Complaint Unlimited Fee AppliesCal. Super. - 6th Dist.March 29, 2021PARKER LAW GROU P $55 Capitol Moll, Suiie I230 Sacramental CA 95814 CWNGm-hWN NNNNNNNNN-‘b-‘HfiHb-lh-AHp-tp-A mqamhwwfloomanAWNflo Port J. Parker, SBN: 179256 Myles G. Taylor, SBN: 298687 Kaitlyn M. Bigoni, SBN: 308455 PARKER LAW GROUPATTORNEYS A Professional Corporation 555 Capitol Mall, Suite 1230 Sacramento, CA 95814 Telephone: (9 1 6) 996-0400 Facsimile: (916) 668-5760 myles@parlawgroup.com kaitlyn@parlawgroup.com Attorneys for Plaintiff BRYAN CARRERA E-FILED 3/29/2021 9:31 AM Clerk of Court Superior Court of CA, County of Santa Clara 21CV381418 Reviewed By: M Vu SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA BRYAN CARRERA, directly and derivatively on behalf ofAXON DESIGN INC, Plaintiff, V. JOHN NOORI, an individual; AXON DESIGN INC., a California Corporation dba NTERRA GROUP; and DOES 1 through 50 inclusive, Defendants, and AXON DESIGN INC., as a Nominal Defendant as to derivate claims Case No. 21CV381418 VERIFIED COMPLAINT DERIVATE CLAIMS FOR: l. 2. 3. Breach of Fiduciary Duty Abuse of Control Corporate Waste DIRECT CLAIMS FOR: 1. 2. Unpaid Wages (Labor Code § 201, et seq.) Failure to Make Timely Payment (Labor Code § 203, et seq.) 3. Violation 0f Corp. Code § 1600, et seq. 4. Involuntary Dissolution (Corp. Code § 1800) PlaintiffBRYAN CARRERA (“Carrera” 0r “Plaintiff’) alleges and complains as follows: PARTIES, VENUE AND JURISDICTION 1. At all times relevant herein Plaintiff was and is an individual residing in the State of California, County of Placer. Plaintiffwas a co-founder 0fDefendant AXON DESIGN, INC. (“Axon”) as a twenty-five percent (25%) shareholder of Axon, with the remaining shares owned by Defendant VERIFIED ?OMPLAINT PARKER LAW GROU P 555 Copito Moll Suhe I230 Sacramento, CA 95814 NOOONQ 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 JOHN NOORI (“Noori”). Additionally, Plaintiff was, and to the best of his knowledge, is a member ofthe Board of Directors of Axon. At the inception of Axon, Plaintiff served as an officer ofAxon, in the position of secretary. Plaintiff s officer position at Axon was terminated in January 2020; however, Axon maintains in a Statement of Infonnation filed on or about. 2. At all times relevant herein Derivative Plaintiff, Defendant, and Nominal Defendant Axon was a corporation duly organized and existing under the laws of the State 0f California with its principal place of business in Santa Clara County, California. To the best of Plaintiff’s knowledge, Axon has and is operating under a fictitious business name ofNterra Group. 3. Plaintiff alleges on information and belief that Noori was and is an individual residing in the State of California, County of Santa Clara. Noori is also an officer, director and shareholder of Axon. Specifically, at the time of this filing, Noori was the Chief Executive Officer and was, and to the best of Plaintiff s knowledge, is a member of the Board of Directors of Axon. 4. Prior to the filing of the present Complaint, Plaintiff complied with the notice requirements of California Corporations Code § 800(b)(2) in that he presented the factual basis for the claims asserted herein in writing and specified the specific nature of the relief sought. Said demand was delivered to Axon by Plaintiff‘s attorney. Plaintiff‘s written explanation 0f his claims and his demand was sent on or about October 29, 2020, and, in response, the Board of Directors ofAxon took no action that Plaintiff is aware of. 5. Further, because Plaintiff and Defendant Noori constitute the only two directors of Axon, and because Noori has refused to take action with knowledge of the issues raised herein derivatively on behalf0fAxon, it would be futile and useless to seek relief from the board and Plaintiff is excused from any further demand obligation. Noori, as the other director of Axon, is an interested party in the issues raised. He is therefore not independent, and it would be inconceivable that any additional demand would result in corporate action against him. 6. Plaintiff is informed and believes that at all relevant times, each of the defendants, including the DOE defendants, were the agents, servants, employees, representatives, partners, principals, successors in interest, or alter egos of one or more 0f the other defendants, were acting at all times within the course and scope of such relationship, agency and employment, or otherwise, and VERIFIED SOMPLAINT PARKER LAW GROUP \Omflamwar-n t-tr-‘p-n-t wNHO 555 Capitol Mar, Suite 1230 Socramertov CA 958] 4 N N [\J N N N N N >-i v-I fl p-A u-a .