Lucy v APT

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IN THE UNITED STATES DISTRICT COURT FOR THtr WESTERN DISTRICT OF MISSOURI KWANGSUN EDMONSTON, Plaintiff, v. APT IP HOLDINGS, LLC, a Foreign Missouri Limited Liability Company, SERVE: Registered Agent Stephen M. Kyle 2800Commerce Tower 911 Main Street Kansas City, MO 64105 and, AMERICAN PERFORMANCE TtrCHNOLOGIES, LLC, a Foreign Missouri Limited Liability Company SERVE: Registered Agent Stephen M. Kyle 2800Commerce Tower 911 Main Street KansasCify, MO 64105 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No.: Division: JURY TRIAL DEMANDED COMPLAINT COMES NOW the Plaintifl KWANGSLTN EDMONSTON, by and through her counsel of record,and states the following for her claims and causes of action against Defendants APT IP HOLDINGS, LLC and AMERICAN PERFORMANCE TECHNOLOGIES, LLC: Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 1 of 19

description

Lucy v APT

Transcript of Lucy v APT

Page 1: Lucy v APT

IN THE UNITED STATES DISTRICT COURTFOR THtr WESTERN DISTRICT OF MISSOURI

KWANGSUN EDMONSTON,

Plaintiff,

v.

APT IP HOLDINGS, LLC, a ForeignMissouri Limited Liability Company,

SERVE:

Registered AgentStephen M. Kyle2800 Commerce Tower911 Main StreetKansas City, MO 64105

and,

AMERICAN PERFORMANCETtrCHNOLOGIES, LLC,a Foreign Missouri Limited Liability Company

SERVE:

Registered AgentStephen M. Kyle2800 Commerce Tower911 Main StreetKansas Cify, MO 64105

)))))))))))))))))))))))))))))))

Case No.:

Division:

JURY TRIALDEMANDED

COMPLAINT

COMES NOW the Plaintifl KWANGSLTN EDMONSTON, by and

through her counsel of record, and states the following for her claims and causes of action

against Defendants APT IP HOLDINGS, LLC and AMERICAN PERFORMANCE

TECHNOLOGIES, LLC:

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THE PARTIES

1. Kwangsun Edmonston ("Plaintiffl') is a resident of San Bernardino

County, California.

2. Defendant APT IP Holdings, LLC ("APT") is a limited liability company

organrzed and existing under the laws of the State of Wyoming, registered in the State of

Missouri as a foreign limited liability company. APT may be served with process by

serving its Registered Agent, Stephen M. Kyle, 2800 Commerce Tower, 911 Main Street,

Kansas City, Missouri 64105.

3. Defendant American Performance Technologies, LLC ("American

Performance") is a limited liability company organized and existing underthe laws of the

State of Wyoming, registered in the State of Missouri as a foreign limited liability

company. APT may be served with process by serving its Registered Agent, Stephen M.

Kyle,2800 Commerce Tower,971 Main Street, Kansas City, Missouri 64105.

4. Upon information and belief, Plaintiff states that APT and American

Performance are affiliate companies with common ownership and/or officers/managers,

that APT and American Performance are alter egos of each other, and American

Performance exercises control over APT with respect to the Agreement and the Patent

described below.

5. Upon information and belief, APT and American Performance have their

principal offices in the State of Missouri at located at 8844 Hillcrest Rd., Kansas City,

MO 64138 .

6. Upon information and beliel, Plaintiff states that APT and American

Performance acted as agents of each other in doing the things described herein and that

each Defendant ratified and otherwise adopted such acts and statements as were

performed, made or carried out by the other Defendants.

JURISDICTION AND VENUE

7. This Court has subiect matter iurisdiction over the claims set forth herein

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pursuant to 28 U.S.C. Section 1332 in that Plaintiff and Defendants are citizens of

different states and the amount in controversy exceeds $75, 000.00.

8. This Court has personal jurisdiction over APT and American Performance

pursuant to Mo. Rev. Stat. Section 506.150 because they reside in and/or can be served

with process in the State of Missouri.

9. Venue lies in this Court pursuant to 28 U.S.C. Section 1391 in that APT

and American Performance may be found in Jackson County, Missouri, APT and

American Performance may be served with process in Jackson County, Missouri, and

upon information and belief APT and American Performance principal places of business

are located in Jackson County, Missouri.

