IN THE CIRCUIT COURT OF CHAMBERS COUNTY, ALABAMA KERI DONALD SIMMS, an Adult resident ) Alabama Citizen and former
member of ) The LLC Defendants named herein, ) ) Plaintiff, ) ) vs. ) Civil Action No. ) WMS, LLC, an Alabama LLC; WMSLW, ) LLC, an Alabama LLC; WMLW, LLC, an ) Alabama LLC, John Whitaker, an ) Individual, William Mudd, an Individual, ) Phillip Luke, an Individual, David Wells, an ) Individual, and A, B, C ) Corporations; D,E,F subsidiary and/or ) affiliated Corporations, ) G and H partnerships, I and J ) partnerships, K,L,M and N ) individuals, agents, servants, and/or ) employees or masters or principal of ) Defendants and/or ) it’s subsidiary and/or affiliated ) entities; fictitious defendants whose ) names and correct identities are ) unknown but will be added when ) ascertained, ) ) Defendants.
PLAINTIFF’S COMPLAINT PARTIES, JURISDICTION, AND FACTUAL BACKGROUND 1. Plaintiff is an Adult resident citizen of the State of Alabama and former member
of the LLC Defendants made the basis of this lawsuit. 2. Defendants, referred herein as “WMS” is, and at all times herein mentioned was
and are, Limited Liability Companies held out to be organized and existing under the laws of the State of Alabama with their principal place of business in Alabama.
Prior to November 30, 2007, and August 2, 2012, the members of WMS were
formally attorneys associated with the law firm of Miller, Hamilton, Synder, and Odom, LLC. The association with such firm ended on or about December 31, 2007. 4. On or about November 30, 2007, Mark E. Hoffman formed an entity known as
WMS, LLC. The name of such entity was changed to WMSLW, LLC. on or about March 11, 2008. Although Hoffman created an Operating Agreement (attached hereto as Exhibit 1) with the formation of WMS on November 30, 2007, such agreement was not executed by the members of WMS until August 20, 2008. Such agreement was amended only once to provide for Life Insurance related to the then members. 5. On or about May 10, 2012, Plaintiff became a disassociated member of WMS.
This disassociation occurred through a “forced buy out” of Plaintiff’s membership interest. Prior to such time, the then five (5) members of WMS each equally owned 20 percent ownership in the LLC. The financial funding of WMS was not member capital based. Prior to the forced buy out of Plaintiff’s ownership interest, the LLC was not funded through the use of member capital. Instead, the LLC was funded through what is known as a receivable line of credit which bank financing had a term of one (1) year. The compensation structure for the members was such that members were paid draws or guaranteed payments based on their revenue originations and services performed on behalf of the LLC. The expectations of members was such that their compensation was based on their originations and legal work (services) performed. 6. Although Mark E. Hoffman began working at the LLC on or about January 1,
2012, Hoffman became a member on or about August 2, 2012. Plaintiff was never asked to vote on Hoffman’s association with the LLC in any capacity. On such date the name of the LLC was changed with the Alabama Secretary of State as was the official office location. On or about
August 13, 2012 the original Articles of Formation dated November 30, 2007 were amended. 7. Prior to the summer of 2011 problems began to develop within the LLC. Various
members of the LLC approached other lawyers and began the process of a possible merger. Plaintiff was not involved in the merger discussions. The merger fell through although
additional office space and telephone extensions had been set up related to the merger and the anticipated addition of attorneys and staff into the then existing LLC. Plaintiff still does not know the reasons for the failed merger nor the true costs and expenses spent on the failed merger by the LLC. Plaintiff does not know the true costs spent to fund Plaintiff cases conducted by members of the LLC. 8. Beginning in the summer of 2011 dissention, conflict, and disagreement began
to occur between the LLC members. Such conflict had as its origin problems related to the operational structure of the LLC. The LLC was not capital funded, but, instead bank financed. The lease of premises was scheduled to end on or about December 31, 2011. While Plaintiff maintained a Master Case List and Inventory and routinely checked for conflicts related to his defense work and other cases, other members did not. On any given day, Plaintiff would not know what or who was being sued by other attorneys in the LLC. As stated the disagreements among the members began to escalate as such problems continued to encumber the cash flow of the LLC and the sources to fund the expectations of the Plaintiff concerning case originations and future compensation. 9. This escalation carried over into the operations moving from leased premises to a
building which Plaintiff understood one of the members was purchasing. To this day Plaintiff has not seen any lease agreement related to the premises nor was Plaintiff ever approached to vote on any such lease or other encumbrances on the cash flow of the LLC.
