RETURN DATE: NOVEMBER 22,2016

)

SHANE MoMAHON,

suPERroR couRT

)

)
)

Plaintiff,
v.

JUDICIAL DISTRICT OF FAIRFIELD AT
BRIDGEPORT

)
)

JOSEPH A. PALMIERI, JR.,
Defendant.

)
)

)

November

l, 2A16

COMPLAINT
FIRST.

COVJT:

Fraud in the Inducement

I.

The

2.

The defendant, Joseph A. Palmieri, Jr., is an individual residing in Easton,

plaintiff

Shane McMahon, is an

individual residing in New York, New York.

Connecticut.

3.

The plaintiff and defendant are cuffently the two members of EnviroGrow, LLC

("EnviroGrow"), a Connecticut limited liability company with

a business address

of I l8 Burr

Court, Bridgeport, Connecticut.

4.

The defendant formed EnviroGrow (then known as Podgrow, LLC) in or about

March af 2014.

5.

EnviroGrow was formed for the purported puqpose of designing, fabricating,

marketing and selling units that have been described by the defendant as "turnkey modular
growing systems" for the growing of plants, predominantly marijuana, to be sold in states where
marijuana may be legally grown.

 6,

In or about February of 2015, the defendant, who at the time was the sole member

of EnviroGrow, approached the plaintiff with an offer to invest in and take a membership interest
in EnviroGrow.

7.

The defendant represented to the plaintiff that, after an extensive period

of

research and development, he had developed a proprietary, patent-pending, self-contained

growing system for growing marijuanathat greatly mitigated or eliminated many of the problems
that marijuana growers typicalty faoe. Specifically, the defendant represented that the growing

unit allowed for around-the-cloek growth in a climate controlled environment that was safe from
theft.

L

In written investment materials defendant provided, the defendant also

specifically represented to the plaintiff that the growing unit was "designed for maximum yield,"
was "fully automated" and was "energy efficient and highly secure."

9.

The defendant also specifically represented in investment materials that the

growing unit "achieves a sterile environment," "utilizes 4 different filters to purify air,"
o'eliminates

contaminants & pest exposure," "eliminates 99,9% of all airborne contaminants,"

and that the

"light height is adjusted and controlled daily to optimize plant growth" and it utilizes

the "most advanced LED 1ights," among other representations concerning the growing units.

10.

Above all, the defendant represented to the plaintiff that EnviroGrow was capable

of immediately manufacturing, selling and delivering growing units to customers.

n

 I

1.

In fact, the defendant represented in investment materials that it planned to build

and sell two growing units in the first month of operation, along with multiple nursery units and

drying units.

12.

The defendant also made representations to the plaintiff regarding orders for units

that EnviroGrow had already received, as well as additional orders it anticipated receiving.

I3.

Specifically, the defendant represented in investment materials that on "iimited

marketing" Podgrow (as EnviroGrow was then known) had "generated orders for approximately
10 systems

with another 100 units in the pipeline."

14.

The plaintiff and his advisors relied on the defendant's representations in making

an investment in EnviroGrow,

15.

On May 74,2015, in further reliance on the defendant's representations, the

plaintiff acquired

16.

a membership interest

in EnviroGrow in exchange for $500,000.

The growing units were to be manufactured at a separate EnviroGrow facility in

Fort Collins, Colorado, along with separate modular units, or o'pods," for the drying and
extraction of marijuana plants.

17.

Shorlly after making the investment, on June

I

and 2,2A15, the

plaintiff traveled

to Fort Collins to inspect EnviroGrow's facility there.

18.

Upon arrival, the plaintiff discovered that the Fort Collins EnviroGrow facility

was virtually non-existent. There were no completed growing units at the

there any prototypes for inspection.

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facility. Nor were

 19.

In fact, as the inspection of the Fort Collins facility made clear, EnviroGrowhad

no ability to produce a viable growing unit for sale within the foreseeable future, contrary to the
defendant's many representations to the plaintiff,

20.

As of the present date, upon on information and helief EnviroGrowhas yet to

produce and sell a single growing unit.
2L

.

The plaintiff has demanded his investment be returned from the defendant on

account of the defendant's many false representations, but the defendant has refused.

22.

The defendant's representations detailed above concerning EnviroGrow's ability

to produce and sell the growing units, the orders it had already received and anticipated
receiving, and its intention and ability to produce multiple units within the first month of
operation were false and known by the defendant to he false when he made them.

23.

The defendant's false representations were made to induce the plaintiff to invest

in EnviroGrow.

24.

The plaintiff did invest in EnviroGrow based on the defendant's false

representations.

