UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

 

ADIL SHAFI, 

Counter-Plaintiff/ Third-Party Plaintiff, 

v. Case No: 09-10454 

Honorable Victoria A. Roberts 

FREDERICK WEIDINGER AND 

BRAINTECH, INC., 

Third-Party Defendant/Counter-Defendant. 

 

BRAINTECH, INC.’S AND FREDERICK WEIDINGER’S 

JOINT REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT 

 

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i 

TABLE OF CONTENTS

INDEX OF CONTROLLING AUTHORITIES ............................................................................. ii 

INTRODUCTION ...........................................................................................................................1 

SHAFI’S RESPONSE BRIEF MISREPRESENTS THE RECORD ..............................................1 

ARGUMENT ...................................................................................................................................4 

I. SHAFI IS NOT ENTITLED TO SEVERANCE PAY FROM 

BRAINTECH ...........................................................................................................4 

II. SHAFI HAS FAILED TO PRODUCE FACTUAL EVIDENCE TO 

SUPPORT A VIOLATION OF SECTION 10(b) OF THE SECURITIES 

AND EXCHANGE ACT, THE MICHIGAN UNIFORM SECURITIES 

ACT OR COMMON LAW FRAUD .......................................................................7 

III. SHAFI HAS FAILED TO PRODUCE FACTUAL EVIDENCE THAT 

DEFENDANTS WRONGFULLY CONVERTED CORPORATE 

PROPERTY TO THEIR OWN USE .....................................................................13 

 

IV. SHAFI’S UNJUST ENRICHMENT CLAIM IS BARRED BY THE 

SHARE PURCHASE AGREEMENT ...................................................................13 

Case 2:09-cv-10454-VAR-VMM Document 81 Filed 01/06/11 Page 2 of 18
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INDEX OF CONTROLLING AUTHORITIES

Cases Page

Belle Isle Grill Corp. v. City of Detroit, 256 Mich.App. 463, 478, 666 N.W.2d 271 (2003) .......14 

Foremost Ins., Co., v. Allstate Ins., Co., 439 Mich. 378, 391, 486 N.W.2d 600 (1992) ..............13 

Lorillard Tobacco Company v. American Legacy Foundation, 

 903 A.2d 728 (De;. Supr., 2006) ...........................................................................................5 

Morris Pumps v. Centerline Piping, Inc., 

 273 Mich.App. 187, 199, 729 N.W.2d 898 (2006) .....................................................13, 14 

Murry Hill Publications Inc. v. ABC Communications, Inc., 

264 F.3d 622, 636 (6th Cir. 2001) ....................................................................................13 

Sherwood Brands, Inc. v. Levie, 2006 WL 827371 (D.Md. at *19) .............................................11 

Statutes

MCL 566.132(1)(b) .......................................................................................................................10 

Rules and Regulations

17 C.F.R. §230.144 .......................................................................................................................11 

Fed.R.Civ.P. 56 ...........................................................................................................................1, 7

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INTRODUCTION

 Adil Shafi’s Response to Defendants’ Motion for Summary Judgment (“Response”) rests 

entirely on rambling conjecture, speculation, opinion and conclusory arguments presented as 

“facts” which do not meet his burden under Rule 56 of the Federal Rules of Civil Procedure. 

Much of Shafi’s Response contains no citation to evidence in this case, and these assertions must 

be stricken or disregarded by the Court. 

 The theme of Shafi’s argument is that Rick Weidinger never intended to honor the 

agreements because he should have known better than to get involved in a business deal with 

Shafi and that Mr. Weidinger never should have believed Shafi when he told him that Reliabot 

would generate revenue in 2008. At best, Shafi presents nothing more than his opinion that his 

experience was far superior than that of Weidinger and that he duped Weidinger into believing 

that his expertise and market access could generate revenue for Braintech. According to Shafi, 

Weidinger was, therefore, reckless, and Defendants are liable for fraud, securities fraud, and 

conversion. This illogical argument cannot serve to defeat summary judgment for Defendants. 

