The entire complaint is below. Someone gave a summary which was both incomplete and incorrect. As I originally suspected, HS Brands is being sued for breach of contract and failure to pay the plaintiff. Happy reading.
Exhibit A
IN THE COURT OF COMMON PLEAS
WOOD COUNTY, OHIO
INTELLISHOP, LLC
2025 Michael Owens Way
Perrysburg, Ohio 43551,
Plaintiff,
v.
HS BRANDS INTERNATIONAL, INC.
c/o CT Corporation System
155 Federal Street, Suite 700
Boston, Massachusetts 02110,
Defendant.
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Case No.
Honorable
COMPLAINT FOR MONEY
DAMAGES, WITH JURY DEMAND
AND PRAECIPE FOR SERVICE
ENDORSED HEREON
ERIK G. CHAPPELL (0066043)
JULIE A. DOUGLAS (0073890)
Lyden, Chappell & Dewhirst, Ltd.
5565 Airport Highway, Suite 101
Toledo, Ohio 43615
Telephone: (419) 867-8900
Telefax: (419) 867-3647
Email:
egc@lydenlaw.com
Email:
jad@lydenlaw.com
Attorneys for Plaintiff
NOW COMES Plaintiff, IntelliShop, LLC (hereinafter “Plaintiff”), by and
through its attorneys, Erik G. Chappell, Esq. and Julie A. Douglas, Esq., of the law firm of
Lyden, Chappell & Dewhirst, Ltd., and for its Complaint for Money Damages against Defendant,
HS Brands International, Inc. (hereinafter “Defendant”), states and avers as follows:
ELECTRONICALLY-FILED
WOOD COUNTY COMMON PLEAS COURT
Wednesday, April 15, 2020 4:29:04 PM
2020CV0218 - Matthew L Reger
CINDY A. HOFNER
CLERK OF COURTS WOOD COUNTY OHIO
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PARTIES
1. Plaintiff is an Ohio limited liability company, having its principal place of
business at 2025 Michael Owens Way, Perrysburg, Ohio, 43551 in Wood County, Ohio.
2. Defendant is a Massachusetts corporation, having its principal place of
business at 6375 S. Pecos Road, Suite 218, Las Vegas, Nevada 89120.
VENUE AND JURISDICTION
3. This Complaint requests damages in an amount in excess of $25,000.00,
plus costs, expenses, and attorney fees. Venue is proper in this County in that Plaintiff’s
principal place of business is in Wood County, Ohio. And, issues regarding expenses and costs
related to a now failed merger between the parties, which is the subject of this Complaint, were
negotiated by the parties via phone, email, and in person in Wood County, Ohio.
4. This Court has the requisite personal jurisdiction over the out-of-state
Defendant because it routinely transacted business within the State of Ohio, purposely directed
its activities at Plaintiff in the State of Ohio, and the litigation at issue in this Complaint results
from alleged injuries that arise out of or relate to the activities of Defendant in the State of Ohio.
GENERAL ALLEGATIONS
5. Both Plaintiff and Defendant are mystery shopping service firms. In or
around 2017, Plaintiff and Defendant began discussions regarding a potential merger agreement
between Plaintiff and Defendant.
6. Plaintiff and Defendant agreed that they would share equally in the
expenses and costs related to the merger.
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7. Due to Defendant’s financial condition, Plaintiff and Defendant agreed
that Plaintiff would front the expenses and costs related to the merger and that Defendant would
reimburse Plaintiff.
8. Plaintiff spent in excess of $150,000.00 in expenses and costs related to
the merger.
9. During the parties’ discussions regarding the potential merger, Defendant
made certain material representations regarding its business which included, but were not limited
to, ownership in certain international offices, existence of written agreements with the
international offices, profitability, and debt.
10. Plaintiff relied on Defendant’s material representations and continued to
expend funds for expenses and costs related to the merger.
11. Plaintiff later discovered that Defendant’s material representations
regarding its ownership in certain international offices, its written agreements with the
international offices, its profitability, and its debt were false. Specifically, Plaintiff discovered
that Defendant did not own certain international offices that it had claimed to own; Defendant
did not have written agreements with any international offices that it had claimed to have;
Defendant was not profitable; and Defendant had an insurmountable amount of debt.
