INDEX NO.

653781/2015

FILED: NEW YORK COUNTY CLERK 11/16/2015 03:27 PM

NYSCEF DOC. NO. 1

RECEIVED NYSCEF: 11/16/2015

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
STONE FAMILY, LLC,
derivatively on behalf of
MAXVITA, LLC,
a Delaware Limited Liability Company,

Index No.
Civil Action

Plaintiff,
SUMMONS
v.
JAQUELINE MAFFEI,
Defendant.

To:

Jaqueline Maffei
95 New Valley Road,
New City, New York 10956

YOU ARE HEREBY SUMMONED to answer this complaint in this action and to serve a copy
of your answer, or, if the complaint is not served with this summons, to serve a notice of
appearance, on the Plaintiffs Attorney(s) within 20 days after the service of this summons,
exclusive of the day of service (or within 30 days after the service is complete if this summons is
not personally delivered to you within the State of New York); and in case of your failure to
appear or answer, judgment will be taken against you by default for the relief demanded in the
complaint.
DATED: November 16, 2015
New York, New York

SHERMAN WELLS SYLVESTER

& STAMELMAN LLP
By: ____________________________
Jordan D. Weinreich
805 Third Avenue, 10th Floor
New York, New York 10022
(212) 763-6464
jweinreich@shermanwells.com

4837-9140-9451, v. 1

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
Index No.

STONE FAMILY, LLC,

derivatively on behalf of
MAXVITA, LLC,
a Delaware Limited Liability Company,

Civil Action

Plaintiff,
VERIFIED COMPLAINT
v.
JAQUELINE MAFFEI,
Defendant.

Plaintiff Stone Family, LLC (Plaintiff), derivatively on behalf of MAXVITA, LLC (the
Company), by way of Complaint against Defendant Jaqueline Maffei (Defendant), hereby
alleges and says:
NATURE OF THE ACTION
1.

This is a derivative suit brought on behalf of the Company against Defendant, who

is the Companys Chief Operating Officer and one of its Managers to, among other things:
(i) prevent her from inflicting further harm upon the Company by removing her as member of the
Company as permitted under the Companys operating agreement, and (ii) recover damages caused
by Defendants actions in breaching her fiduciary duties, engaging in acts of self-dealing,
committing conversion, usurping corporate opportunities and/or otherwise failing to act in the best
interests of the Company and its other members.
2.

The relief requested herein is warranted because Defendant has engaged, and

continues to engage, in numerous wrongful acts, including, but not limited to, the following:
(i) interfering with and inhibiting sales of the Companys products, which have a limited shelf-

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life; (ii) commandeering the Companys website and making unauthorized alterations that
intentionally misdirect customers away from the Company and to a retail store in New City, New
York owned by Defendant; (iii) unlawfully removing the Companys inventory and selling it for
Defendants own personal gain and refusing to remit the proceeds from those sales to the
Company; (iv) unnecessarily exposing the Company to potential liability to various third-parties;
(v) refusing to agree to adequately fund the Company, resulting in one of its other members being
forced to make personal loans to the Company; and (vi) engaging in numerous acts of self-dealing
intended to benefit Defendant at the expense of the Company and its other members.
PARTIES
3.

Nominal plaintiff MAXVITA LLC (the Company) is and was at all material

times a Delaware limited liability company. The Company is primarily located online, but leases
physical warehouse space located at 56 Fairmount Ave Haverstraw, NY 10927, New York.
4.

Plaintiff Stone Family, LLC is a Delaware limited liability company with a

principal address at 350 East 72nd Street, Apt. 8A, New York, New York 10021. Plaintiff is a
member of the Company.
5.

Defendant Jacqueline Maffei is an individual who, upon information and belief,

resides at 95 New Valley Road, New City, New York 10956. Defendant is a member of the
Company
6.

Plaintiff has standing to bring this derivative action on behalf of the Company

because Plaintiff was and is a member of the Company at the time that Defendant committed the
acts complained of herein, as well as at the time that this suit was brought. Plaintiff will adequately
and fairly represent the interests of the Company and its members in enforcing and prosecuting
the Companys rights in this suit.

