IN THE CIRCUIT COURT OF THE SEVENTH JUDICIAL CIRCUIT IN AND FOR FLAGLER COUNTY, FLORIDA

COLONIAL BANK,

Plaintiff,

VS.

ASNACO, L.L.C., BHAGWAN ASNANI, CENTRAL FLORIDA RESTORATION

Case No. 09-CA-000783

SPECIALISTS, LLC, DEL ELECTRIC, INC., CYPRESS POINT OWNERS ASSOCIATION, INC., CITY WALK S m r y

COMMERCIAL CONDOMINIUM ASSOCIATION, INC., JAMES J. CHILDS CARPENTRY, INC., and CITY OF PALM COAST,

'tr -500

Defendants. 1

r-.

,,2

PLAINTIFF'S REPLY TO AFFIRMATIVE DEFENSES AND ANSWER AND AFFIRMATIVE DEFENSES TO COUNTERCLAIM

The plaintiff, COLONIAL BANK', by and through its undersigned counsel, files its

Reply to Affirmative Defenses and Answer to Counterclaim, and states:

REPLY TO AFFIRMATIVE DEFENSES

WAIVER

1. Defendants have waived their ability to raise any affirmative defenses as a result

of their representations in several loan documents.

2. Specifically, in paragraph 13 of the Amended and Restated Loan Agreement

dated July 3, 2008, defendants acknowledged that "Borrower does not have any defenses,

counterclaims or set-offs with respect to any Loan proceeds disbursed or to be disbursed or

I There is a pending motion to substitute Branch Banking & Trust Company as party plaintiff as a result of the assignment of the subject loan documents from the F.D.I.C.

otherwise advanced or to be advanced hereunder." A true and authentic copy of the Amended

and Restated Loan Agreement is attached hereto as Exhibit A.

3. Similarly, in paragraph 7 of the Notice of Future Advance, and Mortgage and

Note Modification Agreement dated January 3,2007 (Exhibit D to the Complaint) and paragraph

7 of the Mortgage and Note Extension Agreement dated July 3, 2008 (Exhibit E to the

Complaint), defendants represented that "there is no claim, counterclaim, defense or other right

of offset or recoupment whatsoever against the Mortgage and the liens and security interests

granted therein are acknowledged to be valid and subsisting liens and security interest against the

Real Property and other real and personal property described therein."

4. Similarly, in the Commercial Loan Extension Agreements dated February 5,

2008, and April 30, 2008, defendants agreed that "Borrower has no demands, claims, counter-

claims, or set-offs against Lender or which could diminish Lender's right to receive full payment

of all amounts advanced or due under the Loan Documents. Borrower specifically acknowledges

and reaffirms the validity and enforceability of the Loan Documents, and agrees to perform all of

Borrower's obligations pursuant to the Loan Documents. Borrower acknowledges that Lender,

in agreeing to enter into this Agreement, has relied on Borrower's foregoing representations."

True and authentic copies of the Commercial Loan Agreements are attached hereto as Exhibits

B and C.

5 . Defendants knew of the alleged events set forth in their affirmative defenses when

they executed the loan documents referenced in paragraphs 2 through 4. As a result of having

executed the documents referenced above in which the defendants agreed, acknowledged and

represented that they have no claims, defenses, or set-offs against Colonial Bank, defendants

knowingly and voluntarily waived any affirmative defenses to this action.

ESTOPPEL

6 . Colonial Bank realleges paragraphs 2 through 4.

7. Colonial Bank relied on defendants' representations stated in the loan documents

referenced in paragraphs 2 through 4 when it enteried into the loan transactions with the

defendants. But for these representations, Colonial Bank would not have entered into the loan

transactions with the defendants. Therefore, as a result of signing the loan documents referenced

in paragraphs 2 through 4 in which the defendants represented to Colonial Bank they have no

defenses to the enforcement of the loan documents, and based on Colonial Bank's reliance on

these representations in entering into the loan transactions, defendants are estopped from raising

any affirmative defenses in this action.

SECOND AFFIRMATIVE DEFENSE FAILURE TO STATE A LEGALLY VALID DEFENSE

8. The defendants' second affirmative defense alleges that the plaintiff is barred

from recovery due to a lack of good faith and fair dealing. Assuming that defendants could state

a claim for breach of good faith and fair dealing, such a claim would be an affirmative claim for

relief and not an affirmative defense. Florida law does not recognize breach of good faith and

faire dealing as an affirmative defense.

9. Moreover, to state a claim for breach of good faith and fair dealing, defendants

must allege the breach of an express term of a contract. See Insurance Concepts and Design,

Inc. v. Healthplan Services, Inc., 785 So. 2d 1232, 1234 (Fla. 4'h DCA 1991); Hospital

Corporation of America v. Florida Medical Center, Inc., 710 So. 2d 573 (Fla. 4th DCA 1998).

Here, defendants have failed to allege any facts demonstrating any breach of an express term of a

contract between defendants and Colonial Bank.

10. Without any factual allegations, defendants allege that Colonial Bank "failed to

perform" paragraph 2 of the Preliminary Statement of the 2004 Loan Agreement. This

provision states "The Loan is to be evidenced by a Promissory note dated November 5,2004, in

the amount of $7,500,000.00, the repayment of which is guaranteed by nla, ("Guarantors") and

is to be secured by, among other things, a mortgage and security agreement dated November 5,

2004, ("Mortgage") encumbering certain real property more particularly described as follows:

See Attached Exhibit "A." Defendants have failed to allege any facts demonstrating how

Colonial Bank "failed to perform" this provision of the Loan Agreement.

11. Without any factual allegations, defendants allege that Colonial Bank "failed to

perform" Article 111, subsection (b) of the 2004 Loan Agreement. This section provides ten

conditions precedent to Colonial Bank's requirement to disburse loan proceeds to defendants.

Defendants have failed to allege any facts suggesting that Colonial Bank failed to disburse the

loan proceeds upon satisfaction of these conditions.

12. Based on the foregoing, defendants have not stated a legally valid affirmative

defense.

THIRD AFFIRMATIVE DEFENSE- FAILURE TO STATE A LEGALLY VALID DEFENSE

13. The defendants' third affirmative defense alleges that the plaintiff is barred from

recovery due to the doctrine of estoppel. The defendants allege that their failure to comply with

"the maturity date provisions of the loan documents" resulted from Colonial Bank's choice of the

third party, Bomar Construction, as the general contractor for the development project. This

allegation is both legally and factually inaccurate. Moreover, this defense fails to allege the

elements for estoppel: 1) a representation as to a material fact that is contrary to a later-asserted

position, 2) reliance on that representation, and 3) a change in position detrimental to the party

claiming estoppels. See State of Florida v. Morris Harris, 881 So. 2d 1079, 1084 (Fla. 2004).

The defendants are not alleging that Colonial Bank made any representation to the defendants on

which they relied. As such, defendants have failed to raise a legally valid defense.

FOURTH AFFIRMATIVE DEFENSE - FAILURE TO STATE A LEGALLY VALID DEFENSE

14. The defendants' fourth affirmative defense alleges that if the original documents

were not attached to the Complaint, the Complaint fails to state a cause of action. First, pursuant

to Rule 1.130, Fla. R. Civ. P., only copies of the applicable documents need to be attached to the

initial Complaint. Moreover, the original loan documents were previously filed with the Court

As such, defendants have failed to state a legally valid defense.

FIFTH AFFIRMATIVE DEFENSE - FAILURE TO STATE A LEGALLY VALID DEFENSE

15. The defendants' fifth affirmative defense alleges that "in the event a final

judgment of foreclosure is entered ... the defendants are entitled in equity to a partition of the

subject property.. ." This is not a legally cognizable affirmative defense. An affirmative defense

is any matter that avoids the action. See Landord v. McCormick, 552 So.2d 954 (Fla. 1'' DCA

1989). See also Tropic Exterminators, Inc. v. Murray, 171 So.2d 432 (Fla. 2nd DCA 1965).

Affirmative defenses do not deny facts of opposing party's claim, but they raise some new matter

which defeats opposing party's otherwise apparently valid claim. The equitable remedy of

partition is a cause of action and not an affirmative defense. Chapter 64 of the Florida Statutes

governs actions for partition. The defendants have failed to allege any of the necessary elements

for a partition action. Accordingly, defendants have filed to state a legally valid defense.

SIXTH AFFIRMATIVE DEFENSE - FAILURE TO STATE A LEGALLY VALID DEFENSE

16. The defendants' sixth affirmative defense alleges that the plaintiff has received

funds from the United States Treasury Trouble Assets Relief Program (TARP) and, as such, the

defendants are entitled to a setoff equal to the amount of the TARP received "arising from or

relating in any way to the loan portfolios containing the subject notes." This defense is frivolous.

Colonial Bank has not received any TAW monies. Further, the defendants have cited neither

case law nor statutory authority supporting the contention that they are entitled to a setoff due to

a bank's receipt of TARP funds. As explained in a press release issued by the U.S. Department

of the Treasury on October 14, 2008, the TARP program merely provides for the United States

Treasury to purchase senior preferred shares in certain qualifying U.S. controlled banks. These

preferred shares are to pay a cumulative dividend rate of 5 percent per annum for the first five

years, and will then pay 9 percent per annum after year five to the Treasury. As such, through

the TAW program, the Treasury merely provided loans to banks at 5% and 9% interest. There

is nothing in the TARP legislation or regulations providing any rights to borrowers relating to

TAW funds received by banks. The fact that a bank received an emergency loan from the

Treasury does not provide any relief to borrowers. Indeed, it would be illogical to lend money to

a bank and then prevent a bank from collecting its own debts. Such a scheme would make it

certain that a bank could never repay the TARP funds. As such, defendants' setoff defense is

frivolous.

SEVENTH AFFIRMATIVE DEFENSE - FAILURE TO STATE A LEGALLY VALID DEFENSE

17. The defendants' seventh affirmative defense alleges that Colonial Bank failed to

establish standing because it failed to attach a chain of assignments for the applicable documents

pursuant to Rule 1.21 0, Fla. R. Civ. P. This assertion is entirely frivolous as there was no actual

chain of assignment. The Complaint was brought by the original plaintiff, Colonial Bank,

formerly known as Colonial Bank, N.A., the same party listed in the loan documents.

Therefore, defendants have failed to state a legally valid defense.

EIGHTH AFFIRMATIVE DEFENSE- FAILURE TO STATE A LEGALLY VALID DEFENSE

18. The defendants' eight affirmative defense states that all figures are subject to an

accounting. As previously stated, an affirmative defense does not deny facts of opposing party's

claim, but raises some new matter which defeats opposing party's otherwise apparently valid

claim. See Tropic Exterminators, Inc at 432. As this defense is a mere blanket statement not

asserting any factual or legal disputes, the defense is not legally valid. Moreover, defendants

have failed to allege the elements necessary for an equitable accounting.

NINTH AFFIRMATIVE DEFENSE- FAILURE TO STATE A LEGALLY VALID DEFENSE

19. The defendants' ninth affirmative defense states that the plaintiff first breached

the loan documents. This defense constitutes a bare legal conclusion of law as it alleges no facts

demonstrating the alleged prior breach. To set forth a proper defense, all elements of an

affirmative defense recognized by law must be alleged. L.B. McLeod Construction Company v.

Cooper, 134 So. 224 (Fla. 1934). The allegations of a defense must be certain and distinctly

allege each element essential to the pleader's right to defend. Folev v. Hialeah Race Course, Inc.,

53 So. 2d 771 (Fla. 1951). In order to be facially sufficient, a defendant's affirmative defenses

must, furthermore, be pled "specifically and with particularity." See Rule 1.140(b), Fla. R. Civ.

Pro. (2009). Certainty is required when pleading defenses, and pleading conclusions of law

unsupported by allegations of ultimate fact is legally insufficient. Cadv v. Chew Chase Savings

& Loan. Inc., 528 So. 2d 136 (Fla. 4'h DCA 1988). Where there are no facts pled to support the

general allegations of affirmative defenses, the defenses are legally insufficient. Leon v.

Deutsche Bank National Trust Company, 21 So. 3d 907 (Fla. 3d DCA 2009). Because this

defense contains a mere bare legal conclusion, defendants have not stated a legally valid defense.

TENTH AFFIRMATIVE DEFENSEc FAILURE TO STATE A LEGALLY VALID DEFENSE

20. The defendants' tenth affirmative defense states that the plaintiff is barred by the

doctrine of unclean hands. This defense constitutes a bare legal conclusion of law as it alleges

no facts demonstrating the alleged prior breach. To set forth a proper defense, all elements of an

affirmative defense recognized by law must be alleged. L.B. McLeod Construction Company v.

Cooper, 134 So. 224 (Fla. 1934). The allegations of a defense must be certain and distinctly

allege each element essential to the pleader's right to defend. Foley v. Hialeah Race Course,

Inc 53 So. 2d 771 (Fla. 1951). In order to be facially sufficient, a defendant's affirmative -9

defenses must, furthermore, be pled "specifically and with particularity." See Rule 1.140(b), Fla.

R. Civ. Pro. (2009). Certainty is required when pleading defenses, and pleading conclusions of

law unsupported by allegations of ultimate fact is legally insufficient. Cadv v. Chevv Chase

Savings & Loan, Inc., 528 So. 2d 136 (Fla. 4"' DCA 1988). Where there are no facts pled to

support the general allegations of affirmative defenses, the defenses are legally insufficient.

Leon v. Deutsche Bank National Trust Company, 21 So. 3d 907 (Fla. 3d DCA 2009). Because

this defense contains a mere bare legal conclusion, defendants have not stated a legally valid

defense.

ELEVENTH AFFIRMATIVE DEFENSE- FAILURE TO STATE A LEGALLY VALID DEFENSE

21. The defendants' eleventh affirmative defense states that Colonial Bank's claims

are barred due to the slander of title because Colonial Bank filed the notice of lis pendens in this

action. This defense is baseless and without merit. First, such an argument is not a legally

cognizable affirmative defense as slander of title is an affirmative cause of action, not an

affirmative defense. As previously stated, an affirmative defense does not deny facts of

opposing party's claim, but raises some new matter which defeats opposing party's otherwise

apparently valid claim. See Tropic Exterminators, Inc., Id. at 432. Further, the notice of lis

pendens contains the exact same legal description as contained in the Mortgage and Mortgage

modification agreements executed by defendants. Therefore, the filing of the notice of lis

pendens cannot, as a matter of law, give rise to a claim for slander of title. Accordingly,

defendants have failed to raise a legally valid defense.

TWELFTH AFFIRMATIVE DEFENSE- FAILURE TO STATE A LEGALLY VALID DEFENSE

22. The defendants' twelfth affirmative defense states that the Court lacks personal

jurisdiction over the defendant, Bhagwan Asnani ("Asnani"). This defense was waived when

Asnani both previously answered the Complaint and filed a counterclaim against the plaintiff,

thereby submitting himself to jurisdiction. A defendant who goes beyond matters of defense and

seeks affirmative relief waives an objection to the personal jurisdiction of the court. See Babcock

v. Whatmore, 707 So. 2d 702, 704 (Fla. 1998). In the instant case, Asnani filed a 21 count

Counterclaim. Further, Asnani is subject to personal jurisdiction as he conducts extensive

business in the state of Florida, including owning and managing the real estate project that is the

subject of this lawsuit. Asnani was served in the state of Florida. Finally, in paragraph 69 of

their pleading, defendants allege that Asnani is a resident of Seminole County, Florida.

Therefore, defendants have failed to state a legally valid defense.

THIRTEENTH AFFIRMATIVE DEFENSE- FAILURE TO STATE A LEGALLY VALID DEFENSE

23. The defendants' thirteenth affirmative defense states that the plaintiff failed to identify

itself as a proper party, and as such, has no real interest in this cause of action pursuant to Rule

1.210, Fla. R. Civ. P. However, there is nothing in the applicable rule of procedure stating that

the plaintiff must allege its identity. Therefore, defendants have failed to state a legally valid

defense.

FIFTEENTH AFFIRMATIVE DEFENSE- FAILURE TO STATE A LEGALLY VALID DEFENSE

24. The defendants' fifteenth affirmative defense alleges that Colonial Bank failed to

notify the defendants of the assignment of the Mortgage and Note in compliance with Section

559.715, Fla. Stat. (2009). Section 559.715 is titled "Assignment of consumer debts" and

requires notice of the assignment of a "consumer debt." As such, the thirty (30) day notice

requirement applies only to consumer debts; it does not apply to commercial transactions such as

the loan in the instant case. Therefore, defendants have failed to state a legally valid defense.

SIXTEENTH AFFIRMATIVE DEFENSE- FAILURE TO STATE A LEGALLY VALID DEFENSE

25. The defendants allege that the 2004 Loan Agreement is illusory. This defense is

frivolous. Colonial Bank did not bring this action on the 2004 Loan Agreement. Instead,

Colonial Bank brought this action to enforce a promissory note and mortgage. Defendants do

not argue that Colonial Bank failed to lend the money represented by the promissory note and

mortgage. Accordingly, the defense that the loan documents are not enforceable due to illusory

obligations is nonsense. Therefore, defendants have failed to state a legally valid defense.

SEVENTEENTH AFFIRMATIVE DEFENSE- FAILURE TO STATE A LEGALLY VALID DEFENSE

26. The defendants' seventeenth affirmative defense alleges that the plaintiff failed to

comply with Section 57.01 1, Fla. Stat. (2009) by placing the applicable bond with the Flagler

County Clerk of Courts. Defendants failed to follow the procedure set forth in Section 57.01 1 to

raise this issue. Pursuant to Section 57.01 1 Fla. Stat. (2009)' opposing counsel was required to

give the plaintiff twenty (20) days notice before raising this argument, and defendants failed to

provide this notice. Moreover, Colonial Bank has posted the bond. Therefore, the defendants

have failed to state a legally valid defense.

