I THE CIRCUIT COURT OF THE FIRST JUDICIAL CIRCUIT I A D FOR WALTO COU TY, FLORIDA CIVIL DIVISIO COASTAL

COMMU ITY BA K, Plaintiff, vs. JOH CARROLL, JODIE CARROLL, CHAMBERS STREET BUILDERS, I C., TAU TO TRUSS, I C., and DEPARTME T OF THE TREASURY I TER AL REVE UE SERVICE, et al Defendants. ____________________________________ JOH CARROLL, Counter-Plaintiff vs. COASTAL COMMU ITY BA K and MIKE BYERS Counter-Defendants. ____________________________________________/ DEFE DA T and COU TER-PLAI TIFF JOH CARROLLS MEMORA DUM I OPPOSITIO TO CE TE IAL BA KS MOTIO FOR APPOI TME T OF RECEIVER A D CUSTODIA FOR PROPERTY Case o.: 09CA001577

Defendant and Counter-Plaintiff John Carroll (Carroll), moves for an Order Denying Centennial Banks (Centennial) Emergency Motion for Appointment of Receiver for the following reasons and shows: 1. To Centennials Paragraph 1, Carroll denies that this Motion is

an accurate representation of the facts of the case.

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2.

To Centennials Paragraph 2: a) Whether or not Carroll had heart attacks is

irrelevant. On the morning of March 13, 2012 Centennial sent an email to Carroll seeking to set a hearing date for their Supplemental Motion for SJ on May 1, 2012 (Exhibit 1). b) The only work which was performed from March

13, 2012 through the date of Centennials filing of their EMERGENCY Motion was work performed by Carroll and the Architect of Record for the project wherein Carroll and the Architect traded various designs for the proper completion of the property (Exhibit 2). c) Centennial does not have the expertise or care to

complete the area of the building which is in conflict on several pages of the design. Further, the WaterSound Beach community and DRB lack the skills to identify the errors or omissions of their own approved Architect. From the deposition of Brian Stackable, Chairman of the DRB:
15 16 17 18 19 20 21 Q Okay. Well, when we have a conflict like

we're seeing in these plans, what does the builder -- now, the builder of record -- what is the builder supposed to do when he finds something like this? A I would say -- off the record -- he should It's not the role of the DRB 2

contact his architect.

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to coordinate drawings.

and again on the subject of the plan conflicts:

Q 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Let me ask this in general. You've

probably done hundreds of plans in WaterColor -- I mean, reviewed hundreds of plans? A At least 600. I mean, there are 600 built

houses to date. Q Have you ever seen a time in your

experience where a window had to be relocated from an elevation because of stairs on the inside of the house? A Yeah. There's multiple things. That's

why we require as-built drawings at the end of the day because there may be changes made either by the contractor or the architect or the owner. wasn't uncommon to have field changes made. Q We were just talking about as-builts. At That

KATHRYN B. PEACOCK, COURT REPORTER (850) 897-2864 13

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the end of the job, I think the rules say that the owner or builder has to turn in a set of as-builts. What are they? A If there are any changes made to the

existing structure that was approved, you need to identify what those changes are so we have a record set on file of that house built to date. Q What kind of things would be changed on

houses in WaterColor or WaterSound? 3

10 11 12 13 14 15

Sometimes there's windows.

Some things

are deleted.

Sometimes an owner may not put the Maybe a little addition bump

shutters on the house.

out that could be added within the, you know, setbacks as permitted. things. They're usually minor

Again per the Chairman of the Design Review Board on the plan conflicts:
23 24 25 BY MR. CARROLL: Q You have to put on your thinking cap for You're

this one cause this one is architectural.

KATHRYN B. PEACOCK, COURT REPORTER (850) 897-2864 42

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the only person that can answer it now.

Okay.

Page

Number 50 appears to be the first floor of this residence, and I really need you to do your best work here, and on Page Number 2 looks to be the second level. And I'm telling you this for the And Page Number 52

record that that's what it is. is the third level.