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RELEVANT NON-PARTIES
7.

Nelson N. Stone, M.D., an individual residing at 675 Lionshead Place, Unit 622,

Vail, Colorado 81657, is the managing member of Plaintiff Stone Family, LLC, a member of the
Companys Board of Managers and the Companys Chief Executive Officer.
8.

Ron Reid is an individual who, upon information and belief, resides at 16707 154th

Lane, Yelm, Washington 98597. Mr. Reid is a member of the Company.

9.

Laura Stone is an individual who resides at 350 East 72nd Street, Apt. 8A, New

York, New York 10021. Ms. Stone is the Companys Director of Operations and its sole employee.
STATEMENT OF FACTS
A. THE COMPANY
10.

Effective March 30, 2012, Plaintiff, Defendant and Ron Reid entered into an

operating agreement (the Operating Agreement) with respect to the Company. Pursuant to its
terms, the construction and interpretation of the Operating Agreement is governed by Delaware
law. (A true and correct copy of the Operating Agreement is attached hereto as EXHIBIT A.)
11.

The Company was formed to develop and market a line of nutritional supplements

under the Millennium Brands trademark.

12.

The Operating Agreement provides, among other things, that Plaintiff would

initially own 45% of the membership interests in the Company, Defendant would initially own
45% of the membership interests and Ron Reid would initially own the remaining 10% of the
membership interests. See Ex. A at p. 45.
13.

The Operating Agreement provides, among other things, that management of the

Company is to be vested in the Board of Managers. See Ex. A. at p. 18, 5.1. The Operating

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Agreement further provides that both Dr. Stone and Defendant would be elected to the Companys
Board of Managers. Id.
14.

At all relevant times, Dr. Stone and Defendant were and are the only Managers of

the Company.
15.

As the only two Managers, a disagreement amongst them, or the refusal of one

Manager to act, would result in a deadlock of the Board. See Ex. A at p. 18, 5.1 and p. 26, 7.8.
16.

The Operating Agreement further provides that Dr. Stone is appointed Chief

Executive Officer of the Company and Defendant is appointed Chief Operating Officer. See Ex.
A at pp. 19-21, 5.2(b)-(c).
17.

As the Companys Chief Executive Officer, Dr. Stone was and is responsible for

conducting, in the name of, and on behalf of, the Company, the day-to-day business and affairs of
the Company. See Ex. A at p. 20, 5.2(b).
18.

As the Companys Chief Operating Officer, Defendant was and is responsible for

conducting the day-to-day business affairs of the Company, subject to the direction of the Board
and the Chief Executive Officer. See Ex. A at pp. 20-21, 5.2(c) (emphasis added).
19.

Unfortunately, Defendant has interfered, and continues to interfere, with the day-

to-day business affairs of the Company and has refused to take any direction from the Companys
Chief Executive Officer, as required by the Operating Agreement.
B. DEFENDANTS ADVERSE ACTS
20.

The Operating Agreement defines an Adverse Act as, among other things, a

determination that a member has committed a breach of the Operating Agreement, which continues
for thirty (30) days following written notice thereof, and for which the breaching member does not
contest the determination within thirty (30) days following written notice thereof. See Ex. A at

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p. 3, 1.10. The Operating Agreement further defines any such member determined to be
committing one or more Adverse Acts as an Adverse Member. See Ex. A at p. 4, 1.10.
21.

As set forth below, Defendant has committed, and continues to commit, numerous

and material breaches of the Operating Agreement, each of which constitutes an Adverse Act.
22.

Defendants Adverse Acts have resulted in significant harm to the Company and

its other members.

1. Defendant Has Improperly Restricted Access to the Companys Warehouse
23.

A lockbox is affixed to the exterior of the Companys warehouse, which contains a

key to the warehouse. This key was used by Laura Stone.

24.

