CAUSE NO. GNavav01 LUKE DAVID LLC AND § IN THE DISTRICT COURT LANCE ARMSTRONG § § Y § § MIKE ANDERSON 8 ‘TRAVIS COUNTY, TEXAS § ¥ § § LUKE DAVID LLC AND § LANCE ARMSTRONG 8 200" JUDICIAL DISTRICT DEFENDANT’S THIRD AMENDED ANSWER AND. SECOND AMENDED COUNTERCLAIM ‘TO THE HONORABLE JUDGE OF SAID COURT: Defendant Michael J. Anderson (“Defendant” or “Anderson”) respectfully submits his Third ‘Amended Answer and Second Amended Counterclaim and respectfully shows: 1. ORIGINAL COUNTERCLAIM OF MICHAEL J. ANDERSON Anderson (“Counterclaimant”) files this Counterclaims against Plaintiffs, Counter- Defendants Luke David LLC (“Luke David”) and Lance Armstrong as follows: A. DISCOVERY 1, Anderson intends to conduct discovery related to his counterclaims under Discovery Control Plan - Level 3, pursuant to a scheduling order entered by the Court. B. JURISDICTION AND VENUE 2. This court has jurisdiction over this matter because it arises under the laws of the State of Texas, The amount in controversy exceeds the jurisdictional limits of this Court. 3. Venue for this case is proper in Travis County, Texas under § 15.062(a) of the Texas (USERS FOLIGDoeI32 Answer 2005 Dep Paget Dates March 1, 2005 (am)Civil Practice and Remedies Code because the counterclaims are properly joined to the main action, consisting of Defendants claims against Anderson. © PARTIES 4. Counterclaimant Michael J. Anderson is a natural person and a resident of Travis County, Texas. 5. Luke David LLC is a limited liability company doing business in Austin, Travis County, Texas. 6. Lance Armstrong is an individual residing in Austin, Travis County, Texas. D. BACKGROUND FACTS SUPPORTING COUNTERCLAIM Michael J. Anderson (“Anderson” or “Counterclaimant”) is thirty-three years old, married to Allison Anderson (“Allison”) and the father of a twenty month old son. Anderson has adegree in Anthropology from the University of Texas at Austin, He is proficient in five languages — English, Spanish, German, French and Arabic. Anderson took graduate work in Middle Basten ‘Studies at the University of Texas at Austin until he decided that instead of pursuing a professorial career, he would work in a career field that was his passion. Mike loved to ride, own and work on bicycles. He had a dream of some day owning and operating his own bike shop. 8. Over four (4) years ago, Anderson met Lance Armstrong (“Armstrong”) when Anderson worked as the Service Manager at the Bicycle Sports Shop in Austin. Among other contacts, they would ride mountain bikes together, an endeavor at which Anderson excelled. In addition, Armstrong regularly asked Anderson, a skilled bike mechanic, to do work on Armstrong's bikes. Anderson liked Armstrong and was determined to treat him like a normal person, not like a star struck fan, Over a period of time, Anderson and Armstrong became friends. CGAUSERS POLK Dac4132.0rphAnerer 0 2005 05-3 wp Peet use Printed) March 31,2005 tas)9. About three (3) years ago, Armstrong began talkingto Anderson about the possibility of Anderson leaving his job at the Bicycle Sports Shop and going to work for Armstrong as Armstrong’s personal bicycle mechanic. In the fall of 2002, Armstrong sent Anderson an email offering employment and setting forth the basic terms and tenure ofemployment. Armstrong's email offer was a two (2) to three (3) year deal, depending on the number of years Armstrong raced in the ‘Tour de France. Armstrong offered to pay Anderson a salary of $3,000 per month and to provide health benefits. The email offer stated that Anderson would work as Armstrong's bike mechanic “and other bulls***.” The email offer stated that in the job, Anderson would travel stateside three or four times a year and maybe to Mexico. Near the end of the email offer, Armstrong stated that he would help Anderson open a bike shop at the conclusion of the period of employment. Anderson thought the Armstrong offer would provide him great experience and that it would help him realize his dream of owning and operating a bike shop of his own. Anderson was not required to sign a confidentiality agreement or agree to any other restrictive provision in connection with his employment, Anderson quickly accepted Armstrong's email offer. 10. Anderson began working for Lance Armstrong and Luke David LLC in November 2002. Anderson was employed as a mechanic, trainer, confidant and assistant for Armstrong. Ammstrong was Anderson’s direct supervisor. Anderson’s duties for Armstrong were extensive and during his tenure included: Anderson built and maintained Armstrong's bicycles. b. Anderson worked with Armstrong’s sponsors to provide the sponsors with feedback regarding prototypes and product testing. Anderson also coordinated all orders of equipment and products from various sponsors. ‘GtwsERS OLDE 2.0 gh Aaswer 5 20050006 mp ages Dale Prin: Moreh 31,205 0am)© Anderson provided technical advice to Armstrong. This technical advice included ‘taining and use of a cyclo-cross bike, training that has been credited by some as the key factor that helped Armstrong win the very close 2003 Tour de France. 4. Anderson drove Armstrong’s support car while Armstrong trained during the off- season. When Anderson drove Armstrong’s support car, his duties included providing Armstrong with food and fluids, making roadside repairs for Armstrong, deflecting traffic and angry motorists while Armstrong rode and mapping Amnstrong’s training routes. © Anderson maintained Armstrong's support vehicle. £ Anderson maintained Armstrong’s transportation fleet, including his automobiles, motorcycles, 4-wheelers and boat. & While Armstrong was married to and living with his former wife, Kristin, Anderson did odd jobs at the Armstrong residence and as they traveled. These tasks were so helpful and numerous that Kristin Armstrong referred to Anderson as “H 2,” standing for “Husband Number Two.” Armstrong gave Anderson keys to his house and Vehicles. Anderson put together Christmas toys, installed baby gates and cabinet Jocks at the Armstrong residence. Anderson changed light bulbs and took out the trash, chores that Armstrong did not do. Anderson maintained Armstrong's children’s bicycles and toys. Anderson was on call “24/7" for Armstrong. h, Anderson was in Santa Barbara, California, with Lance and Kristin Armstrong and their children in early 2003, the trip where Armstrong told Kristin he was leaving her. After Kristin and the children left, Anderson stayed with Armstrong for several days. CGMSERS OLR 932-0 Asawa 3205 01-9 raed Dat Pred: March 1, 2005 (40)‘Then Anderson, following directions from Armstrong, drove back to Austin, Texas by himself in a single day. It was not uncommon for Armstrong to direct Anderson and sometimes Anderson and his wife Allison, to do challenging or inconvenient assignments with virtually no notice. Anderson and Allison readily handled such assignments. i, After Armstrong and Kristin were divorced, Anderson built and maintained bicycles for Sheryl Crow (“Crow”) in Austin, Texas and Girona, Spain. Anderson was asked to assist Crow in music production while in Spain, however Crow and Armstrong left Girona shortly after arriving. j. Anderson volunteered for and managed Armstrong's Wildlife Exemption with the Hays County Tax Office for Armstrong’s 204 acre property in Dripping Springs, Texas. Anderson’s management duties included filling ten (10) bird feeders every 10-14 days, monitoring nest boxes, filling deer feeders every 10-14 days, trapping and shooting feral hogs, checking the hog trap daily, controlling fire ants with pesticides, cutting up fallen tree limbs and making brush piles for bird habitat, completing and timely filing all of the paperwork required by the State of Texas for this program, using the skills Anderson developed at the University of Texas. k. Anderson managed Armstrong’s home in Dripping Springs. Anderson’s management of the Dripping Springs home included working closely with contractors to oversee building plans and projects, checking the well system daily to ensure that the landscaping would be watered, cleaning and maintaining the swimming pool, bi- monthly maintenance of faucets to minimize sulphur aroma, maintaining heating and GUSERSOLRDeeA32 1 AneverO 2005-8 pd Pass Dut rid: Meh, 2005 (an)cooling systems, maintaining the computer network, maintaining the alarm system, changing light bulbs, arranging for interior cleaning services after Armstrong’s visits to the property, taking trash to the landfill, general property repair and maintenance (gates, fences, etc.) as well as coordinating service providers to do tasks he was not able to do on his own, such as exterminating. 