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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION ) ) ) ) ) ) ) ) ) ) ) ) CASE NO. 1:11-cv-1625
THE ST. JOE COMPANY, Plaintiff, v. EPCON COMMUNITY FRANCHISING, INC., PROPERTY GROUP ONE, LTD., SHERRI MEYER, and WATERCOLORS OWNERS ASSOCIATION, INC., Defendants.
COMPLAINT Plaintiff The St. Joe Company (St. Joe), by counsel, brings this complaint against Defendants Epcon Community Franchising, Inc. (Epcon), Property Group One, Ltd. (Property Group), Sherri Meyer (Meyer), and Watercolors Owners Association, Inc. (the Homeowners Association) (collectively, Defendants), and alleges: PRELIMINARY STATEMENT 1. This is an action for infringement of St. Joes federally registered trademarks and
service marks in violation of 15 U.S.C. 1114(1); for unfair competition in violation of 15 U.S.C. 1125(a); for common law infringement; for common law unfair competition; for breach of contract; and for tortious interference with a contractual relationship. Accordingly, St. Joe seeks, among other relief, a permanent injunction to prevent the continuing use of St. Joes valuable trademarks and service marks; its actual damages; treble damages; and its reasonable attorneys fees and costs incurred in prosecuting this action.
THE PARTIES 2. Plaintiff St. Joe is a corporation organized and existing under the laws of the State
of Florida, with its principal place of business at 133 S. Watersound Parkway, Watersound, Florida 32413. 3. Upon information and belief, Defendant Epcon is a corporation organized and
existing under the laws of the State of Ohio, with its principal place of business at 500 Stonehenge Parkway, Dublin, Ohio 43017. 4. Upon information and belief, Defendant Property Group is a corporation
organized and existing under the laws of the State of Indiana, with its principal place of business at 13853 Rue Royale Lane, McCordsville, Indiana 46055. 5. Upon information and belief, Defendant Meyer is President and shareholder of
Property Group and resides in and/or conducts business in this District. 6. Upon information and belief, in her capacity as President and shareholder of
Property Group, Meyer directs the activities of Property Group and has personally participated in and has caused Property Group to engage in the acts complained of herein. 7. Upon further information and belief, Meyer has gained a financial benefit from
her participation in the acts complained of herein. 8. Upon information and belief, Defendant Homeowners Association is a
corporation organized and existing under the laws of the State of Indiana, with its principal place of business at 13853 Rue Royale Lane, McCordsville, Indiana 46055.
JURISDICTION AND VENUE 9. This Court has jurisdiction over the subject matter of this action pursuant to the
provisions of 15 U.S.C. 1121, and 28 U.S.C. 1331(a), 1338, and 1367. 10. This Court has personal jurisdiction over Epcon because Epcon regularly does or
solicits business in this District, derives substantial revenue and benefit from services used, consumed and/or rendered in this District, has committed tortious acts within this District, and has caused personal injury in this District by an occurrence, act or omission done outside of this State. 11. This Court has personal jurisdiction over Defendants Property Group, Meyer, and
Homeowners Association because each resides in and/or conducts business in this District and has committed a tortious act within this District. 12. A substantial part of the unlawful acts and violations hereinafter described have
occurred and are occurring within the Southern District of Indiana, and the interstate trade and commerce hereinafter described is affected, in part, within the Southern District of Indiana. Accordingly, venue is proper in this District pursuant to the provisions of 28 U.S.C. 1391(b) and (c). FACTS COMMON TO ALL COUNTS 13. St. Joe is the owner of the mark WATERCOLOR for a variety of goods and
services, including but not limited to, real estate management; real estate development; real estate site selection; recreational services in the nature of pools, aquatic centers, golf, multipurpose sports fields, hiking, jogging trails, and parks; providing facilities for recreational activities; hotel services and hotel concierge services; mens, womens and childrens clothing, namely, T-shirts and sportswear, namely, shirts and sports hats (the WATERCOLOR Goods
and Services). 14. St. Joe is the owner of several registrations of its WATERCOLOR Mark,
including U.S. Registration Nos. 2,480,515; 2,532,581; 2,626,297; 2,713,757; and 3,473,972 (the WATERCOLOR Registrations) maintained on the Principal Register of the U.S. Patent and Trademark Office. True and correct copies of Patent and Trademark Records showing the status and title of the WATERCOLOR Registrations are attached as Exhibit A. 15. Registration Nos. 2,532,581; 2,480,515; 2,713,757; and 2,626,297 for the
WATERCOLOR Mark have become incontestable under 15 U.S.C. 1065. True and correct copies of PTO records reflecting such status are included as part of Exhibit A. Accordingly, these registrations constitute conclusive evidence of the validity of the WATERCOLOR Mark, of St. Joes ownership of such Mark, and of St. Joes exclusive right to use the Mark in commerce under 15 U.S.C. 1115(b). 16. St. Joe is one of Floridas largest real estate development companies, and is
northwest Floridas largest private landowner, owning approximately 576,000 acres of land, concentrated primarily between Tallahassee and Destin. 17. One of St. Joes most recognized communities is its WATERCOLOR resort and
community, located in Seagrove Beach, Florida (the WATERCOLOR Development). 18. The WATERCOLOR Development is a nationally known beach resort and The WATERCOLOR Development includes residential housing for
vacation destination.
