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IN THE UNITED STATES DISTRICT COURTFOR THtr WESTERN DISTRICT OF MISSOURI
KWANGSUN EDMONSTON,
Plaintiff,
v.
APT IP HOLDINGS, LLC, a ForeignMissouri Limited Liability Company,
SERVE:
Registered AgentStephen M. Kyle2800 Commerce Tower911 Main StreetKansas City, MO 64105
and,
AMERICAN PERFORMANCETtrCHNOLOGIES, LLC,a Foreign Missouri Limited Liability Company
SERVE:
Registered AgentStephen M. Kyle2800 Commerce Tower911 Main StreetKansas Cify, MO 64105
)))))))))))))))))))))))))))))))
Case No.:
Division:
JURY TRIALDEMANDED
COMPLAINT
COMES NOW the Plaintifl KWANGSLTN EDMONSTON, by and
through her counsel of record, and states the following for her claims and causes of action
against Defendants APT IP HOLDINGS, LLC and AMERICAN PERFORMANCE
TECHNOLOGIES, LLC:
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 1 of 19
THE PARTIES
1. Kwangsun Edmonston ("Plaintiffl') is a resident of San Bernardino
County, California.
2. Defendant APT IP Holdings, LLC ("APT") is a limited liability company
organrzed and existing under the laws of the State of Wyoming, registered in the State of
Missouri as a foreign limited liability company. APT may be served with process by
serving its Registered Agent, Stephen M. Kyle, 2800 Commerce Tower, 911 Main Street,
Kansas City, Missouri 64105.
3. Defendant American Performance Technologies, LLC ("American
Performance") is a limited liability company organized and existing underthe laws of the
State of Wyoming, registered in the State of Missouri as a foreign limited liability
company. APT may be served with process by serving its Registered Agent, Stephen M.
Kyle,2800 Commerce Tower,971 Main Street, Kansas City, Missouri 64105.
4. Upon information and belief, Plaintiff states that APT and American
Performance are affiliate companies with common ownership and/or officers/managers,
that APT and American Performance are alter egos of each other, and American
Performance exercises control over APT with respect to the Agreement and the Patent
described below.
5. Upon information and belief, APT and American Performance have their
principal offices in the State of Missouri at located at 8844 Hillcrest Rd., Kansas City,
MO 64138 .
6. Upon information and beliel, Plaintiff states that APT and American
Performance acted as agents of each other in doing the things described herein and that
each Defendant ratified and otherwise adopted such acts and statements as were
performed, made or carried out by the other Defendants.
JURISDICTION AND VENUE
7. This Court has subiect matter iurisdiction over the claims set forth herein
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 2 of 19
pursuant to 28 U.S.C. Section 1332 in that Plaintiff and Defendants are citizens of
different states and the amount in controversy exceeds $75, 000.00.
8. This Court has personal jurisdiction over APT and American Performance
pursuant to Mo. Rev. Stat. Section 506.150 because they reside in and/or can be served
with process in the State of Missouri.
9. Venue lies in this Court pursuant to 28 U.S.C. Section 1391 in that APT
and American Performance may be found in Jackson County, Missouri, APT and
American Performance may be served with process in Jackson County, Missouri, and
upon information and belief APT and American Performance principal places of business
are located in Jackson County, Missouri.
10. The Agreement described below, at\7.6, provides that: "Any lawsuit
based on this Agreement shall be brought in the State of Missouri. Exhibit 2.
ALLEGATIONS COMMON TO ALL COUNTS
1 1. Plaintiff is the widow of William H. "Red" Edmonston. Red Edmonston
died in 2007 .
12. On January 14,2003 Red Edmonston obtained a United States patent
("Patent") for a particular design of carburetor ("Carburetor"), U.S. Patent No. 6,505,821.
13. Thereafter APT and American Performance prepared, and Red Edmonston
and Plaintiff signed, a Letter of Intent effective September 77,2007 that contemplated the
sale of the Carburetor Patent to APT and American Performance for the sum of
$1,250,000 plus the amount of income taxes payable thereon, royalties and licensing
revenue. A copy of the Letter of Intent is attached hereto and incorporated herein by this
reference as Exhibit 1.
