Ralph W. Emerson and Suzanne O. Emerson - Page 6

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          mistake as additional causes of action.  In total, the amended              
          complaint raised 16 separate causes of action.                              
               The defendants filed their answer and a cross-complaint on             
          December 23, 1997.  The cross-complaint alleged breach of                   
          contract, conversion, and breach of covenant of good faith and              
          fair dealing as causes of action against petitioner.  Petitioner            
          filed a status conference report on January 2, 1998, stating that           
          the nature of the case was in contract and tort.  Petitioner                
          filed a second status conference report on March 5, 1998, and               
          included a statement of the nature of the case as rescission or             
          reformation of written contracts, breach of covenant of good                
          faith and fair dealing, declaratory relief, quantum meruit,                 
          slander per se, constructive trust, conspiracy, intentional                 
          infliction of emotional stress, and injunctive relief.                      
          Petitioner filed an answer to the defendants’ cross-complaint on            
          March 6, 1998.                                                              
          Settlement of the Lawsuit                                                   
               In March 1998, retired California State Superior Court Judge           
          Richard Gilbert conducted a mediation with the parties.  In                 
          attendance at the mediation were petitioner, petitioner’s counsel           
          Thomas Casazza, petitioner’s accountant Robert K. Stevenson                 
          (Stevenson), the defendants, and their counsel Gregory Dyer                 
          (Dyer).  Judge Gilbert suggested during the mediation that                  
          petitioner add a personal injury claim to the suit as a vehicle             

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