Professional Documents
Culture Documents
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7 across the United States including and especially in Southern California. In fact,
Defendants KENNETH VANDEVREDE, MICHAEL VANDEVREDE, STEVEN
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VANDEVREDE, DANIEL VANDEVREDE, DAVID VANDEVREDE, and BEVERLY
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WILLEKES are shareholders of Terra Tech whose principal place of business is in Irvine,
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California.
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FACTUAL ALLEGATIONS COMMON TO ALL CAUSES OF ACTION
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18. Terra Tech is a cannabis-focused agriculture company that integrates the
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natural world with technology to create sustainable solutions for cannabis production,
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extraction and distribution, plant science research and development, food production and
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Closed Environment Agriculture (a growing process that does not connect to the external
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environment). Through this development, Terra Tech has created relevant brands in both
17 the cannabis and agriculture industries.
18 19. Terra Tech has also achieved ongoing and unprecedented success whenever
19 it applies for a city, state, and/or governmental agency permit to manufacture, sell or
20 dispense cannabis. In fact, its proprietary applications and strategy, developed over a
21 significant period of time and at great cost in the millions of dollars, have allowed Terra
22 Tech to achieve an unparalleled success at obtaining municipal and governmental agency
23 permits.
24 20. In 2013, Terra Tech entered into an agreement to purchase all shares of Edible
25 Garden from the VandeVrede family, including Defendants KENNETH VANDEVREDE,
26 MICHAEL VANDEVREDE, STEVEN VANDEVREDE, DANIEL VANDEVREDE,
27 DAVID VANDEVREDE, and BEVERLY WILLEKES. Edible Garden, now completely
28 owned and operated by Terra Tech, uses state-of-the-art hydroponic farming to produce
1 and supply fresh herbs and leafy greens on a large scale to supermarkets and restaurants in
2 and around New Jersey. As part of the purchase agreement, Terra Tech leased growing
3 fields from Defendants in New Jersey, a state on the cusp of legalizing marijuana, for the
4 purpose of growing, processing and distributing marijuana when legalized in New Jersey.
5 This agreement further provided that Terra Tech and Defendants KENNETH
6 VANDEVREDE, MICHAEL VANDEVREDE, STEVEN VANDEVREDE, DANIEL
7 VANDEVREDE, DAVID VANDEVREDE, and BEVERLY WILLEKES would litigate
8 disputes in the “federal courts located in the County of Orange, State of California.”
9 21. As part of the 2013 Share Exchange Agreement Defendants KENNETH
10 VANDEVREDE, MICHAEL VANDEVREDE, STEVEN VANDEVREDE, and DANIEL
11 VANDEVREDE each received their pro-rata share of 1,250,000 shares of Terra Tech
12 common stock worth approximately $4 million each. Defendants DAVID VANDEVREDE
13 and BEVERLY WILLEKES each received a pro-rata share of Terra Tech common stock
14 worth approximately $700,000 each.
15 22. After the sale of Edible Garden to Terra Tech, Defendants KENNETH
16 VANDEVREDE, MICHAEL VANDEVREDE, and STEVEN VANDEVREDE became
17 employees and officers of Terra Tech and Edible Garden, which resulted in their regular
18 travels to and work in Orange County, California.
19 23. Defendants KENNETH VANDEVREDE, MICHAEL VANDEVREDE,
20 STEVEN VANDEVREDE, DANIEL VANDEVREDE, DAVID VANDEVREDE,
21 BEVERLY WILLEKES, GREDA VANDEVREDE, and BRIAN VANDEVREDE, are
22 owners, agents and/or intended beneficiaries of Defendants GRO-RITE and
23 NATURALLY BEAUTIFUL. Defendants GRO-RITE and NATURALLY BEAUTIFUL
24 directly compete with Terra Tech and Edible Gardens. Moreover, Defendants KENNETH
25 VANDEVREDE, MICHAEL VANDEVREDE, STEVEN VANDEVREDE, DANIEL
26 VANDEVREDE, DAVID VANDEVREDE, BEVERLY WILLEKES, GREDA
27 VANDEVREDE, and BRIAN VANDEVREDE directly benefit when the family
28 businesses, GRO-RITE and NATURALLY BEAUTIFUL, benefit.
