SUIT FOR DAMAGES
SUIT FOR FRAUD
SUIT FOR INJUNCTION
CAUSE NO. 03-5073-A
SCOTT MAGOON, } IN THE COUNTY COURT
}
Plaintiff,
}
v. }
}
(1) DND TECHNOLOGIES, INC.; } AT LAW NO. 1
(2) ASPECT SEMIQUIP }
INTERNATIONAL, INC.; }
(3) SEMIQUIP, INC.; and }
(4) DOUG N. DIXON, }
}
Defendants. } DALLAS COUNTY, TEXAS
PLAINTIFF'S ORIGINAL PETITION
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW Plaintiff herein, Scott Magoon ("Plaintiff" or "Magoon"), and
files his Plaintiff's Original Petition against Defendants (1) DND Technologies,
Inc. ("DND"), (2) Aspect Semiquip International, Inc. ("ASI"), (3) Semiquip,
Inc. ("SemiQuip"), and (4) Doug N. Dixon ("Dixon") (collectively "Defendants")
and for cause of action shows the following:
DISCOVERY CONTROL PLAN
1. Pursuant to Texas Rules of Civil Procedure 190, discovery in this cause
is intended to be conducted under level two (2) of that rule.
INTRODUCTION
2. This is a fraud case. Defendants DND, AS1 and Dixon are the fraudsters,
with Dixon orchestrating the scheme. Dixon developed a plan to take AS1 (a
company he established and was the 70% owner) public through a reverse takeover
"(RTO") through a public shell,
PAGE 1
ZuricKirch Corp., in order to eventually obtain the gains of selling his shares
on the open market. As part of the RTO plan and to become more attractive to
potential investors, AS1 needed to shed its Texas operation, known as SemiQuip,
which was losing money. In order to do so, Dixon and AS1 made a series of
promises and representations to Magoon, the founder of SemiQuip and thirty
percent (30%) owner of ASI, who relocated to ASI's Arizona operation when the
two companies merged in June, 2001. As part of those promises, AS1 and Dixon
represented repeatedly that Magoon would obtain all of the assets of SemiQuip
along with other consideration of at least $400,000.00 in exchange for his AS1
shares. Based on Dixon's promises and representations regarding the transfer of
SemiQuip to Magoon, Magoon returned to SemiQuip and made SemiQuip profitable. As
a result of SemiQuip's profitability (and that the market for the public shares
appeared weak), Dixon and AS1 delayed, and thereafter, refused to honor their
agreements, representations and promises.
PARTIES
3. Plaintiff. Plaintiff Scott Magoon is an individual residing in Texas.
Pursuant to TEX. CIV. PRAC. & REM. CODE ss. 30.15, Plaintiff's address is 5709
Charleston Drive, Frisco, Texas 75035.
4. Defendant DND Technologies, Inc. Defendant DND Technologies, Inc. f/k/a
ZuricKirch Corp.) is a Nevada corporation with its principle place of business
located at 3960 Howard Hughes Parkway, 5th Floor, Las Vegas, Nevada 89109. DND
is also the purported parent company of Defendants AS1 and SemiQuip. Pursuant to
TEX. R. CIV. P. 103, Defendant DND Technologies, Inc. may be served with
Citation and a copy of Plaintiff's Original Petition by serving its registered
agent, Zuric Kirch Acquisitions, Inc., at 3960 Howard Hughes Parkway,
PAGE 2
5th Floor, Las Vegas, Nevada 89109 or its Chief Executive Officer, Doug N.
Dixon, at 375 East Elliot Road, Chandler, Arizona 85225.
5. Defendant Aspect SemiQuip International, Inc. is an Arizona corporation
with its principle place of business located at 375 East Elliot Road, Chandler,
Arizona 85225. Pursuant to TEX. R. CIV. P. 103, Defendant Aspect SemiQuip
International, Inc. may be served with Citation and a copy of Plaintiff's
Original Petition by serving its registered agent, Hal W. Mack, at 616 E.
Southern Avenue, Suite 103, Mesa, Arizona 85204 or its President, Doug N. Dixon,
at 375 East Elliot Road, Chandler, Arizona 85225.
