Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA316814
`ESTTA Tracking number:
`11/13/2009
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`91192206
`Defendant
`EnviroGLAS, LLC
`STEVE H. CLEMONS
`LEGGETT & CLEMONS, PLLC
`SUITE 310 2745 NORTH DALLAS PARKWAY
`PLANO, TX 75093
`UNITED STATES
`Motion to Suspend for Civil Action
`James C. Mosser
`JMosser@MosserLaw.com
`/James C. Mosser/
`11/13/2009
`Motion to Suspend- Enviroslab.pdf ( 5 pages )(138681 bytes )
`Plaintiffs Amended Complaint.pdf ( 75 pages )(2092662 bytes )
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`Proceeding
`Party
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`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
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`

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`IN THE UNETED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`American Terrazzo Company Ltd.,
`
`§ Mark: ENVEROSLAB
`
`Opposer,
`
`V.
`
`EnviroGLAS, LLC,
`
`§
`
`§
`
`§
`§
`
`Serial No.: 76/686,343
`
`Filed: January 31, 2008
`
`Pubiished: June 16, 2009
`
`Applicant.
`
`E Opposition No. 91192206
`
`APPLICANT'S MEMORANDUM IN SUPPORT OF
`
`MOTION TO SUSPEND PENDiNG LITIGATION IN FEDERAL DISTRICT COURT
`
`Applicant EnviroGi_AS, LLC fiies this motion to suspend Opposer American
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`Terrazzo Company Ltd.’s opposition pending the outcome of litigation in the United
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`States District Court for the Northern District of Texas.
`
`introduction
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`1.
`
`2.
`
`Opposer is American Terrazzo Company Ltd.; Applicant is EnviroGi_AS, LLC.
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`American Terrazzo Company Ltd. initiated an opposition against EnviroGi_AS,
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`Li.C‘s Application Seriai No. 76/686,343 for the mark ENVEROSLAB.
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`3.
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`The subject application was filed on January 31, 2008 pursuant to Section 1(b)
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`of the Trademark Act, 15 U.S.C. § 1051 (b), based on a bona tide intention to
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`use the mark in commerce.
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`4.
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`The subject application was pubiisheci for opposition on June 9, 2009. After their
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`request for an extension of time was granted, American Terrazzo Company filed
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`their opposition on October 7, 2009.
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`5.
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`Because litigation arising out of the same operative set of facts, the same
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`Applicant EnviroGLAS Ltdfs Motion to Pending Litigation in Federai District Court—Enviroslab
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`i of 5
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`transactions, and the same occurrences is aiready pending in another forum, the
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`Board should suspend this opposition.
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`Argument & Authority
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`6.
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`American Terrazzo sued EnviroGi_AS, LLC in the United States District Court for
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`the Northern District of Texas, Dailas Division, on February 10, 2009, styled Civil
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`Action No. 3:0-—-cv-00265-G, fo-r nineteen different claims, including:
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`a.
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`b.
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`c.
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`d.
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`False or Fraudulent Representation to the USPTO;
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`Declaratory Judgment as to the ownership of the "EnviroGi_AS"
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`Trademark;
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`Vioiations of the Lanham Act; and
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`Various ciaims arising out of soured reiations between EnviroGLAS, LLC's
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`President, Tim Whaiey, and American Terrazzo Company.
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`7.
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`Attached as Exhibit A is a copy of American Terrazzo Company's petition in that
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`suit. That lawsuit and the present Opposition proceeding involve the same
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`parties and the same underiying issues, although the named trademark in that
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`suit is not the same as in this Opposition.
`Both this Opposition and that suit invoive disputes about the circumstances
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`8.
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`under which Tim Whaiey—EnviroGLAS, Li_C‘s President~——|eft American
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`Terrazzo Company to form his own company. The suit in the Nort-hern District of
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`Texas wilt be examining whether Whaiey and EnviroGLAS, LLC acted
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`fraudulentiy toward American Terrazzo Company and toward the USPTO. That
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`court wiii also determine whether EnviroGi_AS, LLC is the proper owner of the
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`"EnviroGi_AS" Trademark.
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`Applicant EnviroGLAS Ltd.'s Motion to Pending Litigation in Federai District Court—Enviroslab
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`2 of 5
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`9.
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`in order to decide the issues in the case before it the Northern District of Texas
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`wili necessariiy decide issues which are pertinent in this case, such as the truth
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`behind the allegations that American Terrazzo Company made in its Notice of
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`Opposition. That court wili make findings of fact and law which wouid be directly
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`applicabie to these proceedings.
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`10.
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`The veracity of Opposer’s ailegations are material to this Opposition proceeding.
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`Two concurrent proceedings couid lead to inconsistent factual and iegal findings
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`between this Board and the Court in the Northern District of Texas.
