Tracy R, Reinmiller (SBN 189029) cela Jusme® Cen REINMILLER LAW FIRM 500 N. State College Blvd., Ste. 1100 AUB 04 2008 Orange, CA 92868 ALAN CARLSON. Cea Telephone: (714) 919-4350 ESS Facsimile: (714) 919-4390 eee \ ‘Attomeys for Plaintiffs, MICHAEL JACOBS and JEFF JACOBS SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE ~ CENTRAL JUSTICE CENTER MICHAEL JACOBS, an individu, JEFF | Case Nos 30-2009 JACOBS, an individual, 00289722 Plaintiffs, vs. COMPLAINT FOR: NARCONON SOUTHERN CALIFORNIA, | 1, BREACH OF CONTRACT; California Corporation, and DOES 1 through 2, UNJUST ENRICHMENT; eeeceles 3. FRAUD- INTENTIONAL Defendants. CONCEALMENT; 4. FRAUD - NEGLIGENT MISREPRESENTATION; 5. CONVERSION; AND 6, UNFAIR COMPETITION (BUS & PROF CODE § 17200) JUDGE PETER J. POLOS DEPT. C27 COME NOW, Plaintiffs, MICHAEL JACOBS and JEFF JACOBS, and allege as follows: JURISDICTION AND VENUE MICHAEL JACOBS (hereinafter 1. At all times herein mentioned, Plainti “MICHAEL”) is, and was, an individual, residing in the County of Orange, State of California. JACOBS (hereinafter “JEFF") is, 2. Atal times herein mentioned, Plaintiff, JE and was, an individual, residing in the County of Orange, State of California. ae COMPLAINT NA 1) ORIGINALSowa auany ML 13 14 15 16 7 18 i9 20 21 2 23 24 25 26 27 28 3. At all times herein mentioned, Defendant, NARCONON SOUTHERN CALIFORNIA (hereinafter “NARCONON”) is, and was, a California corporation authorized to and doing business in California, with its principal office located in the County of Orange, State of California. Further Defendant NARCONON solicits business from customers throughout the state, including customers in the County of Orange, State of California. 4, Defendants DOES 1 through 50, inclusive, whether individual, corporate, associate, or otherwise are unknown to Plaintiff, who therefore sues these Defendants herein under fictitious names. When their true names and capacities are ascertained, Plaintiff will amend this complaint by inserting their true names and capacities herein, 5. Atal times relevant to this action, each Defendant, including those fictitiously named, was the agent, servant, employee, partner, joint venturcr, or surety of the other Defendants and was acting within the scope of said agency, employment, partnership, venture, or suretyship, with the knowledge and consent or ratification of each of the other Defendants in doing the things alleged herein, 6. Venue is proper as Defendant business is located in the County of Orange. GENERAL ALLEGATIONS 7. Onor about April 18, 2008, Plaintiff, MICHAEL admitted his adult son, JEFF to Defendant, NARCONON’S Newport Beach facility for the primary purposes of receiving detoxification from substance abuse and to receive medically supervised substance abuse recovery treatment, including, but not limited to, group andor individual psychological counseling or treatment, and medical supervision by a qualified physician. 8. Prior to admitting JEFF to NARCONON, JEFF, MICHAEL and JEFF'S mother, Linda Jacobs, spoke on the telephone with Dan Carmichael, Intake Counselor at NARCONON and self-proclaimed NARCONON success story. Mr. Carmichael told them that JEFF would be “well taken care of,” “in good hands,” and that NARCONON boasted a high success rate for persons with substance abuse problems, like JEFF. 9, Linda Jacobs was further told by Mr. Carmichael that the detoxification would be medically supervised, and that JEFF would have access to a steam room and weight room to =2- COMPLAINTeC wer an een 10 Nl 12 3 14 15 16 7 18 19 20 a 2 23 24 25 26 27 “help him get through the detox.” ‘These representations are also found on the website for Defendant NARCONON. NARCONON’S web page further claims that the rehab center provides a safe environment and caring staff. 10. Based upon the oral representations by NARCONON, and its agents, employees ot representatives, including Mr. Carmichael, IEFF agreed to enter the substance abuse program at NARCONON’S Newport Beach facility on April 18, 2008 and MICHAEL agreed to pay the fee for the substance abuse recovery program. 11. Atall times mentioned herein, JEFF, MICHAEL and Linda Jacobs were informed and believed that the substance abuse treatment program consisted of a 3-day medically supervised detoxification, to be followed by a minimum thirty (30) day in-patient medically supervised treatment program. 