Benson v. DJ Paul - Super High Me PDF
Benson v. DJ Paul - Super High Me PDF
FILED
CountyOf LosAngetti
[email protected]
Mark C. Humphrey, State BarNumber 291718
mhumphrey@earfysullivan. com
DEC 18 2015
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By ^ffuft^ VW
DOUG BENSON
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SUPERIORl COURT OF THE STATE OF CALIFORN1
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Plaintiffs,
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vs.
1. DECLARATORY RELIEF;
3. CONVERSION;
5. CONSTRUCTIVE FRAUD;
6. FRAUDULENT CONCEALMENT;
Defendants,
AND
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and
7. BREACH OF CONTRACT
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BC6 04 419
Case No.:
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1.
passionate fans. Much ofhis comedy has focused on his copious use ofcannabis. In 2006, High
Times magazine named Benson its "Stoner ofthe Year."
2.
In 2007, just as Benson's career was taking off, Benson formed nominal defendant
Four Twenty Partners, LLC (the "Company") with defendant DJ Paul ("Paul"), defendant Alex
Campbell ("Campbell") and non-party Michael Blieden ("Blieden") for the purpose ofproducing
. adocumentary entitled Super High Me (the "Documentary"). The Documentary sought to
10 document the effects ofcannabis on Benson, by following him through thirty straight days of
11 cannabis-free living, immediately followed by thirty straight days of non-stop use. As made clear
12 by the operating agreement for the Company (the "Agreement"), the production ofthis one
13 project was the sole and exclusive purpose for the Company's formation and existence.
14
3.
.5 Michael Blieden on behalfofnon-party The Claw, Inc. (Blieden's company, hereinafter "Claw"),
16 Paul on behalfofdefendant Wabi Pictures, Inc. (Paul's company, hereinafter "Wabi") and
21 "Registration"). The Company had previously registered its copyright in the screenplay for the
22 Documentary with the United States Copyright Office on December 28,2006 under Registration
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Number PAu003124392.
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The Company released the Documentary in 2008. It has since become acult
classic.
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5.
6.
Benson is informed and believes that, on or about April 1,2011, Paul and
Campbell formed alimited liability company in California, defendant Vigorish Productions, LLC
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("Vigorish").1 Upon the formation ofVigorish, Benson is informed and believes that Vigorish
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began to unlawfully exploit the copyrighted materials that were the subject ofthe Registration.
Paul and Campbell never disclosed to Benson that they had formed Vigorish, nor did they
disclose that their new company (i.e., Vigorish) had begun to exploit the copyrighted works
belonging to their old company (i.e., the Company). Instead, they simply pretended that the
Documentary had ceased to generate significant revenues. This, ofcourse, was a half-truth: the
Documentary had ceased to generate significant revenues/or the Company, because Vigorish
7.
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Stated simply, for more than four years, the principals ofthe Company's two
entity-managers led Benson to believe that the Company was agoing concern, and that the
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Company was continuing to exploit its copyrighted works. In reality, Benson's fiduciaries had
misappropriated the Company's key asset (the Documentary) and were now actively engaged in a
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8.
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More than six years after the Company had completed the one project which it was
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formed to create, Campbell contacted Benson's manager several times in 2014 and again in early
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2015 about Campbell and Paul creating and releasing anew documentary project entitled Super
IS
High Me Redux (the "Redux"), consisting ofunused footage from the Documentary. The Redux
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would detail the making ofthe Documentary (i.e., the one project in which Benson agreed to
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participate) from Campbell's and Paul's perspectives. Campbell made it clear that he already
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knew that Benson would not be in favor of the Redux, butasked Benson's manager to tryto
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enlist him nonetheless. Itwas repeatedly made clear in these conversations that the Redux would
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In support ofthe Redux, Paul and Campbell created atrailer consisting ofunused
footage from the Documentary. Benson did not want this footage released (in atrailer or
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The significance ofthe name selected by Paul and Campbell for their new entity is not
lost onBenson. The term "vigorish" refers to the interest charged by a loan shark ona usurious
loan.