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`11.
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`it is appropriate for this Board to stay or suspend this Opposition proceeding
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`pending the outcome of the litigation in the District Court. in DwineIl—Wright Co. v.
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`National Fruit Product Go. there was iitigation over five trademarks. The iitigation
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`began in federai district court. 129 F.2d 848, 853 (1st Cir. 1942). The defendant
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`in that litigation subsequentiy filed a cancellation proceeding. The plaintiff asked
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`the examiner in charge for a stay pending the outcome of the federai district
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`court litigation, and shortly thereafter asked the federai district court for
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`injunction. Although the stay-—-—which the examiner had originally granted——was
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`vacated by the Assistant Commissioner of Patents, the injunction was granted,
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`halting the action before the USPTO.
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`Id.
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`‘E2.
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`in Dwineil-Wright, the First Circuit Court of Appeals noted that “it is just as
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`harassing and vexatious, and there is just as much waste and duplication of
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`effort involved in twice trying the same issue between the same parties whether
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`the second trial is before an administrative tribunai or before a court..." id.
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`13. While this action is different because the Trademark at issue before this Board is
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`Applicant EnviroGLAS t_td.’s Motion to Pending Litigation in Federai District Court—Enviros|ab
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`3 of 5
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`not the same as the Trademark in the litigation in federal district court, the same
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`nucleus of operative fact, the same transactions, and the same occurrences give
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`rise to both proceedings.
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`in order to prevent this Board, and the federal district
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`court, from hearing duplicitous testimony, and anatyzing nearly identical
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`arguments, this Board shouid suspend the pending Opposition proceeding.
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`Conclusion
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`14.
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`The underlying controversy in this Opposition is aiready pending in the United
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`States District Court for the Northern District of Texas. This Board should
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`suspend this Opposition.
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`-Prayer
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`15.
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`For these reasons, EnvtroGLAS, LLC asks the Board to grant the Appiicant’s
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`Motion to Suspend, or in the alternative, to toll the time for EnviroGi_AS, LLC's
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`Response to the American Terrazzo Company's Opposition during the Boards
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`review and consideration of this Motion.
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`Date: 13
`
`ember 2009
`
`
`
`Moss
`
`LA WPLLC
`
`a Ias Parkway, Suite 290
`17110
`exas 75248
`Dallas,
`Telephone: (972) 733-3223
`Facsimile: (972) 267-5072
`JMosser MosserLaw.com
`
`Appiicant EnviroGLAS Ltd.'s Motion to Pending Litigation in Federal District Court—Envirosiab
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`[N THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRlAL AND APPEAL BOARD
`
`American Terrazzo Company Ltd.,
`
`§ Mark: ENVIROSLAB
`
`Opposer,
`
`V.
`
`EnviroGLAS, LLC,
`
`§
`
`§
`
`§
`§
`
`Serial No.: 76/686,343
`
`Filed: January 3'E, 2008
`
`Published: June 16, 2009
`
`Applicant.
`
`§ Opposition No. 91192206
`§
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that on this 13”‘ day of November, 2009, a copy
`of the foregoing Applicant's Memorandum in Support of Motion to Suspend Pending
`Litigation in Federai District Court was sewed via first class maii, postage prepaid, on
`the following:
`
`David A. Bell
`
`Manjuia N. Variyam
`HAYNES AND BOONE, LLP
`2323 Victory Avenue, Suite 700
`Dallas, Texas 75219
`
`
`
`C. Mosser,
`Ja
`M ER LAWPLLC
`
`re} Applicant H
`
`Appticant EnviroGLAS Ltdfs Motion to Pending Litigation in Federal District Court—Enviros|ab
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`5 of 5
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`

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`Case 3:O9—CV-Ob.«_o'5—G Document 8
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`Filed O4/O9/2on9
`
`Page 1 of 30
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF TEXAS
`DALLAS DIVISION
`
`Civil Action No. 3:O9—cv-00265—G
`
`Jury Trial Demanded
`
`§_
`§
`§
`§
`g
`
`§
`
`E
`§
`
`§ § § §
`
`ENVEROGLAS PRODUCTS, INC;
`AMERICAN TERRAZZO COMPANY, LTD.;
`DARJN FLABIANO; BRANDON FLABEANO;
`BRENTON FLABIANO; WILTON
`FLABIANO,
`
`Plaintiffs,
`
`v.
`
`ENVIROGLAS, LLC; TIMOTHY WHALEY,
`
`Defendants.
