Complaint

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THE IDS GROUP, INC., a California ) Corporation, as successor in all rights and ) interest to TAX DEFERRED SERVICES,) INC., a California Corporation, )

)

Plaintiffs, )

)

vs. )

)

THE IRA CENTER, a California )

Corporation; RANDY SCIANNA. an )

individual; RENE ROCAMORA, an )

individual; REBECCA OLSEN, an )

individual; EMPLOYEE BENEFIT )

SERVICES, INC., a California )

Corporation; WILLIAM L. KREBS, an )

individual; PENSION PLANNERS )

SECURITIES, INC., a California )

Corporation; GINA DUREY A, an )

individual; BAR FINANCIAL, LLC a )

California Limited Liability Company; )

t\NTHONY TARANTINO, an individual,')

JOliN BRACKETT, an individual, )

ERIC A. HUCK, an individual and )

DOES 1-100, inclusive, )

)

Defendants. )

) )

-----------------------)

MICHAEL T. STOLLER, ESQ., SBN 120241

LAW OFFICES OF MICHAEL T. STOLLER, APC 2 9454 WILSHIRE BL YD., SUITE 500

BEVERLY Hll.,LS. CALIFORNIA 90212

3 Telephone: 818-226-4040

4 Facsimile: 818-226-4044

5 Attorneys for Plaintiff

Department Assignment& Case Management 43 Law and Motion 54 Minors Compromise 17

34~200 9-0.o05SS,~

SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SACRAMENTO

CASE NO. COMPLAINT FOR;

1. Statutory Unfair Competition in Violation of Calif Bus. & Prof. Code § 17200;

2. Common-law Unfair Competition;

3. Statutory False Advertising in Violation of Calif. Bus. & Prof Code § 17500;

4. Federal Unfair Competition - False Designation of Origin;

5. Product Disparagement Under Lanham Act

6. Unfair Competition Under California State Law in Violation of Calif. Bus. & Prof. Code

§ 17200;

7. Common and Statutory Trademark

Infringement Under State Law;

8. Slander Per Se;

9. Breach of Contract;

10. Business Disparagement; II. Intentional Interference With

Contract;

12. Intentional Interference With Prospective Economic Advantage;

13. Accounting;

14. Injunctive Relief.

14

COMPLAINT

COMES NOW, Plaintiff, THE TDS GROUP, INC., a California corporation, as

') successor in all rights and interest to TAX DEFERRED SERVICES, INC., a California

3 Corporation, (hereinafter "TDS") and complains against defendants THE IRA CENTER, a

4 California Corporation (hereinafter "IRA"); RANDY SCIANNA (hereinafter "SCIANNA"), an 5 I individual; RENE ROCAMORA (hereinafter "ROCAMORA"), an individual; REBECCA

6 OLSEN (hereinafter "OLSEN"), an individual; EMPLOYEE BENEFIT SERVICES, INC.. a 7 California Corporation (hereinafter "EBS"); WILLIAM L. KREBS, an individual (hereinafter

8 "KREBS"); PENSION PLANNERS SECURITIES, INC., a California Corporation (hereinafter 9 "PPSJ"); GINA DUREY A, an individual (hereinafter "DUREY A"); BAR FINANCIAL, LLC

10 (hereinafter "BAR"); ANTHONY TARANTINO (hereinafter "TARANTINO") ; JOHN 11 BRACKETT, an individual (hereinafter "BRACKETT"); ERIC A. HUCK, an individual 12 (hereinafter "HUCK") and DOES 1-100, inclusive, as follows:

13 I. PARTIES

1.

Plaintiff, TDS, is a California corporation with its principal place of business

15 located at 6939 Sunrise Boulevard, Suite 250, Sacramento, California.

16

2.

Defendant, IRA, is a California corporation with its principal place of business

17 located at 14388 Union Avenue, San Jose, California.

18

3.

Plaintiff is informed and believes, and thereon alleges that, at all times herein

19 mentioned, defendant SCIANNA was a principal and Chief Operating Officer of defendant IRA.

20

4.


21 mentioned, defendant ROCAMORA was a principal and Chief Financial Officer of defendant 22 IRA and thereafter became its Chief Operating Officer.

5.


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mentioned, defendant OLSEN was an officer of IRA.

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6.

Plaintiff is informed and believes, and thereon alleges that defendant

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its principal place of business located at 14388 Union Avenue, San Jose, California and is owned and operated by Defendant ROCAMORA. Plaintiff is further informed and believes, and

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2

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14.

Plaintiff is informed and believes, and thereon alleges, that at all times mentioned

thereon alleges that defendants ROCAMORA and OLSEN are the Chief Executive Officer and 2 Vice President/Managing Director of District Relations for EBS

7.

Plaintiff is informed and believes and thereon alleges that defendant, PENSION

4 PLANNER SECURITIES, INC. (hereinafter "PPSI") is a California corporation with its

5 principal place of business located at 9700 Business Park Drive, Suite 200, Sacramento,

6 California 95827.

8.

Plaintiff is informed and believes and thereon alleges that defendant

8 WILLIAM L. KREBS (hereinafter "KREBS") is an individual residing at 117 W. Gutierrez 9 Street. Santa Barbara, California 93 101.

10

9.

Plaintiff is informed and believes and thereon alleges that defendant BAR

11 FINANCIAL, LLC (hereinafter "BAR") is a California corporation with its principal place of 12 business located at 9700 Business Park Drive, Suite 200, Sacramento, California 95827.

13

10.

Plaintiff is informed and believes and thereon alleges that defendant ANTHONY

14 TARANTINO (hereinafter TARANTINO") was and at all times is a partner in defendant BAR

15 FINANCIAL, LLC.

16

11.

Plaintiff is informed and believes and thereon alleges that defendant ERIC A.

17 HUCK (hereinafter "HUCK") was and at all times is a partner in defendant BAR FINANCIAL 18 LLC.

12.

Plaintiff is informed and believes and thereon alleges that defendant JOHN

19

20 BRACKETT (hereinafter "BRACKETT"), was and at all times is a partner in defendant BAR

21 FINANCIAL, LLC.

22

13.

Plaintiff is ignorant of the true names and capacities of defendants sued herein as

DOES I through 100, inclusive, and therefore sues these defendants by such fictitious names.

24

Plaintiff will amend this Complaint to allege their true names and capacities when ascertained.

25

26 herein, defendants, and each of them were the agents, principals, partners, associates, joint

27 venturers, employees, contractors, independent contractors andlor co-conspirators of each of the 28 remaining co-defendants; that defendants, and each of them, were at various relevant times

COMPLAINT

6

COMPLAINT

acting within the purpose and scope of said agency, partnership, association, joint venture,

2 employment, contractor/client relationship, independent contractor/client relationship and/or

3 conspiracy and that defendants, and each of them, were acting with the authorization, permission

4 and/or consent of the remaining co-defendants.

5 II. NATURE OF THE ACTION

15.

This is an action by plaintiff TDS against defendants IRA, SCIANNA,

7 ROCAMORA, OLSEN, KREBS and EBS who have and continue to infringe TDS' trademarks

8 and service marks; who have and continue to make misrepresentations in the marketplace that

9 are damaging to TDS' reputation, and its existing and prospective economic advantage; and who 10 have and continue to interfere with TDS' customer relationships and otherwise to compete

11 unfairly and unlawfully with TDS, and with the assistance of defendants DUREY A, PPSI,

12 TARANTINO, BRACKETT, HUCK and BAR as co-conspirators with the goal of putting TDS

13 out of business.

14

16.

PlaintiffTDS seeks a Temporary Restraining Order, preliminary and permanent

15 injunction:

16

(a)

enjoining all defendants from misrepresenting that they, or

1 7 any of them, are authorized by, related to, affiliated with, or otherwise associated

18 with rDS;

19

(b)

enjoining all defendants from retaining and/or using

20 "TDS", "TAX DEFERRED SERVICES", "THE TDS GROUP, INC." and/or any

21 other trademark or service mark that is confusingly similar to a trademark or

22 service mark owned by TDS; and

(c)

enjoining all defendants from misrepresentation and

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disparagement of plaintiff TDS' financial condition and purported regulatory problems and unfairly soliciting plaintiffTDS' existing representatives, and from interfering with TDS' contracts with and selling to TDS' existing customers the financial services provided by TDS.

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4

17. PlaintiffTDS also seeks an accounting of the commissions from wrongful sales

2 and/or diverted sales of financial services by defendants; damages according to proof; and

3 restitution of all monies unlawfully gained by defendants due to the conduct alleged herein.

4 III. THE INDUSTRY

5

Beginning in or about 1979, TDS has been a Plan Administrator, as that term was

18.

6 commonly known, which provides administrative services to non-profit Public Schools, County

7 Offices of Education and/or Community Colleges throughout the United States (hereinafter

8 "School Districts"). Typically, members of these groups are school employees who are eligible

9 to create certain defined contribution retirement plans, commonly known as Internal Revenue

10 Code Section 457 or 403(b) Plans. These Plans allow school employees to save money from

11 their earnings and to purchase certain financial products from life insurance companies and 12 mutual funds. The services that TDS provides as a Plan Administrator include, among other 13 things, being the Compliance Administrator for the various defined contribution plans, which

14 plans require compliance with federal and state tax regulations, and being the common remitter

15 (i.e., monthly gross payments from the schools are allocated and paid to each vendor that has

16 established a financial product for an individual teacher). By virtue of these contracts, TDS has 17 become the financial advisor to the school employees and end participants. In addition to the 18 Plan Administrator Services, these contracts provide that TDS shall be the exclusive plan

19 provider for 457 accounts. Over time TDS has developed a reputation as a trustworthy source of 20 information and a reliable endorsement of other companies that provide financial services.

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19.

Since 1979, Plaintiffs predecessor adopted the trademarks and/or service marks

"Tax Deferred Services" and "TDS", which it clearly imprinted on business cards, payroll flyers, logos, stationery, brochures and other marketing materials that were extensively and continuously utilized to promote and provide its services and financial products. On or about

July 14,2006 THE TDS GROUP, INC. was formed (hereinafter "THE TDS GROUP"), which became the successor in all rights and interest to TAX DEFERRED SERVICES, INC. and which adopted the trademark and/or service mark "THE TDS GROUP, INC." which it clearly imprinted on business cards, payroll fliers, logos, stationery, brochures and other certain

5

COMPLAINT

5

COMPLAINT

marketing materials that were used to provide its services and financial products. Plaintiff has 2 extensively and continuously used THE TDS GROUP trademark and service mark in the

3 marketing and sale of services and financial products since July 14, 2006 and has continued to 4 use the trademarks and service marks TAX DEFERRED SERVICES, INC. and TDS, as well.