private residents as well as the WATERCOLOR Inn & Resort. Vacationers can rent private homes in the WATERCOLOR Development or stay at the WATERCOLOR Inn & Resort. 19. Since at least 1999, St. Joe has continuously used its WATERCOLOR Mark to
promote and identify its WATERCOLOR Development. True and correct copies of materials
promoting the WATERCOLOR Development are attached as Exhibit B. The rights supported by such use of the WATERCOLOR Mark and the goodwill associated therewith inure to the benefit of St. Joe. 20. St. Joe promotes its WATERCOLOR Development in real estate publications,
travel magazines, e-marketing campaigns, and direct marketing campaigns. True and correct copies of examples of promotions for the WATERCOLOR Development that have been placed in publications that have been distributed nationally, including in Indiana, are attached as Exhibit C. The WATERCOLOR Development has also been recognized as a top resort in national publications such as Conde Nast and Travel + Leisure, and the WaterColor Inn has been awarded a Four Diamond rating by AAA every year since 2007. 21. St. Joe also extensively promotes the WATERCOLOR Development on the
Internet through its www.watercolorflorida.com and www.watercolorresort.com websites. True and correct copies of printouts from St. Joes websites showing such use are attached as Exhibit D. 22. Since 1999, St. Joe has spent approximately thirty million dollars ($30,000,000)
to advertise and promote the WATERCOLOR Development throughout the United States. As a result of such advertising and promotion, and as evidenced by the Registrations, the WATERCOLOR Mark has become well known and widely accepted and respected by the consuming public. As a further result of such advertising, and as evidenced by the Registrations, the WATERCOLOR Mark has become distinctive, identifying real estate development and management and other goods and services emanating only from St. Joe, and symbolizes extremely valuable goodwill, as evidenced by St. Joes revenues from the WATERCOLOR Development of approximately six hundred million dollars ($600,000,000) since 1999.
