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No. 2013-44862

SUSAN PRUITT,

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Plaintiff,

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IN THE 157 th DISTRICT COURT

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v.

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IN AND FOR

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PATRICIA ARRINGTON GRIFFITH,

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HARRIS COUNTY, TEXAS

Defendant.

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WEBSLEUTHS.COM LLC’S AND PATRICIA ARRINGTON GRIFFITH’S ORIGINAL COUNTER-PETITION AND REQUEST FOR DECLARATORY JUDGMENT

Patricia Arrington Griffith [“Griffith”] and Websleuths.com, LLC [“Websleuths”] file this Original Counter-Petition and Request for Declaratory Judgment against Susan Pruitt [“Pruitt”]. In support hereof, Griffith and Websleuths allege the following:

A. Discovery-Control Plan

1. Griffith and Websleuths intend to conduct discovery under Level 3 of Texas Rule of Civil Procedure 190.4.

B. Parties

2. Counter-Plaintiff is Patricia Griffith, a resident of the State of Utah. She can be served through her attorneys of record, Meagan Hassan and William Pieratt Demond of DEMOND & HASSAN, PLLC, 2800 Post Oak Blvd, Suite 4100, Houston, Texas, 77056.

3. Third Party Plaintiff Websleuths is a Limited Liability Company organized under the laws of the State of Texas. Websleuths is managed by Counter-Plaintiff, Patricia Griffith and may be served through its attorneys of record, Meagan Hassan and William Pieratt Demond of DEMOND & HASSAN, PLLC, 2800 Post Oak Blvd, Suite 4100, Houston, Texas, 77056.

4. Counter-Defendant Susan Pruitt may be served through her attorneys of record, Anthony L. LaPorte and Ciro Samperi of Hanzsen LaPorte, 11767 Katy Freeway, Suite 850, Houston, Texas, 77079.

C. Facts

5. Griffith exclusively owned and operated the website “www.websleuths.com” (and all operations associated therewith) from 2004 to April 2011.

6. In April 2011, Griffith sold a 50% interest in said website to Pruitt for $11,000.

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7.

Pursuant to said sale, the business associated with www.websleuths.com was incorporated by agreement with the Texas Secretary of State as Websleuths.com, LLC [“Websleuths”].

8. Griffith and Pruitt executed Articles of Incorporation and Regulations for

Websleuths. Said Articles were filed with the Texas Secretary of State on April 25,

2011. Article V reads (in pertinent part):

a.“[Websleuths] is to be managed by a manager

b.“The initial manager is…Patricia Griffith…”

Exhibit A, p. 1, at Art. V.

9. Article VII further provides that, “The power to adopt, amend, or repeal the regulations of the Company, including the initial regulations, is vested entirely in the manager listed in Article V.” Id., p. 2, at Art. VII.

10. Pruitt subsequently began a concerted effort to undermine Griffith’s membership in and management of Websleuths via (inter alia) filing documents with the Texas Secretary of State that fraudulently listed Pruitt as Manager thereof.

11. Specifically, Pruitt signed and filed a fraudulent instrument with the Texas Secretary of State in 2012 that identified her as the sole Manager and member of Websleuths. Exhibit B. Pruitt signed said instrument as the Manager thereof. Id.

12. In 2013, Pruitt signed and filed a fraudulent instrument with the Texas Secretary of State that identified her as the co-Manager of Websleuths. Exhibit C. Pruitt signed said instrument as Manager of Websleuths. Id.

13. At no time have the parties entered into or executed any agreement permitting Pruitt to acquire managerial title or powers over Websleuths.

14. Exhibits B and C have been authenticated by Pruitt insofar as they were produced by her in discovery during the instant case.

15. Pruitt further claimed in discovery that she is the sole Manager of Websleuths. Exhibit D.

16. Griffith and Pruitt then entered into an agreement allowing Griffith to continue drawing a salary up to the amount of $3,000.00 per month. Exhibit E.

