COMMONWEATLH OF KENTUCKY
FAYETTE CIRCUIT COURT
CIVIL BRANCH
___________ DIVISION
NO. ________________
DIANE GOSHGARIAN, PLAINTIFF
(a/k/a Diane Goshgarian Bourque),
INDIVIDUALLY, AND ON BEHALF OF
ALL OTHERS SIMILARLY SITUATED
v. COMPLAINT
CHARLES DEERING, DOROTHY DEERING, DEFENDANTS
WILLIAM RICHARDSON, DANIEL CRAIG
(a/k/a Daniel Craig Deering), individually, and
as partners in the partnerships known as
SOVEREIGN PUBLICATIONS, DEERING
LITERARY AGENCY, APPALOOSA PRESS
(a/k/a Appaloosa Publications), and other unknown
partnerships or business entities and SOVEREIGN
PUBLICATIONS, DEERING LITERARY AGENCY,
APPALOOSA PRESS, and DANIEL CRAIG
DEERING LITERARY GROUP, Kentucky general
partnerships
***************************************
I. INTRODUCTION
1. Diane Goshgarian brings this action on behalf of herself and on behalf of
all persons similarly situated who have entered into a contractual agreement
with some or all of the Defendants, jointly and/or severally, transferring to
these Defendants, for valuable consideration paid by the Plaintiff, exclusive
rights to publish, market, and receive royalties for manuscripts and other
written materials authored by the Plaintiff and others similarly situated.
Upon execution of the publication, marketing and royalty agreements and
amendments, extensions, and modifications thereto, Plaintiff paid to the
Defendants money as consideration for the services promised to be performed by
the Defendants. The Defendants, acting individually and/or in concert, failed
or refused to perform as agreed pursuant to the terms of the publication,
marketing, and royalty contracts.
In carrying out this scheme, the conduct of the Defendants, individually and
collectively, as hereinafter described, was intentional, willful, fraudulent,
unlawful, and specifically designed to deprive the Plaintiff and others
similarly situated of money to which the Defendants were not entitled and
property rights which cannot be restored absent a judicial declaration as
herein sought.
The action brought herein seeks damages and redress by the Plaintiff and
members of the class on the grounds of breach of contract, violations of the
Kentucky Consumer Protection Act, common law fraud, and outrageous conduct
resulting in infliction of severe mental and emotional distress.
There are potentially hundreds of members of the subject class. There are
questions of law and fact in this case that are common to all members of such
class. Plaintiff's claims are typical of those of the class, and Plaintiff,
Diane Goshgarian, will fairly and adequately protect the interests of such
class.
2. Plaintiff and all others similarly situated seek actual and punitive
damages from Defendants, jointly and severally, for the conduct of the
Defendants. Plaintiff and other members of her class also seek a declaratory
judgment pursuant to CR 57 and KRS 418.040 and an order by the Court deeming
the publication, marketing, and royalty agreements which are a part of this
action to be null, void, and of no legal force and effect thereby returning to
the Plaintiffs all of their literary and publication rights, free, clear and
unencumbered.
II. CLASS ALLEGATIONS
3. Plaintiff brings this action as a class action pursuant to Rule 23 of the
Kentucky Rules of Civil Procedure. The class consists of all persons who
executed publication contracts and any amendments, modifications, or support
documents thereto with any one or more of the named Defendants herein and paid
money as consideration to the Defendant(s). The Defendants, individually, or
acting in concert, with no intent to perform under the aforesaid contracts,
took the money, paid in good faith by the Plaintiffs, and unlawfully converted
the monies to their own personal use committing continuing illegal acts of
fraud and theft upon the members of the class. Plaintiff believes that the
class numbers in excess of two hundred and fifty (250). Individual joinder of
all the members of the subject class is therefore impracticable.
4. Plaintiff will fairly and adequately protect the interests of all class
members. She is a member of the class and her claim is typical of the claims
of all class members. Plaintiff is incensed at the treatment accorded her and
the class members by these Defendants and will aggressively pursue the
interests of the entire class. Plaintiff's interests in obtaining declaratory
relief and damages, actual and punitive, as a result of the intentional
conduct of the Defendants are consistent with and not antagonistic to those of
any other member of the class.