1 24. As described in more detail herein Defendants, and each of them, were co-
2 conspirators with each other when Defendants KENNETH VANDEVREDE, MICHAEL
3 VANDEVREDE, and STEVEN VANDEVREDE committed fraud against Terra Tech,
4 stole its intellectual property, proprietary information, and usurped corporate opportunities
5 intended for Terra Tech in order to benefit of GRO-RITE and NATURALLY
6 BEAUTIFUL which derivatively, benefited Defendants KENNETH VANDEVREDE,
7 MICHAEL VANDEVREDE, STEVEN VANDEVREDE, DANIEL VANDEVREDE,
8 DAVID VANDEVREDE, BEVERLY WILLEKES, GREDA VANDEVREDE, and
9 BRIAN VANDEVREDE.
10 CODE OF ETHICS
11 25. On November 4, 2015, Defendants KENNETH VANDEVREDE, MICHAEL
12 VANDEVREDE, and STEVEN VANDEVREDE signed an Acknowledgment of Receipt
13 and Review of Code of Ethics as a part of that employment and/or agency relationship
14 between each of them and Terra Tech. Attached to this Complaint as Exhibit “A” is a copy
15 of the Terra Tech Code of Ethics. Attached to this Complaint as Exhibit “B” is a copy of
16 each of the Defendants’ signed acknowledgments.
17 26. Section III of the Code of Ethics is titled “Conflicts of Interest”, states, in
18 pertinent part: “Covered Persons should not use their position or association with the
19 Company for their own or their family’s personal gain, and should avoid situations in which
20 their personal interests (or those of their family) conflict or overlap, or appear to conflict
21 or overlap, with the Company’s best interests.”1 It then provides five (5) different examples
22 of activities that “give rise to a conflict of interest”:
23 a. “Where a Covered Person’s association with another person or entity
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would reasonably be expected to interfere with the Covered Person’s
independent judgment as to the Company’s best interests, […]
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28 “Covered Persons” are defined by the Code of Ethics as, “all directors, officers, and employees of the Company, including
the Company’s principal executive officer and principal financial officer”.
1 f. using Terra Tech money to expense items that were used for the benefit of
2 the diversion of these opportunities and the VandeVrede family, not Terra
3 Tech.
4 34. Furthermore, Defendant KENNETH VANDEVREDE signed an
5 acknowledgment of the Employee Manual on September 7, 2017, which restates the
6 policies of the Code of Ethics in Sections 5-2 through 5-4 and other portions of Section 5.
7 Therefore, Defendant KENNETH VANDEVREDE also breached the terms of the
8 Employee Manual for the reasons stated above and below.
9 STOCK OPTION AGREEMENT
10 35. On January 8, 2016, and May 24, 2017, Defendants KENNETH
11 VANDEVREDE, MICHAEL VANDEVREDE, and STEVEN VANDEVREDE signed
12 and entered into a Stock Option Agreement (“Agreement”) between each Defendant and
13 Terra Tech. A copy of the May 24, 2017, Option Agreement is attached to this Complaint
14 as Exhibit “C”. As stated within the Agreement at paragraph 1.2, the Option was made to
15 each Defendant in consideration of the services to be rendered by each Defendant.
16 36. Paragraph 10 of the Agreement spells out the non-compete and non-
17 solicitation condition of the Agreement. In pertinent part, each Defendant agreed and
18 covenanted not to:
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(a) contribute his … knowledge, as an employee, … agent, …to an entity
20 engaged in the same or similar business as the Company and its Affiliates,
21 including those engaged in the business of cultivating, producing, or
dispensing medical marijuana, herbs or produce for a period of one (1) year
22 following the Participant’s termination of Continuous Service; […] (c)
23 directly or indirectly, solicit, contact …, attempt to contact or meet with the
current, former, or prospective customers of the Company or any of its
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Affiliates for purposes of offering or accepting goods or services similar to or
25 competitive with those offered by the Company or any of its Affiliates for a
period of one (1) year following the Participant’s termination of Continuous
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Service.”
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37. Upon a breach of the non-compete and non-solicitation covenant of the
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Agreement, the Defendants agreed that they would forfeit their Options under the Plan and
1 that Terra Tech could seek a temporary restraining order or permanent injunction without
2 showing any actual damages or that money damages would not afford an adequate remedy,
3 and without the necessity of posting any bond or other security.
