Opposition To Talk Fusion's Motion To Compel Arbitration.
Opposition To Talk Fusion's Motion To Compel Arbitration.
DISTRICT OF FLORIDA
TAMPA DIVISION
Plaintiff,
v.
I.
INTRODUCTION
Visitors to Talk Fusions website are greeted to a video montage of clips that give the
appearance of a successful company, with clips of corporate events, million dollar yachts,
Disneyland vacations, luxury automobiles, and the marketing slogan: Welcome to Talk
Fusion: Where Dreams Meet Technology.
But the question is whose dream is this? Surely not the 60.25% who make nothing,
despite paying between $25 to $75 a month for the right to participate in Talk Fusions
business opportunity and use its products. 1 Declaration of Geoffrey J. Spreter ISO
Opposition to Motion To Compel Arbitration (Spreter Dec), Ex. 1. Like this alleged Talk
Fusion Dream, what exactly are Talk Fusions products? Talk Fusion claims to have awardwinning video email products, but as alleged in Plaintiffs First Amended Complaint
(Complaint), most the big competitors have never heard of Talk Fusion.
When one looks closely at Talk Fusion, the business opportunity that Talk Fusion
offers is not the ability to get in at the ground level of the next Apple, Microsoft, or Facebook,
but the opportunity to participate in a classic textbook pyramid scheme. As alleged in
Plaintiffs Complaint, the products dont matter, it doesnt matter what the rep is selling: I am
talking about making money. Thats why Im up here and youre down there. Youre
worried about whats in the shake, and Im selling the opportunity. Complaint at 82. In
response, scores of people, who have not been able to make the Talk Fusion business
opportunity work have complained to Floridas BBB, and other governmental agencies about
Talk Fusion.
While Talk Fusion has recently changed its business model and policies and
procedures, including its dispute resolution section, which contains the arbitration provision
that is at issue in Defendant Talk Fusion, Inc., Robert Reina, Talk Fusion Worldwide Inc.s
Motion To Compel Arbitration (hereinafter collectively TF) (Motion), most likely in
response to this class action, and recent FTC actions against various other alleged multi-level-
1
Talk Fusion has changed is pricing structure and business model since the filing of this lawsuit. Prior
Associates had to pay between $250 to $1,499 (as well as pay a monthly storage fee that ranges from $35 to
$215 a month) to participate in Talk Fusions business opportunity.
marketing companies Fortune Hi-Tech Marketing, VEMA, and recently Herbalife. TF,
however, cannot escape liability for their prior unfair and unlawful business practices
undertaken in violation of California and Federal Law.
In their Motion, TF make the standard stock arguments concerning arbitration
provisions, and rely on an alleged arbitration provision (hereinafter Agreement) and the
application of Federal and Florida Law to insulate them from liability from their prior unlawful
conduct. Unfortunately, though, for TF, because of the wording of its vague and ambiguous
Dispute Resolution Section contained in the Policies and Procedures (P&Ps) Effective
February 13, 2016 (Ex B to TFs Motion), the procedurally and substantively unconscionable
nature of the terms in the Arbitration Agreement), and a past history of threatening and taking
legal action in Federal and State Court against prior and current TF Associates (Associate),
the Agreement is unenforceable.
Even a perfunctory review of TFs Dispute Resolution Section, which contains the
purported Agreement, which TF attempts to enforce in its Motion, shows that the Agreement
contained therein is clearly unconscionable and unenforceable as a matter of law. First, the
delegation clause is not clear and unmistakable. Second, it is procedurally and substantively
unconscionable, in that Agreement is: 1) a boiler plate provision contained on pages 19 of 26
of one document, which is part of six documents that make up the TF Associate Agreement;
2) has vague and ambiguous terms; 3) lacks mutuality; 4) is illusory; 5) removes and/or limits
substantive remedial claims under Federal and State Law; 6) the provision is prohibitively
expensive and denies the Associates a forum; 7) and is void as a matter of Public Policy.
No court, either one applying either Federal, California or Florida State Law, will
enforce TFs alleged Agreement. This clearly unlawful and unenforceable Agreement, as well
as the other unlawful provisions contained within TFs prior Dispute Resolution Section of
TFs P&Ps has led TF to completely overhaul its Dispute Resolution Section, policies and
procedures, terms and conditions and issue dramatically revised policies and procedures.
Spreter Dec, Ex. 2 These revised policies and procedures, though, were not the ones in effect
when Plaintiff joined Talk Fusion, or for that matter, when this class action was filed. And as
such, this court should deny TFs Motion in its entirety and allow Plaintiff and the proposed
Nationwide and California Sub-Class to prosecute this action to a rightful adjudication on the
merits.
II. THE THRESHOLD ISSUE OF WHETHER THERE IS A VALID
AGREEMENT TO ARBITRATE SHOULD BE DECIDED BY THIS
COURT AND NOT AN ARBITRATOR
A. LEGAL STANDARD
The validity of an arbitration agreement is generally governed by the Federal
Arbitration Act (FAA), 9 U.S.C. 1 et seq. A district court should only grant a motion to
compel arbitration if it is satisfied that the parties actually agreed to arbitrate the dispute. John
B. Goodman Ltd. P'ship v. THF Constr., Inc., 321 F.3d 1094, 1095 (11th Cir. 2003). In
determining the propriety of a motion to compel arbitration under the FAA, courts must
determine the following: (1) whether the parties agreed to arbitrate the dispute; and (2) whether
legal constraints external to the parties agreement foreclosed the arbitration of those claims.
Klay v. Pacificare Health Sys., Inc., 389 F.3d 1191, 1200 (11th Cir. 2004).
Thus, the court must first determine whether a valid agreement to arbitrate exists.
Chastain v. Robinson-Humphrey Co., 957 F.2d 851, 854 (11th Cir. 1992); see also Jenkins v.
First Am. Cash Advance of Ga., LLC, 400 F.3d 868, 881 (11th Cir. 2005) (stating that before
determining whether arbitration should be compelled under the FAA, the district court can
decide whether the parties assented to the contracts containing the arbitration clauses). To
determine whether an arbitration agreement exists, courts must apply state-law principles of
contract law. Hanover Ins. Co. v. Atlantis Drywall & Framing LLC, 611 F. App'x 585, 588
(11th Cir. 2015).
As shown below, TF cannot show that there is a valid agreement to arbitrate Plaintiff
or the Classes Claims. TFs Agreement is unlawful and unenforceable under either Federal,
Florida or California State Law. And thus, TFs Motion should be denied in the entirety.
B. CHOICE OF LAW
This Court should apply Florida law, and not federal law under the FAA, in its analysis
of the Agreement set forth in Defendants Motion 2. The Dispute Resolution section of the
P&Ps, wherein the Agreement is located, specifically includes a choice of law provision that
clearly states: The law of the State of Florida shall govern all other matters relating to
or arising from the Agreement. Motion, Ex. A. Given the provisions scope, the choice of
law provision governs matters relating to or arising from agreement the choice of law provision
governs interpretation of the arbitration provision of the Agreement See, e.g., Cooper v.
Meridian Yachts, Ltd., 575 F.3d 1151, 1162 (11th Cir. 2009) (citing Green Leaf Nursery v. E.I.
DuPont De Nemours & Co., 341 F.3d 1292, 1300-01 (11th Cir. 2003)). This section cited in
Defendants Motion governs the actual administration of the arbitration, and not interpretation
2
While Plaintiff asserts a choice of law analysis is proper under the choice of law provision in the Dispute
Resolution Section of the P&Ps, which would warrant the application of California Law, this opposition relies
on Florida Law, as the result is the same under California Law. Plaintiff expressly reserves the right to argue for
the application of California Law in this matter, and in no way waives this argument.
of the Agreement: The Federal Arbitration Act shall govern all matters relating to
arbitration. (Ex. A). Moreover, AAA rules clearly provide that a drafter of an arbitration
provision can choose state law to apply to a matter (it (it is common for parties to specify the
law that will govern the contract/and or arbitration proceedings). Spreter Dec., Ex.3, AAAs
Drafting Dispute Resolutions p. 25. This is what TF has chosen to do.
Contrary to TFs Motion, this portion of the Arbitration agreement does not designate
leaving the enforceability of the Arbitration agreement to the arbitrator. Rather, it clearly states
that the Agreement is (1) The law of the State of Florida shall govern all other matters
relating to or arising from the Agreement and (2) Jurisdiction and venue of any matter
not subject to arbitration shall reside exclusively in Hillsborough County, State of
Florida. (Id.) This, obviously, does not cut in favor of allowing an arbitrator to decide
arbitrability because it states any matters relating to or arising from the Agreement are
governed by Florida Law in a court located in Hillsborough County, State of Florida.
Plaintiff acknowledges TFs argument that the P&Ps provide that the FAA applies to
all matters relating to arbitration and that Florida law applies otherwise. See Motion, p. 9. But,
this merely has the effect of leaving the Agreement ambiguous on the gateway issue of
arbitrarily and, either under California or Florida law, such ambiguity must be construed
against TF. See, e.g., Securitas Security Services USA, Inc. v. Superior Court, 234 Cal. App.
4th 1109, 1126 (Cal. App. 4th Dist. 2015) (denying motion to compel arbitration and stating
that to the extent the dispute resolution agreement's language is uncertain on the point and
one can glean a different outcome from the language, our conclusion would nevertheless stand
under the principle that a court should construe ambiguous language against the interest of the
party that drafted it.); Arriaga v. Fla. Pac. Farms, L.L.C., 305 F.3d 1228, 1247 (11th Cir. 2002)
(holding that under Florida law an ambiguous term is to be construed against the drafter). TFs
Motion should be denied accordingly.
C. THE DELEGATION CLAUSE IS NOT CLEAR AND UNMISTAKEABLE
TFs Motion erroneously claims that any challenge to the enforceability of the
Agreement should be decided by the arbitrator, rather than by this Court. (Motion at p. 9). TFs
argument is legally and factually infirm regardless of whether California or Florida law is
applied. In fact, the plain language in the Dispute Resolution Section, most of which is left
out of TFs Motion, belies TFs position. According to the beginning provisions of the
Dispute Resolution Section which contains the Agreement. Under Section 8.1 - Disciplinary
Sanctions, if TF believes an Associate has undertaken an act that it construes as damaging its
reputation or goodwill, TF, at its sole discretion, may undertake the following corrective
measures: (1) Involuntary termination of the offender's Associate Agreement; (2) Any other
measure expressly allowed within any provision of the Agreement or which TF deems
practicable to implement and appropriate to equitably resolve injuries caused partially or
exclusively by the Associate's policy violation or contractual breach; (3) In situations deemed
appropriate by TF, the Company may institute legal proceedings for monetary and/or equitable
relief: Moreover, Section 8.3, which includes the arbitration provision states:
Nothing in these Policies and Procedures shall prevent TF from applying to and obtaining from
any court having jurisdiction a writ of attachment, a temporary injunction, preliminary
injunction, permanent injunction or other relief available to safeguard and protect TF's
interest prior to, during or following the filing of any arbitration or other proceeding or
pending the rendition of a decision or award in connection with any arbitration or other
proceeding
As alleged in Plaintiffs Complaint, in paragraphs 136, 138, 139, TF has used the above
sections to file civil actions against prior and current Associates. Spreter Dec, Exs.4,5. This
carve out, which TF incorrectly argues in its Motion is limited to equitable relief, along with
the unilateral rights reserved in Section 8.1, allow TF to institute legal proceeding for monetary
and/or equitable relief. Motion at p. 13. As TF pointed out, in its Reply to its Motion to Dismiss
or/alternative Motion to Transfer there are claims that are too remote to be included within the
scope of the arbitration provision, possibly such as personal injury claims, which would no
doubt be excluded from the arbitration provision. Spreter Dec., Ex. 6
In sum, certain claims are subject to arbitration, while others are not. Moreover, TF
reserves carte blanche authority to terminate the Agreement at any time, and seek legal and/or
equitable remedies in a court of law against Associates at its discretion. Thus, there is no clear
express and unmistakable delegation provision as to who should decide the issue of what
claims are subject to the arbitrator or a court. Given the clear lack of a delegation provision,
the interpretation of the Agreement shall be governed by Florida or California law, and not the
FAA, or an arbitrator.
D. THE THRESHOLD FACTUAL GATEWAY ISSUE OF WHETHER THERE WAS
AN AGREEMENT TO ARBITRATE SHOULD BE DECIDED BY THIS COURT
The law is well settled that whether a valid agreement to arbitrate was ever formed is
an issue for the Court, not for the arbitrators. Seifert v. Seifert 346 S.E.2d 504 (1986) (if the
court shall find that a substantial issue is raised as to the making of the agreement or provision,
it shall summarily hear and determine the issue, and according to the determination, shall grant
or deny the application.); Granite Rock Co. v. Intl. Brotherhood of Teamsters, 561 U.S. 287,
297-300 (2010)(courts should order arbitration of a dispute only where the court is satisfied
that that neither the formation or the parties arbitration agreement nor (absent a valid provision
specifically committing such disputes to an arbitrator) its enforceability or applicability to the
dispute is in issue. Where a party contests either or both matters, the court must resolve
the disagreement), citing First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943
(1995)(emphasis added).
The Court only recently addressed this issue in the case of CT Miami LLC v. Samsung
Elec. Miami Inc., No. 3D15-641, 2015 WL 5247160 (Fla. 3d DCA Sept. 9, 2015), which
carefully sets forth the applicable analysis for the instant case. In the CT Miami case, the court
first noted that the same rules of law apply under either the Federal or Florida arbitration acts,
the language of which are virtually identical. Id. at p. 4 n. 3.
Most important for present purposes, in CT Miami, the Court expressly reversed the
circuit courts finding in that case that under AAA rules the arbitrator has the jurisdiction to
make the determination on whether a valid arbitration clause exists. Id. at p. 3. In very clear
terms, the Court underlined the undeniable logic behind this rule of law: Arbitrators have
no inherent authority over a dispute or the parties to that dispute; the only authority vested in
the arbitrator is that contractually designated in the parties agreement. Thus, in the
absence of an agreement to allow the arbitrator to decide the dispute, the arbitrator has no
authority to determine anything. Id. at p. 6.
The Court also noted its agreement with all state and federal courts that challenges to
the validity of the agreement to arbitrate (such as are at issue in this case) must be
decided by the trial court, quoting Buckeye Check Cashing Inc. v. Cardegna, 546 U.S. 440,
445-46 (2006). CT Miami, supra, a p. 5. It is this aspect of this Courts analysis in CT Miami
that is dispositive of this case, and thus the Court should look to this decision for guidance.
As a threshold matter, whether the Court applies Federal, Florida or California law, in
order for any alleged contractual agreement to be enforceable, there must be a meeting of the
minds. Spring Lake NC, LLC v. Holloway 110 So.3d 916 (2013). In its Motion, TF assumes,
without addressing the arguments made in Plaintiffs Complaint that there is a valid agreement
to arbitrate. See Complaint 132-152. However, TF fails to prove the existence of a valid and
enforceable Agreement relating to an arbitration provision, or for that matter the basic element
of a meeting of the minds for such an agreement. TF merely states that Plaintiff joined
through TFs website by clicking on a box representing that he, read, understood, and agreed,
to be bound by the associate agreement. Motion at p. 3. However, just because Plaintiff clicked
a box, does not mean that there is a contract formed or a meeting of the minds.
In the instant case, the evidence is not ambiguous as to there being a meeting of the
minds, with respect to an Agreement; there is none. Declaration of Dennis Gray (Gray Dec)
5. As alleged in Plaintiffs Complaint, and shown below, the forum selection/arbitration
clause on pp. 19 and 20 of the P&Ps, which is one of six documents that makes up the
Associate Agreement, which contains numerous inconsistent and ambiguous terms that affect
the Agreement, is what makes the Agreement unenforceable as a matter of law. Compl. at
131-152. Consequently, the governing principles are clear; where any substantial issues are
raised as to the formation or validity of an agreement to arbitrate, the trial court must resolve
that issue following an evidentiary hearing.
II.
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Under Florida law, in order to invalidate an arbitration clause, the court must find
that it is both procedurally and substantively unconscionable. Curbelo v. Autonation Benefits
Co., No. 14-CIV-62736, 2015 U.S. Dist. LEXIS 18788, 2015 WL 667655, at *3 (S.D. Fla.
Feb. 17, 2015); Golden v. Mobil Oil Corp., 882 F.2d 490, 493 (11th Cir. 1989); Murphy v.
Courtesy Ford LLC, 944 So. 2d 1131, 1134 (Fla. 3d DCA 2006).
A. PROCEDURAL UNCONSCIONABILITY
Procedural unconscionability relates to the manner in which the contract was entered
and it involves consideration of such issues as the relative bargaining power of the parties and
their ability to know and understand the disputed contract terms. Voicestream Wireless Corp.
v. U.S. Comm'ns., Inc., 912 So.2d 34, 39 (Fla. 4th DCA 2005). Where, as here, the arbitration
agreement is substantively unconscionable to such a great degree, courts generally require only
a modest demonstration of procedural unconscionability. See Basulto v. Hialeah Automotive,
141 So.3d. at pp. 11-12 (Fla. 2014) (procedural and substantive aspects of unconscionability
must be present, although not necessarily to the same degree, and both should be evaluated
interdependently rather than as independent elements); see also Romano ex rel. Romano, 861
So.2d 59, 62 (Fla. 4th DC 2003) (Because the arbitration contract in this case is substantively
unconscionable to a great degree, and we conclude that there is some irregularity No Opt Out
Provision the contract formation amounting to procedural unconscionability of some degree,
the contract is unenforceable).
Procedural unconscionability relates to the manner in which the contract was made and
involves issues such as the parties' relative bargaining power and their ability to know and
understand disputed contract terms. Bland v. Health Care & Ret. Corp. of Am., 927 So. 2d 252,
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256 (Fla. 2nd DCA 2006). A court can also find a contract unconscionable if important terms
are hidden in fine print or if the contract reflects an absence of meaningful choice. See
Powertel, Inc. v. Bexley, 743 So.2d 570, 574 (Fla. 1st DCA 1999) (agreement unconscionable
and unenforceable in part because arbitration clause was hidden in a maze of fine print).
The Agreement contained within TFs P&Ps is one of a contract of adhesion. The
Agreement appears on pages 19 and 20 of the P&Ps. These P&Ps are one of six documents
presented as part of the Associate Agreement, via hyperlinks, during the Associate sign up
application process. Complaint Exs. 27-30.
As Plaintiff states in his declaration, Plaintiff did not even know that he was agreeing
to an arbitration provision, or a jury waiver when he signed up. Gray Dec. 5. Moreover, even
after being shown the P&Ps attached to TFs Motion Plaintiff doesnt even know which law
applies: Moreover, from reading section 8.4, I cannot tell what law would apply in arbitration,
would it be Federal, California State, or Florida State Law? Again, I am very confused after
reading these sections, as I find them to be unclear and poorly written. Gray Dec at 26. TFs
revised P&Ps, which were revised after this lawsuit, clearly identify the arbitration provision,
which claims are subject to arbitration, and which law applies. Gray Dec at 28.
Lumping a mandatory arbitration agreement in a 23-page document, that is part of 6
other documents that makes up an Associate Agreement (which contains contradictory terms),
and is difficult to understand is unconscionable. TFs Associate Agreement is precisely the
type of maze of fine print procedural unconscionability that Florida courts look to when
invalidating arbitration agreements. Thus, the TFs Agreement, buried within the Associate
Agreement in this manner is procedurally unconscionable.
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B. Substantive Unconscionability
A contract is substantively unconscionable if its terms are so outrageously unfair as
to shock the judicial conscience. Woebse v. Health and Retirement Corporation of America
977 So.2d 630 (2008). In determining whether an arbitration clause is substantively
unconscionable, courts have considered the cost of arbitration and whether the clause requires
one party to give up or waive any significant legal remedies. Sims v. Clarendon Nat. Ins. Co.,
336 F. Supp. 2d 1311, 1321 (S.D. Fla. 2004). As shown below, the terms of the arbitration
provision are clearly substantively unconscionable.
1. THE TERMS ARE VAGUE AND AMBIGUOUS
The scope of the arbitration provision is unclear as to what claims are subject to
arbitration. The provision states that any controversy or claim arising out of or relating to the
agreement is subject to arbitration. However, the provision is limited merely to claims or
controversies relating to or arising from the agreement. Claims and Controversy are not
defined, nor are examples of such Claims or Controversies provided in the provision. Instead
of a very broad provision that uses the language whatsoever, TF limits the claims to those
relating or arising from the agreement. It is also not clear from the face of the provision as
to whether it is limited to the rights and duties under the agreement, or if it is broad enough to
cover the validity of the provision itself.
Moreover, as shown, above, it is not clear which law applies to interpretation of the
Agreement, or for that matter where the interpretation should take place, in an Arbitration, or
State of Federal Court. Also, as shown below in the illusory section, the Agreement is vague
as to when and how TF can amend the Agreement.
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Any other measure expressly allowed within any provision of the Agreement or which
TF deems practicable to implement and appropriate to equitably resolve injuries caused
partially or exclusively by the Associates policy violation or contractual breach; In
situations deemed appropriate by TF, the Company may institute legal proceedings for
monetary and/or equitable relief. (8.1)
If an Associate wishes to bring an action against TF for any act or omission relating to
or arising from the Agreement, such action must be brought within one year from the
date of the alleged conduct giving rise to the cause of action. Failure to bring such
action within such time shall bar all claims against TF for such act or omission.
Associate waives all claims that any other statutes of limitations applies. (TOC,
Complaint, Ex 30)
Nothing in these Policies and Procedures shall prevent TF from applying to and
obtaining from any court having jurisdiction a writ of attachment, a temporary
injunction, preliminary injunction, permanent injunction or other relief available to
safeguard and protect TFs interest prior to, during or following the filing of any
arbitration or other proceeding or pending the rendition of a decision or award in
connection with any arbitration or other proceeding. (8.3)
Jurisdiction and venue of any matter not subject to arbitration shall reside
exclusively in Hillsborough County, State of Florida.(8.4)
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The law of the State of Florida shall govern all other matters relating to or
arising from the Agreement. (8.4)
Because of the above limitations placed on Associates, and rights reserved to TF, the
15
TFs reservation of a unilateral right to modify the Agreement at its sole discretion at
any time renders the arbitration provision illusory and thereby makes it substantively
unconscionable.
4. THE AGREEMENT REMOVES AND/OR LIMITS SUBSTANTIVE REMEDIAL
CLAIMS BROUGHT UNDER CALIFORNIA AND FEDERAL LAW
Under Floridas choice of law provision, the forum selection/arbitration provision is an
attempt to shield TF from liability under California law, in violation of California Civil Code
1667, by making it too expensive for California citizens to litigate/arbitrate, requiring them to
waive a fundamental right to a jury trial in violation of California public policy, limiting the
statutorily mandated four-year statute of limitations for Plaintiffs UCL and FAL claims, and
replacing it with a one year statute of limitations imposed in TFs Terms and Conditions
(Complaint at 132), precludes the rights of the Associates to seek injunctive relief under the
UCL and FAL, precludes the right to attorneys fees recoverable under RICO, and limiting the
right to recover punitive damages under RICO, or for that matter RICO claims, and subjects
them to possible attorneys fees should they lose their action under the Floridas Unfair Trade
Practices Act, in the event that the court applies Florida Law after a choice of law analysis.
As it stands Florida law is currently unsettled on whether the FDUTPA applies to nonFlorida residents. see also Millennium Commc'n & Fulfillment, Inc. v. Office of Attorney Gen.,
Dept. of Legal Affairs, State of Fla., 761 So.2d 1256 (Fla.Dist.Ct.App.2000) (holding that
FDUTPA applies to transactions in Florida even when the parties are not Florida residents); but
compare Barnext Offshore, LTD. v. Ferretti Group USA, Inc., 2012 WL 1570057, p. 56
(S.D.Fla. May 2, 2012) (applying FDUTPA to a Florida transaction in which certain
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area routinely charges between $250 and $500 an hour for his or her time, but on average they
charge $300. Spreter Dec. 9-10.
Because of the prohibitively expensive administrative fees of Commercial Arbitration
at AAA, numerous TF Associates and consumers are denied a forum for their grievances. And
as such, these Associates and consumers have taken to filing claims with Floridas Better
Business Bureau, which often does not provide the Associate or customer with a resolution to
the matter. Complaint, Ex. 26. In total, over 33 claims have been filed with Floridas Better
Business Bureau, relating to TFs business practices. Id. In particular, many consumers are
having an issue with TFs 3-day-refund policy. Id.; Spreter Dec, Ex. 5.
Here, there is no question that Plaintiff and the purported Class would effectively be
deprived of their day in court. First, no reasonable consumer, including Plaintiff, would ever
be willing to devote the time, expense, and travel necessary to litigate these types of disputes
thousands of miles away and incur these expenses to litigate on an individual basis. See Compl.
135; Gray Dec. 14-18. More importantly is the fact that no reasonable non-Florida resident
consumer or prior-Associate would ever litigate this case in Florida, because the claims
asserted in Plaintiffs Complaint, should this court apply Florida law, under the FDUTPA,
entitle the prevailing party to attorneys fees in the event the Plaintiff loses. And as shown
above, Florida law may not even apply to the non-resident Plaintiffs claims.
6. The Arbitration Provision IS Void For Violating Public Policy
Under California law, a jury trial is a matter of right, and is void as a matter of public
policy. See Grafton Partners L.P. v. The Superior Court of Alameda County, 36 Cal.4th 944
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(2005). In TFs arbitration/forum selection provision, Associates are not given meaningful
notice of the jury waiver provision. Declaration of Robert Reina at Ex. B, Section 8.1.
California is the state where Plaintiff and all many thousands of members of the
proposed California sub-class currently reside. Compl. 164-165. California also has an
interest of providing an adequate forum for its residents who are injured here, under the UCL,
and FAL, and ensuring that they receive the benefit of Californias 4-year statute of limitations
provided by theses remedial business tort statutes. In addition, California also has an interest
in enforcing its law against foreign corporations not licensed to do business in California like
TF.
As shown above, the Agreement is also unenforceable because it would prevent
Plaintiff and the putative class members from effectively and/or vindicating their statutory
rights under RICO, UCL, FAL or any other their other claims. Simply put, the high procedural
and substantive unconscionability of the Agreement, coupled with the excessive costs of
arbitration, shown in the Gray and Spreter Decs, renders the entire Agreement
unenforceableincluding the class waiver. See, e.g., Nesbitt v. FCNH, Inc., 74 F. Supp. 3d
1366, 1373, (D. Colo. 2014) (denying defense motion to compel arbitration and strike FLSA
collective action allegations due, in part, to cost issue); Meyer v. Kalanick, 15Civ9796, S.D
New York, May 7, 2016.
Under the terms of the P&Ps attached to TFs Motion as Exhibit B, TF may have
access to any and all courts in the United States, including California Federal and State, to seek
any remedy, either at law or in equity, before a jury or a judge its choosing. However,
Associates and customers of TF are precluded from receiving the same right. In sum, the effect
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of the Agreement is to strip statutory rights from non-Florida residents, such as Plaintiff, whose
rights are protected under California law, while expressly reserving all rights and remedies
under any Federal and State law for itself. No court will countenance such a provision and
attempt to violate public policy.
V. CONCLUSION
This is an action brought by Plaintiff who resides in California, to address both
California Law, specifically unfair business practices (B&P 17200) and false advertising
statutes (B&P 17500), and violation of RICO under Federal law. As shown above, the
Agreement is both procedurally and substantively unconscionable as a matter of law and
unenforceable. As such, Plaintiff respectfully request that this Court deny TFs motion to
compel arbitration and stay this action in their entirety. Should the Court request additional
briefing or require an evidentiary hearing on the merits of either parties claims and/or defenses,
Plaintiff respectfully request such a hearing, including oral argument, at the Courts
convenience.
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CERTIFICATE OF SERVICE
21
Plaintiff,
v.
1.
I have personal knowledge of the facts herein, and if called to do so, could and
3.
4.
I joined Talk Fusion while visiting with some friends in Las Vegas, Nevada.
5.
visit. Mr. Ho never presented me with a copy of Talk Fusions Policies and Procedures. He did
not mention a forum selection clause nor arbitration provision during our conversation, nor did
he mention the term venue. Nor was I informed that I would be waiving my right to a jury trial
when we checked the box on the Talk Fusions website. Having no knowledge of either provision,
I have not agreed to arbitration of my case, nor to have my case heard in a Florida Court, nor have
I knowingly and voluntarily waived my right to trial by jury under California law.
6.
Neither Talk Fusion nor Mr. Ho offered to negotiate the terms and conditions of
my relationship with Talk Fusion, nor did anyone from Talk Fusion notify me that I had such an
option.
7.
Oceanside, California. I recalling viewing several Talk Fusion promotional videos that featured
Robert Reina, the CEO of Talk Fusion, from my home in California. These videos were
distributed via the internet. I never travelled to the State of Florida while I did business with Talk
Fusion.
8.
The Associates I recruited for Talk Fusion were mostly from California, and I
I found the Talk Fusion software to be inefficient and not effective as a business
tool. It was not user-friendly to use. To send a video email using Talk Fusions software, a user
has to have the intended recipient first contact Talk Fusion and opt-in to the service. A user of
Talk Fusion cannot simply send a video email to all the individuals listed in their email contact
list. I did not like this at all.
10.
I am aware of several other individuals in California who have had problems with
Talk Fusions email software and complained about the quality of the service.
11.
I have read Section 8 of the Talk Fusions Policies and Procedures Effective
February 21, 2013, which were allegedly in effect when I signed up with Talk Fusion. The
Policies and Procedures were attached to the Declaration of Robert Reina filed in support of a
previous motion. I find Section 8 to be confusing and hard to understand. For example, in section
8.1 of the Dispute Resolution Section it states that Talk Fusion, the Company, may institute
legal proceedings for monetary relief and/or equitable relief. But I have been informed that there
is an arbitration provision in the Policies and Procedures that Talk Fusion is attempt to enforce
against me and the proposed putative classes.
12.
If Talk Fusion enforces this arbitration provision, I most likely will be prevented
from maintaining my action to enforce California and Federal law on behalf of a nationwide and
California-sub class. I do not believe that it is fair that Talk Fusion can reserve for itself the right
to use the courts, and file lawsuit against current and prior Associates, while at the same time deny
me access to a court of law.
13.
Also, I do not believe that it is fair that, in section 8.1 of the Dispute Resolution
Section, Talk Fusion has reserved itself the sole unfettered right to do the following things to me
or any other Associate that it deems to have undertaken an act which Talk Fusion construes as
damaging to Talk Fusions reputation or goodwill:
14.
Moreover, I have been informed that Talk Fusion wants to enforce an alleged
arbitration provision against me, and make me fly out to Tampa, Florida and argue my case before
a AAA arbitrator in Hillsborough County, Florida.
15.
or AAA, does not have a location in Hillsborough County, Florida and AAAs only location for
my type of arbitration is in Miami, Florida, which is over 200 miles. I have also been informed
that it will cost me an initial fee of $7,000 and a final fee of $7,000 (which is refundable, if the
matter is not tried.) to arbitrate the current action, or possibly more. I have also been informed
that a AAA associated arbitrator in the Florida area routinely charges between $250 and $500 an
hour for his or her time, but on average they charge $300.
16.
I have also been informed that since the AAA does not have an office in
Hillsborough County, Florida, that I will have to rent a room in an office or have the arbitration
administered in Defendants counsels office, if they are willing. I have also been informed that
the arbitrator we select will most likely be from the legal community/area where Defendants
counsel practices, and is supposed to be from the legal field that Defendants counsel practices in.
I have also been informed that I would most likely have to retain local counsel familiar with
Florida civil procedure and law to represent me in the matter, and the attorney will most likely
charge hourly, and at rates comparable to what the AAA arbitrators charge.
17.
Defendants motion to compel arbitration is enforced, I will most likely not be able to bring this
current action as a class action. And my attorney, who is handling this matter on a contingency
matter, will most likely not be able to represent me in the Hillsborough County arbitration, if I am
forced to arbitrate on an individual basis, as he would have to incur excessive expenses to litigate
the matter, which he wont have to incur if this matter continued in this court. He has informed
me that arbitration involving multi-level-marketing companies and the types of claims pled in my
complaint can in some instances exceed $100,000.
18.
I simply cannot afford to pay this amount, or the amounts listed above, to have my
case heard in arbitration. I brought this action individually, and on behalf of similarly situated
class of people, to enforce a federal statute and California Law, because I believed, among other
things, Talk Fusions products were difficult to use, Talk Fusion did not provide the support and
training it represented it would, and Talk Fusion is taking advantage of people.
19.
problems. Moreover, I have reviewed Exhibit 26 of my First Amended Complaint, and find it sad
that several members of the State of Florida are experiencing problems with using Talk Fusions
products and not getting relief from Talk Fusion or the Florida Better Business Bureau (BBB). I
have been informed and believe that Talk Fusions CEO, Robert Reina, has been personally
responding to the BBB complaints.
20.
One of the complaints to the Florida BBB is from a non-English speaking Talk
Fusion customer, presumably of Russian decent, who complains that she was rushed through the
sign up process and not allowed to read the cancellation policy and the Talk Fusion Agreement.
She also states that there are several misrepresentations going through international communities
about Talk Fusion, because it is easy to mislead people who have limited English, and limited
business knowledge.
21.
In the BBB complaint, the CEO of Talk Fusion, believed to be Robert Reina,
argues with the BBB complainant about the application of Russian Law to the transaction. The
CEO of Talk Fusion states that Consumer Rights Protection Law, Article 26.1, which the
complainant claims applies to her grievance, only applies to consumers under Russian Law. Talk
Fusion then goes on to state that the Russian Consumer Rights Protection Law cited by the BBB
complainant does not apply to consumers and has an exception that excludes uses for
entrepreneurial activity, and thus Russian Law does not apply to Talk Fusions refund policy.
22.
I have been informed that a New Jersey resident named Eric Einholz filed a
complaint with the BBB in or around August 2014, which was posted on the BBBs website. In
response, Talk Fusions attorneys threatened Mr. Einholz, and demanded that he withdraw his
complaint within 3 days. I have been informed that Talk Fusion filed a civil lawsuit against Mr.
Einholz in a Florida State Court located in Hillsborough County, Florida. In addition, I have been
informed that Talk Fusion obtained a default judgment against Mr. Einholtz when he failed to
answer Talk Fusions civil lawsuit.
23.
I have been forwarded an email from my counsel, Geoff J. Spreter, Esq. that was
sent to him recently by an individual, who states he is a French National, who has been working
in Indonesia for the last 10 years concerning Talk Fusions expansion into Indonesia, and
allegations that Talk Fusion may be a pyramid scheme.
24.
I am an immigrant from Sri Lank who came to the United States in or around
1969. I do not believe that it is fair that Talk Fusion can take advantage of non-English speakers,
respond to BBB complaints and debate complainants, regarding which law applies to Talk
Fusions agreements, file civil lawsuits against BBB complainants in Florida State Courts, obtain
default judgements against a BBB complainant, and state that I am obligated to arbitrate my
claims as well as the proposed Nationwide and California Sub-Classes claims.
25.
From reading sections 8.3 and 8.4 of the Policies and Procedures effective,
February 21, 2013, located in the Dispute Resolution Section, I cannot specifically tell what
gives Talk Fusion the right to compel me to arbitrate my and the proposed Classes claims, while
Talk Fusion is free to litigate its claims in Florida State Courts at will.
26.
Moreover, from reading section 8.4, I cannot tell what law would apply in
arbitration, would it be Federal, California State, or Florida State Law? Again, I am very confused
after reading these sections, as I find them to be unclear, poorly written, and contain contradictory
terms.
27.
do not see anything about arbitration or a waiver of jury trial on Talk Fusions Associate
Agreement sign-up page. Nor do I see a definition of the term Talk Fusion Independent Associate
Agreement, which I have been alleged to have agreed to.
28.
Talk Fusions Policies and Procedures Effective May 16, 2016. I find them to be much clearer
and easier to read than the Policies and Procedures that were allegedly in effect when I was an
Associate with Talk Fusion, which were attached to Exhibit A of Defendants Motion To Compel
Arbitration. For example, under the Confidential Arbitration section, the phrase: the Parties
waiver rights to trial by jury or any court, appears in bold and is underlined.
29.
I have been informed that the new Policies and Procedures were posted on Talk
Fusions website after my lawsuit was brought to enforce California State and Federal Law.
30.
I dont think it would be fair compel me to arbitrate my claims while Talk Fusion
has had full and unfettered access to the Courts. As such, I respectfully request that the Court
allow me to proceed in this Court.
31.
I declare under penalty of perjury under the laws of the United States that the
foregoing is true and correct. Executed this 27th day of September 27, 2016, at Oceanside,
California.
______________________________________
Dennis Gray
Exhibit 1
Ex. 26
Exhibit 26: Page 1
Complaint
Joined Talk Fusion, purchased the $250.00 package and paid $35.00 monthly fee. Had an issue, got
no support, no refund, no product.
Purchased as a distributor for $30.00 on May 30, 2013. Then in July 3 purchased a package. I noticed
my header disappeared and I contacted my website support. After their evaluation they informed me
it was the Talk Fusion E-Subscription form HTML which was interfering with the displaying of the
header. It took until July 16th to discovered the E-Subscription form interfered with the header on my
website. Only July 16th I contacted Talk Fusion for support and was told that their code was correct
and that was that. It was not their problem. Then I asked for a refund because of the lack of support
and was told no refund after 3 days.
I had taken the time to add Talk Fusion's E-Subscription form to all the pages on my website, so I
decided to just remove my header.
Today, I removed Talk Fusion E-Subscription form, yes, because I do not have the $35.00 to pay
monthly after all. I have been informed that without paying the $35.00 monthly fee I can not receive
any commissions.
When I joined for $30.00 as a distributor I was able to sell the product and earn commissions.
Now that I purchased a $250.00 package (which I now longer have access to). I cannot even earn any
income. I have written content for the product into my website pages.
My complaint is I paid a total of $315.00 ($30.00 distributor fee, $250 Executive Package, $35.00
monthly fee) Plus invested time for marketing the product. Now I have nothing to show for this, plus I
can not even earn commissions as a distributor.
I would really just like a total refund. I have not used the products, I have nothing for the money I
spent. Is this really legally okay to spend money on a product, but have no product at all?
Desired Settlement
I would like a full refund of $315.00
Business Response
Please note that on this date, we received a "Complaint Activity Report" pursuant to the purchase(s)
made by ********* ********
Amount: $30 -Associate Fee Payment
Transaction Date: May 30, 2013
Amount: $285 - Executive Product Purchase
Transaction Date: July 1. 2013
Please note that it is the official position of Talk Fusion that these purchases are 100% valid for the
following reasons:
Ms. ******** joined Talk Fusion as an associate on May 30, 2013 online from the Talk Fusion
website, www.talkfusion.com Exhibit #1 is the Talk Fusion Agreement.
Ms. ******** purchased the product on July 1, 2013, which was immediately provided to her.
At NO TIME did Ms. ******** contact Talk Fusion in an attempt to resolve any concerns in reference
to the product.
At NO TIME did Ms. ******** request to close this account within the allotted 3-day time frame. In
fact, the first written correspondence we have from Ms. ******** is dated July 16, 2013. This
correspondence is a cancellation request. This request is clearly outside the refund eligibility
timeframe. Pursuant to this request, Ms. ********' monthly access fee was cancelled. At that time,
product access was no longer available, per the cancellation terms of the Agreement.
Ms. ******** contradicts herself within the content of her complaint. First she states she did use the
Talk Fusion product and later goes on to state that she would like a refund because she did NOT use
the product. We will provide evidence supporting the fact that Ms. ******** did in fact, use the Talk
Fusion product she purchased.
Ms. ******** indicates in her complaint that she was informed by her 3rd party website support that
the Talk Fusion E-Subscription form HTML was interfering with the displaying of the header of her 3rd
party website. When a person posts an E-Subscription Form on a 3rd party website, which is not
controlled by Talk Fusion, we cannot control the code/performance on that site. We are happy to try to
help you but we do not control the code on the 3rd party site; hence we cannot control the outcome
on the 3rd party website.
Ms. ******** claims in her complaint that she is no longer eligible to participate in the Talk Fusion
compensation plan. This is factually baseless. Per the Talk Fusion compensation plan, the guidelines to
be eligible to receive commissions are:
You Personally generate a minimum one-time 100 Personal Sales Volume (PSV) and maintain a
minimum of 20 Personal Sales Volume (PSV) on a monthly basis to maintain an Active status.
Pursuant to the compensation plan, Ms. ******** IS, in fact, eligible to receive commissions if she
meets the above criteria.
Pursuant to the Electronic Commerce Merchant Refund Policy Disclosure, Ms. ******** was provided
with the "Proper Disclosure of the Refund Policy and the Recurring Transaction Policy" during the order
process. These Disclosures are clearly posted on the same page as the "I Agree" Click through process
within the sequence of Web pages accessed by Ms. ******** before the final checkout.
For ease of reference, the Refund Policy on the original purchase is as follows:
If any Independent Associate or Customer is unsatisfied with any product purchase for personal use,
Talk Fusion offers o 100% three (3) day money-back guarantee. Please note that shipping charges
and sales tax are not refundable. Returns in excess of the purchase price of$250 will be deemed
inventory returns and will he handled in accordance to section 7.2 of the Policies and Procedures titled
- Return of Sales Aid by Associates UPON Cancellation. Returns in excess of the purchase price of
$250 shall also constitute on Associate's voluntary request to cancel. In the Russian Federation, there
are no refunds after product purchase.