1 Anderson supervised and organized the building of mountain bike trails on Armstrong’s property in Dripping Springs. Anderson's duties included recruiting and organizing the entirely volunteer building crews as well as physically transporting the crewsto the property. Anderson also participated in the hard manual labor of building the approximately ten (10) miles of mountain trails on the property including four (4) bridges, one of which is eighty (80) feet long. The trail building effort was mostly completed during the summer months of 2003 and 2004 while Armstrong was racing, in Burope. Anderson also rode with Armstrong over those same trails. m. Anderson shopped for groceries for Armstrong and his family. n, Anderson ran personal errands for Armstrong. ©. Anderson maintained Armstrong's primary residence ot Amey Austin, Texas, Anderson's duties included maintaining the swimming pool, heating and cooling systems, performing routine maintenance and personally removing the trash each Friday for the weekly trash pick-up. p- Anderson traveled with Armstrong on several commercial shoots. During these commercial shoots, Anderson would perform both mechanical and assistant duties to Amnstrong as well as provide professional bicycle technical assistance to the QuisensPOLKDo4132-0ghAneve 65 2080-3 Poses Date Pid: re’), 20 (Den)8. ML production companies. Anderson and his family traveled with Armstrong to Girona, Spain, where, in addition to bicycle duties, Anderson was responsible for Armstrong’s grocery shopping and residence maintenance and cleaning. Anderson served as Armstrong's personal assistant and translator while in Girona. Anderson was responsible for paying Armstrong's bills, arranging his repairs, and communicating with locals on Armstrong’s behalf. Anderson performed these tasks in Castillian Spanish, a language in which Armstrong can neither read nor write. Anderson provided security services to Armstrong in both Austin and abroad, sometimes physically placing himself between Armstrong and motorists. During training rides, there were frequent incidents with motorists, Armstrong was prone to ‘making obscene gestures at motorists and to catching them at stop lights and stop signs and cussing at them, Anderson also acted as security by protecting Armstrong from fans and the media. Anderson would provide transportation for Armstrong and his guests to and from the airport in Austin as well as Girona, ae hele! During February 2003, Anderson and his wife Allison flew to Spain for Armstrong, at his request. Armstrong provided Anderson and Allison about ten days notice to prepare for the unplanned two month trip to Spain. To make the trip, Allison lost virtually her entire client base. Anderson and Allison had to scramble to find a house sitter and a dog sitter. It was necessary for Alllison to give up her job in Austin, Texas to engage in this work for Armstrong, Allison told Armstrong she could not go to Spain for him without being paid. Armstrong agreed to pay Allison GHUSERSPOLK Docs. hanes 0 2005 0-6 wpd Page Daten: March, 205 (00m).‘$600 per week for her services in Spain, For the flight to Spain, Armstrong paid airfare for Anderson ‘and Allison, Armstrong declined Anderson's request that Armstrong pay for a business class or first class seat for Allison, who was six months pregnant, or to use Armstrong's airline miles to upgrade ‘Allison's ticket, Armstrong traveled in first class and came back to the coach area during the flight totalk to Anderson and Allison, Oncein Girona, Spain, Anderson and Allison cared for Armstrong’s large apartment residence and acted as his personal assistants, performing daily cleaning and shopping duties for Armstrong in addition to Anderson’s mechanic and technical duties and support during Ammstrong’s training rides. During this time, Anderson and Allison were provided a key and were {in and out of Armstrong's apartment in Girona, Spain all day long, performing their normal tasks, which included meal planning, shopping for and preparing meals, cleaning, maintaining the cars, and. doing laundry. One of the first things Anderson did for Armstrong in Girona was to take the ‘Mercedes to have some body work performed, Anderson, Allison and Armstrong ate nearly every meal together, socialized as friends and spent virtually the entire day in the same apartment. ‘Typically while Anderson and Allison prepared meals, Armstrong would shower, have amassageand then join them once dinner was ready. Additionally, Anderson provided support for Armstrong as Armstrong trained for the Tour de France. 7 12. In the summer of 2003, while Armstrong was divorcing Kristin, Kristin’s bicycle arrived at Anderson’s home in Austin, Anderson contacted Armstrong about the bike’s arrival, and Armstrong told Anderson to keep the bicycle because Kristin would not be getting it. Anderson retained the bicycle sent to his home for Kristin Armstrong based on Armstrong’s instruction. 13. Shortly after being told by Armstrong to retain the bicycle sent for Kristin, Bart Knaggs (“Knaggs”) of Capital Sports & Entertainment (“CSE”), which, on information and belief, (GAUSERSPOLKDp152.01 Amer 0 2005 03.39 Poa Dae Pe March, 205 (140s)‘manages Armstrong’s career and businesses, drove into a parking garage with his own bicycle on the roof rack, causing damage to Knagg’s bicycle. Anderson used the handlebar, stem, fork, wheels and other parts from Kristin's bicycle torepair Knagg’s bicycle. The frame of Kristin’s bicycle was given toa member of the trail crew who had volunteered time and materials to build mountain bike trails on Armstrong's Dripping Springs Ranch. 14, Before Armstrong won the 2004 Tour de France, during a training ride near Austin, Armstrong and Anderson discussed the situation of a world famous professional bicyclist from Belgium, Johan Musecuw, who had been caught using steroids and banned from competition. Amnstrong looked directly into the eyes of Anderson and told him, “Everyone does it.” Anderson understood that this statement by Lance Armstrong was an admission that to Anderson that Annstrong was using steroids and a request from Armstrong to Anderson to indicate he was “okay” with this fact. Anderson did not say anything in response to Armstrong to indicate he was “okay” with cheating by using steroids. Anderson sensed because of the way that Armstrong made this, statement, Armstrong expected a supportive response from Anderson, and Armstrong reacted coldly ‘when Anderson did not give him a supportive response. Anderson declined to say he understood that, everyone used steroids. After this exchange, there was more distance between them than before this exchange. Armstrong’s statement bothered and disillusioned Anderson. 15, During the USPS Team December training camp in 2003, Lance Armstrong assigned ‘Mike Anderson the task of transporting Michele Ferrari from Austin Bergstrom International Airport, to Lance Armstrong's cabin off QQ Road in Austin, Texas, where Ferrari stayed during the training camp. Lance Armstrong told Mike Anderson that he did not want Ferrari staying at the Four Seasons Hotel with the USPS team because of the media. Near Christmas, 2003, Armstrong gave (USERS POLIDoci4 15.0 Anrer 0 2005 0-Henpd Tage Pit: Mac 1, 2005 05)Anderson a $5,000 Christmas Bonus, by means of direct deposit to Anderson’s bank account, and ‘without any comment or explanation. Anderson and Allison were deeply appreciative of the bonus. ‘This was the biggest payday Anderson had ever experienced. When Anderson asked Armstrong about the wire transfer, Armstrong replied, “I guess you could consider it a Christmas bonus.” 16. During February 2004, Anderson, his wife Allison and their infant son again flew in ‘coach to Spain at Armstrong's request. Again, the family requested business or first class tickets for this long flight. Armstrong replied that he could not afford them. In Girona, Spain, Anderson and Alllison again cared for Armstrong's apartment residence and acted as his personal assistants, performing daily cleaning and shopping duties for Armstrong in addition to Anderson's mechanic and technical duties; 1 / In early oe Armstrong and Crow arrived, when cleaning out the bathroomin Armstrong’s: apartmentin Girona, Spain, Anderson found abox of what he believed were steroids. box was white with red and black lettering, and had a normal label like any other prescription er, there was no doctor’s prescription attached. Both the trademark name and the pharmacological name were on the front of the box. The trademark name was Androstenin: or something very close to this. When Anderson made this discovery, he was alarmed and worried. ‘He did not know what to do. He went to the computer, looked it up on the WADA or USADA website(s), and confirmed that what he had found was an androgen — a listed banned substance. ‘Disappointed, disillusioned and afraid, he put the box back where he had found it. Anderson was torn about what to do. He felt an obligation to Lance Armstrong, his employer. At the same time, he is ‘an honest person and he strongly opposed the use of steroids in professional cycling. He knew he would never lie for Lance Armstrong. Also, he feared that if he told Lance Armstrong what he knew, ‘GsSERS POLIT 413201 pAsoner 0 2005 03-39 Page 10 Date Med: Mae 1, 200540).confronted him or in any way made what he knew public, he would be fired, treated as traitor and that, Lance Armstrong would attempt to discredit him and say he was lying or just trying to hurt Amnstrong. He hoped he could just go on with his life without ever hurting Lance Armstrong or subjecting himself and his family to retaliation for doing something about his discovery. 