Temuryan vs. Cosway, et al Second Amended Complaint

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1 1:14-bk-13401-VK

I.DONALD WEISSMAN (Bar No. 67980) [email protected] WEISSMAN LAW FIRM 5567 Reseda Boulevard, Suite 118 Tarzana, California 91356 Telephone: (818) 704-5151 Facsimile: (818) 705-2634 Attorneys for Plaintiffs, ARMEN TEMURYAN & HOURY TARTARIAN

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF ORANGE – CENTRAL JUSTICE CENTER

ARMEN TEMURYAN, an individual, HOURY TARTARIAN, an individual

CASE NO. 30-2014-00717436-CU-CO-CJC SECOND AMENDED COMPLAINT

1. Breach of Contract; 2. Breach of Contract; 3. Breach of Contract; 4. Breach of Covenant; 5. Common Count; 6. Conversion; 7. Fraud and Deceit; 8. Negligent Misrepresentation; 9. Unfair Business Practices; 10. Civil Conspiracy; 11. Interference with Economic

Advantage; and 12. Accounting

Plaintiffs,

vs. COSWAY USA INC. dba ECOSWAY USA, INC, a Delaware corporation, EPICERA INCORPORATED, a Utah corporation, GLEN JENSEN, an individual, JAHSEH K. AHLEM, an individual, REGINA NORIEGA, an individual, DOUGLAS WEAD, BRENT JENSEN, an individual, and Does 1 through 50, inclusive,

Defendant.

COMES NOW, Plaintiffs and allege as follows:

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Introductory Allegations

1. Plaintiffs, ARMEN TEMURYAN and HOURY TARTARIAN, are and at all

times mentioned were individuals residing in the City of Pasadena, County of Los Angeles,

State of California.

2. Plaintiffs are informed and believe and based thereon allege that at all times

herein mentioned, Defendants GLEN JENSEN and BRENT JENSEN (hereinafter

collectively referred to as “JENSEN”) were individuals residing in both in the State of Utah

as well as the County of Orange, California. Plaintiff is informed and believes and on that

basis alleges that Defendants GLEN JENSEN (GJENSEN) and BRENT JENSEN

(BJENSEN) are both officers and directors of COSWAY USA, INC. and EPICERA

INCORPORATED and discharged to enter into agreement for said entities and bind them

thereto.

3. Plaintiffs are informed and believe and based thereon allege that Defendant

COSWAY USA INC. dba ECOSWAY USA, INC. (hereinafter referred to as “COSWAY”)

is, and at all times mentioned herein was, a corporation organized and existing under the

laws of the State of Delaware and qualified with the California secretary of state to do

business in California. Said Defendant’s principal place of business in California is in the

City of Irvine, County of Orange. Said Defendant is a multilevel marketing company that

engages in the sale of goods through various retail stores located throughout the State of

California including the County of Orange.


EPICERA INCORPORATED dba EPIC (hereinafter referred to as “EPIC”) is, and at all

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times mentioned herein was, a corporation organized and existing under the laws of the

State of Utah. Plaintiff is informed and believes that said Defendant’s principal place of

business in California is in the City of Irvine, County of Orange. Said Defendant is a

multilevel marketing company that engages in the sale of goods through various COSWAY

retail stores located throughout the State of California including in the County of Orange.


JAHSEN K. AHLEM (hereinafter “AHLEM”) at all times herein mentioned was an

individual residing in the City of the Santa Barbara, County of Santa Barbara. Further,

Plaintiffs are informed and believe and thereon allege that said defendant, at all times

relevant herein, was an officer and/or authorized representative of each corporate defendant

and entity and authorized to represent said interests and to enter into agreements therefor

and bind said entities to said agreements.


DOUGLAS WEAD (hereinafter “WEAD”) maintains residences in Ladera Ranch and

Laguna Niguel, California. Further, Plaintiffs are informed and believe and thereon allege

that said defendant, at all times relevant herein, was an officer and/or authorized

representative of each corporate defendant and entity and authorized to represent said

interests and to enter into agreements therefor and bind said entities to said agreements.


REGINA NORIEGA (hereinafter “NORIEGA”) maintains residences in Irvine and Los

Angeles, California. Further, Plaintiffs are informed and believe and thereon allege that said

defendant, at all times relevant herein, was an officer and/or authorized representative of

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each corporate defendant and entity and authorized to represent said interests and to enter

into agreements therefor and bind said entities to said agreements.

8. The true name and/or capacities, whether individual, corporate, associate or

otherwise of Defendants DOES 1 through 50, inclusive, are unknown to eh Plaintiffs who

therefore sue said Defendants by such fictitious names, and Plaintiffs will amend this

Complaint to show their true names and/or capacities when the same have been ascertained.

Plaintiffs are further informed and believe and based thereon allege that each of the

Defendants designated herein as a fictitiously named Defendant, is, in some manner,

responsible for the events and happenings herein referred to, either contractually or

tortuously, and caused damages to the Plaintiffs as herein alleged.

9. Plaintiffs are informed and believe and based thereon allege that at all times

herein mentioned, each Defendant was the duly authorized agent, employee, joint venture,

principal and partner of each of the remaining Defendants, and in doing the things

hereinafter alleged, was acting within the course and scope of said agency and employment.

10. Plaintiffs are, and at all times herein were, Independent Business Owners in

the Multilevel Marketing business COSWAY, pursuant to a contract for said business

opportunities. Plaintiff entered into this agreement directly with COSWAY representative;

operating said stores for an extended period of time before the events as herein below

alleged.

