The MLM attorney Kevin Thompson brought up some great questions surrounding EPIC a few weeks ago. I doubt even he would have seen this most current lawsuit coming.
Editor’s Update January 17th, 2014
EVOLV HEALTH, LLC, EVOLV,
HEALTH INTERNATIONAL, LLC,
and EVOLVHEALTH MEXICO SERVICIOS, S. de R.L. de C.V., Plaintiffs
ECOSWAY USA, INC.,
and JEFFREY N. ALDOUS, Defendants.
PLAINTIFFS’ VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY RESTRAINING ORDER, TEMPORARY INJUNCTION, AND PERMANENT INJUNCTION
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW Evolv Health, LLC (“Evolv”), Evolv Health International, LLC (“Evolv International”), and EvolvHealth Mexico Servicios, S. de R.L. de C.V. (“Evolv Mexico”) and file this Plaintiffs’ Verified Original Petition and Application for Temporary Restraining Order, Temporary Injunction, and Permanent Injunction complaining of and against EpicEra Incorporated (“Epic”), eCosway USA, Inc. (“eCosway”), Glen Jensen (“Jensen”), and Jeffrey N. Aldous (“Aldous”) (collectively, “Defendants”) and, in support thereof, would respectfully show unto the Court, as follows:
Defendants have engaged and are engaged in a scheme of corporate espionage to misappropriate Plaintiffs’ trade secrets, confidential and proprietary information, employees, distributors, executives, and business in order to benefit the startup of Epic – Defendants’ new multi-level marketing company. Under the fraudulent guise of potentially investing and partnering with Evolv, Defendants signed non-disclosure agreements that Defendants had no intention of honoring in order to gain access to Plaintiffs’ confidential and proprietary information so that they could steal that information and use it for their own benefit. Defendants have engaged in a concerted effort to not only steal Plaintiffs’ trade secrets and other confidential and proprietary information, but also Plaintiffs’ employees, distributors, and executives (despite enforceable non-competition, non-solicitation, and confidentiality agreements) in what Epic brazenly describes as its “100 million dollar Leadership Development Strategy” to “attract…the best and brightest people from around the world to join in this Epic era.” Defendants’ plan all along has been to build Epic on top of Evolv’s shoulders by stealing through deceitful and fraudulent means what Evolv has spent years creating and developing. Through this suit, Plaintiffs seek to recover the tens of millions of dollars in damages caused by Defendants’ surreptitious and unlawful conduct and to enjoin Defendants from continuing to cause imminent and irreparable harm to Plaintiffs.
DISCOVERY CONTROL PLAN
1. This matter is subject to Discovery Level 3 in accordance with Texas Rule of Civil Procedure 190.4.
2. Evolv is a limited liability company organized under the laws of the State of Delaware with its principal place of business located in Dallas County, Texas.
3. Evolv International is a limited liability company organized under the law of the State of Delaware with its principal place of business located in Dallas County, Texas.
4. Evolv Mexico is a limited liability company organized under the law of the United Mexican States with its principal place of business located in Mexico City, Mexico.
5. Epic is a Delaware corporation with its principal place of business located at Thanksgiving Park 4, 2300 W. Executive Parkway, Suite 450, Lehi, Utah 84043. Epic may be served with process by serving its registered agent, Harvard Business Services, Inc., at 16192Coastal Highway, Lewes, Delaware 19958, or wherever else it may be found.
6. eCosway is a Delaware corporation with its principal place of business located at 15221 Barranca Parkway, Irvine, California 92618. eCosway may be served with process by serving its registered agent, The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, 19801, or wherever else it may be found
7. Jensen is an individual who resides in California and may be served with process by serving him at his place of business located at 15221 Barranca Parkway, Irvine, California 92618, or wherever else he may be found.
8. Aldous is an individual who resides in California and may be served with process by serving him at his place of business located at 15221 Barranca Parkway, Irvine, California 92618, or wherever else he may be found.
IV. JURISDICTION &VENUE
9. This Court has jurisdiction over this matter, pursuant to Article V, Section 8 of the Texas Constitution and Section 24.007 of the Texas Government Code, for the reason that the amount in controversy exceeds the minimum jurisdictional limits of this Court.
10. This Court has personal jurisdiction over Defendants because they do business in Texas, contracted with a Texas resident and either party was to perform the contract in whole or in part in Texas, contractually agreed to jurisdiction in Texas, and/or committed torts in whole or in part in Texas.
