Defendant's Attorney: Joshiah Hass and Patricia A. Kirch
Description: Tulsa, Oklahoma civil litigation business law lawyer sued Defendants on breach of contract theories claiming;
Plaintiffs B.J. Dumond and Becky Dumond for their causes of action allege and state as follows:
PARTIES, JURISDICTION AND VENUE
1. B.J. Dumond and Becky Dumond ("Dumonds") are residents of the State of , Oklahoma and are the owners of one hundred percent (100%) of the outstanding stock of J & H ·· Foods, Inc., an Oklahoma corporation.
2. Defendant Initiatus, LLC, ("Initiatus") is an Oklahoma limited liability compaµi,
C)
doing business in the State of Oklahoma.
3. Defendant William R. Kerr a/k/a Bill Kerr ("B. Kerr") is a resident of the State of Oklahoma and at all times relevant has been the founder and principal of Initiatus.
4. Defendant Shannon D. Kerr ("S. Kerr") is a resident of the State of Oklahoma and at all times relevant has been an adviser and principal in Initiatus.
5. Defendant Christi Wamer-Beyer ("Wamer-Beyer") has at all times relevant has been an adviser and principal of Initiatus.
6. Defendant Jim Turner ("Turner") is a resident of Oklahoma and at all times relevant has been an adviser of Initiatus.
7. Defendant Mark Neighbors ("Neighbors") is a resident of Oklahoma and at all times relevant has been an adviser of Initiatus.
8. Jurisdiction and venue are proper in Tulsa County as the actions in representation in the claims giving rise to the causes of action arose in Tulsa County.
STATEMENT OF FACTS
9. Dumonds adopt and incorporate by reference paragraphs 1 through 8 of the Petition.
10. In 1990 the Dumonds purchased J & H Foods, Inc., the franchisor for Simple Simon's Pizza®. At the time the Dumonds purchased J & HF oods there were approximately twenty-six (26) franchisees operating Simple Simon's Pizza®. Over the course of the following years, through the efforts of Dumonds and their staff, they were able to grow J & HF oods to the point where it had 164 Simple Simon's Pizza® franchisees and 10 CheeZies Pizza® franchisees.
11. The Dumonds built J & H Foods into a profitable company devoting substantial time and effort to develop valuable proprietary business information enhancing the value of J & HF oods. In addition, the Dumonds expended significant time and effort in training and guiding numerous employees that provide vital services in furthering the growth of J & H Foods and its brand recognition.
12. In the Fall of 2016, B.J. Dumond was introduced to and met with B Kerr and others as representatives oflnitiatus regarding their interest in purchasing J & H Foods from the Dumonds.
After a series of discussions Dumonds entered into a Letter of Intent with Initiatus for the sale of one hundred percent (100%) of the outstanding stock of J & H Foods.
13. Subsequently, a Stock Purchase Agreement ("SPA") was entered into by and between the Dumonds as sellers and Keeping It Simple, LLC, an Oklahoma limited liability company, as buyer. The SPA provided in part for the following to occur at closing:
a. The buyer would pay Dumonds for the J & H Foods stock Eight Million Three Hundred Eighty-Eight Thousand Dollars ($8,388,000.00).
b. The buyer would purchase at closing from a related entity owned by the Dumonds certain real properties located in Glenpool and pay the purchase price of One Million Four Hundred Fifty-Five Thousand Dollars ($1,455,000.00).
c. A lease agreement would be entered into between the buyer and a related entity owned by the Dumonds for the leasing of the offices of J & H Foods located at 12175 South Yukon Avenue, Glenpool, Oklahoma, providing for rent to be paid over a period of two years totaling more than Three Hundred Thousand Dollars ($300,000.00).
d. The buyer would pay for certain equipment and vehicles.
e. The buyer would enter into a employment agreement with B.J. Dumond providing for annual compensation and benefits exceeding Two Hundred Fifty Thousand Dollars ($250,000.00) per year for a minimum of two years, plus annual bonuses based on the performance.
14. On information and belief Keeping It Simple, LLC, is the instrumentality of Defendant Initiatus as it is believed the entities have common persons in control and the funding of Keeping It Simple, LLC, was provided predominantly, if not solely, by Initiatus and the other Defendants. On further information and belief, Keeping It Simple, LLC, follows the direction of the persons in control oflnitiatus.
15. In connection with the negotiations and execution of the SPA, meetings occurred at which the Dumonds were present along with Defendants B. Kerr, S. Kerr, Neighbors, Warner-Beyer and Turner. During such meetings representations were repeatedly made that the buyer was fully capable of closing the SPA with funds in place to proceed with the closing on or before the date set forth in the SPA.
16. Dumonds fully satisfied all obligations required of them under the SPA and provided
substantial documents and records in connection with duediligence performed on behalf of the buyer in connection with this transaction.
