1. Plaintiff, Hal Royce Abramson, is an adult resident of the State of Maryland.
2. Plaintiff, or in the alternative Defendant, Unite Productions, LLC (“Unite”), is a Delaware limited liability company whose principal place of business is 413 Pearl Drive, Kenton, Tennessee 38233.
3. Defendant, Erik Baker (“Baker”), is an adult resident of Cape Coral, Florida, and Secretary of Unite Productions, LLC.
4. Defendant, Steve Hilton (“Hilton”), is an adult resident of Kenton, Tennessee, and the Vice Operating Manager of Unite Productions, LLC.
5. Defendant, Ivan Hinds (“Hinds”), is an adult resident of Ellabell, Georgia, and Treasurer of Unite Productions, LLC.
6. Defendant Ace Concert Group, upon information and belief, is a partnership, corporation, joint venture, or other entity controlled in whole or in part by defendants Baker, Hilton, and Hinds with its principal place of business located at 413 Pearl Drive, Kenton, Tennessee 38233.
7. This Court has jurisdiction pursuant to T.C.A. §§ 16-11-114, 16-11-115, and 29-14-101 et seq.
8. Venue is proper under T.C.A. § 16-11-114.
II. FACTS
9. Royce met defendants Baker and Hinds in 2007 after they purchased copies of Royce’s book on promoting festivals and concerts. Baker also introduced Royce to Defendant Hilton, and together the four began discussing the formation of a company to pursue putting on Christian concerts and festivals.
10. Unite Productions, LLC, was incorporated January 9, 2008, as a limited liability company organized under the laws of Delaware. Unite was formed for the production and promotion of concerts and music festivals.
11. Originally, the company was to be comprised of three members, Baker, Hilton, and Hinds, with Royce to be contracted separately as an independent contractor with the ability to become a member at his request. A true and correct copy of the independent contract is attached hereto as Exhibit A. An unsigned draft of the 1-26-08 Operating Agreement is attached hereto as Exhibit B.
12. According to the 1-26-08 agreement, Baker was to act as the talent buyer, Hilton as the media buyer, Hinds as treasurer and investor, and Royce as director. None was to be paid for their work upfront, except for Hilton, who received $2,500.00. Royce and Baker also each received a $500.00 advance in February. Profits from the events were to be split among the four on a basis to be determined before each event.
13. As work on the events progressed, Royce became concerned about his ability to direct the company as an independent contractor and invoked his right to be admitted as a member. On February 18, 2008, the company held a special meeting at which the following individuals were elected members and officers of the company: Royce – Chairman and Operating Manager; Hilton – Vice Operating Manager; Baker – Secretary; Hinds – Treasurer.
14. In February 2008, the members agreed to an Operating Agreement Addendum (the “Agreement”), setting out the company’s purpose and each member’s duties. A draft copy is attached hereto as Exhibit C; it is believed that Baker, Hilton, or Hinds has possession of the signed original.
15. The Agreement specifically stated that all four members agreed not to compete with Unite.
16. The Agreement further stated that Royce would license the name “Unite” to the company for $1.00 a year, but in the event he was removed from the company, the name could not be used without his express, negotiated permission.
17. On or about January 15, 2008, Unite began work on two events, a concert featuring the band MercyMe at Oman Arena to be held April 19, 2008, and a larger Christian music festival with several bands, called “Unite Christian MegaFest” (“Unitefest”), to be held June 7, 2008, at Pringles Park.
18. Plaintiff Royce worked tirelessly for Unite carrying out his duties pursuant to the Agreement. Among other things, Royce secured both venues for the concerts, ordered promotional materials, ordered and sold tickets, recruited staff, managed the office, designed and managed the website, composed and daily reviewed financial documents, made wire transfers, composed hundreds of emails to partners, and helped with media buys.
19. Royce’s desire to see the company succeed, coupled with his attention to detail, hands-on management style, and unwillingness to accept anything less than the best efforts the other members, caused some tension within the company. Unbeknownst to Royce, the other three members, Baker, Hilton, and Hinds, began working to compete against Unite.
20. The week of the first concert, Royce had little communication from the other members about the status of final details. On April 17, 2008, Royce came to Jackson, Tennessee, to finish final preparations for the MercyMe concert. He had been working 80-hour weeks without pay tying together all the loose ends to ensure the company’s first event was a success.