25.

As a result of the defendant's false representations, the plaintiff has suffered

damages, including but not limited to pecuniary damages.
SEQQXLP

COUNT: Negligent Misrepresentation

l-21.

Paragraphs

I

through 21 of the First Count are hereby incorporated by reference

and made Paragraphs 1 through2l of the Second Count as if

-4-

fully

set forth herein.

 22.

The defendantos representations detailed above concerning EnviroGrow's ability

to produce and sell the growing units, the orders it had already received and anticipated
receiving, and its intention and ability to produce multiple units within the first month of
operation were false.

23.

The defendant knew or should have known that the representations detailed above

were false when he made them.

24.

The plaintiff reasonably relied on the defendant's false representations in deciding

to invest in EnviroGrow.

25.

As a result of the defendant's false representations, the plaintiff has suffered

damages, including but not limited to pecuniary damages,

THIED COUNT: Violation of Connecticut lJniform Securities Act

l-24. Paragraphs 1 through

24 of the First Count are hereby incorporated by reference

and made Paragraphs 1 through 24 of the Third Count as if

25.

fully

set forth herein"

The interest in EnviroGrow sold to the plaintiff by the defendant constitutes a

security underthe Connecticut Uniform Securities Act, Conn. Gen. Stat.
$$ 36b-2 , et seq.

("cusA").

26-

The defendant sold the interest in EnviroGrowto the plaintiff by means of an

untrue statement of a material fact or an omission to state a material fact necessary in order to
make the statements made, in the light of the circumstances under which they are made, not
misleading.

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 2l

,

The defendant knew or in the exercise of reasonable care should have known

of

the untruths or ornissions.

28.

The plaintiff did not know of the untruths or omissions and in the exercise

of

reasonable care could not have known of the untruths or omissions.

29.

As a result of the defendant's violation of CUSA, the plaintiff has been damaged

and is entitled to resover consideration paid for the security, together with interest at eight per
cent per year from the date of payment, costs and attorneys' fees, and/or damages.

FOURTH ,COUNTi Violation of Connecticut Unfair Trade Practices Act

l-24.

Paragraphs 1 through 24 of the First Count are hereby incorporated by reference

and made Paragraphs

25.

I through24 of the Fourth Count

as

if fully

set forth herein.

The defendant's false representations were made as part of the defendant's trade

or eommerce in order to solicit and obtain outside investment.

26.

The defendant's false representations made to the plaintiff in orderto induce him

to invest in EnviroGrow constituted deceptive and unfair acts or trade practices prohibited by the
Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. $$ 42-110a, et seq. ("CUTPA").
27

.

As a result of the defendant's violation of CUTPA, the plaintiff has suffered

actual damages.

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 \I/HEREF0RE, the plaintiffprays fsr the following relief:

l.

Damages;

2.

Restitution;

3.

Attorneys'

f'ees and costs pursuant

ts Csnn. Gen. Stat. $$ 36b-29(a) and 42-

I 1Oe(d);

4.

Recovery of the consideration paid fur the interest in Envirofirow, together with

interest at eight per cent per year from the date of payment pursuant to Conn. Gen. Stat. 36h$
2e(a);

5.

Such other legal and equitahle relief as the court deems appropriate"

THE PLAINTIFF,
SHAI{E Mch{AHON
BY CUMMINGS & LOCKWOOD LLC
HIS ATTORNEYS

. Cafrnavino
Sfiltriam N. trVright
Six Landmark $quare
Starnford, CT 06901
phone: (203) 351-4677
fax: (203) 708-3892
errnail : j sannavino @cl-law. som
unnrright@cl-law.com
Juris No. 13252

4

 RETURN DATE: NOVEMBER 22,20t6
SHAhIE MeMAHON,

SUPERIOR COURT

Flaintiff,

JUDICIAL DISTRICT OF FAIRFIELD AT
BRIDGEPORT

v.
JOSEPH A. PALMIERI, JR.,
Defendant.

)

NovemhEr 1, 2016

STATEMEryT oF AI\{p
The plaintiff slaims that the amount in eontroversy, exclusive of attorney's fees and
costs, exceeds fifteen thousand dollars ($ 15,000.00).

THE PLAtrNTIFF,
THANE MeMAHON
BY CUMMINGS & LOCK\UOOD LLC
HIS ATTORNEYS

iltriam N. Wright
Six Landmark Square
Stanrford, CT 06901

phone: (203) 351-4677
fax: (203) 7fi8-3892
e-mail ; j cannavino@el-law. com
wwright@cl-law.aom
Juris No. 13257

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