11. Plaintiffs are, and at all times herein were retail store operators with

COSWAY. The retail stores are located in the city of Burbank, California and Henderson,

Nevada. As such, Plaintiffs were and are entitled to the immediate and exclusive possession

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of the subject retail stores and all rights as Independent Business Owners of COSWAY.


GJENSEN and DOES 1 through 10 have dominated and controlled the corporation

COSWAY and its business, property and affairs, and that there existed, and now exists,

such a unity of ownership and interest between the individuals and entity, that the

individuality and separate existence of these individuals and entity cease to exist. Thus,

adherence to the separate existence of these individuals and entities would promote

injustice and/or sanction fraud in that these entities were undercapitalized and a mere shell,

conduit and instrumentality through which these individuals carried on their business as if

this entity did not exist.

13. Plaintiffs are further informed and believe and thereon allege that the

following facts further support alter ego liability of Defendant GJENSEN and DOES 1

through 10 for the corporation COSWAY: Defendants failed to properly issue stock,

Defendants diverted corporate assets to the creditor’s detriment by paying employee’s

officer’s and director’s salary with cash and failing to properly report same in accounting

records and as required by governmental agencies, using a corporate entity as a subterfuge

of illegal transactions, commingling personal and corporate assets, undercapitalization, held

out that shareholders were liable for the debt of the corporation to Plaintiffs, diverted

corporate funds to non-corporate uses, disregarded corporate formalities and failed to

maintain adequate corporate records.


GJENSEN and DOES 1 through 10 have dominated and controlled the corporation EPIC

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and its business, property and affairs, and that there existed and now exists, such a unity of

ownership and interest between the individuals and entity that the individuality and separate

existence of these individuals and entity cease to exist. Thus, adherence to the separate

existence of these individuals and entities would promote injustice and/or sanction fraud in

that these entities were undercapitalized and a mere shell, conduit and instrumentality

through which these individuals carried on their business as if this entity did not exists.


following facts further support alter ego liability of Defendants GJENSEN and DOES 1

through 10 for the corporation EPIC: Defendants failed to properly issue stock, Defendants

diverted corporate assets to the creditor’s detriment by paying employee’s, officer’s and

director’s salary with cash and failing to properly report same in accounting records and as

required by governmental agencies, using a corporate entity as a subterfuge of illegal

transactions, commingling personal and corporate assets, undercapitalization, held out that

shareholders were liable for the debt of the corporation to Plaintiffs, diverted corporate

funds to non-corporate uses, disregarded corporate formalities and failed to maintain

adequate corporate records.


corporations COSWAY and EPIC have been dominated and controlled in such a way by

Defendants JENSEN and DOES 1 through 10 and the business, property and affairs, and

that there existed, and now exists, such a unity of ownership and interest between the

corporations COSWAY and EPIC, that the individuality and separate existence of these

corporations cease to exist. Thus, adherence to the separate existence of these corporations

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would promote injustice and/or sanction fraud in that these entities were undercapitalized

and a mere shell, conduit and instrumentality through which these individuals carried on

their business as if these entities did not exist.


following facts further support alter ego liability between the Defendant Corporations:

Defendants transferred assets of COSWAY to EPIC for less than fair market value,

Defendants transferred COSWAY Independent Business Owners and business “down

lines” to EPIC without fair compensation to COSWAY, COSWAY dominated and

controlled finances, policies and practices of EPIC so that EPIC is merely a conduit or

instrumentality of COSWAY in pursuit of a single enterprise. The disregard of the separate

nature of COSWAY and EPIC is necessary to prevent an injustice upon creditors of the

corporations.

FIRST CAUSE OF ACTION

(BREACH OF ORAL, WRITTEN AND IMPLIED CONTRACT AGAINST

DEFENDANTS COSWAY USA, INC., EPICERA INCORPORATED, GLEN

JENSEN AND BRENT JENSEN)

18. Plaintiffs hereby refers to and incorporates herein by such reference

paragraphs 1 through 17, above.

19. Defendants are, and at all times herein, for purposes of the first cause of

action, Cosway Usa, Inc. (“COSWAY”), Epicera Incorporated (“EPIC”), Glen Jensen and

Brent Jensen, collectively referred to as “Defendants,” unless otherwise specified as

specific Defendant.

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20. In or about April, 2013 and thereafter, Defendants GJENSEN became president or

other managing officer of COSWAY, replacing officers with whom Plaintiffs had done

business and previously contracted with COSWAY to be Cosway Independent Business

Owners. In or about this time, JENSEN met with Plaintiffs and verbally represented to

Plaintiffs that JENSEN and COSWAY were planning on expanding the business of

COSWAY and introducing a new multilevel marketing business. In this regard, Defendants

JENSEN represented to and promised Plaintiffs a position in and with the new venture. All

parties agreed verbally to the terms of this agreement. that Plaintiffs would receive a

finder’s fee and compensation equal to 3% in a bargained for exchange for finding any

existing business that was subsequently acquired. GJENSEN stated “my handshake is my

bond,”

21. In or about April, 2013 and thereafter, Defendants JENSEN also represented

to Plaintiffs that they were seeking additional business leaders for the new planned

multilevel marketing business and sought the assistance of Plaintiffs in this regard. As

Plaintiffs had numerous long standing business relationships in the multilevel marketing

industry, Plaintiffs agreed to solicit and market their personal contacts and associates for

this new business venture.. Defendant JENSEN orally represented to, promised and offered

to Plaintiffs for themselves and as officers and authorized agents of COSWAY that

Plaintiffs would receive priority genealogy in the new multilevel marketing business with

guaranteed residual income and standard multilevel marketing industry benefits. This

position offered Plaintiffs additional income and status in multilevel marketing. In

exchange and in consideration for this opportunity Plaintiffs were to use their best efforts to

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make new introductions of any business leaders to Defendants JENSEN for the new

business venture. Plaintiffs accepted and agreed to the offer.

