FILED: NEW YORK COUNTY CLERK 10/03/2013 INDEX NO /2011 NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 10/03/2013

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1 FILED NEW YORK COUNTY CLERK 10/03/2013 INDEX NO /2011 NYSCEF DOC. NO. 108 RECEIVED NYSCEF 10/03/2013 SUPREME COURT OF THE STATE OF NEW YORK STATE OF NEW YORK DEBORAH R. SLATER, -against- EDCOMM, INC., Plaintiff, Defendants EDCOMM INC., Third-Party Plaintiff -against- LINDA EAGLE, CLIFFORD BRODY, and DAVID SHAPP Third-Party Defendant X X X Index No /11 ANSWER TO THIRD-PARTY COMPLAINT AND THIRD- PARTY COUNTERCLAIMS Third-Party Defendant, Clifford Brody ("Brody"), acting Pro Se, as and for his Answer to the Amended Third-Party Complaint, alleges as follows 1. Have no personal knowledge of Plaintiff s action or the correctness of the complaint set forth in paragraph 1 of the Amended Third-Party 2. Admit the allegations set forth in paragraph 2 of the Amended Third-Party 3. Unaware of what Edcomm does or whether the attached copy is true and correct as alleged in paragraph 3 of the Amended Third-Party

2 4. Deny the allegations set forth in paragraph 4 of the Amended Third-Party 5. Deny the allegations set forth in paragraph 5 of the Amended Third-Party 6. Admit the allegations set forth in paragraph 6 of the Amended Third-Party 7. Deny the allegations set forth in paragraph 7 of the Amended Third-Party Complaint and refer the Court to the Term Sheet for a statement of its contents.. 8. Deny the allegations set forth in paragraph 8 of the Amended Third-Party Complaint and refer the Court to the Term Sheet for a statement of its contents. 9. Deny the allegations set forth in paragraph 9 of the Amended Third-Party 10. Deny the allegations set forth in paragraph 10 of the Amended Third-Party 11. Deny the allegations set forth in paragraph 11 of the Amended Third-Party 12. Deny the allegations set forth in paragraph 12 of the Amended Third-Party Complaint and refer the Court to the Term Sheet for a statement of its contents. 13. Deny the allegations set forth in paragraph 13 of the Amended Third-Party Complaint as Brody is a Pennsylvania resident, all actions in this matter occurred in the state of Pennsylvania and on information and belief, Edcomm has no presence in New York. 2

3 14. Deny the allegations set forth in paragraph 13 of the Amended Third-Party Complaint as Brody is a Pennsylvania resident, all actions in this matter occurred in the state of Pennsylvania and on information and belief, Edcomm has no presence in New York. 15. Have no personal knowledge of the allegations set forth in paragraph 15 of the Amended Third-Party 16. Admit the allegations set forth in paragraph 16 of the Amended Third- Party 17. Admit the allegations set forth in paragraph 17 of the Amended Third- Party 18. Admit the allegations set forth in paragraph 18 of the Amended Third- Party 19. Admit the allegations set forth in paragraph 19 of the Amended Third- Party 20. Admit the allegations set forth in paragraph 20 of the Amended Third- Party 21. Deny the allegations set forth in paragraph 21 of the Amended Third-Party Complaint except admit that Eagle founded Edcomm along with Clifford Brody. 22. Deny the allegations set forth in paragraph 22 of the Amended Third-Party 23. Admit the allegations set forth in paragraph 23 of the Amended Third- Party 3