6. Defendant SemiQuip, Inc. is a Texas corporation that merged into Aspect
SemiQuip International, Inc. However, DND Technologies, Inc. claims that
SemiQuip, Inc. is a wholly owned subsidiary of DND Technologies, Inc. Pursuant
to TEX. R. CIV. P. 103, Defendant SemiQuip, Inc. may be served with Citation and
a copy of Plaintiff's Original Petition by serving its President, Dennis Key, at
1215 Commerce Drive, Richardson, Texas 75081.
7. Defendant Doug N. Dixon is an individual residing in Arizona.
Pursuant to TEX. R. CIV. P. 103, Defendant Doug N. Dixon may be served with
Citation and a copy of Plaintiff's Original Petition by serving him at 375 East
Elliot Road, Chandler, Arizona 85225 or 2187 E. Victor Road, Gilbert, Arizona
85296.
JURISDICTION AND VENUE
8. This Court has jurisdiction over the parties in this action because
Defendants DND Technologies, Inc., Aspect SemiQuip International, Inc.,
SemiQuip, Inc. and Doug N. Dixon committed tortious conduct in whole or in part
in Dallas County, Texas as provided
PAGE 3
herein; Defendant Aspect SemiQuip International, Inc. breached a contract
performable in whole or in part in Dallas County, Texas and has a principal
office in Dallas County, Texas; and SemiQuip, Inc. is a Texas corporation with
its principal office in Dallas County, Texas. This Court has jurisdiction over
the subject matter herein because the amount in controversy is within the
jurisdictional limits of the Court.
FACTUAL BACKGROUND
9. Following graduation from the United Electronics Institute in 1986,
Scott Magoon began working in the semiconductor industry. Among semiconductor
companies, Magoon worked for Texas Instruments and Lam Research Corporation.
During this time, it became apparent to Magoon that semiconductor equipment
customers failed to receive the level of support they expected. Therefore,
Magoon set out to fulfill his lifelong dream of creating a family oriented,
employee focused company, to satisfy this niche in the industry.
10. In the summer of 1998, Magoon began to create SemiQuip. Starting with
the company name and logo (combining "semiconductor" and "equipment" and
traditional industry icons of a semiconductor wafer and chip), Magoon developed
this company from the ground up. Magoon began marketing the company from its
initial offices in Magoon's home. The garage and several bedrooms were converted
into a workshop and office. Additional phone lines were installed and office
equipment purchased.
11. By February, 1999, SemiQuip was incorporated and open for
business - making Magoon's dream, a reality. SemiQuip's first employees
consisted of Brad Graham, as C.F.O., Sandy Dean, as supervisor of accounts
payables and receivables, and James Hooper, who handled operations,
administrative duties, purchasing and inventory.
PAGE 4
12. SemiQuip's business was built on working relationships between
employees, contractors and customers. Magoon prided himself in making sure
SemiQuip supported its employees and gave back to the community. SemiQuip was
performing its mission: supporting the needs of semiconductor wafer fabs and
meeting the needs of its employees.
13. In 2000, SemiQuip began receiving calls from Magoon's previous
employers, Texas Instruments and Lam Research. SemiQuip increased its workforce
to approximately ten employees and ten contract workers. In the summer of 2000,
SemiQuip and Magoon signed its first lease for an 11,600 square foot facility in
Richardson, Texas that would support the contract labor, equipment refurbishment
and spare parts stock room as well as accommodate any future growth. SemiQuip
continued to grow, and based on Magoon's knowledge of PAC equipment and Texas
Instrument's encouragement, SemiQuip secured the exclusive rights to the PAC 150
series. Semiquip would now support parts and labor for this cutting edge
equipment, which is installed all over the world.
14. By 2001, SemiQuip's revenue exceeded Three Million Dollars annually.
During this time, Aspect Systems, Inc., through Steve Cox (who was part of
Aspect's business development section), approached Magoon regarding a business
opportunity to merge the two companies, who provided similar services and
equipment.(1) Through this introduction, Magoon began to speak with Aspect
Systems founder and owner, Doug Dixon.