17. Dumonds were fully prepared to close on the SPA on November 1, 2017, the date set forth in the SPA for closing. Prior the closing date, representatives of the buyer, including B. Kerr, met with employees of Executive Management, LLC, an affiliate of J & H Foods owned by the Dumonds, to introduce themselves as the buyers of J & H Foods and providing assurance to such employees as to their intentions to continue to operate J & H Foods in a similar manner subsequent to the purchase.
18. On the afternoon of October 31, 2017, the day prior to the closing date agreed in the SPA, B.J. Dumond received a phone call from Neighbors advising that the buyer would not close the SPA on November 1, 2017. B.J. Dumond was assured by Neighbors that the buyer intended to
close on the SPA but needed some additional time. B.J. Dumond was assured by Neighbors that funding was not an issue preventing buyer from closing.
19. Subsequently on October 31, 2017 B. Kerr and Warner-Beyer called the Dumonds providing assurance that the SPA would close, that funding was not an issue for the buyer, and that the commitment of the buyer to close the SPA had not diminished.
20. In subsequent conversations B. Kerr continued to assure the Dumonds that funding was not an issue and it was represented the SPA would close in the near future.
21. A new closing date of January 31, 2018, was set and an amendment to the SPA was signed reflecting the new closing date. At the time the Amendment was signed, B. Kerr confirmed that due diligence required by the buyer had been satisfactorily completed.
22. When the transaction did not close on the original closing date as provided for under the Stock Purchase Agreement, some of the employees of Executive Management began to experience apprehension and uncertainty as to their future with J & HF oods. Several key employees began to express concern whether the buyer would actually close the SPA and fulfill the promises and representations that had been made by B. Kerr and others. When the SPA did not close on the amended closing date of January 31, 2018, several key employees began the process to leave J & H Foods.
23. During the period of November 1 through January 31, 2018, Dumonds were repeatedly assured by B. Kerr and others, that the Defendants would cause the buyer to close the SPA.
24. On or about January 23, 2018, B. Kerr advised Dumonds the closing would not occur on January 31. He again stated that funding was not an issue and provided assurance that the SPA would close.
25. On January 31, 2018, the Dumonds at the request ofB. Kerr attended a meeting at the offices of Initiatus and Keep It Simple. During this meeting B. Kerr provided repeated assurances on his behalf and on behalf of the other Defendants that the SPA would close. Warner Beyer participated in the meeting by phone providing similar assurances to the Dumonds that the SPA would close.
26. Despite such repeated assurances and representations by the Defendants that the SPA would close, all of which were reasonably relied upon by the Dumonds, buyer has refused and failed to close and perform its obligations under the Stock Purchase Agreement. As a result Dumonds have suffered damages.
FIRST CAUSE OF ACTION
Promissory Estoppel/Detrimental Reliance
27. Dumonds adopt and incorporate herein by reference the paragraphs 1 through 26
above.
28. Defendants B. Kerr, Neighbors, Warner-Beyer, individually and on behalf oflnitiatus, have repeatedly made promises and representations that the buyer would close on the SPA, and perform its obligations under the SPA, including the payment of the purchase price to the Dumonds.
29. Dumonds reasonably relied upon such promises and representations to their detriment. It was foreseeable by said Defendants that the Dumonds would rely upon the repeated promises and representations.
30. As a result of the Dumonds' reasonable reliance, they have incurred substantial damages which include lost business opportunity, interest expense, taxes and insurance on the real estate the buyer was to purchase, lost revenue under the Lease Agreement that the buyer agreed to enter into, continued obligation under the company vehicle leases which the buyer agreed would assume, and loss of compensation to B.J. Dumond under the Employment Agreement that the buyer represented it would enter into.
31. In addition, Dumonds have sustained damages as a result of the impact of key employees leaving J & H Foods and the gap in the strategic and long term planning for the business operations related to J & H Foods.
32. Damages suffered by the Dumonds are in excess of Two Hundred and Fifty Thousand Dollars ($250,000.00).
WHEREFORE, Dumonds pray for judgment against the Defendants, B. Kerr, Neighbors, Warner-Beyer,jointly and severally, in the amount to be proven at trial in excess of Two Hundred and Fifty Thousand Dollars ($250,000.00).
SECOND CAUSE OF ACTION
Negligent Breach of Contract
33. Dumonds adopt and incorporate herein by reference the paragraphs 1 through 32
above.
34. On information and belief the Defendants jointly own, manage, direct, and/or control Keeping It Simple, LLC. Defendants had a common law duty to cause Keeping It Simple, LLC to perform as required under the SPA and the Amendment to the SPA.
35. On further information and belief the Defendants made decisions with regard to business affairs and activities of Keeping It Simple, LLC and caused its refusal and failure to close as required under the SPA and the Amendment to the SPA.
36. As a result of the Defendants' breach of their common law duty, Keeping It Simple breached the SPA and the Amendment to the SPA. Dumonds have suffered damages as a direct result.