10. The Agreement described below, at\7.6, provides that: "Any lawsuit

based on this Agreement shall be brought in the State of Missouri. Exhibit 2.

ALLEGATIONS COMMON TO ALL COUNTS

1 1. Plaintiff is the widow of William H. "Red" Edmonston. Red Edmonston

died in 2007 .

12. On January 14,2003 Red Edmonston obtained a United States patent

("Patent") for a particular design of carburetor ("Carburetor"), U.S. Patent No. 6,505,821.

13. Thereafter APT and American Performance prepared, and Red Edmonston

and Plaintiff signed, a Letter of Intent effective September 77,2007 that contemplated the

sale of the Carburetor Patent to APT and American Performance for the sum of

$1,250,000 plus the amount of income taxes payable thereon, royalties and licensing

revenue. A copy of the Letter of Intent is attached hereto and incorporated herein by this

reference as Exhibit 1.

14. On October 2.,2007 Red Edmonston assigned the Carburetor Patent to

Plaintiff. Later in October 2007 Red Edmonston died.

15. Subsequent to Red Edmonston's death, Plaintiff and APT entered into an

Asset Purchase Agreement ("Agreement") effective December I0,2007 pursuant to

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which APT purchased the Carburetor Patent from Plaintiff. A copy of the Agreement is

attached hereto and incorporated herein by this reference as Exhibit2.

16. In connection with the Agreement, the Carburetor Patent was assigned to

APT, and the assignment was recorded in the United States Patent and Trademark Office.

17 . Pursuant to the Agreement, tf 1 .1,, APT was to make payments to Plaintiff

totaling $1.5 million plus royalties and licensing fees.

18. APT made the first payment of S15,000 DOLLARS under the terms of the

Agreement, but then failed to make the next payment for $250,000 which pursuant to the

Agreement, fl 1.1, was payable within thirty days of APT's "receiving final certification

and an Executive Order Number ("EO Number") from a CARB/EPA approved testing

facility that the motorcycle, snowmobile, and lawnmower models of the Carburetor meet

or exceed EPA Tier 2 Emissions Standards with no decrease in performance or fuel

economy and no increase in noise levels."

19. APT obtained a final certification and an E,O Number on or about

December 10, 2009. The certification and EO Number were issued to American

Performance.

20. Upon information and belief, Defendants have failed to apply for and/or

obtain final certification and an Executive Order Number ("EO Number") from a

CARB/EPA approved testing facility that snowmobile and lawnmower models of the

Carburetor "meet or exceed EPA Tier 2 Emissions Standards with no decrease in

performance or fuel economy and no increase in noise levels" as required by the

Agreement.

21. Pursuant to the Agreement, $ 1 .1, APT was and is obligated to make two

more payments to Plaintiff of $617,500.00 DOLLARS each on or before December 10,

2010 and June 10,201 1, respectively. APT has not made either of these payments.

22. Additionally, APT is obligated to pay Plaintiff royalties and licensing fees

pursuant to the Agreement, fl 1.2.

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23. As of the date of the filing of this Petition, APT has failed to make any

payments to Plaintiff as required under the terms of the Agreement, with the exception of

the initial $15,000.00 DOLLAR payment.

24. APT has not paid Plaintiff any royalties and licensing fees pursuant to the

Agreement, f1 1.2.

25. Demand has been made on Defendants to pay Plaintiff the monies due and

owing to Plaintiff under the Agreement, but Defendants have failed and refused to pay

the same.

26. Plaintiff has also demanded that Defendants reassign the Patent to

Plaintiff, but Defendants have failed and refused to reassign the Patent to Plaintiff.

27 . Upon information and belief, American Performance is selling carburetors

using the Patent in products sold by American Performance under the fictitious name

Motovox.

28. The Agreement, 116.2, provides for the recovery by the prevailing party in

any litigation of her or its attorney fees.

29 . As the Alter Ego of APT, American Performance is obligated to Plaintiff

under the terms of the Agreement and has failed to meet its obligations under the terms of

the Agreement in the same respects as APT.

30. As the Alter Ego of APT, American Performance is responsible for all acts

and legal liabilities of APT.

