ASSESSMENT OF THE KING COUNTY SUPERIOR COURT OF THE STATE OF WASHINGTON
NO. 98-2-15585-0 SEA (Southeast Asia)
COMPLAINT FOR THE FIRST TIME
GARY TAYLOR and his wife, KATHY TAYLOR, are a husband and wife team.
Plaintiffs,
vs.
SAMIR THAPIT and THERESA D. ATTALAH, a married couple; BRADLEY and JULIE DUNCAN, a married couple; WORLD WIDE GROUP, L.L.C., a Washington Limited Liability Company; ATTALAH MOTIVATION, INC., a Washington Corporation; ATTALAH ENTERPRISES, INC., a Washington Corporation; DUNCAN INTERNATIONAL, INC., a Washington Corporation; WORLD
Defendants.
NOW, the above-mentioned litigants have arrived, and their claim is as follows:
PARTIES
1. The plaintiffs, Kathy Taylor and Gary Taylor, are a married couple who live in the county of King in the state of Washington.
2. It should be noted that the defendant Amway Corporation is a foreign corporation that conducts business in King County, Washington.
3. Samir Thapit and Theresa D. Attalah, the defendants, are a married couple who live in the county of King in Washington state. Among the Washington corporations are Attalah Motivation, Inc., Attalah Enterprises, Inc., Attalah International, Inc., all of which are owned and run by Samir Thapit and Theresa D. Attalah, and which conduct business in King County, Washington, among other places (hereinafter referred to as "Defendants Attalah").
4. Bradley D. and his co-defendants The Duncans, a married couple from King County, Washington, live at their home. Founded and operated by Bradley D. Duncan, Duncan International and Duncan Motivation are two of the company's divisions. and Julie Duncan, who live in King County, Washington, and conduct business there (hereinafter referred to as "Defendants Duncan").
5. Defendant World Wide Group, L.L.C. is a Washington Limited Liability Company that conducts business in the county of King in the state of Washington. "World Wide" is a term used to refer to the entire world.
JURISDICTION AND PLACE OF PERFORMANCE
6. All of the defendants' actions and inactions took place in King County, Washington, and were therefore subject to the jurisdiction of the court referred to above.
ALLEGATIONS RELATING TO THE ACTUALITY
7. Manufacturer and distributor of a wide range of consumer household products, Amway sells its products through hundreds of thousands of distributors throughout the United States.
8. As part of a pyramid-style sales plan, any purchase or sale of Amway goods made by a distributor benefits not only Amway, but also those other Amway distributors who are positioned higher up in the Amway distributorship pyramid. Those who are below a distributor in his or her branch of the pyramid are referred to as the distributor's "downline," and those who are above a distributor in his or her branch of the pyramid are referred to as the "Distributor's upline." In order to earn significant profits as an Amway distributor, one must build a substantial downline organisation by recruiting and sponsoring other distributors.
9. Amway sells, distributes, or otherwise supplies goods for a valuable consideration through independent agents or distributors at various levels, wherein such agents or distributors may recruit other agents or distributors, and wherein commissions, cross-commissions, bonuses, refunds, discounts, dividends, or other considerations in the programme are or may be paid as a result of the sale of such goods or services or telecommunications services or telecommunications services or telecommunications services.
10. World Wide operates a pyramid-type business, in which Amway distributors are "supported" in the development of their downline by mandating the sale of World Wide's "motivational" books, audio tapes, video tapes, and other written materials, as well as the purchase of World Wide products from other distributors. In order for World Wide to be profitable, it must first and foremost benefit its principles, who are at the pinnacle of the firm. While working as Amway distributors, the principles in World Wide derive the vast majority of their profits from the sale of World Wide's motivational material as well as from the holding of "motivational meetings," which they mandate that those in their downline in their business attend in exchange for which World Wide and the upline receive compensation.
11. Amway's World Wide division is responsible for a significant portion of the company's sales and wields significant power at the company's corporate headquarters in Ada, Michigan.
