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Case 8:14-cv-00308-JLS-AN Document 8 Filed 04/21/14 Page 1 of 13 Page ID #:76

1 Dirk O. Julander, Bar No. 132313 doj@jbblaw.com Andrea S. Paris, Bar No. 252621 2 asp@jbblaw.com 3 JULANDER, BROWN & BOLLARD 9110 Irvine Center Drive 4 Irvine, California 92618 Telephone: (949) 477-2100 5 Facsimile: (949) 477-6355 6 Attorneys for Marani Brands, Inc., a Nevada Corporation 7 8 9 10 11 BODIE INVESTMENT GROUP, INC., a Delaware Corporation, 12 Plaintiff, 13 vs. 14 MARANI BRANDS, INC., a Nevada 15 Corporation, 16 17 18 Defendant Marani Brands, Inc., a Nevada Corporation (Defendant or Defendant. Case No. 8:14-cv-00308-JLS-AN The Hon. Josephine L. Staton ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT AND COUNTERCLAIM UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

DEMAND FOR JURY TRIAL

19 Marani) submits its Answers and Affirmative Defenses to the Complaint filed by 20 Plaintiff Bodie Investment Group, Inc. (Plaintiff) on or about March 3, 2014 (the 21 Complaint). 22 23 24 1. 2. ANSWER Defendant admits the allegations in paragraph 1 of the Complaint. Defendant admits that provisions of the Convertible Note can trigger a

25 conversion price adjustment. Defendant denies that any such price adjustment was 26 triggered and further denies the remaining allegations in paragraph 2 of the 27 Complaint. 28 3. Defendant denies the allegations in paragraph 3 of the Complaint.
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

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4.

Defendant lacks sufficient information regarding Plaintiffs alleged

2 error in calculation and therefore denies that and the remaining allegations in 3 paragraph 4 of the Complaint. 4 5 6 5. 6. 7. Defendant denies the allegations in paragraph 5 of the Complaint. Defendant admits the allegations in paragraph 6 of the Complaint. Defendant lacks sufficient information to admit or deny and therefore

7 denies the allegations in paragraph 7 of the Complaint. 8 9 10 11 8. 9. 10. 11. Defendant admits the allegations in paragraph 8 of the Complaint. Defendant admits the allegations in paragraph 9 of the Complaint. Defendant admits the allegations in paragraph 10 of the Complaint. Defendant admits that paragraph 2.1 of the Convertible Note provides a

12 mechanism to compute the conversion price for debt under the Note in substantially 13 the form as alleged in Paragraph 11 of the Complaint. To the extent paragraph 11 of 14 the Complaint does not accurately reflect that provision, Defendant denies the 15 allegations of that paragraph. 16 17 12. 13. Defendant denies the allegations in paragraph 12 of the Complaint. Defendant admits that Marani issued shares at a cost of $0.001 per

18 share to Eco Investment Properties. Other than expressly admitted herein, 19 Defendant denies the allegations contained in paragraph 13. 20 21 14. 15. Defendant denies the allegations in paragraph 14 of the Complaint. Defendant admits that Plaintiff converted its debt to stock but denies

22 the accuracy of the accounting set forth in paragraph 15 of the Complaint. 23 24 16. 17. Defendant denies the allegations in paragraph 16 of the Complaint. Defendant restates and incorporates its answers to the preceding

25 paragraphs above, as if set forth fully herein. 26 27 / / / 28 / / / 2


ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

18.

Defendant admits the allegations in paragraph 18 of the Complaint.

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19.