18, Anderson's discovery of the box of steroids in Armstrong’s apartment, coupled with Armstrong's statement to Anderson to the effect that all professional cyclists used steroids bothered Anderson, Anderson loved the sport of cycling tremendously and thought it was essential for the sport to be clean. Anderson did not confront Armstrong with his discovery when Armstrong and (Crow arrived in Girona shortly thereafter or at any time. Armstrong apparently knew Anderson had made the discovery after the first night Armstrong and Crow spent in Girona, Spain in February 2004. ‘The aftemoon Armstrong and Crow arrived, Armstrong, Crow, Anderson, Allison, William J. Stapleton II (“Stapleton”) (of CSE) and several Spanish friends had a casual lunch together, like good friends. The next moming, however, Armstrong was immediately distant and irritable towards ‘Anderson and his family, which surprised both Anderson and Allison. Armstrong, for the first time in their relationship, instructed Anderson and Allison to call and knock before they ever entered the Anmstrong apartment. This was completely unlike the arrangement that had existed before, in Spain orin Austin. Since that morning, Anderson and Armstrong’s relationship has never been the same. 19. Additional evidence that Armstrongknew Anderson had discovered his box of steroids is this: Armstrong cut short his stay in Girona, explaining that it was too cold and rainy and that he ‘was going to the Canary Islands to train. This struck Anderson as strange, since until then, Armstrong trained in rain or shine. Armstrong and Crow, along with Dr. Michele Ferrari, who has been (GAUSERSFOLKDeee 3201p ewe 652005 08306 Paget Dae Prt: Mach 1,205 ()associated with steroids, left Spain for the Canary Islands, after staying less time than planned in Spain. After Armstrong left Spain, Anderson had occasion to go back into Armstrong’s bathroom in Armstrong's apartment in Girona. The first time he was back in the bathroom after the discovery, Anderson looked for the box of steroids. It was gone. 20. A few days after Anderson found the box of steroids in Armstrong’s apartment, and before Armstrong's surprising early departure, Anderson explained to Armstrong that heneeded more money deposited to his expense account from Armstrong to handle expenses. Armstrong asked what Anderson was spending money on, Anderson explained the many items that he had to pay for with cash in Spain to accommodate Armstrong’s stay, expenses such as the upholsterers, the maid, groceries and household items. Armstrong questioned Anderson about Anderson's expense account. Amnstrong’s personal charge card had been stolen before he came to Spain and suspicious charges had been made. Anderson assured Armstrong that Anderson had receipts for all monies spent. Anderson then presented the receipts and left the apartment. An hour or so later, Armstrong angrily called Anderson and inquired as to who was purchasing the Anderson family groceries in Spain. Anderson responded that Armstrong was buying the groceries, just as he had in years past. Anderson ‘explained that it was cheaper for Armstrong to buy the groceries than to paya per diem, Armstrong yelled that he was unaware of the concept of a travel allowance or a per diem. Armstrong then demanded to know what Anderson had done with his $5,000 bonus. Anderson explained to Lance Armstrong that he thought the bonus was a gift aud Ural it was used pay income taxes and a personal credit card balance. Once Armstrong calmed down, he told Anderson that he would continue to provide the Anderson family with groceries in Spain as he had done in the past. Although Anderson was disillusioned with Armstrong, he continued to perform all his duties as requested in ‘GuseRsPOLKDees4132.0nprAnene 0 2005 830e aE Page 2 Dats rit’ Maven 2005 (en)‘an exemplary manner. 21. On June 28, 2004, Lance Armstrong sent Anderson an email that included this statement by Armstrong: “tests are good (even schumi is psyched) and we're all ready to go for 6!” ‘This email is Attachment F hereto. Lance Armstrong’s reference to “schumi” was the codename he used at the time for Dr. Michele Ferrari. 22. After Lance Armstrong won the Tour de France in July 2004, Anderson was involved in an incident where he concluded that Armstrong was trying to avoid taking a random drug test. Anderson received a telephone call from Derek Russey, who was frantically trying to locate Lance Armstrong. Russey told Anderson that inspectors from WADA/ USADA had come to Lance Ammstrong’s house in Dripping Springs to administer a random test. At the time Anderson received this telephone call from Russey, Anderson thought that Lance Armstrong was at home and was surprised to hear that he had left without telling anyone, especially Anderson. Russey told Anderson that Lance Armstrong was required to notify the inspectors before traveling and that failure to do so ‘would result in an automatic positive drug test. 23, On information and belief, what happened next was that efforts were made to locate Lance Armstrong's friend John Korioth with the idea of trying to fool the inspectors into believing that Lance Armstrong was actually home. John Korioth was supposed to go retrieve Lance's Suburban from the airport and drive past the inspectors, who were then waiting at the edge of Lance Ammstrong’s property after being told to leave by Derek Russey. Anderson was on his way to Lance Anmstrong’s house in Dripping Springs when this occurred. Anderson was asked to look out for the inspectors who were in a white SUV. Anderson passed the WADA/USADA inspectors, in a white ‘GAusensvoLK Does32 onypansnr 0 2005 13.30 mp Page 3 Da Pied: Marc, 2005 (7am)SUV a few miles from the house. They were leaving. Anderson told Derek what he saw. Anderson never heard anything else about the incident. 24. — InSeptember or October 2004, ina telephone conversation Anderson asked Armstrong, fora pay raise of $500 per month. Anderson pled for the raise, the first he had requested in two years, based upon theneeds of his family (which now included his young son), plus his excellent performance and increased responsibilities. Anderson told Armstrong that he had taken on more responsibility than hhad been outlined in the contract. Armstrong told Anderson: “You can’t talk to me that way. Stop being condescending to me.” Armstrong was yelling at Anderson on the telephone. Anderson, who hhad not been condescending, replied, “Allison and I are having a hard time making ends meet.” Armstrong replied, “T guess you and I just need to part ways.” Anderson explained that that was not ‘what he wanted, that he was just asking for a well-deserved raise. By the end of the conversation, Armstrong agreed to give Anderson the precise raise which Anderson had requested and told Anderson he would get him some help by hiring an estate manager. Armstrong added, “How can Allison live with you?” In their next conversation, which was a friendly exchange, Armstrong directed Anderson to “go buy two more kayaks” for his ranch. 25, — Onorabout November 16,2004, Knaggs of CSE informed Anderson that Anderson was being terminated immediately. Knaggs offered Anderson no criticisms ofhis job performance. Knaggs started the meeting by saying, “This is not going to be easy.” Then Knaggs told Anderson, “Lance and you are not secing eye to eye anymore.” Anderson asked, “What’s this all about? I just got a raise. This doesn’t make sense.” Knaggs said that Lance admitted it was “chicken s***.” Anderson said he agreed. 26. During the meeting with Knaggs, Anderson asked, “is the bicycle shop still on the USERS OLKDoci A132 01g dsewer 03 205 03.30 pd age 4 Du Ped: March 31,2005 0000)table?” Knaggs replied, “Yes, Lance mentioned it to me and you and he can discuss it.” During the meeting, Knaggs told Anderson that he would be given three (3) months of severance pay. 21. ‘The termination of Anderson and the effort to have him sign a confidentiality agreement ‘was part of an extreme and outrageous course of conduct by Lance Armstrong, Luke David and those who promote and market Lance Armstrong. ‘The conduct of Lance Armstrong and Luke David was also extreme and outrageous because it was part of a deliberate effort by this group of wrongdoers to insure that Lance Armstrong wins at the Tour de France, cheating for profit, with the use of banned substances, while professing that Armstrong does not use any banned substances, while holding out Lance Armstrong as a hero and role model, and to silence or discredit those who may expose this scheme, an evil, oppressive and dishonest scheme that equals the greatest scandal in sports history. ‘The conduct of Lance Armstrong and Luke David was also extreme and outrageous because Lance Armstrong and Luke David fired Anderson, not for cause, but because Anderson would not support and approve of Lance Armstrong’s use of illegal, banned substances, because Armstrong suspected that Anderson knew he (Armstrong) was using illegal, banned substances as a way of cheating in professional cycling