Bill of Particulars Keystone Freight Corp Vs Pilot Flying J

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 1 of 38 - Page ID#: 1741
MORGAN MELHUISH ABRUTYN

651 W. Mt. Pleasant Avenue, Suite 200
Livingston, New Jersey 07039-1673
Tel: (973) 994-2500
Fax: (973) 994-3375
Attorneys for Plaintiffs
Our File No. NRT 33-248 TS
2:14-MD-02515-ART
IN RE: PILOT FLYING J. REBATE CONTRACT LITIGATION (NO. II)
AMUL R. THAPAR, PRESIDING
COVINGTON, KENTUCKY
Case no. 2:14-cv-00070
Covington, Kentucky
MDL #2515
NATIONAL RETAIL TRANSPORTATION,
INC., KEYSTONE FREIGHT CORP.
Plaintiffs,
NATIONAL RETAIL TRANSPORTATION
AND KEYSTONE FREIGHT CORP.
BILL OF PARTICULARS
-vsPILOT TRAVEL CENTERS, LLC, d/b/a

Pilot Flying J, PILOT CORPORATION,
PROPELLER CORP, JAMES HASLAM,
MARK HAZELWOOD, JOHN FREEMAN,
ARNOLD RALENKOTTER, BRIAN
MOSHER, SCOTT WOMBOLD, VICKIE
BORDEN, LEXIE HOLDEN, KEVIN HITE,
TIM PRINS, KAREN MANN and JOHN
DOES (#1-100) said names being
fictitious,
Defendants.
{00971753}
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Plaintiffs, National Retail Transportation, Inc. and Keystone Freight Corp.

(hereinafter NRT/KFC), submit this Bill of Particulars pursuant to the directive of
the Court and the Minute of Entry of October 31, 2014. Pursuant to the Courts
instructions, this Bill of Particular is structured for each claim as follows: (1) title of
claim (breach of contract, unjust enrichment, fraud, etc.); (2) choice of law the Court
should apply; (3) elements of the claim with cases cited; and, (4) under each
element the facts underlying the claim.
Pursuant to the Courts Order, the Bill of Particular shall be deemed an
amendment to National Retail Transportation and Keystone Freight Corp.s Second
Amended Complaint. As set forth herein the term Pilot refers to Pilot Travel
Centers, LLC.
A. COUNT I - BREACH OF CONTRACT

1. Breach of Contract Against Pilot
2. Choice of Law: New Jersey
Plaintiffs are New Jersey corporations and the contract and agreement was
solicited, negotiated and agreed to in New Jersey.
3. Elements of Claim:
In order to establish a claim of breach of contract in New Jersey, the plaintiff
must prove: (1) the parties entered into a contract containing certain terms; (2) the
plaintiffs did what the contract required the plaintiffs to do; (3) the defendants did
not do what the contract required the defendants to do; (4) the defendants
breached or failed to do what the contract required caused a loss to the plaintiff.
Weichert Co. Realtors v. Tyan. 128 N.J. 427, 435 (1992); West Caldwell v. Caldwell, 26
N.J. 9, 24-25 (1958); Freedman v. Tappan Dev. Corp., 22 N.J. 523, 531 (1956); Leitner
v. Braen, 51 N.J. Super. 31, 38-39 (App. Div. 1958).
4. The Elements of the Underlying Claim
1. Since 2004, a contract existed between Pilot and NRT/KFC.
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2. Pursuant to the terms of the contract, NRT/KFC agreed to purchase

fuel from Pilot and Pilot agreed to sell fuel to NRT/KFC based upon a
specific discount formula referred to as the better of cost plus or
retail minus.
3. The discount was to be calculated based upon Pilots actual cost of fuel
and the number of gallons of fuel purchased by NRT/KFC.
4. Plaintiffs, NRT/KFC, performed under the contract by purchasing diesel
fuel from Pilot.
5. The defendants did not do what the contract required as since 2004
Pilot provided manually reduced rebate checks each month which
contained reductions in the amount that was due under the contract.
6. The rebates were manually adjusted and in a willful, wanton and
malicious manner in an attempt to defraud and cheat NRT/KFC.
7. Despite having agreed to pay a particular rebate discount based upon
the better of cost plus or retail minus, Pilot manipulated the rebate
amount so as to deprive NFT/KFC the amount that was due under the
agreed upon discount.
8. As a result of Pilots manipulation of the rebate NRT/KFC did not
receive the benefits of the contract.
9. Additionally, NRT/KFC were additionally damaged by increased
borrowing costs and were deprived the opportunity to negotiate
contracts with other suppliers of diesel fuel at a more favorable term.
B. COUNT II - UNJUST ENRICHMENT

1. Unjust Enrichment Against All Defendants
3. Elements of Claim
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In order to establish unjust enrichment in New Jersey, the plaintiff must

establish that (1) the plaintiff expected remuneration from the defendants at the
time it performed or conferred a benefit on the defendants, and (2) the failure of
remuneration enriched the defendants beyond its contractual rights. Eli Lilly & Co.
v. Roussel Corp., 23 F.Supp. 2d 460, 496 (D.N.J. 1998); VRG Corp. v. TKN Realty, 135
N.J. 539, 554 (1994).
The most common application for unjust enrichment is when a plaintiff has
not been paid despite having reasonable expectation of payment for services;
however, unjust enrichment also has been used in the State of New Jersey to deny
a wrongdoer of profits from a transaction where the wrongdoer obtains financial
gain through corrupt means. County of Essex v. First Union Natl. Bank, 373 N.J.
Super. 543 (App. Div. 2004) citing Driscoll v. Burlington Bristol Bridge Co., 8 N.J. 433
cert. denied 344 U.S. 838 (1952); S.E. Grand, Inc. v. City of New York, 32 N.Y. 2d 300
(1973); Manning Eng., Inc. v. Hudson County Park Commission, 74 N.J. 113 (1977).1
1. Plaintiffs claim against Pilot for unjust enrichment is pled in the
alternative to the extent that no contract is found.
2. Plaintiff agreed to purchase fuel from defendant Pilot and was to
receive a rebate based upon the actual cost of the fuel.
3. Pilot failed to provide the correct rebate and profited by failing to pay
over to plaintiff the rebate amount.
4. Pilot profited from its actions by the way of increased profits.
The United States District Court of the Southern District of Alabama has already ruled in the case of
Wright Transportation v. Pilot that the claim of unjust enrichment is a valid cause of action against
the individual defendants. The Southern District Court of Alabama dismissed the case against Pilot
Flying J as the plaintiff in Wright did not plead unjust enrichment in the alternative and alleged an
express contract. The case law establishes that where there is an express contract, a claim for
unjust enrichment must fail as a matter of law. NRT/KFC pleads unjust enrichment against Pilot
Travel Centers LLC in the alternative.
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5. James Haslam instructed Pilot employees to advise NRT/KFC that they

would receive specific discounts in the form of monthly rebates for
each gallon of fuel purchased from Pilot.
6. Haslam never intended for Pilot to honor its agreement with the
plaintiffs and rather, each month, Pilots employees under Haslams
direction and control manually adjusted and reduced the rebates that
were due and owing to NRT/KFC.
7. Pilots employees, under Haslams direction and control, sent
fraudulent rebate checks to NRT/KFC in New Jersey.
8. As a result of said action, NRT/KFC suffered a loss of the full amount of
the rebate along with other losses including being denied the
opportunity to purchase fuel from Pilot competitors at a lower price,
increased borrowing costs and paying interest on certain loans.
9. Pilot and Haslam personally benefitted from the scheme in the form of
increased profits, bonuses, valuation of his company and
compensation packages.
10. Mark Hazelwood previously served as the Executive Vice President of
Pilots Sales and Development.
11. Hazelwood has received a target letter from the United States Attorney
General.
12. Hazelwood instructed and directed Pilot employees to solicit and
maintain business from transportation companies including NRT/KFC
via participation in the Pilot rebate program.
13. Hazelwood implemented and executed a plan in which Pilot
employees were specifically trained how to defraud NRT/KFC without
detection.
14. This plan was discussed at an informal meeting which took place in
October 2012 wherein Hazelwood and his co-conspirators met at John
Freemans lake house and at a National Sales Meeting which took
place on November 19-20, 2012.
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15. Hazelwood participated in the training of Pilot employees to manually