20.

PlaintiffTDS has extensively advertised and promoted the trademarks and service

6 marks "TAX DEFERRED SERVICES", "IDS" and "THE TDS GROUP" nationally to Public

7 Schools, County Offices of Education and/or Community Colleges and teachers through the 8 United States, through various methods of advertisements. As a result of these activities the

9 public, including non-profits, School Districts, County Offices of Education andlor Community 10 Colleges and teachers through the United States, has come to know ofTDS and recognize these 11 trademarks and service marks as being associated exclusively with plaintiff IDS. Plaintiff s

12 TDS trademarks and service marks are an asset of inestimable value to TDS, representing and

13 embodying its goodwill and favorable reputation.

14

21.

In order to provide Plan Administrator services to the various School Districts,

15 County Offices of Education and Community Colleges, TDS entered into agreements with

16 certain entities and individuals to act as representatives of IDS and licensed the use of its

17 trademarks and service marks (hereafter, the TDS representatives).

18

22.

In addition to providing the Plan Administrator services, the principals of TDS

19

were also licensed to sell financial products including life insurance and securities and in that

20

capacity developed a network of licensed representatives to sell certain financial service products to school employees that included, among other things, life insurance and annuities. In order to

21

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facilitate providing these services, TDS entered into an arrangement with a Broker/Dealer who was positioned over the entire network ofTDS licensed representatives. The Broker/Dealer would receive commissions from the various life insurance companies and mutual funds and pay TDS and the respective TDS representatives their shares of commission realized from any sale 0 financial products. To assist the BrokerlDealer in administration ofthe financial products being purchased and the payment of the fees associated with them, the Broker/Dealer appointed one of the principals of TDS as the Office Supervisor Jurisdiction ("OSJ") who supervised all the

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COMPLAINT

Broker/Dealer representatives and the quality of the financial products sold under the

7 Broker/Dealer, which enabled him to eam a greater portion of the commission revenue

3 generated.

4 ill

Over the past 30 years that TDS has been in business it has controlled the change

6 of Broker/Dealers for its network on several occasions, always able to transfer its Book of

7 Business to the new Broker/Dealers and a principal of TDS always remaining the OS1.

8

24.

On or about September 2002, TDS changed its Broker/Dealer to defendant

9 Pension Planners Securities, Inc. ("PPSI") which was owned by defendant DUREYA. At that

10 time as usual, a principal of the Plaintiff was the OSJ to assist her in administration. And further, 11 PPSI approved the TDS activity as the Plan Administrator when adopting the TDS principals as 12 licensed agents along with the network of licensed representatives that were loyal to TDS and

13 would operate under the PPSI BrokerlDealer license.

14 IV. TDS AND lRAJKREBS ENTERED INTO AN AGREEMENT AUTHORIZING

15 THEM TO USE THE TDS PROPRIETARY MARKS

16

25.

On or about August 30, 2002, PlaintiffTDS ("Franchisor") and defendants,

17 SCIANNA, ROCAMORA and IRA ("Franchisee") entered into a Franchise Agreement to assist

18 TDS in marketing and providing its Plan Administrator services and expanding its network. A

19 true and correct copy of the Franchise Agreement is attached hereto and incorporated herein as I 20 Exhibit "A," which provides, among other things:

21 "A. The Franchisor has the right to license certain trade names,

22 trademarks, service marks, logos, photographs and indicia or (sic) origin.

23 including the service mark "Tax Deferred Services", as may be designated now or

24 later by the Franchisor (the 'Proprietary Marks')."

25 "B. The Franchisor grants a license to use the Proprietary Marks and

26 financial planning services operating under the name TAX DEFERRED

27 SERVICES ("TDS")."

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7

"c. The Franchisee desires to acquire from the Franchisor and the

2 Franchisor desires to grant to the Franchisee a license to usc the Proprietary

3 Marks and any financial materials at a specified location within a designated

4 geographical area, subject to and in accordance with the terms of the Agreement

5 (the "TDS Franchise")."

6 "2. DUTIES OF THE FRANCHISEE

7 2.1 During this Agreement, the Franchisee will restrict his or her activities

8 exclusively to financial services for public or private education at the TDS

9 Financial Franchise unless otherwise approved in writing by the Franchisor."

1 0 "2.6 In order to protect the goodwill associated with the Proprietary

11 Marks, the Franchisee will use exclusively the services and products authorized

12 by TDS Products and Services Approval Committee."

13 '~.FEES

14 4.1 The Franchisee will pay to the Franchisor a continuing fee during this

15 Agreement in an amount equal to ten (10%) percent of the Franchisee's 'Gross

16 Revenue'."

17 "8. CONDITIONS OF TRANSFER OR SALE OF INTEREST

18 8.4 Any purported assignment, transfer, conveyance or encumbrance of

] 9 the TDS Franchise, any right or interest created in this Agreement, or if any

20 ownership interest in the Franchise, without the written consent of the Franchisor,

21 is null and void, and results in termination of this Agreement as stated in

22 Article 9."

23 "9. DEFAULT AND TERMINATION

24 9.2 Except as otherwise provided by applicable law, the Franchise will be

25 deemed in default under this Agreement and the Franchisor may, at its option,

26 terminate this Agreement and all rights granted in this Agreement without

27 affording the Franchisee any opportunities to cure the default, with the

28 termination effective immediately upon the earlier of receipt of notice of

8

COMPLAINT

2

termination by the Franchisee or, if the notice of termination is deposited by the Franchisor in the United States mails, certified mail, then five (5) days after the

mailing by the Franchisor, upon the occurrence of any of the following events: 9.2.6 The Franchisee attempts to, or purports to, transfer any rights or obligations under this Agreement, or otherwise, to any third party, contrary to the terms of Article 8;

9.2.7 The Franchisee fails to comply with covenants stated in

Article 11;

9.2.8 The Franchisee fails to pay 10% of the Franchisee's gross

revenue or other payments on specific due dates to Franchisor."

Article 11 Covenants provides:

"11.2 The Franchisee agrees that during the term of this Agreement, the Franchisee will not either directly or indirectly, for himself or herself, or

through, on behalf of, or in conjunction with any person, persons, partnerships or

corporation:

11.2.1 Divert or attempt to divert any business or customer

from the TDS Franchise to any competitor, by direct or indirect inducement or

otherwise, or do or perform, directly or indirectly, any other act injurious or

prejudicial to the goodwill associated with the Proprietary Marks." [Emphasis

added.]

26.

From on or about August 30, 2002, up through September, 2008 the defendants

,

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6 7 8 9

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11 12

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16 17 18 19

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7" --'

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IRA and KREBS operated under the terms and conditions ofthe Franchise Agreement without

incident.

V. PPSIIDUREYA BEGIN THEIR PATTERN OF INTENTIONAL INTERFERENCE WITH TDS' BUSINESS RELATIONSHIPS BY DRIVING A WEDGE BETWEEN TDS AND ITS REPRESENTATIVES (SALES FORCE)

27.

Plaintiff is informed and believes, and based thereon alleges, that on or about

28 August, 2008, defendant DUREYA sold her brokerage business PPSI to defendant BAR

9

COMPLAINT

7

COMPLAINT

Financial. BAR Financial was at that time the OS1 for Financial Network Investment

4

Corporation (hereinafter "FNIC"), a Broker/Dealer and wholly owned subsidiary of fNG. The effect of this transaction was to impose FNIC as the replacement Broker/Dealer for the Book of Business ofTDS without continuing the OS1 provided by TDS.

5

28.

About September 2008, upon the completed acquisition of defendant PPSI by

6 defendant BAR Financial, TDS was notified by defendant DUREY A, as an officer of BAR. that 7 FNIC rejected the Plan Administrator services by TDS and that a business affiliate ofFNIC,

8 through its parent ING, specifically "ING Plan With Ease," would be taking over the Plan

9 Administrator services for all of the TDS clients. The intended outcome of this change was to 10 eliminate TDS as a competitor to the defendants by putting them out of business.

11

29.

TDS refused to relinquish its position as Plan Administrator and further, the

12 principals of TDS refused to relinquish their positions as licensed sales representatives of

13 financial products, thereby challenging the influence of defendants BAR and DUREY A over the

14 existing force of representatives that had formerly shown allegiance to TDS (sometimes referred 15 to as the TDS representatives). Concurrent with the threat posed by defendants BAR and

16 DUREY A, TDS requested that BAR and DUREY A make a bulk transfer of the Book of

17 Business to its new chosen Broker/Dealer, Questar Capital Corporation (hereinafter "Questar"), I 18 and advised all of its representatives that all further business would be conducted through

19 Que star. Questar had accepted the Plan Administrator services of TDS, unlike BAR and

20 DUREYA.

21

30.

While DUREY A initially agreed to allow the TDS principals to block transfer its

22 Book of Business, as was the custom in the industry, the defendants reversed their position and 23 notified the TDS principals they would not make a block transfer of their clients to their new

24 Broker/Dealer Questar.

31.

On or about September, 2008, when Mr. Holt (a principal of TDS) attempted to

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move his clients to Questar, as his new Broker/Dealer, defendants BAR and DUREYA

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intentionally interfered by refusing to make a bulk transfer of his Book of Business. In addition. the TDS representatives were notified by defendants BAR and DUREY A that unless they stayed I I 10

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4

COMPLAINT

with DUREYA and BAR they would lose the stream of commissions they were entitled to from 2 the prior financial products sold. Consequently, all of the TDS representatives, tor fear of losing 3 their commissions, stayed with defendants DUREY A and BAR.

32.

Plaintiff is informed and believes, and based thereon alleges, that defendant PPSI

5 promised defendant BAR and FNIC that it could deliver all of the TDS clients which included 6 356 California Schools, to lNG's Plan With Ease and all of the 457 plan assets that exceeded

7 over $100 million, if they would buy defendant PPSI. Defendant PPSI schemed to accomplish 8 this by attempting to force IDS to give up its Plan Administrator Business which it had been

9 conducting over the last 30 years and specifically, authorized by defendant PPSI for the

10 previous 6 years, but thereafter took the contrary position that IDS' business was unauthorized 11 once defendant PPSI had been acquired by BAR Financial and FNIC.

12 VI. SMEAR CAMPAIGN

13

33.

In order to deliver the IDS clients (i.e., 365 California Schools), and 457 plan

14 assets (over $100 million) to BAR and FNIC, defendant DUREYA and the other defendants,

15 conspired, schemed, planned and executed with the defendants, and each of them, a campaign

16 against TDS with the intention to drive the IDS clients and representatives away which would 17 cause it to go out of business since all commissions would not be paid and IDS would lose its

18 income. Included in this conspiracy campaign and scheme were statements made by defendant 19 DUREYA and the other defendants, and each of them, together with actions taken in TDS' name 20 which were not authorized by TDS as follows:

(1)

On or about January 22, 2009, defendant OLSEN, while under

21

22 contract as a IDS representative and required to be loyal to IDS, contacted

23 Virginia Casanovas at the Cambrian Elementary School District and told her that

24 she would find them a new Plan Administrator.