14. On October 2.,2007 Red Edmonston assigned the Carburetor Patent to
Plaintiff. Later in October 2007 Red Edmonston died.
15. Subsequent to Red Edmonston's death, Plaintiff and APT entered into an
Asset Purchase Agreement ("Agreement") effective December I0,2007 pursuant to
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 3 of 19
which APT purchased the Carburetor Patent from Plaintiff. A copy of the Agreement is
attached hereto and incorporated herein by this reference as Exhibit2.
16. In connection with the Agreement, the Carburetor Patent was assigned to
APT, and the assignment was recorded in the United States Patent and Trademark Office.
17 . Pursuant to the Agreement, tf 1 .1,, APT was to make payments to Plaintiff
totaling $1.5 million plus royalties and licensing fees.
18. APT made the first payment of S15,000 DOLLARS under the terms of the
Agreement, but then failed to make the next payment for $250,000 which pursuant to the
Agreement, fl 1.1, was payable within thirty days of APT's "receiving final certification
and an Executive Order Number ("EO Number") from a CARB/EPA approved testing
facility that the motorcycle, snowmobile, and lawnmower models of the Carburetor meet
or exceed EPA Tier 2 Emissions Standards with no decrease in performance or fuel
economy and no increase in noise levels."
19. APT obtained a final certification and an E,O Number on or about
December 10, 2009. The certification and EO Number were issued to American
Performance.
20. Upon information and belief, Defendants have failed to apply for and/or
obtain final certification and an Executive Order Number ("EO Number") from a
CARB/EPA approved testing facility that snowmobile and lawnmower models of the
Carburetor "meet or exceed EPA Tier 2 Emissions Standards with no decrease in
performance or fuel economy and no increase in noise levels" as required by the
Agreement.
21. Pursuant to the Agreement, $ 1 .1, APT was and is obligated to make two
more payments to Plaintiff of $617,500.00 DOLLARS each on or before December 10,
2010 and June 10,201 1, respectively. APT has not made either of these payments.
22. Additionally, APT is obligated to pay Plaintiff royalties and licensing fees
pursuant to the Agreement, fl 1.2.
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 4 of 19
23. As of the date of the filing of this Petition, APT has failed to make any
payments to Plaintiff as required under the terms of the Agreement, with the exception of
the initial $15,000.00 DOLLAR payment.
24. APT has not paid Plaintiff any royalties and licensing fees pursuant to the
Agreement, f1 1.2.
25. Demand has been made on Defendants to pay Plaintiff the monies due and
owing to Plaintiff under the Agreement, but Defendants have failed and refused to pay
the same.
26. Plaintiff has also demanded that Defendants reassign the Patent to
Plaintiff, but Defendants have failed and refused to reassign the Patent to Plaintiff.
27 . Upon information and belief, American Performance is selling carburetors
using the Patent in products sold by American Performance under the fictitious name
Motovox.
28. The Agreement, 116.2, provides for the recovery by the prevailing party in
any litigation of her or its attorney fees.
29 . As the Alter Ego of APT, American Performance is obligated to Plaintiff
under the terms of the Agreement and has failed to meet its obligations under the terms of
the Agreement in the same respects as APT.
30. As the Alter Ego of APT, American Performance is responsible for all acts
and legal liabilities of APT.
ALTER EGO ALLEGATIONS
31. Troy Covey is listed as the "Manager" for both APT and American
Performance with the Wyoming Secretary of State.
32. Troy Covey was designated in the Letter of Intent (Exhibit 1) as the
General Manager for both APT and American Performance.
33. APT and American Performance have common officers/managers, namely
Troy Covey.
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 5 of 19
34. Upon information and belief, American Performance controls APT in
terms of finances, policy and business practice including, but not limited to, the entry into
the Agreement with Plaintiff.
35. Upon information and belief, American Performance has used its control
over APT to cause APT to not pay Plaintiff the sums owed under the Agreement while
retaining control and possession of the Carburetor Patent and, in fact. using the patented
technology in products sold by American Performance and deriving income from the use
of the patent technology.
