IN THE UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS AUSTIN DIVISION FUNDSXPRESS FINANCIAL NETWORK, INC., Plaintiff, v. DIGITAL INSIGHT CORPORATION, JOHN DORMAN, VINCENT BRENNAN, RONALD GOFFMAN, ERIC EDWARDS, and STEPHEN CRAIN, Defendants. ANSWER AND AFFIRMATIVE DEFENSES OF DEFENDANTS ERIC EDWARDS AND VINCENT BRENNAN Defendants Eric Edwards ("Edwards") and Vincent Brennan ("Brennan"), (collectively "the Defendants") by and through their undersigned counsel, hereby set forth their Answer and Affirmative Defenses to the Plaintiff's Third Amended Complaint (the "Complaint"), as follows: ANSWER 1. Defendants admit the allegations of Paragraph 1. 2. Defendants admit the allegations of Paragraph 2. 3. Defendants admit the allegations of Paragraph 3. 4. Defendants admit that Brennan is a Senior Vice President of Sales of Digital. Defendants deny the remaining allegations of Paragraph 4. 5. Defendants admit the allegations of Paragraph 5. 6. Defendants admit the allegations of Paragraph 6. 7. Defendants admit the allegations of Paragraph 7. 8. Defendants admit that for now, this Court has subject matter jurisdiction over all of the causes of action asserted in Paragraph 8. 9. Defendants deny that a substantial part of the events and omissions giving rise to Plaintiff's claims occurred in this District, and Defendants deny that a substantial part of the property that is the subject of this action is situated in this District, as alleged in Paragraph 9. 10. Defendants deny the allegations of Paragraph 10. 11. Defendants deny the allegations of Paragraph 11. 12. Defendants deny the allegations of Paragraph 12. 13. Defendants deny the allegations of Paragraph 13. 14. Defendants admit that FundsXpress and Digital Insight Corporation (hereafter "Digital") compete in providing internet banking services. As to the remainder of the allegations of Paragraph 14, defendants are without sufficient knowledge or information upon which to form a belief. 15. Defendants deny the allegations of Paragraph 15. 16. Defendants admit that they, along with Gifford Dunn ("Dunn"), Ronald Goffman ("Goffman") and Stephen Crain ("Crain"), previously worked at John Harland & Company; that Brennan and Edwards joined Digital and that Goffman and Crain formerly worked for FundsXpress. Defendants deny the remaining allegations of Paragraph 16. 17. Defendants admit the Plaintiff FundsXpress has developed various products and services which it provides to financial institutions to allow their customers to have internet banking products and services and that FundsXpress customers utilize FundsXpress' ASP services to obtain those products and services. As to the remainder of the allegations of Paragraph 17, Defendants are without sufficient knowledge or information upon which to form a belief. 18.Defendants admit that the allegations of Paragraph 18 are generally true, however, Defendants are without sufficient knowledge or information regarding Plaintiff's capabilities to admit or deny the allegations set forth in Paragraph 18. 19. Defendants admit that FundsXpress offers its customers a portal product and that the portal product contains certain information about the financial institution as well as offering them access to other services. As to the remainder of the allegations of Paragraph 19, Defendants are without sufficient knowledge and information upon which to form a belief. 20. Defendants are without sufficient knowledge or information upon which to form a belief as to the allegations of Paragraph 20. 21. Defendants are without sufficient knowledge or information upon which to form a belief as to the allegations of Paragraph 21. 22. Defendants are without sufficient knowledge or information upon which to form a belief as to the allegations of Paragraph 22. 23. Defendants admit that Plaintiff maintains a database it calls "Goldmine" which contains certain information about financial institutions. As to the remainder of the allegations of Paragraph 23, Defendants are without sufficient knowledge or information upon which to form a belief. 24. Defendants admit that Plaintiff maintained a "Pricing Suite". Defendants deny that the "Pricing Suite" provides Plaintiff with "distinctive advantages over its competitors, including Digital Insight." Defendants are without sufficient knowledge or information upon which to form a belief as to the remaining allegations of Paragraph 24. 25. Defendants deny that the "Goldmine database, the Pricing Suite" and the unidentified "FundsXpress proprietary marketing and sales strategies" constitute trade secrets. Defendants are without sufficient knowledge or information upon which to form a belief as to the remaining allegations of Paragraph 25. 