Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 1 of 18
IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANI A PARTNERS EQUITY CAPITAL COMPANY LLC , Plaintiffand Counterclaim Defendant, Civil Action No . : 05-612 7
VS .
LINERS CHIROPRACTIC, INC . and ERIC S . LINERS, D.C.,
Defendants and Counterclaim And Third-Party Plaintiffs, vs . AXIOM WORLDWIDE, INC . and COMMERCE COMMERCIAL LEASING, LLC , Third-Party Defendants.
AMENDED THIRD PARTY COMPLAINT OF LINERS CHIROPRACTIC AND ERIC S . LINERS, D.C. AGAINST AXIO M WORLDWIDE, INC . AND COMMERCE COMMERCIAL LEASING, LLC . Third-Party Plaintiffs, Liners Chiropractic, Inc . ("Liners Chiropractic") and Dr. Eric S. Liners ("Dr . Liners," and, collectively with Liners Chiropractic, "Third Party Plaintiffs"), hereby amend their Third-Party Complaint against Axiom Worldwide, Inc . ("Axiom") and Commerce Commercial Leasing, LLC ("Commerce") and, in support thereof, allege as follows : NATURE OF THE ACTIO N 1. Liners Chiropractic and Dr. Liners bring this Third-Party Complaint to reveal and
redress a scheme of fraud, breach of contract, and bad faith and unfair dealing perpetrated by Axiom and Commerce in collusive fashion .
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 2 of 18
PARTIES 2. Commerce is a New Jersey limited liability company with its principal place i n
New Jersey. Commerce maintains a place of business in Pennsylvania at the same location as Partners Equity, 655 Business Center Drive, Number 250, Horsham, Pennsylvania 19044 . Mr. Martin Babicki, the Executive Vice President of Risk & Operations for Commerce, is also the Executive Vice President of Partners Equity . Upon information and belief, none of Commerce's members are California citizens . 3. Axiom is a corporation organized and existing under the laws of Florida with its
principal place of business located at 9423 Corporate Lake Drive, Tampa, Florida 33634 . Mr. James J . Gibson is the President and CEO of Axiom. 4. Liners Chiropractic is a corporation existing under the laws of the State of
California with a principal place of business located in Salinas, California . 5. Dr. Liners, is a resident of California residing at 834 Provincetown Drive, Salinas,
California 93906 . Dr. Liners is a Doctor of Chiropractic Medicine and the President of Liners Chiropractic . JURISDICTION AND VENUE 6. In a prior and separate Complaint (the "Pa rtners Complaint"), Partners Equity
Capital Company, LLC requested judgment against Dr . Liners and Liners Chiropractic in the amount of $80,413 .61, plus attorney's fees, costs and expenses . The Partners Complaint forms the basis and the factual backdrop for much of this Complaint . 7. This Court has original jurisdiction over this third-pa rty action pursuant to 28
U.S .C. § 1332, in that the amount in controversy exceeds the sum or value of $75,000 .00, exclusive of interest and costs, and the dispute is between citizens of different states .
2
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 3 of 18
8.