`
`PLAINTIFFS’ FIRST AMENDED COMPLAINT
`FOR MONETARY, INJUNCTIVE, AND DECLARATORY RELIEF
`(Jury Trial Demanded)
`
`Plaintiffs EnviroGLAS Products, Inc. (“EnviroGLAS”), Darin Flabiano, Brandon
`
`F labiano, Brenton Flabiano, Wilton Flabiano, and American Terrazzo Company, Ltd. (“ATC”),
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`by and through their attorneys, and for their complaint against Defendants EnviroGLAS, LLC
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`(“EGL”) and Timothy Whaley, allege as follows:
`I
`
`I.
`
`INTRODUCTION
`
`1.
`
`This case centers on the reprehensible conduct of EnviroGLAS’s former
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`president, Defendant Timothy Wlialey. Whaley stole virtually all of EnviroGLAS’s assets and
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`converted them for the use of his new1y—created competing venture, Defendant EGL, that he
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`started while he was still an officer, director, and 50% simreizolder ofEnvimGLAS. Defendant
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`Whaley egregiously breached his fiduciary duties in unlawfully appropriating EnviroGLAS’s
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`assets and, after he resigned, he stole EnviroGLAS’s money directlyfrom its bank accounts.
`
`I-Ie
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`PLAfNTlFFS' FIRST AMENDED COMPLAINT
`
`FOR MONETARY, INJUNCTIVE. AND DECLARATORY RELIEF
`D—E 737Ulfi_l DOC; 33780.4
`
`Page I
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`

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`Case 3:o9—cv—o'u2es':3-G Document 8
`
`7UUxJ
`Filed 04/09/2uu9
`
`Page 2 of 30
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`also continued to contact EnviroGLAS’s customers and vendors after he resigned, and led them
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`to believe that they were still dealing with EnviroGLAS. Plaintiffs are entitled to recover both
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`actual and exemplary damages as a result of Wlialey’s flagrant misconduct.
`
`II.
`
`THE PARTTES
`
`2.
`
`Piaintiff EnviroGLAS is a Texas corporation with its principal office at 309 Gold
`
`Street, Garland, Texas 75042. EnviroGLAS is a closely-held corporation within the meaning of
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`the Texas Business Corporation Act article 5.l4(L).
`
`3.
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`ATC is a Texas Limited Partnership with its principai office at 309 Gold Street,
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`Garland, Texas 75042.
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`4.
`
`Plaintiffs Darin Flabiano, Brandon Flabiano, Brenton Flabianc, and Wilton
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`Flabiano (collectively, the “Flabianos”) are Texas residents and collectively represent all of the
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`shareholders in Plaintiff EnviroGLAS with the exception of Defendant Wlialey.
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`5.
`
`Defendant EnviroGLAS, LLC is a Texas 1nember—managecl limited liability
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`company with a principal office at 7704 San iacinto Place, #200, Plano, Texas 75024. EGL may
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`be served by serving its sole member and registered agent, Timothy Whaley, at 7704 San Jacinto
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`Place, #200, Plano, Texas 75024.
`
`6.
`
`Defendant Timothy Whaley is an individual residing in the State of Texas. Mr.
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`Whaley may be served with process at 7704 San Jacinto Place, #200, Plano, Texas 75024 or at
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`such other place within the State of Texas as he may be found.
`
`III.
`
`JURISDICTION AND VENUE
`
`7.
`
`This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because it
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`arises under the laws of the United States. In addition, this Court has subject matter jurisdiction
`
`PLAINTIFFS’ FIRST AMENDED COMPLAINT
`FOR MONETARY, ¥NJUNCT¥VE, AND DECLARATORY RELIEF
`D~I737016W].DDC; 33780.4
`
`Page 2
`
`

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`Case 3:09‘CV"OULU5"G Document 8
`
`Filed 04/O9/2ou.~3
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`Page 4 of 30
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`the product, and allowed the ATC name and brand to become associated with the product. In
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`addition, ATC used its resources and know—hoW to manufacture the product.
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`12.
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`In 2003, the Flabianos and Whaley consummated their partnership by forming
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`EuviroGLAS. EnviroGLAS’s purpose would he to create and market the new surface.
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`13.
`
`E4.
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`EnviroGLAS was registered with the Texas Secretary of State on July 9, 2003.
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`The majority of the discussions regarding the formation of EnviroGLAS occurred
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`at American Terrazzo’s offices in Garland, Texas, or by Whaley’s teiephone cails with ATC’s
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`offices in Garland, Texas. Whaley traveled to ATC’s offices on a number of occasions during
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`the parties’ negotiations and during their co-ownership of EnviroGLAS. In fact, W"haley’s
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`primary office was iocated in ATC’s offices in Garland during his time with EnviroGLAS.
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`15.
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`The parties agreed that Whaley wouid serve as the president of EnviroGLAS, and
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`would work for EnviroGLAS fisll time. The Flabianos vested Whaley with almost totai control
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`of EnviroGLAS’s day—to-day activities.