(2)

In February, 2009, defendant ROCAMORA told all the IRA

25

26 representatives that IDS would be out of business in the next 3-4 months, and

27 that they were moving all the districts to a new Plan Administrator;

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7

COMPLAINT

(3) In February 2009 and continuing to the present, defendant

2 DUREY A visited and/or contacted every TDS advisor/representative in the

3 network and warned they should not go to Questar, the new Broker/Dealer,

4 knowingly, falsely stating that TDS was in severe financial trouble and threatened

5 that if they did try to transfer their accounts to Questar, the clients would not be

6 transferred to Questar and the representatives would lose their commissions;

(4)

On or about March 18, 2009, defendant DUREY A contacted a new

8 Plan Administrator, Great American Plan Administrators, Inc., to replace TDS,

9 knowing that TDS had contracts with the various School Districts had the

10 exclusive solicitation rights for employees' 457 plans;

11

(5)

About April 10, 2009, defendant KREBS developed a flyer for the

12 Visalia School District promoting the sale of a financial service without TDS' or

13 Broker Dealer approval, which was contrary to the terms of the agreement with

14 TDS and a violation of securities regulations;

15

(6)

On April 10,2009, Defendant KREBS sent a letter to School

] 6 Employees appearing to instruct them to contact TDS as the Plan Administrator

17 regarding compliance questions, while in fact surreptitiously directing them to

18 call his office directly, all of which was contrary to the agreement with TDS; and

19 falsely representing to the employees that he was authorized to conduct

20 compliance;

21

(7)

On or about April 23, 2009, defendants TARANTINO,

22 BRACKETT, KREBS ROCAMORA, BAR and IRA organized a conference call

23 to discuss replacing TDS as the Plan Administrator with ING as the Plan

24 Administrator coupled with the common remitting business through defendant

25 BAR and FNIC;

(8)

On or about May 7, 2009, Alonzo Wickers, CEO ofTDS, spoke

26

27 with Dianne Johnson, a TDS representative in Tennessee, who reported she was

28 contacted by defendants TARANTINO and BAR and told that "TDS would be

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9

COMPLAINT

going out of business in 60 to 90 days." She asked how that was possible and

2 defendant T ARANTIN 0 stated that many of the TDS representatives were going

3 to leave TDS and transfer TDS' School District clients to a new 403(b) Plan

4 Administrator, which would result in TDS losing its commissions paid to Alonzo

5 Wickers, and they would not be able to stay in business when this income

6 stopped. Defendant TARANTINO further advised that he was sponsoring a

7 meeting through BAR Financial to facilitate this outcome in San Francisco and

8 asked her to attend;

(9)

On or about May 13,2009 through June 24, 2009, defendants

10 KREBS, ROCAMORA and DUREY A contacted each other to set up a private

11 meeting without any principal ofTDS present to further coordinate the scheme,

12 plan and conspiracy to put TDS out of business;

13

(10) On or about June 19, 2009 the defendants held a meeting with the

14 network of TDS advisors/representatives, unbeknownst to plaintiff, to further

15 explain that TDS was going out of business, and that TDS would be replaced with

16 a new Plan Administrator, National Benefit Services, whose representatives were

17 introduced during the meeting;

18

(11) On or about May 15,2009, defendants KREBS and ROCAMORA

19 held a compliance seminar, specifically with the Santa Clara County Office of

20 Education (COE), which was done without TDS' authorization, knowledge or

21 consent;

22

(2) On or about June 22, 2009, defendants ROCAMORA and EBS

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sent an email requesting defendant KREBS to provide a "more specific head count of the participating or eligible participants in his districts" with the understanding that to collaborate with NBS as the group's new Plan Administrator, under a three-party agreement;

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(13) On or about June 22, 2009, defendants DUREY A and BAR in

28 furtherance of their nefarious goal to replace TDS with NBS as the new Plan

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COMPLAINT

Administrator, negotiated fees and charges that vendors should pay for the Plan

! Administrator services;

(14) On or about June 24, 2009, defendant KREBS forwarded to the

4 other defendants, all the documents necessary to replace TDS as the Plan

5 Administrator with NBS.

6

(15) On or about June 23, 2009, defendants TARANTINO and BAR

7 advised TDS representative James Adjar that he would lose his commissions on

8 his clients if he moved to Questar, the new Broker/Dealer;

9

(16) On or about June 15,2009, TDS had a telephone conference with

10 all of its representatives during which all representatives were advised that

11 Questar was the new Broker Dealer, and that all representatives would need to

12 confirm, in writing by June 22, 2009, that they were on board or would be

13 terminated at that point.

14

(17) On or about June, 2009, defendants DUREYA and KREBS, during

15 a conference call with the TDS network of representatives invited, knowingly and

16 falsely stated that TDS had serious financial troubles and that the TDS

17 representatives would be taunted by allegations of embezzlement unless they

18 distanced themselves in a hurry from TDS;

19

(18) Alonzo Wickers, TDS' principal, had regulatory and compliance

20 I problems and that he was being audited by the SEC.

21 VII. TERMINATION OF IRA AND KREBS

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34.

On or about June 26,2009 TDS, after not getting confirmation that defendants

23 IRA, ROCAMORA, OLSEN and KREBS had transferred to Questar, TDS notified defendants 24 IRA, ROCAMORA, OLSEN and KREBS in writing that they had been terminated as TDS

25 representatives and requested that they cease and desist from representing themselves as being 26 affiliated with IDS and that they should return all IDS promotional literature and marketing 27 materials that utilized IDS' trademarks and service marks.

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COMPLAINT

35. This notice of termination was issued by plaintiffTDS after defendants IRA,

2 EBS, ROCAMORA, OLSEN and KREBS decided they would not come over to TDS' new

3 Broker/Dealer, Questar.

36.

Plaintiff is informed and believes and based thereon alleges that, despite these

5 written notices, defendants IRA, EBS, ROCAMORA, OLSEN and KREBS have continued to

6 represent themselves as representatives and/or affiliates of TDS, thereby infringing the

7 trademarks and service marks of TDS; having continued to sell financial services to TDS clients 8 without paying 10% of the gross revenue generated; have utilized a rubber signature stamps

9 created without authorization or approval to execute certain compliance documents that only

10 TDS was authorized to execute and have undertaken certain conduct to disparage TDS and

11 interfere with its clients which includes, among other things, the following:

12

(a)

advising TDS clients, specifically School Districts, County Offices

13 of Education and Community Colleges, that TDS was in severe financial trouble,

14 that checks were being returned NSF from the cornmon remitting TDS provided,

15 that one of the TDS principals (Alonzo Wickers) had regulatory compliance

16 problems, and that TDS was going out of business;

17

(b)

advising TDS clients, specifically Public Schools, County Offices

18 of Education and Community Colleges, that they should move their Plan

19 Administration business from TDS to National Benefit Services that defendants

20 would become affiliated with;

21

(c)

contacted TDS clients, specifically school employees in various

22 School Districts, who were already in 457 plans and resold and/or contracted

23 them to 403(b) plans, which provided no benefit to the school employees but

24 allowed the defendants to eam a new commission (which is considered illegal

25 churning), and redirect the client from TDS;

(d)

the defendants, acting as agents for each of them as part of and in

26

27 furtherance of the conspiracy, made the foregoing statements to the following

28 clients:

15

t

6

COMPLAINT

(1) On June 23, 2009, TDS' President, Loy Douglas Holt, met

2 with Linda Dempsey, Chief Business Officer (CBO) of Monrovia Unified School

3 District and was told by her that Defendant KREBS told her that TDS was

4 changing Plan Administrators and left brochures for NBS, as the new Plan

5 Administrator;

(2)

On June 23, 2009, Mr. Holt also met with Ken Prosser,

7 Assistant Superintendent of Fiscal Services and with Tom Etchart, Director of

8 Finance for the Ventura County Office of Education and was told that defendant

9 KREBS had given a presentation to the School District representatives stating that

10 TDS was going with a new Plan Administrator, NBS;

11

(3)

On June 29, 2009, Mr. Holt met with Margie Gustafson,

12 County Office of Education (COE) for San Mateo, who stated that defendant

13 OLSEN came to meet her under the auspices of representing TDS (and presented

14 a TDS business card), and stated that TDS was going to a new Plan

15 Administrator, NBS, and left her brochure for NBS;

(4)

On June 24, 2009, Mr. Holt also met with several

16

17 representatives of Union Unified School District, specifically Nimrat Johnal

18 (Santa Clara County COE), Nan Wijcik (CBO), Rita Sohal, Serena Glancy and

19 Linda Rode (Payroll Department of Union USD) to discuss their concerns over

20 the rumors they heard from defendants IRA, OLSEN, ROCAMORA and EBS

21 that TDS had certain financial problems which included, among other things,

22 common remitting checks being returned for non-sufficient funds (NSF),

23 regulatory compliance audit problems and were confused as to who to deal with

24 on plan compliance, since the defendants had directed them to deal with the local

25 San Jose office directly;

26

(5)

On June 30, 2009, Mr. Holt spoke with Rhonda Wang,

27 Assistant Comptroller of Foothill De Anza Community College District, and was

28

16

8

COMPLAINT

told that she heard from representatives of defendant IRA that TDS was in

2 financial distress;

(6)

On July 1,2009, Mr. Holt met with Chris Jew, Assistant

4 Supervisor of Business Services for Oak Grove Elementary School District and

5 was told that defendant IRA's representatives stated that TDS was having

6 financial difficulties and that checks were being returned NSF from the common

7 remitter account;

(7)

On July 1, 2009, Mr. Holt met with Joanne Chin of

9 Franklin McKinley Unified School District and was told that she had heard of the

10 financial rumors and was told by a representative of defendant IRA, EBS, OLSEN

11 and ROCAMORA, that all compliance for Plan Administration should be sent to

12 defendant's local office rather than to TDS' corporate office;

13

(8)

On July 1,2009, Mr. Holt also met with Jim Luyau,

14 Assistant Supervisor of Business Services for the Santa Clara Unified School

15 District, who advised that Doris Luang, a TDS representative of defendant IRA,

16 OLSEN, ROCAMORA and EBS stated that TDS was having financial difficulties

17 and that they should deal directly with the local San Jose office;

(9)

On July 1,2009, Mr. Holt also met with Tina Tsu, Director

18

19 of Fiscal Services for Berryessa Union School District, who stated that she had

