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CAUSE NUMBER: 2004-59790
MICROCHECK SYSTEMS, INC.AND § IN THE DISTRICT COURT OF
MICROCHECK SOLUTIONS, INC. 8
§
Plaintiffs, §
§
UA §
Vs. §
§ HARRIS COUNTY, TEXAS
ZIGROSSI & MURPHY, L.L.C., Ind. § 1 .
and d/b/a EDUCATED SOLUTIONS; —§ \.
CHRIS ZIGROSSI; SCOTT MURPHY; §
MIKE SMITH Individually and d/b/a CMS § 28
TECHNOLOGY a/k/a CMS 8 esa =
TECHNOLOGIES; MICHOICE 8 Zao. =
TECHNOLOGY SYSTEMS, INC; JIM § oBeS
HAYDEN; ALEX CAMPBELL; AND § Base TV
JASON JABLECKI § wee
§ Soe
Defendants 8 125" JUDICIAL pisTRIET
DEFENDANT, MICHOICE TECHNOLOGY SYSTEMS, INC.
THIRD AMENDED ORIGINAL ANSWER and
ORIGINAL CO) SORY CO
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW, MICHOICE TECHNOLOGY SYSTEMS, INC., Defendant in the above
styled and numbered cause and respectfully files herein their THIRD AMENDED. ORIGINAL
ANSWER and ORIGINAL COMPULSORY COUNTER-CLAIM, and would further show unto
this Honorable Court as follows:
L
Defendant, MICHOICE TECHNOLOGY SYSTEMS, INC,, hereby enters their general denial
pursuant to Rule 92 of the Texas Rules of Civil Procedure, generally denying each and every, all and
singular, the allegations contained in Plaintiff's Third Amended Petition and Application for Injunctive
Relief and demand strict proof thereof.I.
In further answer, Defendant, MICHOICE TECHNOLOGY SYSTEMS, INC.), hereinafter
referred to as “MICHOICE,” will show that Plaintiff's damages, if any, were caused by the negligence
of John Manning. Therefore, pursuant to Chapter 33 of the Texas Civil Practices and Remedies Code,
MICHOICE requests this jury to make a determination as to the proportionate responsibility of the
damages, if any, asserted by Plaintiff in this lawsuit.
iil.
Defendant, MICHOICE, affirmatively pleads that the damages, if any, asserted by the Plaintiff
in this lawsuit were caused in whole or in part by the Plaintiffs failure to mitigate it’s own damages.
Without limitation, Defendant will show that Plaintiff breached the Performance Servicing Agreement,
(PSA), with Educated Solutions. In 2004, Microcheck entered into a PSA agreement with Educated
Solutions, whereby Microcheck was projected to be able to significantly reduce it’s monthly overhead
while receiving a 15 % royalty from Educated Solutions. Microcheck breached the PSA with Educated
Solutions by failing to pay the monthly obligation for the service and sales of Microcheck’s products.
By reason of such breach, any damages incurred by Microcheck was the result of it’s own failure to
Initigate or take advantage of the PSA with Educated Solutions.
Microcheck further failed to mitigate it’s own damages, if any, by reason of it’s failure to properly
fund Microcheck as well as it’s failure to implement and effectuate a marketing plan and to provide a
workforce to further develop it’s software products in order to remain competitive in the marketplace as
well as it’s failure to properly and timely service the existing products in the market.
Iv.
Defendant, MICHOICE, will show that the damages, ifany, as alleged by Plaintiff in this lawsuit,
were caused in whole or in part by the acts and omissions of third parties over which Defendant did not
have control. Specifically, Plaintiffs assert they have been caused damages due to the acts/ omissions of
Defendant, Chris Zigrossi, Defendant would assert that any damages incurred by Plaintiff, (which
Defendant denies), were the result of acts and omissions of Chris Zigrossi, for which this Defendant
should not be held responsible. Defendant requests the jury to make a determination as to theaN a
proportionate responsibility of such third persons as the evidence may show, including Chris Zigrossi.
Vv.
Defendant, MICHOICE, affirmatively pleads section 18.091 of the Texas Civil Practices and
Remedies Code, requiring Plaintiff to present evidence of it’s economic loss damages concerning any
claim for loss of earnings, loss of earning capacity, loss of contributions of an pecuniary value, in “Net”
value.
VI.
Defendant affirmatively pleads the defenses of estoppel as to the allegations of Plaintiff that .
Defendants breached their fiduciary duty and as to any claims that Defendants failed to disclose or
otherwise require board of director’s approval for any actions taken by Defendants as concerns
Microcheck Systems, Inc. and/or Microcheck Solutions, Inc., (hereinafter referred to as “Microcheck”).
Defendants will show that Microcheck filed it’s Articles of Incorporation with the State of Texas on June
7, 1984. Throughout the period of the business operations of Microcheck, Mike Smith was authorized
to make decisions and to take such action as he felt was in the best interest of the company.