In or about July 2015, without notice to Laura Stone or to any of the Companys

other members, and without any authorization, Defendant removed the key from the lockbox. This
removal had the effect of restricting Laura Stones access to the warehouse.
25.

As Laura Stone was responsible for fulfilling the Companys product orders,

Defendants conduct in this regard hindered the Companys ability to fulfill certain orders due to
Laura Stones inability to access the warehouse.
26.

Only after several email communications did Defendant finally provide an

explanation for the missing key. Defendant explained that she had lent the key to her daughter
who is not an employee of the Companyand that her daughter temporarily misplaced it.
27.

Defendant then told Laura Stone that the key could be retrieved from Defendants

retail store in New City. However, upon information and belief, when Laura Stone went to retrieve
the key, Defendant refused to return it unless and until Ms. Stone signed a document in which she
was forced to acknowledge that the key had been misplaced in the manner set forth by Defendant.

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28.

Upon information and belief, Laura Stone signed the document under protest

because she needed the key. Plaintiff demanded that Defendant produce a copy of this document,
but Defendant has failed and refused to do so.
2. Defendant Has Commandeered the Companys Website and Has Made
Unauthorized Alterations Thereto
29.

Defendant, on behalf of and at the expense of the Company, purchased the domain

milleniumblend.com through GoDaddy.

30.

The Company hired Boscia Trott LLC, a website developer, to design and manage

its website, but the website is hosted by GoDaddy.

31.

Pursuant to the Companys agreement with Boscia Trott, Boscia Trott owns the

copyright to the websites content, and, therefore, the Companys website may only be altered by,
or with the permission of, Boscia Trott.
32.

Because Defendant purchased the Companys domain name via GoDaddy,

Defendant was able to restrict access to the Companys website and, without authorization from
the Company or from Boscia Trott, she was able to make several alterations to the website.
33.

Without the authorization of (or event consulting with) Dr. Stone or the Companys

members, Defendant changed the contact information for the Company to her own personal email
address, jm10956@reagan.com, as well as the physical address of the Company to the address of
her retail store in New City, New York. (A true and correct copy of the altered webpage, as of
October 28, 2015, is attached hereto as EXHIBIT B).
34.

As a result of Defendants unauthorized alteration, all communications to the

Company have been funneled to Defendant, who selectively forwards some, but not all, of those
communications to the Companys other members.

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35.

At some point after October 28, 2015, Defendant made additional changes to the

contact information for the Company. While Defendant replaced her Reagan.com email address
with a Company email address, she added Dr. Stones personal cell phone number. The inclusion
of Dr. Stones personal phone number was in no way authorized by Dr. Stone. (A true and correct
copy of the altered webpage, as of November 11, 2015, is attached hereto as EXHIBIT C).
36.

Defendant also unilaterally (and improperly) imposed excessive flat-rate shipping

charges that are vastly more expensive than the actual cost to the Company. Her decision to
attempt to make a profit on shipping was not authorized by the Company, and such misconduct,
among other things, has inhibited, and continues to inhibited, sales and has damaged, and continues
to damage, the Company.
37.

Boscia Trott has made several demands upon Defendant to return control of the

website to it. On or about July 9, 2015, a law firm representing Boscia Trott served a cease and
desist letter upon Defendant regarding her continued failure to relinquish control of the Companys
website and domain. (A copy of this letter is attached hereto as EXHIBIT D).
38.

On or about November 3, 2015, the law firm representing Boscia Trott served a

second, and final, cease and desist letter upon Defendant. (A copy of this letter is attached hereto
as EXHIBIT E).
39.

Accordingly, Defendants actions have hindered, and continue to hinder, sales and

have exposed the Company to potential liability.

40.

Despite several demands, Defendant has failed and refused to return control of the

website to the Company and/or Boscia Trott.

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3. Defendant Has Converted, and Continues to Convert, the Companys

Inventory for Her Own Personal Enrichment
41.

Though the full extent of her misconduct is currently unknown, Defendant has

admittedly removed Company inventory from the warehouse and has sold, and continues to sell,
a portion of it at her own personal store, Zambettis, located in New City, New York.
42.