22. In reliance on the above-mentioned promises and agreement, Plaintiffs

immediately performed, undertaking extensive efforts to locate qualified business leaders

for the new multilevel marketing business which later became known as EPIC. As a result

of these efforts, in or about May, 2013, Plaintiffs introduced Defendants AHLEM,

NORIEGA, and WEAD to Defendant GJENSEN. The introduction is confirmed, in part, by

the non-exclusive engagement letter for strategic acquisition dated May 16, 2013.

23. The above-mentioned oral agreement is also confirmed and reduced to written

form by the text messages between Plaintiffs and Defendants JENSEN between April, 2013

and September, 2013. These emails and texts confirm, in part, the terms for and the

agreement regarding Plaintiffs locating business leaders and the introduction of Defendants

AHLEM, NORIEGA and WEAD by Plaintiffs to Defendants, and the efforts to be

undertaken and efforts undertaken by Plaintiffs and the consideration therefor. Plaintiffs did

in fact undertake these efforts and did so in reliance on the prior promises and general

agreement made by Defendants to Plaintiffs as herein alleged.

24. The above-mentioned agreement is also confirmed by the email from

Defendant GJENSEN on his behalf and that of COSWAY and EPIC to Plaintiffs dated July

28, 2013, wherein Defendant GJENSEN again requests that Plaintiffs locate business

leaders for the new business EPIC.

25. Plaintiffs are informed and believe and thereon that basis allege, that

Defendants AHLEM, NORIEA, and WEAD have all received priority genealogy interests

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including “ambassador” positions in the new business EPIC similar to the financial interest

that were part of the benefits promised to Plaintiffs by Defendants JENSEN. Plaintiffs have

not received any of the financial interests in EPIC that were provided to said Defendants

and promised by Defendants to Plaintiffs. In fact, Plaintiffs were cut out and bypassed for

participation by said Defendants, to deprive Plaintiffs of the benefits of this agreement and

so Defendants could benefit from Plaintiffs’ efforts and profit and keep the business

successes for themselves.

26. Plaintiffs have demanded that Defendants provide the financial interests and

benefits to Plaintiffs in EPIC as agreed upon. Defendants have breached the above-

mentioned agreement by failing and refusing to provide to Plaintiffs the promised financial

benefits in EPIC.

27. As a direct and proximate result of Defendant’s breaches of contract by

failing to perform their obligation under the verbal agreement between Plaintiffs and

Defendant to pay the mentioned obligations in EPIC, Plaintiffs have been damaged in a

sum in excess of $2,000,000.00 or according to proof at trial.

SECOND CAUSE OF ACTION




28. Plaintiffs hereby refers to and incorporates herein by such reference


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29. Within the last four years, Plaintiffs entered into written agreements with

Defendants COSWAY wherein Plaintiffs accepted and agreed to the offer by Defendants

JENSEN, EPIC and COSWAY serve as Independent Business Operators to distribute

products for Defendant COSWAY. Plaintiffs are not currently in possession of the written

agreements as they were never provided a copy by the Defendants. The essential terms of

the agreement were that Defendants agreed to pay Plaintiffs commission in a bargained for

consideration, for each of defendants’ products sold by Plaintiffs. Defendants also offered

to pay Plaintiffs commission in exchange for the sale of products by any Independent

Business Owners recruited by Plaintiffs as part of the multilevel marketing arrangement.

Plaintiffs accepted and agreed. In this regard, Defendants agreed to maintain a distributor’s

organization or “downline” and pay Plaintiffs commissions for all product sales in

Plaintiffs’ “downline.”

30. In reliance on the above-mentioned agreement, Plaintiffs immediately

commenced performance to undertake extensive efforts to sell Defendants’ products and to

recruit other independent business owners to sell Defendants ‘products. Plaintiffs also

agreed with Defendants to become store operators in order to increase the commissions

they would earn for the sale of Defendants’ products.

31. In or about 2013, Defendants failed to perform under said agreement and

breached said agreement when they notified Plaintiffs that Plaintiffs were terminated as

Independent Business Owners. Defendants also failed to perform said agreements by

removing and damaging Plaintiff’s “downline” business network and otherwise deny

Plaintiffs the benefits of an Independent Business Owner.

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32. As a direct and proximate result of Defendants’ failure to perform said

obligation, Plaintiffs have been damaged in sum in excess of $1,000,000.00 and according

to proof at trial.

THIRD CAUSE OF ACTION




33. Plaintiff herby refers to and incorporates herein by such reference paragraphs

1 through 32, above.

34. Within the last two years, Plaintiffs entered into verbal and implied

agreements with Defendant where in Plaintiffs accepted Defendant’s offer and agreed to

provide services on behalf of Defendants in operating COSWAY stores located in Burbank,

California and Henderson, Nevada. Defendants agreed in the bargained for exchange to pay

Plaintiffs for services rendered based upon a percentage of the monthly sales at the store.

Said agreement is confirmed, in part, by the letter sent by Defendants to Plaintiffs on June

21, 2013 confirming that plaintiffs were store operators for Defendants.

