Sam Sloan
08-25-2003, 07:05 AM
Off hand, I can find a few things wrong with this lawsuit. Among them
are:
1. Peterson lists several defendants as residing in California and
doing business in California. This is false. Only one of them resides
in California. That is Joe Wagner. None of the others do business in
California. Most are from the East Coast.
2. Peterson at great length lists the allegedly wrongful acts of Frank
Niro. However Niro is not named a a defendant.
3. Many of the allegations relate to the prior litigation between
Peterson and the USCF. However, that litigation was terminated when
Peterson filed for bankruptcy in 2001. I doubt that that Peterson can
raise these old issues in this new lawsuit.
4. Everybody familiar with this history knows that many of these
allegations are factually false. However, I believe that at least some
of the counts of this complaint will survive a motion to dismiss. So,
I believe that Peterson will be able to keep this lawsuit going for a
while, although eventually the USCF will prevail.
Sam Sloan
On 25 Aug 2003 05:36:53 -0700, Donald.Mihokovich@Ruden.com (Don
Mihokovich) wrote:
Richard, who is pro se in his lawsuit, was kind enough to send me acopy last night. It is a public document, and so I am going to postit, without comment for now, but for a general statement that on itsface, it has many, many deficiencies:SUPERIOR COURT OF CALIFORNIACOUNTY OF KERN1415 TRUXTON AVEBAKERSFIELD CA 93301RICHARD PETERSON, Plaintiff, vs.UNITED STATES CHESS FEDERATION, JOHNMCCRARY, BOB SMITH, TOM BROWNSCOMBE, DIANE REESE, BEATRIZ MARINELLO,DON SCHULTZ, FRANK CAMARATTA, FRANK BRADY, STEVE SHUTT, JOSEPH WAGNER,ARNOLD DENKER, AND DOES 1-50 Defendant )))))))))))))))) Case No.:COMPLAINT FOR: BREACH OF CONTRACT, SPECIFIC PERFORMANCE, LIBEL,INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMICADVANTAGE,CONVERSION, CONSPIRACYPlaintiff alleges,1. Plaintiff is an individual doing business in the County of Kern,California.2. Defendant United States Chess Federation (hereinafter USCF) is anIllinois Corporation presently doing business in California.3. Defendant John McCrary is President of the USCF presently residingin and doing business in California.4. Defendant Bob Smith is Secretary of the USCF presently residing inand doing business in California.5. Defendant Frank Camaratta is a Vice President of the USCF presentlyresiding in and doing business in California.6. Defendant Steve Shutt is a Vice President of the USCF presentlyresiding in and doing business in California.7. Defendant Frank Brady is a member of the Executive Board of theUSCF presently residing in and doing business in California.8. Defendant Joseph Wagner is a member of the Executive Board of theUSCF presently residing in and doing business in California.9. Defendant Arnold Denker is a member of the Executive Board of theUSCF presently residing in and doing business in California.10. Defendant Tom Brownscombe is an employee of the USCF presentlyresiding in and doing business in California.11. Defendant Diane Reese is an employee of the USCF presentlyresiding in and doing business in California.12. Defendant Beatriz Marinello is a former employee of the USCFpresently residing in and doing business in California.13. Defendant Don Schultz is a former President of the USCF presentlyresiding in and doing business in California.14. The true names and capacities of Defendants Does 1 through 50,inclusive, are presently unknown to the plaintiff, who therefore suessaid Defendants by such fictitious names. When their true names andcapacities have been ascertained, the plaintiff will move to amendthis Complaint. Plaintiff is informed and believes and thereonalleges that each fictitiously named Defendant, through his, her, orits breach of contract, negligence, recklessness, or intentionalwrongdoing, proximately caused this controversy to occur, and/orcaused damages to the plaintiff as alleged in this complaint.FIRST CAUSE OF ACTIONBREACH OF CONTRACT1. On or about October of 2002, plaintiff, Richard Peterson, enteredinto a three year affiliate's contract with the USCF for hisaffiliate, the Chess Education Association. The USCF offers certainservices to all its affiliates and lists them in a welcoming letter tothe affiliates. The letter (Exhibit 1), written by USCF ChiefBusiness Officer Judy Misner, states in the third sentence, "Yourstatus as a USCF Affiliate entitles you to special services anddiscounts." Among the "materials you may find useful:" in her letterare "Tournament Announcement Form for Chess Life, so that you canadvertise your upcoming tournament." And "Order Form for USCF MailingLists, Labels or Disks, also to help you advertise your upcomingtournament."Also enclosed was a certificate verifying the Chess EducationAssociation's status as "an Affiliate of the United States ChessFederation and entitled to all privileges thereof," with an expirationdate of December 2005 (Exhibit 2).Plaintiff placed an ad for the 2003 CEA GrandNational ChessChampionship that was to run for four issues beginning with Februaryof 2003. To secure the ad, a credit card was offered as payment.On January 27, 2003, just four days before it was due to appear in theFebruary Chess Life, USCF Executive