5. At all relevant times and places as hereinafter referred to, the
Defendants, individually and/or acting in concert, regularly engaged in false
advertising, fraudulent inducement, and various deceptive business practices
through the continuing use of telecommunications and the United States mail
for the purpose of soliciting a fee and obtaining manuscripts created and
written by the members of the class. In return, Defendants promised to
publish or otherwise arrange for the sale of the manuscripts to the public in
finished book form.
The Defendants intentionally refused to perform. Instead, the Defendants
unlawfully converted the monies to their own personal possession and use.
The acts and omissions of these Defendants in their false and fraudulent
business dealings and transactions with the Plaintiff, and of those similarly
situated, were willful, intentional and unconscionable. The conduct of the
Defendants described herein provides the basis and proof required to sustain
civil actions for willful breach of contract, violations of the Kentucky
Consumer Protection Act (KRS 367.010, KRS 367.175 et seq.), common law fraud,
the tort of outrageous conduct resulting in infliction of severe mental and
emotional distress. Additionally, Plaintiff and members of the class request
a declaration of rights invalidating the publication and marketing agreements
thus restoring publication rights to the Plaintiff and members of the class
pursuant to KRS 418.040 et seq.
6. A class is superior to other available methods for the fair and
efficient adjudication of this controversy for the following reasons:
(a) A multiplicity of suits with consequent burden on the Court and Defendants
should be avoided.
(b) It would be virtually impossible for all class members to intervene as
party-plaintiffs in this action.
(c) Upon adjudication of Defendants' liability, this Court can determine the
claims of the class members.
III. PARTIES
7. Plaintiff, Diane Goshgarian, is a resident of Brookline, Massachusetts.
8. CHARLES DEERING and DOROTHY DEERING, husband and wife, reside at 2457
Lacross Court in Lexington, Fayette County, Kentucky 40508. Together they are
the owners and managing partners of Sovereign Publications, Deering Literary
Agency, Appaloosa Press (a/k/a Appaloosa Publications), and other unknown
business entities engaged in the same or similar unlawful enterprises with the
principle business address of 128 East Reynolds Rd., Suite No. 2, Lexington,
Fayette County, Kentucky. They advertised the availability of publication
services and other support services for a fee and procured the signatures,
executed publication and marketing contracts, and collected fees from
author/applicants for performance of these services. They are also
responsible for the establishment of business policies, including the
employment, training, supervision, and conduct of all Defendants' employees
including managing partners.
9. Defendants, SOVEREIGN PUBLICATIONS, DEERING LITERARY AGENCY,
APPALOOSA PRESS (a/k/a APPALOOSA PUBLICATIONS) and
DANIEL CRAIG LITERARY GROUP are Kentucky general partnerships
each with its principle business offices located at 128 East Reynolds Road,
Suite No. 2, Lexington, Fayette County, Kentucky.
10. Defendant, DANIEL CRAIG (a/k/a DANIEL CRAIG DEERING), is the managing
partner and owner of DANIEL CRAIG LITERARY GROUP and conducted business
from his principle offices located at 128 East Reynolds Road, Suite No. 2,
Lexington, Fayette County, Kentucky. This Defendant acted in concert and in
conspiracy with the other named Defendants in this action.
11. Defendant, William Richardson, is an officer, consultant, and employee of
Defendants with his principle place of business being 128 East Reynolds Road,
Suite No. 2, Lexington, Fayette County, Kentucky. He acted in the role of
editor, consultant, and advisor to Defendants playing a pivotal role in
perfecting the unlawful and fraudulent schemes of the various business
entities.
IV. NATURE OF DEFENDANTS' CONDUCT
12. Defendants individually and in conspiracy with one another engaged in
conduct described below which was intentional, willful, fraudulent, illegal,
and in violation of the statutes of Kentucky and the United States of America.
The offenses described below resulted from a grandiose scheme of fraud,
deception, misrepresentation, and illegal business practices, nationwide in
scope and carried out by the Defendants for the purpose of depriving the
Plaintiff, and members of the class, of money and individual publication
rights to assorted works and manuscripts written and created by the Plaintiff,
and members of the class. Defendants' conduct demonstrated an active malice
toward Plaintiff and the class, and further reflected a total and reckless
disregard for and indifference to the lawful publication rights and financial
security of the Plaintiff and the class, thereby justifying an award of
punitive damages in addition to the actual damages and declaration of rights
which the Plaintiff and the class are entitled to recover.