12. Upon arrival at the facility, MICHAEL was informed that the cost for the program was Thirty Two Thousand Three Hundred Dollars ($32,300.00), which he paid in full via a Chase Manhattan Bank Visa credit card, Based upon information and belief, that $32,300.00 consisted of the medical detoxification program ($3,000.00), the subsequent in-patient program ($28,500.00), JE 13, After approximately forty-five minutes, MICHAEL left NARCONON’S Newport 'S “student money” ($300.00), books ($464.04) and sales tax, Beach facility with only a credit card receipt for $32,300.00 and an invoice. He was not provided with any substantive information about the program, and given no literature or documentation about the purported treatment his son would be receiving. A copy of the credit card receipt and Invoice are attached hereto as Exhibit “A”. 14, Immediately after MICHAEL left the facility, JEFF was instructed to sign a one page admission paper which was filled out by the attendant at the admission desk, before being admitted. 15. After being admitted, JEFF was taken for an off-site medical evaluation, wherein he informed the “physician” that he was currently under a psychiatric doctor’s care and taking several prescription medications designed to treat a variety of conditions, including depression and other mental/mood disorders. -3- COMPLAINTScwmraaueun Ww 2 13 14 15 16 7 18 19 20 2i 2 24 25 26 27 28 16. He was then driven to the off-site “medical” detoxification facility where his parents had paid for him to remain for three (3) days. At no time during his stay at the detoxification facility was JEFF monitored by a qualified physician. Instead, he was “weaned” off his. psychiatric prescription medications in only three days; he was unsupervised and unmonitored; he found the detox facility diy, smelling of mildew, dilapidated, and generally unsanitary, On one occasion, he was forced to use his own t-shirt as a pillow case so that he would not be forced to lay his head on a blood-stained pillow. 17. During his stay at the detox facility JEFF repeatedly asked to sec literature or documentation about the program in which he had agreed to participate, and was repeatedly told the information would be provided to him “later.” 18. On or about April 20, 2008, JEFF was transferred from the detox facility to the NARCONON Newport Beach facility where based upon information and belief, the residential substance abuse recovery program was to take place. On or about that day, JEFF was introduced to and indoctrinated into the NARCONON treatment program based upon the teachings of L. Ron Hubbard and Scientology. 19, Based upon information and belief, NARCONON is a residential drug recovery center closely affiliated with both the Association of Better Living (ABLE) and Scientology. NARCONON and ABLE receive funding from the Scientology organization as evidenced on the ABLE website's frequently asked questions section. Scientology is well-known as a cash flush organization. 20. During the next 24 hours, JEFF was introduced to two “mentors” who had a combined total of four (4) months of sobriety between them. He was provided with three paperback books written by L. Ron Hubbard (for which MICHAEL had paid $464.04) and room in the “smoking” wing of the main house at NARCONON Newport Beach facility, JEFF is a non-smoker. JEFF was never provided with his $300.00 “student” spending money. 21. For the next 24 hours, JEFF, a devout follower of Judaism from birth, was subjected to the teachings and made (o participate in the practices of the Scientology-based program, including “assists” and “confronts” which were physically, spiritually, and emotionally -4- COMPLAINTowe rane on 10 Ml 12 13 14 15 16 7 18 19 20 21 2 23 24 25 26 2 28 offensive to JEFF. 22. When JEFF asked to use to the telephone to contact MICHAEL he was refused. At all times mentioned herein, JEFF felt that he was not free to leave the NARCONON facility, which made him feel unsafe and caused him emotional distress, which was exacerbated by the fact that he was no longer taking his prescription anti-depressant medication. 