Director Frank Niro announced onthe internet that he had removed the ad from the forthcoming ChessLife magazines (Exhibit 3) and further refused to sell mailing labelsfor the event (Exhibit 4). No notification of any kind had been madedirectly to the plaintiff and would have passed unnoticed if theplaintiff had not seen Niro's email on the rec.games.chess.politicschatroom. Defendant Niro went on to write on February 1, 2003 that"It is not in the USCF's best interest to assist anyone in promotingnon-USCF rated chess tournaments. I wish you the best of luck withyour events, but you will not use address labels for our members,acquired from USCF for the purpose of promoting a non-USCF rated chessevent. Regardless of what has been permitted in the past, that ispolicy currently. Sorry." (Exhibit 5).Defendant Niro changed prior USCF practice without notice and causedthe cancellation of the four months advertisement in Chess Life uponwhich we relied.As a result the 2003 CEA GrandNationals was a financial failure andthe event was only able to pay less than 1/3rd of the advertisedscholarships, causing a financial loss to the plaintiff.Further, Defendant Niro's change of policy caused intentionalinterference with plaintiff's prospective economic gain, by preventingattendance at plaintiff's event while directing players to USCF eventsheld on different weekends and more than 2000 miles away. DefendantNiro's actions prevented approximately 50,000 chess players fromlearning of plaintiff's event from the pages of four issues of ChessLife.SECOND CAUSE OF ACTIONSPECIFIC PERFORMANCERegarding the affiliate's contract, Plaintiff asks the court for anorder requiring the defendant USCF to print ads submitted byRichard Peterson and to sell requested mailing lists to RichardPeterson in every form offered by the USCF in January, 2003 at theprevailing affiliate rates.THIRD CAUSE OF ACTIONLIBEL1. Acting in his capacity as Executive Director of the USCF, FrankNiro has repeatedly defamed the plaintiff, holding the plaintiff up inan unfavorable light to the chess community in a public manner.On October 31, Niro emailed the following, "As for your queryregarding your most recent TLA, I have been informed by Debi Sherrythat the VISA card account number you submitted was declined.Therefore, we have tenatively removed your TLA from the ad ladder, inaccordance with our standard policy, pending receipt of another formof payment." In an effort to embarrass the plaintiff, Niro copiedthis email asserting the plaintiff's failed credit card (Exhibit 6) to12 additional parties.In fact, there was nothing wrong with the credit card and the USCFoffice sent an apology to the plaintiff, but not to the other partieswho had been copied by Frank Niro.On January 28th 2003, Frank Niro posted the following email. He said,"You screw other people and other people come back and screw you".(Exhibit 7) It should be noted that Frank Niro copied this email to24 different parties including one who maintains child porn on hiswebsite.On January 29th 2003, Frank Niro posted the following to therec.games.chess.politics newsgroup. He said, "Richard Peterson is nota current certified TD. If he was, I would've asked the TDCC torevoke his TD status months ago. I'd push to revoke his membership,but it would make a martyr out of him." (Exhibit 8)Publication of this document was worldwide.This gratuitious distribution of false and defaming statements hascaused the plaintiff to be held in a false light within the chesscommunity where the plaintiff makes his living.FOURTH CAUSE OF ACTIONINTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE1. On January 31st 2003, Frank Niro posted this on the internet inresponse to plaintiff's question on his ability to purchase mailinglists, Niro wrote, "Nope. No labels for you. They are a privilegeand a courtesy, not a right."In preventing our advertising of events and then preventing plaintifffrom mitigating damages with a mailing effort, USCF interfered withplaintiff's right to make a living.The failure of this tournament to make a profit was a direct result ofUSCF blocking our efforts to hold any non-USCF chess event.FIFTH CAUSE OF ACTIONCONVERSION1. In 1994, plaintiff founded the All America Cup, a children'sscholastic chess championship that was held annually in the month ofNovember since that time. This event was run concurrently with theUSCF National Scholastic Action Chess Championship under a contractwith the USCF that provided an annual payment of $5 per player in theevent for the use of the USCF national title.Each year, the plaintiff, without input or participation from any USCFemployee at the tournament site, made improvements to the tournamentand the structure of the tournament was fine tuned increasing itsattendance every year through 1998.In September of 1999, current USCF President John McCrary presented amotion to the Executive Board to cancel the last two years of thecontract for the event. The motion passed unanimously. This motionwas without cause and was the precursor of an attempt by the USCF tosteal the All America Cup from the plaintiff, changing only the name.This motion represents the extreme bad faith of the USCF.In 2000, after the unilateral termination of the National