20 recent phone calls from defendant IRA's representative that advised TDS was

21 having financial trouble and was having checks returned from the common

22 remitter account for NSF;

(10) On July 1, 2009, Mr. Holt also met with Julie Swanson

24 (CBO) for Cambrian Elementary School District, who stated that she had heard

25 from defendant IRA's representatives that TDS had fiscal problems, and was

26 having vendor checks returned NSF from the common remitter account and was

27 having vendor checks returned NSF from the common remitter account;

28

17

7

COMPLAINT

(11) On July 1, 2009, Mr. Holt also met with Alejandra San

2 Miguel, Human Resources for Campbell Union Elementary School District, who

3 stated that defendant OLSEN on behalf of defendants IRA and EBS previously

4 came to her office and advised that all plan compliance had to be done at the local

5 San Jose office and provided return envelopes that reflected the same, which

6 caused her confusion as to who to direct the plan compliance to;

(12) On July 7, 2009, Mr. Holt met with Cathy Grovenberg,

8 Assistant Supervisor of Business Services for Santa Clara (COE) who stated that

9 representatives of defendant IRA had told her that TDS was in financial trouble,

10 that vendor checks were being returned NSF from the common remitter account

11 and that it was under audit and relayed that there was a rift created between the

12 local San Jose office and the corporate office;

13

(13) On July 9, 2009, Mr. Holt and three other representatives of

14 TDS attended a Multiple District County meeting in Santa Clara, that was

15 attended by over 30 representatives throughout the county that was called by

16 Nimrat Johnal, to discuss the rumors spread by the defendants, specifically

17 defendants IRA, ROCAMORA, OLSEN, EBS and KREBS, that TDS had

18 financial problems, that it had vendor checks returned NSF from its common

19 remitter account, that it had regulatory and compliance problems and TDS had

20 done illegal activities;

21

(14) On July 9, 2009, Mr. Holt spoke with Julie McCarthy a

22 representative from the Brisbane School District who advised that she had

23 received a telephone call from defendant OLSEN on July 8, 2009, during which

24 she requested to meet to discuss moving the School District to another Plan

25 Administrator because of the financial troubles TDS was having. Ms. McCarthy

26 stated that she was unaware of any problems TDS was having until she received

27 the phone call from defendant OLSEN.

28

18

5

COMPLAINT

(15) On July 17, 2009, Mr. Holt spoke with Ann Jones (CBO) of

2 the San Jose Unified School District who stated that representatives from

3 defendant IRA had advised that TDS had regulatory compliance issues and was

4 being audited, had financial troubles which included checks returned NSF;

(16) On July 17,2009, Mr. Holt met with Jerry Kerr, Assistant

6 Supervisor of Business for Eastside Union High School District and Vida

7 Branner-Sidess and Jill Kaufman (representatives of East Side Union HSD), who

8 attended the Santa Clara COE meeting on July 7, 2009 and wanted further

9 confirmation concerning the rumors raised regarding TDS' financial troubles;

10

(17) On July 17,2009, Mr. Holt met with Margie Gustafson

11 (COE) of San Mateo and approximately 30 other representatives and CBO's of

12 the district to discuss the rumors they heard from the representatives of defendants

13 IRA, OLSEN and ROCAMORA regarding TDS' financial and regulatory

14 problems and whether TDS had returned vendor checks.

15

(18) On July 17,2009, Mr. Holt spoke with Vicky Rinehart,

16 Superintendent of Knightsen School District, who stated that TDS had financial

17 and regulatory audit issues that she had heard from representatives of defendants

18 IRA, OLSEN and ROCAMORA.

19

(19) On July 17, 2009, Mr. Holt spoke with Nancy Anderson, Director, Moreno Valley Unified School District who stated that she had heard

20

21

from representatives of defendants IRA, OLSEN, ROCAMORA and KREBS that TDS was having financial difficulties and that defendant KREBS had told her

22

24

vendor checks were being returned NSF, that TDS was being audited by the SEC and Mr. Wickers had failed a compliance audit; She thereafter contacted several

25

other districts and was told the information was inaccurate;

All of the foregoing representations made by defendants were false, were known by the

26

27

defendants to be false or were made without any reasonable belief to the truth of the matters

28

19

6

COMPLAINT

stated at the time they were made, and were made with the intent to disparage and harm its

2 reputation and to cause economic harm to TDS.

3 FIRST CAUSE OF ACTION

4 Statutory Unfair Competition in Violation of California Bus. & Prof Code § 17200

5 (Against Defendants IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and EBS)

37.

Plaintiff, TDS hereby incorporates by reference, each and every allegation

7 contained in paragraphs 1 through 36 of this Complaint.

8

38.

Defendants' IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and EBS

9 activities as set forth herein constitute acts of unfair and/or unlawful competition, and unfair

10 and/or unlawful business practices under California Business & Prof Code § 17200 et seq.

11

39.

Defendants' acts of unfair and/or unlawful business practices include, but are not

12 limited to: the conversion of TDS' personal property for defendants' own use and benefit; the 13 selling of TDS products without authorization; the conversion of proceeds from the sale of TDS' 14 products for defendants' own use and benefit; falsely representing to the public that defendants 15 are authorized by, affiliated with and/or related to TDS; falsely representing to the public that

16 defendants are the source ofTDS services and financial products; unfairly and/or unlawfully

17 diverting sales from TDS' existing and/or prospective customers to defendants; intentionally

18 interfering with TDS customer relationships; misleading the public by using trademarks and/or 19 service marks that are identical or confusingly similar to trademarks and/or service marks owned

20 by TDS in the marketing of their competitive services and financial products; and falsely 21 representing to the public the nature and source of TDS financial products and services.

40.

As a proximate result of defendants' unfair and/or unlawful business practices,

22

24

TDS has suffered, and is continuing to suffer, irreparable injury, and defendants unlawfully gained profits which they are not legally entitled to keep.

25

41.

The unfair and/or unlawful business practices of defendants complained of herein

26 are likely to continue unabated unless and until defendants are enjoined and restrained by this 27 Court. TDS is, therefore, entitled to preliminary and permanent injunctive relief and restitution 28 against defendants, and each of them.

20

1

By reason thereof, TDS is also entitled to an award of punitive and exemplary damages against defendants, and each of them, in an amount subject to proof at trial.

SECOND CAUSE OF ACTION

Common Law Unfair Competition

3 4

42.

(Against all Defendants)


5 contained in paragraphs 1 through 36 of this Complaint.

6

43.

Defendants' adoption and unauthorized use of TDS' trademarks and service

7 marks in the marketing and sale of competing financial products and services have enabled

8 defendants to falsely pass off their products and services as being sold, sponsored, authorized, or I

9 otherwise affiliated with TDS.

Defendants' acts constitute unfair competition under California common law.

44. 45.

10 1 1

As a direct and proximate result of defendants' acts as allege herein, TDS has

12 suffered and will continue to suffer damages, including lost profits, in an amount subject to proo

13 at trial.

14

46.

Defendants' acts have caused and will continue to cause irreparable harm to TDS

15 unless restrained by this Court. TDS has no adequate remedy at law. Accordingly, TDS is

16 entitled to an order enjoining and restraining defendants, during the pendency of this action and 17 permanently thereafter, from marketing, distributing and offering for sale or selling their

18 products and/or services through the use of the trademarks andlor services marks "TAX

19 DEFERRED SERVICES, INC." "TDS" or "THE TDS GROUP, INC." or any other mark

20 confusingly similar to TDS.

21

47.

Defendants' acts of unfair competition were intentional, fraudulent and malicious.

24 //1
25 II I
26 III
27 /11
28
21
COMPLAINT 2

Defendants' acts of false advertising practices are likely to continue unabated

THIRD CAUSE OF ACTION

Statutory False Advertising in Violation of California

..,

_)

Business & Professions Code § 17500 (Against All Defendants)

48. Plaintiff, TDS hereby incorporates by reference, each and every allegation I

I

contained in paragraphs 1 through 36 of this Complaint. II

49. Defendants' activities as set forth herein constitute acts of false advertising under

4

5

6 7 8 9

California Business & Professions Code § 17500 et seq.

50.

Defendants' acts of false advertising include, but is not limited to:

Falsely representing to the public that defendants are authorized

10 11 12

a.

by, affiliated with and/or related to TDS;

b.

Falsely representing to the public that defendants are able to

13 provide Plan Administrator services of TDS and/or sell TDS financial service

14 products.

15

c.

Misleading the public by using trademarks andlor service marks

16 that are identical or confusingly similar to trademarks andlor service marks owned

17 by TDS; and

d.

Falsely representing to the public the nature and source of TDS'

18

19 services.

20

51.

As a proximate result of defendants' false advertising, TDS has suffered, and is

21 continuing to suffer, irreparable injury, and has incurred, and is continuing to incur, monetary 22 damages in an amount subject to proof at trial.

52.

23

24 unless and until defendants are enjoined and restrained by this Court. Plaintiff TDS is, therefore,

25 entitled to preliminary and permanent injunctive relief and restitution against defendants, and

26 each of them.

27 III

28

22

-------------------------=-=-----------------

COMPLAINT

1

2

3

4

FOURTH CAUSE OF ACTION

Federal Unfair Competition - False Designation of Origin (Against All Defendants)

53.

Plaintiff, TDS hereby incorporates by reference. each and every allegation

5 contained in paragraphs 1 through 36, of this Complaint.

7 confusingly similar to TDS' trademarks and service marks is likely to confuse, deceive or cause

8 mistake to members of the public and persons in the trade as to the source of origin of

9 defendants' services and/or financial products, such that the public and persons in the trade arc

10 likely to believe, contrary to fact, that defendants' services and financial products are .sold, 0[,

11 licensed, endorsed, sponsored, or otherwise authorized by TDS and constitutes a false

12 description and/or false designation of origin, which are damaging to plaintiff.

6

13

Defendants' unauthorized and unlawful use of marks that are identical or

54.

Defendants' false representations that (a) defendants are authorized by, affiliated

55.

14 with and/or related to TDS; (b) defendants own and/or have some ownership interest in TDS

15 and/or TDS services; and/or (c) defendants are the source of TDS services, are likely to confuse 16 or deceive members of the public and persons in the trade as to the origin of the defendants'

17 services, such that the public and persons in the trade are likely to believe, contrary to fact, that

18 defendants' services are sold or licensed, endorsed, sponsored, or otherwise authorized by TDS

19 and constitutes a false description and/or false designation of origin, which are damaging to

20 plaintiff.

21

22

)" _-'

24

26

27

28

56.