reduce the rebates of NRT/KFC knowing that said manipulation of the
rebates was fraudulent.
16. Pilot employees then, under Hazelwoods
fraudulent rebates to NRT/KFC in New Jersey.
direction, sent the
17. Hazelwood personally profited from the fraud in the form of increased
commissions and corporate profits.
18. Hazelwood further benefitted from the ancillary purchase made by
NRT/KFC employees while at travel centers to purchase fuel.
19. The purchases by NRT/KFC would not have been made but for the
fraudulent rebate scheme.
20. Each of the defendants participated in the solicitation of NRT/KFC
regarding the purchase of diesel fuel and each of the defendants
received the benefit from the retention of monies due and owing to
NRT/KFC.
21. Each of the defendants benefited from and were enriched as a result
of their wrongful conduct.
22. Each of the defendants obtained financial gain through corrupt
means, that being the participating in the defrauding of NRT/KFC and
the making of false, misleading, fraudulent, misstatements, with the
knowledge that said statements were false, fraudulent and misleading.
23. The retention of that benefit is unjust as part of fraudulent scheme.
24. Plaintiffs expected remuneration from the defendants at the time it
performed its obligation, that being purchasing fuel, and the failure of
remuneration enriched the defendants through increased profits,
bonuses and salary.
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C. COUNT III - CONVERSION

1. Conversion against all defendants
Conversion under New Jersey law is defined as the exercise of any act of
dominion in denial of anothers title to chattels, or inconsistent with such title.
Marsellis-Warner Corp. v. Rabens, 51 F.Supp. 2d 508, 525 (D.N.J. 1999); Mueller v.
Technical Device Corp., 8 N.J. 201, 207 (1951).
Accordingly, the elements of common law conversion under New Jersey law
are (1) the existence of property and (2) the right to immediate possession thereof
belonging to the plaintiff and (3) the wrongful interference with that right by a
defendant. Marsellis-Warner Corp. v. Rabens, 51 F.Supp. 2d 508, 525 (D.N.J. 1999);
Corestar International PTE, Ltd. v. L.P.B. Commcn., 513 F.Supp. 2d 107, 127 (D.N.J.
2007).
Under New Jersey law, the exercise of dominion and control over money
received fraudulently constitutes conversion unless a defendant was unaware of
the fraud and received the money in exchange for fair value. Chicago Title Ins. Co.
v. Ellis, 409 N.J. Super. 444 (App. Div. 2009).
1. Each of the defendants exercised dominion and control over the
property of plaintiffs, that being a rebate that was due and owing to
NRT/KFC.
2. Plaintiffs were entitled to immediate possession of the payment under
the terms of the agreement with Pilot.
3. Defendants wrongfully interfered with NRT/KFCs right to the rebate by
willfully, fraudulently, and intentionally manipulating the rebate
amount and representing to the plaintiffs that the rebate being
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provided to plaintiff was accurate and consistent with the agreement

that Pilot had with Plaintiff.
4. Defendants interfered with Plaintiffs right to possession of its rebate
through fraudulent means, that being making false material
misrepresentations knowing that said statements were false with the
intention that Plaintiffs rely upon said statements. Plaintiffs relied on
said statements and were damaged as a result thereof.
5. In particular, Pilot, Pilot Corporation, Propeller Corp and the individual
defendants directed, instructed and participated in a fraudulent rebate
scheme to deprive NRT/KFC of that particular amount of money that
was due and owing under the rebate scheme.
6. The defendants exercised dominion and control over money that was
fraudulently received in the form of receiving bonuses and payments
which money was, in fact, NRT/KFC.
D. COUNT IV -FRAUD
1. Fraud as to all Defendants
The elements of legal fraud in New Jersey require the plaintiff to establish
five elements. This includes: (1) a material misrepresentation of a presently
existing or past fact; (2) knowledge or belief by the defendant of its falsity; (3) and
intention that the other person rely on it; (4) reasonable reliance thereon by the
other person; and (5) resulting harm. Jewish Center of Sussex County v. Whale, 86
N.J. 619, 624-625 (1991); Simpson v. Widger, 311 N.J. Super. 379, 392 (App. Div.
1998).
1.
Pilot made material misrepresentations of presently existing

and past facts.
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2.
From 2004 through 2013, Pilot sent to the plaintiff numerous

false statements in which Pilot represented to NRT/KFC that the
fuel rebates being provided was in accordance with the agreed
upon terms which referenced the better of cost plus or retail
minus pricing.
3.
Pilot knew that the statements which it was sending contained

material misrepresentations, and manipulated rebate amounts.
4.
From October of 2008 through June of 2009, Pilot sent to

NRT/KFC monthly statements via the United States Mail in which
Pilot represented that said statements accurately set forth the
amount of the rebate that NRT/KFC were entitled to receive
based upon the prior months purchase of fuel.
5.
These statements were materially false in that they did not

reflect Pilots actual cost of fuel which was essential in order to
calculate the cost plus component of the rebate and further
were manipulated to improperly reduce the rebate owed to
NRT/KFC.
6.
Pilot further provided these statements to NRT/KFC with the

intent that NRT/KFC rely upon same so that NRT/KFC would
continue to purchase fuel from Pilot which was done.
7.
These statements concealed the fact that Pilot secretly was

adjusting the discount due to NRT/KFC for its own benefit, an
action which Pilot referred to as jacking the discount.
8.
From 2004 to 2013, Pilot sent monthly rebate checks to

NRT/KFC.
9.
The material false statements made by the defendants to

NRT/KFC took place on and including but not limited to the
dates of December 22, 2008; December 9, 2009; January 19, 2009;
February 16, 2009;March 16, 2009; April 20, 2009; May 18, 2009;
June 15, 2009; July 17, 2009; August 21, 2009; September 18, 2009;
October 13, 2009; November 11, 2009; December 18, 2009;
January 18, 2010; February 10, 2010; March 12, 2010; April 14,
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2010; May 21, 2010; June 11, 2010; July 22, 2010; August 20, 2010;
September 17, 2010; October 18, 2010; November 16, 2010;
December 13, 2010; January 12, 2011; February 14, 2011; March
17, 2011; April 15, 2011; May 13 2011; June 19, 2011; July 15, 2011;
August 12, 2011; September 14, 2011; October 14, 2011;
November 9, 2011; December 9, 2011; January 13, 2012; February
15, 2012; March 14, 2012; April 12, 2012; May 16, 2012; June 13,
2012; July 16, 2012; August 15, 2012; September 12, 2012; October
12, 2012; November 9, 2012; December 12, 2012; January 11,
2013; February 13, 2012; March 13, 2013; and April 19, 2013.
10.
Pilot thus made material misrepresentations of a presently

existing and past fact, that being the amount of the rebate due
and owing to NRT/KFC.
11.
Pilot did so with the knowledge or belief by the defendants that it

was false and intended that NRT/KFC rely upon said statements.
12.
NRT/KFC reasonably relied upon these statements to continue its

relationship with Pilot and continued to purchase fuel.
13.
As a result of said misrepresentations, NRT/KFC were damage by

not receiving their rebate and being deprived of the opportunity
to negotiate with other supplies of fuel to obtain fuel at a discount
rate.
14.
Additionally, NRT/KFC were damaged by not having the benefit of

the rebate while believing that they were, in fact, receiving the
proper amount of the rebate through having increased costs,
expenses, financing expenses and further were economically
harmed as a result of the fraudulent conduct.
15.
Defendants Pilot Corporation and Propeller Corp were aware of

said fraudulent conduct and assisted and otherwise supported
and condoned said fraudulent activity.
16.
Defendants Tim Prins and Scott Wombold made sales calls to