Beginning in March 2012 dissention continued to escalate between the members
this time including the Plaintiff himself and continued into May 2012. Plaintiff became a dissociated member on May 10, 2012. During a meeting between the then existing members on May 10, 2012, the managing member of the LLC represented to Plaintiff that a letter and required ethical communication would be sent to all of Plaintiff’s clients advising that Plaintiff was dissociating and the clients, as was their right to do, could select who would be their attorney. The then managing member further represented to Plaintiff that Plaintiff’s Master Case List would be used to send all such required communications to Plaintiff’s clients and cases. Prior to Plaintiff’s departure from the LLC Plaintiff provided a complete copy of the Master Case List to the then managing member. Plaintiff then departed the premises. During the May 10, 2012 meeting Plaintiff was further advised that his ownership interest was being bought out under the buyout provision of the August 20, 2008 Operating Agreement. 11. On May 10, 2012 Plaintiff communicated in writing to then managing member
and requested certain information. Plaintiff asked for the Accounts Receivable, Work in Progress and Collections to date related to Plaintiff’s originations. Plaintiff asked about the balance on the line of credit used to fund the LLC. Plaintiff asked for a release of his personal guaranty related to the line of credit which had been renewed in April 2012. Plaintiff did not intend to accept nor deposit the LLC check for the amount of buyout presented to Plaintiff on May 10, 2012 without such agreement. 12. On May 11, 2012, the then managing member materially represented to Plaintiff
in writing that the remaining members of the LLC would release Plaintiff on his personal guaranty if the bank would release Plaintiff. In reliance on such material representation Plaintiff deposited the check related to the buyout of his ownership interest. The managing member did
not provide any financials. Indeed and contrary to the Alabama LLC statute which provides access to the books and records of the LLC to Plaintiff, the managing member has never provided financials to Plaintiff despite numerous request for the financials. Some of the financials were provided to Plaintiff on December 26, 2012 although the statement of cash flows has not been provided. The only financials provided were the income statement and balance sheet for the four (4) month period that Plaintiff was a member of the Defendants in 2012. The balance sheet does not show the bank debt of the Defendants. On or about April 6, 2013, without the knowledge or consent of Plaintiff, the LLC and remaining members extended the maturity date of the line of credit until July 6, 2013. 13. On or about Monday May 14, 2012 and continuing to as recent as April 10, 2013,
various members of the LLC have communicated by email, letter, text messages, and verbally through phone calls harassing, abusive, defamatory, slanderous, and untruthful statements directly to Plaintiff and about Plaintiff to other third parties. Such communications by such members of the LLC have not been limited to but have concerned Plaintiff’s ongoing legal cases, clients, and business relationships. The conduct engaged in by various members of the LLC has been oppressive in nature. 14. On or about November 2011, the LLC Defendants terminated from employment
with the LLC a former attorney employed by the LLC. That attorney had been assigned a particular case to handle on a contingency basis. Following the termination of such attorney the client which had assigned the case requested that Plaintiff handle it. Plaintiff then began to handle the case. Following the dissociation of Plaintiff, the client directed the LLC to send the case to Plaintiff for further handling. The LLC then sent the client an hourly based legal bill on a contingency based fee arrangement. The client then advised the LLC that the fee arrangement
was contingency based not hourly based. A review of the bill sent to the client further indicates the presence of legal services not even related to the particular case. The client further indicated and reminded the LLC that the Plaintiff was handling the file per the request of the client. Following such statements from the client to the LLC, various members of the LLC then published defamatory and untrue statements of and concerning the Plaintiff to such client. 15. Prior to August 26, 2011, Plaintiff’s first cousin’s wife sustained injuries due to a cousin approached
burn which occurred in LaGrange Troup County, Georgia. Plaintiff’s