Despite repeated demand, Defendant has failed and refused to account for the

quantity of inventory that she improperly removed from the Company. She has further failed and
refused to remit the proceeds from sales of the Companys inventory though her store, and has,
upon information and belief, sequestered those proceeds into her personal bank account.
43.

These funds belong to the Company, not to Defendant.

44.

Not only does this constitute a conversion of the Companys funds, but it has

interfered with the Companys ability to meet its monthly expenses, including, but not limited to,
rent on its warehouse, insurance for the products, telephone bills and employee payroll.
45.

Despite demand, Defendant has failed and refused to account for the inventory that

she improperly removed from the Company, and has failed and refused to account for the monies
she received, and continues to receive, from sales of the Companys products at her store or to
remit any such proceeds to the Company.
4. Defendant Has Engaged in a Business that Produces a Competing Product
46.

Upon information and belief, Defendant has engaged, and continues to engage, in

business with Isagenix, a business that directly competes with the Company.
47.

As a member of the Companys Board of Managers, Defendant is prohibited,

pursuant to Section 6.9 of the Operating Agreement, from participating in any business or activity
that is directly competitive with that of the Company. See Ex. A.

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48.

Further, Section 8.2(a) of the Operating Agreement prohibits any of the Companys

members, including Defendant, from engag[ing] in any business that is similar to the business of
MaxVita LLC without the written consent of the disinterested members of the Board. Id.
49.

Defendants ongoing business relationship with Isagenixwithout Dr. Stones

consentconstitutes a breach of her obligations under both Sections 6.9 and 8.2(a).
5. Defendant Has Failed and Refused to Authorize Payment of Compensation
Due to the Companys Director of Operations
50.

On or about September 1, 2013, the Company hired Laura Stone as its Director of

Operations. The Company agreed to pay Ms. Stone an annualized salary of $48,000, with half of
the compensation to be paid in cash and the other half paid in membership interests in the
Company.
51.

The Company has paid Ms. Stone the cash component of her compensation.

However, Defendant has failed and refused to authorize the issuance of membership interests to
Ms. Stone.
52.

On or about October 15, 2015, the Company received a demand letter from an

attorney representing Ms. Stone, which demands that the Company pay $48,000 in past due
compensation. (A true and correct copy of this demand letter is attached hereto as EXHIBIT F.)
6. Defendant Has Caused the Companys Inventory to Precipitously Decline in
Value
53.

As noted, the Company develops and markets a line of nutritional supplements

under the Millennium Blend trademark. The Company engaged a formulator to manufacture the
Companys inventory and expended a significant sum of money in that regard.
54.

The Companys inventory is perishable and a limited shelf-life of only two years.

Accordingly, the value of that inventory declines with each passing day.
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55.

The delay in sales of the Companys inventory caused by Defendants interference

with the Companys sales has resulted in a substantial diminution in the value of that inventory.
C. NOTICE OF ADVERSE ACTS, FAILURE TO CONTEST SAID NOTICE, AND
FAILURE TO CURE
56.

The above-described conduct on the part of Defendant constitutes Adverse Acts

under the Operating Agreement. See Ex. A at p. 3.

57.

Section 1.10 of the Operating Agreement provides that, upon the occurrence of a

purported Adverse Act, the breaching member be provided with notice thereof. Id. The same
section provides that, following receipt of notice, the breaching member then has thirty (30) days
to either: (i) cease and desist from the purported Adverse Act, or (ii) deliver to the Company written
notice that the member contests such a breach of the Operating Agreement (referred to as a
Contest Notice). Id.
58.

If a timely Contest Notice is submitted, then the alleged breach of the Operating

Agreement is not to be deemed an Adverse Act until there is a Final Determination (either by
settlement agreement or final judicial determination, not subject to further appeal, by a court of
competent jurisdiction) that such member did, in fact, breach the Operating Agreement. Id. at
pp. 3 & 8.
59.

Failure to submit a timely Contest Notice results in the waiver of the right to a

Final Determination. Id.