And Page 53 is the fourth. It's

Now, we have to compare these to elevations. the type of thing that I've seen before. Let's start with an easy one.

Okay.

If we'll look at Page

54 and we look at the ridge line of the structure and then we compare it to Page 55 and look at the ridge line, do you see any kind of a discrepancy in there? 4

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A Q

No. I think I am seeing that the ridge doesn't

touch the tower on 55 but the ridge does touch the tower on 54. question. Here's another way to ask this

If we look at Page 55, we can see a small

gable roof presenting in that elevation with another gable setoff behind it. Do you think that that's

indicated in this next drawing down in the bottom corner? A Q I don't know. You have to show me.

Yeah, it is hard --

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A Q

Yeah. It is a hard one to tell. I'll submit

that you're at a terrible disadvantage because I know this house inside out and backwards, and you're going to have to discover something on your own, but you're the only person that can help me with this. Why don't we do this. Let's look at the roof plan,

which is Page 53, and tell me if that roof is depicted accurately in 55 or 54. Mainly I'm looking

at this ridge line that's right here. A Yeah, I'd say it's depicted on 55. I'd

take that line. line.

That's the center of that ridge There's the small I would say that

Here's the two gables. Those two pieces.

ridge there.

does reflect that. 5

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Let's look closely at the main ridge

itself of the body of the house and its relationship to the tower right here. Would it be safe to say

that Page 55's ridge -- the main body of the ridge does not touch the tower but the roof plan -A Q Yes. -- shows that it does? And then if we

look at this elevation that's on 54, the ridge line looks to be like it touches the tower. Let me ask

you to compare this one section on Page 55 to the KATHRYN B. PEACOCK, COURT REPORTER (850) 897-2864

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actual plan views now the best that we can, and it will help you get anchored if you keep your eyes on the tower. We know the tower reduces as it goes up.

So downstairs I think it's shown as 18 feet, and by the next floor it's shown as 16 feet, and way up top it gets smaller and smaller till it gets down to 14 feet. How am I going to have you do this? You

can almost set them over the top of each other. Well, let me just ask you to study these three plan views and compare them to this roof plan and tell me if you think that, that all lines up pretty well. A say yes. Well, the tower has been built so I would But I am not their architect. I'm not

their engineer.

I didn't design this structure, so

I'm not going to comment on construction documents. Q Okay. 6

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But esthetically and just first glance,

yeah, it looks like the plates stack up. Q Do you see in Page 55, do you see some

corner boards in that drawing? A Q Yes. And if we look at the plan view of the

first floor, I can see one corner that looks like it's matching up to a corner board. And I can see

another corner that looks like it's matching up to a KATHRYN B. PEACOCK, COURT REPORTER (850) 897-2864

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corner board.

What I'm having a hard time is

finding what corner this lines up with on the plan view. MR. GEORGE: You might want to have him --

well, you can do what you want, but you could circle it and say this part I'm circling with a blue pen. MR. STACKABLE: go. Tell me where you want to

I mean, these are bad drawings, bad That's my opinion. What house is this anyway? This is Lot 24. These drawings aren't

architect.

MR. GEORGE: MR. CARROLL:

MR. STACKABLE: coordinated. BY MR. CARROLL: Q at here. Yeah.

And that's what we're trying to get

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I mean, there's your corner there.

They

chose not to do it there.

I mean, I didn't come

here to comment on architectural drawings hopefully. Q In your experience as being the town

architect, did you ever see plans that didn't line up from one elevation to the next? A Sure. It wasn't our role to coordinate If I could

the architect's drawings for the client.

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make sense of the drawings and understand the design intent of the house and, A, did it meet the basic criteria for a house in WaterColor/WaterSound, then the house would be approved. Q massing? A Yeah. Massing, window proportions, And the basic criteria has to do with

certainly always setting the first floor height, making sure the height isn't, you know, house isn't approved. Things like that, we know that the county

doesn't pick up on.