V. FACTS
13. On August 27, 1996, Plaintiff Diane Goshgarian (a/k/a Diane Goshgarian
Bourque) executed a publication, marketing and royalty contract with SOVEREIGN
PUBLICATIONS, a copy of the contract is attached hereto and marked Exhibit A.
Plaintiff returned the signed contract to SOVERIEGN PUBLICATIONS and enclosed
her check (Treasurer's Check No. 20323) in the sum of six thousand four
hundred twenty-five dollars ($6,425.00), a copy of said check being attached
hereto and marked Exhibit B. Plaintiff agreed to pay this amount to Sovereign
Publications for professional services to be rendered pursuant to the terms of
the contract. Sovereign Publications was obligated to publish Plaintiff's
manuscript in book form within eighteen months of the date of the contract or
by March 27, 1998.
In February, 1998, Sovereign Publications contacted Plaintiff and solicited an
additional two thousand dollars ($2,000.00), stating this amount was required
in order to upgrade the book from "mass market" to "trade size." Plaintiff
sent her check no. 5468 in the sum of two thousand dollars ($2,000.00) to
Sovereign Publications as requested, a copy of said check being attached
hereto and marked Exhibit B.
Under the terms of the contract, Sovereign Publications, upon receipt of the
sum of six thousand four hundred twenty-five dollars ($6,425.00) from
Plaintiff, agreed as follows:
(a) to complete production of Plaintiff's book entitled The Arbitrary Sword
within eighteen months from execution of the contract on or before March 27,
1998;
(b) to produce five thousand mass market paperbacks;
(c) to produce an additional fifteen hundred copies as market demanded; and
(d) to use its best effort to publish within twelve months of the contract date.
Defendant, Sovereign Publications, acting in concert with the other
Defendants, failed and/or refused to perform (a), (b), (c), and (d) above and
refused to return the eight thousand four hundred twenty-five dollars
($8,425.00) previously paid by Plaintiff. Defendants, each of them acting
individually and in concert with one another, intentionally conspired to
deprive the Plaintiff of her contractual benefits, her publication rights, and
the sum of eight thousand four hundred twenty-five dollars ($8,425.00).
As a result of this breach of contract by the Defendants, the Defendants have
been unjustly enriched in the sum of eight thousand four hundred twenty-five
dollars ($8,425.00) plus interest. Additionally, these Defendants, by virtue
of the existence of the publications, marketing, and royalty contract,
continue to encumber and restrict the publication rights of the Plaintiff to
the damage and detriment of the Plaintiff.
The contract described above included as its subject matter the sale of a
product and service within the purview of the Kentucky Consumer Protection
Act. In creating the contract, the Defendants made false, unfair, and
deceptive statements and representations to Plaintiff. The Defendants made
false promises regarding performance and results thereby fraudulently inducing
the Plaintiff into executing the contract in return for a fee. The foregoing
acts by the Defendants constitute violation of KRS 367.170 and KRS 367.175 et
seq.
VI. CAUSES OF ACTION
A. COUNT I
14. Paragraphs 1 through 13 above are incorporated herein by reference and
made this Paragraph 14.
15. Count I is a claim for damages by Plaintiff and all members of the class
for breach of contract. The business practiced by the Defendants, as
previously described herein, involved the Defendants' procurement of the
signatures of the Plaintiff and all class members on an exclusive publication
contract. For a fee, which was paid by the Plaintiff and members of the
class, Defendants promised to publish, in book form for sale to the general
public, the various manuscripts authored by the Plaintiff and members of the
class within a specified period of time. Upon execution of the contracts and
receipt of the agreed upon fee, Defendants had a duty to perform. Defendants
intentionally failed to perform the duties and obligations of the contract.
The Plaintiff and members of the class performed as required by the contracts.
As a result, the Plaintiff and members of the class are entitled to
compensatory damages for breach of contract.
B. COUNT II
16. Paragraphs 1 through 15 above are incorporated herein by reference and
made this Paragraph 16.
17. Count II is a claim for damages for violation of the Kentucky Consumer
Protection Act, specifically for the commission of unlawful acts as prohibited
by KRS 367.170 and KRS 367.175 et seq. In order to accomplish its goal of
obtaining money from Plaintiff and members of the class, Defendants
intentionally engaged in a continuing pattern of conduct systematically
applied to Plaintiff and class members to induce the signing of publication
contracts. The means to this end was characterized by the use of unfair,
false, misleading, and deceptive business practices and acts. Defendants
successfully accomplished the goals of the conspiracy and in so doing
restrained trade and commerce within the Commonwealth of Kentucky and the
United States of America.