**Please note Exhibit #1A is an enlarged version of Exhibit- #1- We enlarged it for easier reading.
The customer agreed to the aforementioned purchase conditions on July 1, 2013. Hence, the refund
eligibility period on the original purchase expired on July 4, 2013.
Exhibit #2 is the enclosed Time and Date Stamped Merchant Receipt.
Exhibit #3 is the information that Ms. ******** supplied to Talk Fusion at the time of registration.
Please note Ms. ******** logged into the account as recently as August 5, 2013 at 3:58 p.m. which
is more than ONE (1) MONTH AFTER the original purchase was made. This clearly PROVES, beyond
any doubt, that Ms. ******** accessed this product. Thus the statement that Ms. ******** did not
use the product is factually baseless.
Exhibit #4 is a copy of the invoice sent to Ms. ******** upon completion of the transaction
electronically via e-mail. All invoices are also stored in Ms. ******** account for future reference.
Exhibit #5 is a variety of screen shots taken for Ms. ********' account outlining the use of the
product.
This clearly proves that the Talk Fusion product works as described and is not defective in any way.
Please note, we have provided the following:
- A copy of Ms. ********' address book where all of the contact email addresses are stored.
- A copy of Ms. ********' Video Library where all of the videos Ms. ******** successfully saved to
this account are saved.
- A copy of the report of video emails Ms. ******** successfully sent from this Talk Fusion account.
- Copies of video emails Ms. ******** successfully sent from this Talk Fusion account.
- A copy of the E-Subscription form Ms. ******** created from within her Talk Fusion account.
- A copy of the Subscriber report that outlines the contacts Ms. ******** successfully logged from her
E-Subscription form on her own website.
Exhibit #6 is copies of all the email correspondence between Ms. ******** and Talk Fusion as of the
writing of this letter. Please note, at NO TIME did Ms. ******** request assistance with her product.
From her very first email the only request was for a refund, which she has been advised on multiple
occasions, is not due.
In closing, Talk Fusion has proven the purchase is valid. Ms. ******** was provided proper disclosure
and acknowledged the Refund Policy BEFORE the purchase was made.
1. Ms. ******** immediately received the product that was purchased.
2. At NO TIME did Ms. ******** contact Talk Fusion in an attempt to resolve any concerns in
reference to the product.
3. At NO TIME did Ms. ******** request to close this account within the allotted 3-day time frame.
4. Ms. ******** claims in her complaint that she is no longer eligible to participate ln the Talk Fusion
compensation plan. This is factually baseless.
5. Ms. ******** derived benefit of the product and logged into this Talk Fusion account up to and
including August 5, 2013.
If you have any questions, please contact us at (XXX) XXX-XXXX or *******@talkfusion.com
- See more at: http://www.bbb.org/west-florida/business-reviews/video-conferencing-services/talkfusion-in-brandon-fl-90033972/complaints#sthash.JCLQZWzZ.dpuf
Complaint
MISLEADING AND MISREPRESENTING BUSINESS OPORTUNITY SPECIFICALLY IN OTHER LENGUAGES,
NOT ENGLISH SPEAKING PEOPLE,OR INDIVIDUALS WITH LIMITED ENGLISH.
I SIGNED IN TO THE PRODUCT AND BUSINESS OPORTUNITY ON 4/7/13, I WAS RUSHED TO SIGN IN
BY THE REPRESENTATIVE, HE DID NOT LET ME READ A CANCELTION POLICY, HE EVEN WAS FORCING
ME TO BUY MORE EXPENSIVE PACKAGE. HE TOLD I WILL RECEIVE E-MAIL WITH DETILES ABOUT
CANCELATION POLICY. I DID NOT RECEIVE ANY E-MAILS,NOR PRODUCT PACKAGE.
MY ACCOUNT # WAS XXXXXXX. I CANCEL THE SERVICE, MONTHLY FEES, BUT WAS TOLD I AM NOT
ENTITLED FOR $315 REFUND BECAUSE THERE IS 3 DAYS CANCELATION POLICY. HOW COULD I
KNOW THAT, IF THE REPRESANTATIVE DID NOT TELL ME THAT, AND I DID NOT HAVE ANY
INFORMATION ABOUT IT.
THIS MISREPRESENTAION GOES THROUGH INTERNATIONAL COMUNITIES, BECAUSE IT IS EASY TO
MISLEAD PEOPLE WHO HAVE LIMITED ENGLISH, AND LIMITED BUSINESS KNOWLEDGE. I STRONGLY
BELIEVE THERE IS A SCAM GOING WITH THIS COMPANY
Desired Settlement
I AM SEEKING REFUND IN THE AMOUNT $315 AND CANCALATION OF MONTHLY $35 RECURRING
FEES.
Business' Initial Response
Please note that on this date, we received a "Complaint Activity Report'' pursuant to the purchase(s)
made by **** ******.
In closing, Talk Fusion has proven the purchase is valid. Ms. ****** was provided proper disclosure
and acknowledged the Refund Policy BEFORE the purchase was made.
1. Ms. ****** immediately received the product that was purchased.
2. At NO TIME did Ms. ****** request to close this account within the allotted 3-day time frame.
3. The agreement was executed with Talk Fusion directly and all Policies 8: Procedures were provided
prior to the completion of the agreement.
4. During the application process, Ms. ****** confirmed that she had read and agreed to all the Talk
Fusion Policies & Procedures in accordance with the Visa & MasterCard e-commerce requirements.
5. Ms. ****** derived benefit of the product and logged into this Talk Fusion account up to and
including April 29, 2013.
Please note, this is the first and final response from Talk Fusion in reference to the matter.
Sincerely,
*** *****
CEO-Talk Fusion
Consumer's Final Response
(The consumer indicated he/she DID NOT accept the response from the business.)
I did not receive any service or product, second I was forced by representative ****** ****** to sign
the agreement without letting to read it.
Also it was represent to me as a business opportunity, and I was told I will receive a business kit with
marketing materials and debit card to receive commissions, which I did not received. This company
misleads people, especially with limited English, or technology knowledge. Talk Fusion is a scam, this
company robs without a knife, or gun.
Business' Final Response
Please note that on this date, we received a "Complaint Activity Report" pursuant to the purchase(s)
made by **** ******.
Amount: $315 - Original Purchase
Transaction Date: April 7, 2013
Talk Fusion Response: The purchase is valid for the following reasons:
- Ms. ****** did, in fact, receive the exact products and services she purchased. Please note, we
have included a record of every time Ms. ****** accessed her products and services, confirming they
had been received.
- The ''VCC Log-in Report'' is a record of every time Ms. ****** accessed her Talk Fusion Video
Communications Center, where the products are hosted.
- The "Back Office Log-in Report) is a record of every time Ms. ****** accessed her Talk Fusion
business center where all the business tools (commissions, presentations, etc.) are managed from.
- The agreement was executed with Talk Fusion directly and all Policies & Procedures were provided
prior to the completion of the agreement.
- Talk Fusion rejects the allegation that Ms. ****** was rushed through the application process.
- During the application process, Ms. ****** confirmed that she had read and agreed to all the Talk
Fusion Policies in accordance with the Visa & MasterCard e-commerce requirements.
- The Talk Fusion Website and all related Policies Kt Procedures are presented in multiple languages,
to ensure all users are properly informed prior to making a purchase.
In closing, Talk Fusion maintains the previous position whereby no refund is due Ms. ******. Please
note this is the final response from Talk Fusion in reference to this matter.
Sincerely,
*** *****
CEO-Talk Fusion
omplaint
The company refuses to refund the money I paid for the product.
May 22, 2013 around 9:00 pm (****************, I have a poster of the product was purchased for
a total of 815 U.S. dollars. After a few days, I understand. that the product is not as good as it was
said at the presentation. May 29, 2013 around 1:00 am in the morning (the ***************), I
wrote in support of the company (address ***********************, a letter requesting a refund.
In the morning I saw that at 2 am I received a reply that the money can not be returned, because in
accordance with the agreement I had obrattsya within 3 days. However, the agreement says that the
refund is made within 3 days if the "otherwise provided for by law." According to Russian law, namely,
"the RF Law" On Protection of Consumers' Rights (the law on the rights of the consumer) from
07.02.1992 N XXXX-X "Chapter 2, Article 26.1, subparagraph 4 -" The consumer has the right to
reject the goods at any time before its transfer, and after transfer of the goods - seven days ". At the
time of support calls 7 days have not yet passed, so I have the right to demand their money back. I
sent the information to the help desk, but today (30 May 2013) of them did not receive any response.
I ask for your help in the return of my money.
Desired Settlement
Honesty and fairness to customers
Business Response
Please note that on this date, we received a "Complaint Activity Report" pursuant to the purchase(s)
made by ******* *********.
Amount: $815 - Original Purchase
Transaction Date: May 22, 2013
Talk Fusion Response: The purchase is valid for the following reasons:
- Mr. ********* purchased the product on May 22, 2013 online from the Talk Fusion website,
****************** Exhibit #1 is the Talk Fusion Agreement.
- The Consumer Rights Protection Law, Article 26.1 only applies to sales to consumers. Consumers are
defined as individuals who purchase the product for personal, family, and household use. The law
excludes individuals who use the product for "entrepreneurial" activity. Essentially, this means
purchase of the product for use for commercial purposes. See Russian Civil Code, Article 2 (definition
of entrepreneurial activity). Absent this law, Russian law does not require a 'cooling off' period.
- Mr. ********* purchased the Elite level product package. This product package includes lead
capture, live broadcasting, and presentation sharing. Talk Fusion has taken the obvious position that
this person would not be purchasing such a product (as opposed to the basic product) solely for
personal use, thus the Consumer Rights Protection Law, Article 26.1 does not apply.
Pursuant to the Electronic Commerce Merchant Refund Policy Disclosure, Mr. ********* was provided
with the "Proper Disclosure of the Refund Policy and the Recurring Transaction Policy'' during the order
process. These Disclosures are clearly posted on the same page as the "I Agree" Click through process
within the sequence of Web pages accessed by Mr. ********* before the final checkout.
For ease of reference, the Refund Policy on the original purchase is as follows:
If any Independent Associate or Customer is unsatisfied with any product purchase for personal use,
Talk Fusion offers a 100% three (3) day money-back guarantee. Please note that shipping charges
and sales tax are not refundable. Returns in excess of the purchase price of $250 will be deemed
inventory returns and will he handled in accordance to section 7.2 of the Policies and Procedures titled
- Return of Sales Aids by Associates Upon Cancellation. Returns in excess of the purchase price of
$250 should also constitute an Associate's voluntary request to cancel. In the Russian Federation,
there are no refunds after product purchase.
**Please note Exhibit #1A is an enlarged version of Exhibit #1- We enlarged it for easier reading.
Exhibit #2 is the enclosed Time and Date Stamped Merchant Receipt.
Exhibit #3 is the information that Mr. ********* supplied to Talk Fusion at the time of registration.
Identification of Cardholder At the time of purchase, Mr. ********* provided confidential information
to Talk Fusion that would only be known to Mr. ********* Passport ******* XXXX XXXXXX
Date of Birth: October 25, 1987
Email: *********************
IP Address: 1**************
Hence, Mr. *********'s identity is confirmed.
In closing, Talk Fusion has proven the purchase is valid. Mr. ********* was provided proper
disclosure and acknowledged the refund policy and Recurring Transaction Policy BEFORE the purchase
was made.
1. Mr. ********* immediately received the product that was purchased.
2. Mr. ********* purchased the Elite level product package. This product package includes lead
capture, live broadcasting, and presentation sharing. Talk Fusion has taken the obvious position that
this person would not be purchasing such a product (as opposed to the basic product) solely for
personal use, thus the Consumer Rights Protection Law, Article 26.1 does not apply.
3. Mr. ********* derived benefit of the product and logged into this Talk Fusion account up to and
including May 28, 2013.
If you have any questions, please contact us at (XXX) XXXXXXX or ***********************
Sincerely,
*** *****
CEO-Talk Fusion
- See more at: http://www.bbb.org/west-florida/business-reviews/video-conferencing-services/talkfusion-in-brandon-fl-90033972/complaints#sthash.JCLQZWzZ.dpuf
Exhibit 2
From:
To:
Subject:
Date:
Geoff Spreter
Re: Talk Fusion doing huge damaged in Indonesia - request for cooperation
Tuesday, September 27, 2016 8:21:27 AM
Geoff,
Just to attract your attention on 2 links that could illustrate your case.
Check this video that demonstrates how TF and Bob Reina focus exclusively on duplication
and not on their product itself.
https://www.youtube.com/watch?v=WC8apbvrHz0
And article about Indonesian success:
https://www.businessforhome.org/2016/08/talk-fusion-indonesian-team-to-celebrateachievements-at-hero-2016/
Again good luck and lookign forward to hear from you soon.
Our opposition is due tomorrow. After tomorrow, I will write you a separate email about
addressing Talk Fusion in Indonesia.
Thank you for your concern.
Geoff
Geoff J. Spreter
Spreter Law Firm, APC
601 3rd Street
Coronado, CA 92118
Phone: 619-865-7986
Fax: 619-956-3932
www.spreterlaw.com
From:
:
Sent: Monday, September 26, 2016 8:39 AM
To: Geoff Spreter <[email protected]>
Subject: Talk Fusion doing huge damaged in Indonesia - request for cooperation
Dear Geoffrey,
I have been through your complaint against Talk Fusion, at first, let me thank you for the
great work.
My name is
last 10 years.
, a french citizen, I have been living and working in Indonesia for the
I recently came across talk fusion when an Indonesian worker driver as a driver I know of,
got in serious debt after joining talk fusion with the 1500$ package. (note that in Indonesia,
a driver salary is around 150$).
Interested and after a few research, I realized that Talk Fusion was nothing less than a
pyramid scheme spreading extremely fast in Indonesia. Why such a success in Indonesia?
Well people there focus on community and naturally have big network, generally low level
of education and have a tendency to be particularly gullible. Therefore Indonesia is the
perfect country for MLM/ pyramid scheme.
As a result, it has made amazing progress and is now making more noise than ever. To
illustrate the scale, I also found out that 2 Indonesian citizen in my close circle have already
been approached as well, in 2 different regions. As we speak Ferrari cars with the talk fusion
logo are parading just a few km away from where I live.
https://www.businessforhome.org/2016/08/talk-fusion-indonesian-team-to-celebrateachievements-at-hero-2016/
https://www.youtube.com/watch?v=WC8apbvrHz0
https://www.youtube.com/watch?v=LAnjc-nWBFU
https://www.youtube.com/watch?v=73rNe5ivHRU
https://www.youtube.com/watch?v=QLpNdiF-Cgw
I am personally very upset about this massive scale scam that will affect the most fragile and
less educated, however, I believe Indonesia success could be the beginning of TF downfall.
- Indonesia is a nationalist country that can be pretty defensive about foreign involvement in
local affairs, therefore the scandal could be quiet big if the truth about the scam was to be
reveal, especially if they find out that the money of their citizen is being send to US through
a scam
- The speed at which TF has spread and the high level of visibility that they know have
inside the country make them familiar with a lot of people
- The high number of recruits means that a lot of people may get very dissatisfied jn not
being able to get back their investment through new prospect, as the product is simply not
sellable
Would you be interested into helping us building an efficient network to consider launching
pursuit in Indonesia? If yes, would you have any advice, organization or contact to share?
I am not in a position to take any active action against TF in Indonesia right now, and this
not must remain confidential,
Exhibit 3
9/27/2016
Talk Fusion
5. General Conduct.
https://ssl.talkfusion.com/jointf/legal/Policies-en.html
1/14
9/27/2016
Talk Fusion
Associates shall safeguard and promote the good reputation of Talk Fusion and its products, and must
avoid all illegal, deceptive, misleading, unethical or immoral conduct or practices, and must exhibit high
moral character in their personal and professional conduct. Associates shall not engage in any conduct that
may damage the Company's goodwill or reputation. While it is impossible to specify all misconduct that
would be contrary to this policy, and the following list is not a limitation on the standards of conduct to
which Associates must adhere pursuant to this policy, the following standards specifically apply to
Associates' activities:
Because you are operating your own business, it is your responsibility to know and comply with
applicable laws that impact your business;
Deceptive conduct is always prohibited . Associates must ensure that their statements are truthful,
fair, accurate, and are not misleading;
If an Associate's Talk Fusion business is cancelled for any reason, the Associate must discontinue
using the Talk Fusion name, and all other Talk Fusion intellectual property, and all derivatives of such
intellectual property, in postings on all Social Media, websites, or other promotional material.
Associates may not represent or imply that any state or federal government official, agency, or body
has approved or endorses Talk Fusion, its program, or products.
Associates must not engage in any illegal, fraudulent, deceptive, or manipulative conduct in the
course of their business or their personal lives that, in the Company's sole discretion, could damage
the Company's reputation or the culture that exists within the field sales force.
6. Social Media.
In addition to meeting all other requirements specified in these Policies, if an Associate utilizes any form of
social media in connection with their Talk Fusion business, including but not limited to biogs, Facebook,
Twitter, Linkedin, YouTube, or Pinterest, the Associate agrees to each of the following:
Associates are responsible for the content of all material that they produce and all of their postings
on any social media site, as well as all postings on any social media site that they own, operate, or
control.
Associates may not make any social media postings, or link to or from any postings or other material
that is sexually explicit, obscene, pornographic, offensive, profane, hateful, threatening, harmful,
defamatory, libelous, harassing, or discriminatory (whether based on race, ethnicity, creed, religion,
gender, sexual orientation, physical disability, or otherwise), is graphically violent, is solicitous of any
unlawful behavior, that engages in personal attacks on any individual, group, or entity, or is in
violation of any intellectual property rights of the Company or any third party.
No product sales or enrollments may occur on or through any social media site. To process sales or
enrollments, a social media site must link only to the Associate's Talk Fusion replicated website, Talk
Fusion's corporate website or an official Talk Fusion corporate social media page.
It is each Associate's responsibility to follow the social media site's terms of use.
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Any social media site that is directly or indirectly operated or controlled by an Associate that is used
to discuss or promote Talk Fusion's products, or the Talk Fusion opportunity may not link to any
website, social media site, or site of any other nature that promotes the products, services, or
business program of any direct selling company other than Talk Fusion.
During the term of this Agreement and for a period of 12 calendar months thereafter, an Associate
may not use any social media site on which they discuss or promote, or have discussed or promoted,
the Talk Fusion business or Talk Fusion's products to directly or indirectly solicit Talk Fusion
Associates for another direct selling or network marketing program (collectively, "direct selling"). In
furtherance of this provision, an Associate shall not take any action on any social media site that may
reasonably be foreseen to draw an inquiry from other Associates relating to the Associate's other
direct selling business activities. Violation of this provision shall constitute a violation of the
nonsolicitation provision in Policy 18.
If an Associate creates a business page on any social media site to promote or relates to Talk Fusion,
its products, or opportunity, the page may not promote or advertise the products or opportunity of
any other network marketing business other than Talk Fusion and its products. If the Associate's Talk
Fusion business is cancelled for any reason or if the Associate becomes inactive, the Associate must
deactivate the page.
Associate Created Marketing Methods, Advertising, and Promotional Material (Sales Tools).
Associates must use only Talk Fusion approved sales aids, advertising, promotional materials, and
marketing methods (collectively "Sales Tools") when promoting the Talk Fusion business or Talk Fusion's
products or services. These materials are available in the Document Library of Associate's Back-Office.
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TALK FUSION'S DECISION REGARDING THE DISPOSITION OF ANY DOWN LINE ORGANIZATION THAT
DEVELOPS BELOW AN ASSOCIATE WHO HAS IMPROPERLY CHANGED HIS/HER SPONSOR.
13. Product Claims.
Associates must not make claims, including but not limited to testimonials, about the functionality of Talk
Fusion's products that are not contained in official Talk Fusion literature or posted on Talk Fusion's official
website.
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"IDS"). The IDS can be downloaded from Associate's Back-Offices. During the presentation, the Associate
must make it clear that income is not guaranteed and must thoroughly review the current IDS with the
prospect. If an Associate is presenting the Talk Fusion business to an audience using a slide or other visual
presentation, one of the slides or pages of the presentation must contain the current IDS, and there may
be no other graphics or text on the slide or presentation page. The presenting Associate must thoroughly
discuss the IDS with the audience.
The above are just examples of improper representations about the Compensation Plan and the
Company's program. It is important that you do not make these, or any other representations, that could
lead a prospect to believe that they can be successful as an Associate without commitment, effort, and
sales skill.
18. Nonsolicitation.
Talk Fusion Associates are free to participate in other network marketing programs. However, during the
term of this Agreement and for one year thereafter, with the exception of an Associate's personally
sponsored downline Associates, an Associate may not directly or indirectly Recruit other Talk Fusion
Associates for any other network marketing business. The term "Recruit" means the direct or indirect,
actual or attempted, sponsorship, solicitation, enrollment, encouragement, or effort to influence in any
other way, another Talk Fusion Associate to enroll or participate in another network marketing
opportunity. Conduct constitutes recruiting even if the Associate's actions are in response to an inquiry
made by another Associate or Customer.
If an Associate is engaged in other non-Talk Fusion business or Network Marketing program, it is the
responsibility of the Associate to ensure that his or her Talk Fusion business is operated entirely separate
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and apart from all other businesses and/or Network Marketing programs. To this end, the Associate must
not:
Display Talk Fusion promotional material, sales aids, or products with or in the same location as, any
non-Talk Fusion promotional material or sales aids, products or services (Pinterest and similar social
media sites are exempt from this policy).
Offer the Talk Fusion opportunity, products or services to prospective or existing Customers or
Associates in conjunction with any non-Talk Fusion program, opportunity or products.
Offer, discuss, or display any non-Talk Fusion opportunity, products, services or opportunity at any
Talk Fusion related meeting, seminar, convention, webinar, teleconference, or other function.
Talk Fusion and Associate agree that any violation of this policy shall cause Talk Fusion irreparable harm for
which there is no adequate remedy at law, and the injury to Talk Fusion shall outweigh the potential injury
to Associate, and therefore Talk Fusion shall be entitled to emergency and permanent injunctive relief to
prevent further violations of this policy.
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Associates may not carry an inventory of Talk Fusion products for resale. Upon purchase, products are
accessible on the internet by the Customer. In addition, bonus buying is strictly prohibited. Bonus buying is
the purchase of products for any reason other than bona fide resale or use, or any mechanism or artifice
to qualify for rank advancement or maintenance, incentives, prizes, commissions or bonuses that are not
driven by bona fide product purchases by end user consumers for actual use.
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25. Return of Merchandise and Sales Aids by Associates Upon Cancellation or Termination.
Upon cancellation or termination of an Associate's Agreement, the Associate may return products and
Sales Tools that he or she personally purchased from Talk Fusion within 12 months prior to the date of
cancellation (the one year limitation shall not apply to residents of Maryland, Massachusetts, Wyoming and
Puerto Rico) so long as the goods are in currently marketable condition. Upon the Company's receipt of
returned goods and confirmation that they are in currently marketable condition, the Associate will be
reimbursed 90% of the net cost of the original purchase price(s). Shipping and handling charges will not be
refunded. If the purchases were made through a credit card, the refund will be credited back to the same
account. Goods are in "currently marketable condition" if they are unopened and unused and packaging
and labeling has not been altered or damaged. Merchandise that is clearly identified at the time of sale as
nonreturnable, closeout, discontinued, or as a seasonal item, or which has passed it commercially
reasonable usable or shelf-life, is not in currently marketable condition. The merchandise must be
returned within 30 days from the date of cancellation/termination. Back-Office and Replicated Website fees
are not refundable except as may be required under applicable state law.
29. Indemnification.
Associates agree to indemnify Talk Fusion for any and all costs, expenses, consumer reimbursements,
fines, sanctions, damages, settlements or payments of any other nature that Talk Fusion incurs resulting
from or relating to any act or omission by Associate that is illegal, fraudulent, deceptive, negligent,
unethical, or in violation of the Agreement. Talk Fusion may elect to exercise its indemnification rights
through withholding any compensation due the Associate. This right of setoff shall not constitute Talk
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Fusion's exclusive means of recovering or collecting funds due Talk Fusion pursuant to its right to
indemnification.
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and until the disciplinary matter is resolved. Prior to transferring a business to a third party, the Associate
must offer Talk Fusion the right of first refusal to purchase the business on the same terms as negotiated
with a third party. The Company shall have ten days to exercise its right of first refusal.
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If an Associate believes there has been a mistake or discrepancy in his/her compensation, in the structure
or composition of his/her down line organization, or any other mistake by the Company that has impacted
his/her income, it is the Associate's responsibility to bring it to the Company's attention in writing no later
than 60 days from the date on which the error occurred. While Talk Fusion will use its best efforts to rectify
mistakes, the Company shall not be responsible for correcting errors, making changes, or making financial
remuneration for errors that are reported more than 60 days after the error occurs.
Confidential Mediation. Subject to the exceptions in these policies, prior to bringing legal
action for disputes that arise from or relate to the Agreement or the Talk Fusion business, the
parties shall attempt in good faith to resolve the dispute through confidential non-binding
mediation. One individual who is mutually acceptable to the parties shall be appointed as
mediator. If the Parties cannot agree on a mediator within 30 days from the date on which the
complaining party submits a written request to the other party seeking mediation, the
complaining party shall request the American Arbitration Association ("AAA") to appoint a
mediator. The mediation shall occur within 90 days from the date on which the complaining
party submits a written request to the other party seeking mediation. The mediator's fees and
costs, as well as the costs of holding and conducting the mediation, shall be divided equally
between the parties. Each party shall pay its portion of the anticipated shared fees and costs at
least 1O days in advance of the mediation. Each party shall pay its own attorney's fees, costs,
and individual expenses associated with conducting and attending the mediation. Claims
seeking $15,000.00 or more shall be held with the parties and the mediator physically present
in the same location in Brandon, Florida and shall last no more than two business days unless
the parties agree otherwise. Claims for less than $15,000.00 may be held telephonically, but
may be held in person if the parties mutually agree to do so, and shall last no more than one
business day unless the parties agree otherwise. Neither party shall be represented by an
attorney in any mediation in which the claim is for less than $15,000.00. However, if one party
is an attorney acting on his/her/its own behalf, the other party shall have the right to be
represented by his/her/its attorney at the mediation as well.
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Associates upon request to Talk Fusion's Customer Service Department. Notwithstanding the
rules of the AAA, unless otherwise stipulated by the Parties, the following shall apply to all
Arbitration actions:
The Federal Rules of Evidence shall apply in all cases;
The Parties shall be entitled to all discovery rights permitted by the Federal Rules of Civil
Procedure;
The Parties shall be entitled to bring motions under Rules 12 and/or 56 of the Federal
Rules of Civil Procedure;
The Federal Arbitration Act shall govern all matters relating to arbitration, including the
enforceability of this arbitration provision. The law of the State of Florida, without regard
to principles of conflicts of laws, shall govern all other matters relating to or arising from
the Agreement and the Talk Fusion business;
The arbitration hearing shall commence no later than 365 days from the date on which
the arbitrator is appointed, and shall last no more than five business days;
The Parties shall be allotted equal time to present their respective cases.
All arbitration proceedings shall be held in a location selected by the parties. If the parties
cannot agree on a suitable location, it will be held in the county in which the respondent to the
action resides (if an individual) or has its principal place of business (if a business entity). The
parties may select a mutually agreeable arbitrator. If the parties do not agree on an arbitrator
within 60 days from the date on which the arbitration is filed, the petitioner shall request that
the AAA appoint an arbitrator. Each party to the arbitration shall be responsible for its own
costs and expenses of arbitration, including legal and filing fees. The decision of the arbitrator
shall be final and binding on the parties and may, if necessary, be reduced to a judgment in
any court having jurisdiction over either of the parties. This agreement to arbitrate shall
survive the cancellation or termination of the Agreement.
The parties, their respective agents and attorneys, and the arbitrator shall maintain the
confidentiality of the arbitration proceedings and shall not disclose to any third party:
The substance of, facts underlying, or basis for, the controversy, dispute, or claim;
The substance or content of any settlement offer or settlement discussions or offers
associated with the dispute;
The pleadings, the content of any pleadings, and exhibits to the pleadings, filed in any
arbitration proceeding;
The content of any testimony or other evidence presented at an arbitration hearing or
obtained through discovery in arbitration;
The terms or amount of any arbitration award;
The rulings of the arbitrator on the procedural and/or substantive issues involved in the
case.
c. Liquidated Damages for Breach of Confidentiality Obligations. If a Party violates its
confidentiality obligations under the mediation or arbitration policies, the nonbreaching party
shall incur significant damages to its reputation and goodwill that shall not be readily
calculable. Therefore, if a Party, its attorneys or agents breach the confidentiality provisions of
this policy, the nonbreaching Party shall be entitled to liquidated damages in the amount of
$25,000.00 per violation. Every disclosure of each allegation, pleading, claim or other
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prohibited disclosure shall constitute a separate violation. The Parties agree that this
liquidated damage amount is reasonable and waive all claims and defenses that it constitutes
a penalty. The confidentiality obligations in this dispute resolution policy shall not restrict a
party or its counsel acting in good faith from discussing a claim with an individual to determine
if he/she is a witness to the action and as necessary to elicit relevant testimony from the
witness} or from discussing or showing documentary or other evidence as necessary to
prepare the witness for testimony or to ascertain the extent of the witnesses knowledge of the
facts relevant to the case. However, neither party shall allow a witness or prospective to retain
copies of any documents, evidence, or pleadings related to the matter.
d. Disputes Not Subject Arbitration
Equitable Relief. Notwithstanding the foregoing arbitration agreement, nothing in the
Agreement shall prevent either party from applying to and obtaining from the court a
temporary restraining order, preliminary or permanent injunction, or other equitable
relief to safeguard and protect the party's intellectual property, trade secrets, and/or
confidential information, including but not limited to enforcement of its rights under the
Nonsolicitation provisions of the Agreement.
Claims for Damages Under $15,000.00. Claims seeking damages for less than $15,000.00
are not subject to the arbitration provisions of this Agreement. The prevailing party to
any litigation seeking damages for less than $15,000.00 shall be entitled to an award of
reasonable attorney fees and litigation expenses.
Small Claims. An Associate may seek remedies in small claims court for disputes or
claims within the scope of the jurisdiction of the small claims court in the jurisdiction in
which he/she resides, and need not engage in the mediation or arbitration process, so
long as the small claims action he/she files is the only forum in which the dispute is
pending.
e. Class Action Waiver. All disputes arising from or relating to the Agreement, or arising from or
relating to the Talk Fusion business, shall be brought and proceed on an individual basis. The
parties waive their rights to pursue any arbitration or lawsuit against the other party and/or
their respective owners, officers, directors and agents, on a class or consolidated basis.
f. Liquidated Damages. In any case which arises from or relates to the wrongful termination of
an Associate's Agreement and/or independent business, the parties agree that damages will be
extremely difficult to ascertain. Therefore, the parties stipulate that if the involuntary
termination of an Associate's Agreement and/or loss of their independent business is proven
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and held to be wrongful under any theory of law, Associate's sole remedy shall be liquidated
damages calculated as follows:
For Associates at the Commission Rank of Bronze through Double Diamond liquidated
damages shall be in the amount of his/her gross compensation that he/she earned
pursuant to Talk Fusion's Compensation Plan in the twelve (12) months immediately
preceding the termination.
For Associates at the Commission Rank of Triple Diamond through Presidential Blue
Diamond liquidated damages shall be in the amount of his/her gross compensation that
he/she earned pursuant to Talk Fusion's Compensation Plan in the eighteen (18) months
immediately preceding the termination.
For Associates at the Commission Rank of Ambassador Blue Diamond through Imperial
Blue Diamond liquidated damages shall be in the amount of his/her gross compensation
that he/she earned pursuant to Talk Fusion's Compensation Plan in the twenty-four (24)
months immediately preceding the termination.
Gross compensation shall include commissions and bonuses earned by the Associate pursuant
to Talk Fusion's Compensation Plan as well as retail profits earned by Associate for the sale of
Talk Fusion merchandise. However, retail profits must be substantiated by providing the
Company with true and accurate copies of fully and properly completed retail receipts
provided by Associate to customers at the time of the sale. The Parties agree that the
foregoing liquidated damage schedule is fair and reasonable.
An Associate's "Commission" rank is the rank or title at which they actually qualified to earn
compensation under the Talk Fusion Compensation Plan during a pay-period. For purposes of
this Policy, the relevant pay-period to determine an Associate's Commission Rank is the payperiod during which the Associate's business is placed on suspension or terminated, whichever
occurs first. The "Commission" rank differs from the "Recognition Rank," which is the highest
title or rank that an Associate has ever been paid under the Talk Fusion Compensation Plan.
g. Damage Waiver. In any action arising from or relating to the Agreement, the parties waive all
claims for incidental and/or consequential damages, even if the other party has been apprised
of the likelihood of such damage. The parties further waive all claims to exemplary and
punitive damages.
h. Governing Law, Jurisdiction and Venue. Jurisdiction and venue relating to a dispute arising
from or relating to this Agreement or from the business relationship between the parties, that
is not subject to arbitration shall reside exclusively in Hillsborough County, State of Florida or
the United States District Court for the Middle District of Florida (Tampa Division). The law of
the State of Florida shall govern actions brought before a court.
i. Louisiana Residents. Notwithstanding the foregoing, and the arbitration provision set forth
above, residents of the State of Louisiana shall be entitled to bring an action in their home
forum and pursuant to Louisiana law.
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Plaintiff,
v.
I am an attorney at law, duly admitted to practice before all the courts of the State
of California, and the United States District Court for the Southern, Central, Northern District of
California, and am appearing pro-hac vice in this Court. I am the attorney of record herein for
Plaintiff. I have personal knowledge of the matters set forth in this declaration, and if called upon
to testify under penalty of perjury, to the truth and accuracy of the matters set forth herein, I could
and would so testify.
2.
copy of Talk Fusions Income Disclosure. A true and correct copy of Talk Fusions Income
Disclosure is attached hereto as Exhibit 1.
3.
Effective May 12, 2016. A true and correct copy of Talk Fusions policies and Procedures Effective
May 12, 2016 is attached hereto as Exhibit 2.
4.
On
September
28,
2016,
accessed
Complaint and the Exhibits thereto, filed in the United States District Court, Middle District
of Florida, in the matter of: Talk Fusion Inc. v. J. J. Uldrich, et al., case no. 8:11CV 01134
EMCAEP. Plaintiff Talk Fusion filed a complaint pleading 9 counts, including claims for:
permanent injunction, breach of contract, tortious interference with a contractual relationship,
tortious interference in an advantageous business relationship, misappropriation of trade
secrets, unfair competition, conversion, and conspiracy, and sought damages and equitable
relief against former representatives.
6.
Eric Einholtz in Support of Plaintiffs Opposition to Talk Fusion, Inc., Talk Fusion
International, Inc., Robert Reinas, and Mane World Promotion, Inc.s Motions to Dismiss.
7.
Attached hereto as Exhibit 6, is a true and correct copy of: Talk Fusions Reply
to Plaintiffs Opposition to Motion to Transfer Venue, from the matter Julie Campagna v. Talk
Fusion Inc., et al., case no. 2:15CV00090RFB-CWH. Talk Fusion makes the following
statement concerning the scope of the arbitration provision: if there might be other types of
hypothetical claims that are too remote to be included within the scope of the forum selection
clause (possibly such as personal injury claims), and those claims would no doubt be excluded
from the scope of the forum selection clause.
8.
Opinion & Order denying Defendant Fortune Hi-Tech Marketings Motion to Compel
arbitration and dismiss or stay all proceedings dated September 24, 2012 in the matter Wallace
v. Fortune Hi-Tech Marketing, Inc. 2012 WL 4364086 (2012, E.D KY).
9.
branch office located in Miami, Florida. I was informed by AAA that AAA does not have a
location in Hillsborough County, Florida and that AAAs only location for Plaintiffs type of
arbitration is in Miami, Florida. I was also informed that it will cost me an initial fee of $7,000
and a final fee of $7,000 (which is refundable, if the matter is not tried.) to arbitrate the current
action (assuming the value of the case is between $5 to $10 million), or possibly more, if the
amount exceeds $10 million.
10.
I was also informed that a AAA associated arbitrator in the Florida area routinely
charges between $250 and $500 an hour for his or her time, but on average they charge $300.
11.
I was also informed that since the AAA does not have an office in Hillsborough
County, Florida, that Plaintiff will have to rent a room in an office or have the arbitration
administered in another lawyers office, if they are willing.
12.
On or about September 26, 2016, I received an email form an individual who stated
that he was French citizen living and working in Indonesia for the last 10 years. In the email, the
individual raises concerns that Talk Fusion may be a scam and a pyramid scheme. A redacted true
and correct copy of the email string between the individual and myself is attached hereto as Exhibit
13.
I declare under penalty of perjury under the laws of the United States that the
foregoing is true and correct. Executed this September 28, 2016, at San Diego California.
/s Geoff J. Spreter
Exhibit 1
Exhibit 1
% OF
ASSOCIATES
60.25%
14.65%
14.69%
4%
2.85%
2.11%
RANGE
(In USD)
No Earnings
$0.01 - $50.00
$50.01 - $250.00
$250.01 - $500.00
$500.01 - $1,000.00
$1,000.01 - $2,500.00
12.55
9.62
7.96
5.63
5.04
3.97
AVG &
MEDIAN #
MO IN THE
BUSINESS
$20,000.01 - $30,000.00
$15,000.01 - $20,000.00
$10,000.01 - $15,000.00
$7,500.01 - $10,000.00
$5,000.01 - $7,500.00
$2,500.01 - $5,000.00
RANGE
(In USD)
0.05%
0.05%
0.11%
0.11%
0.23%
.74%
% OF
ASSOCIATES
31.5
28.94
14.98
22.53
20.26
16.27
AVG &
MEDIAN #
MO IN THE
BUSINESS
RANGE
(In USD)
$200,000.01 +
$150,000.01 - $200,000.00
$100,000.01 - $150,000.00
$75,000.01 - $100,000.00
$50,000.01 - $75,000.00
$30,000.01 - $50,000.00
0.012%
0.004%
0.009%
0.007%
0.02%
0.04%
% OF
ASSOCIATES
52.71
45.66
45.89
44.45
42.52
34.63
AVG &
MEDIAN #
MO IN THE
BUSINESS
Exhibit 2
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Talk Fusion
5. General Conduct.
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Associates shall safeguard and promote the good reputation of Talk Fusion and its products, and must
avoid all illegal, deceptive, misleading, unethical or immoral conduct or practices, and must exhibit high
moral character in their personal and professional conduct. Associates shall not engage in any conduct that
may damage the Company's goodwill or reputation. While it is impossible to specify all misconduct that
would be contrary to this policy, and the following list is not a limitation on the standards of conduct to
which Associates must adhere pursuant to this policy, the following standards specifically apply to
Associates' activities:
Because you are operating your own business, it is your responsibility to know and comply with
applicable laws that impact your business;
Deceptive conduct is always prohibited . Associates must ensure that their statements are truthful,
fair, accurate, and are not misleading;
If an Associate's Talk Fusion business is cancelled for any reason, the Associate must discontinue
using the Talk Fusion name, and all other Talk Fusion intellectual property, and all derivatives of such
intellectual property, in postings on all Social Media, websites, or other promotional material.
Associates may not represent or imply that any state or federal government official, agency, or body
has approved or endorses Talk Fusion, its program, or products.
Associates must not engage in any illegal, fraudulent, deceptive, or manipulative conduct in the
course of their business or their personal lives that, in the Company's sole discretion, could damage
the Company's reputation or the culture that exists within the field sales force.
6. Social Media.
In addition to meeting all other requirements specified in these Policies, if an Associate utilizes any form of
social media in connection with their Talk Fusion business, including but not limited to biogs, Facebook,
Twitter, Linkedin, YouTube, or Pinterest, the Associate agrees to each of the following:
Associates are responsible for the content of all material that they produce and all of their postings
on any social media site, as well as all postings on any social media site that they own, operate, or
control.
Associates may not make any social media postings, or link to or from any postings or other material
that is sexually explicit, obscene, pornographic, offensive, profane, hateful, threatening, harmful,
defamatory, libelous, harassing, or discriminatory (whether based on race, ethnicity, creed, religion,
gender, sexual orientation, physical disability, or otherwise), is graphically violent, is solicitous of any
unlawful behavior, that engages in personal attacks on any individual, group, or entity, or is in
violation of any intellectual property rights of the Company or any third party.
No product sales or enrollments may occur on or through any social media site. To process sales or
enrollments, a social media site must link only to the Associate's Talk Fusion replicated website, Talk
Fusion's corporate website or an official Talk Fusion corporate social media page.
It is each Associate's responsibility to follow the social media site's terms of use.
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Any social media site that is directly or indirectly operated or controlled by an Associate that is used
to discuss or promote Talk Fusion's products, or the Talk Fusion opportunity may not link to any
website, social media site, or site of any other nature that promotes the products, services, or
business program of any direct selling company other than Talk Fusion.
During the term of this Agreement and for a period of 12 calendar months thereafter, an Associate
may not use any social media site on which they discuss or promote, or have discussed or promoted,
the Talk Fusion business or Talk Fusion's products to directly or indirectly solicit Talk Fusion
Associates for another direct selling or network marketing program (collectively, "direct selling"). In
furtherance of this provision, an Associate shall not take any action on any social media site that may
reasonably be foreseen to draw an inquiry from other Associates relating to the Associate's other
direct selling business activities. Violation of this provision shall constitute a violation of the
nonsolicitation provision in Policy 18.
If an Associate creates a business page on any social media site to promote or relates to Talk Fusion,
its products, or opportunity, the page may not promote or advertise the products or opportunity of
any other network marketing business other than Talk Fusion and its products. If the Associate's Talk
Fusion business is cancelled for any reason or if the Associate becomes inactive, the Associate must
deactivate the page.
