Case 1:16-cv-02897-CMA-MJW Document 5 Filed 11/29/16 USDC Colorado Page 1 of 9 DISTRICT COURT, DOUGLAS COUNTY, COLORADO 4000 Justice Way Ste. 2009 Castle Rock, CO 80109 ______________________________________________ Plaintiff: Deanna Meyer, both individually and derivatively on behalf of the true interests of Wildlands Defense Inc., ! " # $ COURT USE ONLY v. _________________________ Defendants: Brian Ertz and Wildlands Defense Inc. ______________________________________________ Attorneys For Plaintiff: David F. Askman, #44423 Michael M. Frandina, #42116 THE ASKMAN LAW FIRM, LLC 1543 Champa St., Suite 400 Denver, CO 80202 Phone: (720) 407-4331 E-mails: dave@askmanlaw.com michael@askmanlaw.com Case Number: Courtroom: Division: COMPLAINT WITH JURY DEMAND Plaintiff Deanna Meyer (“Plaintiff”), both individually and derivatively on behalf of the true interests of Wildlands Defense, Inc. (“Wildlands”), by and through her undersigned counsel hereby submits her Complaint With Jury Demand (the “Complaint”) and states and alleges as follows in support thereof: I. NATURE OF THE ACTION 1. This action concerns misrepresentations by Defendant Brian Ertz (“Ertz”) made to procure funds for his organization and the resulting misuse of those funds, both in terms of the funds being improperly diverted to Ertz and other insiders and the funds not being spent in accordance with Ertz’s representations and binding written and oral agreements. II. 2. PARTIES Plaintiff Deanna Meyer is an individual who resides in Sedalia, Colorado. Exhibit A Case 1:16-cv-02897-CMA-MJW Document 5 Filed 11/29/16 USDC Colorado Page 2 of 9 3. Plaintiff is also a member of Wildlands, or Plaintiff was a member of Wildlands until she was wrongly removed as a member of Wildlands. 4. Plaintiff was also a director of Wildlands until she was wrongly removed as a director of Wildlands. 5. Defendant Wildlands is an Idaho nonprofit corporation. 6. Defendant Ertz is an individual who on information and belief resides in Boise, Idaho. 7. Wildlands. Ertz is a director of Wildlands, is the board president of Wildlands, and controls III. JURISDICTION AND VENUE 8. The Court may exercise subject matter jurisdiction over the claims set forth in this complaint pursuant to Colo. Const. Art. VI, Section 9. 9. Venue is proper in this district because, among other things, the Plaintiff, Wildlands, and Ertz are all parties to an agreement that provides for mandatory venue in Colorado; the defendants are nonresidents and the Plaintiff is a resident of this district; and the contracts at issue were to be performed in this district. IV. CLAIMS FOR RELIEF GENERAL ALLEGATIONS 10. Plaintiff was working on environmental protection efforts (the “Project”) when Plaintiff sought assistance on the Project from several organizations. 11. Plaintiff was approached by Ertz on behalf of Wildlands who offered assistance on the Project. 12. Ertz did provide assistance on the Project, though the vast majority of the work on the Project continued to be accomplished by Plaintiff and by local volunteers recruited by Plaintiff who helped Plaintiff with the Project. 13. In June 2015, Plaintiff obtained funds from another party to continue work on the Project (the “Procured Funds”). 14. While discussing how the Procured Funds should be distributed and allocated, Ertz told Plaintiff that the Procured Funds should be provided to Wildlands and stated on several occasions that the Procured Funds would only be used by Wildlands to continue work on the Project. 2 Exhibit A Case 1:16-cv-02897-CMA-MJW Document 5 Filed 11/29/16 USDC Colorado Page 3 of 9 15. As a result of Ertz’s representations, Plaintiff acquiesced to Ertz’s request and permitted the Procured Funds to be paid in full to Wildlands. 16. After Wildlands received an initial installment of the Procured Funds, Wildlands promptly began making monthly payments to all of its directors, which at that time was Ertz, Ertz’s sister Natalie Ertz, and Katie Fite. 17. These improper diversions are conflict of interest transactions that have never been properly approved. 18. Soon after Wildlands began making monthly payments to its three directors, it also began making payments to Plaintiff. 