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`16.
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`in reliance on Whaiey’s representations that he would be dedicated to
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`EnviroGLAS and would work for its benefit, ATC and the Flabianos infused almost $1 million
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`into the company, purchasing, among other things, domain names for a website (the
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`“EnviroGLAS Doniain Names”), telephone numbers, and office equipment, as weil as paying
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`salaries and various legal fees.
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`17.
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`As with most new ventures, EnviroGLAS took some time to catch on. During
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`EnviroGLAS’s infancy, ATC continued to infiuse cash into the company because it believed in
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`the product, and was convinced that its investment would pay off over the long term.
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`18. Whaley had other plans, however. Unbeknownst to Plaintiffs, Whaley was, from
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`the very beginning, plotting to wrest the venture away from them and to deprive them of the
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`value of their investments. His plan was to allow ATC and the Flabianos to fund EnviroGLAS
`
`PLA[N_TiFFS’ FIRST AMENDED COMPLAINT
`FOR MONETARY, INEUNCTIVE. AND DECLARATORY RELIEF
`D-I737(}l6_l DOC; 33780.4
`
`Page 4
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`

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`Case 3:09—cv-0U4d5—G Document 8
`
`Filed 04/O9/2uu9
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`Page 5 of 30
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`in its fledgling years. During that time, he would become the “face” of the EnviroGi.,AS
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`business on the commercial side. Then, once the market was developed and the business was
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`capable of supporting itself, Whaiey intended to start his own competing busiiiesswusirig the
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`EnviroGLAS name, no less—to which he would take EnviroGLAS’s customers, its inventory,
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`and, incredibly, even its office equipment. To accomplish his purposes, Whaley would engage in
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`self-dealing, diverting corporate assets, and usurping corporate opportunities.
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`19.
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`As ATC and the Flabianos anticipated, over time EnviroGLAS’s business grew,
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`as consumers began to seek cost-effective, stylish, and environmentally-friendly flooring and
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`countertop alternatives.
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`20.
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`EnviroGLAS was poised to capitalize on the emerging demand for the
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`EnviroGLAS product when Whaley began to implement his plans to steal the business away.
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`21.
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`First, he submitted a patent application for the flooring (the “EnviroGLAS
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`Patent”) and trademark application (the “EnviroGLAS Trademark”) in his own name, even
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`though he knew that EnviroGLAS and/or ATC was the true owner of this inteilectual property.
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`In fact, he used EnvfI‘0GLASflH1dS (by submitting receipts for reimbursernetit to ATC’s offices)
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`to pay iegal fees reiated to these applications, and used EnviroGLAS’s ftmds to hire a “trademark
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`protection agency”'to prevent infringement. Whaley, of course, hid the fact that he was hoarding
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`EnviroGLAS’s intellectual property by piacing them in his name. A true and correct copy of the
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`EnviroGLAS Patent (U.S. Patent Number 6,770,328) is attached at Exhibit A, and true and
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`correct copies of the EnviroGLAS Trademark are attached as Exhibit B.
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`22.
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`In furtherance of Whaley’s nefarious plan, he created Defendant “EnvircGLAS,
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`LLC”—a limited liabiiity company trading on the EnviroGLAS name. On January 10, 2007-
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`while he was still an officer and director of EnviroGLAS—Whaley filed a certificate of
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`formation for “EnviroGLAS, LLC.”
`PLAZNTIFFS’ FIRST AMENDED COMPLAINT
`
`FOR MONETARY INJUNCTIVE AND DECLARATORY RELIEF
`D«l'7370l6_l.DOC; 33780.4
`
`Page 5
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`

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`Case 3:09-cv—0U.«_o5—G Document 8
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`Fiied O4/O9/2Uu9
`
`Page 6 of 30
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`23.
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`Piaintiffs were not aware of Wha1ey’s conduct in forming this new entity, nor did
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`Whaley disclose this conduct to Plaintiffs.
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`24.
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`On April 30, 2007, Whaley, on behalf of EnviroGLAS, LLC, executed the
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`document attached as Exhibit C.
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`25.
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`The document attached as Exhibit C reflects a third party’s contract proposal to
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`EnviroGLAS Products, Inc.
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`26.
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`On the document attached as Exhibit C, Whaley struck through i3.nviroGLAS
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`Products, Inc.’s name and inserted the name of EnviroGLAS, LLC. Whaley executed the
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`document as the “President/Owner” of EnviroGLAS, LLC.
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`27.