TDS is informed and believes, and thereon alleges, that defendants' false

representations as to the origin of their goods and services are, and have been, intentional,

deliberate and willful defendants intentional use of the terms "TAX DEFERRED SERVICES, INC.; TDS and THE TDS GROUP, INC. to identify them and the services and financial products

they sell and thereby compete with plaintiff in the same market constitutes federal unfair competition in violation of Section 43(a) and (c) of the Lanham Act, 15 U.S.C. Section 1125(a).

23

COMPLAINT

4

57. As a proximate result of defendants' false representations, TDS has suffered, and

2 is continuing to suffer, irreparable injury, and has incurred, and is continuing to incur, monetary

3 damages in an amount subject to proof at trial, including but not limited to attorney's fees.

58.

The false representations of defendants complained of herein are likely to

5 continue unabated unless and until defendants are enjoined and restrained by this Court. TDS is.

6 therefore, entitled to preliminary and permanent injunctive relief against defendants, and each of 7 them, in addition to compensatory damages, costs and reasonable attorney's fees.

8 FIFTH CAUSE OF ACTION

9

Product Disparagement Under Lanham Act (Against All Defendants)


10 11

59.

contained in paragraphs 1 through 36, of this Complaint.

12

60.

Defendants' statements to customers and potential customers ofTDS, as set forth

13

in paragraphs 33 and 36 of this Complaint:

14

(A) Constitute commercial speech by defendants commercial competitors of

15

plaintiff;

16 17 18

(B) For the purpose of influencing customers and potential customers not to

purchase TDS' services and/or financial products, but rather to purchase

19

defendants' competing services and/or financial products;

20

(C) Were widely disseminated to a significant portion of the potential market:

21

(D) Are false and misleading descriptions or representations of fact which

22

misrepresent the nature, characteristics and quality ofTDS' services and/or

23

24

financial products;

25

(E) Were likely to and did damage TDS' business.

26

61.

Defendants are therefore liable to TDS in damages pursuant to Section

27 43(a)(l)(B) of the Lanham Act, 15 U.S.c. § 112S(a)(l)(B). 28

24

COMPLAINT

5 6 7 8 9

10

11

12

13

14 15 16 17 18 19

20

21

22

23

24

25

26

27

28

2

COMPLAINT

62. In addition, TDS is entitled to an injunction prohibiting defendants from further

violations of the Lanham Act.

3

SIXTH CAUSE OF ACTION

4

Unfair Competition Under California State Law Violation of California Business & Professions Code §17200

(Against Defendants IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and EBS)

63.

Plaintiff TDS incorporates by reference Paragraphs 1 through 36 of this

Complaint as though fully set forth herein.

64.

Defendants' IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and EBS

activities as set forth herein also constitute trademark infringement and unfair competition under

the laws of the State of California and at common law.

65.

As a result of defendants' IRA, SCIANNA, ROCAMORA, OLSEN, KREBS,

EBS intentional state and common law trademark infringement and unfair competition, Plaintiff TDS has suffered, and is continuing to suffer, irreparable injury, and has incurred, and is

continuing to incur, monetary damages in an amount to be determined at trial.

66.

The infringing and unfair competitive activities of defendants complained of

herein are likely to continue unabated unless and until defendants are enjoined and restrained by

this Court.

SEVENTH CAUSE OF ACTION

Common and Statutory Trademark Infringement Under State Law

(Against Defendants IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and EBS)

67.

Plaintiff incorporates by reference Paragraphs 1 through 36, inclusive, of this

Complaint, as though fully set forth herein.

68.

By their acts alleged herein, defendants IRA, SCIANNA, ROCAMORA, OLSEN,

KREBS, and EBS have engaged in trademark infringement under the common and statutory

laws of the State of California and California Business and Professions Code § 14330, et seq.

25

4

82.

As a result of defendants' breach of the Franchise Agreement, plaintiff has

NINTH CAUSE OF ACTION

2 For Breach of Contract

3 (Against Defendants IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and EBS)

78.

Plaintiff, TDS hereby incorporates by reference paragraphs 1 through 36 of this

5 Complaint as if fully set forth herein.

6

79.

As set out more fully in paragraph 25, supra, on or about August 30,2002,

7 plaintiffTDS entered into a written Franchise Agreement (Exhibit "A") to assist IDS in 8 marketing and supplying its Plan Administrator services and expanding its network.

9

80.

Plaintiff duly performed all its obligations in accordance with the terms of the

1 0 Franchise Agreement, except insofar as defendants prevented such performance by their acts or

11 omrssions.

12

81.

From and since June 26, 2009 and continuing through the present, defendants

13 breached the Franchise Agreement by (1) continuing to represent themselves as representatives

14 andlor affiliates of IDS, thereby infringing the trademarks and service marks of IDS;

15 (2) continuing to sell financial services to IDS clients without paying 10% of the gross revenue

16 generated; (3) utilizing a rubber signature stamps created without authorization or approval to 17 execute certain compliance documents that only IDS was authorized to execute; and

18 (4) undertaking certain conduct to disparage IDS and interfere with its clients. Plaintiff is

19 informed and believes and thereon alleges that Defendants IRA, ROCAMORA, OLSEN, EBS

20 and KREBS also breached the Franchise Agreement prior to this time by selling financial

21 services to IDS clients without paying 10% of the gross revenue generated by diverting sales in 22 such a manner that prevented IDS from having knowledge that such sales occurred.

24 suffered damage in an amount according to proof.

25 III

26 III

27 III

28 III

27

-----------------=-:_---------------_._--

COMPLAINT

2

COMPLAINT

TENTH CAUSE OF ACTION

Business Disparagement

4

83.

(Against All Defendants)

Plaintiff, TDS hereby incorporates by reference paragraphs I through 36 of this

5 Complaint as if fully set forth herein.

6

84.

As specifically identified in paragraphs 33 and 36 of this Complaint, defendants,

7 and each of them, published unprivileged false and disparaging statements of fact about plaintiff 8 TDS and its financial services to third party clients of plaintiff s financial condition, and

9 purported regulatory difficulties.

10

85.

Defendants, and each of them, both individually and in furtherance of their

11 conspiracy, published false and disparaging information with malice, in that they knew the

12 statements were false, and/or acted in reckless disregard of their truth or falsity, and/or acted 13 with ill will toward plaintiff TDS, and/or intended without privilege to interfere in TDS'

14 economic interests.

15

86.

Defendants' publication of these false, defamatory and disparaging statements of

fact have proximately caused TDS to suffer special damages as set forth in paragraph 37, supra. I

87. As a result of defendants identified false, defamatory, and disparaging statements

16 17 18

of fact, TDS is entitled to special and exemplary damages.

19

ELEVENTH CAUSE OF ACTION

20

Intentional Interference With Contract

21


22

88.

Plaintiff incorporates by reference Paragraphs 1 through 36 of this Complaint, as

23 though fully set forth herein.

24

89.

Plaintiff is informed and believes and based thereon alleges that defendants had

26

knowledge of plaintiffs contracts with third parties that had been entered into for the benefit of plaintiff.

90.

Defendants intentionally interfered with said contracts by various acts andlor

27

28 omissions including, but not limited to, the following:

28

4

a. Those acts described in paragraphs above;

b.

Continuing to represent themselves as representatives and/or

5

6

affiliates of TDS, thereby infringing the trademarks and service marks of TDS; Continuing to sell financial services to TDS clients without paying

c.

10% of the gross revenue generated;

d.

Utilizing a rubber signature stamps created without authorization

7 or approval to execute certain compliance documents that only TDS was

8 authorized to execute;

9

e.

Undertaking certain conduct to disparage TDS and interfere with

10 its clients;

11

12

13

f.

Creating conditions adverse to plaintiff's businesses; and/or

14 omissions set forth above intentionally and/or with a reckless disregard to the consequences of

g.

Other acts and/or omissions, according to proof.

91.

Plaintiff is informed and believes that defendants exercised the acts and/or

15 their conduct; and/or with specific intent to further their own pecuniary interest and to reap

16 unfair financial gains in violation of the trust placed in them by the public, including plaintiff and 17 in violation of their contractual and fiduciary duties, knowing all the while of the damage that

18 would be sustained by plaintiff.

19

92.

As a legal result of the acts and/or omissions of defendants against whom this

20 cause of action is asserted, plaintiff suffered those damages as set forth above.

21

93.

The conduct of defendants against whom this cause of action is asserted as

22 described hereinafter was done with a conscious disregard of plaintiff's rights and with an intent

23 to vex, injure or annoy plaintiff, such as to constitute oppression, fraud or malice pursuant to the

24 Civil Code, Section 3294, and either committed by or authorized, ratified or otherwise approved 25 by officers, directors or managing agents of defendants. Plaintiff is therefore entitled to punitive 26 damages in an amount appropriate to punish, deter or set an example of defendants, and each of 27 them.

28

29

COMPLAINT

2

COMPLAINT

TWELFTH CAUSE OF ACTION

Intentional Interference With Economic Advantage

..,

j


4

94.

Plaintiff incorporates by reference Paragraphs 1 through 36 of this Complaint. as


6

95.

Plaintiff is informed and believe and based thereon allege that defendants had

7 knowledge of the plaintiffs prospective advantageous business relationships and/or

8 opportunities.

9

96.

Defendants intentionally interfered with said relationships and opportunities by

10 various acts and/or omissions including, but not limited to, the following intentional and

11 wrongful acts:

12

a.

Those acts described in paragraphs above;

13

b.

Continuing to represent themselves as representatives and/or

14 affiliates of TDS, thereby infringing the trademarks and service marks of IDS;

15

c.

Continuing to sell financial services to IDS clients without paying

16 10% of the gross revenue generated;

17

d.

Utilizing a rubber signature stamps created without authorization

18 or approval to execute certain compliance documents that only TDS was

19 authorized to execute;

20

e.

Undertaking certain conduct to disparage IDS and interfere with

21

its clients;

f.

Creating conditions adverse to plaintiffs businesses; and/or

22

23

g.

Other acts and/or omissions, according to proof.

24

97.

Plaintiff is informed and believes that defendants exercised the acts and/or

25 omissions set forth above intentionally and/or with a reckless disregard to the consequences of 26 their conduct; and/or with specific intent to further their own pecuniary interest and to reap

27 unfair financial gains in violation of the trust placed in them by the public, including plaintiff and

28

30

3

103. The exact amount of money due from defendants to plaintiff for said breaches is

in violation of their contractual and fiduciary duties, knowing all the while of the damage that 2 would be sustained by plaintiff.

98.

The aforementioned acts of defendants were wrongful and tortuous independent

4 of the interference itself for the reasons alleged above.

5

99.

As a legal result of the acts and/or omissions of defendants against whom this

6 cause of action is asserted, plaintiffs suffered those damages as set forth above.