Majority owner of Microcheck, John Manning, was an absentee board member, and acquiesced
or otherwise approved the actions of Microcheck’s president, Mike Smith. John Manning did not require
board approval for important company decisions involving Microcheck, including but not limited to,
moving the location of the corporate office on two prior occasions, purchases of vehicles and contracting
with third parties involving the business dealings of Microcheck.
As throughout the previous period of some 19 years of business, John Manning never required
board approval regarding the financial decisions of Mike Smith, As the majority shareholder and officer
of the corporation, John Manning, was charged with the duty and had the opportunity to require board
approval and to hold scheduled board meetings.
Defendants will show that as Microcheck did not regularily hold board meeting or require board
approval, Microcheck is estopped from arbitrarily asserting that Mike Smith owed a duty to Microcheck,
to seek board of director approval for the formation and outsourcing of services through Educated
Solutions.Vil.
Defendant, MICHOICE, further pleads, that the damages asserted by Plaintiff in this lawsuit, if
any, were caused by and were the result of the corporations own financial instability, and were not caused
in any way by the actions of Defendants in this lawsuit. Defendant will show that John Manning, an
absentee board member, officer and majority shareholder of Microcheck, with drew significant sums of
cash from Microcheck beginning in the year 1999 and continuing through the year 2004. Defendant will
show that as a result of Mr. Mannings withdrawals of the financial resources of Microcheck, the
corporation did not have sufficient financial cash in order to make improvements to their products,
market their products and/or to continue providing the necessary servicing of their clients. Defendant will
further show that Microcheck’s financial instability, began in 2001 and has continued to present.
Defendant will show that Microcheck’s damages, if any, were caused in whole or in part by the financial
instability of the corporation and not the result of the actions or inactions of the Defendants in this lawsuit.
Vii.
Defendant, MICHOICE, will further show that the actions or inactions of Mike Smith during the
year 2004 were not a breach of any fiduciary duty owed by Mr. Smith to Microcheck, but rather that Mike
Smith was based upon sound business judgment in his actions regarding the outsourcing with Educated
Solutions. Defendants, including MICHOICE, will show that the actions of the Defendants in
outsourcing with Educated Solutions was done honestly, in good faith, and in furtherance of a rational
business purpose for the benefit of Plaintiff and therefore, the Plaintiffs’ claims are subject to the Business
Judgment Rule. Defendants will show they are not liable to Plaintiffs as their conduct falls within the
protection of the “Business Judgment Rule.” Defendants specifically request that the proper instruction
regarding the defense of the business judgment rule be submitted to the jury.
IX.
Defendant, MICHOICE, requests the jury to be instructed to segregate Plaintiff's damages, ifany,
between (Compensatory / Non-Compensatory), as required by the Texas Civil Practices and Remedies
Code.Xx.
Defendant, MICHOICE, prays for the recovery of all necessary and reasonable attomey fees
incurred by Defendant in defending Plaintiff s claims arising under the Texas Theft Liability Act, claims
of conversion as well as claims for breach of contract as well as all other claims asserted by Plaintiff
herein, whether in tort or in contract, which provide for the recovery of attomney fees incurred by the this
Defendant. Defendant requests the jury to award their reasonable and necessary attorney fees incurred
for:
(1) Defending the claims at the trial of this lawsuit;
(2) _ Post-trial, pre-appeal legal services;
(3) Anappeal to the court of appeals in the event an appeal is taken;
(4) Making or responding to a petition for review to the Supreme Court of
Texas;
(5) Anappeal to the Supreme Court of Texas in the event the petition for
review is granted; and
(6) _ Post-judgment discovery and collection in the event execution on the
Judgment is necessary.
Xi.
MICHOICE’S ORIGINAL COMPULSORY R-CLAIM
MICHOICE TECHNOLOGY SYSTEMS, INC., (hereinafter referred to as “Michoice”),
Defendant and Counter-Plaintiff herein, files their original compulsory counter-claim against
MICROCHECK SOLUTIONS, INC.), (referred to as “Microcheck”), for Tortious Interference of Existing
Contract; Tortious Interference with Prospective Relations; and defamation by libel.
Michoice recently was awarded a contract by Tempe Union High School District #213, (located
in Tempe, Arizona), to supply and service a new product for their meal accounting school system. On
or about October 14, 2007, MICHOICE learned for the first time that John Manning, acting as President
of MICROCHECK, intentionally caused or otherwise forwarded a letter to various officers, directors and
board members of the Tempe Union High School District #213, dated October 9, 2007, in which~ aA
Microcheck Solutions, Inc., represented that Michoice was conducting illegal activities by using the 2004
source code of Microcheck’s software in violation of a court order entered in November 2006 by The
Honorable Judge Coselli, in the 125" Judicial District Court of Harris County, Texas. In it’s letter,
received by the school district on October 15, 2007, Microcheck defamed the reputation of Michoice by
falsely representing that the software utilized by Michoice was illegally copied from or was, Microcheck
original source code. The false statement published by Microcheck directly identified Michoice by name.
