Page 1 DEFENDANT WESTLAKE FLOORING COMPANY, 

LLC DBA WESTLAKE FINANCIAL SERVICES’ 

ANSWER, COUNTERCLAIM, AND CROSSCLAIMS

WHIPPLE & DUYCK, P.C.

ATTORNEYS AT LAW

1500 SW FIRST AVE., SUITE 1170

PORTLAND, OR 97201

503.222.6004

503.222.6191

Daniel L. Duyck, OSB #972529

E-mail: dduyck@whippleduyck.com

Whipple & Duyck, P.C.

1500 SW First Ave., Suite 1170

Portland, OR 97201

Telephone (503) 222-6191

Facsimile (503) 222-6029

Attorneys for Defendant Westlake Flooring Company, LLC dba 

Westlake Financial Services. 

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

PORTLAND DIVISION

TOWER INSURANCE COMPANY OF 

NEW YORK, a New York corporation,

Plaintiff,

v.

ROSE CITY AUTO GROUP, LLC, an 

Oregon limited liability company; 

LEONARD M. SHILEY, an individual; 

THERESA BYLE, an individual; 

LOGAN DRIEDRIC, an individual; 

JOANNA STONER, an individual; 

STEPHEN STONER, an individual; 

LOVE MARTINO, an individual; ANAN 

SRIVILAI, an individual; CAMERON 

JOHNSON, an individual; JONATHAN 

GILLBERT, an individual; TINA 

HARRAL, an individual; ROY 

WIEGAND, an individual; NATHAN 

LANGER, an individual; KAREN 

BERSINE, an individual; MELISSA 

STEVENS, an individual; TONY 

EDWARDS, an individual; DEBBIE 

RECKTANGLE, an individual; 

RODNEY JENKINS, an individual; 

STEPHEN SCHANTIN, an individual; 

BRITTANY LAWRENCE, an individual; 

MATT REED, an individual; SHERIAL 

Case No.: 3:14-cv-00975-MO

DEFENDANT WESTLAKE FLOORING 

COMPANY, LLC DBA WESTLAKE 

FINANCIAL SERVICES’ ANSWER, 

COUNTERCLAIM, AND 

CROSSCLAIMS

Case 3:14-cv-00975-MO Document 22 Filed 10/08/14 Page 1 of 7
Page 2 DEFENDANT WESTLAKE FLOORING COMPANY, 

LLC DBA WESTLAKE FINANCIAL SERVICES’ 

ANSWER, COUNTERCLAIM, AND CROSSCLAIMS

WHIPPLE & DUYCK, P.C.

ATTORNEYS AT LAW

1500 SW FIRST AVE., SUITE 1170

PORTLAND, OR 97201

503.222.6004

503.222.6191

REED, an individual; RACHEL 

SCHANTIN, an individual; EZEKIAL 

HUNT, an individual; BOBBY HEAGLE, 

an individual; LANEY BLANKENSHIP, 

an individual; LONNEY FRANCIS, an 

individual; OREGON COMMUNITY 

CREDIT UNION, an Oregon non-profit 

entity; TWINSTAR CREDIT UNION, a 

Washington nonprofit corporation; 

LOBEL FINANCIAL CORPORATION, 

a California corporation; THE 

EQUITABLE FINANCE COMPANY, 

an Oregon corporation; UNITUS 

COMMUNITY CREDIT UNION, an 

Oregon non-profit entity; WESTLAKE 

FLOORING COMPANY LLC, DBA 

WESTLAKE FLOORING SERVICES, 

a California limited liability company; and 

DOES 1-30,

Defendants.

Defendant Westlake Flooring Company, LLC dba Westlake Financial Services

(“Westlake”), in response to plaintiff’s Complaint, admits, denies, and alleges as follows:

1.

Westlake admits the allegations contained in paragraph 1 of the Complaint.

2.

Westlake admits the allegations contained in paragraph 2 of the Complaint.

3.

With respect to paragraph 3 of the Complaint, Westlake admits that it is a 

California limited liability company. Westlake is without knowledge or information 

sufficient to form a belief as to the truth of the remaining allegations in paragraph 3 of the 

Complaint and, therefore, denies the same. 

Case 3:14-cv-00975-MO Document 22 Filed 10/08/14 Page 2 of 7
Page 3 DEFENDANT WESTLAKE FLOORING COMPANY, 

LLC DBA WESTLAKE FINANCIAL SERVICES’ 

ANSWER, COUNTERCLAIM, AND CROSSCLAIMS

WHIPPLE & DUYCK, P.C.