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120160.1
otherwise) as he feared it would injurehis reputation, alienate and upset his fans, and potentially
to such an expansionof the Company's business. Paul and Campbell paid little heed to Benson's
objections, claiming that the Agreement specifically authorized them (through the entities they
After Pauland Campbell showed no signs of relenting, Benson filed a demand for
arbitration on May 22,2015 with the American ArbitrationAssociation (the "AAA") pursuant to
Section23 of the Agreement (The "Arbitration"). Among other things, Benson sought a
declaration that Campbell's and Paul's planned actions violated the Agreement.
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11.
In a preliminary conference call with the AAA, an attorney named Richard Albert
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appeared on behalf of Paul and Campbell, but not Wabi and PBR as he claimed that the entities
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"no longer [existed]." According to Albert (and unbeknownst to Benson), the California
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Franchise Tax Board had suspended PBR's corporate status in 2008, and Wabi's corporate status
14
in 2009.
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12.
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Albert multiple times regarding Paul's and Campbell's purported right to make the Redux and
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their unauthorized possession ofCompany property (i.e., the unused footage). Throughout these
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conversations, Albert repeatedly maintained that hisclients did not require Benson's permission
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13.
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Campbell, represented by new counsel, objected to the AAA's jurisdiction, this time revealing
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that Wabi and PBR had dissolved the Company in 2011 (several years after the Franchise Tax
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Board hadsuspended Wabi's and PBR'scorporate status). This came as a shock to Benson: At
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no time prior to Paul and Campbell asserting this objection inthe Arbitration did anyone notify
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him thatthe Company no longer existed, much less seek hisconsent to dissolve the Company, as
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14.
According to Paul and Campbell, because the Company had been dissolved, the
Agreement had effectively "blinked" out ofexistence. Thus, Paul and Campbell (and their
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DOUG BENSON'S COMPLAINT
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suspended entities) refused to participate in the Arbitration. Benson therefore planned to obtain
default reliefin the Arbitration, and then enforce thatreliefthrough the courts.
15.
Then, in August 2015, Benson learned for the first time that Paul and Campbell
(allegedly on behalfof the Company) had apparently formed Vigorish, and purported to assign
the copyright in all of the intellectual property the Company owned to Vigorish, by way of ashort
form assignment (the "Assignment") recorded with the United States Copyright Office on June
23, 2014.
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16. The Assignment was executed by Paul and Campbell individually as Managers of
the Company in mid-June 2014, and purported to retroactively assign the copyright in the
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Documentary effective April 1,2011 (i.e., two days after the Company was allegedly dissolved).
Benson suspects that Paul and Campbell created and recorded the Assignment in June 2014
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17.
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Under California law, "Except for filing an application for tax-exempt status or
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corporation is disqualified from exercising any right, power or privilege." Cal-W. Bus. Servs.,
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Inc. v. Corning Capital Grp., 221 Cal. App. 4th 304, 310 (2013).
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18. By the time that Wabi and PBR2 attempted to dissolve the Company, the
California Franchise Tax Board had already suspended their corporate status. Thus, at the time
that Wabi and PBR (i.e., the named managers of the Company) purported to dissolve the
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Company, they had no power to do anything (including dissolve the Company) until they revived
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Furthermore, even ifWabi and PBR had the basic power to function as
corporations in California in 2011 (which they did not), paragraph 9(c)(vii) ofthe Agreement
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The Agreement purports to name Paul and Campbell "on behalf of'Wabi and PBR,
respectively, the managers ofthe Company. Paul and Campbell are thus agents of Wabi and
PBR, such that Wabi and PBR are bound by Paul's and Campbell's actions and are thus the de
120160.1
made clear that themanagers could not "attempt to dissolve or withdraw from the Company"
without the unanimous written consent of all of the members, including Benson.
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facto alter egos Paul and Campbell, could dissolve the Company. Accordingly, the purported
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21.
As set forth above, Wabi and PBR purported to assign the copyright in the
For the reasons set forth in the above paragraphs 18 and 19,by the time of the
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alleged assignment (i.e., April 2011), neither Wabi nor PBR had the ability under California law
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to do anything, much less assign a property interest. Apparently for this reason, Paul and
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Campbell purported to sign the Assignment as the managers ofthe Company. However, neither
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ofthose individuals was ever appointed to act as the managers of the Company. For this reason,
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from "assigning] rights in specific Property [i.e., any assets ofthe Company], for other than a
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Company purpose" without the unanimous written consent of the members. Per paragraph 4of
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the Agreement, the sole purpose ofthe Company was to develop the Documentary.
