Complaint Jury Demand (00435221)

PUEBLO COUNTY, DISTRICT COURT, STATE OF COLORADO 320 W. 10th St., Pueblo CO 81003 719-583-7000 719-586-8830(fax) LAWRENCE P. HERNANDEZ, Ph.D., an individual, ANNETTE HERNANDEZ, an individual, and VELIA RINCON, and individual Plaintiffs, vs. CESAR CHAVEZ ACADEMY, INC., a Colorado Nonprofit Corporation, CESAR CHAVEZ ACADEMY, INC. BOARD OF DIRECTORS, DOLORES HUERTA PREPARATORY HIGH, INC., a Colorado Nonprofit Corporation, DOLORES HUERTA PREPATORY HIGH BOARD OF DIRECTORS, DENNIS L. FEUERSTEIN, an individual, ALEX ARAGON, an individual, DONIELLE GONZALES, an individual, PABLO GONZALES, an individual, ALFREDO VARGAS, an individual, MICHAEL ENGLE, an individual, JEFF ROSS, an individual, RICHARD MESTAS, an individual, GARCIA CALDERÓN RUÍZ, LLP, a California Limited Liability Partnership, DOLORES S. ATENCIO, Esq., an individual, and LORETTA P. MARTINEZ, Esq., an individual, Defendants. Attorneys for Plaintiffs Bruce A. Montoya, Atty. Reg. # 14233 Matthew R. Groves, Atty. Reg. #27315 David W. Feeder II, Atty. Reg. # 31237 MESSNER & REEVES, LLC 1430 Wynkoop Street, Suite 300 Denver, CO 80202 Telephone: (303) 623-1800 Fax Number: (303) 623-0552 E-mail: [email protected]

▲ COURT USE ONLY ▲

Case Number: pending Div.: pending

COMPLAINT AND JURY DEMAND

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COMES NOW Lawrence P. Hernandez, Ph.D. (“Dr. Hernandez”), Annette Hernandez (“Ms. Hernandez”), and Velia Rincon (“Ms. Rincon”) (collectively “Plaintiffs”), by and through their attorneys, Messner & Reeves, LLC, and hereby submit their Complaint and Jury Demand, and in support thereof state as follows: I. PARTIES 1. Plaintiff Lawrence P. Hernandez, Ph.D. is an individual who resides at 5606 Bellagio Way, Pueblo, Colorado 81005. Dr. Hernandez helped found, and most recently served as CEO and Executive Director of Defendants Cesar Chavez Academy, Inc. and Dolores Huerta Preparatory High, Inc. 2. Plaintiff Annette Hernandez is an individual who resides at 5606 Bellagio Way, Pueblo, Colorado 81005. Ms. Hernandez helped found, and most recently served as COO of Defendants Cesar Chavez Academy, Inc. and Dolores Huerta Preparatory High, Inc. 3. Plaintiff Velia Rincon is an individual who resides at 616 Boyero Ave., Pueblo, Colorado 81007. Ms. Rincon most recently served as Assistant Executive Directory of Defendant Cesar Chavez Academy, Inc. 4. Defendant Cesar Chavez Academy, Inc. (“CCA”) is a Colorado non-profit corporation which has its corporate headquarters at 2099 W. Highway 50, Suite 160, Pueblo, Colorado, 81008. CCA operates a charter school in Pueblo, Colorado. 5. Defendant Dolores Huerta Preparatory High, Inc. (“DHPH”) is a Colorado non-profit corporation which has its corporate headquarters at 2099 W. Highway 50, Suite 160, Pueblo, Colorado, 81008. DHPH operates a charter school in Pueblo, Colorado. 6. Defendant Dennis Feuerstein (“Feuerstein”) is an individual who, upon information and belief, resides at 1813 Pioneer Rd., Pueblo, Colorado 81008. Defendant Feuerstein is a member and the President of the CCA and DHPH board of directors. 7. Defendants Alex Aragon, Donielle Gonzales, Pablo Gonzales, Alfredo Vargas, Michael Engle, Jeff Ross, and Richard Mestas are all residents of Pueblo County, Colorado. All are members of the CCA and DHPH Boards, and voted to terminate Plaintiffs on October 2, 2009, with the exception of Mestas, who is Principal of DHPH. 8. Defendant Garcia Calderón Ruíz, LLP (“GCR”) is a California limited liability partnership doing business in Colorado with its principle address at 633 17th Street, Suite 1700, Denver, CO 80202.

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9. Defendant Dolores Atencio (“Atencio”) is an individual who, upon information and belief, resides at 4535 W. Lakeridge Rd, Denver, Colorado 80219. Defendant Atencio is an attorney who represents CCA and DHPH. 10. Defendant Loretta Martinez (“Martinez”) is an individual who, upon information and belief, resides in Denver County, Colorado. Defendant Martinez is an attorney who represents CCA and DHPH. II. JURISDICTION AND VENUE 11. Jurisdiction in this case is proper pursuant to at least C.R.S. § 13-6-104. Personal jurisdiction over the defendants is proper, as all conduct business in the state of Colorado, and upon information and belief do so in Pueblo County. The acts in question also occurred in Pueblo County. 12.

