Case 5:07-cv-00504-FL
Document 28-7
Filed 03/14/2008
Page 1 of 7
DECLARATION
OF FRANK GOURLAY
NOW COMES, Frank Gourlay, after being duly sworn, deposes and states as follows: I am over the age of eighteen and I am competent to testify as to all matters in this affidavit.
MY BACKGROUND
I am a resident of Scotland. I have been building Jog cabin homes in Scotland since 1970. I have built log cabins from both Scottish and Scandinavian manufacturers and I have built a holiday village of 80 log cabin homes in South West Scotland near where I live. Having had experience with European houses, I decided to look to American suppliers to build some more log houses. After researching the potential suppliers I came up with a short list of about six companies, one of which was The Original Log Cabin Homes, owned and operated by Tom Vesce. Someone had contacted me when they found I was interested in building some more houses and asked ifT would build one for them. The person had a contact in the U.S. who was impressed with The Original Log Cabin Homes company. I considered importing the products from the United States and told him that if! built houses that he liked he could buy one. I then decided to visit the Original Log Cabin Homes.
MY RELATIONSHIP WITH THE ORIGINAL DEHART LOG CABIN HOMES AND DAVID
1contacted David DeHart, who was the Export Sales Manager of The Original Log Cabin Homes, and I came over to the United States about 5 years ago to meet him and inspect the facilities and products including the model houses of the company. I was impressed by what I saw. I also found that David DeHart was a person that 1 could work with. I then placed an order for two houses. They duly arrived in Scotland and it was with some concern that we discovered that there were shortages of some items and too much of others. I was concerned that a company, which had been in business for 15 years could not get the orders correct. In my past building experience, when I was manufacturing log cabin homes myself in Scotland, I never had a problem supplying the right quantities of goods to the customer. 1contacted David DeHart and he ensured that the Company corrected any errors. I also wrote to Tom Vesce and told him I was concerned about The Original Log Cabin Homes performance. He assured me that this was due to staff changes and that this would not re-occur. EXHIBIT
1
& I------
Case S:07-cv-00S04-FL
Document 28-7
Filed 03/14/2008
Page 2 of 7
I proceeded to order another house about every six months until we had received a total of 6 buildings for my development and another 3 for other customers of mine. I remained very pleased with the material that we were receiving from The USA but was becoming ever more concerned by The Original Log Cabin Homes' failure to improve their performance. Each delivery for an identical house was still differing and I was now in the position ofhaving to detail the contents of each order rather than buying a log house package supplied by The Original Log Cabin Homes.
T wrote to Tom Vesce and told him that as all the promises he made to correct the problems had
not happened it now made commercial sense for me to look elsewhere in the USA for my supplies. Later David and I spoke. He said "please stay with The Original Log Cabin Homes as I am sure that we can sort these things out". David had never let me down. When there were shortages on some supplies, David would fix the problem. On the strength of David's commitment to oversee all future deliveries, I placed a deposit on another two houses. Having paid the deposit, I learned shortly thereafter that David and Tom apparently had a disagreement. David contacted me to state he believed he had been fired and that he was leaving the company. My son and 1 came to the United States and we went to see Tom Vesce who said that he would be overseeing all our future orders. I was then in a difficult position since I had only dealt with David, who I trusted and always helped to fix any problems. I received the next house and the order was correct only because I was now monitoring the list of materials to be shipped before it was sent. I then made up my mind that as I was doing both my job and theirs I would sever my relationship with The Original Log Cabin Homes and seek another supplier. I felt it very difficult to deal with The Original Log Cabin Homes because there was no longer a person that 1was confident in dealing with and in whom .L could trust. I contacted David and said I was going to have to find another source for my timber supplies and I asked if he would help me find suppliers and negotiate with them on my behalf David .said he would be happy to do so. We did not ask for delivery of the final house on which I had paid a 10% deposit. I requested the deposit be refunded. Mr. Vesce did not respond to my letter. David helped introduce me to various suppliers and we have now imported another three log buildings. These log houses are being built according to my design, not the design of The Original Log Cabin Homes. We are happy with the product we are getting and are receiving orders shipped correctly and without any problems. Going forward 1have no desire to deal with Tom Vesce and The Original Log Cabin Homes Ltd in procuring my supplies.