60.

In accordance with the Operating Agreement, Plaintiff provided Defendant with

notice, by letter dated July 30, 2015, that her actions constituted Adverse Acts under the Operating
Agreement, and advised Defendant that she had thirty (30) days to cease and desist from the
perpetration of the Adverse Acts, and to remedy any harm she has caused resulting therefrom. (A
copy of the Adverse Acts Notice Letter is attached hereto as EXHIBIT G).
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61.

Although Defendant has vaguely asserted that she disputes Plaintiffs allegations,

she has not provided any detail or specifics, and she has not indicated that she was providing a
written Contest Notice. Accordingly, Defendant has failed to deliver to the Company a written
Contest Notice contesting the notice of her repeated breaches of the Operating Agreement within
thirty (30) days of receiving the July 30, 2015 cease and desist letter.
62.

As a result of Defendants failure to submit a Contest Notice, Defendant has waived

her right to seek a judicial determination as to whether she did, in fact, commit Adverse Acts. See
Ex. A at pp. 3 & 8.
D. ADDITIONAL ADVERSE ACTS AND FURTHER HARM INFLICTED UPON THE
COMPANY
63.

With the exception of returning the warehouse key, Defendant has failed and

refused to cease and desist from her perpetration of the Adverse Acts and has failed to cure the
harm she has inflicted upon the Company therefrom.
64.

Not only has Defendant failed and refused to cease and desist from the noticed

Adverse Acts, but she has committed, and continues to commit, additional malfeasance that has
inflicted, and continues to inflict, additional harm upon the Company and its other members.
65.

By way of example only, a reconciliation performed by Dr. Stone and Laura Stone

of the Companys inventory per its books and records with a site count at the warehouse indicates
that Defendant has removed a substantial amount of the Companys inventory from the Companys
warehouse.
66.

By way of further example, the Company is in dire straits financially due to

Defendants refusal to remit the proceeds from the Companys sales. In order to continue funding
the operations of the Company, Dr. Stone called for additional capital contributions from each of

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the Companys members, but Defendant has refused to make her share of contributions,
jeopardizing the Companys ability to function.
67.

As a result, Plaintiff was forced to make several personal loans to the Company,

which, to date, total $9,000. But for Plaintiffs largesse, the Company would be insolvent.
FUTILITY OF DEMANDING DEFENDANTS CONSENT TO THIS LAWSUIT
68.

As set forth above, the management of the Company is vested in the Board of

Managers. The Operating Agreement provides that the Board has certain powers in this regard,
including, but not limited to, the right to bring a lawsuit on behalf of the Company for activities
arising out of, connected with, or incidental to the Operating Agreement. See Ex. A at p. 20,
5.2(a)(xii).
69.

Because Dr. Stone and Defendant constitute the entirety of the Board of Managers,

Defendant may allege that her consent is required in order for the Company to directly bring the
claims set forth herein, all of which are against Defendant.
70.

Even if Defendants consent were required, Plaintiff is excused from making

demand upon Defendant to consent to the Companys filing of a lawsuit against her personally
because such demand would be futile. As set forth in detail above, the crux of this derivative
complaint is that Defendant has unilaterally usurped the authority to make decisions on behalf of
the Company contrary to the terms of the Operating Agreement, and has used that authority to
convert the Companys property to enrich herself to the detriment of the Company and its other
members.
71.

Even if Defendant alleges that she has the authority to consent to legal action taken

on behalf of the Company, it would be futile for Plaintiff to make demand on Defendant in these
circumstances given that Defendant is the wrongdoer whose conduct gave rise to the instant

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derivative suit. Defendant could not reasonably be expected to evaluate in a disinterested manner
whether to pursue the Companys claims against herself.
72.

Moreover, at least since July 2015, if not earlier, Defendant has been fully aware

of her harmful conduct and has, nevertheless, failed and refused to cease and desist from those acts
and conduct. On the contrary, Defendant has sought to inflict further harm upon the Company to
enrich herself to the Companys detriment.
73.