ATTORNEYS AT LAW

1500 SW FIRST AVE., SUITE 1170

PORTLAND, OR 97201

503.222.6004

503.222.6191

4.

With respect to paragraph 4 of the Complaint, Westlake admits the allegations 

found in subparagraphs 4.1 and 4.2. Westlake further admits that is has asserted a claim 

against the bond. Westlake is without knowledge or information sufficient to form a 

belief as to the truth of the remaining allegations in paragraph 4 of the Complaint and, 

therefore, denies the same. 

5.

With respect to paragraph 5 of the Complaint, these allegations are directed to 

parties other than Westlake and no response is required of Westlake. To the extent an 

answer is required of Westlake, all allegations are denied.

FIRST COUNTERCLAIM

(Bond Claim)

6.

Westlake is a California limited liability company with a principal place of 

business in California.

7.

Upon information and belief, Tower Insurance Company of New York (“Tower”) 

is a New York corporation with its principal place of business in New York. Tower is 

authorized to post surety bonds in Oregon.

8.

At all material times, Rose City Auto Group, LLC (“Rose City”) was an Oregon 

limited liability company doing business as Rose City Auto Group. Leonard M. Shiley 

(“Shiley”) is a resident of Oregon and was at all material times the principal of Rose City. 

On or about May 15, 2013, Westlake and Tower entered into a Loan and Security 

Agreement, which was subject to an Addendum to Loan Security Agreement dated on or 

Case 3:14-cv-00975-MO Document 22 Filed 10/08/14 Page 3 of 7
Page 4 DEFENDANT WESTLAKE FLOORING COMPANY, 

LLC DBA WESTLAKE FINANCIAL SERVICES’ 

ANSWER, COUNTERCLAIM, AND CROSSCLAIMS

WHIPPLE & DUYCK, P.C.

ATTORNEYS AT LAW

1500 SW FIRST AVE., SUITE 1170

PORTLAND, OR 97201

503.222.6004

503.222.6191

about June 18, 2013 (collectively, the “Agreement”). The Agreement includes a 

Promissory Note (the “Note”) and an Individual Personal Guaranty (the “Guaranty”) 

signed by Shiley in favor of Westlake. Attached hereto as Exhibit 1 is a true copy of the 

Agreement.

9.

After execution of the Agreement and Guaranty, it came to Westlake’s attention 

that Rose City and Shiley committed fraud with respect to obligations to Westlake. As a 

result of this fraud, Westlake has a claim against the bond issued by Tower (Claim# 157-

323; Bond No. CSBCU1000927)(the “Claim”). Westlake filed an Affidavit of Claim on 

or about February 14, 2014 for the total amount of $44,748.33, which was acknowledged 

by Cinium Financial Services Corporation on behalf of Tower. Attached hereto as 

Exhibit 2 is a true copy of Westlake’s Affidavit of Claim and relevant documents 

substantiating its claim.

10.

Westlake is entitled to payment of its Claim out of any bond funds deposited with 

the Court. 

FIRST CROSSCLAIM

(Breach of Agreement)

11.

Westlake realleges paragraphs 6, 7, 8, 9, and 10.

12.

Rose City has breached the Agreement. Westlake has been damaged in the 

amount of $44,748.33. Additionally, Westlake is entitled to its reasonable attorney fees 

pursuant to paragraph 16 of the Agreement. Finally, Westlake is entitled to prejudgment 

and post-judgment interest at the statutory rate of 9% or, in the alternative, at the interest 

rate provided by the Note and the Agreement. 

Case 3:14-cv-00975-MO Document 22 Filed 10/08/14 Page 4 of 7
Page 5 DEFENDANT WESTLAKE FLOORING COMPANY, 

LLC DBA WESTLAKE FINANCIAL SERVICES’ 

ANSWER, COUNTERCLAIM, AND CROSSCLAIMS

WHIPPLE & DUYCK, P.C.

ATTORNEYS AT LAW

1500 SW FIRST AVE., SUITE 1170

PORTLAND, OR 97201

503.222.6004

503.222.6191

SECOND CROSSCLAIM

(Breach of Personal Guaranty)

13.

Westlake realleges paragraphs 6, 7, 8, 9, 10, and 12.

14.

As a personal guarantor, Shiley is personally liable for Rose City’s liabilities 

under the Agreement. 

THIRD CROSSCLAIM

(Fraud)

15.