NINETEENTH AFFIRMATIVE DEFENSE- FAILURE TO STATE A LEGALLY VALID DEFENSE

27. The defendants' nineteenth affirmative alleges estoppel with no facts to support

the defense. This defense constitutes a bare legal conclusion of law as it alleges no facts

demonstrating the alleged prior breach. To set forth a proper defense, all elements of an

affirmative defense recognized by law must be alleged. L.B. McLeod Construction Companv v.

Cooper, 134 So. 224 (Fla. 1934). The allegations of a defense must be certain and distinctly

allege each element essential to the pleader's right to defend. F o l e ~ v. Hialeah Race Course,

Inc 53 So. 2d 771 (Fla. 1951). In order to be facially sufficient, a defendant's affirmative .'

defenses must, furthermore, be pled "specifically and with particularity." See Rule 1.140(b), Fla.

R. Civ. Pro. (2009). Certainty is required when pleading defenses, and pleading conclusions of

law unsupported by allegations of ultimate fact is legally insufficient. Cadv v. Chevv Chase

Savings & Loan, Inc., 528 So. 2d 136 (Fla. 4th DCA 1988). Where there are no facts pled to

support the general allegations of affirmative defenses, the defenses are legally insufficient.

Leon v. Deutsche Bank National Trust Company, 21 So. 3d 907 (Fla. 3d DCA 2009). Because

this defense contains a mere bare legal conclusion, defendants have not stated a legally valid

defense.

ANSWER AND AFFIRMATIVE DEFENSES TO COUNTERCLAIM

65. Denied.

66. Denied.

67. Admitted for purposes of venue only; otherwise denied.

68. Admitted.

69. Admitted.

70. Admitted.

71. Denied. Defendants have failed to state any causes of action against Colonial

Bank as set forth in Colonial Bank's affirmative defenses to the Counterclaim.

72. Denied.

FACTUAL ALLEGATIONS APPLICABLE TO ALL COUNTS

73. Admitted that Asnaco purchased the Property; otherwise without knowledge.

74. Without knowledge.

75. Without knowledge.

76. Denied.

77. Denied.

78. Denied.

79. Denied.

80. Admitted that BB&T provided defendants with the loan commitment letter

attached as Exhibit A and that the document speaks for itself; otherwise denied.

81. Denied.

82. Admitted Chiumento had represented BB&T; otherwise without knowledge.

83. Admitted that Chiumento represented BB&T in the loan transactions; otherwise

denied.

84. Admitted that Chiumento represented BB&T in the loan transactions; otherwise

denied.

85. Admitted that the documents referenced in this paragraph were signed and speak

for themselves; otherwise denied.

86. Admitted that the Mortgage contains the legal notice provision; otherwise denied.

87. Without knowledge.

88. Denied.

89. Denied.

90. Denied.

91. Denied.

92. Denied.

93. Denied.

94. Admitted that construction on Buildings C & D had not commenced; otherwise

denied as the Mortgage covers all of the real property and improvements.

95. Denied.

96. Denied.

97. Denied.

98. Admitted.

99. Denied.

100. Admitted that the escrow account was pledged as security for the loan; otherwise

denied.

10 1. Admitted.

102. Denied.

103. Denied.

104. Denied.

105. Admitted that the Loan Agreement contained a period of eighteen months to

complete construction; otherwise denied.

106. Denied.

107. Admitted that Asnaco hired Bomar; otherwise denied.

108. Without knowledge.

109. Admitted that Asnani decided to construct Buildings C &D; otherwise without

knowledge.

110.

11 1.

112.

113.

114.

115.

116.

117.

118.

119.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Without knowledge.

Without knowledge.

Denied.

120. Denied.

121. Admitted that Anaco terminated its contract with Bomar; otherwise denied.

122. Denied.

123. Denied.

124. Denied.

125. Denied.

126. Admitted that PCA issued inspection reports and that the inspection reports speak

for themselves; otherwise denied.

127. Denied.

128. Denied.

129. Denied.

130. Denied.

131. Denied.

132. Denied.

133. Admitted that the loan documents were executed; otherwise denied.

134. Denied.

135. Denied.

136. Denied.

137. Denied.

138. Denied.

139. Admitted that Asnaco obtained a separate loan; otherwise denied.

140. Denied.

141. Without knowledge.

142. Admitted that Berrell was a Senior Vice President of BB&T and visited the site;

otherwise denied.

143. Admitted.

144. Denied.

145. Denied.

146. Denied.

147. Denied.

148. Denied.

149. Denied.

150. Denied.

15 1. Admitted that the CO was obtained on May 7,2008; otherwise denied.

152. Denied.

153. Admitted that Chiumento drafted condominium documents and acted as escrow

agent; otherwise without knowledge.

154. Denied.

155. Without knowledge.

156. Denied.

157. Admitted that Asnani executed the loan documents; otherwise denied.

1 5 8. Admitted.

159. Denied.

160. Denied.

161. Denied.

162. Admitted that the loans were in default and that BB&T brought this lawsuit;

otherwise denied.

163. Admitted that BB&T sent rent demand letters to tenants pursuant to the

Assignment of Rents; otherwise denied.

164. Admitted that BB&T withdrew the rent demand letters; otherwise denied.

165. Denied.

166. Denied.

167. Denied.

COUNT I WRONGFUL FORECLOSURE

168. Colonial Bank restates it responses to paragraphs 65 through 167.

169. Denied.

170. Denied.

171. Denied.

172. Denied.

173. Denied.

174. Denied.

175. Denied.

176. Denied.

177. Denied.

178. Denied.

179. Admitted.

180. Denied.

18 1. Admitted that the rent demand letters were sent; otherwise denied.

Denied.

Denied.

Without knowledge.

Denied.

Denied.

Denied.

Denied.

Admitted.

Denied.

Denied.

Without knowledge.

Without knowledge.

Denied.

Denied.

Denied.

COUNT I1 BREACH OF CONTRACT

Colonial Bank restates its answers to paragraph 65 through 167.

Admitted.

Denied.

Denied.

Denied.

Denied.

Denied.

204. Denied.

205. Denied.

206. Denied.

COUNT I11 SLANDER OF TITLE

Colonial Bank restates its answers to paragraph 65 through 167.

Admitted.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Without knowledge.

Without knowledge.

Denied.

Denied.

Denied.

COUNT IV FRAUD IN INDUCEMENT

Colonial Bank restates its answers to paragraphs 65 through 167.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

COUNT V TORTIOUS INTERFERENCE WITH

LANDLORDITENANT BUSINESS RELATIONSHIP

Colonial Bank restates its answers to paragraphs 65 through 167.

Admitted.

Denied.

Admitted that Colonial Bank sent rent demand letters; otherwise denied.

Admitted that Colonial Bank withdrew the rent demand letters; otherwise denied.

Denied.

Denied.

Denied.

Denied.

246. Denied.

COUNT VI TORTIOUS INTERFERENCE WITH BUSINESS RELATIONSHIP

247. Colonial Bank restates its answers to paragraphs 65 through 167.

248. Without knowledge.

249. Denied.

250. Denied.

251. Denied.

252. Denied.

253. Denied.

254. Denied.

255. Denied.

256. Denied.

COUNT VII VIOLATION OF FEDERAL ANTI-TYING LAWS, 12 U.S.C. 1972

257. Colonial Bank realleges paragraphs 65 through 167.

258. Denied.

259. This paragraph contains no allegation of fact to which a response is needed.

260. Admitted.

261. Denied.

262. Denied.

263. Denied.

264. Denied.

265. Denied.

266. Denied.

267. Denied.

COUNT VIII FRAUDULENT MISREPRESENTATION

268. Colonial Bank restates its answers to paragraphs 65 through 167.

269. Denied.

270. Denied.

271. Denied.

272. Denied.

273. Denied.

274. Denied.

275. Denied.

276. Denied.

277. Denied.

278. Denied.

COUNT IX BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING

279. Colonial Bank restates its answers to paragraphs 65 through 167.

280. Denied as drafted.

281. Denied.

282. Admitted.

283. Denied.

284. Denied.

285. Without knowledge.

Without knowledge.

Denied.

Admitted.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

COUNT X PROMISSORY ESTOPPEL

Colonial Bank restates its answers to paragraphs 65 through 167.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

COUNT XI1 DECLARATORY JUDGMENT

335. Colonial Bank restates its answers to paragraphs 65 through 167.

336. Denied.

337. Denied.

338. Denied.

339. Denied.

340. Denied.

COUNT XI11 LIBEL PER SE

Colonial Bank restates its answers to paragraphs 65 through 167.

Denied.

Denied.

Denied.

Denied.

Denied.

COUNT XIV LIBEL

Colonial Bank restates its answers to paragraphs 65 through 167.

Denied.

Denied.

Denied.

Denied.

Denied.

COUNT XV UNJUST ENRICHMENT

353. Colonial Bank restates its answers to paragraphs 65 through 167.

354. Admitted that Colonial Bank loaned $7.5 million to defendants and part of the

loan proceeds were for the construction of Buildings A and B; otherwise denied.

355. Admitted that Colonial Bank loaned $7.5 million to defendants and part of the

loan proceeds were for the construction of Buildings A and B; otherwise denied.

356. Denied.

357. Denied.

358. Denied.

359. Denied.

360. Denied.

361. Admitted that the City Walk Project is more valuable with Buildings C & D;

otherwise without knowledge.

362. Denied.

363. Denied.

364. Denied.

COUNT XVI CIVIL CONSPIRACY

365. Colonial Bank restates its answers to paragraphs 65 through 167.

366. Denied.

367. Denied.

368. Denied.

369. Denied.

370. Denied.

371. Denied.

372. Denied.

373. Denied.

374. Denied.

COUNT XVII QUANTUM MERUIT

375. Colonial Bank restates its answers to paragraphs 65 through 167.

376. Denied.

377. Admitted that Colonial Bank loaned $7.5 million to the defendants; otherwise

denied.

378. Admitted that a portion of the loan proceeds was for the construction of Buildings

A and B; otherwise denied.

379. Denied.

380. Denied.

3 8 1. Admitted.

382. Denied.

383. Denied.

384. Admitted that the City Walk Project is more valuable with Buildings C & D;

otherwise without knowledge.

385. Denied.

386. Denied.

387. Denied.

388. Denied.

COUNT XVIII BREACH OF DUTY TO DISCLOSE RISK FACTORS

389. Colonial Bank restates its answers to paragraphs 65 through 167.

390. Denied.

391. Admitted that Chiurnento drafted the loan documents; otherwise denied.

392. Denied.

393. Denied.

394. Denied.

395. Denied.

COUNT XIX BREACH OF FIDUCIARY DUTY

Colonial Bank restates its answers to paragraphs 65 through 167.

Denied.

Admitted that Chiurnento drafted the loan documents; otherwise denied.

Denied.

Denied.

Denied.

Denied.

Denied.

COUNT XX NEGLIGENCE

404. Colonial Bank restates its answers to paragraphs 65 through 167.

405. Denied.

406. Admitted.

407. Denied.

408. Denied.

409. Without knowledge.

41 0. Without knowledge.

41 1. Denied.

412. Denied.

413. Denied.

COUNT XXI FRAUD IN FACTUM

Colonial Bank restates its answers to paragraphs 65 through 167

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

Denied.

AFFIRMATIVE DEFENSES

FIRST AFFIRMATIVE DEFENSE CREDIT STATUTE

To the extent that defendants' claims are based on alleged verbal promises by Colonial

Bank to extend additional loan proceeds beyond those provided in the written loan agreements,

defendants' claims are barred Section 687.0304, Fla. Stat., also known as the Florida Banking

Statute of Frauds or Credit Statute. This statute provides that "a debtor may not maintain an

action on a credit agreement unless the agreement is in writing, expresses consideration, sets

forth the relevant terms and conditions, and is signed by the creditor and the debtor." This

statute was specifically enacted to "protect lenders from liability for actions or statements a

lender might make in the context of counseling or negotiating with the borrower which the

borrower construes as an agreement, the subsequent violation of which is actionable against the

lender." See Bertkowitz v. Central National Bank, 597 So.2d 340, 341 (Fla. 2nd DCA 1992).

Further, the statute goes on to define a credit agreement as "an agreement to lend or forbear

repayment of money, goods, or things in action, to otherwise extend credit, or to make any other

financial accommodation." Id. See PuffN9Stufof Winter Park v. Bell, 683 So.2d 1176 (Fla. 5th

DCA 1996). On closely analogous facts, in Puff "n Stuffof Winter Park, the Fifth DCA held

that the Credit Statute barred claims by a developer against a bank which were based on an

alleged promise by the bank to "fully fund the project" over and above the established lending

limit. Accordingly, to the extent that the defendants' claims are based on alleged promises to

extend more loan proceeds than those provided for in the written loan documents, such claims

are invalid under the Credit Statute.

SECOND AFFIRMATIVE DEFENSE - WAIVER

Colonial Bank realleges paragraphs 2 through 4 above. Defendants knew of the alleged

claims against Colonial Bank when they executed the loan documents referenced in paragraphs 2

through 4 in which they represented, acknowledged, and agreed that they had no claims against

Colonial Bank. As a result of having executed the loan documents references in paragraphs 2

through 4 above, defendants knowingly and voluntarily waived any claims that may have had

against Colonial Bank.

SECOND AFFIRMATIVE DEFENSE - ESTOPPEL

Colonial Bank relied on defendants' representations in paragraphs 2 through 4 in entering

into the loan transactions with the defendants. But for the defendants' representations that they

had no claims against Colonial Bank, Colonial Bank would not have entered into the loan

transactions with the defendants. Therefore, as a result of signing the loan documents referenced

in paragraphs 2 through 4 in which the defendants represented to Colonial Bank that they have

no claims or counterclaims against Colonial Bank, and based on Colonial Bank's reliance on

these representations in entering into the loan transactions, defendants are estopped from raising

any claims against Colonial bank in this action

THIRD AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - "WRONGFUL FORECLOSURE"

In Count I of the Counterclaim, the defendants purport to state a cause of action for

"wrongful foreclosure." Florida law does not recognize a cause of action for "wrongful

foreclosure," and the allegations in Count I do not otherwise state any legally recognizable cause

of action. Moreover, as set forth in their prayer for relief, defendants request the Court to

"enjoin" Colonial Bank from requiring immediate payment of the matured loan and from

foreclosing a mortgage. Despite requesting the extraordinary relief of an injunction, defendants

have not pled any facts which would give rise to injunctive relief. As such, defendants have

failed to state a cause of action in Count I.

FOURTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - BREACH OF CONTRACT

In Count I1 of the Counterclaim, defendants have failed to state a cause of action for

breach of contract. Defendants contend that Colonial Bank breached its contract by failing to

lend additional money to the defendants over and above the loan limits set forth in the written

loan documents. As a matter of law, Colonial Bank's alleged refusal to lend additional money

above and beyond the amounts set forth in the written loan documents cannot be a breach of the

written loan documents. To the extent that this purported cause of action is based on a verbal

modification of the loan documents, such cause of action is barred by Section 687.0304, Fla.

Stat. This is the exact type of claim rejected by the Fifth DCA in Puff "N Stuffof Winter Park,

Inc. v. Bell, 683 So. 2d 1176 (Fla. 5"' DCA 1996). Finally, any evidence of an alleged verbal

modification of the loan documents is barred by the par01 evidence rule. For these reasons,

defendants have failed to state a cause of action for breach of contract.

FIFTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - SLANDER OF TITLE

In Count I11 of the Counterclaim, defendants have failed to state a cause of action for

slander of title. Specifically, the defendants contend that Colonial Bank slandered title to real

property by filing a Notice of Lis Pendens identifying the exact same real property covered by

the mortgage documents signed by the defendants. The elements of a slander of title claim are:

that the defendant (a) communicates to a third person (b) statements disparaging the plaintiffs

title, (c) which are not true in fact, and (d) which cause the plaintiff actual damage. See Gates v.

Utsey, 177 So. 2d 486, 488 (Fla. 4th DCA 1965). Here, defendants have not alleged any

communications by Colonial Bank which are not true in fact. Colonial Bank filed a Notice of

Lis Pendens on the subject real property in connection with its foreclosure action as provided in

Section 48.23, Fla.Stat. The legal description in the Notice of Lis Pendens is exactly the same as

the legal description in the mortgage documents signed by the defendants. Although defendants

claim that they never intended to mortgage the property identified in the mortgage documents

which they signed, such a claim cannot, as a matter of law, give rise to a slander of title action.

Otherwise, every mortgage foreclosure case could result in a counterclaim for slander of title if

the borrower disputes the relief requested. For these reasons, defendants have failed to state a

cause of action for slander of title.

SIXTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - FRAUD IN INDUCEMENT

In Count IV of the Counterclaim, defendants have failed to state a cause of action for

fraud in the inducements. Defendants base this action on alleged promise by Colonial Bank,

prior to the execution of the loan documents, to lend more than the $7.5 million committed

through the written loan documents. This purported cause of action is barred by Section

687.0304, Fla. Stat. This is the exact type of claim rejected by the Fifth DCA in Puff "N Stuffof

Winter Park, Inc. v. Bell, 683 So. 2d 1176 (Fla. 5'h DCA 1996). Moreover, any evidence of an

alleged verbal agreement to lend more money than provided for in the loan documents is barred

by the par01 evidence rule. For these reasons, defendants have failed to state a cause of action

for fraud in inducement.

SEVENTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - TORTIOUS INTERFERENCE

In Count V of the Counterclaim, defendants have failed to state a cause of action for

tortious interference with landlordhenant business relationship. The stated basis for this claim is

Colonial Bank's letters to tenants demanding payment of rents pursuant to the Assignment of

Rents. The elements for tortious interference with a business relationship include: (1) the

existence of a business relationship; (2) knowledge of the relationship on the part of the

defendant; (3) an intentional and unjustified interference with the relationship by the defendant;

and (4) damage to the plaintiff as a result of the breach of the relationship. See Ethan Allen v.

Georgetown Manor, 647 So. 2d 812. 814 (Fla. 1994). It has long been the view of Florida

courts that where one party does an act which is legal in itself, even if it was with malice, it does

not give right to a cause of action. Id. at 1095. See Palm Beach County Health Care Dist. v.

Prof1 Med. Educ., Inc., 13 So. 3d 1090,1095 (Fla. 4'h DCA 2009). Here, pursuant to the

Assignment of Rents, Colonial Bank was permitted to demand payment for the rents from the

tenants. Accordingly, defendants failed to state a cause of action for tortious interference.

EIGHTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - TORTIOUS INTERFERENCE

In Count VI of the Counterclaim, defendants have failed to state a cause of action for

tortious interference with business relationship. The stated basis for this claim is Colonial

Bank's alleged statements to contractors and subcontractors that the City Walk Project was

failure. However, defendants have failed to allege any facts demonstrating that they were

damaged by the alleged statements. Indeed, the defendants have failed to allege that any

contractors or subcontractors left the project or otherwise changed in their position in response to

the alleged statements. Accordingly, defendants have failed to state a cause of action for tortious

interference.

NINTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - ANTI-TYING LAWS

In Count VII of the Counterclaim, defendants have failed to state a cause of action for

violation of 12 U.S.C. 5 1972, and this claim is frivolous. Defendants allege that Colonial Bank

violated Section 1972 by requiring defendants to maintain the escrow account for contract

deposits at Colonial Bank. This cause of action is brought in bad faith. Pursuant to Section

1972(1)(A), Colonial Bank was expressly permitted to require defendants to enter into a deposit

relationship with the bank as a condition to extending the loans to the defendants. To state a

viable claim under Section 1972, the defendants must show that the banking practice in question

was unusual in banking industry, the existence of anti-competitive tying arrangement, and that

the practices in question benefited the bank. See Bieber v. State Bank of Terry, 928 F2.d 238 (9'h

Cr. 1991). Requiring a deposit relationship as a part of a loan transaction is expressly permitted

by the statute and is not an unusual practice. Moreover, as set forth in the Counterclaim, the

defendants pledged the deposits to Colonial Bank to secure payment of the loan. The only way

for Colonial Bank to perfect its security interest in the deposits was to maintain control over the

deposit account. See Section 679.3121, Fla.Stat. For these reasons, this purported cause of

action is frivolous and does not state a cause of action.

TENTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - FRAUDULENT MISREPRESENTATION

In Count VIII of the Counterclaim, the defendants failed to state a cause of action for

fraudulent misrepresentation. As the basis for this claim, the defendants alleged that, prior to the

execution of the loan documents, Colonial Bank falsely represented that it would lend more

money than provided for in the loan documents. Again, this claim is barred under the Credit

Statute, Section 687.0304, Fla. Stat. The Credit Statute bars all actions based on a verbal

promise to extend credit. This is the exact type of claim rejected by the Fifth DCA in Puff "N

Stuff of Winter Park, Inc. v. Bell, 683 So. 2d 1 176 (Fla. 5th DCA 1996). Therefore, the alleged

verbal statement that Colonial Bank would lend more money than set forth in the written loan

documents is barred by the Credit Statute. Moreover, evidence of the alleged verbal

representation is barred by the par01 evidence rule. See Federal Deposit Ins. Corp. v. Hemmerle,

592 So. 2d 11 10, 11 13-14 (Fla. 4th DCA 1991), rev. denied, 601 So. 2d 552 (Fla. 1992);

Ungerleider v. Gordon, 2 14 F.3d 1279, 1283 (1 1 th Cir. 2000); "); McComb v. Hygeia Coca-Cola

Bottling Works, 188 So. 219 (Fla. 1939) Linear Corp. v. Std. Hardware Co., 423 So. 2d 966,968

(Fla. 1st DCA 1982). For these reasons, defendants have not stated a cause of action for

fraudulent misrepresentation.

ELEVENTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION

- BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING

In Count IX of the Counterclaim, defendants have failed to state a cause of action for the

breach of covenant of good faith and fair dealing. Florida contract law recognizes that there is

an implied covenant of good faith and fair dealing in every contract. See Insurance Concepts and

Design, Inc. v. Healthplan Services, Inc., 785 So.2d 1232, 1234 (Fla. 4th DCA 199 1). However,

this duty of good faith does not attach until the plaintiff can establish that the defendant has

breached a term of the contract that defendant was obligated to perform. Id. at 1235. See also

Hospital Corporation of America v. Florida Medical Center, Inc., 710 So.2d 573 (Fla. 4th DCA

1998). Here, the defendants have not alleged any breach of the loan documents by Colonial

Bank. Colonial Bank loaned the money to the defendants as set forth in the terms of the of the

loan documents. As such, the defendants are unable to legally establish any breach of good faith

and fair dealing, and the defendants have failed to state a cause of action.

TWELFTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - PROMISSORY ESTOPPEL

In Count X of the Counterclaim, the defendants have failed to state a cause of action for

promissory estoppel. Again, this claim is based on the alleged statement from Colonial Bank

prior to executing the loan documents that Colonial Bank would lend more money than set forth

in the written loan documents. As set forth above, this claim is barred by the Credit Statute.

This is the exact type of claim rejected by the Fifth DCA in Puff "N Stuffof Winter Park, Inc. v.

Bell, 683 So. 2d 1 176 (Fla. 5'h DCA 1996). Moreover, this claim is barred due the existence of

an express contract between the parties. See Williams v. Bear Stearns & Co., 725 So. 2d 397,

400 (Fla. 5'h DCA 1998). For these reasons, the defendants have failed to state a cause of

action.

THIRTEENTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - DECLARATORY JUDGMENT

In Count XI1 of the Counterclaim, the defendants have failed to state a cause of action for

declaratory relief. Although the unambiguous language of the mortgage documents extends

Colonial Bank's lien to the entire City Walk Project, including Buildings C & D, defendants

request a declaratory judgment that the mortgage should not be applied as written. This action is

frivolous. Florida law is clear that that courts are powerless to rewrite contracts and that "a

declaratory judgment is not available to settle factual issues bearing on liability under a contract

which is clear and unambiguous and which presents no need for construction." Medical Center

Health Plan v. Brick, 572 So. 2d 548 (Fla. 1'' DCA 1990); See also Abruzzo v. Haller, 603 So. 2d

1338 (Fla. 1'' DCA 1992); Florida Ass 'n of Counties Trust v. Polk County, 722 So. 2d 883 (Fla.

2d DCA 1998). Accordingly, this claim is frivolous, and defendants have failed to state a cause

of action.

FOURTEENTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - LIBEL PER SE

In Count XI11 of the Counterclaim, the defendants have failed to state a cause of action

for libel per se. The defendants allege that Colonial Bank committed libel per se when it sent

letters to tenants demanding payment of the rents. Colonial Bank was entitled to send the rent

demand letters because the loan had matured, the defendants had not paid the full loan balance,

and pursuant to the Assignment of Rents, Colonial Bank was entitled to collect the rents from the

tenants. The defendants have not alleged any false statement made by Colonial Bank.

Accordingly, the defendants have failed to state a cause of action for libel per se.

FIFTEENTH AFFIRMATIVE DEFENSE -PRIVILEGE

With respect to Count XIII, Colonial Bank was privileged in sending the rent demand

letters to the tenants. Colonial Bank was entitled to send the rent demand letters because the loan

had matured, the defendants had not paid the full loan balance, and pursuant to the Assignment

of Rents, Colonial Bank was entitled to collect the rents from the tenants. Accordingly,

defendants' cause of action is barred by the defense of privilege.

SIXTEENTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - LIBEL

In Count XIV of the Counterclaim, the defendants have failed to state a cause of action

for libel. The defendants allege that Colonial Bank committed libel when it sent letters to tenants

demanding payment of the rents. Colonial Bank was entitled to send the rent demand letters

because the loan had matured, the defendants had not paid the full loan balance, and pursuant to

the Assignment of Rents, Colonial Bank was entitled to collect the rents from the tenants. The

defendants have not alleged any false statement made by Colonial Bank. Accordingly, the

defendants have failed to state a cause of action for libel.

SEVENTEENTH AFFIRMATIVE DEFENSE -PRIVILEGE

With respect to Count XIV, Colonial Bank was privileged in sending the rent demand

letters to the tenants. Colonial Bank was entitled to send the rent demand letters because the loan

had matured, the defendants had not paid the full loan balance, and pursuant to the Assignment

of Rents, Colonial Bank was entitled to collect the rents from the tenants. Accordingly,

defendants' cause of action is barred by the defense of privilege.

EIGHTEENTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - UNJUST ENRICHMENT

In Count XV of the Counterclaim, the defendants have failed to state a cause of action for

unjust enrichment because express loan contracts exist between the parties. Upon a showing of

an express contract, a claim for unjust enrichment fails. See Williams v. Bear Stearns & Co., 725

So. 2d 397,400 (Fla. 5th DCA 1998). See also Moynet v. Courtois, 8 So. 3d 377, 379 (Fla. 3'd

DCA 2009). Both Colonial Bank and the defendants have attached written, executed loan

documents to the Complaint and Counterclaim. Due to these written agreements, defendants

cannot maintain a cause of action for unjust enrichment. Moreover, Colonial Bank has not been

unjustly enriched because the value of the City Walk Project is significantly less than the amount

of money that Colonial Bank loaned to the defendants. Accordingly, defendants have failed to

state a cause of action for unjust enrichment.

NINETEENTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - CIVIL CONSPIRACY

In Count XVI of the Counterclaim, the defendants have failed to state a cause of action

for civil conspiracy. The defendants allege that Colonial Bank "conspired" with its attorney,

Michael Chiumento I11 ("Chiumento"), to mislead the defendants into executing the mortgage

which encumbers the entire City Walk Project. This claim is frivolous. The elements of a civil

conspiracy cause of action are: (a) a conspiracy between two or more parties, (b) to do an

u n l a h l act or to do a lawf%l act by unlawful means, (c) the doing of some overt act in

pursuance of the conspiracy, and (d) damage to plaintiff as a result of the acts performed

pursuant to the conspiracy. See Walters v. Blankenship, 931 So. 2d 137, 140 (Fla. 5th DCA

2006). An actionable conspiracy requires an actionable underlying tort or wrong. Id. See also

Liappas v. Augoustis, 47 So. 2d 582 (Fla. 1950). It is generally held that an act which

constitutes no ground of action against one person cannot be made the basis of a civil action for

conspiracy. Id. As set forth in the previous affirmative defense, the defendants have failed to

state any causes of action against Colonial Bank, and, therefore, the defendants cannot state a

cause of action against Colonial Bank for civil conspiracy.

Moreover, to state a cause of action against Colonial Bank and Chiumento for civil

conspiracy, defendants must allege facts demonstrating that Chiumento committed the alleged

wrongful acts in his individual capacity and that he had a personal stake in the alleged wrongful

acts separate and distinct from the interets of Colonial Bank. See American Credit Card

Telephone Co. v. National Pay Telephone Corp., 504 So. 2d 486 (Fla. 1'' DCA 1987); Bongard

v. Winter, 516 So. 2d 27 (Fla. 3d DCA 1987). Here, the defendants failed to allege any facts

demonstrating that Chiumento had a personal stake in any alleged wrong doing. Accordingly,

the defendants have failed to state a cause of action for civil conspiracy.

TWENTIETH AFFIRMATIVE DEFENSE FAILURE TO JOIN INDISPENSABLE PARTY - CIVIL CONSPIRACY

The defendants' purported civil conspiracy claim must be dismissed because the

defendants have failed to join Chiumento as a party defendant. Chiumento, as the alleged co-

conspirator, is an indispensible party to the purported cause of action.

TWENTY-FIRST AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - QUANTUM MERUIT

In Count XVII of the Counterclaim, the defendants have failed to state a cause of action

for quantum meruit. Quantum meruit is an action at law based upon a theory of implied contract.

See Boyce Constr. Corp. v. Dist. Bd. of Trs., 414 So. 2d 634, 636 (Fla. 51h DCA 1982). When

the rights of the parties are described in a written contract, the legal fiction of quantum meruit

cannot be maintained. See May v. Sessurns & Mason, P.A., 700 So. 2d 22, 28 (Fla. 2d DCA

1997); Corn v. Greco, 694 So. 2d 833, 834 (Fla. 2d DCA 1997). Both Colonial Bank and the

defendants have attached written, executed loan documents to the Complaint and Counterclaim.

Due to these written agreements, defendants cannot maintain a cause of action for quantum

meruit.

TWENTY-SECOND AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION -

BREACH OF DUTY TO DISCLOSE RISK FACTORS

In Count XVIII of the Counterclaim, the defendants have failed to state a cause of action

for breach of duty to disclose risk factors. The defendants contend that Colonial Bank had a duty

to disclose risk factors associated with a commercial loan to an experienced developer.

However, there is no recognized duty under either Florida or federal law for a bank to advise a

commercial borrower of the risks inherent in a loan. Accordingly, this cause of action is

frivolous, and the defendants have failed to state a cause of action.

TWENTY-THIRD AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - BREACH OF FIDUCIARY DUTY

In Count XIX of the Counterclaim, the defendants have failed to state a cause of action

for breach of fiduciary duty. The defendants allege that because Colonial Bank's attorney

[Chiumento] had previously represented the defendants, the defendants reposed their trust in

Chiumento which somehow resulted in Colonial Bank owing a fiduciary duty to the defendants.

Florida law is clear that a bank does not owe a fiduciary duty to a borrower unless the bank goes

above and beyond the lendedborrower relationship. See Barnett Bank of West Florida v.

Hooper, 498 So. 2d 923, 926 (Fla. 1996). The allegation that the defendants reposed their trust

in Chiumento, despite signing acknowledgements that Chiumento was representing the bank

only and not the defendants, does not give rise to a fiduciary duty between Colonial Bank and the

defendants. To the extent that the defendants believe that Chiumento misled them or owed a

duty based on past relationships, then the defendants should pursue an action against Chiurnento.

The defendants have not stated a cause of action against Colonial Bank for breach of fiduciary

duty.

TWENTY-FOURTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION - NEGLIGENCE

In Count XX of the Counterclaim, the defendants failed to state a cause of action for

negligence. The defendants claim that Colonial Bank was negligent in recommending the

general contractor that the defendants used to construct Buildings C and D. The defendants'

claim is barred by the economic loss rule due to the privity of contract between the parties. See

Indem. Ins. Co. v. Am. Aviation, Inc., 891 So. 2d 532,536 (Fla. 2004).

TWENTY-FIFTH AFFIRMATIVE DEFENSE FAILURE TO STATE A CAUSE OF ACTION -FRAUD IN FACTUM

In Count XXI of the Counterclaim, the defendants failed to state a cause of action for

fraud in factum. The fraud is the alleged verbal statement to increase the loan amount in the

future and the alleged verbal statement that the mortgage did not encumber the entire property

despite the plain language of the mortgage documents. As set forth above, these allegations do

not support a cause of action for fraud. With respect to the alleged verbal statement to increase

the loan amount, this claim is barred by Section 687.0304, Fla. Stat. This is the exact type of

claim rejected by the Fifth DCA in Puff "N Stuff of Winter Park, Inc. v. Bell, 683 So. 2d 11 76

(Fla. 5th DCA 1996). With respect to the alleged verbal statement regarding the scope of the

mortgage, any evidence attempting to modify the plain language of the mortgage is barred by the

par01 evidence rule. Moreover, the defendants had no right to rely upon alleged statements from

Colonial Bank or from its attorney regarding the scope of the mortgage. As part of this

commercial transaction, the defendants should have retained their own attorney to advise them of

the scope of the mortgage. Moreover, before commencing construction of Building C & D, the

defendants reasonably should have inquired with an attorney representing the defendants or with

a title company regarding whether the mortgage encumbered this property. In this commercial

transaction with sophisticated parties, the defendants had no right to rely upon Colonial Bank's

statement regarding the scope of the mortgage. Accordingly, the defendants have failed to state

a cause of action for fraud in factum.

/ Adam P. Hartley Florida Bar No. 00522 1 1 The Rosenthal Law Firm, P.A. 4798 New Broad Street, Suite 3 10 Orlando, Florida 328 14 Telephone: (407) 488-1 220 Facsimile: (407) 488-1228 Attorneys for Colonial Bank

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing has been hrnished

by U.S. Mail and facsimile this 25th day of March, 2010,, to D.S. Dar Airan, Esq., Airan2, Airan-

Pace, Crosa & Fernandez, P.A., Suite 310, Plaza San Rerno, 6705 S.W. 57'h Avenue, Coral

'* CASE NO: 09-CA-000783 Page 14 of 71

COUNTERCLAIM

COMES NOW, the DefendantsICounter-Plaintiffs, ASNANI and ASNACO (collectively

hereinafter "Counter-Plaintiffs"), by and through their undersigned counsel, and file their

Counterclaim against PlaintifflCounter-Defendant, BRANCH BANKING AND TRUST

COMPANY (hereinafter "Counter-Defendant") and state the following in support thereof:

65. This is an action for wrongful foreclosure, breach of contract, slander of title,

fraud in the inducement, two counts of tortious interference with beneficial business

relationships, violation of federal anti-tying statutes, fraudulent misrepresentation, breach of

covenant of good faith and fair dealing, promissory estoppel, violations of the Florida deceptive

and unfair practices act, declaratory judgment, libel per se, libel, unjust enrichment, civil

conspiracy, quantum meruit, breach of duty to disclose risk factors, breach of fiduciary duty,

negligence, fraud in factum, and damages which, exclusive of interest, attorney's fees, and costs,

exceeds $15,000.00.