Venue is proper in this Court under C.R.C.P. 98(c). III. GENERAL ALLEGATIONS

13. Dr. and Ms. Hernandez founded CCA in or around September 2000. Dr. and Ms. Hernandez founded DHPH in or around September 2003. In connection with the founding of the schools, Dr. and Ms. Hernandez liquidated their savings and retirement accounts, and lent both institutions over $80,000 as start-up money, sums which have never been repaid. 14. Plaintiffs have served as executives of CCA and DHPH, based on written employment contracts that have been renewed annually, including the current period. 15. On or around April 30, 2009, Dr. Hernandez accepted CCA’s and DHPH’s offer of employment to serve as their CEO from July 1, 2009 through June 30, 2010. Dr. Hernandez’s employment contract is a valid, binding and enforceable contract supported by adequate consideration. This contract includes the following enforceable provisions: a. Dr. Hernandez “will be dismissed based on the procedures outlined in the bylaws of the Board of Directors.” b. “In the event that [Dr. Hernandez’s] employment is terminated or employment contract is not renewed, by the Board of Directors at anytime, with or without cause, [Dr. Hernandez] shall receive payment of the balance of this contract.” c. “Should [Dr. Hernandez’s] contract be terminated or employment contract is not renewed, with or without cause, [Dr. Hernandez] will receive six (6) months severance pay on the normal pay schedule.”

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d. “In the event of employment separation, unused sick leave will be paid to [Dr. Hernandez] in full, based on the amount accumulated since the beginning of employment, at the time of separation.” e. “In the event of employment separation, personal leave will be paid to [Dr. Hernandez] in full, based on the amount accumulated since the beginning of employment, at the time of separation.” 16. On or around April 30, 2009, Ms. Hernandez accepted CCA’s and DHPH’s offer of employment to serve as their COO from July 1, 2010 through June 30, 2010. Ms. Hernandez’s employment contract is a valid, binding and enforceable contract supported by adequate consideration. This contract includes the following provisions: a. Ms. Hernandez “will be dismissed based on the procedures outlined in the bylaws of the Board of Directors.” b. “In the event that [Ms. Hernandez’s] employment is terminated or employment contract is not renewed, by the Board of Directors at anytime, with or without cause, [Ms. Hernandez] shall receive payment of the balance of this contract.” c. “Should [Ms. Hernandez’s] contract be terminated or employment contract is not renewed, with or without cause, [Ms. Hernandez] will receive six (6) months severance pay on the normal pay schedule.” d. “In the event of employment separation, unused sick leave will be paid to [Ms. Hernandez] in full, based on the amount accumulated since the beginning of employment, at the time of separation.” e. “In the event of employment separation, personal leave will be paid to [Ms. Hernandez] in full, based on the amount accumulated since the beginning of employment, at the time of separation.” 17. On or around July 27, 2009, Ms. Rincon accepted CCA’s and DHPH’s offer of employment to serve as its Assistant Executive Director, pursuant to a written employment agreement. The agreement provided that any modification of her “at-will” employment status must be “in writing and specifically approved by the Chief Executive Officer.” 18. On or around September 28, 2009, Ms. Rincon accepted CCA’s and DHPH’s written offer of an employment contract, to serve as CCA’s and DHPH’s Assistant Executive Director from July 1, 2009 through June 30, 2010. Ms. Rincon’s employment contract is a valid, binding and enforceable contract supported by adequate consideration. This contract includes the following enforceable provisions:

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a. “Should [Ms. Rincon’s] employment be terminated or employment contract is not renewed, by the Executive Director at anytime, with or without cause, [Ms. Rincon] shall receive payment of the balance of this contract.” b. “Should [Ms. Rincon’s] contract be terminated or employment contract is not renewed, with or without cause, [Ms. Rincon] will receive six (6) months severance pay on the normal pay schedule.” c. “In the event of employment separation, unused sick leave will be paid to [Ms. Rincon] in full, based on the amount accumulated since the beginning of employment, at the time of separation.” d. “In the event of employment separation, personal leave will be paid to [Ms. Rincon] in full, based on the amount accumulated since the beginning of employment, at the time of separation.” 19. On September 24, 2009, Defendant Feuerstein notified Dr. Hernandez, Ms. Hernandez, and Ms. Rincon that they had been placed on paid administrative leave pursuant to his directive. Upon information and belief, Defendant Feuerstein imposed these leaves unilaterally and without consultation with or approval of either the CCA or DHPH Boards. The reasons stated by Defendant Feuerstein did not justify the unilaterally imposed leaves, and were pretextual. In addition, during this time Plaintiffs’ phone service was cancelled, Plaintiffs’ email accounts were disabled, and Dr. Hernandez’s email was accessed without his knowledge or approval and emails were deleted (including emails to Dr. Hernandez from Defendant Atencio). 20. On September 24, 2009, Defendants Feuerstein and Mestas, upon information and belief with the assistance of Defendants Atencio and/or Martinez, also petitioned the Pueblo County District Court and received numerous temporary civil protection orders against Dr. and Ms. Hernandez and numerous members of their families, based on false factual allegations, and did so solely for the improper purpose of generating negative publicity against the Plaintiffs, and to create a pretext for the future termination of the Plaintiffs. These orders were never served on Plaintiffs, and were allowed to expire. Defendant Atencio confirmed to the Court on October 5, 2009 that the orders were not being pursued by Defendants Feuerstein and Mestas. 21. On September 25, 2009, the CCA and DHPH Boards removed both Dr. and Ms. Hernandez from their executive positions with the Cesar Chavez School Network, but allowed them to retain their positions at CCA and DHPH. 22. On or around September 26, 2009, Defendant Feuerstein publicly stated that Dr. and Ms. Hernandez and Ms. Rincon were removed from paid administrative leave, and would return to work on September 28, 2009. Despite Defendant Feuerstein’s assurances, Ms. Hernandez and Ms. Rincon were not able to effectively return to work