3)

Carroll has performed all of the improvements to the property

and Centennial has done nothing to improve or protect the property. In fact, Centennial should have closed the construction financing portion of the loan 30 months ago, but instead has impeded Carrolls progress every chance

theyve been given. Per exhibits from Coastals Senior Executive Vice President, Mike Byers deposition:
Put that energy and time into beating the IRS and finding work that pays or better yet a partner to buy it back with or save funds to service debt after we get IRS out and could sell it back to a new corp that maybe is owned by a family member. The bank can sell it to whoever and the IRS can't do anything unless you bought it back personally. I think Terry (Chairman of Coastal Community Bank), if handled correctly or presented correctly by you, would agree to somehow agree and document that based on getting our common enemy, the IRS, out as quickly as possible, that we'd sell it back the day we get it or wr finance to the winning bidder at the sale. The IRS won't show. I have never had someone show the character you have shown with the cards you're dealt. And we (Russell) hear you loud and clear. But unfortunately the FDIC and IRS don't care about character anymore. But John we won't look under rocks or play dirty, you're not the problem and neither are we, its the IRS. Put that offensive and energy toward them. Call the news. Glenn Beck would luv u. If they are out, everything changes.

4)

While Centennials underlying lot loan was $569,000.00,

Carroll single handedly completed all of the work at the subject property. Carrolls improvements to the property increased the value of the property to (3) times the value of the loan which Centennial seeks to foreclose upon. All the while, Coastal had a certified inspection report from their draw inspector/appraiser Heinz Falke (son-in-law of Coastals Chairman, Terry DuBose, and brother-in-law to Coastals Senior Executive Vice President Mike Byers) which showed the value of Carrolls construction improvements in place was actually $1,030,000.00 (Plus the value of the
underlying lot). Per Heinz Falke deposition:
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A. Okay. This one was an as-is value. Because the home is unfinished as of this particular date where I was on site, 12/21/2009, it was partially completed. So there's a balance. This is an as-is value. Q. How do you figure out the value of something that's not finished? A. We would first find the market value as completed. Q. Okay. A. Okay? And then we would obtain some data from a certified, or excuse me, a licensed builder and find that cost to complete. Q. Got you. A. And then deduct that from the proposed value, which would give you an estimate of what you would need to do to complete that home to bring it to 100 percent. Q. Can you tell me who gave you the estimate to complete? A. The cost data I had was provided by James Gortemoller, a licensed contractor. Q. Is that in that same appraisal? A. The cost data? Q. Yeah. A. His findings? Q. Uh-huh. A. Yes. Were estimated at $385,000 to finish to the quality that it had started at, using the same quality. Q. I'll write it down. I hadn't seen that yet or anything. Would it be any problem for me to get that from you? Do I need to subpoena that? A. Yeah, this is client specific. I cannot release this. It has an intended use by an intended user.
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Q. Got you. Do you know approximately when Mr. Gortemoller indicated that value to you? A. It was provided to me in the process of completing the appraisal, which was December 21st, 2009. So anywhere in the week prior to that when I was gathering all the data, it would have been provided then. Q. And that's probably because you don't want stale information? If he gave you a price in August, but you did the appraisal in -A. Correct. Everything occurred, you know, within a one month or less timeframe from when he compiled his data and I transferred the necessary and pertinent data into the appraisal. All occurred I'd say within a month, I'm sure. In the work file, we have dated, everything is dated in the work file. So my process takes usually a week or less, so it would be the week of the 21st of December 2009. Q. How do you figure something like that when you don't know how long it's going to take? If it might take James one year, do you factor that in or project in any way? A. There's no projections. Projections are too uncertain. It's the value as of 12/21/2009. The as-is value was that number as of 12/21/2009. Q. And that was based on the full value minus the, more or less, cost to complete? A. That is correct. That is the as-is value in its current condition. Q. What did you come up with again? A. 1.6 million as of 12/21/2009, as-is. Q. So I get this James' 385,000? right, that's because you backed out

A. The estimate provided by the licensed contractor backed out of the value. Q. So the -A. Of the proposed value to give us an as-is.
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was

