"We are committed to: The highest ethical standards. Uncompromising honesty and integrity." —The Windermere Mission Statement "In the real estate business somebody's word is very important. If you say you're going to do something, you've got to do it." —Windermere CEO Geoff Wood's Public Affirmation

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CASE MANAGEMENT UPDATE: "The party or parties request that the following additional matters be considered or determined at the case management conference (specify): Fifth Amendment Privilege issue as to Peggy Shambaugh, defendant and major witness." DOWNLOAD AND READ THE FULL CASE MANAGEMENT STATEMENT HERE

DEFENDANTS' MOTION TO STAY PROCEEDINGS: "...Moving Parties [Peggy Shambaugh, Bennion & Deville Fine Homes, dba Windermere Real Estate Coachella Valley] Are Under Investigation by The Federal Bureau of Investigation and the United States Attorney as to the Allegations In Plaintiffs' Complaint" READ IT HERE

Windermere Coachella Valley, California, operates real estate offices in Cathedral City, Garner Valley, Indian Wells, Indio, La Quinta, Palm Desert, Palm Springs and Rancho Mirage...

Bennion & Deville Fine Homes, doing business as Windermere Real Estate Coachella Valley, and its Realtor Peggy Shambaugh, sued for Breach of Contract, Breach of the Implied Covenant of Good Faith and Fair Dealing, Breach of Fiduciary Duty and Professional Negligence in $30 million-plus deal. Windermere Services sued for Breach of Fiduciary Duty, Professional Negligence and Unfair Trade Practices. Complaint alleges that Windermere Services is an "unlicensed entity."

Case Update: Ordered Consolidated with Constructive Fraud case, No. RIC 10019843 HERE; Read the Order to Consolidate HERE.

"Further, at all times relevant to the events alleged in this action, Windermere Coachella was and is licensed by the State of California as a real estate broker, doing business as a real estate broker and operating an unlawful franchise arrangement with defendant Windermere Real Estate Services Company ("Windermere Services") from which both Windermere Coachella and Windermere Services have unlawfully split over a million dollars in commissions from real estate transactions within the State of California." JUMP TO THIS ALLEGATION HERE

"...At the time of the increase in purchase price, with the knowledge and/or consent of Windermere Coachella, Windermere Services, Deville and Shambaugh, Kovall told the Tribe that the increase was the result of "some people from New York," who were supposedly interested in the property, and therefore constituted potential competitors for the property for the Tribe." JUMP TO THIS ALLEGATION HERE

READ THE ENTIRE COMPLAINT BELOW — DOWNLOAD A PDF COPY OF THE COMPLAINT HERE

READ THE ANSWER OF DEFENDANTS HERE

Above L to R, 1-3: Joseph R. "Bob" Deville, Principal, Broker, Owner, and President of Windermere Services Southern California; Bennion & Deville Fine Homes, Inc., Coachella Valley, California. Bob Bennion, Principal and Owner of Windermere Services Southern California; Bennion & Deville Fine Homes, Inc., Coachella Valley, California. Peggy Shambaugh, Realtor at Windermere Real Estate Coachella Valley, Indian Wells office.

Above L to R, 4-8: John W. Jacobi is Chairman and Founder of franchiser Windermere Services Company; Geoffrey P. Wood, Current Governing Person and Windermere Services Company CEO; Jill Jacobi-Wood, Windermere Services President and current Governing Person; current Governing Person and Windermere Services General Manager, John O'Brien "OB"Jacobi; Windermere Services Company General Counsel and Governing Person, attorney Paul Drayna—WSBA# 26636.

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF RIVERSIDE

TWENTY-NINE PALMS BAND OF MISSION INDIANS OF CALIFORNIA; TWENTY-NINE PALMS ENTERPRISES CORPORATION; and ECHO TRAIL HOLDINGS, LLC, a limited liability company,

Plaintiffs,

vs.

DAVID ALAN HESLOP, an individual, DIVERSIFICATION RESOURCES, LLC, a limited liability company, NATIONAL DEMOGRAPICS [sic], Inc., a corporation, PEGGY SHAMBAUGH, an individual, BENNION & DEVILLE FINE HOMES, INC., doing business as WINDERMERE REAL ESTATE COACHELLA VALLEY, a corporation, and Does I through 100,

Defendants.

Case No. RIC10006101

Honorable John Vineyard, Dept. 7

FOURTH AMENDED COMPLAINT FOR:

(1) BREACH OF CONTRACT;
(2) BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING;
(3) BREACH OF FIDUCIARY DUTY;
(4) BREACH OF CONTRACT;
(5) BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING;
(6) BREACH OF FIDUCIARY DUTY;
(7) PROFESSIONAL NEGLIGENCE; and
(8) UNFAIR TRADE PRACTICES

Plaintiffs Twenty-Nine Palms Band of Mission Indians of California, Twenty-Nine Palms Enterprises Corporation, and Echo Trail Holdings, LLC (sometimes collectively referred to herein as "Plaintiffs") allege, as follows:

GENERAL ALLEGATIONS

1. At all times relevant to the events alleged in this action, Plaintiff Twenty-Nine Palms Band of Mission Indians of California was and is a Sovereign Native American Nation duly recognized by the government of the United States of America. At all times relevant to the events alleged in this action, Plaintiff Twenty-Nine Palms Enterprises Corporation was and is a federally chartered corporation duly organized and existing under the laws of the government of the United States of America, and was and is wholly owned by Plaintiff Twenty-Nine Palms Band of Mission Indians of California. Together, these two entities are sometimes hereinafter collectively referred to as the "Tribe."

2. At some of the times relevant to the events alleged in this action, Plaintiff Echo Trail Holdings, LLC ("Echo Trail Holdings") was and is a limited liability company organized and existing under the laws of the State of California and was and is wholly owned by the Tribe.

3. At all times relevant to the events alleged in this action, defendant David Alan Heslop ("Heslop") was and is an individual and, on information and belief, a resident of the County of San Luis Obispo.

4. Plaintiffs are informed and believe that Defendant Diversification Resources, LLC, a Nevada limited liability company ("DRL-NV") is a limited liability company organized under the laws of the State of Nevada. Plaintiffs are informed and believe that in or about August 2006, Heslop formed DRL-NV. On information and belief, Heslop was,
and is, the sole member and manager of DRL-NV; and its business affairs were, and are, controlled by Heslop. Plaintiffs are further informed and believe and thereon allege that in or about August 2007, a conversion was filed with the California Secretary of State, whereby Defendant DRL-NV was purportedly converted to Defendant Diversification
Resources, LLC, a California limited liability company ("DRL-CA"). Assuming that the conversion was lawfully effected, all debts, liabilities and obligations of DRL-NV continue as debts, liabilities and obligations of DRL-CA, and all rights of creditors, including Plaintiffs, were preserved unimpaired against DRL-CA, as if the alleged conversion had not occurred.

5. As a result of Heslop's failure and refusal to respond to any discovery to date, Plaintiffs are currently unable to determine the precise legal status of DRL-NV or the legal effectiveness of the alleged conversion. Plaintiffs are informed and believe and thereon allege that DRL-CA and Heslop failed to notify creditors of DRL-NV of the alleged conversion. Plaintiffs are further informed and believe and thereon allege that DRL-NV failed to transfer its assets (including possible insurance coverage) to DRL-CA in connection with the alleged conversion, and instead, transferred such assets to Heslop, with the intent to defraud its creditors and to escape liability for its debts. Accordingly, the purported "conversion" has no effect on Plaintiffs' claims against DRL-NV

6. Plaintiffs are informed and believe and thereon alleged that DRL-NV and Heslop knowingly and willfully conspired and agreed among themselves, and with Paul P. Bardos, to defraud Plaintiffs out of hundreds of thousands of dollars by charging Plaintiffs spurious consulting fees for construction and construction management. Defendants Heslop and DRL-NV did the acts and things here and alleged pursuant to, and in furtherance of, the conspiracy and the above-alleged agreement.

7. In the alternative, since DRL-NV contends that it is a "dissolved" limited liability company, pursuant to California Corporations Code § 17355, this action may be maintained against DRL-NV to the extent of its undistributed assets, including, without limitation, any insurance assets held by DRL-NV that may be available to satisfy claims. (DRL-NV and DRL-CA are hereinafter collectively referred as "DRL.")

8. On information and belief, at all times relevant to the events alleged in this action defendant National Demographics, Inc. ("NDI") was and is a corporation doing business in the States of Nevada and/or California. Further, on information and belief, NDI was formed by Heslop on or about July 12, 1979; Heslop was and is one of the owners of stock in NDI; and, at various times referred to in this action, Heslop was an officer and director of NDI. On information and belief, NDI has its principal place of business in the County of Los Angeles, at 1217 Glenwood Road, Glendale, CA 91202.

9. On information and belief, in doing or failing to do the things alleged in this action, Heslop was acting in the course and scope of his responsibilities as the managing owner and agent of DRL and as a managing officer, director and agent of NDI.

10. On information and belief, at all times relevant to the events alleged in this action, defendant Peggy Shambaugh ("Shambaugh") was and is an individual and a resident of the County of Riverside. At all times relevant to the events alleged in this action, Shambaugh was and is a real estate licensee and a real estate agent with defendant Bennion & Deville Fine Homes, Inc., which does business as Windermere Real Estate Coachella Valley.

11. At all times relevant to the events alleged in this action, defendant Bennion & Deville Fine Homes, Inc., doing business as Windermere Real Estate Coachella Valley ["Windermere Coachella") was and is a corporation organized and existing under the laws of the State of California with various places of business, including one in Palm Desert, California. Further, at all times relevant to the events alleged in this action, Windermere Coachella was and is licensed by the State of California as a real estate broker, doing business as a real estate broker and operating an unlawful franchise arrangement with defendant Windermere Real Estate Services Company ("Windermere Services") from which both Windermere Coachella and Windermere Services have unlawfully split over a million dollars in commissions from real estate transactions within the State of California.

12. On information and belief, at all times relevant to the events alleged in this action, defendant Windermere Services was and is a corporation organized and existing under the laws of the State of Washington with its principal place of business in Seattle, Washington and offices in various states including, but not limited to, the offices of Windermere Coachella in California. On further information and belief, Windermere Services managed and controlled Windermere Coachella through defendant Bob Deville ("Deville") and others in, among other matters, the events alleged in this action, so as to render Windermere Services legally responsible in some manner for not only its own wrongful conduct but also the wrongful conduct of Windermere Coachella and certain others alleged below. On further information and belief, at all times relevant Windermere Services had an unlawful franchise arrangement with Windermere Coachella, operated as a real estate broker without a license and unlawfully split over a million dollars in commissions with Windermere Coachella from real estate transactions within the State of California.

13. On information and belief, at all times relevant to the events alleged in this action, defendant Deville was and is an individual residing in Southern California, an owner, operator, officer, manager and alter ego of Windermere Coachella, a member of Windermere Services' management team, and a supervisor of Windermere Services' franchise operation, including an unlawful franchise arrangement with Windermere Coachella.

14. Plaintiffs are unaware of the true names and capacities, whether individual, corporate, associate, or otherwise, of Defendants sued herein as Does 1 through 100, inclusive, and therefore sue said Defendants by such fictitious names. On information and belief, Plaintiffs allege that each fictitiously named Defendant is legally responsible in some manner for the wrongful conduct described below, and is therefore legally responsible for the injury and damage to Plaintiffs alleged in this action. Plaintiffs will amend this Complaint to allege the true names and capacities of these fictitiously named Defendants when the same have been ascertained.

15. On information and belief, Plaintiffs allege that the Defendants, and each of them, were the duly authorized and acting agents, employees, partners, joint venturers, co­conspirators and/or the alter egos of each of the other Defendants, and in doing the things alleged in this action, each Defendant was acting within the course and scope of his, her or its employment and authority from the other Defendants and/or the other Defendants have approved and/or ratified all such conduct.

ALLEGATIONS COMMON TO ALL CAUSES OF ACTION

16. At some time before the events alleged in this Complaint, Heslop was associated with the Claremont McKenna College as a professor and/or an administrator. At all times relevant to the events alleged in this action, Heslop was associated with the Rose Institute ("Rose"), as an officer, director and/or sponsor of some sort. Rose holds itself out to the public as being capable of providing services, including survey research, fiscal analysis, and database development and as the author of studies of political and demographic trends.