Defendant admits that Plaintiff paid the amount of $100,000 as set forth

2 in the Convertible Note. Other than expressly admitted herein, Defendant denies the 3 allegations contained in paragraph 19 of the Complaint. 4 5 6 7 8 20. 21. 22. 23. 24. Defendant denies the allegations in paragraph 20 of the Complaint. Defendant denies the allegations in paragraph 21 of the Complaint. Defendant denies the allegations in paragraph 22 of the Complaint. Defendant denies the allegations in paragraph 23 of the Complaint. Defendant restates and incorporates its answers to the preceding

9 paragraphs above, as if set forth fully herein. 10 11 12 25. 26. 27. Defendant admits the allegations in paragraph 25 of the Complaint. Defendant denies the allegations in paragraph 26 of the Complaint. Defendant restates and incorporates its answers to the preceding

13 paragraphs above, as if set forth fully herein. 14 15 28. 29. Defendant admits the allegations in paragraph 28 of the Complaint. Defendant lacks sufficient information to admit or deny and therefore

16 denies the allegations in paragraph 29 of the Complaint. 17 18 30. 31. Defendant denies the allegations in paragraph 30 of the Complaint. Defendant lacks sufficient information regarding Plaintiffs alleged

19 error in calculation and therefore denies that and the remaining allegations in 20 paragraph 31 of the Complaint. 21 32. Defendant lacks sufficient information regarding Plaintiffs alleged

22 error in calculation and therefore denies that and the remaining allegations in 23 paragraph 32 of the Complaint. 24 25 26 27 / / / 28 / / / 3
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

33. 34. 35.

Defendant denies the allegations in paragraph 33 of the Complaint. Defendant denies the allegations in paragraph 34 of the Complaint. Defendant denies the allegations in paragraph 35 of the Complaint.

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1 2 3 4 1.

AFFIRMATIVE DEFENSES FIRST AFFIRMATIVE DEFENSE (Fails to State a Cause of Action) The Complaint, and each cause of action contained therein, fails to state

5 facts sufficient to constitute a cause of action against Defendant. 6 7 8 2. SECOND AFFIRMATIVE DEFENSE (Lack of Damages) Plaintiff has not suffered any damages as a result of any action taken by

9 Defendant and is therefore barred from any recovery in this action. 10 11 12 3. THIRD AFFIRMATIVE DEFENSE (Payment) As set forth more fully in Defendants counterclaim, which is

13 incorporated herein by this reference, Defendant has paid to Plaintiff in full all 14 obligations arising from the agreements underlying Plaintiffs Complaint and 15 Plaintiff is therefore barred from any recovery in this action. 16 17 18 4. FOURTH AFFIRMATIVE DEFENSE (Performance) As set forth more fully in Defendants counterclaim, which is

19 incorporated herein by this reference, Defendant has fully performed any and all 20 contractual, statutory, and other duties required of them, except for those duties as to 21 which Defendant's performance has been excused. 22 23 24 5. FIFTH AFFIRMATIVE DEFENSE (Failure to mitigate damages) Plaintiff failed to mitigate the damages it is alleged to have suffered in

25 the Complaint. Thus, Plaintiffs damages, if any, were proximately caused or 26 increased by its own acts or failures to act and any judgment sustained herein by 27 Plaintiff must be reduced by the percentage and degree of fault by which Plaintiffs 28 failure to mitigate contributed to any damage allegedly suffered by Plaintiff. 4
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

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1 2 3 6.

SIXTH AFFIRMATIVE DEFENSE (Failure of Contractual Conditions) Defendant is excused from any obligations, liability or duty of

4 performance under the purported contracts by reason of failures of conditions 5 precedent, conditions concurrent, and conditions subsequent. 6 7 8 7. SEVENTH AFFIRMATIVE DEFENSE (Unjust Enrichment) Plaintiff would be unjustly enriched if it were to recover upon any of its

9 claims, thus the Complaint, and each purported cause of action contained therein, is 10 barred. 11 12 13 8. EIGHTH AFFIRMATIVE DEFENSE (Inequity) Defendant alleges that it was impossible for it to perform the

14 obligations as alleged in the Complaint; accordingly, any recovery in this action 15 would be unjust and inequitable. 16 17 18 9. NINTH AFFIRMATIVE DEFENSE (Plaintiffs Prior Breach) Plaintiff breached its contracts with Defendant, and by reason of said

19 breach of contracts, Defendant has been excused of its duties to perform all 20 obligations thereunder. 21 22 23 10. TENTH AFFIRMATIVE DEFENSE (Damages Caused By Plaintiff) Despite Defendants performance of the obligations set forth in the

24 contracts alleged in the Complaint, Plaintiffs own conduct resulted in damages 25 Plaintiff now complains about, which damages could not have been avoided by 26 Plaintiffs performance. 27 28 5
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

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1 2 3 11.