Additionally, the false statement published by Microcheck was made for the purposes of defaming the
reputation of Michoice, as well as to adversely interfere with the contractual relationship between
Michoice and the school district. Since receiving the letter from Microcheck Solutions, the school district
has decided to investigate these false allegations and has required Michoice to submit a response for
consideration.
Counter-Plaintiff, MICHOICE has not copied or otherwise wrongfully utilized Microcheck’s
source code, but rather markets and implements software using Michoice’s own original source code or
otherwise legally obtained industry source code. The libel conduct of Microcheck was done intentionally
and with actual malice in regards to the falsity of the statement for the purpose of interfering with
Michoice’s existing contract, as well as to cause harm to the prospective relations between Michoice and
Tempe Union High School District #213. Microcheck’s tortious and libel conduct was the producing
and proximate cause of the damages incurred by Michoice for which their seek redress herein.
COUNT ONE
“Tortious Interference with Existing Contract”
At the time Microcheck sent the defaming letter to the school district, a valid enforceable contract
was established between Michoice and the Tempe Union High School District, #213. Counter-
Defendant, Microcheck willfully and intentionally interfered by forwarding a letter to various school
board members and District itself. The letter contained false allegations, including an allegation that
Michoice was utilizing the source code of Microcheck; that Michoice was in violation of a court order;
and that Michoice was committing an illegal act through the use of Microcheck’s sole proprietary
information, ‘source code.’ Defendant purposefully and with intent to do harm, interfered with the
parties’ contract, attempting to induce the Tempe Union HSD to breach it’s agreement with Michoice,~ oN
’
or to make performance of the contract impossible, more burdensome, difficult or expensive. The
intentional actions ofDefendant, Microcheck Solutions, Inc. in intervening with the existing contract was
a producing cause and proximate cause of actual damages suffered by Michoice Technology Systems,
Inc. for which they seek redress herein.
As the conduct of Microcheck was performed with the intent to harm Michoice, Counter-Plaintiff
would show and request that exemplary damages are warranted for the malicious conduct of Counter-
Defendant, Microcheck Solutions, Inc. Michoice requests the finder of fact to determine the appropriate
exemplary damages which would operate as a deterrence to Microcheck from committing future
interference with existing contracts of Michoice.
COUNT TWO
“Tortious Interference with Prospective Business Relations”
Counter-Plaintiff, Michoice, incorporates by reference herein paragraph XH and Count One above
and would further plead that the intentional misconduct of Counter-Defendant, Microcheck Solutions,
Inc. is also a tortious act for the purposes of interfering with the prospective future relations between
Michoice and the Tempe Union High School District, #213 as well as any other relations Michoice may
have with potential customers which have reviewed or otherwise been informed of the contents of the
Microcheck Systems’s letter dated October 9, 2007. ,
Currently, Michoice and the Tempe Union HSD were anticipating future contracts to be entered
between the two entities. By reason of the tortious interference of Microcheck, Michoice’s prospective
relations with the Tempe Union School District has been harmed. In all probability, Michoice was going
to have continuing business relations with the District and fully anticipated to receive additional contracts
from Tempe Union School District. As a result of Microcheck’s intentional interference with the
business relations between Michoice and the school district, the continuation of business relations with
this customer have been damaged, hindered, and made more expensive.
The intentional actions of Defendant, Microcheck Solutions, Inc. in intervening with the existing
contract was a producing cause and proximate cause of actual damages suffered by Michoice Technology
Systems, Inc. regarding continued business relations with this customer for which they seek redress.As the conduct of Microcheck was performed with the intent to harm the prospective business
telations between Michoice and the Tempe Union School District, Counter-Plaintiff would show and that
exemplary damages are warranted for the malicious conduct of Counter-Defendant, Microcheck
Solutions, Inc. Michoice requests the finder of fact to determine the appropriate exemplary damages
which would operate as a deterrence to Microcheck from continuing to interfere with the prospective
business relations of Michoice.
COUNT THREE
“Defamation by Libel”
Counter-Plaintiff, Michoice, incorporates by reference herein paragraph XII above and would
further plead for recovery based upon Defamation by Libel. Michoice will prove that Microcheck
published statements in the October 9, 2007 letter to Tempe Union High School District, #213 which
referred directly and identified the Counter-Plaintiff by name, Michoice. Statements identified above,
were false and defamatory to your Michoice and Defendant caused such false statements to be made with
actual malice and with intent to do harm to Michoice.
