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Counterclaim alleges damaged reputation

Former Jackson County Commissioner Doug Breidenthal claims his professional reputation has been damaged by allegedly defamatory statements made by investors who sued him over a disputed cannabis business.

"As a result of plaintiff's defamation, Breidenthal suffered and continues to suffer from humiliation, stress, and anxiety," alleges a counterclaim filed Thursday that is a response to a lawsuit filed in Jackson County Circuit Court by Gregory S. Allen, Lawrence J. Nelson and Mary D. Nelson. 

Breidenthal is seeking $303,965, plus $23,835 a month from lost profits, according to Breidenthal's lawyers Casey Murdock and John Howry, with Frohnmayer, Deatherage, Jamieson, Moore, Armorsino & McGovern P.C. of Medford.

The counterclaim agrees with many of the statements in the Allen and Nelsons lawsuit, though Breidenthal claims he invested $53,965 of his own money into Marigold Enterprises LLC that helped set up American Cannabis Co., a recreational marijuana store in Medford that has yet to open.

The counterclaim doesn't address the possible violation of ethics laws that Breidenthal allegedly received cash payments for marijuana consulting in 2016, while he was county commissioner.

As a result of the legal dispute, Breidenthal claims he has been unable to find work in the cannabis industry and was terminated from one job. He also claims Allen and the Nelsons made defamatory statements to the Mail Tribune, as well as contacting his professional acquaintances in the cannabis industry.

"On information and belief, plaintiff Allen is contacting Breidenthal's professional acquaintances by letter and telephone in a coordinated effort to disparage Breidenthal's reputation and impair his ongoing business relationships," the counterclaim alleges.

Breidenthal states an employment deal was terminated with ANM Inc., effective Feb. 28. ANM is a cannabis business located in Medford.

Breidenthal was cleared this week of criminal charges by the Oregon Department of Justice regarding a campaign account set up with the Association of Oregon Counties that he used to run for office with the AOC's Western Interstate Region advocacy group in 2014. But that case is still pending before the Oregon Government Ethics Commission.

Jackson County filed another ethics complaint with the commission this week regarding Breidenthal allegedly receiving cash payments for marijuana consulting while still in office. The Oregon Liquor Control Commission is also investigating Breidenthal's license to operate a recreational marijuana store.

In the counterclaim, Breidenthal claims he was advised not to list the investors' names on the OLCC license, though he doesn't say who advised him. The OLCC requires all investors to be listed on the license application.

An operating agreement for Marigold Enterprises LLC was signed by the Nelsons, but Allen objected to the agreement, Breidenthal claims.

He said a change in ownership form was going to be submitted to the OLCC once the operating agreement was approved by all parties.

The Nelsons provided Breidenthal with a cashier's check for $150,000 as their investment in the marijuana business.

"Breidenthal admits that he engaged plaintiffs Nelson at plaintiff Gregory S. Allen's request and bidding," according to the counterclaim.

In the lawsuit filed by Allen and the Nelsons, it alleges elder abuse because the Nelsons are in their 80s.

The counterclaim alleges Allen solicited the Nelsons' involvement and obtained their consent to invest the money.

"Plaintiffs Nelson would not have invested in American Cannabis Company but for the conduct of plaintiff Allen," the counterclaim alleges.

Allen is also liable for the Nelsons' losses, according to the counterclaim.

Breidenthal claims he offered the Nelsons a full refund March 6. He also claims he requested proof of investments from Allen "in order to provide him with a buy-out offer as well."

According to the counterclaim, American Cannabis is stocked and ready to be open. Based on data from other retail marijuana shops, the counterclaim estimates the net operating income for American Cannabis would be $23,836 a month during its first year.

Breidenthal claims he created Capital Pacific Advisors, which he registered with the state Sept. 23, 2016, to raise investments for other business interests that he and Allen would explore with third parties.

Chris Hearn, attorney for Allen and the Nelsons, said he has agreed with Breidenthal's attorneys not to discuss the case while they work out appointing a receiver to oversee the disputed assets.

— Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com. Follow him on www.twitter.com/reporterdm.

Breidenthal is photographed at the 2015 National Association of Counties Conference in Charlotte, N.C. [Photo from Association of Counties Facebook page]