Q. When did you do the proposed value; on that day? A. As of 12/21/2009, there was a proposed value determined. Q. That was 1,985,000 minus 385,000? A. That is correct. Q. Okay. So I get this right I'll keep track of this. I think that you're almost exactly right by the way. I think today, believe it or not, that the prices are going up there. That's what I think. There's only a few houses left for sale over there, at that point, but... When you go through, did you have to go inside the house? A. I had a walk-through. I photographed and did a walkthrough. Q. And do you know about construction; can you tell if the construction was okay? How do I say it? I better clarify. Can you tell if the construction was usual I would say? A. Typical for the area? Q. Yeah, typical for the area. A. Consistent with the other homes being built? Q. Yes. A. Okay. Yes. Now, are you speaking of the as-is condition? Q. Yeah, the as-is. A. Okay. Not what has been done or what is to be done? Q. Right, not what is to be done. A. The as-is construction, it was typical and consistent with the neighborhoods' building trends and whatnot. And that's stated as such in the appraisal. Part of the valuation process is to make sure that the home is consistent or will be consistent with the trends in that particular neighborhood, the building trends, and similar quality of construction and things like that.
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Q. That was around four months ago? A. Yes. Q. Do you know, like, do you have any reference that says if we had already put the roof on? A. In the photograph addenda, it will show up. Q. Is that with you now? A. I just have the writing. The photographs are in the original appraisal, the work file, and the copy that the bank would have, or I can pull up. The photograph addenda shows interior and exterior pictures as of 12/21/2009. Q. That's great. Do you take a lot of pictures? A. Yes.

*That inspection report on the value of Carrolls construction in place is (Exhibit 3 to Carrolls Memo in Opp. to S.J.). 5. To Centennials paragraph 3, this is the only claim that

Centennial has made setting forth the reason they believe they are entitled to a receiver, and it is clearly hearsay. Centennials Motion does not even provide the Court with any information about how they came to believe that this ANONYMOUS source against Carroll is a neighbor. claim is not an affidavit. entirety. 6. To Centennials paragraph 4, Centennial is seeking to recover Further, this

Centennials Motion should be struck in its

the value of the improvements which Carroll made to the subject property under the terms of a construction loan which Centennial is in default under.
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Centennial has paid Carroll $0.00 for the home which Carroll built on the land. If this Court were to turn Carrolls improvements over to Centennial it would be theft of Carrolls services. 7. To Centennials paragraph 5, Centennial is making an

allegation, completely unsupported by any claim whatsoever. The Record in the case shows that Carroll bought a vacant lot and put over $250,000.00 as the down payment. The Record shows that Carroll then built a structure worth over $1,000,000.00 on the vacant lot. Last, the Record shows that Centennial has never even claimed that they advanced (1) cent to Carroll for the equity he has infused into the property. 8. To Centennials paragraph 6, Centennial is correct in that

provisions within a security instrument consenting to the appointment of a receiver are not binding on the trial Court Martorano v Spicola (Fla. 1933). In deciding whether to enforce a mortgage provision for the appointment of a receiver, the trial court must balance the mortgagors right to own and possess its property against the interests of the mortgagee in protecting its security in the property MB Plaza, LLC v Wells Fargo Bank (Fla. 2d DCA 2011). 9. This Centennial v Carroll case is an extremely rare case in

Florida. The Record shows that Centennials equity position has increased
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by over $1,000,000.00 since the commencement of this action. This is the quintessential case warranting a denial of a Motion for Receiver. 10. To Centennials paragraph 6 and 7, Centennial again makes Further,

broad accusations which are unsupported by any evidence.