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including Indiana, and symbolizes St. Joes reputation for developing high-quality resorts and residential communities. 24. WaterColors Homeowners in the WATERCOLOR Development can enjoy membership in the Community Association, which has its own website at
www.mywatercolorcommunity.com. A true and correct printout from this website is attached as Exhibit E. 25. Upon information and belief, Defendants, with full knowledge of St. Joes rights
in and to the WATERCOLOR Mark, have intentionally advertised and used, and are continuing to advertise and use, the infringing marks WATERCOLORS and AQUARELLES (collectively, the Infringing Marks) to promote and identify a real estate development located in McCordsville, Indiana (the Indiana Development). 26. Upon information and belief, Defendants have willfully and knowingly used the
Infringing Marks in connection with the Indiana Development for the purposes of: (a) trading on the goodwill and reputation of St. Joe; (b) capitalizing on the millions of dollars spent by St. Joe in advertising and promoting its WATERCOLOR Development; and (c) misleading the purchasing public into believing that the Indiana Development is somehow legitimately connected or affiliated with, or sponsored or approved by, St. Joe. 27. Upon information and belief, Defendants are advertising and promoting the
Indiana Development in a manner calculated to call to mind the WATERCOLOR Mark and to create the false impression that the Indiana Development is affiliated, connected, or associated with St. Joe and/or that Defendants have the sponsorship or approval of St. Joe. The public is
likely to be misled or deceived by the false impression arising from Defendants use of the Infringing Marks. 28. Defendants use of the Infringing Marks to promote the Indiana Development is
likely to cause confusion, mistake, and deception as to the source of the Indiana Development, and of St. Joes affiliation or connection therewith. 29. In or about June 2009, St. Joe first learned that Epcon was using the name
WATERCOLORS for the Indiana Development. On June 23, 2009, St. Joe sent a demand letter to Epcon requesting that Epcon cease its use of WATERCOLORS to identify the Indiana Development. A true and correct copy of St. Joes June 23, 2009 demand letter is attached as Exhibit F. 30. Epcon responded to St. Joes June 23, 2009 demand letter by denying that it was
using WATERCOLORS, but claiming that its franchisee, Property Group, was the entity actually using WATERCOLORS to identify the Indiana Development. A true and correct copy of such response is attached as Exhibit G. 31. Counsel for Property Group then contacted counsel for St. Joe to discuss St. Joes
trademark infringement claim. St. Joe and Property Group ultimately entered into a settlement agreement, effective August 25, 2009 (the Settlement Agreement), in which Property Group agreed, inter alia, that it would cease all use of WATERCOLORS to identify the Indiana Development. A true and correct copy of the Settlement Agreement is attached as Exhibit H. As shown in Exhibit H, St. Joe granted Property Group a six-month transition period to cease all use of WATERCOLORS and transition to a new name. 32. The Settlement Agreement was signed on Property Groups behalf by Defendant
33. 34.
Property Groups six-month transition period ended on February 25, 2010. Upon information and belief, after executing the Settlement Agreement, Property
Group selected the name AQUARELLES for the Indiana Development. Aquarelles means watercolors in French and is the French foreign equivalent to St. Joes WATERCOLOR Mark. 35. Use of AQUARELLES is equivalent to use of WATERCOLORS, and use of
AQUARELLES infringes St. Joes rights in the WATERCOLOR Mark. 36. Although Property Group selected the name AQUARELLES for the Indiana
Development, it has never ceased using WATERCOLORS for the Indiana Development. 37. Despite Property Groups agreement to cease all use of WATERCOLORS for
the Indiana Development, Property Group and Epcon continued to use WATERCOLORS to identify the Indiana Development after February 25, 2010. A true and correct copy of a printout from the www.epconcommunities.com website showing continued use of the WATERCOLORS mark for the Indiana Development is attached as Exhibit I. 38. After discovering that Epcon and Property Group were continuing to use the
WATERCOLORS mark and had adopted the foreign equivalent AQUARELLES for the Indiana Development, St. Joe had its counsel send new demand letters to Epcon and Property Group demanding that they comply with the Settlement Agreement and cease all use of WATERCOLORS and AQUARELLES. True and correct copies of such letters are attached as Exhibit J. 39. On April 11, 2011, an individual named Jim Sobek, who identified himself as the
President of the Homeowners Association, contacted counsel for St. Joe to inquire as to the Homeowners Associations potential involvement in the settlement of St. Joes dispute with Epcon and Property Group. In the context of responding to Mr. Sobeks inquiry, counsel for St.
Joe informed Mr. Sobek, and thus the Homeowners Association, of the existence of the Settlement Agreement. 40. Between April and August of 2011, St. Joe negotiated with Epcon, Property
Group, and the Homeowners Association regarding the use of WATERCOLORS and AQUARELLES to identify the Indiana Development. 41. Those negotiations appeared to be making progress, and a second, updated draft
settlement agreement was circulated among all four parties. However, on August 2, 2011, Epcon and the Homeowners Association sent letters to St. Joe stating that they would not sign the second, updated draft settlement agreement. True and correct copies of those August 2, 2011 letters are attached as Exhibit K. 42. Property Group initially indicated that it would execute the draft settlement
agreement. However, it has never done so and has even demanded payment from St. Joe to cease using WATERCOLORS. True and correct copies of email correspondence with Property Group relating to negotiations regarding use of WATERCOLORS and AQUARELLES are attached as Exhibit L. 43. In addition to terminating its own settlement negotiations with St. Joe, on August
2, 2011, the Homeowners Association also sent an email to Property Group threatening to sue Property Group if it agreed to remove the WATERCOLORS sign that still sits at the entrance to the Indiana Development (and which Property Group had already contractually agreed to remove in the Settlement Agreement some two years earlier). A true and correct copy of such email is attached as Exhibit M.