ALTER EGO ALLEGATIONS

31. Troy Covey is listed as the "Manager" for both APT and American

Performance with the Wyoming Secretary of State.

32. Troy Covey was designated in the Letter of Intent (Exhibit 1) as the

General Manager for both APT and American Performance.

33. APT and American Performance have common officers/managers, namely

Troy Covey.

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34. Upon information and belief, American Performance controls APT in

terms of finances, policy and business practice including, but not limited to, the entry into

the Agreement with Plaintiff.

35. Upon information and belief, American Performance has used its control

over APT to cause APT to not pay Plaintiff the sums owed under the Agreement while

retaining control and possession of the Carburetor Patent and, in fact. using the patented

technology in products sold by American Performance and deriving income from the use

of the patent technology.

36. Upon information and belief, American Performance has used its control

over APT to cause the breach of the Agreement, the failure of APT to return the Patent to

Plaintiff, and has unjustly retained the control, use, benefit, income and profits from the

use of the patented technology, all to deprive Plaintiff of the ownership, control, use and

income from the patented technology.

37 . The aforementioned acts by American Performance were done dishonestly

and/or unjustly and are in contravention of Plaintiff s legal rights.

38. Upon information and belief, the control exercised over APT by American

Performance has proximately caused the breach of the Agreement, and the damages to

Plaintiff.

39. Upon information and belief, the formal corporate separateness and

arrangements between APT and American Performance were devised, or are being used,

to accomplish a fraud, injustice or other unlawful purpose against Plaintiff regarding the

Patent and the Agreement.

40. As the Alter Ego of APT, American Performance is liable for all

obliqations of APT.

COUNT IBREACH OF CONTRACT AGAINST APT AND AMERICAN PERFORMANCE

41. Plaintiff realleges and incorporates by reference paragraphs I through 40

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above.

42. Plaintiff and Defendants entered into a valid and enforceable contract.

namely the Agreement.

43 . Plaintiff has performed all terms and conditions of the Agreement on her

part to be performed.

44. Defendants have breached the Agreement.

45. Upon information and belief, Defendant American Performance is the

alter ego of Defendant APT.

46. Specifically, Defendants have breached the Agreement by:

a) Failing to obtain governmental certification of lawnmower and

snowmobile models of the Carburetor;

b) failing to pay Plaintiff the payment due on or before January 10,2010

of $250,000.00 DOLLARS;

c) failing to pay Plaintiff the payment due on or before December 10,

2010 in the amount of $617,500.00 DOLLARS;

d) failing to pay Plaintiff the payment due on or before June 10,201 1 in

the amount of $617,500.00 DOLLARS;

e) failing to pay Plaintiff royalties and licensing fees owed under the

Agreement; and/or

0 breaching the implied covenant of good faith and fair dealing in the

Agreement.

47 . Plaintiff has demanded that Defendants pay Plaintiff the sums owed under

the terms of the Agreement, but Defendants have failed and refused to pay Plaintiff the

same.

48. Plaintiff made demand on Defendants on or about January 10,2010 and

on numerous other occasions before and after that date.

49. As a direct and proximate result of Defendants'breaches of the

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Agreement, Plaintiff has been damaged in a sum in excess of $1,485,000.00 DOLLARS

to be established according to proof, together with prejudgment interest thereon at the

legal rate from January 10,2010 on the principal sum of $250,000.00, from December

70,2010 on the principal sum of $617,500.00 and from June I0,201 I on the principal

sum of $617.500.00.

50. As a result of Defendants' breaches of the Agreement, Plaintiff has

incurred, and will continue to incur attorney's fees and costs in connection with her

claims under the terms of the Agreement.

WHEREFORE, Plaintiff prays for judgment against Defendants, jointly and

severally on Count I in an amount to be determined at trial, but believed to be in excess

of $1,485,000.00, for prejudgment interest at the legal rate, for her reasonable attorney's

fees, for her costs incurred herein, and for such other and further relief as the Court

deems fair, just and equitable under the circumstances.

COUNT IINEGLIGENT MISREPRESENTATION AGAINST APT AND AMERICAN

PERFORMANCE

51. Plaintiff realleges and incorporates by reference paragraphs I through 40-

above.

