owing to the defendant for this period at least the sum of Misstatement of the parties' stipulation. See objection to

The amounts owed to the defendant under the contract for the years 2000

through September, 2004, are set forth in Exhibit B, attached hereto.
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OBJECTION: 52.

See objection to No. 47.

Under the contract, defendant is entitled to commissions on sales made by

Taser, directly or indirectly, to any of the accounts listed in Exhibit A for the period following September 2004 and continuing in the future. OBJECTION: Hennigan has not demonstrated, nor does the evidence

support, that there was ever a contract for perpetual commissions. Hennigan is therefore not entitled to any commissions on sales after his termination. 53. Alternatively, defendant is entitled to recover in quantum meruit for the

services performed by Hennigan and Russell, which Taser has conceded were not performed gratuitously. (Goldstein, Sept. 6, 2005, p. 538) OBJECTION: Hennigan has not demonstrated that Taser received any

benefit from the services provided by Hennigan and Russell or that Hennigan is entitled to any amount of damages under the theory of quantum meruit. See Taser's Response To Defendant's Memorandum In Opposition To Motion To Dismiss Counterclaims, dated November 18, 2004, for a further explanation of Taser's objection to Hennigan's quantum meruit claim. 54. It is reasonable to price the value of the services performed by Russell and

Hennigan at the value recognized by Taser when it computed the commissions for Hennigan International. OBJECTION: objection to No. 53. 55. The value of these services continued after the termination of Hennigan and Hennigan offers no support for this statement. See

Russell, because of the anticipated sales from their accounts in the future as well as the benefits for all future sales from the demonstrations given at the Mock Prison Riot and the International Chiefs of Police conference and the value of the initial sales made when Taser first started selling to law enforcement agencies. OBJECTION: See objections to Nos. 33, 34, and 53.
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56.

As shown by the fact that many sales continued to be made directly by

Taser to the Hennigan International accounts (without the use of any other distributor) after Hennigan's and Russell's termination (see Exhibit C, attached hereto), the value of these services lasted at least through approximately September, 2004. OBJECTION: Hennigan offers no support or evidence that the sales

listed in his Exhibit "C" were all made directly by Taser. The evidence does not support the contention that Taser received any lasting benefit from Hennigan's services or that Hennigan's services were the causal link to the sales made after his termination, whether made by Taser or one of its distributors. 57. It would be therefore appropriate, for quantum meruit purposes, to value

the services of Hennigan and Russell to Taser at the commissions which would have been earned from all of their accounts through September, 2004. Such commissions are set forth in attached Exhibit B. OBJECTION: See objection to No. 53.

DEFENDANT'S CONCLUSIONS OF LAW 1. Defendant is entitled to recover for breach of an oral agreement to pay

commissions on accounts assigned as Hennigan International accounts, or which should have been so assigned. OBJECTION: No evidence supports this conclusion. Hennigan has not

demonstrated by a preponderance of the evidence that he is entitled to any commissions. All the previous objections in this document are incorporated herein. See also Taser's Response To Defendant's Memorandum In Opposition To Motion To Dismiss Counterclaims, dated November 18, 2004. 2. Hanrahan's statement that Hennigan and Russell were entitled to

commissions on all future sales to assigned accounts "as long as they worked on the account with our company" confirms the existence of the agreement for commissions on future sales. Her limitation "as long they worked . . . with our company" is not relevant
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in this case because Taser fired Hennigan and Russell. It is well established that there is a "traditional blanket rule that a contracting party may not obtain discharge if its own act rendered performance impossible." U.S. v Winstar Corp., 518 U.S. 839, 904 (1996). See also : Higgins v Arizona Savings and Loan Association, 85 Ariz. 6, 10; 330 P.2d 504, 507 (Supreme Court Ariz. 1958). Therefore, the fact that Hennigan and Russell no longer work for Taser is not a defense to the breach of contract. OBJECTION: All the previous objections in this document are

incorporated herein. See also Taser's Response To Defendant's Memorandum In Opposition To Motion To Dismiss Counterclaims, dated November 18, 2004. 3. Defendant fully performed its agreement with respect to the accounts set

forth in Exhibit A and therefore the Statute of Frauds is not applicable to the oral agreement to that extent. (The Statute of Frauds is, of course, not applicable to sales made within one year of termination ­ February 21, 2001.) OBJECTION: All the previous objections in this document are

incorporated herein. See also Taser's Response To Defendant's Memorandum In Opposition To Motion To Dismiss Counterclaims, dated November 18, 2004. 4. Russell and Hennigan were entitled to rely on the statement made by