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the week of September 28, 2009, and on September 29, 2009 Defendant Atencio requested that they both refrain from working and remain on paid administrative leave. Ms. Hernandez and Ms. Rincon acquiesced to this request and refrained from working. 23. Throughout this timeframe Plaintiffs sought to work with Defendants to reach a resolution of all concerns, and to put in place a plan going forward that would benefit all concerned, especially the students and staff of CCA and DHPH. Plaintiffs put forward a variety of plans in this regard, including significant concessions regarding each and every concern at issue. 24. Prior to September 2009, Defendant Atencio and her firm had personally represented all three Plaintiffs personally on various matters, including matters with regard to which Defendant Atencio and her firm received confidential information regarding all three Plaintiffs. This confidential information included the information touching on the exact issues forming the basis of the disputes and actions that form the basis of this Complaint. 25. On September 30, 2009, Plaintiffs informed Defendant Atencio that they felt she had a conflict of interest in terms of representing the Plaintiffs in connection with the employment disputes involving the Plaintiffs, and in terms of advising the Board to act against the interests of the Plaintiffs. The Plaintiffs requested Defendant Atencio cease their representation against the Plaintiffs. 26. On October 1, 2009, Defendant Atencio confirmed that, based on the request and conflict asserted by Plaintiffs, she would not be involved in further representation against the Plaintiffs on behalf of the CCA and DHPH Boards, and that she would inform the Boards of the asserted conflict. 27. On October 2, 2009, the CCA and DHPH Boards held a special meeting. The noticed agenda for the special meeting included the following items: “10. Employment Status of Annette Hernandez/New Position; Proposal by Annette Hernandez”; and “11. Salary Reduction of CCA-DHPH Chief Executive Officer”. During the meeting, the CCA and DHPH boards were represented and advised by Defendant Martinez, who is a member of Defendant Atencio’s firm, GCR. Prior to this meeting, Plaintiffs worked at length to present viable solutions that would benefit all parties, especially the staff and students, and were at all times willing to discuss significant concessions in order to achieve a workable solution to the issues at hand. 28. During the October 2, 2009 meeting, upon information and belief, despite knowing of her conflict of interest, and despite her stated acknowledgement of the conflict and commitment to cease representation of the CCA and DHPH Boards with regard to the Plaintiffs, Defendant Atencio advised the various Defendants, via Defendant Martinez, regarding advice to the Boards on these issues.

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29. In connection with this representation, Defendants GCR, Atencio, and Martinez used confidential information acquired during their representation of Plaintiffs, and also acted directly against the interests of Plaintiffs. This effort was spearheaded by Defendant Atencio in an attempt to deflect attention away from prior Motions directed at her continued retention as counsel for the schools. By way of background, Defendant Atencio and her firm received an annual retainer of $250,000, and the amount of this retainer and her continued representation had been called into question by various parties as a result of her poor performance. Further, Defendant Atencio had approached Dr. Hernandez with a demand that she and her staff be made permanent employees of the Defendant schools, at an annual costs of well over $300,000 per year, which demand Dr. Hernandez rejected. As a result, Defendant Atencio then turned on her former clients and spearheaded the effort to terminate their employment. In this regard, Defendant Atencio urged Ms. Hernandez to resign in order to “make the Boards’ PR issues go away,” and advised the Boards consistently in this regard. 30. At the end of the October 2, 2009 meeting the CCA and DHPH Boards voted to terminate the employment of Dr. Hernandez, Ms. Hernandez and Ms. Rincon. The terminations were wrongful, without cause or justification, and in violation of the terms of their employment contracts and the Boards’ bylaws. 31. Throughout this timeframe, various Defendants caused untrue and slanderous statements to be published about the Plaintiffs, detailed below. FIRST CLAIM FOR RELIEF BREACH OF CONTRACT – DR. LAWRENCE HERNANDEZ 32. Plaintiffs incorporate by reference and reallege paragraphs 1 through 31 of this Complaint as though fully set forth herein. 33. On or around April 30, 2009, Dr. Hernandez entered into an employment contract with CCA and DHPH for the period of July 1, 2009 thru June 30, 2010. This employment contract is a valid, binding and enforceable contract supported by adequate consideration 34. As Director and Chief Executive Officer Dr. Hernandez agreed to provide CCA and DHPH services including but not limited to: school operation oversight, school board and school district superintendent relations, local, state, and federal compliance; teacher, staff, and student recruitment; school management; staff development and training; hiring and firing of staff; staff evaluation, educational program oversight, and marketing assistance; budget development in conjunction with the Chief Financial Officer. 35. In compensation for Dr. Hernandez’s services, the CCA and DHPH Board of Directors agreed to compensate him.