12. Defendants Duncan and Attalah are Amway distributors who work for the company's World Wide network of offices.
13. Defendants Duncan and Attalah have established their own businesses in which they publish and/or distribute motivational materials, such as books, audio cassette tapes, and video cassette tapes, as well as organise and promote motivational rallies for Amway distributors throughout the United States. Duncan and Attalah have also established their own businesses in which they publish and/or distribute motivational materials. World Wide, Duncan and Attalah operate their individual enterprises through which they sell large quantities of motivational materials to their respective downline distributors and stage rallies across the United States, which their downline distributors are expected to pay to attend.
14. Defendants Duncan and World Wide obtain a significant percentage of their income from the selling of non-Amway motivational materials to members of their downlines, as well as from the money gained through their motivational rallies. Defendants Duncan and World Wide are not affiliated with Amway.
15. Individuals that are recruited into the business are never informed by Amway and World Wide that the enormous wealth that upline Diamonds, Executive Diamonds, Double Diamonds, and Crowns display in meetings is a ruse to attract new distributors into "the business."
16. Kathy Anderson Taylor started an Amway business in 1991, under the sponsorship of Chris and Peggy Werenka and with the support of the defendants' organisations, which she continued to this day. Kathy Taylor's huge investment of time and work into her business has resulted in her achieving "Gold Direct" status in a relatively short period of time as a direct result of her efforts.
17. The defendants World Wide, Attalah, and Duncan never informed her that the sale of business support materials and attendance at meetings was not only required and necessary in order to achieve the enormous wealth these defendants claimed to have amassed through their Amway businesses, but that the sale of these materials constituted an illegal pyramid scheme as well. There was no indication to the plaintiffs that she had been awarded a licence inside the defendants' organisations to solicit new licensees in order to assist the defendants' illegal scheme's marketing.
18. Plaintiffs were repeatedly told or caused to be told by defendants World Wide, Duncan, and Attalah that their success as Amway distributors was contingent on their purchase of motivational materials published and/or distributed by defendants World Wide, Duncan, and Attalah and attendance at meetings sponsored by them, and that plaintiffs would fail if they did not purchase such materials and attend meetings. The defendants (World Wide, Duncan, and Attalah) further represented or caused to be represented to plaintiffs that they should only buy motivational materials produced and/or distributed by defendants World Wide and Duncan and Attalah, and that they should not purchase any other motivational materials.
19. Plaintiffs were also advised to purchase and require their downline distributors to purchase a weekly supply of defendants' motivational audio tapes through a "standing order" tape-of-the-week programme that defendants World Wide, Duncan, and Attalah refer to as the "S.O.T." programme, which defendants World Wide, Duncan, and Attalah refer to as the "S.O.T." programme. Plaintiffs' success as an Amway distributor, and the success of their downline distributors, according to defendants, was dependent on their weekly purchases of defendants' audio recordings, which defendants said was crucial to their success. If other distributors in either their upline or downline ceased ordering tapes, books, and attending the defendants' profitable rallies on a regular basis, defendants warned plaintiffs that they were to "cut out like cancer" these distributors from their social lives.
20. Defendants World Wide, Duncan, and Attalah further represented to plaintiffs that the only way for plaintiffs to be successful Amway distributors and to create successful Amway distributors downline from them was to purchase motivational and promotional materials prepared by defendants World Wide, Duncan, and Attalah, to pay to attend meetings and conferences sponsored by them, and to recruit and sponsor other Amway distributors. Plaintiffs did not comply with these representations.
21. When it comes to motivational materials and motivational rallies, Amway was well aware that the aforesaid misrepresentations about defendants World Wide, Duncan, and Attalah regarding such materials and rallies were being made to Amway distributors, and that in practise, sales of such materials within the World Wide organisation were consistently being conducted in violation of Amway's rules, including without limitation, the prohibition on selling to minors.
22. The continuation of such misrepresentations and rule violations was in Amway's economic self-interest, and despite the fact that Amway had been made aware of these practises for years, the company has never terminated the distributorships of Duncan or Attalah, or made any credible effort to bring their practises in violation of Amway's rules to an end, according to the lawsuit.