The misrepresentations, false advertising, and deception practiced upon the
Plaintiff and members of the class were knowingly done by the Defendants and
reasonably relied upon by Plaintiff and class members. The Defendants'
conduct was fraudulent and intentional, and accomplished with reckless
disregard for the rights of the Plaintiff and class members. Plaintiff and
class members are entitled to punitive damages, attorney fees, and all other
relief the Court deems appropriate.
C. COUNT III
18. Paragraphs 1-17 above are incorporated herein by reference
and made this Paragraph 18.
19. Count III is a claim for damages suffered by Plaintiff and
members of the class as a result of Defendants' outrageous conduct intentionally
causing infliction of severe mental and emotional distress. The Defendants' conduct
was so outrageous in character and so extreme in degree as to exceed all
possible bounds of decency, so as to be regarded as atrocious and utterly
intolerable in a civilized community. This conduct was and is the proximate
cause of financial instability and ruin, of years of apprehension and stress
regarding the question of ownership and use of the individual manuscripts
written by the Plaintiff and members of the class, and of the indescribable
stress and worry associated with being a victim of the fraudulent scheme
described herein.
Plaintiff and members of the class are entitled to compensatory
damages and punitive damages as a result of the outrageous conduct of the
Defendants.
D. COUNT IV
20. Paragraphs 1-19 above are incorporated herein by reference and
made this Paragraph 20.
21. Count IV is a claim for damages for common law fraud. The
conduct of the Defendants as previously described herein is nothing more or
nothing less than lying for money. Defendants falsely advertised and falsely
represented all of the essential elements of the transactions proposed by Defendants.
The Plaintiffs and members of the class reasonably relied upon the representations
of the Defendants to their detriment. The Defendants intentionally and
through fraudulent means obtained exclusive and enforceable publication
contracts and charged a fee. The Defendants converted the fee monies to their
personal use and refused to perform their contractual obligations. The acts
of the Defendants were concocted, intentional, planned in advance, and
executed for profit. Plaintiff and members of the class are entitled to
compensatory and punitive damages as a result of this fraudulent conduct.
E. COUNT V
22. Paragraphs 1-21 above are incorporated herein by reference and
made this Paragraph 22.
23. Count V is a demand by Plaintiff and members of the class for a
declaration of rights pursuant to KRS 418.040. The declaration of rights
requested herein deals exclusively with the controversy regarding ownership of
publication rights hereinbefore transferred by Plaintiff and members of the
class, in good faith and in reliance upon Defendants' promises, to Defendants
by virtue of enforceable publication rights contracts. The Defendants,
through means previously described, unlawfully retain claim to publication
rights constituting irreparable injury to Plaintiff, which will remain unless
and until this court judicially declares the contracts null, void, and of no
legal force and effect.
Plaintiff and members of the class are entitled to a declaration of
rights so as to resolve the existing controversy.
F. COUNT VI
24. Paragraphs 1-23 above are incorporated herein by reference and
made this Paragraph 24.
25. Plaintiff and the members of the class were unjustifiably and
willfully defrauded and stripped of their publication rights. As a result, they have
suffered and are entitled to recover actual damages. Furthermore,
Defendants' intentional violations of statutory and common law entitle
Plaintiff and the class to recover punitive damages from Defendants in order
to deter such conduct in the future.
G. COUNT VII
26. Paragraphs 1-25 above are incorporated herein by reference and
made this Paragraph 26.
27. In addition to the foregoing, Plaintiff and the members of the
class request that this Court issue a declaration of rights and make a binding
determination regarding publication rights.
WHEREFORE, Plaintiff and the class she represents request (a) that this
action proceed as a class action under rule 23 of the Kentucky Rules of Civil
Procedure, (b) trial by jury, (c) that they be awarded actual and punitive
damages each in an amount in excess of the minimum jurisdictional limit of
this court, (d) that they be granted a declaration of rights as requested
herein, and (e) that they be awarded their costs, attorney's fees and all
other relief to which they are entitled under law or in equity.
Respectfully submitted,
___________________________
Eric V. Evans
EVANS LAW OFFICES
271 West Short
Street, Suite 300
Lexington, Kentucky40507
(606) 231-8161 telephone
(606) 231-8166 facsimile