52. APT and American Performance represented upon preparing the Letter of

Intent and then entering into the Agreement that they would pay Plaintiff at the times

called for by the Letter and Agreement.

53. APT and American Performance represented upon preparing the Letter of

Intent and then entering into the Agreement that they would obtain final certification and

an Executive Order Number ("EO Number") from a CARB/EPA approved testing facility

that the snowmobile and lawnmower models of the Carburetor "meet or exceed EPA Tier

2 Emissions Standards with no decrease in performance or fuel economy and no increase

in noise levels."

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54. These representations were material to the Agreement between Plaintiff

and Defendant.

55. The representations were made by Troy Covey, acting as manager for both

APT and American Performance prior to and at the execution of the Agreement.

56. The representations made by APT and American Performance were

supplied to Plaintiff in the course of their businesses.

57. As a result of APT and American Performance's failure to exercise

reasonable care in making said representations, the representations were false.

58. APT and American Performance intentionally made these representations

to Plaintiff with respect to the Letter of Intent and Agreement to induce Plaintiff to enter

into the same.

59. APT and American Performance knew that said representations were false

when they were made, or failed to exercise reasonable care in making said

representations.

60. Plaintiffjustifiably relied on the representations made by APT and

American Performance in entering into the Letter of Intent and Agreement.

61. As a direct and proximate result of Plaintiff s reliance on said

representations, Plaintiff has been damaged.

62. At all material times Plaintiff was ignorant of the falsity of Defendants'

representations and believed them to be true, did not know of the undisclosed facts, and

could not with reasonable diligence have discovered them. In reliance on Defendants'

misrepresentations, Plaintiff signed the Agreement and assigned the Carburetor Patent to

APT. Plaintiff would not have done so if she had known that Defendants had

misrepresented and failed to disclose the material facts described above.

63. plaintiff s reliance on Defendants' misrepresentation was justified in that

the representations appeared honest, reliable and reasonable and Defendants' actual

intentions had not yet been made evident.

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64. As a proximate result of Defendants'actions, Plaintiff has suffered

financial damages, including incidental and consequential damages, in a sum in excess of

$1,485,000.00 DOLLARS to be established according to proof, together with

prejudgment interest thereon at the legal rate from January 10,2010 on the principal sum

of $250,000.00, from December 10, 2010 on the principal sum of $617,500.00 and from

June 10,201 1 on the principal sum of $617,500.00.

65. As a further proximate result of Defendants' actions, Plaintiff has suffered

humiliation, mental anguish, and severe and extreme emotional distress, all to her

damage in a sum to be established according to proof.

66. Defendants knew, or should have known, that by making said

misrepresentations to Plaintiff there was a high probability of injury to Plaintiff and

thereby showed complete indifference or a conscious disregard for the rights of Plaintiff

thereby entitling Plaintiff to an award of punitive damages that are fair and reasonable.

WHEREFORE, Plaintiff prays for judgment against Defendants, jointly and

severally on Count II in an amount to be determined attrial, but believed to be in excess

of $1,485,000.00, for prejudgment interest at the legal rate, for punitive damages in an

amount to be determined at trial in an amount that is fair and reasonable, for her costs

incurred herein, and for such other and further relief as the Court deems fair, just and

equitable under the circumstances.

COUNT IIIFRAUDULENT MISREPRESENTATION AGAINST APT AND AMERICAN

PERFORMANCE

67 . Plaintiff realleges and incorporates by reference paragraphs I through -40-

above.

68. Upon information and beliel Defendants' representations upon preparing

the Letter of Intent and then entering into the Agreement that they would pay Plaintiff at

the times called for by the Letter and Agreement were knowingly false

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misrepresentations or were made with ignorance of the truth.

69. Upon information and belief, Defendants' representations upon preparing

the Letter of Intent and then entering into the Agreement that they would obtain final

certification and an Executive Order Number ("EO Number") from a CARB/EPA

approved testing facility that the snowmobile and lawnmower models of the Carburetor

"meet or exceed EPA Tier 2 Emissions Standards with no decrease in performance or

fuel economy and no increase in noise levels" were knowingly false misrepresentations

or were made with ignorance of the truth.

70. These representations were material to the Agreement between Plaintiff

and Defendant.