44.
Despite St. Joes extensive efforts to resolve this dispute, protect its rights in the
WATERCOLOR Mark, and enforce Property Groups agreement to cease all use of WATERCOLORS, Defendants are continuing to use the Infringing Marks. 45. Despite Defendants representation to St. Joe that the name of the Indiana
Development has been changed to Aquarelles, such change has not occurred. 46. Although Defendants have contended that the name of the Indiana Development
is now AQUARELLES, the Homeowners Association continues to use the corporate and trade name Watercolors Owners Association, Inc. 47. Property Group and Epcon continue to use WATERCOLORS on the main
entrance signage at the Indiana Development and on signs advertising homes for sale within the Indiana Development. True and correct copies of photographs taken on August 29, 2011,
showing such use are attached as Exhibit N. 48. Property Group and Epcon are also continuing to use WATERCOLORS on
promotional literature that is distributed to potential buyers of property in the Indiana Development. A true and correct copy of such literature is attached as Exhibit O. 49. Property Group and Epcon are also continuing to use WATERCOLORS in
promotions on the Internet for the Indiana Development. True and correct copies of printouts from the epconcommunities.com and propertygrouponeltd.com websites for the Indiana Development are attached as Exhibit P. Epcon has also uploaded video promotions for the WATERCOLORS community on youtube.com. True and correct copies of such promotions are included in Exhibit P. 50. Property Group is also the owner of the domain name
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Upon information and belief, with knowledge of St. Joes rights in the
WATERCOLOR Mark and with specific intent, Defendant Meyer has personally participated in and continues to participate in the aforesaid infringing acts of Property Group, and Meyer directs, controls, ratifies, and is the moving force behind such acts. As a result, Meyer is personally liable for such acts. 52. An example of Meyers personal participation in the infringing acts set forth
herein is her distribution of a WATERCOLORS business card to promote the Indiana Development. A true and correct copy of such business card is attached as Exhibit R. 53. The Homeowners Association is also continuing to use the WATERCOLORS
mark to promote the Indiana Development. True and correct copies of the Associations website at www.wccondos.com are attached as Exhibit S. 54. Although Defendants contend that the name of the Indiana Development has been
changed to AQUARELLES, Defendants have made no effort to effect such change and continue to use the name WATERCOLORS for the Indiana Development. Even where
Defendants have used AQUARELLES for the Indiana Development, Defendants continue to use the WATERCOLORS designation for the Indiana Development to associate WATERCOLORS with its AQUARELLES foreign equivalent. True and correct copies of website advertisements in which the Indiana Development is referred to as WATERCOLORS are attached as Exhibit T. 55. Such continued use of WATERCOLORS by Defendants, their adoption and use
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WATERCOLORS with its AQUARELLES foreign equivalent demonstrate a willful and bad faith intent to create confusion, deception, and mistake in the minds of Defendants customers and potential customers and to trade on St. Joes goodwill by implying a connection or relationship between the Indiana Development and St. Joe as a result of which Defendants have been and will be unjustly enriched.
COUNT I: FEDERAL TRADEMARK INFRINGEMENT AGAINST ALL DEFENDANTS 56. The allegations of Paragraphs 1 through 55 are incorporated by reference and
realleged as if fully set forth herein. 57. Defendants have used and continue to use the Infringing Marks in commerce in
connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive. 58. Defendants aforesaid acts thus constitute trademark infringement in violation of
15 U.S.C. 1114(1). 59. The aforesaid acts of Defendants are greatly and irreparably damaging to St. Joe
and will continue to be greatly and irreparably damaging to St. Joe unless enjoined by this Court, as a result of which St. Joe is without an adequate remedy at law.
COUNT II: FEDERAL UNFAIR COMPETITION AGAINST ALL DEFENDANTS 60. The allegations of Paragraphs 1 through 55 are incorporated by reference and
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61.