ScholasticAction Chess Championship/All America Cup contract, USCF employeesDiane Reese and Tom Brownscombe repeatedly contacted the host hotel(Ramada Valley Ho Resort in Scottsdale) of the All America Cup seekingconfidential information regarding the number of players who stay atthe hotel for the event. Representations were made by defendantsReese and Brownscombe that they had a continuing relationship with theplaintiff and thus had a right to the information. This was false andrepresents intentional interference in plaintiff's contractualrelationship with his host hotel and intentional misrepresentation asgrounds for piercing the corporate veil. Their attempt tomisappropriate trade secrets shows the fraudulent intent of the USCFto steal plaintiff's event. In 2001, defendant USCF ran a tournament in November called theNational Youth Action Championship in Illinois on the weekendpreceeding the All America Cup. In every respect, this tournament had an identical format to the AllAmerica Cup. In 2002, plaintiff learned of the theft of his format andcontacted the Executive Director and all members of the ExecutiveBoard of the USCF demanding that their event (National Youth ActionChampionship) either not be held or a settlement be reached prior toholding the event. This effort was rebuffed and the USCF proceededwith their carbon copy of the All America Cup. In a further attempt to harm the All America Cup, USCF ran ads foranother competing tournament with the identical format of the AllAmerica Cup. That tournament, named the Hail America Cup, was to beheld on the same weekend, within ten miles of the All America Cup. Thus, three identical tournaments were all to be held in themonth of November within one week of each other.Plaintiff alleges USCF knowingly participated in the attempt todestroy the All America Cup by unfair competition. Plaintiff alleges these attacks and theft of plaintiff's formatamount to a conversion of his asset without compensation of any type. These attacks caused participation to fall more than 65% from thepeak year of 1998 and caused grevious financial loss to the plaintiff. Further, the fraudulent attempts to obtain proprietaryinformation from the All America Cup's host hotel represent a piercingof the corporate veil.SIXTH CAUSE OF ACTIONCONSPIRACY1. By allowing the National Youth Action Championship to go forward in2002 with the full knowledge that the event had been stolen from theplaintiff, all members of the Executive Board of the USCF participatedin a conspiracy to convert the All America Cup to a property of theUSCF. The board was repeatedly warned that they would be sued asindividuals if the stolen tournament was held.Collectively, the board ignored that warning and through their silentfraud in claiming plaintiff's event as the property of USCF shouldallow the piercing of the corporate veil. The Executive Board waswarned on October 29th 2002 that they were in violation of the LanhamAct trade dress (Exhibit 10). Trade dress being defined as the totalimage or overall design or appearance of a product or its packaging.Two Pesos, Inc v Taco Cabana, Inc 505 U.S.763, 765 (1992); AmericanGreetings, 807 F.2d at 1141; Rose Art Industries, Inc. v RaymondGeddes & Co., 31 F. Supp. 2d 367 (D.N.J. 1998).Further, as USCF has a negative net worth. The Executive Boardbelieved they had nothing to lose by stealing the plaintiff's format.Their knowledge of the USCF's inability to pay was thought to insurean inequitable result, thus piercing the corporate veil protecting thedirectors and their fraudulent actions.2. Since 1997 a conspiracy has existed in the USCF against thefinancial interests of the plaintiff.The torts are legion and in many instances overlapping.In 1999, then USCF President Don Schlultz allowed the filing of alawsuit against the plaintiff in violation of the bylaws of the USCFwhich would not even allow the hiring of an attorney without ExecutiveBoard approval and over the protest of several of the members of theboard. This lawsuit proved to have no basis in fact as will follow.Additionally, Schultz also sued the wife of the plaintiff, who hadjust given birth and had no knowledge of this matter in any regard.Torts perpetrated by the USCF, include two forgeries of contractsrelating to the 1999 National Elementary Chess Championship were usedas a justification for the lawsuit. One of the forgeries, presentedas evidence in response to subpoena, involved xeroxing the plaintiff'ssignature from one document to another, but reducing the size by 20%.(Exhibit 11)Fraudulent financial statements were prepared by former USCF employeeBeatriz Marinello relating to the 1999 National Elementary ChessChampionship. (Exhibit 12)There was a preparation of fraudulent documents as evidence.