ANSWER AND COUNTERCLAIM OF DEFENDANTS PINE TREE HOMES, LLC AND SANTIAGO JOHN JONES

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1 City and County of Denver, Denver, Colorado District Court Court Address: 1437 Bannock Street, Denver, CO Plaintiffs: WHITNEY SMITH AND CARLOS SMITH, individuals v. Defendants: PINE TREE CUSTOM HOMES, LLC, a Colorado limited liability company, and SANTIAGO JOHN JONES, an individual. COURT USE ONLY Andrew Contiguglia, #26901 Lia Fazzone, #27832 Attorneys for Defendant Contiguglia/Fazzone, P.C. 400 South Colorado Boulevard, Suite 830 Denver, CO (303) ajc@ajcpc.com Case No CV Division: Courtroom ANSWER AND COUNTERCLAIM OF DEFENDANTS PINE TREE HOMES, LLC AND SANTIAGO JOHN JONES COMES NOW, Defendants Pine Tree Custom Homes, LLC and Santiago John Jones, by and through Andrew J. Contiguglia of Contiguglia/Fazzone, P.C., and hereby answers Plaintiffs Complaint as follows: PARTIES, JURISDICTION AND VENUE 1. Defendants admit the allegations contained in paragraph number one of Plaintiffs 2. Defendants admit the allegations contained in paragraph number two of Plaintiffs 3. Defendants admit the allegations contained in paragraph number three of 4. Defendants admit the allegations contained in paragraph number four of 5. Defendants admit the allegations contained in paragraph number five of Plaintiffs

2 GENERAL ALLEGATIONS The Cost Plus Fee Contract 6. Defendants admit the allegations contained in paragraph number six of Plaintiffs Complaint to the extent that the Parties entered into a contract, Plaintiffs Exhibit 1, the terms of which speak for themselves. Defendants deny the remainder of paragraph six. 7. Defendants admit the allegations contained in paragraph number seven of Plaintiffs Complaint to the extent that such statement is consistent with the actual terms of the contract which speak for themselves. Defendants deny the remainder of paragraph seven. 8. Defendants admit the allegations contained in paragraph number eight of Plaintiffs Complaint to the extent that such statement is consistent with the actual terms of the contract which speak for themselves. Defendants deny the remainder of paragraph eight. 9. Defendants admit the allegations contained in paragraph number nine of Plaintiffs Complaint to the extent that such statement is consistent with the actual terms of the contract which speak for themselves. Defendants deny the remainder of paragraph nine. 10. Defendants admit the allegations contained in paragraph number ten of Plaintiffs Complaint to the extent that such statement is consistent with the actual terms of the contract which speak for themselves. Defendants deny the remainder of paragraph ten. 11. Defendants deny the allegations contained in paragraph eleven of Plaintiffs 12. Defendants admit the allegations contained in paragraph number twelve of Plaintiffs Complaint to the extent that the Parties entered into a contract, the terms of which speak for themselves. Defendants deny the remainder of paragraph twelve. Performance of the Contract 13. Defendants admit the allegations contained in paragraph number thirteen of 14. Defendants deny the allegations contained in paragraph number fourteen of 15. Defendants deny the allegations contained in paragraph number fifteen of 16. Defendants deny the allegations contained in paragraph number sixteen of

3 17. Defendants deny the allegations contained in paragraph number seventeen of 18. Defendants deny the allegations contained in paragraph number eighteen of 19. Defendants deny the allegations contained in paragraph number nineteen of FIRST CLAIM FOR RELIEF [Breach of Contract-Pine Tree] 20. Defendants hereby incorporate their answers contained in paragraphs number one through nineteen above as fully set forth herein. 21. Defendants admit the allegations contained in paragraph number twenty-one of 22. Defendants deny the allegations contained in paragraph number twenty-two of 23. Defendants deny the allegations contained in paragraph number twenty-three of 24. Defendants deny the allegations contained in paragraph number twenty-four of 25. Defendants deny the allegations contained in paragraph number twenty-five of 26. Defendants deny the allegations contained in paragraph number twenty-six of 27. Defendants deny the allegations contained in paragraph number twenty-seven of SECOND CLAIM FOR RELIEF [Fraudulent Misrepresentation-Jones and Pine Tree] 28. Defendants hereby incorporate their answers contained in paragraphs number one through twenty-seven above as fully set forth herein. 29. Defendants deny the allegations contained in paragraph number twenty-nine of

