FIRST CAUSE OF ACTION:
FRAUD/MISREPRESENTATION
36. Plaintiffs hereby reallege paragraphs 1 through 35 as though set forth herein.
37. In late November of 1998, plaintiffs began to realize that a fraud had been committed upon them. and that the representations made to them were not true.
38. The actions and statements of the defendants as indicated in the above paragraphs misrepresented the business opportunity available to the plaintiffs. At a minimum, the defendants' actions constituted misrepresentations about the benefits that had been and could be attained through the "Amway business." These misrepresentations were false and material and were made with the knowledge that the plaintiffs would not benefit as promised, but that they stood to reap all of the gain. The defendants knowingly made these misrepresentations with the intent to deceive plaintiffs and deprive them of their time and money. The plaintiffs were justifiably ignorant of the defendants' scheme to defraud and reasonably relied upon their untruthful statements. As a result of the defendants' fraud the plaintiffs suffered the economic damages set forth below and which will be proven at the time of trial.
Wherefore, plaintiffs demand judgment in their favor and against defendants, jointly and severally, in an amount in excess of $25,000, plus interest and costs of suit, and further aver that this amount, exclusive of interest and costs, exceeds the jurisdictional limitation requiring arbitration.
SECOND CAUSE OF ACTION
VIOLATION OF THE CHAIN DISTRIBURTORS
LAW, 73 PS § 201-2 (4)(xiii)
39. Plaintiffs hereby reallege paragraphs 1 through 38 as though set forth herein.
40. By the actions and failure to disclose truthful information, defendants and each of them, made untrue and misleading statements of material fact, and omissions of material fact, in connection with what amounts to an offer to engage in an illegal "Pyramid Club" under 73 Pennsylvania Statute § 201-2 (4)(xiii) and engaged in actions and conduct designed to defraud plaintiffs into participating in their illegal "Pyramid Club" and which operated as a fraud and/or deceit upon plaintiffs.
41. The conduct of the defendants described in the preceding paragraphs constitutes a violation of 73 P.S. § 201-2 (4)(xiii), et seq, and entitles plaintiffs to a trebling of their actual damages, attorney's fees and costs and exemplary damages. As a result of the defendants' conduct, the plaintiffs suffered the economic damages set forth below and which will be proven at the time of trial.
Wherefore, plaintiffs demand judgment in their favor and against defendants, jointly and severally, in an amount in excess of $25,000, plus interest and costs of suit, and further aver that this amount, exclusive of interest and costs, exceeds the jurisdictional limitation requiring arbitration.
THIRD CAUSE OF ACTION:
VIOLATION OF THE PENNSYLVANIA
CONSUMER PROTECTION LAW, 73 PS § 201, et seq.
42. Plaintiffs hereby reallege paragraphs 1 through 41 as though set forth herein.
43. Defendants' "business" causes substantial confusion and misunderstanding regarding the nature of the goods and services offered as part of their business opportunity and operates by making false, deceptive, misleading and fraudulent representations which creates a substantial likelihood of confusion of misunderstanding. The defendants unfair business practices affect public interest because, among other things, they were committed in the course of defendants' businesses, the activities were part of a pattern or generalized course of conduct, the defendants' conduct has caused harm to Pennsylvania consumers, and there is a real or substantial potential for repetition by the defendants.
44. As a result of defendants' actions, misrepresentations and omissions, plaintiffs have sustained harm to their property, in that they invested thousands of dollars in defendants' fraudulent and misrepresented business scheme.
45. Defendants, and each of them, have engaged in unfair methods of competition and unfair or deceptive acts or practices in the conduct of their businesses, in violation of 73 PS § 201 et seq, As a result of the defendants' conduct as alleged, the plaintiffs suffered the economic damages set forth below and which will be proven at the time of trial.
Wherefore, plaintiffs demand judgment in their favor and against defendants, jointly and severally, in an amount in excess of $25,000, plus interest and costs of suit, and further that this amount, exclusive of interest and costs, exceeds the jurisdictional limitation requiring arbitration.
FOURTH CAUSE OF ACTION
BREACH OF CONTRACT
46. Plaintiffs hereby reallege paragraphs 1 through 45 as though set forth herein.
47. In 1989 when the Plaintiffs became Amway distributors, they signed an agreement with Amway which provided that their distributorship would only be taken away by Amway if they failed to follow Amway's rules. This covenant in the agreement implied that the rules would be applied fairly and reasonably to all distributors. Plaintiffs abided by Amway's rules and defendant Amway breached the Agreement by failing to take action that would have prevented them from being defrauded by the non-Amway defendants. Amway had control over the non-Amway defendants' actions, but chose not to enforce rules purportedly designed to stop such abuses because it was in Amway's financial best interests to do so.
48. Amway failed to properly supervise defendants and take appropriate action to insure that defendants were properly presenting the Amway sales and marketing plan. Such failure breached a duty of reasonable care owed to the plaintiffs and resulted in significant general and special damages.
49. At the time the plaintiffs began to realize that the defendants had misrepresented the business opportunity available to them, they had no idea that Amway knew the fall extent of the fraud which had been perpetrated against them or that Amway was an active participant in allowing the defendants' fraud to continue unabated and without any meaningful enforcement of rules designed to protect the plaintiffs. By such failure, defendant Amway breached a duty of reasonable care owed to plaintiffs, resulting in substantial general and special damages to plaintiffs.
50. By the actions alleged above, all of the named defendants, and each of them, intentionally or, alternatively, negligently misrepresented the business opportunity available to the plaintiffs and breached a duty of reasonable care owed to the plaintiffs in continuing to exhort plaintiffs to invest their money into their "businesses" and in continuing to promise plaintiffs "financial independence" by failing to disclose the true percentage of distributors who actually achieved the earnings, profits or sales which defendants promised that plaintiffs would achieve.
51. Defendant Amway breached its contract with the plaintiffs by failing to enforce it own rules. As a result of defendants' breach, the plaintiffs suffered the economic damages set forth below and which will be proven at the time of trial.
Wherefore, plaintiffs demand judgment in their favor and against defendants, jointly and severally, in an amount in excess of $25,000, plus interest and costs of suit, and further aver that this amount, exclusive of interest and costs, exceeds the jurisdictional limitation requiring arbitration.
DAMAGES
52. As a direct and proximate result of defendants' conduct as aforesaid, plaintiffs have suffered compensable damages in the nature of lost wages, lost profits, loss of job opportunities, loss of investment, loss of fringe benefits, mental anguish and emotional suffering, all of which will be proven at the time of trial. Plaintiffs have incurred costs of investigation, attorney's fees and costs of suit. Additionally, plaintiffs are entitled to the trebling, of their actual damages, as well and punitive damages under Pennsylvania law.
WHEREFORE, - Plaintiffs pray as follows:
1. For such damages to Plaintiffs as may be proven at the time of trial;
2. For treble and punitive damages as permitted under Pennsylvania law;
3. For reasonable attorneys' fees,
4. For reasonable investigative costs:
5. For costs of suit;
6. For injunctive relief under 73 PS §201-4. 1; and
7. For such other and further relief as this Court deems just and equitable.
RESPECTFULLY SUBMITTED this day of October, 2000.
GORDON, THOMAS, HONEYWELL, MALANCA, PETERSON & DAHEIM, P.L.L.C.
James B. Meade, WSBA No. 22852
Pro Hoc Vice Motion Pending
Campana Campana & Lovecchio
Attorneys for Plaintiffs
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