15. Steve Cox was very successful in the semiconductor industry by making
inroads in Asia. Cox felt confident that a merger, along with SemiQuip's
technology, would help the two companies expand internationally. During the
merger discussions, Dixon represented that
- ----------
(1) For example, while SemiQuip provided support for Lam Research's new
Rainbow semiconductor equipment; Aspect Systems, provided similar support for
Lam Research's older AutoEtch semiconductor equipment.
PAGE 5
Cox would become President and that Magoon would work directly with him to
expand internationally. Magoon was adamant that SemiQuip's employees and culture
would remain intact following the merger and that SemiQuip's name would be
utilized.
16. On June 29,2001, Dixon and Magoon closed on the merger for their
respective companies into Aspect SemiQuip International, Inc. ("ASI"). As a
result of the merger, Dixon became seventy percent (70%) owner of AS1 and Magoon
became thirty percent (30%) owner of ASI. Magoon entered into an Employment
Agreement as Vice President of Sales with a salary of $120,000.00 and was to
receive various perquisites, such as moving expenses to move Magoon and his
family to Arizona where AS1 was located, a car allowance and other perquisites
that were to exactly mirror the perquisites provided to Dixon. Magoon was also
appointed to the Board of Directors of ASI.
17. Unfortunately, it didn't take long for Dixon to show his true colors.
Very soon after signing this merger agreement, the person supposedly groomed to
be President, Steve Cox, lost faith in Dixon and resigned; Dixon terminated
ASI's marketing director; and Dixon laid off key members of SemiQuip's
management team. Once Magoon relocated his family to Arizona, Dixon immediately
reduced Magoon's contracted salary, failed to reimburse him for all of his
moving expenses, and failed to provide him with all of the perquisites received
by Dixon (such as a car allowance and family health benefits).
18. Just nine months after the merger, Dixon began to take steps to shed
Magoon from ASI. In March, 2002, Dixon intentionally set a last minute board
meeting (knowing that Magoon was out of town and could not attend), where the
Board of AS1 voted to remove
PAGE 6
Magoon as an officer of ASI, giving him the title of Director of Customer
Relations and dictating that Magoon had to relocate to the Texas operation
(SemiQuip) effective June 1,2002.(2)
19. Dixon's initial reason for removing Magoon as an officer and
relocating him to Texas was part of Dixon's plans to take AS1 public - and keep
Magoon "out of the loop" during the process. Dixon made great amounts of money
from the stock he received from working for public companies, such as Lam
Research Corporation and Applied Materials. Dixon planned on doing the same with
AS1 by taking AS1 public through the RTO through ZuricKirch Corp., a public
shell. At the same time, AS1 entered negotiations to become the excusive
supplier of Lam Research Corporation's AutoEtch equipment which would greatly
increase ASI's revenues.
20. Dixon promised Magoon the return of SemiQuip and other consideration
for Magoon's AS1 stock for two main reasons. Dixon wanted to stockpile as much
of the new public companies stock himself to increase his envisioned gains (as
well as control the sale of the stock on the open market once any restrictions
expired). Second, AS1 and the new public company would appear more attractive to
investors (making equity financing more viable) without SemiQuip's liabilities
and losses on the books.
21. Dixon put Wayne Bixler, ASI's Chief Operating Officer, in charge of
negotiating the terms of stock redemption agreement to transfer SemiQuip to
Magoon in exchange for Magoon's AS1 shares. From April 9 through 11, 2002,
Magoon and AS1 discussed deal points. The final material terms are contained in
an April 11, 2002 e-mail from Bixler to Magoon and Dixon. See Exhibit "A" (these
agreements are collectively referred to herein as the "Separation
- ----------
(2) The Texas operation (SemiQuip) was now losing money, in part due to
ASI's business practices. After the merger, certain SemiQuip customers were
unhappy with ASI, including Texas Instruments, Creative Technology, XFab Texas
and Steamboat Semiconductor. Magoon frequently received calls from customers
urging him to return to run the Texas operation.
PAGE 7
Agreements"). On April 20, 2002, the Board of Directors for AS1 approved the
separation pursuant to these terms.
22. Closing for the separation was originally set in April, 2002, to
coincide with occurrences regarding the reverse take over with ZuricKirch Corp.