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Because Benson never gave any such consent, neither Wabi andPBR, northeir de
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and therefore required the unanimous written consent ofthe members (which consent was never
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sought or given). As such, the Assignment was also invalid for this reason, as well.
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To the extent required, Benson brings this action derivatively in the right and for
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the benefit ofthe Company to redress injuries suffered, and to be suffered by the Company as a
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direct result of Wabi's andPBR's violations of law. The Company is named as a nominal
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Benson was a member of the Company at the time of the wrongs of which he
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DOUG BENSON'S COMPLAINT
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27.
As set forth above, the Company has purportedly been dissolved. Pursuant to
California law, the shareholders or members ofa dissolved California corporation or limited
liability company may nonetheless maintain aderivative action in the name ofthe company,
notwithstanding its corporate status. Thus, Paul, Campbell, Wabi and PBR could not extinguish
the claims against them by simply purporting to cancel the Company's corporate status.
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28.
Benson has informed the managers in writing ofthe ultimate facts ofeach cause of
29.
Benson has not made a demand on the Company to institute this action because
such a demand would have beena futile, wasteful, and useless act.
30.
Demand is excused because Wabi and PBR are the only managers ofthe Company
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and face a substantial likelihood ofliability, so they are hardly disinterested or independent. It is
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inconceivable that Wabi and PBR, as managers of the Company, would authorize aderivative
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corporations and, under California law, they have no power to take any action for any business
purpose. Any action Paul and Campbell would purport to take on Wabi's and PBR's behalf
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32.
Furthermore, demand is excused because Wabi and PBR are Paul's and
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Campbell's companies, respectively, and they purport to act on Wabi's and PBR's.behalf. As
such, Wabi and PBR are controlled by wrongdoers who would ultimately decide whether to
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authorize aderivative action, and it is inconceivable that they would authorize asuit against
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themselves.
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33. Lastly, demand is excused because Wabi's and PBR's conduct is not avalid
exercise of business judgment. They have looted the Company's sole asset, purported to dissolve
the Company without unanimous consent ofthe members, and have unlawfully exploited
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Company property, depriving the Company offinancial benefit as aresult. In addition, they
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concealed these actions from the other members ofthe Company for more than four years. There
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is no legitimate business judgment involved in such activity and, as Wabi and PBR are liable for
their own illegal conduct and are the managers of the Company, demand would be futile.
JURISDICTION AND VENUE
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jurisdiction is proper in the Superior Court of California for the County of Los Angeles.
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Pursuant to Code ofCivil Procedure Sections 392,395, and 395.5, venue is proper
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Benson is informed and believes, and based thereon alleges, that Paul is an
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Benson is informed and believes, and based thereon alleges, that Campbell is an
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Benson is informed and believes, and based thereon alleges, that Wabi was a
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corporation organized under the laws ofCalifornia, which has since been suspended by the
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40.
Benson is informed and believes, and based thereon alleges, that PBR was a
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corporation organized under the laws ofCalifornia, which has since been suspended by the
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41.
Benson is informed and believes, and based thereon alleges, that the Company was
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alimited liability company organized under the laws ofCalifornia, which Wabi and PBR
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IV
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Benson is informed and believes, and based thereon alleges, that Vigorish is a
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names DOES 1-10. Benson will amend his pleading to identify these persons and entities by
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44.
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Benson is informed and believes, and based thereon alleges, that an actual
controversy exists between himself, on the one hand, and Paul, Campbell, Wabi and PBR, on the
other hand, insofar as Benson contends, and Paul, Campbell, Wabi and PBR dispute, that the
46.
In light of this dispute, Benson seeks a judicial determination that the dissolution
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of the Company was a nullity, andthat the Company's corporate status should be restored and
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revived, and that Benson may take any action required by the California Secretary of State to
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47.
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In theircapacity as managers, Wabi and PBR owed certain fiduciary duties to the
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Paul and Campbell (who controlled Wabi and PBR) breached those duties by,
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among other things, attempting to misappropriate the Company's sole asset- the intellectual
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50.
Benson is informed and believes, and based thereon alleges, that Wabi and PBR
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As a result of these breaches, Benson is informed and believes that the Company
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suffered damages.
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also breached their fiduciary duties by failing to pay the Company's taxes.