events and ‘was avoiding random drug testing, and because Annstrong intended to terminate Anderson in a way and with timing that would force Anderson to sign a hush agreement that would keep Anderson from ever telling anyone about the evidence Anderson had that Armstrong had used or was using illegal, banned substances as a way of cheating in professional cycling events. The conduct of Lance Armstrong and Luke David was also extreme and outrageous because Armstrong followed the termination of Anderson with threats and bullying toward Anderson, including but not limited to his false statements to Anderson and Alllison, designed to make Anderson and Allison fear for the security of themselves and their family, that Anderson had stolen from Armstrong, his threats to Armstrong and his family, and his efforts to discredit Anderson in the media. “The conduct of Lance Armstrong and Luke David was also extreme and outrageous because Armstrong’s threats, bullying tactics and character assassination toward Anderson are part of Lance Armstrong's modus operandi. ‘The conduct of Lance Armstrong and Luke David was also extreme and outrageous because Anderson followed the termination with persistent and oppressive efforts, including threats to Anderson and his family and slander, to force Anderson to sign a (QAUSERSPOLKDact12-01ph Aner 03 205 0830 Pages Date att: March 3,205 (403m)hush agreement or to discredit him in the event that he failed to sign the hush agreement and told the public about his knowledge of Lance Armstrong's illegal drug use and Armstrong’s effort to avoid random testing for drug use. © The conduct of Lance Armstrong and Luke David was also extreme and outrageous because Armstrong knew of Anderson’s long-standing promise to Anderson as well as Anderson’s hypoglycemic condition. Armstrong deliberately called and pressured Anderson’s wife, Allison, and continued to pressure Allison after being told that Anderson had passed out during the earlier telephone conversation between Armstrong, and Anderson. © The conduct of Lance Armstrong was also extreme and outrageous because Armstrong promised Anderson severance, but then conditioned the three (3) months of payment on, ‘Anderson’s agreement with a unilateral release. © TheconductofLance Armstrong toward Mike Anderson, from the time Anderson found the box of steroids in the bathroom of Lance Armstrong’s apartment in Girona, Spain through the present is extreme and outrageous conduct. This conduct of Lance Ammstrong and Luke David was so outrageous in character and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. 28. OnNovember 28,2004 Anderson sent an e-mail to Knaggs stating: “I would like to see the conclusion of our previous meeting as early as possible this week per my contract with Lance ‘Ammstrong.” On November 29, 2004, Knaggs replied by e-mail: “How about meeting tomorrow — would 2:00 work for you at CSE?” 29. OnNovember 30, 2004 Anderson met with Knagg at CSE’s offices. When Anderson arrived at Knaggs’ office, Armstrong was not present, Anderson remarked that he had expected ‘Armstrong to be in attendance. Knaggs said that there must have been a misunderstanding, Knaggs then handed Anderson a document that had a place for Audersou’s signature and that provided for two (2) months of salary and benefits ($7,000) “in return for your release and agreement not to disclose information.” Anderson immediately commented that at the November 16 meeting, Knaggs had promised him three months severance and there had been no mention of him being required to sign ‘GAUSERSOLK.Dnst32-01 ph Anowe 32005 09.0 rapes ‘ate Pant: Mach 3,205 (0am)anything. Knaggs took back the letter he had handed Anderson, looked atit, and then changed it on his computer and printed out another version, this time providing for three (3) months salary and benefits. ‘The letter Knaggs asked Anderson to sign, dated November 30, 2004, besides providing for continuation of salary and health benefits through February 28, 2005, also provided: Yourelease, acquit, and forever discharge Luke David, LLC, Tailwind Sports Corp, and Lance ‘Armstrong, and all persons natural or corporate, in privity with them, from any and all claims or causes of action that arose or accrued on or before the date of this leter. ‘As part of the services you provided, you had access to confidential and private information related to Luke David, LLC, Lance Armstrong, and members of the US Postal Professional Cycling Team (the “Team”). “Confidential Information” includes without limitation all information you learned, directly or indirectly due to the services you provided, related to Luke David, LLC, Lance Armstrong or his family, Tailwind Sports Corp., and the Team. You will maintain all Confidential Information in strict confidence and will not, directly or indirectly, use or disclose any Confidential Information. If you violate this paragraph with respect to Luke David, LLC or Lance Armstrong, you will pay Luke David, LLC and Lance Armstrong each as liquidated damages the sum of $500,000.00. Due to the value of Luke David, LLC’s and Lance Armstrong’s reputations, damages in the event of a violation are difficult to ascertain, though ‘great and irreparable. This provision with respect to liquidated damages does not prohibit any party from seeking injunctive relief. If this section is for any reason held to be excessive, it will be reformed in a manner to enable it to be enforced to the maximum extent compatible with applicable law. The letter agreement proposed by Plaintifis would not allow Anderson to say anything, such as who he worked for or what he did, during the time he worked with Lance Armstrong. A condition ofthe letter agreement would make Anderson liable for $1,000,000 (one million dollars) should he disclose any so- called “Confidential Information.” Armstrong knew Anderson did not have $1,000,000 when he authorized Knaggs to present this letter agreement to Anderson. Anderson read the letter agreement and was dumbstruck. He then told Knaggs he was not signing the agreement and left the meeting in distress. Not only was Armstrong refusing to keep his word, he was trying to seal and lock away two years of Anderson’s life. (AUSERSWOLAC Dest. pf swe 8 205 03.30 wp feet? Dat Fined: March 31,205 (400).30. On the evening of November 30, 2004, just as Anderson was sitting down for dinner with at his home with Allison and their child, Armstrong telephoned Anderson at Anderson’s home. ‘Anderson answered the telephone. Armstrong attempted to pressure Anderson into signing the release. ‘Amstrong accused Anderson of stealing. This stress caused Anderson, who has a history of hypoglycemia, to enter hypoglycemic shock. Anderson passed out and fell backwards at his dining room table in front of Allison and their young son. As Anderson passed out, Allison made sure he was ‘okay and then reached for the phone. Allison told Lance Armstrong, "He can' talk now, call back Jater" and hung up the phone. A minute later the Anderson’s telephone rang again. Allison answered. Armstrong told Allison that “as soon as Mike stops freaking out, put him back on this phone.” Allison said "Lance, do you understand me? Mike just passed out. Well call you later.” Armstrong said “Allison, let me just talk to you for a minute.” Allison hung up the phone and cared for Anderson. By this time, the young son of Anderson and Allison was crying and was very scared and upset. Allison helped Anderson to the sofa, got him some juice and comforted their son. 31. After Anderson regained consciousness, Allison called Armstrong back. Allison told Lance Armstrong he had caused a ridiculous amount of stress and anger by not taking care of firing Mike on his own. Armstrong replied: “I know, and I feel really bad for that. I am apologizing for that, but that's the only thing I'm going to apologize for.” Allison asked, “What about stringing Mike along with the promise of a bike shop deal when this all was over? Armstrong replied, “Look, Allison, it's nothing personal. I's a business decision. admire the hell out of Mike and think he’s a really great guy. ‘He's smart as hell and very resourceful, but we don't get along. Its a personality difference and I think it would be a bad business decision to go into business with someone you don't mesh with.” Allison said: “Nobody ever said anything about going into business as partners. Mike and I were both under the GAUSERSOLKTDaM1320T pA 02005 O Me pd age 8 Duta: Mae 2005 Cem)impression that you were going to offer up the capitol for Mike to begin a shop.” Lance Armstrong replied, “Well, that's not going to happen. What we talked about was opening up a huge Trek concept store and putting Hill Abell (owner of Bicycle Sport Shop) out of business. That was just apipe dream, though.” After Armstrong and Allison discussed whether Anderson had really needed a raise, the conversation closed with these statements: Allison told Lance Armstrong, “I'm really sad that this whole thing has had to come to this. I thought we were friends and that things could have ended much more nicely.” Armstrong said: “agree. Again, I apologize for being such a chicken s***. I mean, if need to put my narie on a billboard on 1-35 and say Lance Armstrong is achicken s***, Iwill. Twant ‘Mike to know that this whole thing is nothing personal and that I will be available if he needs a reference or you need help with your friend's baby in Seattle. (This was a reference to a friend's baby who has cancer.) Allison asked, “So, would you like to talk with Mike?” Lance Armstrong replied, “No, Ihave to run. I'm late to a function, Tell him I'l call him tomorrow.” 