4 30. Defendants deny the allegations contained in paragraph number thirty of 31. Defendants deny the allegations contained in paragraph number thirty-one of 32. Defendants deny the allegations contained in paragraph number thirty-two of 33. Defendants deny the allegations contained in paragraph number thirty-three of 34. Defendants deny the allegations contained in paragraph number thirty-four of DEFENSES 1. Plaintiffs fail to state a claim for which relief can be granted against Defendants Pine Tree Custom Homes, LLC and Santiago John Jones. 2. Plaintiffs are barred from recovery by the doctrine of waiver. 3. Plaintiffs are barred from recovery by the doctrine of estoppel. 4. Plaintiffs are barred from recovery by the doctrine of unclean hands. 5. Plaintiffs are barred from recovery by their own failure to mitigate their damages. 6. Plaintiffs are barred from recovery by the doctrine of accord and satisfaction. 7. Plaintiffs claims are barred because the amount of damages claimed to be due by the Complaint in this action are not due and owing. 8. The damages complained of by Plaintiffs are the result of acts, omissions or wrongful conduct of the Plaintiffs, and not that of Defendants Pine Tree Custom Homes, LLC and Santiago John Jones. 9. Plaintiffs claims are barred by the doctrine of laches. 10. Defendants Pine Tree Custom Homes, LLC and Santiago John Jones deny the truth of any allegations not previously admitted or denied. 11. Defendants Pine Tree Custom Homes, LLC and Santiago John Jones incorporate any defenses that might be available to them pursuant to Articles 101 to 117 of title 7 also known as the "Colorado Business Corporation Act."

5 12. Defendants Pine Tree Custom Homes, LLC and Santiago John Jones incorporate any defenses that might be available to them pursuant to C.R.S et. seq., also known as the "Colorado Construction Defect Action Reform Act." 13. Plaintiffs claims are frivolous and groundless pursuant to C.R.S Defendants Pine Tree Custom Homes, LLC and Santiago John Jones reserve the right to assert additional defenses as additional facts become known during the course of discovery, and/or where asserting such additional defenses becomes necessary and appropriate. DEFENDANTS COUNTERCLAIMS GENERAL ALLEGATIONS 1. On March 4, 2007, the Parties entered into a contract as more specifically contained in plaintiffs Exhibit 1 to complaint. 2. Inter alia, Section 6.1 of the contract states, The owner will pay the contractor Pine Tree Custom Homes LLC the contract Sum, which is based on the actual Cost of the Work, as defined in section 9.0 plus 10% for the Contractor s profit plus $30, for Management Fees. Payment as follows 5% of the 10% fee at Frame stage (when house is framed) balance of 5% when certificate of occupancy is obtained. Management fee $15,000 at contract signing, balance of $15,000 at frame stage. 3. To date, the Defendants have not been paid in accordance with the terms set forth in the contract. FIRST COUNTER CLAIM FOR RELIEF [Breach of Contract-Whitney and Carlos Smith] 1. All preceding allegations contained in paragraphs one through three of Defendants General Allegations are hereby incorporated in the First Counter Claim for Relief. 2. The Defendants entered into a contract with the Plaintiffs; 3. The Plaintiffs failed to pay him compliance with the contract; 4. Defendants substantially performed their part of the contract; 5. As a result of the Plaintiffs actions, Defendants have incurred damages in an amount to be determined at trial. WHEREFORE, Defendants Pine Tree Custom Homes, LLC and Santiago John Jones pray for judgment in their favor and against the Plaintiffs in this action, compensatory damages in an amount to be determined at trial, for attorney fees and costs, prejudgment interest and for such and further relief as this Court deems just and proper in the matter.

6 Dated: October 6, Respectfully submitted, CONTIGUGLIA/FAZZONE, P.C. //s// Andrew J. Contiguglia Andrew Contiguglia, #26901 Attorney for Defendants CERTIFICATE OF MAILING I hereby certify that on February 15, 2009 a true and correct copy of the foregoing Answer and Counterclaim of Defendants Pine Tree Custom Homes, LLC and Santiago John Jones was sent via Lexis / Nexis file and serve or by first class mail to the following individuals: Ima Whiner, Esq. Law Firm, L.L.C th Street, Suite 3000 Denver, CO //s// Andrew J. Contiguglia

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