17. While at Claremont McKenna College or through Rose, Heslop became acquainted with Gary E. Kovall ("Kovall").

18. From and after about 1997, Kovall represented the Tribe and its related entities, first as an attorney with his own office and subsequently through a series of law partnerships and/or affiliations. Beginning in or about 2002, Kovall continued to represent the Tribe and also to provide advice and counsel to the Plaintiffs of a type generally provided by an entity's general counsel pursuant to an oral agreement. However, Kovall submitted written invoices for all of his services and was paid for all of his services by the Tribe. In this capacity, Kovall became an integral part of the Tribe's management and the operations of the Tribe's business endeavors. Beginning in or about 2007, and continuing to in or about 2009, Heslop convinced representatives of the Tribe, including, Kovall and Gene Gambale, the predecessor of Kovall as the Tribe's legal advisor, that he had special knowledge, training and skill in business affairs, including the acquisition of business opportunities, the acquisition of real estate and the management of construction. In addition, Heslop knew of Kovall's relationship with the Tribe and took steps to endear himself to Kovall and the Tribe so as to be able to influence and control the business decisions made by the Tribe.

19. The Tribe hired Heslop and at his recommendation DRL and NDI to, among other things, advise the Tribe with respect to a variety of matters, including, without limitation, all phases of real estate investment (such as, for example, the acquisition and valuation of real property and the retention of real estate lawyers, appraisers, and brokers), all phases of construction matters involving the Tribe (such as the retention and oversight of consultants, owner-representatives, contractors, and sub-contractors), and in connection with the negotiation of agreements with each such type of construction person and entity in connection with construction work proposed or undertaken by the Tribe. During such times the Tribe also utilized the legal service of Kovall to advise it with respect to such matters, Kovall also represented the Tribe in mediations and litigation matters in which the Tribe was a party, including matters pertaining to the Tribe's business operations. Kovall also represented the Tribe with respect to political matters affecting the Tribe's business operations, and with respect to investments and other business transactions which were of potential benefit to the Tribe, including, without limitation, recyclables and solar product ventures. Heslop and his entities also advised the Tribe with respect to such matters. In the course of such representation, Kovall and Heslop gained considerable and intimate knowledge regarding the Tribe's assets and business operations, as well as its organizational and social structure, its chain of command, and its manner of doing things.

20. In or about 1998, the Plaintiffs retained Heslop, who thereafter, began to advise the Tribe on various business ventures, including those described below, for which Heslop was paid as the Tribe's trusted advisor. In addition, based on the recommendation of Heslop, the Tribe entered into special consulting arrangements with various persons and entities, including DRL, NDI and Paul P. Bardos and his related entities, and the Tribe paid Heslop and these other consultants hundreds of thousands of dollars for their services.

The Total Tire Venture

21. On information and belief, beginning in or about 1997 as a result of the recommendation of Heslop and Kovall, the Tribe invested over $5 million in a "recycling" venture in the Sacramento, California area, known as the "Total Tire" venture. The Tribe did not understand or appreciate that Heslop and Kovall arranged for the ownership of the Total Tire venture to be set up so that they each acquired an ownership interest in the venture without investing any money of their own. Thus, the Tribe took all of the financial risk, which resulted in a total financial loss to the Tribe of over $5 million. In or about 2001, Kovall and Heslop conspired together to convince the Tribe to invest more money in this venture when it was clear, or should have been clear, to them that any further investment by the Tribe would be lost. As a result, the Tribe lost additional sums in the Total Tire venture in excess of $1.5 million. Kovall submitted invoices for the legal work he did on the Total Tire venture and was paid for that work by the Tribe. Kovall and Heslop failed to properly disclose the ownership interest they took in the Total Tire venture and failed to obtain the informed consent of the Tribe to the taking of this interest. Kovall and Heslop conspired together to convince the Tribe to invest these additional funds in the Total Tire venture knowing those funds would probably be lost because Kovall and Heslop believed this was the only means available to them to protect their ownership interests in the deal. In so doing and despite the fiduciary relationship they each had with the Tribe, they sacrificed the interests of the Tribe in favor of protecting their own ownership interests.

Bardos and Kickbacks

22. While Heslop was advising the Tribe as described above, in connection with various business matters, including construction and remodeling issues, Heslop, acting individually and through DRL, purported to advise the Tribe on construction issues involving the Tribe. Heslop and DRL used Paul P. Bardos to provide these services. Later, Kovall and Heslop convinced the Tribe that it needed someone to manage or control its construction work and convinced the Tribe to retain Paul P. Bardos and his company to provide these services. Kovall and Heslop also recommended Paul P. Bardos, Bardos Construction, Inc., Bardos Construction Company and/or Cadmus Construction, Inc. ("Cadmus") (a Bardos company) (collectively "Bardos") for various positions and relationships with the Tribe without revealing (and, indeed, concealing) the nature and extent of their relationships with Bardos. In addition, on information and belief, Bardos compensated Heslop and Kovall, for their recommendation of Bardos to the Tribe, and Kovall and Heslop failed to disclose this benefit to the Tribe. Moreover, Heslop did not obtain the consent of the Tribe to his (Heslop's) receipt of these benefits from Bardos. In addition, Kovall and Heslop hired for the Tribe, or recommended for hire by the Tribe, Bardos in connection with construction work related to the Tribe's casino operations without recommending a competitive bid process for the selection of a contractor. Moreover, Heslop did so at a time when Heslop knew or should have known the agreements proposed for Bardos for the construction work were inadequate and insufficient to protect the interests of the Tribe in that they allowed Bardos to charge excessive and unreasonable fees to the Tribe. Heslop also knew or should have known that Cadmus, an entity Bardos used to provide services to the Tribe, lacked experience in construction of the types of projects for which it was hired by the Tribe, and was undercapitalized and unlicensed.

23. Between May 2007 and June 2008, Bardos paid Heslop approximately $683,000 from the millions of dollars he received from the Tribe as a kickback for contracts he was able to acquire from the Tribe due to the recommendation of Heslop and Kovall. On information and belief, Heslop, in turn, paid some portion of those funds to Kovall or to Shambaugh for Kovall's benefit, or to someone identified by Kovall. The Tribe did not know of the foregoing described payments of kickbacks and did not approve them. In addition, while Heslop purported to advise the Tribe in connection with its dealings with Bardos, Bardos was supplying work and materials to Kovall at little or no cost in connection with the construction or remodeling of property owned by Kovall in the Big Bear area, thereby creating a clear conflict of interest for Kovall. Heslop knew Bardos was providing his service to Kovall but never disclosed these facts to the Tribe. Heslop and Kovall concealed Kovall's receipt of these other benefits from Bardos from the Tribe. On information and belief, Bardos also provided similar undisclosed benefits to Heslop in connection with personal construction work done by Bardos for Heslop while Heslop purported to provide independent advice to the Tribe.

The Moskow Action

24. In August 2003, the Tribe sold certain real property located in the City of Laguna Beach, California to Dr. and Mrs. Lonnie Moskow (the "Moskows"). In June 2004, the Moskows filed a construction defect case in Orange County Superior Court against the Tribe and certain of its members, and Mrs. Moskow claimed injury (bodily injury) from exposure to mold.

25. In or about 2004, Kovall retained attorneys Nada L Edwards, Robert Rosette and Monteau & Peebles ("M & P") to represent the Tribe and others in the defense of the Moskow action. On information and belief, Rosette was, at the time, a partner in the firm of M & P. Later, while still representing the Tribe in the Moskow action, M & P reorganized itself and became Fredericks & Peebles ("F & P"), but continued to represent the Tribe in the Moskow action. In 2007, F & P reorganized itself into Fredericks Peebles & Morgan ("FP & M"), but continued to represent the Tribe in the Moskow action.

26. At the recommendation of Kovall and/or Heslop, the attorneys representing the Tribe in the Moskow action retained various consultants and/or experts in connection with the defense of the Moskow action, including Bardos and Peggy Shambaugh ("Shambaugh"). Shambaugh at the time was the girlfriend of Kovall. Later, in 2008, she became his wife. As described above, Bardos paid Kovall and/or Heslop for recommending him and his companies to the Tribe.

The 47 Acres

27. Beginning in about 2005 and continuing into 2008, Kovall represented the Tribe with respect to the acquisition of approximately 47 acres of real property known as the "Echo Trail" property (hereafter the "Echo Trail property" or "the 47 acres"), from its then owner Dillon Road Associates, LLC, and other matters related to the Tribe's acquisition of the property. The Echo Trail property is located in the City of Coachella, County of Riverside. The Tribe also used the services of Heslop and, at his recommendation, NDI, in connection with its evaluation of the transaction by which it acquired the 47 acres. Ultimately, Heslop, acting for himself and for DRL and NDL and Kovall persuaded the Tribe to purchase the 47 acres. In addition, Kovall persuaded the Tribe to utilize the services of Windermere Coachella as the buyer's broker in the transaction, with Shambaugh as the responsible individual salesperson. On information and belief, Windermere Coachella, Windermere Services, Deville and Shambaugh were brought into this transaction less than two months before it closed, at a point when negotiations between the Tribe and the then-owner of the land were at an end or near an end. Further, on information and belief, the services provided by Windermere Coachella, Windermere Services, Deville and Shambaugh in connection with the Plaintiffs' acquisition of the 47 acres were of little or no value to the Tribe.

28. Unbeknownst to the Tribe, at the time Kovall represented the Tribe in connection with the acquisition of the Echo Trail property, Kovall was in a romantic relationship with Shambaugh, in which the two, at the time of the purchase of the 47 acres, lived together and held themselves out as being husband and wife. In July 2008, following his divorce from his then-wife in 2007, Kovall and Shambaugh were formally married. On information and belief, Heslop, individually and on behalf of DRL and NDI, knew of the romantic relationship between Kovall and Shambaugh at the time Shambaugh and Windermere Coachella were hired by the Tribe to represent it in connection with the acquisition of the 47 acres and throughout the time Windermere Coachella, Windermere Services, Deville and Shambaugh represented the Tribe. At no time did Heslop or Kovall ever disclose to the Tribe Kovall's relationship to Shambaugh, or the conflict of interest created thereby. Instead, Heslop, Kovall and Shambaugh actively concealed this relationship, as a means of personally benefiting from the purchase of the 47 acres. For Kovall, he was able to secure a portion of the commission. For Heslop, he was able to, among other things, secure the position as the first manager of Echo Trail Holdings and fees for acting in that capacity and as the advisor to the Tribe in making its decision to purchase the 47 acres for himself as well as fees for DRL and NDI and fees he anticipated he would receive from the Tribe in the future for development of the 47 acres. Such concealment and relationship between Kovall and Shambaugh created a clear conflict of interest for Kovall and Heslop, who, as noted above, represented the Tribe and Echo Trail Holdings, an entity formed by the Tribe to take title to parcels of real property, including the Echo Trail property.

29. Kovall, ostensibly on behalf of the Tribe, negotiated a sales price of $29 million, which was to include a 3.5% commission to Windermere Coachella and their licensed salesperson, Shambaugh. On information and belief, Kovall, Heslop, Shambaugh, Deville, Windermere Coachella and Windermere Services knew or should have known the Echo Trail property had a market value of no more than $20 million. On information and belief, beginning in 2006 and continuing into 2008, Heslop directed NDI to make various payments to Kovall, totaling many thousands of dollars. On further information and belief, these payments by NDI to Kovall represent a portion of Kovall's share of the kickbacks Heslop received from Bardos, and/or kickbacks for recommending NDI to assist with the acquisition of the 47 acres and were never disclosed by Kovall, Heslop or NDI to the Tribe.

30. Later, as a result of negotiations conducted by Kovall, ostensibly on behalf of the Tribe, the commission for Windermere Coachella and Shambaugh was reduced from 3.5% to 3.0%, but the purchase price was raised to $31 million, apparently to compensate for the reduction in the percentage of the commission to Windermere Coachella, Shambaugh and Windermere Services. At the time of the increase in purchase price, with the knowledge and/or consent of Windermere Coachella, Windermere Services, Deville and Shambaugh, Kovall told the Tribe that the increase was the result of "some people from New York," who were supposedly interested in the property, and therefore constituted potential competitors for the property for the Tribe.

31. While acting on behalf of Windermere Coachella and Windermere Services, Deville was actively involved in the 47 acres transaction. Deville oversaw the 47 acres transaction and communicated with Windermere Coachella and its employees regarding the acquisition of the 47 acres. Windermere Coachella and Windermere Services, through their agent and/or alter ego Deville, knew or should have known that certain of the individuals assigned to act on behalf of Plaintiffs in connection with the 47 acres transaction were grossly lacking the commercial real estate experience and knowledge necessary to adequately represent Plaintiffs in this $30 million plus deal. As a manager of Windermere Coachella in the 47 acres transaction, Deville knew that the individuals assigned to represent Plaintiffs were incompetent and inexperienced but did nothing to rectify the situation, despite the fact that he was "supervising" and following the transaction with bated breath.

