INTRODUCTION
2 This action is about the avaricious disregard of the joint venture partners' relationship, and of failure to keep fiduciary duty by a partner of joint venture who values the fortune to be derived from by breaching the fiduciary duty between the partners, more than adhering to their ethical obligations and contractual agreements. The defendant had violated the fiduciary duty to the plaintiff by trying to reduce ABC's share by their attempt to transfer ABC's share in PMA to its former employees. Plaintiff and XYZ entered into and Joint Venture Agreement to perform the contract for construction and infrastructure repair from Los Angeles Community College District. Both the parties represented and agreed "to take no action that would be contrary to the interests of the other Party, to the interests of the Joint Venture, or to the interest of the Project." 3. However, an agent of XYZ misrepresented to the President of ABC which caused him to sign two amendments. These Amendments would allow XYZ to exercise greater control of the staff selection process for work performed on the PMA.
4. To the extent that the Joint Venture has compensated each venturer based upon the hours worked by their respective employees, these Amendments would allow XYZ to remove a substantial portion of ABC's work on the PMA and reassign it to XYZ employees; this in turn would have decreased ABC's revenue from the PMA. This was made with a view to further the defendant's plan to convert ABC's position in the PMA to another firm, such as the *****, ********** firm. Plaintiff recently learned that LACCD will be invoking its right to re-bid the PMA. This action may reasonably be an attempt by LACCD and XYZ to further seek to remove ABC from having a role in the PMA. Courts have repeatedly issued injunctions preventing breach of fiduciary relationship by joint venture partners, as well as ordering a constructive trust on all resulting profits, and such an injunction and disgorgement of profits are required here. JURISDICTION
5. Venue is proper in this judicial district, pursuant to California Code of Civil Procedure §§ 395(a) and 395.5. The defendants either reside, maintain an office, transact business, have an agent, or are found in the County of Los Angeles , and are within the jurisdiction of this Court for purposes of service of process. THE PARTIES
6. Plaintiff ABC is a corporation organized and existing under the laws of State of California with its registered office at ******************* ******** *********************.
7. Defendant XYZH+N, INC. ("XYZ"), is, on information and belief, a corporation organized under the laws of the State of California , with its registered office at ************************************ ***** *** ***********. Upon information and belief, ...is a principal and/or officer of XYZ 8. Various others, presently unknown to plaintiff, participated as co-conspirators with defendant in the violations of law alleged in this Complaint and have engaged in conduct and made statements in furtherance thereof. DOES 00-00 are individuals, and participated in the activity which is the subject of this action, as alleged in this Complaint. DOES 00-00 are business entities of unknown form that participated in the activity which is the subject of this action. Plaintiff does not know the true names and capacities of the defendants named in this action as DOES 1-00, and therefore sues them under fictitious names. Plaintiff will request permission to amend this Complaint to state the true names and capacities of these fictitiously named defendants when they ascertain them. Plaintiff is informed and believes, and alleges on this ground, that these fictitiously named defendants are legally responsible in some manner for the acts and omissions set forth below, and therefore are liable to them for the relief requested. 9. Plaintiff is informed and believes, and on that basis alleges, that at all times herein mentioned each of the defendants was the agent, servant, employee,
and/or co-conspirator of each of the other defendants, and, in doing the acts hereinafter alleged, was acting within the course and scope of their authority as such agent, servant, employee, and/or co-conspirator with the permission and consent of their co-defendants and, further, that the defendants, and each of them, have authorized, ratified, and approved the acts of each of the other defendants with full knowledge of those acts. FACTUAL BACKGROUND
10. In or about April 20 01 , the plaintiff ABC and the defendant XYZ entered into a Joint Venture Agreement (JVA), a copy of which is attached hereto as Exhibit "A" and made a part hereof, to perform the contract for construction and infrastructure repair from Los Angeles Community College District ("LACCD") 11. The Joint Venture and LACCD entered into a Program Management Agreement,(PMA) a copy of which is attached hereto as Exhibit "B" and made a part hereof. 12. The PMA treats Joint Venture as single entity and nothing is provided in PMA to define the individual rights of XYZ or ABC. 13. ABC employees Andre *****, *****, and ****conspired with **** and ***** of XYZ and Larry Eisenberg of LACCD to convert ABC's goodwill and right to payment in the PMA to another firm headed by ****, *********.