Counter-Plaintiff, Michoice has suffered pecuniary injury as a result of the defamatory statements
made by the Counter-Defendant for which Michoice seeks redress herein. Michoice pleads libel per sa
as the statements were made with intent to cause injury to Michoice’s professional performance and
business dealings. Michoice further pleads in the alternative, libel by implication and/or innuendo as the
false statements published by Microcheck would lead a person to reasonable infer that the defamatory
statements were susceptible to protray Michoice in a false light, and further implies that Michoice is guilty
of criminal activity regarding their daily business activities.
As the conduct of Microcheck has proximately caused Michoice to suffer actual damages,
Michoice prays they recover such actual damages as found by the trier of fact, or in the alternative,
nominal damages as allowed by law as well as the court costs incurred as a result of Microcheck’s
defamatory conduct.
Further, Microcheck’s defamatory conduct was performed with the intent to harm and damage
the business reputation of Michoice. As a result of such intentional and malicious conduct, Michoice
would show and that exemplary damages are warranted for the defamatory conduct of Counter-a a
’
Defendant, Microcheck Solutions, Inc., and requests the finder of fact to determine the appropriate
exemplary damages which would operate as a deterrence Microcheck from continuing to commit future
defamatory conduct to the detriment of Michoice as well as other businesses in the industry.
WHEREFORE, PREMISES CONSIDERED, Defendant/ Counter-Plaintiff herein,
MICHOICE TECHNOLOGY SYSTEMS, INC., prays that upon final trial herein, Plaintiffs,
MICROCHECK SYSTEMS, INC. and MICROCHECK SOLUTIONS, INC., shall take nothing from
Defendant; that Counter-Plaintiff, MICHOICE TECHNOLOGY SYSTEMS, INC., shall have and
recover from Counter-Defendant, MICROCHECK SYSTEMS, INC. and MICROCHECK SOLUTIONS,
INC., their reasonable and necessary attorney’s fee as plead herein; that Counter-Plaintiff, MICHOICE
TECHNOLOGY SYSTEMS, INC., shall have and recover from Counter-Defendant, MICROCHECK
SOLUTIONS, INC., all actual damages as found by the trier of fact; exemplary damages as found by the
trier of facts; along with their cost of court; and pre-judgment and post judgment interest as allowed by
law, and for such other relief as this Honorable Court may find MICHOICE TECHNOLOGY
SYSTEMS, INC., justly entitled.
TBA: 16826400
8303 S.W. Freeway, Ste. 810
Houston, Texas 77074
713) 779-8500
713) 779-8648 (Fax)
Counsel for:
MICHOICE TECHNOLOGY SYSTEMS, INC.CERTIFICATE OF SERVICE
Thereby certify that on this ¥ day of January, 2008, a true and correct copy of the foregoing
instrument, MICHOICE THIRD AMENDED ORIGINAL AN and ORIGINAL
COMPULSORY COUNTER-CLAIM was forwarded to parties of record ref#fenced below, individually
or by and through their attorney of record, in accordance with th, Rules of Civil Procedure.
MICROCHECK SOLUTIONS, INC.
MICROCHECK SYSTEMS, INC.
Mr. Christopher DeMeo
Mr. R. Edward Perkins
SHEEHY, SERPE & WARE
2500 Two Houston Center
909 Fannin Street
Houston, Texas 77010
Mr. Re ’ Murphy, III
. Roy Murphy,
Roy Murphy &Associates
12850 Jones Road, Ste. 201
Houston, Texas 77070
SCOTT MURPHY
Mr. J. Reid Perry
Attorney at Law
12850 Jones Road, Ste. 201
Houston, Texas 77070
CHRIS ZIGROSSI
Pro-Se
335 Shea Dr.
Cedar Park, Texas 78613~~ aN
The Law Offices of David P. Petersen, P.C.
8303 Southwest Freeway, Suite 810
Houston, Texas 77074 .
(713) 779-8500 Se
ae ~,
(713) 779-8648 FAX Q wy BS
~ > Vz.
January 3, 2008 og ~z a,
Br 2
Mr. Theresa Chang ors, y eS
Harris County District Clerk WEP, eB 2,
i Vee A Be
201 Caroline KORE. BS o
Houston, Texas 77002 5 Eee, BS
ss -
=
Re: — Cause No.:2004-59790; Micro Check Systemd, Inc. & Microcheck Solutions, Inc.
vs. Zigrossi & Murphy, L.L.C. Ind. & d/b/a Educated Solutions; Chris Zigrossi;
Scott Murphy; Mike Smith, Ind. & d/b/a CMS Technology a/k/a CMS
Technologies; Michoice Technology Systems, Inc; Jim Hayden; Alex Campbell;
& Jason Jablecki; In the District Court, 125 Judicial District, Harris County,
Texas.
Dear Ms. Chang: . ‘
(X) Please find the enclosed:
Defendant, Counter Plaintiff, Michoice Techonology Systems, Inc.'s, Third Amended
Original Answer and Original Compulsory Counter Claim & Letter to Judge Coselli
on Oral Hearing for January 11, 2008.