ELEVENTH AFFIRMATIVE DEFENSE (Reasonableness and Good Faith) Defendant acted reasonably and in good faith at all times, based on all

4 relevant facts and circumstances known by it at the time it so acted. Accordingly, 5 Plaintiff is barred from any recovery in this action. 6 7 8 12. TWELFTH AFFIRMATIVE DEFENSE (Off Set) Defendant is informed and believes and on that basis alleges that

9 Plaintiff intentionally manipulated Maranis stock price by publishing false 10 statements in public investor fora designed to lower Maranis stock price. 11 Defendant is further informed and believes and on that basis alleges that Plaintiff 12 has been exercising its conversion rights at issue in the Complaint in order to gain 13 from its unlawful market manipulation. Defendant is informed and believes and on 14 that basis alleges that Marani and all of its shareholders have suffered damage by 15 reason of Plaintiffs conduct. As such, the parties have mutual demands that co16 exist against each other. Therefore, the two demands are compensated so far as they 17 equal each other. Defendant has the right of offset if any amount of money is owed 18 to Plaintiff, which Defendant also denies, and Plaintiff is entitled only to the net 19 difference, if any, between the mutual demands. 20 21 22 13. THIRTEENTH AFFIRMATIVE DEFENSE (Unclean Hands) Plaintiff is guilty of wrongful conduct in connection with the

23 allegations contained in the Complaint. Defendant is informed and believes and on 24 that basis alleges that Plaintiff intentionally manipulated Maranis stock price by 25 publishing in public investor fora false or misleading statements of material fact, 26 which it knew or had reasonable ground to believe was false or misleading, designed 27 to lower Maranis stock price. Defendant is further informed and believes and on 28 that basis alleges that Plaintiff has been exercising its conversion rights at issue in 6
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

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1 the Complaint at the price(s) that were affected by his publication of false and 2 misleading statements and that it gained from its unlawful market manipulation. 3 The price at which Defendant converts Plaintiffs debt into stock is dependent upon 4 the price of Marani stock as reflected in the market. Defendant is informed and 5 believes and on that basis alleges that Marani and all of its shareholders have 6 suffered damage by reason of Plaintiffs conduct. As such, Plaintiff is barred from 7 recovery by the doctrine of unclean hands and Plaintiffs alleged injuries resulting 8 from the prices at which it exercised its conversion rights directly relates to its 9 manipulation of Maranis stock prices. 10 11 12 14. FOURTEENTH AFFIRMATIVE DEFENSE (Ratification) Plaintiff has by its conduct, ratified the purported acts and/or omissions

13 of which Plaintiff now complains. 14 15 16 15. FIFTEENTH AFFIRMATIVE DEFENSE (Consent) Plaintiff, by itself or through its agents, consented to the acts and events

17 of which it now complains and Plaintiff is now barred from any recovery in this 18 action. 19 20 21 16. SIXTEENTH AFFIRMATIVE DEFENSE (Statute of Limitations) Plaintiffs Complaint and the allegations contained therein are barred

22 by the applicable statute of limitations including, but not limited to Code of Civil 23 Procedure, sections 337, 338, 339, 339(1), 343 and Civil Code section 3426.6. 24 25 26 17. SEVENTEENTH AFFIRMATIVE DEFENSE (Impossibility/Excuse) Defendant alleges that it was impossible for it to perform the

27 obligations alleged in the Complaint and that its performance was therefore excused. 28 Accordingly, Plaintiff is barred from any recovery in this action. 7
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

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EIGHTEENTH AFFIRMATIVE DEFENSE (Estoppel) Plaintiff is estopped from claiming that any portion of its promissory