NRT/KFC in New Jersey in November 2012.
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17.
Prims and Wombold represented to Mr. Thomas Hayes of

NRT/KFC that Pilot would continue to pay monthly rebates in
accordance with the agreed upon contract.
18.
These representations by Prims and Wombold were false and

made with the intention that NRT/KFC rely upon same to continue
purchasing fuel from Pilot.
19.
In December 2009, NRT/KFC questioned the monthly rebate

amounts and brought this to Pilots attention.
20.
Tim Prins and Karen Mann, on behalf of Pilot, responded

NRT/KFC that the discrepancies were a mistake.
21.
There was no mistake. Wombold, Prins and Mann were aware of

the statements made to NRT/KFC were materially false.
22.
Wombold, Prins and Mann knew that Pilot had shorted NRT/KFC
in November of 2009 and were covering their tracks in
accordance with the Pilot procedure by claiming the shortages,
and reductions which were intentional were to be called a
mistake.
23.
There was no mistake but rather the defendants caused an

intentional fraudulent reduction in the rebate amount due and
owing to plaintiffs.
24.
These false statements by Wombold, Prims and Mann were

made with the intent that NRT/KFC rely upon same so that KFC
and NRT would continue to participate in the fraudulent rebate
program.
25.
NRT/KFC, not knowing that a fraud was being perpetrated,

accepted the false statements by said defendants.
26.
NRT/KFC reasonably relied on said false statements and were

damaged as set forth above.
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to
27.
Beginning in 2001, Kevin Hite replaced Tim Prins as Pilots account

representative assigned to NRT/KFC.
28.
Hite made multiple sales calls to NRT/KFC in New Jersey.
29.
During these sales calls, Hite reiterated to Tom Hayes, Fuel

Manager for NRT/KFC, that NRT/KFC would continue to receive its
monthly rebates based upon the contractually agreed upon
terms.
30.
Hite was aware of the fact that the statements being made by
him were material misrepresentations of a presently existing fact
and past fact in that he was aware of the fact that NRT/KFC was
being defrauded by the Pilot rebate fraud scheme.
31.
Hite was aware of the falsity of same and intended that NRT/KFC
rely upon same.
32.
NRT/KFC reasonably relied upon same representations by Hite

and were harmed as a result of same.
33.
Defendants Haslam, Hazelwood, Freeman, Ralenkotter, Mosher

and Wombold on December 22, 2008; December 9, 2009; January
19, 2009; February 16, 2009;March 16, 2009; April 20, 2009; May
18, 2009; June 15, 2009; July 17, 2009; August 21, 2009; September
18, 2009; October 13, 2009; November 11, 2009; December 18,
2009; January 18, 2010; February 10, 2010; March 12, 2010; April
14, 2010; May 21, 2010; June 11, 2010; July 22, 2010; August 20,
2010; September 17, 2010; October 18, 2010; November 16,
2010; December 13, 2010; January 12, 2011; February 14, 2011;
March 17, 2011; April 15, 2011; May 13 2011; June 19, 2011; July
15, 2011; August 12, 2011; September 14, 2011; October 14, 2011;
2013; February 13, 2012; March 13, 2013; and April 19, 2013
caused, directed, participated and otherwise engaged in causing
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fraudulent rebate checks to be sent to NRT/KFC in New Jersey

knowing that said checks were fraudulent, false and misleading.
34.

and Wombold made material representations of the presently
existing and past fact by sending the fraudulent rebate
statements to be sent to NRT/KFC.
35.

and Wombold (in addition to the statements Wombold made
directly to NRT/KFC in New Jersey) caused, directed, participated
and otherwise engaged in said fraud by directing, instructing and
manipulating the rebates that were due and owing to NRT/KFC.
36.

and Wombold represented, knew, caused, instructed, directed
and sent rebate statements and checks to NRT/KFC knowing that
said statements and rebate checks were false and misleading and
that said statements and rebate checks contained false and
misleading statements.
Defendants Haslam, Hazelwood,
Freeman, Ralenkotter, Mosher and Wombold did so cause said
statements to be sent with the intent to misrepresent the amount
due to NRT/KFC.
37.
NRT/KFC reasonably relied upon said statements sent by

and Wombold and were damaged as a result of same in the form
of not receiving their proper rebate, increased borrowing costs,
being deprived the opportunity to negotiate with other suppliers
of diesel fuel.
38.
In 2009 through 2013 on the above mentioned

dates,
defendant Lexie Holden and Vickie Borden sent, directed,
participated and otherwise caused the fraudulent rebate checks
to be sent to NRT/KFC in New Jersey knowing that said checks
were fraudulent, false and misleading.
39.
Holden and Borden knew that said rebates were false and
misleading and that the statements and rebate checks did not
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accurately reflect the proper amount of the rebate due and owing
to NRT/KFC.
40.
Holden and Borden represented that said rebate checks

accurately reflected the amount due to NRT/KFC and intended
that NRT/KFC rely upon same.
41.
NRT/KFC reasonably relied upon the false statements that were

sent by Holden and Borden and were damaged as a result of
same.
42.
From at least July of 2012, on the above dates Kevin Hite caused,
directed, participated and otherwise instructed that fraudulent
rebate checks be sent to NRT/KFC in New Jersey knowing that said
checks were fraudulent, false and misleading.
43.
Hite knew that the checks were false and misleading and
intended that the plaintiffs, NRT/KFC, rely upon same.
44.
NRT/KFC reasonably relied upon said representations and rebate

checks.
45.
As a result of same, the plaintiffs were damaged.
46.
Defendant, Tim Prins and Scott Wombold appeared in New Jersey

on November 19, 2008 and met with NRT/KFC.
47.
Prins and Wombold on the above mentioned dated after

November 19, 2008, caused, directed, participated and otherwise
instructed that fraudulent rebate checks be sent to NRT/KFC in
New Jersey knowing that said checks were fraudulent, false and
misleading.
48.
Prins and Wombold knew that the rebate statements and checks
being sent to NRT/KFC were false and misleading and intended
that NRT/KFC rely upon same. NRT/KFC reasonably relied upon
said statements provided by defendant Prins and Wombold and
were damaged as a result of same.
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E. COUNT V
49.
Since at least December 2, 2009, defendant, Karen Mann, caused,

directed, participated and otherwise instructed that fraudulent
rebate checks on the above dates be sent to NRT/KFC in New
Jersey knowing that said checks were fraudulent, false and
misleading.
50.
Mann knew that the statements and the checks were false and
intended that the plaintiffs, NRT/KFC, rely upon same.
51.
NRT/KFC reasonably relied upon said statements and were

damaged by not having its rebate, increased costs, interest and
being deprived of the opportunity to purchase fuel from other
suppliers at a lesser cost.
NEW JERSEY CONSUMER FRAUD ACT
1. New Jersey Consumer Fraud Act against all Defendants