11. Venue is proper in this county for the reason that all or a substantial part of the acts or omissions giving rise to the claim occurred in Dallas County, Texas. TEX. CIV. PRAc. REM. CODE§ 15.002.v.
A. Background on PlaintiffEvolv.
12. Plaintiff Evolv is an internet-based nutritional direct marketing company that focuses on wellness products and home-based businesses. Evolv has a revolutionary product line that mixes a sensible diet with activity and a product formula that helps benefit the consumer in being able to live a healthy life. Evolv also focuses on allowing its distributors to continue its home-based business through internet and direct marketing and provides its distributors with a body of knowledge and training that allows them to maximize their financial benefits. Evolv has been operating in the direct marketing and healthcare sector for the last several years and has achieved great success as one of the top 100 direct marketing companies in the United States.
13. Evolv International is a wholly owned subsidiary ofEvolv and carries out Evolv’s business outside the United States.
14. Evolv Mexico is at this time a wholly owned subsidiary of Evolv International and carries out Evolv’s business in Latin America, specifically in Mexico, Colombia, Peru, and Ecuador.
B. Evolv’s Confidential and Proprietary Information.
15. Evolv has achieved its success in the direct marketing and healthcare industries through years of targeted marketing, research and development, unrivaled experience in nutritional health, and maintaining strong brand recognition. Over the years and through considerable effort, expense, and experience, Evolv has compiled and developed a substantial amount of information relative to its industry. Certain of this information is highly confidential and proprietary in nature and provides Evolv with competitive advantages. The information that Evolv has compiled and developed in order to match the needs of its customers and potential customers includes, for example, but is not limited to: customers’ tendencies and needs, price lists, trade secrets related to its industry, the identities of non-published contacts, customer lists, customer contact information, customers’ past orders, marketing and advertising methods and strategies, computer programs, designs, technologies, formulas, processes, and product research and development.
16. Evolv markets its products to customers around the globe. An Evolv distributor’s primary responsibility is to match Evolv’s products and programs to a customer’s needs. Distributors are provided access to Evolv’s confidential and proprietary information necessary to carry out their duties, which includes portions of the confidential and proprietary information described above — most of which information is not generally known to the public and all of which information enables Evolv’s distributors to render services to Evolv’s customers of a special and unique value. Additionally, Evolv’s distributors are provided training by Evolv, including but not limited to, special training regarding Evolv’s products and programs and Evolv’s sales and marketing strategies for locating, obtaining, and securing customers.
17. Evolv makes special efforts to safeguard its confidential and proprietary information. For example, Evolv’s distributors are only given access to the customer files for the customers that they have been assigned to call upon in marketing and selling Evolv’s products. In addition, it is the practice and policy of Evolv to require distributors to sign agreements that contain non-competition, non-solicitation, and confidentiality clauses. It is also the practice and policy of Evolv to require its employees to sign agreements that contain confidentiality and secrecy clauses.
C. eCosway and Jensen Set Up Meetings with Evolv to Gain Access to its Confidential and Proprietary Information.
18. In late May 2013, one of Evolv’s distributors, Matt Steffe (“Steffe”), approached Evolv about a potential business opportunity concerning eCosway. eCosway is a growing international company and member of the Berjaya Group, operates in seventeen countries, is a subsidiary of a company that has operated for the past 34 years, and earns allegedly $500 million a year in revenues.
19. On or about June 6, 2013, Roscoe White, III (“White”), Evolv’s Chairman of the Board, met with Jensen, the President of eCosway, to discuss the potential investment opportunity with eCosway. The parties executed a Mutual Non-Disclosure and Non-Circumvention Agreement (the “MNDNCA”) in advance of these discussions, pursuant to which eCosway agreed on behalf of itself and its affiliates and their respective officers, directors, employees, and other agents to maintain all confidential information received from Evolv in strictest confidence and to not use such confidential information other than for the purpose of evaluating the potential transaction.
20. eCosway further agreed in the MNDNCA that it would not circumvent Evolv regarding any business relationship between Evolv and any third party identified by Evolv as a component of its business, solution, or process.
21. In the meeting on June 6, 2013, and the communications that continued after that meeting, Evolv subsequently disclosed to Jensen and eCosway confidential and proprietary information valuable to Evolv in its business.
D. Defendants Use Evolv’s Confidential and Proprietary Information and Evolv’s Executives, Employees, and Distributors to Create a Competing Business.
