Marani Response

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

Dirk O. Julander, Bar No. 132313 [email protected] Andrea S. Paris, Bar No. 252621 [email protected] JULANDER, BROWN & BOLLARD 9110 Irvine Center Drive Irvine, California 92618 Telephone: (949) 477-2100 Facsimile: (949) 477-6355

Attorneys for Marani Brands, Inc., a Nevada Corporation

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

BODIE INVESTMENT GROUP, INC., a Delaware Corporation,

Plaintiff,

vs.

MARANI BRANDS, INC., a Nevada Corporation,

Defendant.

Case No. 8:14-cv-00308-JLS-AN

The Hon. Josephine L. Staton

ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT AND COUNTERCLAIM

DEMAND FOR JURY TRIAL

Defendant Marani Brands, Inc., a Nevada Corporation (Defendant or

Marani) submits its Answers and Affirmative Defenses to the Complaint filed by

Plaintiff Bodie Investment Group, Inc. (Plaintiff) on or about March 3, 2014 (the

Complaint).

ANSWER

1. Defendant admits the allegations in paragraph 1 of the Complaint.

2. Defendant admits that provisions of the Convertible Note can trigger a

conversion price adjustment. Defendant denies that any such price adjustment was

triggered and further denies the remaining allegations in paragraph 2 of the

Complaint.

3. Defendant denies the allegations in paragraph 3 of the Complaint.

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

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT

4. Defendant lacks sufficient information regarding Plaintiffs alleged

error in calculation and therefore denies that and the remaining allegations in

paragraph 4 of the Complaint.



7. Defendant lacks sufficient information to admit or deny and therefore

denies the allegations in paragraph 7 of the Complaint.




11. Defendant admits that paragraph 2.1 of the Convertible Note provides a

mechanism to compute the conversion price for debt under the Note in substantially

the form as alleged in Paragraph 11 of the Complaint. To the extent paragraph 11 of

the Complaint does not accurately reflect that provision, Defendant denies the

allegations of that paragraph.


13. Defendant admits that Marani issued shares at a cost of $0.001 per

share to Eco Investment Properties. Other than expressly admitted herein,

Defendant denies the allegations contained in paragraph 13.


15. Defendant admits that Plaintiff converted its debt to stock but denies

the accuracy of the accounting set forth in paragraph 15 of the Complaint.


17. Defendant restates and incorporates its answers to the preceding

paragraphs above, as if set forth fully herein.


/ / /

/ / /


12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


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

in the Convertible Note. Other than expressly admitted herein, Defendant denies the

allegations contained in paragraph 19 of the Complaint.












29. Defendant lacks sufficient information to admit or deny and therefore

denies the allegations in paragraph 29 of the Complaint.











/ / /

/ / /


12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


AFFIRMATIVE DEFENSES

FIRST AFFIRMATIVE DEFENSE

(Fails to State a Cause of Action)

1. The Complaint, and each cause of action contained therein, fails to state

facts sufficient to constitute a cause of action against Defendant.

SECOND AFFIRMATIVE DEFENSE

(Lack of Damages)

2. Plaintiff has not suffered any damages as a result of any action taken by

Defendant and is therefore barred from any recovery in this action.

THIRD AFFIRMATIVE DEFENSE

(Payment)

3. As set forth more fully in Defendants counterclaim, which is

incorporated herein by this reference, Defendant has paid to Plaintiff in full all

obligations arising from the agreements underlying Plaintiffs Complaint and

Plaintiff is therefore barred from any recovery in this action.

FOURTH AFFIRMATIVE DEFENSE

(Performance)

4. As set forth more fully in Defendants counterclaim, which is

incorporated herein by this reference, Defendant has fully performed any and all

contractual, statutory, and other duties required of them, except for those duties as to

which Defendant's performance has been excused.