32. OnDecember3, 2004, Anderson’s attorney, Hal Gillespie (“Gillespie”), wrote Plaintiffs through Armstrong's attomey, Stapleton, and stated in part: ‘Mr. Mike Anderson has retained David M. Davis and me to protect his rights and to pursue his claims arising from (1) promises made to him in exchange for his agreement to work for Lance Armstrong and Luke David, LLC (hereinafter “Defendants”) and (2) his recent termination and the statements made by defendants and/or their agents since on or about November 16,2004, It appears Defendants are liable to Mr. Anderson on several grounds and that Mr. Anderson’s tort and contract claims would likely result in an award of actual damages, compensatory damages and punitive damages, plus costs and attorneys fees. ‘Mr, Anderson sincerely regrets the need to hire an attorney and to proceed as set forth above. Despite everything, Mr. Anderson sincerely wishes the best for Lance Armstrong and ‘would like to resolve these matters swiftly, confidentially, and on an amicable basis. Because of the severe stress he has experienced since November 16, 2004, including but not limited to the stress of the telephone conversation with Lance Armstrong on November 30, 2004, which contributed to him literally passing out during the phone conversation in front of his wife and young son, please be sure to direct all communications concerning claims and disputes between GAUSERSYOLKDoceWI52 answer 2005 05 ep Pa 19 Date Pined Mae 3, 205 (240).the parties to me. In connection with this representation, please provide the following documents to me as soon as possible, and in any event by December 10, 2004, the e-mail from Lance Armstrong, to Mike Anderson in 2002 that set forth the terms of his employment. Mr. Anderson does not currently have a copy of that e-mail, although he remembers it clearly. I expect we can obtain it by reconstructing data on the computer Mr. Anderson used when he received the e-mail. Otherwise, we will pursue it, if need be, through discovery. Please insure that your clients preserve all evidence relevant to Mr. Anderson’s claims and any defenses or claims of Defendants (written, electronic or otherwise recorded in any manner). Finally, Mr. Anderson has several boxes of food (such as Power Bars) and some bicycle parts that are work related at his house, These items were shipped to Mr. Anderson’s house by sponsors and stored there to be used through the course of his work. Mr. Anderson would like to return them to Defendants as soon as possible and in a non-stressful way. Would it be acceptable for Mr. Anderson to take these items somewhere, such as to your office, to tun them over to Defendants? 33, On December 4, 2004, by letter faxed to Stapleton at 1:54 p.m., Gillespie wrote to Plaintiffs and stated in part: ‘As my letter to you yesterday indicated, Mr. Anderson would prefer to resolve these matters by means of a prompt, amicable agreement. If Lance Armstrong and Luke David, LLC have an interest in discussing settlement in advance of litigation, please contact me to initiate settlement discussions by December 10, 2004. (emphasis in original. 34, On December 4, 2004 Armstrong sent an e-mail to Allison at 9:33 pm., stating, in part that before Armstrong would authorize any payments, Anderson had to “get back all equipment that ‘was ever in mike’s (sic) possession during his time w/me.” Armstrong specified “my cyclo-cross bike ‘w/ wheels,” “kristin’s mtn bike,” and “a pair of 26 inch ZIPP wheels that were purchased at the bicycle sport shop in may I (sic) believe.” Armstrong had given Anderson the cyclo-cross bike, without wheels. At Amstrong’s direction, Anderson had used Kristin’s mountain bike to repair Knaggs’ bike. CGAUSERSWOLKDacst12-01 gh Aner 0320050: Page20 Daten Mich 3,200 70m)‘Anderson did not have any ZIPP wheels, nor did he ever purchase any. Anderson had already, by letter from Gillespie to Stapleton dated December 3, 2004, offered to return “several boxes of food (such as Power Bars) and some bicycle parts that are work related at his house” to Plaintiffs as soon as possible and had asked for directions on how to do so, Neither Stapleton nor Plaintiffs had responded as of Armstrong’s e-mail to Allison on December 4, 2004 at 9:33 p.m. 35. — Onthe afternoon of Monday, December 6, 2004, Lance Armstrong called Allison’s cell phone and left a message asking her to call him. Armstrong tone was sounded really nice. 36. On December 7, 2004 at about 2:00 p.m., Plaintiffs’ then attorney, Stapleton, called Anderson’s attorney, Gillespie. Stapleton told Gillespie he got Gillespie's letter. He said Anderson could take the work related property to the offices of Capital Sports & Entertainment. Gillespie said that would be fine and that they would do so that day. Stapleton said that as to the other things in Gillespie’s letter, “We don’t have an e-mail, the one from Dec er 2002. Mike would have the computer, alaptop. Mike took some laptops and gave them to Goodwill. That will be part of our claim if this gots ugly. You're going to have a lot of problems with your client.” Gillespie responded, “Mike couldn’t send the e-mail to himself. If Lance sent him an e-mail, it must have been from a computer Lance was using,” Stapleton replied, “We don’t have an ¢-mail. If you want to try to reconstruct one, ‘20 ahead.” Gillespie said, “What about the agreement.” Stapleton asked: “What agreement?” Gillespie said, “The agreement that when the work mechanic was over, Lance would help set Mike up with a bicycle shop.” Stapleton replied, “There was no agreement, just a discussion that if things worked out ‘Lance would think about helping Mike start a bike shop.” Gillespic asked, “Have you read the e-mail’ Stapleton responded, “I don’teven know there issuch an email.” Gillespie asked again, “Have youread the e-mail?” Stapleton replied, “I don’t know if there is one. Do you have any evidence there was an CGWUSERSWOLKSDoes M137 Ohana 3205 0830p Page2t at Pe: March 31,2005 (7am)agreement?” Gillespie replied, “Yes.” Stapleton responded, “Then send it to me.” Gillespie stated, “ don’t have a copy of the e-mail now. That’s why I’m asking for a copy. We have my client's memory of what it said and other people have read it.” Stapleton replied, “That won’t get you there. If Mike wants to file a suit, go ahead.” 37. Onthesame day, December 7, 2004 at about 4:30 p.m. Stapleton called Gillespie again. Stapleton said to Gillespie, “Before World War III begins, what does Mike want?” Gillespie told Stapleton that it was a great idea to discuss settlement before deciding upon litigation. Gillespie asked Stapleton if he was asking for Mike to make a settlement offer. Stapleton said yes. Gillespie said he ‘would really like to make a proposal but wanted Stapleton’ assurance that the purpose of their request for an offer was not just so they could have an offer but because they wanted to engage in serious, good faith settlement discussions now. Stapleton said that was the reason. Gillespie promised he would provide Stapleton with a proposal promptly. 38. On December 7, 2004, Lance Armstrong had a mutual friend pass on Armstrong’s threats to Anderson. Derek Russey (“Russey”) is a friend of Anderson’s and does all of the Jandscaping work for Lance Armstrong. At the end of the day on December 7, 2004, when Anderson was driving home, Russey called Anderson on his cell phone, Russey told Anderson: “just wanted to tell you that I was over at Lance's meeting with him about the plans for Foothill Terrace when Stapleton called. He got real quiet and red in the face, then stood up and started yelling about you suing him. I don't know what's going on between you two, but can't you just sit down and work things out?” Anderson replied, “That's what we're trying to do.” Russey said, “He told me that if T was any kind of friend to you, that I'd call you and tell you to cut this s*** out before they start WWIIL, and that you should drop it if you care about your family, or ever want to work in the bike business.” Russcy also CGAUSERSOLKOac415.0 Aner 0 2008 0.3 pd Page ‘ated: hh 31, 200 (00m)told Anderson, “don't you realize that all he has to do is make a phone call and you won't be able to ‘work in the bike business ever again? Don't you want to keep working in the industry?” 