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`Because Whaley was the president (and primary employee) of EnviroGLAS, he
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`was entrusted with the responsibility of setting up the company’s website, EnviroGLAS’s
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`Domain Names, EnviroGLAS’s toil-free telephone lines (the “Toll-Free Nnrnbers”),
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`EnviroGLAS’s email accounts (the “Emaii Accounts”), and the like. He set these up in his own
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`name—rather than in the name of EnviroGLAS—~«—althougl1 he used EnviroGLAS’s funds to pay
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`for them. Later, when he resigned from EnviroGLAS, he refused to give EnviroGLAS access to
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`any of these things—instead, he used them to give his new venture a ieg up (even though neither
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`Whaley nor EGL had any rights in them).
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`28.
`
`29.
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`On May 7, 2007, Whaiey tendered his resignation as president of EnviroGLAS.
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`Despite having tendered his resignation, Whaley nevertheless remained as a
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`director and shareholder of the company.
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`30.
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`Even before he resigned as an officer of EnviroGLAS, Whaley began his efforts
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`to put] customers away from i3nviroGLAS to his new company (on which he bestowed a
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`confusingly similar name). In addition, both before and after his departure, Whaley interfered
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`with EnvitoGLAS’s relationships with its customers and suppliers by leading EnviroGLAS’s
`?LAiN’I'IFFS’ FIRST AMENDED COMPLAINT
`
`FOR MONETARY, INJUNCTIVE, AND DECLARATORY RELIEF
`D-§737016_1.DOC; 33780.4
`
`i’age 6
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`

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`Case 3:D9—cv-OU4o‘5—G Document 8
`
`Filed 04/O9/2uu9
`
`Page 7 of 30
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`existing customers and suppliers to believe that they were dealing with him in his capacity with
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`EnviroGLAS—in other words, he continued to deal with EnviroGLAS’s customers and
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`suppliers, who didn’t recognize any difference.
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`31.
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`Not satisfied with his flagrant breaches of fiduciary duties and with stealing
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`EnviroGLAS’s customers and inteilectual property rights, Whaley openly and unabashedly stoic
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`EnviroGLAS’s money, equipment, and rents, and used all of these things to jumpstart Defendant
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`EGL, providing it with start-up capital and pre-paid equipment and facilities.
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`32.
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`Incredibly, Wha1ey—qfier resigningfi'0m Envz'roGLA.S'—knowingly and willfully
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`accessed EnviroGLAS’s bank accounts to withdraw money and to transfer funds from those
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`accounts into his own accounts. Whaiey did this even though EnviroGLAS had expressly
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`informed him that he was no longer permitted to access EnviroGLAS’s accounts.
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`33. Whaley also used EnviroGLAS’s funds to pay the deposit and two months’ rent
`
`on the office space for his new venture. In addition, Whaley knowingly charged shipments for
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`his new venture to EnviroGLAS’s FedEx account.
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`34. Whalcy also converted the office equipment—inc1uding computers, desks, and
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`other sapplies—for which Envi1'oGLAS had paid (via ATC’s payment processing). When he left
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`EnviroGLAS, he rain his competing venture out of the same office paid for by EnviroGLAS and
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`which EnviroGLAS had intended to use.
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`35. Whaley refused to return ail of the computers, furniture, printers, and other office
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`equipment for which EnviroGLAS had unquestionably paid (again, Wlialey submitted receipts to
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`ATC’s offices and was reimbursed for any of his own expenditures for this equipment).
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`36. Whaley did not even bother to fabricate an excuse for his misdeeds—»-~he simply
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`shamelessly stole EnviroGLAS’s personal property and money to use in the operation of EGL.
`
`PLAINTIFFS’ FIRST AMENDED COMPLAENT
`
`FOR MONETARY. INJUNCTIVE AND DECLARATORY RELIEF
`E)-l7370E6_l.DOC; 33780.4
`
`Page 7
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`

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`Case 3:09-cv—OUao5—G Document 8
`
`Filed 04/U9l2uu9
`
`Page 8 of 30
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`37.
`
`Not only did he iilegaliy conveit this property for his own use, but he used this
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`property to compete against EnviroGLAS, the very company that owned them.
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`38.
`
`Wlialey even went so far as to attend a trade show on behalf of his new company
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`even though Enviro GLAS hadpaid the depositfor the show.
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`39.
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`Whaley then, upon information and belief, contacted EnviroGLAS’s sales
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`representatives in an effort to persuade them to sever their ties with EnviroGLAS and team up
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`with him.
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`40.
`
`After resigning from his position at EnviroGLAS, Whaley continued to access
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`EnviroGLAS’s email accounts without authorization. In addition, he used the domain names
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`registered with EnviroGLAS funds, and a website created at EnviroGLAS’s expense, on behaif
`
`of Defendant EGL, his new company. Whaley has flooded the internet with the EnviroGLAS
`
`name and has used EnviroGLAS’s Trademark, website, email addresses, domain names, and
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`patent to further the interests of Defendant EGL. He has repeatedly misrepresented EnviroGLAS
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`as related to his venture, and has confused the market by trading on EnviroGLAS’s established
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`name and trademarks.