General background information on the NJCFA.
The New Jersey Consumer Fraud Act is intended to be one of the strongest
consumer protection laws in the nation. Dorber Contracting, Inc. v. Housing Auth.
of Newark, 282 N.J. Super. 430, 433 (App. Div. 1995).
There are three independent theories under which a Plaintiff may bring a
claim under the New Jersey Consumer Fraud Act. The New Jersey Consumer Fraud
Act itself declares two general categories of conduct as unlawful. The first category
makes any unconscionable commercial practice, deception, fraud, false pretense,
false promise or misrepresentation unlawful. These are considered affirmative
acts. The second category involves the knowing concealment, suppression or
omission of any material fact. These are considered conduct by omission. The
third basis for responsibility under the Act involves either a violation of a specific
statute or administrative regulation enacted to interpret the act itself. Such
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statutes or regulations define specific conduct prohibited by law. See New Jersey
Model Jury Charge 4.43.
An affirmative act under the New Jersey Consumer Fraud Act is a physical act
but also includes any steps taken by a person to advance a plan or design or
accomplish the purpose. An omission is neglecting to perform what the law
quires.
The New Jersey Consumer Fraud Act defines an unconscionable commercial
practice as an activity that is basically unfair or unjust which materially departs
from the standards of good faith, honesty in fact and fair dealing with the public
market place. DErcole Sales, Inc. v. Fruehauf Corp., 206 N.J. Super. 11, 29 (App. Div.
1985). An unconscionable act requires that there be factual dishonesty and a lack
of fair dealing. Deception is conduct or advertisement which is misleading to the
average consumer to the extent that it is capable of, and likely to mislead an
average consumer. It does not matter that at a later time it could have been
explained to a more knowledgeable and inquisitive consumer. It does not matter
whether the conduct or advertisement actually mislead the plaintiff. The fact that
defendant had acted in good faith is irrelevant under the New Jersey Consumer
Fraud Act and it is the capacity to mislead that is important. See New Jersey Model
Jury Charge 4.43.
Fraud under the New Jersey Consumer Fraud Act is the perversion of truth,
a misstatement or falsehood communicated to another creating the possibility that
the other person will be cheated. The New Jersey Supreme Court required the
Consumer Fraud Act requirement that knowledge and intent be shown is limited to
claims of concealment, suppression or omission of material fact.
Under the Consumer Fraud Act, a person includes not only a human being
but his/her legal representative and a partnership, corporation, company, trust,
business entity, association as well as his/her agent, employee, sales person,
partner, officer, director, member, stockholder, associate, trustee or beneficiary of
a trust.
Under the New Jersey Consumer Fraud Act, it is not necessary that a person
actually mislead or deceive another by their conduct. It is not necessary for the
plaintiffs to show that the defendant intended that his/her conduct deceived. It is
only required that there be an affirmative act that had the potential to mislead or
deceive when it was performed. It is the capacity to mislead that is the prime
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ingredient of the affirmative Consumer Fraud Act. Settlement of the New Jersey
Consumer Act and the Consumer Fraud Act does not require a showing of intent.
See New Jersey Model Jury Charge 4.43.
Under the New Jersey Consumer Fraud Act, claims for unfair practices are
not required to meet the heightened pleading standard and neither fraud nor
mistake is an element of unfair conduct. A-1 Advance Moving & Storage v.
Norvergence, Inc., 424 B.R. 663 (D.N.J. 2010). Claims for unfair practices under the
New Jersey Consumer Fraud Act are to be reviewed under Rule 8(a) and not Rule
9(b). Id., citing, Windy City Metal v. CIT, 537 F.3d 663 (7th Cir. 2005).
Elements of a claim under the NJCFA
The plaintiffs, in order to establish a claim under the New Jersey Consumer
Fraud Act, need only establish (1) that the defendant engaged in an unlawful
practice, (2) an ascertainable loss and (3) a causal connection between the two. Cox
v. Sears Roebuck & Co., 138 N.J. 17, 22 (1994).
1.
Each of the defendants participated in a fraudulent scheme to

deceive and deprived NRT/KFC of the rebates due and owing.
Each of the defendants engaged in an unlawful practice under
the New Jersey Consumer Fraud Act.
2.
Each of the defendant engaged in unconscionable commercial

practices, deception, fraud, false pretense, false promise,
misrepresentation, the knowing concealment, suppression,
omission of material facts with the intent that NRT/KFC rely
upon same.
3.
Each of the defendants engaged and participated in a scheme

not to sell diesel fuel at the agreed price in violation of N.J.S.A.
56:8-2.2
4.
The defendants engaged in an unconscionable commercial

practice which is an activity that materially departs from the
standard of good faith, honesty in fact and fair dealing.
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5.
Each of the defendants engaged in a deception which is defined

as conduct which is misleading to an average consumer.
6.
Each of the defendants engaged in a fraud which is defined in

the Consumer Fraud Act as a perversion of the truth,
misstatement or a falsehood communicated to another creating
the possibility that the other person will be cheated.
7.
Each of the defendants engaged in such unconscionable

commercial practices in causing material false and fraudulent
statements and checks to being sent to NRT/KFC included the
dates of December 22, 2008; December 9, 2009; January 19, 2009;
2013; February 13, 2012; March 13, 2013; and April 19, 2013 and
at other dates including those dates as set forth above when said
individual defendants falsely represented to NRT/KFC the nature
of the rebate and further represented that the rebates received
were accurate and correct when said individuals and entities
knew same to be false.
8.
Each of the defendants engaged in false pretense which is

defined as an untruth knowingly expressed by the wrongdoer.
9.
Each of the defendants violated the New Jersey Consumer

Fraud Act by making a false promise which is an untrue
commitment or pledge communicated to another person to
create the possibility that the other person would be misled.
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10.
Each of the defendants made misrepresentations which are

defined by the Act as an untrue statement made about a fact
which is important or significant to the sale/advertisement and
was communicated to another person to create the possibility
that the other person would be misled.
11.
Not only has the plaintiffs stated an ascertainable loss,

defendants have already acknowledged the ascertainable loss
by acknowledging certain discrepancies in the rebate checks
sent and by forwarding to the plaintiffs $300,000.00. based
upon said discrepancies.
12.
Each of the defendants further violated the New Jersey

Consumer Fraud Act by acts or omissions.
13.
Each of the defendants knowingly concealed, hid, suppressed

and kept from being known and left out or failed to mention
facts with the intent that NRT/KFC would rely upon said
concealment, suppression, omission in connection with the sale
of diesel fuel.
14.
To conceal under the Act is to hide, secrete or withhold

something from the knowledge of others or to hide from
observation, cover or keep from site or prevent discovery of.
Concealment is withholding of something that which one is
bound or has a duty to reveal so that one entitled to the
information will remain in ignorance. See Model Jury Charge
4.43.
15.
Under the New Jersey Consumer Fraud Act, it is not necessary

for NRT/KFC to have been, in fact, misled or deceived by the
conduct of the plaintiff. The intent to mislead or deceive when
they act constitutes a violation of the Act.
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F. COUNT VI - NEW JERSEY CONSUMER FRAUD/STATUTORY

VIOLATION OF ADVERTISING REGULATIONS
1. Violation of the Advertising Regulation of the New Jersey Consumer
Fraud Act as to all defendants other than Pilot Corporation and
Propeller Corporation.
The elements to said claim are identical to the New Jersey Consumer Fraud
Act; however, are based on statutory regulations.
Pursuant to New Jersey Consumer Fraud Act, the making of false or
misleading representations of fact concerning the reason for, existence or amount
of price reductions, the nature of any offering or the quantity of advertised
merchandise available for sale is a violation of the New Jersey Consumer Fraud Act
regulations. N.J.A.C. 13:45A-9.2(a)(9).
4. Elements of the Underlying Claim
1.
Pilot and the individual defendants on the dates set forth above
in advertising, offering for sale and the sale of fuel to the
plaintiff violated the New Jersey Advertising Regulations by
engaging in conduct including but not limited to advertising and
representing to NRT/KFC that the fuel rebate would be based
upon actual cost of fuel to Pilot.).
2.
Pilot and the individual defendants falsely represented to the

plaintiff NRT and KFC that the price of fuel was based on the
actual cost of fuel to Pilot.
3.
Further Pilot and the individual defendants falsely represented

to the plaintiffs that they were receiving the correct and
accurate rebate amount, knowing that same was false.
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4.
5.
Pilot and the individual defendants made false and misleading

representations regarding the advertised price of the fuel, and
the amount of the rebate.
Each of the defendants violated N.J.S.A. 56 :8-1 (9) in falsely
advertising the price of fuel and making fraudulent statements
and checks to being sent to NRT/KFC included the dates of
December 22, 2008; December 9, 2009; January 19, 2009;
2013; February 13, 2012; March 13, 2013; and April 19, 2013 and
at other dates including those dates as set forth above when said
individual defendants falsely represented to NRT/KFC the nature
of the rebate and further represented that the rebates received
were accurate and correct when said individuals and entities
knew same to be false.
6.
Each violation of the Advertising Regulations by the defendants

constitute a separate violation of the Consumer Fraud Act.
N.J.S.A. 56:8-2.
7.
As a result of said violations of N.J.S.A 56:8-1(9) plaintiffs have

been damaged.
8.
Plaintiffs have an ascertainable loss as a result of said violation

including loss of the benefit of the agreement with Pilot,
increased borrowing costs, the loss of the opportunity to
negotiate and enter contract with other providers of fuel.
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G. COUNT VII - CIVIL RICO 18 U.S.C. 1961-1968