23. On April 21, 2008, JEFF snuck away from the watchful eye of his “mentor” at the NARCONON Newport Beach facility, called his parents, who came immediately to retrieve him, and admitted him to another treatment facility where he completed his substance abuse recovery treatment. 24, At no time prior to April 21, 2008, did JEFF or MICHAEL receive any information or literature, other than the invoice and credit card receipt attached hereto as Exhibit “A”, from NARCONON. 25. Prior to April 21, 2008, neither JEFF, nor MICHAEL ever received a Customer Service Policy or refund policy for Defendant, NARCONON. 26. At no time prior to payment of the fee, or prior to JEFF'S leaving the NARCONON Newport Beach facility, were Plaintiffs informed by anyone at NARCONON, either orally, or in writing, that the in-patient substance abuse treatment program was based on the teachings or followed the teachings of L. Ron Hubbard or Scientology. 27. Had MICHAEL or JEFF been informed that JEFF would be subjected to the teachings of L. Ron Hubbard or Scientology prior to JEFF'S admission to the substance abuse treatment program, they absolutely and unequivocally would not have placed JEFF in the NARCONON Newport Beach facility, as the teachings of L. Ron Hubbard and Scientology are completely contradictory to the family’s religious beliefs, 28. Had MICHAEL or JEFF been informed that JEFF would be subjected to the teachings of L. Ron Hubbard or Scientology prior to JEFF'S admission to the substance abuse treatment program, they absolutely and unequivocally would not have paid $32,300.00 to NARCONON under any circumstances. tig ‘COMPLAINTv SowmuHvauaee ul 12 B 14 1S 16 7 18 19 20 a 2 B 24 25 26 27 28 29. MICHAEL immediately and repeatedly requested a refund of the portion of the fee paid in the amount of $29,275.00, including the $300 “student” money which was never received by JEFF. MICHAEL made such requests to June Rosenberry, the Director of Client Services at NARCONON. 30, Onor about April 21, 2008, after JEFF had left the NARCONON Newport Beach facility, MICHAEL received a package via federal express which included NARCONON’S Consumer Service Policy (“POLICY”) and other documents purporting to be literature about the NARCONON residential drug treatment facility. The POLICY was never provided to MICHAEL or JEFF prior to April 21, 2008, 31. Asarresult of the failure to disclose the POLICY to MICHAEL and JEFF prior to April 21, 2008, Plaintiffs, and each of them, have been harmed, and continue to be harmed, in an amount fo be proven at the time of trial, but not less than $32,300.00. 32. Asa result of the failure by NARCONON to disclose the fact that its residential drug treatment program is founded on beliefs which violate their own deep religious beliefs, Plaintiffs have been harmed, and continue to be harmed, in an amount to be proven at the time of ‘rial, but less than $32,300.00. FIRST CAUSE OF ACTION BREACH OF ORAL CONTRACT (By All Plaintiffs Against NARCONON and DOES | through 25) 33, Plaintiffs reallege and reincorporate by reference each and every allegation contained in paragraphs | through 32 as though fully set forth herein. 34. Plaintiffs and Defendant entered into an oral agreement at the time Plaintiff MICHAEL paid to Defendant the admission fee for substance abuse recovery treatment for his son, JEFF (hereinafter the “Agreement”). In consideration of MICHAEL'S payment in the amount of $32,300.00, Defendants promised that JEFF would be treated with medically supervised detoxification, that he would be “well taken care of,” “in good hands,” and that NARCONON boasted a high success rate for persons with substance abuse problems, like JEFF. They also promised that JEFF would have access to specific treatments to help him get through -6- ‘COMPLAINTSewraneun detoxification and through the substance abuse treatment program. Further NARCONON’S ‘website claims that the rehab center provides a safe environment and caring staff. 35. Defendants materially breached this agreement when they refused to provide the services promised under the Agreement and refused (o refund the money paid as requested repeatedly by MICHAEL affer the material breaches were discovered. 