7

100. The conduct of defendants against whom this cause of action is asserted as

8 described hereinafter was done with a conscious disregard of plaintiff's rights and with an intent 9 to vex, injure or annoy plaintiff, such as to constitute oppression, fraud or malice pursuant to

10 Civil Code, Section 3294, and either committed by or authorized, ratified or otherwise approved 11 by officers, directors or managing agents of defendants. Plaintiff is therefore entitled to punitive 12 damages in an amount appropriate to punish, deter or set an example of defendants, and each of 13 them.

14 THIRTEENTH CAUSE OF ACTION

15 Accounting

16 (Against All Defendants)

17

101. Plaintiff incorporates by reference Paragraphs 1 through 36 of this Complaint, as


19 102. As set forth above, defendants, and each of them, improperly paid commissions

20 owed under the agreement, improperly diverted business from plaintiff to third parties, and failed 21 to compensate Plaintiff for the services which plaintiff performed.

22

23 unknown to plaintiff and cannot be ascertained without an accounting of the books and records 24 of said defendants.

25 III 26 III 27 III 28 III

31

COMPLAINT

24

employees and all persons in active concert and participation with them, from misrepresenting that they, or any of them, are authorized by, related to, affiliated with, or otherwise associated with TDS;

FOURTEENTH CAUSE OF ACTION

Injunctive Relief


4 104. Plaintiff incorporates by reference Paragraphs 1 through 36 of this Complaint. as

:) though fully set forth herein.

6 105. Defendants' wrongful conduct as described above, unless and until enjoined and

7 restrained by order of this Court, will cause great and irreparable injury to plaintiff in that such 8 conduct, among other things: (a) is likely to confuse or deceive members of the public and

9 persons in the trade, contrary to fact, that defendants' services are provided by plaintiffTDS, or 10 are licensed, endorsed, sponsored or otherwise authorized by TDS; (b) that defendants and each 11 of their use of the marks that are identical or confusingly similar to TDS' trademarks and service 12 marks will create a likelihood of confusion with plaintiff TDS' services among TDS' customers

13 and members of the consuming public; (c) that defendants and each of their false and

14 defamatory statements will continue to damage TDS' reputation, goodwill and prestige; and

15 (d) intentionally interfere with TDS customer relationships and economic advantage thereby

16 preventing plaintiff from maintaining andlor expanding its business.

17 106. Plaintiff has no adequate remedy at law for many of the injuries that are

18 threatened in that it will be impossible for plaintiff to determine the precise amount of damage it 19 will suffer if defendants' conduct is not restrained.

20 PRA YER FOR RELIEF

21 WHEREFORE, plaintiffTDS seeks judgment against defendants, jointly and severallv.

22 and other orders as follows:

1.

For a preliminary and permanent injunction:

(a)

enjoining all defendants, their officers, directors, agents. servants,

26

I I

I

I

____________________ ~3~2 J

COMPLAINT I

27

28

6

7.

(b) enjoining all defendants, their officers, directors, agents, servants,

2 employees and all persons in active concert and participation with them, from retaining

3 and/or using "TDS", "TAX DEFERRED SERVICES", "THE TDS GROUP, INC."

4 and/or any other trademark or service mark that is confusingly similar to a trademark or

5 service mark owned by TDS; and

(c)

enjoining all defendants, their officers, directors, agents, servants,

7 employees and all persons in active concert and participation with them, from

8 misrepresentation and disparagement ofplaintiffTDS' financial condition and purported 9 regulatory problems and unfairly soliciting plaintiffTDS' existing representatives, and

10 from interfering with TDS' contracts with and selling to TDS' existing customers the

1 1 financial services provided by plaintiff TDS.

12

Cd)

any business cards, payroll fliers, logos, stationery, brochures,

13 advertisements and other marketing materials bearing the infringing trademarks or

14 service marks as set forth above, shall be delivered up for impoundment and ultimate

15 destruction as the Court directs.

16

2.

For general and special damages according to proof at trial, but in any event in an

17 amount in excess of the jurisdictional limit of this Court;

18

19

3. 4.

20 enriched;

21

22

5. 6.

For exemplary damages;

For the disgorgement by defendants of the amount by which they were unjustly

For attorney's fees;

23 U.S.c. §1117; 43(a)(l); (c)(l); and

All damages hereunder shall be trebled in accordance with the provisions of 15

24

For such other and further relief this Court deems just and proper.

25 DATED: August 17, 2009 26

LA W OFFICES OF MICHAEL T. STOLLER, APC

BY~~ i

33 I

~~--·-----------C-O-M--"'::'PL::"'A-IN-T-------------- -or

27

28

EXHIBIT A

ll/.2l/~OO(:1. 17: ~/:j rll

2.3.3 The Franchisee agreea to screen carefully prospective trainees and staff applfcants before employment and to employ only those who have good moral character. experience and . training.

__

." .

2,4 The interior and exterior decor of the TOS Franchise, as well

as the Location. must be tasteful, In accordance With loo~1 community standards and with due regard at all times to th$ preservation of the dignity and quaIlty associated wIth the Proprietary Marks. Tna Franchisee will maintain the TOO Franchise premises In the highest degree of cleanliness! attractiVenQss, orderliness. sanitation and r~pair, and wm make all addItIons, alterations. repairs and replaoements te the premises as may be requIred for that purpose Including the periodf~ rePainting or replacement of obsofete signs) furnishings, equipment and decor as the

Franchisor may reasonably dfrect. '

... -'j

2.5 The FrElnchisee will operate the ros Franchise and all activltfes In conformity with the standards. operating procedures and policies stated by the franQhlsor, and as' the Franohlsor 'may othsr.,yise reasonablY prescribe fn Writing.

2.6 In oider to protect the goodwin associated wfth the Proprietary Marks, the Franchrsse will use exclusively the servioes and products autho~ed by TOS Products and Services Approval Committee.

, : _J

2.7 The Franchisee will permit the Franchisor and Its agents 01

d(!slgnated. representative:s. to enter the TDS Franchf~, without prior \ notica, dunng normal, bUSIr1es5 hours for the purpose. of conducting inspections; wUl eoope~te fulty with the FranChisors agents or

representatives In these inspections by rendering the ~iStance as they \

may reasonably request Upon written notlca from the Franchisor, cr its agents or representatives, and without limiting the FranchiSOr'S other tights under this Agreement, the Franchisee wm take aU !${eps as may be I necessary to correct any deficiencies detected dUring these inspections j/ Including Immediately dt;$istlng from any actfon in violation Of the requirements Imposed upon the Franchisee by thf9 Agreement.

3. OBL.IGATIONS OF THE FRANCH'SOR

3.1 The Franchisor or its designated representatives will, upon

reasonable request, consult with and advise the Franchisee by mail or by telephone with respect to matters pertaining 10 the servicing of publio or priVate sohcole,

,

09128/2004 ~ L~:lO r1l/~t ~o ~487J ~oa6

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4. FEes

4.1 The Franchisee "",m pay to tI'_le f!ranchisor a cpntfnUing fee \ ~

during this Agreement In an ~mount eqoal to ten (10%) pefCen~ of the \~-

Franchisee's "Gross Revenues . ':

.

4.2 "Gross Revenues" means the amount of; all revenue \

received by the Franchisee 10 the form of commissions from any and all ~

neW transactions and from any commissions derived from any and all (JD business revenue received from electronic transactions GiJia the Web)

within the Designated TerritorY of this Franchise from the da~e of this I

Agreement. '

4.3 If any fee or other amoUnt due under this Agreement Js not

paid withIn ten (10) days after the payment issUQ, the Fran9hlsea will pay a servfce charge aquaf to the lesSer of the daify equivalent of 18% per year, or the highest-rate thaJ:l permItted hy app~cabte law, f~f each day the amount is past due. If it Is ne.cessSJy for the Franchlso~ to employ an attorney to collect any amount dua from the Frarrchisea under this Agreement, the Fra.nchl~ee agrees to pay all costs of collectlon, Inoluding a reasonable attomeY'$ fee.

5. RIGHTS TO TERRITORIAL PROTECTtON

......

See cxhlbit A attached hereto

5.2 If the Franchisee faUs to meet the specifiep goals stated in

Sectlon 5.1 for any periods, all of the Franchisee's rights in and to territorial protection in the DeSignated ierritory pennanently cease and the Franchisor may, In Its safe diSCtetlon, franchise other TDS Fraflchlses or operate a TDS Franchise wltnin the Designated Territbry. However, all renewal and trailer commissions earned by the Franchisee prior to termioatiol'l of this Agreement would continua as lonQ as the busIness stays on the books. All other remainIng tams of this Aglieemant .co ntin.ue.

I

4

G9/28/2004 1'UE 12: 10 (Tl/rtX NO 84871 fgJQ07

1l/~l!20(J6.17:28 FAX

I.g] 006/015

G. INSURANCE

6.1 The F;ranCihisee agrees to obtain befor;g the ~ening of the

Franchise, and maintain m frJlt force and effect d~ring thiS Agreement Errors and Omissions insurance for any producer reptese~ng .th~ .' Franchisee, ' ' I ..... , ... :: . .'

....... ~ .

.... ' ... ,.;. .

8.2 These policfes must include, at a minimum (except as additional coverages and hIgher poflcy rllllits are re~onabry specified for all franchisees by the Franchisor In writing) the fono~jng:

1

6.2.1 Errors & Oml$sion Insuranoe to be kept at levels to satisfy

Broker Dealer requirements. .

6.2.2 Franchisee agrees to obtain bef~ra op'enlng of the Franchise, and maintain in full force and effe:rt during this Agreel11ent, general liability insurance naming TDS as additfonal Insured (minimum ~veraga to be sp~cltJed bY TOS):

7. ADVERTi$ING AND BUSINESS PROMOTION

I ,

7.1 All advertising' and busIness promofjon conducted by the

Franchisee In any rnsdlum (iFloludlng print, vidljao or audio) myst be conducted {n a tasteful and dignified manner arild mus't b$ conducted consist~nt with the dignity and Integrity of too; Propribtaty MarXs. in accordance With good busines~ p~ctices, The Fr.$nchisor may. In its sale discretion. object to and have the right to 1ermfnate the P.ranchise()l~ usa of the Proprietary Marks.,.

, .

7.2 The Franchisee will display the ?~oprfeta'ry Marks in tha

manner prescribed J;ly the Franchiser In' his or ~r act(vlties and on all stationery, busIness cards, operational forms and prtnt2d signs and aU other advertising and promOtion materiaiG used: in connection With the TOS Franchise. All drspfays of the Proprietary Mtks~ Includins: allintenor and exterler afgns, must clearly state and iden the I Franchisee as a "'-05 Franchise," in the specific form required by e Franchisor .