Please present to Judge for approval.
Please send me _ certified copy of
Our check is enclosed in the amount of:
(
(
(
wev
PLEASE STAMP THE DATE OF FILING ON THE COPY THAT HAS BEEN ATTACHED
AND RETURN TO THE UNDERSIGNED.
Very truly yours,
David P. Petersen
DPP/tr
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all CAUSE NUMBER: 2004-59790 MICROCHECK SYSTEMS, INC.AND § IN THE DISTRICT COURT OF MICROCHECK SOLUTIONS, INC. 8 § Plaintiffs, § § UA § Vs. § § HARRIS COUNTY, TEXAS ZIGROSSI & MURPHY, L.L.C., Ind. § 1 . and d/b/a EDUCATED SOLUTIONS; —§ \. CHRIS ZIGROSSI; SCOTT MURPHY; § MIKE SMITH Individually and d/b/a CMS § 28 TECHNOLOGY a/k/a CMS 8 esa = TECHNOLOGIES; MICHOICE 8 Zao. = TECHNOLOGY SYSTEMS, INC; JIM § oBeS HAYDEN; ALEX CAMPBELL; AND § Base TV JASON JABLECKI § wee § Soe Defendants 8 125" JUDICIAL pisTRIET DEFENDANT, MICHOICE TECHNOLOGY SYSTEMS, INC. THIRD AMENDED ORIGINAL ANSWER and ORIGINAL CO) SORY CO TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW, MICHOICE TECHNOLOGY SYSTEMS, INC., Defendant in the above styled and numbered cause and respectfully files herein their THIRD AMENDED. ORIGINAL ANSWER and ORIGINAL COMPULSORY COUNTER-CLAIM, and would further show unto this Honorable Court as follows: L Defendant, MICHOICE TECHNOLOGY SYSTEMS, INC,, hereby enters their general denial pursuant to Rule 92 of the Texas Rules of Civil Procedure, generally denying each and every, all and singular, the allegations contained in Plaintiff's Third Amended Petition and Application for Injunctive Relief and demand strict proof thereof.I. In further answer, Defendant, MICHOICE TECHNOLOGY SYSTEMS, INC.), hereinafter referred to as “MICHOICE,” will show that Plaintiff's damages, if any, were caused by the negligence of John Manning. Therefore, pursuant to Chapter 33 of the Texas Civil Practices and Remedies Code, MICHOICE requests this jury to make a determination as to the proportionate responsibility of the damages, if any, asserted by Plaintiff in this lawsuit. iil. Defendant, MICHOICE, affirmatively pleads that the damages, if any, asserted by the Plaintiff in this lawsuit were caused in whole or in part by the Plaintiffs failure to mitigate it’s own damages. Without limitation, Defendant will show that Plaintiff breached the Performance Servicing Agreement, (PSA), with Educated Solutions. In 2004, Microcheck entered into a PSA agreement with Educated Solutions, whereby Microcheck was projected to be able to significantly reduce it’s monthly overhead while receiving a 15 % royalty from Educated Solutions. Microcheck breached the PSA with Educated Solutions by failing to pay the monthly obligation for the service and sales of Microcheck’s products. By reason of such breach, any damages incurred by Microcheck was the result of it’s own failure to Initigate or take advantage of the PSA with Educated Solutions. Microcheck further failed to mitigate it’s own damages, if any, by reason of it’s failure to properly fund Microcheck as well as it’s failure to implement and effectuate a marketing plan and to provide a workforce to further develop it’s software products in order to remain competitive in the marketplace as well as it’s failure to properly and timely service the existing products in the market. Iv. Defendant, MICHOICE, will show that the damages, ifany, as alleged by Plaintiff in this lawsuit, were caused in whole or in part by the acts and omissions of third parties over which Defendant did not have control. Specifically, Plaintiffs assert they have been caused damages due to the acts/ omissions of Defendant, Chris Zigrossi, Defendant would assert that any damages incurred by Plaintiff, (which Defendant denies), were the result of acts and omissions of Chris Zigrossi, for which this Defendant should not be held responsible. Defendant requests the jury to make a determination as to theaN a proportionate responsibility of such third persons as the evidence may show, including Chris Zigrossi. Vv. Defendant, MICHOICE, affirmatively pleads section 18.091 of the Texas Civil Practices and Remedies Code, requiring Plaintiff to present evidence of it’s economic loss damages concerning any claim for loss of earnings, loss of earning capacity, loss of contributions of an pecuniary value, in “Net” value. VI. Defendant affirmatively pleads the defenses of estoppel as to the allegations of Plaintiff that . Defendants breached their fiduciary duty and as to any claims that Defendants failed to disclose or otherwise require board of director’s approval for any actions taken by Defendants as concerns Microcheck Systems, Inc. and/or Microcheck Solutions, Inc., (hereinafter referred to as “Microcheck”). Defendants will show that Microcheck filed it’s Articles of Incorporation with the State of Texas on June 7, 1984. Throughout the period of the business operations of Microcheck, Mike Smith was authorized to make decisions and to take such action as he felt was in the best interest of the company. Majority owner of Microcheck, John Manning, was an absentee board member, and acquiesced or otherwise approved the actions of Microcheck’s president, Mike Smith. John Manning did not require board approval for important company decisions involving