32. The negotiations resulted in a September 19, 2007 option agreement between the seller and the purchaser Echo Trail property. Ultimately, the property sold to Echo Trail Holdings for $31 million, which amount was paid by the Tribe. The escrow for the purchase of the property took place in or about November 2007. Shambaugh, Windermere Coachella and Windermere Services received a total commission of approximately $1 million on the sale and Heslop, as stated above, became the first Manager of Echo Trail Holdings, the entity taking title to the 47 acres. Naturally, as an owner, operator, officer, manager and alter ego of Windermere Coachella, a member of Windermere Services' management team, and a supervisor of Windermere Services' franchise operation, including an unlawful franchise arrangement with Windermere Coachella, Deville benefited from the unlawfully split commission.

33.. The Tribe hired and paid Heslop to review the proposed acquisition of the 47 acres and make a recommendation to the Tribe. As part of Heslop's review, and at Heslop's recommendation, the Tribe hired NDI and paid it tens of thousands of dollars in or about early 2006 and in 2007 to conduct valueless studies to justify Heslop's recommendations with respect to the acquisition of the 47 acres. Heslop reviewed the transaction and recommended to the Tribe that it acquire the 47 acres for a price that exceeded $30 million. On information and belief, the 47 acres was worth no more than $20 million at that time of Heslop's recommendation. Part of the reason for Heslop's recommendation was his relationship with Kovall and Bardos and the financial benefits he received from them. On information and belief, Heslop and Kovall recommended to the Tribe that Echo Trail Holdings be formed as a Limited Liability Company to take title to the Echo Trail property, and that Heslop be appointed as the sole manager of Echo Trail Holdings. As a result of the recommendations of Heslop and Kovall, the Tribe formed Echo Trail Holdings with Heslop as the only manager of the company and its business, and arranged for Echo Trail Holdings to take title to the 47 acres. In his capacity as advisor to the Tribe, Heslop occupied a special position of trust and confidence. On information and belief, Heslop knew of the relationship between Kovall, on the one hand, and Shambaugh, on the other, and deliberately did not disclose such information to the Tribe. In his June 24, 2008 letter of resignation, Heslop stated, "You will remember that the Tribe instructed me to keep all transactions strictly confidential: I have done this and believe that the Tribe's position has been effectively protected and its secrets maintained."

34. In his position of leadership in NDI, Heslop repeatedly stated knowledge of the importance of the confidentiality and secrecy of the Tribe's interests. For example, in a July 2007 document entitled, "Development of 47 acre site", Heslop stated, "In order to preserve the absolute secrecy of the Tribe's possible interest in the site and its plans, needed contacts have not been made with professionals in the entertainment field. Thus, the recommendations are based primarily on this consultant's past experience and knowledge of the entertainment industry." As a further example, NDI's 29 Palms Market Study Proposal, dated November 7, 2007 includes the following language: "First and foremost, all information, data, analysis and report will be treated in the strictest confidence. This report will be a vital resource for the tribe and the Spotlight 29 Casino in planning their future business strategy, and NDI will ensure that every aspect of this study is conducted with the utmost in secrecy and discretion." NDI made payments to Kovall after the preparation of this report. On 'information and belief, Heslop directed NDI to make these payments to Kovall.

35. The Tribe is further informed and believes that Kovall arranged for Shambaugh to provide other real property related services for the Tribe in connection with other matters, including litigation, in which the Tribe was involved and for which Shambaugh received payment from the Tribe. The value of these services by Shambaugh was worth little or nothing to the Tribe in that it could not rely on Shambaugh to provide independent expert advice on tribal matters.

FIRST CAUSE OF ACTION FOR BREACH OF CONTRACT

(By All Plaintiffs Against Heslop, DRL, NDL and Does 1-25)

36. Plaintiffs re-allege and incorporate here by this reference paragraphs 1 through 35, above, as though fully set forth at length.

37. Heslop agreed to provide expert consulting services to the Tribe, individually and through DRL and NDI, beginning in or about 1998 and continuing up to approximately June of 2008, for which the Tribe paid Heslop and these defendants hundreds of thousands of dollars. Heslop and the other defendants provided these services in connection with various transactions, including construction and construction management, the Total Tire venture, the Moskow action and the acquisition of the 47 acres. The agreements between Heslop, DRL and NDI, on the one hand, and the Tribe, on the other, were both verbal and in writing. Heslop, individually, and on behalf of DRL and NDI continued to represent the Plaintiffs in these matters up to at least June of 2008 when Heslop resigned as Manager of Plaintiff Echo Trail Holdings, and NDI's last known payment to Kovall was made in April, 2008.

38. Plaintiffs performed all of the things required of them under the various agreements described above, and there is no condition to their right to full performance of the agreements from the Defendants.

39. In doing or failing to do the things described, the defendants breached the agreements they had with the Plaintiffs, together with obligations imposed by law. As a direct and proximate breach by the Defendants, Plaintiffs have suffered damages in the form of overpayments of fees, payments for useless services, payments for advice tainted by kickbacks and undisclosed benefits from persons and/or entities with whom Plaintiffs dealt in matters in which Defendants provided services to Plaintiffs, erroneous advice and recommendations, and other errors and malfeasance in an amount which is presently unknown but which exceeds the jurisdictional minimum of this Court.

40. In addition, Heslop has received benefits and/or kickbacks as described above for business received by others from the Tribe and Heslop has been unjustly enriched by the receipt of such benefits and kickbacks. Heslop should be made to pay over those benefits to the Tribe and, where those funds or benefits have been invested in other property by Heslop, a constructive trust should be imposed on Kovall's interest in any such property.

SECOND CAUSE OF ACTION FOR BREACH OF THE IMPLIED COVENTANT OF GOOD FAITH AND FAIR DEALING
           
(By All Plaintiffs Against Heslop, DRL, NDL and Does 1-25)

41. Plaintiffs re-allege and incorporate here by this reference paragraphs 36 through 40, above, as though fully set forth at length.

42. In every contract entered into or to be performed in this State, there is an implied covenant of good faith and fair dealing which requires each of the parties to the contract to take no action to prevent the other party to the contract from realizing the benefit of same.

43. To the extent they do not represent breaches of the express contract, Defendants, in doing the things described above, breached the covenant of good faith and fair dealing and deprived the Tribe and Echo Trail Holdings of the benefits of their agreements with the Defendants in connection with each of the matters identified above and as to other matters as yet unidentified. As a direct and proximate result of the breach by the Defendants, Plaintiffs have suffered the damages described above in an amount which is presently unknown, but which exceeds the jurisdictional minimum of this Court.

THIRD CAUSE OF ACTION FOR BREACH OF FIDUCLARY DUTY
           
(By All Plaintiffs Against Heslop, DRL, NDL and Does 1-25)

44. Plaintiffs re-allege and incorporate here by this reference paragraphs 41 through 43 as though fully set forth at length.

45. At all times relevant to the events alleged above, Heslop, individually and on behalf of DRL and NDI, occupied a position of trust and confidence with the Plaintiffs. In that position Heslop was provided access to information about the Plaintiffs' business operations, inner workings and plans for the future. Indeed, Heslop was consulted for his advice, for which the Plaintiffs paid him, on various projects, ventures and strategies for the use of the Plaintiffs' property and property rights. For example, Heslop advised the Tribe to invest in the Total Tire venture and to continue to invest money in the Total Tire venture when he knew or should have known that the additional investment would result in additional loss to the Tribe. Heslop did so, in part, because he had a personal financial interest in this venture that was not properly disclosed. Heslop also advised the Tribe to use the services of Bardos, as described above, when he knew or should have known that Bardos was not qualified to provide these services to the Tribe. Part of the reason Heslop recommended Bardos to the Tribe was the kickbacks that Bardos was providing to Heslop. Heslop also advised the Tribe to hire DRL and NDI in connection with services that neither organization was qualified to provide, or under circumstances where the services were valueless, at least in part because Heslop owned or managed these entities. On information and belief, Heslop benefited financially from the services he arranged for DRL and NDI to provide to the Tribe. Heslop was also hired by the Tribe to provide a confidential analysis and recommendation with respect to whether the Plaintiffs should purchase the 47 acres, the correct price to pay for the 47 acres, and how the property might be developed beneficially by the Plaintiffs after it was acquired. In these positions Heslop, individually and on behalf of DRL and NDI, and the other Defendants acquired confidential information about the Tribe's business plans; indeed, they were responsible for many of the Tribe's business decisions and plans and arrangements. Given Heslop's position and given the nature of the services he, DRL and NDI provided to Plaintiffs, Heslop, DRL and NDI occupied a position as fiduciaries in their dealings with Plaintiffs.

46. In doing the things described above, including, without limitation, setting up or continuing to recommend ventures to profit themselves at the expense of the Plaintiffs, and taking undisclosed benefits from persons and entities with whom the Plaintiffs dealt, the Defendants breached their fiduciary duties to Plaintiffs. As a direct and proximate result of such breach by the Defendants, Plaintiffs have suffered the damages described above in an amount which is presently unknown but which exceeds the jurisdictional minimum of this Court.

47. In doing or failing to do the things described above, Defendants acted with malice, fraud or oppression as those terms are defined by California law by, among other things:

            (a)            Accepting kickbacks as described above from persons and entities with whom Plaintiffs dealt in exchange for causing the Plaintiffs to enter into agreements with these persons and entities;
            (b)            Taking ownership interests in business ventures with Plaintiffs without properly disclosing to Plaintiffs the ownership interest and inherent conflicts of interest involved with these ventures; and
            (c)            Concealing material information from the Plaintiffs about certain
            business ventures in connection with which Defendants provided consulting and expert services, including, without limitation, the relationship between Kovall and Shambaugh and Windermere in connection with the Plaintiffs' acquisition of the 47 acres.
            Accordingly, in addition to any other relief awarded to the Plaintiffs against the Defendants, Plaintiffs are entitled to the imposition of punitive damages.

FOURTH CAUSE OF ACTION FOR BREACH OF CONTRACT

(By All Plaintiffs Against Shambaugh, Deville Windermere Coachella and Does 28-50)

48. Plaintiffs re-allege and incorporate here by this reference paragraphs 1 through 35 [sic], above, as though fully set forth at length.

49. Shambaugh and Windermere Coachella provided real estate brokerage and/or expert or consulting services to the Plaintiffs for which the Tribe paid them over $1 million. The agreements between Plaintiffs, on the one hand, and Shambaugh and Windermere Coachella, on the other, were both verbal and in writing.

50. Attached hereto as Exhibit "A" is a true and correct copy of the written agreement between Echo Trail Holdings, on the one hand, and Windermere Coachella and Shambaugh, on the other, for broker services in connection with the acquisition of the Echo Trail property. Exhibit "A" relates to the Plaintiffs' purchase of the Echo Trail property, the escrow for which closed on November 7, 2007. The funds for the purchase of the Echo Trail property came from the Tribe.

51. Attached hereto as Exhibit "B" is a true and correct copy of the Disclosure Regarding Real Estate Agency Relationships form filled out and provided to Echo Trail Holdings by Defendants in connection with the Plaintiffs' acquisition of the Echo Trail property. In Exhibit "B," there is an acknowledgement by Defendants of the existence of a fiduciary relationship, and concomitant duty of honesty and full disclosure. Despite the recognition and acknowledgement of this relationship, neither Windermere Coachella nor Deville or Shambaugh ever disclosed the relationship between Kovall and Shambaugh as described above, or the fact that the Tribe was paying more than the market value of the Echo Trail property.

52. Plaintiffs performed all of the things required of them under the agreements described above, and there is no condition to their right to full performance of the agreements from Defendants.

53. In doing or failing to do the things described above, Windermere Coachella and Shambaugh, and Deville as an alter ego of Windermere Coachella, breached the agreements they had with Plaintiffs, together with obligations imposed by law, by among other things, failing to disclose the romantic relationship that existed between Shambaugh and Kovall, by failing to disclose the market value of the Echo Trail property, and by failing to disclose the fact that Defendants were providing little or no services to Plaintiffs in connection with the acquisition of the 47 acres. As a direct and proximate breach by Defendants, Plaintiffs have suffered the damages described above in an amount which is presently unknown, but which exceeds the jurisdictional minimum of this Court.