21. On the afternoon of April 19, 2008, just hours before the concert was to begin, Baker told Royce that he and the other members of Unite were removing Royce. Baker said that Unite Productions was finished and that Royce could have the name back. Baker then had sheriff’s deputies escort Royce from the premises.
22. The MercyMe concert went on that evening as a Unite concert, but upon information and belief, it was announced during the concert that Ace Concert Group would be putting on an event at Pringles Park June 7, 2008, called “JacksonJam.” Flyers for JacksonJam were distributed at the MercyMe concert.
23. This JacksonJam event, promoted by Baker, Hinds and Hilton, as, or in conjunction with Ace Concert Group, was in direct competition with Unitefest, which was already booked at Pringles Park for June 7.
24. Upon information and belief, on or about April 19, Baker, Hinds, and Hilton, as, or in conjunction with Ace Concert Group, redirected visitors to the Unite website, uniteconcerts.com, to a new URL: jacksonjam.com.
25. As a result of the actions of Baker, Hinds, and Hilton, Royce was denied access to a Unite event that he had worked for months to produce. Additionally, he was left with more than $7,000.00 in company debt incurred on his personal credit card.
26. Royce attempted to reimburse himself from the company account for $5,600.00 of the company expenses before leaving Jackson. Upon learning of this, Hilton called the police and attempted to have Royce arrested for debit card theft.
27. Royce proved to police that he was authorized to make the charges and that, contrary to Baker’s assertions, the card had been used for more than just office supplies.
28. Shortly thereafter, Defendant Baker filed a false affidavit alleging that Royce had fraudulently used the company debit card.
29. In fact, Royce had been using the card for weeks making purchases and he was an authorized signatory on the account connected to the card.
30. All of the reimbursed expenses were clearly documented as company expenses.
31. In early May, Royce received a letter from a Maryland attorney on behalf of Hinds and Unite Productions, LLC. The letter demanded return of the $5,600 in reimbursed expenses and that Royce cease all actions in conjunction with Unite.
32. Pursuant to 6 Del. C. § 18-1003, Royce has not made an effort to secure initiation of this action by other members or managers because, as the allegations in the Complaint demonstrate, such efforts would be futile since a majority of the other directors were not disinterested or independent from the challenged acts and their actions were not a valid exercise of business judgment.
III. CAUSES OF ACTION
Count 1 – Breach of Duty of Loyalty
33. Royce, derivatively for Unite, re-alleges and asserts the facts in the above paragraphs as if set forth herein.
34. Defendants Baker, Hilton, and Hinds each owed a duty of loyalty to Unite, which included a duty not to compete with Unite.
35. Baker, Hilton, and Hinds each breached this duty when they began doing business as, or in conjunction with, Ace Concert Group and planning Jacksonjam, a festival that was to directly compete with Unitefest.
36. Additionally, upon information and belief, Baker was actively promoting other competing events in Tennessee.
37. The breaches by Baker, Hilton, and Hinds have injured Unite and are the causes in fact and proximate causes of injury to Unite.
38. Unite has suffered damages as a result of the breaches by Baker, Hilton, and Hinds, including expenses for materials produced with the Unitefest logo, the loss of profits from Unitefest, and loss of business reputation and goodwill associated with the Unite mark.
39. Defendants Baker, Hilton, and Hinds are liable to the company for the above damages.
Count 2 – Breach of Fiduciary Duty
40. Royce, derivatively for Unite, re-alleges and asserts the facts in the above paragraphs as if set forth herein.
41. Defendants Baker, Hilton, and Hinds each owed a fiduciary duty to Unite.
42. Defendants Baker, Hilton, and Hinds each breached their fiduciary duty when they engaged in the JacksonJam scheme in which they had a personal financial interest that was directly adverse to Unite’s interest.
43. Unite has suffered damages as a result of the breaches of Baker, Hilton, and Hinds, including expenses for materials produced with the Unitefest logo, the loss of profits from Unitefest, and loss of business reputation and goodwill associated with the Unite mark.
44. Defendants are liable to the company for the above damages.
Count 3 – Breach of Contract
45. Royce, derivatively for Unite, re-alleges and asserts the facts in the above paragraphs as if set forth herein against Baker, Hilton, and Hinds.