23. Plaintiffs purchased, and forced their downline to purchase, substantial quantities of defendants World Wide, Duncan, and Attalah's motivational materials and attended defendants' motivational rallies in reliance on the misrepresentations of defendants World Wide, Duncan, and Attalah.
24. In addition to the foregoing, defendants Duncan and Attalah, with the knowledge of World Wide and Amway, engaged in a regular practice of plaintiffs' downlines, cutting out the plaintiffs from the organization they had built.
25. On various occasions, defendaPlaintiffs' downline distributors complained that defendants sold or forced the sale of Amway and non-Amway products directly to them, so interfering with their distributorship relationships.
26. Defendants Attalah disparaged plaintiffs to plaintiffs' downline distributors on a number of times, all with the knowledge of World Wide, Duncan, and Amway, in an attempt to interfere with plaintiffs' downline distributorship ties and isolate plaintiffs from upline assistance.
27. In the middle of 1993, Roger Connolly, a member of the plaintiffs' downline, was being "counselled" by Samir Attalah in connection with his Amway business. Samir Attalah, in violation of Amway standards, used his position and influence to persuade Mr. Connolly into taking out a $20,000 loan so that he could utilise the money to invest in a land development project. According to Mr. Attalah, he was investing money into the plan and was assured a return on his investment and return on his return on investment. Mr. Attalah made no mention of the fact that he would get twenty percent (20%) of the proceeds from each transaction he sought. Mr. Attalah also utilised his power and status in World Wide and Amway to exert pressure on additional downlines of Kathy Taylor, including but not limited to Patrick Schultz, at or around the same time.
28. Mr. Attalah advised Mr. Connolly and Mr. Schultz that their investments had "gone sour" in the early to mid-1995 period. Despite the fact that he had made money off of their investments, Mr. Attalah never told them of this.
During the first few months of 1993, Samir Attalah began dating and having sexual relations with one of the plaintiffs' downline sponsors, a woman who was then 19 years old. In August 1993, Mr. Attalah's intentions to continue sexual interactions with her in private while wooing other women in public became obvious, and he was expelled from the country. This young woman became dissatisfied with Mr. Attalah and stopped attending meetings and participating in the plaintiffs' operations. The plaintiffs questioned Mr. Attalah about their business relationship, and Mr. Attalah assured her that her business would not be adversely harmed by the relationship.
thirty-one. Defendants Attalah and Duncan began undermining the authority and status of Chris and Peggy Werenka in late 1995 and early 1996, by making false and defamatory statements in an attempt to force the Werenkas to give up their lucrative Amway business for the benefit of defendants Attalah and Duncan.
31, In the course of late 1995 and early 1996, after Mr. Attalah became aware that Ms. Taylor was aware of his failed business dealings with Ms. Taylor's downline sponsors, defendants Attalah, Duncan, and World Wide engaged in a campaign of defamatory statements directed at individuals in Ms. Taylor's Amway business in an effort to undermine her status and authority as an Amway distributor with the ultimate goal of enricocheting her. 32.
The defendants Attalah, Duncan, and World Wide began urging distributors who were downline from Ms. Taylor to write letters to Amway expressing dissatisfaction with the management of Ms. Taylor's firm in 1996, with the goal of convincing Amway to terminate Ms. Taylor's business relationship.
Thirty-three (3). Between 1993 and 1995, defendants Attalah, Duncan, and World Wide claimed to Ms. Taylor that they had the authority, political connections, and clout inside the Amway organisation to cause her to lose her business.
Defendants Attalah and Duncan were scheduled to meet with Ms. Taylor in February of 1996 with the goal of resolving their issues. This meeting was also the occasion for Ms. Taylor to indicate that she was having difficulties placing her trust in defendants Attalah as a result of slanderous allegations made about the Werenkas, as well as the inappropriate solicitation of investments from defendants Connolly and Schultz.
Besides communicating with Amway officials, Ms. Taylor also communicated with Amway officials, including at the very least Ron Mitchell, Amway's manager for "Business Conduct and Rules Division," about Mr. Attalah's solicitation of sexual favour from one of her young downline distributors as well as the outrageous solicitation of investments from two of her other downline distributors.