Associate Created Marketing Methods, Advertising, and Promotional Material (Sales Tools).
Associates must use only Talk Fusion approved sales aids, advertising, promotional materials, and
marketing methods (collectively "Sales Tools") when promoting the Talk Fusion business or Talk Fusion's
products or services. These materials are available in the Document Library of Associate's Back-Office.
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TALK FUSION'S DECISION REGARDING THE DISPOSITION OF ANY DOWN LINE ORGANIZATION THAT
DEVELOPS BELOW AN ASSOCIATE WHO HAS IMPROPERLY CHANGED HIS/HER SPONSOR.
13. Product Claims.
Associates must not make claims, including but not limited to testimonials, about the functionality of Talk
Fusion's products that are not contained in official Talk Fusion literature or posted on Talk Fusion's official
website.
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"IDS"). The IDS can be downloaded from Associate's Back-Offices. During the presentation, the Associate
must make it clear that income is not guaranteed and must thoroughly review the current IDS with the
prospect. If an Associate is presenting the Talk Fusion business to an audience using a slide or other visual
presentation, one of the slides or pages of the presentation must contain the current IDS, and there may
be no other graphics or text on the slide or presentation page. The presenting Associate must thoroughly
discuss the IDS with the audience.
The above are just examples of improper representations about the Compensation Plan and the
Company's program. It is important that you do not make these, or any other representations, that could
lead a prospect to believe that they can be successful as an Associate without commitment, effort, and
sales skill.
18. Nonsolicitation.
Talk Fusion Associates are free to participate in other network marketing programs. However, during the
term of this Agreement and for one year thereafter, with the exception of an Associate's personally
sponsored downline Associates, an Associate may not directly or indirectly Recruit other Talk Fusion
Associates for any other network marketing business. The term "Recruit" means the direct or indirect,
actual or attempted, sponsorship, solicitation, enrollment, encouragement, or effort to influence in any
other way, another Talk Fusion Associate to enroll or participate in another network marketing
opportunity. Conduct constitutes recruiting even if the Associate's actions are in response to an inquiry
made by another Associate or Customer.
If an Associate is engaged in other non-Talk Fusion business or Network Marketing program, it is the
responsibility of the Associate to ensure that his or her Talk Fusion business is operated entirely separate
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and apart from all other businesses and/or Network Marketing programs. To this end, the Associate must
not:
Display Talk Fusion promotional material, sales aids, or products with or in the same location as, any
non-Talk Fusion promotional material or sales aids, products or services (Pinterest and similar social
media sites are exempt from this policy).
Offer the Talk Fusion opportunity, products or services to prospective or existing Customers or
Associates in conjunction with any non-Talk Fusion program, opportunity or products.
Offer, discuss, or display any non-Talk Fusion opportunity, products, services or opportunity at any
Talk Fusion related meeting, seminar, convention, webinar, teleconference, or other function.
Talk Fusion and Associate agree that any violation of this policy shall cause Talk Fusion irreparable harm for
which there is no adequate remedy at law, and the injury to Talk Fusion shall outweigh the potential injury
to Associate, and therefore Talk Fusion shall be entitled to emergency and permanent injunctive relief to
prevent further violations of this policy.
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Associates may not carry an inventory of Talk Fusion products for resale. Upon purchase, products are
accessible on the internet by the Customer. In addition, bonus buying is strictly prohibited. Bonus buying is
the purchase of products for any reason other than bona fide resale or use, or any mechanism or artifice
to qualify for rank advancement or maintenance, incentives, prizes, commissions or bonuses that are not
driven by bona fide product purchases by end user consumers for actual use.
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25. Return of Merchandise and Sales Aids by Associates Upon Cancellation or Termination.
Upon cancellation or termination of an Associate's Agreement, the Associate may return products and
Sales Tools that he or she personally purchased from Talk Fusion within 12 months prior to the date of
cancellation (the one year limitation shall not apply to residents of Maryland, Massachusetts, Wyoming and
Puerto Rico) so long as the goods are in currently marketable condition. Upon the Company's receipt of
returned goods and confirmation that they are in currently marketable condition, the Associate will be
reimbursed 90% of the net cost of the original purchase price(s). Shipping and handling charges will not be
refunded. If the purchases were made through a credit card, the refund will be credited back to the same
account. Goods are in "currently marketable condition" if they are unopened and unused and packaging
and labeling has not been altered or damaged. Merchandise that is clearly identified at the time of sale as
nonreturnable, closeout, discontinued, or as a seasonal item, or which has passed it commercially
reasonable usable or shelf-life, is not in currently marketable condition. The merchandise must be
returned within 30 days from the date of cancellation/termination. Back-Office and Replicated Website fees
are not refundable except as may be required under applicable state law.
29. Indemnification.
Associates agree to indemnify Talk Fusion for any and all costs, expenses, consumer reimbursements,
fines, sanctions, damages, settlements or payments of any other nature that Talk Fusion incurs resulting
from or relating to any act or omission by Associate that is illegal, fraudulent, deceptive, negligent,
unethical, or in violation of the Agreement. Talk Fusion may elect to exercise its indemnification rights
through withholding any compensation due the Associate. This right of setoff shall not constitute Talk
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Fusion's exclusive means of recovering or collecting funds due Talk Fusion pursuant to its right to
indemnification.
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and until the disciplinary matter is resolved. Prior to transferring a business to a third party, the Associate
must offer Talk Fusion the right of first refusal to purchase the business on the same terms as negotiated
with a third party. The Company shall have ten days to exercise its right of first refusal.
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If an Associate believes there has been a mistake or discrepancy in his/her compensation, in the structure
or composition of his/her down line organization, or any other mistake by the Company that has impacted
his/her income, it is the Associate's responsibility to bring it to the Company's attention in writing no later
than 60 days from the date on which the error occurred. While Talk Fusion will use its best efforts to rectify
mistakes, the Company shall not be responsible for correcting errors, making changes, or making financial
remuneration for errors that are reported more than 60 days after the error occurs.
Confidential Mediation. Subject to the exceptions in these policies, prior to bringing legal
action for disputes that arise from or relate to the Agreement or the Talk Fusion business, the
parties shall attempt in good faith to resolve the dispute through confidential non-binding
mediation. One individual who is mutually acceptable to the parties shall be appointed as
mediator. If the Parties cannot agree on a mediator within 30 days from the date on which the
complaining party submits a written request to the other party seeking mediation, the
complaining party shall request the American Arbitration Association ("AAA") to appoint a
mediator. The mediation shall occur within 90 days from the date on which the complaining
party submits a written request to the other party seeking mediation. The mediator's fees and
costs, as well as the costs of holding and conducting the mediation, shall be divided equally
between the parties. Each party shall pay its portion of the anticipated shared fees and costs at
least 1O days in advance of the mediation. Each party shall pay its own attorney's fees, costs,
and individual expenses associated with conducting and attending the mediation. Claims
seeking $15,000.00 or more shall be held with the parties and the mediator physically present
in the same location in Brandon, Florida and shall last no more than two business days unless
the parties agree otherwise. Claims for less than $15,000.00 may be held telephonically, but
may be held in person if the parties mutually agree to do so, and shall last no more than one
business day unless the parties agree otherwise. Neither party shall be represented by an
attorney in any mediation in which the claim is for less than $15,000.00. However, if one party
is an attorney acting on his/her/its own behalf, the other party shall have the right to be
represented by his/her/its attorney at the mediation as well.
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Associates upon request to Talk Fusion's Customer Service Department. Notwithstanding the
rules of the AAA, unless otherwise stipulated by the Parties, the following shall apply to all
Arbitration actions:
The Federal Rules of Evidence shall apply in all cases;
The Parties shall be entitled to all discovery rights permitted by the Federal Rules of Civil
Procedure;
The Parties shall be entitled to bring motions under Rules 12 and/or 56 of the Federal
Rules of Civil Procedure;
The Federal Arbitration Act shall govern all matters relating to arbitration, including the
enforceability of this arbitration provision. The law of the State of Florida, without regard
to principles of conflicts of laws, shall govern all other matters relating to or arising from
the Agreement and the Talk Fusion business;
The arbitration hearing shall commence no later than 365 days from the date on which
the arbitrator is appointed, and shall last no more than five business days;
The Parties shall be allotted equal time to present their respective cases.
All arbitration proceedings shall be held in a location selected by the parties. If the parties
cannot agree on a suitable location, it will be held in the county in which the respondent to the
action resides (if an individual) or has its principal place of business (if a business entity). The
parties may select a mutually agreeable arbitrator. If the parties do not agree on an arbitrator
within 60 days from the date on which the arbitration is filed, the petitioner shall request that
the AAA appoint an arbitrator. Each party to the arbitration shall be responsible for its own
costs and expenses of arbitration, including legal and filing fees. The decision of the arbitrator
shall be final and binding on the parties and may, if necessary, be reduced to a judgment in
any court having jurisdiction over either of the parties. This agreement to arbitrate shall
survive the cancellation or termination of the Agreement.
The parties, their respective agents and attorneys, and the arbitrator shall maintain the
confidentiality of the arbitration proceedings and shall not disclose to any third party:
The substance of, facts underlying, or basis for, the controversy, dispute, or claim;
The substance or content of any settlement offer or settlement discussions or offers
associated with the dispute;
The pleadings, the content of any pleadings, and exhibits to the pleadings, filed in any
arbitration proceeding;
The content of any testimony or other evidence presented at an arbitration hearing or
obtained through discovery in arbitration;
The terms or amount of any arbitration award;
The rulings of the arbitrator on the procedural and/or substantive issues involved in the
case.
c. Liquidated Damages for Breach of Confidentiality Obligations. If a Party violates its
confidentiality obligations under the mediation or arbitration policies, the nonbreaching party
shall incur significant damages to its reputation and goodwill that shall not be readily
calculable. Therefore, if a Party, its attorneys or agents breach the confidentiality provisions of
this policy, the nonbreaching Party shall be entitled to liquidated damages in the amount of
$25,000.00 per violation. Every disclosure of each allegation, pleading, claim or other
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prohibited disclosure shall constitute a separate violation. The Parties agree that this
liquidated damage amount is reasonable and waive all claims and defenses that it constitutes
a penalty. The confidentiality obligations in this dispute resolution policy shall not restrict a
party or its counsel acting in good faith from discussing a claim with an individual to determine
if he/she is a witness to the action and as necessary to elicit relevant testimony from the
witness} or from discussing or showing documentary or other evidence as necessary to
prepare the witness for testimony or to ascertain the extent of the witnesses knowledge of the
facts relevant to the case. However, neither party shall allow a witness or prospective to retain
copies of any documents, evidence, or pleadings related to the matter.
d. Disputes Not Subject Arbitration
Equitable Relief. Notwithstanding the foregoing arbitration agreement, nothing in the
Agreement shall prevent either party from applying to and obtaining from the court a
temporary restraining order, preliminary or permanent injunction, or other equitable
relief to safeguard and protect the party's intellectual property, trade secrets, and/or
confidential information, including but not limited to enforcement of its rights under the
Nonsolicitation provisions of the Agreement.
Claims for Damages Under $15,000.00. Claims seeking damages for less than $15,000.00
are not subject to the arbitration provisions of this Agreement. The prevailing party to
any litigation seeking damages for less than $15,000.00 shall be entitled to an award of
reasonable attorney fees and litigation expenses.
Small Claims. An Associate may seek remedies in small claims court for disputes or
claims within the scope of the jurisdiction of the small claims court in the jurisdiction in
which he/she resides, and need not engage in the mediation or arbitration process, so
long as the small claims action he/she files is the only forum in which the dispute is
pending.
e. Class Action Waiver. All disputes arising from or relating to the Agreement, or arising from or
relating to the Talk Fusion business, shall be brought and proceed on an individual basis. The
parties waive their rights to pursue any arbitration or lawsuit against the other party and/or
their respective owners, officers, directors and agents, on a class or consolidated basis.
f. Liquidated Damages. In any case which arises from or relates to the wrongful termination of
an Associate's Agreement and/or independent business, the parties agree that damages will be
extremely difficult to ascertain. Therefore, the parties stipulate that if the involuntary
termination of an Associate's Agreement and/or loss of their independent business is proven
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and held to be wrongful under any theory of law, Associate's sole remedy shall be liquidated
damages calculated as follows:
For Associates at the Commission Rank of Bronze through Double Diamond liquidated
damages shall be in the amount of his/her gross compensation that he/she earned
pursuant to Talk Fusion's Compensation Plan in the twelve (12) months immediately
preceding the termination.
For Associates at the Commission Rank of Triple Diamond through Presidential Blue
Diamond liquidated damages shall be in the amount of his/her gross compensation that
he/she earned pursuant to Talk Fusion's Compensation Plan in the eighteen (18) months
immediately preceding the termination.
For Associates at the Commission Rank of Ambassador Blue Diamond through Imperial
Blue Diamond liquidated damages shall be in the amount of his/her gross compensation
that he/she earned pursuant to Talk Fusion's Compensation Plan in the twenty-four (24)
months immediately preceding the termination.
Gross compensation shall include commissions and bonuses earned by the Associate pursuant
to Talk Fusion's Compensation Plan as well as retail profits earned by Associate for the sale of
Talk Fusion merchandise. However, retail profits must be substantiated by providing the
Company with true and accurate copies of fully and properly completed retail receipts
provided by Associate to customers at the time of the sale. The Parties agree that the
foregoing liquidated damage schedule is fair and reasonable.
An Associate's "Commission" rank is the rank or title at which they actually qualified to earn
compensation under the Talk Fusion Compensation Plan during a pay-period. For purposes of
this Policy, the relevant pay-period to determine an Associate's Commission Rank is the payperiod during which the Associate's business is placed on suspension or terminated, whichever
occurs first. The "Commission" rank differs from the "Recognition Rank," which is the highest
title or rank that an Associate has ever been paid under the Talk Fusion Compensation Plan.
g. Damage Waiver. In any action arising from or relating to the Agreement, the parties waive all
claims for incidental and/or consequential damages, even if the other party has been apprised
of the likelihood of such damage. The parties further waive all claims to exemplary and
punitive damages.
h. Governing Law, Jurisdiction and Venue. Jurisdiction and venue relating to a dispute arising
from or relating to this Agreement or from the business relationship between the parties, that
is not subject to arbitration shall reside exclusively in Hillsborough County, State of Florida or
the United States District Court for the Middle District of Florida (Tampa Division). The law of
the State of Florida shall govern actions brought before a court.
i. Louisiana Residents. Notwithstanding the foregoing, and the arbitration provision set forth
above, residents of the State of Louisiana shall be entitled to bring an action in their home
forum and pursuant to Louisiana law.
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Exhibit 3
Drafting Dispute
Resolution Clauses
A Practical Guide
Available online at
adr.org
A PRACTICAL GUIDE
Table of Contents
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
I. A Checklist for the Drafter of ADR Clauses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
II. Major Features of Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
A Written Agreement to Resolve Disputes by the Use of Impartial Arbitration . . . . . . . 8
Informal Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Impartial and Knowledgeable Neutrals to Serve as Arbitrators. . . . . . . . . . . . . . . . . . . . 8
Final and Binding Awards that are Enforceable in a Court. . . . . . . . . . . . . . . . . . . . . . . . 8
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
A PRACTICAL GUIDE
Introduction
Millions of business contracts provide for mediation and arbitration as ways of
resolving disputes. A large number of these contracts provide for administration
by the American Arbitration Association (AAA), a public-service, not-for-profit
organization offering a broad range of conflict management procedures.
The agreement to arbitrate or mediate can empower the parties with a great
deal of controlover the process and the arbitrator who hears the case, or the
mediator who assists the parties in settlement efforts. A well-constructed AAA
dispute resolution clause can provide certainty by defining the process prior
to a dispute, after which agreement becomes more problematic. This Guide is
designed to assist drafters in constructing basic clauses for negotiation, mediation,
and arbitration, as well as more comprehensive clauses that address a variety
of issues.
The first section of this booklet contains a brief checklist of some of the more
important elements a practitioner should keep in mind when drafting or adopting
any dispute resolution clause, no matter how basic. The second section describes
the major features of arbitration. The third section provides a series of clauses
that the AAA feels are appropriate for use in a general commercial setting and
which meet different needs and concerns in such a context. The fourth section
contains a series of clauses that the AAA deems appropriate for use in the
particular contexts of international disputes, construction disputes, employment
disputes, and patent disputes. The final section consists of examples of
supplemental language which go beyond the basic dispute resolution clauses in
Sections III and IV. While the AAA does not necessarily recommend such expanded
provisions, it recognizes that such additions are used from time to time to meet
specific wishes or needs of the parties. Explanatory text sets forth factors one
might take into account when considering whether to include such supplemental
language.
AAA services are available through offices located in major cities throughout
the United States, in addition to Mexico, Singapore, and Bahrain, as well as
through arrangements with other institutions worldwide. Hearings may be held
at locations convenient for the parties and AAA offices in most major cities offer
hearing rooms. In addition, the AAA provides education and training, produces
specialized publications and conducts research on out-of-court dispute
settlement. Typically, the parties agreement to mediate or arbitrate is contained
in a future-disputes clause in their contract; the clause may provide that any
disagreement will be resolved by AAA Administration under the mediation or
arbitration rules of the American Arbitration Association.
The American Arbitration Association is known for the high quality of its panels
of mediators and arbitrators, including a Large, Complex Case Panel. A special
AAA international center, the International Centre for Dispute Resolution,
administers cases around the globe and anywhere in the U.S.
A PRACTICAL GUIDE
>
The drafter should keep in mind that the AAA has specialized rules for arbitration
in the construction, patent, payor provider (healthcare), and certain other fields. If
anticipated disputes fall into any of these areas, the specialized rules should be
considered for incorporation in the arbitration clause. A panel with specialized
subject matter expertise and an experienced AAA administrative staff manages
the processing of cases under AAA rules.
>
The parties are free to customize and refine the basic arbitration procedures to
meet their particular needs. If the parties agree on a procedure that conflicts with
otherwise applicable AAA rules, the AAA will almost always respect the wishes
of the parties.
Informal Procedures.
Under the AAA rules, the procedure is efficient and straightforward: courtroom rules
of evidence are not strictly applicable; there usually is no motion practice or formal
discovery; and there is no requirement for transcripts of the proceedings or for written
opinions of the arbitrators. Though there is often little formal discovery, the AAAs
various commercial rules allow the arbitrator to require production of relevant
information and documents. The AAAs rules are flexible and may be varied by mutual
agreement of the parties.
3.
During its many years of existence, the AAA has refined its standard arbitration
clause. That clause, when linked to AAA case management, offers the parties a
simple, time-tested means of resolving disputes. Occasionally, parties or their
counsel desire additional provisions. This booklet has been prepared as a
general guide for drafting dispute resolution clauses. It contains examples of
clauses and portions of clauses that have been used by parties in cases filed
with the AAA. Readers should feel free to contact their local AAA office for
further information.
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A PRACTICAL GUIDE
The AAAs Commercial Arbitration Rules and Mediation Procedures provide for
a streamlined, cost-effective arbitration process, and include a mediation step
(subject to the authority of any party to unilaterally opt-out) for cases with claims
greater than $75,000; access to dispositive motions; greater clarity concerning
the exchange of information between the parties; the inclusion of emergency
relief to allow for temporary injunctions; an increased emphasis on arbitrators
effectively managing the process with additional tools, authority and specific
enforcement powers; and the right for parties to seek sanctions for abusive
conduct and for arbitrators to deal with non-paying parties.
The preceding clauses, which refer to the time-tested rules of the AAA, have
consistently received judicial support. The standard clause is often the best to
include in a contract. By invoking the AAAs rules, such a clause meets the
following requirements of an effective arbitration clause:
> It makes clear that all disputes are arbitrable. Thus, it minimizes dilatory court
actions to avoid the arbitration process.
> It is self-enforcing. Arbitration can continue despite an objection from a party, unless
the proceedings are stayed by court order or by agreement of the parties.
> It provides a complete set of rules and procedures. This eliminates the need to
spell out dozens of procedural matters in the parties agreement.
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A PRACTICAL GUIDE
> It provides for the selection of a specialized, impartial panel. Arbitrators are selected
by the parties from a screened and trained pool of available experts. Under the AAA
rules, a procedure is available to disqualify an arbitrator for bias.
> It settles disputes over the locale of proceedings. When the parties disagree, locale
determinations are made by the AAA as the administrator, precluding the need for
intervention by a court.
>
>
It makes available preliminary hearings in all but the simplest cases and provides
arbitrators with a checklist of items to be discussed at the conference if the clause
provides for AAA Commercial Rules. A preliminary hearing can be arranged in cases
of any size to specify the issues to be resolved, clarify claims and counterclaims,
provide for a pre-hearing exchange of information, and consider other matters
that will expedite the arbitration proceedings.
>
It also makes mediation available. The AAA Commercial Arbitration Rules and
Mediation Procedures require parties to mediate or opt-out of the process. If the
clause provides for any of the AAAs various commercial arbitration rules, mediation
conferences can be arranged to facilitate a voluntary settlement, without additional
administrative cost to the parties.
> It establishes time limits to ensure prompt resolution for all disputes. An additional
feature of the various AAA rules is a special expedited procedure, which may be used
to resolve smaller claims and other disputes that need more speedy resolutions.
> It provides for AAA administrative assistance to the arbitrator and the parties.
To protect neutrality and avoid unilateral contact, most rules provide for the AAA
to channel communications between the parties and the arbitrator. An AAA case
manager may also provide guidance to help ensure the prompt conclusion of a
proceeding.
>
It establishes a procedure for serving notices. Depending on the rules used and the
type of the case, notices may be served by regular mail, addressed to the party or its
representative at the last known address. Under the rules, the AAA and the parties
may use facsimile transmission or other written forms of electronic communication
to give the notices required by the rules.
>
Unless otherwise provided, it gives the arbitrator the power to decide matters
equitably and to fashion appropriate relief. The AAA commercial rules allow the
arbitrator to grant any remedy or relief that the arbitrator deems just and equitable
and within the scope of the agreement of the parties, including specific performance.
> It allows ex parte hearings. A hearing may be held in the absence of a party who has
been given due notice. Thus, a party cannot avoid an award by refusing to appear.
> It provides for enforcement of the award. The award can be enforced in any court
having jurisdiction, with only limited statutory grounds for resisting the award. If, in
a domestic transaction, as distinguished from an international one, the parties desire
that the arbitration clause be final, binding and enforceable, it is essential that the
clause contain an entry of judgment provision such as that found in the standard
arbitration clause (and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof).
Negotiation
The parties may wish to attempt to resolve their disputes through negotiation
prior to arbitration. A sample clause which provides for negotiation follows.
NEG 1
Mediation
The parties may wish to attempt mediation before submitting their dispute
to arbitration. This can be accomplished by agreeing to mediation, a voluntary
process that may be entered into either by a standalone agreement or
incorporated into an arbitration clause as a first step and may be terminated
at any time by either party.
The AAA Commercial Rules call for mediation to take place as part of the
arbitration with parties given the choice to unilaterally opt out of the mediation
step. Parties may desire to customize their mediation step in their agreement.
Example Mediation 1 can be used for a customized clause and example
Mediation 2 can be used to submit a dispute to mediation.
MED 1
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A PRACTICAL GUIDE
MED 2
An AAA administrator can assist the parties regarding selection of the mediator,
scheduling, pre-mediation information exchange and attendance of appropriate
parties at the mediation conference.
It is prudent to include time limits on steps prior to arbitration. Under a broad
arbitration clause, the question of whether a claim has been asserted within an
applicable time limit is generally regarded as an arbitrable issue, suitable for
resolution by the arbitrator.
Large, Complex Cases
The large, complex case framework offered by the AAA is designed primarily
for business disputes involving claims of at least $500,000, although parties are
free to provide for use of the LCC Rules in other disputes. The key elements
of the program are (1) selection of arbitrators who satisfy rigorous criteria to
insure that the panel is an extremely select one; (2) training, orientation, and
coordination of those arbitrators in a manner designed to facilitate the program;
(3) establishment of procedures for administration of those cases that elect to
be included in the program; (4) flexibility of those procedures so that parties can
more speedily and efficiently resolve their disputes; and (5) administration of
large, complex cases by specially trained, experienced AAA staff.
The procedures provide for an early administrative conference with the AAA,
and a preliminary hearing with the arbitrators. Documentary exchanges and
other essential exchanges of information are facilitated. The procedures also
provide that a statement of reasons may accompany the award, if requested
by the parties. The procedures are meant to supplement the applicable rules
that the parties have agreed to use. They include the possibility of the use of
mediation to resolve some or all issues at an early stage.
The parties can provide for future application of the procedures by including the
following arbitration clause in their contract.
LCCP 1
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A PRACTICAL GUIDE
INTL 2
INTL 3
Any dispute, controversy, or claim arising from or relating to this contract,
or the breach, termination, or invalidity thereof, shall be settled by
arbitration in accordance with the Rules of Procedure of the Inter-American
Commercial Arbitration Commission in effect on the date of this
agreement.
INTL 4
INTL 6
Usually, the effective management of time and expense in arbitration is best left in
the hands of experienced case managers and arbitrators. Occasionally, however,
parties wish to ensure that matters are resolved in a minimum of time and without
recourse to the expense and time necessitated by common law methods of
pre-hearing information exchange. The clauses that follow limit the time frame
of arbitration (clauses presented in the alternative) and the amount of pre-hearing
information exchange available to the parties. One word of caution: once entered
into, these clauses will limit the arbitrators authority to mold the process to the
specific dictates of the case.
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A PRACTICAL GUIDE
INTL 7
Alternative
INTL 8
CONST 2
Parties also have the option of inserting a step mediation-arbitration clause into
their contracts. A dispute resolution hybrid, the clause provides first for mediation
and then, if the dispute is not resolved within a specified time frame, arbitration.
CONST 4
If the parties want to use a mediator to resolve an existing dispute, they can
enter into the following submission.
CONST 5
A PRACTICAL GUIDE
practice and employee relations. The AAA therefore has developed special
rules called the Employment Arbitration Rules and Mediation Procedures. The
AAAs policy on employment ADR is guided by the state of existing law, as well
as its obligation to act in an impartial manner. In following the law, and in the
interest of providing an appropriate forum for the resolution of employment
disputes, the Association administers dispute resolution programs which meet
the due process standards as outlined in its Employment Arbitration Rules
and Mediation Procedures and the Due Process Protocol for Mediation and
Arbitration of Statutory Disputes Arising Out of the Employment Relationship.
If the Association determines that a dispute resolution program on its face
substantially and materially deviates from the minimum due process standards
of the Employment Arbitration Rules and Mediation Procedures and the
protocol, the Association will decline to administer cases under that program.
Other issues will be presented to the arbitrator for determination.
An employer intending to incorporate these rules or to refer to the dispute
resolution services of the AAA in an employment ADR plan, shall, at least 30
days prior to the planned effective date of the program, (1) notify and (2) provide
the Association with a copy of the employment dispute resolution plan. If an
employer does not comply with this requirement, the Association reserves the
right to decline its administrative services.
Parties can provide for arbitration of future disputes by inserting the following
clause into their employment contracts, personnel manuals or policy statements,
employment applications, or other agreements.
EMPL 1
Parties may agree to use mediation on an informal basis for selected disputes,
or mediation may be designated in a personnel manual as a step prior to
arbitration, litigation, or some other dispute resolution technique. If the parties
want to adopt mediation as a part of their contractual dispute-settlement
procedure, they can add the following mediation clause to their contract.
EMPL 3
If the parties want to use a mediator to resolve an existing dispute, they can
enter into the following submission.
EMPL 4
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A PRACTICAL GUIDE
arbitrator by name for that purpose in their arbitration clause, or authorize the
AAA to name a preliminary relief arbitrator; for sample clauses, consult
Section V, discussion of Preliminary Relief. Parties can provide for arbitration
of future disputes by inserting the following clause into their contracts.
PATENT 1
If the parties want to use a mediator to resolve an existing dispute, they can
enter into the following submission.
PATENT 4
22
A PRACTICAL GUIDE
The arbitration clause can also specify by name the individual whom the parties
want as their arbitrator. However, the potential unavailability of the named
individual in the future may pose a risk.
All of these issues and others can be dealt with in the arbitration clause. Some
illustrative provisions follow.
ARBSEL 1
ARBSEL 2
ARBSEL 3
QUAL 2
QUAL 3
QUAL 4
QUAL 5
QUAL 6
In the event that any partys claim exceeds $1 million, exclusive of interest
and attorneys fees, the dispute shall be heard and determined by three
arbitrators.
Parties might wish to specify that the arbitrator should or should not be a
national or citizen of a particular country. The following examples can be added
to the arbitration clause to deal with this concern.
NATLY 1
NATLY 2
NATLY 3
C. Locale Provisions
Parties might want to add language specifying the place of the arbitration.
The choice of the proper place to arbitrate is most important because the place
of arbitration implies generally a choice of the applicable procedural law, which
in turn affects questions of arbitrability, procedure, court intervention and
enforcement.
In specifying a locale, parties should consider (1) the convenience of the location
(e.g., availability of witnesses, local counsel, transportation, hotels, meeting
facilities, court reporters, etc.); (2) the available pool of qualified arbitrators within
the geographical area; and (3) the applicable procedural and substantive law. Of
particular importance in international cases is the applicability of a convention
providing for recognition and enforcement of arbitral agreements and awards
and the arbitration regime at the chosen site.
An example of locale provisions that might appear in an arbitration clause follows.
LOC 1
24
A PRACTICAL GUIDE
D. Language
In matters involving multilingual parties, the arbitration agreement often
specifies the language in which the arbitration will be conducted. Examples of
such language follow.
LANG 1
LANG 2
Such arbitration clauses could also deal with selection and cost allocation of
an interpreter.
E. Governing Law
It is common for parties to specify the law that will govern the contract and/or
the arbitration proceedings. Some examples follow.
GOV 1
GOV 2
GOV 3
In international cases, where the parties have not provided for the law applicable
to the substance of the dispute, the AAAs International Arbitration Rules contain
specific guidelines for arbitrators regarding applicable law. See the discussion
concerning International Disputes.
F. Conditions Precedent to Arbitration
Under an agreement of the parties, satisfaction of specified conditions may be
required before a dispute is ready for arbitration. Examples of such conditions
precedent include written notification of claims within a fixed period of time and
exhaustion of other contractually established procedures, such as submission
of claims to an architect or engineer. These kinds of provisions may, however, be
a source of delay and may require linkage with a statute of limitations waiver
(see below). An example of a condition precedent clause follows.
CONPRE 1
If a dispute arises from or relates to this contract, the parties agree that
upon request of either party they will seek the advice of [a mutually
selected engineer] and try in good faith to settle the dispute within
30 days of that request, following which either party may submit the
matter to mediation under the Commercial Mediation Procedures of the
American Arbitration Association. If the matter is not resolved within
60 days after initiation of mediation, either party may demand arbitration
administered by the American Arbitration Association under its
[applicable] rules.
G. Preliminary Relief
While preliminary relief is provided for in the AAAs Commercial Rules, when
a clause calls for other rules it is appropriate to provide specifically for it if a
need for an interim remedy is anticipated. One way to do so is to incorporate
the Emergency Measures of Protection (R-38) of the AAA Commercial Arbitration
Rules and Mediation Procedures, discussed above. Alternatively, if the parties
foresee the possibility of needing emergency relief akin to a temporary restraining
order, they might specify an arbitrator by name for that purpose in their arbitration
clause or authorize the AAA to name a preliminary relief arbitrator to ensure an
arbitrator is in place in sufficient time to address appropriate issues.
Specific clauses providing for preliminary relief are set forth below.
PRELIM 1
Either party may apply to the arbitrator seeking injunctive relief until the
arbitration award is rendered or the controversy is otherwise resolved.
Either party also may, without waiving any remedy under this agreement,
seek from any court having jurisdiction any interim or provisional relief
that is necessary to protect the rights or property of that party, pending
the establishment of the arbitral tribunal (or pending the arbitral tribunals
determination of the merits of the controversy).
Note that the AAAs rules provide for interim relief by the arbitrator upon
application of a party.
Pending the outcome of the arbitration, parties may agree to hold in escrow
money, a letter of credit, goods, or the subject matter of the arbitration. A
sample of a clause providing for such escrow follows.
26
A PRACTICAL GUIDE
ESCROW 1
H. Consolidation
Where there are multiple parties with disputes arising from the same transaction,
complications can often be reduced by the consolidation of all disputes. Since
arbitration is a process based on voluntary contractual participation, parties may
not be required to arbitrate a dispute without their consent. However, parties
can provide for the consolidation of two or more separate arbitrations into a
single proceeding or permit the joinder of a third party into an arbitration. In a
construction dispute, consolidated proceedings may eliminate the need for
duplicative presentations of claims and avoid the possibility of conflicting rulings
from different panels of arbitrators. However, consolidating claims might be a
source of delay and expense. An example of language that can be included in
an arbitration clause follows.
CONSOL 1
I. Document Discovery
Under the AAA rules, arbitrators are authorized to direct a prehearing
exchange of documents. The parties typically discuss such an exchange and
seek to agree on its scope. In most (but not all) instances, arbitrators will order
prompt production of limited numbers of documents which are directly relevant
to the issues involved. In some instances, parties might want to ensure that such
production will in fact occur and thus provide for it in their arbitration clause.
DRAFTING DISPUTE RESOLUTION CLAUSES 27
A PRACTICAL GUIDE
The award shall be made within nine months of the filing of the notice
of intention to arbitrate (demand), and the arbitrator(s) shall agree to
comply with this schedule before accepting appointment. However,
this time limit may be extended by agreement of the parties or by
the arbitrator(s) if necessary.
L. Remedies
Under a broad arbitration clause and most AAA rules, the arbitrator may grant
any remedy or relief that the arbitrator deems just and equitable within the
scope of the parties agreement. Sometimes parties want to include or exclude
certain specific remedies. Examples of clauses dealing with remedies follow.
REM 1
REM 2
REM 3
REM 4
REM 5
REM 6
REM 7
M. Baseball Arbitration
Baseball arbitration is a methodology used in many different contexts in
addition to baseball players salary disputes, and is particularly effective when
parties have a long-term relationship.
The procedure involves each party submitting a number to the arbitrator(s) and
following a hearing, the arbitrator(s) will pick one of the submitted numbers,
nothing else.
A key aspect of this approach is that there is incentive for a party to submit a
highly reasonable number, since this increases the likelihood that the arbitrator(s)
will select that number. In some instances, the process of submitting the numbers
moves the parties so close together that the dispute is settled without a hearing.
Sample language providing for baseball arbitration is set forth below.
BASEBALL 1
Each party shall submit to the arbitrator and exchange with each other
in advance of the hearing their last, best offers. The arbitrator shall be
limited to awarding only one or the other of the two figures submitted.
A PRACTICAL GUIDE
LIMITS 1
A second approach is for the parties to agree but not tell the arbitrator(s) that the
amount of recovery will, for example, be somewhere between $500 and $1,000. If
the award is less than $500, then it is raised to $500 pursuant to the agreement;
if the award is more than $1,000, then it is lowered to $1,000 pursuant to the
agreement; if the award is within the $500-1,000 range, then the amount awarded
by the arbitrator(s) is unchanged. Sample contract language providing for this
methodology is set forth below.
LIMITS 2
In the event that the arbitrator denies the claim or awards an amount
less than the minimum amount of [specify], then this minimum amount
shall be paid to the claimant. Should the arbitrators award exceed the
maximum amount of [specify], then only this maximum amount shall
be paid to the claimant. It is further understood between the parties
that, if the arbitrator awards an amount between the minimum and the
maximum stipulated range, then the exact awarded amount will be
paid to the claimant. The parties further agree that this agreement is
private between them and will not be disclosed to the arbitrator.
FEE 2
FEE 3
Each party shall bear its own costs and expenses and an equal share
of the arbitrators and administrative fees of arbitration.
FEE 4
The arbitrators may determine how the costs and expenses of the
arbitration shall be allocated between the parties, but they shall not
award attorneys fees.
OPIN 2
OPIN 3
OPIN 4
Q. Confidentiality
While the AAA and arbitrators adhere to certain standards concerning the privacy
or confidentiality of the hearings (see the AAA-ABA Code of Ethics for Arbitrators
in Commercial Disputes, Canon VI), parties might also wish to impose limits on
themselves as to how much information regarding the dispute may be disclosed
outside the hearing. The following language might help serve this purpose.
CONF 1
32
A PRACTICAL GUIDE
R. Appeal
The basic objective of arbitration is a fair, fast and expert result, achieved
economically. Consistent with this goal, an arbitration award traditionally will
be set aside only in egregious circumstances such as demonstrable bias of an
arbitrator. Sometimes, however, the parties desire a more comprehensive
appeal, most often in the setting of legally complex cases. Parties may include
the AAA Appellate Rules in their agreement by including the following clause.
APP 1
S. Mediation-Arbitration
A clause may provide first for mediation under the AAAs mediation procedures.
If the mediation is unsuccessful, the mediator could be authorized to resolve
the dispute under the AAAs arbitration rules. This process is sometimes referred
to as Med-Arb. Except in unusual circumstances, a procedure whereby the
same individual who has been serving as a mediator becomes an arbitrator
when the mediation fails is not recommended, because it could inhibit the
candor which should characterize the mediation process and/or it could convey
evidence, legal points or settlement positions ex parte, improperly influencing
the arbitrator. The AAA Commercial Arbitration Rules and Mediation Procedures
(effective October 1, 2013) provide for a mediation/arbitration process that runs
concurrently. A sample of a med-arb clause follows that runs sequentially can
be used to submit a present dispute or to vary the revised AAA Commercial
Rules in a dispute resolution clause.
MEDARB 1
T. Statute of Limitations
Parties may wish to consider whether the applicable statute of limitations will
be tolled for the duration of mediation proceedings, and can refer to the
following language.
STATLIM 1 The requirements of filing a notice of claim with respect to the dispute
submitted to mediation shall be suspended until the conclusion of the
mediation process.
34
A PRACTICAL GUIDE
V. Mass Torts
ADR techniques can be employed privately by parties facing the prospect of mass
tort litigation to explore in a nonbinding fashion the options for management,
evaluation, and/or resolution of the dispute. A wide range of binding and
nonbinding techniques, including neutral evaluation, mediation, and arbitration
can be used to explore the potential for resolution of a dispute and/or to develop
a basic framework for discussions. Although these options have limitations and
may not be a substitute for litigation with possible full evidentiary trials, they can
provide a useful framework for early discussion of the issues. The parties should
be able to formulate procedures to assure confidentiality and to protect against
the inappropriate use of information.
Conclusion
A dispute resolution clause should address the special needs of the parties
involved. An inadequate ADR clause can produce as much delay, expense,
and inconvenience as a traditional lawsuit. When writing a dispute resolution
clause, keep in mind that its purpose is to resolve disputes, not create them. If
disagreements arise over the meaning of the clause, it is often because it failed
to address the particular needs of the parties. Use of standard, simple AAA
language may avoid difficulties. Drafting an effective ADR agreement is the
first step on the road to successful dispute resolution.
After a dispute arises, parties can request an administrative conference with
a AAA case manager to assist them in establishing appropriate procedures
necessary for their unique case. This can be done before or after mediator or
arbitrator selection. Such conferences can expedite the proceedings in many
cases.
This brochure describes ways in which some parties have modified the AAAs
time-tested standard clause to deal with specific concerns. Given that commercial
transactions vary greatly, its purpose is not to urge use of the provisions cited,
but rather to suggest the range of possible options. To arrive at the most suitable
and effective ADR clause, parties should consult legal counsel for guidance
and advice.
Rules, forms, procedures and guides, as well as information about applying for
a fee reduction or deferral, are subject to periodic change and updating.
To ensure that you have the most current information, see our website at
www.adr.org. Also, for assisted clause drafting, please visit the AAAs clause
building tool at www.clausebuilder.org.
36
A PRACTICAL GUIDE
2013 American Arbitration Association, Inc. All rights reserved. These Rules are the copyrighted property of the
American Arbitration Association (AAA) and are intended to be used in conjunction with the AAAs administrative services.
Any unauthorized use or modification of these Rules may violate copyright laws and other applicable laws.
Please contact 800.778.7879 or [email protected] for additional information.
Exhibit 4
v.
J.J. ULRICH, an individual, JOE READ, an
individual, WOWWE, INC., a Nevada
corporation, and WOWWE MEDIA, LLC, a
Nevada limited liability company,
Defendants.
/
SECOND AMENDED COMPLAINT
Plaintiff, Talk Fusion, Inc., by and through undersigned counsel, sues Defendants, J.J.
Ulrich, Joe Read, WowWe, Inc. and WowWe Media, LLC, and alleges:
PARTIES
1.
Plaintiff, Talk Fusion, Inc. (Talk Fusion), is a Florida corporation with its
Upon information and belief, Read resides in and is a citizen of the State of Utah or Colorado.
4.
Defendant, WowWe, Inc., is not a citizen of the State of Florida. WowWe, Inc. is
a corporation formed under the laws of the State of Nevada. WowWe, Inc.s principal place of
business is in The Woodlands, Texas.
5.
Upon information and belief, Defendant, WowWe Media, LLC, is not a citizen of
the State of Florida. WowWe Media, LLC is a limited liability company organized under the
laws of the State of Nevada. The managing member of WowWe Media, LLC is William
Starkey, who is a citizen of the State of Texas. On information and belief, the other member of
WowWe Media, LLC is Ernest O. Sutter, who is not a citizen of the State of Florida.
JURISDICTION AND VENUE
6.
an action between citizens of different states. Plaintiff is a citizen of the State of Florida, and
Defendants are citizens of states other than Florida.