In connection with the RTO, AS1 and ZuricKirch represented to U.S. Securities
and Exchange Commission that all 1,750,000 outstanding shares of AS1 were owned
by Dixon and that Dixon would exchange these shares for 18,000,000 shares in
ZuricKirch as consideration for the acquisition.(3)
23. Based on the Separation Agreements, and the additional promises and
representations of Dixon regarding the transfer of SemiQuip back to Magoon,
Magoon relocated to Texas, took over the operations of SemiQuip, and informed
its employees and customers of the impending transfer of ownership of SemiQuip
to Magoon. Magoon hired key employees for SemiQuip and quickly turned SemiQuip
into a profitable enterprise.
24. AS1 by-passed its own target closing dates for the Separation
Agreements in April, May, and June, 2002. Beginning in May, Dixon, Bixler and
Paul Gallo (then the financial consultant and now the CFO and a director of DND)
all confirmed the Separation Agreements. However, due to SemiQuip's newfound
profitability, AS1 unilaterally added conditions to the terms. Namely, that AS1
would not close on the Separation Agreements until the RTO was consummated
and/or it obtained the Lam Research Corporation contract.
25. Dixon, AS1 and DND took full advantage of Magoon's successful efforts
in returning SemiQuip to profitability. By continuing to reiterate its promises
to Magoon that it would complete the separation agreement as soon as AS1
received equity funding or closed on
- ----------
(3) See ZuricKirch Corp.'s and DND's 2002 Annual Report (Form 10-KSB) as
well as its 8-K reports dated May 16, 2002, and August 6, 2002.
PAGE 8
the Lam Research contract, Magoon continued to make SemiQuip profitable. AS1
then denuded the assets of SemiQuip by transferring SemiQuip's profits to AS1
and slow-paying SemiQuip's vendors. Essentially, AS1 refused to close on the
deal so that AS1 could speculate on their own impending deals while taking
advantage of SemiQuip's success.
26. After months of false promises, Magoon made demand on July 25, 2002
for AS1 to consummate the closing of the Separation Agreements by August 15,
2002.
27. On August 2, 2002, ZuricKirch closed on its acquisition of ASI.
ZuricKirch was renamed after Dixon as DND Technologies, Inc. In connection with
this RTO, Dixon became the owner of 18,000,000 shares in DND.
28. In October, 2002, AS1 closed on the Lam Research Corporation contract
that makes AS1 the exclusive supplier for manufacture and sale of AutoEtch and
Drytek capital equipment together with related spare parts and consumables.
29. Despite the closing of the RTO and Lam Research Corporation contract
(the conditions precedent AS1 unilaterally added to the Separation Agreements),
AS1 has failed and refused to close on the Separation Agreements - or even
provide Magoon with what would be his ownership in DND. Rather, at the October
2002 AS1 Board Meeting, Dixon confirmed that Defendants intended to breach the
Separation Agreements. Dixon offered Magoon a new issuance of shares in DND (not
the thirty percent owned by Dixon containing the same restrictions as Dixon's
stock) in return for a release of Magoon's claims against ASI.(4) In addition,
Dixon hired a President for SemiQuip, Dennis Key, to replace Brad Graham,
Magoon's hire for the position.
- ----------
(4) Magoon refused the issuance of shares because the condition of his
release of claims and improper restriction dates.
PAGE 9
30. On December 6, 2002, AS1 received a demand letter on its defaulted
line of credit with Merrill Lynch Business Financial Services, Inc. in excess of
1.2 Million Dollars. On December 18, 2002, Merrill Lynch filed suit on the debt
against ASI, DND and Dixon raising questions regarding ASI's survival. Despite
ASI's financial problems, offers from Brad Graham for Magoon to join Graham's
new company, and Defendants' fraud and breach of contract, Magoon continued his
efforts to rebuild the revenues of SemiQuip. As late as January, 2003, Magoon
sought to have Graham (and the revenues of his business) brought back to
SemiQuip.