54. In addition, Shambaugh and Windermere Coachella (and Deville as an alter ego, owner, operator, officer and manager of Windermere Coachella) have received benefits and compensation as described above for which they did little or nothing under circumstances where their ability to provide such services was the direct result of the undisclosed romantic relationship between Shambaugh and Kovall. As a result, they have been unjustly enriched by the receipt of such benefits and compensation. Shambaugh, Deville and Windermere Coachella should be made to pay over those benefits to the Tribe and, where those funds or benefits have been invested in other property by them, a constructive trust should be imposed on their interest in any such property.

FIFTH CAUSE OF ACTION FOR BREACH OF THE IMPLIED COVENTANT OF GOOD FAITH AND FAIR DEALING

(By AR Plaintiffs Against Shambaugh, Deville, Windermere Coachella and Does 28-50)

55. Plaintiffs re-allege and incorporate here by this reference paragraphs 48 through 54, above, as though fully set forth at length.

56. In every contract entered into or to be performed in this State, there is an implied covenant of good faith and fair dealing which requires each of the parties to the contract to take no action to prevent the other party to the contract from realizing the benefit of same.

57. To the extent they do not represent breaches of the express contract, Defendants, in doing the things described above, breached the covenant of good faith and fair dealing, and as a direct and proximate result of the breaches by Shambaugh, Deville and Windermere Coachella, Plaintiffs have suffered the damages described above in an amount which is presently unknown but which exceeds the jurisdictional minimum of this Court.

SIXTH CAUSE OF ACTION FOR BREACH OF FIDUCIARY DUTY
           
(By All Plaintiffs Against Shambaugh, Deville, Windermere Coachella, Windermere
Services and Does 28-50)

58. Plaintiffs re-allege and incorporate here by this reference paragraphs 10 through 15, 27 through 35 and 36 through 57, above, as though fully set forth at length.

59. Given their respective positions as either real estate brokers, licensees, experts and/or consultants, and given the positions they assumed vis a vis Plaintiffs in connection with the purchase of real property (including but not limited to the 47 acres transaction) and the giving of expert advice with respect to real estate related questions, and/or given their contract and acknowledgement of the fiduciary nature of that position, Shambaugh, Deville, Windermere Coachella and Windermere Services were fiduciaries in their dealings with Plaintiffs.

60. In doing the things described above, these Defendants breached their fiduciary duties to Plaintiffs. As a direct and proximate result of such breaches by these Defendants, Plaintiffs have suffered the damages described above in an amount which is presently unknown but which exceeds the jurisdictional minimum of the Superior Court.

61. In doing or failing to do the things described above, Defendants acted with malice, fraud or oppression as those terms are defined by California law by, among other things:

            (a) Concealing the relationship between Shambaugh and Kovall;
            (b) Accepting commissions for non-existent services;
            (c) Placing their financial interests above those of Plaintiffs;
           (d) Knowingly advising Plaintiffs to purchase the 47 acres despite Defendants' knowledge that the transaction would cause Plaintiffs to suffer significant financial loss so that Defendants would receive the benefit of a $1 million commission; and
            (e) Entering into an unlawful agreement to share a commission of approximately $1 million among Windermere Coachella and Windermere Services (an unlicensed entity) and Kovall (an unlicensed individual).

Accordingly, in addition to any other relief awarded to Plaintiffs against Defendants, Plaintiffs are entitled to the imposition of punitive damages.

SEVENTH CAUSE OF ACTION FOR PROFESSIONAL NEGLIGENCE

(By All Plaintiffs Against Shambaugh, Deville, Windermere Coachella, Windermere
Services and Does 28-50)

62. Plaintiffs re-allege and incorporate here by this reference paragraphs paragraphs 10 through 15, 27 through 35 and 36 through 61, above, as though fully set forth at length.

63. Shambaugh, Deville, Windermere Coachella and Windermere Services negligently represented Plaintiffs in connection with the acquisition of the Echo Trail property, and/or negligently negotiated agreements for Plaintiffs, and/or negligently supervised agents, representatives and/or employees, as described above, in connection with the business affairs of Plaintiffs for which Defendants were paid by Plaintiffs to represent them.

64. While acting on behalf of Windermere Coachella and Windermere Services, Deville was actively involved in the 47 acres transaction. Deville oversaw the 47 acres transaction and communicated with Windermere Coachella and its employees regarding the acquisition of the 47 acres. Windermere Coachella and Windermere Services, through their agent and/or alter ego Deville, knew or should have known that certain of the individuals assigned to act on behalf of Plaintiffs in connection with the 47 acres transaction were grossly lacking the commercial real estate experience and knowledge necessary to adequately represent Plaintiffs in this $30 million plus deal. As a manager of Windermere Coachella in the 47 acres transaction, Deville knew that the individuals assigned to represent Plaintiffs were incompetent and inexperienced but did nothing to rectify the situation, despite the fact that he was "supervising" and following the transaction.

65. As a proximate result of the negligence of Defendants, Plaintiffs have sustained loss and injury, the precise amount of which is presently unknown, but which exceeds the jurisdictional minimum of this Court. Further, Defendants have profited from their wrongful conduct by among other things, collecting and/or benefiting from commissions and fees which they would not have received in the absence of such wrongful conduct. Accordingly, Defendants should disgorge to Plaintiffs the funds they have wrongfully acquired, together with interest thereon.

EIGHTH CAUSE OF ACTION FOR UNFAIR TRADE PRACTICES

(By All Plaintiffs Against Windermere Coachella, Windermere Services, Deville and
Does 28-50)

66. Plaintiffs re-allege and incorporate here by this reference paragraphs 62 through 65, above, as though fully set forth at length.

67. On information and belief, at all times relevant to the events alleged in this action, Windermere Services and Windermere Coachella have held themselves out to Plaintiffs and the general public as franchisor and franchisee, respectively; when, in fact, their relationship is that of licensor and licensee as defined in the only document produced by Windermere Coachella as to the relationship between the parties — a trademark licensing agreement. Also on information and belief, no valid and lawful franchise agreement has ever existed between Windermere Services and Windermere Coachella. On further information and belief, Windermere Services was not licensed as a real estate broker in the State of California.

68. At all times relevant to the events alleged in this action, Windermere Coachella (and its owner, operator, manager and alter ego Deville) and Windermere Services engaged in the following acts, each of which constitute unlawful, unfair and/or fraudulent business practices within the meaning of California Business and Professions Code Section 17200:

            (a)            Failing to disclose the fact that Heslop had a preexisting and ongoing financial arrangement with Windermere Coachella, through Shambaugh and her then boyfriend, now husband, Kovall, or the fact that Plaintiffs were paying substantially more than market value for the Echo Trail property;
            (b)          Concealing the fact that Heslop had a preexisting and ongoing financial arrangement with Windermere Coachella, through Shambaugh and Kovall, or the fact that Plaintiffs were paying substantially more than market value for the Echo Trail property;
            (c)             Accepting commissions for non-existent services, or for services performed without the requisite disclosures and/or due diligence, as hereinabove alleged; and
           (d)             Windermere Coachella's unlawfully sharing real estate commissions with Windermere Services, an unlicensed entity, on not only the Echo Trail property transaction but also, on information and belief, various other real estate transactions with consumers other than Plaintiffs throughout the State of California, all in violation of California law.

            On information and belief, Windermere Coachella (and its owner, operator, manager and alter ego Deville) and Windermere Services engaged in the above-mentioned acts for the purpose of injuring Plaintiffs and other prospective purchasers of real property similarly situated. By virtue of the conduct alleged herein, there is a likelihood of actual and pernicious confusion and an unfair and inequitable advantage for any real estate broker employing the aforementioned business model or device, and based on the unlawful, unfair and fraudulent practices of these Defendants, a permanent injunction should issue to prevent these Defendants from engaging in such unlawful and fraudulent conduct and restitution should be ordered from these Defendants of all unlawful commissions derived from the real estate transactions involving Plaintiffs.

WHEREFORE, Plaintiffs pray for relief as follows:

            On the First Cause of Action by All Plaintiffs for Breach of Contract against Heslop, DRL. NDL and Does 1-25:

1. For compensatory damages in an amount according to proof;

2. For orders requiring restitution and a disgorgement of all profits, benefits and other compensation obtained as a result of the conduct alleged herein;

3. For an order imposing a constructive trust;

            On the Second Cause of Action by All Plaintiffs for Breach of Implied Covenant of Good Faith and Fair Dealing against Heslop, DRL, NDL and Does 1-25:

4. For compensatory damages in an amount according to proof,

5. For orders requiring restitution and a disgorgement of all profits, benefits and other compensation obtained as a result of the conduct alleged herein;

6.  For an order imposing a constructive trust;

            On the Third Cause of Action by All Plaintiffs for Breach of Fiduciary Duty against Heslop, DRL, NDL and Does 1-25:

7.  For compensatory damages in an amount according to proof;

8.  For orders requiring restitution and a disgorgement of all profits, benefits and other compensation obtained as a result of the conduct alleged herein;

9.   For an order imposing a constructive trust;

10.  For punitive and exemplary damages in an amount according to proof;

            On the Fourth Cause of Action by All Plaintiffs for Breach of Contract against Shambaugh, Deville, Windermere Coachella, and Does 28-50:

11. For compensatory damages in an amount according to proof;

12. For orders requiring restitution and a disgorgement of all profits, benefits and other compensation obtained as a result of the conduct alleged herein;

13. For an order imposing a constructive trust;

            On the Fifth Cause of Action by All Plaintiffs for Breach of Implied Covenant of Good Faith and Fair Dealing against Shambaugh, Deville. Windermere Coachella and Does 28-50:

14. For compensatory damages in an amount according to proof;

15. For orders requiring restitution and a disgorgement of all profits, benefits and other compensation obtained as a result of the conduct alleged herein;

16. For an order imposing a constructive trust;

            On the Sixth Cause of Action by All Plaintiffs for Breach of Fiduciary Duty against Shambaugh, Deville, Windermere Coachella, Windermere Services and Does 28-50:

17. For compensatory damages in an amount according to proof;

18. For orders requiring restitution and a disgorgement of all profits, benefits and other compensation obtained as a result of the conduct alleged herein;

19.  For an order imposing a constructive trust;

20.  For punitive and exemplary damages according to proof;

            On the Seventh Cause of Action by All Plaintiffs for Professional Negligence against Shambaugh. Deville, Windermere Coachella, Windermere Services and Does 28-50:

21. For compensatory damages in an amount according to proof;

22. For orders requiring restitution and a disgorgement of all profits, benefits and other compensation obtained as a result of the conduct alleged herein;

23. For an order imposing a constructive trust;

            On the Eighth Cause of Action for Unfair Trade Practices against Windermere Coachella, Windermere Services, Deville and Does 28-50:

24. For an order requiring restitution and disgorgement of all profits, benefits and other compensation obtained as a result of the conduct alleged herein in favor of Plaintiffs as to those real estate transactions involving Plaintiffs;

25.  For a permanent injunction barring Defendants from engaging fraudulent and unfair practices as real estate brokers as alleged herein;

            On All Causes of Action by All Plaintiffs Against All Defendants:

26.  For costs of suit;

27.  For interest at the maximum allowable by law;

28.  For such other and further relief as the Court deems just and proper.

Dated: April 4, 2012                         SPOLIN COHEN MAINZER & BOSSERMAN LLP

By:___________________________                  

GORDON E. BOSSERMAN
Attorneys for Plaintiffs

________________________________

Defendants Respond with Twenty-Six Affirmative Defenses in the

ANSWER OF PEGGY SHAMBAUGH, BENNION & DEVILLE FINE HOMES, INC., dba WINDERMERE REAL ESTATE COACHELLA VALLEY, WINDERMERE REAL ESTATE SERVICES COMPANY, and JOSEPH R. DEVILLE TO PLAINTIFFS' SECOND AMENDED COMPLAINT

DOWNLOAD A COPY OF THE FULL ANSWER HERE

Affirmative Defenses stated in the Answer are:

           COMES NOW Defendants PEGGY SHAMBAUGH, BENNION & DEVILLE FINE HOMES, INC., dba WINDMRRE REAL ESTATE COACHELLA VALLEY, WINDERMERE REAL ESTATE SERVICES COMPANY, and JOSEPH R. DEVILLE ("Answering Defendants”), in answer to the unverified Second Amended Complaint filed by Plaintiffs TWENTY-NINE PALMS BAND OF MISSION INDIANS OF CALIFORNIA, TWENTY-NINE PALMS ENTERPRISES CORPORATION and ECHO TRAIL HOLDINGS, LLC ("Plaintiffs"), and allege as follows:

            Pursuant to Section 431.30(d) of the Code of Civil Procedure these Answering Defendants deny generally and specifically each and every allegation contained in the unverified Second Amended Complaint, the whole thereof and each and every cause of action set forth therein. These Answering Defendants specifically deny that Plaintiffs have been damaged in the amounts alleged in the Complaint, or in any other amounts, or at all by reason of any act, breach or omission on the part of these Answering Defendants. As used herein, words including singular numbers shall include plural, words including the plural shall include the singular, and words importing the masculine gender shall include the feminine gender.