66. Upon information and belief, Counter-Plaintiffs' damages in the instant action are

in excess of Thirty Millions Dollars ($30,000,000.00).

67. Venue is proper in Flagler County, Florida as the real property in question is

located in Flagler County, Florida and per contract.

68. Upon information and belief, Counter-Defendant, BRANCH BANKING AND

TRUST COMPANY is a North Carolina Corporation, as alleged successor in interest to Colonial

Bank, N.A. and Colonial ~ a n k ' (hereinafter "Colonial Bank, N.A.", "Colonial Bank", and

' To date, Branch Banking and Trust Company has not properly alleged that it is a real party in interest or, filed an effective Assignment or Allonge to the Secured Promissory Note it is attempting to foreclose upon in the above referenced lawsuit. For convenience purposes only and without waiving Defendantsfcounter-Petitioners' defenses concerning the lack of proper assignment or standing, Defendantsf Counter-Defendant will accept PlaintifffCounter- Defendant's standing as successor in interest to Colonial Bank, N.A. and Colonial Bank for the purposes of this Counterclaim only.

B CASE NO: 09-CA-000783 Page 15 of 71

"Branch Banking and Trust Company" will collectively be referred to as the "BB&T").

69. Counter-Plaintiff, ASNANI is an individual with his primary place of residence in

Seminole County, Florida and is otherwise sui juris.

70. Counter-Plaintiff, ASNACO is a Florida Limited Liability Company with its

primary place of business located in Flagler County, Florida.

71. All conditions precedent to the institution of the present action have occurred,

been waived, performed and/or excused.

72. Counter-Plaintiffs have retained the undersigned counsel and are obligated to pay

the undersigned a reasonable attorney's fee in connection therewith. Counter-Defendants are

liable for Counter-Plaintiffs' attorneys' fees and costs pursuant to contract andlor applicable

Florida Statutes.

FACTUAL ALLEGATIONS APPLICABLE TO ALL COUNTS

A. The 2004 Loan

73. In the year 2004, Asnaco purchased a 13 acre parcel land in Flagler County,

Florida (hereinafter the "Property") with the intention of developing the Property into

approximately 160,000 square feet of commercial condominium space (hereinafter the "City

Walk Project").

74. Asnani, the managing partner of Asnaco, approached his long time real estate

attorney Michael Chiumento I11 (hereinafter "Chiumento) concerning which bank, Asnani and

Asnaco should consider with regard to the financing the City Walk Project.

75. Chiumento suggested BB&T. Unbeknownst to Asnani at the time, Chiumento

was a member of BB&T's 'Adivissory Committee' in Flagler County, Florida.

76. Asnani applied for financing of the four planned buildings in the City

'.I CASE NO: 09-CA-000783 Page 16 of 71

Walk Project (hereinafter "Buildings A, B, C, and D" respectively). The City Walk Project was

divided into two phases. Phase I consisted of the construction of Buildings A and B, or

approximately 70,000 square feet of commercial office and retail space. Phase I1 of the City

Walk Project planned for the construction of Buildings C and D which would total

approximately 90,000 square feet of commercial office and retail space.

77. BB&T agreed to provide financing only for Phase I of the City Walk Project

which consisted of the construction of Building A and B.

78. BB&T informed Asnani, that they were unwilling to commit to the financing of

Buildings C and D, collectively approximately 90,000 square feet, due to the fact that with a

project this large, they were unwilling to commit to the financing of Buildings C and D until

Buildings A and B proved a success.

79. In Asnani's discussions with various bank representatives and with Michael

Chiumento and as evidenced by the various proposed construction costs, land purchase cost,

prospective impact fees, and the soft costs and interest reserves of the City Walk Project, BB&T

was on notice and well aware that the complete cost of the construction of Buildings A and B,

would require financing from BB&T in the amount of $10,500,000.00.

80. On October 12,2004, BB&T sent Asnani and Asnaco a written offer for a

commercial real estate loan in the amount of $7,500,000.00 (hereinafter the "2004 Loan") for the

Construction of Buildings A and B. (BB&T's written loan offer hereinafter referred to as the

"2004 Loan Commitment Letter"). A true and correct copy of the 2004 Commitment Letter is

attached hereto as Exhibit "A".

81. When Asnani addressed the apparent shortfall of $3,000,000.00 in financing of

the construction of Buildings A and B with Senior Vice President of BB&T, Lloyd Collins

;* CASE NO: 09-CA-000783 Page 17 of 71

(hereinafter "Collins"), Collins told him that when those additional funds were necessary, the

financing would be "no problem" and that BB&T intended to at least finance all of Phase I of the

City Walk Project (Buildings A and B).

82. Chiumento has been Asnani's attorney since 1999. On prior occasions

Chiumento has also represented BB&T.

83. Despite this clear conflict of interest, Chiumento offered to represent BB&T in

the preparation of the pertinent loan documents and offered to act as the closing attorney on the

2004 Loan.

84. BB&T accepted Chiumento's representation to act as its agent and closing

attorney as evidence by the "Lender's Counsel" provision on page 5 of the 2004 Loan

Commitment Letter.

85. On or about November 5,2004, Asnani on behalf of himself and Asnaco,

executed the 2004 Loan. Collins executed the 2004 Loan on behalf of BB&T. In connection

with the 2004 Loan, the following documents were executed: (1) Construction Loan Agreement

(hereinafter the "2004 Loan Agreement"), (2) Mortgage, Assignment of Rents, and Profits and

Security Agreement (hereinafter the "2004 Mortgage"), and a Secured Promissory Note

(hereinafter the "2004 Note")(collectively hereinafter the "2004 Loan Documents"). A true and

correct copy of the 2004 Loan Agreement is attached hereto as Exhibit "B". True and correct

copies of the 2004 Mortgage, and the 2004 Note are attached to Counter-Defendant's Complaint

as Exhibit "C" and are incorporated by reference as through fully set forth herein.

86. As further evidence of Chiumento's dual representation of both BB&T and

Asnani and Asnaco, Chiumento drafted the legal notice provision of the 2004 Mortgage to

include legal notice upon Chiumento on behalf of both BB&T and Asnani and Asnaco.

w CASE NO: 09-CA-000783 Page 18 o f 71

87. When Asnani appeared at Chiumento's office for the closing on the 2004 Loan,

he was presented with the above stack of 2004 Loan Documents and was asked to execute the

same by Chiumento on behalf of BB&T. Asnani very briefly reviewed the stack of documents

and then stated to Chiurnento, "I am not reading any these documents, I am trusting that you

have my interests covered." Chiumento responded to Asnani's aforesaid statement of reliance by

stating that "well, as long as you are paying, you have nothing to worry about."

88. Asnani trusted Chiumento as his long time attorney to represent his interests in

the 2004 Loan and Chiumento, acting as a representative of BB&T was aware that Asnani was

relying on him to represent his interests and fully inform him concerning the provisions of the

2004 Loan Documents.

89. Instead, Chiurnento drafted the 2004 Loan Documents strongly favoring BB&T

and without consideration for Asnani and Asnaco's in te re~ t .~ In fact, even a cursory review of

the 2004 Loan Documents clearly shows that the 2004 Loan Documents assert no absolute

affirmative obligation of any kind on the part of BB&T. Whereas all obligations on the part of

Counter-Plaintiffs are drafted using the qualifier "shall," all "obligations" on the part of BB&T

are qualified by the term "may" and "within the sole discretion of the lender."

90. It is clear that under the 2004 Loan Documents, while all of Counter-Plaintiff s

obligations are absolute and mandatory, all affirmative obligations on the part of BB&T are

discretionary and optional.

91. Of primary concern to Asnani and Asnaco was that, being as BB&T was only

financing the construction of Buildings A and B, that none of the documents or agreements

Amazingly, despite this blatant conflict of interest in Chiumento's representation of BB&T, Asnani, and Asnaco and all of the events subsequent to the execution of 2004 Loan Documents, Chiumento's representation of Asnaco and Asnani extended all the way to the initiation of this lawsuit. Chiumento was served with this lawsuit pursuant to the notice provisions in the various loan documents as a representative of both Asnani and Asnaco.

w CASE NO: 09-CA-000783 Page 19 of 71

between the parties would encumber any construction of Buildings C and D which Asnani

planned to construct with his own, independent financing andlor funds.

92. At no point during the negotiations of the 2004 Loan or any of the documents

thereunder did either party suggest that if, and when, Buildings C and D were built that Buildings

C and D would be included as collateral for the 2004 Loan.

93. The 2004 Commitment Letter specifically states that the purpose of the loan is

solely the construction of Phase I of the City Walk Project.

94. At the time of the execution of the various loan documents which constitute the

2004 Loan, construction had not begun on Buildings C and D as Asnaco and Asnani had yet to

secure financing for Phase I1 of the City Walk Project. The agreement of BB&T to finance Phase

I of the City Walk project was not contingent upon Asnani providing any further collateral in

way of future improvements to construct Buildings C & D.

95. Further, at no time did any party to the 2004 Loan discuss any requirement on the

part of Asnani or Asnaco to fund any shortfalls or fund any tenant build outs in the City Walk

Project.

96. Without knowledge that any future construction of Buildings C and D may be

encumbered by the 2004 Loan Documents, Asnani and Asnaco continued to gather the resources

necessary to independently finance the construction of Buildings C and D, Phase I1 of the City

Walk Project.

97. At no time relevant hereto, or prior to the construction of Buildings C and D did

Chiumento or, any other BB&T representative inform Asnani or Asnaco that any future

construction of Buildings C and D may be encumbered by the 2004 Loan.

98. Further, Chiumento included in the 2004 Loan Agreement, a provision requiring

- CASE NO: 09-CA-000783 Page 20 of 71

Asnaco to set up and escrow account for all non-refundable deposits made on condominium units

under pre-construction contract.

99. This escrow account was set up to be an interest free account maintained by

BB&T, for which they even charged a fee. This account eventually held over 2.5 million dollars

of interest free cash for over two years.

100. Chiumento further established, Counter-Plaintiff's interest in this account as a

security on the 2004 Loan thereby precluding Asnaco from making agreements with potential

condominium purchasers for the disbursements of certain percentages of their escrow deposits

upon completion of a certain percentage of the City Walk Project (a common practice among

commercial developers).

B. Financing of Buildings C and D and Construction of Buildings A, B, C, and D.

101. Among the conditions of the 2004 Loan Agreement, Article 11 1, subsection (b)

states in pertinent part that:

"(b) Disbursement Schedule. Except for the amount required to pay of existing mortgages on the Property, future disbursements shall be strictly contingent upon the Borrower submitting to Lender:

. . .2) Receipt of acceptable contract with the builder; ..."

(Emphasis added.)

102. In connection with Article 11 1, subsection (b) of the 2004 Loan Agreement,

BB&T insisted upon Counter-Plaintiff using their local favored builder Bomar Construction

(hereinafter "Bomar").

103. Asnani objected to the use of Bomar as the contractor in the construction of

Buildings A and B because Asnani was unfamiliar with Bomar but had heard that Bomar was a

"slow" contractor.

\B CASE NO: 09-CA-000783 Page 21 of 71

104. In commercial development, the timely and speedy construction of a proposed

contract is often the key to whether the development is a success or failure. For that reason,

Asnani did not want to select a contractor with whom he had not worked and with whom he was

not familiar.

105. Asnani was especially concerned due to the fact that Article 11, Subsection (b) of

the 2004 Loan Agreement contained a "Commencement and Continuity of Work" clause which

required that all proposed improvements to the Property (namely the construction of Buildings A

and B) be completed within eighteen months of the execution of the 2004 Loan Agreement.

106. Upon Information and Belief, BB&T was independently aware that Bomar was a

slow contractor and still insisted upon Bomar as the contractor for the construction of Buildings

A and B.

107. Finally, in consideration of Article 11 l(b) and related provisions of the 2004 Loan

Documents, Asnani relented to BB&T's demand to hire Bomar to construct Buildings A & B.

108. Construction of Buildings A and B began in April of 2005.

109. Soon thereafter, Asnani decided to construct Buildings C & D with his own funds

and other independent financing. Asnani enthusiastically informed Chiumento and BB&T of his

intention to personally finance the construction of Phase I1 of the City Walk Project, consisting

of Buildings C and D.

110. Despite having full knowledge that under the 2004 Loan Documents, the

construction of Buildings C and D may be encumbered, even if Asnani did not use any of

BB&T's funds to complete construction of Buildings C and D, neither Chiumento nor, any other

BB&T agent informed Asnani that he may be pouring his life savings into BB&T's pockets.

11 1. Moreover, Asnani addressed the issue directly with Collins and Chiumento. When

.*r CASE NO: 09-CA-000783 Page 22 of 71

Asnani asked Collins what BB&T's position was concerning the construction of Phase I1 of the

City Walk Project, Collins told Asnani that BB&T had nothing to do with Buildings C & D.

112. When Asnani asked Chiumento the same question, Chiumento for the first time,

informed Asnani that under the 2004 Loan Documents Buildings C and D were probably

encumbered because the property description was never divided into two phases the way the City

Walk Project was. However, Chiumento assured Asnani that while according to the 2004 Loan

Documents (which Chiumento drafted) Buildings C and D may be encumbered, as soon as

Asnani filed his Declaration of Condominium on Buildings C and D, that he would ensure that

BB&T would release Buildings C & D from the 2004 Loan.

113. In reliance upon Chiumento and BB&T9s aforesaid representations and

commitments that Buildings C and D would not be encumbered by the 2004 Loan, Counter-

Plaintiff s began construction of Buildings C and D in February of 2006, approximately nine (9)

months after the construction of BuiIdings A and B was commenced.

114. Despite this fact, and the fact that Buildings C and D (at 90,000 square feet) were

substantially larger than Buildings A and B (at 70,000 square feet) the construction of Buildings

C and D progressed much faster than the construction of Buildings A and B.

115. The extremely slow construction of Buildings A and B were directly attributable

to BB&T's wrongful actions in insisting upon their preferred contractor (Bomar) and other

cronyism.

116. As an example, BB&T, pursuant to Article 1 1 l(b) insisted upon C.P. Concrete as

a sub-contractor to pour the concrete on the second floor walkways to Buildings A and B. The

owner of C.P. Concrete is the spouse of a senior BB&T employee.

117. C.P. Concrete failed to construct the walkways as designed. Specifically, C.P.

w CASE NO: 09-CA-000783 Page 23 of 71

Concrete simply neglected to construct the walkways with the two inch slope designated in the

construction plans. The result was water leaking from the second floor into the commercial

condominium units below and, significant amounts of mold accumulating in those units.

118. The leakage and mold problems caused damage in excess of $300,000.00 which

Asnani and Asnaco were required to pay.

119. Thereafter, despite Asnani's requests to the contrary, BB&T released the full

retainer to C.P. Concrete thereby removing from Asnani and Asnaco their most convenient and

effective legal remedy against C.P. Concrete for their negligence and failure to construct the

second floor walkways in compliance with the construction plans.

120. The construction of Buildings A and B was so slow, in fact, that despite the fact

that construction on Building C was commenced nine (9) months after Building A, Building C

which was fully funded by Asnani and constructed by a contractor of Asnani choosing, was

completed a full two months before construction on Building A was completed. What is more

remarkable about this fact is that Building C is 50% bigger in square footage than Building A.

121. Finally, in April of 2007, due to the extremely slow progress of the construction

of Buildings A and B, BB&T authorized Asnani to terminate the contract with Bomar which,

Asnani was forced to enter into pursuant to Article 11 1 paragraph B of the 2004 Loan

Agreement.

C. The 2007 Loan

122. As stated above, BB&T was well aware that the construction of Buildings A and

B would require $10,500,000.00 in financing from BB&T.

123. However, in mid-2006 when the City Walk Project became stressed for additional

financing, BB&T balked at providing the additional financing required to complete the City

- CASE NO: 09-CA-000783 Page 24 of 71

Walk Project.

124. BB&T's delay in providing the planned additional financing slowed the

Construction of Buildings A and B and effectively strangulated Asnani and Asnaco's finances as

the Counter-Plaintiffs desperately scrambled to keep the City Walk Project from going under.

125. BB&T's intentional distressing of Asnani and Asnaco was evidenced by several

comments from the representatives and agents of BB&T.

126. On September 22,2006, Property Condition Assessment, Inc. (hereinafter

"PCA), a company which works with BB&T, in collaboration with Bomar filed a report with

BB&T declaring the City Walk Project a "failed project" (hereinafter the "PCA Report"). PCA's

report stated specifically that:

"There appear to be a myriad of issues regarding work progress, owner hiring of subs, etc involved in this project. At the present time this project has all the indicators of a failed project that may or may not be completed.. ."

127. Upon receipt of the PCA Report, Asnani called BB&T to speak with Collins.

However, Asnani was directed to another of BB&T7s representatives, a Ms. Kimberly Clifford

(hereinafter "Clifford"). Clifford greeted Asnani by asking him "Are you ready to give up yet?".

128. To further distress Asnani, BB&T then wrongfully and without cause, froze all of

Asnani's personal and business deposit and savings accounts, totaling over one million dollars.