4 note is now due and payable. 5 6 7 19. NINETEENTH AFFIRMATIVE DEFENSE (Acquiescence/Waiver) By its own conduct, Plaintiff is barred from recovery on the ground that

8 Plaintiff waived the claims alleged in the Complaint. 9 10 11 20. TWENTIETH AFFIRMATIVE DEFENSE (Laches) Plaintiff is barred from any relief and/or the recovery of any damages

12 under the doctrine of laches. 13 14 PRAYER WHEREFORE, Defendant, Marani Brands, Inc. prays for judgment as

15 follows: 16 1. That the Complaint be dismissed and that Plaintiff take nothing

17 pursuant to its Complaint; 18 19 and 20 21 22 23 COUNTERCLAIM Defendant and Counterclaimant Marani Brands, Inc., a Nevada Corporation 3. For such other and further relief as the Court may deem just and proper. 2. For costs of suit incurred herein, including reasonable attorney's fees;

24 (Marani) for its counterclaim against Plaintiff and Counterdefendant Bodie 25 Investment Group, Inc. (Bodie) alleges as follows: 26 27 / / / 28 / / / 8
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

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1 2 3 36.

FIRST CLAIM FOR RELIEF (Breach of Convertible Note) On or about February 1, 2010, Marani entered into a Convertible Note

4 with Bodie whereby Bodie agreed to lend to Marani $100,000 for one year in 5 exchange for repayment of the principal with interest (the Note). According to the 6 terms of the Note, Bodie also had the option to convert the principal and interest due 7 under the Note into common stock of the company. A true and correct copy of the 8 Note is attached to the Complaint as Exhibit 1 (Dkt. No. 1). In conjunction 9 therewith, Marani and Bodie also entered into a Subscription Agreement providing 10 for specific terms relating to the conversion of debt into the companys stock. A 11 true and correct copy of the Subscription Agreement is attached to the Complaint as 12 Exhibit 2 (Dkt. No. 1) These parties also executed a Form of Common Stock 13 Purchase Warrant (the Warrant) as part of this transaction. A true and correct 14 copy of the Warrant is attached to the Complaint as Exhibit 3 (Dkt. No. 1) 15 37. Marani performed each of the obligations on its part to be performed

16 under the Note, the Subscription Agreement and the Warrant except those 17 obligations which have been excused, frustrated, or rendered impossible by the prior 18 breaches of Bodie. 19 38. Marani is informed and believes, and based thereon alleges, that Bodie

20 breached the Note, Subscription Agreement and Warrant in that: 21 a. Bodie sent conversion notices and received shares directly from

22 Maranis transfer agent without notice to and without obtaining approval from the 23 company for the transfers; 24 b. Bodie sent conversion notices and received shares directly from

25 Maranis transfer agent in excess of that required under the Note; 26 c. Bodie sent conversion notices and received shares directly from

27 Maranis transfer agent without accounting for all of the conversions with the 28 company; 9
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

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d.

Bodie sent conversion notices and received shares directly from

2 Maranis transfer agent using improper accounting and conversion methods; and 3 e. Marani is informed and believes, and based thereon alleges, that

4 during Maranis performance under the Note, the Subscription Agreement and the 5 Warrant, Bodie was improperly shorting or manipulating Maranis stock in order to 6 increase the amount of common stock that would convert to Bodie in exchange for 7 its debt and under the Warrant. 8 39. As a direct and proximate result of the above described breaches,

9 Marani has suffered compensatory damages in a sum in excess of $100,000, 10 according to proof at the time of trial. 11 40. Pursuant to section 5.5 of the Note and Civil Code Section 1717

12 Marani is entitled to recover its attorneys fees in connection with Bodies breach of 13 the Note. Marani has retained Julander, Brown & Bollard to prosecute this 14 Counterclaim and has incurred, and continues to incur, reasonable attorneys fees 15 and costs that it is entitled to recover. 16 17 18 19 41. SECOND CLAIM FOR RELIEF (Accounting) Marani refers to and incorporates by reference the allegations of

