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Lieberfarb Lawyers Ask Court to Dismiss MOD Systems Countersuit

29 Jan, 2009 By: Chris Tribbey

MOD Systems

In the latest round of a legal battle between the widely proclaimed father of DVD Warren Lieberfarb and digital technology company MOD Systems, lawyers representing Lieberfarb have asked a Seattle court to dismiss a countersuit from MOD.

The motion to dismiss claims MOD has no right to counter-sue using Washington’s Consumer Protection Act (CPA). “The facts asserted by MOD are not sufficient to support a CPA claim against Warren Lieberfarb, the former vice chairman of its board of directors,” the motion reads. “MOD cannot show that the allegations giving rise to the CPA claim affect the public interest or that the conduct occurred in the ‘course of trade or commerce.’”

Robert Dwyer, partner at Boies, Schiller & Flexner, the firm representing Lieberfarb, said, “Warren Lieberfarb was forced to commence this action against MOD Systems to collect the $500,000 loan, finder’s fees and consultant fees that MOD owed him. The overdue loan has been repaid, but only after litigation was initiated.

“MOD has failed to honor its contractual commitments and instead has made baseless allegations to forestall its obligations to pay finder’s fees and consultant fees owed to Mr. Lieberfarb. We look forward to having his contractual rights vindicated by the federal court in Seattle.”

Lieberfarb first sued MOD in the summer of 2008, claiming MOD owed him at least $749,560 in loans, fees and business expense reimbursements. The suit claims MOD agreed to pay Lieberfarb 5% of any investment funds it received, but failed to do so when Toshiba made a considerable investment.

A loan of $500,000 has since been paid back to Lieberfarb, his lawyers said.

MOD countersued earlier in January, claiming Lieberfarb overstated his connections and expertise, claiming breach of contract by disclosure of proprietary information to an investment firm, and that Lieberfarb was planning to either “obtain MOD Systems or sell MOD Systems’ confidential technology, business plan, and other assets.”

A hearing on the latest filing is set for mid-February.

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