7I . The misrepresentations were made to Plaintiff by Troy Covey (the

manager of APT and American Performance) both before the Letter and Agreement were

signed, and at the time of signing.

72. Upon information and beliel Defendants made the misrepresentations,

and failed to disclose material facts, with the intent to deceive and defraud Plaintiff and to

induce Plaintiff to enter into the Agreement.

73. At all material times Plaintiff was ignorant of the falsity of Defendants'

representations and believed them to be true, did not know of the undisclosed facts, and

could not with reasonable diligence have discovered them.

7 4. In reliance on the truth of Defendants' misrepresentations, Plaintiff signed

the Agreement and assigned the Carburetor Patent to APT. Plaintiff would not have done

so if she had known that Defendants had misrepresented and failed to disclose the

material facts described above.

75. Plaintiff s reliance on Defendants' misrepresentation was justified in that

the representations appeared honest, reliable and reasonable and Defendants' actual

intentions had not yet been made evident.

76. Plaintiff had the right to rely on Defendants' misrepresentations.

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77 . As a proximate result of Def'endants' actions, Plaintiff has suffered

financial damages, including incidental and consequential damages, in a sum in excess of

$1,485,000.00 DOLLARS to be established according to proof, together with

prejudgment interest thereon at the legal rate from January 10,2010 on the principal sum

of $250,000.00, from December 10,2010 on the principal sum of $617,500.00 and from

June 70,201 1 on the principal sum of $617,500.00.

78. As a further proximate result of Defendants' actions,, Plaintiff has suffered

humiliation, mental anguish, and severe and extreme emotional distress, all to her

damage in a sum to be established according to proof.

79. In doing the foregoing acts, Defendants acted in a willful, wanton,

malicious, oppressive and fraudulent manner toward Plaintiff, and in conscious disregard

of Plaintiff s known rights, with the intention of benefiting themselves financially and

with the intent of, or a conscious disregard of the probability of, causing Plaintiff injury.

Officers, directors or managing agents of the entity Defendants authorized or ratified

such acts. In so acting, Defendants intended to and did vex, anno), injure, and harass

Plaintiff, and consciously disregarded Plaintiff s rights, so as to justify the assessment of

punitive and exemplary damages against Defendants in a sum to be established according

to proof in an amount that is fair and reasonable.

WHEREFORE, Plaintiff prays for judgment against Defendants, jointly and

severally on Count III in an amount to be determined at trial, but believed to be in excess

of $1,485,000.00, for prejudgment interest at the legal rate, for punitive damages in an

amount to be determined at trial that is fair and reasonable, for her costs incurred herein,

and for such other and further relief as the Court deems fair, just and equitable under the

circumstances.

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COUNT VCONVERSION AGAINST APT AND AMERICAN PERFORMANCE

80. Plaintiff realleges and incorporates by reference paragraphs I through 79

above.

81. Plaintiff was the owner of the Patent which is the subject of the

Agreement and is entitled to its possession.

82. Defendants took possession of the Patent with the intent to exercise

control over the Patent.

83. Defendants have deprived Plaintiff of the right to possession of the Patent

without compensating Plaintiff.

84. Plaintiff has demanded the return and reassignment of the Patent, but

Defendants have failed and refused to return and reassign the Patent and corrtinue to

exercise dominion, control and use of the Patent to the exclusion of Plaintiff.

85. As a direct and proximate result of Defendants action in converting

Plaintiff s property, Plaintiff has been damaged.

86. As a proximate result of Defendants' actions, Plaintiff has sufTered

financial damages, including incidental and consequential damages, in a surn in excess of

$1,485,000.00 DOLLARS to be established according to proof, together with

prejudgment interest thereon at the legal rate from January 10,2010 on the llrincipal sum

of $250,000.00, from December 10, 2010 on the principal sum of $617,500.00 and from

June 10,201 1 on the principal sum of $617,500.00.

87 . As a further proximate result of Defendants' actions, Plaintiff has suffered

humiliation, mental anguish, and severe and extreme emotional distress, all to her

damage in a sum to be established according to proof.