31. In January, 2003, Magoon questioned whether Dixon's business
practices, including whether Dixon was directing DND's new CFO, Paul Gallo, to
take actions that would manipulate DND's stock price. Within a week, Magoon was
suspended from his duties at SemiQuip on bogus allegations of dishonesty and
breach of fiduciary duties. While refusing to provide the basis for such claims,
Dennis Key told Magoon that he had to sign a new Employment Agreement (without
the protections of Magoon's current Employment Agreement that matches the terms
of Dixon's Agreement) and accept a twenty percent (20%) reduction in pay if he
wanted continued employment. As Magoon had not attempted to usurp any corporate
opportunities of SemiQuip or attempted to profit from any dealings with Brad
Graham or any other person or entity, Magoon refused. Regardless, AS1 breached
Magoon's Employment Agreement (both procedurally and substantively) and
terminated Magoon for cause based on two affidavits that Magoon was allegedly
attempting to start his own competing business. Pursuant to Magoon's Employment
Agreement, Magoon anticipates making a demand for arbitration with respect to
claims resulting from his employment.
PAGE 10
CONDITIONS PRECEDENT
32. All conditions precedent to Magoon's recovery herein have been
performed or have occurred, including the presentment of Magoon's claims against
Defendants.
EXHIBITS
33. Pursuant to TEX. R. CIV. P. 59, the following exhibit is attached
hereto:
Exhibit "A": Binding letter of intent containing the principle
agreements between - Magoon and AS1 and Dixon; and
COUNT I
BREACH OF CONTRACT
34. To the extent not inconsistent, Plaintiff incorporates the allegations
set forth in the above paragraphs the same as if set forth herein.
35. Defendants AS1 and Dixon agreed to return SemiQuip to Magoon according
to the material terms provided in Exhibit "A" attached hereto and incorporated
herein. Since that time, Defendant DND now purports that AS1 is a wholly owned
subsidiary of AS1 and SemiQuip. DND has also failed and refuses to honor the
parties' agreement.
36. As a result of Defendants' default and breach of their agreement with
Plaintiff to return SemiQuip to Plaintiff, Plaintiff seeks specific performance
of the parties' agreement in addition to actual damages against Defendants,
jointly and severally, within the jurisdictional limits of the Court. In the
alternative, Plaintiff seeks actual damages against Defendants, jointly and
severally, in an amount within the jurisdictional limits of the Court.
PAGE 11
COUNT II
FRAUD
37. To the extent not consistent, Plaintiff incorporates the allegations
set forth in the above paragraphs the same as if set forth herein.
38. Defendants ASI, DND and Dixon represented and promised to Plaintiff
that Plaintiff would receive the assets of SemiQuip along with other
consideration in return for Plaintiff's ownership interest in AS1 (and
thereafter, DND). Defendants ASI, DND and Dixon made these representations and
promises to Magoon orally and in writing. These representations and promises
were approved by ASI's Board of Directors and also evidenced by filings with the
U.S. Securities and Exchange Commission. These representations and promises:
a. were material;
b. were false;
c. were made by Defendants with knowledge of its falsity or
recklessly without any knowledge of the truth and as a
positive assertion;
d. were made with the intent that Plaintiff rely on it;
e. was relied on by Plaintiff; and
f. caused damages to Plaintiff.
ACTUAL DAMAGES
39. Plaintiff relied and acted on Defendants' material representations and
promises and suffered damages as a result of same, including but not limited to
actual damages, mental anguish damages and consequential damages. Therefore,
Plaintiff seeks damages from Defendants, jointly and severally, in an amount
within the Court's jurisdictional limits.
PAGE 12
EXEMPLARY DAMAGES
40. Pursuant to TEX. CIV. PRAC. & REM. CODE ss. 41.003(a)(l) and (2),
exemplary damages may be awarded when the injury or harm to which the claimant
seeks recovery results from malice and/or fraud. Therefore, Plaintiff seeks
exemplary damages against Defendants in an amount within the jurisdictional
limits of the Court, considering among other things, the degree of culpability
of Defendants, the extent to which Defendants' conduct offends a public sense of
justice and propriety, the costs and inconvenience incurred by Plaintiff in
prosecuting this action, and the substantial net worth of Defendants.