Russell to Tuttle and confirmed by Tuttle as to the terms of the agreement and changed their position in reliance on such conversation by continuing to work for Taser. As a result plaintiff is also estopped from denying the contract. Wilson v Metheny, 72 Ariz. 339, 343; 236 P.2d 34, 36 (Supreme Court Ariz. 1951). OBJECTION: All the previous objections in this document are

incorporated herein. See also Taser's Response To Defendant's Memorandum In Opposition To Motion To Dismiss Counterclaims, dated November 18, 2004, and Taser's Trial Memorandum On Rule 801(d)(2)(D), dated August 29, 2005. 5. The conversations with Tuttle concerning the terms of the agreement

between the parties is admissible because it concerned a matter within the scope of
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Tuttle's employment. It is not relevant that the conversation may not have been with the actual scope of employment, for it is sufficient if it concerned such employment. Corley v Burger King Corp., 56 F.3d 709, 710 (5th Cir. 1995). OBJECTION: All the previous objections in this document are

incorporated herein. See also Taser's Response To Defendant's Memorandum In Opposition To Motion To Dismiss Counterclaims, dated November 18, 2004, and Taser's Trial Memorandum On Rule 801(d)(2)(D), dated August 29, 2005. 6. Quantum meruit damages may be found by looking to the value which the

parties placed upon the services provided. Spitalny v Tanner Construction Co., 75 Ariz. 192, 200; 254 P.2d 440, 446 (Supreme Court Ariz. 1953). OBJECTION: All the previous objections in this document are

incorporated herein. See also Taser's Response To Defendant's Memorandum In Opposition To Motion To Dismiss Counterclaims, dated November 18, 2004. 7. Pursuant to A.R.S. 23-355 the commissions which have not been paid

constitute wages and therefore the award given should be tripled. OBJECTION: No commissions are due to Hennigan. All the previous

objections in this document are incorporated herein. See also Taser's Response To Defendant's Memorandum In Opposition To Motion To Dismiss Counterclaims, dated November 18, 2004. No evidence supports a finding that Hennigan was Taser's employee and thus entitled to treble damages under A.R.S. § 23-355. Taser was not Hennigan's employer. 8. Defendant is entitled as the prevailing party under A.R.S. § 12-341.01 to an

award of attorney's fees. OBJECTION: There has been no finding that Hennigan is successful on

any of his counterclaims and the evidence does not support such a finding. Hennigan is therefore not the prevailing party and is thus not entitled to attorneys' fees.
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RESPECTFULLY SUBMITTED this 18th day of November 2005. HYMSON & GOLDSTEIN, P.C.

/s/David B. Goldstein David B. Goldstein Holly L. Gibeaut Attorneys for Plaintiff/Counterdefendant

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CERTIFICATE OF FILING

I hereby certify that on November 18th, 2005, I electronically transmitted the attached document to the Clerk's office via the CM/ECF filing system for filing and 3 transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:
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Leslie Trager 5 C/O ROSEMARY J. SCHOCKMAN SHOCKMAN LAW OFFICE, P.C. 6 8170 North 86th Place, #102 Scottsdale, AZ 85258 7 Attorneys for Defendant/Counterclaimants Rosemary J. Shockman SHOCKMAN LAW OFFICE, P.C. 9 8170 North 86th Place, #102 Scottsdale, AZ 85258 10 Attorneys for Defendant/Counterclaimants
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507111:2/10321-00 Case 2:00-cv-00945-ROS 299890v2

/s/Barrie Peagler

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