Plaintiff and asked him to assist as concerns the burns sustained by his wife. Plaintiff thereafter retained Lanett, Alabama attorney Skip McCoy to assist and locate Georgia counsel to represent Plaintiff’s first cousin and his wife. Georgia attorney Tim Morrison was retained. On or about August 26, 2011 Plaintiff created a file related to the case in the system of the LLC and added the case to Plaintiff’s Master case list. The file was assigned the LLC file number 5938.07. A file was opened and various staff personnel of the LLC who remain employed with the LLC to date placed various information in the case file as such employee’s handwriting is located on the file materials. On May 10, 2012, Plaintiff assumed, since the file contained information about his first cousin and wife including their home address and canceled checks and based on the then managing member’s representation that the required ethical letters would be sent to all clients, that Plaintiff’s first cousin would have been sent the required letter requesting them to advise the LLC how they wished for their case file to be handled. Apparently, however, and contrary to the then managing member’s representation, no such letter was sent to these clients. 16. At the time of Plaintiff’s departure from the LLC on May 10, 2012, Plaintiff did
not take any case files with him. Following the receipt of the clients directives during the week of May 14, 2012, the clients who the then managing member apparently did send the required
ethical communications to begin to direct the LLC to send the case files to Plaintiff. Following receipt of these client directives, certain members of the LLC began to send abusive and oppressive text and email communications to Plaintiff. The LLC further refused to send Plaintiff the case files. 17. During the week of May 14, 2012, and prior to May 17, 2012, Plaintiff had to
elicit the assistance of the Alabama State Bar to get possession of the client files which clients of the LLC directed be sent to Plaintiff. Finally the LLC sent Plaintiff the files on or about May 17, 2012. Following receipt of the files including some files that were not the Plaintiff’s, members of the LLC represented to and instructed Plaintiff that all such files were the responsibility of the Plaintiff. At no time did the LLC advise Plaintiff that the LLC was claiming any entitlement to any fees or future fees related to the files sent to Plaintiff. To the contrary, members of the LLC represented that the files had been billed and were the future responsibility of Plaintiff. The files of the former terminated attorney referenced in paragraph 14 and Plaintiff’s first cousin’s file referenced in paragraph 15 were among the files sent to Plaintiff by the LLC. Plaintiff further advised the LLC that some files sent to Plaintiff belonged to the LLC as they were opened by other members of the LLC under their names and to make arrangements to come get the files yet Plaintiff has never heard from the LLC about those files to date. 18. At the time the LLC sent Plaintiff his cousin’s file on May 17, 2012, no fee had
been generated in the file as no contingency had occurred. 19. On or about May 25, 2012, the bank sent the LLC a release to be executed to
release Plaintiff from his personal guaranty. On the same date, attorneys Morrison and McCoy sent emails to Plaintiff which went to Plaintiff’s old email address at the LLC and was intercepted by the LLC which advised that a confidential agreement to settle Plaintiff’s cousin’s
case had been tentative reached. 20. On May 26, 2012, at approximately 5:30 a.m. the then managing member of the
LLC emailed Plaintiff and rescinded the promise to execute the Bank release related to Plaintiff’s personal guaranty unless Plaintiff provided the LLC the fee related to Plaintiff’s cousin’s file which the LLC sent to Plaintiff. The LCC, based on statements made by various members, continues to refuse to execute the release without being provided the fee. The fee is held in trust in attorney Morrison’s trust account in Georgia. The representations made by members of the LLC have continued although an analysis of the financial records which were provided in partial part to Plaintiff on December 26, 2012 and the tax information provided to Plaintiff show that the LLC represents on its financial records and tax returns that there is no debt with the bank for which Plaintiff’s personal guaranty would be related. 21. Prior to December 31, 2012, Plaintiff requested payment from the LLC of his
separate tax distribution under the terms of the LLC Operating Agreement dated August 20, 2012. The Defendants have failed and/or refused to provide the payment. Plaintiff has further requested in writing that Defendants retract any and all statements regarding Plaintiff. Defendants have failed and/or refused. 22. On or about January 22 or 23, 2012 various members of the LLC did verbally and