(Exhibit 13) USCF claimed to have specific knowledge of each andevery shirt plus the size of every shirt sold at the 1999 NationalElementary, yet the USCF ‘s auditors, Stanley Marks and Company statedin their audit notes "We noted that there were limited controls oninventory taken to tournaments and inventory returned to theFederation after tournaments."USCF President Bob Smith withheld the "John L. White Report", (Exhibit14) which was prepared at President Smith's direction in September of1999, from the plaintiff and the plaintiff's attorney despite the factthat he was aware it was subject to subpoena.The John L White Report of 9/21/99 states, "The board should be aware(it is my understanding) that no tournament accounting has been donesince about the first of this year. The auditors worked with thecurrent bookkeeper to close out last year tournaments as bestpossible. And, not any accounting has been done on tournaments as ofmy visit. Does someone think this is not important? Why?"Defendant Smith proposed a settlement of the lawsuit in January of2000, while withholding evidence (the John L. White report) that thefinancials prepared by Beatriz Marinello were false and that notournament accounting had been done in 1999. More especially, notournament accounting had been done prior to the filing of thelawsuit, thus negating any basis for the lawsuit and constituting aconspiracy against the plaintiff.3. In 1998, there was an attempt to rig the bidding for the 2000National Elementary Chess Championship. In approximate terms thatwill be more fully explored at trial, Plaintiff made a bid of aguaranteed $25,000 to host the event. A second bidder bid anon-guaranteed $9,000. The bidding deadline was September 15th, 1998. One month after the bidding deadline on October 15th, the secondbidder was allowed to change his bid to approximately equal to that ofthe plaintiff and the second bidder was awarded the bid.Plaintiff appealed to the Executive Board (then called the PolicyBoard) and after raising his bid to $40,000 in a forced second roundof bidding, the Executive Board awarded plaintiff the contract basedupon his bid.After both USCF and plaintiff advertised the event nationally (Exhibit15) and more than six months after a contract was signed, USCF'sExecutive Board (on a motion from current USCF President JohnMcCrary)the board voted that "contract negotiations" would beterminated. This despite the fact that the contract had already beensigned six months earlier and no negotiations relating to the 2000National Elementary had been ongoing. (Exhibit 16)Incredibly, Marinello told members of the USCF scholastic committee inAugust of 1999 that no contract had been signed when that was not thecase. Marinello knew because she had signed it herself and was theholder of the signed contract.Beatriz Marinello contacted the 2000 National Elementary site hotel(Adam's Mark Dallas) and requested a copy of the site contract withthe plaintiff.USCF then contacted the Adam's Mark Dallas requesting the Adam's Marksever all ties with the plaintiff and continue with USCF as thecontractual party. (Exhibit 17)When the Adam's Mark Dallas refused to transfer the contract to USCF,USCF moved the event to another location.Plaintiff was left with a contract for a hotel and the possibility ofa $600,000 liability to the Adam's Mark Dallas.This breach of the contract for the 2000 National Elementary in Dallascost plaintiff approximately $200,000 in lost revenue as well as theobligation to the Adam's Mark Dallas.WHEREFORE, Plaintiff prays judgement against Defendants, and each ofthem as follows:FIRST CAUSE OF ACTION1. Plaintiff requests damages in an amount equal to all of the entryfees from the largest tournament USCF held in the month or May 2003.The month of May being the same month that the failed CEAGrandNationals were held.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.SECOND CAUSE OF ACTION1. Plaintiff requests a court order requiring the defendant USCF toprint ads submitted by Richard Peterson and to sell requested mailinglists to Richard Peterson in every form offered by the USCF inJanuary, 2003 at the prevailing affiliate rates.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.THIRD CAUSE OF ACTION1. Plaintiff requests compensation in an amount to be determined bythis court.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.FOURTH CAUSE OF ACTION1. Plaintiff requests compensation in an amount to be determined bythis court.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.FIFTH CAUSE OF ACTION1. Plaintiff seeks treble damages in accordance with the Lanham Act ofall income from all National Youth Action Championships andcompensation for each year of the All America Cup equal to revenuefrom its highest year of attendance prior to cancellation of thecontract in 1999 less actual entries received by the All America Cupfrom 2000 until the present. Further, plaintiff seeks an orderdisallowing further National Youth Action Championships without theexpress written permission of the plaintiff.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.SIXTH CAUSE OF ACTION1. Plaintiff seeks damages from the cancellation of the contract forthe 2000 National Elementary Chess Championship in the amount ofprojected gross income of $200,000 less the agreed upon contract forthe event in the amount of $40,000, making a net payment of $160,000.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.Dated August 8, 2003
are:
1. Peterson lists several defendants as residing in California and
doing business in California. This is false. Only one of them resides
in California. That is Joe Wagner. None of the others do business in
California. Most are from the East Coast.