129. Finally, in December of 2006, with Asnani and Asnaco struggling to keep the

City Walk Project afloat, BB&T finally offered the additional $3,000,000.00 in funding it knew

in 2004 were required to complete Buildings A and B (hereinafter the "2007 Loan").

130. Asnani, again seeking advice from Chiumento, again told Chiumento that while

he understood he was not in a strong position with the Bank, he did not want to give BB&T a

security interest in Buildings C and D which Asnani constructed with his own money.

9m' CASE NO: 09-CA-000783 Page 25 of 71

13 1. Chiumento again assured Asnani that he would obtain the releases of Bulding C

& D when they were completed and the Declaration of Condominium was filed.

132. Asnani reminded Chiumento that he never signed any documents which

encumbered Buildings C and D and that he never would have spent $8,000,000.00 of his own

money developing a property which was previously encumbered by BB&T without some

additional consideration.

133. Again, Asnani trusted and relied on Chiumento to review the 2007 loan

documents on his behalf. In reliance thereon, on or about January 3,2007, Asnani on behalf of

himself and Asnaco, executed the 2007 Loan. Collins executed the 2007 Loan on behalf of

BB&T. In connection with the 2007 Loan, the following documents were executed:

(1) Amended and Restated Construction Loan Agreement (hereinafter the "2007 Loan

Agreement"), (2) Notice of Future Advance, and Mortgage and Note Modification Agreement

(hereinafter the "2007 Mortgage"), (3) Additional Advance Secured Promissory Note

(hereinafter the "2007 Note"), (4) Amended and Consolidated Secured Promissory Note

(hereinafter the "2007 Loan Consolidation") (collectively hereinafter the "2007 Loan

Documents"). A true and correct copies of the 2007 Loan Documents are attached hereto as

Composite Exhibit "C".

134. Again, Asnani trusted and relied on Chiumento to review the 2007 Loan

Documents on his behalf, and in reliance thereon, Asnani executed the 2007 Loan Documents.

135. The provisions of the 2007 Loan Documents clearly favor BB&T, notably, the

2007 Future Advance increases the base interest rate of $10,500,000.00 total loan to an

adjustable 8.75% interest rate.

136. However, none of the 2007 Loan Documents presented to Asnani mention

- CASE NO: 09-CA-000783 Page 26 of 71

Buildings C and D or a security interest therein.

137. In November of 2007 Asnani wrote to Collins, informing him that the $10.5

million funded by BB&T was short funded by $1,149,353.00 and provided a full accounting for

the shortfall. Asnani explained that there were multiple reasons for the short funding, mainly

additional interest costs (over $500,000.00) due to the delays in the City Walk Project, change

orders introduced by Bomar and correcting construction errors made by Bomar.

138. BB&T refused to fund the additional costs to the City Walk Project even though

said additional costs were directly related to BB&T and Bomar's wrongful actions.

139. Asnani was then forced to put up 24 units in Buildings C & D as collateral for a

separate private loan in the amount of $3 million dollars to in part, fund the shortfall in the

financing of Buildings A & B.

140. Thereafter, BB&T continued a course of wrongful conduct which severely

damaged the City Walk Project, Asnaco, and Asnani.

141. Chiumento began advising potential buyers and lessors, (including the City of

Palm Coast) who were considering renting or purchasing space in the City Walk Project that the

project was unsound.

142. On one occasion, in about March of 2008, Thomas Berrell, Senior Vice President

at BB&T (hereinafter "Berrell") sent a representative of BB&T to the unfinished construction

site of the City Walk Project. At that time, the bank representative tracked down the projects

foreman, Eli Faignant and informed him that he was an attorney for BB&T and that BB&T

would be taking the project over and that "we want all of you to get out". This incident caused

significant confusion on the work site and caused unnecessary delays to the City Walk Project.

143. On April 9,2008 Asnani wrote to Collins informing him that the City Walk

v CASE NO: 09-CA-000783 Page 27 of 71

project was 100% complete with exception of punch list items and that he was few weeks away

from getting a certificate of occupancy for Building C.

144. Thereafter, on April 16,2008 Asnani visited BB&T, upon BB&T's request and

was met by Berrell and another corporate BB&T representative, Tara Bromisrky. Just as the

City Walk Project had nearly recovered from the extremely slow construction progress made by

Bomar, Berrell informed Asnani that the Asnaco Loan was classified at a distressed level, seven

(7) one (1) step away from foreclosure, which is classified as level eight (8) and that the loan was

now place in special assets.

145. Asnani asked Berrell why the Loan was classified as a level seven (7). Berrell

informed Asnani that the sole reason for the downgrade was because the project had been

delayed by slow construction.

146. Berrell further informed Asnani at that time that BB&T was invoking its default

remedies and would hereafter refuse to make any further disbursements on the 2007 Loan.

147. Berrell informed Asnani that he had to complete the project immediately and or,

the bank would institute foreclosure proceedings.

148. Thereafter, even though Counter-Plaintiffs were not in default of the 2007 Loan

or any other loan document, BB&T invoked the default remedies outlined in the loan documents.

149. Asnani was floored by this lack of good faith on the part of BB&T. Asnani

reminded Berrell, that the project had been delayed by the slow construction of Bomar and that

the project was only a few weeks away from gaining certificates of occupancy for Building C.

150. Despite the constant frustration and funding deprivation caused by the wrongful

actions of BB&T, Asnani continued to try to work with BB&T to keep the payments on the 2007

Loan current.

- CASE NO: 09-CA-000783 Page 28 of 71

151. Asnani worked around the clock and obtained the Certificate of Occupancy for

Building C on May 7,2008. On May 12,2009, Asnani closed on five units in Building C and

paid down $800,000.00 of the principal balance on the 2007 Loan.

D. The 2008 Loan

152. Despite the "representation letters" drafted by Chiumento, both BB&T and

Chiurnento were well aware that Chiumento was actively representing Asnani and Asnaco and

that Asnani was relying on Chiumento to represent his interests as well as the interests of

~ s n a c o . ~

153. From 1999 to June, 2008, Chiurnento has represented Asnani and his businesses

in the purchase of land, has assisted in securing various entitlements and approvals from the City

of Palm Coast, recommended and dealt with sub-contractors and related contractor issues,

drafted condominium documents, acted as the escrow agent for all contracts to do with the City

Walk Project, and has further represented Counter-Plaintiffs in various loans, extensions etc.

154. Despite this intimate business and professional relationship with Counter-

Plaintiffs, Chiumento continually drafted the various City Walk Project documents strongly

favoring BB&T. At times, Chiumento went so far as to draft blatant and materially adverse

falsehoods into the documents he was supposed to be drafting on behalf of Counter-Plaintiffs.

155. A clear example of said falsehoods are the Notices of Commencement for the

construction of Buildings C and D. Chiumento drafted these documents on behalf of Counter-

Plaintiffs and filed them with Flagler County. However, these Notices state that BB&T were the

lenders and financiers of Buildings C and D. This is simply not true. None of the vaious loans

Although this purported "waiver" implies that Chiurnento is a neutral party in this transaction, as late as August 2008, Chiurnento has admitted his dual representation. On August 3,2009, Chiurnento sent a letter to BB&T acknowledging his dual representation and encouraging BB&T to settle their claims with Asnani. A true and correct copy of Chiurnento's letter dated August 3,2009 is attached hereto as Exhibit "C".

- U P CASE NO: 09-CA-000783 Page 29 of 71

and loan documents made between Plaintiff and Defendant support the fact that any monies or

financing provided by BB&T were made to develop or construct Phase I1 of the City Walk

Project.

156. The 2008 loan documents drafted by Chiumento in October of 2008 state that

Asnani executed letters of commitment dated December 14,2006 and September 22,2008,

which purportedly gave BB&T a security interest in Buildings C and D. Asnani did not execute

any such Letters of Commitment.

157. In October of 2008, Asnani reluctantly agreed in response to persuasion for

Chiumento for a Mortgage and Extension Agreement with BB&T (hereinafter the "2008 Loan").

In connection with the 2008 Loan, the following documents were executed: (1) Amended and

Restated Loan Agreement (hereinafter the "2008 Loan Agreement"), (2) Mortgage and Note

Extension Agreement (hereinafter the "2008 Mortgage"), (3) Renewal and Secured Promissory

Note (hereinafter the "2008 Note") (collectively hereinafter the "2008 Loan Documents"). True

and correct copies of the 2008 Loan Documents are attached hereto as Composite Exhibit "D".

158. Asnani was told both by BB&T and Chiumento to bring along certain checks to

the closing on the 2008 Loan to pay any past due interest. Asnani complied and after the closing

was advised to deposit the checks into an account with BB&T.

159. Asnani complied. However, in direct contravention of the representations of both

Chiumento and BB&T, BB&T misapplied the payments to pay down the principal on the 2008

Loan and left certain cross collateralized loans in default.

160. Then in November of 2008, pursuant to the 2008 Loan Agreement, Asnani sent

BB&T $247,159.00. Asnani requested that $100,000.00 of this payment be placed into the

established interest reserve account to insure future interest payments and ensure that that the

* CASE NO: 09-CA-000783 Page 30 of 71

2008 Loan would not go into default.

161. BB&T refused this request using the payment to pay down the principal on the

2008 Loan.

162. In January 2009, BB&T declared that all of Counter-Plaintiff s loans were being

defaulted and proceeded to file suit against Asnani and Asnaco seeking to foreclose on the

Property including Buildings C and D to which BB&T contributed no funds and to which BB&T

has no interest in.

163. In March of 2009, BB&T further wrongfully and without cause circulated letters

to all tenants in the occupied portions of the City Walk Project advising them to cease sending

any and all rents to Asnani or Asnaco and instead send all rents directly to BB&T.

164. BB&T later withdrew this letter upon demand by Asnani however, the letter had

the desired effect. Several prospective purchasers and lessor of units in the City Walk Project

withdrew their offers to purchase andlor rent in the City Walk Project due in part to "concerns

that the project was financially unstable."

165. When Asnani confronted Thomas Berrell, Senior Vice President at BB&T

(hereinafter "Berrell"), Berrell informed him that the letters were circulated "just to get his

attention."

166. Next, upon information and belief, Berrell entered into negotiations with

Chiumento to appoint Chiumento's friend, Nick Jebbai (hereinafter "Jebbai") as receiver under

the 2008 Loan when Asnani and Asnaco allegedly defaulted.

167. Upon information and belief, Berrell was well aware that at this time, both

Chiumento and Jebbai were interested in purchasing the City Walk Project as a distressed asset

and at a discount.

COUNT I WRONGFUL FORECLOSURE

lyl CASE NO: 09-CA-000783 Page 31 of 71

168. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

169. Due to Counter-Defendant's breach of duty to disclose risk factors, breaches of

the covenant of good faith and fair dealing, fraudulent misrepresentations and inducement, and

breach of contract as alleged herein, Counter-Defendant has wrongfully filed a foreclosure action

against Counter-Plaintiff.

170. Counter-Defendant's representative, Chiumento had a confidential relationship

with Counter-Plaintiffs wherein Counter-Plaintiffs reposed special confidence in Chiumento

pursuant to their relationship as attorney and client.

17 1. Knowing of this confidential relationship, Counter-Defendant retained Chiumento

to negotiate with Counter-Plaintiff concerning the 2004 Loan, 2007 Loan, 2008.

172. By virtue of the fiduciary relationship between Chiumento, as agent and

representative of Counter-Defendant and Counter-Plaintiffs, Counter-Defendant had a fiduciary

duty to Counter-Plaintiffs to disclose material facts and risk factors associated with the 2004

Loan, 2007 Loan, and 2008 Loan and the subsequent construction of the encumbered Buildings

C and D.

173. Chiumento, acting as a representative and agent for Counter-Defendants breached

his fiduciary duty to Counter-Plaintiffs by failing to disclose the risk factors associated with a

balloon mortgage such as the 2004 Loan, the 2007 Loan and the 2008 Loan.

174. Chiumento, acting as a representative and agent of Counter-Defendants further

breached his fiduciary duty by failing to inform Counter-Plaintiffs of the risks associated with

the construction of Buildings C and D. Specifically, Chiumento failed to inform Counter-

c CASE NO: 09-CA-000783 Page 32 of 71

Plaintiffs that if Counter-Plaintiff constructed Buildings C and D with their own funds, Buildings

C and D may still be encumbered by the various loan documents executed by the parties in

relation to the construction of Buildings A and B.

175. On or about November 2004, Counter-Defendant by and through Counter-

Defendant's Vice-President, Collins made material misrepresentations to Asnani regarding the

financing of the City Walk Project.

176. Further, Collins informed Asnani that BB&T would be financing and funding at

least Phase I (Buildings A and B) of the City Walk Project. When Asnani specifically

questioned why the 2004 Loan was only set at 7.5 million dollars when everyone knew that

Phase I would cost at least 10.5 million dollars, Collins told Asnani that when the time came, the

additional funds would be "no problem."

177. Subsequently, Asnani discovered that Collins aforesaid representations were false.

When Asnani approached BB&T for the additional financing, Collins initially denied said

financing and delayed making its decision to provide said financing significantly damages

Asnani, Asnaco, and the City Walk Project.

178. Due to the delay in finalizing the additional financing, construction on the City

Walk Project was delayed and at one point came to a halt as BB&T wavered on its decision to

provide the additional financing Collins promised Asnani in November of 2004.

179. Counter-Defendant further knew that Counter-Plaintiffs had a beneficial business

relationship with the various tenants and/or potential tenants of the City Walk Project.

180. Despite this acknowledged beneficial business relationship, Counter-Defendant

on several occasions specifically slandered and undermined the City Walk Project to the various

tenant and/or prospective tenants of the City Walk Project.

CASE NO: 09-CA-000783 Page 33 of 71

18 1. Counter-Defendant's intentionally and without cause sent notices to each and

every tenant of the City Walk Project directing said tenants to stop making all payments to

Asnaco and instead send payments directly to Counter-Defendant.

182. When Asnaco objected to this interference with its collection of rents at the City

Walk Project, Counter-Defendant withdrew its letters and informed Asnaco that it was simply

trying to get his attention.

183. Said improper interference with Asnaco's business relationship with its tenants

caused several new tenants to cancel their commercial condominium contracts andlor leases.

Several prospective tenants further abandoned plans to lease in the City Walk Project based upon

Counter-Defendant's improper behavior as alleged herein.

184. Counter-Plaintiffs further had a beneficial business relationship with the various

contractors and subcontractors on the City Walk Project.

185. Counter-Defendant was well aware of this beneficial business relationship.

186. As described above, Counter-Defendant repeatedly and systematically

undermined the relationship between Counter-Plaintiffs and the contractors of the City Walk

Project.

187. Counter-Defendant's wrongful behavior includes but is not limited to statements

made to the contractors and sub-contractors that the City Walk Project was a failure and

undermining their confidence that they would be paid for their services.

188. Counter-Defendant owed a duty to Counter-Plaintiffs to properly perform its

obligations under the 2004 Loan, 2007 Loan, and 2008 Loan with good faith and with fair

dealing and Counter-Defendant failed to perform its duties and obligations in accordance with

the 2004 Loan, 2007 Loan, and 2008 Loan as alleged herein.

- CASE NO: 09-CA-000783 Page 34 of 71

189. Paragraph 2 of the Preliminary Statement of the 2004 Loan Agreement states that

the 2004 Loan is secured by the Property. The 2004 Mortgage states that the 2004 Loan is

secured by the Property.

190. However, the 2004 Loan Documents are ambiguous as to whether the 2004 Loan

would be secured by the planned Buildings C and D.

191. At the time the 2004 Loan Documents were executed, neither Counter-Plaintiff

nor Counter-Defendant believed that the 2004 Loan would encumber Buildings C and D if

constructed.

192. At the time the 2004 Loan was executed, there were no immediate plans to build

Buildings C and D.

193. Buildings C and D were constructed and financed entirely by Asnani and Asnaco.

Counter-Plaintiff s have paid over $8,000,000.00 for the construction of Buildings C and D.

194. Counter-Defendant's breached their duty of good faith by insisting that Buildings

C and D were encumbered by the 2004 Loan even though they contributed no finds to the

development of Buildings C and D and were well aware that Buildings C and D were never

originally agreed upon as collateral for the 2004 Loan.

195. Counter-Defendant's breaches of its duty of good faith and fair dealing frustrates

and disappoints the reasonable expectations of Counter-Plaintiffs, thereby depriving Counter-

Plaintiffs of the benefits of the 2004 Loan, 2007 Loan, and 2008 Loan.

196. Based upon the Counter-Defendants wrongful foreclosure, Counter-Plaintiffs

have been significantly damaged including but not limited to loss of working capital, loss of

business opportunities, and a loss of credit worthiness.

ya- CASE NO: 09-CA-000783 Page 35 of 71

WHEREFORE, Counter-Plaintiffs respectfully requests that this Court enjoin Counter-

Defendant from requiring immediate repayment in full of the outstanding balance due under the

2008 Loan until this matter is concluded, enjoin Counter-Defendant from further pursuing any

foreclosure, award Counter-Plaintiffs its attorneys' fees and costs pursuant to Fla. Stat. 557.105,

and the various contracts between the parties, and grant such other and further relief this

Honorable Court deems just and proper.

COUNT I1 BREACHOFCONTRACT

197. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167" as though fully set forth and incorporated herein.

198. The 2004 Loan, 2007 Loan, and 2008 Loan were valid legal contracts formed

between Counter-Plaintiffs and Counter-Defendant.

199. Counter-Defendant owed a duty to Counter-Plaintiffs to properly perform its

obligations under the 2004 Loan, 2007 Loan, and 2008 Loan (collectively hearinafter the

"Loan") and Counter-Defendant failed to perform its duties and obligations in accordance with

the 2004 Loan as alleged herein.