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36. Dr. Hernandez was to receive other benefits in accordance with his contract, including the following: health, dental, vision, life, and short-term disability insurance; employer contributions to his Colorado PERA and PERA 401(k) supplemental plans; sick leave; personal leave; severance pay upon termination or non-renewal of employment; merit and cost of living raises; annual bonus; and a auto allowance. 37. Up until the point he was terminated, Dr. Hernandez continued to perform all of his obligations under the agreement with CCA and DHPH. 38. Dr. Hernandez’s employment agreement states that he will be dismissed based on the procedures outlined in the bylaws of the Board of Directors. 39. Section 5.8.2 of the bylaws of both CCA and DHPH provides that an Officer may removed for cause and by two-thirds of the Board of Directors if an Officer: is absent from more than two (2) consecutive regular Board meetings without a valid excuse; misses six (6) consecutive meetings then removal may be automatic; is unable or refuses to perform any of the Board’s duties and obligations; commits unethical or illegal conduct. 40. The Boards’ bylaws provide that if an Officer is asked to resign and declines to do so, the matter can be placed for hearing on the agenda of any regular or special meeting of the Board of Directors upon the consent of any five (5) regular board Members. The Officer being asked to resign must be notified in writing by certified mail of the action thirty (30) days prior to the date of the Board meeting. This notice must include the date, time, and place of the Board meeting and the reason the resignation is being sought. A two-thirds (2/3) vote of the entire Board of Directors is required to remove an Officer. 41. Under Dr. Hernandez’s employment contract, in the event of the termination or non-renewal of his employment, with or without cause, he is entitled to receive payment of the balance of the contract, and six (6) months severance pay “on the normal pay scale.” 42. On October 2, 2009, the CCA and DHPH Boards terminated Dr. Hernandez. The CCA and DHPH Boards did not provide Dr. Hernandez with the process required for his removal by his contract, and thereby violated his employment contract and their own bylaws. The termination was wrongful and without cause or justification. In addition, CCA and DHPH have breached Dr. Hernandez’s contract by failing to compensate him as required upon his termination. 43. As a result of CCA’s and DHPH’s breaches of contract, Dr. Hernandez has been damaged in an amount to be proven at trial.

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SECOND CLAIM FOR RELIEF BREACH OF CONTRACT – ANNETTE HERNANDEZ 44. Plaintiffs incorporate by reference and reallege paragraphs 1 through 43 of this Complaint as though fully set forth herein. 45. On or around April 30, 2009, Annette Hernandez entered into an employment contract with CCA and DHPH for the period of July 1, 2009 thru June 30, 2010. This employment contract is a valid, binding and enforceable contract supported by adequate consideration. 46. As Chief Operations Officer, Ms. Hernandez agreed to provide CCA and DHPH services including but not limited to: providing building related and direct support to staff at all levels; supporting school board and school district/superintendent relations; assisting with local, state, and federal compliance; assisting with teacher, staff, and student recruitment, school and employee management, staff development, training, and evaluation; providing educational program oversight and marketing; and finally operating the school’s offices and facilities to provide support for the implementation of the schools programs, development, and implementation of its mission. 47. These duties required Ms. Hernandez to act as the Director in the absence of the CEO/Executive Director, to operate and manage all school operations as directed by the CEO/Executive Director; to directly supervise office, custodial, and facilities staff; to assist discipline teams; to conduct general oversight of purchases, care, and delivery of school supplies and equipment, and other various duties. 48. In compensation for Ms. Hernandez services the CCA and DHPH Board of Directors agreed to compensate Ms. Hernandez. 49. Ms. Hernandez was to receive other benefits in accordance with her contract, including the following: health, dental, vision, life, and short-term disability insurance; employer contributions to his Colorado PERA and PERA 401(k) supplemental plans; sick leave; personal leave; severance pay upon termination or non-renewal of employment; merit and cost of living raises; annual bonus; and a monthly auto allowance. 50. Up until the point she was terminated, Ms. Hernandez continued to perform all of her obligations under the agreement with CCA and DHPH. 51. Ms. Hernandez’s employment agreement states that she will be dismissed based on the procedures outlined in the bylaws of the Board of Directors. 52. Section 5.8.2 of the bylaws of both CCA and DHPH provides that an Officer may removed for cause and by two-thirds of the Board of Directors if an Officer: is absent from more than two (2) consecutive regular Board meetings without a valid