in writing communicate and publish defamatory and untrue statements about and concerning Plaintiff to attorneys McCoy in Chambers County, Alabama and Morrison in Georgia. 23. At all times material hereto, each of the Defendants named herein under the
fictitious names of DOE or A,B,C, etc., inclusive, is the agent, servant, employee, subsidiary, principal, master, and/or affiliated entity of each of the named or remaining Defendants, and, acting within the purpose, scope and course of said agency, service and employment, and/or
affiliation, with express and/or implied knowledge, permission and consent of the named or remaining Defendants, and each of them, and each of said Defendants ratified and approved the acts and/or omissions alleged herein of the other Defendants. The Defendants involved in the various transactions made the basis of this suit each had a dual agency relationship. With respect to much of the wrongdoing alleged below, the Defendants acted as principal and agent. 24. The fictitious Defendants include the correct legal name and entity designation of
the named Defendant. The fictitious defendants also include all of those persons, employees, agents, servants, and/or other entities and individuals who participated in the allegations alleged in this suit, whether through actual or implied authority and agency. 25. Plaintiffs make some of the pleadings in the alternative as provided by the
Alabama Rules of Civil Procedure. 26. Venue is proper pursuant to the Alabama Rules of Civil procedure because the
claims alleged herein arose and various actions and omissions and transactions giving rise to the claims asserted herein occurred in Chambers County, Alabama, as did the injuries and damages sustained by Plaintiff, in whole or in part.
COUNT ONE FIRST CAUSE OF ACTION DEFAMATION AND LIBEL
27. forth herein. 28.
Plaintiff incorporates by reference each of the preceding paragraphs as if fully set
The statements contained in the verbal and written communications by members
of the Defendants of and concerning Plaintiff inclusive of the statements made to attorney McCoy in Chambers County, Alabama are false, Defendants knew the statements to be false and
acted intentionally causing the statements to be published, and/or Defendants were negligent or acted recklessly in failing to determine whether the statements were true before publishing them. 29. Plaintiff has been injured by the publications and broadcast of the false statements
by Defendants. WHEREFORE, PREMISES CONSIDERED, Plaintiff seeks compensatory and punitive damages from a jury. COUNT TWO SECOND CAUSE OF ACTION INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS 30. Plaintiff adopts the material allegations of the foregoing paragraphs of this
Complaint herein by reference. 31. Defendants did send text messages, emails, verbal, and other written
communications to Plaintiff to intentionally inflict emotional distress on Plaintiff. 32. As a proximate consequence of said conduct, Plaintiffs sustained legal damages
under the laws of the State of Alabama. WHEREFORE, PREMISES CONSIDERED, Plaintiffs pray for a money judgment against Defendant as allowed under Alabama law for compensatory and punitive damages. COUNT THREE THIRD CAUSE OF ACTION OPPRESSION OF MINORITY SHAREHOLDER
Plaintiff incorporates the material allegations of the foregoing paragraphs of this
complaint herein by reference. 34. Defendants, by and through its agents, servants, employees, master, and/or
principals did systematically and intentionally oppress through the wrongful conduct alleged herein the minority ownership interest of Plaintiff to buyout Plaintiff’s ownership interest at a low value and to additionally deprive Plaintiff of his reasonable expectations of a return on his
services performed and case originations and future compensation. 35. As a proximate consequence of said conduct, Plaintiff sustained legal damages
under the laws of the State of Alabama, including punitive damages. WHEREFORE, PREMISES CONSIDERED, Plaintiff s pray for a money judgment against Defendants as allowed under Alabama law for compensatory and punitive damages. COUNT FOUR FOURTH CAUSE OF ACTION MISREPRESENTATIONS, DECEIT, AND LEGAL FRAUD
Plaintiff adopts the material allegations of the foregoing paragraphs of the
complaint herein by reference. 37. The material representations made to Plaintiff as alleged herein, including but not