46. Pursuant to Paragraph 19 of the Agreement, Baker, Hilton, and Hinds agreed “not to enter into the production of any other event that will compete with a UP event or impair any participants time and or resources necessary for UP to maximize it’s event’s chances of success.”
47. Baker, Hilton, and Hinds breached this contract when they began planning the JacksonJam competing event and handed out flyers for the event at the MercyMe concert.
48. The actions of Baker, Hilton and Hinds also constitute a breach of the implied covenant of good faith and fair dealing.
49. As a result of these breaches, Unite has suffered damages, including expenses for materials produced with the Unitefest logo, the loss of profits from Unitefest, and loss of business reputation and goodwill associated with the Unite mark.
Count 4 – Civil Conspiracy
50. Royce, derivatively for Unite Productions, LLC, re-alleges and asserts the facts in the above paragraphs as if set forth herein against Defendants Baker, Hilton, Hinds, and Ace Concert Group.
51. Baker, Hilton, and Hinds as, or in conjunction with, Ace Concert Group, conspired and worked in concert, each with the intent and knowledge of the other’s intent, and with improper motive, to directly compete with the company in breach of their duties and in breach of their contract with Unite.
52. As a result Defendants’ actions, Unite has suffered damages, including expenses for materials produced with the Unitefest logo, the loss of profits from Unitefest, and loss of business reputation and goodwill associated with the Unite mark.
Count 5 – Procurement of Breach of Contract
53. Royce, derivatively for Unite, re-alleges and asserts the facts in the above paragraphs as if set forth herein against Baker, Hilton, Hinds, and Ace Concert Group.
54. In connection with Unitefest, Unite had contracts for the June 7, 2008, Pringles Park festival with various vendors, performers and other entities, including more than one hundred ticket sales, each of which constituted a separate and distinct contract.
55. Defendants had knowledge of these Unite contracts and acted maliciously with the intent to procure breaches of the contracts.
56. By June 7, 2008, at the latest, the contracts were breached when Unite was unable to perform its obligation to ticket holders who purchased tickets to Unitefest at Pringles Park and said vendors, performers and other entities provided goods and services to Ace Concert Group at JacksonJam, held at Oman Arena.
57. Defendant’s actions were the proximate cause of the breaches for which Unite has suffered damages.
58. Pursuant to T.C.A. § 47-50-109, defendants are liable to Unite for treble damages resulting from or incident to these breaches.
Count 6 – Conversion
59. Royce, derivatively for Unite, re-alleges and asserts the facts in the above paragraphs as if set forth herein against Ace Concert Group.
60. As of April 19, 2008, Unite owned certain tangible and intangible assets, including funds from the pre-sales of Unitefest tickets and contract rights.
61. Upon information and belief, Ace Concert Group intentionally appropriated and converted Unite’s property for its own use and benefit in defiance of Unite’s rights in the property.
62. Ace Concert Group is liable to Unite for conversion of assets.
Count 7 – Dissolution and Distribution
63. Royce individually re-alleges and asserts the facts in the above paragraphs of the Complaint as if set forth herein.
64. Unite is governed by the Delaware Limited Liability Act.
65. Based on the actions of the other Unite members, it is not reasonably practicable to carry on the business in conformity with the Operational Agreement.
66. Pursuant to 6 Del. C. § 18-802, Plaintiff Royce as a manager/member of Unite makes application to this Court for dissolution, accounting, and winding up of Unite with a distribution of any and all assets pursuant to 6 Del. C. § 18-804.
Count 8 – Removal from Unite
67. In the alternative, Royce individually re-alleges and asserts the facts in the above paragraphs of the Complaint as if set forth herein against Unite.
68. According to the Agreement, the management group was intended to be a permanent fixture with the exception that if a member committed heinous unethical or criminal behavior, the other three could vote to eject that party, but first paying them any due profits.
69. On or about April 19, 2008, Royce was removed from the MercyMe concert and informed that he was no longer a member of the company without explanation.
70. At the time of the alleged removal, Royce had $7,761.88 in expenses he had incurred on behalf of Unite, and he was due 30 percent of any profits from MercyMe and 30 percent of any profits from Unitefest. To date, Royce has not been paid or reimbursed.