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`41.
`
`On information and belief, including information obtained from the EnviroGLAS
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`Website now operated by Defendants, Whaley and EnviroGLAS Products, LLC have used the
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`EnviroGLAS Trademark in Dalias County and have deait with customers in Dallas County.
`
`indeed, the EnviroGLAS Website includes a “testimonial” from a resident of this district.
`
`42.
`
`Often, customers and suppliers dealing with Whaley after Wha1ey’s resignation
`
`believed that they were deaiing with EnviroGLAS, and were unaware of any distinction between
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`EnviroGLAS Products, Inc. (the Piaintift) and Wha1ey’s new venture (EnviroGLAS, LLC).
`
`Exhibits D and E are tme and correct copies of correspondence received by EnviroGLAS
`
`PLAINTIFFS’ FIRST AMENDED COMPLAINT
`
`FOR MONETARY. INJUNCTIVE, AND DECLARATORY RELEEF
`D-1‘."370E6__I.DOC; 33780.4
`
`Page 8
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`

`
`Case 3:09-CV-0O4ti5—G Document 8
`
`Filed 04/09/2Uu9
`
`Page 9 of 30
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`related to CO1'lfl1SiO[1 created by Defendants. There are undoubtedly many additional instances of
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`which EnViroGLAS is not yet aware.
`
`43.
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`In addition, Whaley contacted EnviroGLAS’s website hosting service (related to a
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`website different fioni the one that Whaley improperly continued to control after he resigned
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`from EnviroGLAS) and demanded that the site be taken down (claiming that it infiinged on his
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`trademark). As a result of Whaley’s improper conduct, EnviroGLAS’s website host temporarily
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`removed EnviroGLAS’s website from the internet.
`
`44.
`
`Until Wlialey resigned from E11viroGLAS, Plaintiffs were prevented from
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`reasonably discovering Whaley’s prior rnisconduct as a result of his continuing fraud. Once he
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`resigned his position and began soliciting clients for his competing venture, his misconduct came
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`to light.
`
`45.
`
`On or about March 26, 2009, Whaley and/or EGL’s attorney sent a letter to
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`American Terrazzo, accusing American Terrazzo (presumably referring to Er1viroGLAS
`
`Products, Inc.) of infringing the E11viroGLAS Patent and the EnviroGLAS Trademark. A true
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`and correct copy of the letter is attached as Exhibit F.
`
`46.
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`At about the same time, Whaiey and/or EGL’s attorney sent letters to
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`EnviroGLAS custoiners and other terrazzo industry participants (including at least one in Dallas
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`County) in which Whaiey accused American Terrazzo (presumably referring to EnviroGLAS
`
`Products, Inc.) of infringing the EnviroGLAS ?atent and the EnviroGLAS Trademark. A true
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`and correct copy of one such letter is attached as Exhibit G.
`
`47.
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`These letters were sent in bad faith or as the result of a failure on the part of
`
`Whaley and/or his agents to conduct due diligence.
`
`FLAINTIFFS’ FIRST AMENDED COMPLAINT
`
`FOR MONETARY INJUNCTIVE AND DECLARATORY RELIEF
`D-]7370Efi_l.DC|C; 33730.4
`
`Page 9
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`

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`Case 3:09—cv-Ooaud-G Document 8
`
`Filed O4/09/Ztiue
`
`Page 10 of 30
`
`V.
`
`CLAIMS FOR RELIEF
`
`CLAIM ONE
`
`(Breach of Fiduciary Duty — Whaley)
`
`48.
`
`Plaintiffs repeat and re-allege all of the allegations in the paragraphs above as
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`well as in the other counts of this complaint, as if set forth fully herein.
`
`49. Whaley, as an officer, director, and fifty—percent shareholder of EnviroGLAS,
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`owed fiduciary duties to the company and to the Flabianos, as the remaining sharehoiders of a
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`closely-held corporation.
`
`50.
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`In addition, even before EnviroGLAS was formed, Whaley and the Flabianos
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`partnered together to work on the concept. Moreover, once EnviroGLAS was formed, the
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`Flabianos entrusted Whaley with the role of running the corporation. They allowed Whaley to
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`become the “face” of EnviroGLAS to clients, suppliers, and others. Whaley knew that the
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`Flabianos reposed a great deal of trust in him for these purposes, and he actively encouraged
`
`such trust.
`
`51. Whaley breached his fiduciary duties, including his duties of loyalty, fair dealing,
`
`integrity, and fiili disclosure, as well as his duty to refrain from selfldealing, through his self~
`dealing and his disloyai and surreptitious conduct described above.