12. Had Plaintiff been aware of Defendant’s material misrepresentations,
Plaintiff would not have expended in excess of $150,000.00 for expenses and costs related to the
merger.
13. The relationship between Plaintiff and Defendant deteriorated due to
Defendant’s material misrepresentations and Plaintiff rightfully rescinded any agreement to
merge with Defendant due to Defendant’s wrongful and unlawful actions.
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14. Defendant has failed and refused to pay its share of the expenses and costs
incurred by Plaintiff related to the now failed merger.
FIRST CLAIM FOR RELIEF
Breach of Contract
15. Plaintiff incorporates by reference paragraphs 1 through 14 as if fully set
forth herein.
16. Plaintiff and Defendant entered into a verbal agreement whereby Plaintiff
and Defendant agreed to share equally in the expenses and costs related to the now failed merger.
17. Plaintiff expended in excess of $150,000.00 in expenses and costs related
to the now failed merger.
18. Defendant has refused and failed to reimburse Plaintiff for its share of the
expenses and costs of the now failed merger.
19. Plaintiff has demanded payment from Defendant, which demand has been
refused and the just amount owing to Plaintiff remains unpaid. As such, Defendant is in breach
of the parties’ verbal agreement.
20. As a direct and proximate result of Defendant’s breach of contract,
Plaintiff has been damaged and respectfully requests a judgment against Defendant in an amount
in excess of $25,000.00, together with interest, attorney fees, costs, and expenses incurred in the
litigation of this action.
SECOND CLAIM FOR RELIEF
Fraudulent Misrepresentation
21. Plaintiff incorporates by reference paragraphs 1 through 20 as if fully set
forth herein.
22. During the parties’ discussions regarding the potential merger, Defendant
made certain material representations regarding its business which included, but were not limited
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to, its ownership in certain international offices, the existence of written agreements with the
international offices, its profitability, and its debt.
23. The material representations made by Defendant to Plaintiff were false.
24. At the time that Defendant made the material representations to Plaintiff,
Defendant knew said material representations were false, or were made recklessly without
knowledge of their truth.
25. The material representations made by Defendant to Plaintiff were made as
positive assertions.
26. Defendant made the false material representations to Plaintiff with the
intention that they would be acted upon by Plaintiff and that they would induce Plaintiff to
continue to expend funds for expenses and costs related to the now failed merger.
27. Plaintiff acted in reliance upon the false material representations made by
Defendant and expended in excess of $150,000.00 for expenses and costs related to the now
failed merger, thereby causing Plaintiff to suffer injury.
28. Plaintiff’s reliance upon the false material representations of Defendant
was justifiable, reasonable, and foreseeable.
29. As a direct and proximate result of Defendant’s fraudulent
misrepresentations to Plaintiff, Plaintiff has sustained damages in an amount in excess of
$25,000.00, plus interest, costs, expenses, and attorney fees.
WHEREFORE, Plaintiff respectfully requests that this Court enter a judgment in
its favor and against Defendant in an amount in excess of $25,000.00, plus interest, costs,
expenses, and attorney fees and for such other further and additional relief as may be fair and just
under the circumstances.
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THIRD CLAIM FOR RELIEF
Negligent Misrepresentation (Pled in the Alternative)
30. Plaintiff incorporates by reference paragraphs 1 through 29 as if fully set
forth herein.
31. At all pertinent times during this action and during the discussion
regarding the potential merger of the companies of which Defendant had a pecuniary interest,
Defendant supplied false information to Plaintiff regarding its business which included, but was
not limited to, its ownership in certain international offices, the existence of written agreements
between Defendant and international offices, its profitability, and its debt. Defendant failed to
exercise reasonable care or competence when supplying this information to Plaintiff.
32. Defendant had a duty to advise Plaintiff that it did not have any ownership
in certain international offices, that it did not have written agreements with any international
offices, that it was not profitable, and that it had an insurmountable amount of debt.
33. Plaintiff’s reliance on Defendant’s misrepresentations was justifiable,
reasonable, and foreseeable.
34. Plaintiff relied on Defendant’s misrepresentations and continued to expend
funds for expenses and costs related to the now failed merger, thereby causing Plaintiff to suffer
injury.
35. As a direct and proximate result of Defendant’s misrepresentations to
Plaintiff, Plaintiff has sustained damages in an amount in excess of $25,000.00, plus interest,
costs, expenses, and attorney fees.