36. Upon information and belief, American Performance has used its control
over APT to cause the breach of the Agreement, the failure of APT to return the Patent to
Plaintiff, and has unjustly retained the control, use, benefit, income and profits from the
use of the patented technology, all to deprive Plaintiff of the ownership, control, use and
income from the patented technology.
37 . The aforementioned acts by American Performance were done dishonestly
and/or unjustly and are in contravention of Plaintiff s legal rights.
38. Upon information and belief, the control exercised over APT by American
Performance has proximately caused the breach of the Agreement, and the damages to
Plaintiff.
39. Upon information and belief, the formal corporate separateness and
arrangements between APT and American Performance were devised, or are being used,
to accomplish a fraud, injustice or other unlawful purpose against Plaintiff regarding the
Patent and the Agreement.
40. As the Alter Ego of APT, American Performance is liable for all
obliqations of APT.
COUNT IBREACH OF CONTRACT AGAINST APT AND AMERICAN PERFORMANCE
41. Plaintiff realleges and incorporates by reference paragraphs I through 40
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 6 of 19
above.
42. Plaintiff and Defendants entered into a valid and enforceable contract.
namely the Agreement.
43 . Plaintiff has performed all terms and conditions of the Agreement on her
part to be performed.
44. Defendants have breached the Agreement.
45. Upon information and belief, Defendant American Performance is the
alter ego of Defendant APT.
46. Specifically, Defendants have breached the Agreement by:
a) Failing to obtain governmental certification of lawnmower and
snowmobile models of the Carburetor;
b) failing to pay Plaintiff the payment due on or before January 10,2010
of $250,000.00 DOLLARS;
c) failing to pay Plaintiff the payment due on or before December 10,
2010 in the amount of $617,500.00 DOLLARS;
d) failing to pay Plaintiff the payment due on or before June 10,201 1 in
the amount of $617,500.00 DOLLARS;
e) failing to pay Plaintiff royalties and licensing fees owed under the
Agreement; and/or
0 breaching the implied covenant of good faith and fair dealing in the
Agreement.
47 . Plaintiff has demanded that Defendants pay Plaintiff the sums owed under
the terms of the Agreement, but Defendants have failed and refused to pay Plaintiff the
same.
48. Plaintiff made demand on Defendants on or about January 10,2010 and
on numerous other occasions before and after that date.
49. As a direct and proximate result of Defendants'breaches of the
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 7 of 19
Agreement, Plaintiff has been damaged in a sum in excess of $1,485,000.00 DOLLARS
to be established according to proof, together with prejudgment interest thereon at the
legal rate from January 10,2010 on the principal sum of $250,000.00, from December
70,2010 on the principal sum of $617,500.00 and from June I0,201 I on the principal
sum of $617.500.00.
50. As a result of Defendants' breaches of the Agreement, Plaintiff has
incurred, and will continue to incur attorney's fees and costs in connection with her
claims under the terms of the Agreement.
WHEREFORE, Plaintiff prays for judgment against Defendants, jointly and
severally on Count I in an amount to be determined at trial, but believed to be in excess
of $1,485,000.00, for prejudgment interest at the legal rate, for her reasonable attorney's
fees, for her costs incurred herein, and for such other and further relief as the Court
deems fair, just and equitable under the circumstances.
COUNT IINEGLIGENT MISREPRESENTATION AGAINST APT AND AMERICAN
PERFORMANCE
51. Plaintiff realleges and incorporates by reference paragraphs I through 40-
above.
52. APT and American Performance represented upon preparing the Letter of
Intent and then entering into the Agreement that they would pay Plaintiff at the times
called for by the Letter and Agreement.
53. APT and American Performance represented upon preparing the Letter of
Intent and then entering into the Agreement that they would obtain final certification and
an Executive Order Number ("EO Number") from a CARB/EPA approved testing facility
that the snowmobile and lawnmower models of the Carburetor "meet or exceed EPA Tier
2 Emissions Standards with no decrease in performance or fuel economy and no increase
in noise levels."
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 8 of 19
54. These representations were material to the Agreement between Plaintiff
and Defendant.