SHAFI’S RESPONSE BRIEF MISREPRESENTS THE RECORD

 Fed.R.Civ.P. 56 prohibits Shafi from merely relying on his pleadings and requires him--

by affidavit or as otherwise provided in the rule--to set out specific facts showing a genuine issue 

for trial. Nevertheless, Shafi refers to allegations in his second amended counterclaim as the 

main evidence for his tort claims. According to Shafi, his contract and tort claims rest solely 

upon the alleged non-performance of contractual obligations. It is plainly evident, however, that 

Shafi has not produced evidence of non-performance.

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 As noted above, most of Shafi’s assertions contain no citation to admissible evidence in 

this case. However, even when Shafi does cite to the record, it is often a misrepresentation of the 

record or an outright fabrication of the record. For example: 

1. Shafi Assertion: Immediately following the closing, every single material promise 

was breached. False

Actual Record: After closing, Shafi immediately received a $15,000 signing bonus 

which was wired to his personal account. (Ex.KK) Shafi also admitted that he 

received 3 million shares of Braintech stock. Thereafter, Shafi received the entirety of 

his salary while he was employed at Braintech. Shafi has offered only vague 

references to broken promises, but he has offered no factual evidence to support. 

2. Shafi Assertion: Shafi never had a Braintech email address or access to Braintech 

servers. False

Actual Record: Shafi received a Braintech email address before the effective date of 

his employment and was given access to Braintech’s hosted exchange to view the 

emails. (Ex.LL; Weidinger 8/15/08 email) 

3. Shafi Assertion: Weidinger and Braintech failed to provide Shafi with a company 

credit card as required by his Employment Agreement. False

Actual Record: Shafi used Rick Weidinger’s company credit card until his company 

card was processed. (Ex.MM) Thereafter, Shafi was provided with and used his 

company credit card for expenses. (Ex.NN) 

4. Shafi Assertion: Braintech at no time provided for health insurance for Shafi or his 

family as required by the Employment Agreement. False

Actual Record: The Employment Agreement required Braintech to pay for thirdparty family health insurance utilized by Shafi until he became eligible for 

Braintech’s group policy. (Ex.OO; EA p.3,¶9(c)(i)) Shafi selected the insurance plan, 

submitted invoices for insurance premiums he received from BCBS, and 

acknowledged that they were paid by Braintech. (Ex.PP; p.3) There was an issue with 

BCBS processing Braintech’s November payment, but Shafi was told to use his 

company credit card for any payments if it was necessary. (Ex.PP; pp.1-2) The only

issue regarding health insurance was Shafi’s request for payment for a medical test 

that was not covered by the insurance plan that Shafi selected. (Ex.QQ) There was no 

obligation for Braintech to pay for medical expenses that were not covered by the 

insurance policy selected by Shafi. 

 

5. Shafi Assertion: Weidinger and Braintech failed to hire appropriate staff. False

Actual Record: It was Shafi’s responsibility to hire, manage, and direct employees to 

further the objectives set forth in the Employment Agreement. (Ex.OO; EA, ¶4(e)) 

After closing, Weidinger immediately met with individuals Shafi proposed to hire. 

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(Ex.RR) Weidinger repeatedly asked Shafi to prepare offer letters to potential 

employees. Shafi did not prepare an offer letter for Donna Burr until 9/10/08, and 

Weidinger immediately approved Burr’s hiring. (Ex.SS) Shafi reported to Weidinger 

that the hiring of others was underway and that Pete Manias was doing an excellent 

job. (Ex.TT, p.1; 9/13/08 email) As of 9/29/08, Shafi indicated that he would forward 

offer letters for other staff. (Ex.TT; p.2) Hiring of salespersons was delayed because 

Shafi had not developed a compensation and incentive plan that could be offered to 

sales support personnel. (Ex.UU) 

6. Shafi Assertion: Weidinger and Braintech failed to open a Michigan based office. 

False

Actual Record: Immediately upon closing, Weidinger began looking at selected sites 

for office space. Shafi demanded an office no further east than midpoint of 

Farmington Hills and Southfield. (Ex.VV) Shafi liked the space selected by 

Weidinger, but acknowledged that the lessor was slow in committing to get the place 

built out to requirements. (Ex.VV, p.3) 

7. Shafi Assertion: Weidinger and Braintech failed to reimburse the most basic 

business expenses incurred by Shafi. False

Actual Record: Braintech reimbursed Shafi for every single business expense which 

was preapproved as required by the Employment Agreement. In addition, Braintech 

reimbursed Shafi for all of his business expenses - even if he failed to get the required 

approval. (Ex.NN) Shafi has not produced as evidence in this case any business 

expense invoice which was not paid by Braintech. 

