Darrel C. Menthe (SBN 186252)

Sage Law Partners, PC

9696 Culver Blvd., Suite 301

Culver City, CA 90232

(310) 601-1200 Phone

(310) 601-1201 Facsimile

Email: dmenthe@sagelawpartners.com

Attorneys for Plaintif!Xyvest Holdings, Inc.

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES - UNLIMITED

Xyvest Holdings, Inc., a California corporation;

Plaintiff,

Civil Case No.: ------

COMPLAINT FOR:

-vs-

General Recovery Recycling LLC d/b/a GRR

LLC, a limited liability company; John Wanko,

an individual; and Does 1 through 10, inclusive,

1. Breach of Contract

2. Conversion

Defendants.

COMPLAINT

Plaintiff Xyvest Holdings, Inc. ("Xyvest") hereby alleges as follows:

PARTIES

1. Xyvest Holdings, Inc. ("Xyvest" or "Plaintiff') is a California corporation with its

principal place of business within the County of Los Angeles, in the State of California. Xyvest is

the managing partner of 611 Wilshire Properties, the fee owner of the prope1iy located at 611

Wilshire Boulevard, Los Angeles, CA 90017.

2. Plaintiff is infmmed and believes and thereon alleges that Defendant General

Recovery Recycling LLC d/b/a GRR LLC ("GRR") is an Ohio limited liability company with its

principal place of business in Galena, Ohio.

- 1 -

COMPLAINT

Electronically FILED by Superior Court of California, County of Los Angeles on 04/29/2019 04:54 PM Sherri R. Carter, Executive Officer/Clerk of Court, by K. Vargas,Deputy Clerk

Assigned for all purposes to: Stanley Mosk Courthouse, Judicial Officer: Monica Bachner

19STCV14828

1 3. Plaintiff is informed and believes and thereon alleges that Defendant John Wanko is a

2 resident of Galena, Ohio.

3 4. Each Defendant named herein, including those named as DOES, is, and at all relevant

4 times mentioned herein was, the agent, servant, co-conspirator, and/or employee of each of the other

5 named Defendants and, in doing the things alleged herein, was acting within the course and scope

6 and with the knowledge of the other named Defendant. Plaintiff further alleges on information and

7 belief that each Defendant named herein aided and abetted the others by authorizing and/or ratifying

8 the acts herein alleged.

9 5. The full extent of the facts linking the fictitious named defendants with the foregoing

10 causes of action and/or trne names or capacities, whether individual, corporate, partnership,

11 associate, member, or otherwise, of defendants DOES 1 through 10 are unknown to Plaintiff, who

12 therefore sues these defendants by such fictitious names. Plaintiff is informed and believes and

13 thereon alleges that each of the defendants designated herein as DOE is negligently, wantonly,

14 recklessly, tortiously and unlawfully responsible in some manner for the events and happenings

15 herein refen-ed to and proximately caused injury and damages to Plaintiff as herein alleged. Plaintiff

16 will hereafter seek leave of Court to amend this Complaint to show said defendants' trne names and

17 capacities after the same have been asce1iained.

18 6. Plaintiff is info1med and believes and thereon alleges that Defendant General

19 Recovery Recycling LLC d/b/a GRR LLC ("GRR") is and was at all relevant times herein the alter

20 ego of its member-manager and principal owner John Wanko, such that the corporate veil should be

21 pierced and he held personally liable for the misdeeds of the corporation, for the following reasons:

22 a. Plaintiff is informed and believes and thereon alleges that at all times herein

23 mentioned there existed such a unity of interest and ownership between the individual

24 defendant and the corporate defendant GRR such that the individuality and

25 separateness of the corporate defendant as alter ego had ceased.

26 b. Plaintiff is informed and believes and thereon alleges that at all times herein

27 mentioned GRR has been a shell and empty framework which the individual

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COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12 7.

defendant used as conduct of his personal business, prope1iy, and affairs.

c. Plaintiff is informed and believes and thereon alleges that at all times herein the

corporate defendant GRR was insufficiently provided with capital, such that its

capitalization was inadequate for the business in which it was engaged.

d. Plaintiff is informed and believed and thereon alleges that the corporate defendant

GRR is unable to pay its invoices as they regularly come due.

e. Based on the foregoing, and due to the other facts alleged herein, adherence to the

fiction of the separate corporate existence of the corporate defendant GRR would

under these circumstances be urtjust and inequitable, such that the corporate fiction

should be disregarded.

JURISDICTION AND VENUE

This court has subject matter jurisdiction over this action because the amount in

13 controversy exceeds $25,000.

14 8. Venue is proper in this comi because the contracts at issue were signed in this County

15 and specify Los Angeles County as the forum for resolution of disputes.