`
`52. Whaley’s breaches of fiduciary duties proximately caused damages to
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`EnviroGLAS and the Flabianos, for which they are entitled to recover. EnviroGLAS has
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`suffered lost profits and additionai expenses as a result of Whaley’s breaches. The Flabianos and
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`ATC have suffered pecuniary damages through their investments in EnviroGLAS. In addition,
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`Whaley profited and earned significant fees through his breaches of fiduciary duties, and
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`EnviroGLAS is entitled to recover any profits to Whaley under the equitable theory of
`
`disgorgement.
`PLA2N'¥‘IFFS' FIRST AMENDED COMPLAINT
`FOR MONETARY, INJUNCTIVE, AND DECLARATORY RELIEF
`D-1'.7370l6_l .DCJC; 33780.4
`
`Page 10
`
`

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`Case 3:09-cv-004445-G Document 8
`
`Filed O4/09/Zoos
`
`Page ‘H of 30
`
`53. Whaley’s breaches of his fiduciary duty have been willful, committed with gross
`
`negiigence, or otherwise qualify for the imposition of exemplary damages. Plaintiffs seek
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`exemplary damages as a result of Whaley’s breaches of fiduciary duties.
`
`CLAEM TWO
`
`(Fraud by Non-Disclosure — Whaley)
`
`54.
`
`Plaintiffs repeat and re—allege all of the allegations in the paragraphs above as
`
`well as in the other counts of this complaint, as if set forth fully herein.
`
`55.
`
`Throughout his dealings with ATC, the F labianos, and EnviroGLAS until the time
`
`he resigned from EnviroGLAS, Whaley concealed his true intentions from Plaintiffs, as well as
`
`his illicit conduct in forming his conipeting venture.
`
`56. Whaley had a duty to disclose his conduct and intentions due to his fiduciary
`
`relationship with Plaintiffs as well as his partiai disclosures conveying a false impression to
`plaintiffs at the outset oftheir venture (specifically, the impression that Whaley intended to
`
`partner with the Flabianos and ATC and that his conduct would further the interests of
`
`Em/iroGLAS).
`
`57. Whaley’s true intentions and the true nature of his conduct were rnaterial—~had
`
`Plaintiffs known that Whaiey was preparing to steal all of the assets that EnviroGLAS
`
`accumulated (including its customers), Plaintiffs would have dealt differently with Whaley and
`
`would not have infused substantial amounts of money in EnviroGLAS. In addition, Plaintiffs
`
`would not have expended EnviroGLAS’s limited funds on assets that Whaley placed in his own
`
`name and that Whaiey was planning to convert for his own use.
`
`58. Whaley knew that Plaintiffs were ignorant of the undisclosed facts and conduct——
`
`indeed, he made every effort to conceal these things from them. Because of this, Plaintiffs did
`
`not have an equal opportunity to discover these facts.
`
`PLAINTWFS’ FIRST AMENDED COMPLAINT
`FOR MONETARY, INJUNCTIVE, AND DECLARATORY RELIEF
`D-1737U16_1.DOC; 33780.4
`
`Page i l
`
`

`
`Case 3:O9—cv-00435-G Document 8
`
`Filed D4/O9/2Uua
`
`Page 12 of 30
`
`59.
`
`Despite Whaiey’s duty of full disclosure of information relevant to his conduct
`
`and his plans regarding his competing venture, Whaley deliberately remained silent.
`
`60. Whaley intended to induce Plaintiffs to partner with him in creating EnviroGLAS,
`
`to fund EnviroGLAS, and to continue funding various activities and acquisitions which Plaintiffs
`
`believed to be for the benefit and use of EnviroGLAS.
`
`6l.
`
`Plaintiffs in fact took the actions that Whaley intended as a result of their reliance
`
`on the facts as they believed there to be (that is, because of Whaley’s nondisclosure).
`
`62.
`
`As a proximate result of Whaley’s conduct and non—disc1osures, Plaintiffs
`
`suffered damages in an amount to be proven at trial, for which Plaintiffs are entitled to recover.
`
`63.
`
`Plaintiffs are also entitled to recover exemplary damages as a result of Whaley’s
`
`fraudulent conduct.
`
`CLAIM THREE
`
`(Conversion — Defendants)
`
`64.
`
`Plaintiffs repeat and re~allege all of the allegations in the paragraphs above as
`
`well as in the other counts of this complaint, as if set forth fully herein.
`
`65.