55. The representations were made by Troy Covey, acting as manager for both
APT and American Performance prior to and at the execution of the Agreement.
56. The representations made by APT and American Performance were
supplied to Plaintiff in the course of their businesses.
57. As a result of APT and American Performance's failure to exercise
reasonable care in making said representations, the representations were false.
58. APT and American Performance intentionally made these representations
to Plaintiff with respect to the Letter of Intent and Agreement to induce Plaintiff to enter
into the same.
59. APT and American Performance knew that said representations were false
when they were made, or failed to exercise reasonable care in making said
representations.
60. Plaintiffjustifiably relied on the representations made by APT and
American Performance in entering into the Letter of Intent and Agreement.
61. As a direct and proximate result of Plaintiff s reliance on said
representations, Plaintiff has been damaged.
62. At all material times Plaintiff was ignorant of the falsity of Defendants'
representations and believed them to be true, did not know of the undisclosed facts, and
could not with reasonable diligence have discovered them. In reliance on Defendants'
misrepresentations, Plaintiff signed the Agreement and assigned the Carburetor Patent to
APT. Plaintiff would not have done so if she had known that Defendants had
misrepresented and failed to disclose the material facts described above.
63. plaintiff s reliance on Defendants' misrepresentation was justified in that
the representations appeared honest, reliable and reasonable and Defendants' actual
intentions had not yet been made evident.
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 9 of 19
64. As a proximate result of Defendants'actions, Plaintiff has suffered
financial damages, including incidental and consequential damages, in a sum in excess of
$1,485,000.00 DOLLARS to be established according to proof, together with
prejudgment interest thereon at the legal rate from January 10,2010 on the principal sum
of $250,000.00, from December 10, 2010 on the principal sum of $617,500.00 and from
June 10,201 1 on the principal sum of $617,500.00.
65. As a further proximate result of Defendants' actions, Plaintiff has suffered
humiliation, mental anguish, and severe and extreme emotional distress, all to her
damage in a sum to be established according to proof.
66. Defendants knew, or should have known, that by making said
misrepresentations to Plaintiff there was a high probability of injury to Plaintiff and
thereby showed complete indifference or a conscious disregard for the rights of Plaintiff
thereby entitling Plaintiff to an award of punitive damages that are fair and reasonable.
WHEREFORE, Plaintiff prays for judgment against Defendants, jointly and
severally on Count II in an amount to be determined attrial, but believed to be in excess
of $1,485,000.00, for prejudgment interest at the legal rate, for punitive damages in an
amount to be determined at trial in an amount that is fair and reasonable, for her costs
incurred herein, and for such other and further relief as the Court deems fair, just and
equitable under the circumstances.
COUNT IIIFRAUDULENT MISREPRESENTATION AGAINST APT AND AMERICAN
PERFORMANCE
67 . Plaintiff realleges and incorporates by reference paragraphs I through -40-
above.
68. Upon information and beliel Defendants' representations upon preparing
the Letter of Intent and then entering into the Agreement that they would pay Plaintiff at
the times called for by the Letter and Agreement were knowingly false
1 0
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 10 of 19
misrepresentations or were made with ignorance of the truth.
69. Upon information and belief, Defendants' representations upon preparing
the Letter of Intent and then entering into the Agreement that they would obtain final
certification and an Executive Order Number ("EO Number") from a CARB/EPA
approved testing facility that the snowmobile and lawnmower models of the Carburetor
"meet or exceed EPA Tier 2 Emissions Standards with no decrease in performance or
fuel economy and no increase in noise levels" were knowingly false misrepresentations
or were made with ignorance of the truth.
70. These representations were material to the Agreement between Plaintiff
and Defendant.
7I . The misrepresentations were made to Plaintiff by Troy Covey (the
manager of APT and American Performance) both before the Letter and Agreement were
signed, and at the time of signing.
72. Upon information and beliel Defendants made the misrepresentations,
and failed to disclose material facts, with the intent to deceive and defraud Plaintiff and to
induce Plaintiff to enter into the Agreement.