Microcheck, including but not limited to, moving the location of the corporate office on two prior occasions, purchases of vehicles and contracting with third parties involving the business dealings of Microcheck. As throughout the previous period of some 19 years of business, John Manning never required board approval regarding the financial decisions of Mike Smith, As the majority shareholder and officer of the corporation, John Manning, was charged with the duty and had the opportunity to require board approval and to hold scheduled board meetings. Defendants will show that as Microcheck did not regularily hold board meeting or require board approval, Microcheck is estopped from arbitrarily asserting that Mike Smith owed a duty to Microcheck, to seek board of director approval for the formation and outsourcing of services through Educated Solutions.Vil. Defendant, MICHOICE, further pleads, that the damages asserted by Plaintiff in this lawsuit, if any, were caused by and were the result of the corporations own financial instability, and were not caused in any way by the actions of Defendants in this lawsuit. Defendant will show that John Manning, an absentee board member, officer and majority shareholder of Microcheck, with drew significant sums of cash from Microcheck beginning in the year 1999 and continuing through the year 2004. Defendant will show that as a result of Mr. Mannings withdrawals of the financial resources of Microcheck, the corporation did not have sufficient financial cash in order to make improvements to their products, market their products and/or to continue providing the necessary servicing of their clients. Defendant will further show that Microcheck’s financial instability, began in 2001 and has continued to present. Defendant will show that Microcheck’s damages, if any, were caused in whole or in part by the financial instability of the corporation and not the result of the actions or inactions of the Defendants in this lawsuit. Vii. Defendant, MICHOICE, will further show that the actions or inactions of Mike Smith during the year 2004 were not a breach of any fiduciary duty owed by Mr. Smith to Microcheck, but rather that Mike Smith was based upon sound business judgment in his actions regarding the outsourcing with Educated Solutions. Defendants, including MICHOICE, will show that the actions of the Defendants in outsourcing with Educated Solutions was done honestly, in good faith, and in furtherance of a rational business purpose for the benefit of Plaintiff and therefore, the Plaintiffs’ claims are subject to the Business Judgment Rule. Defendants will show they are not liable to Plaintiffs as their conduct falls within the protection of the “Business Judgment Rule.” Defendants specifically request that the proper instruction regarding the defense of the business judgment rule be submitted to the jury. IX. Defendant, MICHOICE, requests the jury to be instructed to segregate Plaintiff's damages, ifany, between (Compensatory / Non-Compensatory), as required by the Texas Civil Practices and Remedies Code.Xx. Defendant, MICHOICE, prays for the recovery of all necessary and reasonable attomey fees incurred by Defendant in defending Plaintiff s claims arising under the Texas Theft Liability Act, claims of conversion as well as claims for breach of contract as well as all other claims asserted by Plaintiff herein, whether in tort or in contract, which provide for the recovery of attomney fees incurred by the this Defendant. Defendant requests the jury to award their reasonable and necessary attorney fees incurred for: (1) Defending the claims at the trial of this lawsuit; (2) _ Post-trial, pre-appeal legal services; (3) Anappeal to the court of appeals in the event an appeal is taken; (4) Making or responding to a petition for review to the Supreme Court of Texas; (5) Anappeal to the Supreme Court of Texas in the event the petition for review is granted; and (6) _ Post-judgment discovery and collection in the event execution on the Judgment is necessary. Xi. MICHOICE’S ORIGINAL COMPULSORY R-CLAIM MICHOICE TECHNOLOGY SYSTEMS, INC., (hereinafter referred to as “Michoice”), Defendant and Counter-Plaintiff herein, files their original compulsory counter-claim against MICROCHECK SOLUTIONS, INC.), (referred to as “Microcheck”), for Tortious Interference of Existing Contract; Tortious Interference with Prospective Relations; and defamation by libel. Michoice recently was awarded a contract by Tempe Union High School District #213, (located in Tempe, Arizona), to supply and service a new product for their meal accounting school system. On or about October 14, 2007, MICHOICE learned for the first time that John Manning, acting as President of MICROCHECK, intentionally caused or otherwise forwarded a letter to various officers, directors and board members of the Tempe Union High School District #213, dated October 9, 2007, in which~ aA Microcheck Solutions, Inc., represented that Michoice was conducting illegal activities by using the 2004 source code of Microcheck’s software in violation of a court order entered in November 2006 by The Honorable Judge Coselli, in the 125" Judicial District Court of Harris