16 FIRST CAUSE OF ACTION

17 BREACH OF CONTRACT

18 (Against all Defendants)

19 9. Xyvest is the managing paiiner of 611 Wilshire Properties, the title owner of the real

20 prope1iy, a high-rise building located at 611 Wilshire Boulevard, Los Angeles, California (the

21 "Building"). Xyvest and GRR entered into an agreement signed on or about February 19, 2019, for

22 GRR to perform services for Xyvest in the building located at 611 Wilshire Boulevard, Los Angeles,

23 California, 90017 (the "Agreement").

24 10. Under the tenns of the Agreement, GRR was to remove from the Building a

25 substantial amount of telecommunications equipment from the Building, including from the walls

26 and conduits internal to the building. GRR was to then sell the salvaged equipment and scrap,

27 paying 50% of the gross proceeds to Xyvest. Under the Agreement, GRR was to complete all

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COMPLAINT

1 removal and sales within 60 days, and pay to Xyvest all sums due within 10 days of the receipt of

2 funds.

3 11. Plaintiff is informed and believes and thereon alleges that gross proceeds of $750,000

4 were received, requiring GRR to tender payment of $375,000 to Xyvest.

5 12. GRR has refused to make any payment to Xyvest. GRR is therefore indebted to

6 Xyvest in the amount of $375,000.

7 13. Xyvest Holdings, Inc. perfmmed all conditions and covenants required of it for

8 payment under the Agreement.

9

10

14.

15.

Demand has been made for payment of these sums, but no payments have been made.

As a direct and proximate result of the breach of the Agreement, Plaintiff has and will

11 sustain damages of $375,000. Plaintiff is entitled to such payment of $375,000 plus interest at the

12 legal rate.

13 SECOND CAUSE OF ACTION

14 CONVERSION

15 (Against all Defendants)

16 16. Plaintiff restates and incorporates the allegations contained in each paragraph above

17 as though fully set forth herein.

18 17. GRR removed telecommunications equipment and scrap from the Building pursuant

19 to the Agreement with Xyvest. The total amount of such removed property ("Removed Prope1iy") is

20 known to GRR. All such equipment was the personal prope1iy of Plaintiff in which it had a present

21 possessory interest.

22 18. GRR was required pursuant to the Agreement to sell the Removed Property for the

23 benefit ofXyvest. GRR had no right to possess or sell the equipment for any other purpose.

24 19. GRR was to retain 50% of the gross proceeds as return to Xyvest 50% of the gross

25 proceeds after sale of the Removed Prope1iy.

26 20. GRR has refused to pay to Xyvest 50% of the gross proceeds, thus it has wrongfully

27 conve1ied the Removed Property for its own benefit. Xyvest did not consent to the sale of the

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COMPLAINT

1 Removed Property by GRR except insofar as it received the sales proceeds.

2

3

21.

22.

Xyvest has been damaged in an amount to be proven at trial.

Defendants' acts were willful, wanton, malicious, oppressive, and fraudulent, and

4 therefore justify the award of exemplary and punitive damages according to proof at trial.

5

6 Jury Demand

7 Plaintiff demands a trial by jury as to all issues so triable.

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

Prayer for Relief

WHEREFORE, Plaintiff prays for as to each Defendant:

First Cause of Action

1. Actual damages of $375,000

2. Costs of suit; and

3. Interest at the legal rate.

Second Cause of Action

WHEREFORE, Plaintiff prays for as to each Defendant:

1. Actual damages

2. Punitive or Exemplary Damages

3. Costs of suit; and

4. Interest at the legal rate.

23 Dated: April 25, 2019

24

Sage Law Partners, PC

25

26

27 Danel C. Menthe

28

Attorneys for Xyvest Holdings, Inc.

- 5 -

COMPLAINT

EXHIBIT A

l!greement

This agreement is being made between Xyvest Holdings and GRR LLC. Xyvest Holdings is the

managing partner of a building in Los Angeles al 611 Wilshire Blvd. The buHding has a large amount of

telecommunications equipment that Xyvest Holdings wants to sell. GRR LLC is in the business of

removal and selling of telecommunications equipment and has hereby agreed lo remove and sen

telecommunications equipment for Xyvest Holdings based on the following guidelines.

GENERAL WORK GUIDELINES:

Safety is GRR LLC's priority on all jobs big or small. GRR LLC has and shall comply fully wrth their

very own Health, Safety and Environmental Operations manual outlining safety processes and

procedures that are set in place and in compliance with all OSHA federal guidelines and

California CA-OSHA mandates

GRR LLC to follow all of regulatory. security and logislic protocols, including those of Xyvest

Holdings, in selling, removing and shipping of the telecommunications equipment.

All GRR LLC employees are to be fully insured for Workers Compensation. Additionally, GRR LLC

shall carry a General Liability Insurance policy. Prior to commencement of any work for the

removal and selling of the telecommunications equipment. GRR LLC shall provide evidence of all

insurance to Xyvest Holdings with an additional insured clause as follows:

Xyvest Holdings Inc and 611 WJ!shire Properties GP

611 Wilshire Blvd. #810

Los Angeles, CA 90017

GRR LLC shall perform the work outlined in this agreement based on a 7:00 am to 5:00 pm

Mondays through Saturdays, excluding holidays, to be attended by a representative of Xyvest

Holdings at its sole discretion, as follows:

> 7:00 AM attendance check, job safety discussion and review.