73. At all material times Plaintiff was ignorant of the falsity of Defendants'
representations and believed them to be true, did not know of the undisclosed facts, and
could not with reasonable diligence have discovered them.
7 4. In reliance on the truth of Defendants' misrepresentations, Plaintiff signed
the Agreement and assigned the Carburetor Patent to APT. Plaintiff would not have done
so if she had known that Defendants had misrepresented and failed to disclose the
material facts described above.
75. Plaintiff s reliance on Defendants' misrepresentation was justified in that
the representations appeared honest, reliable and reasonable and Defendants' actual
intentions had not yet been made evident.
76. Plaintiff had the right to rely on Defendants' misrepresentations.
l 1
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 11 of 19
77 . As a proximate result of Def'endants' actions, Plaintiff has suffered
financial damages, including incidental and consequential damages, in a sum in excess of
$1,485,000.00 DOLLARS to be established according to proof, together with
prejudgment interest thereon at the legal rate from January 10,2010 on the principal sum
of $250,000.00, from December 10,2010 on the principal sum of $617,500.00 and from
June 70,201 1 on the principal sum of $617,500.00.
78. As a further proximate result of Defendants' actions,, Plaintiff has suffered
humiliation, mental anguish, and severe and extreme emotional distress, all to her
damage in a sum to be established according to proof.
79. In doing the foregoing acts, Defendants acted in a willful, wanton,
malicious, oppressive and fraudulent manner toward Plaintiff, and in conscious disregard
of Plaintiff s known rights, with the intention of benefiting themselves financially and
with the intent of, or a conscious disregard of the probability of, causing Plaintiff injury.
Officers, directors or managing agents of the entity Defendants authorized or ratified
such acts. In so acting, Defendants intended to and did vex, anno), injure, and harass
Plaintiff, and consciously disregarded Plaintiff s rights, so as to justify the assessment of
punitive and exemplary damages against Defendants in a sum to be established according
to proof in an amount that is fair and reasonable.
WHEREFORE, Plaintiff prays for judgment against Defendants, jointly and
severally on Count III in an amount to be determined at trial, but believed to be in excess
of $1,485,000.00, for prejudgment interest at the legal rate, for punitive damages in an
amount to be determined at trial that is fair and reasonable, for her costs incurred herein,
and for such other and further relief as the Court deems fair, just and equitable under the
circumstances.
T2
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 12 of 19
COUNT VCONVERSION AGAINST APT AND AMERICAN PERFORMANCE
80. Plaintiff realleges and incorporates by reference paragraphs I through 79
above.
81. Plaintiff was the owner of the Patent which is the subject of the
Agreement and is entitled to its possession.
82. Defendants took possession of the Patent with the intent to exercise
control over the Patent.
83. Defendants have deprived Plaintiff of the right to possession of the Patent
without compensating Plaintiff.
84. Plaintiff has demanded the return and reassignment of the Patent, but
Defendants have failed and refused to return and reassign the Patent and corrtinue to
exercise dominion, control and use of the Patent to the exclusion of Plaintiff.
85. As a direct and proximate result of Defendants action in converting
Plaintiff s property, Plaintiff has been damaged.
86. As a proximate result of Defendants' actions, Plaintiff has sufTered
financial damages, including incidental and consequential damages, in a surn in excess of
$1,485,000.00 DOLLARS to be established according to proof, together with
prejudgment interest thereon at the legal rate from January 10,2010 on the llrincipal sum
of $250,000.00, from December 10, 2010 on the principal sum of $617,500.00 and from
June 10,201 1 on the principal sum of $617,500.00.
87 . As a further proximate result of Defendants' actions, Plaintiff has suffered
humiliation, mental anguish, and severe and extreme emotional distress, all to her
damage in a sum to be established according to proof.
88. In doing the foregoing acts, Defendants acted in a willful, wanton,
malicious, oppressive and fraudulent manner toward Plaintiff, and in conscious disregard
of plaintiff s known rights, with the intention of benefiting themselves financially and
13
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 13 of 19
with the intent of, or a conscious disregard of the probability of, causing Plaintiff injury,
Officers, directors or managing agents of the entity Defendants authorized or ratified
such acts. In so acting, Defendants intended to and did vex, annoy, injure, and harass
Plaintiff, and consciously disregarded Plaintiff s rights, so as to justify the assessment of
punitive and exemplary damages against Defendants in a sum to be established according
to proof in an amount that is fair and reasonable.