200. Under the Loan, Counter-Defendant was obligated to make disbursements on of

the principal amounts of the loan upon proper demand by Counter-Plaintiff.

201. On or about April 16,2008, just as the City Walk Project had nearly recovered

from the extremely slow construction progress made by Bomar, Berrell informed Asnani that the

2007 Loan was classified as a distressed loan at level seven (7), one step away from foreclosure,

which is classified as level eight (8).

202. Asnani was floored by this lack of good faith on the part of BB&T. Asnani

-- CASE NO: 09-CA-000783 Page 36 of 71

reminded Berrell, that the project had been delayed by the slow construction of Bomar and that

the project was only a few weeks away from gaining certificates of occupancy for Building C.

203. Asnani asked Berrell why the 2007 Loan was classified as a level seven (7).

Berrell informed Asnani that the sole reason the 2007 Loan was being classified at level seven

(7) was because the project had been delayed by slow construction. Berrell further informed

Asnani that because the 2007 Loan was at level seven (7), BB&T was invoking its default

remedies and would hereafter refuse to make any further disbursements of the 2007 Loan to

Asnani or Asnaco.

204. The refusal to make further disbursements on the Loan on the sole basis that the

contractor selected by Counter-Defendant was slow in performing his obligations is a breach of

Counter-Defendants obligations under the Loan.

205. As described above, Counter-Plaintiffs were in full compliance with the terms of

the 2004 Loan and Counter-Defendant improperly breached the Loan.

206. As a direct and proximate cause of the breach of the Loan by Counter-Defendant,

Counter-Plaintiffs have suffered substantial direct and consequential damages.

WHEREFORE, Counter-Plaintiffs demand judgment against Counter-Defendant for the

direct and consequential damages it has suffered, prejudgment interest, post judgment interest,

attorneys' fees and costs pursuant to Fla. Stat. 557.105, and the various contracts between the

parties, and any such other relief that this Court deems just and proper.

COUNT I11 SLANDER OF TITLE

207. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

~ 4 s ' CASE NO: 09-CA-000783 Page 37 of 71

208. Counter-Defendant has filed a Notice of Lis Pendens (hereinafter "Lis Pendens")

on the entire City Walk Project, Buildings A, B, C, and D. A true and correct copy of said Lis

Pendens has been filed with the Court by Counter-Defendant and is incorporated herein by

reference.

209. On or about November 2004, Counter-Defendant by and through Counter-

Defendant's Vice-President, Collins made material misrepresentations to Asnani regarding the

financing of the City Walk Project.

210. Collins informed Asnani that BB&T would be financing and funding at least

Phase I (Buildings A and B) of the City Walk Project. When Asnani specifically questioned why

the 2004 Loan was only set at 7.5 million dollars when everyone knew that Phase I would cost at

least 10.5 million dollars, Collins told Asnani that when the time came, the additional funds

would be "no problem."

21 1. Asnani reasonably relied on this representation by Collins on behalf of BB&T.

212. Collins knew the aforesaid representation was false when he made it to Asnani.

213. Collins made the aforesaid representation to Asnani to induce Counter-Plaintiffs

to enter into the 2004 Loan.

214. In reasonable reliance upon the aforesaid representations by Collins and BB&T,

Asnani and Asnaco entered into the 2004 Loan.

215. Subsequently, Asnani discovered that Collins aforesaid representations were false.

When Asnani approached BB&T for the additional financing, Collins initially denied said

financing and delayed making its decision to provide said financing significantly damages

Asnani, Asnaco, and the City Walk Project.

w CASE NO: 09-CA-000783 Page 38 of 71

216. Due to the delay in finalizing the additional financing, construction on the City

Walk Project was delayed and at one point came to a halt as BB&T wavered on its decision to

provide the additional financing Collins promised Asnani in November of 2004.

217. Collins and BB&T's actions caused Counter-Plaintiffs to enter into and execute

the 2004 Loan, the 2007 Loan, and the 2008 Loan under false pretenses and trickery.

218. Upon information and belief, Counter-Defendant knew that said representations

were false at the time it made them.

219. Based upon the foregoing acts of fraud and misrepresentation against Counter-

Plaintiffs with regard to the 2004 Loan, the 2007 Loan, and the 2008 Loan, and by virtue of

filing the Lis Pendens, Counter-Defendant has in fact communicated false statements to third

parties disparaging the title of the Property, the City Walk Project and Buildings A, B, C, and D.

220. Additionally, At the time the 2004 Loan Documents were executed, neither

Counter-Plaintiff nor Counter-Defendant believed that the 2004 Loan would encumber Buildings

C and D if constructed.

221. At the time the 2004 Loan was executed, there were no immediate plans to build

Buildings C and D.

222. Buildings C and D were constructed and financed entirely by Asnani and Asnaco.

Counter-Plaintiffs have paid over $8,000,000.00 for the construction of Buildings C and D.

223. What's more, Counter-Defendant has wrongfully operated for the past two years

as though it had a valid claim of lien over Buildings C and D.

224. Counter-Plaintiff was previously unable to file suit under threat by Counter-

Defendant that a lawsuit to discharge the alleged lien would certainly mean the non-renewal of

the 2004 Loan.

k w CASE NO: 09-CA-000783 Page 39 of 71

225. As a direct and proximate result of Counter-Defendant's filing of the Lis Pendens,

Counter-Plaintiffs have suffered damages.

WHEREFORE, Counter-Plaintiffs demand judgment against Counter-Plaintiff for

damages, together with prejudgment interest, post judgment interest, attorneys fees and costs

pursuant to the various contracts between the parties and applicable Florida statutes and such

other and further relief that this Honorable Court deems necessary and proper.

COUNT IV FRAUD IN INDUCEMENT

226. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

227. On or about November 2004, Counter-Defendant by and through Counter-

Defendant's Vice-President, Collins made material misrepresentations to Asnani regarding the

financing of the City Walk Project.

228. Collins informed Asnani that BB&T would be financing and funding at least

Phase I (Buildings A and B) of the City Walk Project. When Asnani specifically questioned why

the 2004 Loan was only set at 7.5 million dollars when everyone knew that Phase I would cost at

least 10.5 million dollars, Collins told Asnani that when the time came, the additional funds

would be "no problem."

229. Asnani reasonably relied on this representation by Collins on behalf of BB&T.

230. Collins knew the aforesaid representation was false when he made it to Asnani.

23 1. Collins made the aforesaid representation to Asnani to induce Counter-Plaintiffs

to enter into the 2004 Loan.

232. In reliance upon the aforesaid representations by Collins and BB&T, Asnani and

Asnaco entered into the 2004 Loan.

w CASE NO: 09-CA-000783 Page 40 of 71

233. Subsequently, Asnani discovered that Collins aforesaid representations were false.

When Asnani approached BB&T for the additional financing, Collins initially denied said

financing and delayed making its decision to provide said financing which significantly damaged

Asnani, Asnaco, and the City Walk Project.

234. Due to the delay in finalizing the additional financing, construction on the City

Walk Project was delayed and at one point came to a halt as BB&T wavered on its decision to

provide the additional financing Collins promised Asnani in November of 2004.

235. Collins and BB&T's actions caused Counter-Plaintiffs to enter into and execute

the 2004 Loan, the 2007 Loan, and the 2008 Loan under false pretenses and trickery.

236. Counter-Plaintiffs hereby reserve the right to request exemplary damages

pursuant to the applicable statutory law.

WHEREFORE, Counter-Plaintiffs demand judgment against Counter-Defendant for

compensatory damages, plus costs and attorney's fees pursuant to the various contracts between

the parties and applicable Florida statutes prejudgment and post judgment interest and such other

relief as this Honorable Court deems just and proper.

COUNT V TORTIOUS INTERFERENCE WITH

LANDLOKDITENANT BUSINESS RELATIONSHIP

237. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167" as though fully set forth and incorporated herein.

238. Counter-Defendant knew that Counter-Plaintiffs had a beneficial business

relationship with the various tenants and/or potential tenants of the City Walk Project.

- CASE NO: 09-CA-000783 Page 41 of 71

239. Despite this acknowledged beneficial business relationship, Counter-Defendant

on several occasions specifically slandered and undermined the City Walk Project to the various

tenant and/or prospective tenants of the City Walk Project.

240. Counter-Defendant intentionally and without cause sent notices to each and every

tenant of the City Walk Project directing said tenants to stop making all payments to Asnaco and

instead send payments directly to Counter-Defendant.

241. When Asnaco objected to this interference with its collection of rents at the City

Walk Project, Counter-Defendant withdrew its letters and informed Asnaco that it was simply

trying to get his attention.

242. Said improper interference with Asnaco's business relationship with its tenants

caused several new tenants to cancel their commercial condominium contracts andlor leases.

Several prospective tenants further abandoned plans to lease in the City Walk Project based upon

Counter-Defendant's improper behavior as alleged herein.

243. Counter-Plaintiffs have been significantly damaged by Counter-Defendants

wrongful interference with its beneficial business relationship with its tenants.

244. Counter-Defendant's actions as described herein were calculated to interfere with

Counter-Plaintiffs' business relationship with the various tenants of the City Walk Project.

245. The full extent of the damage to Counter-Plaintiffs' relationship with the tenants

of the City Walk Project cannot be fully known at this time.

246. As a direct and proximate result of Counter-Defendant's tortious interference,

Counter-Plaintiffs has suffered damages.

WHEREFORE, Counter-Plaintiffs respectfully request that this Court award damages to

Counter-Plaintiffs against Counter-Defendant for any and all direct and consequential damages it

has suffered as a result of the intentional and tortious interference with Counter-Plaintiffs'

"dr CASE NO: 09-CA-000783 Page 42 of 71

business relationships, prejudgment interest, post judgment interest, attorneys' fees pursuant to

Fla. Stat. 557.105, the various contracts between the parties, court costs, and any such other

relief that this Court deems just and proper.

COUNT VI TORTIOUS INTERFERENCE WITH BUSINESS RELATIONSHIP

247. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167" as though fully set forth and incorporated herein.

248. Counter-Plaintiffs had a beneficial business relationship with the various

contractors and subcontractors on the City Walk Project.

249. Counter-Defendant was well aware of this beneficial business relationship.

250. As described above, Counter-Defendant repeatedly and systematically

undermined the relationship between Counter-Plaintiffs and the contractors of the City Walk

Project.

251. Counter-Defendant's wrongful behavior includes but is not limited to statements

made to the contractors and sub-contractors that the City Walk Project was a failure and

undermining their confidence that they would be paid for their services.

252. In one incident in March of 2008, Berrell sent a representative of BB&T to the

unfinished construction site of the City Walk Project. At that time, the bank representative

tracked down the project's foreman, Eli Faignant and informed him that he was an attorney for

BB&T and that BB&T would be taking the project over and that "we want all of you to get out".

This incident caused significant confusion on the work site and caused unnecessary delays to the

City Walk Project.

* CASE NO: 09-CA-000783 Page 43 of 71

253. Counter-Plaintiffs have been significantly damaged by Counter-Defendant's

wrongful interference with its beneficial business relationship with its contractors and

subcontractors.

254. Counter-Defendant's actions as described herein were calculated to interfere with

Counter-Plaintiffs' business relationship with the contractors and subcontractors of the City

Walk Project.

255. The full extent of the damage to Counter-Plaintiffs relationship with the

contractors on the City Walk Project cannot be fully known at this time.

256. As a direct and proximate result of Counter-Defendant's tortious interference

Counter-Plaintiffs have suffered damages.

WHEREFORE, Counter-Plaintiffs respectfully request that this Court award damages to

Counter-Plaintiffs against Counter-Defendant for any and all direct and consequential damages it

has suffered as a result of the intentional and tortious interference with Counter-Plaintiffs'

business relationships, prejudgment interest, post judgment interest, attorneys' fees pursuant to

Fla. Stat. 457.105, the various contracts between the parties, court costs, and any such other

relief that this Court deems just and proper.

COUNT VII VIOLATION OF FEDERAL ANTI-TYING LAWS, 12 U.S.C. 81972

257. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167" as though fully set forth and incorporated herein.

258. This court has jurisdiction over this matter by virtue of 12 U.S.C. 41972.

259. 12 U.S.C.§1972 provides in pertinent part as follows:

(1) A bank shall not in any manner extend credit, lease or sell property of any kind, or furnish any service, or fix or vary the consideration for any of the foregoing, on the condition or requirement-

*P- CASE NO: 09-CA-000783 Page 44 of 7 1

(A) that the customer shall obtain some additional credit, property, or service from such bank other than a loan, discount, deposit, or trust service;

260. Counter-Defendant is a "bank" as defined by 12 U.S.C. $1813 (l)(a).

261. Counter-Defendant has violated 12 U.S.C. $1972 by tying the requirement that

Counter-Plaintiffs maintain an escrow account with the Counter-Defendant "interest free," as

requirement of Counter-Defendant extending a line of credit under the 2004 Loan, 2007 Loan,

and 2008 Loan.

262. Said interest free escrow account eventually totaled 2.5 Million dollars which was

held "interest free" for over two years.

263. Counter-Defendant violated 12 U.S.C. $1972 by tying the requirement that

Counter-Plaintiffs maintain said escrow account "interest free" with Counter-Defendants with

the 2004 Loan, 2007 Loan, and the 2008 Loan.

264. The tying arrangement as described herein is an anti-competitive practice

designed to benefit Counter-Defendant.

265. Absent the tying requirement of these various separate agreements, Counter-

Plaintiffs would have been able to establish an interest bearing escrow account with a separate

institution.

266. The tying of these agreements is an unusual banking practice.

267. As a direct and proximate result of Counter-Defendant's violations of 12 U.S.C.

$ 1972, Counter-Plaintiffs has suffered damages.

WHEREFORE, Counter-Plaintiffs respectfully requests that this Court award damages to

Counter-Plaintiffs against Counter-Defendant for any and all direct and consequential damages it

w CASE NO: 09-CA-000783 Page 45 of 71

has suffered as a result of the various loan agreements and the escrow account services being

improperly tied, treble damages pursuant to 12 U.S.C. $1975, pre-judgment interest, post

judgment interest, attorneys' fees and costs pursuant 12 U.S.C. $1975, the various contracts

between the parties, that Counter-Defendant be sanctioned for its violation of 12 U.S.C. 1972 in

accordance with 12 U.S.C. 1972 (F), and for such other and further relief this Honorable Court

deems just and proper.

COUNT VIII FRAUDULENT MISREPRESENTATION

268. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

269. On or about November 2004, Counter-Defendant by and through Counter-

Defendant's Vice-President, Collins made material misrepresentations to Asnani regarding the

financing of the City Walk Project.

270. Collins informed Asnani that BB&T would be financing and funding at least

Phase I (Buildings A and B) of the City Walk Project. When Asnani specifically questioned why

the 2004 Loan was only set at 7.5 million dollars when everyone knew that Phase I would cost at

least 10.5 million dollars, Collins told Asnani that when the time came, the additional funds

would be "no problem."

271. Asnani reasonably relied on this representation by Collins on behalf of BB&T.

272. Collins knew the aforesaid representation was false when he made it to Asnani.

273. Collins made the aforesaid representation to Asnani to induce Counter-Plaintiffs

to enter into the 2004 Loan.

274. In reliance upon the aforesaid representations by Collins and BB&T, Asnani and

Asnaco entered into the 2004 Loan.

w CASE NO: 09-CA-000783 Page 46 of 71

275. Subsequently, Asnani discovered that Collins aforesaid representations were false.

When Asnani approached BB&T for the additional financing, Collins initially denied said

financing and delayed making its decision to provide said financing significantly damages

Asnani, Asnaco, and the City Walk Project.

276. Due to the delay in finalizing the additional financing, construction on the City

Walk Project was delayed and at one point came to a halt as BB&T wavered on its decision to

provide the additional financing Collins promised Asnani in November of 2004.

277. Collins and BB&T's actions caused Counter-Plaintiffs to enter into and execute

the 2004 Loan, the 2007 Loan, and the 2008 Loan under false pretenses and trickery.

278. As a result of Counter-Plaintiffs' reliance on Counter-Defendant's

misrepresentations, Counter-Plaintiffs have suffered damages.

WHEREFORE, Counter-Plaintiffs respectfully request that this Court award damages to

Counter-Plaintiffs against Counter-Defendant for any and all direct and consequential damages it

has suffered as a result of Counter-Defendant's fraudulent misrepresentations, pre-judgment

interest, post judgment interest, award attorneys' fees and costs pursuant to Fla. Stat. 557.105,

the various contracts between the parties, court costs, and for such other and further relief this

Honorable Court deems just and proper.

COUNT IX BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING

279. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

280. Each party to the 2004 Loan, 2007 Loan, and 2008 Loan had an implied duty to

perform its obligations thereunder with good faith and fair dealing.

CASE NO: 09-CA-000783 Page 47 of 71

281. Counter-Defendant owed a duty to Counter-Plaintiffs to properly perform its

obligations under the 2004 Loan, 2007 Loan, and 2008 Loan with good faith and with fair

dealing and Counter-Defendant failed to perform its duties and obligations in accordance with

the 2004 Loan, 2007 Loan, and 2008 Loan as alleged herein.

282. Paragraph 2 of the Preliminary Statement of the 2004 Loan Agreement states that

the 2004 Loan is secured by the Property. The 2004 Mortgage states that the 2004 Loan is

secured by the Property.

283. However, the 2004 Loan Documents are ambiguous as to whether the 2004 Loan

would be secured by the planned Buildings C and D.

