STRATUS BUILDING SOLUTIONS Amended Petition Adds Master Franchisees to Lawsuit
July 2, 2012
Attorney Jonathan Fortman, on behalf of Stratus Building Solutions unit franchisees, has filed an Amended Class Action Petition for Declaratory Judgement to the Circuit Court of St. Louis County, State of Missouri.
The amended petition claims that the Stratus franchisor and it master franchisees deceptively sold janitorial franchises to individuals nationwide, that the defendants knew that they could not deliver the janitorial contracts promised to the franchisees, and that they engaged in “churning” of accounts in order to callously cheat the plaintiffs out of their life savings.
The amended petition names the specific regional Stratus Master franchisees for the first time, and asks the court recognize the class and to declare (among other things) that Stratus Franchising, LLC and Simpatico, Inc. “may be jointly liable to Plaintiffs and members of the putative class for conspiring to utilize Master Franchisees to commit fraud against Plaintiffs and the putative class.”
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Scroll down for the full list of Stratus Plaintiffs, an excerpt from the petition, and a link to the full legal document.
Case Number: 12SL-CC00339
MARKEETA RIVERA, And GUADALUPE CLEMENTE,
Both for themselves and as representatives
Of a class of similarly situated others.
SIMPATICO, INC, Division: 13
STRATUS FRANCHISING, LLC,
PHSCCH SBS, LLC, (Serve: Agent: Channen Smith 9531 E Nora Circle
Mesa, AZ 85207) )
Stratus Building Solutions of Arizona, Inc.,
Goldeneye Holdings, Inc., d/b/a Stratus of Orange County [CA],
Mark Bashforth d/b/a Stratus Building Solutions of San Diego[CA],
Jayson Bashforth d/b/a Stratus Building Solutions of San Diego[CA],
Afshin Cangarlu, d/b/a Stratus of Los Angeles [CA],
Stratus Building Solutions of Northern California, LLC, d/b/a Stratus of Sacramento [CA],
Jim Parell d/b/a Stratus of Ventura County [CA],
Colorado Cleaning Partners, Inc, d/b/a Stratus Building Solutions of Southern Colorado [CO],
Channen Smith, d/b/a Stratus of Denver [CO],
Jitendra Kapur, d/b/a Stratus of Stamford and Westchester [CT],
Raynal Enterprises, Inc., d/b/a Stratus of Miami [FL],
Stratus Building Solutions of Tampa St. Pete, LLC, [FL],
Paladin Building Services, LLC, d/b/a Stratus of Jacksonville, [FL] [Jeffrey B. Aibel],
Paladin Building Services, LLC d/b/a Stratus of Atlanta [GA] (Serve: Agent: Jeffrey Aibel )
Kukamaehu, Inc., d/b/a Stratus of Honolulu, [HI],
Iowa Building Solutions, LLC, d/b/a Stratus of Iowa (Serve: Agent: Leonard R. Fazio ),
DPK Investments, Inc., d/b/a Stratus of Chicago [IL] )(Serve: Agent: Devang Kothari ),
Shamrock Building Services, Inc., d/b/a Stratus of Indianapolis [IN] (Serve: Agent: Kevin G. Spellacy )
Stratus Building Solutions of Kansas, LLC (Serve: Agent: Peter Frese )
Shamrock Building Services, LLC, d/b/a Stratus of Louisville, [MO],
Stratus Building Solutions of Lafayette, LLC [LA](Serve: Agent: S.D. Steckler )
Stratus Building Solutions of Minnesota (Serve: Agent: Kevin Spellacy or Lorena Aristizabal),
TTK Investments, Inc., d/b/a Stratus of Concord, [NC] (Serve: Agent: Ernest Kraft ),
TTK Investments, Inc., d/b/a Stratus of the Triad [NC] (Serve: Agent: Ernest Kraft ),
TTK Investments, Inc., d/b/a Stratus of Charlotte [NC] (Serve: Agent: Ernest Kraft ),
Stratus Building Solutions of Omaha [NE],
Stratus Building Solutions of Nebraska (Serve: Agent: Channen Smith ),
Joy Community Development Corporation d/b/a Stratus Building Solutions of Central New Jersey, (Serve: c/o D’Andre Salter ),
Stratus Building Solutions of Long Island, Inc [NY] (Serve: Agent: Richard M. Baran ),
Impressive Cleaning Solutions, Inc., d/b/a Stratus of Buffalo [NY] (Serve: Agent: Kenneth A. Casseri),
MARRS, LLC d/b/a Stratus Building Solutions of Cincinnati [OH] (Serve: Agent: Mark Stocker )
Stratus Building Solutions of Oregon, Inc., (Serve: Agent: Jon A. White ),
Z3 Enterprises, LLC, d/b/a Stratus Building Solutions of Pittsburgh [PA],
HolBon Holdings, LLC, d/b/a Stratus Building Solutions of Philadelphia [PA],
TTK Investments, Inc., d/b/a Stratus of Columbia [SC] (Serve: Agent: Ernest Kraft ),
Kevin Gass, d/b/a Stratus of Columbia, [SC],
Ralph Sizemore d/b/a Stratus of Upstate Carolina, [SC],
D&E Holdings, LLC d/b/a Stratus Building Solutions of Nashville [TN],
Stratus Building Solutions of Northern Utah (Serve: Agent: Lori Sealy),
SYDDAR, Inc. d/b/a Stratus Building Solutions of Salt Lake [UT] (Serve: Agent: Shauna Sharpsteen ),
Afshin Cangarlu, d/b/a Stratus of Inland Empire, [CA],
J. Beck, d/b/a Stratus Building Solutions of Wilmington [DE],
Jason Potts, d/b/a Stratus of Raleigh [NC],
Don Gartner, d/b/a Stratus of Northern New Jersey,
Rob Salazar, d/b/a Stratus of Albuquerque [NM],
Quail Run Enterprises, Inc., d/b/a Stratus Building Solutions of Las Vegas [NV] (Serve: Agent: Tamara Kyllo ),
Craig Donovan, d/b/a Stratus Building Solutions of WNY, [NY],
Mark Bashforth, d/b/a Stratus Building Solutions of Houston [TX],
Jayson Bashforth, d/b/a Stratus Building Solutions of Houston [TX],
Jacquelyn Mosley d/b/a Stratus of Northern Texas,
Thomas Mosley, d/b/a Stratus of Northern Texas,
Greg Fishman, d/b/a Stratus of Austin [TX],
Cordell Dean, d/b/a Stratus of Richmond [VA],
HERE IS AN EXCERPT FROM THE STRATUS PETITION:
1. This class action seeks declaration of liability on behalf of all persons who purchased franchises through Master Franchisees of Defendants in the United States of America.