2. Peterson at great length lists the allegedly wrongful acts of Frank
Niro. However Niro is not named a a defendant.
3. Many of the allegations relate to the prior litigation between
Peterson and the USCF. However, that litigation was terminated when
Peterson filed for bankruptcy in 2001. I doubt that that Peterson can
raise these old issues in this new lawsuit.
4. Everybody familiar with this history knows that many of these
allegations are factually false. However, I believe that at least some
of the counts of this complaint will survive a motion to dismiss. So,
I believe that Peterson will be able to keep this lawsuit going for a
while, although eventually the USCF will prevail.
Sam Sloan
On 25 Aug 2003 05:36:53 -0700, Donald.Mihokovich@Ruden.com (Don
Mihokovich) wrote:
Richard, who is pro se in his lawsuit, was kind enough to send me acopy last night. It is a public document, and so I am going to postit, without comment for now, but for a general statement that on itsface, it has many, many deficiencies:SUPERIOR COURT OF CALIFORNIACOUNTY OF KERN1415 TRUXTON AVEBAKERSFIELD CA 93301RICHARD PETERSON, Plaintiff, vs.UNITED STATES CHESS FEDERATION, JOHNMCCRARY, BOB SMITH, TOM BROWNSCOMBE, DIANE REESE, BEATRIZ MARINELLO,DON SCHULTZ, FRANK CAMARATTA, FRANK BRADY, STEVE SHUTT, JOSEPH WAGNER,ARNOLD DENKER, AND DOES 1-50 Defendant )))))))))))))))) Case No.:COMPLAINT FOR: BREACH OF CONTRACT, SPECIFIC PERFORMANCE, LIBEL,INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMICADVANTAGE,CONVERSION, CONSPIRACYPlaintiff alleges,1. Plaintiff is an individual doing business in the County of Kern,California.2. Defendant United States Chess Federation (hereinafter USCF) is anIllinois Corporation presently doing business in California.3. Defendant John McCrary is President of the USCF presently residingin and doing business in California.4. Defendant Bob Smith is Secretary of the USCF presently residing inand doing business in California.5. Defendant Frank Camaratta is a Vice President of the USCF presentlyresiding in and doing business in California.6. Defendant Steve Shutt is a Vice President of the USCF presentlyresiding in and doing business in California.7. Defendant Frank Brady is a member of the Executive Board of theUSCF presently residing in and doing business in California.8. Defendant Joseph Wagner is a member of the Executive Board of theUSCF presently residing in and doing business in California.9. Defendant Arnold Denker is a member of the Executive Board of theUSCF presently residing in and doing business in California.10. Defendant Tom Brownscombe is an employee of the USCF presentlyresiding in and doing business in California.11. Defendant Diane Reese is an employee of the USCF presentlyresiding in and doing business in California.12. Defendant Beatriz Marinello is a former employee of the USCFpresently residing in and doing business in California.13. Defendant Don Schultz is a former President of the USCF presentlyresiding in and doing business in California.14. The true names and capacities of Defendants Does 1 through 50,inclusive, are presently unknown to the plaintiff, who therefore suessaid Defendants by such fictitious names. When their true names andcapacities have been ascertained, the plaintiff will move to amendthis Complaint. Plaintiff is informed and believes and thereonalleges that each fictitiously named Defendant, through his, her, orits breach of contract, negligence, recklessness, or intentionalwrongdoing, proximately caused this controversy to occur, and/orcaused damages to the plaintiff as alleged in this complaint.FIRST CAUSE OF ACTIONBREACH OF CONTRACT1. On or about October of 2002, plaintiff, Richard Peterson, enteredinto a three year affiliate's contract with the USCF for hisaffiliate, the Chess Education Association. The USCF offers certainservices to all its affiliates and lists them in a welcoming letter tothe affiliates. The letter (Exhibit 1), written by USCF ChiefBusiness Officer Judy Misner, states in the third sentence, "Yourstatus as a USCF Affiliate entitles you to special services anddiscounts." Among the "materials you may find useful:" in her letterare "Tournament Announcement Form for Chess Life, so that you canadvertise your upcoming tournament." And "Order Form for USCF MailingLists, Labels or Disks, also to help you advertise your upcomingtournament."Also enclosed was a certificate verifying the Chess EducationAssociation's status as "an Affiliate of the United States ChessFederation and entitled to all privileges thereof," with an expirationdate of December 2005 (Exhibit 2).Plaintiff placed an ad for the 2003 CEA GrandNational ChessChampionship that was to run for four issues beginning with Februaryof 2003. To secure the ad, a credit card was offered as payment.On January 27, 2003, just four days before it was due to appear in theFebruary Chess Life, USCF Executive Director Frank Niro announced onthe internet that he had removed the ad from the forthcoming ChessLife magazines (Exhibit 3) and further refused to sell mailing labelsfor the event (Exhibit 4). No notification of any kind had been