284. At the time the 2004 Loan Documents were executed, neither Counter-Plaintiff

nor Counter-Defendant believed that the 2004 Loan would encumber Buildings C and D if

constructed.

285. At the time the 2004 Loan was executed, there were no immediate plans to build

Buildings C and D.

286. Buildings C and D were constructed and financed entirely by Asnani and Asnaco..

Counter-Plaintiff s have paid over $8,000,000.00 for the construction of Buildings C and D.

287. Counter-Defendant's breached their duty of good faith by insisting that Buildings

C and D were encumbered by the 2004 Loan even though they contributed no finds to the

development of Buildings C and D and were well aware that Buildings C and D were never

originally agreed upon as collateral for the 2004 Loan.

288. Further, among the conditions in the 2004 Loan Agreement, Article 11 1,

subsection (b) states in pertinent part that:

"(b) Disbursement Schedule. Except for the amount required to pay of existing mortgages on the Property, future disbursements shall be strictly contingent upon

w- CASE NO: 09-CA-000783 Page 48 of 71

the Borrower submitting to Lender:

. . .2) Receipt of acceptable contract with the builder;. . ."

(Emphasis added)

289. In connection with Article 1 11, subsection (b) of the 2004 Loan Agreement,

BB&T insisted upon Counter-Plaintiff using their local favored builder Bomar Construction

(hereinafter "Bomar").

290. Asnani objected to the use of Bomar as the contractor in the construction of

Buildings A and B because Asnani was unfamiliar with Bomar and had heard that Bomar was a

"slow" contractor.

291. Counter-Defendant's insistence on the use of Bomar even though Counter-

Defendant knew Bomar was a "slow contractor" was a breach of Counter-Defendant's duty of

good faith and fair dealing.

292. As described above, Counter-Plaintiffs were in full compliance with the terms of

the 2004 Loan, 2007 Loan, and 2008 Loan at the time Counter-Defendant improperly breached

its duty of good faith and fair dealing as described herein.

293. Counter-Defendant's breaches of it duty of good faith and fair dealing were

conscious and deliberate acts and unfairly frustrate the agreed common purpose of the 2004

Loan, 2007 Loan, and 2008 Loan.

294. Counter-Defendant's breaches of its duty of good faith and fair dealing frustrates

and disappoints the reasonable expectations of Counter-Plaintiffs, thereby depriving Counter-

Plaintiffs of the benefits of the 2004 Loan, 2007 Loan, and 2008 Loan.

b~ CASE NO: 09-CA-000783 Page 49 of 71

295. As a direct and proximate cause of Counter-Defendant's the breach of its duty of

good faith and fair dealing, Counter-Plaintiffs has suffered substantial direct and consequential

damages.

WHEREFORE, Counter-Plaintiffs respectfully request that this Court award damages to

Counter-Plaintiffs against Counter-Defendant for any and all direct and consequential damages it

has suffered as a result of Counter-Defendant's breach of its duty of good faith and fair dealing,

pre-judgment interest, post judgment interest, award attorneys' fees and costs pursuant to Fla.

Stat. 557.105, and the various contracts between the parties, court costs, and for such other and

further relief this Honorable Court deems just and proper.

COUNT X PROMISSORY ESTOPPEL

296. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

297. On or about November 2004, Counter-Defendant by and through Counter-

Defendant's Vice-President, Collins made material misrepresentations to Asnani regarding the

financing of the City Walk Project.

298. Collins informed Asnani that BB&T would be financing and funding at least

Phase I (Buildings A and B) of the City Walk Project. When Asnani specifically questioned why

the 2004 Loan was only set at 7.5 million dollars when everyone knew that Phase I would cost at

least 10.5 million dollars, Collins told Asnani that when the time came, the additional funds

would be "no problem."

299. Asnani reasonably relied on this representation by Collins on behalf of BB&T.

300. Collins knew the aforesaid representation was false when he made it to Asnani.

. CASE NO: 09-CA-000783 Page 50 of 71

301. Collins made the aforesaid representation to Asnani to induce Counter-Plaintiffs

to enter into the 2004 Loan.

302. In reliance upon the aforesaid representations by Collins and BB&T, Asnani and

Asnaco entered into the 2004 Loan.

303. Subsequently, Asnani discovered that Collins aforesaid representations were false.

When Asnani approached BB&T for the additional financing, Collins initially denied said

financing and delayed making its decision to provide said financing significantly damaging

Asnani, Asnaco, and the City Walk Project.

304. Counter-Plaintiffs were entitled to rely on Counter-Defendant's representations

due to the parties' prior course of dealing and Counter-Plaintiffs did in fact reasonably rely on

said promises and representations.

305. By virtue of Counter-Defendant's aforesaid actions and the filing of suit against

Counter-Plaintiffs, Counter-Defendant has asserted a position contrary to the promises and

representations made previously to Counter-Plaintiffs.

306. Counter-Defendant's change in position is detrimental to Counter-Plaintiffs and

Counter-Plaintiffs has incurred damages as a result.

307. Counter-Plaintiffs have been damaged by its reliance upon the parties' implicit

agreement and Counter-Defendant's misrepresentations as alleged herein.

WHEREFORE, Counter-Plaintiffs demands judgment against Counter-Defendant for

damages suffered and requests that this Honorable Court order Counter-Defendant to renew or

extend the 2008 Loan until such time as the disputes between the parties have been settled,

award attorneys' fees and costs pursuant to Fla. Stat. 557.105, the various contracts between the

parties, and such other and further relief as this Honorable Court deems just and proper.

v CASE NO: 09-CA-000783 Page 51 of 71

COUNT XI VIOLATION OF FL. STAT. $501.204

FLORIDA DECEPTIVE & UNFAIR TRADE PRACTICES ACT

308. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

309. This is an action for damages against Counter-Defendant based upon the

following violations of Florida Statute Chapter 501 known as the Florida Deceptive and Unfair

Trade Practices Act (hereinafter "FDUTPA).

3 10. Pursuant to Florida Statutes $501.204 "unfair methods of competition,

unconscionable act or practices, and unfair or deceptive act or practices in the conduct of any

trade or commerce are hereby declared unlawful."

3 1 1. Counter-Defendant's unfair misrepresentations and acts as alleged herein are per

se violations of FDUTPA under Florida Statutes $501.203(3).

3 12. Initially, Counter-Defendant's retaining of Counter-Plaintiff s attorney

Chiumento to represent Counter-Defendant in the preparation and execution of the 2004 Loan,

2007 Loan, and 2008 Loan are per se violations of FDUPTA as Counter-Defendant knew or

should have known that Counter-Plaintiff reposed special confidence in his attorney Chiumento

to properly represent his interests.

3 13. Counter-Defendant took advantage of Counter-Plaintiffs special confidence in

Chiumento by structuring the 2004 Loan in such a way as to completely favor Counter-

Defendant's interests and to remove from Counter-Plaintiff all of his rights and remedies as

described herein which would have otherwise been retained had Counter-Plaintiff been properly

represented.

k w CASE NO: 09-CA-000783 Page 52 of 71

314. Counter-Defendant's representative, Chiumento had a confidential relationship

with Counter-Plaintiffs wherein Counter-Plaintiff reposed special confidence in Chiumento

pursuant to their relationship as attorney and client.

3 15. Knowing of this confidential relationship, Counter-Defendant retained Chiumento

to negotiate with Counter-Plaintiff concerning the 2004 Loan, the 2007 Loan, and the 2008

Loan.

316. By virtue of the fiduciary relationship between Chiumento, as agent and

representative of Counter-Defendant and Counter-Plaintiffs, Counter-Defendant had a fiduciary

duty to Counter-Plaintiffs to disclose material facts and risk factors associated with the 2004

Loan, 2007 Loan, and 2008 Loan and the subsequent construction of the encumbered Buildings

C and D.

3 17. Chiumento, acting as a representative and agent for Counter-Defendant breached

his fiduciary duty to Counter-Plaintiffs by failing to disclose the risk factors associated with a

balloon mortgage such as the 2004 Loan, the 2007 Loan, and the 2008 Loan.

318. Chiumento, acting as a representative and agent of Counter-Defendant further

breached his fiduciary duty by failing to inform Counter-Plaintiffs of the risks associated with

the construction of Buildings C and D. Specifically, Chiumento failed to inform Counter-

Plaintiffs that if Counter-Plaintiff constructed Buildings C and D with their own funds, Buildings

C and D may still be encumbered by the various loan documents executed by the parties in

relation to the construction of Buildings A and B.

3 19. On or about November 2004, Counter-Defendant by and through Counter-

Defendant's Vice-President, Collins made material misrepresentations to Asnani regarding the

financing of the City Walk Project.

- CASE NO: 09-CA-000783 Page 53 of 71

320. Collins informed Asnani that BB&T would be financing and funding at least

Phase I (Buildings A and B) of the City Walk Project. When Asnani specifically questioned why

the 2004 Loan was only set at 7.5 million dollars when everyone knew that Phase I would cost at

least 10.5 million dollars, Collins told Asnani that when the time came, the additional funds

would be provided.

321. Subsequently, Asnani discovered that Collins aforesaid representations were false.

When Asnani approached BB&T for the additional financing, Collins initially denied said

financing and delayed making its decision to provide said financing significantly damages

Asnani, Asnaco, and the City Walk Project.

322. Due to the delay in finalizing the additional financing, construction on the City

Walk Project was delayed and at one point came to a halt as BB&T wavered on its decision to

provide the additional financing Collins promised Asnani in November of 2004.

323. Collins and BB&T's actions caused Asnani to enter into the 2004 Loan under

false pretenses thereby permitting BB&T to obtain Counter-Plaintiff s entry into the various

loans by trickery.

324. Further, under Florida Statute $ 501.203(3)(~), the definition of "violation of this

part,' of FDUTPA states a violation may be based on "any . . . rule [or] regulation. . . which

proscribes unfair methods of competition, or unfair, deceptive, or unconscionable acts or

practices."

325. 12 U.S.C.51972 provides in pertinent part as follows:

(1) A bank shall not in any manner extend credit, lease or sell property of any kind, or furnish any service, or fix or vary the consideration for any of the foregoing, on the condition or requirement-

(A) that the customer shall obtain some additional credit,

.*r CASE NO: 09-CA-000783 Page 54 of 71

property, or service from such bank other than a loan, discount, deposit, or trust service;

326. Counter-Defendant is a "bank" as defined by 12 U.S.C. $18 13 (l)(a).

327. Counter-Defendant has violated 12 U.S.C. $1972 by tying the requirement that

Counter-Plaintiffs maintain an escrow account with the Counter-Defendants "interest free," as

requirement of Counter-Defendant extending a line of credit under the 2004 Loan, 2007 Loan,

and 2008 Loan.

328. Said interest free escrow account eventually totaled 2.5 Million dollars which was

held "interest free" for over two years.

329. Counter-Defendant violated 12 U.S.C. $ 1972 by tying the requirement that

Counter-Plaintiffs maintain said escrow account "interest free" with Counter-Defendants with

the 2004 Loan, 2007 Loan, and the 2008 Loan.

330. The tying arrangement as described herein is an anti-competitive practice

designed to benefit Counter-Defendant.

33 1. Absent the tying requirement of these various separate agreements, Counter-

Plaintiffs would have been able to establish an interest bearing escrow account with a separate

institution.

332. The tying of these agreements is an unusual banking practice.

333. Counter-Defendant's violations of the provisions of 12 U.S.C.$1972 is a further

violation of FDUPTA.

334. As the direct and proximate result of Counter-Defendant's deceptive and unfair

trade practices, Counter-Plaintiffs has sustained actual damages and consequential damages.

WHEREFORE, Counter-Plaintiffs demand judgment against Counter-Defendant for the

direct and consequential damages it has suffered, prejudgment interest, post judgment interest,

v CASE NO: 09-CA-000783 Page 55 of 71

award attorneys' fees and costs pursuant to Fla. Stat. $501.2105, and the various contracts

between the parties, and such other and further relief'that this Honorable Court deems just and

proper.

COUNT XI1 DECLARATORY JUDGMENT

335. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

336. Counter-Plaintiffs are in doubt as to their rights under the 2004 Loan, 2007 Loan,

and 2008 Loan and request to obtain a declaration of rights, status, or other equitable or legal

relations under the 2004 Loan, 2007 Loan, and 2008 Loan andlor the title to the Property.

337. As previously alleged herein, pursuant to the discussions of the various parties, it

was the intention of all parties that the security for the various loans be a mortgage on Buildings

A and B of the City Walk Project which was partially financed with funds from Counter-

Defendant.

338. At no point did the parties intend for Buildings C and D be encumbered by the

various loans between the parties. Counter-Defendant contributed no funds to the development

and construction of Buildings C and D and Counter-Defendant has no interest therein.

339. Any provisions of the various loan documents which might imply that Buildings

C and D of the City Walk Project might be encumbered were procured through the fraudulent

representations on the part of Counter-Defendant's agent, Chiurnento that he was representing

the interests of Counter-Plaintiff and should be negated as an unnegotiated and unenforceable

provision of the respective loans.

340. Counter-Defendant should have no security interest in Buildings C and D.

WHEREFORE, Counter-Plaintiffs respectfully request that this Honorable Court enter an

- CASE NO: 09-CA-000783 Page 56 of 71

order declaring that Counter-Defendant has no security interest, mortgage on, or lien with regard

to Buildings C and D of the City Walk Project under the 2004 Loan, the 2007 Loan, and/or the

2008 Loan, award Counter-Plaintiffs reasonable attorneys' fees and costs pursuant to applicable

Florida statutes and the various contracts between the parties, and grant such other and further

relief this Honorable Court deems just and proper under the circumstances.

COUNT XI11 LIBEL PER SE

341. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

342. Counter-Defendants, wrongfully sent a written letter to all of the tenants of the

City Walk Project informing them that Counter-Plaintiffs were in default and that all tenants

were directed to not send any further rent payments to Counter-Plaintiffs and were directed to

send all payments directly to Counter-Defendants.

343. This letter to constitutes the publishing of false and defamatory statements about

Counter-Plaintiffs to a third party.

344. These false statements were malicious and they exposed Counter-Plaintiffs to

distrust, ridicule, contempt, or disgrace by those to whom the statements were published; tended

to injure it in its trade or profession; and imputed to another person: conduct, characteristics, or

a condition incompatible with the proper exercise of Counter-Plaintiffs lawful business, trade,

profession, or office.

345. Counter-Defendant's false statements were the natural and proximate cause of

Counter-Plaintiff s injuries which include but are not limited to the cancellation of leases by

tenants for the rental of units in the City Walk Project.

P' CASE NO: 09-CA-000783 Page 57 of 71

346. Counter-Plaintiff's have sustained additional damages as a result of Counter-

Defendant's wrongful actions.

WHEREFORE, Counter-Plaintiffs respectfully request that this Honorable Court enter

judgment in its favor and as against Counter-Defendants for Libel Per Se, award damages,

prejudgment interest, attorneys fees pursuant to Florida Statutes 957.105, costs, and grant such

other and further relief as this court deems just and proper under the circumstances.

COUNT XIV LIBEL

347. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

348. Counter-Defendants, wrongfully sent a written letter to all of the tenants of the

City Walk Project informing them that Counter-Plaintiffs were in default and that all tenants

were directed to not send any further rent payments to Counter-Plaintiffs and were directed to

send all payments directly to Counter-Defendant.

349. This letter to constitutes the publishing of false and defamatory statements about

Counter-Plaintiffs to a third party.

350. Counter-Defendant acted negligently by publishing the aforesaid statements

which they knew to be false.

35 1. Counter-Defendant' s false statements were the natural and proximate cause of

Counter-Plaintiff s injuries which include but are not limited to the cancellation of leases for the

rental of units in the City Walk Project.

352. Counter-Plaintiff s have sustained additional damages as a result of Counter-

Defendant's wrongful actions.

WHEREFORE, Counter-Plaintiffs respectfully request that this Honorable Court enter

w CASE NO: 09-CA-000783 Page 58 of 71

judgment in its favor and as against Counter-Defendants for Libel, award damages, prejudgment

interest, attorneys fees pursuant to Florida Statutes $57.105, costs, and grant such other and

further relief as this court deems just and proper under the circumstances.

COUNT XV UNJUST ENRICHMENT

353. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

354. Pursuant to the 2004 Loan, Counter-Defendant loaned Counter-Plaintiffs 7.5

Million dollars for the construction of Buildings A and B of the City Walk Project.

355. The admitted purpose of this loan was the construction of Buildings A and B of

the City Walk Project.

356. Counter-Plaintiffs contributed no funds to the construction of Buildings C and D

of the City Walk Project.

357. Counter-Plaintiffs constructed Buildings C and D of the City Walk Project with

over 8 million dollars of their own funds and developed Buildings C and D under the impression

that said buildings were unencumbered by any of the various loan agreements between the

parties.

358. Counter-Plaintiffs have wrongfully claimed an interest in Buildings C and D of

the City Walk Project.

359. If it is held that Counter-Plaintiffs have any interest in Buildings C and D of the

City Walk Project under the various loan documents, such interest was procured through the

fraudulent representations of Counter-Defendant's representative Chiumento, including but not

limited to that statement that Chiumento was representing the interests of Counter-Plaintiffs.

CASE NO: 09-CA-000783 Page 59 of 71

360. Had Counter-Plaintiffs known that Buildings C and D, when constructed, would

be encumbered by the various loan documents concerning the construction of Buildings A and B,

Counter-Plaintiff would never have constructed Buildings C and D.

361. By spending over 8 million dollars and supervising the construction of Buildings

C and D Counter-Plaintiffs exponentially increased the value of the entire City Walk Project over

which Counter-Defendant now claims an interest and for which Counter-Defendant received a

benefit.