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disregard for the rights of the Company, thereby exposing them to punitive damages under
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DOUG BENSON'S COMPLAINT
120160.1
California law.
Furthermore, Wabi and PBR were not authorized to act as corporations under
California law. Therefore, the liability shield ordinarily afforded to shareholders did not exist.
Accordingly, Paul and Campbell are jointly and severally liable for the torts oftheir corporate
instrumentalities.
54.
Even ifsuspension did not nullify the liability shield, Benson is informed and
believes that Wabi and PBR were the mere alter-egos ofPaul and Campbell. Benson is informed
and believes that Wabi and PBR existed solely as liability shields for the purpose ofthe
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production of the Documentary (and formation of the Company), that neither had any separate
assets and that amanifest injustice would result unless the Court disregarded the corporate form.
In addition to monetary relief; pursuant to Cal. Corp. Code 17706.02(e)(1) Benson hereby
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applies, on behalfofthe Company, for an order dissociating Wabi and PBR from the Company,
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55.
As set forth above, the Agreement prohibited anyone from transferring the
Company's intellectual property rights without the unanimous consent of the members. Because
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such consent was not given, and because they were never appointed as managers of the Company,
Paul and Campbell lacked the authority to enter into the Assignment on behalf ofthe Company.
57. The Assignment amounted to actionable conversion and misappropriation of the
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53.
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58.
The defendants named herein maliciously and oppressively acted with acallous
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disregard for the rights of the Company, thereby exposing them to punitive damages under
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California law.
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For the reasons set forth in the above paragraphs 53 and 54, Benson contends that
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Paul and Campbell are liable for the wrongs ofWabi and PBR.
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DOUG BENSON'S COMPLAINT
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61.
In their capacityas managers, Wabi and PBR owed certain fiduciary duties to the
62.
Wabi and PBR breached those duties by, among other things, purportingto
wrongfully dissolve the Company without the unanimous written consent of the membership.
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63.
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64.
Additionally, Wabi and PBR maliciously and oppressively acted witha callous
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disregard for the rights of the members in the Company, thereby exposing them to punitive
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65.
For the reasons set forth in theabove paragraphs 53 and 54, Benson contends that
Pauland Campbell are liable for the wrongs of Wabi and PBR.
66.
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67.
As alleged above, Wabi, PBR, Paul, and Campbell owed certain fiduciary duties to
69.
As set forth in the above paragraphs 9 through 15, Paul, Campbell, Wabi and PBR
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concealed from Benson the fact that they had both purported to dissolve the Company, and the
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70.
Up until Benson initiated the Arbitration and shortly thereafter, Paul, Campbell,
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Wabi and PBR continually made statements and represented that the Company was a going
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concern and purported to take actions on its behalf as its managers. These actions included
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licensing the Documentary and collecting monies and revenues from its exploitation.
71.
Bensondid not learnof the purported dissolution of the Company or the purported
Assignment until he initiated the Arbitration. Consequently, Benson was prevented from
discovering that his rights as a member of the Company had been violated, and that the
Company's sole asset had been stolen. Paul, Campbell, Wabi and PBR sought to deceive Benson
72.
Had these facts been disclosed, Benson would have taken action to protect his and
the Company's rights before these defendants compounded their misdeeds by unlawfully
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73.
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76.
As set forth in the above paragraphs 9 through 15, Paul, Campbell, Wabi and PBR
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knowingly and intentionally concealed from Benson the fact that they had both purported to
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dissolve the Company, and the fact that they had purported to assign the copyright to Vigorish.
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77.
Up until Benson initiated the Arbitration and shortly thereafter, Paul, Campbell,
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Wabi and PBR continually made statements and represented that the Company was a going
23
concern and purported to take actions on its behalf as its managers. These actions included
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licensing the Documentary and collecting monies and revenues from its exploitation.
IV
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Benson did not learn of the purported dissolution of the Company or the purported
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Assignment until he initiated the Arbitration. Consequently, Benson was prevented from
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discovering that his rights as a member of the Company had been violated, and that the
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in
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Company's sole asset had been stolen. Paul, Campbell, Wabi and PBR sought to deceive Benson
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DOUG BENSON'S COMPLAINT
120160.1
Had these facts been disclosed, Benson would have taken action (i.e., Benson
would have sought to arbitrate orinstituted other legal action) to protect his and the Company's
rights before these defendants compounded their misdeeds by unlawfully exploiting the
Documentary.