Venue is proper in this District pursuant to 28 U.S .C . § 1391(a)(1) in that several
of the events giving rise to the instant actions occurred in this District . FACTUAL ALLEGATION S 9. Axiom manufactures medical devices and equipment utilized by healthcare
providers, including chiropractors . Axiom also provides business, marketing and technological support services to customers that purchase certain products, like the Spinal Decompression System . 10. Axiom markets the Spinal Decompression System via direct response . Upon
information and belief, Axiom has partnered with a California-based corporation named Altadonna Communications, Inc ., which is owned by Dr. Ben Altadonna ("Dr . Altadonna") to perform direct, face-to-face marketing of its products to doctors like Dr. Liners. (See Ex . 1 .) 11. Among other things, Dr. Altadonna sells a "Direct Response Marketing Kit"
advertised in the American Chiropractic Association Journal . Dr. Altadomma who, upon information and belief, is compensated by Axiom, solicited Dr . Liners in January or February 2005 to attend a seminar at Axiom's headquarters in Florida . Dr. Altadonna represented that the seminar would "revolutionize" Dr . Liners' California-based chiropractic practice . 12. Axiom then contacted Dr . Liners and arranged his travel plans to and
accommodations in Tampa, Florida . 13. On or about February 24, 2005, Dr . Liners traveled to Florida as arranged and
paid for by Axiom . Along with approximately 40 other chiropractors, who upon information and belief were referred to Axiom by Dr . Altadonna, Dr . Liners was put up in a hotel across the street from Axiom's headquarters, given a tour of the Axiom facility and asked to attend a day-lon g
3
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 4 of 18
sales seminar regarding Axiom's Spinal Decompression System (hereinafter the "Axiom Sales Seminar") . 14. During the Axiom Sales Seminar, Axiom representatives, including Dr .
Altadonna, made numerous material misrepresentations relating to, inter alia, the Spinal Decompression System, Axiom services and other deliverables, clinical trials, and physician testimonials . (See Ex . 2-4.) For example, referring to ironclad research results, Axiom represented that the Spinal Decompression System successfully treats existing patients with significant disc and back problems in a revolutionary and highly competitive fashion . Axiom also represented that the Spinal Decompression System would allow Dr . Liners to successfully and safely treat existing patients, and add hundreds of new patients referred to him through the Axiom marketing system, for herniated and degenerated discs without surgery . (See Ex . 5 ; Ex.
6 .)
15.
During the Axiom Sales Seminar, literature was distributed that included
consumer testimonials and guarantees from James J . Gibson, Axiom's President and CEO about the Spinal Decompression System . (See Ex . 3 .) By way of example, Mr. Gibson stated, "Axiom Worldwide is committed to providing the highest quality healthcare products to practitioners across the world . We continue to make exhaustive efforts to ensure the quality and reliability of all our products ." 16. At the Axiom Sales Seminar, Axiom representatives explained that it offered
practitioners access to a "specialized team of engineers" and offered "physicians the clinical outcome they desire . " 17. Axiom's sales personnel and management employees represented to Dr . Liners
that the Company's "team of specialists has combined proven scientific methodology with th e
4
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 5 of 18
latest technological developments, achieving advanced principles of treatment with a higher degree of efficacy ." (See Ex . 3 .) Axiom represented that "research" had "proven" an 87% success rate for treating lumbar and cervical discopathies under the Spinal Decompression System . (See Ex . 1 .) 18. Axiom represented to Dr . Liners that throughout the development and
manufacturing phases, the Company has "continued to make exhaustive efforts to ensure the quality" of its "hardware and software" . (See Ex . 3 .) 19. In selling the Spinal Decompression System, Axiom emphasized what they
referred to as the "quality system theory" that guaranteed Axiom's services and equipment are in compliance with the current regulations . Axiom representatives promised that with "the support of [its] products and commitment to service, practitioners can deliver the best medical care for their patients ." (See Ex . 3 .) 20. At the Axiom Sales Seminar, Axiom guaranteed its commitment to providing
practitioners "complete support, encompassing medical, technical, and marketing components ." (See Ex . 3.) 21. Axiom representatives, Dr . Altadonna included, mislead Dr . Liners relative to the
revolutionary financial impact the Spinal Decompression System would have upon his practice . By way of example, Dr . Liners was provided a spreadsheet titled "DRX 9000 Lumbar Decompression Return on Investment and Breakeven Analysis" that projected his marginal profit over a period of five (5) years to be $1,757,880 .00. (See Ex . 7.) 22. Axiom made these misrepresentations for the purpose of causing Dr . Liners and
Liners Chiropractic to rely on them and to purchase the Spinal Decompression System . (See Ex .