8. Shafi Assertion: Weidinger and Braintech failed to acquire robots in order to run 

demonstrations for customers. False

Actual Record: Shafi has produced no evidence of Braintech’s inactivity with 

respect to robots. In fact, Braintech was doing everything it could to get Shafi to 

provide information about his Reliabot software and acquire robots so that the 

software could be analyzed. Weidinger and Braintech scientists continuously asked 

Shafi about the progress of supplying them with the necessary hardware and software. 

(Ex.WW; p.1) Finally, Shafi confessed that he could not deliver the basic Reliabot 

software as promised in the SPA. (Ex.WW, pp.2-3) Shafi had not arranged for the 

acquisition or use of any robots and admitted that he “forgot” that he had a KUKA 

robot that could be used. (Ex.XX; Shafi 8/29/08 email) Weidinger responded 

immediately and authorized Shafi to repair the existing robot and acquire a new one 

for the Detroit office. (Ex.XX, p.2) A month after closing Shafi still had not delivered 

the Reliabot hardware and software, and Weidinger made clear that he needed to do 

so. (Ex.WW; pp.6-8) Shafi did not deliver the products until 9/17/08, and even then, 

items were missing which his wife had to retrieve from her basement. (Ex.WW; p.9) 

9. Shafi Assertion: Weidinger and Braintech failed to pay “Braintech assumed debt” to 

Shafi Inc. creditors almost immediately following the transaction as required by the 

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SPA. False

Actual Record: Shafi has not offered any documentary evidence to substantiate this 

allegation. Moreover, the actual record demonstrates that Braintech made payments in 

accordance with the debt schedule until it was financially unable to do so as a result 

of Shafi’s failure to generate revenue. (Ex.YY) Under the SPA, Braintech was 

permitted to negotiate the payment of certain debts which it was attempting to do. 

 It is plainly evident that the assertions relied upon by Shafi for his breach of employment 

contract and his tort claims are not supported by admissible evidence in the record. 

ARGUMENT

 Shafi’s Response Brief does not establish a genuine issue as to any material fact on any 

of his claims. 

I. SHAFI IS NOT ENTITLED TO SEVERANCE PAY FROM BRAINTECH.

 Shafi’s entitlement to severance pay is strictly based on the express language of the 

Employment Agreement. Shafi’s efforts to re-write the agreement must be rejected. 

A. The Record Evidence Demonstrates That Braintech Terminated Shafi’s 

Employment As Defined By The Employment Agreement. 

 Shafi’s assertion that Braintech never actually terminated his employment or provided the 

requisite notice of same directly contradicts Shafi’s own deposition testimony. Shafi affirmatively 

stated in his deposition: “I was terminated from Braintech without cause.”; “...I believe that my 

employment was terminated without cause...” (Ex.ZZ; Shafi at 26, 508)1

 Even if those admissions did not exist, a review of the record makes clear that Braintech 

properly terminated Shafi’s employment in conformity with the terms of the Employment 

Agreement. Paragraph 12 of the contract expressly defines the word termination: “(t)ermination 

 

1

 Consistent with his admissions, Shafi testified that the termination released him from his 

noncompetition agreement with Braintech (Ex.AAA) and allowed him to start a new company in 

March 2009 (Advenovation) which competed with Braintech. (Ex.ZZ; Shafi at 26-27) 

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shall mean the cessation of EXECUTIVE employment by Braintech ... which is not 

promptly...followed by re-employment of the EXECUTIVE by BRAINTECH....” (Ex.OO; EA, 

¶12) Although the word “cessation” is not defined in the Employment Agreement, MerriamWebster’s Collegiate Dictionary defines “cessation” as a “temporary or final ceasing (as of 

action): Stop.” Merriam-Webster’s Collegiate Dictionary, 203 (Eleventh Edition, 2003)2 

 Shafi’s “employment” is defined in the Employment Agreement.3 Shafi’s employment 

was terminated when Braintech ceased paying him and instructed him to discontinue performing 

his job duties. Shafi admitted that the November 19, 2008 letter from Rick Weidinger was his 

“termination letter.” (Ex.ZZ; Shafi at 304-305)4

 

B. Shafi Has Produced No Admissible Evidence To Challenge Braintech’s 

Showing That He Was Terminated For Good Cause. 