Seventy-Five Thousand Dollars ($75,000), exclusive of interest and costs. Immediate injunctive
relief is sought pursuant to Federal Rule of Civil Procedure 65(a). Venue is proper in this
judicial district under 28 U.S.C. 1391(a) as the Defendants are subject to personal jurisdiction
within this District.
7.
jurisdiction and venue in Hillsborough County, Florida. See Talk Fusions Statement of Policies
and Procedures attached as Exhibit C.
BACKGROUND FACTS
8.
Talk Fusion is a direct sales company that markets its products through
communication products for personal and business use, including a web-based software that
allows a customer to create video emails and send them to friends, family, and customers; all
without attachments or special software to install. Associates are customers of Talk Fusions
services, but also sell Talk Fusions products, recruit other Associates, and earn commissions.
9.
On or about October 21, 2010, Ulrich became a Talk Fusion Associate. See
Exhibit A.
10.
Exhibit B.
11.
WowWe, Inc. and WowWe Media, LLC are related entities and offer the same or
similar services. Both WowWe, Inc. and WowWe Media, LLC conduct business as I Wow
We. WowWe, Inc. and WowWe Media, LLC will be jointly referred to as I Wow We.
I Wow We engages in substantially the same business as Talk Fusion, offers similar products,
uses a similar business model, and is a competitor of Talk Fusion.
12.
Fusions Statement of Policies and Procedures (Policies), and also Talk Fusions Terms of
Service. A true and correct copy of the Policies is attached as Exhibit C, and a true and correct
copy of the Terms of Service is attached as Exhibit D. The Policies and Terms of Service are a
contract between Ulrich, Read, and Talk Fusion.
13.
www.thetalkfusionteam.com and represented to Talk Fusion that these websites contained only
a collection of existing Talk Fusion videos already appearing on the Talk Fusion website. Talk
Fusion granted Ulrich and Read permission to create these websites because they were presented
to Talk Fusion only as a collection of Talk Fusion videos. Ulrich and Read then used these
websites in a manner to breach their contracts with Talk Fusion and obtain Talk Fusions
confidential, proprietary, and trade secret information. Read subsequently resigned from Talk
Fusion and Ulrich was terminated.
competitors, I Wow We, and are soliciting Talk Fusion Associates in violation of their contracts
with Talk Fusion and using confidential information illegally obtained from Talk Fusion.
14.
Without the knowledge and consent of Talk Fusion, Ulrich and Read marketed
Associates, including those Associates who were not part of their Talk Fusion team. It is a
violation of the Policies to Cross Sponsor, meaning market to Associates who are already on
another Associates team. The Policies state:
3.9 - Cross-Sponsoring
Actual or attempted cross sponsoring is strictly prohibited. Cross
sponsoring is defined as the enrollment of an individual who or entity
that already has a current Customer or Associate Agreement on file with
Talk Fusion, or who has had such an agreement within the preceding six
calendar months, within a different line of sponsorship.
15.
Without
Talk
Fusions
knowledge
or
consent,
through
the
identification numbers and passwords, Ulrich and Read accessed over a period of weeks Talk
Fusions servers to gather confidential information, including Talk Fusions Associates
geneology and back office.
16.
Once Ulrich and Read obtained other Associates identification numbers and
passwords, they had access to confidential, proprietary, and trade secret information including
names, email addresses, and telephone numbers of Talk Fusion Associates and customers, copies
of every video email that an Associate had sent to anybody, the Address Book of Talk Fusion
Associates (showing to whom videos were sent and their subject), and Talk Fusions Downline
Activity (Genealogy) showing placement, volume, commission amounts and history, rank, and
status. Ulrich and Read used a program to attack Talk Fusions servers on an hourly basis and
update this information.
17.
19.
Ulrich and Read used confidential information illegally obtained from Talk
Fusions Associates to market selling aids to Talk Fusion Associates in violation of the Policies.
The Policies provide:
3.2 - Advertising
3.2.1 - General
* * *
Talk Fusion Associates may not sell sales aids to other Talk Fusion
Associates. Therefore, Associates who receive authorization from Talk
Fusion to produce their own sales aids may make the sales aids available
to other Associates free of charge, but may not sell such sales aids to any
other Talk Fusion Associate.
20.
The selling aids that Ulrich and Read were selling included an auto dialer. It is
specifically against Talk Fusions Policies to use an auto dialer of any type:
3.23.5 - In addition, Associates shall not use automatic telephone dialing
systems relative to the operation of their Talk Fusion businesses. The term
automatic telephone dialing system means equipment which has the
capacity to: (a) store or produce telephone numbers to be called, using a
random or sequential number generator; and (b) to dial such numbers.
21.
On or about April 25, 2011, Talk Fusion began receiving complaints from other
Associates that Ulrich was marketing to their Associates in violation of the Policies.
22.
On or about April 25, 2011, Talk Fusion became aware of Ulrich and Read
accessing a Talk Fusion server and copying Talk Fusions genealogy. Talk Fusion uses a
direct marketing business model.
Associates who build their own sales force. Associates can develop exponentially expanding
organizations for which they have oversight. These organizations are referred to as downlines
or in Talk Fusions case, genealogies.
23.
to access Talk Fusions servers using the Talk Fusion associate identification numbers and
6
On or about April 25, 2011, Talk Fusion noticed a spike of activity on one of its
servers. This spike was Ulrichs and Reads attack of Talk Fusions servers to obtain the
genealogy information.
25.
Robert Reina, President of Talk Fusion, spoke with Ulrich and Read, and they
admitted to creating and using a program to obtain genealogy information from Talk Fusions
servers. After Reina spoke with Ulrich and Read, the attacks on Talk Fusion servers ended.
26.
27.
On May 9, 2011, Talk Fusion began receiving reports that Ulrich was promoting I
29.
Subsequent to his termination, Ulrich solicited Talk Fusion Associates, who were
not personally sponsored by Ulrich and Read, to join I Wow We. Among other things, Ulrich
and Read solicited Talk Fusion Associates through the use of a surrogate or strawman named Joe
Gillardi. Joe Gillardi is associated with I Wow We.
30.
Agreement, and for a period of six calendar months thereafter, with the
exception of an Associate who is personally sponsored by the former
Associate, a former Associate may not Recruit any Talk Fusion Associate
or Customer for another network marketing business. Associates and the
Company recognize that because network marketing is conducted through
networks of independent contractors dispersed across the entire United
States and internationally, and business is commonly conducted via the
internet and telephone, an effort to narrowly limit the geographic scope of
this non-solicitation provision would render it wholly ineffective.
Therefore, Associates and Talk Fusion agree that this non-solicitation
provision shall apply to all markets in which Talk Fusion conducts
business.
31.
During the term of their contracts with Talk Fusion, Ulrich and Read breached the
After
termination of their contracts with Talk Fusion, Ulrich and Read breached their non-solicitation
covenants with Talk Fusion by soliciting Talk Fusions Associates, whom they did not
personally sponsor, to join I Wow We.
32.
Ulrich and Read are using the confidential information they illegally obtained
from Talk Fusion to target, market to, and solicit Talk Fusion Associates.
COUNT I
ACTION FOR PRELIMINARY AND PERMANENT INJUNCTION
33.
34.
their contracts with Talk Fusion and other legal duties to Talk Fusion. Ulrich and Read obtained
confidential Talk Fusion Associates identification numbers and passwords. They then designed
a program using illegally obtained identification numbers and passwords to access Talk Fusions
servers and obtain other confidential information, including genealogy information of Talk
Fusion Associates. They violated their contracts with Talk Fusion by selling sales aids to other
Talk Fusion Associates. They attempted to recruit Talk Fusion Associates away from their
existing sponsors. They have and are currently soliciting Talk Fusion Associates to leave Talk
Fusion and join I Wow We.
35.
Ulrich and Read have intentionally breached their contracts, which has resulted in
Ulrich, Read, and I Wow We have conspired to solicit Talk Fusion Associates to
join I Wow We in violation of Ulrichs and Reads contracts with Talk Fusion.
37.
immediate entry of injunctive relief to enjoin the action of Defendants, which are in violation of
their contracts with Talk Fusion.
39.
The duration and geographic scope of the nonsolitiation covenants are reasonable.
40.
Pursuant to Section 688.01, et seq., Florida Statutes, Talk Fusion is entitled to the
immediate entry of injunctive relief to enjoin the actions of Defendants that constitute
misappropriation of Talk Fusions trade secrets.
42.
has sustained and will continue to sustain irreparable injury unless defendants are immediately
enjoined.
43.
Talk Fusion is without an adequate remedy at law to redress the harm caused to
its legitimate business interest by the actions of Defendants, including the loss of Associates, the
loss of income, and the disclosure and use of its confidential and proprietary information and
trade secrets.
9
44.
The issuance of an injunction against Defendants will not threaten the public
All conditions precedent to bringing this action have occurred or have been
Talk Fusion has retained undersigned counsel to represent it in this action and is
adjudication and permanent relief, enjoining Ulrich and Read from violating their nonsolicitation
covenants with Talk Fusion, including but not limited to recruiting Talk Fusion Associates who
they did not personally sponsor and enjoining I Wow We from soliciting Talk Fusion Associates
in concert with Ulrich and Read;
b.
adjudication and permanent relief, enjoining Ulrich, Read, and I Wow We from using or
disclosing Talk Fusions confidential and proprietary information and trade secrets, and requiring
the return of same;
c.
48.
Ulrich and Read entered into a contract with Talk Fusion which included Talk
Fusions Policies and Procedures and Terms of Service. See Exhibits C and D.
49.
Ulrich and Read have breached their contracts with Talk Fusion by:
a.
b.
c.
during the term of their contracts with Talk Fusion, Ulrich and Read
breached the non-solicitation covenant by soliciting Talk Fusion Associates to join I Wow We;
d.
after termination of their contracts with Talk Fusion, Ulrich and Read
breached their non-solicitation covenants with Talk Fusion by soliciting Talk Fusions
Associates, whom they did not personally sponsor, to join I Wow We;
e.
f.
Associates;
Talk Fusion has been damaged by Ulrich and Reads breach of contract.
51.
All conditions precedent to this action have occurred, been performed or been
waived.
WHEREFORE, Talk Fusion demands judgment against Ulrich and Read for damages and
costs, injunctive relief, and all other relief the Court deems appropriate.
11
COUNT III
TORTIOUS INTERFERENCE WITH A CONTRACTUAL RELATIONSHIP
52.
53.
There existed contracts between Talk Fusion and its Associates, other than Ulrich
and Read.
54.
Ulrich, Read, and I Wow We had knowledge of the contracts between Talk
contracts by obtaining and using confidential and proprietary information, and by soliciting
Associates to leave Talk Fusion and join I Wow We.
56.
Talk Fusion has been damaged as a result of the interference in their contractual
relationships.
WHEREFORE, Talk Fusion demands judgment against Ulrich, Read, WowWe, Inc. and
WowWe Media, LLC for damages and costs, injunctive relief, and all other relief the Court
deems appropriate.
COUNT IV
TORTIOUS INTERFERENCE IN ADVANTAGEOUS BUSINESS RELATIONSHIP
57.
58.
There existed an advantageous business relationship between Talk Fusion and its
Ulrich, Read, and I Wow We had knowledge of the relationships between Talk
12
60.
relationships by obtaining and using confidential and proprietary information, and by soliciting
Associates to leave Talk Fusion and join I Wow We.
61.
63.
This is an action against Ulrich, Read, and I Wow We for violation of Florida's
information and trade secrets, including the genealogy and back office data of Talk Fusions
Associates. Ulrich and Read acquired this information by improper means, or knew or had
reason to know it acquired Talk Fusion's proprietary and confidential business information and
trade secrets under circumstances which gave rise to a duty on its part to maintain the secrecy
and limit the use thereof.
65.
information and trade secrets. I Wow We acquired the information through improper means, or
knew or had reason to know it acquired Talk Fusion's proprietary and confidential business
information and trade secrets under circumstances which gave rise to a duty on its part to
maintain the secrecy and limit the use thereof.
13
66.
The disclosure and use by Ulrich, Read, and I Wow We of Talk Fusions
confidential and proprietary information and trade secrets for their own commercial benefit
constitutes a misappropriation thereof.
67.
suffered both the actual loss of the independent economic value thereof and the unjust
enrichment enjoyed by Ulrich, Read, and I Wow We as a result of the misappropriation.
WHEREFORE, Talk Fusion demands judgment against Ulrich, Read, WowWe, Inc. and
WowWe Media, LLC for damages and costs, exemplary damages, injunctive relief, and all other
relief the Court deems appropriate.
COUNT VI
UNFAIR COMPETITION
68.
69.
This is an action against Ulrich, Read, and I Wow We for unfair competition.
70.
The actions of Ulrich, Read, and I Wow We, as alleged herein and above,
constitute unfair competition, as a direct and proximate result of which Talk Fusion has been
damaged and continues to suffer irreparable harm.
WHEREFORE, Talk Fusion demands judgment against Ulrich, Read, WowWe, Inc. and
WowWe Media, LLC for damages and costs, injunctive relief, and all other relief the Court
deems appropriate.
COUNT VII
CONVERSION
71.
72.
14
73.
The actions of Ulrich, Read, and I Wow We, as alleged herein and above,
75.
I Wow We acted in concert and conspiracy with Ulrich and Read to cause them to
violate the terms of their contracts with Talk Fusion, to misappropriate Talk Fusions
confidential, proprietary information, and trade secrets, and to solicit Talk Fusions Associates to
leave Talk Fusion and join I Wow We.
76.
Talk Fusion has been damaged as a direct and proximate result of the conspiracy
78.
There existed a contractual relationship between Ulrich and Talk Fusion, and
15
79.
I Wow We had knowledge of the contracts between Ulrich, Read, and Talk
80.
Fusion.
relationships by soliciting Ulrich and Read to leave Talk Fusion and join I Wow We, and by
inducing Ulrich and read to recruit Talk Fusion Associates away from Talk Fusion and to join I
Wow We.
81.
Talk Fusion has been damaged as a result of the interference in its contractual
relationships.
WHEREFORE, Talk Fusion demands judgment against WowWe, Inc. and WowWe
Media, Inc. for damages and costs, injunctive relief, and all other relief the Court deems
appropriate.
NOTICE OF INTENT TO SEEK ATTORNEYS FEES
Talk Fusion hereby provides notice of its intent to seek attorneys fees pursuant to
Sections 542.335 and 688.005, Florida Statutes.
SIVYER BARLOW & WATSON, P.A.
401 East Jackson Street, Suite 2225
Tampa, Florida 33602
Telephone: (813) 221-4242
Facsimile: (813) 227-8598
Attorneys for Plaintiff
/s/ Edward J. Kuchinski
Mahlon H. Barlow
Florida Bar No. 871117
Edward J. Kuchinski
Florida Bar No. 796964
16
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 14th day of June, 2011, I electronically filed the
foregoing with the Clerk of the Court by using the CM/ECF system and furnished a copy by U.S.
mail, postage prepaid, to the following:
Christina Minshew Lewis, Esq.
Lewis & Barnes
5248 Larkin, Suite A
Houston, TX 77007
J.J. Ulrich
12811 Goshute Drive
Riverton, UT 84096
Pro Se
Joe Read
c/o J.J. Ulrich
12811 Goshute Drive
Riverton, UT 84096
Pro Se
s/ Edward J. Kuchinski
Attorney
17
Exhibit 5
6
7
8
10
11
l2
13
14
15
16
17
18
19
20
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Case No.
DECLARATION OF ERIC
EINHOLZ IN SUPPORT OF
PLAINTIFF'S OPPOSITIONS TO
TALK FUSION, INC., TALK
FUSION INERNATIONAL, INC.,
ROBERT REINA'S, AND MANE
WORLD PROMOTIONS, INC.'s
MOTIONS TO DISMISS
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1.
Talk Fusion concerning purchasing Talk Fusion's video email software. I was
interested in using the Talk Fusion email service to assist my wife with her business.
Among other things, the Talk Fusion sales associate informed me that the Talk
Fusion email service was new and revolutionary, and that Talk Fusion had excellent
support, and that the associate would provide me with personalized training.
3.
approximately $815 for the Talk Fusion email software, and agreed to a $3 5 a month
service charge.
4.
I contacted the Talk Fusion associate who sold me the software and he
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6.
about receiving training. Talk Fusion support never answered my specific questions.
For example, a Talk Fusion support technician named Milton stated in an email dated
May 19, 2014, in response to my inquiries: "Respectively, you can use all of the
products and train yourself and/or use the current tutorials." I found the Talk
Fusion software tutorials available on Talk Fusion's website at or around the time of
my purchase to be out of date, and not helpful. A true and correct copy of an email
exchange between myself and the Talk Fusion support team member named Milton
is attached hereto as Exhibit A.
7.
with training for the expensive Talk Fusion software I recently purchased, I filed a
complaint with the Better Business Bureau.
8.
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it within 3 days. I tried the product, however, I was unable to get it to work properly
within the 3 days. In fact, I was never able to get it to work properly. Talk Fusion
gave me 3 days to withdraw my complaint from the Better Business Bureau. A true
and correct copy of the letter is attached hereto as Exhibit B.
9.
the Circuit Court of the 13th Judicial Circuit in and for Hillsborough County, Florida,
Circuit Civil Division. Talk Fusion chose to sue me in Florida State Court instead of
a Federal District Court. In its complaint, Talk Fusion alleges that I defamed them
in the complaint I filed with the Better Business Bureau. Talk Fusion gave me no
warning of the lawsuit after their letter, neither did they offer to mediate my dispute,
nor offer arbitration before the AAA as an option prior to filing the lawsuit against
me in Florida State Court. A true and correct copy of the complaint is attached here
as Exhibit C.
10.
I was served with the summons for the complaint on or around August
25, 2016. I am not a lawyer, and did not know how to properly respond to the lawsuit.
Had the lawsuit been filed in a court in New Jersey near my residence, I could have
hired a local attorney to review the complaint and respond to the complaint
accordingly.
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At the time I received the complaint, I did not believe the lawsuit was
valid, as I never expected to be sued in a Florida State Court, and questioned whether
the court had jurisdiction over me.
12.
State Action. The judgement was entered in on or around October 15, 2014. Because
I did not respond to the complaint, the judge treated the allegations in the complaint
as true. The amount of the default judgment was around $15,000. A true and correct
copy of the Judgment After Default in Damages and Permanent Injunction
("Judgement") is attached hereto as exhibit D.
13.
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1 that I can "train yourself." I also stated that I believed that the Talk Fusion was
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obligated, under the FTC regulations, to verbally advise me of the three-day right to
cancel at the time of purchase. A true and correct copy of the letter is attached here
as Exhibit E.
14.
On or about December 10, 2014, Talk Fusion filed an action to have the
not have personal jurisdiction over me, Talk Fusion's counsel filed an Opposition to
Motion to Vacate Judgment and argued that my complaint with the Better Business
Bureau in Florida subjected me to personal jurisdiction of the courts of the State of
Florida. When I purchased the Talk Fusion software at my office in New Jersey, I
did not expect to be sued in a Court in the State of Florida. A true and correct copy
of the motion is attached hereto as Exhibit G.
17.
Court, I retained an attorney licensed to practice law in Florida to attempt to set aside
the default judgment entered in the Florida State Court. A true and correct copy of
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Esq. concerning the judgement obtained in the Florida State Court action and entered
in a New Jersey State Court. Attached to the letter was a document entitled
Talk Fusion has taken subsequent legal action against me following the
default judgment they obtained against me. Among other things, Talk Fusion sought
and has obtained an award of attorney's fees and costs in the amount of $8,078.50.
A true and correct copy of Talk Fusion's Affidavit as to Attorneys' Fees and Costs
is attached hereto as Exhibit J.
20.
Policies and Procedures Effective March 5, 2016. I have reviewed Paragraph 41,
entitled Dispute Resolution. Had Talk Fusion offered confidential mediations to
resolve my grievances at the time of my dispute, and paid the fees and costs of the
mediation, and I would not be liable for Talk Fusion's attorneys' fees, I would have
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Bureau.
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I declare under penalty of perjury under the laws of the United States
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Eric Einholz
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day of
Exhibit A
Subject :
RE: training
From:
[email protected] ([email protected])
To :
Date :
Eric,
Respectfolly, you can use all of the products and train yourself and/or use the current tutorials.
Mitlon
From: EE [mai~
b I Ot
. J;::}Sent: Monday, May 19, 2014 12 :26 PM
To: suppport@ta lkfusion.com
Subject: Re: trai ning
ERIC EINHOLZ
I of4
8/26/20 14 3 :43 PM
Exhibit B
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Re:
Talk Fusion offers a three day money back guarantee from the date the service is
activated. When you purchased Talk Fusion's product, you clicked off a box indicating that you
had read and agreed to Talk Fusion's Policies and Procedures, Terms of Service, Terms and
Conditions and Refund Policy, including the three day refund policy. Additionally, Talk
Fusion 's three day refund policy is actually displayed on the BBB's website regarding Talk
Fusion.
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You purchased Talk Fusion's product on February 6, 201 , sed the product, d did not
quest to depart
request a refund until May 12, 2014. Talk Fusion cannot comply w1
from its clearly stated three day refund policy. You had immediate access to Talk Fusion's
system and an opportunity to try it out during the three day period. Furthermore, Talk Fusion
paid an instant commission to a third party based on your purchase and cannot recoup the
commission. This is not a retail transaction where you can simply return an unused product to the
store. For all these reasons and others, Talk Fusion must insist on enforcing its three day refurid
policy.
You agreed to Talk Fusion's three day refund policy at the time of purchase and Talk
Fusion is merely enforcing its policy as it does with all other customers. Calling Talk Fusion a
pyramid scheme in an attempt to get a refund will not be tolerated. Talk Fusion repeats its
demand that you withdraw your complaint and remove the defamatory statements within three
days.
Sincerely,
EJK/HD
Exhibit C
Case No.
Plaintiff,
Division:
vs.
COMPLAINT
Talk Fusion, Inc. sues Eric Einholz and alleges:
J.
This is an action for damages exceeding $ J5,000, exclusive of interest costs and
'
2.
Plaintiff, Talk Fusion, Inc. ("Talk Fusion") is a corporation organized under the
Jaws of the State of Florida witli its principle place of business in Brandon, Florida.
3.
Talk Fusion is a direct sales (or multi-level marketing) company that markets its
products through independent associates ("Associates"). Talk Fusion markets and sells various
video communication products for personal and business use, including a webbased software
that allows a customer to create video emails and send them to friends, family, and customers; all
without attachments or special software to install. Associates are customers of Talk Fusion's
services, but also sell Talk Fusion's products, recruit other Associates, and earn commissions.
4.
5.
6.
Talk Fusion has a three day money back guarantee from the date of activation.
Einholz agreed to this policy when he became a Talk Fusion Associate. Einholz had access to
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and used Talk Fusions services for over three months. Additionally, Talk Fusion paid an instant
commission to a third party when Einholz became an Associate.
7:
On May 12, 2014, after Einholz had access to and used Talk Fusion's product for
approximately three months, Einholz requested a complete refund of his purchase price.
Consistent with its three day money back guarantee, Talk Fusion denied Einholz's request for a
refund.
8.
After Talk Fusion denied Einholz request for a refund, Einholz electronically made a
complaint to the Better Business Bureau of West Central Florida, (the "BBB - WFL"). A copy of
Einholz's complaint to the BBB-WFL is attached as Exhibit A.
9.
The BBB - WFL is a not for profit corporation organized under the laws of the State
Einholz complaint was made directly to the BBB - WFL located in Florida,
Einholz complaint States, "$920 stolen! ... At this point I realize that this is an
unscrupulous company and l will only settle for a full refwid. It is not a real MLM company but
a pyramid scheme." This statement is false and defamatory. Calling a direct sales company like
Talk Fusion a "pyramid scheme" is a serious and damaging allegation.
.'
12.
After Einholz complained to the BBB - WFL, Talk Fusion WTote Einholz advising
him that his complaint contained a statement that was defamation per se and demanding that he
withdraw the complaint. A copy of Talk Fusion's letter is attached hereto as Exhibit B. Einholz
responded by email that " ... I will continue to defame your company ... " A copy of Einholz's
response is attached as Exhibit C.
13.
14.
Einholz has also posted defamatory comments on Talk Fusion Associates' Facebook
pages, including, "Beware. Talk Fusion Stole my money, they will gladly steal yours too."
15.
organization."
Jurisd!tion and VSJ11e
16.
This Court. has jurisdiction over Einholz pursuant to Section 48. 193. Florida Statutes,
because this action arises from Einliolz committing a tortious act in Florida. Einholz published a
false and defamatory statement about Talk Fusion to the BBB - WFL which is located in
Florida, and placed a false and defamatory statement on Talk Fusion's Facebook page.
17.
This Court's jurisdiction over Einholz comports with due process principles becaui.e
18.
Hillsborough County, Florida where Talk Fusion is located and where it has been damaged.
Clai,m (Qr Defamation
19.
Einholz has made the following defamatory statements concerning Talk Fusion:
"$920 stolen! , .. At this point I realize that this Is an unscrupulous company and I will only settle
for a full refund. It is not a real MLM company but a pyramid scheme;"
"Those dirt bags stole my money;"
"Beware. Talk Fusion stole my money, they will gladly steal yours too;'' and
"Talk Fusion is a scumbag organization."
20.
Einholz published his false and defamatory statements in Florida to the BBB - WFL
21.
Einholz either knew his statements were false or made the statements without
Einholz stating that Talk Fusion stole money and calling Talk Fusion a "pyramid
scheme" is defamation per se. Therefore,. general damages are presumed as a matter of law and
Einholz is subject to punitive damages.
WHEREFORE, Talk Fusion, Inc. requests the Court enter judgment against Einholz:
a) for damages;
\
d) for all other relief the Court deems just and proper.
[email protected]
401 E. Jackson Street, Suite 2225
Tampa, florid21 33602
Telephone; (813) 221-4242
Facsimile: (813) 227-8598
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Exhibit D
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THIS CAUSE came to be heard ex p~e on October 14, 2014 upon Plaintiff's, Talk
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Fusion, Inc. ("Talk Fusion"), Motion for Defuuit Judgment After Default. The Court, after
reviewing the pleadings, hearing argument of Talk Fusion's counsel, and otherwise being fully
advised in the premises, finds and adjudges as follows:
Talk Fusion served Defendant, Eric Einholz ("Einholz") with its Complaint herein, alleging
a single count for defamation, on August 25, 2014.
2.
Einholz did not file a response to the complaint or respond to the complaint in any way.
3.
The Clerk of the Court entered a default against Einholz on September 25, 2014.
4.
5.
Talk Fusion is a Florida Corporation. with its principal place of business in Brandon,
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Jersey. .
Einholz electronically made a complaint to the Better Business Bureau of West Central
Florida, (the "BBB - WFL").
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in Clearwater, Florida.
8.
Einholz complaint to the BBB-WFL state~, "~_920 stolen! ... At this point I realize that this
is an unscrupulous company and I will only settle for a full refund. It is not a real MLM
company but a pyramid scheme."
9.
Einholz posted a defamatory statement about Talk Fusion on Talk Fusion's Facebook page
stating, "Those dirt bags stole my money."
10.
Einholz has also posted defamatory comments on Talk Fusion Associates' Facebook pages,
including, "Beware. Talk Fusion Stole my money, they will gladly steal yours too."
11.
12.
Talk Fusion wrote Einholz and demanded he remove his defamatory statements. Einholz
refused to do so.
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This Court has jurisdiction over Einholz pursuant to Section 48.193. Florida Statutes,
;
13.
: ;
because this action arises from Einholz committing a tortious act in Florida. Einholz
published a false and defamatory statement about Talk Fusion to the BBB - WFL which is
located in Florida, and placed a false and defamatory statement on Talk Fusion's Facebook
page.
14.
This Court's jurisdiction over Einholz comports with due process principles because
Einholz has committed a tortious act in Florida.
15.
Venue is appropriate in this Court because the cause of action occurred in Hillsborough
County, Florida where Talk Fusion is iocated and where it has been damaged.
Bk 22860 Pg 68
law.
17.
Pursuant to Florida Rules of Civil Procedure 1.500, the Court finds that Einholz has failed
to file or serve any paper in this action, and has failed to plead or otherwise defend as
provided for by the Florida Rule of Civil Procedure.
18.
The Court hereby finds Eric Einholz)iable for defamation as alleged in Talk Fusion's
complaint.
19.
Einholz' statements that Talk Fusion stole.his money, that Talk Fusion is a ''unscrupulous
company", and that Talk Fusion is ''not a real MLM company but a pyramid scheme", are
defamatory per se. General damages are therefore presumed.
20.
The Court finds that an injunction is necessary to prevent Einholz from repeating and
republishing his defamatory statements. Einholz has continued to post defamatory
comments about Talk Fusion on the internet despite Talk Fusion's demand that he desist.
Talk Fusion has sustained and will continue sustain irreparable injury unless Einholz is
enjoined. Talk Fusion is without an adequate remedy at law to redress the harm caused to
its legitimate business interest by Emholz' actions. Damages are inadequate to deter
Einholz and protect Talk Fusion's reputation. The issuance of an injunction against Einholz
.... ~. .
will not threaten the public health, safety, or welfare and the equities favor Talk Fusion.
Judgment
21.
It is adjudged the Plaintiff, Talk Fusion, Inc., 1319 Kingsway Rd. Brandon, Florida 335102515, recover from Defendant, Eric Einholz, 433 Piaget A venue, Ste. 3, Clifton, NJ 07011,
the sum of $15,000 that shall bear interest at the legal rate, for which let execution issue.
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Fusion, including statements that Talk Fusion is unscrupulous, a pyramid scheme or stole
his money.
23.
The Court reserves jurisdiction to consider an award of punitive damages against Eric
Einholz, to enforce this judgment and to grant such further relief as may be necessary and
proper.
DONE AND ORDERED in chambers of Hillsborough County, Florida on October
) "f"
2014.
~,~
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Copies to:
Edward J. Kuchinski, Esq.
401 E. Jackson Street, Suite 2225
Tampa, Florida 33602
Eric Einholz
433 Piaget Avenue, Ste. 3
Clifton, NJ 07011
4
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Exhibit E
ERJC EINHOLZ
433 PIAGET AVE. STE 3
CLIFTON NJ 07011 -3002
October 15, 2014
Via e-mai l and US Mail.
Carolina Washington
Florida Department of Agriculture
Consumer Services Division
2005 Apalachee Pkwy.
Tallahasse, Florida 32399-6500
Subject: Refund, Talk Fusion
Ref: complaint # 1408-36218 /CW
This is my response to your letter of Sep 30, 2014. I may not be as eloquent as the
attorneys employed by Talk Fusion to cover up their misdeeds, but I will attempt to offer
you the details that were omitted from their letter to you.
First, as stated in their letter, I am indeed very upset that Talk Fusion has not refunded
my money, because I was in fact never able to use the product (logging in to their website
does not constitute using their product as intended).
Second, the reason I waited 3 months to request the refund was because I naively
believed the clai ms of the sales rep, that he would conduct live training AT MY
LOCATION. I made numerous attempts to schedule that promised training, but the
response was always "sometime next week", or similar empty promises.
That same rep also promised me that there would be excellent tutorials available on the
Talk Fusion website. In the interim I did attempt to use their tutorials. They were, in
fact, so outdated, that they bore little resemblance to the current product, rendering them
totally useless. I subsequently requested current tutorials from their customer support
department, but after several attempts, was told "train yourself' (see enclosed
documentation). Simply because their lawyers state that the tutorials are useful, does not
make it a fact. ONLY after making attempts to learn the product through various
channels, did I request a refund, in frustration, since I had by that time spent $920, and
received absolutely nothing of value in return.
Additionally, they have recently stated in their correspondence to me that their product
did not offer "squeeze pages". When the sales rep presented the product, I mentioned
that I was about to place an order with "A-Weber" (a product that provides online
squeeze pages), and he clearly stated that I would not need to order form A-Weber, as
that feature was already included with Talk Fusion.
I would also like to note that when I first made a complaint to the local BBB in Florida,
Talk Fusion's attorney sent me a letter THREATENING ME WITH LITIGATION ifl
did not withdraw my complaint with the BBB. Upon further research on various internet
posts, I have discovered that this is their apparent modus operandi: Should someone
complain, instead of addressing their customer complaint honestly, sue the customer!!
They have had an exceptionally large number of BBB complaints (in my opinion), but
apparently have been able to resolve them all by threatening their customers with
litigation.
With regards to the sales presentation itself: It is FTC regulation that in a direct sales
situation, that the sales rep, (whether employed directly by the company, or an
independent rep), VERBALLY ADVISE the consumer of their J day right to cancel, AS
WELL as HAND THE CONSUMER the 3 day cancellation notice. In.this case, neither
regulation was followed. So since FTC regulations were clearly violated, I believe Talk
Fusion is obligated to not only refund my money, but to totally withdraw their ridiculous
lawsuit against me.
I could go on and on with other complaints that numerous people have against this
company (including other less vocal members of my local community), but I don't want
to make this letter any longer than need be.
In closing, their 3 day refund policy is a joke, not only because they flagrantly violated
FTC regulations, but because it is impossible for a busy person to know if their product
works in 3 days, especially with such lack of support. Please feel free to contact me
directly at 973 -750-8090, should you have any further questions.
Sincerely,
Eric Einholz
Exhibit F
vs.
Civil Action
NOTICE OF MOTION
Eric Einholz
Debtor.
TO:
PLEASE TAKE NOTICE that the undersigned Attorney for the Debtor, Laura
Rodriguez, Esq., shall apply to the above named Court located at 77 Hamilton St., Paterson, New
Jersey 07505 on February 2Q1h 2015 at 9 O'cloek in the forenoon or as soon thereafter as
Counsel can be heard for an order as follows:
PLEASE TAKE NOTICE that in support of said motion, Laura M. Rodriguez, Esq.,
will rely upon the attached c.ertification which contains the grounds for the relief sought.
Date:
1/'d- h<
~YI _ _
J:bj_~'---1_
By: _ _
1... _____
Laura Rodriguez, Esq.
Darrington & Rodriguez, LLP
149 Washington St. 2d Floor
Bloomfield, NJ 07003
(973)558-5469
[email protected]
Attomey for the D.ebtor
Eric Einholz
I certify that confidential personal identifiers have been redacted from documents now submitted
to the court, and will be redacted from all documents submitted in the future in accordance with
Rule 1:38-l(b).
Date:
I/;>, Il <"'
Laura Rodriguez, Esq.
(973)558-5469
Attorney for the Debtor
Eric Einholz
VS.
Civil Action
CERTIFICATION IN SUPPORT
OF MOTION
Eric Einholz
Debtor.
I, Laura Rodriguez, Esq., am the attorney for the plaintiff in the above-captioned matter. I make
this certification in support of the motion to vacate the judgment against the debtor. This motion
should be granted because:
I certify that the above statements made by me are true and that if any of the statements are
.:villfully false, I mn subject to punishment.
Date:
l/&,e-111
By:~
.
Esq.
o nguez,
Laura Rd
Darrington & Rodriguez, LLP
149 Washington St. 2m1 Floor
Bloomfield, NJ 07003
(973)558-5469
[email protected]
Attorney for the Debtor
Eric Einholz
CERTIFICATION OF SERVICE
I certify that on I!dtl1f I sent a copy of the Notice of Motion, Certification, proposed
forul of Order, and Amended Complaint to the following parties by certified mail.
Marks & Sokolov, LLC
1835 Market St, 28th Fir.
Philadelphia, PA 19103
Attorney for Creditor Talk Fusion
Date: lJ~tr
Laura Rodriguez, Esq.
Darrington & Rodriguez, LLP
149 Washington St. 2"d Floor
Bloomfield, NJ 07003
(973)558-5469
lrodriguez:@drllp.com
Attorney for the Debtor
Eric Einholz
vs.
ORDER
Eric Einholz
Debtor.
THIS MATTER, having been brought before the Court upon the Motion of Laura Rodriguez,
Esq., attorney for the debtor, for an Order vacating the judgment dated December 10, 2014 and
the court having read and considered the moving papers, any argument of counsel aud any
opposition thereto, and for good cause shown,
FURTHER ORDERED that a copy of this Order be served upon all parties within __
days of the date hereof.
~Opposed
_'_ Unopposed
Exhibit G
Pblladelphi, PA 19103
---ATTORNO:Y!ll AT LAW - - -
PHILADELPHIA I MOSCOW
TSUI..LIVAN@ll'ISl,ECA.L.COM
Paterson, NJ 07505
RE:
For:
TCS/omd
cc:
PI!!Lil.!.>&LFIUA.
I MOSCOW
v.
Judgment No. DJ-238655-14
Eric Einholz,
Debtor
First, under Florida's Jong-aim statute, Honda Statutes, Section 415.1 ?J, rmuaa nau
personal jurisdiction because Einholz committed"a tortious act in Florida by, inter alia, sending a
defamatory communication about Talk Fusion to the BBB-WFL in Florida and posting a
defamatory communication about Talk Fusion on Talk Fusion's Facebook page.
Second, Florida and New Jersey caselaw confirm non-residents who "purposefully
direct" tortious conduct, such as defamatory commnmnications, at or about forum residents in
the forum satisfy the "minimum contacts" requirement imposed by the Due Process clause.
Third, Einholz's conclusory motion docs not meet his burden to establishjurisdiction is
constitutionally unreasonable once "minimum contacts" are satisfied.
PROCEDURAL HISTORY
On August 25, 2014, Talk Fusion filed a Complaint in Florida and served Einholz.
"Florida Judgment"). Florida Judgment, Exhibit B. On December 10, 2014, Talk Fusion
recorded its Florida Judgment in New Jersey. On, January 20, 2015, Einholz filed a Motion to
Vacate the Judgment (the "Motion"). The Motion had no supporting brief; nor was it supported
by Einholz's affidavit or any evidence.
Parties
Talk Fusion is a corporation organized under the laws of the State of Florida with its
principle place of business in Brandon, Florida. Complaint,~!? Talk Fusion sells video
communication products. Complaint, ~2. "Associates'' sell Talk Fusion's products, recruit other
Associates, and earn commissions. Complaint, 13, Einholz resides in New Jersey. Complaint,
Background
18.
BBL-WFL stated: '$920 stolen! ... At this point I realize that this is an unscrupulous company
and I will only settle for a full refund. It is not a real MLM company but a pyramid scheme."'
Florida Judgment, 18 (emphasis added); Complaint, Ex. A. 3
Second, "Einholz posted a defamatory statement about Talk Fusion on Talk Fusion's
Facebook page stating, 'Those dirt bags stole my money.'"
Florida Judgment,
19 (emphasis
"MLM" means multi-level marketing, i.e. companies which market through associates who
recruit other associates such as Avon and Mary Kay cosmetics.
Third, "Einholz also posted defamatory conunents on Talk Fusion Associates' Facebook
pages, including, 'Beware. Talk Fusion stole my money, they
.Eifih,
"Talk Fusion wrote Ein.holz and demanded he remove his defamatory statements.
comments about Talk Fusion on the internet despite Talk Fusion's demand that he desist.''
Florida Judgment, '1[20.
In fact, Einholz threatened "I will continue to defame you" unless the
The October 15, 2014, the Florida court made findings of fact and conclusions of law.
The Court found, inter a/ia,
jurisdiction over Einholz pursuant to Section 48.193, Florida Statutes because this action
arises from Einholz committing a tortious act in Florida. Einholz published a false and
defamatory statement about Talk Fusion to the BBB-WFL which is located in Florida,
and placed a false and defamatory statement on Talk Fusion's Facebook page.
Florida Judgment, '1[13.
The Florida Court found Einholz committed defamation per se and awarded $15,000 plus
interest while reserving jurisdiction to consider punitive damages. Florida Judgment, '112 l. The
Florida Court also permanently enjoined Einholz from repeating or republishing his defamatory
statements. Florida Judgment, '1]22.
ARGUMENT
"One of the bedrocks of our federal system is that 'Full Faith and Credit shall be given in.
each State to the public Acts, Records, and judicial Proceedings of every other State.' U.S.
4
Const. art. IV, J." McKesson Corp. v. Hackensack Med. Imaging, 197 N.J. 262, 274-75
(2009). The judgment for which full faith and credit is sought need only "be issued by a court
of competent jurisdiction in possession of valid personal jurisdiction over the defendant." Id.
Einholz challenges the Florida comt had personal jurisdiction to render the judgment. The
burden of proving a ground for non-recognition of a sister-state judgment is "on the party
asserting the ground." Kam-Tech Systems Ltd. v Yardeni, 340 N.J. Super. 414, 423 (App.Div.
2001 ). Einholz fails to meet his burden that the Florida court lacked personal jurisdiction.
the defendant possesses sufficient minimum contacts with Florida to satisfy constitutional due
process requirements."
Id. Third, if minimt1m contacts are established, the burden shifts to the
Genera)ly New Jersey's long arm statute extends jurisdiction to the full extent pennitted by the
Due Process clause. Thus, the first step in the Florida test is not required. Thereafter, New
Jersey applies a two-step due process analysis. See Wash. v. Magazzu, 216 N.J. Super. 23, 27-28
(App.Div. 1987) ("It must first be decided whether a defendant purposefully established
minimum contacts within the forum state so as to have had fair warning that a particular activity
may subject him to the jurisdiction of a foreign sovereign ... The second step is described in
Burger King as follows: Once it has been decided that a defendant purposefully established
minimum contacts within the forum State, these contacts may be considered in light of other
factors to detennine whether the assertion of personal jurisdiction would comport with fair play
and substantial ji1stice.").