19. When Plaintiff began receiving payments Plaintiff was continuing work on the Project and believed that funding her efforts on the Project was a proper use for the Procured Funds. 20. The receipt of payments reinforced Plaintiff’s belief that Wildlands was using the Procured Funds to continue work on the Project. 21. At some point in 2015, Ertz asked Plaintiff to become a director of Wildlands, and Plaintiff agreed. 22. On information and belief, Plaintiff became a director of Wildlands on or before November 5, 2015. 23. The allegation made in the preceding paragraph is made on information and belief because Ertz and the other directors refused to provide information requested by Plaintiff prior to Plaintiff being improperly removed as a director, including but not limited to Plaintiff’s request that she be provided all board minutes. 24. On November 5, 2015, Plaintiff participated in a telephone call with the other directors of Wildlands that Plaintiff understood to be Plaintiff’s first board meeting as a director of Wildlands. 25. After Plaintiff became a director of Wildlands, Plaintiff began to suspect that the Procured Funds were not being used to continue work on the Project. 26. For example, Plaintiff began noticing that while Ertz was being paid a full time salary from Wildlands Ertz was not dedicating himself full time to Wildlands. 27. From around the time Ertz began receiving payments in August 2015 to around December 2015, Ertz was a full time law student. 28. Then from the time Ertz graduated from law school until in or around April 2016 Ertz was studying full time for the bar exam. 3 Exhibit A Case 1:16-cv-02897-CMA-MJW Document 5 Filed 11/29/16 USDC Colorado Page 4 of 9 29. Plaintiff also began noticing that even the time Ertz was spending outside of law school and studying for the bar was spent on Ertz’s other interests, including promoting the presidential candidacy of Bernie Sanders. 30. It ultimately became apparent to Plaintiff that Ertz and the other directors intended to use the Procured Funds to pay themselves in whatever amounts and for whatever reason they saw fit. 31. Upon this realization, in or around May of 2016 Plaintiff began to confront Ertz and the other directors about the use of the Procured Funds. 32. For example, a provision in the written agreement providing for payment of the Procured Funds states that the Procured Funds are being paid “to Wildlands to help pay for” the Project. 33. Plaintiff confronted Ertz with that provision. 34. In response, Ertz informed Plaintiff that he had purposefully drafted that provision so that he could spend the money in any manner he wanted to. 35. This statement by Ertz was directly contrary both to the language of the provision itself and to the explicit promises that Ertz had made to Plaintiff to induce Plaintiff to allow the Procured Funds to be paid in whole to Wildlands. 36. Plaintiff also confronted Ertz about a “WildLands Defense Litigation Strategy” document that was prepared in which the Procured Funds were to be used to fund Ertz to pursue litigation. 37. In or around June 2016, Plaintiff also began to question the payments that were being made to Ertz and the other directors. 38. Plaintiff was concerned that Ertz and the other directors were wrongly diverting Wildlands funds for themselves. 39. Plaintiff was also concerned that the other directors were not spending the Procured Funds towards work on the Project. 40. Plaintiff asked Ertz and the other directors how the payments had been approved, when they were approved, by whom, and for what purpose. 41. Plaintiff also asked for other materials and information regarding the payments, including the board minutes and budget materials. 42. In response to Plaintiff raising concerns about the payments to Ertz and the other directors, Ertz formed a compensation committee. 4 Exhibit A Case 1:16-cv-02897-CMA-MJW Document 5 Filed 11/29/16 USDC Colorado Page 5 of 9 43. The compensation committee was overseen by Ryan Stratton, a close personal friend of Ertz. 44. On June 30, 2016, the compensation committee met for 50 minutes and issued a report dealing in part with proper compensation for Ertz and the other directors. 45. This was the only meeting of the compensation committee. 46. The report is invalid in part because it was not based on all of the materials facts. 