4 38. As stated above each Defendant agreed to all of the terms of the Stock Options
5 Agreement including those identified above. And, each Defendant breached the terms of
6 the Agreement as outlined above and below.
7 Defendants’ Breaches and Other Malfeasances against Terra Tech
8 39. In or about June 2017, Terra Tech became concerned that MICHAEL
9 VANDEVREDE and STEVEN VANDEVREDE were using Terra Tech and Edible
10 Garden facilities, equipment, and other assets such as manpower, for the benefit of
11 NATURALLY BEAUTIFUL, a separate VANDEVREDE business. Eventually, both
12 Defendants MICHAEL VANDEVREDE and STEVEN VANDEVREDE resigned as
13 officers and directors from Terra Tech though they both remained employees of Terra
14 Tech, in leadership positions with fiduciary duties, and officers of Edible Garden.
15 40. Due, in part, to the fact that Defendants KENNETH VANDEVREDE,
16 MICHAEL VANDEVREDE and STEVEN VANDEVREDE were and are fiduciaries to
17 both Terra Tech and Edible Garden, Terra Tech is informed and believes and on that basis
18 alleges that Defendants MICHAEL VANDEVREDE, STEVEN VANDEVREDE and
19 DANIEL VANDEVREDE knew about all of Defendant KENNETH VANDEVREDE’S
20 fraudulent breaches of contract, fiduciary duty and other wrongdoings outlined below, and
21 conspired to wrong Terra Tech. To that end, Terra Tech is informed and believes and on
22 that basis alleges that Defendants DAVID VANDEVREDE, GREDA VANDEVREDE,
23 BEVERLY WILLEKES, and BRIAN VANDEVREDE also knew about Defendant
24 KENNETH VANDEVREDE’S conduct and conspired to wrong Terra Tech.
25 I. Cultivar Opportunity
26 41. On August 30, 2017, Defendant KENNETH VANDEVREDE forwarded an
27 email from his GRO-RITE email account to his Terra Tech account with pictures of the
28 Cultivar Facility in Salinas, California. He also forwarded it to Defendants MICHAEL
1 Edible Garden, Defendant KENNETH VANDEVREDE responded with “Please send all
2 emails to ken@grorite.com”.
3 52. On September 21, 2017, Defendant KENNETH VANDEVREDE asked a
4 Terra Tech employee to send over the Terra Tech Property ID in order to login and access
5 google analytics for the Terra Tech website. Defendant KENNETH VANDEVREDE
6 immediately forwarded Terra Tech’s Property ID to CEO Gareffa at Chill Waze so that he
7 could login as a Terra Tech user and access Terra Tech proprietary information.
8 53. At no point in time did Defendant KENNETH VANDEVREDE communicate
9 this opportunity with Chill Waze to Terra Tech, or obtain permission to allow an outsider
10 into Terra Tech’s proprietary data base.
11 54. Further, Terra Tech did not give permission for nor did it have any knowledge
12 of Defendants KENNETH VANDEVREDE, MICHAEL VANDEVREDE and STEVEN
13 VANDEVREDE’S involvement in diverting the Chill Waze opportunity. In fact, Terra
14 Tech did not learn that this opportunity was diverted until February 2018.
15 IV. CBD Water Opportunity
16 55. In a more recent example of how Defendant KENNETH VANDEVREDE has
17 been using Terra Tech’s name and resources to attract vendors and business partners, but
18 then keep the opportunities for his family, GRO-RITE, and NATURALLY BEAUTIFUL,
19 Defendant KENNETH VANDEVREDE took an opportunity presented by Ken Voorhees
20 of Ungerer & Co on February 6, 2018, for the Plant Based organic CBD Water packer.
21 CBD is a cannabidiol infused extra virgin olive oil derived from the hemp plant.
22 56. On February 7, 2018, Mr. Voorhees emailed Defendant KENNETH
23 VANDEVREDE at his Terra Tech email address and stated, “Organic CBD Water 50%
24 Vande 50% Voorhees, $50k each initial seed money. We can open after launch to others.
25 [sic]” An additional email was exchanged on February 8, 2018, regarding the look of the
26 bottle.