.

7.3 The Franchisee will submit to the Franc~fsor for approval

samples of all adv9rtisfng and promotIonal plaqs and i materia.ls and all other matertals and all other materials displayi~g. the l='roprietary MarkS that the Franchisee desires to use and that have not ·been prepared or preViOUSly approved by the Fmnchiaor. The F(~chisGr has ths right to disapprove the plans and matenal$ for failure te be consistent with the goodwill associated with the propnetary Marks. I upon notlce in writing to

5

09/2B/2001 TUE 12:10 (TI/~~ NO 8487] ~008

~OU11015

the FranchIsee within thirty (30) days from the date 01 • ~cefpt by the 'Franchisor of the plans and materials.

6. CONOITIONS OF TRANSFER OR SALE OF INTEREST

8.1 The Franchisor haS the right to transfer or assign this·

Agreement, and all or any part of its rights or oblfgatlons in this Agreement. to any patson or legal entity.

8.2 This TOS Franchise Is personal to the FraJilchlsee. ThS\ Franchisee will not sell, assign, transfer or convey the following without

the prior' written consent of the Franchisor!

\ I

8.2.1 The TDS Franehi~: l

. .

8.2.2 Any right or interest created by thfs Agreement;

8.2.3 Tt\a ownership interests in the Franeh(see;

8.2.4 This Agreement.

8:3 The TOS FranchISe' may not be divided or othelWisa \

segregated and sold or transferred bY,the Franchisee. Th~ Franchisor will \\

not, however, unreasonably withhold or delay its consent ito a transfer of ~

the TDS Franchise or any ownershIP Interests in the Frant1hisee, provided )

that all of the following' conditions are met before jhe time of the proposed

transfer.

• u~ t I

8.3.1 AU of the Franchisee's accrued monetary obligations

to the franchisor have been satfsfiGdj ,

, ,I'

5.3.2 The Franchisee's right to reoaive compensation must be subordinated and secondary to the Franchisor's! rights to receive compensatfon and have satisfied any outstaOdlng mOr.letary obUgations or other outstanding obligations 'due from the Franchlssej

8.3.3 If permitted by applicable taw, the Franchisee must sign a general release under seal, In a form satisfactory to the Franchisor, of all claims against the Franchisor and Its affilIa.tes. and each of their officers, directors, shareholders and employees, in their corporate and individual capacities, including claims ansing under federal. state and local Jaws, rules and ordlnances;

6

1l/;:lnUOtl 17:29 rU

a.3.4 The transferme must demonstrate to t ,; Franchisor's satisfaction that he of she meets the Francmiscr'$, educatfonal. managerial and business standards. possesses a good aptitude, moral charaatsr, business reputation and ability las may be evidenced by priOr relateQ business experience or otherwise; has adequate fInanclal resources and capital to own and operate the iDS Franchise and has no material, prior unresolved problemsrelated to financIal planning services. The Franchisee wIll provIde the Franohrsor with any informatIon that the Franchisor may reasonably require to make rts determination conceming each proposed transfer.

8.3.5 The tfar1sfereG must sign (and/or. upon the Franchisor's request, cause all intere$tecI parties. to sign) the Franchisors then-current standard form franchise agreament and . other ancDlary agre-ements as th$.~tanchisor may raquire; and

a~3.e Th~ F:ranc~sor m~ receive fully. signed copIes of an

.. ,y.:, documents in connection with the proposed transfer including a completed standard franchise application form, together with all requlr6P supporting document!l1Ion. The fa,r1ure i to submit the informatIon required In the Franc;hlsor's· then..current standard' application fotm, including aJil'equired $upportfng ·dOcumentatlon. Is reasonable grot1l1ds for rejeotfon of the proposed transfer.

S.4 Any purported assIgnment, transfer, ~nveyanoe or enclJmbrance of the TOS Franchise, any right or Interest created in this Agree~n~ or of any ownership Interest In the Fcanchlsee. without. tho written consent of the Franchfsor, Is null and void.! and resuUs in termination of this Agreement, as stated in Article 9.

S.S The Franchisors consent to a transfer r Qf any interest

gtanted In this Agreemlint doas not constltlJte a waiver ~f any claims the Franchisor may have against the transferring party. nor ~aemed a WaiVer of the Franchiso($ rights to demart9 exact complianoe' with any of thg

terms of this Agreement by the transferee. .

S.6 It Is agreed that sInce. francblge has bem an in~gral gart of bringlpg this Franchise to fn.dtJon, UPO!] any sali otlTDS FranchIsee ~bali have the option of b@ing i Dirt of the sale: the vfjlu~ to be ~qott§w.d betweeo IDS and the Frgnchtsae 19Jown as '!he IRA center' \

.

9. DEFAUL1 AND TERMINA710N

9.1 Except as otherwise pmvided by appltcabhiil law, the

Franchisee will ba deemed to be In default under this Agreement. and thl5

7

09/2&/2004 ruE 12:10

(r.UlU N{) 84A1J iqJolQ

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Agreement ?od aU rights granted [0 this Agreement Wii. dulomatioaily terminate without opportunity to cure and without notice by Ins Franchisor to the FranchiSee, If the Franchisee files any petition in' bankruptcYl

voluntary or io¥oluntary. ' ,

)

9.2 except as oti:lelWise provided by applicable law, the

Franchisee witl be deemed In default under this Agreement and the Franchisor may. at its option, tel1T!lnate this Agreement and all rights granted in this Agreement without affording the Frahchl$ee any opportUnity to cure tM default, with the. termination effective lmmedlately upon the earlIer of fGCefpt of notioe at termination by the FranchIsee ort if the notice of termination is dGPo~[ted by the Franchisor In- United States mails, certifIed mailj then ffve (5) days after the mailrng by tfjle Franchisor, upon the cecurrencie of any of the, following events:

'9.2.1 The Franchisee becomes jnsolVen~ or, In the Franchisor's reasonable opinion, the Franchisee cannot fulfilJ his or har obligattons to TOS client or to the Franchisor. as provfded in this Agreement;

9.2.2 . The Franchisee makes an asSlgnment'for the benefit of his or her creditors;

9.2.3 The FranchISee admits In writing his or her InabIlity to pay his or her debts generally as they become due;

9.2.4 The Franchisee suffers temporary or pennanently .

appointed recelvershlp: . .

9.2.5 -The Franchisee Is. convicted of a felony or any other ortme cr offRnse, In eluding any violation of SEC rulGS. that Is reasonably likely, in me sole opihiQn ot'the Franchisor. to adversely affect the Franchisor. the Proprietaty M2fI<s. or the goodwill associated with the Proprietary MarkS;

9.2.6 The Franchisee attempts to, or purports 10, transfer any rights, or oblJgations under this Agreemen~ or otherwfse, to any third party. contrary to the tenns of ArtIcle 8;

9.2.7 The Franchl$ee fans to comply willi the covenants stated In Article 11;

9.2.8 The franchisee, falls to pay 10% of: the Franchises's gross revenue or other payments on specific due dates to FranchIsor.

8

09/2!VZG04 TU£ LZ~ 10 (TXi(U NO IH87] @Oll

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11/ ~11 ~UUtl 17; ~~ toll

9.3 Except as stated In Sections 9.1 and 9.2, \ ~ except as

ofherwise provided byappncabls law, the Franchises has 30 days after receipt from the Franchisor ot a written notice of default within which to remedy a default of any of the terms of this Agreement, as ~tated in 1he written notice' of default, and provide written evidence Of f cure to the satisfaction of the Franohisor. If the notice of default is dep~sited by the franohisor in United States matis, certified man, then receipt win be presumed 5 days a.fter- mailing by the Franchfsor, If any cretault is not cured within the so day period (er longer period as appli~fe law may, othel'Wise fe<!ulre), tJ'la Franchiso( may, at its option, terminate this Agreement and all rights granted in this Agreement without: affording the r'ranchlsee any further opportunity to Cure the default, with terminatIon to be effective immediately upon the depositing 'of the notice of terminatfon by the F~hlsor in the United States Mail, certified mail.

10. OBLIGATIONS UPON TJ:RMINAilQN

Upon the termination of this Agreement by either the Franchisee or the Franchisor, by operation' of law, the Franchisee's Obligations are as 'follows:

10.1 The- Franchisee will immediately cease to op'erate the TOO Franchise and is- prohibited thereafter from either dlreclly or indlractly representing himself or herself to the public, or to any person, that he or she is a present or former TDS rranchi~ee.

10.2 The Francl1fsee will Immediately and permanently cease to use, by advertising or any olher manner, the trademarkS, trade natnQa, service marksl signs, structures and other forms cf advertlsir'lg a(ld indlcfa as a .TDS Franehisf!e, including aU materials and articles displaying ihe Proprietary Marks and agrees to tum over all diSCS, systems, trade secrets and arty other mateJialS provided. by TOS without duplication or copying.

10,3 The Franohlsee must take all aortan as may be requfred to cancel aU assumed names or GquJvalsnt fictfttous name reglsfratIons relating to use of the ProprIetary Marks and any other (elated marks In connection with TOS Franchise.

10.4 ThQ Franchisee wlll not use any reproduction, counterfeit, copy or other imitation of the Proprietary Marks that a$ likely to cause confusIon, mistake or daception, or to dilute the Franohlsors exclusive rights In and to the Proprietary Marks, nor u1i1ize any designation of origin or description or representation falsely suggestIng or: reprsS$ntfng an associa1ion or connection wfth the Franchisor which constitutes unfair competitIOn. 10 a.ny business which It may thereafter engage.

9

09/:1812004 lU'R 12:!O fTX/lU NO 84671 @012

tmOlOf015

III Z1/ ZUUtl 17: 29 l-li

10.5 The Franchisee will promptly pay all SUIlI>:i! owing to the Franchisor. The Franchisee will also pay all damag~s, costs and expenses, including reasonable attorney's 1~s Incurred byahe Franchisor as a resu~ of a default by the French1see which resulted in termination of this Agreement, Inclucnng all fees and t:osts in obtaining fnj~nctive or other ralief for the enforcement Qf'the Franchisee's obligations in .this Article.

11. COVENANTS

11.1 The Franchisee Bgre9S that during th~ term of this Agreement, except as otherwise app,roved In writing by 'the Franchlsor, whIch approval wHr not be unreasonably withheld or delayed, the FranchIsee Will personaJJy devote his or her fUll time, energy and best efforts to the management and operation of the TDS fraOehisB.