-- fl O\ (II A b.) N b-i O \O W fl O\ LII h N 00 with the knowledge and consent of their principal and employer, or otherwise. 7. The present Complaint alleges both derivative and direct claims asserted by Plaintiff on behalf and against Axon respectively. The nature of each claim shall be specified below with derivative claims preceding the direct causes of action. FACTUAL ALLEGATIONS (Derivate Claims) 8. Plaintiff co-founded Axon in March of 201 5 along with Noori. Plaintiff became owner of 25% of the outstanding voting shares of Axon, while Noori held the remaining 75% of the shares. Both at the inception ofoon and at the present day, the Board ofDirectors consists solely of Plaintiff and Noori, including pursuant to agreement. 9. In or around early 2019, Noori’s involvement in Axon began to wane. He would regularly miss crucial meetings. When he did come to the office, he was unproductive and a distraction to other employees. By March 2019, there was $300,000-$400,000 in unbilled work that had not been charged to Axon’s clients. Plaintiff is informed and believes that by the end of 2019, this amount was no less than $500,000. By the end of 2020, Plaintiff is informed and believes this amount was approximately $800,000. 10. Following the termination of Plaintiff’s officer position in January 2020, Noori began operating Axon without consulting or informing Plaintiff, despite Plaintiff’ s continued position on the Board of Directors and demands for involvement. This included Noori, 0n Axon’s behalf, applying for emergency funding and filrloughing most of the staff, while continuing to pay Noori’s own salary. Plaintiff is informed and believes that Noori commented to persons that he was knowingly misusing and/or violated rules regarding the use of PPP loan proceeds. Such acts were wrongful and to the detriment ofAxon and its shareholders. FACTUAL ALLEGATIONS (Direct Claims) 11. As of Plaintiff’s termination in January 2020, Plaintiff was owed approximately 136 hours 0f wages, with 40 as regular hours worked, 40 hours of vacation, and 16 hours of holiday pay. However, his final paycheck only contained 96 hours of wages. The final paycheck also lists 22.88 VERIFIED EOMPLAINT PARKER LAW GROU P AQSEM ,. v 555 Caplro‘ MaH Sune 1230 Socrcmemo, \OOOQQLII b.) NNNNNNNNNr-IHr-tu-sp-tv-Ar-In-n-r-A WNQm-waflOOWVQM-§WN_O hours in “Remaining Paid Time Off Balance” that was not paid out to Plaintiff as required by Labor Code section 227.3. 12. Plaintiff’s final paycheck also omitted back pay from 2018. In regard to this, Noori accused P1aintiffof“possible frau ” and insisted that Plaintiffrepay money that Noori alleges Plaintiff took before Noori will pay him “any credit remaining from the backpay bonus.” 13. On or around May 2020 and again in October 2020, following prior demands, Plaintiff made written request to inspect corporate records under Corp. Code §§ 1601 and 1602. To date, Plaintiff has not been provided with access to said corporate records for his inspection. FIRST CAUSE OF ACTION Breach 0f Fiduciary Duty (Derivative as Against Defendant Noori and DOES 1-50) 14. Plaintiff realleges and incorporates by reference herein paragraphs 1 through 13 above as though fully set forth herein. 15. As the Chief Executive Officer and member of the Board of Directors of Axon, Noori owed a fiduciary duty to Axon and its shareholders (including Plaintiff) to use his ability to control and manage the affairs of Axon in a fair, just and equitable manner, t0 refrain from abusing his positions of control, and not to favor his own interests or the interests of any third party at the expense of Axon. Defendant violated this fiduciary duty to Axon and its shareholders, including without limitation his duty of care, good faith, honesty and loyalty. 