22. As Plaintiffs subsequently learned, eCosway and Jensen had no intention of honoring the MNDNCA and had no interest in an investment opportunity with Evolv. Instead, the meeting and agreement were a ruse to gain access to Evolv’s confidential information, including identities of its key employees, customers, and distributors. Jensen and eCosway were planning the launch of a new multi-level marketing company, Epic, which would be partnering with eCosway and directly competing with Evolv. Jensen (President of eCosway) is the CEO of Epic and Aldous is the Vice-President and General Counsel of Epic.
23. Subsequent to the meeting with eCosway, and after revealing confidential and proprietary information to eCosway and Jensen, Evolv began receiving phone calls regarding the potential sale of Evolv to a third party. Jensen had raised the possibility of eCosway buying Evolv as an alternative to investing in Evolv during the meeting, and, on information and belief, eCosway and Jensen disclosed this information in violation of the MNDNCA. Jensen and eCosway’s purpose in fomenting these rumors was to create uncertainty as to Evolv’s future among Evolv’s distributors, customers, and employees.
24. Defendants, with the assistance and direct participation of former employees and distributors of Evolv, began contacting current distributors and employees of Evolv in order to recruit them to Epic and steal the confidential and proprietary information imparted to them by Evolv. Defendants’ intent is to use this information to build their own business- Epic- and directly compete with Evolv.
25. Steffe was an Evolv distributor and had obligations not to solicit or recruit other Evolv distributors to join any other direct selling, multilevel, or network marketing business (“Network Marketing Business”) during the term of Steffe’s distributorship with Evolv and continuing for twelve months following the termination of Steffe’s distributorship with Evolv. Steffe also had obligations not to disclose Evolv’s confidential information to third parties and not to use Evolv’s confidential information to sell other products or services, in connection with any other business, or to solicit or recruit other Evolv distributors to any other Network Marketing Business.
26. Travis Bott (“Bott”) was a Vice-President of Evolv and an Evolv distributor. Bott not only had the same obligations as a distributor as did Steffe, but also owed fiduciary duties to Evolv as an officer of the company. Bott entered into a Confidential Settlement Agreement and Release in Full of All Claims (“CSA”) with Evolv, effective as of June 1, 2013, pursuant to which Bott released all claims he may have had against Evolv, and agreed that he would destroy and not retain any copies of Evolv’s confidential, proprietary, and trade secret information.
27. Kevin Keranen (“Keranen”) was an Executive Vice-President ofEvolv and owed fiduciary duties to Evolv as an officer of the company. Keranen entered into a Resignation Agreement (“RA”) with Evolv, effective as of July 1, 2013, pursuant to which Keranen agreed that during and after his employment he shall not disclose any of Evolv’s confidential information other than to an employee of Evolv or its subsidiaries or as reasonably necessary and appropriate in connection with the performance of his duties as an employee ofEvolv. Keranen further agreed that for thirty-six months following the termination of his employment, he would not solicit or recruit, directly or by assisting others, any other employees or distributors of Evolv, or contact or communicate with other employees or distributors of Evolv for the purpose of inducing them to terminate their relationship with Evolv.
28. As early as May 30, 2013, Jensen and eCosway began conspiring with Steffe to steal Evolv’s confidential information, undermine it in the marketplace, and raid its employees and distributors, all for the purpose of launching a new Network Marketing Business-Epic. In furtherance of the conspiracy, Steffe promoted and set-up the June 6, 2013 meeting on the pretext that eCosway was interested in investing in Evolv.
29. Defendants quickly solicited and brought Bott and Keranen into the conspiracy to set up Epic at the expense ofEvolv, breaching the MNDNCA and inducing Bott and Keranen to breach the CAS and RA, respectively, and to violate their obligations as distributors of Evolv by improperly disclosing and using Evolv’s confidential information and by soliciting other Evolv employees and distributors to terminate their relationships with Evolv and join Epic.
