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Robert B. Zelms (State Bar No. 18956)

 rbz@manningllp.com

Anthony S. Vitagliano (State Bar No. 009331)

 asv@manningllp.com

MANNING & KASS

ELLROD, RAMIREZ, TRESTER LLP

6909 East Greenway Parkway, Suite 200

Scottsdale, Arizona 85254

Telephone: (480) 477-5269

Facsimile: (480) 477-5268

Attorneys for Defendant, Clear Energy 

Systems, Inc.

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Axxess Energy LLC, a Delaware limited 

liability company,

Plaintiff,

v.

Clear Energy Systems, Inc., a Nevada 

corporation,

Defendant.

Case No. 2:15-cv-01831-MHB

DEFENDANT CLEAR ENERGY 

SYSTEMS, INC.’S ANSWER

Defendant, Clear Energy Systems, Inc. (“Defendant”), by and through undersigned 

counsel, hereby responds to Plaintiff's Complaint as follows:

I. GENERAL ALLEGATIONS

A. Parties

1. Answering paragraph 1, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

2. Answering paragraph 2, Defendant admits the allegations contained in said 

paragraph.

B. Jurisdiction and Venue

3. Answering paragraph 3, Defendant admits only that this Court has jurisdiction 

over this matter.

Case 2:15-cv-01831-DJH Document 24 Filed 11/19/15 Page 1 of 7
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4. Answering paragraph 4, Defendant admits only that this Court has jurisdiction 

over this matter.

C. Factual Background

5. Answering paragraph 5, Defendant admits only that Defendant was incorporated 

in May, 2002, and designs and develops a lightweight power generation system. 

6. Answering paragraph 6, Defendant admits only that Defendant has raised 

financing and has incurred operating expenses including, but not limited to, expenses incurred 

in engine development. 

7. Answering paragraph 7, said paragraph references a document that speaks for 

itself.

8. Answering paragraph 8, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

9. Answering paragraph 9, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

10. Answering paragraph 10, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

11. Answering paragraph 11, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

12. Answering paragraph 12, Defendant denies the allegations contained in said 

paragraph.

13. Answering paragraph 13, Defendant admits only that Mr. Coors had some 

contact with Mr. Carmen. Defendant is without knowledge or information sufficient to form a 

belief as to the truth of the remaining allegations contained in said paragraph and therefore 

denies such allegations. 

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14. Answering paragraph 14, Defendant admits only that Mr. Coors had some 

contact with Mr. Carmen. Defendant is without knowledge or information sufficient to form a 

belief as to the truth of the remaining allegations contained in said paragraph and therefore 

denies such allegations.

15. Answering paragraph 15, Defendant admits only that there was a visit to

Defendant's offices sometime around November, 2012. Defendant denies the remaining 

allegations contained in said paragraph.

16. Answering paragraph 16, Defendant denies the allegations contained in said 

paragraph.

17. Answering paragraph 17, said paragraph's allegations state a legal conclusion 

and therefore Defendant denies such allegations and said legal conclusion.

18. Answering paragraph 18, Defendant admits only that in early 2013 Defendant 

incurred setbacks in its engine development program. Defendant is without knowledge or 

information sufficient to form a belief as to the truth of the remaining allegations contained in 

said paragraph and therefore denies such allegations. 

19. Answering paragraph 19, Defendant denies the allegations contained in said 

paragraph.

20. Answering paragraph 20, Defendant denies the allegations contained in said 

paragraph.

21. Answering paragraph 21, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

22. Answering paragraph 22, Defendant admits only that Mr. Carmen was replaced 

as its CEO sometime around January 2013. 

23. Answering paragraph 23, Defendant admits only that at some point Defendant 

received a letter making certain allegations and seeking a return of its investment. Defendant 

denies the remaining allegations contained in said paragraph. 

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24. Answering paragraph 23, Defendant admits only that it did not rescind the Stock 

Purchase Agreement and did not refund amounts paid thereunder.

25. Answering paragraph 25, Defendant denies the allegations contained in said 

paragraph.

26. Answering paragraph 26, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

27. Answering paragraph 27, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

28. Answering paragraph 28, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

D. CES’s Bankruptcy and Relief from the Automatic Stay

29. Answering paragraph 29, Defendant admits the allegations contained in said 

paragraph.

30. Answering paragraph 30, said paragraph references a document that speaks for 

itself.

31. Answering paragraph 31, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

II. CLAIM FOR RELIEF

(Negligent Misrepresentation)

32. Answering paragraph 32, Defendant restates and incorporates by reference its 

Answers to all previous paragraphs of Plaintiff’s Complaint as set forth herein.