WHEREFORE, Plaintiff respectfully requests that this Court enter a judgment in
its favor and against Defendant in an amount in excess of $25,000.00, plus interest, costs,
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expenses, and attorney fees and for such other further and additional relief as may be fair and just
under the circumstances.
FOURTH CLAIM FOR RELIEF
Innocent Misrepresentation (Pled in the Alternative)
36. Plaintiff hereby incorporates paragraphs 1 through 35 as though fully set
forth herein.
37. Defendant made representations of fact to Plaintiff that it owned certain
international offices, that it had written agreements with international offices, that it was
profitable, and that it had a manageable amount of debt.
38. The representations made by Defendant to Plaintiff were false.
39. Defendant was aware of the false nature of the representations yet allowed
Plaintiff to continue to expend funds for expenses and costs related to the now failed merger.
40. Plaintiff justifiably relied upon the representations of Defendant to its
damage.
41. The loss sustained by Plaintiff has inured to the benefit of Defendant.
42. Absent the representations made by Defendant, Plaintiff would not have
continued to expend funds for expenses and costs related to the now failed merger.
43. As a direct and proximate result of Defendant’s misrepresentations to
Plaintiff, Plaintiff has sustained damages in an amount in excess of $25,000.00, plus interest,
costs, expenses, and attorney fees.
WHEREFORE, Plaintiff respectfully requests that this Court enter a judgment in
its favor and against Defendant in an amount in excess of $25,000.00, plus interest, costs,
expenses, and attorney fees and for such other further and additional relief as may be fair and just
under the circumstances.
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FIFTH CLAIM FOR RELIEF
Unjust Enrichment (Pled in the Alternative)
44. Plaintiff hereby incorporates paragraphs 1 through 43 as though fully set
forth herein.
45. Plaintiff conferred a benefit on Defendant by expending in excess of
$150,000.00 for expenses and costs related to the now failed merger.
46. Defendant has been unjustly enriched by Plaintiff’s expending in excess of
$150,000.00 for expenses and costs related to the now failed merger to Plaintiff’s detriment.
47. Plaintiff is entitled to payment from Defendant in an amount in excess of
$25,000.00 by which it has unjustly enriched Defendant.
WHEREFORE, Plaintiff respectfully requests that this Court enter a judgment in
its favor and against Defendant in an amount in excess of $25,000.00, plus interest, costs,
expenses, and attorney fees and for such other further and additional relief as may be fair and just
under the circumstances.
SIXTH CLAIM FOR RELIEF
Promissory Estoppel
48. Plaintiff hereby incorporates paragraphs 1 through 47 as if fully set forth
herein.
49. Defendant made clear and unambiguous promises that it would share
equally in the expenses and costs related to the now failed merger.
50. Plaintiff reasonably and materially relied upon Defendant’s promises.
51. Plaintiff’s reasonable and material reliance on the promises made to it by
Defendant was foreseeable by Defendant.
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52. Plaintiff has been substantively and materially injured by its reasonable,
material, and foreseeable reliance upon Defendant’s promises.
53. As a direct result of Defendant’s promissory estoppel, Plaintiff has been
damaged in an amount in excess of $25,000.00.
WHEREFORE, Plaintiff respectfully requests that this Court enter a judgment in
its favor and against Defendant in an amount in excess of $25,000.00, plus interest, costs, and
attorney fees and for such further and additional relief as may be fair and just under the
circumstances.
Respectfully submitted,
/s/ Erik G. Chappell
Erik G. Chappell (0066043)
Lyden, Chappell & Dewhirst, Ltd.
5565 Airport Highway, Suite 101
Toledo, Ohio 43615
Telephone: (419) 867-8900
Telefax: (419) 867-3647
Email:
egc@lydenlaw.com
Attorney for Plaintiff
JURY DEMAND
Plaintiff hereby requests a jury trial on all issues so triable.
/s/ Erik G. Chappell
Erik G. Chappell, Attorney for Plaintiff
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PRAECIPE FOR SERVICE
To the Clerk of Court:
Please cause summons and a copy of the Complaint to be served upon Defendant,
HS Brands International, Inc., at the above referenced address, via certified mail, return receipt
requested.
/s/ Erik G. Chappell
Erik G. Chappell, Attorney for Plaintiff
04/15/2020
Date