17. Griffith and Pruitt also agreed that Pruitt would not draw a salary until the income from Websleuths reached “a comfortable amount” in excess of the $3,000.00 per month income. Id.

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18.

Pruitt then further undermined Griffith’s membership in and management of Websleuths by alleging that Griffith defrauded and improperly took money from members of the Websleuths community.

19. Said allegations and filings were without foundation, contrary to law, and have compromised Griffith’s reputation and authority as an owner, member, and sole Manager of Websleuths.

20. Pruitt’s fabricated claims were a bad faith effort to irreversibly damage Griffith’s reputation and undermine her authority as Manager of Websleuths after Pruitt’s failed attempts to purchase the remainder of Griffith’s interests therein.

D. Count 1 – Promissory Estoppel

21. The foregoing paragraphs are incorporated herein as if quoted verbatim.

22. Pruitt promised Griffith that:

a. Griffith would remain the sole Manager of Websleuths and

b. Pruitt would permit Griffith to continue withdrawing up to $3,000 a month from Websleuths’ corporate accounts (minus expenses paid for the operation of the company, which at no time have exceeded $400.00 per month).

23. Griffith relied on Pruitt’s promises by acting as Manager of Websleuths and withdrawing monies from Websleuths’ corporate accounts.

24. Because of the nature of Pruitt’s promises, Griffith’s reliance thereon was both reasonable and substantial.

25. Pruitt knew, or reasonably should have known, that Griffith would rely upon Pruitt’s promises.

26. Injustice to Griffith can only be avoided if Pruitt’s promises are enforced.

27. Griffith’s reliance upon Pruitt’s promises resulted in injuries to Griffith and Websleuths (as an intended third party beneficiary), which specifically include (but are not limited to) expenses and indemnification associated with Griffith’s defense against Pruitt’s frivolous lawsuit, the need for the declaratory judgment filed herewith, a diminution in value of Griffith’s pecuniary interests in Websleuths, and the threatened cessation, diminution, and/or fragmentation of Websleuths’ business operations due to internal conflict unilaterally created by Pruitt in bad faith.

28. Plaintiff seeks unliquidated damages within the jurisdictional limits of this Court.

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29. Attorney fees. Griffith is entitled to recover reasonable and necessary attorney fees under Texas Civil Practice & Remedies Code section 38.001(8) because this suit is for promissory estoppel. Griffith retained counsel, who timely presented Griffith’s claim to Pruitt’s duly authorized agent. Pruitt did not tender the amount owed within 30 days of when the claim was presented.

E. Count 2 – Negligence

30. The foregoing paragraphs are incorporated herein as if quoted verbatim.

31. Pruitt owed legal duties to Websleuths and Griffith.

32. These duties included (but were not limited to) the duties to:

a. refrain from intentionally filing materially fraudulent or erroneous documents with the Texas Secretary of State (a crime under Tex. Bus. Org. Code §

4.008);

b. use ordinary care in advancing Websleuth’s interests;

c. exercise reasonable care to avoid foreseeable risks of injury to Griffith;

d. take affirmative action to control or avoid increasing the danger from one or more conditions at least partially created by Pruitt’s conduct (e.g., making baseless and frivolous claims that Griffith embezzled monies from Websleuths, claiming that Griffith stole monies from Websleuths’ members, making fraudulent filings with the Texas Secretary of State that intentionally mischaracterized the roles and responsibilities of the partners, harming Griffith’s financial interests in Websleuths, and working in concert with third parties to undermine Griffith’s role as Manager of Websleuths);

e. use ordinary care in ascertaining the accuracy of information conveyed to Websleuths’ members and third parties concerning Griffith’s conduct as a member and/or Manager of Websleuths; and

f. to refrain from acting as Manager of Websleuths in any capacity (including, but not limited to, commencing legal action in Websleuths’ name).

33. Pruitt breached her duty by intentionally filing fraudulent and erroneous documents with the Texas Secretary of State that listed her (as opposed to Griffith) as Websleuth’s Manager. In at least one instance, said documents further failed to identify Griffith as a member of Websleuths. This fraudulent conduct constitutes a crime under Texas law and is negligence per se.