36. Plaintiff has performed all conditions, covenants, and promises required on its part to be performed in accordance with the terms and conditions of — the Agreement with Defendants 37. The continuing breaches by Defendants, and cach of them, have and will itreparably harm and impair Plaintiffs in an amount to be proven at the time of trial, but exceeding $32,300.00. 38. Asa direct and proximate result of each Defendant's breaches of the Agreement, Plaintiffs have been required to incur, and will continue to incur, attomey's fees, costs and expenses in connection with this lawsuit, in an amount to be proven at the time of trial SECOND CAUSE OF ACTION UNJUST ENRICHMENT (By MICHAEL against NARCONON and DOES 1 through 50) 39, Plaintiffs reallege and reincorporate by reference each and every allegation contained in paragraphs 1 through 38 as though fully set forth herein. 40. Based upon the foregoing, Defendants, and cach of them, received proceeds, including but not limited to the payment in the amount of $32,300.00 for services which were not eamed by NARCONON and to which it is not entitled, and has been unjustly enriched by its receipt of them. 41. MICHAEL seeks recovery of the amount to which NARCONON has been unjustly enriched. 42, The manner in which Defendants went about taking this money from MICHAEL was through duress, lies, and fraud which entitles MICHAEL to recover punitive damages in an amount to be proven at the time of trial. -7- ‘COMPLAINTCm ranean 10 ul 12 13 4 15 16 17 18 19 20 21 2 2B 24 25 26 a7 28 43, MICHAEL is entitled to an award of attomeys’ fees related to recovering the amount by which NARCONON was unjustly enriched. THIRD CAUSE OF ACTION FRAUD - INTENTIONAL CONCEALMENT (By All Plaintiffs against NARCONON and DOES | through 50) 44, Plaintiffs reallege and reincorporate by reference each and every allegation contained in paragraphs 1 through 43 as though fully set forth herein. 45. On or about April 18, 2008, Defendants and each of them, were aware of the fact that NARCONON’S substance abuse treatment program was based on the teachings of L. Ron Hubbard and based upon Scientology. 46. Furthermore, from about April 18, 2008 through April 21, 2008, Defendants and its agents and representatives, and each of them knew and were aware that the substance abuse treatment program at NARCONON wes based upon the teachings of L. Ron Hubbard and Scientology. 47. Despite JEFF'S repeated requests for information regarding the nature of the purported treatment he was receiving, Defendant, its agents and representatives fraudulently concealed the truth from JEFF subjecting him to beliefs and practices which were contrary to his own deep religious beliefs. 48, Notwithstanding the knowledge possessed by Defendant, its agents and representatives and DOES 1 through 50, Defendant, its agents and representatives willfully, intentionally and fraudulently concealed from MICHAEL and his son, JEFF, the manner and method of the substance abuse treatment that JEFF would be receiving. 49, Based on information and belief, such concealment occurred at the time Defendant ordered, directed and required JEFF to be subjected to the teachings of L. Ron Hubbard and Scientology. 50. Ultimately, and upon leaming the truth, JEFF was forced to re-evaluate his treatment options, and as a result of Defendant’s fraudulent conduct and concealment, JEFF and MICHAEL sustained damages. =8- COMPLAINTSewer aueron 51. Each of these acts and omissions by Defendant, including but not limited to failing to reveal the method and manner of the substance abuse treatment center and was done by Defendant falsely and fraudulently with intent to induce Plaintiff to admit JEFF into its facility, and with the intention to induce MICHAEL to pay $32,300.00 to Defendant. Plaintiff was ignorant of the truth, and would not have subjected JEFF to the aforementioned had known the true facts, 52. In undertaking the conduct described above, Defendants, and each of them, acted in willful and conscious disregard of the rights, safety, welfare, or best interests of JEFF, and therefore, of his father, MICHAEL. 