16. Plaintiff is informed and believes Noori completely and totally failed to recognize or adhere to his fiduciary obligations t0 Axon and its shareholders. Specifically, Plaintiff is informed and believes Noori failed t0 bill clients for an estimated $800,000 in work completed by Axon. Further, Plaintiff is informed and believes that Noori engaged in gross conflict of interest in his operation of Axon, while operating unilaterally and refusing to account t0 the Board of Directors (which contains Noori and Plaintiff). 17. As a result of Noori’s actions, Axon has suffered losses and incurred costs. Additionally, the value of Axon’s shares has been greatly reduced due to Noori’s breach 0f fiduciary duties. This includes, but is not limited to, the loss of valuable revenue from a knowing failure to bill VERIFIED EOMPLAINT PARKER LAW GROUP \OOONQ r-Ap-Iu-tn- WNWO 555 Capito‘ Mal. Suhe 1230 Sacramento CA 95814 N N N N [\J N N N N H H H '- *-‘ H 0° Q O\ kl! A b) N fl O Q W fl ON U’I A for work, and the loss of clients due to gross mismanagement and mishandling of clients and projects. 18. The wrongful conduct particularized herein was not due t0 an honest error in judgement, but rather to Noori’s gross mismanagement, bad faith and/or reckless disregard of the rights and interests ofAxon and its shareholders. 19. As a result of the foregoing, Noori has participated in banning Axon and has breached the fiduciary duties he owed to Axon. 20. As a direct and proximate result of the wrongful acts and omissions ofNoori, Plaintiff and Axon have been damaged generally, specially, and consequentially according to proof, in an amount within the jurisdiction 0f the court, as aforesaid. WHEREFORE Plaintiff and Axon pray for relief as set forth below. SECOND CAUSE OF ACTION Abuse of Control (Derivative as Against Defendant Noori and DOES 1-50) 21. Plaintiff realleges and incorporates by reference herein paragraphs 1 through 13 above as though fully set forth herein. 22. By virtue 0f his position and financial holdings in Axon, Noori exercised control over Axon and its operations, and owed duties as the Chief Executive Officer and member of the Board of Directors not to use their positions 0f control within Axon for his own personal interests and contrary t0 the interests 0f Axon. 23. Noori’s conduct as set forth herein amounts to an abuse of control 0fAxon in violation of his obligation to the company. Noori knowingly undertook and perpetrated said abuse of control. 24. As a direct and proximate result of the wrongful acts and omissions ofNoori, Plaintiff and Axon have been damaged generally, specially and consequentially according to proof, in an amount within the jurisdiction of the court, as aforesaid. WHEREFORE Plaintiff and Axon pray for relief as set forth below. /// /// /// VERIFIED ?OMPLAINT PARKER LAW GROUP \OWQQU‘I-hwm t-r-th-t WNHO 555 Ccoitcl Mal Suite 1230 Sacramento CA95814 N N N N N N N N r-d t-‘ h-‘ H H v-A fl ON U: A DJ N h“ O NO 0° N O\ Ul g [\JW THIRD CAUSE OF ACTION Corporate Waste (Derivative as Against Defendant Noori and DOES 1-50) 25. Plaintiff realleges and incorporates by reference herein paragraphs l through 13 above as though fully set forth herein. 26. As alleged in detail above, Noori owed a fiduciary duty to exercise good faith and diligence in the administration of the affairs of Axon and in the use and preservation 0f its property and assets; and the highest obligation of fair dealing. 27. Plaintiff is informed and believes Noori wasted Axon’s corporate assets by failing to bill clients for more than $500,000 (or potentially as high as $800,000) of work completed by Axon as well as continuing to pay his own salary while furloughing most of Axon’s employees. 28. As a result of Noori’s actions, Axon has suffered losses and incurred substantial costs. Additionally, the value of Axon’s shares has been greatly reduced due to Noori’s corporate waste. 