4 24. Deny the allegations set forth in paragraph 24 of the Amended Third-Party 25. Deny the allegations set forth in paragraph 25 of the Amended Third-Party 26. Deny the allegations set forth in paragraph 26 of the Amended Third-Party 27. Admit the allegations set forth in paragraph 27 of the Amended Third- Party 28. No knowledge of the allegations set forth in paragraph 28 of the Amended Third-Party 29. No knowledge of the allegations set forth in paragraph 29 of the Amended Third-Party 30. Deny the allegations set forth in paragraph 30 of the Amended Third-Party 31. Deny the allegations set forth in paragraph 31 of the Amended Third-Party 32. Deny the allegations set forth in paragraph 32 of the Amended Third-Party 33. Deny the allegations set forth in paragraph 33 of the Amended Third-Party 34. Deny the allegations set forth in paragraph 34 of the Amended Third-Party 4

5 35. Deny the allegations set forth in paragraph 35 of the Amended Third-Party 36. Deny the allegations set forth in paragraph 36 of the Amended Third-Party 37. Deny the allegations set forth in paragraph 37 of the Amended Third-Party 38. Deny the allegations set forth in paragraph 38 of the Amended Third-Party 39. Deny the allegations set forth in paragraph 39 of the Amended Third-Party 40. Deny the allegations set forth in paragraph 40 of the Amended Third-Party 41. Deny the allegations set forth in paragraph 41 of the Amended Third-Party 42. Brody hereby incorporates by reference and restates each and every prior 43. Deny the allegations set forth in paragraph 43 of the Amended Third-Party 44. Deny the allegations set forth in paragraph 44 of the Amended Third-Party 45. Deny the allegations set forth in paragraph 45 of the Amended Third-Party 5

6 46. Have no knowledge of the allegations set forth in paragraph 46 of the Amended Third-Party Complaint and refer the Court to Edcomm's books and records for a statement of their contents. 47. Deny the allegations set forth in paragraph 47 of the Amended Third-Party 48. Deny the allegations set forth in paragraph 48 of the Amended Third-Party 49. Brody hereby incorporates by reference and restates each and every prior 50. Deny the allegations set forth in paragraph 50 of the Amended Third-Party 51. Deny the allegations set forth in paragraph 51 of the Amended Third-Party 52. Deny the allegations set forth in paragraph 52 of the Amended Third-Party 53. Deny the allegations set forth in paragraph 53 of the Amended Third-Party 54. Brody hereby incorporates by reference and restates each and every prior 55. Deny the allegations set forth in paragraph 55 of the Amended Third-Party 56. Deny the allegations set forth in paragraph 56 of the Amended Third-Party 6

7 57. Have no knowledge of the allegations set forth in paragraph 57 of the Amended Third-Party 58. Deny the allegations set forth in paragraph 58 of the Amended Third-Party 59. Deny the allegations set forth in paragraph 59 of the Amended Third-Party 60. Deny the allegations set forth in paragraph 60 of the Amended Third-Party 61. Deny the allegations set forth in paragraph 61 of the Amended Third-Party 62. Deny the allegations set forth in paragraph 62 of the Amended Third-Party 63. Brody hereby incorporates by reference and restates each and every prior 64. Deny the allegations set forth in paragraph 64 of the Amended Third-Party 65. Deny the allegations set forth in paragraph 65 of the Amended Third-Party 66. Brody hereby incorporates by reference and restates each and every prior 67. Deny the allegations set forth in paragraph 67 of the Amended Third-Party 7

8 68. Deny the allegations set forth in paragraph 68 of the Amended Third-Party 69. Deny the allegations set forth in paragraph 69 of the Amended Third-Party 70. Deny the allegations set forth in paragraph 70 of the Amended Third-Party 71. Brody hereby incorporates by reference and restates each and every prior 72. Deny the allegations set forth in paragraph 72 of the Amended Third-Party Complaint and refer the Court to the Term Sheet for a statement of its contents Deny the allegations set forth in paragraph 73 of the Amended Third-Party 74. Deny the allegations set forth in paragraph 74 of the Amended Third-Party 75. Deny the allegations set forth in paragraph 75 of the Amended Third-Party 76. Brody hereby incorporates by reference and restates each and every prior 77. Deny the allegations set forth in paragraph 77 of the Amended Third-Party Complaint as this is a matter of law to be decided at trial. 78. Deny the allegations set forth in paragraph 78 of the Amended Third-Party 8