53. Asa direct and legal result of the fraudulent concealment of Defendants, and each of them as described above, JEFF and MICHAEL were harmed in an amount to be proven at the time of trial 54. Asa result of such conduct, Defendants, and each of them, acted fraudulently, willfully, maliciously, and oppressively, as defined in California Civil Code § 3294, and Plaintiffs are entitled to punitive damages from Defendants, and each of them. FOURTH CAUSE OF ACTION FRAUD - MISREPRESENTATION (By All Plaintiffs against NARCONON and DOES 1 through 50) 55. Plaintiffs reallege and reincorporate by reference cach and every allegation contained in paragraphs | through 54 as though fully set forth herein. 56. On or about April 18, 2008, Defendants and each of them made multiple misrepresentations to MICHAEL, JEFF, and Linda Jacobs regarding the “medical” detoxification and in-patient substance abuse recovery treatment which would purportedly be provided to JEFF in exchange for $32,300.00. Defendants knew these representations to be false, and the representations were made with the intent to defraud and deceive Plaintiffs, and with the intent to induce MICHAEL to purchase the services, on behalf of JEFF, that Plaintiffs were promised. 57. When Defendants entered into the Agreement with Plaintiffs, Defendants knew -9- ‘COMPLAINTthat they in fact would use this arrangement to keep for themselves MICHAEL'S $32,300.00, regardless of whether JEFF was ever to receive the promised services, and Defendants, its agents, representatives, and employees concealed this information from Plaintifis. 58. At the time the representations were made by Defendants, Plaintiffs were ignorant of their falsity 59. In reliance upon Defendant’s representations, JEFF was induced into admission into the NARCONON Newport Beach facility, and MICHAEL was induced into entering into an Agreement with Defendants promising the services set forth herein. 60, Had Plaintifis known the actual facts about the services and the provider of the services, Plaintiffs would not have entered into any such Agreement, and not acted in the manner alleged herein 61. Plaintiffs’ reliance on the Defendant's representations were justified and reasonable because of their belief that Defendants were making representations to Plaintiffs fairly, honestly and in good faith, and because there was nothing that led Plaintifls to believe that the Defendants would defraud and exploit Plaintfis, 62. Asa proximate result of Defendants’ fraud and deceit, and the alleged facts herein, Plaintiffs have been damaged in an amount according to proof at trial, but exceeding $32,300.00. 63. As a result of such conduct, Defendants, and each of them, acted fraudulently, willfully, maliciously, and oppressively, as defined in California Civil Code § 3294, and Plaintiffs are entitled to punitive damages from Defendants, and each of them. FIFTH CAUSE OF ACTION CONVERSION (By MICHAEL Against NARCONON and DOES | through 25) 64. Plaintiffs reallege and reincorporate by reference each and every allegation contained in paragraphs 1 through 63 as though fully set forth herein, 65. As a result of Defendant's material breaches of the Agreement, Defendant, and each of them, had a duty to repay MICHAEL the entire amount paid to Defendant under the =10- ‘COMPLAINTRon Sowmraau ul 12 1B 14 15 16 7 18, 19 20 21 2 23 24 25 26 27 28 express and implied terms of the Agreement. Yet, through the direction of Defendants’ agents, representatives, and employees, converted for itself or themselves the money due to Plaintiff by refuusing to issue a refund to MICHAEL. 66. Plaintiffs never consented to, approved, waived, or ratified any such conversion by Defendants. 67. MICHAEL took all reasonable steps to ensure that he would be paid all sums due him from Defendant, and each of them, in accordance with the Agreement between Plaintiff and Defendant, including asking for the return of the monies paid, but Defendant has refused to return the money to MICHAEL, its rightful owner. 68. MICHAEL is entitled to an award of costs, including attomeys fees, incurred in recovering the amounts converted. 69. Defendant’s actions were fraudulent, malicious and oppressive and Plaintiff is entitled to an award of punitive damages. ‘TH CAUSE OF ACTION UNFAIR COMPETITION/FRAUDULENT ACTS OR PRACTICES California Business and Professions Code §§17200 et seq. (By Plaintiffs Against All Defendants and DOES 1 through 50) 70, Plaintiffs reallege and reincorporate by reference each and every allegation contained in paragraphs | through 69 as though fully set forth herein. 