Accordingly, demand upon Defendant to consent to bring an action to redress the

wrongs caused by her own conduct would, in effect, have required Defendant to institute suit
against herself and would have been futile.
COUNT I
(Declaratory Judgment pursuant to CPLR 3001)
74.

Plaintiff, derivatively on behalf of the Company, repeats and re-alleges each of the

foregoing allegations set forth above as if set forth fully herein.

75.

The actions taken by Defendant described herein constitute Adverse Acts under the

Companys Operating Agreement.

76.

Defendant failed and refused to cure those Adverse Acts and remedy the harm

caused therefrom following timely notice thereof.

77.

Defendant has failed to submit a timely Contest Notice contesting that her actions

constituted Adverse Acts under the Operating Agreement. As a result, Defendant has waived her
right to a judicial determination as to whether her actions constitute Adverse Acts.
78.

Accordingly, Defendant is an Adverse Member as that term is defined in the

Operating Agreement.

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79.

Section 12.1(a)(i) of the Operating Agreement provides that:

If an Adverse Act has occurred or is continuing with respect to any
member, the Board may elect: To cause the Company to commence
the procedures specified in Section 12.2 [of the Operating
Agreement] for the purchase of the Adverse Members Membership
Interest . . .

80.

By letter, dated October 7, 2015, Plaintiff notified Defendant that it intended to

proceed with the procedures set forth in Section 12.2 and force the sale of Defendants interest in
the Company. (A true and correct copy of this letter is attached hereto as EXHIBIT H.)
81.

Such a remedy is sanctioned under 18-306 and 18-502(c) of the Delaware

Limited Liability Company Act, which permits an LLCs operating agreement to provide for the
forced sale of a members interest as a consequence for breaching the operating agreement.
WHEREFORE, Plaintiff, derivatively on behalf of the Company, respectfully
requests that this Court enter judgment in the Companys favor and against Defendant granting the
following relief:
(a)

Declaring that Defendant has breached her obligations under the Operating
Agreement, has failed to cure such breaches following notice by Plaintiff and
has, therefore, committed Adverse Acts under the Operating Agreement;

(b)

Declaring that, pursuant to Sections 1.10 and 12.1 of the Operating

Agreement, Defendant waived her right to seek a Final Determination by a
court of competent jurisdiction as to whether her actions constituted Adverse
Acts under the Operating Agreement due to her failure to submit a timely
Contest Notice;

(c)

Declaring that Defendant is an Adverse Member as that term is defined in the

Operating Agreement;

(d)

Declaring that Plaintiff, on behalf of the Company, may commence the

procedures set forth in Section 12.2 of the Operating Agreement to purchase
the entirety of Defendants interest in the Company;

(e)

Declaring and effectuating any other appropriate rights of Plaintiff under New
Yorks declaratory judgment statute, CPLR 3001;
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(f)

Awarding Plaintiff, on behalf of the Company, attorneys fees, costs and

expenses incurred in this action pursuant to Section 12.1(a) of the Operating
Agreement; and

(g)

Awarding such other and further relief as the Court deems just and equitable.
COUNT II
(Breach of Contract)

82.

Plaintiff, derivatively on behalf of the Company, repeats and re-alleges each of the

foregoing allegations set forth above as if set forth fully herein.

83.

The Operating Agreement constitutes a binding contract between Plaintiff,

Defendant, Ron Reid and the Company, whereby the parties owe each other duties and obligations.
84.