39. On December 8, 2004, Lance Armstrong called Anderson. Armstrong said, “ Mike.” Anderson replied, “Lance.” Armstrong said, “We need to talk. What's with the lawsuit?” Armstrong said, “Well, I'm not actually suing you yet. What I'm trying to do is to get you to live up to your end of theagreement.” Armstrong asked, “What agreement?” Anderson replied, “The agreement that you and Thad that was laid out in the e-mail.” Lance Armstrong replied, “Yeah, Mike. Well, I looked on the ‘computer that I was using at the time, and Ihave no record of it. Besides, why would I want to go into ‘business with someone I don't like?” Anderson said, “I don't remember ever seeing anything in the e- ‘mail that mentioned a partnership. The way I understood it was that you would help me out in opening the shop. You even showed me Dave Lettieri's shop and we talked about it number of times. And asiit ‘turns out, Thave those two old laptops you gave me last year, We'll find the e-mail.” Lance Armstrong, retorted: “Listen, {**er. What about these other issues?” Although Armstrong’s accountant had previously told Anderson in front of Allison that Anderson did not need to send him all of the receipts, only the big ones, Anderson replied to Lance Armstrong that they could go through receipts, and that ‘he had never bought any ZIPP wheels. Armstrong replied, “Right now I believe you.” Anderson said, “Good. You know that I was always acting with your interests at heart. What do I have to show for it? ‘Look at us Lance! We're barely making it month to month with Allison hardly working. That's why I asked for araisel” Armstrong responded, “Tknow that you guys weren’t getting rich working for me.” After discussing the part time work Anderson did for a person at the suggestion of Armstrong, Armstrong asked Anderson: “So, Mike what do you want?” Anderson replied, “I already told you want you to live up to the contract, so that I can get on with my life.” Lance Armstrong said, “That's ‘GAUSERS POLK Dac4152 pt Asser 0 2005 3 wp Page Date ited Ma, 205 (sm)not gonna happen. I'm not gonna be extorted. People are trying this all over the world right now.” Anderson replied, “That's not what this is about. I don't want to go to court with this-—--it won't do either ‘one of us any good. There has been enough stress caused to my family as its. Well, why don't we find this e-mail, then sit down with some lawyers and work it out. Relax. Don't go starting WWIII, and I ‘won't. Just enjoy your trip and welll alk about it when you get back. When will you be back in Austin?” Lance Armstrong said, “Il be back next Thursday, but Ihave the kids, so...” Anderson interjected, “Well, when you have time, we can sit down and work it out.” 40. Later still, on December 8, 2004, Gillespie sent, by U.S. Mail and by facsimile a comprehensive settlement proposal to Plaintiffs on behalf of Anderson. Gillespie’s settlement letter, dated December 9, 2004, but faxed on December 8, stated in bold print at the top: “Settlement ‘Communication - Confidential - Rule 408, T.R.C-E.” Based on his conversation with Stapleton, Gillespie expected Anderson’ first offer to facilitate further negotiations. Gillespie would not have sent Anderson’s first offer to Plaintiffs, via Stapleton, but for Stapleton’s request for the offer and representation that the reason for requesting it was to start good faith settlement negotiations. Gillespie transmitted a proposed comprehensive “Settlement Agreement and Mutual Release of Claims,” with a proviso that its terms would be confidential. Gillespie's settlement letter on behalf of Anderson, stated in part: appreciate your phone calls on Tuesday. It certainly makes sense to make good faith efforts to negotiate terms of an agreement that are mutually acceptable, ifat all possible, before (rather than after) litigation begins. Not only is that principle generally true, itis especially true in this matter, where friendship is involved and where there really can be a fair separation and a fair resolution of disputed claims. 1am enclosing a full proposed Settlement and Mutual Release of Claims. This constitutes our first offer of settlement in this matter. While this proposal certainly is negotiable, I think itis very important for you to know that Mike Anderson, David Davis and ‘CAUSERS OL Dees. phanswe 8 205 080e-0p ase24 Dat Pied: Mah 31,200 (70am)are satisfied that this is a fair proposal in view of the claims and potential damage recover in this case. Before you respond to our proposal, I want to explain to you (and thus to Mr. Armstrong) why we think this is a reasonable settlement proposal and one that we believe Mr. Armstrong should seriously consider. (On our second telephone conversation on December 7, you mentioned talking before ‘going to World War II. Lance Armstrong called Mike Anderson yesterday and said if he filed suit it would be World War IIL, along with other statements that sound like threats. Tam hopeful that soon Mike Anderson and Lance Armstrong can talk freely if they choose to, with these disputed matters well settled and behind them. Mike Anderson, David Davis and I are committed to fully exploring good faith settlement efforts before filing suit. Our goal is toNOT file suit. Given the level of emotion at the moment, I am hopeful that as attomeys and counselors and officers of the court, we can help our clients achieve a smart and amicable resolution of theit differences. T look forward to your response. I am requesting that you respond at your earliest convenience, and if possible by December 15 to our settlement proposal. Thank you for your consideration. 41. Neither Stapleton, nor anyone else on behalf of Plaintiffs responded to the settlement offer Stapleton invited. Instead, Plaintiffs Luke David LLC and Lance Armstrong filed a lawsuit against Anderson on December 13, 2004 in the 200" Judicial District in Travis County, Texas. 42, Based upon information and belief, Armstrong and/or his agents immediately provided a copy of the lawsuit they filed against Anderson to the press and the media. 43, The lawsuit, Plaintiffs’ Original Petition, filed against Anderson by Luke David LLC and Lance Armstrong holds Anderson out for ridicule by degrading his duties and responsibilities and referring to him as a petty employee whose work involved “clearing brush.” Plaintiffs’ Original Petition holds Anderson out for ridicule and contempt by implying that Anderson was attempting to extort funds fiom Armstrong. Plaintiffs’ Original Petition holds Anderson out for ridicule by referencing an “alleged email" suggesting that no such email exists, when Armstrong has admitted that ‘GxUSeRSPOLNDoce32-1phAmver 3205 0.30 p Pageas at Printed Mach 31, 205 (0a)he authored the email and has discussed the email and its contents with Anderson. 44, On January 7, 2005, Cross-Defendant Timothy J. Herman, acting as attorney and agent for Plaintiffs, Armstrong and Luke David LLC, wrote to attorneys for Defendant, demanding that Defendant “return” two laptop computers to “our client” and threatening to “pursue all available remedies” of Defendant failed to do so. A true and correct copy of this letter is Attachment A hereto. 45. On January 7, 2005, Anderson, through his attorneys, replied to this demand by explaining that the laptop computers in question do not belong to Plaintiffs Armstrong and/or Luke David LLC, that Armstrong had told Plaintiff to get rid of them, and that Plaintiff had given them away, one to his father-in-law and the other to a friend. Anderson communicated this to Plaintifis: Mr. Herman, in light of these facts, the logistics of honoring the request you made this, morning, and the disputed issues in this case, there are some obvious difficulties with your request. First, the laptops do not belong to your client. Second, the laptops do not belong to Mike Anderson. Third, even if Mike can convince his mother-in-law to give up possession of the older Dell and can convince his friend to give up the possession of the newer Dell, Mr. Anderson has a right in this lawsuit to subject the laptops in question to forensic review to see if the e-mail contract can be found on either of them. Thus, if we can succeed in taking back the computers that Armstrong gave to these people, through his instructions to Mike Anderson, ‘we need to be certain that the laptops and their hard drives are not subject to spoliation In light of these facts, please reconsider the request for the return of the laptops in your letter tome today. Otherwise, we will endeavor to return them to you, today if possible, without waiving our position that the two laptops do not belong to your clients (they belong to Mike’s mother-in-law and a friend) and with the understanding that you will insure that the laptops and their hard drives are kept and preserved “as is” until this litigation is concluded. ‘A true and correct copy of this January 7, 2005 letter from Anderson to Plaintiffs is Attachment B hereto, 46. Plaintiffs, through their attorney, replied to Anderson that they still demanded “retum” of the laptops. Plaintifis did not retract their threat to pursue all available remedies. A true and correct, copy of Plaintifis’ reply is Attachment C hereto. ‘GwUSERSFOLEIDae412-01 gh Anwer 05 2005 08: Pape26 Bae Pines Mach, 2005 Cte)47, Andersonreplied through his attorneys by letter dated January 7, 2005, atrueand correct copy of which is Attachment D hereto, stating: Tam in receipt of your letter of today’s date, faxed to me at 4:01 p.m, today concerning two laptop computers. Based on the threats in your earlier letter this morning, which seem to bereaffirmed in your 4:01 p.m. fax, as well your written commitment to preserve the computers as required by the law and Rules of Civil Procedure and Evidence and not to spoiliate evidence, Mr. Anderson, who has been able to retrieve the laptops from their owners today, will deliver them to your office by 5:30 p.m. today. Mr. Anderson is delivering these two laptops to you without waiving our position that the two laptops do not belong to your clients (they belong to Mike’s mother-in-law and a friend) and with the understanding that you will insure that the laptops and their hard drives are kept and preserved “as is” until this litigation is concluded. As aresult of being pressured into going to his parents-in-law and his friend to beg them to give him back the laptop computers he had given them, after Armstrong had given them to him, Anderson was deeply ashamed, embarrassed and humiliated. Plaintiffs’ pressure upon Anderson was acalculated part of their effort to oppress, embarrass and humiliate Anderson, part of their declared World War II that they warned Anderson they would pursue if he did not yield to their demands to agree to an oppres: e confidentiality/hush agreement. 