47. For example, the report was made premised on Ertz working 40 hours per week for Wildlands. 48. Wildlands. On information and belief, at no time has Ertz worked 40 hours per week for 49. Indeed, just prior to the report being issued Ertz spent significant time in preparing for and attending the Idaho State Democratic Convention, which occurred on June 1618, 2016. 50. In July 2016 Ertz also spent nearly a week at the national Democratic convention in Philadelphia. 51. From June through August of 2016, Plaintiff continued to push for access to board minutes and for information on how the Procured Funds were being spent. 52. For example, between July 28, 2016 and August 8, 2016 J. Kahle Becker, Plaintiff’s attorney, and Malcolm Copple, Wildlands’ attorney, exchanged several letters in which Plaintiff demanded, inter alia, records and an accounting of Wildlands’ expenditures, that the Procured Funds be frozen, and that Plaintiff be provided with a copy of the “contract” Mr. Copple alleged she had with Wildlands. 53. 54. information. Plaintiff was never provided with any of the requested information. Instead, Plaintiff was told to travel to Boise, Idaho to get the requested 55. Based on information and belief, on or around August 18, 2016 Ertz, Ertz’s sister Natalie Ertz, and Katie Fite—the three directors who had engaged in the conflict of interest transactions and were diverting funds for their own benefit—improperly voted to remove Plaintiff from the board. 5 Exhibit A Case 1:16-cv-02897-CMA-MJW Document 5 Filed 11/29/16 USDC Colorado Page 6 of 9 FIRST CLAIM FOR RELIEF (Breach of Written Contract – Plaintiff, individually, against Ertz and Wildlands) 56. Plaintiff hereby incorporates the allegations set forth above as if fully set forth herein. 57. The Procured Funds were provided pursuant to a written agreement that is a valid and binding agreement entered into by Plaintiff, Ertz, and Wildlands. 58. Plaintiff has fully performed all of her obligations under the agreement, and all conditions precedent to enforcing the agreement have been met or satisfied. 59. Ertz and Wildlands breached the agreement by, among other things, spending the Procured Funds in violation of the provision requiring that the Procured Funds be spent on the Project. 60. As a direct and proximate cause of the breach of the agreement, Plaintiff has been damaged in an amount to be proven at trial, or Plaintiff is entitled to a constructive trust or specific performance. SECOND CLAIM FOR RELIEF (Breach of Implied Duty Good Faith and Fair Dealing – Plaintiff, individually, against Ertz and Wildlands) 61. Plaintiff hereby incorporates the allegations set forth above as if fully set forth herein. 62. The Procured Funds were provided pursuant to a valid and binding agreement written agreement that contains the implied duty of good faith and fair dealing. 63. In performing its obligations under the agreement, Ertz and Wildlands failed to act in good faith and to deal fairly by, among other things, spending the Procured Funds in impermissible ways. 64. As a direct and proximate cause of the breach of the agreement, Plaintiff has been damaged in an amount to be proven at trial, or Plaintiff is entitled to a constructive trust or specific performance. THIRD CLAIM FOR RELIEF (Breach of Oral Contract – Plaintiff, individually, against Ertz and Wildlands) 65. Plaintiff hereby incorporates the allegations set forth above as if fully set forth herein. 6 Exhibit A Case 1:16-cv-02897-CMA-MJW Document 5 Filed 11/29/16 USDC Colorado Page 7 of 9 66. Ertz and Wildlands offered to Plaintiff that they would spend all of the Procured Funds on the Project in exchange for Plaintiff’s agreement that the entirety of the Procured Funds could be paid to Wildlands. 67. Plaintiff accepted the offer and allowed the entirety of the Procured Funds to be paid to Wildlands. 68. This agreement is a valid and binding agreement entered into by Plaintiff, Ertz, and Wildlands. 69. Plaintiff has fully performed all of her obligations under this agreement, and all conditions precedent to enforcing this agreement have been met or satisfied. 70. Ertz and Wildlands breached this agreement by, among other things, spending funds in violation of their agreement to spend the Procured Funds on the Project. 