29. As a direct and proximate result of the wrongfi11 acts and omissions ofNoori, Plaintiff and Axon have been damaged generally, specially and consequentially according to proof, in an amount within the jurisdiction of the court, as aforesaid. WHEREFORE Plaintiff and Axon pray for relief as set forth below. FOURTH CAUSE 0F ACTION Unpaid Wages (Labor Code § 201, et seq.) (Direct as Against Defendant Axon and DOES 1-50) 30. Plaintiff realleges and incorporates by reference herein paragraphs l through 13 above as though fully set forth herein. 31. At the time of his termination, Plaintiff had earned approximately $8,735.32 in back wages that were previously earned. California Labor Code § 201 et seq. mandates that a terminated employee receives all compensation due to them at the time of termination - and in no event later than seventy-two (72) hours after termination. 32. Despite making oral and written demands for his back wages, Axon refused to pay, and continues to refuse to pay, the back pay owed to Plaintiff. VERIFIED gOMPLAINT PARKER LAW GROUP flOfiUI-wa r-Av-tHh-I WNHowm 555 Capitol Moll, Suite i230 Sacramento CA 958:4 N N N N N N N N H - '-“ H '-‘ '-‘ N ON U1 A b) N P“ o \o W N O\ U‘I -B NW 33. As a result of Axon’s continued refusal to pay the back wages due to him, Plaintiff is entitled to monetary damages including, but not limited to, waiting time penalties and attomeys' fees. WHEREFORE Plaintiff prays for relief as set forth below. FIFTH CAUSE OF ACTION Failure t0 Make Timely Payment (Labor Code § 203, et seq.) (Direct as Against Defendant Axon and DOES 1-50) 34. Plaintiff realleges and incorporates by reference herein paragraphs 1 through l3 above as though fully set forth herein. 35. Plaintist employment with Defendant ended. 36. Defendant failed to pay Plaintiff all wages when due. 37. Defendant’s failure to pay the wages owed to Plaintiff was willful. 38. As a result of Defendant’s failure to timely pay wages due and owing t0 him, Plaintiff is entitled to waiting time penalties under Labor Code § 203 in the amount of at least $1 3,963.20. WHEREFORE Plaintiff prays for relief as set forth below. SIXTH CAUSE OF ACTION Violation of Corporation Code § 1600, et seq. (Direct as Against Defendants Noori and Axon) 39. Plaintiff realleges and incorporates by reference herein paragraphs 1 through 13 above as though fully set forth herein. 40. On or around May 2020 and again in October 2020, following prior demands, Plaintiff made a written request to inspect corporate records under Corp. Code §§ 1601 and 1602. To date, Plaintiff has not been pro'vided with access to said corporate records for his inspection. 41. Corp. Code § 1601(3) provides that accounting books and records and minutes of proceedings of the shareholders and the board of any domestic corporation shall be open to inspection upon the written demand on the corporation of any shareholder at any reasonable time during usual business hours, for a purpose reasonably related to such holder’s interest as a shareholder. 42. As Plaintiff is a director, his rights t0 information under Corp. Code § 1602 are broader still, as every director has the absolute right at any reasonable time to inspect any copy corporate records. VERIFIED (730MPLAINT PARKER LAW GROUP \OWNGMhWNfl u-n-t-IH wNflo 565 Caoim‘ MGM Suns 1230 Socramenfo CA 95814 N N N N N N N N H H '-‘ fl fl '-‘ Q O\ UI A U) N H O \D 00 N 0‘ LI'I ¥ NW 43. Plaintiff seeks an order granting access to all books, records, minutes, and information of the corporation that he is entitled to as a matter of law. 44. Corp. Code § 1604 provides that in any action under Sections 1600 or 1601, ifthe court finds the failure of the corporation to comply with a proper demand thereunder was without justification, the court may award an amount sufficient to reimburse the shareholder the reasonable expenses incurred, including attorneys’ fees and costs, in connection with such action or proceeding. 45. By reason of the foregoing, Plaintiffhas sustained and will continue to sustain damages for which there is no complete and adequate remedy at law. WHEREFORE Plaintiff prays for relief as set forth below. SEVENTH CAUSE OF ACTION Involuntary Dissolution (Corp. Code § 1800) (Direct as Against Defendant Axon) 46. Plaintiff realleges and incorporates by reference herein paragraphs 1 through 13 above as though fully set forth herein. 