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excuse; misses six (6) consecutive meetings then removal may be automatic; is unable or refuses to perform any of the Board’s duties and obligations; commits unethical or illegal conduct. 53. The Boards’ bylaws provide that if an Officer is asked to resign and declines to do so, the matter can be placed for hearing on the agenda of any regular or special meeting of the Board of Directors upon the consent of any five (5) regular board Members. The Officer being asked to resign must be notified in writing by certified mail of the action thirty (30) days prior to the date of the Board meeting. This notice must include the date, time, and place of the Board meeting and the reason the resignation is being sought. A two-thirds (2/3) vote of the entire Board of Directors is required to remove an Officer. 54. Under Ms. Hernandez’s employment contract, in the event of the termination or non-renewal of her employment, with or without cause, she is entitled to receive payment of the balance of the contract, and six (6) months severance pay “on the normal pay scale.” 55. On October 2, 2009, the CCA and DHPH Boards terminated Ms. Hernandez. The CCA and DHPH Boards did not provide Ms. Hernandez with the process required for her removal by her contract, and thereby violated her employment contract and their own bylaws. The termination was wrongful and without cause or justification. In addition, CCA and DHPH have breached Ms. Hernandez’s contract by failing to compensate her as required upon her termination. 56. As a result of CCA’s and DHPH’s breaches of contract, Ms. Hernandez has been damaged in an amount to be proven at trial. THIRD CLAIM FOR RELIEF BREACH OF CONTRACT – VELIA RINCON 57. Plaintiffs incorporate by reference and reallege paragraphs 1 through 56 of this Complaint as though fully set forth herein. 58. On or around July 27, 2009, Ms. Rincon accepted CCA’s offer of employment to serve as its Assistant Executive Director. On or around September 28, 2009, Ms. Rincon accepted CCA’s written offer of employment, from Dr. Hernandez acting in his capacity as CCA’s Chief Executive Officer, to serve as CCA’s Assistant Executive Director from July 1, 2009 through June 30, 2010. Ms. Rincon’s employment contract is a valid, binding and enforceable contract supported by adequate consideration. 59. As Assistant Executive Director, Ms. Rincon agreed to provide services including but not limited to: providing direct support to staff at all levels; assisting with local, state, and federal compliance; assisting with teacher, staff, and student recruitment; assisting with school and employee management; directing staff development and

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training as well as staff evaluation, educational program oversight and marketing; operating the school’s offices and facilities to provide support for the implementation of the schools programs, development, and implementation of its mission. 60. These duties required Ms. Rincon to operate and manage all school operations as directed by the CEO/Executive Director; to directly supervise office, custodial, and facilities staff; to provide oversight of substitute teachers including record keeping; to coordinate and work with parents and community members in establishing a network of volunteers to assist students and staff members of the Academy; to conduct general oversight of purchases, care, and delivery of school supplies and equipment; and other various duties. 61.

In compensation for Ms. Rincon’s services, CCA agreed to compensate

her. 62. Ms. Rincon was to receive other benefits in accordance with her contract, including the following: health, dental, vision, life, and short-term disability insurance; employer contributions to her Colorado PERA and PERA 401(k) supplemental plans; sick leave; personal leave; severance pay in the event of termination or non-renewal of employment; merit and cost of living raises; annual bonus; and a monthly auto allowance. 63. Up until the point she was terminated, Ms. Rincon continued to perform all of her obligations under the agreement with CCA. 64. Under Ms. Rincon’s employment contract, in the event of the termination or non-renewal of her employment, with or without cause, she is entitled to receive payment of the balance of the contract, and six (6) months severance pay “on the normal pay scale.” 65. On October 2, 2009, the CCA Board terminated Ms. Rincon. Ms. Rincon’s termination was wrongful and without cause or justification. In addition, CCA has breached Ms. Rincon’s contract by failing to compensate her as required upon her termination. 66. As a result of these breaches by CCA, Ms. Rincon has been damaged in an amount to be proven at trial. FOURTH CLAIM FOR RELIEF VIOLATION OF THE COVENANT OF GOOD FAITH AND FAIR DEALING 67. Plaintiffs incorporate by reference and reallege paragraphs 1 through 66 of this Complaint as though fully set forth herein. 68. Plaintiffs had valid employment contracts with CCA and DHPH for the period of July 1, 2009 thru June 30, 2010.

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69. Under Colorado law, all contracts include an implied duty of good faith and fair dealing to the parties. These duties apply to both the administration and execution of contracts. 70. CCA and DHPH, and their Boards, violated their duties of good faith and fair dealing in numerous respects, including the following: a. Placing Plaintiffs on paid administrative leave without proper cause or approval of the Boards. b. Failing to support and acknowledge their role in Dr. Hernandez’s action to terminate employment of certain GOAL Academy employees. c. Changing Plaintiffs’ responsibilities without proper cause, justification or process. d. Attempting to change Plaintiffs’ compensation without proper cause, justification or process. e. Terminating Plaintiffs without proper cause, justification or process. 71. At all relevant times, Plaintiffs fully performed their obligations under their employment contracts. 72. Plaintiffs have been damaged by CCA’s and DHPH’s breaches of their duties of good faith and fair dealing in an amount to be proven at trial. FIFTH CLAIM FOR RELIEF BREACH OF CONTRACT – DR. HERNANDEZ (RIVERA LITIGATION) 73. Plaintiffs incorporate by reference and reallege paragraphs 1 through 72 of this Complaint as though fully set forth herein. 74. Defendants CCA, DHPH, and their Board of Directors agreed to fund and defend Dr. Lawrence Hernandez in a civil suit brought by Alvin Rivera against Dr. Hernandez for acts taken in his official capacity. 75. On March 11, 2008 the Board of Directors unanimously voted to continue its support of the lawsuit and approved a “Consent to Representation” and other obligations “including all fees associated with [the] lawsuit.” 76. Dr. Hernandez, acting on behalf and with the approval of the Board of Directors, agreed with CCA, DHPH, and its Board of Directors to defend the suit as long as the Board of Directors indemnified Dr. Hernandez of any liability.