Venetian Salami Co. v. Parthenais, 554 So.2d 499, 502 (Fla. 1989) "sets forth the
procedures ... to use when a defendant argues that the court lacks personal Jurisdiction over the
defendant." Hilltopper, 955 So.2d at 601. 5 "[T]he plaintiff bears the burden of pleading a basis
for jurisdiction . . . The plaintiff may do so either by tracking the language of section 48.193
without pleading supporting facts ... or by alleging specific facts that demonstrate that the
defendant's actions fit within one or more subsections of section 48.193. " Id.
King Corp. v. Rudzewtcz, 471 U.S. 462, 472 (1985) (internal citations omitted).
Firs\, this "fair warning" requirement is satisfied for "specific jurisdiction over a
non.resident.defendant if the defendant has 'purposefully directed' his activities at resident$ of
the forum, and the litigation results from alleged injuries that 'arise out of or relate to' those
activities." Burger King, 471 U.S. at 472. "A substar1tial connection" with a forum arising out
of"a single act can supportjurisdiction." Burger King, at 475, n. 18 (quotations omitted). As
here, "a substantial amount of business is transacted'solely by mail and wire communications
across state lines, thus obviating the need for physical presence within a state in which business
is conducted." Id. at 476.
toward ~esidents of another state, we have consistently rejected the notion that an absence of
physical contacts can defeat personal jurisdiction there." Id
'New Jersey's procedure when jurisdictional facts are not contested is the same. See Blakey v.
Cont'! Airlines, 164 N.J. 38, 70-71 (2000) (burden "on plaintiff to allege or plead sufficient facts
with respect to jurisdiction").
J.
Solutions Corporation v. Marshall, 39 So.3d 1201, 1215 (Fla. 2010). "The [Florida] supreme
court ... opted for a broad view of the intemet and its reach into Florida." Caiazzo v. Am. Royal
Arts Corp., 73 So.3d 245, 254 (Fla. DCA 4th 2011). Under Section 48.J 93(1), a tortious act
occurs within Florida through telephonic, electronic or written communications into Florida if
the cause of action arises from those communications even if the defendant makes the
communications outside of the state.
First. Caiazzo held defamatory telephone calls made from outside Florida which were
received in Florida fell under Section 48. 193. 73 So.3d at 259. Numerous cases hold
defamatory communications made into Florida fall under the statute. Infra., fn. 7. Talk Fusion
alleged and provided a copy of the defamatory complaint which Einholz inade to the BBB WFL
in Florida which established Jurisdiction. Florida Judgment, iJ8.
'The Florida court was not required to decide this issue because Einholz chose not to appear.
E.g. Becker v. Hooshmand, 841 So.2d 561, 563 (Fla. 4 DCA 2003) (defamatory comments on
internet chat room that targeted Florida resident or persons likely to engage in commercial
activities with the Florida resident fell within Section 48. 193); Wendt v. Horowitz, 822 So.2d
1252, 1257 (Fla. 2002) (Section 48. 193 applies to non-resident who posted libelous material on
its own website outside of Florida targeting a Florida corporation). Talk Fusion alleged and
provided a copy of the defamatory statement which Einholz made on Talk Fusion's Facebook
page which was accessible and accessed in Florida which established jurisdiction. Florida
Judgment, 19.
II.
THERE WERE SUFFICIENT "MINIMUM CONT ACTS" TO SUPPORT
SPECIFIC PERSONAL JURISDICTION
A.
JURISDICTION WAS ESTABLISHED UNDER TRADITIONAL
MINIMUM CONTACTS
"If there is a basis for jurisdiction under section 48.193(1 ), the plaintiff must still
establish that the noruesident defendant has sufficient minimum contacts with the State of
Florida to satisfy due process oflaw." Schwartzberg v. Knobloch, 98 So.3d 173, 178 (Fla. 2nd
DCA 2010). The Due Process "minimum contacts" test is merely whether "the defendant's
conduct and connection with the forum State are such that he should reasonably anticipate being
haled into court there." Schwartzberg, 98 So.3d at 178 citing World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 297, (1980). "The requirement is satisfied if the defendant purposefully
directs activities at Florida and litigation arises out of those activities ... " Renaissance Health
Publishing, LLC v. Resveratrol Partners. LLC, 982 So.2d 739, 742 (Fla. 4th DCA 2008).
First, Einholz published a defaniatory complaint - "$920 stolen", "unscrupulous
8
company", "pyramid scheme" -- about Florida resident Talk Fusion to the BBB-WFL located in
Florida. Based upon this action, Einholz could reasonably anticipate being haled into a Florida
court. Caiazzo sustained jurisdiction over a defendant who made defamatory telephone calls into
Florida, holding "the allegedly defamatory statements were targeted into Florida, at a
competitor's business headquartered in Florida, with the alleged purpose to damage that
competitor's reputation and business operations." 73 So.3d at 258. "Based upon these
allegations, [Defendant] could reasonably anticipate being haled into a Florida court .. :'' Id.
Here, Einholz did exactly this - he directed a defamatory communication about Talk Fusion to
the BBB-WFL in Florida. 8
Second, Einholz placed a defamatory comment
Talk Fusion's Facebook page which constitutes an "electronic communication into Florida"
which is a "tortious act of defamation within Florida" because it was accessible and accessed in
Florida. Internet Solutions Corp, 39 So.3d at 1215. See Whitney lrifo. Network. Inc. v. Xcentric
Ventures. L.L.C., 347 F. Supp. 2d 1242, (M.D. Fl. 2004) ("comments [on Worldwide Web]
targeted a Florida resident and a Florida corporation, and concerned a Florida community .... As
a result of the defendants' contacts with Florida, they should anticipate being sued for any
E.g. Silver v. Levinson, 648 So.2d 240, 243 (Fla. 4th .DCA 1994) (defendant who mailed
defamatory letters into Florida committed an intentional act directly aimed at Florida and made
accusations targeted at a Florida resident. He 'purposefully directed' his activities at Florida....
defendant could have reasonably anticipated being haled into court ill Florida due to the fact that
his actions were intentional and purposeful, designed to have an effect in South Florida.");
Carida v. Holy Cross Hosp. Inc., 424 So.2d 849 (Fla. 4th DCA 1982) (slanderous telephone
conversation was sufficient); Achievers Unlimited, Inc. v. Nutrf Herb, Inc., 710 So.2d 716 (Fla.
4th DCA 1998) (defamatory telephone call into Florida was sufficient).
'New Jersey law is the same, holding sending tortious communications into the. state establish
jurisdiction. See Carrabba v. Morgat, 2014 U.S. Dist. LEXIS 7799, at* 13 (D.N.J. Jan., 2014)
(upholding personal jurisdiction in defamati(m case where defendant was "deliberately directing
mail, telephone, and/or email communications to the forum state, [New Jersey].")
9
defamatory statements published on their websites. Therefore, because the defendant possess at
least minimum contacts with this forum, the due process requirement is satisfied."). 9 Einholz's
comment was placed on Talk Fusion's own Facebook page, obviously targeting persons who
might do business with Talk Fusion establishlngjurisdiction. Florida Judgment, 19, 20. 10
B.
In the tort context, Calder v. Jones, 465 U.S. 783, 789 (1984) held specific personal
'1urisdiction over [defendants] was proper in California based on the 'effects' of their Florida
conduct in California." In this case, a reporter and editor were responsible for an allegedly
defamatory story which was circulated in California, where actress Shirley Jones resided.
Calder held:
[P]etitioners are not charged with mere unta:rgeted negligence. Rather, their
intentional, and allegedly tortious. actions were expressly aimed at California.
Petitioner South wrote and petitioner Calder edited an article that they knew would
have a potentially devastating impact upon respondent. And they knew that the
brunt of that injury would be felt by respondent in the State in which she lives and
works and in which the National Enquirer has its largest drculation. Under the
circumstances, petitioners must "reasonably anticipate being haled into court there"
to answer for the truth of the statements made in their article ... An individual
injured in California need not go to Florida to seek relief from persons who, though
remaining in Florida, knowingly cause the injury in California.
Id at 789-90 (citations omitted, emphasis added).
E.g. Becker v. Hooshmand, 841 So.2d 561 (Fla. 4th DCA 2003) (sustaining jurisdiction over
defendant who posted defamatory comments on a chat room that targeted to Florida residents or
persons likely to engage in commercial activities with the Florida resident plaintiff).
1,'\
10
New Jersey law is the same. See Blakey v. Coni'l Airlines, 164 N.J. 38, % (2000) (sustaining
jurisdiction, stating: "Because defamation was alleged to be part of the harassing conduct ... it
would be fair to posit jurisdiction where the effects of the harassment were expected or intended
to be felt ... in Newark, New Jersey."); Goldhaber v. Kohlenberg, 395 N.J. Super. 380,
390 (App.Div. 2007) (sustaining jurisdiction, Califomia defend,mt who directed defamatory
internet postings at New Jersey resident should have reasonably anticipated being haled into
New Jersey court.)
10
"Distilling Calder to its essence ... the Cotui ... found ptul)OSeful direction there because
of the presence of(a) an intentional action ... (b) expressly aimed at the forum state ... with (c)
knowledge that the brunt of the injury would be felt in the forum state". Dudnikov v. Chalk &
Vermillion Fine Arts, Inc., 514 F.3d I 063, I 072 (10th Cir. 2008). 11 See Blakey, 164 N.J. at 69
(following Calder, "We are satisfied that if defendants' statements are capable of a defamatory
meaning and were published with knowledge or purpose of causing harm to plaintiff ... within
New Jersey, those intentional contacts within the fortun would satisfy the minimum contacts
requirement"). The Florida court had jurisdiction under this test.
First, Talk Fusion alleged intentional action, i.e. sending defamatory statements to the
BBB-WFL in Florida and making a defamatory statement about Talk Fusion 011 its Facebook
page. Florida Judgment, '1[8, 9. In addition, Einholz: made defamatory comm~nts on Talk Fusion
associates' Facebook pages and on Einholz's Facebook public group. Florida Judgment, 110, 11.
Second, Einholz:'s conduct was "expressly aimed" at Talk Fusion in Florida. Specifically,
the communication to the BBB-WCF was made about Talk Fusion to Florida and the
communication on Talk Fusion's Facebook page was made on the website ofa Florida resident.
Equally, the defamatory comments on Talk Fusion associates' Facebook pages and Einholz's
Facebook public group targeted Talk Fusion.
Thir~. Einholz: obviously had knowledge the brunt of the injury would be felt in Florida
because this is where Talk Fusion was headquartered and damaged. Florida Judgment, 'I[! 5.
11
As Dudnikov clarified, "In the to1t conte111, we often ask whether the nonresident defendant
'purposefully directed' its activities at the forum state; in contract cases, meanwhile, we
sometimes ask whether the defendant 'purposefully availed' itself of the privilege of conducting
activities or consummating a transaction in the forum state." Id. at 1071 (emphasis added).
11
Further, Einholz intended to hann Talk Fusion, as evidenced by his statement "I will continue to
defame your company" unless the refund was provided. Complaint, i]l 2.
Like Calder, Einholz was not charged with mere untargeted negligence. Rather his
intentional tortious actions were ai.med at Talk Fi1sion in Florida. Einholz not only knew the
brunt of Talk Fusion's injury would be felt in Florida, he intended this to pressure Talk Fusion
into providing the refund. Under these circumstances, Einl1olz should have reasonably
anticipated being haled into Florida to answer for his defamation. A party injured in the Florida
need not go to New Jersey to seek redress from Einholz, though remaining in New Jersey,
knowingly caused the i~jury in Florida.
III.
EINHOLZ CANNOT MEET HIS HEAVY BURDEN JURISDICTION IS
CONSTITUTIONALLY UNREASONABLE
"[O]nce it is established that defendant's activities relating to the action established
minimum contacts with the forum state, the 'fair play and substantial justice' inquiry must still be
made." McKesson Corp., 197 N.J. at 278. However, the burden is on the "nonresident defendant
who has been found to have minimum contacts with the forum [who] 'must present a compelling
case that the presence of some otl1er considerations would render jurisdiction unreasonable.'" Id.
(quoting Burger King, 471 U.S. at 477). As A1cKesson Corp. explains:
This determination requires evaluation of such factors as (I] the burden on the defendant,
[2] tl1e interests of the forum State, [3] the plaintiffs interest in obtaining relief, [4] the
interstate judicial system's interest in obtaining the most efficient resolution of
controversies; and [5] the shared interest of the several States in furthering fundamental
substantive social policies.
197 N.J. at 278-79 (quoting Asahi A1etallndus. Co., Ltd. v. Superior Coun, 480 U.S. 102, 113
(l 987) (internal quotation and editing marks omitted)). Florida considers the same factors if
raised by the defendant. Caiazzo, 73 So.3d at 258 (citing and quoting Asahi). Einholz's bare
'
motion does not meet his heavy burden jurisdiction would be unconstitutionally unreasonable.
12
A.
to the plaintiff going to the defendant's home state, is too slight an imbalance to defeat
jurisdiction." In fact, "a trip from Fort Lauderdale to Newark Airpm1 is not qualitatively that
different from one from Fort Lauderdale to Tallahassee. Reliance Nat. Ins. Co. In Liquidation v.
Dana Transport; Inc., 376 N.J. Super. 537, 551 (App.Div. 2005) (sustaining jurisdiction).
Einholz offers literally no evidence jurisdiction in Florida is unconstitutionally
burdensome. If Einholz chose to do business with Talk Fusion in Florida and send defamatory
communications into Florida, defending a lawsuit in Florida imposes no unconstitutional burden.
B.
States have "a 'manifest interest' in providing its residents with a convenient forum for
redressing injuries infiicted by out-of-state actors." Burger King, 4 71 U.S. at 462, 4 73. Further,
"states have a special interest in exercising personal jurisdiction over those who commit torts
within its territory." Keeton v. Hustler Magazine, 465 U.S. 770, 776 (1984). "Florida has a
strong interest in affording relief to a company whose principal place of business is in [Florida]
and whose business activities impact [Florida]'s citizens." HE.R.O., Inc., 2012 U.S. Dist.
13
LEXIS 69044 at 20. Florida had "manifest interest" in providing a forum for Talk Fusion, whose
headqua:iters are and who was hanned in Florida by Einholz's tortious acts committed in Florida.
C.
"Plaintiffs ... have a strnng interest in adjudicating suit [in Florida] because ... Plaintiff's
headquarters are in Florida and ... In addition, it appears that by virtue of Plaintiffs' headquarters
being in Florida, most if not alI of the witnesses and documents in this case are likewise found in
Florida." HE.R.O., Inc., 2012 U.S. Dist. LEXIS 69044 at 20. Equally, Talk Fusion had
compelling interest in prosecuting its claims in its home forum, paiticularly given that its claims
are based on communications which Einholz unilaterally directed to and intended or expected to
'
be felt in Florida. Talk Fusion's witnesses are in Florida and key third party witnesses (BBBWFL), are also there. Id.
D.
This factor asks "whether the forum state is the most efficient place to litigate the
dispute." OM! Holdings v. Royal Ins. Co. of Can., 149 F.3d 1086, 1097 (10th Cir. 1998). Courts
look at the "location of the witnesses, where the wrong underlying the lawsuit occurred, what
forum's substantive law governs the case, and whether jurisdiction is necessary to prevent
piecemeal litigation." Id
(App.Div. 1987) held "It will be convenient to all parties, satisfy both states' interest in an
efficieht resolution of the controversy, and provide plaintiffs the most effective reliefifthe
action is tried in Virginia where almost all the key witnesses reside, where most of the vital
evidence is to be found and where Virginia law and practice can more readily be applied ... " Talk
Fusion's own and third patty witnesses (BBB-WFL) are located in Florida, the wrong occurred
14
in Florida where Talk Fusion was defamed, and Florida law governs the claims. 1here is no risk
of piecemeal litigation since the only parties to the dispute are Talk Fusion and Einholz.
E.
This factor "focuses on whether the exercise of personal jurisdiction by [the fomm]
affects the substantive social policy interests of other states or foreign nations." OM/, 149 F.3d at
l 097. New Jersey courts "presume both states share a mutual interest in preventing disparate
results occasioned by the simultaneous litigation of dual proceedings." Martinez v. Amrit, 2014
The Motion alleges Einholz' s communications are protected by the First Amendment.
Motion, p. l. This is irrelevant.
First, the only issue is personal jurisdiction, not whether Einholz may have had
substantive defenses to Talk Fusion's claims. Thus, whether Einholz made the statements is at
issue, not whether they were tortious. Htlltopper, 955 So.2d at 601 (when defendant does not
dispute making "the statements at issue but simply denied that they were tortious, [defendant]
did not contest the basis for jurisdiction"). Einholz's motion does not deny making the
statements nor could it.
15
CONCLUSION
For the foregoing reason, Einholz's motion should be denied.
BY:
16
. r'"'\
Case No.
Plaintiff,
Division:
vs.
COMPLAINT
Talk Fusion, Inc. sues Eric Einholz and alleges:
J.
This is an action for damages exceeding $ J5,000, exclusive of interest costs and
'
2.
Plaintiff, Talk Fusion, Inc. ("Talk Fusion") is a corporation organized under the
Jaws of the State of Florida witli its principle place of business in Brandon, Florida.
3.
Talk Fusion is a direct sales (or multi-level marketing) company that markets its
products through independent associates ("Associates"). Talk Fusion markets and sells various
video communication products for personal and business use, including a webbased software
that allows a customer to create video emails and send them to friends, family, and customers; all
without attachments or special software to install. Associates are customers of Talk Fusion's
services, but also sell Talk Fusion's products, recruit other Associates, and earn commissions.
4.
5.
6.
Talk Fusion has a three day money back guarantee from the date of activation.
Einholz agreed to this policy when he became a Talk Fusion Associate. Einholz had access to
1
and used Talk Fusions services for over three months. Additionally, Talk Fusion paid an instant
commission to a third party when Einholz became an Associate.
7:
On May 12, 2014, after Einholz had access to and used Talk Fusion's product for
approximately three months, Einholz requested a complete refund of his purchase price.
Consistent with its three day money back guarantee, Talk Fusion denied Einholz's request for a
refund.
8.
After Talk Fusion denied Einholz request for a refund, Einholz electronically made a
complaint to the Better Business Bureau of West Central Florida, (the "BBB - WFL"). A copy of
Einholz's complaint to the BBB-WFL is attached as Exhibit A.
9.
The BBB - WFL is a not for profit corporation organized under the laws of the State
Einholz complaint was made directly to the BBB - WFL located in Florida,
Einholz complaint States, "$920 stolen! ... At this point I realize that this is an
unscrupulous company and l will only settle for a full refwid. It is not a real MLM company but
a pyramid scheme." This statement is false and defamatory. Calling a direct sales company like
Talk Fusion a "pyramid scheme" is a serious and damaging allegation.
.'
12.
After Einholz complained to the BBB - WFL, Talk Fusion WTote Einholz advising
him that his complaint contained a statement that was defamation per se and demanding that he
withdraw the complaint. A copy of Talk Fusion's letter is attached hereto as Exhibit B. Einholz
responded by email that " ... I will continue to defame your company ... " A copy of Einholz's
response is attached as Exhibit C.
13.
14.
Einholz has also posted defamatory comments on Talk Fusion Associates' Facebook
pages, including, "Beware. Talk Fusion Stole my money, they will gladly steal yours too."
15.
organization."
Jurisd!tion and VSJ11e
16.
This Court. has jurisdiction over Einholz pursuant to Section 48. 193. Florida Statutes,
because this action arises from Einliolz committing a tortious act in Florida. Einholz published a
false and defamatory statement about Talk Fusion to the BBB - WFL which is located in
Florida, and placed a false and defamatory statement on Talk Fusion's Facebook page.
17.
This Court's jurisdiction over Einholz comports with due process principles becaui.e
18.
Hillsborough County, Florida where Talk Fusion is located and where it has been damaged.
Clai,m (Qr Defamation
19.
Einholz has made the following defamatory statements concerning Talk Fusion:
"$920 stolen! , .. At this point I realize that this Is an unscrupulous company and I will only settle
for a full refund. It is not a real MLM company but a pyramid scheme;"
"Those dirt bags stole my money;"
"Beware. Talk Fusion stole my money, they will gladly steal yours too;'' and
"Talk Fusion is a scumbag organization."
20.
Einholz published his false and defamatory statements in Florida to the BBB - WFL
21.
Einholz either knew his statements were false or made the statements without
Einholz stating that Talk Fusion stole money and calling Talk Fusion a "pyramid
scheme" is defamation per se. Therefore,. general damages are presumed as a matter of law and
Einholz is subject to punitive damages.
WHEREFORE, Talk Fusion, Inc. requests the Court enter judgment against Einholz:
a) for damages;
\
d) for all other relief the Court deems just and proper.
[email protected]
401 E. Jackson Street, Suite 2225
Tampa, florid21 33602
Telephone; (813) 221-4242
Facsimile: (813) 227-8598
<;
Case# 67288869
Einhol:1 Etic
1
einhol:,[email protected]
Location Involved:
(Same as above)
Onlin service promised training via onlln~ tutorials. Tutorials so outd~ted that they are U$$less. rendering service useless to me. $920 stolon I
Tslk F1.J&ion's online Hrvioee are 3old th~Qugh Independent distributors, via ii "Multl Le.vel Merk.et:lng 11 bas Ii. Over the winter l 1;1l1end~d ;i;1 ~err'ljr'l~f in NJ
,an by one oflhei, rep,, "Hatter Alvaroz".
I consider myself quite adopt at te<:hnology, butt was concerned about gettin; their sorvlc,,$ up ond
running quicl<ly. Mt. Alvara, promised product training oesarons to be held on a LOCAL basis at a time that waa convenient lo me. Ho also alluded to
the excellent Miine tutorial that were offered by the T$1k lueion Company. I also exploined that I was about to pu,ehase ''squ~ezo pages" from a
competito,, and he assured mo that they would be available vra tho Talk Fusion site. at much better prico.
On Feb 6, 2014, I purchal"'d th seivice for $S1S, ond agreed to Mura montlily l)i!llng at $35.00 per month. I logged Into the $1te, and attempted lo use
the tutorials, only to discoV\lr that they were so outdated, that they did not even resemble !ho current version of Talk Fusion that I was trying to acc,,ss.
In oHence, the tutorials wero totally u,el!l$s, rendering the product unavollable to me. Over tho naxl ieveral wee,o, I logged in e tim trying to l~rn
the &y$tem myself, but became totally ftustrated by It's complexity, and lad< of relevent tutorials. I also made multiple verbal requests to my "ponoc>r'
for the promised local training, 1nd his responso was typically "we will try to oet It up lllr next week". I was pali~nt, and continued to pay lhe monthly
ohorges, bot the promised training never meterlallzed.
When I asked thEtir support how I was supp09ed ~ maKa use of the S&Nica, thelr response was ' train yourself'.
1
point I ~allze that this is on unoortJpurous e-0mpany. and I will only settle for rUll 1'$luM.
seh~'.
BBB Proooplng
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(813) 221,4242
FAX: (8 ta) 227-8598
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August 14, 20 l4
l'Acl. D. WATSON
Re:
Let me state c:11 the outset, Talk Fusion is not writing oecau~e you made a complaint to the
BBB. You are free to complain to the BBB lf:you wish and Talk Fusion will respond to the BBB
accordingly. You go beyond making a complaint to the BBB and include in your complaint to
the BBB the folse statement, "It [Talk Fusion] is not a real MLM, but a pyramid scheme."
You seem to have some familiarity with multi-level marketing. I am sure you realize that
accuslng a multi-level marketing company such as Talk Fusion of being a pyramid scheme is a
very serious and dwnaging accusation, Your statement that Talk Fusion is a pynunid scheme is
false and defamatory. Talk Fusion is not in any way a pyramid scheme. You have no way of
even knowing if Talk Fusion could possibly be a pyramid scheme, You knew this statement was
false when you made it. Calling Talk Fusion a pyramid scheme is not w1 opinion. You made
this false statement either out of frustration or as a deliberate attempt to damage Talk Fusion. No
matter your motive, the statement was intentional and exposes you to liability for damages.
Ac,;:using Talk Fusion of being a pyramid scheme is the equivalent to accusing Talk Fusion of a
crime and is therefore defamation per se. In cases of defamation per se. damages are presumed.
In other words, merely making the statement is.sufficient to expose you to damages.
'I,
EXHIBIT
!'
It'
. ' I
'
Mr. Eric Einholz
August 14, 2014
Page 2
Talk Fusion offers a three day money back gi1arantee from the date the service is
activated. When you purchased Talk Fusion's product, you clicked off a box indicating that you
had read and agreed to Talk Fusion's Policies and Procedures, Tenns of Service, Terms and
Condition~ and Refund Policy, including the three day refund policy. Additionally, Talk
Fusion's three day refund policy is m;tually displayed on the BBB's website regarding Talk
Fusion.
You purchased Talk Fusion's product on February 6, 2014, used the product, and did not
request a refund until May 12, 2014. Talk FU11fon cannot comply with your request to depm
from its clearly stated three day refund policy. You had immediate access to Talk Fusion's
system and an opportunity to try it out during the three day period, Furthermore, Talk Fusion
paid an instant commission to a third party based on your purchase and cannot recoup the
commission. This is not a retail transaction where you can simply retum M unused proouct to the
store. For all these reasons and others, Talk Fusion must insist on enforcing its three day refund
policy.
You agreed to Talk Fusion's three day refund policy at the time of purchase and Talk
Fusion is merely enforcing its policy as it does with all other customers. Calling Talk Fusion a
pyramid scheme in an attempt to get II refund will not be tolerated. Talk Fusion repeats its
demand that you withdraw your complaint and remove the defamatory statements within three
days.
'i
t
t
EJKJHD
i'
'
I
I
Ii
Edward Kuchinski
From:
E E <einholz_e@yahoo.,0111>
Sent:
To:
Cc:
Subject:
Heather DeCoeur
Edward Kuchinski; [email protected]
Re: Talk Fusion
Categories:
Red Category
EE
ERIC EINHOLZ
Garden State Advisors Ll.C
Helping busy PROFESSIONALS on
the path to Financial Independence
433 Piaget Ave.
Ste#3
Clifton, NJ 07011-3002
ph: 973-750-8090 fax: 973-689-9090
this is a "MUST WATCH''
friends please watch AND SHARE !!
www.isasocial.com/eeinholz
From: Heather DeCoeur <hdecoeur@sbwleqal,gom,.
To: "einhol~ [email protected]" <einholz [email protected]~
Cc: Edward Kuchinski <[email protected]>
Sent; 1hursday, AYgust 14, 2014 2:01 PM
Subject: Talk Fusion
Mr. Einholz,
EXHIBIT
I C,
Thank you,
Heather
'' ._)
.~
Eric Einholz Don~ buy into Talk Fusion. Those dirt-bags stole my mofley.
""'.,.._
...
.lllil Like Reply 9 hours ngo
CJ Vir;;,w ~ mnrp f'nmmPntc:
EXHIBIT
~,
IN
. . Plaintiff',
Division: B
VS,
I.
Talk FQ$lon served Deft:indant, Erle Elnhob. ("Blnhob.'') with its Complaint herein, alleging
a single count for delwnatl.011, on August 25, 2014.
2,
Emholz did ru>t filu a l\'l8JIOlllKl tn 1he c:ompla.lnt or respond to 1he complaint in eny way.
3.
The Clerk of1he Court entered a delimit aplnat BIDhob: on Seplelnber 25, 2014.
4,
s.
Elnholz
~ made
ilk 22860 Pg 67
...
I
7.
The BBB.:.. WFL is a Florida not for profit corpondion with. its principle place ofbusinllllll
in CleatWBter, Florida.
8.
ill an UJlllCntPWOU8 CODlJmDY mu:! I WID: only sc,tt:le fur a full ret\md. It is not II n:al MLM
company but a pytamid scheme,"
9.
Binholz posted a didiinlatary stalllJ:!lent about Talk Fusion on Talk Fusion's Paoebook page
stating, "Those dht bagll stole m.y JDoney."
lo.
Btaholz bu also posted de&matory conunmltl on Talk Fusion Associaws' Facebook pages,
Including, "Beware. Talk Fusion Stole m.y money, they will gladly steal yours too."
i l,
. oqp,ni:>ati'>ll." ..
12,
Talk Fusion wrow Elnholz mid demanded ho mnave his du&matory statement!!, Elnholz
rofusud to. do so .
13.
,' ,.. . .
J.
because. this IICfion arises from Elnholz committiPg a tortioua act In Florida. Einbolz
published a :mJ.se 1111d defamatory rltaleWllD1 a.bout Talk Fusion to the BBB - WFL which i~
loc:atcd in Florida, mid placed a false and def,rnirtory statement on Talk Fusion's Facebook
page.
14.
This Court's jurisdiction over Elnholz comports with due progess principles because
15.
Venue is appropriate in. this Court booau.se the causo .of w:tion ollCUl'l'ed in HlllsboroJl8b.
County, Florida wbei:e Talk Fusion Is :locatlld mu:l where it has been damaged.
,,
ec~t\ne,:!
\0
16
2014
131';
22960 Pg 60
'\
16.
Tiu, Court finds that Talk Fwdon hu slated a causes of action for defiunation undDI' Florida
l&w,
to ftle or se.rve my paper in this aotlon, and has fll.iled to p!Clld Of.' otherivi11e defimd
1111
18.
The Court hereby finds Erle Etnholz,, liabl11 :fur defumotion as alleged in Talk Fusion's
"
complabrt.
19.
Binholz' atat.mnents that Talk Fusion stole'hia momy, that Talk Fusion is a ''unscrupulous
oompany", and thst Talk Fusion u "not a i:eal MLM compmy but a pyramid scheme", are
defirrnatory per se. General damages are 'lbereJbte premimed.
20.
The
Court finds thst an iajunetion is mocslllll'Y to prevent EJnholz :ftom iepeatiq and
comma about Talk Fusion on the lntemet despite Talk Fusion's demand that he desist.
. ,,,.
Talk Fusion has sustained and will con~ austain ltrcparable iajury unl11SS EJnholz Is
enjoined. Talk Fusion is without an adequate reuii:d,y at law to rcdniss the hmm CIIIISed to
Its legitimate blWIUIII intetest by Ehlllolz' actions. Damages are l.uadeqwt.e to deter
Bmhob:ud protect Tulk Fusion' ~ o n . The issuance ofan i.qj1nwtion against Einholz
... ,...
. will not threaten the pubHr.: health, safety, or WCllfbre and the equities favor Talk Fusion.
lvdmmt
21.
Ith! adjudgodthe Plaint!~ Talk:Fwdon, Jnc., 1319 Kmgsway Rd. Brandon, Florida 33510-
/25 IS, nicovc from Deiimdant, Erle EJnholz, 433 Piaget Avenue, Ste. 3, Clifton, N107011,
the sum of Sl 5,000 thst shall hew intmut at the legal ndt:, for whieh let execution ui11ue.
3
scannad
1 Q
1 S
201 4
. ..
22.
Binholz is Ol'.ljobu:d :Imm repeating or republlilhlng his defiunatory rtatements about Talk
hismom,y.
23.
The Coul1 reserves jurisdiction to corisider ail award of punitive darnqes aplrut Bric
.Binholz,. to cnfon,e this judgment and to enmt ,uch fw1her reUef 1111 may be necellW)' and
) "f . 2014.
--~~~
" ., .Honorable Manha Co
,~ i
t+,
Copic,ato:
"
BTATI:! OF FLORIDA
CQUN'fY OF HILLSBOAOUGH)
PAT FRANK
a:~~-o.
4
Hillsborough county
",
nm
,P~
Division: B
VB,
:reviewing the pleadings, hearing lllJJIIIDllDI of Talk Fusion's IIOUWIGI, and othwise bdng fully
Talk Fusion served Defendant, Brie BinhoJz ("Binholz") with itll Complaint herein, alleging
a IIIDgle llOl1llt fur defilma1fon, OD A.ugust 25, 2014.
2.
Binholz did not ffle a ,:espome to the oomplaint or respond to the complaint in any way.
3.
The Clerk of tho Court entered a deJhult flg8iDst Binholz on Septeinb 25, 2014.
4.
5.
Talk Fusion is a Florida Cmponllion, with its prlru.lipal place of m111mHs in Bnmdon.
Florida. Blnholz Is a nsldent of New i~.
6.
true.
Bmholz 'electronically nuuJe a complaint to tho Betler Business Bw:cau of West Central
Florida. (fho ''BBB - WFL'?,
1
Bk 22t'160 Pg 67
7.
Tho BBB .:.. w,L is a Floridll not for profit ewporation with its principle place of business
. in Claatwater, Florida.
8..
Binholz complaint to the BBB-WFL ~ ,?20 !JtOlenl .,, At this point I realize that this
ill an uosm:upuloua company and I will: only settle for a full rdl.l.Qd. It is not a real MLM
9.
Elnholz posted a de&niulOry statament about Talk Fusion on Talk fusion's FDllllbook pap
stating, "Those di.rt baas stole my money."
10.
it.
12.
Talk Fusion wrote Einholz and demanded he rmmrve bis dv&tnatory lllatemenltl, Einhclz
refused to do so.
13.
; I, '
I' \ '~
,I'
This Court bas jurisdiction over Einii<ibi pursuant to Section 48.193. Florida S1atutes,
because. thill action arises from Emholz committing a tortious act in Florida. Einholz
published a mllie and duflllnatory llllltllmRlt llbout Talk Fus.ion to the BBB - WFL
. which is.
104:lltcd ln Florida, and placed a false and cfofiunaU>ry statement on Talk Fusion's Facebaok
page.
14.
CIOIIlportll
with due
pw00&1
pri.Dlllples 1xlc:lflll!ll
l S,
Vil.DUii is llpj:>n)priatc in this Colll1 because the cause of action .occllm:d in HillBborough
County, Florida where Talk Fusion Is io.:aled and where it bas been damapd.
Ell!. 22860 Pg 68
16.
The Court liDds that Tnlk Fusion bus Btutud a cause of lllllion for de1iimudon imder Florida
law.
17. . Punwmt to Florida Rules of Civil Procedure 1.500, lbll Comt fitids that Einholt bus fililed
to rue or 8fflll.l any paper in this aatlon, Bild bu failed to plead or Olhotw:lse deAmd as
provlded :fbr by the Florida Rule of Civil Proeedme.
18.
The Court hereby liDds Eric Einholz liable for defiurnmon as alleged in Telle Fusion's
'
"
19.
Einholz' statmncnts tba1 Telle Fusion stol1s'his money, that Telle Fusion is a ''unsC.l'llpulous
company", and that Telle Fusion is ''not a real MLM company but a pymm.ld scheme", me
deflrrnatory pm: se..Oeueral dam1ges lln'I them'brcl presumed.
20.
The
Court liDds dUlt llll iqjunction is neceesury to p,:,:vent Einholz fi:om repeatiiig and
.. . '..
,,;
Telle Fusion baa BU8tained and will contlit~ ~ inepai:able iqjury unl11BS Binholz is
eivoined. Talk Fusion is without 1111 adequate ~ at law to redress the hmn C11W1ed to
Its Ieglt!mm:e business ID.to.mt by 'E1:a!wJg' lllllions. JJamases ltnl inadequate to deter
Binholz and protect TellcFusiOD.'s~on. The lsawwce ofllll injunction ngalnst EJnholz
,
'nl,,'
. will not tbtvaten die public health, sa:ftlty, or welfatc and the equities fil.vor Tolk Fusion.
bdemt
21. . Itis aqjudae,d 1he Plninliff; Tellc Fusion. Ina., 1319 Kfng&wa.y Rd. Bmnd.on, Florida 33S 102515, teCOVerftvaiDeiendaat. EricEinholz, 433 Piaget Avenue, Ste. 3, Clifton, NJ 07011,
tho sum of $15,000 tbat shell beat i1ltere,t et the lepl ratu, tor which let exewtion i1111UO.
\
3
scanned
1 Q
16
2014
22.
Binholz is enjoined ftom repeating or republlilhing his deilunatory statements about Talk
Fusion, lnclwtina ~ that Talk Fll8ion is 1UllllltUplllo1Jll, a pyramid aoheme ot lltole
bis money,
23.
'
Einhol.z, to anforae this judgment and to grant sueh further relief u may be llllCIISllfll'Y and
proper.
DONB AND ORDERED in chambers of Hillsborough County, Florida on October
I "I
2014.
-~~
Copies to:
J.
..
STATE OF FLOFIIOI\
)
OOUl'fTY OF HILLSSOROUGHl
~HIS IS TO Cl:RTIFY THAT THE FOREGOING 1$ A
'\"RUE AND COI'IRECT COPY OF THE DOCUMENT ON
FILE IN MY
~:f"JJ. Tt;:fgF1irr.l.Glf2t.li
1
MT FRANK
CLERK OF Ol~C~IT COURT
J . ' . ~~
. D.C.
Iii.,""
4
v.
Judgment No. DJ-238655-14
Eric Einholz,
Debtor
ORDER
THIS MATTER having come before the Court upon Debtor Eric Einholz's Motion to
Vacate Judgment, and the Court having considered the papers submitted, and any oral argument,
and for other good cause having been shown;
IT IS on this---....-
FURTHER ORDERED that a copy of this Order shall be served upon all counsel of
record and unrepresented parties within ___ days of entry hereof.
HON.
v.
Judgment'No. DJ-238655-14
Eric Einholz,
Debtor
Certificate of Service
I, certify that on February 11, 2015, I served a true and conect copy of Creditor's
Opposition to Motion to Vacate Judgment by United States Postal Service prepaid certified mail
to:
Laura Rodriquez, Esq.
Darrington & Rodrigue, LLP
149 Washington Street
2"d Floor
Bloomfield, NJ 07003
BY:
Exhibit H
Plaintiff,
vs.
ERIC EINHOLZ,
Defendant.
BEFORE ME this day personally appeared Defendant Eric Einholz, who, being first duly
sworn, deposes and says:
1.
2.
3.
Sometime in September 2014, I was served with the Summons and Complaint: at my office
at 433 Piaget Avenue, Suite 3, Clifton, New Jersey 07011.
4.
Fallowing service of the Summons and Complaint, I sought legal advice via the free online
service at avvo.com. I was told that since the action was in Florida, the Plaintiff would have
trouble collecting any judgment from me, as I live in New Jersey. I understood that to mean
that the Florida courts did not have jurisdiction over me, and that 1 had nothing to worry
about.
5.
On or about October 2014, I moved out of the office located at433 Piaget Avenue, Clifton,
New Jersey. After I m oved out of the office, I did not receive any mail being sent to this
office.
6.
Thereafter, I was travelling outside of the United States for about a month, and had not
received any other documents relating to this matter rmtil December 2014.
7.
On or about late December 2014, I received a Notice from the Superior Court of New
Jersey, stating that the Judgment entered in Florida has been recorded in New Jersey on
December 10, 2014.
8.
The Notice had been sent to a mail drop located at 208 Main Street, Suite 400, Keansburg,
New Jersey 07734-1735. Neither my home nor my office arc located at this address.
9.
l 0.
In or about January 2015, my attorney, on my behalf: moved to vacate the Judgment in the
Superior Court of Ne:w Jersey, Passaic County.
11.
In or about March, 2015, the Superior Court ofNew Jersey denied my Motion to Vacate.
12.
Thereafter, I tried to figure out whether there were any other options available to me, and
I believed that I probably did not have many options available.
13.
In or about August 2015, I contacted The Law Offices of Damian G. Waldman, P.A. ,
located in Clearwater, Florida, to see if the Default Judgment against me could be vacated.
14.
It should also be noted that I have been diagnosed with clinical depression. This disability
often prevents me from remembering details and events, and from keeping track of matters,
including keeping track of the notices, events, and documents in this matter.
15.
I have read the Motion to Vacate the Default and Default Judgment and this Affidavit and
know the allegations and facts contained therein are true, accurate and correct.
Eric Einholz
(
~
I,
:-\o .\ c.J
t l( CX.
N_'_7_D---'-L______
as identification.
STEPHANIE COONEY
Notary Public
~,.=..\.,...Jc-=--L..1<..>::_,__~'-"-4'-L.ILi"--'vp
My commission expires:
l~ / ~ (, {I g
Exhibit I
ATTORNEYS AT LAW - - -
PHILADELPHIA I MOSCOW
April 1, 2015
[email protected]
Laura Rodriguez, Esq .
Darrington & Rodriguez, LLP
149 Washington Street - 2"d Floor
Bloomfield, NJ 07003
RE:
For:
TCS/omd
PHILADELPHIA
I MOSCOW
TO:
Einholz (hereinafter you or your) to, in accordance with Rule 4:17-4, answer under oath
within 60 days the following Interrogatories-In-Aid of Execution:
1. Please set forth your full name?
2. What is your current address?
3. What is your date of birth?
4. What is your Social Security Number?
5. Please set forth your driver's license number?
6. What is your current telephone number?
7. Please set forth:
(a) The full name and address of your employer:
(b) Your weekly salary: Gross $_______
Net $_______
8. List the names, addresses and account numbers of all bank accounts and/or investment
accounts on which your name appears.
Attach copies of the three most recent bank statements for each account listed in Question 8.
9. If you receive money from any of the following sources, list the amount, how often, and
the name and address of the source:
Type
Alimony
Loan Payments
Rental Income
Pensions
Bank Interest
Stock Dividends
Other
10. Do you receive any of the following, which are exempt from levy?
No _____
S.S.I. benefits
Yes _____
No _____
Welfare benefits
Yes _____
No _____
V.A. benefits
Yes _____
No _____
No _____
No _____
No _____
Attach copies of the three most recent bank statements for each account listed in Question 9 that
contains funds from these sources.
