slep-tone answers brophy counterclaim

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ANSWER OF SLEP-TONE ENTERTAINMENT CORPORATION TO COUNTERCLAIMS

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James M. Harrington, pro hac vice [email protected] HARRINGTON LAW, P.C. 12245 Nations Ford Rd Ste 506 Pineville, NC 28134-8444 Tel.: (704) 315-5800 Attorney for Plaintiff Slep-Tone Entertainment Corporation

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA Slep-Tone Entertainment, Plaintiff, v. Steven C. Brophy et al., Defendants.

Case No.: CV-12-02684-PHX-SRB ANSWER OF SLEP-TONE ENTERTAINMENT CORPORATION TO COUNTERCLAIMS

Steven C. Brophy, Counterclaim-Plaintiff, v. Slep-Tone Entertainment Corporation; Kurt Slep; and James M. Harrington, Counterclaim-Defendants.

Counterclaim-Defendant Slep-Tone Entertainment Corporation (“Slep-

Tone”), by its undersigned counsel, hereby answers the counterclaims (Doc. 43) of

Counterclaim-Plaintiff Steven C. Brophy in like-numbered paragraphs.

1. Upon information and belief, admitted.

2. Slep-Tone admits that it is a North Carolina corporation, but denies

that its principal place of business is in Charlotte, North Carolina. (Slep-Tone’s

principal place of business is in Pineville, North Carolina.)

3. Admitted.

4. Denied.

Case 2:12-cv-02684-SRB Document 46 Filed 07/21/14 of 8

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5. Slep-Tone admits that the Court has jurisdiction over the subject

matter of this action.

6. Slep-Tone admits that it is subject to personal jurisdiction as to the

pending counterclaim because it has subjected itself to the jurisdiction of the Court

as to the principal claim and because the counterclaim is related to the claim by

common facts. Slep-Tone declines to answer as to personal jurisdiction over the

other counterclaim-defendants.

7. Slep-Tone admits that it is subject to personal jurisdiction as to the

pending counterclaim because it has subjected itself to the jurisdiction of the Court

as to the principal claim and because the counterclaim is related to the claim by

common facts. Slep-Tone declines to answer as to personal jurisdiction over the

other counterclaim-defendants.

8. Slep-Tone admits that venue is proper in this Court as to the pending

counterclaim against it. Slep-Tone declines to answer as to the propriety of venue

with respect to the other counterclaim-defendants.

9. Slep-Tone admits that it is a manufacturer and distributor of karaoke

accompaniment tracks.

10. Slep-Tone admits that Kurt Slep contacted Brophy to request that

Brophy conduct investigations in April 2010. Otherwise, denied.

11. Admitted.

12. Admitted.

13. Denied.

14. Slep-Tone admits that Harrington had drafted settlement agreements

for trademark infringement claims in which he was counsel and that Harrington

received a portion of settlements in which he served as counsel. Otherwise, Slep-

Tone is without sufficient information to admit or deny the allegations, and they

are therefore provisionally denied.


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15. Slep-Tone is without sufficient information to admit or deny the

allegations of this paragraph, which are therefore provisionally denied.

16. Slep-Tone is without sufficient information to admit or deny the

allegations of this paragraph, which are therefore provisionally denied.

17. Denied.

18. Slep-Tone admits that Slep stated to Brophy that Slep-Tone had never

given permission for any KJs to make copies of Slep-Tone’s karaoke

accompaniment tracks or to use unauthorized copies to run karaoke shows from

their computers. Slep-Tone admits that Slep represented to Brophy that Slep-

Tone’s trademark infringement claims against the KJ infringers were valid and

enforceable. Slep-Tone admits that Slep represented to Brophy that the claims that

had proceeded to litigation by April 21, 2010, had been successful. Slep-Tone

admits that Slep represented to Brophy that Slep-Tone had taken all steps

necessary to comply with applicable trademark laws to establish and preserve its

trademark rights. Slep-Tone also admits that “Brophy did not know at the time

these representations were made that the representations were false nor did he have

any reason to believe that they were false” because those representations were and

remain true.

19. Slep-Tone admits that Slep represented to Brophy that Slep-Tone was

selling karaoke tracks and that its business remained viable and solvent. Slep-Tone

also admits that “Brophy did not know that these representations were false and did

not have any reason to believe they were false” because those representations were

and remain true.

20. Denied.

21. Slep-Tone admits that the referenced Agreement was executed by

Slep-Tone and by Associated Protective Services, L.L.C., by their respective

officers. To the extent that the paragraph implies that Brophy, not Associated

Protective Services, L.L.C., was the party to the Agreement, that implication is


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denied. Otherwise, the Agreement speaks for itself, and to the extent that the

paragraph’s characterization of the Agreement contradicts the Agreement, the

allegations of the paragraph are denied.

22. The Agreement speaks for itself, and to the extent that the paragraph’s

characterization of the Agreement contradicts the Agreement, the allegations of the

paragraph are denied.

23. Slep-Tone is without sufficient information to determine the truth or

falsity of the allegations of the paragraph, which are therefore provisionally denied.



paragraph are denied. Slep-Tone is without sufficient information to determine

Brophy’s state of mind, and the allegations of the paragraph are additionally

provisionally denied on that basis.



paragraph are denied. Slep-Tone is without sufficient information to determine

Brophy’s state of mind, and the allegations of the paragraph are additionally

provisionally denied on that basis.