47. Plaintiff is authorized and entitled to maintain an action for involuntary dissolution of Axon. 48. Plaintiff is one-half (one of two) 0f the only directors of Axon. Carrera and Noori entered a shareholder agreement providing: “The Shareholders [Noori and Carrera] are the sole directors 0f Axon, and agree that they or their respective designees shall constitute the sole directors of said corporation throughout the term ofthis Agreement. ...” (Section 5.) The shareholder agreement further provides: “This Agreement shall remain in full effect until terminated by mutual agreement of the parties ...” (Section 10.) 49. In addition to the pervasive mismanagement, abuse of authority, persistent unfairness toward Carrera, mishandling 0f matters alleged infla, there is deadlock 0f directors regarding the corporation and its handling such that the business cannot be conducted with advantage to its shareholders. Carrera is informed and believes there have been at least two consecutive annual meetings failed to be held. Further, Noori has asserted unilateral control over the corporation to the detriment of the shareholders, namely Carrera as a twenty-five percent (25%) owner 0f outstanding VERIFIED EOMPLAINT PARKER LAW GROUP QWNGUI-bww r-I-v-IH DJNv-‘O 555 Copifcw Mal Suite 1230 Socramento‘ CA 95814 N N N N N N N N H r-d I-‘ |-' H H N 0 KI! A U) N Id O \O 0° fl Q M A N 00 voting shares of Axon. As a result, grounds exist for involuntary dissolution of said corporation pursuant to Corp. Code § 1800(b)(2), (3), (4), and/or (5). 50. Plaintiff seeks an order winding up and dissolving Axon in the manner provided by law. WHEREFORE Plaintiff prays for relief as set forth below. PRAYER FOR RELIEF Plaintiff, on behalf of himself and Axon, as to all derivate claims, and solely on behalf of himself as to all direct claims, prays for judgment as follows: 1. Awarding Plaintiff compensatory damages against Defendants in an amount to be proven at trial. 2. Awarding Plaintiff restitution and disgorgement of all proceeds generated as a result of the wrongful conduct alleged herein. 3. Awarding Plaintiff appropriate equitable relief, including enforcing the rights of inspection under Corporation Code §§ 1601 , 1602, et seq. and/or appointing competent inspector(s) or accountant(s) to audit Axon’s books and records. 4. Awarding Plaintiff general damages arising out of Plaintiffs direct claims. 5. Awarding Plaintiff punitive damages permitted by law. 6. Awarding Plaintiff pre-judgment interest. 7. Awarding Plaintiff reasonable attomeys’ fees and other costs. 8. Awarding Plaintiff statutory damages and waiting time penalties arising out of Plaintiff‘s direct claims under the Labor Code. 9. Ordering that Defendant Axon Design, Inc. be wound up and dissolved in the manner provided by law. 10. Ordering Plaintiff such ancillary orders and decrees as may be necessary to effectuate said winding up and dissolution. 11. Awarding such other relief as this Court may deem just and proper. /// /// VERIFIED gOMPLAINT PARKER LAW GROUP UI$UJN \OOOQ@ 10 11 12 13 14 15 16 555 Caaifo‘ MOM Suife 1230 Sacramento, CA 958M 18 19 20 21 22 23 24 25 26 27 28 DEMAND FOR JURY TRIAL Plaintiff hereby demands a jury trial on all issues so triable. PARKER LAW GROUP ATTORNEYS DATED: MarCh 29’ 2021 A Pro sional Co oration MYLES G. TAYLOR KAITLYN M. BIGONI Attorneys for Plaintiff BRYAN CARRERA VERIFIEDICOOMPLAINT PARKER LAW GROUP ©W\l0\UIADJN u-Hr-‘w wN-‘o 555 Canno‘ Mail, Suite 1230 Sacramento] CA 95814 N N N N N N N N >--| - H p-‘ .- ._. \J ON LII k DJ N I'- O O 00 fl ON M A Nm Mm I, BRYAN CARRERA, declare as follows: I am the Plaintiff in this action. Iam familiar with an have reviewed this Verified Complaint. The information supplied therein is based 0n my own personal knowledge and/or has been supplied to me or obtained through review of documents. The information contained in the foregoing Verified Complaint is true and correct as to my persona] knowledge, except as to those matters which are alleged on information and belief, and as to thos’e matters, I am informed and believe them to be true. I declare under the penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed March 24 , 2021 at Roseville, California. 7?[m BRYAN CARRERA