2. This action arises from Defendants utilizing Master Franchisees as their agents to:
(a) fraudulently induce Plaintiffs to enter into franchise agreements by failing to disclose all costs associated with the franchise;
(b) fraudulently withhold the identities of all franchisees who had there franchises terminated;
(c) violate the disclosure requirements of the Federal Trade Commission;
(d) provide fraudulent earnings claims to the class without proper documentation; and
(e) prevent potential franchisees from learning the turnover rate of its franchises.
3. Plaintiffs allege that Defendants, through the Master Franchisees, engaged in “churning” in which the franchisor cancels the franchise agreement or accounts of the Unit Franchisee without just cause, making the conditions for accepting accounts or servicing accounts so untenable that the Unit Franchisee will decline or abandon an account. These actions are taken by Defendants for the sole purpose of providing accounts to new Unit Franchisees thus obtaining more initial franchise fees.
4. Plaintiffs allege that Defendants were aware that the Stratus system first implemented by Defendant Simpatico was fatally flawed in that the limited number of available accounts and the competition in the market required the franchisor to continue selling Unit Franchises even though there were not enough accounts to permit the Franchisor to comply with its obligations under the various Franchise Agreements.
5. As a direct and proximate result of the actions of Defendants, both directly and through its Master Franchisees, many of the Unit Franchisees lost their life savings.
6. Plaintiffs further allege that Defendants have improperly misclassified the Plaintiffs as independent contractors, and thereby denied them various benefits to which they are entitled to as employees under the wage laws, including minimum wage, overtime pay, other wage protections, and other benefits of employment, such as eligibility for unemployment and workers compensation.
7. Plaintiffs’ right to declaratory relief stems from Missouri Revised Statute Section 527.010, et al., and Rule 87 of the Missouri Rule of Civil Procedure.
8. Plaintiffs and the putative class are in a position of uncertainty as to the enforceability of the Master Franchise Agreement and whether the Master Franchisees are independent contractors or agents of Defendants for purposes of vicarious liability.
9. Plaintiffs and the putative class have an immediate personal interest in having this adjudicated in such manner because the Master Franchise Agreements require application of Missouri law and this Court is best suited to determine the nature of the relationship between Defendants and the Master Franchisees.
10. As a matter of judicial economy, and in the interest of uniform application of Missouri law, this Court should determine the status of the relationship to avoid having other state and federal courts apply Missouri law. Otherwise, there is a potential for conflicting decisions of foreign state and federal courts applying Missouri law.
11. Plaintiffs and the putative class members lack an adequate remedy at law.
12. Plaintiffs are entitled to an attorney’s fees for under the Missouri Declaratory Judgment Act, as the circumstances surrounding the filing and prosecuting of such Petition constitute “unusual circumstances” justifying an award of attorney’s fees.
13. The questions posed by Plaintiffs are ripe for judicial resolution, as all Plaintiffs, Defendants and interested third parties are represented in this action.
WHEREFORE, Plaintiffs pray this Court enter an Order and Declaratory Judgment, ordering:
a. Certification of a class of individuals who are identified as those who have purchased a franchise from the Defendants through Master Franchisees.
b. That an Order/Judgment issue declaring that Defendant Stratus is the principal of the Master Franchisee for purposes of vicarious liability under the laws of the State of Missouri and/or that Defendants may be jointly liable to Plaintiffs and members of the putative class for conspiring to utilize Master Franchisees to commit fraud against Plaintiffs and the putative class.
c. Order that Notice be disseminated to individual class members pursuant to Missouri law
d. any and all other relief as the Court deems just and proper.
LAW OFFICE OF JONATHAN E. FORTMAN, LLC
READ THE FULL PETITION:
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