30. The next step for Defendants was to solicit and recruit Roberto Gonzalez (“Gonzalez”). Gonzalez was the President of Evolv Mexico, owed fiduciary duties to Evolv Mexico, and was responsible for Evolv’s Latin American operations. Gonzalez also had executed an Executive Employment Agreement (“EEA”) with Evolv Mexico effective July 1, 2013. The EEA contained a number of important provisions designed to protect Evolv Mexico’s confidential information and business relationships. Gonzalez agreed that during and after his employment he shall not disclose, directly or indirectly, any of Evolv’s confidential information other than to an employee of Evolv Mexico or its subsidiaries or as reasonably necessary and appropriate in connection with the performance of his duties as an employee of Evolv Mexico. Gonzalez agreed that for twelve months following the termination of his employment he shall not engage in the same or similar business as Evolv Mexico in the United States, Canada, Mexico, Colombia, Chile, Peru, or any other region where Evolv had active distributors. Gonzalez agreed that for twelve months following the termination of his employment, he shall not contact any client, customer, or prospect that he personally solicited, contacted, communicated with, or accepted business from during the last twelve months of his employment with Evolv Mexico for the purpose of engaging in the same or similar business as Evolv Mexico. Gonzalez agreed that for thirty-six months following the termination of his employment, he shall not solicit or recruit, directly or by assisting others, any employees or distributors of Evolv Mexico, and shall not contact or communicate with other employees or distributors for the purpose of inducing them to terminate their relationships with Evolv Mexico.
31. By late August 2013, Defendants had induced Gonzalez to agree to bring his entire executive team and important distributors from Evolv Mexico to Epic. At this time, Gonzalez began complaining to White about various facets ofEvolv Mexico’s operation and the relationship between Evolv and Evolv Mexico. Gonzalez’s complaints were illusory and designed to provide cover for his later resignation.
32. Defendants also solicited and recruited Easton Rutkowski (“Rutkowski”) and Kyle Palmer (“Palmer”) to join Epic. Rutkowski was Evolv’s customer service lead and sales coordinator. Palmer was employed in Evolv’s information technology section. Rutkowski and Palmer had executed Invention and Secrecy Agreements (“ISA”) with Evolv pursuant to which they agreed that all trade secrets, inventions, and confidential information held by Evolv and its related companies before their employment or developed during their employment were the exclusive property of Evolv. Rutkowski and Palmer further agreed not to disclose any of Evolv’s trade secrets, inventions, and confidential information during or after their employment, and not to use such independently of their work for Evolv or its related companies.
33. Epic hired Rutkowski and Palmer as of August 26, 2013, but they concealed that fact from Evolv and continued to be employed by Evolv. Defendants induced Rutkowski and Palmer to breach the ISA by disclosing Evolv’s trade secrets and confidential information to Epic for use by Epic in competing with Evolv.
34. On August 29, 2013, Defendants via email coordinated a conference call about the “Latin Epic Team”-stealing Plaintiffs’ Latin American management and distributors-in order to “get this all taken care of today, time is not our friend right now. There are some concerns and points we need to talk about to all be on the same page and ready to crush this.” The email was mistakenly sent to Keranen’s Evolv email address. Realizing their unlawful conspiracy was at risk of being uncovered, Defendants had Steffe contact Palmer, who was still employed at Evolv to coordinate with Palmer about deleting the e-mails discussing their plan to solicit Evolv’s Latin America team, and Palmer unlawfully accessed Evolv’s server and deleted thee-mails. Defendants congratulated Palmer (who was still an Evolv employee) for what they believed to be a successful destruction of the incriminating e-mails and specifically stated he would be rewarded with a bonus for pulling off this nefarious act. As a backup plan, Defendants planned to spam e-mail bomb Keranen’s Evolve-mail account with “10,000 SPAM emails” in order to bury the incriminating e-mails and conceal them from Evolv. Evolv was able to recover the deleted e-mails discussing Defendants’ plan to recruit Evolv’s Latin America team.
35. On September 6, 2013, Palmer and Rutkowski resigned from Evolv and openly assumed their positions with Epic.
36. Although Gonzalez continued to represent that he was working to develop the Latin America market for Evolv, he was actually working on his deal with Epic. On September 12, 2013, Gonzalez and Evolv’s Latin America team resigned from Evolv, and took their positions at Epic.
37. Shortly following Gonzalez’s resignation, most of Plaintiffs’ distributors in Latin America terminated their relationships with Plaintiffs.
38. Plaintiffs suspended Steffe’s distributorship on or about September 20, 2013.
39. Evolv provided Steffe, Keranen, Bott, Gonzalez, Rutkowski, and Palmer, all of whom were prior employees and distributors and now work for Epic, access to its confidential and proprietary information in order to assist them with their employee or distribution responsibilities. Additionally, Evolv provided training regarding its products, marketing, and sales techniques, among other things. Evolv invested and/or loaned significant amounts of money to Steffe, Keranen, Bott, Gonzalez, Rutkowski, and Palmer to develop and assist them with their distribution responsibilities and capabilities. Epic has specifically targeted these employees and distributors of Evolv in order to gain access to this information and exploit it for their own benefit.