Defendants aforesaid acts tend to represent falsely that the Indiana Development
is legitimately connected with St. Joe, tend to describe falsely that the Indiana Development is sponsored or approved by St. Joe, and tend to designate falsely that the Indiana Development originates from St. Joe. 62. Defendants aforesaid acts thus constitute unfair competition in violation of 15
U.S.C. 1125(a)(1)(A). 63. The aforesaid acts of Defendants are greatly and irreparably damaging to St. Joe
and will continue to be greatly and irreparably damaging to St. Joe unless enjoined by this Court, as a result of which St. Joe is without an adequate remedy at law.
COUNT III: CONTRIBUTORY AND VICARIOUS TRADEMARK INFRINGEMENT AGAINST ALL DEFENDANTS 64. The allegations of Paragraphs 1 through 55 are incorporated by reference and
realleged as if fully set forth herein. 65. In addition to their direct trademark infringement, or in the alternative, each
Defendant has induced and/or materially contributed to the trademark infringement of the other Defendants, of which they each had knowledge. 66. 67. Defendants aforesaid acts thus constitute contributory trademark infringement. In addition to their direct and contributory trademark infringement, or in the
alternative, each Defendant enjoys an apparent or actual partnership with the others; all have the authority to bind the others in transactions with third parties; and/or can all exercise joint ownership or control over the use of the Infringing Marks. 68. 69. Defendants aforesaid acts thus constitute vicarious trademark infringement. The aforesaid acts of Defendants are greatly and irreparably damaging to St. Joe
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and will continue to be greatly and irreparably damaging to St. Joe unless enjoined by this Court, as a result of which St. Joe is without an adequate remedy at law.
COUNT IV: COMMON LAW TRADEMARK INFRINGEMENT AGAINST ALL DEFENDANTS 70. The allegations of Paragraphs 1 through 55 are incorporated by reference and
realleged as if fully set forth herein. 71. Defendants have used the Infringing Marks in connection with the sale, offering
for sale, distribution, and advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive. 72. 73. Defendants aforesaid acts thus constitute common law trademark infringement. The aforesaid acts of Defendants are greatly and irreparably damaging to St. Joe
and will continue to be greatly and irreparably damaging to St. Joe unless enjoined by this Court, as a result of which St. Joe is without an adequate remedy at law.
COUNT V: COMMON LAW UNFAIR COMPETITION AGAINST ALL DEFENDANTS 74. The allegations of Paragraphs 1 through 55 are incorporated by reference and
realleged as if fully set forth herein. 75. As shown in the foregoing allegations, Defendants have: (a) obtained the benefit of and traded on the goodwill of St. Joe and continue to do so; (b) damaged and will continue to damage St. Joes goodwill in that St. Joe does not have control over the businesses and services of Defendants;
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(c)
caused and are likely to continue to cause confusion, mistake, or deception of the public; and
Defendants aforesaid acts thus constitute common law unfair competition. The aforesaid acts of Defendants are greatly and irreparably damaging to St. Joe
and will continue to be greatly and irreparably damaging to St. Joe unless enjoined by this Court, as a result of which St. Joe is without an adequate remedy at law.
COUNT VI: BREACH OF CONTRACT AGAINST PROPERTY GROUP 78. The allegations of Paragraphs 1 through 55 are incorporated by reference and
realleged as if fully set forth herein. 79. As shown in the foregoing allegations: (a) the Settlement Agreement is a valid contract between St. Joe and Property Group; (b) (c) St. Joe performed its part of the Settlement Agreement; Property Group failed to perform its part of the Settlement Agreement when it continued to use Watercolors and Aquarelles after its sixmonth transition period expired; and (d) St. Joe has been damaged by Propertys Groups breach of the Settlement Agreement. 80. The aforesaid acts of Property Group thus constitute breach of contract.