1. Civil Rico 18 U.S.C. 1961-1968 against all defendants
2. Choice of Law: Federal
The elements of civil RICO are (1) conduct, (2) an enterprise, (3) through a
pattern (4) of a racketeering activity, (5) resulting in injury. In order to successfully
plead a civil claim under 18 U.S.C. 1964 ("RICO"), a plaintiff must allege that a
person or persons conducted an enterprise through a pattern of racketeering
activity or collection of unlawful debts proximately resulting in harm to the
plaintiff's business or property interests. 18 U.S.C. 1962(c); Maio v. Aetna, Inc., 221
F.3d 472, 483 (3d Cir. 2000)
4. Elements of Underlying Claim
1.
Plaintiffs allege that the defendants engaged in a predicated act

continuous included within the meaning of H.J. Inc. v.
Northwestern Bell Telephone Co., 492 U.S. 229 (1989).
2.
Said continuous predicated act (wire and mail fraud) continued

until the fraudulent conduct was discovered.
3.
Each of the defendants participated, directed and conspired to

defraud the Plaintiffs by sending through interstate mail
fraudulent rebate checks and by representing that said rebate
checks accurately reflected the agreed upon rebate.
4.
Each of the defendants participated in the sending through

interstate mail on or about December 22, 2008; December 9,
2009; January 19, 2009; February 16, 2009;March 16, 2009; April
20, 2009; May 18, 2009; June 15, 2009; July 17, 2009; August 21,
2009; September 18, 2009; October 13, 2009; November 11, 2009;
12, 2010; April 14, 2010; May 21, 2010; June 11, 2010; July 22,
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2010; August 20, 2010; September 17, 2010; October 18, 2010;
November 16, 2010; December 13, 2010; January 12, 2011;
February 14, 2011; March 17, 2011; April 15, 2011; May 13 2011;
October 14, 2011; November 9, 2011; December 9, 2011; January
13, 2012; February 15, 2012; March 14, 2012; April 12, 2012; May
16, 2012; June 13, 2012; July 16, 2012; August 15, 2012; September
12, 2012; October 12, 2012; November 9, 2012; December 12,
2012; January 11, 2013; February 13, 2012; March 13, 2013; and
April 19, 2013 fraudulent rebate checks from Pilots headquarters
located at 5508 Lonas Drive Knoxville, TN to plaintiffs offices
located in New Jersey.
5.
Each of the rebate checks sent were fraudulent in that

defendants intentionally manipulated the rebate due and owing
and then represented that the rebate check accurately reflected
the correct amount due, knowing that same was false and
misleading.
6.
Thus, plaintiff has alleged the time, place and content of the
fraudulent statements. Bender v. Southland Corp., 749 F2d
1105, 1216 (6th Cir. 1984).
7.
The RICO enterprise does not include only employees of the

defendant Pilot, but also Propeller Corp and Pilot Corporation,
separate and independent entities.
8.
Plaintiffs allege that each of the defendants agreed to facilitate a

scheme that included the operation or management of a RICO
enterprise. United States v. Fernandez, 388 F.3d 1199 (9th Cir.
2004), cert. denied 555 U.S. 1043 (2005).
9.
The defendants engaged in a predicated act including that of

wire fraud in violation of 18 U.S.C. 1962(b).
10.
The illegal enterprise had an ascertainable structure separate

from that inherent in the racketeering activity and plaintiff
alleges that Pilot Travel Centers LLC, through Pilot Corporation
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and Propeller Corporation and Pilot Travel Centers, LLC

employees engaged in a RICO conspiracy.
INTERSTATE COMMERCE REQUIREMENT

1.
All RICO complaints must allege a predicated activity affecting

the exchange, interstate or foreign commerce.
2.
Plaintiffs specifically alleges that the defendants used interstate

mail which affected interstate commerce.
3.
As alleged by the plaintiffs, the defendants engaged in the

common plan referred to as the Pilot Rebate Fraud Scheme in
which Pilot Corporation, Pilot Travel Centers LLC, Propeller Corp.
and the defendants individually and as employees of Pilot Travel
Centers LLC agreed to target and victimize the plaintiffs through
RICO violations.
4.
The common plan was to defraud the plaintiff of their rebate

under the agreement so that the members of the common plan
could self-enrich themselves.
5.
This common plan was targeted towards the plaintiff and other
similarly situation plaintiffs in this multi-district litigation.
Common Purpose
1.
The common plan to engage in rebate fraud was targeted

specifically towards NRT/KFC.
2.
Said unlawful conduct was done in violation of 18 U.S.C.

1962(b).
3.
The defendants/following individuals and entities participated in

the RICO scheme include but are not limited to: Pilot Travel
Centers, LLC; Pilot Corporation; Propeller Corp; James Haslam;
Mark Hazelwood; John Freeman; Arnold Ralenkotter; Brian
Mosher; Scott Wombold; Vickie Borden; Lexie Holden; Kevin
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Hite; Tim Prins; Karen Mann; Christopher Andrews; Janet Welsh;

Michael Scott Fenwick; Vincent Grecco.
4.
The defendants common purpose was to enrich themselves at

the expense of the plaintiffs.
Alleged Misconduct and Basis of Liability of the Defendants

1.
Pilot Travel Centers, LLC is the nations largest distributor of

diesel fuel to over the road truckers in the United States.
2.
In 2001, Pilot and Marathon Oil Co entered into an agreement to

form Pilot Travel Centers.
3.
In 2008, the year that Pilots fraudulent activities took off, Pilot
joined as a financial partner Propeller Corp.
4.
Pilot Flying J was created in July 2010.
5.
Pilot and its employees conspired with Propeller Corporation to

defraud members of the public such as NRT/KFC by inducing
said plaintiffs to enter into contracts to purchase diesel fuel.
6.
Pursuant to the terms and conditions of the agreement to

purchase diesel fuel, the plaintiffs were to receive a rebate
based upon actual cost of diesel fuel to Pilot.
7.
Unbeknownst to the plaintiffs, the defendants surreptitiously

manipulated and otherwise made false representations and
reduced the rebate amount and sent via e-mail and interstate
mail statements which were knowingly fraudulent.
8.
The defendants represented to the plaintiffs that the

statements and checks which contained rebates were accurate
knowing that said rebate checks and statements were, in fact,
false and fraudulent.
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9.
The defendants made multiple representations to the plaintiffs

that the rebate statements and rebate checks that the plaintiffs
were receiving accurately reflected the proper amount of rebate
due and owing based upon the actual cost of fuel.
Course of Conduct
1.
This course of conduct is described below.
2.
It is supported by the racketeering acts described herein and

other specific facts presented in the General Background
Information of the plaintiffs Second Amended Complaint.
3.
Defendants employees in submitting on each of the referenced

dates via interstate mail, false, fraudulent and misleading
statements as it relates to the rebate discount and the
calculations which were used to calculate same.
4.
The RICO members mailed and continued through 2013 to send

documents through the United States Mail for the purpose of
executing schemes to defraud with the intend to obtain
property of the plaintiff and to deprive the plaintiffs of their
proper rebates and to deprive the plaintiffs the opportunity to
seek out other suppliers of diesel fuel.
5.
This scheme or artifice to defraud constitutes a violation of RICO