E. Epic’s Business Strategy Is to Attract Evolv’s Leaders, Use the Confidential and Proprietary Information Imparted to Them by Evolv, and Steal Evolv’s Business.
40. This is not the first time that Defendants have poached or attempted to poach Evolv’s current or former distributors or a current or former employee ofEvolv. In fact, Epic’s current business plan seems to focus solely on targeting the leaders of rival companies and bringing them to Epic. Epic’s promotional materials tout its “$100 million fund” to attract such leaders. In addition, Defendants have implemented a concerted business plan that targets Evolv’s distributors and employees in order to gain insider knowledge ofEvolv’s business model and manufacturing secrets. Evolv is informed and believes and on that basis alleges that Defendants targeted Steffe, Keranen, Bott, Gonzalez, Rutkowski, and Palmer because of their relationships with Evolv. Evolv is further informed and believes and on that basis alleges, that Defendants induced Steffe, Keranen, Bott, Gonzalez, Rutkowski, and Palmer to utilize their knowledge of Evolv’s products, pricing, mixing, and marketing, among other things, to assist Defendants in competing with Evolv in the marketplace. Evolv is further informed and believes and on that basis alleges that, Defendants hired Steffe, Keranen, Bott, Gonzalez, Rutkowski, and Palmer and assigned them to work in the same territories and areas of expertise that they served while working and distributing for Evolv.
41. Steffe, Keranen, Bott, Gonzales, Rutkowski, and Palmer’s actions in working or distributing on behalf of one of Plaintiffs’ competitors and violating the CSA, RA, EEA, and ISA, and the Epic Defendants’ actions in inducing Plaintiffs’ distributors and employees to breach their fiduciary duties and contractual obligations by disclosing confidential and trade secret information, their deliberate destruction of Plaintiffs’ property, and solicitation of Plaintiffs’ customers threatens Evolv’s business and ongoing customer relationships. Steffe, Keranen, Bott, Gonzalez, Rutkowski, and Palmer are fully aware of Plaintiffs’ business relationship with these customers. The Epic Defendants were fully aware of Plaintiffs’ relationship with Steffe, Keranen, Bott, Gonzalez, Rutkowski, and Palmer. Plaintiffs’ business and its relationships with its customers will be damaged if Defendants are allowed to flaunt and interfere with the contractual relationships between Plaintiffs and their distributors and call on and solicit Plaintiffs’ customers for the benefit of the Defendants.
42. Additionally, in furtherance of the conspiracy and in direct violation of their contractual and fiduciary duties, Steffe, Keranen, Bott, Gonzalez, Rutkowski, and Palmer have used and disclosed the confidential knowledge and information Plaintiffs provided to them about Plaintiffs’ products, pricing, mixing, and marketing, among other things, to gain a competitive advantage over Plaintiffs and for the benefit of Epic, despite the existence of valid and enforceable agreements designed to protect Plaintiffs from employees and distributors who seek to use or disclose confidential and proprietary information and trade secrets gained through their relationship with Plaintiffs to compete against Plaintiffs. The purpose of these agreements is to protect the legitimate business interests, business goodwill, trade secrets, and confidential information belonging to Plaintiffs, among other things. To make matters worse, Defendants have engaged in a campaign to disparage Plaintiffs’ reputation by making defamatory statements to others regarding Plaintiffs’ ownership, compensation plan, and financial status, among other things.
43. Plaintiffs seek monetary relief over $1,000,000.00 against Defendants.
Count One — Temporary Restraining Order, Temporary Injunction, and Permanent Injunction
44. Plaintiffs incorporate and reallege the allegations set forth above.
45. Plaintiffs have a likelihood of success on the merits of their claims for breach of contract, misappropriation of trade secrets, common law misappropriation, violation of the Texas Theft Liability Act, conversion, tortious interference with contract, civil conspiracy, aiding and abetting, business disparagement, and defamation against Defendants.