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77. Upon information and belief, CCA, DHPH, and its Board of Directors now refuses to maintain its support of the suit in violation of its agreement with Dr. Hernandez. As a result, Dr. Hernandez is subject to potential personal liability and will incur significant attorneys’ fees defending against this action. 78. As a result of CCA’s and DHPH’s breach of contract, Dr. Hernandez has been damaged by Defendants’ conduct in an amount to be proven at trial. SIXTH CLAIM FOR RELIEF UNJUST ENRICHMENT 79. Plaintiffs incorporate by reference and reallege paragraphs 1 through 78 of this Complaint as though fully set forth herein. 80. In connection with the initial operations of the school, Plaintiffs Dr. and Ms. Hernandez cashed out their retirements and loaned Defendants CCA and DHPH money in the amount of approximately $80,000 with the reasonable expectation that Defendants would repay his money. 81. Defendants have accepted and retained the money without repaying Plaintiffs’ loan, under such circumstances that allowing them to retain such money would be an injustice. SEVENTH CLAIM FOR RELIEF WRONGFUL TERMINATION IN VIOLATION OF PUBLIC POLICY 82. Plaintiffs incorporate by reference and reallege paragraphs 1 through 81 of this Complaint as though fully set forth herein. 83. Colorado public policy protects the right of individuals to consult with or obtain legal counsel. 84. On October 4, 2009, in discussing the reasons for the Plaintiffs’ terminations, Defendant Feuerstein publicly stated that the “Hernandez’s decision last week to seek legal counsel put us [the Board of Directors of CCA and DHPH] in another predicament.” 85. CCA’s and DHPH’s decision to terminate Plaintiffs in whole or in part because they obtained legal counsel violates public policy. 86. Even after obtaining legal counsel, and up and until the time Plaintiff’s were terminated, Plaintiff’s fully performed their obligations under their employee agreements.

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87. Plaintiffs have been damaged by CCA’s and DHPH’s wrongful actions in violation of Colorado public policy, in an amount to be proven at trial. EIGHTH CLAIM FOR RELIEF SLANDER PER SE (FEUERSTEIN STATEMENTS) 88. Plaintiffs incorporate by reference and reallege paragraphs 1 through 87 of this Complaint as though fully set forth herein. 89. Defendant Feuerstein published in public statements and at Board meetings salacious statements that reflect negatively against Plaintiffs Dr. and Annette Hernandez. 90. Specifically, Defendant Feuerstein stated that Dr. Hernandez accosted him with verbal cursing, threats, and shouting. Feuerstein also stated that Dr. Hernandez was a “traitor,” that Dr. Hernandez “would get me” and other similar statements. 91. Defendant Feuerstein also made statements that Plaintiffs had failed to perform conditions imposed by the Board upon their being placed on administrative leave. These statements are false in that no such conditions existed. Instead, Plaintiffs at all times performed according to their employment contracts. 92. At the time Defendant Feuerstein made these statements, Defendant Feuerstein knew them to be false and harmful to Dr. and Annette Hernandez’s reputation by lowering them in the estimation of at least a substantial and respectable minority of the community, mainly the staff and students at CCA, DHPH, and the Cesar Chavez School Network, and the Colorado and national education communities. 93. These statements concerned matters incompatible with the Plaintiffs’ successful business, trade, and profession. 94. Plaintiffs have been damaged by Defendant Feuerstein’s slander in an amount to be proven at trial. NINTH CLAIM FOR RELIEF SLANDER PER SE (MESTAS STATEMENTS) 95. Plaintiffs incorporate by reference and reallege paragraphs 1 through 94 of this Complaint as though fully set forth herein. 96. Defendant Mestas published in public statements and salacious statements that reflect negatively against Plaintiffs Dr. and Annette Hernandez. 97. Specifically, Defendant Mestas stated that Dr. Hernandez created a threatening, intimidating scene which took place at DHPH on September 24, 2009.

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98. Further, Defendant Mestas stated that Dr. Hernandez brought family members to DHPH. According to statements published by Defendant Mestas these family members in response to Defendant Mestas’ assertion that the faculty meeting was over told Mestas to “get the f*** out of here” and that Defendant Mestas was a traitor. 99. Defendant Mestas further stated that Dr. and Annette Hernandez were making the faculty “fearful, afraid,” and that Dr. Hernandez “takes the damn credit and he takes the money.” 100. At the time Defendant Mestas made these statements, Defendant Mestas knew them to be false and harmful to Dr. and Annette Hernandez’s reputation by lowering them in the estimation of at least a substantial and respectable minority of the community, mainly the staff and students at CCA, DHPH, and the Cesar Chavez School Network, and the Colorado and national education communities. 101. These statements concerned matters incompatible with the Plaintiffs’ successful business, trade, and profession. 102. Plaintiffs have been damaged by Defendant Mestas’ slander in an amount to be proven at trial. TENTH CLAIM FOR RELIEF ABUSE OF PROCESS 103. Plaintiffs incorporate by reference and reallege paragraphs 1 through 102 of this Complaint as though fully set forth herein. 104. Upon information and belief Defendants Feuerstein, Mestas, Atencio, Martinez and/or GCR caused temporary civil protection orders to be issued against Dr. and Ms. Hernandez, and members of their families. 105. Defendants never served these orders on Dr. and Ms. Hernandez, and allowed them to expire without action. 106. The principal reason for Defendants’ action was other than the stated reason of restraining Dr. and Ms. Hernandez from coming within one hundred yards of Defendants Feuerstein and Mestas. Instead, their intent was for the improper purposes of harassing Plaintiffs and their families, preventing Plaintiffs from speaking with staff and parents, and prejudicing Plaintiffs in the public and community, which was successful due to the extensive media coverage these orders received. 107. Plaintiffs have been damaged by Defendants’ abuse of process in an amount to be proven at trial.