71. Pursuant to 6 Del. C. § 18-110, Royce makes application to this Court to determine if was removed, and if said removal did occur, to enforce the provision of the Agreement regarding payment of due profits, pursuant to 6 Del. C. § 18-601.
72. If he was removed, he also became entitled to a distribution pursuant to the Agreement and entitled to all remedies available to a creditor of the company under 6 Del. C. § 18-606.
Count 9 – Breach of Contract Between Unite and Royce
73. In the alternative, Royce individually re-alleges and asserts the facts in the above paragraphs of the Complaint as if set forth herein against Unite.
74. Royce was hired as an independent contractor hired by Unite to perform certain services related to the promotion and production of the MercyMe and Unitefest concerts. After working for months on preparations for both concerts, Royce was summarily dismissed and removed from the property by sheriff’s deputies a few hours before the MercyMe concert with $7,761.88 in Unite expenses outstanding on his personal credit card. Royce has not been reimbursed for theses expenses or his services by Unite or its successor, upon information and belief, Ace Concert Group.
75. Additionally, Royce has trademark rights in the “Unite” mark as used in the promotion of concerts and festivals. Royce agreed to lease the “Unite” name to Unite for $1.00 per year subject to the condition that if he was removed from the company, the Unite name could not continue to be used without his express permission.
76. Unite put on the MercyMe concert under the Unite mark, continues to operate under the “Unite Productions” name, and has not obtained Royce’s express permission to continue use of the mark.
77. Unite’s failure to reimburse expenses, pay for services, or obtain express permission for use of the mark are breaches of the contract between the parties for which he is entitled damages and an injunction against further use of the mark.
Count 10 – Breach of Implied Covenant of Good Faith and Fair Dealing
78. Royce individually re-alleges and asserts the facts in the above paragraphs of the Complaint as if set forth herein against Unite, Baker, Hilton and Hinds.
79. The actions of Unite, Baker, Hilton and Hinds in dismissing Royce a few hours before the event after months of work and their failure to pay him for his services or reimburse his expenses constitute a breach of the implied covenant of good faith and fair dealing.
80. As a result of the breach of Unite, Baker, Hilton and Hinds, Royce suffered damages and is entitled to his share of the profits from the events and reimbursement of his expenses and work.
Count 11 – Unfair Competition
81. Royce individually re-alleges and asserts the facts in the above paragraphs of the Complaint as if set forth herein against Unite, Baker, Hilton and Hinds.
82. Royce has trademark rights to the “Unite” mark used in the promotion of concerts and festivals. Unite, Baker, Hilton and Hinds have knowledge of Plaintiff’s rights in the mark and have not obtained permission to use Plaintiff’s mark since Plaintiff’s dismissal (either as a member or an independent contractor) from Unite on April 19, 2008.
83. The acts of Unite, Baker, Hilton and Hinds are willful and constitute unfair competition, false designation of origin unfair or deceptive trade practices that are likely to cause confusion or mistake, or to deceive the public, as to the origin, sponsorship or approval of goods and services offered by Unite, Baker, Hilton and Hinds, in violation of 15 U.S.C. § 1125(a).
84. As a direct and proximate result of the acts, practices and conduct of Unite, Baker, Hilton and Hinds, Royce has suffered and will continue to suffer injury for which he is entitled to injunctive relief, pursuant to 15 U.S.C. § 1116 and profits, damages, costs, and because of the exceptional nature of this case, attorney’s fees, pursuant to 15 U.S.C. § 1117(a).
Count 12 – Quantum Meruit
85. Royce individually re-alleges and asserts the facts in the above paragraphs of the Complaint as if set forth herein against Unite, Baker, Hilton and Hinds.
86. Royce began work on the MercyMe and Unitefest projects on or about January 5, 2008. He worked approximately 960 hours from January 5, 2008, to April 19, 2008, managing preparations, marketing, financial assessment, ticket sales, venue and vendor issues, and other aspects of planning the events. He furnished goods, services, and labor in a diligent and workmanlike manner to Unite, Baker, Hilton and Hinds.
87. As a result of Royce’s furnishing said services and labor, the value provided to the business improved and Unite, Baker, Hilton and Hinds received the benefit of the value.
88. As Royce has not been paid in full for his services and labor, Unite, Baker, Hilton and Hinds have been unjustly enriched.