11.2 The Franchisee agrees that during the term of this Agreement, the Franchisee WIll nOI, eithet diractly or indlieotry, for himself or herself, or through, on behalf ofl or In conjunction With any. person,

persons, partnership or corporatlon: '

11.2.1 Divert 0( attempt to divert any blJsl~ess or customer \ /\

from the TOS Franchise to any com~tJtor, by;dtrect or Indirect \ ~

inducement 01" othelWl~ef or do or perform, dIrectly or Indirectly, any J

other act injurious or preJudicial to the gocdWlII asecclated wJth the

ProprtetaIy Marks; . .

11.2.2 Employ or seek tQ employ any par~n, who ls at that time currently employe!1 by any other ToS Franchise or had ~en ernployad by any other ro5 Franchise iJ'l the p~evlous ninety (90) days, or dlre'ctly or Indlr.ect!y, incluce that person fto leave hfs or her employmen~ without the written consent of the cl)rrent or previous employer of the perSon; .

i

11.2.3 Own, maintain, engage in or hav~:any interest in any . buslne$s speofalfZing, In whole or In part. financial planning sesvicas, other than as a TDS Franchfsee.

12.. lNDE?eNDEN-r CONTRACTOR AND INDEMNIFICATION

12.1 It is agreed by 1he parties mat this Agreement does not oreate a ffduclary relationship between or among theni. The Franchisee is an independent contractor, Nothing in this Agreement is Intended to consUMe or construe the FranChisee as an agent. !egal representative,

10

Q9/U/2004 TIE 12:.1.0 (Tl/IU NO B431) @lOiS

IgJOll/015

subsidiary, joint venture, partner, affiliate, employ~e 01 .iiervant of the Franchisor for any purpose.

12.2 It Is agteed that nothing in this Agreement ~uthori~es !he Franchisee to make any contract, agreement, warranty or ;representatIon on the Franchlsots behalf, or to In¢tJr any debt 0( ether oPJlgation In the Franchisors name. The Fra!'lchisor will not assume lia~UI1y for) or be deemed liable under thiS Agreement, as a result of any aot\on, or by reason of any act or omission of the Franchises, his or h~ employees or agent, in hls·or her conduct of the TOS Franchise.

12.a The Franchisee Indemnifies the Franchisor, Its parent company and its affiliatas. as wen as their respectiv~ Offi091'$J employaes, partners, directors ancf shareholders (for purposes of this ~cn only, all ate (collectively. the "Company") and holds the CompariYt and each of them. harmless from, agaJnst, for and In .respect of any dsnag9S, losses, obligations, liabilities, claims, deficlenoies, costs and expens~ including reasona~le attotneys lees and other costs and expense~. incident to any suit, actlon. lnvestlgation, clalm or proceeding (90llaotiVely, the "Companyts Losses1 suffered, sustained, incurred or required to be pai<;i by Company, or any of them, by raason of any rep~nlatlon, act, commission or omlsslon of the FranchISee, his or her agents servants, employees, guests or visitors, wIth respect t9:

(a) The 9stabftshmelllf and operation of the TDS

Franchise;

(b) The TDS Franchlsej

(0) Any suit. action, claim or procee{.U~:g brought by any

person or entity within the Designated r errltory during the term, and renewala with respect to the TDS Franchise irrespectlve of when the claim arose;

(d) Any failure by the Franchisee to observe or perform

his or her covenants and agreements stated in thIs Agreement; or

(e) Any inJury to, or loss of property of; any cRents of the

TOO Franchise.

AI! of the Company's Losses must be satlsfied by cash Payments from the Franchisee to the Company. The Franchisee will, In writing, nbtify the Pranchisor immediately as to any suit, action, Investigation, claim or prbceeding for which indemnification might be elalmed by the Company, or any of them. Upon receipt of any notice of suit., actIon I Investigatlon, Claim or proceeding for which indemnification might be claimed by the Company, or any of them. th~ Company

11

tgJ 012/015

\ ~ \~

)

09128/1004 'l'UE 1:'2ao [1'l/RX NO IJ487J @Ol-t

I

will be entitled promptly to defendl p.rosecuta, contest or o[hSlWlbtf/ protect itself, by COlJnsel of its own choosing, at the Franchisee's sole (;Cst and expense. The Franchisee has 1h9 right to select hIs or her own counsel; provided. ~at attorney's fees and costs for this counsel are paid by the Franchisee. The Company is entitled to control the defense or prosecution of the Ift£gatlcm, unless the Company has consented in writlng to 1!1I.ow the Prancl'lisee ito control the litigation.

13. NOTICES

Any notices required or permitted under this Agre:ement must be In wtiJing and be personafly delivered or mailed. by certified or regist9r~d mail, rerum receipt requested, to the respectIVe parties at the folloWing addre~ses unless and until a different address has been designated by written notIce to the other party:

Notices to the FrclOchiser:

Mr. AI Wickers & Mr. Ooug Holt Tax Deferred Services, Inc. 5740 Windmill Way, #16 Carmichael, CA 95608

Notices to the Franchi4e$:

Mr. Randy Scian~f on behalf of The IRA Centsr.lnc.

14388 Union Avenue

San Jose. CA 95124

With a copy toi Counse' fOT reS:

14. ENTIRe AGREEMeNT

nus Agreement and the documents. referred to irl this Agreement constitute 1he entire, fUll and complete agreement between ~e Franchisor and the Franchisee cO'ht;emfng \be subject matter of this Agreem~, ~upersede all prior agreements. No other representa.1fons have been made by the Franchisor or its agents to induce the Franchisee to sIgn this Agreement No amendment, change or variance from this Agreement is binding on either party unless mutually agreed to In writing by the partJes and signed by their authorized officers or agents In writing.

TAX DEFERRED SERVICES, INC.

12

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09/28/2004 IUE i2:10 CTI/Rl NO 8487J ~Ol~

IgJOIJ/UHi

I . 1TQRI'<EY OR PAAlYWlThQUi ATTORNEYttamb Sai!8ar.'7IIfIIJW. 311!l~) FOR COU1IT USE ONLY ,
r MICHAEL T. STOLLER. SB 12 241 !
9454 Wilsbire Blvd. Suite 500 I
! Beverly Hills, CA 90212
I I
i TCU;PHONENO. 818-226-4040 FAXt.I().; 818-226-4044 -'.~. ._
ATTO~Nf:Y FOR (Name): THE TDS GROUP. INC.
[SUPERIOR COURT OF CAUFORHJA, COuHlYOf SACRAMENTO 1
• S'lRfET ADDFIess, 720 Ninth Street I
,
IJAILINGADIlRESS: same I
CITY AND liP COOE Sacramento, CA 958lll
I BRANCH NAIIE: .... /
I CASE NAME:
! ._
I The IDS Group v. The IRA Center, etc., et al.
CIVIL CASE COVER SHEET Complex Case Designation CASE NUMBER: I
o UnUmited o Limited o Counter o Joinder
(Amount (Amount JUDGe: !
demanded demanded is Filed with first appearance by defendant I
exceeds $25,000) $25,000 or less) (Cal Rules of Court, rule 3.402) OEPI'; Items 1-6 below must be ccm~ted. (see mslructions on page 2).

f1. Check one box below for the case type that best describes this case:

I Auto Tort ecntract

I 0 Auto (22) 0 8teadl of conlradlWananty (06)

I 0 Unil1surea motorist (4S) 0 Rule 3.740 collections (OS)

! Other PUPO!WD (Personal Injury/Property 0 Other collections (09)

oamageIWrongful Death) TOI! 0 Insurance CO\IeIag8 (18)

o Asbestos (04) 0 Olher contract (37)

o Product lillbllity (24) Reall'ropetty

o Medical malpractice (45) D Eminent domainllnvetSa

o O!tJe( PUPD/WD (23) condemnallon (14)

Non-PI/PO/WD (Othe" Tort 0 1MongfIJI eviction (33)

[2] Business tortilJnfair business praczice (O?). D Other reaJ property (26)

o Chill rights (08) Unlawful Detalnsr

o Qefamation {13) 0 Commercial (31)

o Fraud (16) 0 Residential (32)

o Intellectual property (19) 0 Drugs (38)

o Professional negligence (25) Judicial Review

o Omer non-PllPDJWD tort (35) B Asset forfeiIUle (OS)

PetiIIon re: arbitration award (11)

o Writ of mandate C02)

Provisionally Complex Civil Litigation (Cal. Rules of Court, rules 3.400-3.4G31

o Anti1rusllTrade regulatiOn (03)

DD Construction defed (10) Mass tort (40}

o Securitles litigation (28}

o EnvtronmentaVf oxic lort (3D}

o

Insurance coverage cfalm5 arising from lhe aboVe rlSteeI provisionally complex case types (41)

Enforcement of Judgment

o Enforcement or Judgment (20)

Mlsceflaneous Civil Complaint o RICO(27)

D Other complaint (not specified above) (42) Miscellaneous Civil Palition

o Partnersnip and corporale governance (21) D Other pelltlon (not specIfie(18bOve) (43)

This case is is not complex under rule 3.400 of the California Rules of Court. If the case is complex, mark the

factors requiring exceptional judicial management

3. 0 Large number of separately represented parties b. 0 Extensive motion practice raising difficult or novel issues that will be lime-.:onsuming to resolve

c. 0 Substantial amount of documentary evidence

3 Remedies sought (meek aU that apply): a.W monetary b.0 nonmonetary; decfaratory or injunctive relief c. 0 punitive

4. Number of causes of action (specify}: J 4

5. Tnis case D is 0 is not a dass action suit

6 If there are any known related cases, file and serve a notice of related case. (You may use fOnTI CM-D15.)

Date: August 17, 2009 MfCHAEL T. STOLLER

d. 0 large number of witnesses

e. 0 Coordination with related actions pending in one or more courts in other counties. states, or countries, or in a federal court

f. 0 Substantial posgudgment judicial supervision

(TYPE OR PRINT """'IE!

NOllCE

o PlaintJff must file this cover sheet with the frrst paper liIad in the action or proceeding (except small claims cases or cases tiled i

under the Probate Code, family Code. or Welfare and Institutions Code). (Cal. Rules of Court rule 3.220.) Failure to file may result,

in sanctions. I

• Fife this cover sheet in addition to allY cover sheet required by local court rule. I

• if this case IS complex under rule 3.400 et seq. of !he California Rules of Court, you must serve a copy Of this cover sheet on all I

other parties to the action or proceeding. !

I • Unless this is a collections case under.rule 3.740 or a complex case, this cover sheet willl>e used for statistical purposes ontv, !

_ h 19f

F~;;:r~~,~sn~~~... CIVIL CASE COVER SHEET Cal. ~~ ~:~~~;J;~~J·~~o

CM.a10 ~ev. July 1.2007] WWlIf._tIinIoJ:a.QDV

!~e~~~~~!ll,,:,: I

CM"()10

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