27 57. On February 20, 2018, Defendant KENNETH VANDEVREDE met with Mr.
28 Aaron Harris to discuss CBD Water. Defendant KENNETH VANDEVREDE charged his
1 parking in Morristown, New Jersey, to the Terra Tech corporate credit card for that
2 meeting.
3 58. At no point in time did Defendant KENNETH VANDEVREDE communicate
4 this opportunity with CBD Water to Terra Tech, or obtain permission to purse the
5 opportunity with CBD Water outside his capacity as an officer and director for Terra Tech.
6 59. Terra Tech did not learn that this opportunity was diverted until February
7 2018.
8 V. Great Meadows Design Group Opportunity
9 60. On or about January 22, 2018, Daniel Grover from the Great Meadows Design
10 Group emailed Defendant KENNETH VANDEVREDE at his Terra Tech email address to
11 ask Defendant KENNETH VANDEVREDE if he had sent over the executed contract or
12 non-disclosure agreement.
13 61. Great Meadows Design Group (“Great Meadows”) is a consulting engineering
14 company that provides electrical, mechanical, plumbing, and fire protection engineering
15 services for new and existing facilities.
16 62. From January 31, 2018 through February 22, 2018, the two exchanged emails
17 regarding corporate names and obtaining a New Jersey cannabis permit for “Lincoln Park
18 and Belvidere locations.”
19 63. At no point did Defendant KENNETH VANDEVREDE disclose this
20 opportunity with Great Meadows to Terra Tech, or that Great Meadows would be a
21 competitor of Terra Tech. Therefore, Terra Tech did not give Defendant KENNETH
22 VANDEVREDE permission to redirect this opportunity to another business or his family
23 entities.
24 64. Terra Tech did not learn that this opportunity was diverted until February
25 2018.
26 VI. Burton Trent Public Affairs Opportunity
27 65. On January 31, February 6 and 22, 2018, Defendant KENNETH
28 VANDEVREDE received emails at his Terra Tech email address from Thomas
1 Mastrangelo, a cannabis lobbyist, to discuss the next potential steps in growing the
2 cannabis side of the VandeVrede family business with GRO-RITE.
3 66. At no point did Defendant KENNETH VANDEVREDE disclose the
4 opportunity to obtain permits from New Jersey with Thomas Mastrangelo to Terra Tech.
5 Terra Tech did not give Defendant KENNETH VANDEVREDE permission to divert this
6 opportunity to GRO-RITE.
7 67. Terra Tech did not learn that this opportunity was diverted until February
8 2018.
9 VII. Unlawful Use of Proprietary Information and Intellectual Property
10 68. On or about August 23, 2017, Defendant KENNETH VANDEVREDE
11 received an email at his Terra Tech email address from Quantum 9 CEO Michael Mayes
12 for a telephone call to take place on August 25, 2017. Defendant KENNETH
13 VANDEVREDE forwarded the email from CEO Mayes to Defendants DANIEL
14 VANDEVREDE, MICHAEL VANDEVREDE and STEVEN VANDEVREDE stating
15 “Help us write our family cannabis permits for NJ.” Defendant STEVEN VANDEVREDE
16 responded and asked, “What’s this for?” Defendant KENNETH VANDEVREDE
17 responded, “Consultant that will help our family write the NJ cannabis application for us.
18 Scored #1 in PA. Has a 93% success rate.”
19 69. Quantum 9 is an international hemp and medical cannabis consulting firm,
20 which provides consultants to those seeking permits, marijuana cultivation, processing and
21 dispensing.
22 70. From August 25, 2017, through February 6, 2018, Defendant KENNETH
23 VANDEVREDE exchanged emails at his Terra Tech email address with CEO Mayes from
24 Quantum 9, which culminated in Quantum 9 sending a work order, contract and non-
25 disclosure agreement to Defendant KENNETH VANDEVREDE, which he forwarded to
26 himself at his GRO-RITE email address, identifying GRO-RITE as the contracting party
27 with Quantum 9 and the entity that would benefit from the work order from Quantum 9.