362. Counter-Defendant readily accepted and retained said benefit to Counter-

Plaintiffs' detriment.

363. There is a reasonable sum, together with interest, due from Counter-Defendant to

Counter-Plaintiffs for the reasonable value of said interest wrongfully claimed by Counter-

Defendant in Buildings C and D.

364. Circumstances are such that it would be inequitable and Counter-Defendant

would be unjustly enriched for Counter-Defendant to retain the benefit of said interest in

Buildings C and D without paying the reasonable value thereof to Counter-Plaintiffs.

WHEREFORE, Counter-Plaintiffs respectfully request judgment against Counter-

Defendant for said reasonable amount, with prejudgment interest, post judgment interest,

attorneys' fees pursuant to applicable Florida statutes, court costs, and such other and further

relief that this Honorable Court deems just and proper under the circumstances.

COUNT XVI CIVIL CONSPIRACY

365. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

w1 CASE NO: 09-CA-000783 Page 60 of 71

366. Counter-Defendant and Chiurnento, by concerted action to accomplish an

unlawful purpose or, to accomplish a lawful purpose by unlawful means, namely the

encumbering of Buildings C and D of the City Walk Project and the Property, committed willful

and malicious acts that resulted in injury to Counter-Plaintiffs as parties to the subject loan

agreements.

367. Counter-Defendant's representative, Chiumento had a confidential relationship

with Counter-Plaintiffs wherein Counter-Plaintiffs reposed special confidence in Chiumento

pursuant to their relationship as attorney and clients.

368. Knowing of this confidential relationship, Counter-Defendant retained Chiurnento

to negotiate with Counter-Plaintiff concerning the 2004 Loan, 2007 Loan, 2008.

369. Chiurnento, acting as agent for Counter-Defendant, failed to disclose the risk

factors associated with a balloon mortgage such as the 2004 Loan, the 2007 Loan and the 2008

Loan.

370. Chiurnento, acting as a representative of Counter-Defendant further failed to

inform Counter-Plaintiffs of the risks associated with the construction of Buildings C and D.

Specifically, Chiurnento failed to inform Counter-Plaintiffs that if Counter-Plaintiffs constructed

Buildings C and D with their own funds, Buildings C and D may still be encumbered by the

various loan documents executed by the parties in relation to the construction of Buildings A and

B.

371. But for Counter-Defendant's failure to disclose the aforesaid information

concerning the risks associated with a balloon mortgage and the potential future encumbrance of

Buildings C and D under the 2004 Loan, 2007 Loan, and the 2008 Loan, Counter-Plaintiffs

would not have executed the subject loans without substantial revisions to said documents and

wL CASE NO: 09-CA-000783 Page 61 of 71

would not have constructed Buildings C and D without garnering additional consideration from

Counter-Defendant.

372. As an act in furtherance of this civil conspiracy, Counter-Defendant filed a lis

pendens which includes an encumbrance of Buildings C and D.

373. As a result of Counter-Defendant's wrongful actions as described herein,

Counter-Plaintiffs have been damaged.

374. Whether the acts were done by one or both conspirators, both conspirators are

jointly and severally liable to Counter-Plaintiffs.

WHEREFORE, Counter-Plaintiffs, respectfully requests the entry of judgment for money

damages against Counter-Defendant, plus interest, costs, and attorneys' fees pursuant to

applicable Florida statutes and the various contracts between the parties, and for such other and

further relief as this Honorable Court deems just and proper under the circumstances.

COUNT XVII OUANTUM MERUIT

375. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

Paragraphs "65" through "167", as though fully set forth and incorporated herein.

376. In the event this Court finds the lack of an express agreement concerning the

development of Buildings C and D, Counter-Plaintiffs alternatively plead that they are entitled

damages under quantum meruit.

377. Pursuant to the 2004 Loan, Counter-Defendant's loaned to Counter-Plaintiffs 7.5

Million dollars for the construction of Buildings A and B of the City Walk Project.

378. The admitted purpose of this loan was the construction of Buildings A and B of

the City Walk Project.

'IS CASE NO: 09-CA-000783 Page 62 of 71

379. Counter-Plaintiffs contributed no finds to the construction of Buildings C and D

of the City Walk Project.

380. Counter-Plaintiffs constructed Buildings C and D of the City Walk Project with

their over 8 million dollars of their own funds and developed Buildings C and D under the

impression that said buildings were unencumbered by any of the various loan agreements

between the parties.

381. Counter-Plaintiffs have claimed an interest in Buildings C and D of the City Walk

Project.

382. If it is held that Counter-Plaintiffs have any interest in Buildings C and D of the

City Walk Project under the various loan documents, such interest was procured through the

fraudulent representations of Counter-Defendant's representative Chiumento, including but not

limited to Chiumento's statement that he was representing the interests of Counter-Plaintiffs.

383. Had Counter-Plaintiffs known that Buildings C and D, when constructed, would

be encumbered by the various loan documents concerning the construction of Buildings A and B,

Counter-Plaintiff would never have constructed Buildings C and D.

384. By spending over 8 million dollars and supervising the construction of Buildings

C and D Counter-Plaintiffs exponentially increased the value of the entire City Walk Project over

which Counter-Defendant now claims an interest and for which Counter-Defendant received a

benefit.

385. Counter-Defendant readily accepted and retained said benefit to Counter-

Plaintiffs' detriment.

~r CASE NO: 09-CA-000783 Page 63 of 71

386. Under ordinary circumstances, a reasonable person in the position of Counter-

Defendants would have expected to pay for said financing, funds, and expenditure of time in the

construction of Buildings C and D.

387. Counter-Defendant has not paid for this benefit.

388. Circumstances are such that it would be inequitable for Counter-Defendant to

retain these benefits without paying the reasonable value thereof to Counter-Plaintiffs.

WHEREFORE, Counter-Plaintiffs respectfully request judgment against Counter-

Defendant for damages under quantum meruit, prejudgment interest, post judgment interest,

attorneys' fees pursuant to applicable Florida statutes, court costs, and such other and further

relief that this Honorable Court deems just and proper under the circumstances.

COUNT XVIII BREACH OF DUTY TO DISCLOSE RISK FACTORS

389. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

paragraphs "65" through "167" and incorporates same as though fully set forth herein.

390. Counter-Defendant's representative, Chiumento had a confidential relationship

with Counter-Plaintiffs wherein Counter-Plaintiff reposed special confidence in Chiumento

pursuant to their relationship as attorney and client.

39 1. Knowing of this confidential relationship, Counter-Defendant retained Chiumento

to negotiate with Counter-Plaintiff concerning the 2004 Loan, 2007 Loan, 2008.

392. Chiumento, acting as agent for Counter-Defendant failed to disclose the risk

factors associated with a balloon mortgage such as the 2004 Loan, the 2007 Loan and the 2008

Loan.

393. Chiumento, acting as a representative of Counter-Defendant further failed to

inform Counter-Plaintiffs of the risks associated with the construction of Buildings C and D.

w CASE NO: 09-CA-000783 Page 64 of 71

Specifically, Chiumento failed to inform Counter-Plaintiffs that if Counter-Plaintiff constructed

Buildings C and D with their own funds, Buildings C and D may still be encumbered by the

various loan documents executed by the parties in relation to the construction of Buildings A and

B.

394. But for Counter-Defendant's failure to disclose the aforesaid information

concerning the risks associated with a balloon mortgage and the potential future encumberance

of Buildings C and D under the 2004 Loan, 2007 Loan, and the 2008 Loan, Counter-Plaintiffs

would not have executed the various loans without substantial revisions to said documents and

would not have constructed Buildings C and D without garnering additional consideration from

Counter-Defendant.

395. As the direct and proximate result of Counter-Defendant's breach of duty to

disclose risk factors, Counter-Plaintiffs have sustained substantial damages.

WHEREFORE, Counter-Plaintiffs respectfully request that this Court enter judgment in

its favor and against Counter-Defendant for damages, prejudgment interest, an award of

attorneys' fees pursuant to the various contracts between the parties and applicable Florida

Statutes, costs and such other relief as the court deems just and proper under the circumstances.

COUNT XIX BREACH OF FIDUCIARY DUTY

396. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

paragraphs "65" through "167" and incorporates same as though fully set forth herein.

397. Counter-Defendant's representative, Chiumento had a confidential relationship

with Counter-Plaintiffs wherein Counter-Plaintiff reposed special confidence in Chiumento

pursuant to their relationship as attorney and client.

ssr- CASE NO: 09-CA-000783 Page 65 of 71

398. Knowing of this confidential relationship, Counter-Defendant retained Chiumento

to negotiate with Counter-Plaintiff concerning the 2004 Loan, the 2007 Loan, 2008.

399. By virtue of the fiduciary relationship between Chiumento, as agent and

representative of Counter-Defendant and Counter-Plaintiffs, Counter-Defendant had a fiduciary

duty to Counter-Plaintiffs to disclose material facts and risk factors associated with the 2004

Loan, 2007 Loan, and 2008 Loan and the subsequent construction of the encumbered Buildings

C and D.

400. Chiumento, acting as a representative and agent for Counter-Defendant breached

his fiduciary duty to Counter-Plaintiffs by failing to disclose the risk factors associated with a

balloon mortgage such as the 2004 Loan, the 2007 Loan, and the 2008 Loan.

401. Chiumento, acting as a representative and agent of Counter-Defendant further

breached his fiduciary duty by failing to inform Counter-Plaintiffs of the risks associated with

the construction of Buildings C and D. Specifically, Chiumento failed to inform Counter-

Plaintiffs that if Counter-Plaintiff constructed Buildings C and D with their own funds, Buildings

C and D may still be encumbered by the various loan documents executed by the parties in

relation to the construction of Buildings A and B.

402. But for Counter-Defendant's failure to disclose the aforesaid information

concerning the risks associated with a balloon mortgage and the potential future encumberance

of Buildings C and D under the 2004 Loan, 2007 Loan, and the 2008 Loan, Counter-Plaintiffs

would not have executed the various loans without substantial revisions to said documents and

would not have constructed Buildings C and D without garnering additional consideration from

Counter-Defendant.

403. As the direct and proximate result of Counter-Defendant's breach of fiduciary

wm' CASE NO: 09-CA-000783 Page 66 of 71

duty to Counter-Plaintiffs, Counter-Plaintiffs have sustained substantial damages.

WHEREFORE, Counter-Plaintiffs demand judgment against Counter-Defendant for

compensatory damages, prejudgment and post judgment interest, attorneys' fees and costs

pursuant to the various contracts between the parties and applicable Florida statutes, and any

other relief this Court deems necessary and proper.

COUNT XX NEGLIGENCE

404. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

paragraphs "65" through "167" and incorporates same as though fully set forth herein.

405. Counter-Defendant and its agent, Chiumento, owed Counter-Plaintiffs a duty

under the circumstances to protect Counter-Plaintiffs' interests related to the 2004 Loan.

406. In addition, Article 11 1, subsection (b) of the 2004 Loan states in pertinent part

that:

"(b) Disbursement Schedule. Except for the amount required to pay of existing mortgages on the Property, future disbursements shall be strictly contingent upon the Borrower submitting to Lender:

. . .2) Receipt of acceptable contract with the builder;. . ."

(Emphasis added)

407. Counter-Defendant breached its duty to Counter-Plaintiffs when it directed

pursuant to Article 11 1, subsection (b) of the 2004 Loan, that Counter-Plaintiffs use Bomar as its

contractor for Phase I of the City Walk Project even though it knew that Bomar was a slow

contractor.

408. Counter-Defendant breached its duty to Counter-Plaintiffs where it insisted

pursuant to Article 11 1, subsection (b) of the 2004 Loan that Counter-Plaintiffs use C.P.

CASE NO: 09-CA-000783 Page 67 of 71

Concrete as its contractor for Phase I of the City Walk Project just because the company was

owned by the spouse of a BB&T employee.

409. C.P. Concrete failed to construct the walkways as designed. Specifically, C.P.

Concrete simply neglected to construct the walkways with the two inch slope designated in the

construction plans. The result was water leaking from the second floor into the commercial

condominium units below and, significant amounts of mold accumulating in those units.

410. The leakage and mold problems caused damage in excess of $300,000.00 which

Asnani and Asnaco were required to pay.

41 1. Thereafter, despite Asnani's requests to the contrary, BB&T released the full

retainer to C.P. Concrete thereby removing from Asnani and Asnaco their most convenient and

effective legal remedy against C.P. Concrete for their negligence and failure to construct the

second floor walkways in compliance with the construction plans.

412. The construction of Buildings A and B by Bomar was so slow, in fact, that despite

the fact that construction on Building C was commenced nine (9) months after Building A,

Building C which was fully funded by Asnani and constructed by a contractor of Asnani

choosing, was completed a full two months before construction on Building A was completed.

What is more remarkable about this fact is that Building C is 50% bigger in square footage than

Building A.

413. As a direct and proximate result of Counter-Defendant's aforesaid negligence,

Counter-Plaintiffs have suffered and continue to suffer substantial damages, including monetary

loss, and other incidental and consequential damages.

WHEREFORE, Counter-Plaintiffs demand judgment against Counter-Defendant for

compensatory damages, prejudgment and post judgment interest, attorneys' fees and costs

w CASE NO: 09-CA-000783 Page 68 of 71

pursuant to the various contracts between the parties and applicable Florida statutes, and any

other relief this Court deems necessary and proper.

COUNT XXI FRAUD IN FACTUM

414. Counter-Plaintiffs hereby reallege and reaver the general allegations contained in

paragraphs "65" through "167" and incorporates same as though fully set forth herein.

415. On or about November 2004, Counter-Defendant by and through Counter-

Defendant's Vice-President, Collins made material misrepresentations to Asnani regarding the

financing of the City Walk Project.

416. Collins informed Asnani that BB&T would be financing and funding at least

Phase I (Buildings A and B) of the City Walk Project. When Asnani specifically questioned why

the 2004 Loan was only set at 7.5 million dollars when everyone knew that Phase I would cost at

least 10.5 million dollars, Collins told Asnani that when the time came, the additional funds

would be provided.

417. Asnani reasonably relied on this representation by Collins on behalf of BB&T.

418. Collins knew the aforesaid representation was false when he made it to Asnani.

419. Collins made the aforesaid representation to Asnani to induce Counter-Plaintiffs

to enter into the 2004 Loan.

420. Subsequently, Asnani discovered that Collins aforesaid representations were false.

When Asnani approached BB&T for the additional financing, Collins initially denied said

financing and delayed making its decision to provide said financing which significantly damaged

Asnani, Asnaco, and the City Walk Project.

%F CASE NO: 09-CA-000783 Page 69 of 71

421. Due to the delay in finalizing the additional financing, construction on the City

Walk Project was delayed and at one point came to a halt as BB&T wavered on its decision to

provide the additional financing Collins promised Asnani in November of 2004.

422. Moreover, Despite having full knowledge that under the 2004 Loan Documents,

the construction of Buildings C and D may be encumbered, even if Asnani did not use any of

BB&T's funds to complete construction of Buildings C and D, neither Chiumento nor, any other

BB&T agent informed Asnani that he may be pouring his life savings into BB&T's pockets.

423. When Asnani addressed the issue of whether Buildings C and D would be

encumbered by the 2004 Loan with Collins; Collins told Asnani that BB&T had nothing to do

with Buildings C & D or Phase I1 of the City Walk Project.

424. When Asnani asked Chiumento the same question, Chiumento for the first time,

informed Asnani that under the 2004 Loan Documents Buildings C and D were probably

encumbered because the property description was never divided into two phases the way the City

Walk Project was. However, Chiumento assured Asnani that while according to the 2004 Loan

Documents (which Chiumento drafted) Buildings C and D may be encumbered, as soon as

Asnani filed his Declaration of Condominium on Buildings C and D, that he would ensure that

BB&T would release Buildings C & D from the 2004 Loan.

425. Any provisions of the various loan documents which might imply that Buildings

C and D of the City Walk Project might be encumbered were procured through the fraudulent

representations on the part of Counter-Defendant's agent, Chiumento.

426. Counter-Plaintiffs relied on Counter-Defendant's aforesaid representations in

executing the 2004, the 2007 Loan, and the 2008 Loan and therefore, Counter-Plaintiffs executed

said loans without knowledge as to the true and nature and content of the subject loans and

Counter-Plaintiffs' and Counter-Defendant's obligations thereunder.

v CASE NO: 09-CA-000783 Page 70 of 71

427. As a result of Counter-Plaintiffs' reliance on Counter-Defendant's aforesaid

misrepresentations, Counter-Plaintiffs have suffered damages.

428. Counter-Defendant acted in wanton and willful disregard of Counter-Plaintiffs'

rights and their actions shock the conscience of the community and should not be condoned by

this court.

429. Counter-Plaintiffs reserve the right to seek leave to amend their complaint to

include a claim for punitive damages in accordance with Florida Statute $768.72.

WHEREFORE, Counter-Plaintiffs demand judgment against Counter-Defendant for

compensatory damages, prejudgment and post judgment interest, attorneys' fees and costs

pursuant to the various contracts between the parties and applicable Florida statutes, and any

other relief this Court deems necessary and proper.

Respectfully Submitted,

AIRAN2, AIRAN-PACE, CROSA & FERNANDEZ, P.A. Suite 3 10, Plaza San Remo 6705 SW 57 Avenue (Red Road) Coral Gables, Florida 33143 Telephone: 305-666-93 1 1 Facsimile: 305-665-6373

By: mrp D.S. DAR A ~ A N Fla. Bar No.: 405825 MICHELE A. CROSA Fla. Bar No.: 0039283 MICHAEL JAMES COREY Fla. Bar No.: 0043598