No one at Amway, the Duncans, or World Wide ever looked into these instances of Mr. Attalah's misuse of authority, instead choosing to believe his claims that she was destroying the very business she had worked so hard to build.
Defendants Attalah, Duncan, and World Wide conspired to have Ms. Taylor's business taken away by Amway on November 26, 1996, according to the complaint.
When defendants Attalah learned that she had lost her business, they refused to repurchase goods and advertising materials that they were contractually obligated to repurchase, and they failed to pay her money that she was owed for work that she had completed.
FOR THE FIRST TIME, THERE WAS CONSCIOUS INTERFERENCE WITH BUSINESS EXPECTATIONS.
The defendants, individually and collectively, engaged in intentional interference with contractual relations or commercial expectations between the plaintiffs and their downline distributors, according to the complaint. Plaintiffs had a slew of erroneous contractual connections and business expectations with its distributors, all of which were invalid. Defendants were aware of the ties or expectations that existed between them. For personal financial benefit, defendants wrongfully and knowingly interfered with the plaintiffs' relationships or expectations, causing them financial harm.
Violating the Chain Distributor's Law is the second basis for the lawsuit.
In violation of RCW 19.102.020, defendants, and each of them, engaged in a "chain distributor's scheme," as defined in RCW 19.102.010, in which they were each a participant.
PROFITEERING ON THE BASIS OF CRIMINALITY IS THE THIRD CAUSE OF ACTION.
Criminal profiteering was committed by the defendants and each of them, in violation of RCW 9A.82.100, through the theft of property, extortion of property, and trafficking in stolen goods.
42. Defendants, and each of them, engaged in a pattern of criminal profiteering by committing these crimes over a one-year period, in violation of RCW 9A.82.100, by committing these crimes over a one-year period.
In accordance with RCW 9A.82.060, defendants, and each of them, committed the offence of leading organised crime by knowingly organising, managing, directing, and supervising extortion of the plaintiffs with the intent to engage in a pattern of criminal profiteering activity with the intent to engage in a pattern of criminal profiteering activity.
In violation of RCW 9A.82.080 (criminal profiteering), defendants and each of them knowingly accepted and used funds generated, directly or indirectly, from a pattern of criminal profiteering behaviour in the course of the operation of their individual enterprises.
Violating the Unfair Business Practices/Consumer Protection Act is the fourth reason for taking legal action.
Plaintiff alleges that the defendants, collectively and individually, have engaged in unfair methods of competition and unfair or deceptive acts or practises in the conduct of their companies, which is in violation of RCW 19.86.020.
In addition, because they were committed in the course of defendants' businesses and were part of a pattern or general course of conduct, they were repeated acts by the defendants and had a real or substantial potential for repetition by the defendants, the unfair business practises of the defendants are detrimental to the public interest.
Plaintiffs' property has been damaged as a result of the defendants' activities, according to paragraph 47.
CONVERSION IS THE FIFTH CAUSE OF ACTION.
48. Defendants willfully interfered with plaintiffs' business proceeds without valid basis, thereby depriving plaintiffs of ownership of their property. The conduct of the defendants constituted conversion.
DAMAGES
plaintiff has suffered losses in an amount that will be shown at the time of trial as a direct and proximate effect of defendants' action, and plaintiff has incurred the costs of research, attorney's fees, and litigation expenses. Additionally, under Washington law, plaintiffs are entitled to a civil penalty as well as multiple damages awards.
As a result, the plaintiffs pray the following:
1. To compensate plaintiffs for any damages that may be proven at the time of trial;
In the case of civil fines and multiple damages, as provided under Washington law;
3. For reasonable attorney's costs and expenses;
4. To cover reasonable investigation expenses; and
5. To cover the costs of the lawsuit; and
• Other and further remedy as this Court finds just and equitable in the circumstances
This day of August, 1998, has been respectfully submitted. GORDON, THOMAS, HONEYWELL, MALANCA, PETERSON & DAHEIM, P.L.L.C. GORDON, THOMAS, HONEYWELL, MALANCA, PETERSON & DAHEIM, P.L.L.C.
Attorneys for the Defendants
The work of James B. Meade, WSBA No. 22852.
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