limited to the representations that Plaintiff would be released on his personal guaranty for all LLC debt, were false, Defendants knew they were false or Defendants formed a motive to not perform such promises as represented; or were made by Defendants recklessly and without regard to the truth or falsity of such representations; were made by Defendants so that Plaintiff would rely upon the representations to his detriment; Plaintiff relied upon such representations to his detriment; and Plaintiff was injured and damaged under Alabama law. 38. Defendants were a duty to disclose material facts to Plaintiff yet Defendants
concealed material facts from Plaintiff to induce Plaintiff to act or not act upon which Plaintiff did act or did not act and Plaintiff was injured thereby under Alabama law. WHEREFORE, PREMISES CONSIDERED, Plaintiffs pray for a money judgment against Defendants as allowed under Alabama law. COUNT FIVE FIFTH CAUSE OF ACTION DECLARATORY JUDGMENT AND PERMANENT INJUNCTION
Plaintiff adopts the material allegations of the foregoing paragraphs of the
complaint herein by reference. 40. Plaintiff moves this Court for an order declaring that Defendants are not entitled
to any portion of any fee related to Plaintiff’s cousin’s Georgia case and for an order directing the Morrison firm in Georgia to release any and all such funds to Plaintiff. 41. The managing member represented to Plaintiff on May 10, 2012 that all clients
would be sent the required letter allowing the clients to decide what was to be done with regard to their case files. Had the representation been honored by said managing member and the required ethical letter sent in accordance with the Rules of Professional Conduct under the Alabama Bar and Georgia Bar Rules of Professional Conduct, the clients would have communicated immediately that the Defendants were discharged and Defendants would be have been a discharged firm prior to the contingency related to the fee held in trust in Georgia occurring. Indeed, once the clients learned of Simms disassociation they immediately discharged the Defendants. 42. Irrespective of the ethical failure of the managing member to send the required
client communication as represented, Defendants none the less sent the file to Plaintiff on May 17, 2012 prior to the contingency related to the fee held in trust occurring. On the same date the Defendants represented that the files sent to Plaintiff were his responsibility. Defendants
intentionally, permanently, completely, finally, gave up and abandoned all such files. Moreover Defendants did not reserve nor claim any lien or entitlement to any such files or future fees related to any such files. As represented in writing by Defendants all such files were the responsibility of Plaintiff. Based on such representation, Plaintiff performed work, rendered legal services, and undertook responsibility to all such files.
On or about May 25, 2012, the bank which provided the receivables line of credit
to Defendants and which held Plaintiff’s personal guaranty sent a release to Defendants to be executed to release Plaintiff’s personal guaranty. Instead of executing the release as promised to Plaintiff by Defendants on May 11, 2012, in the early morning hours of May 26, 2012, the then managing member of the Defendants refused to honor such promise and have the release executed. Moreover, and contrary to the financial statements and tax related documents of Defendants that they had no such debt remaining on said date, Defendants represented that they would not execute such release unless Plaintiff gave them the fee from the case file sent to Plaintiff on May 17, 2012. Additionally, on the occasion that the Defendants refused to honor the prior promises, Defendants had intercepted an email directed to Plaintiff concerning a potential settlement in such matter on May 25, 2012. WHEREFORE, PREMSIES CONSIDRED, Plaintiff moves this Court for an immediate injunction preventing Defendants from engaging in further oppressive conduct, to immediately execute any and all releases to release any personal guaranty of Plaintiff, and for an order of Declaratory relief finding that Defendants gave up any entitlement to any fees and to further direct the fee held in trust in Georgia to be sent to Plaintiff without recourse. COUNT SIX SIXTH CAUSE OF ACTION INTENTIONAL INTERFERENCE WITH RELATIONSHIPS 44. Plaintiff adopts the material allegations of the foregoing paragraphs of the
complaint herein by reference. 45. During the period that Defendants refused to send Plaintiff the files as directed by
clients to Defendants until the involvement of the Alabama Bar, Defendants intentionally interfered with Plaintiff’s contractual and business relationships with his clients irrespective of Defendants having received instructions from the clients.