88. In doing the foregoing acts, Defendants acted in a willful, wanton,

malicious, oppressive and fraudulent manner toward Plaintiff, and in conscious disregard

of plaintiff s known rights, with the intention of benefiting themselves financially and

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with the intent of, or a conscious disregard of the probability of, causing Plaintiff injury,

Officers, directors or managing agents of the entity Defendants authorized or ratified

such acts. In so acting, Defendants intended to and did vex, annoy, injure, and harass

Plaintiff, and consciously disregarded Plaintiff s rights, so as to justify the assessment of

punitive and exemplary damages against Defendants in a sum to be established according

to proof in an amount that is fair and reasonable.

WHEREFORE, Plaintiff prays for judgment against Defendants,, jointly and

severally on Count V in an amount to be determined atfttal, but believed to be in excess

of $1,485,000.00, for prejudgment interest at the legal rate, for punitive damages in an

amount to be determined at trial that is fair and reasonable, for her costs incurred herein,

and for such other and further relief as the Court deems fair, just and equitable under the

circumstances.

COUNT VIQUANTUM MERUIT AGAINST APT AND AMERICAN PERFORMANCE

89. Plaintiff realleges and incorporates by reference paragraphs I through 88

above.

90. Defendants requested that Plaintiff transfer the Patent to them.

91. Plaintiff transferred the Patent to Defendants.

92. Defendants have received the benefit of the Patent assigned by Plaintiff.

93. Defendants have retained and accepted the Patent and have benefited from

the retention of the Patent.

94. The reasonable value of the Patent is $1,500,000.00 DOLLARS, plus any

royalties and fees generated by the use, licensing or sale of products related to the Patent.

95. The retention of the Patent by Defendants without compensating Plaintiff

is inequitable.

96. The retention of the Patent without compensation to Plaintiff is unjust.

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97 . Defendants have retained the Patent and the value of the same, despite the

demands by Plaintiff to pay Plaintiff the reasonable value of the Patent, Defendants have

failed and refused to pay Plaintiff for the same.

98. Plaintiff has been damaged in an amount not yet determined, but believed

to be in excess of $1.500.000.00 DOLLARS.

WHEREFORE, Plaintiff prays for judgment against Defendants, jointly and

severally on Count VI in an amount to be determined attrial, but believed to be in excess

of $1,500,000.00 DOLLARS, for her costs incurred herein, and for such other and further

relief as the Court deems fair, just and equitable under the circumstances.

COUNT VIIDECLARATORY JUDGMEI{T

99. Plaintiff realleges and incorporates by reference paragraphs I through 98

above.

100. Under 28 U.S.C. Section2201 this Court has the power to declare the

rights, interests and obligations of the parties relative to the Agreement.

101 . Plaintiff is an interested party in the Agreement.

102. Defendant APT is an interested party in the Agreement.

103. Defendant American Performance is an interested party in the Agreement.

104. Upon information and belief, Defendant American Performance has an

interest in the Agreement and any declaration made by this Court as American

Performance is using the Patent or the patented technology in products that it is selling

and is alleged to be the Alter Ego of APT.

105. Plaintiff seeks a declaration of the rights, status and legal relations

between the parties as it relates to their rights and obligations under the Agreement.

106. Plaintiff seeks a declaration and order that Plaintiff has performed all of

her obligations under the Agreement.

107 . Plaintiff seeks a declaration and order that APT and/or American

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Performance are obligated to make all payments set forth in the Agreement.

108. Plaintiff seeks a declaration and order that APT and/or American

Performance have breached the Agreement by failing to apply for andlor obtain necessary

certifications for the Carburetor which is the subject of the Patent.

109. Alternatively, Plaintiff seeks a declaration and order that APT and/or

American Performance are obligated to reassign and/or transfer all right, title and interest

in and to the Patent which is the subject of the Agreement to Plaintiff.

1 10. Plaintiff seeks a declaration and order regarding the damages that Plaintiff

has incurred as a result of the breaches by Defendants of the Agreement and the

conversion of Plaintiff s property in the form of the Patent.

WHEREFORE, Plaintiff prays that the Court issue its declaration and order

regarding the rights, status and legal relations between the parties as it relates to the

Agreement, for her damages as determined by the Court, for her costs incurred herein,

reasonable attorney's fees, and for such other and further relief as the Court deems fair,

just and equitable under the circumstances.