5
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 6 of 18
8, 9.) Indeed, Dr . Liners and Liners Chiropractic relied on these and other material representations in their decision to engage Axiom and purchase its equipment . 23. Late in the afternoon of the day of the Axiom Sales Seminar, Axiom officials
isolated Dr. Liners and escorted him to a small office located in the back of the Axiom building (the "Closing Room") . With the door closed, an Axiom employee repeatedly asked Dr. Liners if he "was a believer" and explained that Liners Chiropractic would immediately see an increase in patient-related revenue of $30,000 .00 per month if Dr . Liners agreed to "sign on" with Axiom . 24. After a lengthy period of this "hard sell," the Axiom sales representative
presented Dr . Liners with a one page document which he explained represented the Axiom deal. The document reflected myriad lines of miniscule print . The Axiom representative asked Dr . Liners to initial the document . A copy of that document, titled Sales and Services Agreement, is attached hereto as Exhibit 10 (the "Axiom Agreement") . 25. Relying on the material misrepresentations and misleading product and system-
related claims made by Axiom during the Axiom Sales Seminar and in the Closing Room, Dr . Liners initialed the Axiom Agreement . 26. Also in the Closing Room, the Axiom representative explained to Dr . Liners that
Axiom's affiliate, Commerce (Partners' assignor in this litigation), would provide favorable and fair financing to Liners Chiropractic . The Axiom official led Dr . Liners to understand that Commerce and Axiom were business partners and worked closely together facilitating purchases of the Spinal Decompression System . The Axiom representative did not disclose to Dr . Liners that the financing terms that Commerce's assignee, Partners, now endeavors to enforce were punitive, onerous, and unconscionable .
6
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 7 of 18
27.
Upon information and belief, Commerce agreed with Axiom that Axiom would
make these representations to Dr . Liners, and authorized Axiom to do so, for the purpose of convincing Dr . Liners to make a purchase from Axiom and thereby necessitating his contracting with Commerce . 28. After Dr. Liners departed Florida, Axiom contacted Commerce and, upon
information and belief, disclosed that Dr . Liners was a financing candidate . Upon information and belief, Commerce and Axiom work in concert, taking advantage of consumers such as Dr . Liners and Liners Chiropractic who have been misled by inappropriate, unsubstantiated, and false representations as to Axiom's deliverables, including the Spinal Decompression System and Axiom's service commitment. 29. By way of example, Axiom billed Commerce for Liners Chiropractic's Spinal
Decompression System on February 25, 2005, weeks before Commerce even communicated with Dr . Liners about the lease. (See Ex . 11 .) 30. Thereafter, acting in concert with Axiom, Commerce contacted Dr . Liners in
California and represented that Commerce was his financing company for the transaction with Axiom . Commerce explained that, among other things, Dr . Liners was obligated to sign a personal guarantee and that it was Commerce's policy "not to contract just with businesses ." 31. Commerce explained that it would send a document to Dr. Liners and instructed
him to sign and return it immediately . Dr. Liners received the documents, but, while it was clear that they related to the Spinal Decompression System that Liners Chiropractic had bought from Axiom, most of the print in the documents was miniscule, blurry, unclear, and illegible . (See, e.g. , Am. Compl . Ex . A.)
7
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 8 of 18
32 .
2005 .
The Spinal Decompression System was delivered to Liners Chiropractic in Apri l
33.
The Spinal Decompression System never worked, however, the way Axiom
represented and promised that it would . For instance, the computer system in the Spinal Decompression System malfunctioned . Patient data was not retrievable from the system . The machine physically molested Liners Chiropractic's patients . 34. Moreover, Axiom's representations and promises about revenue generation, the
implementation and cost of the marketing system, and the actual marketing service provided by Axiom proved false . (See Ex . 7.) 35. Axiom's financial projections, based upon patient treatment capacity and
recommended protocols, proved grossly misleading . Virtually all of the patients placed in treatment showed no objective signs of favorable response, a substantial deviation from the "research" population that Axiom used to sell the Spinal Decompression System . There were significant refunds and discontinued care, which caused further financial disruption to Liners Chiropractic . 36. Dr. Liners repeatedly contacted the service center designated by Axiom to support
the Spinal Decompression System . Many of said calls went unanswered and no substantive technical support was offered to Dr . Liners. 37. Dr. Liners repeatedly attempted to contact the practitioner support number
provided by Axiom to assist owners of the Spinal Decompression System with administering treatment. Nobody was available to provide instruction . Often, Dr. Liners' calls to Axiom were not returned .