48, Ithas been necessary for Anderson to retain the undersigned counsel to represent him in this suit, Counterclaimant Anderson is entitled to recover his reasonable attomeys’ fees and other costs incurred in the bringing of this action, for all of which Anderson now sues. E, CAUSES OF ACTION 1, INTENTIONAL INFLICTION OF SEVERE MENTAL DISTRESS 49, Anderson realleges and incorporates paragraphs 1-48 as if fully contained herein. 50, Amnstrong and Luke David LLC’s conduct was extreme and outrageous in character, andso extreme in degree, as to go beyond all possible bounds of decency, as to be regarded as atrocious (GAUSERS POLK DoeMI32 Onl Maener 052005 0-385 pd Paee27 Dat Pini: Mar, 2008 (7060)and utterly intolerable in a civilized community. 51. Armstrong and Luke David LLC’s conduct proximately caused Anderson damages in that is caused Anderson to suffer severe emotional distress. In particular, Armstrong and Luke David LLC’s conduct was the direct and proximate cause of severe disappointment, indignation, wounded pride, shame, despair and public humiliation in that Anderson fainted during a confrontation with Armstrong, scaring his wife and young son. Armstrong and Luke David LLC’s conduct was also the direct and proximate cause of severe disappointment, indignation, wounded pride, shame, despair and public humiliation by describing Anderson’s job duties and menial and petty, by insinuating that Anderson is attempting to extort money and by mocking Anderson and referring to the parties written communication as an “alleged email” when Armstrong discussed the email repeatedly with Anderson. 52. Anderson's emotional distress as a result of the acts by Armstrong and his agents has been severe in that Anderson has caused Anderson to pass out and to suffer anxiety, anger, depression, lack of appetite, insomnia, shame, humiliation and loss of self esteem. 53. In addition to severe emotional distress, Anderson has suffered and will continue to suffer additional damages as a proximate result of Armstrong and Luke David LLC’s conduct in that, in all reasonable probability Anderson will continue to suffer this mental pain and anguish for a long time into the future. $4, Theconduct of Armstrong and Luke David LLC, as described in this counterclaim, was ‘malicious so as to entitle Anderson to recovery exemplary damages. In this connection, Anderson will show that as a result of Armstrong and Luke David LLC's conduct, Anderson has suffered losses of time and other expenses, including attorneys’ fees incurred in the investigation and prosecution of this, action. Accordingly, Anderson asks that exemplary damages be awarded against Armstrong and Luke CGuuseRSPOUNDoest32anpfAnewe 05 205 0830 pd Page28 Dut: Me 1, 2005 (7am)David LLC in a sum within the jurisdictional limits of the Court. 2. DEFAMATION 55. Anderson realleges and incorporates paragraphs 1-54 as if fully contained herein. 56, Lance Armstrong and Luke David have slandered Mike Anderson by making the statement to one or more third parties that Mike Anderson was terminated for stealing and/or that Mike Anderson stole and/or had been stealing from Lance Armstrong. These statements are false and defamatory. 57. Onorabout January 13, 2005, Tim Herman, acting as an agent for Lance Armstrongand Luke David, but not in the regular course of judicial pleadings in this matter and not in any way pertinent and material to the redress or relief sought in this matter, stated and published that Armstrong fired Anderson because he was messing up Armstrong's training schedule, Herman stated, “Mr. Anderson tends to get car sick on training rides in Spain, and Mr. Armstrong would have to go back, which was not the best training regimen.” On or about March 27, 2005, Armstrong and/or his agents made additional and similar false and defamatory statements, or republished those made earlier, on a television tabloid show, “Celebrity Justice.” These statements are false. They hold Anderson out to ridicule and discredit. These statements injured Anderson in connection with his profession, occupation and livelihood, so that itis slander and slander perse. These statements were not made by any attomey or person in the regular course of judicial proceedings and these statements are not pertinent and ‘material to the redress or relief sought by Plaintiffs in this proceeding or in any judicial proceeding. 57. Persons who have heard or read the defamatory statements about Anderson understood the statements to be defamatory and to have injured Anderson in connection with his profession, which is slander per se. ‘GtuserspoLi Dees4i52 ony rene 0 200500 Page29 ate Prined: Mae 1, 2003 (040)58. _ Armstrongand Luke David LLC published these defamatory statements with knowledge that they were false and with reckless disregard for their truth, 59, Anderson has resided in Travis County, Texas for about the past 12 years. Prior to the publication of the defamatory statements described above, Anderson enjoyed a reputation for integrity and as a highly skilled bicycle mechanic. 60. Asadirect and proximate result of Armstrong and Luke David LLC’s publication of the defamatory statement, Anderson's reputation has been severely injured. The allegations contained in the defamatory statements have caused Anderson to suffer severe mental anguish, public humiliation and embarrassment, Anderson seeks damages for these injuries in an amount within the jurisdiction of this court. 61, Because ofthe publication ofthe defamatory statements, and their damage to Anderson's reputation, Anderson is unable to obtain comparable employment, causing Anderson to suffer lost ‘wages and benefits, Anderson seeks damages for these injuries in an amount within the jurisdiction of this court. 62, Furthermore, Anderson is entitled to exemplary damages from Armstrong because he acted with the malice required to support an award of exemplary damages. Armstrong acted with a specific intent to case injury to Anderson. Armstrong and/orhis agents made the defamatory statements with knowledge of their falsity or with reckless disregard to whether or not they were true. Further, and without limitation, prior to the publication of these statements, Armstrong pressured Anderson and Allison for Anderson to sign the release, non-disclosure and $1 million liquidated damages provision referenced in paragraph 24 above (the “$1 million liquidated damages provision”) and threatened Anderson that Anderson’s failure to sign the $1 million liquidated damages provision would be the [GAUSERS POLK Do«s4132 01 pAswe BB 2005 0330p ag 30 Date rote Mah, 2005 (tua)beginning of World War Ill and would result in Armstrong putting Anderson out of the bike business. 63. Anderson is also entitled to exemplary damages from Luke David LLC because Luke David LLC approved and ratified the conduct of Armstrong with full knowledge that Armstrong was acting with malice and because an agent of Luke David LLC, Stapleton, participated in the wrongful conduct alleged. 3. BREACH OF CONTRACT 64, Anderson realleges and incorporates paragraphs 1-63 as if fully contained herein. 65. Acontract existed between Armstrong and Anderson. 66. The contract between Armstrong and Anderson was supported by adequate consideration. The parties mutually agreed on all relevant terms. All conditions precedent to Anderson’s performance under the contact have been performed or have occurred. Performance by Armstrong has not been excused. 