26. Defendants are without sufficient knowledge or information upon which to form a belief as to the allegations of Paragraph 26. 27. Defendants are without sufficient knowledge or information upon which to form a belief as to the allegations of Paragraph 27. 28. Defendants are without sufficient knowledge or information upon which to form a belief as to the allegations of Paragraph 28. 29. Defendants admit that Plaintiff hired Gifford Dunn, that at some point he was a senior employee in charge of sales and at certain times he probably had access to certain information of Plaintiff. As to the remainder of the allegations of Paragraph 29, Defendants are without sufficient knowledge or information upon which to form a belief. 30. Defendants admit that Dunn held a position of authority at Plaintiff and as such, at certain times would have probably had access to certain information and they admit that they believe that Dunn signed a nondisclosure agreement with Plaintiff. As to the remainder of the allegations of Paragraph 30, Defendants are without sufficient knowledge or information upon which to form belief. 31. Defendants admit that Crain was hired by Plaintiff and that he was in a sales position. As to the remaining allegations of Paragraph 31, the Defendants are without sufficient knowledge or information upon which to form a belief. 32. Defendants admit that Goffman was hired by Plaintiff as a sales executive responsible for the states of Michigan and Wisconsin, that he reported to Dunn and that he had access to certain information of Plaintiff while employed there. As to the remaining allegations of Paragraph 32, the Defendants are without sufficient knowledge or information upon which to form a belief. 33. Defendants believe that Dunn and Goffman signed some form of a nondisclosure agreement. As to the remaining allegations of Paragraph 33, the Defendants are without sufficient knowledge or information upon which to form a belief. 34. Defendants admit that Goffman was hired by Digital on or around June, 2001 and they believe that he signed a nondisclosure agreement. As to the remaining allegations of Paragraph 34, Defendants are without sufficient knowledge or information upon which to form a belief. 35. Defendants admit that Goffman had a notebook computer, it contained certain information of Plaintiff and that Goffman provided Edwards with a document that purported to be a FundsXpress copy of Goffman's personal pipeline. Defendants deny the remaining allegations of Paragraph 35. 36. Defendants admit that Goffman was hired as a salesperson and that his job was to conduct telemarketing and sales via telephone for Digital. Defendants deny the remaining allegations of Paragraph 36. 37. Defendants neither admit nor deny the allegations of Paragraph 37, as they are without sufficient knowledge or information upon which to form a belief. Defendants further allege that the email which is being quoted is not a complete and thereby accurate version of what was communicated in that email. 38. Defendants admit the allegations of Paragraph 38, except that Defendants deny knowledge that "Dunn began working for Digital Insight... while still employed by FundsXpress, without telling FundsXpress he was now serving two masters." 39. Defendants neither admit nor deny the allegations of Paragraph 39, as they are without sufficient knowledge or information upon which to form a belief. 40. Defendants admit that Digital hired Dunn to market and sell products of Digital, some of which were directly competitive to Plaintiff's products and services. Defendants deny the remaining allegations of Paragraph 40. 41. Defendants deny the allegations of Paragraph 41. 42. Defendants neither admit nor deny the allegations of Paragraph 42, as they are without sufficient knowledge or information upon which to form a belief. 43. Defendant Edwards admits that on or about November 12, 2001, an email containing the message set forth in Paragraph 43 was sent by Dunn to Edwards. Defendants deny that Dunn "systematically spied" for Digital. Defendants are without sufficient knowledge or information upon which to form a belief as to the remaining allegations of Paragraph 43. 44. Defendant Edwards admits that on or about November 12, 2001, an email containing the message set forth in Paragraph 44 was sent by Edwards to Dunn. Defendants deny the remaining allegations of Paragraph 44. 45. Defendants neither admit nor deny the allegations of Paragraph 45, as they are without sufficient knowledge or information upon which to form a belief. 46. Defendant Edwards admits that on or about November 13, 2001, an email containing the message set forth in Paragraph 46 was sent by Edwards to Dunn and that Dunn replied. Defendants deny the remaining allegations of Paragraph 46. 