as set forth in Congress response to the United States Supreme
Court decision in McNally v. United States, 483 U.S. 350 (1987) in
that Congress expressly included this definition of scheme or
artifice to defraud.
6.
Such schemes of the defendants were executed by means

involving the making of false pretense, promises and
representations in the sale of diesel fuel in violation of 18 U.S.C.
1341.
7.
False pretenses, promises and representations including

falsifications as to the amount and basis for the credit received
for diesel fuel being purchased and false assurances relating to
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adherence to compliance with the agreement to purchase fuel

continued throughout 2013.
8.
The RICO members transmitted documents through wire

communications in the form of electronic mail, faxes, electronic
spreadsheets, interstate mail, all to execute schemes to defraud
and obtain the property of the plaintiffs by means of false
pretense, promise and representations in violation of 18 U.S.C.
1343.
9.
The defendants, as part of their racketeering scheme, also

resorted to concealment of evidence through direct and indirect
fraudulent tactics to conceal the mass scale of their fraudulent
activities upon the plaintiffs and the like situation victims of
their fraudulent scheme.
10.
All defendants have committed at least two substantive RICO

predicated acts listed under 18 U.S.C. 1961 as evidenced from
the racketeering acts described. Additionally, the defendants
conspired with other defendants committing multiple
predicated acts and thereby conspired to operate or manager to
the affairs of the RICO enterprise. U.S. v. Antar, 53 F.3d 568, 581
(3rd Cir. 1985).
11.
Said defendants conspired by having meetings at defendant

Freemans lake house wherein they conspired and decided and
planned the RICO conspiracy and determined to teach the
conspiracy fraudulent conduct to all direct sales personnel.
12.
The RICO conspiracy requirement was loosened further in the

Third Circuit under the case of Smith v. Berg, 247 F.3d 532
(2001).
Damages
1.
Plaintiffs, NRT and KFC, have specifically been damaged not only
by the failure to receive upon the agreed upon rebates but
further were damaged by being deprived the opportunity to
negotiate with other fuel providers.
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2.
Further, NRT/KFC were damage by having increased carrying

costs including interest, financing costs, and separate other
damages by being unable to meet with other long haul trucking
companies who were paying less for fuel with reputable
companies who were not defrauding said entities.
3.
As a result of same, NRT/KFC were at an economic disadvantage

due to the fraud.
4.
Plaintiffs sustained damages other than out of pocket losses as

noted above.
5.
Plaintiff could have obtained a letter price for diesel fuel than
they purchased and were deprived of the rights to do so based
upon the fraudulent conduct of the defendants.
Plaintiffs have pled a RICO conspiracy.

1.
As set forth in the Second Amended Complaint, the plaintiffs

have pled an agreement to commit a predicated act in violation
of one of the RICO substantive provisions.
2.
In particular, at both Mr. Freemans lake house and at the

breakout sessions at Pilots national headquarters the
unequivocal proofs will establish that a RICO conspiracy took
place.
3.
As noted above, on the above referenced dates, in furtherance

of the RICO conspiracy, the defendants caused to be sent in
interstate mail false and fraudulent rebate checks in violation of
18 U.S.C. 1962(d).
4.
Defendants knowingly agreed to participate in the conspiracy

and each of the defendants either supported, manipulated or
participated in the sending of the fraudulent rebate checks to
the plaintiffs.
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H. COUNT VIII CONSPIRACY TO ENGAGE IN A PATTERN OF RACKETEERING

IN VIOLATION OF 18 U.S.C. 1961(5), 1962(d) AGAINST ALL DEFENDANTS
1. Conspiracy to engage in a pattern of racketeering activity.
2. Choice of Law: Federal
In addition to the elements of a RICO violation, there are four essential
elements in any civil conspiracy claim: (1) a combination of two or more persons;
(2) a real agreement or confederation with a common design; (3) the existence of
an unlawful purpose or a lawful purpose to be achieved by unlawful means; and, (4)
proof of special damages. Morganroth & Morganroth v. Norris McLaughlin &
Marcus, P.C., 331 F.3d 406, 414 (3rd Cir. 2003). The gravamen of an action in civil
conspiracy is not the conspiracy itself but the underlying wrong which, absence the
conspiracy, would have a right of action. Board of Ed. v. Hoek, 38 N.J. 213, 238
(1962).
1.
Each of the defendants conspired themselves as set forth in the

FBI Affidavit.
2.
In particular, individual defendants met at Mr. Freemans lake

house to conspire to commit various violations including
violations of racketeering and engaging in a pattern of
racketeering in violation of 18 U.S.C. 1961.
3.
Defendants conspired further to train and did train the sales

force of Pilot wherein the defendants trained, planned and
agreed to perpetrate rebate fraud upon the Plaintiffs.
4.
The purpose of which they conspired was, in fact, unlawful and

they conspired to use unlawful means to defraud Plaintiffs.
5.
As a result of the conspiracy to engage in racketeering activity,

the plaintiffs were damaged including loss of profit, loss of the
right to negotiate with other providers of diesel fuel, increased
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borrowing and lending costs, and a loss of competitive

advantage.
I. COUNT IX CONSPIRACY TO COMMIT FRAUD AS TO ALL DEFENDANTS
1. Conspiracy to Commit Fraud
The elements of a civil conspiracy are: (1) a combination of two or more
persons, (2) the real agreement or confederation of the common design, (3) the
existence of an unlawful purpose or lawful purpose to be achieved by unlawful
means, and (4) proof of special damages. Maylor v. Harkins, 27 N.J. Super. 594
(1953) mod. o.g. 32 N.J. Super. 559 (1954); Morganroth & Morganroth v. Norris
McLaughlin & Marcus, P.C., 331 F.3d 406 (3rd Cir. 2003).
1.
In the instant matter, it is alleged that each of the defendants

conspired among themselves and on behalf of the corporate
defendants to make material misrepresentations of presently
existing or a past facts regarding the amount of the rebate due
and owing to the plaintiffs, NRT/KFC, with knowledge and belief
that said statements were false and with the intent that the
plaintiffs relied upon said statements.
2.
In particular, the defendants conspired to send false fraudulent,

misleading, manipulated, modified, statements and rebate
checks to the plaintiffs knowing that said rebate checks and
statements were false fraudulent and misleading so as to
defraud the plaintiffs of their proper rebate.
3.
It is alleged that in conspiring to make such fraudulent

statements the defendant knew that NRT/KFC would reasonably
rely on said statements and NRT/KFC did, in fact, reasonably rely
on said statements to continue to purchase fuel from the
defendants.
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4.
Plaintiffs were damaged by the conspiracy to commit fraud

including, among other things, increased borrowing costs, lost
contracts, lost sales, and decline in business due to the inability
to compete with other contractors who were obtaining fuel
from reputable fuel suppliers.
J. COUNT X BREACH OF IMPLIED COVENANT OF GOOD FAITH

AND FAIR DEALINGS AS TO PILOT
1. Breach of Implied Covenant of Good Faith and Fair Dealings
In order to establish breach of an implied covenant of good faith and fair
dealings, plaintiff must establish: (1) that the defendants acted with bad motive of
intentions or engaged in deception or invasion in the performance of a contract; (2)
by such conduct, deny the plaintiffs the bargain initially intended by the parties.
Brunswick Hills Racket Club, Inc. v. Route 18 Shopping Center Assocs., 182 N.J. 230231 (2005); Wilson v. Amerada Hess Corp., 168 N.J. 236, 251 (2001).
Under New Jersey law, it is implicitly understood that each party to a contract
must act in good faith and deal fairly with the other party with performing or
enforcing the terms of the contract. Suns of Thunder, Inc. v. Borden, Inc., 148 N.J.
396 (1997). Further, under the New Jersey Uniform Commercial Code, every
contract or duty within the Act imposes an obligation of good faith in the
performance or enforcement. N.J.S.A. 2A:1-203. Good faith is defined as honesty in
fact in the conduct or transaction concerned. N.J.S.A. 12A:1-201(19).
1.
The defendant Pilot breached its duty of good faith and fair
dealings in defrauding the plaintiffs in this matter.
2.
Pilot caused its employees to systematically defraud the

plaintiffs.
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3.
Pilots actions were done with bad motive and intention and
engaged in deception in the performance of the contract by the
aforementioned acts.
4.
Pilot, and its employees, taught its sales force how to defraud
the plaintiffs in this matter.
5.
Pilot in doing so intended to deny the plaintiffs of the benefit of

the bargain intended by the parties.
K. FRAUDULENT INDUCEMENT AS TO PILOT, HITE, PRINS AND WOMBOLD