28 At no point did Defendant KENNETH VANDEVREDE disclose this opportunity to Terra
1 Tech. Worse, Terra Tech is informed and believes that Defendant KENNETH
2 VANDEVREDE used Terra Tech’s propriety and confidential application process in order
3 to market himself and his family to Quantum 9.
4 71. Terra Tech did not learn that the Quantum 9 opportunity was diverted until
5 February 2018; nor did it learn that Defendant KENNETH VANDEVREDE used Terra
6 Tech’s propriety and confidential application process in order to market himself and his
7 family to Quantum 9 until February 2018.
8 72. On November 30, 2017, Defendant KENNETH VANDEVREDE emailed
9 Terra Tech’s proprietary Nevada Permit Applications to Mark Hanselman and David
10 Alston, individuals who are not affiliated or associated with Terra Tech.
11 73. Terra Tech did not learn that Defendant KENNETH VANDEVREDE emailed
12 this propriety application until February 2018.
13 74. From December 28, 2017, to January 9, 2018, Defendant KENNETH
14 VANDEVREDE emailed with David Hollberg, the Pequannock, New Jersey Township
15 Manager/CFO. They agreed to set up a meeting, which took place on January 10, 2018, at
16 GRO-RITE, to discuss GRO-RITE’S application to grow cannabis.
17 75. At no point did Defendant KENNETH VANDEVREDE disclose the
18 opportunity to obtain permits from New Jersey with David Hollberg to Terra Tech. For
19 that matter, Terra Tech did not give Defendant KENNETH VANDEVREDE permission
20 to divert this opportunity to GRO-RITE.
21 76. Moreover, Terra Tech is informed and believes and on that basis alleges that
22 Defendant KENNETH VANDEVREDE used Terra Tech’s proprietary application
23 documents to submit an application to Pequannock Township.
24 77. Terra Tech did not learn that this opportunity was diverted and proprietary
25 information was potentially disclosed until February 2018.
26 VIII. Misrepresentations and Misappropriations
27 78. Defendant KENNETH VANDEVREDE attended Terra Tech board meetings
28 on September 26, 2017, and December 19, 2017. At each of these meetings, the board
1 breaches of their fiduciary duties to Terra Tech, Terra Tech has suffered damages in an
2 amount according to proof.
3 92. Defendants KENNETH VANDEVREDE, MICHAEL VANDEVREDE and
4 STEVEN VANDEVREDE’S were willful and malicious in their actions and justify an
5 award of punitive damages in an amount sufficient to punish Defendants KENNETH
6 VANDEVREDE, MICHAEL VANDEVREDE and STEVEN VANDEVREDE and deter
7 future conduct of this type.
8 THIRD CAUSE OF ACTION
9 (Conversion Against Defendants KENNETH VANDEVREDE, MICHAEL
10 VANDEVREDE, STEVEN VANDEVREDE, DANIEL VANDEVREDE, DAVID
11 VANDEVREDE, GREDA VANDEVREDE, BEVERLY WILLEKES, and BRIAN
12 VANDEVREDE and Does 1 – 100)
13 93. Terra Tech repeats and re-alleges all the allegations contained in Paragraphs
14 1 through 92 inclusive, and by this reference incorporates the same herein as though fully
15 set forth.
16 94. Pursuant to the terms of the Code of Ethics, the Stock Option Agreement and
17 the Employee Manual, Terra Tech has clear legal ownership and right to possession in its
18 (1) intellectual, proprietary property in the form of permit applications, (2) its PowerPoint
19 presentations, (3) daily revenue reports, (4) Google analytics, (5) compliance
20 memorandums, (6) stock options, and (7) other personal and intellectual property subject
21 to conversion.
22 95. Defendants KENNETH VANDEVREDE, MICHAEL VANDEVREDE and
23 STEVEN VANDEVREDE wrongfully misappropriated Terra Tech’s (1) intellectual,
24 proprietary property in the form of permit applications, (2) its PowerPoint presentations,
25 (3) daily revenue reports, (4) Google analytics, (5) compliance memorandums, (6) stock
26 options, and (7) other personal and intellectual property owned by Terra Tech for the
27 benefit of themselves, GRO-RITE, NATURALLY BEAUTIFUL, DANIEL
28 VANDEVREDE, DAVID VANDEVREDE, GREDA VANDEVREDE, BEVERLY
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1 120. Defendants’ acquisition, use and/or disclosure of its trade secrets was a
2 substantial factor in causing Terra Tech’s harm and/or Defendants’ unjust enrichment.