35. In reliance on the above-mentioned agreement, Plaintiffs changed their jobs

and positions in order to perform and operate the stores Plaintiffs undertook and sought to

sell Defendants products and recruit Independent Business Owners for Defendants.

36. On or about June 21, 2013, and thereafter, Defendant unlawfully and in

violation of the written agreement then in existence, without legal recourse or due process

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took possession from Plaintiffs of the COSWAY retail stores located in Burbank, California

and Henderson, Nevada. Defendant also breached and failed to perform the agreement by

taking, converting and retaining personal property owned by Plaintiffs when the COSWAY

Burbank and Henderson retail stores were taken back by Defendants. Plaintiffs believe the

fair market value of the personal property is in excess of $50,000. Defendants also breached

the agreement by retaining Plaintiffs security deposits for the retail stores in the amount of

$4,000.00, according to proof.

37. Defendants also breached and failed to perform said agreements by replacing

Defendants with new store operators outside Plaintiff’s genealogy thereby effectively

cutting off the benefits of plaintiffs "downline" in the multilevel marketing business.

38. As a direct and proximate result of Defendants failure to perform and breach

of contract, Plaintiffs have been damaged in a sum according to proof at trial.

FOURTH CAUSE OF ACTION

(BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING

AGAINST DEFENDANTS COSWAY USA, INC., EPICERA INCORPORATED,

GLEN JENSEN AND BRENT JENSEN)

39. Plaintiff hereby referred to you and incorporates herein by such reference


40. Defendants, COSWAY, EPIC and their officers and agents, when they

entered into the above mentioned oral and written agreements with Plaintiffs, impliedly

agreed, and in fact owed to Plaintiffs a duty of good faith and fair dealing, which is a part of

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every contract in California. Defendants conduct as alleged herein constitutes a bad faith

breach of such duty in that Defendant refused to honor their agreements to Plaintiffs as

store operators and Independent Business Owners with COSWAY. Defendants conduct

also breached such duty in that Defendants failed to honor their obligations to Plaintiffs as

to EPIC resulting in the loss of a valuable business interest including residual income for

Plaintiffs in EPIC. Defendants also breached such duty by wrongfully taking appropriation

and locking Plaintiffs from the Burbank and Henderson COSWAY stores, retaining

converting Plaintiffs personal property in the COSWAY stores, terminating Plaintiffs as

Independent Business Owners in COSWAY and not honoring Plaintiffs “downlines” and

genealogy in COSWAY and EPIC. Defendant also breached such duty by taking

affirmative actions in bad faith to cut off Plaintiffs “downline” and genealogy by

transferring clients in Plaintiffs “downline” to others in COSWAY and EPIC.

41. Defendants conduct was in bad faith as the true intention of Defendant was to

deprive Plaintiffs of their rightful interest in COSWAY and EPIC so that Defendants and

others would obtain a more favorable financial interest in COSWAY and EPIC, as well as

defendants keeping Plaintiff’s downstream association in multi-level marketing. Plaintiffs

are informed and believe and on that basis alleged that Defendants obtained a more

valuable genealogy an epic by refusing in bad faith to honor Plaintiffs interest in EPIC.

42. Plaintiffs have performed all conditions, covenants, and promises required on

Plaintiff’s part to be performed in accordance with the terms and conditions of the contract

between Plaintiffs and Defendants. Pursuant to the aforementioned agreement, Plaintiffs

operated the COSWAY stores, sought to sell Defendants products, recruit Independent

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Business Owners for Defendants, undertook extensive efforts to sell Defendants’ products

and to recruit other independent business owners to sell Defendants ‘products, and agreed

with Defendants to become store operators in order to increase the commissions they would

earn for the sale of Defendants’ products.

43. After Plaintiffs expended the time, energy, money, resources, exhausted

business relationships and contacts, and located and secured business locations, Defendant

refused to adhere to or uphold that same contract under which Plaintiffs had already

satisfied their obligations. Defendants subsequently barred, and continues to bar Plaintiffs

from any benefit promised to them by failing to and consciously refusing to fulfill their

obligations to pay Plaintiffs for services rendered based upon a percentage of the monthly

sales at the store, maintain a distributor’s organization or “downline” and pay Plaintiffs

commissions for any product sales in Plaintiffs’ “downline,” and pay Plaintiffs commission

in exchange for the sale of products by any independent business owners recruited by

Plaintiffs, pursuant to the contract between Plaintiffs and Defendants. Defendants had no

intent to act on or accomplish the above listed promises that comprise the contract prior to,

at the time of or any time thereafter the contract was made.

44. Instead Defendant took possession from Plaintiffs of the COSWAY retail

stores, took possession of Plaintiff’s personal property in said stores, failed and refused to

maintain Plaintiffs genealogy and “downline,” and failed and refused to pay Plaintiffs any

commission based upon the monthly sales of their stores or for the sale of products by any

independent business owners recruited by Plaintiffs. Defendant, by these actions,

effectively made it impossible for Plaintiffs to recoup any of the time, energy, money, and

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resources Plaintiffs had expended in reliance on and pursuant to the contract for the

expansion and building of COSWAY and EPIC. In acting in the manner described in this

Paragraph, Defendant violated the implied covenant of good faith and fair dealing that

exists in the between Plaintiff and Defendant.

45. As a proximate result of the acts and conduct of Defendants, Plaintiffs have

incurred damages in sum according to proof at trial but in excess of $2 million.