1. Fraudulent Inducement
The elements of fraudulent inducement, like common law fraud are: (1) a
misrepresentation of material facts, (2) knowledge or belief by the defendants of its
falsity, (3) intent that the other party rely upon the misrepresentation, and (4)
reasonable reliance by the other party (5) resulting damages. McConkey v. AON
Corp., 354 N.J. Super. 25 (App. Div. 2002); Jewish Center of Sussex County v. Whale,
86 N.J. 619 (1981).
1.
As set forth in the Second Amended Complaint and as set forth

herein, Pilot, Hite, Prins and Wombold made misrepresentations
of material fact as it relates to rebates.
2.
In particular, said entities and individuals misrepresented that

the rebate checks were accurate and correctly reflected the
amount of rebates due and owing to plaintiff.
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3.
It is alleged that the defendants had knowledge and belief of the

falsity and that they intended that the plaintiffs rely upon said
misrepresentations.
4.
Plaintiffs reasonably relied upon this misrepresentation and

were damaged.
L. COUNT XII AIDING AND ABETTING AS TO ALL DEFENDANTS

1. Aiding and abetting
The elements of aiding and abetting in New Jersey are: (1) the commission of
a wrongful act, (2) knowledge of the fact by the alleged aider-abettor and (3) the
aider-abettor knowingly and substantially participated in the wrongdoing.
Morganroth & Morganroth v. Norris McLaughlin & Marcus, P.C., 331 F.3d 406, 415
(3rd Cir. 2003).
1.
As set forth in the Second Amended Complaint and as set forth

herein, the defendants all engaged in multiple violations of the
law including wire and mail fraud, violations of the New Jersey
Consumer Fraud Act, violations of the federal RICO statute and
the other causes of action set forth.
2.
Each and every defendant had knowledge of the acts and that
they knowingly and substantially participated in the
wrongdoing.
3.
In particular, each of the defendants substantially participated

in causing fraudulent and deceptive rebate checks to be sent to
the plaintiffs and further conspired among themselves to
defraud the plaintiffs so as to increase their profitability and
remuneration.
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4.
Each of the defendants knew that a fraud was being

perpetrated by the other defendants and the each knew that
the representations and omissions by the others were false and
misleading.
5.
Plaintiffs have been damaged as a result of the defendants

actions as stated in the second amended
M. COUNT XIII EQUITABLE FRAUD AS TO ALL DEFENDANTS

1. Equitable Fraud
To prove legal fraud, a plaintiff demonstrate a material misrepresentation of
a presently existing or past fact, made with knowledge of its falsity and with the
intention that the other party rely thereupon and resulting in reliance by that party.
Equitable fraud, however, does not require proof that the representation was made
with knowledge of its falsity and intention to obtain an undue advantage therefrom.
Jewish Center of Sussex County v. Whale, 86 N.J. 619, 625 (1981).
1.
The elements of the underlying claim are sufficiently set forth in

the Second Amended Complaint and as stated above.
N. COUNT XIV NEW JERSEY CIVIL RICO N.J.S.A. 2C:41, ET SEQ.,

AS TO ALL DEFENDANTS
1. New Jersey Civil RICO
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To state a claim under New Jersey Civil RICO, a plaintiff must establish five
elements. That being, (1) the existence of an enterprise, (2) that the enterprise
engaged in or its activities affected trade or commerce, (3) the defendant was
employed by or associated with the enterprise, (4) that he or she participated in the
conduct of the affairs of the enterprise, and (5) that he or she participated through
a pattern of racketeering activity. State v. Ball 141 N.J. 142 (1995); Prudential Ins.
Co. of America v. Goldman Sachs & CO., 213 U.S. Lexis 50788 2013 W.L. 1431680
(D.N.J. April 9, 2013).
Unlike the federal RICO statute, New Jerseys RICO statute does not require
separate and distinct entities in order to establish an enterprise. New Jersey
broadly construes the enterprise element unlike the federal statutory
counterpart. Maxim Sewage Corp. v. Monmouth Ridings, 273 N. J. Super. 84, 95 (S.
Ct. 1993) (New Jersey RICO defines person more broadly than the federal statute).
The New Jersey Supreme Court has held that enterprise element will be
satisfied if there exists a group of people, no matter how loosely associated, whose
existence or association provides or implements the common purpose of
committing two or more predicated acts. Ball v. Ball, 141 N.J. 160 (1995).
The element is also satisfied if the enterprise is no more than the sum of the
racketeering acts. Id. In New Jersey an enterprise does not have to be an
organization whose purpose is greater than the predicated acts nor does it have to
evidence any definable structure. Id. See also, Prudential Ins. Co. of America v.
Goldman Sachs & CO., 213 U.S. Lexis 50788 2013 W.L. 1431680 (D.N.J. April 9, 2013).
Further, unlike the federal RICO statute, NJ RICO does not require
operational management and participation is defined as acting purposefully or
knowingly in the affairs of the enterprise. Szelc v. Stanger No. 08, 4782, 2011 U. S.
Dist. Lexis 41827 (D. N. J. 2011)
1.
The elements of the underlying claim are set forth above in the
Federal RICO statute.
2.
Unlike the federal RICO statute, however, New Jersey applies a

much more liberal standard and there need not be any
distinction between the corporate structure and its employees.
-35-
3.
Unlike the federal RICO statute which case law holds that
employees in a corporation and its employees cannot constitute
an enterprise, under the New Jersey RICO statute the
requirement of a separate and distinct legal entity is not
required. An enterprise exists if there is a group of people, no
matter how loosely associated, whose existence or association
provides or implements the common purpose of committing
two or more predicated acts. Prudential Ins. Co. of America v.
Goldman Sachs & CO., 213 U.S. Lexis 50788 2013 W.L. 1431680
(D.N.J. April 9, 2013)
4.
The defendants engaged in violations of the New Jersey RICO

statute by engaging in a pattern of racketeering activity
including deceptive business practices under N.J.S.A. 2C:27-(1) in
making false and misleading statements in connection with the
offer and sale of fuel, theft by deception in violation of N.J.S.A.
2C:20-4 wherein said defendants purposely committed and
attempted to commit, solicited to commit and conspired to
commit theft by deception by obtaining property of another by
deceitful means, falsifying records in violation of N.J.S.A. 2C:214(a) in that the defendants used false and misleading
statements including falsifying the rebates that the plaintiffs
were entitled to and that the rebate checks were, in fact, created
and utilized by the defendants to defraud the plaintiffs and said
rebate checks constituted a writing or record within the
meaning of N.J.S.A. 2C:21-4(a).
5.
The enterprise affected New Jersey trade or commerce in that

the defendant was associated with a racketeering enterprise
which engaged in trade or commerce in New Jersey. State v.
Casilla 362 N.J. Super. 554 (App. Div. 2003)
6.
Pilot, Propeller Corp, Pilot Corporation along with the individual

defendants and others participated in the enterprise, the Pilot
Rebate Fraud Scheme as set forth in the second amended
complaint.
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7.
Each of the Defendants on multiple occasions noted above

uttered, falsified, concealed records that contained false
statements or information with the purpose to deceive and
injury the plaintiff, that being sending false, fraudulent
statements and representing that the statements and rebate
checks were true and accurate.
8.
The defendants were employed by or associated with the