madedirectly to the plaintiff and would have passed unnoticed if theplaintiff had not seen Niro's email on the rec.games.chess.politicschatroom. Defendant Niro went on to write on February 1, 2003 that"It is not in the USCF's best interest to assist anyone in promotingnon-USCF rated chess tournaments. I wish you the best of luck withyour events, but you will not use address labels for our members,acquired from USCF for the purpose of promoting a non-USCF rated chessevent. Regardless of what has been permitted in the past, that ispolicy currently. Sorry." (Exhibit 5).Defendant Niro changed prior USCF practice without notice and causedthe cancellation of the four months advertisement in Chess Life uponwhich we relied.As a result the 2003 CEA GrandNationals was a financial failure andthe event was only able to pay less than 1/3rd of the advertisedscholarships, causing a financial loss to the plaintiff.Further, Defendant Niro's change of policy caused intentionalinterference with plaintiff's prospective economic gain, by preventingattendance at plaintiff's event while directing players to USCF eventsheld on different weekends and more than 2000 miles away. DefendantNiro's actions prevented approximately 50,000 chess players fromlearning of plaintiff's event from the pages of four issues of ChessLife.SECOND CAUSE OF ACTIONSPECIFIC PERFORMANCERegarding the affiliate's contract, Plaintiff asks the court for anorder requiring the defendant USCF to print ads submitted byRichard Peterson and to sell requested mailing lists to RichardPeterson in every form offered by the USCF in January, 2003 at theprevailing affiliate rates.THIRD CAUSE OF ACTIONLIBEL1. Acting in his capacity as Executive Director of the USCF, FrankNiro has repeatedly defamed the plaintiff, holding the plaintiff up inan unfavorable light to the chess community in a public manner.On October 31, Niro emailed the following, "As for your queryregarding your most recent TLA, I have been informed by Debi Sherrythat the VISA card account number you submitted was declined.Therefore, we have tenatively removed your TLA from the ad ladder, inaccordance with our standard policy, pending receipt of another formof payment." In an effort to embarrass the plaintiff, Niro copiedthis email asserting the plaintiff's failed credit card (Exhibit 6) to12 additional parties.In fact, there was nothing wrong with the credit card and the USCFoffice sent an apology to the plaintiff, but not to the other partieswho had been copied by Frank Niro.On January 28th 2003, Frank Niro posted the following email. He said,"You screw other people and other people come back and screw you".(Exhibit 7) It should be noted that Frank Niro copied this email to24 different parties including one who maintains child porn on hiswebsite.On January 29th 2003, Frank Niro posted the following to therec.games.chess.politics newsgroup. He said, "Richard Peterson is nota current certified TD. If he was, I would've asked the TDCC torevoke his TD status months ago. I'd push to revoke his membership,but it would make a martyr out of him." (Exhibit 8)Publication of this document was worldwide.This gratuitious distribution of false and defaming statements hascaused the plaintiff to be held in a false light within the chesscommunity where the plaintiff makes his living.FOURTH CAUSE OF ACTIONINTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE1. On January 31st 2003, Frank Niro posted this on the internet inresponse to plaintiff's question on his ability to purchase mailinglists, Niro wrote, "Nope. No labels for you. They are a privilegeand a courtesy, not a right."In preventing our advertising of events and then preventing plaintifffrom mitigating damages with a mailing effort, USCF interfered withplaintiff's right to make a living.The failure of this tournament to make a profit was a direct result ofUSCF blocking our efforts to hold any non-USCF chess event.FIFTH CAUSE OF ACTIONCONVERSION1. In 1994, plaintiff founded the All America Cup, a children'sscholastic chess championship that was held annually in the month ofNovember since that time. This event was run concurrently with theUSCF National Scholastic Action Chess Championship under a contractwith the USCF that provided an annual payment of $5 per player in theevent for the use of the USCF national title.Each year, the plaintiff, without input or participation from any USCFemployee at the tournament site, made improvements to the tournamentand the structure of the tournament was fine tuned increasing itsattendance every year through 1998.In September of 1999, current USCF President John McCrary presented amotion to the Executive Board to cancel the last two years of thecontract for the event. The motion passed unanimously. This motionwas without cause and was the precursor of an attempt by the USCF tosteal the All America Cup from the plaintiff, changing only the name.This motion represents the extreme bad faith of the USCF.In 2000, after the unilateral termination of the National ScholasticAction Chess Championship/All America Cup contract, USCF employeesDiane Reese and Tom Brownscombe