2
Case 5:07-cv-00504-FL
Document 28-7
Filed 03/14/2008
Page 3 of 7
By the time] first contacted David DeHart at The Original Log Cabin Homes, I had a Original Log Cabin Homes brochure, I had seen their website and .r had found a drawing, chopped it up, changed it and decided on a final design. 1 then faxed a copy to David to ask him to give me a price for supplying it. The drawing was a derivative of an Original Log Cabin Homes floor-plan, but I had found similar drawings in other log cabin manufacturers' brochures and websites. The Original Log Cabin Homes design was not unique and was a typical generic log house floorplan. I was just looking to build log houses that would fit into the Scottish countryside and have one and a half stories with donner windows as this is very much the local vernacular design of old farmhouses and cottages in my area. I saw similar designs in various brochures, including but not limited to The Original Log Cabin Homes designs. . MY DEALINGS WITH DAVID DEHART AFTER HE LEFT ORIGINAL LOG CABIN HOMES
1 approached David after he had left The Original Log Cabin Homes. He did not approach me.
I ceased to deal with The Original Log Cabin Homes because I did not trust Tom Vesce. He would happily and glibly promise to do what he thought I was expecting to hear although r did not believe that he would carry it out. The only reason I stayed with The Original Log Cabin Homes as a customer was because of my relationship with David DeHart and because I trusted him. The only reason I stayed after he had left was because ofthe two deposits, which I had paid. David did not provide any information (trade secrets, trademarked information) before or after he left. In fact, I gave them some trade secrets to improve their construction methods (their houses were not really up to the quality that we needed owing to the inclement weather (damp, rain and wind) that we experience in Scotland. I had been building log houses longer than Tom Vesce and my finished products were superior in some ways to his designs. I do not recall being provided any The Original Log Cabin Homes information by David after he left. By then we were on our sixth house on our own development site. It was just a case of trying to make certain that The Original Log Cabin Homes had the parts list correct. Over the time we worked with The Original Log Cabin Homes we had steadily improved the specifications and made many changes including using higher quality windows. We actually changed the way we operated. When we started I ordered a house package, but by the time we ceased trading with them, they were supplying a list of materials that we had ordered. My real gripe was that I lost confidence in The Original Log Cabin Homes ability to get things right. We ordered 6 houses that were basically identical. I kept a spreadsheet with the items that were sent for every house. They were all different. I did not feel they were competent in filling my orders. There were a continuing series of errors that appeared to be shortcuts or changes to save The Original Log Cabin Homes costs. As an example, the tongue and groove lining that was pro-
3
Case 5:07-cv-00504-FL
Document 28-7
Filed 03/14/2008
Page 4 of 7
vided for one house was mostly six foot long. That is not a good length for lining the walls of a room that is twenty foot long! There was an enormous amount of waste as a result of the product shipped versus what we needed. After contacting David they eventually sent the correct material. On another occasion I ordered 2 Pine spiral staircases and was sent 2 steel spiral staircases that would have been suitable for a warehouse but not a high quality house. In dealing with Tom Vesce I had to be suspicious of everything that was shipped. In any business, you have to have trust in the people with whom you are dealing. David DeHart but did not trust Tom Vesce.
1 did trust
I wish to continue to bring in timber from the USA to build log houses in Scotland. David has repeatedly said he has no desire to set up business selling log cabin homes in U.S. market, but is willing to help complete our houses in Great Britain and act for me in purchasing material in this country. Attached are several of the letters and emails that I sent to Tom and David expressing my concern. J said these things two or three years ago. Those statements reflect that I was not a happy customer for quite some time. They were not selling an exclusive package. They were buying logs, lining, doors, windows, etc. and sending them on to me. There was nothing that I was buying from them that I could not buy myself if! were to come over from Britain and look for the supplies. 1was merely buying materials for log houses, which are generally available in the USA. This is what I bought from The Original Log Cabin Homes, not any intellectual property. VALHALLA LOG HOMES I am familiar with Valhalla Log Homes. I met the Owner, Jens Christensen twice. In talking with Jens Christiansen, my understanding is that he was only buying materials. He was buying log siding and logs for houses, which he constructed in Denmark. We had lunch and discussed our experiences with The Original Log Cabin Homes. He was saying the exact same thing about The Original Log Cabin Homes as I was. He had great respect for David DeHart but he did not trust Tom Vesce. He was finding he was not getting a good deal from Tom. He had decided to live in America for part of the year and he decided to buy the timber for himself. He is now back in Denmark. He was buying American timber to integrate in to his Danish built houses. It is my understanding he terminated his relationship with Tom Vesce. I understand that Tom Vesce called him and threatened him.