8
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 9 of 18
38.
During May and July 2005, Dr . Liners did contact Axiom's general sales
department and explained, among other things, that his Spinal Decompression System was defective, that his practice was losing money, that Axiom's prior representations about marketing and patient support were false, and that the machine manufactured by Axiom was posing a significant risk to the health and safety of his existing clients, some of whom had elected not to treat with him due to the performance of the Spinal Decompression System . 39. During these discussions, Axiom acknowledged the defects in the unit . Axiom
agreed to accept the entire Spinal Decompression System as a return, crediting Liners Chiropractic's account . Dr. Liners understood that Axiom and its affiliate, Commerce, would promptly relieve him of any payment obligations and coordinate with him in taking any necessary steps in doing so . 40. Accordingly, in July of 2005, Axiom sent a service technician to Liners
Chiropractic to retrieve the Spinal Decompression System . Relying on his discussions with Axiom, Dr. Liners allowed Axiom to take possession of the Spinal Decompression System . 41. At the time Axiom took back the Spinal Decompression System, Liners
Chiropractic had paid every rent payment due to Commerce . (See Ex . 12.) He ceased paying rent only after Axiom removed the machine . 42. Less than a month later, however, in August 2005, Dr . Liners received notice that
his lease had been assigned to Partners Equity and that Partners Equity not only considered the lease still to be in effect but also had taken advantage of an "acceleration" clause in the lease and demanded that the entire five-year lease amount was now due and owing . Partners Equity's counsel demanded an immediate lump sum payment of $135,653 .03, plus additional attorneys' fees, legal costs and expenses as they accrue . Partners' counsel alleged Dr . Liners was "in
9
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 10 of 18
default" and must pay $135,653 .03 to avoid being sued for "the full accelerated balance due and owing, together with any and all charges associated with the litigation . . . ." (See Am . Compl. Ex. E .) 43. In other words, after one missed rent payment (not paid only in reliance on
Axiom's representation), Commerce assigned the lease to Partner Equity, who then, without even contacting Dr . Liners to inquire about the discrepancy, "accelerated" the lease and demanded that the entire five-year amount was due . What's worse, as is explained below, Partners Equity takes this position, even though it knows that Dr . Liners had relinquished use of the defective system in July . 44. After Axiom removed the Spinal Decompression System, it never contacted Dr .
Liners again. Axiom did not indicate that payments were owed despite Dr . Liners not having a functional Axiom system . 45. Axiom did, however, communicate with representatives of Commerce and/or
Partners Equity and disclosed that Dr . Liners' Spinal Decompression system was in the Company's possession . Upon information and belief, Axiom was instructed by Commerce and/or Partners Equity to transfer possession of the Spinal Decompression System . Axiom subsequently released the machine to a moving company hired by Commerce and/or Partners Equity . Dr. Liners was not apprised of said communications, believing all dealings, transactions, and payment obligations relative to the system had ceased, not having heard anything from Axiom. 46. After Commerce and/or Partners Equity coordinated with Axiom and procured
Dr. Liners' Spinal Decompression System, Commerce and/or Partners Equity proceeded to sell the system on the wholesale market at a price far below the fair market value. Upon informatio n
10
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 11 of 18
and belief, despite the resale of Dr . Liners' Spinal Decompression System, Pa rtners Equity still demanded that Dr. Liners remit a lump sum payment for $12 7,911 .61 in addition to other fees . (See Ex . 13 .) 47. Upon information and belief, the Spinal Decompression System, for which
Partners seeks a lump sum payment from Dr . Liners, is owned by a New Jersey-based chiropractor . 48. Despite Commerce having the Spinal Decompression System in its possession,
Partners, Commerce's assignee, pressured Dr . Liners into paying a substantial lump sum under the unconscionable and punitive terms of the Lease agreement . 49. Axiom assisted Commerce and Partners in procuring the Spinal Decompression
System, to the detriment of Dr . Liners and Liners Chiropractic . Axiom, Commerce, and Partners collaborated in allowing Partners to strong-arm Dr . Liners in spite of his being deprived of the use of the Spinal Decompression Machine and its supposed revenue generating power .
COUNT I- BREACH OF CONTRACT (As to Axiom Worldwide, Inc.) 50. Third-Party Plaintiffs repeat, reassert and incorporate by reference the allegations
of Paragraphs 1 through 49 as if set forth fully herein . 51. Defendant Axiom offered Dr . Liners for purchase the Spinal Decompression
System, as well as a wide range of services to augment the machine use (DRX 9000 Marketing Plan) and increase marketability and profitability . 52. Defendant Axiom stated that the Spinal Decompression Machine would work
and, when used with the DRX 9000 Marketing Plan, would make Dr . Liners millions of dollars .
11
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 12 of 18
53. 54.
Dr. Liners accepted the terms of said contract in reliance on Axiom's offer . Axiom breached the express and implied contract with Dr . Liners in that the
machine supplied to Dr. Liners was malfunctioning, the support provided to Dr. Liners was nonexistent, and the DRX 9000 Marketing Plan was a sham . 55 . The conduct of Axiom toward Dr. Liners constituted a material breach of the
contract, visiting upon Dr. Liners damages and depriving Dr. Liners of the benefit of his bargain . COUNT II- BREACH OF EXPRESS WARRANTY (As to Axiom Worldwide, Inc.) 56. Third-Party Plaintiffs repeat, reassert and incorporate by reference the allegations
of Paragraphs 1 through 55 as if set forth fully herein . 57. The terms of the Agreement between Defendant Axiom and Dr . Liners provided
for a "one year parts and labor warranty at the customer's location from the time of installation" for the Spinal Decompression System . In addition, Axiom stated that Axiom maintained a 24hour Doctor Hotline for questions related to the machine's use . 58. Axiom breached this express warranty through its failure to provide a defect-free
product for a year, its failure to respond to calls for repair, and its failure to maintain an active service hotline . 59. These breeches resulted in significant pecuniary loss to Dr . Liners, including lost
profits from multiple patient visits . COUNT III- FRAUDULENT MISREPRESENTATION (As to Axiom Worldwide, Inc.) 60. Third-Party Plaintiffs repeat, reassert and incorporate by reference the allegations
of Paragraphs 1 through 59 as if set forth fully herein .
12
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 13 of 18
61.
Dr. Liners purchased at a price of $140,000 the DRX 9000 Marketing Plan and
the Spinal Decompression System. 62. Dr. Liners justifiably relied upon Axiom and its representatives' expertise,
knowledge, and experience in the field in agreeing to purchase the Spinal Decompression System and the DRX 9000 Marketing Plan . 63. Axiom's misrepresentations resulted in significant pecuniary loss to Dr . Liners,
both in terms of the lost value of goods purchased and loss of patient visits and the attendant remuneration . COUNT IV- NEGLIGENT MISREPRESENTATION (As to Axiom Worldwide, Inc.) 64. Third-Party Plaintiffs repeat, reassert and incorporate by reference the allegations
of Paragraphs 1 through 63 as if set forth fully herein . 65. Dr. Liners was supplied by Axiom, through its agents and Dr . Ben Altadonna,
with false information regarding Axiom's product quality, service and support . 66. Dr. Liners was justified in relying on the false information supplied by Axiom and
its agents, and did so to his detriment . 67. Axiom failed to exercise reasonable care and/or competence in communicating
the correct information to Dr . Liners. 68. Said failure has resulted in Dr . Liners incurring significant pecuniary loss . COUNT V- UNJUST ENRICHMENT (As to Axiom Worldwide, Inc.) 69. Third-Party Plaintiffs repeat, reassert and incorporate by reference the allegations
of Paragraphs 1 through 68 as if set forth fully herein .
13
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 14 of 18
70.
Axiom received the substantial benefit of the returned Spinal Decompression
System while at the same time having received payment from Defendant Commerce . 71. 72. Defendant Axiom accepted and retained this benefit. Dr. Liners has not been afforded the benefit of his bargain and Defendant Axiom
has been unjustly enriched by refusing to perform services and support as agreed and accepting the returned machine from Dr . Liners . 73. The circumstances are such that it would be inequitable for Defendant Axiom to
retain the benefit without paying the value thereof to Dr . Liners. COUNT VI - FRAUDULENT INDUCEMENT (As to Commerce and Axiom Worldwide, Inc .) 74. Third-Party Plaintiffs repeat, reassert, and incorporate by reference the allegations
of Paragraphs 1 through 73 as if set forth fully herein . 75. Defendant Axiom misrepresented a number of material facts with respect to the
Spinal Decompression System and the DRX 9000 Marketing Plan. 76. Upon agreement with and authorization by Commerce, Defendant Axiom also
represented to Dr . Liners that Commerce and Axiom were affiliates and that Commerce would provide Third-Party Plaintiffs with fair and favorable financing . 77. Third-Party Defendants knew or should have known of the falsity of these
representations . 78. Third-Party Defendants Axiom's intent was to entice Third-Party Plaintiffs into
signing an Agreement to purchase the Spinal Decompression System and accompanying DRX 9000 Marketing Plan without the benefit of counsel, and to convince Third-Party Plaintiffs to
14
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 15 of 18
obligate themselves to accept financing of the lease of the Spinal Decompression System through Commerce. 79. Relying on Axiom's representations, Dr . Liners agreed to purchase the machine
and accept financing from Axiom's affiliate . 80. Defendant Axiom's and Defendant Commerce's action were collusive in nature
and were designed to fraudulently induce Dr . Liners to sign the Agreement . COUNT VII- FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT Florida Statutes 44 501 .201 et seq . (As to Axiom Worldwide, Inc.) 81. Plaintiffs repeat, reassert and incorporate by reference the allegations of
Paragraphs 1 through 80 as if set forth fully herein . 82. Defendant Axiom has engaged in deceptive acts and practices in the conduct of its
dealings with Plaintiff, as herein alleged, all in violation of the Florida Deceptive and Unfair Trade Practices Act set forth in Florida Statutes, §§501 .201 et se q . ("FUDTPA"). 83. Florida Statutes § 501 .204 declare unlawful "unfair methods of competition,
unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce . . . " 84. Florida Statutes § 501 .202 (2) provides that the FDUTPA shall be construed
"liberally to promote the following polic[y] : to protect the consuming public and legitimate business enterprises from those who engage in unfair methods of competition, o r unconscionable, deceptive, or unfair acts or practices in the conduct of any trade or commerce ." 85. Dr. Liners' business activities constitute a legitimate business enterprise within
the meaning of Florida Statutes § 501 .202 (2) .
15
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 16 of 18
86.
alia,
The definition of "consumer" in Florida Statutes § 501 .203 (7) includes, inter
an "individual", "business", or "corporation" . 87. Florida Statutes § 501 .203 (8) defines trade or commerce to include the
"advertising, soliciting, providing, offering, or distributing, whether by sale, rental, or otherwise, of any good or service, or any property, whether tangible or intangible, or any other article, commodity, or thing of value wherever situated ." 88. Dr. Liners is engaged in "trade or commerce" within the meaning of § 501 .203 (8)
and is a consumer within the meaning of § 501 .203 (7) . 89. Florida Statutes § 501 .211 (1) provides that "without regard to any other remedy
or relief to which a person is entitled, anyone aggrieved by a violation of this part may bring an action to obtain a declaratory judgment that an act or practice violates this part and to enjoin a person who has violated, is violating, or is otherwise likely to violate this part . " 90. Florida Statutes § 501 .211(2) provides that in any individual action brought by a
consumer "who has suffered a loss as a result of a violation of this part, such person may recover actual damages, plus attorneys fees and court costs . . . " 91. The acts, omissions, and conduct of Defendant Axiom and its representatives in
their dealings with Dr . Liners as detailed herein were deceptive, had the capacity to deceive, and did, in fact, deceive Dr . Liners . 92. Dr. Liners justifiably relied upon the wrongful advice, acts, omissions and
representations of Defendant Axiom and its representatives, all to their very great damage, in violation of FDUTPA . 93. As a result of the wrongful and deceptive acts, omissions, and conduct of
Defendant Axiom, Dr . Liners has sustained damages in at least the sum of $150,000 .00; which
16
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 17 of 18
amount includes, inter alia, the purchase price for the Spinal Decompression System and the DRX 9000 Marketing Plan, lost profits as a result of lost patient visits and money-back guarantee reimbursements to patients, out-of-pocket costs, and other costs of dealing with the defective machine. 94. To protect his rights, Dr . Liners has been required to retain the services of the
undersigned attorneys and have agreed to pay them a fee for their services herein . COUNT VIII - BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING (As to Axiom and Commerce) 95. Plaintiffs repeat, reassert and incorporate by reference the allegations of
Paragraphs 1 through 94 as if set forth fully herein . 96. Defendant Axiom and Defendant Commerce had a duty to follow standards of
good faith and fair dealing to protect the parties' reasonably contracted obligations . 97. Defendant Axiom's and Defendant Commerce's actions and inactions with
respect to Dr. Liners constituted a breach of the implied covenant of good faith and fair dealing . 98. Dr. Liners was materially and substantially injured as a result of Defendant
Axiom's and Defendant Commerce's breach . COUNT IX - CIVIL CONSPIRACY (As to Axiom and Commerce) 99. Third-Party Plaintiffs repeat, reassert and incorporate by reference the allegations
of Paragraphs 1 through 98 as if set forth fully herein . 100. Third-Party Defendants combined and agreed to convince Third-Party Plaintiffs
to make a purchase from Axiom and obligate themselves to accept financing from Commerce .
17
Case 2:05-cv-06127-NS
Document 13
Filed 02/15/2006
Page 18 of 18
They agreed an combined to make false representations about the products, their relationship, and the terms of the Commerce financing, to achieve this common goal . 101 . Axiom made these misrepresentations to Third-Party Plaintiffs, which caused Third-Party Plaintiffs the actual damage described above .
WHEREFORE, Third-Parry Plaintiffs respectfully request that this Court : (i) (ii) (iii) (iv) Enter judgment against Third-Party Defendants Axiom and Commerce on all counts; Award Third-Party Plaintiffs damages, including direct, indirect, consequential and punitive damages in excess of $75,000 ; Order Third-Party Defendants to pay Plaintiffs' attorney's fees and costs in pursuing this matter ; and Grant such other and further relief this Court deems just and proper under the circumstances . George M. Gowen III George M . Gowen IJI (83210) Blair J . Robinson (92915) COZEN O'CONNOR 1900 Market Street Philadelphia, PA 19103 (215) 665-2781 ggowen@cozen.com Attorneys for Defendants and Counterclaim and Third-Party Plaintiffs Dr. Eric Liners and Liners Chiropractic, Inc.
Dated: February 13, 2006
18