9 79. No knowledge of the allegation set forth in paragraph 79 of the Amended Third-Party 80. Deny the allegations set forth in paragraph 80 of the Amended Third-Party 81. Brody hereby incorporates by reference and restates each and every prior 82. Deny the allegations set forth in paragraph 82 of the Amended Third-Party 83. Deny the allegations set forth in paragraph 83 of the Amended Third-Party 84. Brody hereby incorporates by reference and restates each and every prior 85. Deny the allegations set forth in paragraph 85 of the Amended Third-Party 86. Brody hereby incorporates by reference and restates each and every prior 87. Deny the allegations set forth in paragraph 87 of the Amended Third-Party 88. Deny the allegations set forth in paragraph 88 of the Amended Third-Party 89. Deny the allegations set forth in paragraph 89 of the Amended Third-Party 9

10 90. Brody hereby incorporates by reference and restates each and every prior 91. Deny the allegations set forth in paragraph 91 of the Amended Third-Party Complaint and refer the Court to the Term Sheet for a statement of its contents. 92. Deny the allegations set forth in paragraph 92 of the Amended Third-Party 93. Deny the allegations set forth in paragraph 93 of the Amended Third-Party 94. Deny the allegations set forth in paragraph 94 of the Amended Third-Party 95. Deny the allegations set forth in paragraph 95 of the Amended Third-Party 96. Brody hereby incorporates by reference and restates each and every prior 97. Deny the allegations set forth in paragraph 97 of the Amended Third-Party 98. Deny the allegations set forth in paragraph 98 of the Amended Third-Party 99. Deny the allegations set forth in paragraph 99 of the Amended Third-Party 100. Deny the allegations set forth in paragraph 95 of the Amended Third-Party 10

11 AFFIRMATIVE DEFENSES AS AND FOR A FIRST AFFIRMATIVE DEFENSE 101. Plaintiffs claims should be dismissed for failure to state a claim. AS AND FOR A SECOND AFFIRMATIVE DEFENSE 102. Plaintiffs claims should be dismissed under the doctrines of waiver, estoppel, or laches. AS AND FOR A THIRD AFFIRMATIVE DEFENSE 103. Plaintiffs claims are barred by their own breach of contract. AS AND FOR A FOURTH AFFIRMATIVE DEFENSE 104. Plaintiffs claims are barred by the doctrine of unclean hands. AS AND FOR A FIFTH AFFIRMATIVE DEFENSE 105. Plaintiffs claims for damages are barred for failure to mitigate damages. AS AND FOR A SIXTH AFFIRMATIVE DEFENSE 106. Plaintiffs claims are barred because they failed to conduct any reasonable due diligence in connection with any proposed transaction with Defendants. AS AND FOR A SEVENTH AFFIRMATIVE DEFENSE 107. Plaintiffs claims are barred by their failure to negotiate in good faith a final document memorializing terms and conditions of their transaction with Defendants. AS AND FOR AN EIGHTH AFFIRMATIVE DEFENSE 108. Plaintiffs claims are barred in whole or in part by a lack of standing. AS AND FOR A NINTH AFFIRMATIVE DEFENSE 109. Plaintiffs claims are barred in whole in or in part for lack of causation of any alleged damages. 11