47. Defendant Edwards admits that on or about December 3, 2001, an email and attachment containing the message set forth in Paragraph 47 was sent by Dunn to Edwards, and that an email containing the message set forth in that same Paragraph was sent by Edwards to Dunn. Defendants are without sufficient knowledge or information upon which to form a belief as to the remaining allegations of Paragraph 47. 48. Defendant Edwards admits that the email contained in Paragraph 48 was sent by him to Dorman, McDonnell and Walker. Defendants deny that that the email is a complete and accurate version of what was communicated. Defendants deny the remaining allegations in Paragraph 48. 49. Defendant Edwards admits that he requested a Digital employee to post certain FundsXpress information on the Digital companywide intranet. Defendants deny the remaining allegations of Paragraph 49. 50. Defendants admit that Digital had in its possession, the items listed in Paragraph 50 (a)-(j) and (n). Defendants deny that those items are trade secrets and that the attributes and functions of those items are correctly described in the Complaint. Defendants deny the remaining allegations of Paragraph SO. 51. Defendants deny the allegations of Paragraph 51, except to admit that Edwards assumed the title of Vice-President at Digital. 52. Defendants are without sufficient knowledge or information to admit or deny the allegations of Paragraph 52. 53. Defendants are without sufficient knowledge or information to admit or deny the allegations of Paragraph 53. 54. Defendants deny the allegations of Paragraph 54. 55. Defendants deny the allegations of Paragraph 55. 56. Defendants are without sufficient knowledge or information to admit or deny the allegations of Paragraph 56. 57. Defendant Brennan admits that he gave the approval alleged in Paragraph 57 in an effort to verify whether or not the source information was accurate. Defendants lack sufficient knowledge or information upon which to form a belief as to the remaining factual allegations of Paragraph 57, except to deny that any statements made as alleged in Paragraph 57 were false, or that they were intended to damage the Plaintiff. 58. Defendants admit that Dorman was quoted by a reporter in a trade newsletter and that they read the article. Defendants are without sufficient knowledge or information to admit or deny the remaining allegations of Paragraph 58. 59. Defendants deny the allegations of Paragraph 59. 60. Defendants are without sufficient knowledge or information to admit or deny what FundsXpress believes as alleged in Paragraph 60. 61. Defendants deny that Plaintiff directly lost contracts with financial institutions as a result of Defendants' activities as alleged in Paragraph 61. Defendants lack sufficient knowledge or information upon which to form a belief as to the truth or falsity of the remaining allegations of Paragraph 61. 62. Defendants deny the allegations of Paragraph 62. 63. Defendants deny the allegations of Paragraph 63, except that Defendants admit that it accurately quotes a portion of Comment F of Section 45 of the Restatement of Unfair Competition. 64. Defendants deny that any or all of those financial institutions were added as a result of any allegations contained in Plaintiff's Complaint, or the allegedly misappropriated information that Plaintiff complains of. Defendants neither admit nor deny the allegations of Paragraph 64, to the extent they are based upon calculations of value, or set forth damages as they lack sufficient knowledge or information upon which to form a belief. Defendants also deny the allegations of Paragraph 64 to the extent they call for a legal conclusion. 65. Defendants deny the allegations of Paragraph 65. 66. Defendants deny the allegations of Paragraph 66. 67. Defendants deny the allegations of Paragraph 67. 68. Defendants deny the allegations of Paragraph 68. 69. Defendants deny the allegations of Paragraph 69. 70. Defendants deny the allegations of Paragraph 70. 71. Defendants deny the allegations of Paragraph 71. 72. Defendants deny the allegations of Paragraph 72. 73. Defendants deny the allegations of Paragraph 73. 74. Defendants deny the allegations of Paragraph 74. 75. Defendants deny the allegations of Paragraph 75. 76. Defendants deny the allegations of Paragraph 76. 77. Defendants deny the allegations of Paragraph 77. 78. Defendants deny the allegations of Paragraph 78. 79. Defendants deny the allegations of Paragraph 79. 80. Defendants deny the allegations of Paragraph 80. 81. Defendants deny the allegations of Paragraph 81. 82. Defendants deny the allegations of Paragraph 82. 83. Defendants deny the allegations of Paragraph 83. 84. Defendants deny the allegations of Paragraph 84. 85. Defendants deny the allegations of Paragraph 85. 86. Defendants deny the allegations of Paragraph 86. 87. Defendants deny the allegations of Paragraph 87. 88. Defendants are without sufficient information or knowledge to form a belief as to the truth of the allegations of Paragraph 88. 89. Defendants are without sufficient information or knowledge to form a belief as to the truth of the allegations of Paragraph 89. 90. Defendants are without sufficient information or knowledge to form a belief as to the truth of the allegations of Paragraph 90. 91. Defendant Edwards admits that on or about December 3, 2001, Dunn distributed a copy of the so-called "Tutorial" to Edwards via email. Defendants deny the remaining allegations of Paragraph 91. 92. Defendants admit that on or about December 2001 and at times thereafter, Plaintiff's so-called "Pricing Suite", or portions of it, was posted on Digital's intranet website and that several of Digital's employees had access to such material. Defendants deny the remaining allegations of Paragraph 92. 93. Defendants deny that Plaintiff has been substantially damaged by the alleged infringement set forth in Paragraph 93. Defendants are without sufficient knowledge or information to admit or deny the remaining allegations of Paragraph 93. 94. Defendants admit that Digital requires its employees to sign nondisclosure agreements and believe that Plaintiff required some of its employees to sign nondisclosure agreements. Defendants are without sufficient knowledge or information to admit or deny the remaining allegations of Paragraph 94. 95. Defendants deny the allegations of Paragraph 95. 96. Defendants deny the allegations of Paragraph 96. 97. Defendants deny the allegations of Paragraph 97. 98. Defendants deny the allegations of Paragraph 98. 99. Defendants deny the allegations of Paragraph 99. 100. Defendants deny the allegations of Paragraph 100. 101. Defendants deny the allegations of Paragraph 101. 102. Defendants deny the allegations of Paragraph 102. 103. Defendants deny the allegations of Paragraph 103. 104. Defendants deny the allegations of Paragraph 104. 105. Defendants deny the allegations of Paragraph 105 106. Defendants deny the allegations of Paragraph 106. 107. Defendants deny the allegations of Paragraph 107. 108. Defendants deny the allegations of Paragraph 108. 109. Defendants deny the allegations of Paragraph 109. 110. Defendants deny the allegations of Paragraph 110. 111. Defendants deny the allegations of Paragraph 111. 112. Defendants admit that an article appeared in the Credit Union Times containing the language described in Paragraph 112 attributed to Dorman. Defendants deny all the remaining allegations of Paragraph 112. 113. Paragraph 113 does not require a response. II. AFFIRMATIVE DEFENSES 1. One or more of the claims in Plaintiff's Complaint fails to state a claim upon which relief can be granted. 2. One or more of Plaintiff's claims are barred by the equitable doctrines of waiver, estoppel, or unclean hands. 3. Any damages Plaintiff sustained occurred because of its own acts or omissions, and not because of any conduct by the defendants. 4. One or more of Plaintiff's claims fail to state a claim upon which relief can be granted, because Plaintiff has failed to join Gifford Dunn as a defendant, who is an indispensable party. 5. This Court does not have personal jurisdiction over Eric Edwards. 6. This Court does not have personal jurisdiction over Vincent Brennan. 7. This action should be dismissed for improper venue. Respectfully submitted, MINTON, BURTON, FOSTER & COLLINS A Professional Corporation 1100 Guadalupe Street Austin, Texas 78701 (512) 476-4474 (telephone) (512) 476-1315 (telecopier) By: Martha S. Dickie State Bar No. 05833100 Jeffrey D. Miller State Bar No. 24008714 Attorneys for Eric Edwards and Vincent Brennan CERTIFICATE OF SERVICE On this the 6th day of September, 2002, a true and correct copy of the above and foregoing Answer and Affirmative Defenses of Defendants Eric Edwards and Vincent Brennan was forwarded to the following: R. James George, Jr. VIA HAND DELIVERY Nanneska N. Hazel Rebecca S. Smith George & Donaldson, L.L.P. 114 West 7th Street, Suite 1100 Austin,Texas 78701 Peter Nolan G. Stewart Whitehead Winstead Sechrest & Minick, P.C. 100 Congress, Suite 800 Austin, Texas 78701 Barry K. Bishop Clark, Thomas & Winters, P.C. 300 West 6th Street, 15th Floor Austin, Texas 78701 Aaron G. Gundzik John Cotton Cotton & Gundzik, L.L.P. 725 S. Figueroa Street, 34th Floor Los Angeles, California 90017 A. Boone Almanza Akin & Almanza 1717 W. 6th Street, Suite 230 Austin, Texas 78703 Martha D. Dickie