71. As a direct and proximate cause of the breach of the agreement, Plaintiff has been damaged in an amount to be proven at trial, or Plaintiff is entitled to a constructive trust or specific performance. FOURTH CLAIM FOR RELIEF (Promissory Estoppel – Plaintiff, individually, against Ertz and Wildlands) 72. Plaintiff hereby incorporates the allegations set forth above as if fully set forth 73. Project. Ertz and Wildlands promised that all of the Procured Funds would be spent on the herein. 74. Ertz and Wildlands knew or reasonably should have known that this promise would induce Plaintiff to permit all of the Procured Funds to be paid to Wildlands. 75. This promise induced Plaintiff to allow the entirety of the Procured Funds to be paid to Wildlands. 76. Ertz and Wildlands have broken their promise by, among other things, spending the Procured Funds on issues other the Project. 77. Injustice can only be avoided by imposing a constructive trust, requiring specific performance of the promise, or by forcing Ertz and Wildlands remit the Procured Funds so that they can be spent on the Project. 7 Exhibit A Case 1:16-cv-02897-CMA-MJW Document 5 Filed 11/29/16 USDC Colorado Page 8 of 9 FIFTH CLAIM FOR RELIEF (Fraudulent Misrepresentation – Plaintiff, individually, against Ertz and Wildlands) 78. Plaintiff hereby incorporates the allegations set forth above as if fully set forth 79. Project. Ertz represented to Plaintiff that all of the Procured Funds would be spent on the herein. 80. At the time Ertz made the representation, he was an agent for Wildlands. 81. At the time Ertz made the representation, he knew it to be false. 82. Indeed, Ertz later informed Plaintiff that he drafted the provision so that he did not have to spend the Procured Funds on the Project and instead could spend the Procured Funds any way he wanted to. 83. Ertz made this representation to induce Plaintiff to permit all of the Procured Funds to be paid to Wildlands. 84. This representation induced Plaintiff to allow the entirety of the Procured Funds to be paid to Wildlands. 85. Plaintiff relied on Ertz’s representation because they had been working together on the Project and Plaintiff believed Ertz intended to honor his word and to act with the recognition that all of the Procured Funds, which was all of the funding his Wildlands entity had received, was because of the Project. 86. As a result of Plaintiff’s justifiable reliance on Ertz’s representation, Plaintiff has been damaged by the Procured Funds not being spent on the Project including to further her work on the Project. 87. Plaintiff is entitled to punitive damages for the fraudulent misrepresentation. SIXTH CLAIM FOR RELIEF (Breach of Fiduciary Duty – Plaintiff, derivatively on behalf of the true interests of Wildlands, against Ertz) 88. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 52 above as if fully set forth herein. 89. As a director of Wildlands, Ertz owed a fiduciary duty towards Wildlands. 90. Ertz breached that duty by engaging in self-interested transactions when he diverted Wildlands’ funds to himself and his sister. 8 Exhibit A Case 1:16-cv-02897-CMA-MJW Document 5 Filed 11/29/16 USDC Colorado Page 9 of 9 91. As a result of Ertz’s breach of fiduciary duty, Wildlands has been damaged in an amount to be proven at trial. V. PRAYER FOR RELIEF WHEREFORE, Plaintiff Deanna Meyer prays that the Court enter judgment in her favor and against Defendants Brian Ertz and Wildlands Defense, Inc. on the claims asserted herein, and that she be awarded the following relief: a. Imposition of a constructive trust; b. Specific performance; c. Money damages in an amount to be calculated at trial; d. An award of punitive damages; e. An award of statutory damages and penalties; f. Costs and attorneys’ fees; g. Pre-judgment interest; h. Post-judgment interest; and i. Any such further relief as this Court deems just and proper under the circumstances. VI. JURY DEMAND Plaintiff demands a jury trial on all issues so triable. Respectfully submitted this 21st day of October, 2016. THE ASKMAN LAW FIRM LLC s/ Michael M. Frandina Michael M. Frandina 1543 Champa St., Suite 400 Denver, CO 80202 Phone: (720) 407-4331 michael@askmanlaw.com ATTORNEY FOR PLAINTIFF 9 Exhibit A