33. Answering paragraph 33, Defendant denies the allegations contained in said 

paragraph.

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34. Answering paragraph 34, Defendant denies the allegations contained in said 

paragraph.

35. Answering paragraph 35, Defendant denies the allegations contained in said 

paragraph.

36. Answering paragraph 36, Defendant denies the allegations contained in said 

paragraph.

37. Answering paragraph 37, Defendant denies the allegations contained in said 

paragraph.

38. Answering paragraph 38, Defendant denies the allegations contained in said 

paragraph.

39. Answering paragraph 39, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

40. Answering paragraph 40, Defendant is without knowledge or information 

sufficient to form a belief as to the truth of the allegations and therefore denies the allegations 

contained in said paragraph.

41. Defendant denies the allegations contained in said paragraph.

AFFIRMATIVE DEFENSES

Defendant states for its Affirmative Defenses and asserts as follows:

1. Defendant denies any allegations not specifically admitted herein.

2. Defendant affirmatively alleges Plaintiff cannot establish the elements of its 

claims.

3. Defendant affirmatively alleges Plaintiff was not damaged by the alleged 

conduct of Defendant.

4. Defendant affirmatively alleges that if Plaintiff was damaged, it failed to 

mitigate those damages.

5. Defendant affirmatively alleges that Plaintiff's injuries were caused in whole or 

in part by Plaintiff's own fault or the fault of its authorized representatives. 

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6. Defendant affirmatively alleges that Plaintiff's injuries may have been caused in 

whole or in part by the fault of a third entity and/or person or third entities and/or persons, 

whether a party to this action or not. 

7. Defendant affirmatively alleges that, pursuant to A.R.S. § 12-2501, et seq., 

Defendants are responsible, if at all, to Plaintiff only for its proportionate degree of fault, 

which it specifically denies, and is entitled to have the trier of fact determine at one time the 

relative degrees of fault for all persons and/or entities whether named as defendants herein or 

not, and including Plaintiff. 

8. Defendant affirmatively alleges that Plaintiff may lack standing for the claims 

asserted. 

9. Defendant affirmatively alleges that Plaintiff may have failed to name an 

indispensable party. 

10. Defendant affirmatively alleges that one or more of Plaintiff's claims may be 

barred by the applicable statute of limitations.

11. Defendant affirmatively allegesthat Plaintiff's claims are barred in whole and/or 

in part pursuant to one or more of the following doctrines: laches, set off, ripeness, release, 

waiver, accord and satisfaction, statute of frauds, unclean hands, mistake, failure to avoid 

damages, business judgment rule, economic loss rule, estoppels, res judicata, standing, lack of 

duty, and real party in interest. 

Defendant reserves the right to amend this Answer at a later time to assert any 

additional matter constituting an avoidance or affirmative defense, including without 

limitation, those matters set forth in Rule 8(c) of the Federal Rules of Civil Procedure as 

discovery shows to be applicable. 

WHEREAS Defendant respectfully request that Judgment be entered in its favor on 

Plaintiff's Complaint as follows: 

a. That Plaintiff's Complaint be dismissed with prejudice and Plaintiff take nothing 

thereby; 

b. That Defendant have judgment on Plaintiff's Complaint;

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c. That Defendant be awarded its costs and attorneys’ fees incurred, expended and 

accruing in connection with the defense hereof, as allowed by law; and

d. For other and further relief as the Court deems just and proper.

DATED: November 19, 2015 MANNING & KASS

ELLROD, RAMIREZ, TRESTER LLP

By: s/Anthony S. Vitagliano

Robert B. Zelms

Anthony S. Vitagliano

Attorneys for Defendant, Clear Energy 

Systems, Inc.

CERTIFICATE OF SERVICE

I hereby certify that on November 19, 2015, I electronically transmitted the attached 

document to the Clerk’s Office using CM/ECF System for filing and transmittal of a Notice of 

Electronic Filing to the following registrants: 

Jeffrey S. Leonard

jeffrey.leonard@SacksTierney.com

James S. Samuelson

james.samuelson@sackstierney.com

Sacks Tierney, P.A.

4250 N. Drinkwater Blvd., Fourth Floor

Scottsdale, AZ 85251-3693

Attorneys for Plaintiff

A courtesy copy with a copy of the Notice of Electronic filing was also mailed to 

Honorable Michelle H. Burns on this same date at the following address:

Honorable Michelle H. Burns

Sandra Day O’Connor, U.S. Courthouse, Suite 323

401 W. Washington, SPC 12

Phoenix, AZ 85003

By: s/Kimberly Sheble 

Case 2:15-cv-01831-DJH Document 24 Filed 11/19/15 Page 7 of 7