89. The reasonable value of services Royce provided to Unite, Baker, Hilton and Hinds in connection with the work he did for MercyMe and Unitefest is $43,200.00. Additionally, Royce incurred $7,761.88 in company expenses that have not been reimbursed.
90. Royce claims the unpaid balance of the fair value of the goods, labor, and services provided to Unite, Baker, Hilton and Hinds in the amount of $50,961.88 and Royce is entitled to a joint and severed monetary judgment against Unite, Baker, Hilton and Hinds for said amount, plus pre-judgment interest and costs for this action.
Count 13 –Unfair Competition
91. Royce individually re-alleges and asserts the facts in the above paragraphs of the Complaint as if set forth herein against Baker.
92. Royce has trademark rights to the “Unite” mark used in the promotion of concerts and festivals.
93. Defendant Baker maintains a presence on the Internet at www.myspace.com/recordingartistrep where he uses the Unite mark in connection with advertising his services which is likely to cause confusion, mistake or deceive.
94. Baker has knowledge of Royce’s rights in the mark and has not obtained permission to use Royce’s mark.
95. Defendants’ acts are willful and constitute unfair competition, false designation of origin unfair or deceptive trade practices that are likely to cause confusion or mistake, or to deceive the public, as to the origin, sponsorship or approval of goods and services offered by Defendant, in violation of 15 U.S.C. § 1125(a).
96. As a direct and proximate result of Defendant’s act, practices and conduct, Royce has suffered and will continue to suffer injury for which he is entitled to injunctive relief, pursuant to 15 U.S.C. § 1116 and profits, damages, costs, and because of the exceptional nature of this case, attorney’s fees, pursuant to 15 U.S.C. § 1117(a).
WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests the following relief:
1. That process issue and that the Defendants are required to answer the Complaint under oath.
2. That the Court hold a hearing on this matter and find that Plaintiff Royce is a member of Unite qualified to bring a derivative action on behalf of the company, that the Defendants, Baker, Hilton, and Hinds, breached their contracts with Unite, that each breached his duty of loyalty and fiduciary duty and that Unite is entitled to damages for these breaches.
3. That the Court find that Baker, Hilton, Hinds and Ace Concert Group procured the breach of contracts between Unite and various entities, and award Unite treble damages for said breaches.
4. That the Court find that Ace Concert Group converted Unite assets.
5. That the Court award Royce reasonable expenses for bringing this derivative action, including reasonable attorney’s fees, from any recovery, or from the company, pursuant to 6 Del. C. § 18-1004.
6. That Unite be judicially dissolved and wound up with a distribution of all profits from both concerts after creditors have been paid.
7. In the alternative, that the Court determine the validity of the alleged removal of Royce from Unite, and if he was removed, that the Court enforce the Agreement that Royce be paid his share of due profits for the MercyMe and JacksonJam, event and reimbursed for his expenses.
8. That the Court issue a Writ of Attachment pursuant to T.C.A. § 29-12-107 and 29-6-101, et seq. to attach $7,761.88 in funds from Unite Productions, LLC, or upon information and belief, its successor Ace Concert Group.
9. In the alternative, that the Court find that Unite, Baker, Hilton and Hinds breached their contract with Royce as an independent contractor and that he be awarded damages for those breaches.
10. That the Court declare the rights and duties of the parties under the contracts.
11. In the alternative, that the Court find that Royce provided goods, labor, and services to Unite, Baker, Hilton and Hinds that provided value to the business and that it award him the reasonable value for his goods, labor and services in the amount of $50,961.88, plus pre-judgment interest and costs.
12. That the Court find that the use of Plaintiff’s mark by Unite, Baker, Hilton and Hinds is willful, unfair competition and award profits, damages, costs and attorney’s fees.
13. That the Defendants be permanently enjoined from using the “Unite” mark in connection with the promotion and production of music concerts and festivals.
14. That the Court find that Baker has violated Royce’s trademark rights in the “Unite” mark, that use of Royce’s mark is willful, unfair competition, and award profits, damages, costs and attorney’s fees.
15. For such other relief as the Court deems necessary and proper.
THIS IS THE FIRST APPLICATION FOR EXTRAORDINARY RELIEF IN THIS CAUSE.
This the 6th day of June, 2008. |