FIFTH CAUSE OF ACTION

(COMMON COUNT – REASONABLE VALUE OF WORK, LABOR AND

SERVICES/QUANTUM MERUIT AGAINST DEFENDANTS COSWAY, EPIC,

GLEN JENSEN AND BRENT JENSEN)

46. Plaintiff hereby refers to and incorporates here in by such reference


47. Within the last four years, at Defendants request, Plaintiffs perform services

in locating business leaders, operating to COSWAY stores, and serving as Independent

Business Owners of COSWAY, pursuant to the agreements therewith as herein alleged.

Plaintiffs and Defendant both understood that Plaintiffs would be compensated for

performing the services. Defendant knew that the services were being provided and never

told Plaintiffs to stop performing these services. Defendant accepted, used, and enjoyed the

services provided by Plaintiffs.

48. The fair and reasonable value of the services plaintiffs provided to Defendants

is at least $500,000 or according to proof at trial.

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49. Although demand therefore has been made, there remains do, owing an

unpaid the sum of $500,000 or according to proof, together with interest there on at the

legal rate of 10% per annum.

SIXTH CAUSE OF ACTION

(CONVERSION AGAINST DAFENDANTS COSWAY, EPIC AND JENSEN AND

BENT JENSEN)

50. Plaintiffs repeat, repleads, and incorporates herein by this reference


51. At all times here in mentioned, and in particular on or about June, 2013,

Plaintiffs were the owners of and entitled to the possession of the personal property that

was located at the Burbank and Henderson COSWAY stores. The stores contained products

ordered from Defendants and paid for by Plaintiffs, as well as Plaintiffs personal property.

52. In or about June, 2013, the above-mentioned personal property had a value of

at least $50,000.

53. In or about June, 2013, Defendants, and each of them, exercised self-help

without due process or order and took the above-mentioned property from Plaintiffs

possession, evicted Plaintiffs from the stores and converted the same to their own use.

54. As a proximate result of Defendants conversion, Plaintiffs have wrongfully

been deprived of their personal property, all to Plaintiffs damage in a sum according to

proof.

55. Between the time of Defendants conversion of the above-mentioned property

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to their own use and the filing of this action, Plaintiffs has expended time and money in

pursuit of the converted property, all to Plaintiffs further damage in sum according to proof.

56. At the time Defendants, and each of them, converted the property,

Defendants, and each of them, were guilty of malice, oppression, and willful disregard for

the rights of Plaintiffs in that Defendants, without making any investigation and with

reckless indifference and wanton disregard for the rights of any person who may have had

an interest in the converted property, and particularly for the rights of Plaintiffs, did convert

the property. Further, after knowledge and notice of Plaintiffs interest in the converted

property was given to Defendants, Defendants failed and refused, and continue to fail and

refuse, to return the property. By reason of these acts Plaintiffs have been oppressed and

seek punitive and exemplary damages in a sum according to proof.

SEVENTH CAUSE OF ACTION

(FRAUD AND DECEIT – PROMISE MADE WITHOUT ANY INTENTION OF

PERFORMING AGAINST DEFENDANTS COSWAY, EPIC, JENSEN AND

JENSEN)

57. Plaintiff hereby refers to and incorporates here and by such reference


58. Between April, 2013 and September, 2013, officers of Defendant COSWAY

and EPIC, JENSEN and JENSEN, verbally represented to Plaintiffs that they intended to

introduce a new multilevel marketing business venture, EPIC. Defendants JENSEN

represented and promised to Plaintiffs that they would receive priority genealogy in the new

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multilevel marketing business with guaranteed residual income and standard multilevel

marketing industry benefits. Defendants knew that Plaintiffs had extensive contacts in the

multi level marketing industry and had been successful in the past with bringing people in

the multi level marketing programs in which they have been involved. Defendants wanted

Plaintiffs to introduce any business leaders they were associated with to Defendants

JENSEN for the new business, EPIC. These verbal promises and inducements were

memorialized and confirmed, in part, by the aforementioned emails and text messages.

Plaintiffs were to be on the ground floor, to gain the best benefit, when the new company,

EPIC was to launch.

59. In or about May, 2013, based upon the fraudulent representations and

promises of residual income and priority genealogy by said Defendants individually and on

behalf of COSWAY and EPIC, to Plaintiffs, Plaintiffs began to contact and introduce

various business leaders, including Defendants AHLEM, NORIEGA, and WEAD to

Defendants JENSEN and. Despite the efforts made and providing all introductions,

Plaintiffs did not receive any of the promised interest by Defendants in the new multilevel

marketing business known as EPIC.

60. Plaintiffs are informed and believe and onto that basis allege that Defendants

AHLEM, NORIEGA, and WEAD all received priority genealogy in the new multilevel

marketing business with a guaranteed residual income and standard multilevel marketing

industry benefits similar to the benefits promised to Plaintiffs by Defendants JENSEN and

denied to Plaintiffs.

61. In truth and in fact Defendants had no intention to keep their promise to

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Plaintiffs at the time the promises were made.

62. At the time Defendants made the promises and representations referred to

hereinabove, Defendants had no intention of fulfilling same. Defendants’ true intention was

to take advantage of Plaintiffs’ reputation and experience and to in the multitasking

industry and to induce Plaintiffs to incur substantial expenses and time in locating business

leaders to join the new business EPIC for the sole benefit of Defendants. Defendants’ true

intention was to obtain the benefit of the new business leaders introduced by Plaintiffs and

not provide Plaintiffs with any financial benefit from EPIC as promised by Defendants

memorialized by texts and emails between Plaintiffs and Defendants.