41. More specifically, Dixon directs AS1 and DND with no regard to morals
or truth. Under Dixon's direction, AS1 has a history of refusing or failing to
pay its shareholders and employees. Dixon, AS1 and DND have engaged in a pattern
of maneuvers involving deceit and fraud to obtain SemiQuip and its assets from
Plaintiff without consideration for same. Therefore, Plaintiff seeks an award of
exemplary damages sufficient to punish Defendants and deter such conduct in the
future.
42. Additionally, pursuant to TEX. CIV. PRAC. & REM. CODE ss. 41.008(10),
(11), and/or (13), the exemplary damage limitations are not applicable.
COUNT III
DENUDING
43. To the extent not inconsistent, Plaintiff incorporates the allegations
set forth in the above paragraphs the same as if set forth herein.
44. Defendants AS1 and DND have systematically transferred and denuded the
profits and assets of SemiQuip to AS1 since the time of the agreement between
Plaintiff and AS1 to return SemiQuip to Plaintiff.
PAGE 13
ACTUAL DAMAGES
45. As a result of Defendants' actions, the value of SemiQuip has been
diminished. Plaintiff seeks damages as a result of same, including but not
limited to, actual damages, mental anguish damages and consequential damages.
Therefore, Plaintiff seeks damages from Defendants, jointly and severally, in an
amount within the Court's jurisdictional limits.
EXEMPLARY DAMAGES
46. Pursuant to TEX. CIV. PRAC. & REM. CODE ss. 41.003(a)(l) and (2),
exemplary damages may be awarded when the injury or harm to which the claimant
seeks recovery results from malice and/or fraud. Therefore, Plaintiff seeks
exemplary damages against Defendants in an amount within the jurisdictional
limits of the Court, considering among other things, the degree of culpability
of Defendants, the extent to which Defendants' conduct offends a public sense of
justice and propriety, the costs and inconvenience incurred by Plaintiff in
prosecuting this action, and the substantial net worth of Defendants.
47. More specifically, Dixon directs AS1 and DND with no regard to morals
or truth. Under Dixon's direction, AS1 has a history of refusing or failing to
pay its shareholders and employees. Dixon, AS1 and DND have engaged in a pattern
of maneuvers involving deceit and fraud to obtain SemiQuip and its assets from
Plaintiff without consideration for same. Therefore, Plaintiff seeks an award of
exemplary damages sufficient to punish Defendants and deter such conduct in the
future.
48. Additionally, pursuant to TEX. CIV. PRAC. & REM. CODE ss. 41.008(10),
(11), and/or (13), the exemplary damage limitations are not applicable.
PAGE 14
COUNT IV
CONVERSION
49. To the extent not inconsistent, Plaintiff incorporates the allegations
set forth in the above paragraphs the same as if set forth herein.
50. As part of the merger between Aspect Systems, Inc. and SemiQuip, Inc.,
Plaintiff became the owner of thirty percent of the outstanding shares of the
resulting company, ASI. Plaintiff was issued Nine Hundred Eighteen Thousand Two
Hundred Fourteen (918,214) shares in ASI. As a result of Defendants' agreements
with Plaintiff, AS1 was to transfer the assets of SemiQuip (ASI's Texas
operation) to Plaintiff along with additional consideration in return for
Plaintiffs shares in ASI. In accordance with that agreement, AS1 and ZuricKirch
Corp. filed documents with the U.S. Securities and Exchange Commission
indicating that Defendant Dixon was the sole shareholder in ASI.
51. On August 2, 2002, ZuricKirch Corp. closed its acquisition of ASI. As
a result, Defendant Dixon received Eighteen Million shares in Defendant DND
Technologies, Inc. f/k/a ZuricKirch Corp. Despite demand for performance of the
parties' agreement or issuance of stock in DND (Plaintiff is entitled to thirty
percent (30%) of the shares owned by Dixon in DND with the same restrictions),
Defendants unlawfully and without authority assumed dominion and control over
Plaintiff's property, which is described above and failing to relinquish the
property to Plaintiff.
ACTUAL DAMAGES
52. Therefore, alternatively to the other claims set forth herein and
without waiving such other claims, Plaintiff seeks thirty percent of the shares
in DND issued to Dixon (with the same restrictions and restriction dates) as a
result of the RTO along with damages, including
PAGE 15
actual damages, mental anguish damages and consequential damages, against
Defendants, jointly and severally, in an amount within the jurisdictional limits
of the Court.