Defendant is in breach of the Operating Agreement by, among other things:

(a)

Acting outside the scope of her authority as a member of the Board of

Managers pursuant to Section 5.2(a) of the Operating Agreement;

(b)

Failing to act at the direction of the Companys Chief Executive Officer, as

required by Section 5.2(c) of the Operating Agreement;

(c)

Unlawfully removing the Companys inventory and selling it from her

personal retail store without remitting the proceeds thereof to the Company, thereby depriving the
Company of the benefit of those funds, all in abrogation of her obligations under, among other
sections, Section 5.3(a)(i) of the Operating Agreement;
(d)

Restricting access to the Companys warehouse and inhibiting fulfillment

of sales as a result, all in abrogation of her obligations under, among other sections, Section
5.3(b)(ii) of the Operating Agreement;
(e)

Commandeering the Company website and making unauthorized alterations

thereto, including, but not limited to, replacing the Companys contact information with her

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personal contact information and contact information for her personal retail store, all in abrogation
of her obligations under, among other sections, Section 5.3(b)(ii) of the Operating Agreement;
(f)

Refusing to agree to issue calls for additional capital contributions

necessary for continued funding of the Companys operations, all in abrogation of her obligations
under, among other sections, Section 5.3(b)(ii) of the Operating Agreement; and
(g)

Engaging in a business that competes with the Company without the

Companys authorization, in violation of Sections 6.9 and 8.2(a) of the Operating Agreement.
85.

As a direct and proximate result of the aforementioned breaches, the Company has

incurred substantial damages, as set forth above.

WHEREFORE, Plaintiff, derivatively on behalf of the Company, respectfully
requests that this Court enter judgment in the Companys favor and against Defendant granting the
following relief:
(a)

Compensatory damages in an amount to be determined at trial or inquest;

(b)

Pre-judgment and post-judgment interest;

(c)

Costs of suit, including attorneys fees, as provided for in the Operating

Agreement; and

(d)

Such other and further relief as the Court deems just and equitable.
COUNT III
(Conversion)

86.

Plaintiff, derivatively on behalf of the Company, repeats and re-alleges each of the

foregoing allegations set forth above as if set forth fully herein.

87.

Defendant has wrongfully and intentionally asserted dominion and control over the

property of the Company, inconsistent with the Companys ownership thereof, and has

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permanently deprived the Company of its property and right to possession, dominion, use, and
control thereof.
88.

Defendant has admittedly removed inventory from the Companys warehouse, the

full extent of which is in dispute, and sold that product at her personal retail store, retaining the
proceeds and refusing to remit them to the Company, thereby depriving the Company of the benefit
of those funds.
89.

As a direct and proximate result of the aforementioned conversion of the

Companys property, the Company has suffered monetary damages.

WHEREFORE, Plaintiff, derivatively on behalf of the Company, respectfully
requests that this Court enter judgment in the Companys favor and against Defendant granting the
following relief:
(a)

Compensatory damages in an amount to be determined at trial or inquest;

(b)

Pre-judgment and post-judgment interest;

(c)

Costs of suit, including attorneys fees, as provided for in the Operating

Agreement; and

(d)

Such other and further relief as the Court deems just and equitable.
COUNT IV
(Breach of Fiduciary Duties)

90.

Plaintiff, derivatively on behalf of the Company, repeats and re-alleges each of the

foregoing allegations set forth above as if set forth fully herein.

91.

As a member of the Companys Board of Managers and its Chief Operating

Officer, Defendant had and has a fiduciary obligation to act in the best interests of the Company
and its members, and to not act in a manner to inhibit sales of the Companys products, enrich
herself at the Companys expense or to expose the Company to undue liability.

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92.

Defendant materially breach her fiduciary duties and obligations by engaging in

misconduct, including, without limitation, the following:

(a)

Restricting access to the Companys warehouse and inhibiting fulfillment

of sales as a result;
(b)

Commandeering the Company website and making unauthorized alterations

thereto, including, but not limited to, replacing the Companys contact information with her
personal contact information and contact information for her personal retail store, exposing the
Company to liability to Boscia Trott in the process;
(c)

Unlawfully removing the Companys inventory and selling it from her

personal retail store without remitting the proceeds thereof to the Company, thereby depriving the
Company of the benefit of those funds;
(d)

Engaging in a business that produces a competing product;

(e)

Refusing to agree to the issuance of agreed-upon compensation to Laura

Stone, thereby exposing the Company to liability therefrom; and

(f)

Refusing to agree to issue calls for additional capital contributions

necessary for continued funding of the Companys operations.