It is my understanding David DeHart's grandson was in the office and overheard the conversation in which Tom was threatening to do personal injury to Jens Christensen (Valhalla Log Homes) and his family because Christiansen was 110t repared to complete the purchase of a rep cent order or buy any more from Tom and The Original Log Cabin Homes.
Jens told me he had paid a deposit of $40,000 (being 10% of the total). He realized he would lose his $40,000, but by that stage he had discovered that he could save more than $40,000 by buying the timber himself because Vesce had so badly overpriced the timber that he had been buying for several years.
4
Case 5:07-cv-00504-FL
Document 28-7
Filed 03/14/2008
Page 5 of 7
Jens like me dealt with David and had respect for David. But with David gone, he was not happy dealing with Tom Vesce. Jens felt ripped off and was not happy. It had nothing to do with David. He was just ordering logs and siding, not any intellectual property or a specific quantity for a house. Like me, he was not paying for any speci fie design or intellectual property, He was just buying supplies. Jens felt, like me, that without David DeHart at the company Tom would have lost him as a customer at least twelve months earlier, because Jens was dissatisfied with the performance ofthe company and he did 110ttrust Tom Vesce.
THE COMPLAINT I have reviewed the complaint filed in New York, Case # 07 CV 10352 entitled The Original Log Cabin Homes Ltd vs. Log Cabin Homes USA, and others including David DeHart. I understand that the case has been transferred to the Eastern District of North Carolina. My understanding is this is where The Original Log Cabin Homes was Jocated and where Mr. Vesce resided. Specifically, all my dealings regarding my efforts to buy building materials for log cabin homes that 1. am building in Scotland have been with David DeHart, not any of the other defendants (Edmund DeHart (David's son) and Algie DeHart (David's wife)). Those dealings only had to do with obtaining raw materials and other suppJies for building log cabins in Scotland, none of which related to contracts I had with The Original Log Cabin Homes. To the extent any of the allegations in the complaint suggest that any of the Defendants provided me or my company with copyrighted protected designs or marketing materials of The Original Log Cabin Homes as part of their business activities, that statement is false. To the extent that the allegations that Log Cabin Homes USA's website contains pictures of homes manufactured, sold and constructed by The Original Log Cabin Homes but misleads customers by written statements into believing that these homes were actually manufactured by USA (paragraph 3), that statement is false. Mr. DeHart never directed my attention to such a website and 1 never saw such a website. To the extent that the claims arise "out of USA's usurpation of Original corporate assets and interference with its contracts and business relationships; or that USA or any of the defendants have made any false and misleading claims and other nefarious actions which damaged and continue to damage Original" (paragraph 4), as far as it relates to me or my company, that statement is false. To the extent that USA recent actions have undermined any notion of fair competition, it is my belief that statement is false. I am not aware ofMr. DeHart or any of the defendants making any false or unsubstantiated claims or attempting to damage The Original Log Cabin Homes' business (paragraph 5).