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ELEVENTH CLAIM FOR RELIEF ASSAULT AND BATTERY (MESTAS) 108. Plaintiffs incorporate by reference and reallege paragraphs 1 through 107 of this Complaint as though fully set forth herein. 109. On or around September 24, 2009, Defendant Mestas placed Plaintiff Dr. Lawrence Hernandez in apprehension of immediate, offensive, and harmful physical contact by threatening to strike Dr. Hernandez and putting his hands on Dr. Hernandez in an unwanted and offensive way. 110. Defendant Mestas intended to cause in Dr. Hernandez an apprehension of immediate, offensive, and harmful physical contact. 111. Defendant Mestas did commit a battery by putting his hands on Dr. Hernandez in an unwanted and offensive way. 112. Defendant Mestas’s unwanted and offensive conduct harmed Dr. Hernandez in an amount to be proven at trial. TWELVTH CLAIM FOR RELIEF ASSAULT & BATTERY (FEUERSTEIN) 113. Plaintiffs incorporate by reference and reallege paragraphs 1 through 112 of this Complaint as though fully set forth herein. 114. On or around September 24, 2009, Defendant Feuerstein placed Plaintiff Dr. Lawrence Hernandez in apprehension of immediate, offensive, and harmful physical contact by threatening to strike Dr. Hernandez and putting his hands on Dr. Hernandez in an unwanted and offensive way. 115. Defendant Feuerstein intended to cause in Dr. Hernandez an apprehension of immediate, offensive, and harmful physical contact. 116. Defendant Feuerstein did commit a battery by putting his hands on Dr. Hernandez in an unwanted and offensive way. 117. Defendant Feuerstein’s unwanted and offensive conduct harmed Dr. Hernandez in an amount to be proven at trial. THIRTEENTH CLAIM FOR RELIEF INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS 118. Plaintiffs incorporate by reference and reallege paragraphs 1 through 117 of this Complaint as though fully set forth herein.

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119. Plaintiffs had existing, valid and enforceable employment contracts with both CCA and DHPH for the dates of July 1, 2009 thru June 30, 2010. 120. Defendants GCR, Atencio and Martinez had knowledge of Plaintiffs’ existing employment agreements and with this knowledge, upon information and belief, interfered with Plaintiffs’ employment by counseling Defendants CCA, DHPH, and their Boards to terminate Plaintiffs’ employment. Defendants gave such advice despite conflicts of interest, and despite the fact that the Boards had not satisfied the requirements for terminations provided in the contracts of Dr. and Ms. Hernandez. Further, Defendants engineered the dismissal of Plaintiffs in order to act in their own self interest, namely to deflect attention away from the pending effort to remove GCR and Atencio as counsel to the schools. 121. The Plaintiffs, have been and will be further damaged as a result of the Defendants’ interference with Plaintiffs’ employment agreements with CCA and DHPH. 122. As a result of Defendants’ interference, Plaintiffs have been damaged by an amount to be proven at trial. FOURTEENTH CLAIM FOR RELIEF NEGLIGENCE 123. Plaintiffs incorporate by reference and reallege paragraphs 1 through 122 of this Complaint as though fully set forth herein. 124. Defendants, GCR, Dolores S. Atencio, Esq., and Loretta P. Martinez, Esq., had previously represented the interest of Dr. Lawrence Hernandez both personally or as Director and Chief Executive Officer. 125. Prior to events that gave rise to this cause of action Defendants GCR, Dolores S. Atencio, Esq., and Loretta P. Martinez, Esq., represented the interests of Annette Hernandez either personally or as Chief Operations Officer of CCA and DHPH. 126. Prior to events that gave rise to this cause of action Defendants, GCR, Dolores S. Atencio, Esq., and Loretta P. Martinez, Esq., had represented the interests of Ms. Rincon personally. 127. As a result of the representation by GCR, Dolores S. Atencio, Esq., and Loretta P. Martinez, Esq., of Dr. and Ms. Hernandez as well as Ms. Rincon, GCR, Dolores S. Atencio, Esq., and Loretta P. Martinez, Esq., owed Dr. and Ms. Hernandez and Ms. Rincon a duty of care, codified in statutory and common law, as well as established in Colo. R. Prof. Conduct 1.9 & 1.10.

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128. Colo. R. Prof. Conduct 1.9 & 1.10 was in effect during the events that underlie the cause of this action, and provides an illustration, if not a basis for relief, of the unethical actions of Martinez, Atencio and their firm. 129.

Colo. R. Prof. Conduct 1.9 provides: (a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing. (b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client (1) whose interests are materially adverse to that person; and (2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing. (c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter: (1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or (2) reveal information relating to the representation except as these Rules would permit or require with respect to a client.

130.

Colo. R. Prof. Conduct 1.10 provides in pertinent part that (a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless the prohibition is based on a personal interest of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.