93.

As a direct and proximate result of the aforementioned breaches, the Company has

incurred substantial damages, as set forth above.

WHEREFORE, Plaintiff, derivatively on behalf of the Company, respectfully
requests that this Court enter judgment in the Companys favor and against Defendant granting the
following relief:
(a)

Compensatory damages in an amount to be determined at trial or inquest;

(b)

Pre-judgment and post-judgment interest;

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(c)

Costs of suit, including attorneys fees, as provided for in the Operating

Agreement;

(d)

Punitive damages; and

(e)

Such other and further relief as the Court deems just and equitable.
COUNT V
(Unjust Enrichment)

94.

Plaintiff, derivatively on behalf of the Company, repeats and re-alleges each of the

foregoing allegations set forth above as if set forth fully herein.

95.

As set forth above, Defendant unlawfully, and without any authorization from the

Company or any of its other members, removed certain of the Companys inventory and sold a
portion of that inventory from her personal retail store without remitting the proceeds thereof to
the Company, thereby depriving the Company of the benefit of those funds and the remaining
unsold inventory, the extent of which is currently unknown.
96.

As a result of Defendants conduct, she has enriched herself at the expense of the

Company
97.

Allowing Defendant to personally retain the proceeds from the sale of the

Companys products and/or allowing Defendant to retain the remainder of the Companys
inventory in her possession would be unjust.
WHEREFORE, Plaintiff, derivatively on behalf of the Company, respectfully
requests that this Court enter judgment in the Companys favor and against Defendant granting the
following relief:
(a)

Compensatory damages in an amount to be determined at trial or inquest;

(b)

Pre-judgment and post-judgment interest;

(c)

Costs of suit, including attorneys fees, as provided for in the Operating

Agreement; and
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(d)

Such other and further relief as the Court deems just and equitable.
COUNT VI
(Theft of Business Opportunities)

98.

Plaintiff, derivatively on behalf of the Company, repeats and re-alleges each of the

foregoing allegations set forth above as if set forth fully herein.

99.

As set forth above, Defendant unlawfully commandeered the Companys website

and made unauthorized alterations thereto that intentionally misdirect customers away from the
Company and to Defendants retail store in New City, New York. Upon information and belief,
Defendant has used, and continued to use, the diversion of the Companys customers as an
opportunity to sell other, and possibly competing, products from her store.
100.

As further set forth above, Defendant unlawfully removed the Companys

inventory and sold it, and continues to sell it, for her own personal gain and refuses to remit the
proceeds from those sales to the Company.
101.

The Companys website and its registered domain name, milleniumblend.com,

belong to the Company.

102.

The Companys inventory, and any proceeds resulting from sales therefrom, belong

to the Company.
103.

Defendant has knowingly, intentionally, and without justification misused, and

continues to misuse, property belonging to the Company, for Defendants own personal benefit
and to the detriment of the Company and its non-complicit members.
104.

By engaging in the conduct described above, Defendant has engaged in a theft of

the Companys corporate and business opportunities.

105.

Defendants conduct was intentional, wanton, willful, malicious, and in gross and

reckless disregard of the Companys rights.

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106. As a direct and proximate result of Defendants'theft

of the Company's corporate

and business opportunities, the Company has incurred substantial damages, as set forth above.

WHEREFORE, PlaintifT, derivatively on behalf of the Company, respectfully

requests that this Court enter judgment in the Company's favor and against Defendant granting the

following relief:

(e)

Compensatory damages in an amount to be determined at trial or inquest;

Pre-judgment and post-judgment interest;

(g)

Costs of suit, including attorneys' fees, as provided for in the Operating

Agreement;

(h)

Punitive damages; and

(i)

Such other and further relief as the Court deems just and equitable.

DATED: November 16,2015

SHpRvraN

Wells

& SrnveIMAN

Svt vpsreR

LLP

By:
J

Third Avenue, 10tl' Floor

New York, New York 10022
8

212-763-6464
At t or ney s for P I ai

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nt

iff