EXEMPLARY DAMAGES
53. Pursuant to TEX. CIV. PRAC. & REM. CODE ss. 41.003(a)(1) and (2),
exemplary damages may be awarded when the injury or harm to which the claimant
seeks recovery results from malice and/or fraud. Therefore, Plaintiff seeks
exemplary damages against Defendants in an amount within the jurisdictional
limits of the Court, considering among other things, the degree of culpability
of Defendants, the extent to which Defendants' conduct offends a public sense of
justice and propriety, the costs and inconvenience incurred by Plaintiff in
prosecuting this action, and the substantial net worth of Defendants.
54. More specifically, Dixon directs AS1 and DND with no regard to morals
or truth. Under Dixon's direction, AS1 has a history of refusing or failing to
pay its shareholders and employees. Dixon, AS1 and DND have engaged in a pattern
of maneuvers involving deceit and fraud to obtain SemiQuip and its assets from
Plaintiff without consideration for same. Therefore, Plaintiff seeks an award of
exemplary damages sufficient to punish Defendants and deter such conduct in the
future.
55. Additionally, pursuant to TEX. CIV. PRAC. & REM. CODE ss. 41.008(10),
(11), and/or (13), the exemplary damage limitations are not applicable.
COUNT V
VIOLATION OF THE TEXAS THEFT LIABILITY ACT
56. To the extent not inconsistent, Plaintiff incorporates the allegations
set forth in the above paragraphs the same as if set forth herein.
PAGE 16
57. Defendant DND unlawfully obtained Magoon's shares in AS1 (and
thereafter DND) without consideration for same pursuant to TEX. CIV. PRAC. &
REM. CODE ss. 134.001 et seq.
ACTUAL AND ADDITIONAL DAMAGES
58. Therefore, as a result of Defendants Dixon, AS1 and DND's theft,
Plaintiff seeks damages from Defendants, jointly and severally, in an amount
within the jurisdictional limits of the Court. Further, Plaintiff seeks
additional damages pursuant to TEX. CIV. PRAC. & REM . CODE ss. 134.005(a)(1)
against each Defendant separately.
COUNT VI
UNJUST ENRICHMENT
59. To the extent not consistent, Plaintiff incorporates the allegations
set forth in the above paragraphs the same as if set forth herein.
60. Defendants ASI, DND and Dixon obtained a benefit from Plaintiff by
fraud or the taking of an undue advantage by obtaining SemiQuip and/or
Plaintiffs shares in ASI/DND without consideration for same.
61. Defendants will be unjustly enriched if they are able to keep the
benefit of such property without consideration for same.
ACTUAL DAMAGES
62. Therefore, Plaintiff seeks damages, including but not limited to,
actual damages, mental anguish damages and consequential damages from
Defendants, jointly and severally, for unjust enrichment, in an amount within
the jurisdictional limits of the Court.
PAGE 17
EXEMPLARY DAMAGES
63. Pursuant to TEX. CIV. PRAC. & REM. CODE ss. 41.003(a)(l) and (2),
exemplary damages may be awarded when the injury or harm to which the claimant
seeks recovery results from malice and/or fraud. Therefore, Plaintiff seeks
exemplary damages against Defendants in an amount within the jurisdictional
limits of the Court, considering among other things, the degree of culpability
of Defendants, the extent to which Defendants' conduct offends a public sense of
justice and propriety, the costs and inconvenience incurred by Plaintiff in
prosecuting this action, and the substantial net worth of Defendants.
64. More specifically, Dixon directs AS1 and DND with no regard to morals
or truth. Under Dixon's direction, AS1 has a history of refusing or failing to
pay its shareholders and employees. Dixon, AS1 and DND have engaged in a pattern
of maneuvers involving deceit and fraud to obtain SemiQuip and its assets from
Plaintiff without consideration for same. Therefore, Plaintiff seeks an award of
exemplary damages sufficient to punish Defendants and deter such conduct in the
future.