14. These attempts occurred while the PMA was ongoing and prior to the
PMA being put up for re-bid. 15. There was an effort on the part of these ABC former employees to break away and try and obtain some of the District work was encouraged by the District personnel and XYZ. 16. In or about February of 2005, XYZ agent ******** made misrepresentations to ABC President ********* which caused **** to execute two Amendments to the JVA and JVOA. 17. This was made to allow XYZ to exercise greater control of the staff selection process for work performed on the PMA. To the extent that the Joint Venture has compensated each venturer based upon the hours worked by their respective employees, these Amendments would have allowed XYZ to remove a substantial portion of ABC's work on the PMA and reassign it to XYZ employees; this in turn would have decreased ABC's revenue from the PMA. 18. It is reasonably believed that the intent of XYZ in seeking ABC to execute the Amendments was to further the plan to convert ABC's position in the PMA to another firm. 19. Mr. *******recently learned that LACCD will be invoking its right to re-bid the PMA. This action may reasonably be an attempt by LACCD and XYZ to further seek to remove ABC from having a role in the PMA.
FIRST CAUSE OF ACTION (Breach of Contract by XYZ and Conspiracy to Breach Contract)
[Against All Defendants]
20. ABC re-alleges and incorporates by reference each and every allegation set forth in Paragraphs 1-19 above.
21. In or about April 2001 ABC entered into a JVA with XYZ to perform the contract for construction and infrastructure repair from LACCD. An implied provision in this contract was that the XYZ would comply with the fiduciary obligation to ABC. This agreement imposes an obligation on the parties "to take no action that would be contrary to the interests of the other Party, to the interests of the Joint Venture, or to the interest of the Project."
22. Joint venturers entered into a Project Management Contract ("PMA") with LACCD and a Joint Venture Operating Agreement ("JOVA") between themselves.
23. By the terms of JVA, XYZ agreed that the Joint Venture shall continue until such time as the venture's obligations under the PMA have been fulfilled and all disputes which arose under the PMA have been resolved.
24. By terms of JVA, XYZ agreed that the Joint Venture is deemed terminated once a final settlement and accounting between the venturers has been completed.
25. By terms of JVA, XYZ agreed "to take no action that would be contrary to the interests of the other Party, to the interests of the Joint Venture, or to the interest of the Project." XYZ also agreed not to enter into any other contracts if such contracts affect the performance of the JVA.
26. XYZ breached these agreements by trying to convert ABC's goodwill and the right to payment in the PMA to another firm.
27. At some time, presently unknown to ABC, and continuing, on information and belief, to the present, XYZ and DOES 1-00, knowingly and willingly conspired and agreed with ***** and ******** of XYZ and Larry Eisenberg of LACCD to convert ABC's goodwill and right to payment in the PMA to another firm.
28. Plaintiff has performed all conditions, covenants, and promises required by him on his part to be performed in accordance with the terms and conditions of the contract.
29. XYZ had a fiduciary relationship with ABC based on trust and confidence that derived from the facts that XYZ and ABC entered into a JVA to infrastructure repair from LACCD. XYZ agreed to take no action that would be contrary to the interests of the other Party, to the interests of the Joint Venture, or to the interest of the Project. This created a fiduciary relationship between XYZ and ABC that existed at all times relevant to this Complaint between ABC and XYZ. By virtue of this special relationship that existed between XYZ and ABC, ABC had confidence in the fidelity and integrity of XYZ, ABC President signed an instrument amending the JVA and JVOA and that it is reasonably believed that the intent of XYZ in seeking ABC to execute the Amendments was to further the plan to convert ABC's position in the PMA to another firm
30. Defendants did the acts and things alleged pursuant to, and in furtherance of, the conspiracy and above-alleged agreement.
31. ABC is informed and believes and thereon alleges that the last overt act in pursuance of the above-described conspiracy occurred on or about the date of filing of the Complaint, as defendants are currently taking actions to replace ABC during the pendency of the JVA and plaintiff reasonably believes that XYZ is trying to participate in re-bid of PMA in case the LACCD decided to re-bid.