WHEREFORE, Dumonds pray for judgment against the Defendants, jointly and severally, in the amount to be proven at trial in excess of Two Hundred and Fifty Thousand Dollars ($250,000.00).
THIRD CAUSE OF ACTION
Constructive Fraud
37. Dumonds adopt and incorporate herein by reference the paragraphs 1 through 36
above.
38. Defendants B. Kerr, Warner-Beyer, and Neighbors, individually and on behalf of Initiatus, have repeatedly made assurances and representations to the Dumonds that the SPA would close and that funding of the purchase price and other obligations of the buyer was not an issue.
39. Such assurances and representations constitute misrepresentation based upon the fact that despite the passage of time buyer has still failed to perform its obligations under the SPA.
40. Defendants B. Kerr, Warner-Beyer, and Neighbors had an obligation to fully and correctly inform the Dumonds of the status of the buyer's inability to close the SPA and have failed to do so.
41. As a result of such misrepresentations by Defendants B. Kerr, Warner-Beyer, and Neighbors Dumonds have suffered damages.
WHEREFORE, Dumonds pray for judgment against the Defendants B. Kerr, Warner-Beyer, and Neighbors, jointly and severally, in the amount to be proven at trial in excess of Two Hundred and Fifty Thousand Dollars ($250,000.00).
FOURTH CAUSE OF ACTION
Breach of the Implied Covenant of Good Faith and Fair Dealing
42. Dumonds adopt and incorporate herein by reference the paragraphs 1 through 41
above.
43. The actions of the Defendants in continuing to state, imply, represent and provide assurances to the Dumonds that the buyer would close under the SPA are actions constituting gross recklessness or wanton negligence by such Defendants.
44. Defendants by their acts, omissions, failures and conduct breached the duty of good faith and fair dealing by their continued representation and assurances to the Dumonds that the buyer would fulfill its obligations under the SPA, including the payment of the purchase price to the Dumonds.
45. Dumonds reasonably relied upon such representations to their detriment and as a result have suffered damages.
46. Defendants knew or had reasons to know that the damages to the Dumonds was probable and acted with a conscious disregard of the damages to the Dumonds caused by their acts, omissions, failures and conduct. Defendants acted with a reckless indifference to the Dumonds from the failure to close the SPA despite representations and assurances to the contrary.
WHEREFORE, Dumonds pray for judgment against the Defendants, jointly and severally, in the amount to be proven at trial in excess of Two Hundred and Fifty Thousand Dollars ($250,000.00).
Outcome: 12-17-2021
GREENOUGH, KELLY M; CASE COMES ON FOR HEARING FOR PRETRIAL CONFERENCE; JOHN CARWILE APPEARS FOR PLAINTIFFS; BAILIFF CALLS FOR DEFENDANT KEEPING IT SIMPLE LLC OR A REPRESENTATIVE 3 TIMES IN THE HALLWAY, NO RESPONSES, NO APPEARANCES; JUDY WILSON COURT REPORTER; PRETRIAL CONFERENCE STRICKEN; COURT ORDERS 3 COUNTER CLAIMS FILED BY KEEPING IT SIMPLE LLC ARE DISMISSED; THERE ARE REMAINING MOTIONS THAT ARE WAITING FOR RESPONSE TIME TO RUN;
12-17-2021
ORDER GRANTING PLAINTIFFS' APPLICATION FOR HEARING / PLAINTIFFS' MOTION TO SETTLE JOURNAL ENTRIES OF JUDGMENT FILED 11-8-21 SET ON 1-25-22 AT 11:00 AM IN COURTROOM 713
Document Available (#1051159858) TIFF PDF
12-17-2021
RECEIPT # 2021-4301494 ON 12/17/2021.
PAYOR: JOHN J CARWILE TOTAL AMOUNT PAID: $ 20.00.
LINE ITEMS:
CJ-2018-2834: $20.00 ON AC01 CLERK FEES.
12-29-2021
PLAINTIFFS' RESPONSE IN OPPOSITION TO DEFENDANT JIM TURNER'S MOTION TO ORDER RELEASE AND SATISFACTION OF JUDGMENT / C TO J / CERTIFICATE OF SERVICE
Document Available (#1051165392) TIFF PDF
DUMOND, BJ
01-25-2022
JUDGMENT
Document Available (#1051439460) TIFF PDF
01-26-2022
GREENOUGH, KELLY M; CASE COMES ON FOR HEARING ON MOTION TO SETTLE JOURNAL ENTRY; JOHN CARWILE APPEARS FOR PLAINTIFF; RICHARD LOVE APPEARS FOR DEFENDANT; AGREED JOURNAL ENTRY ENTERED; CLERK GAVE TO COUNSEL FOR FILING;
Plaintiff's Experts:
Defendant's Experts:
Comments: