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From:
"bullstone" Friday, April 24, 20096:38 PM header.htm ATLIPRIDE LEGAL COMPLAINT
To: Sent:
Attach: Subject:
Jane: attached is a copy of the lawsuit FYI para 28 and para 31 refer to the contaminated meat-Larry - - -- - - --- - -- -,_._-- - - -~ IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT IN AND FOR PINELLAS COUNTY, FLORDIA
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PRISON REHABILITATIVE INDUSTRIES AND DIVERSIFIED ENTERPRISES, INC., a Florida corporation, Plaintiff, vs. ATL INDUSTRIES, INC., a Georgia corporation, Defendant. ~~~~==~~~----------------~/ ATL INDUSTRIES, INC., a Georgia Corporation, Plaintiff, vs. PRISON REHABILITATIVE INDUSTRIES AND DIVERSIFIED ENTERPRISES, INC., a Florida corporation, RAY PARKS, DEVIN S. WESTBROOK, and CREATIVE ENTERPRISES, INC. Defendants. --------------------------~/ ATL'S FOURTH CONSOLIDATED AMENDED COMPLAINT, ANSWER, DEFENSES, AND COUNTERCLAIMS TO PRIDE'S AMENDED COMPLAINT ATL INDUSTRIES, amends ATL's INC. ("ATL") hereby files this Fourth Consolidated Pleading which to CASE NO. 05-797CI-15 CASE NO. 05-00696-CI-07 CONSOLIDATED
Third Consolidated
Amended Complaint, Answer, Defenses, and Counterclaim
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PRIDE's
Amended Complaint to accommodate the dismissal of certain parties and claims and clarify
the remaining claims. Exhibits referred to herein were attached to previous pleadings and are not attached again.
ANSWER AND AFFIRMATIVE
DEFENSES
ATL hereby adopts and incorporates by reference the Answer and Affirmative Defenses set forth in its Second Consolidated Pleading as if fully set forth herein. ATL'S AMENDED COMPLAINT AND COUNTERCLAIMS ATL, by and through its undersigned attorneys, pursuant to Rule 1.170( a) of the Florida Rules of I1J Civil Procedure, hereby counterclaims against Plaintiff, PRIDE, and alleges as follows:
I.
PARTIES
Plaintiff
I.
ATL, a Georgia corporation doing business in Pinellas County, Florida, sold meat
products to vendors throughout the United States, including federal penitentiaries and prisoners in the state of Florida.
Defendants PRIDE and the Individual PRIDE Defendants
2.
Prison Rehabilitative Industries and Diversified Enterprises, Inc. ("PRIDE") is a Florida
corporation, organized under Chapter 946, Florida Statutes, that conducts business in Pinellas County, Florida. PRIDE utilizes prison labor to process raw foods products into finished goods. 3. Ray Parks ("Parks") is an individual who is a resident of Bradford County, Florida. Parks
has been served at 6112 NW 211th Street, Starke, Florida 32091-8203. Parks was, at all times relevant to this Amended Complaint, an employee of Defendant PRIDE.
Devin S. Westbrook and Creative Enterprises, Inc.
4.
Devin S. Westbrook ("Westbrook") is an individual who is a resident of Hernando
County, Florida. Westbrook has been served at his residence, 4330 Bessemer Road, Brooksville, Florida 34602. Westbrook is Defendant Edgemon's son-in-law and was, at all times relevant to this
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amended complaint, both a PRIDE employee and the sole Director of Defendant Creative Enterprises, Inc. 5. Creative Enterprises, Inc. ("CEI") is a Florida corporation engaged in the meat processing
business that maintains its principal place of business at 4330 Bessemer Road, Brooksville, Florida 34602. CEI has been served with process by and through its registered agent, Devin S. Westbrook, at 4330 Bessemer Road, Brooksville, Florida 34602.
ll.
JURISDICTION AND VENUE 6. 7. This Court has jurisdiction pursuant to Sections 26.0 12(2)(a) and (c), Florida Statutes. Venue is appropriate pursuant to Section 47.011, Florida Statutes, as this action is in part
based on the breach of a contract which contains a choice of law provision making venue proper in Pinellas County, Florida. See Food Processing Agreement, attached hereto as Exhibit "A," at par. 9.9.2. 8. PRIDE, each of the Defendants, and all parties are subject to personal jurisdiction and
venue in Pinellas County, Florida. 9. 10. Parks and Westbrook are residents of the state of Florida. PRIDE and CEI are Florida corporations, subject to venue and jurisdiction in Pinellas
County, Florida. 11. ATL has been injured by the tortious acts and omissions of Defendants PRIDE, Parks,
Westbrook, and CEI, which occurred in the state of Florida.
m.
12.
FACTUAL ALLEGATIONS
Factual Allegations Related to ATL's Claims for Breach of Contract and Bailment In August of 2002, ATL and PRIDE entered into a Food Processing Agreement (the
"Agreement"). See Exhibit "A." 13. Under the Agreement, ATL delivered bulk meat products to PRIDE's Union Correctional
Institution ("UCI") at Raiford Prison in Florida for processing by PRIDE. 14. As a result of PRIDE's quasi-governmental status and close ties to the Florida
Department of Corrections, PRIDE is permitted use of a secure location on VCl's prison grounds. Prison guards monitor PRIDE's UCI facility and restrict access to only those persons authorized by
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PRIDE. 15. Under ATL's Agreement with PRIDE, ATL provided PRIDE with equipment, raw
materials, packaging, labels and other necessary meat processing materials at no cost to PRIDE. 16. The packaging materials that ATL provided to PRIDE included boxes bearing the labels
"Circle A. Brands" and "EI Sabroso." ATL processed and distributed meat from the UCI facility under these trade names, among others. 17. according regulations. 18. Under the Agreement, PRIDE earned a processing fee based on the volume of meat it Under the Agreement, PRIDE was to store, process, package, label and pack ATL' s meat to ATL's specifications and in compliance with applicable USDA specifications and
processed for ATL. Volume was to be calculated based on the weight of the meat to be processed, not the net weight of finished product produced. 19. Under the Agreement, PRIDE was responsible for generating production reports, which it
used to generate invoices. PRIDE was also supposed to control and report inventories on a daily basis. Supervisors and inmates at the UCI facility were supposed to perform these tasks. 20. Under the Agreement, and as established through the parties' course of dealing, PRIDE
was required to issue credits to ATL, to be deducted from its processing fee, for production errors (e.g., PRIDE's failure to comply with USDA regulations resulting in the destruction of raw food goods) and inventory errors (e.g., PRIDE's use of the wrong price per pound to invoice ATL). 21. Under the Agreement, PRIDE was required to process meat exclusively for ATL
provided that ATL maintained an average weekly production volume of at least 100,000 pounds when averaged over any consecutive thirteen-week period. In the event ATL did not maintain such volume, PRIDE was required to notify ATL in writing of its non-compliance and then give ATL thirteen weeks to achieve a 100,000 pound weekly average. Only if ATL failed to do so was PRIDE permitted to seek other processing business. 22. Under the Agreement, PRIDE was required to give ATL ninety days written notice, via
certified letter, before terminating the Agreement. 23. In the event the Agreement was terminated, PRIDE was required to permit ATL to 5/20/2009
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remove its equipment, products, supplies, packaging and other meat production materials from PRIDE's facility within ten days. 24. No provision of the Agreement permitted PRIDE to retain ATL' s equipment, products,
supplies, packaging and other meat production materials in the event of a dispute, termination of the Agreement, or otherwise. 25. PRIDE did not have any ownership interest, lien, or other right of possession to ATL's
equipment, products, supplies, packaging, or other meat production materials. 26. Throughout the parties' relationship and course of dealing, ATL reported production
errors and inventory errors to PRIDE as they occurred, for which PRIDE was required to issue credits to ATL. 27. Per PRIDE's instructions, ATL notified both PRIDE corporate and UCI management of
such production and inventory errors. See, e.g., Email dated May 20, 2004, attached hereto as Exhibit "B". PRIDE never contested the form of such notifications. 28. Such production and inventory errors included, for example, the following: (1) PRIDE
sent stew meat with plastic embedded in it to the military, which was discovered by military cooks when heated, and returned by the millitary as non-compliant with USDA regulations; and (2) the USDA
tagged as unusable ninety-nine ten pound cases of turkey patties because a bottle labeled "acid poison" was found on a machine where the patties had been processed. See Email dated January 12, 2005, attached hereto as Exhibit "C." 29. During the duration of the Agreement, PRIDE committed production and inventory
errors totaling at least $78,000, for which ATL is entitled to credits. 30. Despite proper notification to PRIDE of the production and inventory errors, and
repeated demands by ATL for the credits, PRIDE has refused to provide such credits to ATL. 31. production Further, PRIDE failed to store ATL's raw materials, supplies, packaging and other meat materials in a manner consistent with USDA standards. Certain of ATL's supplies,
packaging and other meat production materials were stored in an infested warehouse and therefore became contaminated and unusable in whole or in part. See Affidavit of former PRIDE Production Supervisor Charles McCarty ("McCarty Aff."), attached to hereto as Exhibit "D". 5/20/2009
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32.
On or about December 14,2004, PRIDE unilaterally shut down the VCI facility without
valid justification and without following the required contractual procedures. 33. On or about January 14,2005, PRIDE unilaterally terminated the Agreement without any
prior notice to ATL in violation of the Agreement. 34. On or before February 22, 2005, PRIDE began processing meat at the VCI facility for at
least one other company in violation of the Agreement. 35. Both before and after PRIDE's wrongful termination of the Agreement, PRIDE denied
ATL access to its equipment, raw materials, packaging, labels and other necessary meat processing materials, to which PRIDE had no contractual or lawful claim, in violation of the Agreement. PRIDE and the other named Counterclaim Defendants converted certain of ATL' s equipment, raw materials, packaging, labels and other meat processing materials to their own use as alleged more fully below .. 36. PRIDE's breaches of the Agreement caused ATL to suffer damages as allowed under the
Agreement and applicable law. ATL does not seek damages for its destruction or based upon its own value, but rather the value of the contracts interfered with for a duration to be determined by a jury. Factual Allegations Related to ATL's Tort Claims 37. During the duration of ATL's Agreement with PRIDE, ATL routed food products that
were processed at the VCI facility to federal penitentiaries and other end users with which ATL had contracts. 38. At the time PRIDE terminated the Agreement, ATL had more than 35 contracts with
third parties involving the goods processed at the VCI facility. These third parties included: Piggly Wiggly Alabama Distributing Company, Inc.; Brunos Supermarkets; Federal Prison Camp in
Montgomery, Alabama; Bay County Schools; V.S. Penitentiary, Atlanta, Georgia; F.C.1. Jessup; State of Louisiana Prison Enterprises; Federal Bureau of Prisons, Otisville, New York; V.S. Penitentiary,
Lewisburg, Pennsylvania; Mendez & Company; Shelby County Correction Center; U.S. Food Service; and others. 39. parties. 40. In approximately autumn of 2004, PRIDE demanded that ATL pay certain supposedly 5/20/2009 Defendants PRIDE, Parks, Westbrook, and CEI knew about ATL's contracts with third
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unpaid invoices that actually were not owed. PRIDE knew at the time it made these demands that ATL did not owe the amounts in question. 41. On or about December 7,2004, PRIDE threatened to stop processing meat for ATL and
withhold the release of its products unless ATL signed a promissory note and security agreement covering the amount of the alleged unpaid invoices. 42. The promissory note and security agreement were not based on an actual debt, were not
contemplated by the Agreement between ATL and PRIDE, and were not otherwise lawfully justified. 43. When ATL refused to sign the promissory note and security agreement, PRIDE shut
down the VCI facility on December 14, 2004 and then unilaterally terminated the Agreement without prior notice to ATL on January 14,2005. As a result of PRIDE's conduct, ATL was denied access to its equipment, raw materials, packaging, labels and other necessary meat production materials, which PRIDE was holding in the secure DCI facility. 44. PRIDE thereafter knowingly sent at least four (4) false invoices to ATL which
purportedly substantiated ATL's alleged debt to PRIDE. 45. 46. On or about December 23,2004, PRIDE faxed three ofthese (3) false invoices to ATL. On or about January 27, 2005, PRIDE faxed the fourth false invoice to ATL. This fourth
invoice, which is attached hereto as Exhibit "E," was dated December 31, 2004, carried a due date of January 30, 2005, and sought an additional $74,950.44 for "processing fees calculated for the period of 1113/03through 3/21104 not previously invoiced." 47. Westbrook (ostensibly acting on behalf of PRIDE) helped prepare the fourth invoice
during a supposedly neutral audit of the accounting records of PRIDE and ATL, which was actually not at all neutral or a true audit. 48. At the time of this audit, Westbrook was serving as the sole Director and owner of
Creative Enterprises, Inc. in addition to being a full time PRIDE employee. 49. Westbrook participated in creating the false invoices that PRIDE sent to ATL. By
creating these false invoices and perpetuating a false payment dispute between ATL and PRIDE, Westbrook delayed ATL from getting its equipment, raw materials and supplies and permitted PRIDE and the Counterclaim Defendants to convert certain of the equipment, raw materials and other supplies
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to their own personal use. 50. Westbrook participated in the scheme to create the false invoices while acting within the
scope of his employment as Director of Clil and/or PRIDE. 51. In the alternative, Westbrook participated in the scheme to create the false invoices while
acting outside the scope of his employment as Director of eEl and/or PRIDE. 52. On or about January 27, 2005, PRIDE and ATL began litigating over the payment
dispute that PRIDE, through Westbrook had manufactured.
53.
At a February 7, 2005 hearing before Judge Farnell, a PRIDE representative stated under
oath that the Del facility was shut down and that ATL's equipment, raw materials, packaging, labels, and other necessary meat processing materials were secure. 54. PRIDE knew these statements to be false. PRIDE was, at the time the statements were
made, processing meat for eEl or others using ATL' s equipment, raw materials, packaging, labels, and other necessary materials. PRIDE was also permitting the theft, vandalism, and destruction of ATL's property. 55. For several months after the hearing PRIDE denied ATL access to its equipment, raw
materials, packaging, labels and other necessary meat processing materials. 56. At the same time, PRIDE, Parks and Westbrook began converting certain of ATL's
equipment, raw materials, packaging, labels and other necessary meat processing materials to their own use and also permitting others to convert such materials to their own use. This affirmative misuse, conversion and theft went far beyond the terms of the Agreement and constitutes tortious misconduct. 57. PRIDE, and Westbrook, acting through Clil, began fulfilling third party contracts using
certain of ATL' s equipment, raw materials, packaging, labels and other supplies, retaining all proceeds from these sales for themselves, their companies and/or others not entitled to the property. 58. Additionally, PRIDE and Westbrook, acting through Clil, took possession of, and sold
certain at below market value prices, certain of ATL' s equipment, raw materials, packaging, labels and other supplies, retaining all proceeds for themselves, their companies, and others not entitled to the property. 59. At all relevant times, PRIDE, Parks, Westbrook and eEl knew that the above-described 5/20/2009
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equipment, raw materials, packaging, labels and other supplies belonged to ATL but they nevertheless converted it for their own benefit and that of CEL 60. Parks engaged in the above-described conduct while acting within the course and scope
of his employment with PRIDE. 61. In the alternative, Parks engaged in the above-described conduct while acting outside the
scope of his employment with PRIDE and/or while acting with malicious purpose or in a manner exhibiting wanton, willful disregard of human rights and safety. 62. Westbrook engaged in the above-described conduct while acting within the scope of his
employment as a PRIDE employee and/or Director of CEl. 63. In the alternative, Westbrook engaged in the above-described conduct while acting
outside the scope of his employment as a PRIDE employee and/or Director ofCE!. 64. Due to ATL's inability to access its equipment, raw materials, packaging, labels and
other necessary meat processing materials and the theft and conversion of same, ATL has been unable to satisfy its third party contracts. 65. Substantially all parties with whom ATL had third party contracts have canceled their
contracts with ATL, and ATL' s inability to satisfy the federal contracts has disqualified ATL from bidding on other federal contracts. At the time ATL filed its initial claims against PRIDE, such federal contracts represented approximately 90% of ATL' s business. 66. The Counterclaim Defendants all intentionally took part, to varying degrees, in conduct
that deliberately deprived ATL of its ability to fulfill its contracts. 67. As a direct and proximate result of Defendants' conduct, ATL is entitled to recover
damages from the Defendants in the amount of the lost contracts and stream of business from those contracts in an amount, and for a duration of time to be determined by a jury.
Factual Allegations Related to Notice and Demand Requirements
68.
On December 21,2004, ATL sent a letter to PRIDE, PRIDE's counsel and various
Florida agencies and offices notifying them of PRIDE's unlawful conduct as described herein and alerting them to this potential legal action. See letter dated December 21, 2004, attached hereto as Ex. "G." 5/20/2009
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69.
On December 6, 2005, ATL sent a letter to PRIDE, Parks, Westbrook and csi
demanding the return of and/or payment for its stolen parts and equipment. See Notice dated December 6,2005, attached hereto as Ex.