11. Do you own the property where you reside?
Yes ___ No ___
13. Does the present value of your personal property, which includes automobiles, furniture,
appliances, stocks, bonds, and cash on hand, exceed $1,000?
Yes ___ No ___
If the answer is "yes," you must itemize all personal property owned by you.
Cash on hand: $___________
Other personal property: (Set forth make, model and serial number. If financed, give name and
address of party to whom payments are made).
Item
Date Purchased
Purchase Price
Value
I hereby certify that the foregoing statements made by me are true. I am aware that if any of
the foregoing statements made by me are willfully false, I am subject to punishment.
Date:
, 2015
_________________________
Eric Einholz
Exhibit J
Plaintift
Division: 8
vs.
ERIC EINHOLZ, an individual,
Defendant.
COUNTYOF HILLSBOROUGH
BEFORE ME, the undersigned authority, personally appeared Edward J. Kuchinski, who,
{"Talk
Fusion").
4. Attached to this Affidavit is a true and correct copy of a statement reflecting all time
expended to research and prepare Talk Fusion's Motion for Contempt against Defendant, Eric
Einholz. I anticipate expending an additional four (4) houts through the conclusion of this
matter.
5. It is the regu]ar practice of Sivyer Barlow & Watson, P.A. to produce bilHng
statements. The biHing statements are made and kept in the ordinary course of Sivyer Barlow &
Watson, P.A. 's business. The time entries within the billing statements are entered by persons
with knowledge of the time expended and are entered at or near the time that the time was
expended.
6. The standard hourly rates for attorneys and paralegal assistants handling this matter
on behalf of Plaintiff are:
MahJon H. Barlow
Edward J. Kuchinski
7. Plaintiff is indebted to its attorneys for fees incurred in the amount of $6,798.50, as
reflected in the attached summary. plus $1,280.00 in fees to conclude this matter, for a total of
$8,078.50 in attorneys' fees and costs presently.
Edward].~
~~
NOTARY >UBLIC
Statement of Account
001288
000020
Talk Fusion
Einholz, Eric
03/31/201505/14/2015
Time & Rate: Original Value
Fees
I ;~Dte ~t~j ~~iDl~.ff ~~-~~'i4f~~-~-~r@otf~*ti~~Z~f:l~i~~l';;i:~;j~1h~;~~~~~W;lKti*~3 Time IHr!Y iteJ Orig ~MQunt f Bill Amount
3131/2015 MH8
0.30
$415
$124.50
$124.50
3131/2015 EJK
Research and email client re motion for contempt Prepare motion for
3.50.
$320
$1.120.00
$1,120.00
$1,244.50
$1,2.C4.50
$1.280.00
EJK
EJK
413/2015
MHB
413/2015
EJK
416/2015
EJ!(
417/2015
MHB
3.80
Research re cMJ injunctions and fines for same: research punHiV& damages.
4.00 .. $320
2.00
$320
$640.00
$1;280.00
$640.00
0.60
$415
$249.00
$249.00
.4.00
$320
$1,280.00
$1.280.00
3.20
$320
$1,024.00
$1.024.00
o.eo
$415
$249.00
$249.00
0.10
$320
$32.00
Research and revise motion for contempt; Research and prepare motion for
punit!Ve damages.
review and revise motion for contempt; conference with furn attorney regarding
same; brief legal research regarding show cau&e order.
$416.00
4/10/2015 EJK
$32.00
$160.00
$98.00
total~ees~04/2015
5/14/2015 EJK
Prepare for heaimg on motion for contempt;_ prepare order; prepare fee
16.60
2.50
$320
$800.00
$800.00
$800.00
$800.00
affidavit..
Total Fees: 06/2015
2.50
Total Fees;
22.90
04130/2015
,,.,J : '.::;.;;:,'.:'ik::.'-: :f~J,..:..,!!\:11>.l.ii~'.r,\,J.,;~,/ -;/ ::{'-'f<: 'DeKriptJon :~w '._,,?-,~ - if,' >''!./ "-P ::,:s:m,\,.;;~~.:i:'1. 's~'':1;'',1 OrJg Expense l
1
Westlaw Research
$26.38
:f
BUI Amount J
$26.38
$0.00
$26.38
'.Orig cost
Total Costs/~penses:
03/201 s
$2U8
Total Costs/Expenses:
04/2016
$320.80
$320.80
$0.00
$320.80
$347.18
$0.00
$347.18
Westlaw Research
Total Cost.s/Expenses:
$320.80
Other Accounting
04/07/2015
04/29/2015
Peg 1
Payment
Payment
$816.00
$2,006.86
SM'E:R GARLOW & WATSON. P.A
Statement of Account
001288
Talk Fusion
000020
Elnholz, Eric
03/31/2015-05/1412015
Time & Rate: Original Value
Other Accounting
04/29/2015
Write Off
$0.02
'
Exhibit K
Talk Fusion
Talk Fusion
Associates shall safeguard and promote the good reputation of Talk Fusion and its products, and must avoid all
illegal, deceptive, misleading, unethical or immoral conduct or practices, and must exhibit high moral character
in their personal and professional conduct. Associates shall not engage in any conduct that may damage the
Companys goodwill or reputation. While it is impossible to specify all misconduct that would be contrary to this
policy, and the following list is not a limitation on the standards of conduct to which Associates must adhere
pursuant to this policy, the following standards specifically apply to Associates activities:
Because you are operating your own business, it is your responsibility to know and comply with
applicable laws that impact your business;
Deceptive conduct is always prohibited. Associates must ensure that their statements are truthful, fair,
accurate, and are not misleading;
If an Associates Talk Fusion business is cancelled for any reason, the Associate must discontinue using
the Talk Fusion name, and all other Talk Fusion intellectual property, and all derivatives of such
intellectual property, in postings on all Social Media, websites, or other promotional material.
Associates may not represent or imply that any state or federal government official, agency, or body has
approved or endorses Talk Fusion, its program, or products.
Associates must not engage in any illegal, fraudulent, deceptive, or manipulative conduct in the course
of their business or their personal lives that, in the Companys sole discretion, could damage the
Companys reputation or the culture that exists within the field sales force.
6. Social Media.
In addition to meeting all other requirements specified in these Policies, if an Associate utilizes any form of
social media in connection with their Talk Fusion business, including but not limited to blogs, Facebook,
Twitter, Linkedin, YouTube, or Pinterest, the Associate agrees to each of the following:
Associates are responsible for the content of all material that they produce and all of their postings on
any social media site, as well as all postings on any social media site that they own, operate, or control.
Associates may not make any social media postings, or link to or from any postings or other material that
is sexually explicit, obscene, pornographic, offensive, profane, hateful, threatening, harmful, defamatory,
libelous, harassing, or discriminatory (whether based on race, ethnicity, creed, religion, gender, sexual
orientation, physical disability, or otherwise), is graphically violent, is solicitous of any unlawful behavior,
that engages in personal attacks on any individual, group, or entity, or is in violation of any intellectual
property rights of the Company or any third party.
No product sales or enrollments may occur on or through any social media site. To process sales or
enrollments, a social media site must link only to the Associates Talk Fusion replicated website, Talk
Fusions corporate website or an official Talk Fusion corporate social media page.
It is each Associates responsibility to follow the social media sites terms of use.
Any social media site that is directly or indirectly operated or controlled by an Associate that is used to
Talk Fusion
discuss or promote Talk Fusions products, or the Talk Fusion opportunity may not link to any website,
social media site, or site of any other nature that promotes the products, services, or business program
of any direct selling company other than Talk Fusion.
During the term of this Agreement and for a period of 12 calendar months thereafter, an Associate may
not use any social media site on which they discuss or promote, or have discussed or promoted, the
Talk Fusion business or Talk Fusions products to directly or indirectly solicit Talk Fusion Associates for
another direct selling or network marketing program (collectively, direct selling). In furtherance of this
provision, an Associate shall not take any action on any social media site that may reasonably be
foreseen to draw an inquiry from other Associates relating to the Associates other direct selling
business activities. Violation of this provision shall constitute a violation of the nonsolicitation provision
in Policy 18.
If an Associate creates a business page on any social media site to promote or relates to Talk Fusion, its
products, or opportunity, the page may not promote or advertise the products or opportunity of any other
network marketing business other than Talk Fusion and its products. If the Associates Talk Fusion
business is cancelled for any reason or if the Associate becomes inactive, the Associate must
deactivate the page.
Associate Created Marketing Methods, Advertising, and Promotional Material (Sales Tools).
Associates must use only Talk Fusion approved sales aids, advertising, promotional materials, and marketing
methods (collectively Sales Tools) when promoting the Talk Fusion business or Talk Fusions products or
services. These materials are available in the Document Library of Associates Back-Office.
8. Trademarks and Copyrights.
The name Talk Fusion and other names as may be adopted by the Company are proprietary trade names,
trademarks and service marks of Talk Fusion. The Company grants Associates a limited license to use its
trademarks and trade names in promotional media for so long as the Associates Agreement is in effect. Upon
cancellation of an Associates Agreement for any reason, the license shall expire and the Associate shall
immediately discontinue all use of the Companys trademarks and trade names. Under no circumstances may
an Associate use any of Talk Fusions trademarks or trade names in any email address, website domain
name, social media handle, social media name or address.
Talk Fusion commonly puts on live and recorded events as well as webinars and telephone conference calls.
During these events Company executives, Associates, and guests appear and speak. The content of such
events is copyrighted material that is owned exclusively by the Company. Associates may not record company
functions for any reason, whether such event is live, a webinar, via conference call, or delivered through any
other medium.
In addition, Company produced Sales Tools, videos, audios, podcasts, and printed material are also
copyrighted. Associates shall not copy any such materials for their personal or business use without the
Companys prior written approval.
9. Associate Web Sites.
Associates may not create their own websites to promote their Talk Fusion business or Talk Fusions products
Talk Fusion
and services. Official Talk Fusion supplied Replicated Websites are the only online forum through which Talk
Fusion products may be sold and new Talk Fusion Associate enrollments may be transacted.
10. Retail Outlets.
To support the Companys direct selling method of distribution and to protect the independent contractor
relationship, Associates agree that they will not display or sell Talk Fusion products or literature, or in any
other way promote the Talk Fusion opportunity or products in any retail, wholesale, warehouse, or discount
establishment. Notwithstanding the foregoing, Associates may display and sell Talk Fusion promotional
literature at professional trade shows.
11. Change of Sponsor.
The only means by which an Associate may legitimately change his/her sponsor is by voluntarily canceling
his/her Talk Fusion business in writing and remaining inactive for six (6) full calendar months. Following the six
calendar month period of inactivity, the former Associate may reapply under a new sponsor. The Associate will
lose all rights to his/her former downline organization upon his/her cancellation.
12. Waiver of Claims.
In cases wherein an Associate improperly changes his/her sponsor, Talk Fusion reserves the sole and
exclusive right to determine the final disposition of the downline organization that was developed by the
Associate in his/her second line of sponsorship. ASSOCIATES WAIVE ANY AND ALL CLAIMS AGAINST
TALK FUSION, ITS OFFICERS, DIRECTORS, OWNERS, EMPLOYEES, AND AGENTS THAT RELATE TO
OR ARISE FROM TALK FUSIONS DECISION REGARDING THE DISPOSITION OF ANY DOWNLINE
ORGANIZATION THAT DEVELOPS BELOW AN ASSOCIATE WHO HAS IMPROPERLY CHANGED
HIS/HER SPONSOR.
13. Product Claims.
Associates must not make claims, including but not limited to testimonials, about the functionality of Talk
Fusions products that are not contained in official Talk Fusion literature or posted on Talk Fusions official
website.
14. Income Representations.
Associates must always present the Talk Fusion income opportunity in a fair and honest fashion. Associates
must not overstate the income potential, must never represent that successor income is assured to those who
join as Talk Fusion Independent Associates.
15. Income Disclosure Statement.
When presenting the Talk Fusion business to a prospective Associate, or in any case in which you are
discussing the Talk Fusion income opportunity with a prospective Associate, the presenting Associate must
provide the prospect(s) with the most current version of Talk Fusions Income Disclosure Statement (the
IDS). The IDS can be downloaded from Associates Back-Offices. During the presentation, the Associate
must make it clear that income is not guaranteed and must thoroughly review the current IDS with the
prospect. If an Associate is presenting the Talk Fusion business to an audience using a slide or other visual
presentation, one of the slides or pages of the presentation must contain the current IDS, and there may be no
Talk Fusion
other graphics or text on the slide or presentation page. The presenting Associate must thoroughly discuss the
IDS with the audience.
16. Compensation Plan and Program Claims.
When presenting or discussing the Talk Fusion Compensation Plan, you must make it clear to prospects that
financial success in Talk Fusion requires commitment, effort, and sales skill. Conversely, you must never
represent that one can be successful without diligently applying themselves. Examples of misrepresentations
in this area include, but are not limited to:
Its a turnkey system.
The system will do the work for you.
Just get in and your downline will build through spillover.
Just join and Ill build your downline for you.
The Company does all the work for you.
You dont have to sell anything.
All you have to do is buy your products every month.
The above are just examples of improper representations about the Compensation Plan and the Companys
program. It is important that you do not make these, or any other representations, that could lead a prospect to
believe that they can be successful as an Associate without commitment, effort, and sales skill.
17. Media Inquiries.
Associates must not interact with the media regarding the Talk Fusion business or products. All inquiries from
the media, including radio, television, print, online, or any other medium, shall be directed to Talk Fusions
marketing department.
18. Nonsolicitation.
Talk Fusion Associates are free to participate in other network marketing programs. However, during the term
of this Agreement and for one year thereafter, with the exception of an Associates personally sponsored
downline Associates, an Associate may not directly or indirectly Recruit other Talk Fusion Associates for any
other network marketing business. The term Recruit means the direct or indirect, actual or attempted,
sponsorship, solicitation, enrollment, encouragement, or effort to influence in any other way, another Talk
Fusion Associate to enroll or participate in another network marketing opportunity. Conduct constitutes
recruiting even if the Associates actions are in response to an inquiry made by another Associate or
Customer.
If an Associate is engaged in other non-Talk Fusion business or Network Marketing program, it is the
responsibility of the Associate to ensure that his or her Talk Fusion business is operated entirely separate and
apart from all other businesses and/or Network Marketing programs. To this end, the Associate must not:
Display Talk Fusion promotional material, sales aids, or products with or in the same location as, any
non-Talk Fusion promotional material or sales aids, products or services (Pinterest and similar social
media sites are exempt from this policy).
Offer the Talk Fusion opportunity, products or services to prospective or existing Customers or
Associates in conjunction with any non-Talk Fusion program, opportunity or products.
Talk Fusion
Offer, discuss, or display any non-Talk Fusion opportunity, products, services or opportunity at any Talk
Fusion related meeting, seminar, convention, webinar, teleconference, or other function.
Talk Fusion and Associate agree that any violation of this policy shall cause Talk Fusion irreparable harm for
which there is no adequate remedy at law, and the injury to Talk Fusion shall outweigh the potential injury to
Associate, and therefore Talk Fusion shall be entitled to emergency and permanent injunctive relief to prevent
further violations of this policy.
19. Handling Personal Information.
If you receive Personal Information from or about prospective Associates or Customers, it is your responsibility
to maintain its security. You should shred or irreversibly delete the Personal Information of others once you no
longer need it. Personal Information is information that identifies, or permits you to contact, an individual. It
includes a Customers, potential Customers, Associates and prospective Associates name, address, email
address, phone number, credit card information, social security or tax identification number and other
information associated with these details.
20. Confidential Information.
Confidential Information includes, but is not limited to, the identities, contact information, and/or sales
information relating to Talk Fusions Associates and/or Customers: (a) that is contained in or derived from any
Associates respective Back-Office; (b) that is derived from any reports issued by Talk Fusion to Associates to
assist them in operating and managing their Talk Fusion business; and/or (c) to which an Associate would not
have access or would not have acquired but for his/her affiliation with Talk Fusion. Confidential Information
constitutes proprietary business trade secrets belonging exclusively to Talk Fusion and is provided to
Associates in strict confidence. Confidential Information shall not be directly or indirectly disclosed to any third
party nor used for any purpose other than Associates use in building and managing his/her Independent Talk
Fusion business.
Any violation of this policy shall cause Talk Fusion irreparable harm for which there is no adequate remedy at
law. The parties further agree that the harm to Talk Fusion shall outweigh any harm to the Associate if
injunctive relief is awarded to the Company. Talk Fusion shall therefore be entitled to immediate and
permanent equitable relief to prevent further violations of this policy.
21. Product Inventory & Bonus Buying.
Associates may not carry an inventory of Talk Fusion products for resale. Upon purchase, products are
accessible on the internet by the Customer. In addition, bonus buying is strictly prohibited. Bonus buying is the
purchase of products for any reason other than bona fide resale or use, or any mechanism or artifice to qualify
for rank advancement or maintenance, incentives, prizes, commissions or bonuses that are not driven by bona
fide product purchases by end user consumers for actual use.
22. Limitations on Associate and Household Businesses.
Associates may own, operate, control, or have an interest in, only one Talk Fusion business, and there may be
only one Talk Fusion business in a household. A household is defined as spouses or couples, and
dependent children of one or both spouses or couples, living in the same home of the spouses or member of
Talk Fusion
the couple, as well as dependent children of either spouse or member of the couple, while attending school
away from home.
23. Actions of Affiliated Parties and Household Members.
The term Business Entity shall mean any corporation, partnership, limited liability company, trust or other
entity that owns or operates a Talk Fusion independent business. The term Affiliated Party shall mean any
individual, partnership, trust, limited liability company, or other entity that has an ownership interest in, or
management responsibility for, a Business Entity.
A Business Entity and each Affiliated Party must comply with the Agreement. If a Business Entity and/or any
Affiliated Party violates the Agreement, Talk Fusion may take disciplinary action against the Business Entity
and/or against any or all of the Affiliated Parties. In addition, if a household family member of an Associate
engages in conduct that would be a violation of the Agreement, the conduct of the household family member
may be imputed to the Associate.
24. Negative Comments.
Complaints and concerns about Talk Fusion should be directed to the Customer Service Department.
Associates must not disparage, demean, or make negative remarks to third parties or other Associates about
Talk Fusion, its owners, officers, directors, management, other Talk Fusion Associates, the Marketing and
Compensation Plan, or Talk Fusions directors, officers, or employees. Disputes or disagreements between
any Associate and Talk Fusion shall be resolved through the dispute resolution process, and the Company
and Associates agree specifically not to demean, discredit, or criticize one another on the Internet or any other
public forum.
25. Adjustment to Bonuses and Commissions.
Compensation stemming from product sales is fully earned when the applicable return, repurchase, and
chargeback periods applicable to product sales have all expired. If a product is returned to Talk Fusion for a
refund or is repurchased by the Company, or a chargeback occurs, the compensation attributable to the
returned or repurchased product(s) will be recovered by the Company. Unearned compensation will be
deducted, in the month in which the refund is issued or the chargeback occurs, and continuing every pay
period thereafter until the commission is recovered, from the upline Associates who received bonuses and
commissions on the sales of the refunded products.
Talk Fusions Compensation Plan pays up to 60% of total company Sales Volume in commissions and
bonuses to Independent Associates. If any payout calculation results in total payout exceeding 60% of Sales
Volume, Team Bonuses will be adjusted on a pro-rated basis so that the total payout (all bonuses and
commissions) is capped at no more than 60% of Sales Volume.
Talk Fusion reserves the right to withhold or reduce any Associates compensation as it deems necessary to
comply with any garnishment or court order directing Talk Fusion to retain, hold, or redirect such
compensation to a third party.
26. Return of Merchandise and Sales Aids by Associates Upon Cancellation or Termination.
Upon cancellation or termination of an Associates Agreement, the Associate may return products and Sales
Tools that he or she personally purchased from Talk Fusion within 12 months prior to the date of cancellation
Talk Fusion
(the one year limitation shall not apply to residents of Maryland, Massachusetts, Wyoming and Puerto Rico) so
long as the goods are in currently marketable condition. Upon the Companys receipt of returned goods and
confirmation that they are in currently marketable condition, the Associate will be reimbursed 90% of the net
cost of the original purchase price(s). Shipping and handling charges will not be refunded. If the purchases
were made through a credit card, the refund will be credited back to the same account. Goods are in currently
marketable condition if they are unopened and unused and packaging and labeling has not been altered or
damaged. Merchandise that is clearly identified at the time of sale as nonreturnable, closeout, discontinued, or
as a seasonal item, or which has passed it commercially reasonable usable or shelf-life, is not in currently
marketable condition. The merchandise must be returned within 30 days from the date of
cancellation/termination. Back-Office and Replicated Website fees are not refundable except as may be
required under applicable state law.
27. Order Cancellation.
Federal and state law requires that Associates notify their retail customers that they have three business days
(5 business days for Alaska residents, 15 days for residents of North Dakota over the age of 65. Saturday is a
business day, Sundays and legal holidays are not business days) within which to cancel their initial purchase
and receive a full refund upon return of the products in substantially as good condition as when they were
delivered. Associates shall verbally inform their customers of this right.
28. Montana Residents.
A Montana resident may cancel his or her Associate Agreement within 15 days from the date of enrollment,
and may return his or her Associate Kit and any Sales Tools and products he or she purchased from the
Company for a full refund within such time period.
29. Disciplinary Sanctions.
Violation of the Agreement, any illegal, fraudulent, deceptive or unethical business conduct, or any act or
omission by an Associate that the Company reasonably believes may damage its reputation or goodwill, may
result in the suspension or termination of the Associates Talk Fusion business, and/or any other disciplinary
measure that Talk Fusion deems appropriate to address the misconduct. In situations deemed appropriate by
Talk Fusion, the Company may institute legal proceedings for monetary and/or equitable relief.
30. Indemnification.
Associates agree to indemnify Talk Fusion for any and all costs, expenses, consumer reimbursements, fines,
sanctions, damages, settlements or payments of any other nature that Talk Fusion incurs resulting from or
relating to any act or omission by Associate that is illegal, fraudulent, deceptive, negligent, unethical, or in
violation of the Agreement. Talk Fusion may elect to exercise its indemnification rights through withholding any
compensation due the Associate. This right of setoff shall not constitute Talk Fusions exclusive means of
recovering or collecting funds due Talk Fusion pursuant to its right to indemnification.
31. Effect of Cancellation.
An Associate whose business is cancelled for any reason will lose all Associate rights, benefits and privileges.
This includes the right to represent yourself as an Independent Talk Fusion Associate, to sell Talk Fusion
products and services and the right to receive commissions, bonuses, or other income resulting from his/her
Talk Fusion
own sales and the sales and other activities of the Associate and the Associates former downline sales
organization. There is no whole or partial refund for Associate Kit fees or renewal fees if an Associates
business is cancelled.
32. Voluntary Cancellation.
A participant in this network-marketing plan has a right to cancel at any time, regardless of reason.
Cancellation must be submitted in writing to the Company at its principal business address or by cancelling
his/her business through the Back-Office. The written notice must include the Associates signature, printed
name, address, and Associate I.D. Number. If an Associate is also a product subscriber, the Associates
product subscription shall continue unless the Associate also specifically requests that his or her subscription
also be canceled. An Associate may also voluntarily cancel his/her Talk Fusion business by failing to renew
the Agreement on its annual anniversary date, by withdrawing consent to contract electronically.
If any Independent Associate or Customer is unsatisfied with an initial Product Package purchase, Talk Fusion
offers a 100% three (3) day money-back guarantee (unless otherwise required by law) from the date of
purchase. Please note that $39.00 one-time Independent Associate Cost, Product Package upgrades, wire
transfer fees and sales and service taxes are non-refundable. Returns on the purchase price constitute a
purchasers voluntary request to cancel. All refunds will be processed within 7 business days.
33. Cancellation
for Inactivity.
If an Associate fails to earn a commission for six consecutive months, his/her Associate Agreement and Talk
Fusion business will be cancelled for inactivity. If an Associate also subscribes to the Companys products, the
Associates monthly subscription shall continue unless the Associate also specifically requests that his or her
subscription also be canceled. The former Associate will then be classified as a retail customer. If the former
Associate wishes to re-enroll as an Associate, he or she must submit a new application and will be placed at
the bottom of the binary tree.
34. Business Transfers.
Associates in good standing who wish to sell or transfer their business must receive Talk Fusions prior written
approval before the business may be transferred. Requests to transfer a business must be submitted in writing
to [email protected]. It is within Talk Fusions discretion whether to allow a business sale or transfer,
but such authorization shall not be unreasonably withheld. However, no business that is on disciplinary
probation, suspension, or under disciplinary investigation may be transferred unless and until the disciplinary
matter is resolved. Prior to transferring a business to a third party, the Associate must offer Talk Fusion the
right of first refusal to purchase the business on the same terms as negotiated with a third party. The Company
shall have ten days to exercise its right of first refusal.
35. Transfer Upon an Associates Death.
An Associate may devise his/her business to his/her heirs. Because Talk Fusion cannot divide commissions
among multiple beneficiaries or transferees, the beneficiaries or transferees must form a business entity
(corporation, LLC, partnership, etc.), and Talk Fusion will transfer the business and issue commissions to the
business entity. In the case of a business transfer via testamentary instrument, the beneficiary of the business
must provide Talk Fusion with certified letters testamentary and written instructions of the trustee of the estate,
or an order of the court, that provides direction on the proper disposition of the business. The beneficiary must
also execute and submit to the Company a Talk Fusion Associate Agreement within 30 days from the date on
Talk Fusion
which the business is transferred by the estate to the beneficiary or the business will be cancelled.
36. Business Distribution Upon Divorce.
Talk Fusion is not able to divide commissions among multiple parties, nor is it able to divide a downline
organization. Consequently, in divorce cases, any settlement or divorce decree must award the business in its
entirety to one party. Talk Fusion will recognize as the owner of the business the former spouse to who is
awarded the business pursuant to a legally binding settlement agreement or decree of the court. The former
spouse who receives the Talk Fusion business must also execute and submit a Talk Fusion Associate
Agreement within 30 days from the date on which the divorce becomes final or the business will be cancelled.
37. Dissolution of a Business Entity.
Talk Fusion is not able to divide commissions among multiple parties, nor is it able to divide a downline
organization. Consequently, in the event that a business entity that operates a Talk Fusion business dissolves,
the owners of the business entity must instruct the Company on the identity of the proper party who is to
receive the business. The Talk Fusion business must be awarded to a single individual or entity that was
previously recognized by the Company as an owner of the business entity; the Company cannot divide the
business among multiple parties or issue separate commission payments. If the business entity wishes to sell
or transfer its Talk Fusion business, it must do so pursuant to Policy 34. In addition, the recipient of the Talk
Fusion business must also execute and submit a Talk Fusion Associate Agreement to the Company within 30
days from the date of the dissolution of the business entity or the Talk Fusion business will be cancelled.
38. Inducing Associates to Violate Policy.
Associates must not induce, encourage, or assist another Associate to violate the Agreement in any fashion.
39. Reporting Mistakes or Discrepancies.
If an Associate believes there has been a mistake or discrepancy in his/her compensation, in the structure or
composition of his/her downline organization, or any other mistake by the Company that has impacted his/her
income, it is the Associates responsibility to bring it to the Companys attention in writing no later than 60 days
from the date on which the error occurred. While Talk Fusion will use its best efforts to rectify mistakes, the
Company shall not be responsible for correcting errors, making changes, or making financial remuneration for
errors that are reported more than 60 days after the error occurs.
40. International Activities.
Associates may not sell Talk Fusion products in any international market, or conduct business activities of any
nature, in any foreign country that the Company has not announced is officially open for business.
41. Dispute Resolution.
The following comprehensive approach to dispute resolution shall apply to all disputes between Associates and
the Company:
Confidential Mediation. Prior to bringing legal action for disputes that arise from or relate to the
Agreement or the Talk Fusion business, the parties shall attempt in good faith to resolve the
dispute through confidential non-binding mediation. One individual who is mutually acceptable to
Talk Fusion
the parties shall be appointed as mediator. If the Parties cannot agree on a mediator within 30
days from the date on which the complaining party submits a written request to the other party
seeking mediation, the complaining party shall request the American Arbitration Association
(AAA) to appoint a mediator. The mediation shall occur within 90 days from the date on which
the complaining party submits a written request to the other party seeking mediation. The
mediators fees and costs, as well as the costs of holding and conducting the mediation, shall be
divided equally between the parties. Each party shall pay its portion of the anticipated shared fees
and costs at least 10 days in advance of the mediation. Each party shall pay its own attorneys
fees, costs, and individual expenses associated with conducting and attending the mediation.
Claims seeking $15,000.00 or more shall be held with the parties and the mediator physically
present in the same location in Brandon, Florida and shall last no more than two business days
unless the parties agree otherwise. Claims for less than $15,000.00 may be held telephonically,
but may be held in person if the parties mutually agree to do so, and shall last no more than one
business day unless the parties agree otherwise. Neither party shall be represented by an
attorney in any mediation in which the claim is for less than $15,000.00. However, if one party is
an attorney acting on his/her/its own behalf, the other party shall have the right to be represented
by his/her/its attorney at the mediation as well.
Confidential Arbitration. Except as otherwise provided in the Agreement, if a claim is not
resolved through mediation, any controversy or claim seeking $15,000.00 or more in
damages that arises out of or relates to the Agreement, the breach thereof, or the Talk
Fusion business shall be settled through binding confidential arbitration. The Parties
waive rights to trial by jury or to any court. The arbitration shall be filed with, and
administered by, the American Arbitration Association in accordance with the AAAs
Commercial Arbitration Rules and Mediation Procedures, which are available on the AAAs
website at www.adr.org. Copies of the AAAs Commercial Arbitration Rules and Mediation
Procedures will also be emailed to Associates upon request to Talk Fusions Customer
Service Department. Notwithstanding the rules of the AAA, unless otherwise stipulated by
the Parties, the following shall apply to all Arbitration actions:
The Federal Rules of Evidence shall apply in all cases;
The Parties shall be entitled to all discovery rights permitted by the Federal Rules of
Civil Procedure;
The Parties shall be entitled to bring motions under Rules 12 and/or 56 of the Federal
Rules of Civil Procedure;
The Federal Arbitration Act shall govern all matters relating to arbitration, including
the enforceability of this arbitration provision. The law of the State of Florida,
without regard to principles of conflicts of laws, shall govern all other matters
relating to or arising from the Agreement and the Talk Fusion business;
The arbitration hearing shall commence no later than 365 days from the date on
which the arbitrator is appointed, and shall last no more than five business days;
The Parties shall be allotted equal time to present their respective cases.
All arbitration proceedings shall be held in a location selected by the parties. If the parties
cannot agree on a suitable location, it will be held in the county in which the respondent to
the action resides (if an individual) or has its principal place of business (if a business
entity). The parties may select a mutually agreeable arbitrator. If the parties do not agree
Talk Fusion
on an arbitrator within 60 days from the date on which the arbitration is filed, the petitioner
shall request that the AAA appoint an arbitrator. Each party to the arbitration shall be
responsible for its own costs and expenses of arbitration, including legal and filing fees.
The decision of the arbitrator shall be final and binding on the parties and may, if
necessary, be reduced to a judgment in any court having jurisdiction over either of the
parties. This agreement to arbitrate shall survive the cancellation or termination of the
Agreement.
The parties, their respective agents and attorneys, and the arbitrator shall maintain the
confidentiality of the arbitration proceedings and shall not disclose to any third party:
The substance of, facts underlying, or basis for, the controversy, dispute, or claim;
The substance or content of any settlement offer or settlement discussions or offers
associated with the dispute;
The pleadings, the content of any pleadings, and exhibits to the pleadings, filed in
any arbitration proceeding;
The content of any testimony or other evidence presented at an arbitration hearing or
obtained through discovery in arbitration;
The terms or amount of any arbitration award;
The rulings of the arbitrator on the procedural and/or substantive issues involved in
the case.
c. Liquidated Damages for Breach of Confidentiality Obligations. If a Party violates its
confidentiality obligations under the mediation or arbitration policies, the nonbreaching
party shall incur significant damages to its reputation and goodwill that shall not be
readily calculable. Therefore, if a Party, its attorneys or agents breach the confidentiality
provisions of this policy, the nonbreaching Party shall be entitled to liquidated damages in
the amount of $25,000.00 per violation. Every disclosure of each allegation, pleading, claim
or other prohibited disclosure shall constitute a separate violation. The Parties agree that
this liquidated damage amount is reasonable and waive all claims and defenses that it
constitutes a penalty. The confidentiality obligations in this dispute resolution policy shall
not restrict a party or its counsel acting in good faith from discussing a claim with an
individual to determine if he/she is a witness to the action and as necessary to elicit
relevant testimony from the witness) or from discussing or showing documentary or other
evidence as necessary to prepare the witness for testimony or to ascertain the extent of
the witnesses knowledge of the facts relevant to the case. However, neither party shall
allow a witness or prospective to retain copies of any documents, evidence, or pleadings
related to the matter.
d. Disputes Not Subject Arbitration
Equitable Relief. Notwithstanding the foregoing arbitration agreement, nothing in the
Agreement shall prevent either party from applying to and obtaining from the court a
temporary restraining order, preliminary or permanent injunction, or other equitable relief to
safeguard and protect the partys intellectual property, trade secrets, and/or confidential
information, including but not limited to enforcement of its rights under the Nonsolicitation
provisions of the Agreement.
Talk Fusion
Claims for Damages Under $15,000.00. Claims seeking damages for less than
$15,000.00 are not subject to the arbitration provisions of this Agreement. The prevailing
party to any litigation seeking damages for less than $15,000.00 shall be entitled to an
award of reasonable attorney fees and litigation expenses.
Enforcement of an Arbitration Award. A Party may apply to a court for judicial
enforcement of an arbitration award. The Parties consent to exclusive jurisdiction and
venue in the courts residing in Hillsborough County, State of Florida or the United States
District Court for the Middle District of Florida, Tampa Division, to enforce an arbitration
award. If an action is brought to enforce an arbitration award, the prevailing party to the
action shall be entitled to an award of reasonable attorney fees and litigation expenses.
e. Class Action Waiver. All disputes arising from or relating to the Agreement, or arising
from or relating to the Talk Fusion business, shall be brought and proceed on an
individual basis. The parties waive their rights to pursue any arbitration or lawsuit against
the other party and/or their respective owners, officers, directors and agents, on a class or
consolidated basis.
f. Liquidated Damages. In any case which arises from or relates to the wrongful termination of an
Associates Agreement and/or independent business, the parties agree that damages will be
extremely difficult to ascertain. Therefore, the parties stipulate that if the involuntary termination of
an Associates Agreement and/or loss of their independent business is proven and held to be
wrongful under any theory of law, Associates sole remedy shall be liquidated damages
calculated as follows:
For Associates at the Commission Rank of Bronze through Double Diamond liquidated
damages shall be in the amount of his/her gross compensation that he/she earned
pursuant to Talk Fusions Compensation Plan in the twelve (12) months immediately
preceding the termination.
For Associates at the Commission Rank of Triple Diamond through Presidential Blue
Diamond liquidated damages shall be in the amount of his/her gross compensation that
he/she earned pursuant to Talk Fusions Compensation Plan in the eighteen (18) months
immediately preceding the termination.
For Associates at the Commission Rank of Ambassador Blue Diamond through Imperial
Blue Diamond liquidated damages shall be in the amount of his/her gross compensation
that he/she earned pursuant to Talk Fusions Compensation Plan in the twenty-four (24)
months immediately preceding the termination.
Gross compensation shall include commissions and bonuses earned by the Associate pursuant to
Talk Fusions Compensation Plan as well as retail profits earned by Associate for the sale of Talk
Fusion merchandise. However, retail profits must be substantiated by providing the Company
with true and accurate copies of fully and properly completed retail receipts provided by Associate
to customers at the time of the sale. The Parties agree that the foregoing liquidated damage
schedule is fair and reasonable.
An Associates Commission rank is the rank or title at which they actually qualified to earn
compensation under the Talk Fusion Compensation Plan during a pay-period. For purposes of
this Policy, the relevant pay-period to determine an Associates Commission Rank is the pay-
Talk Fusion
period during which the Associates business is placed on suspension or terminated, whichever
occurs first. The Commission rank differs from the Recognition Rank, which is the highest title
or rank that an Associate has ever been paid under the Talk Fusion Compensation Plan.
g. Damage Waiver. In any action arising from or relating to the Agreement, the parties
waive all claims for incidental and/or consequential damages, even if the other party has
been apprised of the likelihood of such damage. The parties further waive all claims to
exemplary and punitive damages.
h. Governing Law, Jurisdiction and Venue. Jurisdiction and venue relating to a dispute arising
from or relating to this Agreement or from the business relationship between the parties, that is
not subject to arbitration shall reside exclusively in Hillsborough County, State of Florida or the
United States District Court for the Middle District of Florida (Tampa Division). The law of the
State of Florida shall govern actions brought before a court.
i. Louisiana Residents. Notwithstanding the foregoing, and the arbitration provision set forth
above, residents of the State of Louisiana shall be entitled to bring an action in their home forum
and pursuant to Louisiana law.
Exhibit 6
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Attorneys.for Defendant Talk Fusion, Inc.
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Defendant, Talk Pusion, lnc. ("Talk Fusion"), 1 by and through undersigned counsel and '
20
21
pursuant to Local Rule 7.2 (c), replies to Plaintiffs' Opposition to Motion to Transfer Venue to the
22
Middle District of Florida or, Alternatively, Dismiss Complaint (Doc. 34), as follows.
23
24
The facts supporting Talk fusion's Motion to Transfer Venue to the Middle District of
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25
Florida or, Alternatively, Dismiss Complaint (the "Transfer Motion") (Doc. 22) are stated in
26
27
28
detail in the affidavit of Robert Reina (Doc. 23), and incorporated herein. Several facts relative to
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6
An
Associate applicant must provide an electronic signature by "clicking" on a standard box labelled
"I AGREE." Like every Associate, Ho and ~ampagna had to click on the "I AGREE" box to join
!Talk Pusion.
The following statement was posted immediately above the "I AGREE" box:
7
By checking ;,I AGREE" you are indicating that you have read,
understand and agree with the Talk Fusion Policies and Procedures,
Terms und Conditions 1Varketing and Compensation Plan, lnc:ume
Disclaimers, Terms of Service, Refund and Cancellation Policy and
Consent to Electronic Record
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12 'referred to collectively within Talk Fusion as the "Associate Agreement." The forum-selection
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See Exhibit "B" to Reina Affidavit (Doc. 23) (emphasis in original). These various agreements are
13
clause is contained in the Policies and Procedures (the "Policies"). The Associate Agreement,
14
including the Policies, is al all times posted on Talk Fusion's website find an Associate applicant
15
must represent that the applicant has read, understands, and agrees to the terms cmd conditions of
16
17
the Associate Agreement before Talk Fusion will accept the applicant.
During the seven years Minh I-Io ("Ho") and Julie Campagna ("Campagna") were
18
19
20
associated with Talk fusion, they directly or indirectly opened in excess of 20 separate accounts
with Talk Fusion, each time clicking the same "I AGREE" box and making the same
ri
21
representation that they had read, understood and agreed to the Associate Agreement. Reina Aff.
22
14.
23
organization, and were the highest paid Associates within Talk Fusion. They personally recruited
24
thousands of people to join Talk Fusion, well aware that each new Associate was required to join
25
via the Talk Fusion website and agree to the same Associate Agreement.
26
27
Plaintiffs eventually became the highest ranked Associates, with the largest downline
Jn fact, Ho and
Campagna (and later, MJ Rich Media Corp.) were obligated to ensure that each Associate they
recruited had access to the Associate Agreement. To that end, I-lo and Campagna maintained a
28
-2 -
website l'.ontaining a link to Talk Fusion's sign-up page for the Associate Agreement. id. at !J.
2
"-'
4
5
\Vas
ending, I lo and
Campagna joined a different MI.\1 company named "Dubli" located in J3oca Raton, Plorida. Id. at
~ 21
The process to join Dubli is very sirnilm to the process to join Talk FL1sion. Dubli u~es a
similar clickvvrap agreement requiring applicants to click a box indicating they have read,
(,
understand and agree to a similar set of terms and conditions, including DL1bli's own policies and
7
prol'.edurcs.
8
9
10
1l
Dubli's policies contain a similar forum~selcction clause, right dmvn to the selected state forum
(Florida).
Dub!i's Policies designate Palm Beach County as the rorum for arbitration ,md "any
12 i matter" not subject lo arbitration. See Dubli's Policies and Procedures at Section 8.5.
13
Remarkably, despite opening more than 20 accounts and recruiting thousands of other
14
Associates to join Talk Fu:-.ion, llo and Campagna maintain that they never read Talk Fusion's
15
16
Policies during the seven years they were the highest ranking Talk fusion Associfltcs. This despite
representing to Tfllk Fusion each time they opened an account that they had read and understood
17
the Associate Agreement.
18
, Plamliffs cannot repudiate the forum-selection clause by denying having read it.
19
21)
21
22
I.
23
actions . .Mao v. S'anum Investments, Ltd 2014 \VL 5292982, *2 (N.D. Cal. 2014).
24
response ignores the Supreme Court's most recent decision on forum-selection clauses.