 To rebut Braintech’s evidence that it had good cause to terminate his employment, Shafi 

makes many accusations about Braintech’s alleged nonperformance under the Employment 

Agreement. Contrary to Shafi’s unsubstantiated assertions, Braintech performed under the 

 

2

 Under well-settled case law, Delaware courts look to dictionaries for assistance in determining 

the plain meaning of terms which are not defined in a contract. Lorillard Tobacco Company v. 

American Legacy Foundation, 903 A.2d 728 (De;. Supr., 2006). 

3

“BRAINTECH, as of August 16, 2008, hereby employs EXECUTIVE to perform the duties 

and render services customarily required for the position hereinafter set forth, and EXECUTIVE 

hereby accepts said employment and agrees faithfully to perform said duties and render said 

services, subject to the terms and conditions of this Agreement.” (Ex.OO; EA, ¶1) 

4

 As set forth in Defendants’ initial brief, the November 19 letter memorialized a meeting with 

Shafi in which he was told that the company intended to rescind the transaction because of his 

failure to perform his job duties and sought his concurrence in the rescission. Braintech gave 

Shafi several days to consider the proposal and provided notice that it had ample grounds to 

terminate his employment for good cause and would not accept any further performance from 

him under the agreement. (Ex. Z to MSJ) When Shafi refused to discuss rescission with 

Braintech and started deleting emails, he was informed by Jeff Milton on November 24 that his 

pay and benefits would cease. (Ex. BB to MSJ) 

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employment contract by paying Shafi his signing bonus and his salary, paying for his insurance 

premiums, providing him a credit card, and reimbursing his expenses. Shafi has offered no 

evidence contradicting the documents which show Braintech’s performance.5

C. Shafi’s Failure To Execute a Release As Required By the Employment 

Agreement Precludes His Claim for Severance Benefits. 

 Even if the Court were to find that there is a genuine issue of fact whether Braintech had 

good cause to terminate Shafi, Braintech is still entitled to summary judgment on Counts I and II 

of the second amended counterclaim because Paragraph 12(g)(ii) unambiguously required Shafi 

to execute a full release of claims as a prerequisite to receiving the severance payment: 

....The EXECUTIVE agrees that after the Termination Date, but prior to the 

payment of the severance pay and any outstanding bonus monies called for 

herein, EXECUTIVE shall execute a release, in the form of a severance 

agreement, of any and all claims he may have against the Company and its 

officers, employees, directors, parents and affiliates. EXECUTIVE 

understands and agrees that the payment of the severance pay and bonus 

called for by this paragraph are contingent on his execution of the previously 

described release of claims. (Ex.OO; EA, ¶12(g)(ii)) 

There is no evidence whatsoever that Shafi executed a release of claims as required by the 

Employment Agreement. Shafi’s failure to execute a release and his filing of tort claims against 

Braintech and Weidinger preclude any possible right to a severance payment. On this basis 

alone, Braintech is entitled to summary judgment on Counts I and II. 

 

5 Although Shafi’s termination was predicated on good cause regardless of the revenue issue, 

Shafi inaccurately asserts that the contract contains no requirement that he generate revenue as 

part of his job duties. To the contrary, the Agreement states on its face that “the business 

objectives for BRAINTECH include...revenue generation,” and that “...in order to achieve the 

business objectives BRAINTECH wishes to engage EXECUTIVE to serve as Chief Operating 

Officer of Braintech ... on the terms and conditions set forth in this Agreement.” (Ex.OO; ¶A) 

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II. SHAFI HAS FAILED TO PRODUCE FACTUAL EVIDENCE TO 

SUPPORT A VIOLATION OF SECTION 10(b) OF THE SECURITIES 

AND EXCHANGE ACT, THE MICHIGAN UNIFORM SECURITIES 

ACT OR COMMON LAW FRAUD. 

 In response to a properly supported motion for summary judgment, plaintiff cannot rest 

on his pleadings, the “response must . . . set out specific facts showing a genuine issue for trial.” 