63. At all times relevant herein, Plaintiffs were ignorant of Defendants intention

not to perform as promised and represented, and of Defendants true intentions. Plaintiffs

were falsely induced to encourage extensive labor and substantial expenses in locating

business leaders to join EPIC in reliance on the promises and representations of Defendant.

Plaintiff's actions were reasonable and justified because Plaintiff had no way of knowing of

Defendants intention not to perform as promised and represented, or their true intentions.

64. At all times relevant here in, Defendants were aware that Plaintiffs were

ignorant of Defendants intentions are not to perform as promised, or their true intention.

65. As direct and proximate result of Defendants fraud and deceit, Plaintiff

sustained general, compensatory, and consequential damages in a some according to prove

that trial together with interest thereon as provided by law.

66. In doing the acts and taking the actions here in alleged, Defendant acted

intentionally, maliciously, wantonly, and fraudulently, with a conscious disregard for the

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rights of Plaintiffs, and with the intent to vex, injured, annoy, and damage Plaintiffs .

Plaintiffs are there by entitled to an award of punitive and exemplary damages in a sum to

be determined according to proof at the time of trial.

EIGHTH CAUSE OF ACTION

(FOR NEGLIGENT MISREPRESENTATION AGAINST DEFENDANTS

COSWAY, EPIC, JENSEN AND JENSEN)

67. Plaintiff hereby refers to and incorporates here and by such reference


68. When Defendants made, authorized, ratified or approved the above-

mentioned representations, they had no sufficient or reasonable grounds for acting and,

therefore, acted negligently and carelessly.

69. As a direct and proximate result of the negligence of misrepresentation by

Defendants, Plaintiff suffered nervousness, mental pain, anguish, embarrassment, difficulty

in sleeping, and emotional distress, all to their damage according to proof.

70. As a further direct and proximate result of the negligence misrepresentations

by Defendants, Plaintiffs have incurred loss of profit, loss of earning capacity, loss of

business opportunities, lots of time, loss of money, and energy made in reliance on and as a

result of the loss of the promised financial interest in EPIC made by Defendants.

71. As a further direct and proximate result of the negligence representation by

Defendants, Plaintiffs have suffered special damages and general damages in a according to

proof at trial.

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NINTH CAUSE OF ACTION

(UNFAIR COMPETITION/BUSINESS PRACTICES – BUSINESS AND

PROFESSIONS CODE SECTION 17200 AGAINST ALL DEFENDANTS)

72. Plaintiffs hereby refers to and incorporates herein by reference paragraphs 1

through 71, above.

73. At all times herein mentioned, Plaintiffs were store operators and Independent

Business Owners with COSWAY.

74. In or about June, 2013, Defendants engaged in unfair and fraudulent business

practices when Defendants took possession of the COSWAY Burbank and Henderson

stores the Plaintiffs were operating, in violation of the Defendants aforementioned promises

to Plaintiffs. Defendants also unfairly and fraudulently informed Plaintiffs that they were

terminating Plaintiffs as Independent Business Owners of COSWAY in violation of the

Defendants aforementioned promises and business agreements with Plaintiffs to Plaintiffs.

Defendants unfairly and fraudulently retained Plaintiffs personal property in the COSWAY

stores upon self-help termination of Plaintiffs as Independent Business Owners as the

COSWAY stores in Burbank and Henderson and the storm trooper tactics in taking control

of said stores and property. In addition, Defendants unfairly and fraudulently replaced

Plaintiffs with alternate operators in the Burbank and Henderson stores. These alternate

operators were outside of Plaintiffs genealogy thereby effectively cutting off Plaintiff’s

“downlines” and commissions for the sale of COSWAY products.

75. Plaintiffs are informed and believes that Defendants undertook to deceive

Plaintiffs and falsely induced Plaintiffs to introduce and incorporate new Independent

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Business Owner to Defendants for the unfair and fraudulent purpose of terminating

Plaintiffs “downline” and genealogy thereby cutting Plaintiffs out of the agreement for

priority genealogy and residual income creating financial gain and benefit for Defendants

and allowing Defendants to acquire other select Independent Business Owners and store

operators of COSWAY. Ongoing unfair and business acts and practices by Defendants

violate Business and Professions Code section 17200.

76. In the course of conducting this business, Plaintiffs, to their detriment, have

expended a great deal of time and money in building a clientele, including, but not limited

to, ascertaining the location and needs of distributors and customers and prospective

distributors and customers, and developing and maintaining a business relationship with

them. Plaintiff are injured as to their loss of time, money and efforts in obtaining clientele,

business locations, customers and distributors. At all times herein, Plaintiffs enjoyed a

substantial “downline” of distributors and customers and a specific genealogy in the

multilevel marketing business of COSWAY until Defendants fraudulently and unfairly

deprived Plaintiffs of the promised benefits of such actions.

77. As alleged above, Plaintiffs were promised a financial interest in EPIC by

Defendants for introducing the business leaders (Defendants AHLEM, NORIEGA, and

WEAD) to Defendant's. In addition to the Defendants promises, the standard practice of

multilevel marketing industry is such that Plaintiffs are entitled to a financial interest in

EPIC for the introduction of said business leaders to Defendants. Based upon Plaintiffs

consistent request and Defendant’s ongoing denial of an interest in EPIC for Plaintiffs,

Defendants engaged in unfair and fraudulent business or practice pursuant to Business and

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Professions Code section 17200.