FIRST AFFIRMATIVE DEFENSE
(Failure to State a Cause Of Action)

            1.            These Answering Defendants are informed, believe and thereon allege that each and every allegation contained in the Second Amended Complaint fails to state facts sufficient to constitute a cause of action against these Answering Defendants.

SECOND AFFIRMATIVE DEFENSE
(Comparative Negligence)

            2.            These Answering Defendants are informed, believe and thereon allege that Plaintiffs are barred from any recovery or relief on the basis that their own negligence was the sole and proximate cause of any damages they may have sustained or will sustain. In the event that a determination is made that these Answering Defendants were negligent and/or otherwise responsible to Plaintiffs, and such negligence and/or responsibility proximately contributed to Plaintiffs’ damages, the amount of recovery, if any, shall be reduced on the basis of Plaintiffs’ own comparative negligence which contributed to the damages sought by them against these Answering Defendants.

THIRD AFFIRMATIVE DEFENSE
(Laches)

            3.             These Answering Defendants are informed, believes and thereon allege that each and every allegation and cause of action alleged in the Second Amended Complaint against these Answering Defendants is barred under the equitable doctrine of laches.

FOURTH AFFIRMATIVE DEFENSE
(Unclean Hands)

            4.             These Answering Defendants are informed, believes and thereon allege that each and every cause of action alleged in the Second Amended complaint against these Answering Defendants is barred by the doctrine of unclean hands in that Plaintiffs, by their own conduct, have acted in such a manner as to preclude any recovery against these Answering Defendants.

F1FTH AFFIRMATIVE DEFENSE
(Superseding Acts of Third Parties)

            5.             These Answering Defendants are informed, believe and thereon allege that the damages alleged in the Second Amended Complaint were exclusively caused or contributed to by the negligence or other acts or omissions of other defendants, persons, or entities, whether parties to this action or not. Said negligence or other acts or omissions were an intervening and superseding cause of injuries and damages, if any, and that such superseding forces are unforeseeable, independent, intervening actions breaking the chain of causation and barring recovery by Plaintiffs against these Answering Defendants.

SIXTH AFFIRMATIVE DEFENSE
(Failure to Mitigate Damages)

            6.             These Answering Defendants are informed, believe and thereon allege that Plaintiffs failed to take reasonable steps toward mitigating the losses alleged in the Second Amended Complaint; therefore, Plaintiffs' right to recover damages against these Answering Defendants must be barred or diminished accordingly.

SEVENTH AFFIRMATIVE DEFENSE
(Assumption of the Risk)

            7.             These Answering Defendants are informed, believe and thereon allege that Plaintiffs were of, perceived, appreciated, comprehended and understood the relevant terms, conditions and hazards, including the risk of pecuniary loss, associated with the purchase and investment in real property. Despite their appreciation of sUch risk, Plaintiffs unreasonably exposed himself to the risk of harm, thereby causing and/or contributing to their own damages, if any. Plaintiffs’ assumption of said risk bars any recovery herein, or diminishes their recovery to the extent the alleged damages are attributed to Plaintiffs’ assumption of the risk.

EIGHTH AFFIRMATIVE DEFENSE
(Estoppel)

            8.            These Answering Defendants are informed, believe and thereon allege that Plaintiffs are estopped from seeking relief requested in the Second Amended Complaint against these Answering Defendants due to Plaintiffs’ own acts or omissions with reference to the subject matter of the Second Amended Complaint.

NINTH AFFIRMATIVE DEFENSE
(Fault of others)

            9.            These Answering Defendants are informed, believe and thereon allege that at all times and places set forth in the Second Amended Complaint, certain parties defendant (s) / codefendant(s), other than these Answering Defendants, named or unnamed herein, whether served or unserved, failed to exercise ordinary care, caution or circumspection on their behalf, which negligence and carelessness was a proximate cause of some portion, up to and including the whole thereof, of the injuries and damages complained of by Plaintiffs in this action. The fault, if any, of these Answering Defendants should be compared with the fault or contributory negligence of other defendant (s) , and damages, if any, should be apportioned among the same in direct relation to each such defendant (s) , comparative fault. These Answering Defendants should be obligated to pay only such damages, if any, that are directly attributable to their percentage of comparative fault. To require these Answering Defendants to pay any more than their percentage of comparative fault violates the Equal Protection and Due Process Clauses of the Constitution of the United States and the Constitution of the State of California.

TENTH AFFIRMATIVE DEFENSE
(Not Responsible for Acts of Does)

            10.             These Answering Defendants are informed, believe and thereon allege that these Answering Defendants are not legally responsible for the acts and/or omissions of those defendant (s) named herein as DOES I through 100, inclusive.

ELEVENTH AFFIRMATIVE DEFENSE
(Waiver)

            11.             These Answering Defendants are informed, believe and thereon allege that Plaintiffs engaged in conduct and activities sufficient to constitute a waiver of any alleged breach, negligence, or any other conduct, if any, as set forth in the Second Amended Complaint.

TWELFTH AFFIRMATIVE DEFENSE
(Several Liability)

            12.             These Answering Defendants are informed, believe and thereon allege that its liability, if any, for non-economic general damages is several only and not joint pursuant to California Civil Code §1431.2. 

THIRTEENTH AFFIRMATIVE DEFENSE
(Improper Prosecution of Action)

            13.             These Answering Defendants are informed, believe and thereon allege that Plaintiffs are prosecuting this litigation in bad faith and for an improper purpose. The claims of Plaintiffs are frivolous, and therefore, entitle these Answering Defendants to an award of reasonable expenses and attorneys' fees pursuant to Code of Civil Procedure §1038.

FOURTEENTH AFFIRMATIVE DEFENSE
(Absence of Probable Cause/Presence of Malicious Intent)

            14.             These Answering Defendants are informed, believe and thereon allege that Plaintiffs are prosecuting this litigation without probable cause against these Answering Defendants and with malicious intent.

FIFTEENTH AFFIRMATIVE DEFENSE
(Absence of Actual/Proximate Causation)

            15.             These Answering Defendants are informed, believe and thereon allege that any and all damages or injuries alleged by Plaintiffs were not, and are not, the result of acts or omissions by these Answering Defendants.

SIXTEENTH AFFIRMATIVE DEFENSE
(Apportionment of Fault)

            16.             These Answering Defendants are informed, believe and thereon allege that all of the acts and/or omissions alleged in the Second Amended Complaint were solely, entirely, and fully those of defendant (s) and/or parties named or unnamed therein, other than these Answering Defendants; and, therefore, such parties are fully and solely liable to Plaintiffs. As a result, these Answering Defendants are entitled to total indemnification from said parties including, but not limited to, any and all damages, costs, and attorneys, fees these Answering Defendants may sustain as a result of Plaintiffs’ claims. In the alternative, if it should be found that these Answering Defendants are in some manner legally responsible for injuries or damages allegedly sustained by Plaintiffs, if any, and it should be found that Plaintiffs’ injuries or damages were proximately caused or contributed to by other defendant (s) in this case, whether served or unserved, and/or other persons or entities not parties to this action, then these Answering Defendants are entitled to a finding that the negligence and fault of each of the aforesaid person and/or parties, whether parties to this action or not, shall be determined, apportioned and prorated, and that any judgment rendered against these Answering Defendants shall be reduced not only by the degree of comparative negligence of Plaintiffs, but also shall be reduced by the percentage of negligence and/or fault and/or unreasonable conduct attributed to the aforesaid other defendant (s) and/or third persons or entities, whether parties to this action or not. Under the doctrine of Li v. Yellow Cab (1975) 13 Cal. 3d 804, Plaintiffs' contributory negligence and/or fault shall reduce any and all damages allegedly sustained by Plaintiffs.

SEVENTEENTH AFFIRMATIVE DEFENSE
(Ratification)

            17.            These Answering Defendants are informed, believe and thereon allege that Plaintiffs are barred from asserting each and all of their causes of action by reason of Plaintiffs’ ratification of the conduct of these Answering Defendants.
           

EIGHTEENTH AFFIRMATIVE DEFENSE
(Prevention)

            18.            These Answering Defendants are informed, believe and thereon allege that Plaintiffs and/or other parties prevented and precluded these Answering Defendants from performing their obligations, if any were unperformed at all.

NINETEENTH AFFIRMATIVE DEFENSE
(No Basis for Punitive Damages)

            19.             These Answering Defendants at all times acted in a proper, lawful, and legally permitted fashion without malice or oppression. They exercised and possessed that degree of skill, care, and knowledge required of a real estate licensee and employer; and, therefore, there is not a basis upon which to base an award of punitive or exemplary damages against these Answering Defendants.

TWENTIETH AFFIRMATIVE DEFENSE
(Statute of Limitations)

            20.            These Answering Defendants are informed, believe and thereon allege that the Second Amended Complaint, and each and every cause of action contained therein, is barred by the statute of limitation provisions contained in, but not limited to Code of Civil Procedure §§337, 338, 339, 340, 343 and/or Civil Code §2079.4.

TWENTY-FIRST AFFIRMATIVE DEFENSE
(Second Amended Complaint Presented for an Improper Purpose)

            21.            These Answering Defendants are informed, believe and thereon allege that Code of Civil Procedure §128.7 provides that an attorney or party who presents a document to the Court certifies, to the best of his/her knowledge, that after a reasonable inquiry, that certain conditions have been met. Those conditions are as follows:

“1.That the document/pleading is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.  2.  That the claim or other legal contention presented in the document/pleading is warranted by existing law or by a nonfrivolous argument for the extension, modification or reversal of existing law or the establishment of new law.  3.  That the allegations or other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery.  4.  The denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief."

        As such, sanctions under §128.7 of the Code of civil Procedure are appropriate in an amount sufficient to deter repetition, and further, the subject Court herein should award to these Answering Defendants, if they are prevailing parties, the reasonable expenses and attorneys’ fees incurred in presenting any such motion contemplated under said statute.

TWENTY-SECOND AFFIRMATIVE DEFENSE
(Lack of Jurisdiction)

            22.            These Answering Defendants are informed, believe and thereon allege that several of the real properties and/or property matters that are the subject of Plaintiffs' Second Amended Complaint are located outside the state of California. These Answering Defendants therefore asserts that this Court lacks jurisdiction to adjudicate matters as to these properties and/or matters.

TWENTY-THIRD AFFIRMATIVE DEFENSE
(Unasserted Defenses)

            23.            These Answering Defendants are informed, believe and thereon allege that they may have additional, as yet unasserted, defenses to the Second Amended Complaint or the purported causes of action contained therein. These Answering Defendants specifically reserve the right to assert additional affirmative defenses as deemed appropriate at a later time.

TWENTY-FOURTH AFFIRMATIVE DEFENSE
(Failure to Join Necessary/Indispensable Party)

            24.            These Answering Defendants are informed and believe and thereon allege that Plaintiffs have failed to join as parties to the action persons whose interests are such that complete relief cannot be accorded among the parties before the court and the absence of such persons will prejudice the abilities of the parties before the court to protect their interests and will leave the parties before the court exposed to risk of additional liability or inconsistent obligations,

TWENTY-FIFTH AFFIRMATIVE DEFENSE
(Lack of Subject Matter for Constructive Trust)

            25.             These Answering Defendants are informed and believe and thereon allege that Plaintiffs have not paid any monies or other consideration to these Answering Defendants that could serve as a subject for a Constructive Trust.

TWENTY-SIXTH AFFIRMATIVE DEFENSE
(Not Entitled to Damages)

            26.             These Answering Defendants are informed and believe and thereon allege that Plaintiffs are not entitled to any actual damages, permanent injunctive relief or punitive damages pursuant to Unfair Trade Practices cause of action.

