The district contends that DeWayne’s connections to multilevel marketing company Organo Gold create an ethical conflict of interest that compromises his work for PSD. According to The Coloradoan, its attorneys advocate that DeWayne’s claim be dismissed by a judge.

Organo’s Distributor Agreement and Policies and Procedures require that, should any dispute arise between parties, an attempt shall be made at nonbinding mediation to attempt resolution. No party seriously contests this requirement.

Defendants’ Misrepresentations

According to the Complaint, Organo and Aussie and Norman entered into various contracts pertaining to the development of premier coffee products. Organiso agreed to pay Aussie and Norman approximately $5 Million over five years as payment for them to promote Organo by making personal appearances, performing professional management consulting services, obtaining trademark registrations etc. Unfortunately, however, Organiso later used these trademarks without their permission; which violated both their contracts as well as their rights of publicity.

Defendants assert in their Supplementary Briefing that, with the exception of Little Prince Equity LLC and Thibaut Denonain, claims against Third-Party Defendants do not arise out of indemnification related liability; rather they constitute viable causes of action arising from the same core facts and allegations against Plaintiff (DE 165 at 7). They specifically allege that Plaintiff has dispossessed Goldner of his equity interest in various MegaCap Third Party Defendants as well as engaging in misconduct and breaching fiduciary duties relating to these activities (DE 165 at 7).

Defendants also contend that the Court lacks jurisdiction to hear Third-Party Defendant Counterclaims because they do not meet the legal standard for standing to raise them. As per their supplemental filing, Plaintiff and Defendants’ distributor agreement includes mandatory pre-litigation mediation which states “[nothing in this Agreement shall prevent [Plaintiff] from seeking an injunction or other relief from any court with jurisdiction to safeguard and protect his interests prior to, during, or post arbitration proceeding”

Due to the above discussion, the Motion to Dismiss (DEC 71) should be denied. Plaintiff has filed multiple allegations alleging numerous statutory violations and breaches of contract and fiduciary duty by defendants, so he deserves an ample opportunity to present evidence supporting his claims. According to The Coloradoan’s coverage, Smyser cited DeWayne’s involvement with Organo as one of his reasons for leaving her department and jeopardize its effectiveness – something which could imperil both their effectiveness and that of public schools as a whole.

Defendants’ Negligence

A lawsuit filed in Delaware federal court asserts that a class of plaintiffs who experienced injuries after consuming Organo products containing Ganoderma Lucidum should receive financial compensation. According to the complaint, defendants misrepresented and concealed health risks associated with their products as well as failed to adequately label them; compensatory and punitive damages are sought through this suit.

Aussie and Norman were charged in a lawsuit with Organo for entering into contracts to develop its premium coffee product line, which required them to create brand and logo elements, obtain trademark registrations for these trademarks, appear at personal appearances for promotional events organized by Organo, perform professional management consulting services as required, as well as fulfill other conditions stipulated in their agreements with Organo.

According to Organo’s lawsuit, Norman and Aussie earned more than $4.3 million over five years from their contract with Organo; however, the suit alleges they violated their contracts by failing to fulfill requirements outlined within various agreements.

As part of their settlement agreements, the defendants were required to participate in Organo’s “Project 50K,” an multi-level marketing event targeting top-tier distributors that took place in Las Vegas during February 2015 and included training sessions led by former distributors with significant success.

One training session featured a speaker who asked attendees whether or not they were satisfied with earning teacher salaries alone, or whether they desired greater financial gains by selling Organo Gold products. Participants were advised to recruit new members as often as possible while also promoting Organo products.

Smyser found the conduct and involvement of DeWayne violated district policies, so she placed him on paid administrative leave on December 4 and later terminated him due to conflict-of-interest concerns and as she could no longer trust him to lead his department.

Defendants’ Breach of Contract

Defendants have not raised serious objections to Plaintiff’s allegations that she has properly brought several causes of action – fraud, negligence and breach of contract – in this lawsuit. Therefore, this Court finds that Plaintiff invoked the supplemental jurisdiction provided by SS 1367 over all her claims in this litigation. Furthermore, all her claims stem from Organo misrepresenting its purported health benefits for Ganoderma Lucidum products.

Although Defendants dispute the facts alleged in the complaint, they have failed to present any evidence that misrepresentations did not take place or was false. Therefore, this claim will be dismissed with prejudice by the Court.

The breach of contract allegations relate to Defendants’ failure to fulfill certain obligations under the Distributor Agreement as amended. More specifically, they allegedly failed to pay their required monthly fees, attend training events and promote Organo professionally while making personal appearances to meet with distributors and customers.

Defendants have also been accused of breaching the Distributor Agreement’s non-solicitation and confidentiality provisions, specifically regarding non-competing opportunities that directly compete with Organo Gold’s offering of Ganoderma-based products, while their confidentiality obligation prohibits them from sharing any information regarding Organo’s business with any outside parties.

Although Defendants contend that non-solicitation and confidentiality provisions are unenforceable, the Court finds these allegations are sufficient to support a finding of probable cause that Defendants breached both. Their statements to other distributors regarding offering new “opportunities” constitute statements sufficient to establish probable cause that Defendants violated both provisions.

As for Organo’s breach of contract claims, the Court rejects Defendants’ argument that these claims do not involve any reasonable amount in controversy as the alleged breach occurred post-DeWayne’s termination from PSD. Furthermore, as this matter pertains to preliminary injunctive relief being granted or denied the balance clearly tips in favor of Organo receiving relief as requested in Organo’s petition for preliminary injunction relief.

Defendants’ Breach of Fiduciary Duty

An operating partner of an LLC or member of its board of directors are bound by fiduciary duties to act in the best interests of both their company and shareholders. If a director or managing member breached their fiduciary duty by taking actions that result in forcing out minority shareholders, those shareholders can file suit to recover losses sustained as a result. To prove a fiduciary duty violation by defendant, plaintiff must establish three elements. 1. That they and the defendant had an fiduciary relationship. This can include contractual or trust-like arrangements, like between employers and employees or lawyers and clients, or familial/personal ones like between parents and their children. 2. That the defendant breached their fiduciary duty towards them by acting against their best interests directly resulting in damages to themselves or another.

Marlin Johnson filed his claim alleging that defendants marketed and sold coffees and teas containing Ganoderma Lucidum, a fungus which causes severe complications when consumed by individuals undergoing gastric bypass surgery. Johnson charged that they failed to label or warn consumers about these products as per federal standards and that due to this negligence he suffered severe injuries as a result of their products.

To support his claim, the plaintiff filed an amended complaint with additional claims of legal malpractice and breach of fiduciary duty. While these two claims are normally redundant and should not be pursued together, courts should allow both cases to move forward simultaneously in this instance.

Today’s decision demonstrates the court’s agreement with the plaintiff in permitting both legal malpractice and breach of fiduciary duties claims to go forward simultaneously, consistent with many previous rulings such as VA Management v. Valvani (2021 N.Y. Slip Op. 01878 (1st Dept Mar 25 2021) – that shows they will not prioritize form over substance when interpreting these statutes and principles.