Fed.R.Civ.P. 56(e)(2). The facts must be admissible into evidence. Rule 56(e)(1). Shafi has 

failed to carry this burden. For example, the following “fact” allegedly establishing Weidinger’s 

scienter is included on page 28 of Shafi’s Response: “Without any understanding of what it takes 

to sell vision software solutions in the field of robotic vision systems, Weidinger lacked the 

ability to understand the promises he was making were material and needed to be honored.” No 

record citation is included for support. Shafi repeatedly relies on this type of conclusory assertion 

in attempting to satisfy the requirement of scienter.

6

 This is legally inadequate to oppose 

summary judgment under Fed.R.Civ.P. 56(e)(2). 

The Access and Acceleration Agreement Contained Promises by Shafi – Not Defendants

 Much of Shafi’s alleged fraud revolves around Braintech and Weidinger’s intent not to 

honor the A&A agreement. Response at 28-31. However, Shafi and his companies (“Sellers” in 

the Share Purchase Agreement dated August 12, 2008) were the only parties who represented 

and warranted the truthfulness or accuracy of the A&A. See Ex. A to MSJ; SPA §3.26 (Sellers 

 

6 Other such unsupported conclusions – which are not inferential from any facts in evidence -- 

are located on pages 33 (“Weidinger’s personal investment would be that much further diluted”); 

(“Weidinger had no intention of subjecting Braintech to the cash drain that would have required 

the infrastructure support for Shafi’s sales efforts”); page 34 (“Weidinger’s commercialization 

plan was to leverage Shafi for as long as he could in the desperate and reckless hope that revenue 

would materialize”); page 35 (“If the plan did not work, they could simply walk away from $2.9 

million worth of financial obligations to Shafi . . . [t]his is exactly what they did.”). These 

conclusions are no substitute for evidence concerning Defendants’ state of mind. 

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Representations and Warranties) “Attached hereto are true and complete copies of the Market 

Access Schedule . . . each of which is current.” Even Shafi admits in his Response that he was 

the promisor under the A&A – not Weidinger or Braintech. See Response at 28. Thus, any 

alleged failure to honor it cannot form the basis for a fraud, let alone a claim of securities fraud. 

The SPA Was Fully Performed By Defendants

 Apart from the A&A agreement, the SPA cannot be the genesis of any of Shafi’s claims 

because Braintech made no promises therein that were not fully performed.7 Braintech, as buyer 

in the transaction, made only the most basic representations and warranties, namely that: (1) It 

was in good corporate standing; (2) had authority to execute the agreement; (3) was acquiring the 

Shares of Shafi Inc. for investment; (4) did not pay finder’s fees; (5) filed accurate SEC reporting 

documents; and (6) provided evidence “to sellers reasonable satisfaction” of its financial 

resources. 

 Moreover, Shafi received at closing the consideration set forth in SPA § 2.2(a) – 3 

million shares of Buyer’s common stock. (Ex.ZZ; Shafi at 66:5-12) Shafi has no facts to the 

contrary. In fact, Shafi admitted at deposition that he was not prepared to offer any evidence 

regarding the falsity of any of Braintech’s warranties. Mr Shafi also disclaimed any knowledge 

of any false or misleading statements in any of Braintech’s SEC forms and filings. (Ex.ZZ; Shafi 

at 78-86) Ironically, the “false statements” Mr. Shafi relies upon are the very transactions which 

 

7 Shafi’s reliance on “promises” such as those to open an office in Michigan and hire certain 

personnel were belied by the language of the SPA, which specifically addressed those issues. 

The SPA made no promises to Shafi in that regard. See § 6.5 “The parties agree to cooperate to 

cause SII to have a market presence in Houghton Michigan by July 2009” see also SPA § 6.7 

(“Buyer will consider the hiring of a business development employee, administrative assistant to 

seller, and director of government and international programs of SII recommended by Seller, 

subject to final approval by Buyer’s CEO.”) Shafi admits that these hires were considered. 

(Ex.ZZ; Shafi at 97:12 to 98:16. (“It does say Braintech will consider, Braintech did consider.”) 

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have been described in great detail in Braintech’s SEC filings – which are not contended by 

Shafi to be false. 