STIPULATION FOR ORDER SETTING DEPOSITION OF DEFENDANT PEGGY SHAMBAUGH (left); ORDER THEREON

 

DOWNLOAD A COMPLETE PDF COPY OF THE STIPULATION AND ORDER HERE

The Stipulation and Order state in part:

TO THE COURT, AND TO ALL PARTIES IN INTEREST AND TO THEIR
ATTORNEYS OF RECORD:

The following Stipulation is made by and between Plaintiffs Twenty-Nine Palms Band of Mission Indians of California, Twenty-Nine Palms Enterprises Corporation and Echo Trail Holdings LLC on the one hand, and Defendant Peggy Shambaugh, by and through their respective attorneys of record, with reference to the following facts:

1. WHEREAS, Plaintiffs, by agreement of counsel, set the deposition of Defendant Peggy Shambaugh for February 14,2012; and

2. WHEREAS, due to the unavailability of Ms. Shambaugh's criminal defense lawyer, the deposition did not proceed on February 14,2012

.
3. WHEREAS, Mathew Horezcko, Ms. Shambaugh's criminal defense lawyer, has advised counsel for Ms. Shambaugh in this action that he is available for the deposition of Ms. Shambaugh on April 30,2012 and that he will not knowingly scheduled any matter that will conflict with the taking of Ms. Shambaugh's deposition on April 30,2012.

WHEREFORE, THE PARTIES HEREBY STIPULATE that, conditioned upon the presence at the deposition of Matthew Horezcko, criminal defense counsel for Ms. Shambaugh, the deposition of Peggy Shambaugh shall commence at 10:00 a.m. on April 30,2012, at IVAMS, INC., 8287 White Oak Ave., Rancho Cucamonga, California 91730, in the presence of Discovery Referee Retired Judge Sam Cianchetti, and shall continue from day to day, holidays and weekends excluded, or otherwise by agreement of counsel, until completed.

______________________________________________

NOTICE OF MOTION AND MOTION FOR PROTECTIVE ORDER RE DEPOSITION OF DAVID ALAN HESLOP; MEMORANDUM OF POINTS AND AUTHORITIES, STATES:

"As widely published in this matter, a Grand Jury and FBI investigation have been instituted to discover whether any criminal wrongdoing arose out of Plaintiffs' allegations in this civil litigation...

...That stay had been instituted because the Court was informed a criminal investigation had begun concerning Plaintiffs' allegations in this lawsuit...

...Furthermore, the prejudice falls on Heslop if he is forced to appear at an August deposition, without his criminal defense attorney, when the questions to be asked relate directly to the investigation now pending against the many defendants in this action."

DOWNLOAD THE NOTICE OF MOTION AND MOTION FOR PROTECTIVE ORDER HERE

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF RIVERSIDE

TWENTY-NINE PALMS BAND OF MISSION INDIANS OF CALIFORNIA; TWENTY-NINE PALMS ENTERPRISES CORPORATION; and ECHO TRAIL HOLDINGS, LLC, a limited liability company,

Plaintiffs,

vs.

DAVID ALAN HESLOP, an individual, DIVERSIFICATION RESOURCES, LLC, a limited liability company, NATIONAL DEMOGRAPICS, Inc., a corporation, PEGGY SHAMBAUGH, an individual, BENNION & DEVILLE FINE HOMES, INC., doing business as WINDERMERE REAL ESTATE COACHELLA VALLEY, a corporation, and Does I through 100,

Defendants.

Case No. RIC10006101

NOTICE OF MOTION AND MOTION FOR PROTECTIVE ORDER RE DEPOSITION OF DAVID ALAN HESLOP; MEMORANDUM OF POINTS AND AUTHORITIES AND DECLARATION OF PHILIP W. VINEYARD IN SUPPORT THEREOF

[[PROPOSED] ORDER FILED CONCURRENTLY HEREWITH]

DATE:            August 11, 2011
TIME:             8:30 a.m.
DEPT:             2

Judge:             Honorable Jacqueline C. Jackson
                        Dept. 7 - Case Management Purposes
                        Dept. 2 - Law & Motion

Complaint Filed:   November 7, 2009
Trial Date:              None set

            TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

            PLEASE TAKE NOTICE that on August 11, 2011 at 8:30 am., or as soon thereafter as the matter may be heard by the Discovery Referee and/or the Court, Defendant David Alan Heslop (“Heslop”) will move the Discovery Referee and/or the Court, pursuant to California Code of Civil Procedure section 2025.420, for a Protective Order requiring Plaintiffs to reasonably accommodate Heslop's and his counsel's schedules for purposes of taking Heslop's deposition. This Motion is based on the following:

• Plaintiffs noticed Heslop's deposition for August 1, 2011, or anytime within a week thereof, but Heslop is unavailable due to family obligations, as is his criminal defense attorney, who plans on attending the deposition, but cannot do so within Plaintiffs' demanded time;

• Heslop provided the first week of September 2011 for his appearance at deposition, and his counsel communicated those dates to all other parties' counsel;

• As widely published in this matter, a Grand Jury and FBI investigation have been instituted to discover whether any criminal wrongdoing arose out of Plaintiffs' allegations in this civil litigation. Due to this contingency, and as explained on numerous occasions to all parties, Heslop currently intends to invoke his Fifth Amendment Right in response to any substantive discovery, including deposition, related to the matters asserted in this litigation.

• Notwithstanding Heslop's intention to invoke his Fifth Amendment rights at deposition and his offer to appear in September, Plaintiffs' counsel insists the deposition proceed on August 1, 2011; and

• No trial date has been set in this matter; therefore, Plaintiffs do not incur any prejudice in taking Heslop's deposition at a date and time convenient to him and his attorneys and only one month later than initially noticed.

            Pursuant to California Code of Civil Procedure sections 2023.010, et seq., and 2025.420, Heslop also requests the Discovery Referee and/or the Court to impose upon Plaintiffs sanctions in the amount of $2,065 for failure to reasonably accommodate Heslop and his attorneys, as well as to compensate Heslop for the time and costs expended in the preparation of this Motion and in his good faith efforts to meet and confer on mutually agreeable deposition dates. Heslop also requests that Plaintiffs be deemed responsible for the Discovery Referee's time and expense in this matter.

            This Motion is based upon this Notice of Motion and Motion, the attached Memorandum of Points and Authorities, and the Declaration of Philip W. Vineyard and all other papers filed in support of Heslop's Motion, and such further documentary evidence and oral argument that may be considered at the hearing of this Motion.

                                                           KLINEDINST PC

DATED: July 11, 2011            By: _________________________________
                                                            Connie M. Anderson
                                                            Philip W. Vineyard
                                                            Pouya B. Chami
                                                            Attorneys for Defendant
                                                            David Alan Heslop

MEMORANDUM OF P0INTS AND AUTHORITIES

I.

INTRODUCTION

            Here we go again. And once again, it is Plaintiffs' continuing lack of reasonability that got us here. On June 10, the Court loosed Plaintiffs from the discovery stay theretofore in place as to David Alan Heslop. That stay had been instituted because the Court was informed a criminal investigation had begun concerning Plaintiffs' allegations in this lawsuit. However, because Department 71 of the Riverside Superior Court wanted to move toward a trial date, it had to lift the stay so that the case could be transferred to a trial department, which is responsible for scheduling trial. With the stay lifted, Plaintiffs noticed Heslop's deposition and wrote to his counsel that they were willing to move the deposition within a week on either side of August 1, but would budge no farther­ — this despite the fact that there is no trial date for this litigation. (See Vineyard Decl., Exhs. A and D.)

            On July 7, 2011, Heslop's counsel notified all parties that Heslop was unavailable for deposition in the timeframe demanded by Plaintiffs. (See Vineyard Decl., Exh. B.) After a recitation of why an early deposition of Heslop would likely be fruitless and a waste of everyone's time and money (due to the impending invocation of Heslop's Fifth Amendment rights), Heslop nonetheless offered to appear for deposition in the first week of September. While true Heslop's counsel did not disclose why Heslop was unavailable (and need not given the reason), suffice it to say that Heslop, who is elderly, has familial obligations to which to attend. (Vineyard Decl., ¶5.) That is, however, immaterial. Heslop has offered to appear in September. (Exh. B, supra.) What prejudice Plaintiffs suffer by waiting one month to depose Heslop, especially in view that no trial date exists, is a mystery.

__________________________________

1 Department 7 is charged with case management pending assignment of litigation to trial departments,

___________________________________

II.

ARGUMENT

            "A foundational purpose of the Civil Discovery Act is to avoid gamesmanship in litigation." Murillo v. Superior Court, 143 Cal. App. 4th 730, 739 (2006)(citing Emerson Electric Co. v. Superior Court, 16 Cal.4TH 1101, 1107 (1997)). Given Plaintiffs' history in both the pleadings and discovery stages, "gamesmanship" seems to be the only strategy they intend to employ. California Code of Civil Procedure section 2025.420 permits the Court, upon a showing of good cause, to issue a protective order to ensure a party deponent is not the subject of unwarranted annoyance or undue burden or expense. Subsection (b) to section 2025.420 enumerates the possible forms of the protective order, the first two of which including an order that the deposition not be taken at all and the deposition be taken at a different time. See Cal. Code Civ. Proc. § 2025.420(b)(1) and (2).

            Heslop is not trying to avoid a deposition; indeed, he has offered the first week of September to appear. His request to the Discovery Referee and/or the Court is to require Plaintiffs to notice the deposition in the provided timeframe, and to assist in the process, Heslop offers September 1, 6, and 9 for purposes of taking his deposition. If Plaintiffs are unable to work out a deposition in the first week of September, Heslop stands ready to cooperate on future dates. Since the parties have yet to receive notice of which trial department they are to be assigned, there is no need to force a deposition date on any party when that date might conflict with other calendared events. Simply, with no trial date set, Plaintiffs can show no prejudice in permitting Heslop to attend to his familial obligations. Furthermore, the prejudice falls on Heslop if he is forced to appear at an August deposition, without his criminal defense attorney, when the questions to be asked relate directly to the investigation now pending against the many defendants in this action. (Vineyard Decl., 16.)

            Heslop is informed and believes that Plaintiffs precipitated the FBI and Grand Jury investigation into the various allegations made in Plaintiffs’ complaint. Indeed, when Heslop attempted to confirm this fact through Requests for Admissions, Plaintiffs purposely did not respond, instead relying on the mysterious and meritless objection of "invades the province of law enforcement." Because there is an ongoing criminal investigation, Heslop has little choice but to invoke his Fifth Amendment rights to any form of substantive discovery that could be used against him in a criminal proceeding. Relevant to this Motion, Heslop's counsel has explained to all parties how wasteful it would be to proceed with Heslop's deposition while the criminal investigation continues, because an invocation of Heslop's Fifth Amendment rights would be forthcoming. (See Vineyard Decl., Exhibit C, p. 2.) Nonetheless, Plaintiffs continue to insist that Heslop appear on the August 1 deposition date. Plaintiffs' decision further highlights their lack of reasonability in prosecuting this matter.

            Plaintiffs will try to argue that the case is nearly two years old and that they must be able to work up their case now that the discovery stay as to Heslop has been lifted. Again, this argument might have more teeth if a trial date were pending in the instant action, but it is not, so the delays of the past (e.g., Plaintiffs initially filing their lawsuit in the wrong venue, the aforementioned stay as to Heslop due to the pending Grand Jury investigation, and Plaintiffs' continuing efforts to avoid their own discovery responsibilities) are of no consequence in the instant Motion. What is truly at work, and which Plaintiffs will be quiet about, is that the related legal malpractice action2 is proceeding toward trial, and they would like to use Heslop's testimony for the matters being pursued in Orange County. Had Plaintiffs not so vigorously fought the Motion to Consolidate and Coordinate the Orange County action with the instant action, they would not be in the bind in which they find themselves currently. Nonetheless, any prejudice Plaintiffs might be facing in Orange County has no determinative value on the merits of Heslop's very reasonable request to move his deposition to the first week of September.

III.