3 SEVENTH CAUSE OF ACTION
4 (Conspiracy Against Defendants KENNETH VANDEVREDE, MICHAEL
5 VANDEVREDE, STEVEN VANDEVREDE, DANIEL VANDEVREDE, DAVID
6 VANDEVREDE, GREDA VANDEVREDE, BEVERLY WILLEKES, BRIAN
7 VANDEVREDE, GRO-RITE, INC. and NATURALLY BEAUTIFUL PLANT
8 PRODUCTS, LLC and Does 1 – 100)
9 121. Terra Tech repeats and re-alleges all the allegations contained in Paragraphs
10 1 through 120 inclusive, and by this reference incorporates the same herein as though fully
11 set forth.
12 122. A conspiracy is an agreement by two or more persons to commit a wrongful
13 act. Such an agreement may be made orally or in writing or may be implied by the conduct
14 of the parties.
15 123. Defendants KENNETH VANDEVREDE, MICHAEL VANDEVREDE,
16 STEVEN VANDEVREDE, DANIEL VANDEVREDE, DAVID VANDEVREDE,
17 GREDA VANDEVREDE, BEVERLY WILLEKES, BRIAN VANDEVREDE, GRO-
18 RITE, NATURALLY BEAUTIFUL, and DOES to be determined were aware of and/or
19 planned to (1) breach contracts with Terra Tech, (2) convert Terra Tech property, (3) divert
20 corporate opportunities for Terra Tech to themselves and/or other Defendants including
21 but not limited to GRO-RITE and NATURALLY BEAUTIFUL, (4) conceal and
22 misrepresent material facts and (5) misappropriate trade secret information.
23 124. Defendants KENNETH VANDEVREDE, MICHAEL VANDEVREDE,
24 STEVEN VANDEVREDE, DANIEL VANDEVREDE, DAVID VANDEVREDE,
25 GREDA VANDEVREDE, BEVERLY WILLEKES, BRIAN VANDEVREDE, GRO-
26 RITE and NATURALLY BEAUTFIUL agreed amongst themselves and/or intended that
27 the (1) breach of contracts with Terra Tech, (2) conversion of Terra Tech property, (3)
28 diversion of corporate opportunities for Terra Tech to themselves and/or other Defendants
1 including but not limited to GRO-RITE and GRO-RITE and NATURALLY BEAUTFIUL,
2 (4) concealment and misrepresentation of material facts and (5) misappropriation of trade
3 secret information be committed.
4 125. This agreement and/or intention became apparent, in part, when Defendant
5 KENNETH VANDEVREDE forwarded emails to MICHAEL VANDEVREDE, STEVEN
6 VANDEVREDE and DANIEL VANDEVREDE at their GRO-RITE email accounts. At
7 no point did anyone from GRO-RITE disclose that its co-conspirators were engaging in
8 the above-mentioned wrongful conduct.
9 126. As a proximate result of Defendants’ conspiracy, Terra Tech has suffered, and
10 continues to suffer damages, in an amount currently unascertained, but according to proof
11 at trial.
12 127. The aforementioned conduct of Defendants constitutes conspiracy, and was
13 despicable conduct that subjected Terra Tech to cruel and unjust hardship in conscious
14 disregard of the Terra Tech’s rights, so as to justify an award of exemplary and punitive
15 damages.
16 PRAYER FOR RELIEF
17 WHEREFORE, Terra Tech prays for judgment against all Defendants as follows:
18 1. For compensatory damages, in an amount to be proved at trial;
19 2. For prejudgment interest at the highest legal rate;
20 3. For the return of its shares exchanged under the 2013 Share Exchange
21 Agreement;
22 4. For the return of its (1) intellectual, proprietary property in the form of permit
23 applications, (2) its PowerPoint presentations (3) daily revenue reports, (4)
24 Google analytics, (5) compliance memorandums, and (6) stock options;
25 5. For the return of the options owned by the individual Defendants and the right
26 to exercise the vested options;
27 6. For exemplary and/or punitive damages;
28 7. For costs of suit incurred;