25
Arlan!ic Marine v. US Dist. Courtfhr W. Dist. of'f'exas, J 34 S.Ct. 5G8, 581-582 (2013), the Court
2(,
27
Plaintiffs'
In
confirmed the supremacy of forum-selection clauses and held that fl valid forum~sclcction clause is
given controlling ,vcighl in all hut the most exceptional cases. The Court also dictated tbat a court
28
3-
may not consider the parties' private interests, such as cost and convenience, when enforcing a
valid forum-selection clause. Id. at 582. Even though Talk Pusion extensively cites Atlantic
Marine in its Transfer Motion, Plaintiffs have decided not to address Atlantic lvfarine at all, and do
not even cite any case decided after the seminal A!lantic Marine decision in 2013.
clauses is limited to admiralty cases or cases involving international agreements merely because
7
the Supreme Court's earlier seminal decision in ,VIS Bremen v. Zapata OjfShore Co., 407 U.S. 1
8
>-
decision is not limited in that fashion. The Supreme Court made that clear in Atlantic A1arine,
10
The Bremen
11
Atlantic 1'vfarine is not an admiralty case and docs not involve an international agreement. Atlantic
12
Afarine involved a dispute between a contractor and a subcontractor arising out of the construction
. ll'.z 31Hfil
n. )!I~'-{
13
of a child development center at an Army base. Id. at 575. The Supreme Court confirmed that its
0[l<1>i~Z
14
prior decision in Bremen applies equally to non-admiralty cmd diversity jurisdiction cases. Id. at
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582. The Ninth Circuit has also acknowledged this. "Although Bremen was an admiralty case, its
standard has been applied to forum-selection clauses in general." lvfanetti-Farrow, Inc. v. Gucci
Am, Inc., 858 F.2d 509, 514 (9th Cir. 1988).
After ignoring Atlantic Marine, Plaintiffs next cite the wrong standard for conducting a
19
1404(a) analysis in the presence of a forum-selection clause. Plaintiffs cite Bremen and Stewart
20
21
Organization, Inc. v. Ricoh Corporation, 487 U.S. 22 (1988), to suggest that this Court should
22
consider the "totality of circumstances including the interest of justice and the convenience of the
23
parties." (Doc. 34 p. 6). Atlantic 1\farine, however, mandates that a court not consider the totality
24
of circumstances and the convenience of the parties when there is a valid forum-selection clause in
25
place. When considering a 1404(a) motion based on a forum-selection clause, a district court
26
27
must deem the private-interest factors (including the cost and inconvenience of litigating in a
I
28
-4 -
2
3
4
6
at 514. The other limited exceptions to enforcement are if the selected forum is so "gravely
7
difficult and inconvenient" that it is essentially no forum at all, or \Vhere enforcement of the clause
8
9
10
will contravene a strong public policy of the forum. A1ao, 2014 \VL 5292982 at *2. Cases where
transfer pursuant to a forum-selection clause is not appropriate" ... \Vil! not be common." Atlantic
11
/vfarine, 134 S.Cl. at 582. Plaintiff-; have not identified any reason vvhy a Florida forum is so
12
"gravely difficult and inconvenient" that it would deprive them of a remedy, shield Talk Fusion
1]
14
selection clause, a district court should ordinarily transfer the case to the forum specified in that
15
16
clause. Only under extraordinary circurrnitanccs unrelated to the convenience of the pmtics should
a 1404(a) motion be denied." Id. at 581.
17
Plaintiff:-; essentially argue that the forum-selection clause in the Policies is unenforceable
18
for four reasons: (1) it is unfair because it is inconvenient ,md costly for them to litigate in Florida,
19
20
(2) their relationship vvith Talk Fusion \Vas induced through fraud, (3) the forum-selection clause
21
is ovcrbroad because it could apply to hypothetical claims not at issue in this case, and (4) they did
22
not read the forum-selection clause before agreeing to the Associate Agreement (more than 20
2]
24
25
26
27
Plaintiffs' extensive private interest complaints that litigating in a Florida forum is unfair,
inconvenient and costly simply have no weight. In any event, Court's routinely enforce forumselection clauses requiring a party to litigate in a distant forum (us if Florida is "distant"). For
28
-5 -
instance, in Manetti, 858 F.2d at 515, the Ninth Circuit enforced a forum-selection clause and
compelled a California corporation to litigate its claims against an Italian corporation in Italy, S'ee
also, Mao, 2014 WL 5292982 (court enforced forum-selection clause requiring litigation in Laos).
florida is not an unreasonable forum. Talk Fusion, its employees and Reina, and Talk Fusion's
documents, are located in Florida. Talk fusion conducts its business from Florida. Plaintiffs
frequently travelled to Florida for Talk Fusion business. Witnesses are located across the United
7
States. The only witnesses in Nevada are Ho and Campagna.
8
Plaintiffs cite Nagarampa v. Alail Corps, Inc. 469 F. 3d 1257 (9111 Cir. 2005), and Comb v.
Pay Pal, Inc., 218 F. Supp. 2d 1165 (K.D. Cal. 2002), for the proposition that a fommwselection
10
ll
clause requiring one party to travel to the other party's distant forum to litigate is unenforceable.
12
Both of those cases were decided years before Atlantic Afarine and do not apply to the current
13
1404(a) analysis. And in both cases the courts considered the private convenience of the parties
14
and applied California law, rather than governing federal law, to find the forumwselection clauses
15
w1cnforceable. 2
\6
The Northern District of California recently revisited Nagarampa and concluded it applied
17
the wrong law and analysis. East Bay Women's Health, Inc. v. Glostream 2014 WL 1760989
18
(N.D. Cal. 2014) (decided after Atlantic Marine). The East Bay court first noted that federal law
19
20
*1.
21
reliance on Nagarampa was misplaced because Nagarampa applied state law principles.
22
Next, citing Atlantic Marine, the East Bay court noted that a court cannot consider private interests
23
when forumwse!ection clause is present. Thus, the court rejected the plaintiffs argument that the
24
25
26
27
28
Nagarampa and Combs primarily concern the enforcement of arbitration clauses which involves
a mixture of federal and state law. lt appears these courts also applied the arbitration clause
analysis to the fornmwsclcction clauses and inappropriately applied state law, rather than federal
law.
-6 -
II
*2.
llcre, Plaintiffs complain they lacked equal bargaining power, "but uncqm1l contract terms
m1d unequal bargaining power will not invalidate a forum-selection clause." lvfao, 2014 \VL
5292982 (citing Murphy v. Schneider Nat'/, Inc, 362 F.3d 1133, 1141 (9th Cir. 2003)) (holding
that the non-negotiability of an employment contract did not vitiate forum-selection clause);
7
Carnival Cruise Unes, Im:. v. Shute, 499 L.S. 585, 593-94, 111 S.Ct. 1522, 113 L. Ed. 2d 622
8
(199l)(holding that cruise passengers' lack of bargaining parity with the cruise line did not
1II
1I
Plaintiffs also argue that the forum-selection clause should not be enforced because of
12
fraud. Plaintiffs; contend that they were fraudulently induced to join Talk Fusion because of the
13
purported ":,,lLM Promise" (that they were allegedly guaranteed income for the rest of their lives).
14
(Doc. 34. p. 8). They do not argue that the forum-selection clause itself wac; procured by fraud.
15
16
Rather, they argue that the entire Associate Agreement betv,,,ccn Plaintiffs and Talk Fusion is the
product of fraud.
17
Again, Plaintiffs miss the mark. A challenge to an agreement as a whole is not grounds for
18
invalidating a forum-selection clause. See, e.g., 8atchefder v. Kawamo10, 147 F.3d 915, 919 (9th
19
20
21
Cir.), as amended (1998)(rccognizing that "[t]hc Supreme Court has noted that simply alleging
that one was duped into signing the contract is not enough.
22
selection clause on the grounds of fraud, it must show that 'the inclusion of that clause in the
23
contract was the product of fraud or cocrcion.")(quoting Scherk v. Alberto-Culver Co., 417 U.S.
24
506, n. 14 (1974)); see, e.g., Muzumdar v. Wellness Int'! Network, Ud, 438 f.3d 759, 762 (7th Cir.
25
2006)(holding lhat it was not enough to argue a contract was void as against public policy hccausc
26
27
28
it set out a pyramid scheme; rather, Plaintiff had to shlnV the forum-selection clause itself was
void); Comm. l\'etwork 5'ervices Corp. v. Cnlt Telecommunications, 2004 \VL I 960174, at *4
(K.D. Cal. 2004)("To hold that the forum-Selection Clause is invalid because the contract as a
entering the contract - requires the Court to assess the merits of the case.
4
5
Lsing Plaintiff's
6
Plaintiff's' contention that their contractual relationship with Talk Fusion vvas fraudulently
7
induced is not relevant for purposes of enforcement of the forum-selection clause.
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that they simply must not have read it before agreeing to it. If true, they did so (over 20 times) at
12
their own peril. It docs not invalidate the contract provision. Plaintiffs cite ,Vguyen v. Harnes &
13
Noble, Inc., 763 f.3d I] I !(9th Cir. 2014), for the proposition that one must manifest assent to a
14
contract by written or spoken word, or by conduct. But, here, Plaintiffs did manifest assent to the
15
"
16
17
rn
18
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Plaintiffs take the remarkable position that the forum-selection clause is so unreasonable
11
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II.
Clickwrap agreements are increasingly common and have routinely been upheld, even against
19
20
21
"consumers" (vvhich Plaintiffs are not). See, e.g., Ilancock v. Am. Tel. & Tel. Co., inc., 804 I'.
Supp. 2d 1215, 1222 (W.ll. Okla. 2013); see also, %altz v . .!DA'l'H, 952 F. Supp. 2d 419, 451-52
22
(E.D.N.Y. 2013) (enforcing forum-selection clause where prospective members had to check box
23
confirming they both read and agreed to website's Terms and Conditions of Service to ohtain
24
account). Plaintiffs have not cited any authority holding that a forum-selection clause in a
25
26
27
28
"8 "
I
1
assent to the terms and conditions expressly ... [A] party gives his consent simply by using the
website." Nguyen, 763 P. 3d at 1176 (quoting Hines v. Overstock.com, Inc., 668 F Supp. 2d 362,
4
5
366-67 (E.D.N. Y. 2009)). Nguyen goes on to state that the outcome of that case would be different
Plaintiffs also manifested assent through their conduct. Plaintiffs were the highest ranking
i
!
'
7
Associates in Talk Fusion and were actively involved in internal matters. For years, they operated
8
and received generous benefits in accordance with the Associate Agreement. They recruited
10
thousands of others to accept the Associate Agreement, apparently never once suggesting to any of
11
them or Talk Fusion that the Associate Agreement or any provision therein is unenforceable, or
12
13
Associate Agreement, Plaintiffs manifested their assent to the agreement. They are also equitably
14
15
16
Plaintiffs suggest that the forum-selection clause is overbroad and therefore unenforceable
because it could conceivably apply to any dispute between Talk Pusion and its Associates, even
17
actions for personal injmy unrelated to the business relationship. The forum-selection clause must
18
be read together with the arbitration clause. The arbitration clause states; "Any controversy or
19
20
claim arising out of or relating to the Agreement, or the breach thereof, shall be settled by
21
22
the forum-selection clause states: "Jurisdiction and venue of any matter not subject to arbitration
23
24
provisions together makes clear they apply to disputes arising from or related to the Associate
25
26
27
28
'Ironically, in this respect the forum-selection clause in the Dubli agreement is identical to the
forum-selection clause in the Talk Fusion agreement.
The Dubli clause provides that:
"9 -
2
3
4
5
6
Boiled down, Plaintiffs' position is that because the forum-selection clause could be
,;
overbroad in one context (it is not), it should not be enforced in any context, including the context
at issue in this case where the claims indisputably relate to and arise out
o[
the Associate
Agreement. Plaintiffs have not cited any authority supporting their contention that an "overbroad"
forum-sekction clause is unenforceable in all contexts. As for Plaintiffs' claims, they clearly fall
within the scope of the forum-selection clause. If there might be other types of hypothetical
7
claims that are too remote to be included within the scope of the forum-selection clause (possibly
8
9
10
11
such as personal injury claims), then those claims would no doubt be excluded from the scope of
the forum-selection clause.
But that would not invalidate the forum-selection clause for all
purposes.
12
Without explanation or authority, Plaintiffs characterize the "bulk" of their claims as torts
13
"independent from the agreement." (Doc. 34, p. 11). This is inaccurate. Five of their seven claims
14
are contract-hased.
15
16
,
I'
Two claims are torts, both of which expressly rely upon the Associate
Agreement. The same alleged acts that form the basis of the breach of contract claims against Talk
Fusion for "changes to the compensation plan'' and "wrongful termination" also form the basis of
17
the fraud and negligent misrepresentation claims against Talk Fusion. (Complaint at
18
71, 75-76). Porum-selection clauses are equally applicable to contractual and tort causes of action
19
20
21
where, as here, the tort claims arc intertwined with contract claims and relate to interpretation of
the contract. Nextrade, Inc. v. Hyosung (Am.), Inc., 122 Fed. Appx. 892, 894 (9th Cir. 2005)
22
(finding that the plaintiffs' wrongful termination claim "could not be adjudicated without
23
analyzing whether the parties were in compliance with" the exclusive distributorship agreement.);
24
see also, Afanetti-Farrow 858 F.2d at 514. Plaintiffs' tort claims fall within the scope of the
25
forum-selection clause because both the fraud and negligent misrepresentation claims cannot be
26
27
28
"jurisdiction and venue of any matter not subject to arbitration shall reside exclusively" in Palm '
Beach Cow1ty, Florida. (Emphasis added).
- JO -
Agreement.
3
4
5
Plaintiffs are also seeking to enforce the Associate Agreement. Plaintiffs arc estopped to
deny the enforceability of the Associate Agreement (including the forum-selection clause) when
they are attempting to enforce it.
III.
7
As addressed in detail in Talk Fusion's Transfer Motion, MJ Rich Media Corp. ("M.J
8
9
10
ill
Rich") is bound to the forum-selection clause, even though it protests that it did not sign the
Associate Agreement, for three independent reasons: (1) it is the successor in interest to I-Io and
11
Campagna, (2) it received a direct benefit under the Associate Agreement, and (3) it relies on the
12
13
MJ Rich is further estopped to evade the forum-selection clause because MJ Rich is the
14
successor in interest to position 1000004 and is bound by the Policies as a result. See, e.g.,
15
16
Graham Tech. Solutions, Inc. v. Thinking Pictures, Inc., 949 F. Supp. 1427, 1434 (N.D. Cal. 1997)
(finding that a non-signatory corporate plaintiff was the successor to the signatories to the contract
17
and therefore bound by it, including the forum-selection clause).
18
MJ Rich is bound to the forum-selection clause because it directly received the benefits
19
20
21
originally due to Ho and Campagna under the Associate Agreement. See., e.g., Mundi v. Union
Security Life Ins., 555 F. 3d 1042, 1045-46 (9th Cir. 2009)(11011-signatory may be held to an
22
arbitration clause where the non-signatory "knowingly exploits the agreement containing the
23
arbitration clause despite having never signed the agreement"); Hugel v. Corporation of Lloyd's,
24
999 F.2d 206, 209 (7th Cir. 1993)(forum-selection clause was applicable to non-signing plaintiff
25
corporations whose president and majority shareholder signed agreements containing forum-
26
27
selection clauses); Upcon v. Underwriters at Lloyds, London, 148 P.3d 1285, 1289-90 (11th Cir.
1998)(spouses of American investors were bound by choice of law and choice of forum clauses
28
-I I -
contained agreements between the American investors and the English defendants when the
interests of the spouses were completely derivative of the American investors' interests); XR Co. v.
Block & Balestri, P.C., 44 F. Supp. 2d 1296, 1299 (S.D. Fla. l999)(corporation's sole shareholder
bound by forum-selection clause contained in agreement between the corporation and its counsel).
Finally, MJ Rich is also estopped from avoiding the forum-selection clause because MJ
Rich relies upon the Associate Agreement as a basis for its claims. The doctrine of equitable
7
estoppel prevents a party from relying on the terms of a contract to assert its claims while
8
9
10
simultaneously attempting to avoid the burdens that other provisions of the contract impose. See,
e.g., Bahamas Sales Associate, LLC v. Byers, 701 f.3d 1335, 1342 (l ltl1 Cir. 2012)(applying the
11
doctrine of equitable estoppel to bar a party from rejecting a forum-selection clause where that
12
party sued upon the very contract containing the forum-selection clause); see also, Bailey v. ERG
13
Enterprises, LP, 705 F.Jd 1311, 1320 (11th Cir. 2013)("In essence. equitable cstoppel precludes a
14
party from claiming the benefits of some of the provisions of a contract while simultaneously
15
16
attempting to avoid the burdens that some other provisions of the contract impose. A forumselection clause would be one such burden,"); Gersten v. Intrinsic Technologies, !J,P, 442 F.
17
Supp. 2d 573, 579 (N.I). Ill. 2006)(cstopping a plaintiff claiming a benefit under a contract
18
containing an arbitration clause from simultaneously rejecting the arbitration clause).
19
MJ Rich acknowledges that, to the extent MJ Rich protests it did not "click" on the "I
20
21
AGREE" box, Talk fusion invokes equitable cstoppel. But MJ Rich fails to cite any cases in
22
opposition to Talk fusion's position. MJ Rich merely repeats the unavailing lament that litigating
23
24
IV.
25
26
27
28
The "first-to-file" rule does not apply when a forum-selection clause is present.
Plaintiffs urge the Court to ignore the forum-selection clause and "keep" this case
111
Nevada under the "firsHo-file" rule. Xumcrous cases hold that the first-to-file rule does not apply
in the presence of a forum-selection clause, primarily because that would allow a paiiy to evade
3
4
Universal Operations Risk Afanagement v. Global Rescue, LLC, 2012 WL 2792444 (N.D.
Cal. 2012), is on point.
6
competing business, the former employees filed an action in California seeking a declaration that
7
the non-competition clauses were unenforceable under California law. Id. 1n response, the former
8
9
10
employer filed a separate action in Massachusetts - the exclusive forum chosen by the parties - to
enforce the non-competition clauses.
Id. at
*3.
11
California action for improper venue. In opposition, the employees argued that dismissal of the
12
California action was improper under the first-to-file rule. Id at *5. They asserted enforcing the
13
forum-selection clause was contrary to California's strong public policy against non-competition
14
clauses.
15
16
The court in Universal noted that it must enforce the parties' choice of forum and dismiss
the action absent some compelling m1d countervailing reason. Id. But the employees in Universal
17
- like Plaintiffs in this case - failed to cite any authority supporting the proposition that a party
18
may defeat a valid forum-selection clause by invoking the first-to-file rule.
19
20
Universal court also could not independently find any authority holding that the first-to-file rule is
21
a "compelling and countervailing" reason to set aside a valid forum-selection clause. Id. The
22
court reasoned:
23
24
25
26
27
28
2
3
Id. at 6. The court concluded that these types of attacks on forum-selection clauses had been
rejected by it and other courts. Id. at *6.
Similarly, Cert?fied Restoration and Cleaning Network LLC v. Tenke Corp., 511 f. 3d 535
(6th Cir. 2007), involved a dispute between a franchisee and franchisor over a non-competition
clause. The franchise agreement contained a forum-selection clause designating Michigan as the
mandatory forum for any disputes. 1\onethelcss, the franchisee filed an action in Ohio seeking a
declaration of the parties' obligations under the franchise agreement. Id. at 539. The franchisor
10
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the franchisor's request for preliminary injunction, erroneously concluding that the franchisor was
ID
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not likely to succeed on the merits of its claim and because the court gave undue weight to the
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filed a second action in Michigan seeking injunctive relief. Id The trial court in Michigan denied
comity concerns raised by the existence of the first-filed Ohio action. Id. at 593.
The Sixth Circuit reversed, finding that the franchisor met the preliminary injunction
15
Q L'.
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16
standard and that the trial court's reliance on the first-to-file rule was an abuse of discretion
I:0
17
18
attempting to forum shop as well as preempt resolution of the dispute in the parties' agreed forum.
19
Id.
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20
21
The Ohio action was the very kind of anticipatory suit that should not have been given
Id.
judgment in denying the franchisor's request for preliminary injunction on such a basis. Id. See
22
also, Automated Solutions, lnc. v. Fadal Machining Centers, LLC, 2011 WL 2182457, at *5 (D.
23
Idaho 201 l)(although Plaintiffs were the first to file, the Court finds that should not defeat an
24
25
26
otherwise valid and enforceable forum-selection clause); lvfegadance USA Corp. v. Knipp, 623
F.Supp.2d 146, 149 (D. Mass. 2009)("It is improper for a party to invoke the first filed doctrine in
27
the face of a clearly articulated forum~selection clause in a contract."); Hy Cite Corp. v. Advanced
28
mandate that the firsUo-filc rule should not be applied to plaintiffs' action because of the forum-
v.
Plaintiffs assert that the doctrine of forum non conveniens is inapplicable in the present
case and only applicable where a paiiy desires to transfer a case to a state court. If this Court were
to determine that the forum-selection clause at issue designates only a Florida state court forum,
7
the doctrine of forum non conveniens applies. In such instance, this case would be subject to
8
9
10
11
dismissal, not transfer. Mao, 2014 \VL 5292982, at* (citing Atlantic lvfarine, 134 S.Ct. at 580).
12
Plaintiffs concede that the forum-selection clause, if enforced, permits transfer to the
13
Middle District of Florida. (Doc. 34, p. 11 ). Talk Fusion suggests that is in the best interests of
14
the Parties.
15
16
17
18
19
20
21
22
23
24
25
26
27
28
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CERTIFICATI<: OF SERVICE
2
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12
13
mbarlow@),b_y,,rlcgal.com
14
16
17
18
19
20
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22
23
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28
- 17 -
EXHIBIT "1"
_______/
DECLARATION OF EDWARD KUCHINSKI
Tam one of the attorneys herein for Defendant, Talk Fusion, foe. I am competent
2.
selling company.
Procedures" and "E~SIGN consent" which l reviewed and printed at that time.
3.
On March 19, 2015, l again conducted an internet search for Dubli and was again
"www.dublinetwork.com" homepage, dated March 19, 2015, is attached hereto as Exhibit "A".
4,
The homepage attached as Exhibit "A" has a link to Dubli's "E-SIGN conser.t".
Clicking on that link took me to Dubli'~ "E-SIGN consent". A true and correct copy of Dubli's
"E-Sign consent", which I printed from "www.dublinetwork.com" on March 19, 2015, is attached
HS
Exhibit "B."
5.
Procedures."
Tbe "dublinetwork.com" home page also contained a link to Dubli's "Policies and
Procedures and containing a .pdf version of Dubli's Policies and Procedures. A true and correct
print out of that webpagc, dated March 19, 2015, is attached as Exhibit ';C".
6.
On March 19, 2015, l also performed an internet search for "Dub!i E-SIGN
7.
On March 19, 2015, I also performed an internet search for "Dubli Policies and
A true and con-ect copy of the Dubli Network Limited Statement of Polici~s and
Procedures is attached hereto as Exhibit "D". This is a trne and correct copy of Dubli's Policies
nnd Procedures I nccessed through the "dublinctwork.com" website (Exhibit"/\"), through the
Dubli E-STGN consent (Exhibit "B"), and through an intcmct search for "Dubli Policies and
Procedures" on the internet (Exhibit "C"). The attached Dubli Policies and Procedures have an
effective date of April 2, 2013.
I declare under penalty of perjury that the foregoing is lrue and correct.
19th day of March, 2015 in Tampa, Florida.
Executed this
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PROCEDURES
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TABLE OF CONTENTS
SECTION 1 - INTRUDU<..:1IUJ\ .... , ... , ...... ., .................. , ............................................................................. ,.... !
J, J - Por.rr:rns A"1D co,1PE','S.\TJO!'," l'LAN Ji',COR!'OR/\Tl::D l:-.JTO B11.~r:,:i:.~s A~SOCJATE A()HF.J::\1K-.JT
1.2 - l'l.'HPOSF. O\i Poucms .,.
.................... I
1.3 C'llAi\GES TO THE ,\Gll.liE:<lEST.
..................... l
1.4DELAYS..
.................... 2
.... ,.2
. .... 2
,. ., ...... ,....... 2
... .7.
.3
.,
.3
................................... }
J
............................ .4
'" ......................... .4
'IF. J"\\Q]ll{
MARl,'.El'lKG
.'\r-;]J
3.2.J - Gemmif....
J.2.2 - DubLi's iHmf(s mul 1\'(11/J/'S
3,2.3 - Bu1-ineH Carll.1, Stnlio1w1J' 11111{ Telep/;fme U.1ti11g.1 ...
5
............... 5
.. .. 6
" ..................... 6
.7
................. 7
.8
............................................................................ 8
................................................... 8
.. ....... 8
3.5.I - ,'rlisplllcemenl.
.. ...... 9
.9
.. ..... 9
........... IO
3,6.l "!11dl.'11111ijicatlon
3,6,] - hitOl!U' Claim\' ..
3,7 - CO.'H'LICTS Ol' )i'iTlcflEST,
3. 7, l - i'>'o11;-o/idtnlfo11 ..
3, 7.l - Srd1: of Compe/ing Goorl~ or Se1'J!lce.1 ...
.,,/()
..
/()
,.,,,,,,,,,,,,l
EXHIBlr D
....... 11
. '" 12
................. "" 12
.. .. I 2
"""' ... 11
..................... 1.1
............................. !J
..... 13
.. ................. 14
.. .................. 14
:4
..... " ......... 4
:1,19-MlNORS- ...
3.23-Sl!CU:SSl(J.'I
.,,, 16
i6
.. I 7
..... 17
.. .. 18
"
"" 18
.. .... 18
.. ........ 19
.. ...... I y
_ 19
. ................ 19
4 ..3 - NON[)JSJ'All,\Gllr-.-rnr,;T.
4.4 RFPORTJNG J'OL!C.:Y \' IOLATIO.'IS ...
.. .............................. 19
19
19
StC'J'lOi'.' 6 - BONUSES ANO COJ',IMISSIOI\S., ......................... .,,. ............................................. ., ... ,.. ,, ... 20
..................... 20
.............. 20
. .... :w
f,.J - R1::FoR'r~ .
. ............................................. 21
....... 21
............. 21
.. ............... 21
....... 22
.................... 22
.23
.. ............................................ 23
.. 23
. "' """"" ..... 23
..... 24
ii
'""''""'"
............ 24
... 2,;
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SECTION 1 INTRODUCTION
1.1
ment
These Policies and Procedures, in their present fom1 and as amended ;:it the sole dis.,
cretion of DUBLI NETWORK LIMITED (hereafter "Dl1bLi Netwo1k" or the "Company"), are incorporated into, and form all iir.egrnl pa11 of, the DubLi Network Independent
Business Associate. Throughout these Policies, when the term "Agreement" is used, it
col!ectively refers to the DubLi \!etwork Independent Business Associate, these Policies
and Procedures, the D11bLi Network Marketing and Compensation Plan, and the Dubl..,i
Network Business Entity Application (if applicable), These docmnents are incorporated
by reference into the DubLi Network Business Associate Agrnemcnt (all in their current
form and as amended by DubLi Network). lt is the responsibility of each Independent
Business Associate (hcrinafier "Bwdrwss Associate" or ;'Bl\") to read, adhere to, and ensure that he or she is aware of and operating under the most current version of these Poli~
cies and Procedures. When spo11::::oring or enrolling a new BA, it is the responsibility of
the sponsoring BA to ensure that the applicant is provided with, or has on line access to,
the most current wrsion of these Policies and Procedures and the DubLl Network Marketing a11d Compensation Plan p!ior tu his or her execution of the Agreement.
J,2 - Purpose of Polkies
Dt1bLi Network is ti social mnrketing company affiliated with the direct sales field
tluit markets products through BAs. It is important to understand !hat yom success and
the st1ccess of your follow Business Associates depends on the integrity of the men and
women who market our products and services, To cleflrly define the rolationshlp that exists between Business Associntes and DubLi Network, and to explicitly set a standard for
acccptabk business conduct, DuhLi Network has established the Agreement.
DubLi Network Business Associates are reqLdred to comply with all of the Terms and
Conditiom sd forth in the Agreement, as wc.:11 as all foderal, state, and local laws governing their DubLi Network b11.~iness and their conduct. Because you may be unfamiliar
with many of these standards of practice, it is ve1y important that you read and abide by
the Agreement. Please review the infoirnation in this manual carefully. Jt explains and
govt!rns the rela!ionship between you, as an independent contractor and the Company. If
you have any q1,.1estions regarding any policy or rule, do not hesitate to seek rm answer
from DubLi Network.
1.3 - Changes to the Agreement
Because federal, slate, and local laws, as well as the business environment, periodically change, DubLi Ncti,.vork reserves the right to amend the Agreement, it's products
and services, the Marketing an Compensation plan and its prices in its sole and absolute
discretion. By signing the Business Associate Ag1eement, a I3usiness Associate agrees to
abide by all amendments or modifications that DubLi Netwol'k elecb to make. The
Business Associate needs to infonn himself or herself about modifications and amendments nt regulfll' intervals. The continuation of a Business Associnte's DubLi Network
business or a Business Associatc's acceptance of bonuses or commissions constitutes ac-
"'''""'"'"
l.4 ~ Delays
TJubLi Network shull no'. be respcmsibk: for del11ys or failmcs in performance of ils
obligations wltC'n p~rfommnce is mac!c commcrc'.ally imprncticab!c due to cir,iumsttlmTs
b('.yond it~ r0,1so1m':ilc cont10I. This includes, witl1out limitation, ~trikes, labor difiku!tic~, riot, war, fire, death, Cllrtai:mcnt ofa party's source of supply, government decrees
or orders, soft.ware and/or system errors
1,6 - Waiver
ThiJ Comprmy never glvc~ up its right to in;ist on compliance with the Agrccrnen( and
\\'ith the applicable laws governing llw ernduet of a bu~ines~. "J\'o failure of l>ubLi Network to exercise any right. o: power t1J1der the Ag:,~ement or to insist upon strict compli-
ance by a Business Associa:e ,vith uny obligati:.m ur pmvi~ion o/'the Agreement, and no
custom or practice of the pt:;-t!Cs lit variance with the lcrrn~ of tile /\gn:cment, ~hall eons1itu(c n waiver of DubLi l\ctwork'::; right to demand exact compliance with the Agrec11ient. Waiver by DubLi Network can be effectuated only in writing by an authorized of"
fooer of tl1c Comp1rny. O"JbLi Network's waiver of any pnrticular br1cc1ch by 11 Business
Associate shal: not affect OI' impair DLibLi Network's rights will, l'espcct to any ~ub~eany o.her Busir.ess
qucn1 breach, ror shull it affect in any way the rights 01 obligatio:1s
/\ssoci<1k. Nor shall uny delay or omission by DubLi Network 10 !.o;-;ereise any right arisi11g from il breach 11ffoct m impair Dub Li Network's tlghts as to tf1at or any subsequent
brelieh.
or
The cxistc:1cc of any claim or causl! Df action ofa nusiness A8sociate against Dub Li
Network shall not constitute a defense to DubL.i Ntotwork's 1Jtifr1ccmc11t of any ter:n 01
provision ofthc Agreemcnl.
fl
Busimss Associate
A monthly license fee of $49/E38/AU$47 will be charged starting from Lhe second
month of your membership. 'l'J,e fee is charged to cover the support costs, IT production,
annual maintenance and improvements of the JJack Office IT system. For US residc:mts, a
monthly license foe of$39 will be charged starting from their 13 111 month of membership.
2.4 - Minimum Customer Point Requil'cmcnt
In Order to maintain your rank and the benefits associatt:J with it, you need to comply
with the minimum customer point requirements according to the DubLi Ni.:twork Compensation Plm1. If you fail to maintain or regain the required amount of Cus1omer Points
within the time limits as defined in the Compensation Plan, you will be downgraded to a
lower rank.
2.5 - Business Associate Benefit.~
Once a Business Associate Application and Agreement has been acc.epted by DubLi
Network, the be11elits of the Marketing and Compensation Plan and the Business Associate Agreement are available to the new Business Associate. These benefits include the
right to:
Sell DubLi Network products and ~ervices and recruit new customers;
Participate in the DubLi Network Marketing a11d Compensation Plan, if eligible;
Sponsor other individua!.q as Business As80ciates into the DubLi Network busiM
ness and thereby build a marketing organization and progress through tho DubLi
Network Marketing and Compc11~ation Plan;
keeeive periodic DubLi Network onlinc literature and other DubLi Network
communications;
Paiticipate in DubLi Network-sponsored supprn1, service, training, motiv1:1tional
'""'"'"""'
chase: and
may b::: distributed by a RA up to two tit1es prior to expiration: however a BA's
JJerwnal Retail Custorrn.:r ic. prohibltc.:d fro:n distrih11ting the r,ccess lkcn~cs or sub licensing acces~ to the privileges oC anC s1c1-vices offered to, Premium or VIP Mcmb\:rS
on www.dubli,corn.
!iLerature. R/\'s shall not make folse or misk:adit:g rcprnsenlations of any kind inclLtding,
but not limited to, misrepresentations about DubLi Netvvorks services m the DubLi Network Compensation Plan,
3.2 - Adverfolng
J.2.1 - General
All Business !\irnociate5 shall safcgwird and promote the gocci ~cputation of Dub Li/
DubU Network and DubLi/ DubLi Network prnt'.uct~. The marketing and prninotion ot
Dubl.i Network, the DubLl l\'etwork opportunity, the Marketing :md Compensation Plan,
and D11bLi Network products shall be co11sistent with the p~1b:ic interest, and must avoid
al I d is::omteo,1s, decetive, misleading, un\.:th ic2J or immoral conduct or practices.
Only I3usiness Associates who have achieved the rank of fades Director 01 higl1er
may create and pcblicih their :::ivvn mat'keting 1m,:crials, adveriisirig materials, a1"1d/or other
sales rids, (collectively "sales tools"). This policy docs not r.pply to web site,, which all
Bi\ 's arc allowl!d to operate. l lowever, all :m1tcrials, inchlditig websites, mrnt be s.tbmiltcd to DubLi Network's Compliance Department anC. r<;1c;:dve written pre-approval beforn
th-:y can be used or made public. Jr written approval is not isSLll-!d within ten days from
ilie d2ttc it is submitted to the Compliance Department, the request is dcniud and the I3i\
shall not U!iC die material.
Business A~sueiatcs rnay nu', sell sales tools to other DubLi Network Busim:ss A~8ociates. Therefore, l3usim:ss Assudaks whD receive ,.11.1tlm:izatio;1 from DubLi N1,.;lwork
10 prodctcc their ow11 ~ales tools n:ay no: sell such material to any other 8t1sincss Associ
ate. BAs may rrlilk~ approved :;ales tocl8 availab!c to otl1er Business Asrndatcs free of'
~h<Jrgc lfthry wi~b, but may not chuge other DubLi Network Busirwss A~wcialc~: for the
sale~ !ools.
DubLi Net.work further reserves the light to rescind approval for any sales tool~ ai
any time, and 8usincss A%ociates waive all clJirns for <l,mmg0s or rc11rn1wration a1ising
from or relating to such rescission.
DubLi Network I\Jrtlier reserves tl1e right to prohibit any rnmketing ac1ivitfC$ 11ia:, in
tht.: Company's sole discrelion, ca.,t negative asr,l!rnions on the integrity, truthfolncss,
and/or rcputatio:1 LlfDubLi Netwut'k.
3.2.2 DubLi's Mark~ :rnd N,irncs
DuCLi NctwOt"k Business Assocbtcs shall ncl usc )JubLi ai1dio1 DubLi N.:twu~k'~
tradc rnuncs, trademarks, service; marks, logos, artwork, rnpyriglits, or ut!1er intellectual
property without DubLi Network's prior written pen-:iission, Bu~i11e~s Associates may
not produce foI' sale or distribl:tion any 1ecorded Company events and speeches without
wtitten pem1i~siun from DubLi Network nor nrn.y Business ;\ssociaks rcproduct: for sale
or for personnl us~ any recording of Companyprnduced cn1dio or video tllpc pr1.:srntations.
Busbcss Assoeiatcs may not usr: or al1(:mpl to register ally ofDubLi Network's trndc
,,,,,,1.,,:,,,,
raames, trademarks, service nnmes, service marks, produc1 nflnies, the Company\ name,
or any derivative thereof, for a~y h:temet dor:1aln name or email address, or use such
marks in connection with any blog site, clrnt toom, or' on fine forum of any other nalme.
3.2.3 - Business Cards, Stalionilry and Telephone Listings
Business Associates may u8e DubLi's name in on business cat'ds, statlonmy and in
telephone directories as follows:
Business Associate's Name
Dubl,i@ Independent Business Associate
All Business Associates may list themselves as an "DubLi Independent Business
Associale'' in the white or yellow pages ofthc telephone directory under thci, own name.
No 13usiness Associate may place telephorc directory display ads using DubLi Network's
nan1e or logo. Business Associi.nes mny not answer the telephone by saying "DuhLi
(Network)", "DubLi (Network) Incorporated", "DubLi (Network) Limited", or in any
other manner that would lead the caller to believe that he or she has reached co11ion:tc
offices ofDubLi or DubLi Nctwotk
3.2.4 - Medin and Media Inquiries
Business Associattis must no: attempt to respond to media inq;.1iric~ regarding DubLi
:'ietwork, its prnducts or ~crvices, or their i1:dependent DubL: Network business. All inquirie~ by any type of rnedii:l must be imn:ediately referred to DubLi Network's Public
Relations Depaitment. This policy ii\ designed to assure that accurate ar,d co:1sistc11t h
fo1111ation ts provided to the public at: well as a proper public imnge,
Bttsiness Associates are strictly prohibiteci represer.ting DubLi Network in any public
mt:dia arena and from using ur.compe11sated media !onm including, but not limited lo,
news releases, asticles, editorials, unpaid adveitising, infomercials/adv1;.rtorials, and tc!c
vision, cable or radio program appearnnces to promote or piiblicize DubLi Network or its
products, except as approvcC in writing by DubU Network, Such requests mus: be sub
mitted in writing ;o DubLl Netwol'ks Marketing Department at '.east 30 days b advance
oftbe media aclivity.
3.2.S - (lnsolichcd Email
DubLl Network daes not petmit Business Associates~ send unsolicited commercial
emails unless such emails strictly comply with applicable laws and regulations inc)udi1:g,
without limitation, the U.S. CAN SPAM Act. Any email sent by a Bus[ness Associate
that promotes DubU Network, the DubLi Network opportunity, or DubLi Netwcrk products and services must comply with tl1e following
The emall mnsL include the Business Associale's physical mailing address.
The email must clearly and conspicuously disclose that the mc%agc is an .idvcr..
tisernent or solicitation.
The use of deceptive subject lines a11d/or false header information is prohibited.
All opt.out requests, whether received by email 0r regular mail, must be hono1-cd.
If a Business A~soc\at.c recsives ar: opt-OL!I req11es1 frorn a redpir;:nt of an email,
the Business Associete mu~t forward the opt-olll request to the Company.
DubLi Network may periodically send co1mne1cia\ emails or, behalf of Business Associatc8, By entering into the Business Associate Agreement, Business Associate agrees
tha! the Company may 8end such emails and that the Busi11e,;s Associate's physical and
email add1esses will be included in such emails as outlined above. Business Associates
shall honor opi-oul requests generated as a ;esult of such c;irnails sent by the Company.
3.2.6 ~ Unsolicited Faxes
Except as provided in this section, Business As~ociates may not use 01 trnnsmit unsolicited faxes or use an automatic telepbor:e di1Lling system relative to the operation of
their DubLi Network bushesses. The term "autcmatic :elephone dialing system" means
equipment wblch has the capacity to: (a) store or produce telephone numbers to be called,
using a random or sequential number generator; and (b) lo difil such numbers. The terms
"unsolicited faxes" means the transmission via telephonc facsimile of any mctterial or i11form11tion advertising or promoting Du'.)LJ K'et.wcrk, its products, its compcnscitior. plnn
or ciny othet' aspect of the company which is rnnsmit~cd to any person, except Ornt these
terms do not include a fax or eumail: (a) to m1y persor, with that pcrsons prior express
invitation or permission; or (b) to any perso:1 with whom the Business Associate lias 11n
estab!ished business or personal rc!a(ionsbb. The term ''established busi11c::1s o~ ::iersunal
rnl:donship" mea;1s a pdor or existing 1-etaiionship formed by a voluntary two v,;ay (:or.1municatio11 between e. Business Associate and .i person, en the basis of: (a) an inqil\1)',
application, purchase or transaction by :he person regarding products offCrcd by such
f3Ltsiness Associate; or (b) a pe:sonul or familial relationship, which relationship hus not
been p1wiously terminated by either pa11y.
A corporation, pmtnership or trust (collectively referred to in this sectlon as a "Bt:sincss Entity") may apply to be a DubLi Ketwork Bushiess Associate by Sl!.bmitting a
properly completed Business Entity Registration foi'rtL A'.1 BA may change its status under the same spon~or from an individual to a partne:ship, corporation or trust, or from
.one type of entity to anotlier. There is a $80.00 fee for North American rcsldtmt::; and
60.00 for Eoropean residellt~ lbr each cliange requested, which must be included with
the written request and the completed Business Associate Application and Agreement.
Members of the entity are jointly and severally liable for any indebtedness or other obligation to DubU Network, and for compliance with the Agreement.
To prevent the circumvc11:ion of Section 3.21 (regaiding transfers and assignments ol"
lJubLi l\etwork bus:ness), if an additiona: partner, shareholder, IT.ember, or other busiT
1~css entity affiliate is added lo a bu~iness entity, the ol"iginlll applicant r.1us1 remain l'.S a
parly to the original 13usiness Associate Application and Agrcurnent [f lhe original
Business Associate wants to terminate his or ho1 relationship with the Company, he or
she must transfer or assign his or her business in accordance with Section 3.21. If this
pnicess is not followed, the business shall be canceled upcn the withdrawal of the original Business Associate. All bom:s and commission chccb will bu sent to the c1ddrnss of
record of the original Bl1siness Associate. Please note that the modifications pennitted
within the scope of thls paragrnph do no/ ~11cludc a change of sponsorship, Changes of
sponsorship are addressed in Section 3.5., below. There is a $80.00 (60.00) foe for each
change requested, which must be ir.cluded with the written reqtiesl and the completed
Business Associate Application El!ld Agreement. DubLi Network may, at its discretion,
require notarized documents before implementing any changes to a DubLi Network business. Please allow thirty (30) clays after the receipt ofth1; request by DubLi Ne:work for
processing.