67. Theemploymentagreement between Armstrong and Anderson, later adopted and ratified by Luke David LLC, provided for a two (2) to three (3) years of employment for Anderson, depending on the number of years Armstrong raced in the Tour de France, with Armstrong to pay Anderson a salary of $3,000 per month and to provide health benefits (a monthly salary later modified by mutual consent to $3,500), where Anderson would workas Armstrong's bike mechanic and perform other tasks as assigned. The agreement provided that Anderson would travel for Armstrong stateside three or four times a year and maybe to Mexico. The agreement provided that Armstrong stated that he would help Anderson open a bike shop at the conclusion of the period of employment. This agreement was reduced to writing in an email exchange between Armstrong and Anderson, Attachment E hereto (Bate Stamp numbers 00052 -00057). Plaintiffs were in possession of this e-mail exchange when the called it “an GouseRs POL Da:s4132.OnpfAnener 052005 0-3 wp ages DP: Mc 1, 2005(um)alleged email which Defendant claims Plaintiffs sent to him sometime in 2002" in Plaintiffs? Original Petition, which Plaintiffs filed and discussed with the media on December 13, 2004. 68. After Armstrong won the Tourde France in 2003, Armstrong told Anderson in an e-mail words to the effect of “let's do it another year or maybe two.” OnJuly 25, 2004, Lance Armstrong won the Tour de France, the second Tour de France Armstrong participated in after hiring Anderson. 69. On or about November 16, 2004 Anderson’s employment with Armstrong was terminated, without cause. As of November 16, 2004, Armstrong had not announced publicly or told Anderson he would not be participating in the 2005 Tour de France. As aconsequence, Anderson was entitled to continue through the third year of his employment agreement. 70. In the termination meeting on November 16, 2004, Anderson asked Knaggs, “is the bicycle shop still on the table?” Knaggs replied, “Yes, Lance mentioned it to me and you and he can discuss it.” 71. On November 30, 2004, Armstrong telephoned Anderson and attempted to pressure Anderson into signing the $1 million liquidated damages provision. Anderson passed out during the conversation. Later that evening, in another telephone conversation, Armstrong told Allison that Armstrong would not honor his promise to help Anderson open a bicycle shop in Austin, that it was just a pipe dream. 72. Anderson performed his obligations (and more than his obligations) under the contract and was performing them at the time of his termination. 73. As aresult of Armstrong's breach of contract, as set out in the preceding paragraphs of this petition, Anderson sustained lost wages and benefits for the unexpired term of his employment agreement. In addition Anderson has suffered financial injury as a result of Plaintiffs’ failure to help (GASES WOLCDos 413201 Vrewer 03 205 0-30 Page Daten March 3,25 (an)Anderson open a bike shop and the actions of Plaintiffs’ that are the opposite of helping Armstrong open a bike show, acts and omissions calculated to put Anderson out of the bike business. 75. On November 16, 2004, Anderson presented his claim concerning the agreement by Plaintiffs to help Anderson open a bike shop. On December 8, 2004, Anderson presented a claim for the amount due for his performance under the contract and demanded performance by Armstrong. Because Armstrong has refused to honor the claim and perform as promised, Anderson asks for judgment against Armstrong for damages. 76. Anderson is entitled to recover his reasonable and necessary attomeys’ fees because this is a claim on an oral or written contract within the meaning of Civil Practices and Remedies Code §38.001. Anderson perfected his right to fees as he presented a claim for payment on the contract to Armstrong and Luke David LLC. The claim was made by means of oral request and by written presentment. More than thirty (30) days have elapsed since Luke David LLC informed Anderson that Armstrong would be contacting him regarding the agreement. Payment for amount owed has not been tendered by Armstrong. As a result, Anderson has been required to retain the services of counsel to prosecute this action. 4, FRAUD CONCERNING HELPING ANDERSON OPEN A BIKE SHOP 77. Anderson realleges and incorporates paragraphs 1-76 as if fully contained herein. 78. Lance Armstrong made a material misrepresentation to Anderson that at the conclusion of Anderson’s period of employment for Armstrong, Armstrong would help Anderson open abike shop. Armstrong repeated the material mistepresentation by showing Anderson a bike shop in Santa Barbara, Califomia and representing to Anderson that he had hetped the owner open that shop and by talking with Anderson numerous times about helping him open a bike shop at the end of Anderson’s ‘GAUSERSWPOLKDox4132 OF pMAnsner 0 200 083 wp Pages Date rte: Mare 2008 (Pala)employment with Anderson. 79. Lance Armstrong made the misrepresentations with knowledge of their falsity or recklessly without any knowledge of the truth and as positive assertions. 80. The misrepresentations were made with the intention that they should be acted on by Anderson. 81. Anderson relied on the misrepresentations and thereby suffered injury. 82. Luke David LLC adopted and ratified the fraudulent acts of Armstrong as referenced in paragraphs 73 through 76 above. F, JURY DEMAND 83. Anderson hereby demands a trial by jury on his counterclaims and all defenses in this action. Ill, GENERAL DENIAL Pursuant to Rule 92 of the Texas Rules of Civil Procedure, Defendant Anderson denies cach and every, all and singular, the allegations filed by Plaintiffs Luke David LLC and Lance Armstrong, and state that the same are untrue, in whole or in part. Defendant demands strict proof of the allegations contained in Plaintiffs’ Original Petition by a preponderance of the evidence, as is required by the Constitution, Statutes, Laws, and Texas Rules of Civil Procedure. IV. AFFIRMATIVE DEFENSES Defendant hereby states the following defenses to Plaintiffs’ Original Petition as follows, but does not assume the burden of proof on any such defenses except as otherwise required by applicable law. Defendant further reserves the right to assert other affirmative and additional defenses and other to supplement this pleading upon discovery of facts or evidence rendering such action appropriate. GausenswoLibocss2 otyninser 0 2008 08-9 epd Pages Dat inte: Meh 31, 2005 (Tm)A. 1 AFFIRMATIVE DEFENSE Plaintiffs’ claims are estopped by their own misconduct because Plaintiffs solicited an offer of settlement from Anderson under the guise of furthering good faith settlement discussions, when it was their intent to use the initial offer from Anderson’s counsel as the basis for their lawsuit against Anderson. B. 2“ AFFIRMATIVE DEFENSE Some or all of Plaintiffs’ claims are barred, in whole or in part, because no alleged action or inaction on the part of or attributable to Anderson are or were the proximate cause of any alleged injury or damages suffered by Plaintiff. C. 3 AFFIRMATIVE DEFENSE Some or all of Plaintiffs’ claims are barred, in whole or in part, because Plaintiffs’ own acts or admissions contributed to any alleged injury or damage suffered by Plaintifis. D. AFFIRMATIVE DEFENSE Plaintiffs are not entitled to attomeys” fees, costs, or expenses. Vv. PRAYER FOR RELIEF WHEREFORE, Defendant Anderson prays as follows: a, That this Court dismiss all claims against Defendant with prejudice; b. That costs be assessed against Plaintiffs and in favor of Defendant; and ¢. -ThatDefendant be awarded his attorneys" fees and costs incurred in the defense of this action. ADDITIONALLY, Counterclaimant Anderson prays as follows: 4. Thatthe Courtenter judgment against Plaintiffs and in favor of Counterclaimant Anderson upon Counterclaimant’s claims of Intentional Infliction of Severe ‘GAusERSWOLKDncs452.01 phaser 02005 0p aps Datei, March, 205 (400m)Mental Distress, Defamation, Breach of Contract and Fraud; That the Court enter judgment against Armstrong and Luke David, LLC, jointly and severally for a sum within the jurisdictional limits of the Court; £ That Counterclaimant Anderson be awarded pre-judgment and post-judgment interest at the maximum rate allowed by law; ‘That Counterolaimant be awarded exemplary damages; That Counterclaimant Anderson be awarded his attomeys’ fees and costs incurred in this action; That the Court grant Counterclaimant Anderson such other and further relief as it deems just and proper. Respectfully submitted, GILLESPIE, ROZEN, WATSKY, MOTLEY & JONES, P.C. 3402 Oak Grove Avenue, Suite 200 Dallas, Texas 75204 Phone: (214) 720-2009 Fax: (214) 720-2291 By: ele A ‘ Hal K. Gillespie State Bar No. 07925500 Cheryl A. Rubenstein State Bar No. 24027826 DAVIS & WILKERSON, P.C. 1801 S. MoPac Expressway, Suite 300 Austin, Texas 78768-2283, Phone: (512) 482-0614 Fax: (512)482-034; By: Ae David M. Davis State Bar No. 05477500 ATTORNEYS FOR DEFENDANT/COUNTER- CLAIMANT MIKE ANDERSON ‘GtuseRs POL Does4152.onptAnever 03 2050-36 P36 Dot tds Mare 30,2005 (24),CERTIFICATE OF SERVICE [ hereby certify that a true and correct copy of the foregoing document has been HAND DELIVERED to the following counsel of record on this 31" day of March, 2005: Timothy J. Herman Sean Breen 1900 Pearl St. Austin, TX 78705-5408 David M. Davis ‘GusersouKiDee 32 01ghanower 82005 00-30 Pages? ‘uterine Marh0, 205 (2247)