32. ABC has no adequate legal remedy for this breach of fiduciary duties in that damages are inadequate to remedy the harm to the sanctity of the Joint Venture partners relationship and the harm that would be caused by the replacement of ABC from PMA during the pendency of JVA and the attempt to participate in re-bid without ABC, since once such breach of fiduciary duty is taken place it cannot be undone.
33 As a result of defendants' actions in breaching and conspiring to breach contract, ABC is entitled to equitable relief in the form of injunctive relief and full restitution and/or disgorgement of all revenues, earnings, profits, compensation and benefits which may have been obtained by defendants as a result of such actions, including the imposition of a constructive trust over the proceeds of such actions.
34 In doing the acts alleged above, defendants acted with oppression, fraud, and malice, such that ABC is entitled to punitive damages.
SECOND CAUSE OF ACTION (Breach of Fiduciary Duty by XYZ and Conspiracy to Breach Fiduciary Duty)
[Against All Defendants]
35. ABC re-alleges and incorporates by reference each and every allegation set forth in Paragraphs 1-34 above.
36. In or about April 2002 ABC entered into a JVA with XYZ to perform the contract for construction and infrastructure repair from LACCD. An implied provision in this contract was that the XYZ would comply with the fiduciary obligation to ABC. This agreement imposes an obligation on the parties "to take no action that would be contrary to the interests of the other Party, to the interests of the Joint Venture, or to the interest of the Project."
37. Plaintiff has performed all conditions, covenants, and promises required by him on his part to be performed in accordance with the terms and conditions of the contract.
38. XYZ had a fiduciary relationship with ABC based on trust and confidence that derived from the facts that XYZ and ABC entered into a JVA to infrastructure repair from LACCD. XYZ agreed to take no action that would be contrary to the interests of the other Party, to the interests of the Joint Venture, or to the interest of the Project. This created a fiduciary relationship between XYZ and ABC that existed at all times relevant to this Complaint between ABC and XYZ. By virtue of this special relationship that existed between XYZ and ABC, ABC had confidence in the fidelity and integrity of XYZ, ABC President signed
an instrument amending the JVA and JVOA and that it is reasonably believed that the intent of XYZ in seeking ABC to execute the Amendments was to further the plan to convert ABC's position in the PMA to another firm, such as the *****, *********.
39. Defendants did the acts and things alleged pursuant to, and in furtherance of, the conspiracy and above-alleged agreement.
40. ABC is informed and believes and thereon alleges that the last overt act in pursuance of the above-described conspiracy occurred on or about the date of filing of the Complaint, as defendants are currently taking actions to replace ABC during the pendency of the JVA and plaintiff reasonably believes that XYZ is trying to participate in re-bid of PMA in case the LACCD decided to re-bid.
41. ABC has no adequate legal remedy for this breach of fiduciary duties in that damages are inadequate to remedy the harm to the sanctity of the Joint Venture partners relationship and the harm that would be caused by the replacement of ABC from PMA during the pendency of JVA and the attempt to participate in re-bid without ABC, since once such breach of fiduciary duty is taken place it cannot be undone.
42 As a result of defendants' actions in breaching and conspiring to breach XYZ's fiduciary duties, ABC is entitled to equitable relief in the form of injunctive relief and full restitution and/or disgorgement of all revenues, earnings, profits, compensation and benefits which may have been obtained by defendants as a result of such actions, including the imposition of a constructive trust over the proceeds of such actions.
43 In doing the acts alleged above, defendants acted with oppression, fraud, and malice, such that ABC is entitled to punitive damages.
PRAYER FOR RELIEF
WHEREFORE, ABC prays for relief against defendants as follows:
1. For a preliminary injunction and permanent injunction that defendants XYZ, DOES 1-, their agents, servants, representatives, attorneys, partners, successors, predecessors, assigns, and all persons acting for, with, by, through, or under them, and each of them, directly or indirectly:
a. Be restrained and enjoined from selling, transferring, licensing, assigning, or in any way conveying any rights or title of ABC's interest in JVA;
b. Be restrained and enjoined from participating in any manner in re-bid of PMA by LACCD, without ABC;
2. For disgorgement of all gains, profits, and advantages derived by defendants from their acts of unfair competition and other violations of law;
3. For punitive damages;
4. For all costs and expenses;
5. For prejudgment interest at the maximum legal rate; and
6. For such other and further relief as the Court may deem proper.
Dated: ........, 200
Respectfully submitted, |