Enterprise. Under N.J.S.A. 2C:41-2(c) a person is employed by
or associated with an enterprise if he or she has a position or a
functional connection with the enterprise that enables him or
her to engage or participate directly or indirectly in the affairs of
the enterprise. State v. Ball 141 N.J. at 175
The threshold
showing of association only requires proof that the defendant
was aware of at least the general existence of the enterprise.
United States v. Parise 159 F. 3rd 790 (3rd Cir. 1998)
9.
The defendants engaged in a Pattern of Racketeering Activity.
10.

made false and misleading statements and advertising to the
plaintiff in advising and representing that the discount being
provided was based on the actual cost of fuel to Pilot.
11.

committed the act of theft by illegally retaining upon false
pretense funds that were due and owing to NRT/KFC
12.
Each of the Defendants on multiple occasions illegally exercised

unlawful control over NRT/KFCs rebate.
13.

created a false impression by sending fraudulent rebate
statements to NRT/KFC, representing that said statements and
checks represented the accurate rebate amount.
14.

prevented NRT/KFC from acquiring information which would
have affected NRT/KFC decision to enter into the transaction.
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15.
Each of the defendants on multiple occasions noted above

failed to correct a false impression which defendants
deceptively created
16.
In addition to same, said defendants violated N.J.S.A. 2C:41-2(c)

by associating with the enterprise in conducting and
participating directly or indirectly with the enterprise through a
pattern of racketeering activity including theft by deception,
deceptive practices, falsifying records, fraud, aiding and abetting
fraud, equitable fraud and the predicated acts which stem from
said conduct. Prudential Ins. Co. of America v. Goldman Sachs &
CO., 213 U.S. Lexis 50788 2013 W.L. 1431680 (D.N.J. April 9,
2013).
17.
Defendants behavior directly targeted NRT/KFC and proximately

caused damaged to the plaintiffs by depriving plaintiffs of their
rebate, denying plaintiffs the ability to negotiate with other
suppliers of fuel, increased the plaintiffs borrowing and interest
costs.

Attorney for Plaintiffs
BY:______/s/ Leonard Leicht

Leonard Leicht
BY:______/s/ Timothy K. Saia

TIMOTHY K. SAIA
Dated: November 14, 2014
-38-
Case: 2:14-cv-00069-ART Doc #: 80-1 Filed: 11/14/14 Page: 1 of 2 - Page ID#: 1779

651 W. Mt. Pleasant Avenue, Suite 200
Livingston, New Jersey 07039-1673
Tel: (973) 994-2500
Fax: (973) 994-3375
Attorneys for Plaintiffs
Our File No. NRT 33-248 TS
2:14-MD-02515-ART
IN RE: PILOT FLYING J. REBATE CONTRACT LITIGATION (NO. II)
AMUL R. THAPAR, PRESIDING
COVINGTON, KENTUCKY
Case no. 2:14-cv-00070
Covington, Kentucky
MDL #2515
NATIONAL RETAIL TRANSPORTATION,
INC., KEYSTONE FREIGHT CORP.
Plaintiffs,
CERTIFICATION
OF SERVICE
-vsPILOT TRAVEL CENTERS, LLC, d/b/a

Pilot Flying J, PILOT CORPORATION,
PROPELLER CORP, JAMES HASLAM,
MARK HAZELWOOD, JOHN FREEMAN,
ARNOLD RALENKOTTER, BRIAN
MOSHER, SCOTT WOMBOLD, VICKIE
BORDEN, LEXIE HOLDEN, KEVIN HITE,
TIM PRINS, KAREN MANN and JOHN
DOES (#1-100) said names being
fictitious,
Defendants.
{00974075}
-1-
Case: 2:14-cv-00069-ART Doc #: 80-1 Filed: 11/14/14 Page: 2 of 2 - Page ID#: 1780
I, Timothy K. Saia, Esq., certify that on the 14th day of November, 2014, have
filed the foregoing Bill of Particulars with the Clerk of the Court for the United
States District Court, Eastern District of Kentucky, via ECF, and that same has been
filed and served in accordance with the Federal Rules of Civil Procedure.
By:
{00974075}
-2-
/s/Timothy K. Saia
TIMOTHY K. SAIA

Bill of Particulars Keystone Freight Corp Vs Pilot Flying J

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Bill of Particulars Keystone Freight Corp Vs Pilot Flying J

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Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 1 of 38 - Page ID#: 1741

MORGAN MELHUISH ABRUTYN

-vsPILOT TRAVEL CENTERS, LLC, d/b/a

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 2 of 38 - Page ID#: 1742

Plaintiffs, National Retail Transportation, Inc. and Keystone Freight Corp.

A. COUNT I - BREACH OF CONTRACT

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 3 of 38 - Page ID#: 1743

2. Pursuant to the terms of the contract, NRT/KFC agreed to purchase

B. COUNT II - UNJUST ENRICHMENT

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 4 of 38 - Page ID#: 1744

In order to establish unjust enrichment in New Jersey, the plaintiff must

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 5 of 38 - Page ID#: 1745

5. James Haslam instructed Pilot employees to advise NRT/KFC that they

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 6 of 38 - Page ID#: 1746

15. Hazelwood participated in the training of Pilot employees to manually

direction, sent the

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 7 of 38 - Page ID#: 1747

C. COUNT III - CONVERSION

2. Choice of Law: New Jersey

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 8 of 38 - Page ID#: 1748

provided to plaintiff was accurate and consistent with the agreement

Pilot made material misrepresentations of presently existing

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 9 of 38 - Page ID#: 1749

From 2004 through 2013, Pilot sent to the plaintiff numerous

Pilot knew that the statements which it was sending contained

From October of 2008 through June of 2009, Pilot sent to

These statements were materially false in that they did not

Pilot further provided these statements to NRT/KFC with the

These statements concealed the fact that Pilot secretly was

From 2004 to 2013, Pilot sent monthly rebate checks to

The material false statements made by the defendants to

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 10 of 38 - Page ID#: 1750

Pilot thus made material misrepresentations of a presently

Pilot did so with the knowledge or belief by the defendants that it

NRT/KFC reasonably relied upon these statements to continue its

As a result of said misrepresentations, NRT/KFC were damage by

Additionally, NRT/KFC were damaged by not having the benefit of

Defendants Pilot Corporation and Propeller Corp were aware of

Defendants Tim Prins and Scott Wombold made sales calls to

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 11 of 38 - Page ID#: 1751

Prims and Wombold represented to Mr. Thomas Hayes of

These representations by Prims and Wombold were false and

In December 2009, NRT/KFC questioned the monthly rebate

Tim Prins and Karen Mann, on behalf of Pilot, responded

There was no mistake. Wombold, Prins and Mann were aware of

There was no mistake but rather the defendants caused an

These false statements by Wombold, Prims and Mann were

NRT/KFC, not knowing that a fraud was being perpetrated,

NRT/KFC reasonably relied on said false statements and were

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 12 of 38 - Page ID#: 1752

Beginning in 2001, Kevin Hite replaced Tim Prins as Pilots account

Hite made multiple sales calls to NRT/KFC in New Jersey.

During these sales calls, Hite reiterated to Tom Hayes, Fuel

NRT/KFC reasonably relied upon same representations by Hite

Defendants Haslam, Hazelwood, Freeman, Ralenkotter, Mosher

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 13 of 38 - Page ID#: 1753

fraudulent rebate checks to be sent to NRT/KFC in New Jersey

Defendants Haslam, Hazelwood, Freeman, Ralenkotter, Mosher

Defendants Haslam, Hazelwood, Freeman, Ralenkotter, Mosher

Defendants Haslam, Hazelwood, Freeman, Ralenkotter, Mosher

NRT/KFC reasonably relied upon said statements sent by

In 2009 through 2013 on the above mentioned

Case: 2:14-cv-00069-ART Doc #: 80 Filed: 11/14/14 Page: 14 of 38 - Page ID#: 1754