WHEREFORE, Plaintiff prays for judgment against Defendants,, jointly and
severally on Count V in an amount to be determined atfttal, but believed to be in excess
of $1,485,000.00, for prejudgment interest at the legal rate, for punitive damages in an
amount to be determined at trial that is fair and reasonable, for her costs incurred herein,
and for such other and further relief as the Court deems fair, just and equitable under the
circumstances.
COUNT VIQUANTUM MERUIT AGAINST APT AND AMERICAN PERFORMANCE
89. Plaintiff realleges and incorporates by reference paragraphs I through 88
above.
90. Defendants requested that Plaintiff transfer the Patent to them.
91. Plaintiff transferred the Patent to Defendants.
92. Defendants have received the benefit of the Patent assigned by Plaintiff.
93. Defendants have retained and accepted the Patent and have benefited from
the retention of the Patent.
94. The reasonable value of the Patent is $1,500,000.00 DOLLARS, plus any
royalties and fees generated by the use, licensing or sale of products related to the Patent.
95. The retention of the Patent by Defendants without compensating Plaintiff
is inequitable.
96. The retention of the Patent without compensation to Plaintiff is unjust.
t 4
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 14 of 19
97 . Defendants have retained the Patent and the value of the same, despite the
demands by Plaintiff to pay Plaintiff the reasonable value of the Patent, Defendants have
failed and refused to pay Plaintiff for the same.
98. Plaintiff has been damaged in an amount not yet determined, but believed
to be in excess of $1.500.000.00 DOLLARS.
WHEREFORE, Plaintiff prays for judgment against Defendants, jointly and
severally on Count VI in an amount to be determined attrial, but believed to be in excess
of $1,500,000.00 DOLLARS, for her costs incurred herein, and for such other and further
relief as the Court deems fair, just and equitable under the circumstances.
COUNT VIIDECLARATORY JUDGMEI{T
99. Plaintiff realleges and incorporates by reference paragraphs I through 98
above.
100. Under 28 U.S.C. Section2201 this Court has the power to declare the
rights, interests and obligations of the parties relative to the Agreement.
101 . Plaintiff is an interested party in the Agreement.
102. Defendant APT is an interested party in the Agreement.
103. Defendant American Performance is an interested party in the Agreement.
104. Upon information and belief, Defendant American Performance has an
interest in the Agreement and any declaration made by this Court as American
Performance is using the Patent or the patented technology in products that it is selling
and is alleged to be the Alter Ego of APT.
105. Plaintiff seeks a declaration of the rights, status and legal relations
between the parties as it relates to their rights and obligations under the Agreement.
106. Plaintiff seeks a declaration and order that Plaintiff has performed all of
her obligations under the Agreement.
107 . Plaintiff seeks a declaration and order that APT and/or American
15
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 15 of 19
Performance are obligated to make all payments set forth in the Agreement.
108. Plaintiff seeks a declaration and order that APT and/or American
Performance have breached the Agreement by failing to apply for andlor obtain necessary
certifications for the Carburetor which is the subject of the Patent.
109. Alternatively, Plaintiff seeks a declaration and order that APT and/or
American Performance are obligated to reassign and/or transfer all right, title and interest
in and to the Patent which is the subject of the Agreement to Plaintiff.
1 10. Plaintiff seeks a declaration and order regarding the damages that Plaintiff
has incurred as a result of the breaches by Defendants of the Agreement and the
conversion of Plaintiff s property in the form of the Patent.
WHEREFORE, Plaintiff prays that the Court issue its declaration and order
regarding the rights, status and legal relations between the parties as it relates to the
Agreement, for her damages as determined by the Court, for her costs incurred herein,
reasonable attorney's fees, and for such other and further relief as the Court deems fair,
just and equitable under the circumstances.