repeatedly contacted the host hotel(Ramada Valley Ho Resort in Scottsdale) of the All America Cup seekingconfidential information regarding the number of players who stay atthe hotel for the event. Representations were made by defendantsReese and Brownscombe that they had a continuing relationship with theplaintiff and thus had a right to the information. This was false andrepresents intentional interference in plaintiff's contractualrelationship with his host hotel and intentional misrepresentation asgrounds for piercing the corporate veil. Their attempt tomisappropriate trade secrets shows the fraudulent intent of the USCFto steal plaintiff's event. In 2001, defendant USCF ran a tournament in November called theNational Youth Action Championship in Illinois on the weekendpreceeding the All America Cup. In every respect, this tournament had an identical format to the AllAmerica Cup. In 2002, plaintiff learned of the theft of his format andcontacted the Executive Director and all members of the ExecutiveBoard of the USCF demanding that their event (National Youth ActionChampionship) either not be held or a settlement be reached prior toholding the event. This effort was rebuffed and the USCF proceededwith their carbon copy of the All America Cup. In a further attempt to harm the All America Cup, USCF ran ads foranother competing tournament with the identical format of the AllAmerica Cup. That tournament, named the Hail America Cup, was to beheld on the same weekend, within ten miles of the All America Cup. Thus, three identical tournaments were all to be held in themonth of November within one week of each other.Plaintiff alleges USCF knowingly participated in the attempt todestroy the All America Cup by unfair competition. Plaintiff alleges these attacks and theft of plaintiff's formatamount to a conversion of his asset without compensation of any type. These attacks caused participation to fall more than 65% from thepeak year of 1998 and caused grevious financial loss to the plaintiff. Further, the fraudulent attempts to obtain proprietaryinformation from the All America Cup's host hotel represent a piercingof the corporate veil.SIXTH CAUSE OF ACTIONCONSPIRACY1. By allowing the National Youth Action Championship to go forward in2002 with the full knowledge that the event had been stolen from theplaintiff, all members of the Executive Board of the USCF participatedin a conspiracy to convert the All America Cup to a property of theUSCF. The board was repeatedly warned that they would be sued asindividuals if the stolen tournament was held.Collectively, the board ignored that warning and through their silentfraud in claiming plaintiff's event as the property of USCF shouldallow the piercing of the corporate veil. The Executive Board waswarned on October 29th 2002 that they were in violation of the LanhamAct trade dress (Exhibit 10). Trade dress being defined as the totalimage or overall design or appearance of a product or its packaging.Two Pesos, Inc v Taco Cabana, Inc 505 U.S.763, 765 (1992); AmericanGreetings, 807 F.2d at 1141; Rose Art Industries, Inc. v RaymondGeddes & Co., 31 F. Supp. 2d 367 (D.N.J. 1998).Further, as USCF has a negative net worth. The Executive Boardbelieved they had nothing to lose by stealing the plaintiff's format.Their knowledge of the USCF's inability to pay was thought to insurean inequitable result, thus piercing the corporate veil protecting thedirectors and their fraudulent actions.2. Since 1997 a conspiracy has existed in the USCF against thefinancial interests of the plaintiff.The torts are legion and in many instances overlapping.In 1999, then USCF President Don Schlultz allowed the filing of alawsuit against the plaintiff in violation of the bylaws of the USCFwhich would not even allow the hiring of an attorney without ExecutiveBoard approval and over the protest of several of the members of theboard. This lawsuit proved to have no basis in fact as will follow.Additionally, Schultz also sued the wife of the plaintiff, who hadjust given birth and had no knowledge of this matter in any regard.Torts perpetrated by the USCF, include two forgeries of contractsrelating to the 1999 National Elementary Chess Championship were usedas a justification for the lawsuit. One of the forgeries, presentedas evidence in response to subpoena, involved xeroxing the plaintiff'ssignature from one document to another, but reducing the size by 20%.(Exhibit 11)Fraudulent financial statements were prepared by former USCF employeeBeatriz Marinello relating to the 1999 National Elementary ChessChampionship. (Exhibit 12)There was a preparation of fraudulent documents as evidence.