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COUNT VII: TORTIOUS INTERFERENCE WITH A CONTRACTUAL RELATIONSHIP AGAINST HOMEOWNERS ASSOCIATION 81. The allegations of Paragraphs 1 through 55 are incorporated by reference and
realleged as if fully set forth herein. 82. As shown in the foregoing allegations: (a) (b) the Settlement Agreement is a valid and enforceable contract; the Homeowners Association knew of the existence of the Settlement Agreement; (c) the Homeowners Association, through its threat of litigation against Property Group if Property Group were to remove signage containing the WATERCOLORS designation, intentionally induced Property Group to breach that Agreement and not remove such signage; (d) (e) the Homeowners Association did so without justification; and St. Joe has suffered damages resulting from the Homeowners Associations wrongful interference with the Settlement Agreement. 83. The aforesaid acts of the Homeowners Association thus constitute tortious
interference with a contractual relationship. WHEREFORE, St. Joe prays for the following relief: (a) (b) That judgment on the Complaint be entered for St. Joe and against Defendants; That Defendants, their affiliated entities, servants, agents, representatives, and employees, and all other persons in active concert or participation with Defendants, and Defendants heirs, successors, and assigns, be enjoined and restrained from:
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(1)
Using, in the advertisement, promotion, merchandising, distribution, offering for sale, and sale of any real estate development services and/or any related goods or services, including but not limited to any goods or services related to the Indiana Development, the Infringing Marks, and any other mark that contains the term water or color, or any foreign equivalent thereof, including but not limited to the term aquarelles;
(2)
Using the Infringing Marks, and any other mark that contains the term water or color, or any foreign equivalent thereof, on any website, including but not limited to, www.epconcommunities.com,
www.propertygrouponeltd.com, wccondos.com, and www.youtube.com; (3) Expressly or impliedly representing themselves to customers, potential customers, or the public to be affiliated in any way with St. Joe in connection with the advertisement, promotion, merchandising,
distribution, offering for sale, or sale of any real estate development services and/or any related goods or services, including but not limited to any goods or services related to the Indiana Development; (4) Representing, by words or conduct, that any goods or services provided, offered for sale, sold, advertised, or rendered by Defendants are authorized, sponsored, or endorsed by, or otherwise connected with, St. Joe; (5) (6) Otherwise infringing the WATERCOLOR Mark; and Competing unfairly with St. Joe in any manner;
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(c)
That the Court find Defendants acts of infringement and unfair competition to be willful;
(d)
That St. Joe receive from Defendants, jointly and severally, three times St. Joes actual damages caused by the acts of Defendants, and Defendants profits from any sales of goods or services under the Infringing Marks, or any colorable imitation of such Marks;
(e)
That
the
Court
order
that
the
registration
of
the
domain
name
www.watercolorsinfishers.com and any other domain name containing the term watercolor be canceled; (f) That the Court order that the corporate name Watercolors Owners Association be canceled; (g) That Defendants be ordered to deliver up for destruction all labels, signs, prints, insignia, brochures, and any other written or recorded material or advertisements in their possession, custody, or control that contain the Infringing Marks; (h) That this case be found to be exceptional under 15 U.S.C. 1117 and that Defendants be required to pay St. Joe exemplary and punitive damages and the costs of this action, together with reasonable attorneys fees and disbursements; (i) That Defendants be required, in accordance with 15 U.S.C. 1116, to file with this Court and serve on St. Joe within thirty (30) days from the date of entry of any injunction, a report in writing, under oath, setting forth in detail the manner and form in which Defendants have complied with the terms of the injunction; and
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(j)
That St. Joe be awarded all damages, cost, attorneys fees and such other and further relief as the Court deems just and equitable.
By: /s/James Dimos James Dimos, #11178-49 Sarah S. Riordan, #17517-53 201 N. Illinois St., Suite 1900 P.O. Box 44961 Indianapolis, IN 46244-0961 317-237-3800 Fax: 317-237-3900 jdimos@fbtlaw.com sriordan@fbtlaw.com Attorneys for Plaintiff The St. Joe Company Of Counsel: Elizabeth G. Borland Georgia Bar No. 460313 Todd D. Williams Georgia Bar No. 142379 Smith, Gambrell & Russell LLP Suite 3100, Promenade II 1230 Peachtree Street, N.E. Atlanta, Georgia 30309-3592 (404) 815-3645 (phone) (404) 815-6045 (fax) egborland@sgrlaw.com twilliams@sgrlaw.com
INDLibrary2 LR07000.0954125 1077542v1
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