12 AS AND FOR A TENTH AFFIRMATIVE DEFENSE 110. Plaintiffs claims are barred in whole or in part because they are sophisticated investors who did not reasonably rely upon alleged misrepresentation or omission, and/or were not owed any affirmative duty of disclosure. OVERVIEW OF COUNTERCLAIMS 111. The counterclaims set forth below arise from a scheme whereby the Third-Party Counterclaim-Defendants made false promises, misrepresentations and coercion to take over Edcomm and then terminate Eagle, Brody and Shapp. The Third-Party counterclaim-defendants turned what had been discussed as a $730,000 loan among friends into a trap by which they took over the company. They did not complete the promised Due Diligence during which assets and liabilities would be defined and rather than the agreed-upon negotiation between SISCOM and Eagle, Brody and Shapp to determine what if any equity position SISCOM would be interested in buying, they terminated Eagle, Brody and Shapp, refused to pay their deferred salary, refused to pay the loans put in by Eagle Brody and Shapp and have not returned important personal effects and records to them. PARTIES AND JURISDICTION FOR COUNTERCLAIMS 112. Linda Eagle ( Eagle ) is an individual domiciled in New York Clifford Brody ( Brody ) is an individual domiciled in Pennsylvania David Shapp ( Shapp ) is an individual domiciled in Pennsylvania Edcomm is a New York corporation which, on information and belief, has no presence in New York but rather has its only office in Fort Washington, Pennsylvania. 12

13 116. Sawabeh Information Services Company ("SISCOM") on information and belief is a Saudi Arabian corporation which, on information and belief, maintains its corporate office in Saudi Arabia 117. Waleed Abalkhail ( Abalkhail ) is, on information and belief, a citizen of Saudi Arabia. On information and belief Abalkhail is the co-owner of SISCOM and is one of its officers and/or directors Brody believes that proper jurisdiction in this matter would be the United States District Court, Southern District of New York under the theory of supplemental jurisdiction under 28 U.S.C. 1331, as there is a related case currently pending in that court - SAWABEH INFORMATION SERVICES CO. and EDCOMM, INC., Plaintiffs/Counterclaim Defendants, v. CLIFFORD BRODY, LINDA EAGLE and DAVID SHAPP, Defendants/Counterclaimants[11 CIV 4164 (SAS)] 119. Brody believes that proper jurisdiction in this matter would be the United States District Court, Southern District of New York under the theory of diversity jurisdiction under 28 U.S.C. 1332, as the parties involved are not all citizens of the State of New York. Brody resides in Pennsylvania and any actions alleged to have taken place were in Edcomm's Pennsylvania office located in Fort Washington, PA and although Edcomm is incorporated in New York, it has no presence in New York. FIRST COUNTERCLAIM Indemnification against Edcomm 120. Third-Party Counterclaimant hereby incorporates by reference and realleges each and every prior answer and allegation as if fully set forth herein. 13

14 121. Edcomm s claims arise out of the alleged conduct of Eagle, Brody and Shapp in their capacity as officers and directors of Edcomm By virtue of Edcomm s bylaws and/or the Business Corporation Law, Eagle, Brody and Shapp are entitled to indemnification by the company for any losses or damages, as well as attorneys fees To the extent that Eagle, Brody and Shapp were to be found to have any liability or incur any attorneys fees by virtue of the claims asserted against them, Edcomm must indemnify Third-Party Counterclaimants To the extent it is allowed under the company s bylaws, Eagle, Brody and Shapp seek advancement of costs incurred in connection with this lawsuit by the Company. JURY DEMAND Eagle, Brody and Shapp demand a jury trial on all claims, affirmative defenses, or counterclaims which may be tried before a jury. WHEREFORE, Eagle, Brody and Shapp respectfully demand judgment as follows I. Dismissing each of Third-Party Plaintiff s claims such that Third-Party Plaintiffs take nothing by their claims; and II. With respect to the Third-Party Counterclaims, awarding a. Compensatory damages in an amount to be determined at trial; b. Punitive damages in an amount to be determined at trial; c. Liquidated damages or other statutory damages as set forth in the counterclaims which arise under statutes or regulations which provide for such damages; d. Attorney s fees; 14

15 e. Cost of suit; and f. Such other and further relief as the Court deems just and proper. Dated Ambler, PA September 29, 2013 By Clifford Brody, Pro Se 840 Merrill Rd Ambler PA