78. In or about, July, 2013, Defendants represented and promised to Plaintiffs that

COSWAY Independent Business Owners “downlines” would be transferred into EPIC with

the identical genealogy so that the Independent Business Owners investment an interest in

COSWAY would be protected. Plaintiff is informed and believes and on that basis alleges

that Defendant are unfairly and selectively providing individuals with superior genealogy in

EPIC, as exemplified in the placement of Defendants AHLEM, NORIEGA, and WEAD,

thereby not protecting the genealogy of independent business owners of COSWAY

including Plaintiffs. Plaintiffs are informed and believes and on that basis allege that the

Defendants are not honoring the genealogy of COSWAY Independent Business Owners in

that Defendants are changing these Independent Business Owners genealogy to other

genealogy groups at EPIC. This conduct effectively deprives existing COSWAY

Independent Business Owners, including Plaintiffs, of their valuable genealogy interest in

COSWAY. These ongoing unfair and fraudulent acts and practices violate Business and

Professions Code section 17200.

79. Defendants also unlawfully, unfairly and fraudulently conspired among

themselves to deprive Plaintiffs of their promised financial interest in EPIC at the time that

Defendants made promises to Plaintiffs to protect their genealogy in transferring interest

into EPIC.

80. As a proximate result of Defendants, and each of them, unlawful actions,

Plaintiffs were effectively denied the benefits of their business “downline” they had

established with COSWAY thereby cutting off all financial benefits the Plaintiff. But for

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Defendants interference with Plaintiffs business as herein alleged, Plaintiffs distributors and

customers would have continued to transact business with Plaintiffs, Plaintiffs would have

continued to receive financial benefit from COSWAY, and Plaintiffs would have retained

their priority genealogy. Plaintiffs were also wrongfully denied an interest in EPIC due to

the unfair and fraudulent actions of Defendants.

81. Plaintiffs were subject to unfair business dealings by Defendants when they

were falsely lead to invest their time, money and resources into expanding Defendants

business by introducing new Independent Business Owners (Defendants AHLEM,

NORIEGA, and WEAD) to Defendants whom would, unbeknownst to Plaintiffs, but

always at the intent of Defendants, take Plaintiffs positions as Independent Business

Owners, take Plaintiffs priority positions in the genealogy and reap the benefits promised to

but subsequently taken from Plaintiffs by Defendants. Plaintiff were deceived by

Defendants when they were induced to engage in business efforts to help expand the

business stores of COSWAY and build EPIC. Plaintiff were not compensated for their

efforts in engaging in said actions to the unfair and unilateral benefit of Defendants, and

Plaintiffs lost use and enjoyment of their property, valuable time, valuable resources,

important business relationships and potential and actual business opportunities in doing so.

Plaintiff is entitled to relief, including full restitution and/or disgorgement of all revenues,

earnings, profits, compensation, and benefits which may have been obtained by Defendants

as a result of such unfair business acts and practices.

82. Defendant’s contract and agreement with Plaintiffs and Plaintiff’s actions, set

forth above, pursuant to that agreement enabled and advanced Defendant’s opportunity,

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ability and intent to engage in unfair competition by which Defendants used the new

business leaders, (Defendants AHLEM, NORIEGA, and WEAD) that Plaintiffs acquired

and introduced to Defendants and that under the agreement Plaintiffs would benefit from

such introduction, to replace Plaintiffs, and subsequently redirect Plaintiffs promised

benefits (priority genealogy, residual income, and interest in EPI and COSWAY) to said

Defendants AHLEM, NORIEGA, and WEAD. Further, Defendants had no intention of ever

providing the said benefits to Plaintiffs or fulfilling their obligations under the contract and

agreements upon the introduction of new business leaders by Plaintiffs. However,

Defendants allowed Plaintiffs to operate under a false and fraudulent promise despite

Defendants knowledge of Plaintiffs lack of knowledge or any indication that Defendants are

and were never going to honor the promise made to Plaintiffs. Defendants’ actions,

amongst other things are unlawful, unfair, and fraudulent business act and practice, unfair,

deceptive, and untrue.

83. Plaintiffs seeks restitution and disgorgement of all amounts received by

Defendants as a result of their unfair and fraudulent business and practices as specified

above in an amount according to proof.

TENTH CAUSE OF ACTION

(FOR CIVIL CONSPIRACY AGAINST DEFENDANTS WEAD, NORIEGA, AND

AHLEM AND DOES 1 THROUGH 10)

84. Plaintiff hereby refers to an incorporated herein by reference paragraphs 1

through 83, above.

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85. From in or about May, 2013 through February, 2014, Defendants, and each of

them, knowingly, willfully, and maliciously conspired and agreed amongst themselves to

do each of the acts alleged herein, including wrongfully depriving Plaintiffs of any financial

interest in EPIC all for the financial benefit of the conspiring Defendants. Said Defendants

also conspired to induce Defendants JENSEN to not honor their verbal compromise to

Plaintiffs to provide Plaintiffs with the financial interest in EPIC which actions also

constituted a fraud and deceit upon Plaintiffs.

86. Pursuant to such conspiracy and agreement, and in furtherance thereof,

Defendants, acted as alleged herein.

87. As a proximate result of Defendants wrongful acts pursuant to the conspiracy

as herein alleged, Plaintiffs have suffered nervousness, mental pain, anguish,

embarrassment, difficulty in sleeping, and emotional distress, all to their damage in a sum

according to proof.