FIFTH AFFIRMATIVE DEFENSE

(Failure to mitigate damages)

5. Plaintiff failed to mitigate the damages it is alleged to have suffered in

the Complaint. Thus, Plaintiffs damages, if any, were proximately caused or

increased by its own acts or failures to act and any judgment sustained herein by

Plaintiff must be reduced by the percentage and degree of fault by which Plaintiffs

failure to mitigate contributed to any damage allegedly suffered by Plaintiff.


12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


SIXTH AFFIRMATIVE DEFENSE

(Failure of Contractual Conditions)

6. Defendant is excused from any obligations, liability or duty of

performance under the purported contracts by reason of failures of conditions

precedent, conditions concurrent, and conditions subsequent.

SEVENTH AFFIRMATIVE DEFENSE

(Unjust Enrichment)

7. Plaintiff would be unjustly enriched if it were to recover upon any of its

claims, thus the Complaint, and each purported cause of action contained therein, is

barred.

EIGHTH AFFIRMATIVE DEFENSE

(Inequity)

8. Defendant alleges that it was impossible for it to perform the

obligations as alleged in the Complaint; accordingly, any recovery in this action

would be unjust and inequitable.

NINTH AFFIRMATIVE DEFENSE

(Plaintiffs Prior Breach)

9. Plaintiff breached its contracts with Defendant, and by reason of said

breach of contracts, Defendant has been excused of its duties to perform all

obligations thereunder.

TENTH AFFIRMATIVE DEFENSE

(Damages Caused By Plaintiff)

10. Despite Defendants performance of the obligations set forth in the

contracts alleged in the Complaint, Plaintiffs own conduct resulted in damages

Plaintiff now complains about, which damages could not have been avoided by

Plaintiffs performance.


12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


ELEVENTH AFFIRMATIVE DEFENSE

(Reasonableness and Good Faith)

11. Defendant acted reasonably and in good faith at all times, based on all

relevant facts and circumstances known by it at the time it so acted. Accordingly,

Plaintiff is barred from any recovery in this action.

TWELFTH AFFIRMATIVE DEFENSE

(Off Set)

12. Defendant is informed and believes and on that basis alleges that

Plaintiff intentionally manipulated Maranis stock price by publishing false

statements in public investor fora designed to lower Maranis stock price.

Defendant is further informed and believes and on that basis alleges that Plaintiff

has been exercising its conversion rights at issue in the Complaint in order to gain

from its unlawful market manipulation. Defendant is informed and believes and on

that basis alleges that Marani and all of its shareholders have suffered damage by

reason of Plaintiffs conduct. As such, the parties have mutual demands that co-

exist against each other. Therefore, the two demands are compensated so far as they

equal each other. Defendant has the right of offset if any amount of money is owed

to Plaintiff, which Defendant also denies, and Plaintiff is entitled only to the net

difference, if any, between the mutual demands.

THIRTEENTH AFFIRMATIVE DEFENSE

(Unclean Hands)

13. Plaintiff is guilty of wrongful conduct in connection with the

allegations contained in the Complaint. Defendant is informed and believes and on

that basis alleges that Plaintiff intentionally manipulated Maranis stock price by

publishing in public investor fora false or misleading statements of material fact,

which it knew or had reasonable ground to believe was false or misleading, designed

to lower Maranis stock price. Defendant is further informed and believes and on

that basis alleges that Plaintiff has been exercising its conversion rights at issue in


12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


the Complaint at the price(s) that were affected by his publication of false and

misleading statements and that it gained from its unlawful market manipulation.

The price at which Defendant converts Plaintiffs debt into stock is dependent upon

the price of Marani stock as reflected in the market. Defendant is informed and

believes and on that basis alleges that Marani and all of its shareholders have

suffered damage by reason of Plaintiffs conduct. As such, Plaintiff is barred from

recovery by the doctrine of unclean hands and Plaintiffs alleged injuries resulting

from the prices at which it exercised its conversion rights directly relates to its

manipulation of Maranis stock prices.

FOURTEENTH AFFIRMATIVE DEFENSE

(Ratification)

14. Plaintiff has by its conduct, ratified the purported acts and/or omissions

of which Plaintiff now complains.