COUNT VIIIRESCISSION FOR FRAUD IN THE INDUCEMENT AGAINST APT AND

AMERICAN PERFORMANCE

1 1 1. Plaintiff realleges and incorporates by reference paragraphs I through 40

and 67 through 79 above. This Count is pled in the alternative.

112. Upon information and belief, Defendants fraudulently induced Plaintiff to

enter into the Letter of Intent and then the Agreement by making false representations

and/or omitting to state material facts prior to the execution of the Letter of Intent and

Agreement, and at the time said documents were executed.

1 1 3. Upon information and belief, Defendants had no intention of applying for

and/or obtaining final certification and an Executive Order Number ("EO Number") from

a CARB/EPA approved testing facility that the snowmobile and lawnmower models of

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the Carburetor o'meet or exceed EPA Tier 2 Emissions Standards with no decrease in

performance or fuel economy and no increase in noise levels" at the time the Agreement

was executed, and prior to the execution of the Agreement.

ll4. Upon information and beliel Defendants had no intention to pay Plaintiff

as set forth in the Agreement at the time the Agreement was executed, or prior to the

execution of the Agreement.

115. Upon information and belief, these representations were knowingly false

misrepresentations or were made with ignorance of the truth.

1 16. Defendants made said representations to induce Plaintiff to enter into the

Agreement.

117 . The representations or omissions were material to the Agreement.

1 18. The misrepresentations induced Plaintiff to enter into the Agreement.

1 19. Plaintiff is seeking rescission of the Agreement and for the Court to return

the parties to the status quo that existed prior to the execution of the Agreement.

I20. Plaintiff is seeking an order from the Court for Defendants to assign or

transfer all right, title and interest in the Patent to Plaintiff.

I2I. Plaintiff is seeking consequential and special damages to balance the

benefits between the parties in an amount not yet determined.

I22. Plaintiff is seeking her reasonable attorney's fees and costs. As a further

proximate result of Defendants' actions,, Plaintiff has suffered humiliation, mental

anguish, and severe and extreme emotional distress, all to her damage in a sum to be

established according to proof.

123. In doing the foregoing acts, Defendants acted in a willful, wanton,

malicious, oppressive and fraudulent manner toward Plaintiff, and in conscious disregard

of Plaintiff s known rights, with the intention of benefiting themselves financially and

with the intent of, or a conscious disregard of the probability of, causing Plaintiff injury,

Officers, directors or managing agents of the entity Defendants authorized or ratified

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such acts. In so acting, Defendants intended to and did vex, annoy, injure, and harass

Plaintiff, and consciously disregarded Plaintiff s rights, so as to justify the assessment of

punitive and exemplary damages against Defendants in a sum to be established according

to proof in an amount that is fair and reasonable.

WHEREFORE, Plaintiff prays for judgment against Defendants, jointly and

severally on Count VIII that the Agreement is rescinded, for the reassignment and/or

transfer of all right, title and interest in and to the Patent to Plaintiff, for the Court to

award Plaintiff such damages that will balance the equities between the parties, for her

special and consequential damages to be determined at trial, for punitive damages in an

amount to be determined at trial that is fair and reasonable, for her costs incurred herein,

and for such other and further relief as the Court deems fair, just and equitable under the

circumstances.

DEMAND FOR JURY TRIAL

COMES NOW the Plaintiff and demands a trial by jury on all issues so triable in

this action.

1 8

Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 18 of 19

Page 19: Lucy v APT

Respectfully Submitted:

Lee's Summit, MO 64063

Mailing Address:P.O. Box 3716Shawnee, KS 66203

Phone: (91 3) 549-4790Fax: (91 3) 549-4791Cell: (816) 522-5063lhar dee @theharde e I awfi rml I c. com

LAW OFFICES OF BAIRD A. BROWNA Professional Corporation

Baird Brown Cal. Bar No. 56627Law Offices of Baird Brown PC3055 Wilshire Boulevard, Suite 1200Los Angeles, CA 90010

Phone: (213) 487-8880Fax: (213) [email protected]

Attorneys for Plaintiff

t 9

e R. Hardd IlYi608 SW Third Street

Case 4:11-cv-00529-SOW Document 1 Filed 05/24/11 Page 19 of 19