88. As a further direct and proximate result of said conspiracy, Plaintiffs had

incurred loss of profit, loss of earning capacity, loss of business opportunities, loss of use of

the subject property, loss of time, money and energy, and pecuniary loss in a sum according

to proof.

89. As a further direct and proximate result of said conspiracy, Plaintiffs have

suffered special damages and general damages in an exact amount unknown to them at this

time, but according to proof at trial.

90. In doing the acts herein alleged, Defendant acted with conscious disregard of

the rights of Plaintiffs, with such outrageousness and reprehensibility that Plaintiffs suffered

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substantial injury and damages, with conscious disregard to the probability that their

conduct would injury and damage Plaintiffs, with callous disregard for Plaintiffs, and with

oppression, malice or fraud, such that Plaintiffs are entitled to punitive damages against

Defendants, in a sum according to proof.

ELEVENTH CAUSE OF ACTION

(FOR INTENTIONAL INTERFERENCE WITH ECONOMIC RELATIONSHIP

AGAINST DEFENDANTS WEAD, NORIEGA AND AHLEM AND DOES 1

THROUGH 20)

91. Plaintiff repeats, repleads, and incorporates herein by this reference


92. In or about May, 2013, Plaintiffs introduced Defendants AHLEM,

NORIEGA, and WEAD to Defendants GLENN JENSEN and BRENT JENSEN as business

leaders for the new multilevel marketing business EPIC. Defendant knew that Plaintiffs

were entitled to receive financial benefits in EPIC as a result of the introduction of said

business leaders to EPIC. In fact, Defendants AHLEM, NORIEGA, and WEAD all

received financial benefits in EPIC including, amongst other things, a designation as

"Ambassador" in the genealogy.

93. Despite such knowledge, Defendants directly interfered and disrupted

Plaintiffs prospective business relationship with EPIC, resulting in EPIC not providing any

financial benefits to Plaintiffs. As a result Plaintiffs sustained general damages and loss of

profits the nature and extent of which is unknown to Plaintiffs at this time; such proof will

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be made at the time of trial. Plaintiffs are informed and believes that said damages are in

sum within the jurisdiction of this court.

94. By acting as here in alleged, Defendants intended to interfere with and disrupt

the business relationship between Plaintiffs and COSWAY and the prospective business

relationship between Plaintiffs and EPIC. Such acts were done with the further intent to

injure Plaintiffs and Plaintiffs business and thereby gain an unfair competitive advantage

over Plaintiffs. As such, Defendants acted maliciously and oppressively, and Plaintiffs are

entitled to an award of exemplary and punitive damages in a sum according to proof at trial.

TWELFTH CAUSE OF ACTION

(ACCOUNTING AGAINST ALL DEFENDANTS)

95. Plaintiff hereby refers to and incorporates herein by such reference


96. As a result of the aforementioned acts by Defendants, Plaintiffs had not

received monies which are rightfully due to Plaintiffs from COSWAY and EPIC.

97. The amount of money due from Defendants to Plaintiffs is unknown to

Plaintiffs and cannot be ascertained without an accounting of sales made by COSWAY and

EPIC for which Plaintiffs are entitled to an interest. The amount of money due to Plaintiffs

for commissions, residual income and other amounts also cannot be ascertained without an

accounting of all monies received by each Defendant from COSWAY and EPIC as

Plaintiffs should have received similar amounts of monies from EPIC. Plaintiffs also seek

an accounting of all sales by COSWAY to determine the amount of money due to Plaintiffs

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from COSWAY.

98. Plaintiffs are informed and believes that the amount due to Plaintiffs is within

the jurisdictional limits of this court

We are for, Plaintiffs praise judgment against Defendants, and each of them, as

follows:

AS TO THE FIRST, SECOND, THIRD, FOURTH, FIFTH, AND EIGHTH CAUSES

OF ACTION AGAINST DEFENDANTS:

1. For general and special damages in a sum according to proof at the time of trial;

2. For interest thereon according to proof at time of trial

AS TO THE SEVENTH, TENTH, AND ELEVENTH CAUSES OF ACTION

AGAINST DEFENDANTS:

3. For general and special damages in a sum according to proof at time of trial;

4. For interest at a maximum legal rate;

5. For punitive damages according to proof;

AS TO THE TWELFTH CAUSE OF ACTION AGAINST DEFENDANTS:

6. For an accounting of all sales by Defendants for which Plaintiffs may be entitled to

commissions or residual income;

7. For an accounting of all monies received by Defendants from COSWAY and EPIC;

8. For the amount found to be due from Defendants to Plaintiffs as a result of the

accounting;

AS TO THE SIXTH CAUSE OF ACTION AGAINST DEFENDANTS:

9. For the value of the property converted in the sum according to proof at trial;

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10. For interest at the legal rate on the foregoing sum;

11. For damages for the proximate and foreseeable loss resulting from Defendants’

conversion in a sum according to proof;

12. For damages of time and money properly expended in pursuit of the converted

property in a sum according to proof;

13. For punitive and exemplary damages in a sum according to proof;

14. For costs of suit herein incurred, including attorneys’ fees; and

15. For such other and further relief as the Court may deem proper.

It is respectfully submitted Defendant’s motion to dismiss be denied.

DATED: December 18, 2014

I.DONALD WEISSMAN WEISSMAN LAW FIRM

By: Attorneys for Plaintiffs,

ARMEN TEMURYAN & HOURY TARTARIAN

Temuryan vs. Cosway, et al Second Amended Complaint

Small Business & Entrepreneurship