Mr. Weidinger Made No Promises To Pay Shafi’s Debts

 It is undisputed that Braintech already was operating under a “going concern” letter from 

its auditors at the time of closing. Nonetheless, Shafi agreed that he was presented with 

satisfactory evidence of Braintech’s ability to take on more debt.8 See Ex. A to MSJ; SPA §4.6. 

However, Mr. Shafi at deposition admitted that Braintech was likely unable to pay its debts 

because it did not have any revenue. (Ex.ZZ; Shafi at 362:14-17) There is a total absence of any 

evidence in this case suggesting SI revenue9

 or Braintech revenue was diverted to any other 

person or source that otherwise would have been used to pay the debts contemplated by §6.3 

(“Buyer covenants and agrees with Seller that from and after closing, Buyer will cause SI to 

satisfy the Braintech Accepted Debt.”)10 For his part, it is undisputed that Mr. Weidinger never 

sold any Braintech shares which he owned. Moreover, SEC documents including Braintech’s 

Form 10-Q dated November 16, 2009 disclose that Mr. Weidinger elected to forego his salary for 

a period of time before Braintech ceased operating. 

 

 

8 Mr. Shafi admitted he had no idea how Braintech would be able to pay SI’s debt. (Ex.ZZ; Shafi 

at 357:14-17 (Q. “Did you have an understanding of how Braintech was going to come up 

with...$900,000 to pay off these debts. A. That was not my problem. That was their problem.”). 

The notion that Braintech took on Shafi debts (including debts owed to customers) so it would 

bankrupt itself in exchange for the opportunity to solicit these creditors is implausible. 

9 It is undisputed that SI had no revenue after the transaction. 

10 It is undisputed from Braintech’s 10-Q dated November 16, 2009 that Braintech caused SI to 

pay down over $100,000 of the Accepted Braintech Debt. See Braintech’s 10-Q (“Through 

September 30, 2009, Braintech, Inc. had advanced additional funds to Shafi thereby allowing SI 

to repay $103,882 of the $900,000 in current liabilities.”) 

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 Notwithstanding Braintech’s insolvency, Mr. Weidinger never personally agreed to pay 

these SI debts that allegedly reverted to Mr. Shafi. Under Michigan’s Statute of Frauds, Mr. 

Weidinger (the party to be charged) would have to agree in writing to pay Mr. Shafi’s debts. 

MCL 566.132(1)(b). (“[a] special promise to answer for the debt, default, or misdoings of 

another person” is void unless the agreement, contract, or promise is in writing and signed with 

an authorized signature by the party to be charged with the agreement.). No such writing is in 

evidence and for that additional reason Mr. Weidinger cannot be held legally responsible for the 

payment of these debts as damages or otherwise. 

Failure to Attempt Proper Section 144 Sales Bars the Securities Fraud Claim.

 The presence of restrictive stock legends on Mr. Shafi’s stock was no surprise – it was 

part of the bargained for consideration in this transaction. See SPA §3.28(e). Thus, that alone 

could not form the basis of a securities fraud claim. Shafi’s newest argument is that he had no 

obligation to attempt to sell any common shares he wished to sell in conformity with Rule 144’s 

safe harbor provision and that he was not obliged to abide by securities laws and should have 

been able to sell all 3 million shares he had at once in February 2009.11 On this score, he is 

legally incorrect: The SPA says exactly the opposite of this: “Buyer shall prepare and file a 

registration statement covering the resale of any and all shares of Buyer common stock received 

by Seller as purchase price that cannot be sold pursuant to Rule 144 under the Securities Act... .” 

(emphasis added). Plaintiff admits that he failed to take even the first step to invoke the Rule 144 

process, which starts with him requesting an opinion letter from Braintech. See, Ex.ZZ, Shafi at 

 

11 At deposition, Mr. Shafi relied exclusively on inadmissible hearsay regarding what he heard 

about the prospect of selling his shares – those statements are not sufficient under Rule 56 and 

cannot support his Opposition or get him a trial in this case. 

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454:6-10: “Q. Did you ever contact Braintech to enlist their help in registering these shares? A. 