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34.

Pruitt further breached her duty by subsequently identifying herself as a co- Manager of Websleuths.

35. Pruitt also breached her duties to Griffith and Websleuths by failing to:

a. use ordinary care in advancing Websleuth’s interests;

b. refrain

from

Websleuths’ Manager;

committing

criminal

acts

while

purportedly

acting

as

c. exercise reasonable care to avoid foreseeable risks of injury to Griffith;

d. take affirmative action to control or avoid increasing the danger from one or more conditions at least partially created by Pruitt’s conduct (e.g., making baseless and frivolous claims that Griffith embezzled monies from Websleuths, claiming that Griffith stole monies from Websleuths’ members, making fraudulent filings with the Texas Secretary of State that intentionally mischaracterized the roles and responsibilities of the partners, harming Griffith’s financial interests in Websleuths, and working in concert with third parties to undermine Griffith’s role as Manager of Websleuths); and

e. use ordinary care in ascertaining the accuracy of information conveyed to Websleuths’ members and third parties concerning Griffith’s conduct as a member and/or Manager of Websleuths.

36. Additionally, Pruitt breached her duty by commencing legal action in Websleuths’ name.

37. Pruitt’s breaches of her duties proximately caused injuries to Griffith and Websleuths, which specifically include (but are not limited to) expenses and indemnification associated with Griffith’s defense against Pruitt’s frivolous lawsuit, the need for the declaratory judgment filed herewith, a diminution in value of Griffith’s pecuniary interests in Websleuths, and the threatened cessation, diminution, and/or fragmentation of Websleuths’ business operations due to internal conflict unilaterally created by Pruitt in bad faith.

38. Plaintiff seeks unliquidated damages within the jurisdictional limits of this Court.

39. Exemplary damages. Griffith’s and Websleuths’ injuries resulted from Pruitt’s gross negligence, fraud, and/or malice, thereby entitling Griffith and Websleuths to recover exemplary damages under Texas Civil Practice & Remedies Code section

41.003(a).

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F. Count 3 – Breach of Fiduciary Duty

40. The foregoing paragraphs are incorporated herein as if quoted verbatim.

41. Pruitt had a fiduciary relationship with Griffith and Websleuths.

42. Pruitt breached her fiduciary duty to Griffith and Websleuths by intentionally and knowingly filing fraudulent and erroneous legal documents with the Texas Secretary of State that (1) identified Pruitt as Manager of Websleuths and (2) failed to identify Griffith as a member (or Manager) of Websleuths.

43. Pruitt further breached her fiduciary duties to Griffith and Websleuths by commencing a legal action in Websleuth’s name despite her lack of authority to do so in an attempt to both solidify her fraudulent authority as Manager and undermine Griffith’s rightful authority as Manager .

44. Pruitt further breached her fiduciary duties to Griffith and Websleuths by assuming the role of Manager despite binding legal documents naming Griffith as sole Manager.

45. Pruitt’s breach of fiduciary duty injured Griffith and Websleuths.

46. The damages caused by Pruitt’s breach of fiduciary duty include (1) legal expenses to defend a fraudulent lawsuit brought by Pruitt in bad faith, (2) the need to file a declaratory judgment establishing Griffith’s membership in and management of Websleuths, (3) the need to file a declaratory judgment declaring that Pruitt is not the Manager of Websleuths, (4) a diminution in value of Griffith’s pecuniary interests in Websleuths, and (5) the threatened cessation, diminution, and/or fragmentation of Websleuths’ business operations due to internal conflict unilaterally created by Pruitt in bad faith.

47. Griffith and Websleuths seek unliquidated damages within the jurisdictional limits of this Court.

48. Exemplary damages. Griffith’s and Websleuths’ injuries resulted from Pruitt’s malice, fraud, and/or gross negligence, thereby entitling Griffith and Websleuths to recover exemplary damages under Texas Civil Practice & Remedies Code section

41.003(a).