80.
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81.
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Asa result, Benson suffered harm, which was substantially caused by Paul,
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82.
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83.
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84.
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85.
Wabi and PBR have breached the Agreement by, among other things, purporting
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to dissolve the Company and purporting to change the Company's primary business (i.e., by
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threatening to make the Redux), all without the unanimous consent ofthe members.
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86.
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87.
For the reasons set forth in the above paragraphs 53 and 54, Benson contends that
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Paul and Campbell are liable for the wrongs ofWabi and PBR.
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PRAYER FOR RELIEF
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1.
Ajudicial declaration that the dissolution of the Company was a nullity, and that
the Company's corporate status should be restored and revived, and that Benson may take any
actionrequired by the California Secretary of State to effectthe restoration and revival of the
Company.
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2.
For anorder pursuant to Cal. Corp. Code 17706.02(e)(1) dissociating Wabi and
PBR from the Company, and terminating them as managers of the Company.
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3.
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4.
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5.
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6.
For attorneys' fees and costs, to the extent that any relief grantedarises out of a
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7.
For such otherand further reliefas the Courtmay deem just or appropriate.
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JURY DEMAND
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DOUG BENSON'S COMPLAINT
120160.1
CM-010
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name. SlateBarnumber,
late Bar mi
andaddress):
FILED
Caanty Of t* Angeles
DEC 18 2015
CD
MAILING AOORESS:
By
Tjki&&<0fflJl0&d-~, Deputy
Knstirawugay
CD
[7] Unlimited
CASENI
Limited
(Amount
(Amount
demanded
demanded is
I Counter
6 0 4 419
I Joinder
JUOGE:
DEPT:
$25,000 or less)
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Items 1-6 below must be completed (see instructions on page 2).
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Business tort/unfair business practice (07) LZD Other real property (26)
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Judicial Review
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3. Remedies sought (check all that apply): a.CZl monetary b.GZH nonmonetary; declaratory orinjunctive relief
4. Number of causes of action (specify): ~~J
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>, 6. ifthere are any known related cases, file and serve a notice of related case. (You mayuse form
.Date: December 18, 2015
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case will be subject to the requirements for service and obtaining a judgment in rule 3.740.
To Parties in Complex Cases. In complex cases only, parties must also use the Civil Case Cover Sheet to designate whether the
case is complex. If a plaintiff believes the case is complex under rule 3.400 of the California Rules of Court, this must be indicated by
completing the appropriate boxes in items 1 and 2. If a plaintiff designates a case as complex, the cover sheet must be served with the
complaint on all parties to the action. A defendant may file and serve no later than the time of its first appearance a joinder in the
plaintiffs designation, a counter-designation that the case is not complex, or, if the plaintiffhas made no designation, a designation that
the case is complex.
CASE TYPES AND EXAMPLES
Auto Tort
instead of Auto)
Other PI/PD/WD (Personal Injury/
Property Damage/Wrongful Death)
Tort
Asbestos (04)
Asbestos Property Damage
Asbestos Personal Injury/
Wrongful Death
Product Liability(not asbestos or
toxic/environmental) (24)
Medical Malpractice (45)
Medical MalpracticePhysicians & Surgeons
Other Professional Health Care
Malpractice
Other PI/POAfVD (23)
Premises Liability (e.g., slip
and fall)
Intentional Bodily Injury/PD/WD
(e.g., assault, vandalism)
Intentional Infliction of
Emotional Distress
Condemnation (14)
Negligent Infliction of
Quiet Title
Emotional Distress
Other PI/PD/WD
Practice (07)
; Civil Rights (e.g., discrimination,
"'
k i
harassment) (08)
. Fraud (16)
',.:''
Contract
Legal Malpractice
h-"
domain, landlordAenant, or
foreclosure)
Unlawful Detainer
Commercial (31)
Residential (32)
Drugs (38) (if the case involves illegal
drugs, check this item; otherwise,
report as Commercial or Residential)
Judicial Review
Workplace Violence
Elder/Dependent Adult
Abuse
Election Contest
Notice of Appeal-Labor
Commissioner Appeals
CM-010[Rev. July 1.20071
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