Westlake realleges paragraphs 6, 7, 8, 9, 10, and 12, and 14.

16.

Shiley and Rose City have committed fraud against Westlake as outlined in the 

Claim. Westlake has been damaged in the amount of $44,748.33. Additionally, 

Westlake is entitled to its reasonable attorney fees pursuant to paragraph 16 of the 

Agreement. Finally, Westlake is entitled to prejudgment and post-judgment interest at 

the statutory rate of 9% or, in the alternative, at the interest rate provided by the Note and 

the Agreement.

WHEREFORE, having fully answered the Complaint and allegations by plaintiff 

Tower in this matter, defendant Westlake prays for the following relief:

1. That Tower take nothing pursuant to its Complaint and judgment be entered 

in favor of t Westlake;

2. On Westlake’s first counterclaim, for a judgment in the amount of its 

Claim;

Case 3:14-cv-00975-MO Document 22 Filed 10/08/14 Page 5 of 7
Page 6 DEFENDANT WESTLAKE FLOORING COMPANY, 

LLC DBA WESTLAKE FINANCIAL SERVICES’ 

ANSWER, COUNTERCLAIM, AND CROSSCLAIMS

WHIPPLE & DUYCK, P.C.

ATTORNEYS AT LAW

1500 SW FIRST AVE., SUITE 1170

PORTLAND, OR 97201

503.222.6004

503.222.6191

3. On Westlake’s first crossclaim, for a judgment against Rose City in the 

amount of its Claim including prejudgment and post-judgment interest, its costs and 

reasonable attorneys fees;

4. On Westlake’s second crossclaim, for a judgment against Shiley in the 

amount of its Claim including prejudgment and post-judgment interest, its costs and 

reasonable attorneys fees;

5. On Westlake’s third crossclaim, for a judgment against Rose City and 

Shiley in the amount of its Claim including prejudgment and post-judgment interest, its 

costs and reasonable attorneys fees;

6. For Westlake’s costs and disbursements; and

7. For such further and additional relief as the Court deems just and equitable. 

Dated this 8

th day of October, 2014.

WHIPPLE & DUYCK, P.C.

By: /s/ Daniel L. Duyck

Daniel L. Duyck, OSB #972529

Of Attorneys for Defendant 

Westlake Flooring Company, LLC dba 

Westlake Financial Services

Case 3:14-cv-00975-MO Document 22 Filed 10/08/14 Page 6 of 7
Page 1 CERTIFICATE OF SERVICE WHIPPLE & DUYCK, P.C.

ATTORNEYS AT LAW

1500 SW FIRST AVE., SUITE 1170

PORTLAND, OR 97201

503.222.6004

503.222.6191

CERTIFICATE OF SERVICE

I hereby certify that on the 8

th day of October, 2014, I served the foregoing 

DEFENDANT WESTLAKE FLOORING COMPANY, LLC DBA WESTLAKE FINANCIAL 

SERVICES’ ANSWER, COUNTERCLAIM, AND CROSSCLAIMS on the following:

Lawrence A. Wagner

Stewart Sokol & Gray LLC

2300 SW First Ave, Suite 200

Portland, OR 97201-0699

Of Attorneys for 

Tower Insurance Company of New York

Michelle M Bertolino

Farleigh Wada Witt

121 SW Morrison St Ste 600

Portland OR 97204

Of Attorneys for 

Unitus Community Credit Union

by mailing a true and correct copy thereof by U.S. Postal Service, ordinary first class 

mail, addressed to each attorney’s last-known address and depositing in the U.S. mail at 

Portland, Oregon, on the date set forth above;

by mailing a true and correct copy thereof by U.S. Postal Service, certified mail, 

return receipt requested, addressed to each attorney’s last-known address and depositing in the 

U.S. mail at Portland, Oregon, on the date set forth above;

by causing a true and correct copy thereof to be hand-delivered to the abovementioned attorneys at each attorney’s last-known office address on the date set forth above;

by sending a true and correct copy thereof by overnight courier, addressed to each 

attorney’s last-known office address on the date set forth above;

by delivering a true and correct copy thereof by electronic means [facsimile 

transmission/e-mail], as provided in Fed. R. Civ. P. 5(b) (2) (E) 

via CM/ECF system

DATED this 8

th day of October, 2014.

/s/ Daniel L. Duyck

Daniel L. Duyck, OSB #972529

Case 3:14-cv-00975-MO Document 22 Filed 10/08/14 Page 7 of 7