20 paragraph 1 through 40 above as though fully set forth herein. 21 42. Marani is informed and believes and on that basis alleges that Bodie

22 received stock in excess of that required under the Note and Warrant. The 23 underlying transfers of stock from Marani and Bodie occurred over a period in 24 excess of two (2) years and involved numerous transactions and the transfer of 25 millions of shares of stock facilitated by a third party transfer agent. As such, the 26 amount of excess stock cannot be determined without an accounting. 27 43. Pursuant to section 5.5 of the Note and Civil Code section 1717 Marani

28 is entitled to recover its attorneys fees in connection with the accounting of excess 10
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

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1 stock transferred to Bodie. Marani has retained Julander, Brown & Bollard to 2 prosecute this Counterclaim and has incurred, and continues to incur, reasonable 3 attorneys fees and costs that it is entitled to recover. 4 5 6 7 44. THIRD CLAIM FOR RELIEF (Declaratory Relief) Marani refers to and incorporates by reference the allegations of

8 paragraph 1 through 43 above as though fully set forth herein. 9 45. An actual controversy has arisen and now exists between Bodie, on the

10 one hand, and Marani, on the other hand, regarding their respective rights, duties 11 and obligations pursuant to the Note, the Subscription Agreement, and the Warrant. 12 46. Marani alleges that Bodie has received excess stock under the Note and

13 Warrant insofar as: 14 a. Bodie sent conversion notices and received shares directly from

15 Maranis transfer agent without notice to and without obtaining approval from the 16 company for the transfers; 17 b. Bodie sent conversion notices and received shares directly from

18 Maranis transfer agent in excess of that required under the Note; 19 c. Bodie sent conversion notices and received shares directly from

20 Maranis transfer agent without accounting for all of the conversions with the 21 company; 22 d. Bodie sent conversion notices and received shares directly from

23 Maranis transfer agent using improper accounting and conversion methods; and 24 e. Marani is further informed and believes, and based thereon

25 alleges, that during Maranis performance under the Note, the Subscription 26 Agreement and the Warrant, Bodie was improperly shorting or manipulating 27 Maranis stock in order to increase the amount of common stock that would convert 28 to Bodie in exchange for its debt and under the Warrant. 11
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

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47.

Marani is informed and believes, and based thereon alleges, that Bodie

2 denies these allegations and claims that it has not received excess stock. 3 48. A judicial determination is necessary and appropriate to determine the

4 respective rights, duties, and obligations of Bodie and Marani as set forth above. 5 6 7 PRAYER FOR RELIEF WHEREFORE, Marani prays for judgment on its counterclaim against Bodie

8 as follows: 9 10 1. 2. For compensatory damages according to proof; For an accounting of the financial transactions between Marani, on the

11 one hand, and Bodie, on the other hand, to determine the amount of excess stock 12 transferred to Bodie under the Note and Warrant. 13 3. For a judicial determination of the controversy between Bodie, on the

14 one hand, and Marani, on the other hand, regarding their respective rights, duties 15 and obligations pursuant to the Note, the Subscription Agreement, and the Warrant. 16 17 18 19 20 21 DATED: April 21, 2014 22 23 24 25 26 27 28 12
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

4. 5. 6. 7.

For attorneys fees as requested herein; For prejudgment and post-judgment interest upon all amounts awarded; For costs of the suit herein; and For such other and further relief as the Court may deem just and proper.

JULANDER, BROWN & BOLLARD

By: Dirk O. Julander Andrea S. Paris Attorneys for Marani Brands, Inc., a Nevada Corporation

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DEMAND FOR JURY TRIAL

Defendant and Counterclaimant, Marani Brands, Inc., demands a jury trial in

4 the above-captioned matter. 5 6 DATED: April 21, 2014 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13


ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

JULANDER, BROWN & BOLLARD

By: Dirk O. Julander Andrea S. Paris Attorneys for Marani Brands, Inc., a Nevada Corporation