71. Defendants’ unlawful and fraudulent conduct constitutes unfair, unlawful, and fraudulent business practices in violation of California Business and Professions Code §§17200 et seq. which have caused harm to Plaintiffs, including monetary damagers and emotional distress. 72. Defendant, through its agents, representatives, and employees made promises and misrepresentations to Plaintiffs, MICHAEL and JEFF, and Linda Jacobs that JEFF would receive “medical” detoxification and in-patient substance abuse recovery treatment as described hereinabove, and incorporated herein by reference. These misrepresentations were made with the intent to defraud and deceive Plaintiffs, and with the intent to induce Plaintiffs to purchase the ae COMPLAINTa aueurn 10 WL 12 13 4 15 16 17 18 19 20 2 2 24 25 26 27 28 services that Plaintiffs were promised in the amount of $32,300.00. Defendants statements were likely to deceive, and did in fact deceive Plaintiffs, proximately causing substantial injury to Plaintiffs. 73, The aforementioned wrongful acts have proximately caused and will continue to cause Plaintiffs substantial injury, by inducing PlaintiffS to enter into an Agreement, wherein Plaintiffs paid $32,300.00 which Defendants knew that they in fact would keep for themselves regardless of whether Plaintiffs were entitled to a refund as part of the Agreement, and concealed this information from Plaintiffs. 74, As part of their strategy, Defendants induced JEFF to sign documents that he did not understand or comprehend at a time when he was vulnerable and confused. 75, As part of their strategy, Defendants induced MICHAEL to pay $32,300.00 for a substance abuse treatment program without providing him with literature or documentation other than a credit card receipt and an invoice at the time JEFF was admitted for treatment. 76. The foregoing conduct of Defendants constitutes unfair business practices and/or unfair competition under California Business and Professions Code §§ 17200, et seq. 77. Defendants have acquired money, property or other benefits as a direct and proximate result of their unfair competition and/or unfair business practices directed at Plaintiffs, and in an amount to be proven at trial 78. Defendants, and each of them, should be ordered to restore and/or disgorge to Plaintiffs all money or property or other benefits gained by them as a direct and proximate result of Defendant's unfair competition and/or unfair business practices directed at Plaintiffs. PRAYER FOR RELIEF 1, That Plaintiff receive monetary damages against each Defendant in amounts to be determined at trial; 2. That Defendants each be held to have converted MICHAEL'S money in the amount of $32,300.00; 3. That Defendants each be held to have conducted unfair business practices; 4. That Defendants be ordered to restore and/or disgorge to Plaintiff’ all money or -12- COMPLAINTBon Secwre ul 3 14 15 16 17 18 19 20 2 2 2B 24 26 27 28 property or benefits gained by them; 5. That Plaintiffs be awarded attorney’s fees as against each Defendant; That Plaintifis receive punitive damages as against each Defendant; ae For the interest to the extent allowable by law; 8. For Plaintiff’s costs of suit herein incurred in this action; and 9, Forany other relief as the Court may deem appropriate JURY TRIAL DEMANDED Plaintiffs hereby demand a trial by jury of ll issues so triable, Dated: August _Q 3 __, 2009 REINMILLER LAW FIRM Aes TRACY. REINMILLER Attorneys for Plaintiffs, MICHAEL JACOBS and JEFF JACOBS: -13- ‘COMPLAINTEXHIBIT EXHIBIT “A”Narconon ‘$1745 Eateries Cirle N Sule 102 Phone: ‘Tepomula CA 92550 Fax 951-252.98)9 inf@dmarehabamperies net See vente Invoice Date: 4-18.08 Bill Ta: Mike & Linda Jacobs 9 Rue Grand Villa ‘Newport Beach, CA 92660 Paid To: Narconon Southem California ‘41743 Enterprise Circle N. Suite 102 ‘Temecula, CA 92590 e nanan aoatsoo7 ‘Nareonon Progam | #1 500.00 . a 2 $32,000.00 Books $464.04 ‘Paid In Full Medical Detox | $3,000.00 Sales Tax $35.96 Tesi S25 n0000 L ‘Narconon is 2 501(¢)3 Cor Please provide ‘i Tea ithaca os nc ental detnton 44400.00 Thank You, Daniel Carmichael srucenr 4