5
Case 5:07-cv-00504-FL
Document 28-7
Filed 03/14/2008
Page 6 of 7
After his departure from The Original Log Cabins Homes, neither David DeHart nor any of the other defendants have made available to me any confidential or proprietary information including product renderings, floor plans, marketing materials or customer information (paragraph 18). Mr. DeHart did not contact and convince my company as to breach its agreement with The Original Log Cabin Homes and did not lead me or my company to believe that orders placed with USA arc actually being placed with The Original Log Cabin Homes (paragraph 21). To the extent that USA made misrepresentations and engaged in nefarious acts designed to advance USA at the cost of The Original Log Cabin Homes (paragraph 22) is false. To the extent that Log Cabin Homes USA had any "floor plans or home designs or brochures featuring floor plans and renderings of The Original Log Cabin Homes (paragraph 40 and 41), Mr. DeHart has not provided any of the proprietary designs of log cabin homes set forth in Paragraphs 31-39. Likewise none ofthe other named Defendants nor anyone associated with the named Defendants provided me with those designs or floor plans listed in paragraphs 31-39 and as alleged in paragraphs 40 and 41. With respect to paragraph 42, I never saw or relied upon a materials list or agreement that Plaintiff contends was on a Log Cabin Homes USA website. With respect to paragraph 44 and 45, I never observed the websites as described by the Plaintiff. Furthermore, to attribute the statement "these images are an assortment of houses that we have built on our site at Riverview Park in South West Scotland and for other clients on their own land" to The Original Log Cabin Homes would be false. It is false in that the pictures of the fifteen log cabin homes were "actually manufactured, sold and/or constructed by Original." The Original Log Cabin Homes did not manufacture, sell or construct these 15 homes. My company actually designed the final version of each of the homes, constructed and sold them. The only thing The Original Log Cabin Homes had to do with these homes was to provide the building materials. Paragraph 48 states that the photos of the log cabin homes were manufactured and sold by USA. They were not. Equally, The Original Log Cabin Homes lacks any reasonable basis to claim that the log cabin homes on that website are houses that Log Cabin homes "built on our site at Riverview Park in South West Scotland and for other clients on their own land." Any suggestion by Log Cabin Homes that they built these homes would be misleading to consumers. My company built these homes with plans that I had developed. Based on my personal knowledge and information, it is false statement in the complaint that David DeHart utilized proprietary customer information or that he had wrongfully taken from The Original Log Cabin Homes and contacted an existing customer or potential customer Riverview Park, Ltd, (my company) (paragraph 49).
6
Case 5:07-cv-00504-FL
Document 28-7
Filed 03/14/2008
Page 7 of 7
n(~:Ctt
<)\, l';":~.
couvcrsati
•.. ••. lt~ vi~h j~~;. Ci!'!.';~t...;.n.~n. it 1:; 3ts-o\
~!1alsc
sl;,ktncnt j;~th~ complaint
i~ •.
Ih~H
David De+Inn atiE,.ed f;!:opcie13ty f:''''h~ii~J information T!lI:Origtild .Lt.~ (~~bhl ~:m~c5 i!nd C')ltt~t"~!..,j c;tistiog :l.'1 \;aH':aih f-h."nt-e"S.(1.";1-) {·hnst.~!l:iC"n·s C")I)1pi1n~') (pard~r~lph
C!" :}At1
h~ h:id
l·ust,;:r!:.::' t:r
t(~~pbH~"taken from ft!llt!:'-n;ai ,·il:... omcr .
49 L
1have re.;i!!\\",xf :!-•.: Pr\i.,.·1Vl' cause s 'It:1\.::liun. . Ba~>CJJ rhe ahDV,,:: ;i:l~llllli!ti!,:t ::! ih,!: a1iid:t •.. •.\~~ -ir, 1(. mv .. l~Er~~; with rv!r. ()cHart ~h:.:fJtlu:'!.-]l;Ufitd Dd:.;l;\~a.nl:': i~i,'~n::,mL' v~~i~'iaied 1.\ :ih ~ir. D::':iJ O{+!iirt .. I-ut~not hdie"e he i:-. glt~11)' )(•. r.\~-tb:~~ ~ xnv :iI~;;;.~!.~ :~ .'\1.'\ !{~rLh thc ceu iu t:...lu.~~ :'h:~.it"\n u! rhc l"~~r;lphlin1 vr
with r•... "'SfA..,·;
l-i
I
I Jl:--";.''-<'' under penalt; of jl"rjury under the laws oftlJo", Unit",j Stl,t~, (,f America that th<: f,:'I"'~lIini! i:: liW',lnil correct. EXoXlIt,!d rhix 111\) 41h day ,,(\Olan:h 20n~, 1