FIFTEENTH AFFIRMATIVE DEFENSE

(Consent)

15. Plaintiff, by itself or through its agents, consented to the acts and events

of which it now complains and Plaintiff is now barred from any recovery in this

action.

SIXTEENTH AFFIRMATIVE DEFENSE

(Statute of Limitations)

16. Plaintiffs Complaint and the allegations contained therein are barred

by the applicable statute of limitations including, but not limited to Code of Civil

Procedure, sections 337, 338, 339, 339(1), 343 and Civil Code section 3426.6.

SEVENTEENTH AFFIRMATIVE DEFENSE

(Impossibility/Excuse)

17. Defendant alleges that it was impossible for it to perform the

obligations alleged in the Complaint and that its performance was therefore excused.

Accordingly, Plaintiff is barred from any recovery in this action.


12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


EIGHTEENTH AFFIRMATIVE DEFENSE

(Estoppel)

18. Plaintiff is estopped from claiming that any portion of its promissory

note is now due and payable.

NINETEENTH AFFIRMATIVE DEFENSE

(Acquiescence/Waiver)

19. By its own conduct, Plaintiff is barred from recovery on the ground that

Plaintiff waived the claims alleged in the Complaint.

TWENTIETH AFFIRMATIVE DEFENSE

(Laches)

20. Plaintiff is barred from any relief and/or the recovery of any damages

under the doctrine of laches.

PRAYER

WHEREFORE, Defendant, Marani Brands, Inc. prays for judgment as

follows:

1. That the Complaint be dismissed and that Plaintiff take nothing

pursuant to its Complaint;

2. For costs of suit incurred herein, including reasonable attorney's fees;

and

3. For such other and further relief as the Court may deem just and proper.

COUNTERCLAIM

Defendant and Counterclaimant Marani Brands, Inc., a Nevada Corporation

(Marani) for its counterclaim against Plaintiff and Counterdefendant Bodie

Investment Group, Inc. (Bodie) alleges as follows:

/ / /

/ / /


12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


FIRST CLAIM FOR RELIEF

(Breach of Convertible Note)

36. On or about February 1, 2010, Marani entered into a Convertible Note

with Bodie whereby Bodie agreed to lend to Marani $100,000 for one year in

exchange for repayment of the principal with interest (the Note). According to the

terms of the Note, Bodie also had the option to convert the principal and interest due

under the Note into common stock of the company. A true and correct copy of the

Note is attached to the Complaint as Exhibit 1 (Dkt. No. 1). In conjunction

therewith, Marani and Bodie also entered into a Subscription Agreement providing

for specific terms relating to the conversion of debt into the companys stock. A

true and correct copy of the Subscription Agreement is attached to the Complaint as

Exhibit 2 (Dkt. No. 1) These parties also executed a Form of Common Stock

Purchase Warrant (the Warrant) as part of this transaction. A true and correct

copy of the Warrant is attached to the Complaint as Exhibit 3 (Dkt. No. 1)

37. Marani performed each of the obligations on its part to be performed

under the Note, the Subscription Agreement and the Warrant except those

obligations which have been excused, frustrated, or rendered impossible by the prior

breaches of Bodie.

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

breached the Note, Subscription Agreement and Warrant in that:

a. Bodie sent conversion notices and received shares directly from

Maranis transfer agent without notice to and without obtaining approval from the

company for the transfers;

b. Bodie sent conversion notices and received shares directly from

Maranis transfer agent in excess of that required under the Note;

c. Bodie sent conversion notices and received shares directly from

Maranis transfer agent without accounting for all of the conversions with the

company;


12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


d. Bodie sent conversion notices and received shares directly from

Maranis transfer agent using improper accounting and conversion methods; and

e. Marani is informed and believes, and based thereon alleges, that

during Maranis performance under the Note, the Subscription Agreement and the

Warrant, Bodie was improperly shorting or manipulating Maranis stock in order to

increase the amount of common stock that would convert to Bodie in exchange for

its debt and under the Warrant.