I did not contact Braintech.” This Court would not be the first to dismiss securities claims on 

this basis. See Sherwood Brands, Inc. v. Levie, 2006 WL 827371 (D. Md) at *19 (dismissing 

10(b)(5) claim and reasoning that “There was no evidence that Eleanor Levie ever requested for 

Sherwood to issue such a written statement in relation to a potential Rule 144 sale.”) (Ex.JJ) 

 Moreover, on page 36 of his Response, Shafi takes issue with how much stock he might 

be able to sell at one time under Rule 144. However, any such volume limitations merely track 

the trading restrictions which Mr. Shafi agreed to and was made aware of in the SPA which 

affected sales of his Braintech common stock under securities laws, penny stock sales, and as an 

insider. See Ex.A; SPA §6.12.3. Mr. Shafi was bound by these rules before he ever received any 

stock. While Mr. Shafi might not be sufficiently educated on the issue, as an insider he would 

certainly be forbidden to sell his shares at once, or during blackout periods, and would have been 

subject to other trading restrictions on his stock. 

 Shafi was free to begin selling shares under Rule 144 on or after February 12, 2009. 

Shafi is incorrect that Rule 144 imposes a one-year waiting period on him. Because Braintech 

was a reporting company, the holding period under Section 144 expired after 6 months. See 17 

CFR 230.144. (http://www.sec.gov/rules/final/2007/33-8869.pdf). The SEC final rule 

promulgated in December 2007 reducing the holding period to six months was accompanied by 

this chart: 

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Affiliate or 

Person Selling on Behalf 

of an Affiliate 

Non-Affiliate (and Has Not Been 

an Affiliate During the Prior Three 

Months) 

Restricted 

Securities 

of Reporting 

Issuers 

During six-month holding period -

no resales under Rule 144 permitted. 

After six-month holding period -

may resell in accordance with all 

Rule 144 requirements including: 

• Current public information, 

• Volume limitations, 

• Manner of sale requirements 

for equity securities, and 

• Filing of Form 144. 

During six-month holding period -

no resales under Rule 144 permitted. 

After six-month holding period but 

before one year – unlimited public 

resales under Rule 144 except that 

the current public information 

requirement still applies. 

After one-year holding period -

unlimited public resales under Rule 

144; need not comply with any other 

Rule 144 requirement. 

Restricted 

Securities of 

NonReporting 

Issuers 

During one-year holding period –

no resales under Rule 144 permitted. 

After six-month holding period -

may resell in accordance with all 

Rule 144 requirements including: 

• Current public information, 

• Volume limitations, 

• Manner of sale requirements 

for equity securities, and 

• Filing of Form 144. 

During six-month holding period -

no resales under Rule 144 permitted. 

After one-year holding period -

unlimited public resales under Rule 

144; need not comply with any other 

Rule 144 requirement. 

 Accordingly, Shafi’s position is not supported by law or evidence. 

Shafi Also Failed To Meet His Burden In His Common Law Fraud 

And Michigan Statutory Securities Law Claims 

 Shafi is required to produce clear and convincing evidence in support of his claim of 

common law fraud. As noted earlier, he has not provided any evidence, much less clear and 

convincing evidence, that the Defendants did not intend to honor the Share Purchase Agreement. 

Therefore, his common law fraud claim and state securities claims must be dismissed. 

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III. SHAFI HAS FAILED TO PRODUCE FACTUAL EVIDENCE THAT 

DEFENDANTS WRONGFULLY CONVERTED CORPORATE 

PROPERTY TO THEIR OWN USE. 

 In Point 6 of his Response Brief, Shafi fails to cite to a single evidentiary fact in the 

record before the Court. In addition to offering no admissible evidence in support of his 

conversion claim, Shafi also elected not to address the legal arguments made by Defendants. He 

simply relies upon conjecture, opinion, and conclusory arguments.12

 First, Shafi does not refute that Weidinger personally did not receive anything from 

Shafi, SI, SII, or from the Company Sale Agreements; thus, Weidinger is entitled to judgment on 

the conversion and unjust enrichment claims. Second, Shafi does not even address dispositive 

legal authority offered by Defendants which holds that a party cannot convert his or her own 

property. Foremost Ins., Co., v. Allstate Ins., Co., 439 Mich. 378, 391, 486 N.W.2d 600(1992) 

aff'd, 439 Mich. 378, 486 N.W.2d 600 (1992). Braintech and Shafi entered into a Share Purchase 

Agreement which extended Braintech certain rights to Shafi I and II assets. Shafi has not 

presented admissible evidence that Defendants wrongfully exerted domain over property in 

denial of or inconsistent with the owner’s rights. Murry Hill Publications Inc. v. ABC 

Communications, Inc., 264 F.3d 622, 636 (6th Cir. 2001).13

IV. SHAFI’S UNJUST ENRICHMENT CLAIM IS BARRED BY THE 

SHARE PURCHASE AGREEMENT. 