46. Plaintiffs are threatened with immediate and irreparable harm and have no adequate remedy at law to prevent Defendants from engaging in the actions described above and requests that a temporary restraining order be issued against Defendants without notice, if need be, restraining Defendants, their agents, servants, employers, principals, assignees, transferees, and/or beneficiaries, either directly or indirectly:
(1) from using or disclosing for any purpose whatsoever:
(a) any confidential information, as that term is defined in the MNDNCA;
(b) any information related to Plaintiffs marketing and advertising methods and strategies, cost information, price lists, sales information, and supplier and vendor lists and information;
(2) from contacting, attempting to contact, recruiting, engaging or hiring away any of Plaintiffs’ employees, sales representatives, or distributors;
(3) from disparaging Plaintiffs’ business or otherwise communicating with Plaintiffs employees, sales representatives, or distributors in an effort to tortiously interfere with Plaintiffs contracts; and
(4) from hiding, secreting, destroying, changing or modifying any document, in either hard copy or electronic form, including e-mails, relevant to the subject matter of this lawsuit.
47. Accordingly, Plaintiffs seek enforcement of the terms of the MNDNCA through the issuance of the injunctive relief requested herein. Additionally, Plaintiffs would show that, as a result of the breach of such contracts and/or misappropriation of trade secrets to unfairly compete with Plaintiffs, Plaintiffs have been damaged in an amount in excess of the minimum jurisdictional limits of the Court and seek recovery of said amount from Defendants.
Count Two –Breach of Contract
48. Plaintiffs incorporate and reallege the allegations set forth above.
49. Plaintiffs and Defendants entered into the MNDNCA, which is a valid and enforceable agreement. Plaintiffs have standing to sue for breach of the agreement with Defendants. Defendants breached the agreement, and as a result of the Defendants’ breaches of this contract, Defendants have proximately caused actual and consequential damages to Plaintiffs in an amount within the jurisdictional limits of this Court, plus interest, costs, attorneys’ fees, and post-judgment interest as allowed by law.
Count Three –Misappropriation of Trade Secrets
50. Plaintiffs incorporate and reallege the allegations set forth above.
51. Plaintiffs own trade secrets concerning their product, pricing, marketing, sales techniques, customer information, customer histories, etc. Defendants used or disclosed Plaintiffs’ trade secrets in violation of their contractual relationship with Plaintiffs, and unlawfully obtained Plaintiffs’ trade secrets from Steffe, Keranen, Bott, Gonzalez, Rutkowski, and Palmer, and used or disclosed such trade secrets. Plaintiffs have suffered injury as a result.
52. As a result of Defendants’ misappropriation and/or disclosure of trade secrets, Plaintiffs have suffered actual, consequential, incidental and special damages to Plaintiffs for which Plaintiffs now bring suit. Plaintiffs seek exemplary damages in an amount sufficient to deter similar conduct by Defendants in the future in an amount to be determined by the trier of fact.
53. Furthermore, Plaintiffs have suffered irreparable injury and will continue to suffer irreparable harm if the actions and conduct of Defendants, as stated herein, are not restrained by this Court through an injunctive order. Accordingly, Plaintiffs request that this Court enter a temporary restraining order, a temporary injunction, and upon trial a permanent injunction enjoining such acts and conduct.
Count Four– Common Law Misappropriation
54. Plaintiffs incorporate and reallege the allegations set forth above.
55. Plaintiffs have created confidential information concerning their product, pricing, marketing, sales techniques, customer information, customer histories, etc. through extensive time, labor, skill and money. Defendants have used this information in competition with Plaintiffs thereby gaining a special advantage in that competition because Defendants are burdened with little or none of the expense incurred by the Plaintiffs. As a result, Plaintiffs have suffered damages.
56. As a result of Defendants’ common law misappropriation, Plaintiffs have suffered actual, consequential, incidental and special damages to Plaintiffs for which Plaintiffs now bring suit. Plaintiffs seek exemplary damages in an amount sufficient to deter similar conduct by Defendants in the future in an amount to be determined by the trier of fact.
57. Furthermore, Plaintiffs have suffered irreparable injury and will continue to suffer irreparable harm if the actions and conduct of Defendants, as stated herein, are not restrained by this Court through an injunctive order. Accordingly, Plaintiff requests that this Court enter a temporary restraining order, a temporary injunction, and upon trial a permanent injunction enjoining such acts and conduct.