131. During, the events that gave rise to this action, Defendants GCR, Atencio, and Martinez, represented CCA, DHPH, and it’s Board of Directors in their actions against Dr. Lawrence Hernandez, Annette Hernandez, and Ms. Rincon. In connection

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with this representation, Defendants GCR, Atencio, and Martinez used confidential information acquired during their representation of Plaintiffs, and also acted directly against the interests of Plaintiffs. 132. On October 1, 2009, Defendant Atencio confirmed that, based on the request and conflict asserted by Plaintiffs, she would not be involved in further settlement-related discussions with regard to them and the CCA and DHPH Boards, and that she would inform the Boards of the asserted conflict. 133. On October 2, 2009, the CCA and DHPH Boards held a special meeting. The noticed agenda for the special meeting included the following items: “10. Employment Status of Annette Hernandez/New Position; Proposal by Annette Hernandez”; and “11. Salary Reduction of CCA-DHPH Chief Executive Officer”. During the meeting, the CCA and DHPH boards were represented and advised by Defendant Martinez, who is a member of Defendant Atencio’s firm, GCR. 134. During the October 2, 2009 meeting, upon information and belief, despite her commitment to cease representation of the CCA and DHPH Boards with regard to the Plaintiffs, Defendants GCR, Atencio, and Martinez advised Defendants on these issues and provided information to defendant Martinez and the CCA and DHPH boards that was materially adverse to her former clients, Dr. and Mrs. Hernandez and Ms. Rincon. 135. By continuing to represent CCA, DHPH, and its Board of Directors, Defendants GCR, Dolores S. Atencio, Esq., and Loretta P. Martinez, Esq., violated the duty of care owed to Dr. Lawrence Hernandez, Annette Hernandez, and Ms. Rincon as former clients, which duty is established by Colorado statutory and common law. 136. As a result of Defendants’ negligence, Plaintiffs have been damaged by an amount to be proven at trial. FIFTEENTH CLAIM FOR RELIEF CIVIL CONSPIRACY 137. Plaintiffs incorporate by reference and reallege paragraphs 1 through 136 of this Complaint as though fully set forth herein. 138. Upon information and belief, Defendants CCA, DHPH, and their Boards of Directors among themselves and with Defendants GCR, Dolores S. Atencio, Esq., and Loretta P. Martinez, Esq., agreed to cause Defendants GCR, Dolores S. Atencio, Esq., and Loretta P. Martinez, Esq., to violate the statutory and common laws governing an attorney’s duty to a former client, including the Rules of Professional Conduct, and to terminate Plaintiffs employment wrongfully, without cause or justification. 139. In furtherance of these goals, Defendants caused Defendants GCR, Dolores S. Atencio, Esq., and Loretta P. Martinez, Esq., to violate the Colorado Rules of

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Professional Conduct and other applicable laws governing duties to former clients, and wrongfully terminated Plaintiffs’ employment without cause or justification. 140. As a result of Defendants’ civil conspiracy, Plaintiffs have been harmed in an amount to be proven at trial. SIXTEENTH CLAIM FOR RELIEF EXTREME AND OUTRAGEOUS CONDUCT 141. Plaintiffs incorporate by reference and reallege paragraphs 1 through 140, as though fully set forth herein. 142. The Defendants have engaged in extreme and outrageous conduct directed at Plaintiffs, including the following: a. Placing Plaintiffs on leave from their employment without justification, cause, or approval from the applicable Boards. b. Obtaining temporary civil protection orders against Plaintiffs and their families under false pretenses. c. Violating attorneys’ duties to former clients. d. Engaging in slanderous conduct. e. Acting against Plaintiffs to further their own personal, employment and/or financial interests. f. Wrongfully terminating Plaintiffs without proper cause, justification, or process, and in disregard of their contractual rights. 143. Defendants engaged in this conduct recklessly or with the intent of causing Plaintiffs severe emotional distress and other harm. 144. As a result of Defendants’ extreme and outrageous conduct, Plaintiffs have suffered and will continue to suffer severe emotional distress and other damages as set forth herein. JURY DEMAND Plaintiffs hereby request a trial by jury on all issues so triable.

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PRAYER FOR RELIEF WHEREFORE, Plaintiffs request that this court enter judgment in Plaintiffs’ favor and against Defendants, and award to Plaintiffs all available and appropriate damages, including but not limited to the following: 1. Economic loss (including lost future wages and earning potential); 2. Contract damages; 3. Attorney fees; 4. Court costs and witness fees; 5. Pre-judgment and post-judgment interest; 6. Emotional distress; 7. Such other and further relief as this court may deem appropriate. Respectfully submitted this 8th day of October, 2009 MESSNER & REEVES, LLC /s/ Matt Groves Bruce A. Montoya, Esq. # 14233 Matt Groves, Esq. #27315 David W. Feeder II, Esq. # 31237 Counsel for Plaintiffs This document was filed electronically pursuant to C.R.C.P. 121 § 1-26. Duly signed original on file at the offices of Messner & Reeves, LLC

Plaintiffs’ Addresses: 1. Dr. Lawrence Hernandez 5606 Bellagio Way Pueblo, CO 81005 2. Annette Hernandez 5606 Bellagio Way Pueblo, CO 81005 3. Velia Rincon 616 Boyero Ave. Pueblo, CO 81007 {00435210 / 1}

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