G. Count 4 - Breach of Contract

49. The foregoing paragraphs are incorporated herein as if quoted verbatim.

50. On May 1, 2011, Plaintiff and Defendant executed a valid and enforceable written contract entitled “Regulations of Websleuths” [“Regulations”]. Plaintiff attaches a copy of said contract as Exhibit F and incorporates same by reference herein.

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51. Said Regulations stated that Griffith and Pruitt filed Articles of Organization (attached hereto as Exhibit A) [“Articles”] with the Texas Secretary of State and that the Regulations were subject to and governed by (inter alia) the Articles.

52. Article V of the Articles states that:

“The Company is to be managed by a manager, as that term is used in the Texas Limited Liability Company Act. The number of initial managers of the Company is one (1) and the initial manager shall serve until successor shall have been duly elected and qualified. The initial manager is identified as follows: Patricia Griffith, who has an address of 6300 N. Sage Wood Drive, Suite H #214, Park City, UT 84098.”

53. Griffith and Pruitt have never agreed upon an alteration of this unambiguous provision.

54. Pruitt breached her contract with Griffith by (inter alia):

a. fraudulently misrepresenting herself as Websleuths’ Manager to the Texas Secretary of State on at least two filings (the Texas Franchise Tax Public Information Reports for 2012 and 2013, attached hereto as Exhibits B and C);

b. omitting Patricia Griffith’s name and information entirely on the Texas Franchise Tax Public Information Report for 2012 (Exhibit B); and

c. commencing legal action in Websleuths’ name despite the fact that only the Manager is entitled to commence such actions.

55. Pruitt has also held herself out as the Manager of Websleuths to third parties, including members and vendors who have provided services to Websleuths.

56. Additionally, Griffith and Pruitt entered into an agreement in which they agreed that Griffith would be able to withdraw $3,000.00 a month from Websleuths’ corporate account (minus necessary expenses for the website) each month. This agreement is attached as Exhibit E. Pruitt has authenticated this document by providing same in discovery.

57. Griffith has complied with said agreement.

58. Pruitt breached said agreement by filing the instant lawsuit against Griffith for (in pertinent part) complying with same via the withdrawal of the agreed upon funds from Websleuths’ corporate account.

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59. Pruitt’s breaches caused injuries to Griffith and Websleuths, which resulted in the following damages: (1) legal expenses to defend a fraudulent lawsuit brought by Pruitt in bad faith, (2) the need to file a declaratory judgment establishing Griffith’s membership in and management of Websleuths, (3) the need to file a declaratory judgment declaring that Pruitt is not the Manager of Websleuths, (4) a diminution in value of Griffith’s pecuniary interests in Websleuths, and (5) the threatened cessation, diminution, and/or fragmentation of Websleuths’ business operations due to internal conflict unilaterally created by Pruitt in bad faith.

60. Griffith and Websleuths seek unliquidated damages within the jurisdictional limits of this Court.

61. Attorney fees. Griffith and Websleuths are entitled to recover reasonable attorney fees under Texas Civil Practice & Remedies Code chapter 38 because this suit is for breach of a written contract. Griffith and Websleuths retained counsel, who presented their claims to Pruitt’s Counsel. Pruitt did not tender the amount owed within 30 days of when the claim was presented.

H. Suit for Declaratory Relief

62. The foregoing paragraphs are incorporated herein as if quoted verbatim.

63. Griffith and Websleuths seek a declaratory judgment in order to establish existing rights, status, or other legal relationships. City of El Paso v. Heinrich, 284 S.W.3d 366, 370 (Tex. 2009).

64. Specifically, Griffith and Websleuths seek a declaratory judgment declaring that (contrary to Pruitt’s filings with the Texas Secretary of State) Griffith is a member and sole Manager of Websleuths.

65. Griffith and Websleuths further seek a declaratory judgment declaring that Pruitt is not a Manager of Websleuths.

66. Griffith and Websleuths further seek a declaratory judgment declaring that Griffith is entitled to withdraw up to $3,000 a month (minus necessary expenses for the website) from Websleuths’ corporate account.