Centennials Motion does not explain what they would do differently to continue to enhance the equity value of the property. 11. As has become customary Frank Baker style, Coastal and

Centennial seek to recover more than they have been indemnified for, See Coastal Community Bank v. Jones (Fla. 1DCA 2009) On denial of appellant's motion for rehearing on the fee matter, the trial court again observed that appellant had offered no evidence of the amount of attorney's fees incurred, and concluded "that equity cannot tolerate a result of a requirement that a Defendant in a mortgage foreclosure be required to pay more for attorney's fees than the mortgagee actually paid their attorney." In the present case, however, the bank declined an opportunity to provide any evidence concerning its obligation to pay fees to its lawyers. Under these circumstances, we do not reach the question whether the fee sought was reasonable or excessive, because no amount at all was demonstrated. See Brett, 120 So. at 554. To summarize, we do not approve denial of the
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fee because the fee was unreasonable or unjust. Instead, we affirm because appellant declined to demonstrate at all the fee due from it to its lawyers. 12. The evidence shows that Centennials assertion in paragraph 7,

of their Motion is a continued attempt to commit fraud against Carroll and this Court. Its very important to note however that per Centennials own internal appraisals, Carrolls equity in the completed Lot 24 is enough to satisfy not only Coastal/Centennials mortgage, but also the IRS, and all other encumbrances in their entirety. 13. Throughout this case Carroll has pled that Coastal/Centennial

should be barred from enforcing this action through Laches. The record evidence shows that Coastal, Byers and Chairman DuBose intentionally slept on their right to initiate this action in order to be enriched by Carrolls equity infusions and enhancements to the value of the collateral. 14. Carroll also pled that Coastal came to the Court with Unclean

Hands. The record evidence shows that Byers and Coastals actions in this matter are condemned by honest and reasonable people; the default and foreclosure would not have occurred but for Coastal and Byers unclean hands; Coastal seeks a remedy but its inequitable conduct, constituting unclean hands, bars the granting of relief which Coastal/Centennial seeks. 15. Carroll also pled Anticipatory Repudiation.
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The record

evidence shows that Carroll and Coastal had an oral contract with written memos whereby Coastal would advance Carroll an additional $860,000.00 against Lot 24 guaranteed by the land and home. Byers and Coastal

instructed Carroll and his companies to commence construction at Lot 24. Carroll constructed the approved residence on the land to 65% of completion. Carroll satisfied his obligation to Coastal under the terms of the parties contract. Coastal has failed to pay Carroll and his company

according to Coastals draw schedule. Coastal continues to refuse to close the loan and pay Carroll and his companies for their work under the agreement. The agreement provided that Carroll and his companies would be paid $559,000.00 for the present level of completion. Byers and

Coastals affirmative actions have rendered performance of the contract impossible or apparently impossible. Coastals breach entitles Carroll to change his position under the contract, wiping out Coastals claims against Lot 24 in this action. 16. Carroll also pled the defense of Unconscionability in this

action. The record evidence shows that Carroll has enhanced the current value of Lot 24 by at least $1,000,000.00 as a result of his sacrifices and efforts. Byers personally guaranteed Carroll that Coastal would never seek attorneys fees of 10% of the outstanding principal balance.
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Coastals

ambitions and attempts to acquire Carrolls equity without paying the full value to Carroll are unconscionable for many of the same reasons described in Judge Charles J. Kahn, Jr.s 1st DCA opinion filed November 17, 2009 against Coastal in Coastal Community Bank vs. Jones. Their complaint should be barred. 17. a) The record evidence shows that: Carroll made a certified request for an accounting of the loan

balance and production of all documents contained in the loan file on July 28, 2009 (Exhibit L to Memo in Opp. to S.J.). b) c) Coastal did not respond to the certified request for accounting. Instead, Coastal immediately began misappropriating funds

from Carrolls loan into the bank account of bank insider and long time associate of Chairman DuBose, James Gortemoller to cover his past due loan payments (Exhibit M to Memo. in Opp. to S.J.). d) Carroll served several requests for production upon Coastal

through Florida Rule of Civil Procedure 1.350, but Coastal withheld the documents. e) Carroll filed a Motion to Compel the Production of said

Documents, and 8 minutes prior to the January 8, 2010 hearing on the Motion, Coastal faxed Judge Green what it purported to be a complete list of
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the documents from Carrolls loan file along with a privilege log (Exhibit N to Memo in Opp. to S.J.). f) The record evidence shows that Coastal had the inspection

report of Carrolls construction in place (Exhibit K to Memo in Opp. to S.J.) in their possession at the time they faxed their documents to Judge Green, but they purposefully omitted that evidence from their documents and privilege log. g) That inspection report, along with the other evidence in record,

shows that Coastal was over $400,000.00 behind in its payments to Carroll as of the time of the filing of their 1st Amended Complaint. h) The construction loan statement Russell Enfinger, Esq.