26. Denied.

27. Slep-Tone admits that it provided a sample complaint for trademark

infringement for use as an example by attorneys engaged to prosecute claims.

Denied. The allegations that the representations in the sample complaint were or

are false is specifically denied.

28. Denied. Slep-Tone has been engaged continuously in the sale and

distribution of karaoke accompaniment tracks since 1987, and those sales and

distribution activities continue to the present day, even apart from sales and

distributions related to settlement of claims.

29. Admitted as to Slep’s representations.


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30. Slep-Tone is without sufficient information to admit or deny the date

on which Brophy obtained a copy of the letter in question, and Slep-Tone therefore

leaves Brophy to his proof as to that point. The letter in question, which is

attached hereto as Exhibit A, speaks for itself, but Slep-Tone specifically denies

that it constitutes an authorization for the use of media-shifted and format-shifted

karaoke tracks without notification or verification. The letter, which is directed to

bar and club owners (and not to karaoke operators), specifically notes the

requirement that operators “prove the purchase of the original manufacturer’s

content in support of each and every hard drive they use in a commercial

application to perform karaoke shows.”

31. Slep-Tone admits that this was and is its position.

32. Denied. Additionally, Slep-Tone has no way of knowing what action

Brophy would have undertaken if a true statement had instead been false. Slep-

Tone agrees generally with the premise that investigation would be extremely

difficult if Slep-Tone had given a blanket authorization as Brophy suggests, but

denies that such an authorization was ever given.

33. Admitted.

34. Denied, on the basis that the statement was not a misrepresentation.

35. Denied.

36. Slep-Tone admits that it requested that APS include in its

investigations those persons who were illegally duplicating trademarked tracks and

selling computers and computer hard drives containing those tracks. Slep-Tone

denies that such investigations are outside the scope of the Agreement, that APS or

Brophy was entitled to extra compensation for such investigations, and that Slep-

Tone agreed to such extra compensation. To the extent not addressed above,

denied.

37. Slep-Tone is without sufficient information to admit or deny that

Brophy conducted the referenced Pirate Investigations. Slep-Tone admits that it


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has refused to pay any amounts for pirate investigations, because those

investigations are within the scope of the Agreement and therefore were to be at

APS’s expense.

38. Denied.

39. Slep-Tone admits that it has refused to pay any amounts for extra

investigations, because no such investigations were requested.

40. Denied. Slep-Tone specifically denies that such activities stand

outside the normal duties under the Agreement (which is denominated an

“Investigative Collection Services Contract” and which specifically requires that

APS conduct collection activities).

41. Slep-Tone admits that it has refused to pay any amounts for so-called

“collection duties,” because those duties are within the scope of the Agreement and

therefore were to be at APS’s expense.

42. Slep-Tone admits that it has refused to pay any amounts for “travel

and miscellaneous expenses,” such expenses, if incurred, being chargeable to APS,

not Slep-Tone.

43. Denied.

44. Slep-Tone admits that it made the notification in question and that

Brophy so responded. Slep-Tone denies that the notification was wrongful.

45. Slep-Tone admits that it notified defendants with existing settlement

agreements to make their future payments directly to Slep-Tone as a measure to

attempt to recoup monies wrongfully withheld by APS. Slep-Tone denies that the

notification was wrongful.

46. Denied.

47. Slep-Tone admits that it has requested that Brophy turn over the

referenced files. Otherwise, denied.

48. Denied.

49. Denied.


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50. Denied.

51. Denied.

52. Denied.

53. Slep-Tone admits that it instructed three defendants who had been

making payments to APS to make their payments to Slep-Tone instead. The

remainder of the allegations of this paragraph are denied. Moreover, because the

contract in question was with APS, not Brophy, Slep-Tone specifically denies that

Brophy has suffered any pecuniary loss whatsoever as to these diverted payments.

54. Denied.

55. Denied.

56. Denied.

57. Denied.

58. Denied.

59. Denied.

60. Denied.

61. Denied.

62. Denied.

WHEREFORE, Slep-Tone prays that judgment be entered in its favor upon

the Counterclaims and that Brophy have and take nothing thereon.

Respectfully submitted this the 21st day of July, 2014. HARRINGTON LAW, P.C. By: /s/ James M. Harrington 12245 Nations Ford Road, Suite 506 Pineville, NC 28134-8444 (704) 315-5800 Attorney for the Plaintiff


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CERTIFICATE OF SERVICE

The undersigned hereby certifies that the foregoing paper is being filed using the Clerk’s CM/ECF system, which will send a Notice of Electronic Filing to counsel of record. CM/ECF non-participants are being served on the date indicated below by depositing a copy of this paper as First Class Mail, postage prepaid, addressed as follows: STEVEN C. BROPHY ASSOCIATED PROTECTIVE SERVICES, L.L.C. 3120 W CAREFREE HWY STE 1-301 PHOENIX AZ 85086-3202 Date: 7/21/2014 /s/ James M. Harrington James M. Harrington


EXHIBIT ACase 2:12-cv-02684-SRB Document 46-1 Filed 07/21/14 Page 1 of 1

slep-tone answers brophy counterclaim

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