67. The declaratory relief sought herein by Griffith and Websleuths does not alter the existing right, status, or relationships between the parties.

68. Further, the instant case represents a justiciable controversy concerning the rights and status of the parties and declaratory relief would resolve said controversy. As a result, declaratory relief is appropriate to resolve the matters contained herein. Bonham State Bank v. Beadle, 207 S.W.2d 465, 467 (Tex. 1995).

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69. Additionally, the controversy herein is real rather than theoretical and involves a genuine conflict of tangible interests. As a consequence, the instant litigation (initiated by Pruitt) is clearly unavoidable.

70. The instant request for declaratory relief is also appropriate because it represents a counterclaim that has greater ramifications than Pruitt’s original suit. Beadle, 207 S.W.2d at 467.

71. Attorney Fees. Griffith and Websleuths are entitled to recover reasonable and necessary attorney fees that are equitable and just under Texas Civil Practice & Remedies Code section 37.009 because this is a suit for declaratory relief.

I. Limited Demand for a Jury Trial

72. Griffith and Websleuths demand a jury trial for all matters other than their request for declaratory judgment.

J. Conditions Precedent

73. All conditions precedent to Griffith’s and Websleuths’ claims for relief have been performed or have occurred.

K. Objection to Associate Judge

74. Griffith and Websleuths object to this case being referred to an associate judge for hearing a trial on the merits or presiding at a jury trial.

L. Prayer

75. For these reasons, Griffith and Websleuths ask that the Court issue citation for Pruitt to appear and answer, and that they be awarded a judgment against Pruitt for the following:

a. Actual damages;

b. Exemplary damages;

c. Prejudgment and postjudgment interest;

d. Court costs;

e. Attorney’s fees;

f. A declaratory judgment; and

g. All other relief to which Plaintiff is entitled, both at law and in equity.

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Respectfully submitted,

/s/ Meagan Hassan Meagan Hassan State Bar No. 24065385 meagan.hassan@demondhassan.com

William Pieratt Demond State Bar No. 24058931 william.demond@demondhassan.com

DEMOND & HASSAN, PLLC

2800 Post Oak Blvd, Suite 4100 Houston, Texas 77056

Telephone:

713-701-5240

Telecopier:

713-588-8407

ATTORNEYS FOR DEFENDANT/COUNTERPLAINTIFF PATRICIA GRIFFITH

CERTIFICATE OF SERVICE

I hereby certify that on this 30 th day of December, 2013, a true and correct copy of the foregoing document, entitled “WEBSLEUTHS.COM LLC’S AND PATRICIA ARRINGTON GRIFFITH’S ORIGINAL COUNTER-PETITION AND REQUEST FOR DECLARATORY JUDGMENT” was served upon the following parties and attorneys of record in accordance with the Texas Rules of Civil Procedure:

Anthony L. LaPorte Ciro Samperi Hanzen LaPorte, L.L.P. 11767 Katy Freeway, Suite 850 Houston, Texas 77079 Telephone: (713) 522-9444 Telecopier: (713) 524-2580

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/s/ Meagan Hassan MEAGAN HASSAN

Exhibit A

PRUITT 0013
PRUITT 0014

Exhibit B

PRUITT 0091

PRUITT 0091

Exhibit C

PRUITT 0089

PRUITT 0089

Exhibit D

Exhibit E

PRUITT 0049

PRUITT 0049

Exhibit F

PRUITT 0015
PRUITT 0016
PRUITT 0017
PRUITT 0018
PRUITT 0019
PRUITT 0020
PRUITT 0021
PRUITT 0022
PRUITT 0023
PRUITT 0024
PRUITT 0025
PRUITT 0026
PRUITT 0027
PRUITT 0028
PRUITT 0029
PRUITT 0030
PRUITT 0031
PRUITT 0032
PRUITT 0033
PRUITT 0034
PRUITT 0035