CONCLUSION

For all of the forgoing reasons, Heslop respectfully requests the Discovery Referee and/or the Court to order Plaintiffs to accommodate Heslop's reasonable scheduling requests by

_________________________________

2 Twenty-Nine Palms Band of Mission Indians of California, et al., v. Nada L. Edwards, ei al., assigned case number 30-2009 00311045 by the Superior Court for the State of California, County of Orange. Very early in the Orange County proceeding, the parties attempted to consolidate the two actions, but those efforts were denied by the then-presiding judge.
_________________________________

noticing his deposition for the offered dates in September. If Plaintiffs are unable to appear on the offered dates, Heslop requests the Discovery Referee and/or the Court to order Plaintiffs to meet and confer with Heslop's counsel to arrive at a mutually agreeable deposition date. Finally, Heslop respectfully requests the Discovery Referee and/or the Court to impose sanctions against Plaintiffs and its counsel in the amount of $2,065, to be paid to Heslop by a date deemed suitable by this court. Plaintiffs should also be held responsible for the Discovery Referee's costs related to his efforts in this Motion, and Heslop specifically requests that they be ordered to do so.

                                                           KLINEDINST PC

DATED: July 11, 2011            By: _________________________________
                                                            Connie M. Anderson
                                                            Philip W. Vineyard
                                                            Pouya B. Chami
                                                            Attorneys for Defendant
                                                            David Alan Heslop

________________________________________________________________

The Windermere Real Estate Relocation Rape Case:

Court Declares that Windermere "...condoned a rape by a business colleague..."

Editorial Preface: The incredibly violent and insidious psychological ramifications of rape, connected through an “abusive work environment” serves as an unfortunate yet credible subtext for the way in which Windermere Real Estate treats employees and damaged customers alike: Windermere’s application of aggressive, wasteful and mendacious litigation to stall and ruin innocent consumers, serves as the coercive metaphor of corporate power and arrogance: Windermere has no concern for the social damage it has done to people or communities. It cares only about how to manipulate the law and the courts to avoid any legal responsibility.

(Above L to R) Windermere CEO Geoff Wood (far left) is currently listed as a Governing Person of Windermere Relocation. Peggy Scott (second from left), also a current Governing Person of Windermere Relocation, "... did not give Little any advice about going to the police, and she did not conduct an investigation of Little's complaint or any follow-up interview with Little." Windermere General Counsel, attorney Paul Drayna (third from left) is listed as the registered agent of RELO LLC, the current entity name of Windermere Relocation. Windermere Founder John W. Jacobi (fourth from left) along with Gayle Glew (far right) are listed as Governing Persons of Windermere Relocation during the Little case. Glew told Ms. Little he did not want any "clouds in the office," and subsequently, after she would not accept a pay cut, that she should clean out her desk.

All citizens who abhor such treatment of women in the workplace should recall Maureen Little v. Windermere Relocation when choosing real estate services. WindermereWatch visitors will also want to read the United States District Court of Appeals Ninth Circuit's Order and Amended Opinion from the Little case.

Summarized and excerpted from a decision by the U.S. Court of Appeals

Maureen Little was employed by Windermere Relocation Services (“Windermere”) as a Corporate Services Manager, a position that required her “to develop an ongoing business relationship and relocation contacts with corporations in order to obtain corporate clients needing relocation services for their employees.” Until she was terminated, she received only positive feedback from her supervisors. Windermere’s records confirm that during the relevant period, Little had the best transaction closure record of all corporate managers by a large margin.

Unlike the other managers, Little’s employment contract provided that Little would receive $2,000 monthly, plus a $1,000 monthly override and $250 per closed sale. The override was based on the assumption that Little would close four transactions per month, with a provision for rollover when she did not make the target. According to Windermere President Gayle Glew, the other managers had not received the $1,000 override.

One of Windermere’s clients was the Starbucks Corporation. Some time in 1997, Little performed some relocation services for Starbucks Human Resources Director, Dan Guerrero, on a contract basis, and she learned from him that Starbucks was dissatisfied with its primary relocation provider. Glew told Little that he would “do whatever it takes to get this account” and that Little should “do the best job she could.” Thus, little believed that, as part of her job, she was to build a business relationship with Guerrero to try and get the Starbucks account, and she had at least two business lunches with Guerrero toward this end.

On October 14, Little accepted Guerrero’s invitation to discuss the account at a restaurant. After eating dinner with Guerrero and having a couple of drinks, Little suddenly became ill and passed out. She awoke to find herself being raped by Guerrero in his car. She fought him off and jumped out of the car, but again she became violently ill. Guerrero put her back in the car and took her to his apartment, where he raped her again. Little fell asleep, and when she awoke he was raping her again. Afterward, he showered and drover her to her car.

Little was reluctant to tell anyone at Windermere about the rape because, in her own words, “I knew how important the Starbucks account was to Mr. Glew. Mr. Glew would ask me on a consistent basis the status of the account and I was afraid that if I told him about the rape, he would see me as an impediment to obtaining the Starbucks account.” This belief was reinforced when, a few days after the rape, Little reported the rape to Chris Delay, Director of Relocation Services (apparently not one of Little’s supervisors), and Delay advised her not to tell anyone in management. Little believed that Delay feared “what might happen to [Little] if [she] did tell.”

On October 23, about nine days after the rape, Little reported it to Peggy Scott, the Vice President of Operations, who was designated in Windermere’s Harassment Policy as a complaint-receiving manager. Little described Scott’s response:

She came out around the desk and I could tell she was upset and she just gave me a hug and said she wished there was something she could do. She didn't understand what I was going through. She asked me if I was in therapy. Then she proceeded to tell me she wouldn't say anything to [Glew] unless I proceeded to seek legal action [against Dan Guerrero].

Scott told Little that "[s]he thought it would be best that [Little] try to put it behind [her] and to keep working in therapy," and that she should discontinue working on the Starbucks account. She did not give Little any advice about going to the police, and she did not conduct an investigation of Little's complaint or any follow-up interview with Little. Scott testified in her deposition that, because the rape occurred outside the "working environment," she believed that it fell outside the scope of Windermere's Harassment Policy.

Despite Little's supposed removal from the Starbucks account, Glew continued to ask her about the status of the Starbucks account during the next six weeks. "[As of December 2,] Gayle was asking me questions about Starbucks ... a couple of times every month to see what the status was." Concerned by Glew's questions, Little told her immediate supervisor, Linda Bellisario, the Vice President of Sales and Marketing, on December 2, 1997, about the rape. Little had been reluctant to tell Bellisario because she "felt that [Bellisario] would immediately go to Gayle and Gayle would terminate my position.... I knew how much this account meant to him. He said he would do whatever it took to get this account." Bellisario told Little to inform Glew of the incident.

When Little told Glew of the rape, which, according to Glew, was the first he had heard of it, Glew's" immediate response was that he did not want to hear anything about it." He told Little that she would have to respond to his attorneys. Glew then informed her that he was restructuring her salary from $3,000 monthly to $2,000 monthly plus $250 per closed transaction. The pay reduction was effective immediately and non-negotiable. Bellisario, who was present at that portion of the meeting, appeared "surprised and upset" to Little.

Little found the pay cut unacceptable, and Glew told her to go home for two days to think it over "because he did not want any `clouds in the office.'" When Little still found the pay cut unacceptable two days later, Glew told her it would be best if she moved on and that she should clean out her desk.

Little brought suit against Windermere, alleging unlawful discrimination and retaliation in violation of Title VII, 42 U.S.C. § 2000e, and the Revised Code of Washington § 49.60; wrongful discharge in violation of public policy; and intentional, reckless, and/or negligent infliction of emotional distress. The district court granted summary judgment in favor of Windermere on all four claims.

Little appealed dismissal of her claims, and the appeals court reversed in part, and ruled:

In sum, taking the facts in the light most favorable to Little, because her employer effectively condoned a rape by a business colleague and its effects, Little was subjected to an abusive work environment that "detract[ed] from [her] job performance, discourage[d] [her] from remaining on the job, [and kept her] from advancing in [her] career."

Incredibly, Windermere asked for a rehearing, but "...the panel has voted to deny the petition for rehearing and to reject the suggestion for rehearing en banc.

________________________________

WINDERMERE: AMERICA'S PREDATORY REAL ESTATE ENTERPRISE

Consumer advocates, legal experts and elected lawmakers all agree that the American real estate industry demands greater regulation to protect consumers from the human disaster of real estate fraud perpetrated by unethical realtors employed at companies like Windermere Real Estate. Windermere manipulates our clogged, inundated courts and the justice system to stall, wear down and financially exhaust victimized consumers, many of whom are wiped-out by the cost of pursuing civil justice in a process where innocent victims must CHASE perpetrators of real estate fraud through the courts AFTER a fraudulent offense has been committed. Acts of fraud are so common and widespread throughout the Windermere real estate network, that the defense of real estate fraud has become has become just another bottomline expense on the Windermere balance sheet. And the litigation nightmare of real estate fraud can happen to anyone who deals with Windermere Real Estate. It could happen to you. Windermere is by far the most unethical, deceitful, and culturally toxic real estate company operating in the United States. Windermere knowingly, deliberately, and unabashedly profits on corrupt franchise owners, brokers and agents with proven histories of fraud and ethical misconduct, many of whom are profiled in the pages of WindermereWatch.com. Despite Windermere's well-documented assault on victim speech rights, more and more unconscionable cases of Windermere fraud continue emerging.

Windermere is headquartered in Seattle, at franchiser Windermere Services Company. It was founded by John W. Jacobi, and he has kept the company a private, family-owned enterprise, eluding the transparency and ethical accountability required by stockholders. For decades, Windermere has harnessed the art of positive PR, affixing itself—however superficially—to community art events, the homeless, and even an annual college rowing competition which opens Seattle's boating season—the Windermere Cup—irresponsibly promoted by, and in conjunction with, the University of Washington. But those are the disingenuous and cynical sideshows created by an adept market manipulator, shown only briefly to the public, to obscure and obfuscate Windermere's true predatory nature.

FRANCHISER WINDERMERE SERVICES' MANAGEMENT TEAM AND DESIGNATED GOVERNING PEOPLE: EXPERTS IN MARKETING FRAUD, ABUSE OF THE LEGAL PROCESS, AND AT COERCING DAMAGED WINDERMERE CLIENTS INTO SILENCE BY SUPPRESSING THEIR SPEECH RIGHTS

The shameless greed and repugnant ethics of Seattle's Jacobi family, deliberately profiting on the loss and suffering of Windermere victims through commissions on the fraudulent home deals and unlawful misconduct of dishonest Windermere agents, brokers and franchise owners. Forget human decency, commercial reputation or social responsibility—it's all about the money.

Before turning the business over to his children and son-in-law, Windermere founder John W. Jacobi (left) simply ignored any complaints of fraud from Windermere victims, sending them straight to the lawyers. Yet despite claims of retirement, Jacobi is still indeed quite active at franchiser Windermere Services Company:

In Complaint 10-2-36192-8 SEA, filed in King County Superior Court on October 12, 2010, Windermere Services Company has sued former Windermere Puyallup Canyon Road owner Joe Maxwell for default on an “Unconditional Guaranty of Payment” promissory note. The Maxwell Answer and Counterclaims state that the “Plaintiff's [Windermere Services Company] claims are barred by Plaintiff’s fraud, duress, and unclean hands,” and alleges $4,000,000 in damages and violation of Washington's Franchise Investment Protection Act; and also that "The alleged Note and Guarantee are unconscionable and unenforceable." Maxwell's Counterclaims state "6. The WPCR Operating Agreement contains a provision granting Jacobi a special veto power which among other things, states that the company shall conduct its business and manage its affairs in accordance with the directions of Jacobi and all management decisions are subject to Jacobi’s review," and "13. In early 2006, WSC and Jacobi decided to open another WSC office in the territory in which WPCR was operating, despite the objections of Maxwell. As a result of the opening of this new WSC office, WPCR lost a significant number of its real estate agents and revenue that transferred to the new office in Graham, Washington," and "14. As a direct result of these actions taken by WSC and Jacobi, WPCR was left with a large debt burden and overhead, and WPCR’s revenue was significantly reduced... 22. On September 14, 2010, Maxwell heard from a real estate agent working at WPCR that the agent had received and email from WSC notifying him WPCR’s franchise had been terminated. This notice was sent to WPCR’s real estate agents before Maxwell learned of the termination of WPCR’s franchise." Read the complete report on this case here.

Jacobi's Washington Loan Company is also currently being sued for Intentional Misrepresentation—read that report here. And the Windermere affiliated service company, Commonwealth Land Title Company of Puget Sound, has recently been found negligent by a jury who awarded the third-party plaintiffs $1,190,000. Read the Commonwealth report here.

Current Governing Person and Windermere Services Company CEO Geoffrey P. Wood (left) is married to John W. Jacobi's daughter, Jill Jacobi-Wood. Wood is the chief architect of Windermere marketing fraud, inducing business volume through—among other fraudulent promotion—an express warranty of "The highest ethical standards. Uncompromising honesty and integrity." When called upon to honor his company's warranty, Wood instructs Demco lawyers—led by Matthew F. Davis–to sue vocal victims for libel and defamation. Wood is also a Governing Person of Windermere Relocation, the subject enterprise of Windermere's employee rape case. He was briefly a real estate sales person in 1994, but that license was CANCELLED in 1995, and Wood currently has no real estate license of any kind that WindermereWatch can find.

Governing Person Jill Jacobi-Wood (left), Windermere Services President, is a licensed real estate broker in Washington State, and as such is subject to the statutory condition of RCW 18.86.030 "(d) To deal honestly and in good faith." For her part in Windermere's marketing fraud and malfeasance, Jacobi-Wood's RE license should be cancelled by the Washington State DOL's real estate division. By promoting honesty and integrity—while in reality—she is suing and coercing Windermere victims to shutup about their Windermere experience, Jacobi-Wood is hardly dealing honestly and in good faith.

Governing Person John O'Brien "OB"Jacobi (left) is General Manager of franchiser Windermere Services Company and also has many Windermere realty brokerage offices. He's a licensed real estate broker who is also called upon by statutory law to "Deal honestly and in good faith." But John "OB" Jacobi instead promotes fraudulent claims of honesty and integrity, and falsely sues victims of Windermere misconduct for libel and defamation to intimidate them and coerce their silence. Then this junior Jacobi runs away and voluntarily dismisses his own mendacious lawsuit when a victim refuses to sign Windermere's dark clause settlement agreement that has cost the victimized party so much distress and money and to defend.

Windermere Services Governing Person and attorney—WSBA# 26636—Paul Drayna (left) has even more stringent ethical requirements placed upon him through his collateral professions of Lawyer and Notary Public; and Drayna is also bound by the Model Rules of Professional Conduct. But Mr. Drayna is not just practicing marketing fraud at Windermere. As Windermere in-house counsel, Drayna oversees Windermere's legal strategy of abusing process by falsely suing victims for libel and defamation, and then attempting to intimidate and coerce those victims out of their speech rights and into Windermere's Dark Clause silence agreement. When victims WON'T sign the Windermere Dark Clause, Drayna runs away too, and voluntarily dismisses his own company's lawsuit under Civil Rule 41—but only after first costing the victim thousands to defend the phony lawsuit. Drayna is even copied on the mendacious, Demco-authored settlement documents meant to quash speech rights and be signed by Windermere victims.

WINDERMERE'S DEMCO LAW FIRM: ESCHEWING ETHICS and DOING WHAT OTHER LAWYERS JUST WON'T DO

Attorney and multi-office Windermere broker John Demco (left) is the ethically-elastic Windermere kingpin lawyer who operates Demco Law, Windermere’s in-house legal firm, whose primary job is to stall and outspend small fry consumers damaged by dishonest Windermere brokers, agents and franchise owners. When an innocent real estate consumer has the misfortune to suffer one of Windermere’s many bad apples, Demco Law Firm will refuse to settle the matter forthrightly, no matter what conspicuously unlawful or offensive conduct the agent or broker has committed. Demco and Windermere will force the aggrieved party to sue or swallow their damage and go away—standard Windermere operating procedure.

WindermereWatch has compiled voluminous evidence that Windermere-Demco attorney Matthew F. Davis (left), WSBA# 20939, is the kind of lawyer about which jokes are coined. Davis is franchiser Windermere Services' frontline bully—the guy in the legal trenches actually wrecking lives, making threats, and suing victims who speak out. When Shakespeare was recommending "The first thing we do, let's kill all the lawyers," in Henry the Sixth, Part 2, he was talking about egomaniacal lawyers like Matt Davis.

Attorney Matt Davis of Windermere's Demco Law Firm is so unethical, so deceitful and intimidating, that he's famous in law circles. As Windermere-Demco's lead attorney, Matthew F. Davis is renown for his dishonesty, dubious legal tactics, lack of decency and disrespect for the rules of professional conduct. He will do absolutely anything to win—without regard for truth or justice. He will lie to courts and opposing parties. He will file fallacious and erroneous documents with the court. He will email opposing parties telling them not to hire a lawyer when he has just served them a lawsuit. He will call a judge's chambers and request more time without informing the opposing party. He will file orders for a bench trial when he knows a jury trial has been demanded and paid for. He will trick, stall, coerce, menace and threaten. He will invent and extend mendacious Windermere litigation and abuse the legal process for no other reason than to exhaust an opponent’s pocketbook. If he can, he will get YOUR attorney to quit—a favorite tactic.

Windermere, Davis and Demco Law will push a $5 cat poop case all the way to the state supreme court just to avoid paying damages—because it’s all in the Windermere operating budget. And in the end, Windermere and Davis will try to coerce silence about your Windermere experience by trying to make you sign a "settlement" agreement that terminates your speech rights, so you can't ever inform the public about your Windermere debacle. What if you DON'T sign that you'll shut up, and then SPEAK UP instead? Windermere-Demco's Matt Davis will sue you for libel and defamation, then run away and dismiss his own lawsuit on the eve of trial—because after all—you're telling the truth.

Windermere's Clear and Overt Marketing Fraud:

"THE HIGHEST ETHICAL STANDARDS. UNCOMPROMISING HONESTY AND INTEGRITY."

—The Windermere Real Estate Mission Statement

Windermere widely promotes its deceptive express warranty in sales documents and on the internet which states "We are committed to... The highest ethical standards. Uncompromising honesty and integrity." In other Windermere promotion, like the Puget Sound Business Journal, Windermere CEO Geoff Wood is quoted as saying "In the real estate business somebody's word is very important. If you say you're going to do something, you've got to do it." The article goes on to say, "Geoff oversees marketing, legal, financial and internet development services throughout the Windermere network..." Mr. Wood claims absolute dominion over both Windermere legal and internet strategy, making him chief architect of Windermere marketing fraud.

Effective reportage can be harsh in recounting facts, but it must be said in consideration of all the Windermere victims profiled here who truly sought Windermere's vaunted honesty and integrity, that Windermere Services CEO Geoffrey P. Wood is simply lying when he states his company's utterly false and fraudulent commitment to honesty and integrity. He both lies and deceives again when he says that "In the real estate business somebody's word is very important. If you say you're going to do something, you've got to do it." Wood clearly doesn't do what he says he's going to do—be committed to uncompromising honesty and integrity. Wood himself is indeed IN the real estate business and his word is absolutely no good at all. He sues victims of Windermere misconduct for trade libel and defamation to shut them up, and then he tries to use the legal system to suppress victims' speech rights when they ask him to actually perform on the warranty he promotes. As this website proves, Mr. Wood does anything BUT what he says he's gonna do. Far from providing victimized Windermere customers a commitment to high ethical standards, honesty and integrity, Wood and Windermere run away and hide behind their lawyers when innocent consumers are ruined by their Windermere experience.

John W. Jacobi, Geoff Wood, his wife Jill Jacobi-Wood, and governing cohorts John O'brien "OB" Jacobi and attorney Paul Drayna have gone to the absolute ends of the earth in stonewalling, ignoring, denying and fleeing any and all responsibility for Windermere wrongdoing and misconduct. When called upon by victimized Windermere consumers to make good on its warranty of honesty and integrity, Windermere even states in legal pleadings that Windermere agents are NOT agents of Windermere at all—but independent contractors. As the legally-designated Governing People and top managers of the Windermere empire who drive policy, ethics and market promotion, it demands repeating that John W, Jacobi, Geoff Wood, Jill Jacobi-Wood, John OB Jacobi and attorney Paul Drayna are all clearly lying when they promise high ethical standards and uncompromising honesty to the public and consumers of real estate services.

Protect your life, home, family and future by cancelling or not renewing your Windermere listing. Don't risk doing business with Windermere Real Estate, the brand built on lies, fraud and ruined lives. Refuse to fund public predator Windermere Real Estate with commission from the sale of your home.

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Is WindermereWatch.com of social benefit to consumers and the public? You decide:

Windermere Real Estate is one of our country’s largest real estate companies and widely promotes a fraudulent express warranty that states “We are committed to... The highest ethical standards. Uncompromising honesty and integrity.” The definition of an express warranty from Black's Law Dictionary is: "A warranty created by the overt words or actions of the seller. • Under the UCC, an express warranty is created by any of the following: (1) an affirmation of fact or promise made by the seller to the buyer relating to the goods that becomes the basis of the bargain."

But when customers are victimized by dishonest Windermere brokers and agents, and complain in writing through legal counsel to franchiser Windermere Services Company, it is absolutely silent in the face of clear and convincing evidence, and forces the customer to sue or go away. In many cases, unsuspecting consumer lives are thrown into complete chaos through costly litigation; and also because the subject homes may actually be uninhabitable or unserviceable for reasons about which Windermere knew and had a legal obligation to disclose—but did not. For some victims, the long and expensive litigation forced upon them even results in bankruptcy and homelessness. Despite their clear evidence, many victims go on to lose in court because they can't afford attorneys or have no legal experience, and Windermere exploits those impediments to endless advantage—lives, homes, and personal finances are ruined forever. And Windermere expects those victims to just go away without their lives and homes, merely for buying a house through Windermere Real Estate, innocently.

Although such irrefutable evidence of Windermere broker/agent misconduct has been presented to franchiser Windermere Services Company, it knowingly continues collecting commissions from dishonest agents and brokers by deliberately passing them on to other unwitting consumers. Just one example is Windermere S.C.A. Redmond's Paul Stickney, who received a $522,200 court judgment for not disclosing a conflict of interest, but is still producing commissions for his Windermere SCA franchise, and Windermere Services Company. Is that the "Highest ethical standards. Uncompromising honesty and integrity?" You may want to search and visit more websites about Windermere's predatory business conduct.

When victims use the media to report their Windermere experiences honestly, Windermere sues them for libel and defamation through false lawsuits to intimidate, silence, and hush bad PR—read one of those lawsuits here. It then tries to coerce victims into signing a “dark clause settlement agreement” that permanently terminates their speech rights—read some of those "settlement" agreements here. Through an expensive and emotionally distressing roller coaster ride with Windermere's nasty Demco lawyers, a victim of Windermere fraud is told they will be taken all the way to trial on trumped-up libel and defamation charges, and if they don't sign the dark clause, their life and future will be ruined. When a victim persists in refusing to sign, Windermere voluntarily dismisses its own lawsuit under Civil Rule 41, just before trial, after costing the victim years and yet thousands more to defend against the false action. This predatory legal tactic is known as abuse of process or malicious prosecution. In one example cited below, franchiser Windermere Services Company served an outspoken victim a lawsuit for libel and defamation, and then immediately sent them an email instructing that they "...need not hire an attorney," and further stating, “…we will try to resolve this directly and outside the legal system.”

Every Windermere office in every state is legally tied to franchiser Windermere Services Company's fraudulent express warranty, false advertising, predatory conduct and policies through privity and its pecuniary franchise agreement. Some legal observers believe that Windermere's conduct has RICO and Civil Rights violation implications. If you have recently purchased a Windermere franchise without having been disclosed Windermere's falling brand value, PR decline, and its adverse website problems, click here for its duty of disclosure under Federal Trade Commission rules. Proof that Windermere Services Company knew about WindermereWatch.com in March of 2007 is in this document.

Windermere Real Estate is a textbook corporate predator who operates franchises in Washington State, Oregon, California, Arizona, Nevada, Utah, Idaho, Montana, Hawaii and British Columbia. Windermere repeatedly makes the false claim that it has offices in Wyoming, but it does not. If you’re buying or selling property through ANY Windermere office, a percentage from your transaction will be used by franchiser Windermere Services Company to silence and financially ruin innocent parties who’ve encountered Windermere fraud. Windermere won't pay legitimate damages or acknowledge wrongdoing, and will stall settlement of cases all the way to state supreme courts, a legal strategy that Windermere routinely employs to bankrupt victims and exhaust their resources.

We believe the information presented here is of profound social benefit to consumers and the community, and we are dedicated to providing it.

THROUGH FEES AND COMMISSIONS PAID TO FRANCHISER WINDERMERE SERVICES COMPANY, EVERY WINDERMERE NETWORK OFFICE IN EVERY STATE IS AN ENTHUSIASTIC PARTNER AND KNOWING ACCESSORY TO WINDERMERE MARKETING FRAUD AND ITS PREDATORY POLICIES

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