COUNT VIIIRESCISSION FOR FRAUD IN THE INDUCEMENT AGAINST APT AND
AMERICAN PERFORMANCE
1 1 1. Plaintiff realleges and incorporates by reference paragraphs I through 40
and 67 through 79 above. This Count is pled in the alternative.
112. Upon information and belief, Defendants fraudulently induced Plaintiff to
enter into the Letter of Intent and then the Agreement by making false representations
and/or omitting to state material facts prior to the execution of the Letter of Intent and
Agreement, and at the time said documents were executed.
1 1 3. Upon information and belief, Defendants had no intention of applying for
and/or obtaining final certification and an Executive Order Number ("EO Number") from
a CARB/EPA approved testing facility that the snowmobile and lawnmower models of
t 6
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 16 of 19
the Carburetor o'meet or exceed EPA Tier 2 Emissions Standards with no decrease in
performance or fuel economy and no increase in noise levels" at the time the Agreement
was executed, and prior to the execution of the Agreement.
ll4. Upon information and beliel Defendants had no intention to pay Plaintiff
as set forth in the Agreement at the time the Agreement was executed, or prior to the
execution of the Agreement.
115. Upon information and belief, these representations were knowingly false
misrepresentations or were made with ignorance of the truth.
1 16. Defendants made said representations to induce Plaintiff to enter into the
Agreement.
117 . The representations or omissions were material to the Agreement.
1 18. The misrepresentations induced Plaintiff to enter into the Agreement.
1 19. Plaintiff is seeking rescission of the Agreement and for the Court to return
the parties to the status quo that existed prior to the execution of the Agreement.
I20. Plaintiff is seeking an order from the Court for Defendants to assign or
transfer all right, title and interest in the Patent to Plaintiff.
I2I. Plaintiff is seeking consequential and special damages to balance the
benefits between the parties in an amount not yet determined.
I22. Plaintiff is seeking her reasonable attorney's fees and costs. As a further
proximate result of Defendants' actions,, Plaintiff has suffered humiliation, mental
anguish, and severe and extreme emotional distress, all to her damage in a sum to be
established according to proof.
123. In doing the foregoing acts, Defendants acted in a willful, wanton,
malicious, oppressive and fraudulent manner toward Plaintiff, and in conscious disregard
of Plaintiff s known rights, with the intention of benefiting themselves financially and
with the intent of, or a conscious disregard of the probability of, causing Plaintiff injury,
Officers, directors or managing agents of the entity Defendants authorized or ratified
T7
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 17 of 19
such acts. In so acting, Defendants intended to and did vex, annoy, injure, and harass
Plaintiff, and consciously disregarded Plaintiff s rights, so as to justify the assessment of
punitive and exemplary damages against Defendants in a sum to be established according
to proof in an amount that is fair and reasonable.
WHEREFORE, Plaintiff prays for judgment against Defendants, jointly and
severally on Count VIII that the Agreement is rescinded, for the reassignment and/or
transfer of all right, title and interest in and to the Patent to Plaintiff, for the Court to
award Plaintiff such damages that will balance the equities between the parties, for her
special and consequential damages to be determined at trial, for punitive damages in an
amount to be determined at trial that is fair and reasonable, for her costs incurred herein,
and for such other and further relief as the Court deems fair, just and equitable under the
circumstances.
DEMAND FOR JURY TRIAL
COMES NOW the Plaintiff and demands a trial by jury on all issues so triable in
this action.
1 8
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 18 of 19
Respectfully Submitted:
Lee's Summit, MO 64063
Mailing Address:P.O. Box 3716Shawnee, KS 66203
Phone: (91 3) 549-4790Fax: (91 3) 549-4791Cell: (816) 522-5063lhar dee @theharde e I awfi rml I c. com
LAW OFFICES OF BAIRD A. BROWNA Professional Corporation
Baird Brown Cal. Bar No. 56627Law Offices of Baird Brown PC3055 Wilshire Boulevard, Suite 1200Los Angeles, CA 90010
Phone: (213) 487-8880Fax: (213) [email protected]
Attorneys for Plaintiff
t 9
e R. Hardd IlYi608 SW Third Street
Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 19 of 19