39. As a direct and proximate result of the above described breaches,

Marani has suffered compensatory damages in a sum in excess of $100,000,

according to proof at the time of trial.

40. Pursuant to section 5.5 of the Note and Civil Code Section 1717

Marani is entitled to recover its attorneys fees in connection with Bodies breach of

the Note. Marani has retained Julander, Brown & Bollard to prosecute this

Counterclaim and has incurred, and continues to incur, reasonable attorneys fees

and costs that it is entitled to recover.

SECOND CLAIM FOR RELIEF

(Accounting)

41. Marani refers to and incorporates by reference the allegations of

paragraph 1 through 40 above as though fully set forth herein.

42. Marani is informed and believes and on that basis alleges that Bodie

received stock in excess of that required under the Note and Warrant. The

underlying transfers of stock from Marani and Bodie occurred over a period in

excess of two (2) years and involved numerous transactions and the transfer of

millions of shares of stock facilitated by a third party transfer agent. As such, the

amount of excess stock cannot be determined without an accounting.

43. Pursuant to section 5.5 of the Note and Civil Code section 1717 Marani

is entitled to recover its attorneys fees in connection with the accounting of excess


12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


stock transferred to Bodie. Marani has retained Julander, Brown & Bollard to

prosecute this Counterclaim and has incurred, and continues to incur, reasonable

attorneys fees and costs that it is entitled to recover.

THIRD CLAIM FOR RELIEF

(Declaratory Relief)

44. Marani refers to and incorporates by reference the allegations of

paragraph 1 through 43 above as though fully set forth herein.

45. An actual controversy has arisen and now exists between Bodie, on the

one hand, and Marani, on the other hand, regarding their respective rights, duties

and obligations pursuant to the Note, the Subscription Agreement, and the Warrant.

46. Marani alleges that Bodie has received excess stock under the Note and

Warrant insofar as:

a. Bodie sent conversion notices and received shares directly from

Maranis transfer agent without notice to and without obtaining approval from the

company for the transfers;

b. Bodie sent conversion notices and received shares directly from

Maranis transfer agent in excess of that required under the Note;

c. Bodie sent conversion notices and received shares directly from

Maranis transfer agent without accounting for all of the conversions with the

company;

d. Bodie sent conversion notices and received shares directly from

Maranis transfer agent using improper accounting and conversion methods; and

e. Marani is further informed and believes, and based thereon

alleges, that during Maranis performance under the Note, the Subscription

Agreement and the Warrant, Bodie was improperly shorting or manipulating

Maranis stock in order to increase the amount of common stock that would convert

to Bodie in exchange for its debt and under the Warrant.


12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


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

denies these allegations and claims that it has not received excess stock.

48. A judicial determination is necessary and appropriate to determine the

respective rights, duties, and obligations of Bodie and Marani as set forth above.

PRAYER FOR RELIEF

WHEREFORE, Marani prays for judgment on its counterclaim against Bodie

as follows:

1. For compensatory damages according to proof;

2. For an accounting of the financial transactions between Marani, on the

one hand, and Bodie, on the other hand, to determine the amount of excess stock

transferred to Bodie under the Note and Warrant.

3. For a judicial determination of the controversy between Bodie, on the

one hand, and Marani, on the other hand, regarding their respective rights, duties

and obligations pursuant to the Note, the Subscription Agreement, and the Warrant.

4. For attorneys fees as requested herein;

5. For prejudgment and post-judgment interest upon all amounts awarded;

6. For costs of the suit herein; and

7. For such other and further relief as the Court may deem just and proper.

DATED: April 21, 2014 JULANDER, BROWN & BOLLARD By: Dirk O. Julander

Andrea S. Paris Attorneys for Marani Brands, Inc., a Nevada Corporation


12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


DEMAND FOR JURY TRIAL

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

the above-captioned matter.

DATED: April 21, 2014 JULANDER, BROWN & BOLLARD By: Dirk O. Julander

Andrea S. Paris Attorneys for Marani Brands, Inc., a Nevada Corporation


Documents

Marani Response