(Exhibit 13) USCF claimed to have specific knowledge of each andevery shirt plus the size of every shirt sold at the 1999 NationalElementary, yet the USCF ‘s auditors, Stanley Marks and Company statedin their audit notes "We noted that there were limited controls oninventory taken to tournaments and inventory returned to theFederation after tournaments."USCF President Bob Smith withheld the "John L. White Report", (Exhibit14) which was prepared at President Smith's direction in September of1999, from the plaintiff and the plaintiff's attorney despite the factthat he was aware it was subject to subpoena.The John L White Report of 9/21/99 states, "The board should be aware(it is my understanding) that no tournament accounting has been donesince about the first of this year. The auditors worked with thecurrent bookkeeper to close out last year tournaments as bestpossible. And, not any accounting has been done on tournaments as ofmy visit. Does someone think this is not important? Why?"Defendant Smith proposed a settlement of the lawsuit in January of2000, while withholding evidence (the John L. White report) that thefinancials prepared by Beatriz Marinello were false and that notournament accounting had been done in 1999. More especially, notournament accounting had been done prior to the filing of thelawsuit, thus negating any basis for the lawsuit and constituting aconspiracy against the plaintiff.3. In 1998, there was an attempt to rig the bidding for the 2000National Elementary Chess Championship. In approximate terms thatwill be more fully explored at trial, Plaintiff made a bid of aguaranteed $25,000 to host the event. A second bidder bid anon-guaranteed $9,000. The bidding deadline was September 15th, 1998. One month after the bidding deadline on October 15th, the secondbidder was allowed to change his bid to approximately equal to that ofthe plaintiff and the second bidder was awarded the bid.Plaintiff appealed to the Executive Board (then called the PolicyBoard) and after raising his bid to $40,000 in a forced second roundof bidding, the Executive Board awarded plaintiff the contract basedupon his bid.After both USCF and plaintiff advertised the event nationally (Exhibit15) and more than six months after a contract was signed, USCF'sExecutive Board (on a motion from current USCF President JohnMcCrary)the board voted that "contract negotiations" would beterminated. This despite the fact that the contract had already beensigned six months earlier and no negotiations relating to the 2000National Elementary had been ongoing. (Exhibit 16)Incredibly, Marinello told members of the USCF scholastic committee inAugust of 1999 that no contract had been signed when that was not thecase. Marinello knew because she had signed it herself and was theholder of the signed contract.Beatriz Marinello contacted the 2000 National Elementary site hotel(Adam's Mark Dallas) and requested a copy of the site contract withthe plaintiff.USCF then contacted the Adam's Mark Dallas requesting the Adam's Marksever all ties with the plaintiff and continue with USCF as thecontractual party. (Exhibit 17)When the Adam's Mark Dallas refused to transfer the contract to USCF,USCF moved the event to another location.Plaintiff was left with a contract for a hotel and the possibility ofa $600,000 liability to the Adam's Mark Dallas.This breach of the contract for the 2000 National Elementary in Dallascost plaintiff approximately $200,000 in lost revenue as well as theobligation to the Adam's Mark Dallas.WHEREFORE, Plaintiff prays judgement against Defendants, and each ofthem as follows:FIRST CAUSE OF ACTION1. Plaintiff requests damages in an amount equal to all of the entryfees from the largest tournament USCF held in the month or May 2003.The month of May being the same month that the failed CEAGrandNationals were held.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.SECOND CAUSE OF ACTION1. Plaintiff requests a court order requiring the defendant USCF toprint ads submitted by Richard Peterson and to sell requested mailinglists to Richard Peterson in every form offered by the USCF inJanuary, 2003 at the prevailing affiliate rates.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.THIRD CAUSE OF ACTION1. Plaintiff requests compensation in an amount to be determined bythis court.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.FOURTH CAUSE OF ACTION1. Plaintiff requests compensation in an amount to be determined bythis court.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.FIFTH CAUSE OF ACTION1. Plaintiff seeks treble damages in accordance with the Lanham Act ofall income from all National Youth Action Championships andcompensation for each year of the All America Cup equal to revenuefrom its highest year of attendance prior to cancellation of thecontract in 1999 less actual entries received by the All America Cupfrom 2000 until the present. Further, plaintiff seeks an orderdisallowing further National Youth Action Championships without theexpress written permission of the plaintiff.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.SIXTH CAUSE OF ACTION1. Plaintiff seeks damages from the cancellation of the contract forthe 2000 National Elementary Chess Championship in the amount ofprojected gross income of $200,000 less the agreed upon contract forthe event in the amount of $40,000, making a net payment of $160,000.2. For an award of pre-judgment interest at the maximum legal rate.3. For costs of the suit incurred herein; and4. Such other and further relief as this court may deem just andproper.Dated August 8, 2003