Subsequent to the complete abandonment by Defendants of all files to Plaintiff on
May 17, 2012, including Plaintiff’s cousin’s file, Defendants have intentionally interfered with Plaintiff’s contractual and business relationships with his clients including alleging a lien against fees, alleging an entitlement to fees under the August 20, 2012 Operating Agreement, and further alleging that Defendants had debt for which they refused to release Plaintiff’s personal guaranty. WHEREFORE, PREMISES CONSIDERED, Plaintiffs pray for a money judgment against Defendants as allowed under Alabama law for compensatory and punitive damages. COUNT SEVEN SEVENTH CAUSE OF ACTION COURT APPOINTMENT OF RECEIVER, ACCOUNTING, AND/OR DISSOLUTION
Plaintiff adopts the material allegations of the foregoing paragraphs of the
complaint herein by reference. 48. Due the wrongful conduct alleged herein and the oppressive nature of the conduct
of Defendants, Plaintiff moves this Court to appoint a receiver to take over control of the day to day operations of the LLC, to conduct an accounting under Alabama law, and/or alternatively, to order a judicial dissolution of the LLC. 49. Plaintiff further moves the Court to tax all costs associated with the above relief to
Defendants as provided under Alabama law. COUNT EIGHT EIGHTETH CAUSE OF ACTION BREACH OF CONTRACT AND ACCOUNTING IRREGULARITIES
Plaintiff adopts the material allegations of the foregoing paragraphs of the
complaint herein by reference. 51. Defendants breached the operating agreement between the parties by failing to
accurately create, maintain, proper and reliable financial and accounting records of the LLC and
to provide Plaintiff an accurate and reliable K1 tax document and by failing to provide Plaintiff with a tax payment prior December 31, 2012. WHEREFORE, PREMISES CONSIDERED, Plaintiffs pray for a money judgment against Defendants as allowed under Alabama law for compensatory damages.
PRAYER Plaintiff prays for the relief as requested and a money judgment against the Defendants, but in the event the relief demanded is not legally available to Plaintiff, Plaintiff further seek equitable and legal relief to which he is entitled under Alabama law, including but not limited to: 1. Compensatory and consequential damages in an amount to be determined by a jury of the citizens of Chambers County, Alabama; 2. 3. For special damages under Alabama law; For punitive damages to punish Defendant to deter similar conduct from being perpetrated upon the citizens of the State of Alabama by other Defendants like Defendants; 4. 5. 6. 7. 7. For civil penalties on all applicable claims as provided for by Alabama law; For the costs of these proceedings; For interest as allowed by law; For attorney fees and costs as allowed under Alabama law; and For such other and further relief as the court may deem proper.
S/K. Donald Simms K. DONALD SIMMS PRO SE
OF COUNSEL: WEBSTER, HENRY, LYONS, WHITE, BRADWELL and BLACK, P.C. Suite 445 East Two Perimeter Park South Birmingham, Alabama 35243 Phone: (205) 380-3480 Facsimile: (205) 380-3485
JURY TRIAL DEMAND Pursuant to the provisions of the Alabama Rules of Civil Procedure, Plaintiff hereby demands trial by jury on all counts so allowed by law.
S/ K. Donald Simms OF COUNSEL
SERVE DEFENDANT BY CERTIFIED MAIL AS FOLLOWS: WMS, LLC WMSLAW, LLC WMLW, LLC David R. Wells Managing Member WMLW, LLC. 2011 4th Avenue North Birmingham, Alabama 35203 John Whitaker 2011 4th Avenue North Birmingham, Alabama 35203 William Mudd 2011 4th Avenue North Birmingham, Alabama 35203 Phillip Luke 2011 4th Avenue North Birmingham, Alabama 35203 David Wells 2011 4th Avenue North Birmingham, Alabama 35203