 Shafi concedes that the existence of an express contract bars a quantum meruit claim. 

Morris Pumps v. Centerline Piping, Inc., 273 Mich.App. 187, 199, 729 N.W.2d 898 (2006). 

 

12 That Shafi misunderstands his burden under Rule 56 is evident by his conclusion on page 43 

that he has “sufficiently pleaded a claim for conversion.” 

13 Even if Shafi could offer proof that Braintech was not entitled to the property, it is undisputed 

that Braintech offered to return the property, but Shafi refused. 

Case 2:09-cv-10454-VAR-VMM Document 81 Filed 01/06/11 Page 16 of 18
14 

Belle Isle Grill Corp. v. City of Detroit, 256 Mich.App. 463, 478, 666 N.W.2d 271 (2003). 

However, in Point 6, Shafi summarily concludes that “there is no valid enforceable contract in 

this case” and that “the law will imply a contract in order to present (sic) unjust enrichment.” 

Shafi offers no legal authority to support the proposition. 

 Moreover, even if such authority exists, Shafi has not filed a claim for a declaratory 

ruling that there is no valid, enforceable Share Purchase Agreement, and there will be no such 

ruling in this case. The SPA bars a claim for unjust enrichment. 

 Finally, Shafi has not presented factual evidence that Braintech benefitted from the 

alleged wrongdoing. Morris Pumps v. Centerline Piping, Inc., 273 Mich.App. 187, 195, 729 

N.W.2d 898 (Mich.Ct.App.2006). Of course, Shafi can offer no such evidence because it would 

contradict his sworn deposition testimony in which he admitted he had no such evidence. 

(Ex.ZZ; Shafi at 142-143).

 Accordingly, Braintech and Weidinger are entitled to summary judgment on all claims 

and judgment should be entered in their favor dismissing all of Shafi’s Counterclaims and third 

party claims against Braintech, Inc. and Mr. Weidinger, with prejudice. 

Respectfully submitted, 

NEMETH BURWELL, P.C. 

By: s/Susan D. Koval 

 Anne Widlak (P35763) 

 Susan D. Koval (P59297) 

 Attorneys for Braintech, Inc. 

 200 Talon Centre Drive, Suite 200 

 Detroit, Michigan 48207 

 (313) 567-5921 

 awidlak@nemethburwell.com 

 skoval@nemethburwell.com 

PILLSBURY WINTHROP SHAW PITTMAN 

LLP 

By: s/with consent of Geoffrey J. Greeves 

 Geoffrey J. Greeves 

 Attorney for Frederick Weidinger 

 2300 N Street, N.W. 

 Washington, DC 20037-1122 

 (202) 663-9228 

 geoffrey.greeves@pillsburylaw.com 

January 6, 2011 

Case 2:09-cv-10454-VAR-VMM Document 81 Filed 01/06/11 Page 17 of 18
CERTIFICATE OF SERVICE 

I hereby certify that on January 6, 2011, I electronically filed the foregoing paper 

(Braintech’s and Weidinger’s Joint Reply Brief in Support of Motion for Summary Judgment)

with the Clerk of the Court using the ECF system, which will send notification of such filing and 

service of such documents to all parties via their counsel of record at the e-mail addresses 

disclosed on the Notice of Electronic Filing receipt. 

s/Susan D. Koval

Susan D. Koval (P59297) 

NEMETH BURWELL, PC 

Attorney for Braintech, Inc. 

200 Talon Centre Drive, Suite 200 

Detroit, Michigan 48207 

(313) 567-5921 

skoval@nemethburwell.com 

P59297 

Case 2:09-cv-10454-VAR-VMM Document 81 Filed 01/06/11 Page 18 of 18