`
`EnviroGLAS owned, possessed, and/or had the immediate right to possession of
`
`certain personal property, including raw materials used to fabricate the EnviroGLAS flooring,
`
`the office space and leased premises (and accompanying lease agreements), the office equipment
`
`and furniture, the EnviroGLAS Patent, the EnviroGLAS Trademark, the Domain Names (and
`
`accompanying lease agreements), and the web sites (and accompanying lease agreements).
`
`66.
`
`Defendants have wrongfiilly exercised dominion or control over the above
`
`described property—they have treated the property as their own and have interfered with
`
`EnviroGLAS’s possessory rights.
`
`PLAINTIFFS’ F¥RST AMENDED COMPLAINT
`FOR MONETARY, INJUNCTIVE, AND DECLARATORY RELIEF
`D-1'/'3?0I6_I.DOC; 33780.4
`
`Page [2
`
`

`
`Case 3:09—cv-OO4o5~G Document 8
`
`Filed O4/09/Zbue
`
`Page ‘E3 of 30
`
`67.
`
`Defendants’ wrongfiil conduct has proximately injured EnviroGLAS, and
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`Em/iroGLAS is entitled to recover damages in an amount to be proven at trial.
`
`68.
`
`In addition, Plaintiffs are entitled to recover exemplary damages as a result of
`
`Defendants’ conversion of Plaintiffs’ property.
`
`CLAIM FOUR
`
`(T01-tious Interference with Existing Relations - Defendants)
`
`69.
`
`Plaintiffs repeat and re—allege all of the allegations in the paragraphs above as
`
`well as in the other counts of this complaint, as if set forth fully herein.
`
`70.
`
`EriviroGLAS had a number of valid contracts and agreements with its customers,
`
`suppliers, and representatives, as well as ongoing business relationships with these parties, at the
`
`time Whaley resigned and began his competing venture.
`
`71. Whaley and EGL were aware of these agreements and relat-ionships—indeed,
`
`Whaley had fostered many of these relationships in his role as EnviroGLAS’s president.
`
`72.
`
`Despite their awareness of the established relationships and contracts that
`
`EnviroGLAS had with its customers, suppliers, and representatives, Defendants intentionally
`
`interfered by inducing parties to breach their contracts with EnviroGLAS and to enter into
`
`contracts with EGL'. Defendants accomplished his rnisfeasance by, among other things, using
`
`contact information and customer iists that Whaley had acquired as a result of his position at
`
`EnviroGLAS.
`
`73.
`
`in addition, Whaley interfered with EnviroGLAS’s contractual relationships by
`
`threatening EnviroGLAS’s web host regarding alleged infringeinent of the EnviroGLAS
`
`Trademark.
`
`PLA[NT§FFS’ FIRST AMENDED COMPLAINT
`
`FOR MONETARY, IN.}UNCTi\/E, AND DECLARATORY RELIEF
`D-1737Ul6Wl DOC; 33780.4
`
`Page 13
`
`

`
`Case 3:09-cv—0O2:ti5—G Document 8
`
`Filed O4/09/2(Ju9
`
`Page 14 of 30
`
`74.
`
`Moreover, Defendants have interfered with EnviroGLAS’s contractual
`
`relationships by sending a threatening letter accusing Piaintiffs of infringing the EnviroGLAS
`
`Patent and the EnviroGLAS Trademark.
`
`75.
`
`As a proximate result of Defendants’ maiicious conduct, EnviroGLAS has
`
`suffered significant damages for which EnviroGLAS is entitled to recover in an amotmt to be
`
`proven at trial.
`
`76.
`
`In addition, EnviroGLAS is entitled to recover exemplary damages as a result of
`
`Defendants’ tortious interference.
`
`CLAIM FIVE
`
`(Tortious Interference with Prospective Relations — Defendants)
`
`77.
`
`Plaintiffs repeat and re—a1lege all of the allegations in the paragraphs above as
`
`well as in the other counts of this complaint, as if set forth fiilly herein.
`
`7'8.
`
`In addition to interfering with EnviroGLAS’s relationships with its existing
`
`customers and suppliers, Defendants also interfered with prospective customers and suppliers.
`
`EnviroGLAS had numerous prospective clients when Whaley began EGL. There was a
`
`reasonable probability that, but for Whaley's and l3GL’s misconduct, EnviroGLAS would have
`
`entered into a business relationship with these prospective customers.
`
`79.
`
`Defendants intentionally and maliciously interfered with EnviroGLAS’s
`
`prospective relationships.
`
`80.
`
`As set forth above, Defendants illicitly contacted EnViroGLAS’s prospective
`
`customers and suppliers (using information he obtained as a result of his position with
`
`EnviroGLAS), and interfered with Enviro(}LAS’s prospective relationships.
`
`81.
`
`Moreover, Defendants have interfered with EnviroGLAS’s prospective
`
`relationships by sending a threatening letter accusing Plaintiffs