65. Additionally, pursuant to TEX. CIV. PRAC. & REM. CODE ss. 41.008(10),
(11), and/or (13), the exemplary damage limitations are not applicable.
COUNT VII
PROMISSORY ESTOPPEL
66. To the extent not inconsistent and solely in the alternative to
Plaintiff's other claims, Plaintiff incorporates the allegations set forth in
the above paragraphs the same as if set forth herein.
67. In order to induce Plaintiff to relocate to Texas, make
representations to customers and vendors of SemiQuip regarding its impending
change in ownership (that AS1
PAGE 18
knew would increase revenues), Defendants AS1 and Dixon promised Magoon that
ownership in SemiQuip would be transferred to him.
68. It was foreseeable to Defendants at the time it made such promises to
Plaintiff that Plaintiff would rely on Defendants' promises.
69. As evidenced by Plaintiffs relocation to Texas and increased revenues
for the Texas operation, Plaintiff substantially relied on Defendants' promises.
70. Therefore, alternatively to the other claims set forth herein and
without waiving such other claims, Plaintiff seeks damages, including but not
limited to, reliance damages, mental anguish damages and consequential damages,
from Defendants AS1 (and now DND) and Dixon, jointly and severally, pursuant to
the doctrine of promissory estoppel, in an amount within the jurisdictional
limits of the Court.
COUNT VIII
ATTORNEY'S FEES
71. To the extent not inconsistent, Plaintiff incorporates the allegations
set forth in the above paragraphs the same as if set forth herein.
72. As a result of Defendants' breach of contract, conversion and
violation of the Texas Theft Liability Act, Plaintiff employed Korn, Bowdich &
Diaz, L.L.P. to prosecute his claims. Pursuant to TEX. CIV. PRAC. & REM. CODE
ss. ss. 38.001 et seq., and 134.005, Plaintiff seeks its reasonable and/or
reasonable and necessary attorney's fees for the prosecution of his claims.
PAGE 19
COUNT IX
INJUNCTION
73. To the extent not consistent, Plaintiff incorporates the allegations
set forth in the above paragraphs the same as if set forth herein.
74. Plaintiff requests that the Court sign an order enjoining Defendants
and their agents, servants, employees, attorneys, and those persons in active
concert or participation with them, from denuding, conveying, secreting, moving,
disposing of or transferring any assets of SemiQuip outside the normal course of
business, including any transfer of assets to Dixon, ASI or DND.
PRAYER
For the foregoing reasons, Plaintiff Scott Magoon requests that upon final
trial, Plaintiff have and recover the following:
(a) Specific performance of Defendants' obligations pursuant to
Exhibit "A";
(b) Actual damages against Defendants (jointly and severally where
appropriate), in an amount within the jurisdictional limits of
the Court;
(b) Reasonable and/or reasonable and necessary attorneys' fees;
(d) Separate awards of exemplary and/or additional damages against
each Defendant;
(e) An order enjoining Defendants and their agents, servants,
employees, attorneys, and those persons in active concert or
participation with them, from conveying, secreting, moving,
disposing of or transferring any assets of SemiQuip outside
the normal course of business, including any transfer of
assets to Dixon, ASI or DND;
(f) Pre- and post judgment interest at the highest rate allowed by
law;
(g) Costs of Court; and
(h) Such other and further relief to which Plaintiff may be
entitled.
PAGE 20
NOTICE
The following documents are being served contemporaneously to Defendants
with citation and a copy of Plaintiff's Original Petition.
o Plaintiff's Requests for Disclosure to Defendants;
o Plaintiff's First Requests for Production to Defendants; and
o Plaintiff's First Set of Interrogatories to Defendant ASI.
Respectfully submitted,
By: /s/ John W. Bowdich
-------------------
Andrew R. Korn
State Bar No. 11683150
John W. Bowdich
State Bar No. 00796233
KORN, BOWDICH & DIAZ, L.L.P.
4221 Avondale Ave.
Dallas, Texas 75219
(214) 521-8800 - Telephone
(214) 521-8821 - Telecopy
www.kbdtexas.com
ATTORNEYS FOR PLAINTIFF
SCOTT MAGOON
PAGE 21