County, Texas. In it’s letter, received by the school district on October 15, 2007, Microcheck defamed the reputation of Michoice by falsely representing that the software utilized by Michoice was illegally copied from or was, Microcheck original source code. The false statement published by Microcheck directly identified Michoice by name. Additionally, the false statement published by Microcheck was made for the purposes of defaming the reputation of Michoice, as well as to adversely interfere with the contractual relationship between Michoice and the school district. Since receiving the letter from Microcheck Solutions, the school district has decided to investigate these false allegations and has required Michoice to submit a response for consideration. Counter-Plaintiff, MICHOICE has not copied or otherwise wrongfully utilized Microcheck’s source code, but rather markets and implements software using Michoice’s own original source code or otherwise legally obtained industry source code. The libel conduct of Microcheck was done intentionally and with actual malice in regards to the falsity of the statement for the purpose of interfering with Michoice’s existing contract, as well as to cause harm to the prospective relations between Michoice and Tempe Union High School District #213. Microcheck’s tortious and libel conduct was the producing and proximate cause of the damages incurred by Michoice for which their seek redress herein. COUNT ONE “Tortious Interference with Existing Contract” At the time Microcheck sent the defaming letter to the school district, a valid enforceable contract was established between Michoice and the Tempe Union High School District, #213. Counter- Defendant, Microcheck willfully and intentionally interfered by forwarding a letter to various school board members and District itself. The letter contained false allegations, including an allegation that Michoice was utilizing the source code of Microcheck; that Michoice was in violation of a court order; and that Michoice was committing an illegal act through the use of Microcheck’s sole proprietary information, ‘source code.’ Defendant purposefully and with intent to do harm, interfered with the parties’ contract, attempting to induce the Tempe Union HSD to breach it’s agreement with Michoice,~ oN ’ or to make performance of the contract impossible, more burdensome, difficult or expensive. The intentional actions ofDefendant, Microcheck Solutions, Inc. in intervening with the existing contract was a producing cause and proximate cause of actual damages suffered by Michoice Technology Systems, Inc. for which they seek redress herein. As the conduct of Microcheck was performed with the intent to harm Michoice, Counter-Plaintiff would show and request that exemplary damages are warranted for the malicious conduct of Counter- Defendant, Microcheck Solutions, Inc. Michoice requests the finder of fact to determine the appropriate exemplary damages which would operate as a deterrence to Microcheck from committing future interference with existing contracts of Michoice. COUNT TWO “Tortious Interference with Prospective Business Relations” Counter-Plaintiff, Michoice, incorporates by reference herein paragraph XH and Count One above and would further plead that the intentional misconduct of Counter-Defendant, Microcheck Solutions, Inc. is also a tortious act for the purposes of interfering with the prospective future relations between Michoice and the Tempe Union High School District, #213 as well as any other relations Michoice may have with potential customers which have reviewed or otherwise been informed of the contents of the Microcheck Systems’s letter dated October 9, 2007. , Currently, Michoice and the Tempe Union HSD were anticipating future contracts to be entered between the two entities. By reason of the tortious interference of Microcheck, Michoice’s prospective relations with the Tempe Union School District has been harmed. In all probability, Michoice was going to have continuing business relations with the District and fully anticipated to receive additional contracts from Tempe Union School District. As a result of Microcheck’s intentional interference with the business relations between Michoice and the school district, the continuation of business relations with this customer have been damaged, hindered, and made more expensive. The intentional actions of Defendant, Microcheck Solutions, Inc. in intervening with the existing contract was a producing cause and proximate cause of actual damages suffered by Michoice Technology Systems, Inc. regarding continued business relations with this customer for which they seek redress.As the conduct of Microcheck was performed with the intent to harm the prospective business telations between Michoice and the Tempe Union School District, Counter-Plaintiff would show and that exemplary damages are warranted for the malicious conduct of Counter-Defendant, Microcheck Solutions, Inc. Michoice requests the finder of fact to determine the appropriate exemplary damages which would operate as a deterrence to Microcheck from continuing to interfere with the prospective business relations of Michoice. COUNT THREE “Defamation by Libel” Counter-Plaintiff, Michoice, incorporates by reference herein paragraph XII above and would further plead for recovery based upon Defamation by Libel. Michoice will prove that Microcheck published statements in the October 9, 2007 letter to Tempe Union High School District, #213 which referred directly and identified the Counter-Plaintiff by name, Michoice. Statements identified above, were false and defamatory to your Michoice and Defendant caused such false statements to be made with actual malice and with intent to do harm to Michoice. Counter-Plaintiff, Michoice has suffered pecuniary injury as a result of the defamatory statements made by the Counter-Defendant for which Michoice seeks redress herein. Michoice pleads libel per sa as the statements were made with intent to cause injury to Michoice’s professional performance and business dealings. Michoice further pleads in the alternative, libel by implication and/or innuendo as the false statements published by Microcheck would lead a person to reasonable infer that the defamatory statements were susceptible to protray Michoice in a false light, and further implies that Michoice is guilty of criminal activity regarding their daily business activities. As the conduct of Microcheck has proximately caused Michoice to suffer actual damages, Michoice prays they recover such actual damages as found by the trier of fact, or in the alternative, nominal damages as allowed by law as well as the court costs incurred as a result of Microcheck’s defamatory conduct. Further, Microcheck’s defamatory conduct was performed with the intent to harm and damage the business reputation of Michoice. As a result of such intentional and malicious conduct, Michoice would show and that exemplary damages are warranted for the defamatory conduct of Counter-a a ’ Defendant, Microcheck Solutions, Inc., and requests the finder of fact to determine the appropriate exemplary damages which would operate as a deterrence Microcheck from continuing to commit future defamatory conduct to the detriment of Michoice as well as other businesses in the industry. WHEREFORE, PREMISES CONSIDERED, Defendant/ Counter-Plaintiff herein, MICHOICE TECHNOLOGY SYSTEMS, INC., prays that upon final trial herein, Plaintiffs, MICROCHECK SYSTEMS, INC. and MICROCHECK SOLUTIONS, INC., shall take nothing from Defendant; that Counter-Plaintiff, MICHOICE TECHNOLOGY SYSTEMS, INC., shall have and recover from Counter-Defendant, MICROCHECK SYSTEMS, INC. and MICROCHECK SOLUTIONS, INC., their reasonable and necessary attorney’s fee as plead herein; that Counter-Plaintiff, MICHOICE TECHNOLOGY SYSTEMS, INC., shall have and recover from Counter-Defendant, MICROCHECK SOLUTIONS, INC., all actual damages as found by the trier of fact; exemplary damages as found by the trier of facts; along with their cost of court; and pre-judgment and post judgment interest as allowed by law, and for such other relief as this Honorable Court may find MICHOICE TECHNOLOGY SYSTEMS, INC., justly entitled. TBA: 16826400 8303 S.W. Freeway, Ste. 810 Houston, Texas 77074 713) 779-8500 713) 779-8648 (Fax) Counsel for: MICHOICE TECHNOLOGY SYSTEMS, INC.CERTIFICATE OF SERVICE Thereby certify that on this ¥ day of January, 2008, a true and correct copy of the foregoing instrument, MICHOICE THIRD AMENDED ORIGINAL AN and ORIGINAL COMPULSORY COUNTER-CLAIM was forwarded to parties of record ref#fenced below, individually or by and through their attorney of record, in accordance with th, Rules of Civil Procedure. MICROCHECK SOLUTIONS, INC. MICROCHECK SYSTEMS, INC. Mr. Christopher DeMeo Mr. R. Edward Perkins SHEEHY, SERPE & WARE 2500 Two Houston Center 909 Fannin Street Houston, Texas 77010 Mr. Re ’ Murphy, III . Roy Murphy, Roy Murphy &Associates 12850 Jones Road, Ste. 201 Houston, Texas 77070 SCOTT MURPHY Mr. J. Reid Perry Attorney at Law 12850 Jones Road, Ste. 201 Houston, Texas 77070 CHRIS ZIGROSSI Pro-Se 335 Shea Dr. Cedar Park, Texas 78613~~ aN The Law Offices of David P. Petersen, P.C. 8303 Southwest Freeway, Suite 810 Houston, Texas 77074 . (713) 779-8500 Se ae ~, (713) 779-8648 FAX Q wy BS ~ > Vz. January 3, 2008 og ~z a, Br 2 Mr. Theresa Chang ors, y eS Harris County District Clerk WEP, eB 2, i Vee A Be 201 Caroline KORE. BS o Houston, Texas 77002 5 Eee, BS ss - = Re: — Cause No.:2004-59790; Micro Check Systemd, Inc. & Microcheck Solutions, Inc. vs. Zigrossi & Murphy, L.L.C. Ind. & d/b/a Educated Solutions; Chris Zigrossi; Scott Murphy; Mike Smith, Ind. & d/b/a CMS Technology a/k/a CMS Technologies; Michoice Technology Systems, Inc; Jim Hayden; Alex Campbell; & Jason Jablecki; In the District Court, 125 Judicial District, Harris County, Texas. Dear Ms. Chang: . ‘ (X) Please find the enclosed: Defendant, Counter Plaintiff, Michoice Techonology Systems, Inc.'s, Third Amended Original Answer and Original Compulsory Counter Claim & Letter to Judge Coselli on Oral Hearing for January 11, 2008. Please present to Judge for approval. Please send me _ certified copy of Our check is enclosed in the amount of: ( ( ( wev PLEASE STAMP THE DATE OF FILING ON THE COPY THAT HAS BEEN ATTACHED AND RETURN TO THE UNDERSIGNED. Very truly yours, David P. Petersen DPP/tr