Count Five- Violation of the Texas Theft Liability Act
58. Plaintiffs incorporate and reallege the allegations set forth above.
59. Through the course of their business, Plaintiffs have developed, compiled, and maintained a substantial amount of non-public, confidential, and proprietary information and trade secrets. Defendants have unlawfully appropriated valuable, confidential business information and documents belonging to Plaintiffs. The unlawful appropriation by Defendants constitutes theft of trade secrets under TEXAS PENAL CoDE § 31.05, and Defendants have stolen trade secrets from Plaintiffs and/or made copies of material representing a trade secret without Plaintiffs’ effective consent. Plaintiffs have suffered damages as a result of Defendants’ unlawful appropriation of Plaintiffs trade secrets, in an amount to be determined at trial. Further, Plaintiffs have retained the undersigned counsel to prosecute this claim against Defendants and are entitled to their court costs and reasonable and necessary attorneys’ fees pursuant to TEXAS CIVIL PRACTICE & REMEDIES CODE § 134.005(b).
Count Six — Conversion
60. Plaintiffs incorporate and reallege the allegations set forth above
61. On information and belief, Defendants converted and unlawfully and without authority assumed dominion and control over certain property of Plaintiffs, including the confidential files of Plaintiffs, their client information, and certain client-resource property of Plaintiffs, including Plaintiffs’ marketing brochures, presentations, and strategy information.
62. Defendants’ conversion of Plaintiffs’ property was malicious because they knew their actions were unlawful and without authority. Accordingly, Plaintiffs are entitled to actual, consequential, incidental and special damages for which Plaintiffs now bring suit. Plaintiffs seek exemplary damages in an amount sufficient to deter similar conduct by Defendants in the future in an amount to be determined by the trier of fact.
Count Seven — Tortious Interference with Existing Contracts
63. Plaintiffs incorporate and reallege the allegations set forth above.
64. Plaintiffs entered into a contractual relationship with Steffe, Keranen, Bott, Gonzalez, Rutkowski, Palmer and others. Defendants were aware of Plaintiffs’ contractual relationships with Steffe, Keranen, Bott, Gonzalez, Rutkowski, Palmer, and others. Defendants intentionally interfered with Plaintiffs’ contractual relationships with Steffe, Keranen, Bott, Gonzalez, Rutkowski, and Palmer, as well as others.
65. As a result of Defendants’ tortious interference with Plaintiffs’ contractual relationships, Plaintiffs have suffered actual, consequential, incidental and special damages for which Plaintiffs now bring suit. Plaintiffs seek exemplary damages in an amount sufficient to deter similar conduct by Defendants in the future.
Count Eight– Civil Conspiracy
66. Plaintiffs incorporate and reallege the allegations set forth above.
67. All Defendants were a member of a combination of two or more persons. The object of the combination was to unlawfully obtain Plaintiffs’ confidential and trade secret information. The members of the conspiracy had a meeting of the minds on the object or course of action. One of the members of the conspiracy committed an unlawful, overt act to further the object or course of action. Plaintiffs have suffered injury as a proximate result of the wrongful act.
68. As a result of Defendants’ consptracy, Plaintiffs have suffered actual, consequential, incidental and special damages, for which Defendants should be held jointly and severally liable. Plaintiffs seek exemplary damages in an amount sufficient to deter similar conduct by Defendants in the future in an amount to be determined by the trier of fact.
Count Nine -Aiding and Abetting
69. Plaintiffs incorporate and reallege the allegations set forth above.
70. Steffe, Keranen, Bott, Rutkowski, Gonzalez, and Palmer owed Plaintiffs a fiduciary duty not to disclose Plaintiffs’ confidential and trade secret information during, and after the termination of, their relationship with Plaintiffs. Defendants aided and abetted Steffe, Keranen, Bott, Rutkowski, Gonzalez, and Palmer in the breach of their fiduciary duties by disclosing Plaintiffs confidential and trade secret information to Defendants, a direct competitor of Plaintiffs.
71. Defendants aided and abetted Steffe, Keranen, Bott, Rutkowski, Gonzalez, and Palmer and committed torts against Plaintiffs. Defendants had specific intent and knowledge that their conduct constituted a tort and Defendants had the intent to assist each other in committing the torts.
72. Defendants and Steffe, Keranen, Bott, Rutkowski, Gonzalez, and Palmer gave each other assistance or encouragement and the Defendants’ assistance or encouragement was a substantial factor in causing the torts. The actions of Defendants complained of herein were a proximate cause of harm to Plaintiffs and have resulted in actual damages in an amount within the jurisdictional limits of this Court for which sums Plaintiffs now sue Defendants, who should be held jointly and severally liable for the underlying torts.
73. As a result of Defendants’ conduct, which was committed knowingly, willfully, intentionally, with actual awareness, or with actual malice, Plaintiffs also seek the recovery of exemplary damages of not less than three times the amount of Plaintiffs’ actual damages.