transmitted to the IRS (Exhibit H in Memo in Opp. to S.J.), shows an unexplained $100,000.00 increase in Carrolls principle due. There is no record evidence that explains this fraud which Coastal committed against Carroll, the IRS and this Court. i) The record evidence uncovered during discovery in this action,

shows that Coastals key executives and construction draw inspectors purposefully delayed this action while Carroll continued to improve that value of the subject property by over $1,000,000. Those key individuals included no less than:
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1) 2) 3) Heinz Falke 4) DuBose 5) 6) Esq. 7) 8) 9) 10) 11) DuBose 12) 13) Campbell j)

Senior Executive Vice President, Mike Byers Chief Credit Officer, Russell Enfinger, Esq. Construction draw inspector and certified appraiser,

President of Coastal Community Insurance, Anthony

Loan Officer, Dustin Stokesberry Coastal and Centennials Chief Counsel, Frank A. Baker,

Board of Director, Steve Counts Loan Officer, Daniel Jones Assistant to the Chief Credit Officer, Lisa Whitman Assistant to the Executive Vice President, Paula Moravec Coastal Community Chairman of the Board, Terry

Assistant to the Chairman, Becky Executive Vice President Coastal/Centennial, Troy

The record evidence shows that Gortemoller, Byers, DuBose

and other unknown co-conspirators combined their efforts to misappropriate

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over $10,000 of Carrolls construction loan proceeds and deposit those into Gortemollers accounts at Coastal Community Bank. Carroll continuously held the building permit for the project and worked the project everyday during the period the Counter-Defendants were charging Carrolls construction loan for Gortemollers fraudulent invoices (Exhibit O and Exhibit M to Memo in Opp. to S.J.). k) Byers testified during deposition that he personally signed off

on the misappropriations to Gortemoller:

Q. Does Mr. Gortemoller have any mortgages with Coastal Community Bank? A. Yes. Q. Okay. I'm going to reserve those other questions. There was an entry that we looked at a few minutes ago where James Gortemoller turned in a bill for work he had performed on lot 24. Do you remember him turning in any invoices for lot 24? A. Yeah, I remember him bringing in invoices. Q. Do you think that you okayed the payments of any of those invoices? A. I'm sure I okayed the ones that have my signatures on them.

18.

What Centennial knows, but failed to inform the Court in its

Motion is that Carroll at his expense bleached, primed and painted all of the trusses that could ever be affected by rain water in the home as well as each and every wood floor in the building. Carroll also house wrapped the
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interior walls of the building to preserve them in brand new condition. The only windows which were removed from the building were removed at the direction of WaterSound security with instructions to place boards over the openings. Carroll did this too, with no assistance of Centennial of any kind (Exhibit 3). 19. Carroll cannot be denied full access and authority to continue to

pursue his current course of actions on his property under Florida Law. Centennials Motion (read Petition for Injunction) is a proceeding in equity. The Record shows that Carroll has treated them far more equitably than they deserve under the law. WHEREFORE, Carroll respectfully requests that the court enter an Order Denying Centennial Motion for Appointment of a Receiver; and granting such other or further relief as is appropriate.

I HEREBY CERTIFY that a copy of the foregoing was forwarded to Frank A. Baker, Esq., 4431 Lafayette Street, Marianna, FL. 32446, counsel for Coastal, and to Paul Alan Sprowls, Asst. U.S. Attorney, 111 North Adams Street, Tallahassee, FL 32301, counsel for the IRS, and to Mike Byers 12141 Panama City Beach, FL. 32407 by fax and regular mail this 26th day of March, 2012. Respectfully submitted,

___________________________
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John Carroll Box 613524 WaterSound, FL 32461 Phone (850) 231-5616 Fax (850) 622-5618

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