3.5 - Change of Sponsor
To protect the integrity of all marketing organit.ations und sufegLwrd the hc1rd 1,1.wk of
all Business Associates, DubLi Network prohibl\s cluu~ges in sponsorship except as noted
below,
3.5.1 - Mispl:tcemcnt
ln cases in which the new Business Associate is sponsored by someone other than the
individual he or she was led to bel:eve would be his or her Sponsor, a Business A~wc:ate
may 1cqucst that he or she be transferred lO another organizat:on with his or her enti1e
marketing organi:.:ation intact. Rcque~[s fc1 transfer under this mu~t be made within t:8
hours from the tim,;, of enrollment. The Business Associate requesting the change has the
burden of proving that he or she wa.~ placed ben1;:i1th the wrung ~ponsor. tt is up to DubLi
Network's discretion whether the requested change will be implemented,
3.5.2 - Cnncellation and Rc-npp!ict1tio11
tcndancc at any DubLi Network functio1:s, r1artk:ip1:!.ion in any othcr form nf' ifosin,~~s
Associa1c ac:ivlty, or opcratio11 of any othe: Duh!.i Network bu~iness) for six (6) full calendar montl1s. Following the 8ix mo:1th JJcriod of inactivity, the former Businr.ss Asg0ciate may reapply t:ncler a new :;ponsor, however, the former Bw:incss ,\~sociate's sil!cs
tcarnwtll remain ir: their original line of sponsorship.
3.5.3 - Waiver of Claims Agai11st DubLi Network for Improper Orglrniztttion
Ch;l!lgcs
In ca:w:; wherein the appropriate sponsorship change procedmes have nol been followed, and a snlcs tearn has been developed in tl1e second business developed by a Business Associak, DubLi Network reserves the sc:e and cxclLt~ivc right to detennine the r:nal disposition of i!ic sales tem11. Resolving conflicts over the proper pli:t.cemcnt of a saks
team that ha~ dovclopcd under an organizatiDn that J:as improperly switched sponsors is
often extremely dinicult. ll1crefore, BtJSIJ\ESS ASSOCIATES WAIVE ANY AND
ALL CLAIMS AGAII\ST DUBLI THAT RELATE TO OR ARISE FROM DCBLl's DECISlON REG,\lUHNG THE DISPOSITION OF ANY SALJ<;s TEAM
THAT DEVELOPS Bl,;J,(lW AN OR(;ANJZATIO'.\! THAT HAS lMPROPF:H.LY
i\1(n(.:0\'81', the f~cdcral Trade Commission and sever<-11 swws have laws or IT_gulat:oris
tlrnt :-egubte or eve11 prohibit cel':ain 1ypcs of income claims and testimor~ials ir.adc by
persons engaged l11 network marketi11g, While Husim:ss Associalcs r:1ay believe it beneficial to ctisdose tht..:ir earnings 01 thc.t of others, su<:h approciehcs hav:.: legal consequcncr.::s that can negatively impact ])ubLi }:etw0rk a~ wdl ~~ the Business As.~uda.tc making
the clnim 1mkt,.~ t1ppropriato disclosuros required by law tire: also milzk contcmpornncou~,
,c,l',1)11.:ll
ly with the income claim or earnicgs rcprnscntrition. ncr.ausc Duhl. l\etwork Bm;inc3s
Associates do not havtJ lhc data :1ecessa1)' to comply with tltc legal req"Jireme11ts for mai<:ing income claims, a Bi1siness As~ociatc, i.Vher presenting er discussing the DubL: Net~
work opport1mity or Marketing 11nd Compensation Plan to a prospective Business Associate, may not make income projections, incc11T1e dai:m, or disclose his or her DubLi
Ni/work ir:cornc or that of any other Dub Li l\'ctwurk 8 A,
The term "l\eL:rnit" rr:eans tfr:: actuHI or c1ttcmpted sponsor~hip, soiici1<1lion, enl'Ollme:-it, cncourngeme111, or effort to inllucnce in any other way, 1Jither directly, indirectly,
m through a third purty, another DubLi Network Business Associate to c1uoll or paiticipatc in :mother multilevel :wirketi11g, netwo1"k marketing or direct sales opportu11ity.
3.7.2 - Sale of Competing Goods or Services
BLJSinc~s As.'wciales must not id], or atte:11pt to sell, any competing non-LJubLi l\'ctwork pwgrams, products or services to DubLi Network Business Associates. Any progrnm, product or st.:rvkes in the same generic rnlegories as DubU Networ-k pi-oducts or
services are deemeC to be C(Hnpeting1 regardless of dif:'crcnccs in cost, quality or other
distinguishing factors.
3.7.3- Business Associate Participation in Other Direct Selling Progn1ms
Jf t1 13u5iness Associak fa engaged in other non-DubLi Network direct st.:lling programs, It is the responsibility of the Busiu~s~ Associate to L'.tlSut'C that his or her Dubl.i
Network business is operated cnti1ely separn.lc.\ w,d apal't from 1UJY otlii;:r prugram. To this
end, t.lie following rr:ust be adhered to
Husinc% A~~odatcs ~hall not display DubLi Nl'twork promotional matninl, sales
aids, proCucts or servir;;e~ witl1 or !11 the same lo~atio11 i.l~, ai1y 11011-Dul.JLi Netwo1k
IU
"'''';'"'"
Business Associates shall not offer the DubLi Network opportunity, or DubLi
Netwotk.com products or services to prospective or existing Business Assuciatds
in conjunction with any 11011-DubLi Network program, opportunity, prodm:t or
service.
Directly or indirectly disclose any information contained in any Marketing Organization Activity Report to any third party;
Directly or indirectly disclose the password or other access codi.: to his or her
Marketing Organization Activity Report;
Use the infom1ation to compete with DubLi Network or for any purpose other
than promoting his or her DubLi Netwmk business;
Recruit or solicit any Business Associ<1te listed on any report, or in any manner attempt to influence or induce a11y Business Associate to alter their business relationship with OubLi Network; or
Use or disclose 1.o any person, paitnersl1 lp, association, corporntion, or other entity
any infonnation contahied in any Marketing Organization Activity Report.
Upon demand by the Company, any current or Former Bw.iness Associate will return
the original and all copies of Marketing Org:mization Activity Reports to the C<1111pm1y.
3.8 - Back Office Access
DubLi Network makes online back offices available to its Business Associates. Back
offices provide Business Associates access to confidential and proprietary information
thnt may be used solely and exclusively to promote the development ofa Business A~~uciate's Dub Li Network business and to increase salt!S of DubLi Network products. However, access to fl back office ls a privilege, and not a right. DubLi Network reserves the
right to deny Business Associates' access to the back office, or any part of the back of:
flee, at its sole discretion.
II
"" w1i,1rn2
3,10 - Cross-Sponsoring
Actual or attcmp".ed cross sponsoring is strictly prcih:bitecl. "Cross sponsoring" is defined as the t:nmllment or attempted enrollment o-= ~:1 indivhkul wbo or l:!llity that already has a current Business As3ocic1te Agreement 011 flc with DubLi Netwo1k, o: who
bis had such an agl'cement v.'ithin the preceding Bix cale1;dar montfE;, within a di:'fCrcnt
J:nc of sponsorship The use ofa spouse\~ or relativcs na:ne, trade name~, lJBAs, assur:1ed 112.mes, c.orporntiono, partnerships, trus!s, federal 1D 11ulf.be1s, fictitiou~ lD numbers, any strn\v-rnan or other artifice to ch.:urnvent thia p0Jicy is prnhi:iitcd Business
/\swcic1tus 8hall not dcr:iean, discredit 01 defame other Dub[,i Network Business Associates in a:i attempt to entice another Business Assoc'.atc lo become pa1t oft:ic first Bu~incss Associatc's marketing organization. :'his poli;;y 8hall not prciliibit the tmnsth >:Ji' a
D:1bLi Network buRine~s in ~ccordm1cc with Scction 3.5.
in:mediutcly. OubLi Ns~work may Wke disciplinary action against the Business Assoi.::iate that changed organi1.,dons and/or those B11$ines~ Associates who encouraged or :iarticipateci in tbc Cross Sponsoring. l)ubLi Network may also move al: or pa1i of the of
rending I3usiness Associatc's !v.'.arketing Organizallon to hl$ or her original Marketing
Organinitio:1 if the Company deems lt cq1iitable and feasible to do so. However, Dub!.i
'J\e1work is under no obligation to move the Crnss Sponsored Businc~~ !\ssociatc'ci Marketing Organization, and the ul:inrnte dispositirnl of the orgs11iz:ction n::nmins within the
wle discre~ion ofDubLi Network. Busilrn~s Associates waive all claims and cHuses of
action against DuhLi Network arising from or relating to the di,5positio11 of the
Cross Sponsored Ilusiucss Associutc's Marl\:ctlng Org:-iniz:-ition.
12
3.12
Regulatory agencies or offlcials do no: approvi.: or cndDrsc any dirci.:t sellir.g or net\vork marketing com'.:)<1.nies or prCJgrnms. Thendore, Business Asrnci,ctcs s!iall not represent or imply that DubLi l'<ctwork or its .Vladu~ting Hr.d Compensation Plan rlavc becm
"cpprovcd," "endorsed" or otherwise sanction::d by any govcrnmc11t lig1c11cy.
J.13 Collecting Applicant Information
Busi :1css Associutvs arc indcpenden t. con trnc(Ol"E. The validity or consumer pl"Okction
rcg11trnio11s is expressly i:xcluded. fh1si11ess Associates an: not pun;ha~crs ofa frrnchise
or a busirie8~ upportunity . ."be agreeme11: ':ietwee:1 DubLi 1','etw~rk and it8 Husir.ess i\ssoci ate~ dues not create an emp loyer/cmployee 1cbdcrnilip, agency, parlnersh ip, 0r joint
vc:1twn: be'.ween the Co:npany and the Hu~incss Associaw. DLL~ine~s As~ociates shall nor
be trc;atecl as nn employee for their ~e1~1ices 01 for Fecieral or State tax purposes. /\II
Businciss Associates ,ue n:~ponsib!c for paying lociJ, state, nnd fodcrnl taxes due from all
conpensatiu11 earned as a Business A~soc;iate o:'1he Company. Tile Busiress Associ1ttc
has no ai.:thority (expn:s~~d 01 implied), to bind the Comp~ny to any obligation. Each
f3usine;-s Associate shall c~tabli~h hi8 or her own goals, houts. ,md mebods of sale, so
long :1s he nr she complies with the lerr:1s of' the 8usine5s Associate Agreement, th(;sc
Policic~ and Proci::durcs, aud applicablc law,,
All Bu~iness A!:,sociates a:e rc~_Jon~ible fot" all expense~ relnti11g t.n their \Jus:ncss cpcrntion. Y:iscellaneous expenses include, ':llt are not :irnited to, license or pe:wits rcq:tircd to opcmte n business, legal fees :onneckti with the use of a busirwss 1rnrr.c, telephone expenses, product advertising, etc. Bt.siness i\Jsuciatcs shali not involve DubLi
NL:twork in any co11trc1r.;tut1l relationship~ rcla:ive to tlicir businesses. Business cannot and
shall not sign contrncts, rent or lei.Sc offii.:e ~puce or equipment, open bank accoLrnts, se~
n1re credit, cash negoti:ibl:;l imtrumcnts, md. c purchns:::s o; entc1 into agrcuments ofrmy
kind in the name ofDubLi r<ctwurk Such m:'.ion is prohibited and causes the termination
ofhc Business Associate status. Each !3usi.1ess A~sociate shall hold DuhLi Network, its
sharc~lwlders, pi!'.'"l:iers, members, dircctcrn, officers and employees harmless from any
clHims, damages or liabilitie~ arising out of such action.
13
''"''"'''''"'
Hm:c1usc oferitkal .cgaJ and wx considcrations, DLtbLi Networl musl limit the sale of
procil1cls and 8Crvkcs, ant..: the ~rescnt:Ltion ofthe DubLi Nctw01k business to prospective
customers and Busi11e~8 i\c;8ociatcs located within tho "..Jnitcd States and US. Tm-ritorics
an:l t)]()SI.! utlic:r co1:ntrics that the Company has annot:nced aio officially opened for business. Mo1t!ovcr, allov,ing <1 fow Business J\ssociaws '.o c0nduct business i11 markets not
yc1 op~m:<l by DubLi Network would violate the elrnccpt of affording every Business Associate i,he equal opportrn1ity to expand i:1[crnatiu1ially. Acccrdingly, !lu~inoss Associates are authorized to sell DubLi Network,wm products, enml. [3,.isiness Ass::iciaws, lltld
engage: in business bliilding activities, only in coi.;ntries that Dl1hL: Network is authorized
to ..:onduct business, as announced ln official Company liternturc.
3.17 - lmcntory Loading
BL\siness As~ociates 111ust never purchusi: inore prnducts than they ca:1 reasonably .1se
sell to retail ctrntcm1ers in a month. and :-:nust nut inlluence Dr attempt to influence any
other Business A$so:,;l11k tu buy more products than they can reasonably use or sell to
retail customer~ in a month.
01
3.18
Business J\%ociatc~ slrn!l compJy with all fodcral, state, and local laws and regulations in the conduct oftlitir l.JL1sincsscs. Many cities anc counties have lav,s regulating
ccnain horne-ha~cd businesses. In most cases these ordinances "re 11ot applicable to
Business Associat~s b-:cG1usr;: ufthc natun: ,.irthcir bu.~iness, However, Business Asso(iEl!es must obey those !aw~ tliat do apply to them. Jr a c:ty or county officia: lells a B.1si11ess Associate that an 01dinancc applies to him or her, the: Business /\ssociak shall be
po!ite and cooperntivc, and inm1~diatcly se:1d n copy of'thc ordinance to the Compliance
l)cpiirtmcnt ofDubLi "\!etwotk.
3.19
MinoJ"s
Dubl.i Network Bmincss Associate. Busi11e~s As8ociates shal: :not enroll or rncruil minors into the DubLi Network progrnm.
3.W - Actions ofHouseho!tl .'.\-lembcrs or Affiliutcd lmlividuals
lf'any member ora Business Associate's :mn1edia'..e liou~~+old engage~ in any activity which, if pctfo:med by the Business Associate, woulc! violate any provis'ion of the
Agreement, ~uch c1ctivity will be deemed a violation by the Busil1ess Associate <ind D.Tb
l,i Netwnk :nay :akc disciplinary action purnuant to the Statement of Policies against the
Bu.oiness 1\ssociale. Similarly, i!' any individ.1al a%ociated in any ,vay with a CllT1)0J"a"
tion, partm.:1ship, LLC, trust or othicr entity (collectively "Businci;s Entity") violates lhe
Agreement, rnch actlon(s) will be deemed a viola:ion by the I3usirn.:ss hnti1.y, miJ DubL.i
Network may take discipli:1ary actlou against the Business Entity. Likewise, if a Busitl()~s Assodate enrn!ls i:i DubLi Netwn;k 11-, 11 Husi:wss Entily, each shareholdel", onicer,
member, pmtncr, or other individu,11 or entity wi1h an uw;ii:r~hip interest or management
responsibility in the Busin1css Enti1y ~hall be: rersonally ~nd individually bound to, and
must comply with, the Lcrn1s and condition., of the /\grccmcnL.
"
The: buyer or transferee must become a qualifieC DubLi t'<ctwork ffosin(;s~ /\s~ociate. Jfthe buyer is r1n f\c1ive DubLi Neiwork !3u~incss Associate, he or she nm~t
first tei111inatc hi~ o~ her DubLi Nch\oork business and wait s:x cal~mhir muntlis
before ac[]Uiring cmy inter::st i:i a difforc11t DubLi Nctwo:k business.
Bd(Jcc thi: stile, lrnnsfer 01 as,ignnent Ci\11 be finalized and approved by DubLi
Network, any debt obligatio:rn th: selling Business Associa1e l:ils ,.vit:-1 D:1bLi
Network must be satisfied.
The selling Busi11c~s Associc1tc must be in good standing and not :r: violrnion c1f
any of(he ter:-ns of't!tc Agree1mc11t in order Lo be cligibk tu 81:ll, tmnsfer or assign
a Dub Li Nctwori< business.
The seller must subm:t a Business Sni~s Trn11sfor Fotrn along with a $80.00
(60.00) transfer foe.
Tht: selling Business Associ<tle must notif)-' Duhl.i Nctwork's Cornp.iance Ol!pc1.rtmen! nCbs or hcr mlcnt to sell the [}ubLi Ndw:)rk busl11i;,~\.
sorship.
Durine \:le l'.ivorcc or entity di~3ollltion process, the parties rmist adopt one oftl1e follow:ng methods ofoperat:on:
One of the parties n;ay, with co11~enl of !110 othcr(s), opcr.:ite the DubLi
Ndwork bLrnincss pursuant b mi assignment in writing whereby lhc rc inquishing ~pousc, sharnholdc1s, pt11tncrs or trus.ee)' t1uthorize Dub:.: Nctwcwk to deal directly and solely with tile other spouse or non-rclinyu'.~hir:g
sh,Lrcholdcr, pm1ner or 1uste~.
The pll1'lics l'rny continue to operate the D.1bLi Network Liusinec,s jo:ntly
on a ''business-as~us:1al" basis, whereupon all comcnsation paid by DubLi Network will be ;)aid according to the status qt:o as lt existed prior to
the divorce filing or dissolution proceedings. This is the cicfault piocedun::
15
,cci,:1J:qi,
Upon the dec1th or incapacitation of a Business Associate, his or her business may be
passed to his or her heirs. Appropriate legal documentntion must be submitted to the
Company to ensure the transfer is proper. Accordingly, a Business Associate should consult an attorney to assist him or her in the preparation ofa will or olher testamentary instrument. Wlienever an l)ubLi Network business is transferred by a will or other testa1111:ntary process, the beneficiary acquires the fig/it to collect all bonuses and commissions of the deceased Business Associatc's marketing organizalion provided the following qualifications are mel. The successor(s) must:
notarized copy of the will or othcl' instrument establishing lhi: successor's right lo the
DtibLi Ni.:twork business; (3) eertiiic.d letters testamentary or a lettcr of a:::!rninistt'ation
appointing an executor; and (4) written ins.ni:.:tions from the aulhorb:d executor to DubLi Nc1work specifying :o wborn the business and income should be transfuned.
;1
If the Bu~iness Associate has an establi~Led business relationship with the prnspcct. An cstablishcci business rel1t'.ion~'1ip" is a i-elolionsl~ip between a Business
A~wciale a:id a pro~pcct based 011 th: pr:'.lspect's purch8se, 1cntal, o: !e['.se of
goods or scrvkes from the Business Associate, or a 'financial transaction hetwe011
tile prospect and the Business Associate, within the eighteen (18) months imm0di
ntely preceding ~he date ofa lclcphmrn call :o induce 1hc r;rcspcct's purcl1asc of 11
product or service,
lf the Business Associate recciv:;;s vait1c.:r1 and signed pe1111issior, from tlw pro-
17
t0
You may call family rnember~, personal friends, a:1d acquaintances. An "acquaintance" is someone with whoti: yoc have at least a recent first~hand relationship within the prcccdi1:g t)m;i) months. Bcai in mind, however, that ifyoL: engage ill "card collecting" with CWl)'011c yot1 r:~cc:t and s.1bsequently calli11g them,
t.he FTC may consider thi~ a fonn oftekma::-kdng tlrnt is not subject to this exc.'.nption. Thu~, if you engage in calling "ncquain1imccs," you mmt make such
calls on nn occasional ln:si~ only and not make this 11 routine practice.
01
13usiness Associutcs ~hould monitor the Bu::iliesa i\ssocialcs in thei; Murkcting Organiiations to guard against Bu~iness Associates making iinpropc: product ur business
claim8, or 0ngLlging ir. any illegal or inuppropriate conduct.
18
SJ - Product Sales
The DubLi Netwol'k Ma1h:ting and Compcmution Plan is based on the sale ofl)ubLi
Netwo:k.com products ,nci services to end com:umers. Therefore,<"- Business Associates
must have at least three Active Retail Cmtnmers each year. A~ a Business Asso\:ialc
climbs to a higher 1ar1k, his or her minimum At.:tive Retai! Custome1 requ\1'e1r1ent s!rnll
also increase.
'"
,cll,1'<"1/
A Bu;drn,.~_q /1.,sociale nrnst b~ m.:'.ive a:1d in cornplia11cc with tl:c Agreement t1 qualif'y for bonuses und eornrnissior:s. :"'lo long as 11 Bu~iness Associate comp:iL'S with the
tenn:; or1t1~ !\gre:'.!me;1t, DubLi Network slrnll pay commissions to sucl Business Associate in accord:mce with t!1c Marketing and Cornpensa1ion plnn, The minimum amount for
which DubLi Network will issue a commiosion payment is SJ'.i.00. 17'a Ut1siness /\sso2.ia:e~ bonuses and cornmissicns do nor equal or cxcc1xl $35.00, lhe Company will accrue
tho commissions and bonuses until they total $35.00, and payment will be issuer! once
$35.00 has bccn accnied.
6.2 - Adjustment lo Bonuses and Commission~
Business Associates receive bcnu~cs imJ c\lmmissim1s based on t:-1e actual sa!cs of
prnducts anC serv!ccs 1.o e1d cornumcrs. \V:1en products are returned to Duhl .i Ne1work
fo1 a refund 01 are repurchased by the Company, dhcr of the foLowing may occur at the
Compan;r"s discretion: (1) the bonuses and commissions attributable to the 1ctJ1:1cd or
n:pmchascd product(s) will be deducted, in the month in \',hkh the refond is i:;iven, nnd
continuing every pay period thcrca:1.cr from the Su;,port Team Busine.~.~ /\~sociatcs who
received the comrnissiuo or bur.us until it is recovered; or (2) the Business Associi:11,~s
,vhu earned commissions bnse::l on the sale or 1hc rctumcd products will haw the couesponding ;mint~ deducted from tl1elr Group Vo!umG in thG next month and all subsequent
months until il is comp:etely recovered.
(d - R1cports
All infornrn1ion provided by Dub Li Network in oniine or telephonic sf-lies lemmictivity rcpo1t~, including but not limited lo personal r.:1d Organization Su:cs Volt1mc (or any
rmr! thereof), and Sales Organization sponsoring activity is believed to be accurn1.c and
reliable. Neve1thcless, due to var:ous factors including but not limited to the inhcn:nl
poc.diility of human, soil ware, and mechanical error: the accumey, cumplctc:ncss, and
timeliness of orders; denial of credit curd mid electronic check payments; relll med products: credit card and clci:trunk: check charge-backs: the i11fo1mntion i~ 1tot gumanli:eJ by
DubL: Network 0r any persons creating or trJnsrr:1tti11g :he infoi-mutioti.
A.LL PERSONAL AND ORCiANJ;(!\l!O\: SALES VOLUME r:,JTORMi\TI01\ 1S
l'ROV!DED "AS lS" WlTHOUT WARRANTIES, EXPRESS CH IMPLJEIJ, OR IZE!'RESE7\TATJOJ\'S Ol.- ANY KlND WI-IATSOFVER. IN PJ\l<TJCUL/\R BUI WITHOUT fJMlTAT!ON THERE SHALL BS NO \VARi-ti\NTJES (W Vll:.RC!lAN.I ABJLITY, FITNESS PORA Pi\RTJCULAR USE, OR NON -JNFRINGEMENT,
TO THE FULLEST EXTEN'f' l,hRMlSS!DLE UNDER APPUCABLF LAV\',
OUBLl /\ND/OR OTHER PERS07\S CREATL\..JG OR TRA1\SM!TTJNG THE JN-
"' I: I WI ;
OR ACCl.<SS TO PERSONAL AN!J10R ORGJ\NlZAlJON SALES VOLUME INFORMATJON (l"NCLUDINO BU'f NOT LIMIT!"'.[) TO LOST PROFITS. no\JUSES,
OR COMMISSIONS, LOSS OF OPPORTUNITY, AND DAMAGES "!'HAT MAY RESULT FROM INACCURACY, JNCOMl 1 LETENFSS, lNCONVLl\lENCE, Dl:::~AY,
OR LOSS (W Tl IE USE OF THE INFORMATION), EVEN IF DUBLf OR OT! !ER
PERSO~S CREATlNG OR TRANSMITTI~U THE 1\lFORMATJON SHALL llAVE
BEEN ADVJSLD or THI: POSSIDJL!TY Of SLCJ I DAMAGES, TO TIU: FULLEST
EXTENT PERMITTED BY LAW, DUBLJ OR OTl!ER PERSONS CREATING OR
TRANSMITTING TI-lb JNFORMATiOJ\ SHALL HAVE >JO RESPONSJ31LITY OR
LiAB!UTY ['O YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEG~
Access to and use of DubL Network's online and tckphone rnpc11ing se1vices and
your lTliance upon ~\lch inforrnatiun i8 at your own risk. A!I such infornmtion is provided to you ''as is" If you arc dissntbfitd with the Qccura.cy or qcc1lity of the information,
your sole ,md exclusive remedy is to disccntinu~ use of a:1d access to DubL.i Nctwo:-k's
on line and telephone rep01ting service~ cmd your rc!iancc upon the ir1fonnatiu11.
Violalion of!l1c Agrccrnent, the~e Policies and l'1ocedl\l"es, violation ofnny cor11mo:1 Jaw duty, includi;1g but not limited to any wplicnblc duty of loyalty. any illegal,
fraudulent. decc:ptivc or u11c1hical llllsir:ess conduct. 01 ctny act or ornission by a 13Jsi11ess
As~uciatc tha(, in the ~ole disc:retion of the Compr-my may damage it'~ reputation or
21
,c,!<>IJ:,"l
goodwi!; (such damaging act or omission 11ecd not be related to the Business Associate's
Dub Li N~twork business), may rest:I(, at DubLi Network's discretion, in or.e or mol'C of
the following conective measures:
"
When a Business Associate htlli a grievance o~ complaint with another Business Associ<1~c regarding any prnctice or condlJC\ in relationship lo thei: respective DubLi Network businesses, the complaining Business Associate shocdd first report tbe pl'Oblem to
his or her Sponsor who should review the nmttcl' and try to resolve it with the other party's Support Team sponsor. lf1.he mutter involves interpretation or vii:ilation o:'Compm1y
policy, it mus\ ~c reported in writing to th~ Bu~iness Associate Services D0part!ncnt at
the Company. The BusineS$ A.ssocia~e Services Department will review the facts and
altempt to resolve it.
8.3 - Mediation
Prior to institu:lng 1m arbitration, the parties shall meet in good faith and atternpt to
resolve m;y dispute arising from or relaiing '.o the Agreement through nonbinding 111edi1:1lion. One individual who is mutually ac,.:eplable to the partie,; shall be appointed as mediator. The mediator's fees and costs, as well as the costs of holding cmd conducting tl1c
mediation, shall he divided equally between t!'.e parties. Each party shall pey its port:on
of the anticipated shared !tes a1:d co~ts at least IO days in c1dv1:1nce of the mediation.
Each pa11y shall pay its own attorney~ foes, costs, and individual expenses associated
with conducting and attending the mediation. Mediation s!lai: be held tn the City of Boca
22
'"1:,;.1rw,1
R11to11, Floridfl. :md .q]1all lnst no more tllnn one husi11css day.
8.4 - Arbilrnlion
If mediation is unsuccessful, any couirovcrsy or claim arising out of 01 reluting to
the Agreement, Or the br(mCh !hereof, sh11ll be scH!cd exclusively by arbitraJion aclminlslcrctl by the American Arbitration As~ociution untl judgment on the award
rendered hy the arhitrator may he entered in any court having jurisdiction thereof.
Rusine.:;s J\ssocintcs waive ::111 rights to trial by jury or to any court. !'here !;hull be one
arbitrator, cm attorney at law, who shall !lave expertise in bt:siness law transa.::tions with a
str::ing preference bdng former fhkral judge selected from the pt>.nel v,-ldch the American
Arbitrntion Panel pmvide~. Each patiy to :he arbitration shall be responsible fol' it~ own
costs ai1C expenses ofarbitrntion, including legal and filing fees. The lJ.S. Federal Rulto8
ofEvidcnn: shall stl'ictly apply, and the ptrtics will hnvc 1111 discovery rights c011tal!lcc'. in
t:1e l.S. Federnl l{u]es of Civil Procedure. The decision of the arbitrutor shall be flna:
rm,1 bindi11g on th.: panics 1:nd nrny, ifrn.:cc:isilry, bc rcducl:d to ajt.cigrncnt i:i irny court
of competent jurisdiction, This iigreem:;nt to a1bitrntion slrnll sc1rvive uny the tcrm:nation
or expiration of the ;\grcClllCl\t. All nrbitratim: proceedings shall be held in ll1e City of
Boca Raton, Florida.
No:witlrntanding the lbregoing, uo1J-.ing in thc~0 Policies and Procedures shall prevem
Di1bLi Network from applying to and obtaining from any ::;oUJ1 having jurisdiction a writ
of attcicbment, a temporary injunction, preliminl11'Y injunction, pen-r.anent injunction or
ut:1c1 re!kf availab.e to safcgt1ard e.nd ;irotcct Dt1bLi Nctwcirk's intcrGst prior to, during
01 following tlw Jiling of any arbitration or other pt"occcding ell' pending ihe rendition ofa
decision or award in connection with any rbitratio:i 01 other rrnceeding.
:n
sholl hnvt: no right, titlt:, clili111 er interns! to the r:1nl'keting ol'ganization which !1e or shr
operated, OJ' any comn:isdon or bonus frcrn the sales genercl:ed by Lhe orgm1irntiur A
Business Associate whose business is c.ince!led will lose all rights as a Business Associate, This includes the right to sell lJuOLi Network products 1md services and the
right to recl\ivc future commissions, bonuses, or other income resulting from rhe
sales :rnd other activities of the Business Associate's former sales team. Ju the event
of cancellation, Business Associates agrel' to waive illl rights they may have, including but 1wt limited to property rights, to their former Marketing Organi.i:atio11 and
to any bonuses, commissions or other ienrnnerntion derived from the sules am! ufh
er activities of his
tff
01
her
A participant in thh. network rnark:;ting plfl11 has a right to cancel at any time, regard~
less of reason. Cancellation must be submitted via email to the 8usiness t\.'lsociate Support J)(.1partrncn, using tho onlint contc1ct form al www.dublini.:t,vork.com following the
link ''FAQ and Contact"' at the bottom oft:1e welrnrne page. The writte1; notice rr.~1st i11cL:dc the 8t1Siness Associace's name, address, and Business Associate 1.0. Nu:nbcr.
9.4 - Nuu-n'newal
A Business Associate may al,;o voluntarily caned his or her Busiuess ;\,;~ocic;le
Agreerne1.t by foiling to pay the license foe aci.:u:-<!i11g to Sc:dion 2.3.
.er71>1,\IIM
Active Independent Business Associate--- A !-h1siness Associate who has enrolled within
the preceding l 2 calendar months, or who has received a commission during the preceding 12 calendar months or who is continwusly paying the monthly :kense fee ..
Agl'eement - The contract between the Ccmpc1ny mid each Business Associate includes
the f,usiness Associate Application and Agreement, the DubU Network Policies and
Procedures, the DubLi NetWork Marketing and Compensation Plari, mid the Business Entity Form (where appropriate), al! :n their current form and as amended by DubLi Network in its sole discretion. These docuJT.cnts arc collectively referred to as the "Agreement."
Cancel -- The tennination of a Business Associate';; business. Cancellation may be either voluntaiy, lnvoluntaiy, throtigh no1Henewat.
Ge11ea!ogy Report - A monthly repo1t generated by DubLi Networi< that pt'ovidcs critical data relating to the identities of Business Associates, sales information, and enroltmcnl activity of each Business Assodate's Marketi11g Oaganizatio:1. This report contains
con!idrntial and :rade secret information which is proprietary to DubLt Networ'k.
Markeling Organization- Ali ol'the Sales Team~ beneath
11
Husiness Associate
Official DubLi Network Material -The D'JbLi Network website and all literature, audb
or video tapes, and other materh,ls developed, printed, published and distributed by DubLi Network to Business Associates.
Personal Production--- Moving DubLi Network prodticts or services to an end consumer
for pe:sonal use.
Recruit - For purposes ofDubLi Network's Conflict of Interest Policy (Section 3.7),
the term ''Recruit" means the actm.J or aJcmptcd spons.:irship, solicitation, enrollment,
encourngement, or effort to influence in any other way, either directly, indirectly, or
through a third plirty, another DubLi Network Bu~iness Associutc or Customer to enroll
25
26
Exhibit 7
PLAINTIFFS,
DEFENDANTS.
***********
This matter is before the court upon the defendants motion to compel
arbitration and to dismiss or stay all proceedings, R.44. For the following reasons,
the court will deny the motion.
The plaintiffs are past independent representatives (IRs) of Fortune Hi-Tech
Marketing, Inc. (FHTM), who filed suit against the defendants for allegedly
operating an illegal pyramid scheme in violation of California state and federal laws.
The plaintiffs assert claims of RICO and California Business and Professions Code
violations and seek a judgment declaring FHTMs arbitration and forum selection
provisions unconscionable and unenforceable. The defendants include FHTM,
FHTM officers, and other individuals. Together they move to compel arbitration,
arguing that this action should be submitted to arbitration because the plaintiffs
claims are covered by a valid arbitration agreement.
The defendants point to two documents, the application and agreement and
the FHTM policies and procedures, which they claim contain arbitration provisions
1
to which the plaintiffs assented and by which they are bound. The plaintiffs
disagree, stating that they are not bound to arbitrate with FHTM because the
parties never agreed to arbitrate, the FHTM agents had no authority to bind the
plaintiffs to an arbitration policy, and the arbitration provision is illusory. Finding
that the alleged agreement to arbitrate is illusory, the court will deny the motion to
compel arbitration.
The Federal Arbitration Act (FAA) provides that an agreement in writing
to submit to arbitration an existing controversy arising out of . . . a contract
evidencing a transaction involving commerce . . . shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity for the revocation
of any contract. 9 U.S.C. 2. In deciding whether to compel parties to arbitrate
under the FAA, the court must make four determinations:
first, it must determine whether the parties agreed to arbitrate; second,
it must determine the scope of that agreement; third, if the federal
statutory claims are asserted, it must consider whether Congress
intended those claims to be nonarbitrable; and fourth, if the court
concludes that some, but not all, of the claims in the action are subject
to arbitration, it must determine whether to stay the remainder of the
proceedings pending arbitration.
Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000).
Kentucky contract law governs in determining whether the arbitration clause
itself was validly obtained, Doctors Assocs. v. Casarotto, 517 U.S. 681, 686-87;
see also Inland Bulk Transfer Co. v. Cummins Engine Co., 332 F.3d 1007, 1014
(6th Cir. 2003), but in making determinations on the scope of arbitrable issues,
any doubts regarding arbitrability should be resolved in favor of arbitration. Moses
2
H. Cone Meml Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983).
The parties did not agree to arbitrate because there was no exchange of
consideration. Every contract requires mutual assent and consideration. Cuppy v.
General Accident Fire & Life Assurance Corp., 378 S.W.2d 629, 632 (Ky. 1964).
A promise may act as consideration for an agreement as long as the promisor
receives in exchange for that promise some act or forbearance, or the promise
thereof. Floss v. Ryans Family Steak Houses, Inc., 211 F.3d 306 (6th Cir. 2000).
Here, the alleged agreement to arbitrate consisted of promises by both parties to
arbitrate. See R.1-1, p. 50. But FHTMs promise to arbitrate is illusory because of
a provision in the FHTM policies and procedures (which are incorporated into the
application and agreement, R.1-1, p.29) that authorizes FHTM to unilaterally amend
all of its obligations under the Agreement meaning, collectively, the FHTM
application and agreement, the FHTM trainer/coach agreement, the policies and
procedures, and the marketing and compensation plan. R.1-1, p.29.
The amendment provision renders illusory the alleged agreement to arbitrate
because FHTM has in actuality no fixed obligation[] to perform. David Roths
Sons, Inc. v. Wright & Taylor, Inc., 343 S.W. 2d 389, 391 (Ky. App. Ct. 1961).
[A]t any time, in its sole and absolute discretion, FHTM may amend the
Agreement, including the arbitration provisions within the Agreement. R.1-1, P.29.
This is so even though FHTM must post notice to IRs of any amendment to the
Agreement. A notice provision can constitute consideration for an otherwise
illusory contract by limiting a partys ability to unilaterally amend or terminate an
3
agreement. See Morrison v. Circuit City Stores, 317 F.3d 646, 667 (6th Cir.
2003) (upholding an arbitration agreement because an employer had the authority
to alter or terminate an agreement at the end of each year only upon giving thirty
days notice [of the amendment or termination] to its employees.); see also
Seawright v. Am. Gen. Fin., Inc., 507 F.3d 967 (6th Cir. 2008)(upholding an
arbitration agreement containing a ninety-day notice provision). The FHTM notice
provision, however, does not provide for advance notice. Amendments are
effective upon notice to IRs that the Agreement has been modified, which is
accomplished by publishing the amendment in official FHTM materials, including
posting it on the FHTM website, e-mailing it to IRs, broadcasting it over voice mail,
or including it in FHTM periodicals. Notice is deemed received by the IR upon
posting. R.1-1, p.29.
Because this notice provision requires no wait period between the time notice
is published and when an amendment takes effect, it does not limit FHTMs
unfettered discretion. Floss v. Ryans Family Steak Houses, Inc., 211 F.3d 306,
315 (6th Cir. 2000). FHTM could inform an [IR] of its decision to radically alter
the terms of an arbitration agreement immediately after both parties had bound
themselves to the agreement and the [IR] would be left without any of the
protections for which he had bargained. Stanich v. Hissong Group, Inc., 2010 U.S.
Dist. LEXIS 98709, *19 (S.D. Ohio 2010). There is no promise to maintain the
arbitration agreement for a specified period of time, and, therefore, not enough of
a limitation on FHTMs ability to terminate or amend the arbitration agreement to
4
Exhibit 8
From:
To:
Subject:
Date:
Geoff Spreter
Re: Talk Fusion doing huge damaged in Indonesia - request for cooperation
Tuesday, September 27, 2016 8:21:27 AM
Geoff,
Just to attract your attention on 2 links that could illustrate your case.
Check this video that demonstrates how TF and Bob Reina focus exclusively on duplication
and not on their product itself.
https://www.youtube.com/watch?v=WC8apbvrHz0
And article about Indonesian success:
https://www.businessforhome.org/2016/08/talk-fusion-indonesian-team-to-celebrateachievements-at-hero-2016/
Again good luck and lookign forward to hear from you soon.
Our opposition is due tomorrow. After tomorrow, I will write you a separate email about
addressing Talk Fusion in Indonesia.
Thank you for your concern.
Geoff
Geoff J. Spreter
Spreter Law Firm, APC
601 3rd Street
Coronado, CA 92118
Phone: 619-865-7986
Fax: 619-956-3932
www.spreterlaw.com
From:
:
Sent: Monday, September 26, 2016 8:39 AM
To: Geoff Spreter <[email protected]>
Subject: Talk Fusion doing huge damaged in Indonesia - request for cooperation
Dear Geoffrey,
I have been through your complaint against Talk Fusion, at first, let me thank you for the
great work.
My name is
last 10 years.
, a french citizen, I have been living and working in Indonesia for the
I recently came across talk fusion when an Indonesian worker driver as a driver I know of,
got in serious debt after joining talk fusion with the 1500$ package. (note that in Indonesia,
a driver salary is around 150$).
Interested and after a few research, I realized that Talk Fusion was nothing less than a
pyramid scheme spreading extremely fast in Indonesia. Why such a success in Indonesia?
Well people there focus on community and naturally have big network, generally low level
of education and have a tendency to be particularly gullible. Therefore Indonesia is the
perfect country for MLM/ pyramid scheme.
As a result, it has made amazing progress and is now making more noise than ever. To
illustrate the scale, I also found out that 2 Indonesian citizen in my close circle have already
been approached as well, in 2 different regions. As we speak Ferrari cars with the talk fusion
logo are parading just a few km away from where I live.
https://www.businessforhome.org/2016/08/talk-fusion-indonesian-team-to-celebrateachievements-at-hero-2016/
https://www.youtube.com/watch?v=WC8apbvrHz0
https://www.youtube.com/watch?v=LAnjc-nWBFU
https://www.youtube.com/watch?v=73rNe5ivHRU
https://www.youtube.com/watch?v=QLpNdiF-Cgw
I am personally very upset about this massive scale scam that will affect the most fragile and
less educated, however, I believe Indonesia success could be the beginning of TF downfall.
- Indonesia is a nationalist country that can be pretty defensive about foreign involvement in
local affairs, therefore the scandal could be quiet big if the truth about the scam was to be
reveal, especially if they find out that the money of their citizen is being send to US through
a scam
- The speed at which TF has spread and the high level of visibility that they know have
inside the country make them familiar with a lot of people
- The high number of recruits means that a lot of people may get very dissatisfied jn not
being able to get back their investment through new prospect, as the product is simply not
sellable
Would you be interested into helping us building an efficient network to consider launching
pursuit in Indonesia? If yes, would you have any advice, organization or contact to share?
I am not in a position to take any active action against TF in Indonesia right now, and this
not must remain confidential,