Count Ten -Business Disparagement
74. Plaintiffs incorporate and reallege the allegations set forth above.
75. Defendants intentionally published false statements, and the statements were reasonably understood by those who read or heard them to cast doubt upon the veracity and competence of Plaintiffs’ reputation. The defamatory statements made by Defendants were false and made with malice. Defendants lack privilege for these statements and this business disparagement caused Plaintiffs special damages. As a direct and proximate result of Defendants’ false and defamatory statements, Plaintiffs’ business reputation, good name, and standing in the community have been damaged.
76. Consequently, Plaintiffs seek actual and special damages for Defendants’ acts of business disparagement, in an amount within the jurisdictional limit of the Court. Further, the acts of business disparagement as described above were willful and wanton, done with a specific intent to cause substantial injury to Plaintiffs, and with a conscious disregard for the rights of others, Plaintiffs seek exemplary damages from Defendants as well as interest and costs.
Count Eleven -Defamation
77. Plaintiffs incorporate and reallege the allegations set forth above.
78. Defendants published statements of fact referring to Plaintiffs that were defamatory and false. With regard to the truth of the statements, Defendants were: (1) acting with actual malice; (2) negligent; and/or, (3) liable without regard to fault. As a result of Defendants’ defamation, Plaintiffs have suffered pecuniary injury.
79. Plaintiffs have suffered actual and consequential damages in an amount that is within the jurisdictional limits of this Court, for which Plaintiffs now bring this suit and seeks the recovery of exemplary damages, interest, and costs.
Count Twelve– Attorneys’ Fees
80. Plaintiffs incorporate and reallege the allegations set forth above.
81. As a result of the actions of Defendants, it was necessary for Plaintiffs to employ the services of the undersigned counsel to conduct this litigation. Plaintiffs are entitled to recover a sum equal to all reasonable attorney’s fees and costs of court incurred in prosecuting this lawsuit, as well as all post-judgment proceedings and appellate proceedings, in accordance with Chapter 38 of the Texas Civil Practice and Remedies Code.
Count Thirteen -Exemplary Damages
82. Plaintiffs incorporate and reallege the allegations set forth above.
83. The acts complained of herein were committed knowingly, willfully, intentionally, with actual awareness, or with actual malice. In order to punish Defendants for such unconscionable overreaching and to deter such actions and/or omissions in the future, Plaintiffs seek recovery against Defendants for exemplary damages as provided by Chapter 41 of the Texas Civil Practice and Remedies Code.
84. All conditions precedent necessary for Plaintiff to have and recover in this action have been performed, have occurred, or have been waived.
85. Plaintiffs demand that this Court empanel a lawful jury to hear this case.
REQUEST FOR DISCLOSURE
86. Pursuant to Texas Rule of Civil Procedure 194, Plaintiffs request that Defendants disclose to Plaintiffs within fifty (50) days of this service of this request, the information and materials described in Texas Rule of Civil Procedure 194.2(a) through 194.2(k).
WHEREFORE, PREMISES CONSIDERED, Plaintiffs respectfully request that citation issue and process be served on Defendants, that Plaintiffs be granted a Temporary Restraining Order, that Plaintiffs be granted a Temporary Injunction and that, upon final hearing, Plaintiffs have and recover a Permanent Injunction against Defendants, a decree requiring Defendants to specifically perform in accordance with the covenant not to compete contained in the Agreements, judgment from and against Defendants as requested above, for reasonable attorney’s fees incurred by Plaintiffs in prosecuting this action, for costs and expenses of suit herein, for pre-judgment and post-judgment interest on all monetary relief sought herein at the highest rates allowed by law; and, for such other and further relief to which Plaintiffs may be justly entitled.
CARTER STAFFORD ARNETT HAMADA & MOCKLER, PLLC s=K –\(
J.,R6hert Arnett ll
State Bar No. 01332900/
8150N. Central Expressway, Suite 1950
Dallas, Texas 75206
(214) 550w8188 (Telephone) (214) 550-8185 (Facsimile)
FRIEDMAN & FElGER, L.L.P.
Lawrence J. Friedman
State Bar No. 07469300
Michael L. Gaubert
State Bar No. 00785903
State Bar No. 24045519
5301 Spdng Valley Road, Suite 200
Dallas, Texas 75254
(972) 788-1400 (Telephone)
ATTORNEYS FOR PLAINTIFFS