> 7:30 AM start work when all concerns are addressed and a Job Safety

Agreement is signed.

> 9:30 AM break.

> 12:00 noon lunch,

> 12:45-1:00 PM return and continue work.

> 4 :30 PM housekeeping and review

> 5:00 PM shut down (unless discussed otherwise, and based on particular task)

Note: Any significant deviations from the above schedule by GRR LLC may be authorized

in writing at the sole discretion of Xyvesl Holdings.

ELECTRIC HANDLING GUIDELINES:

A local, medium voltage and high voltage industrial electrical contractor will accompany the GRR

LLC crew onsite to perform the acfual testing. airgaps and disconnections to isolate & loto

whatever we plan to remove.

GRR LLC hereby certifies that every one of their aew are fully versed in medium and high voltage

electrical safety.

GRR LLC may outsource the electricians on projects not only to promote safety for GRR LLC crew

and to adhere to any all fire/zoning codes. regulations and/or laws

GRR LLC hereby acknowledges that some of the equipment is live and in use, these are not to be

touched or removed.

COPPER RECOVERY GUIDELINES:

GRR LLC will furnish 4x4x4 Gaylord 5 wall cardboard boxes to store copper scrap.

Cable will be rolled up in coils and taped with heavy duty duct tape and placed in boxes.

Copper bars will be placed in same boxes but not filled more than half way lo prevent box from

breaking.

GUIDELINES FOR WEIGHING SCRAP

GRR LLC will furnish a 5x5 or 6x6 platform digital scale and weigh each box individually when

empty to gel tare weight.

Full box will be weighed again for gross weight

Each box will get a white sticker to identify, gross, tare & net

Prior to loading boxes on truck the vehicle itself is also weighed empty al certified CAT Scale at

nearest truck stop, then weighed again while loaded, and then compared with packing

slip/manifest to be recorded.

Everything sold by GRR LLC gets weighed, be it scrap, salvage, or used equipment.

GRR LLC to provide a qualified, certified forklift operator as deemed necessary.

GUIDELINES FOR THE SALE OF THE TELECOMMUNICATIONS EQUIPMENT:

GRR LLC LLC will sell the telecommunications equipment at its sole discretion to third party

buyers within its network with invoices lo be paid no later than 1 O days after delivery.

All telecommunications equipment are to be sold with the sales proceeds to be mailed in form of a

cashier's check or wired funds to ..

611 Wilshire Properties GP

611 Wilshire Blvd. #810

Los Angeles, CA 90017

@"('/

The share of the sales proceed shall be split will be 50/50 with an estimated $750,000.00 in sales

including all scrap materials and salvaged equipment

All sales of the lefecommunications equipment are to be made as FINAL with no returns, no

warranty expressed or implied by bolh parties.

All labor related to !he scope of work as outlined in !his agreemenl is provided al the cost of GRR

LLC.

All Shipping related to the scope of work as outlined in !his agreement is provided at the cost of

GRRLLC.

All work and all sales will be compleled wilhin a period no longer than 60 calendar days after

mutual execution of this agreement Any extension of this time period negotialed shall be in

wrtting.

When work is considered complete and all receivables are collecled by Xyvest Holdings, GRR LLC

will Invoice Xyvest Holdings 50% of the revenue collected by Xyvest Holdings.

Xyvest Holdings shall pay the percentage owed to GRR LLC in full no laler lhan 10 days after

receipt of invoice.

INDEMNITY:

To the fullest extent permitted by law, GRR LLC shall defend, indemnify and hold harmless Xyvest

Holdings. its agents and any and all affiliates of Xyvest Holdings. including, without limitation, any

corporations or other entities controlling, controlled by, or under common control with Xyvest

Holdings, from and againsl any and all claims, liabililies, costs or expenses. arising out of the

scope of work as provided in !his agreement.

Said indemnity includes without limitation losses or claims against affiliates. shareholders, members.

officers, agents. employees, invitees, contractors, licensees and/or successors of Xyvest

Holdings.

Said indemntty includes without limitation any claims made by any GRR LLC's affiliates.

shareholders. members, officers. agents, employees. invitees, contractors, licensees and/or

successors.

Xyvest Holdings may, at its option. require GRR LLC to assume the defense of Xyvest Holdings in

any action from which GRR LLC is obligated to hold Xyvest Holdings harmless through counsel

satisfaclory to Xyvest Holdings

AGREED

XYVEST HOLDINGS

By:----~~~--+-------- Date

signed: __ -,f,?C-1-;),_.,.':;:;,-""'--,

GRRLLC:

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