Nicolas Cage Money Manager Suit

couFg-Sw*?"E9P l_ ,

Court SuPerior Loi Angeles

PIAI{TIN D. SINGER (Bar IYo. itLE6) BRIAN c. WOLF [Bar No. LSSZSTI pp_q rrJuD u' (Bar No. 207426') S. "riAtiA"F{ EAGAN (Ea{l{9'*a0flry'l

CIclI 62009

LAIMLY & SINGER rRorEssIol$AL- , coRPoRATIoN ^Atrftnn ^ mrArr JohnA.ctarke,Execonve0ffieer/clerk I rrr/??T T^ndq 3 2049 Cenatry Park Easr, Suire2400 Los Angeles,California 90A67-2gA6 4 Telephone:(310)55G3501 Facsimile: (310) 556-3615 CONFERENCE CASEMANAGEMENT t Email: rndsinoer@IaveIy sinper. com bwqlftdlav elysinger. com FEBOT Z[]IO 6 tea g4n(&lavelysi n ser.c0nr 7

Attnrneys for Plainriff NICOLAS CAGE

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SUPERIOR COURTOF THE STATEOF CALIFORNIA

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FORTI{E COUNTYOF LOSANGELES- WESTDISTRTCT

11

t2 13

NICOLAS CAGE, an iudividuat,

CASENO.

Plainiff,

COMPLAINT F'OR:

l4 v.

(1)

15 L6 SAMTIEL J. LEVIN, an individual; SAMIJELJ. LEVIN, C.P.A.,INC., A ) L7 Califoroia corporariorr; LEVIN & ) COMPANY MANT.CEMENT, INC., A i t8 busiaessentity, fiorm unknown; and DOES i I through50, iaclusive, ) \ L' Defendanrs. ) 20 i 2t o,

a, (3) (4'

(s)

(o (T

PROFESSIONALNEGLIGENCEI BR"EACIIOtr' F'IDUCIARYDLIIIYT CONSTRUCTIW FRATJD; CONCS,AI"KIENT; NEGLIGENT S{ISREPRESENTATION; BRHACH Of' COIffRACT; arrd ACCOT]NTING DEMANU FOR.TARYTEIaL

PlaiutiffNICOLAS CAGE ("Plaintiff' or nCage")allegesas follows:

23

sul{MA.RYOF CLAIM

24 25

sc105285

1.

Nicolas Cagais one of the most soughtafter afid lrighly paid actorsin the worgl.

26 I'Ie is alsothe victin of an incomperentbusinessmaoager,SamuelJ. Levin ("Levin"), who lined 27 his pockas with several million dollars in businessmanagementfees while sendingCagedown 28 a path toward financial ruil. Kr\151l-7d\PLE\COMPLAIN? l0l309,wFd

Like many successfulartists who trusr financial professionalsro

L advisethem,Cagerelied on Levin to handlehis financialaffairsto ensurethat he andhis family ). would have a financially securefuture built on the foundationof the substantialmoniesCage 3

earnedthroughyearsof hardwork. However,Cagediscoveredthathe is now forcedto sellmajor

4

assetsandinvestments at a significantlossandis facedwith hugetax liabilitiesbecause of Levin's

5

incompetence, misrepresentations Ratherthanattainingfinancialsecurity,Cage andrecklessness.

6 hasbeenforcedto disposeof significantassetsin order to pay for Levin's grossmisconduct. 7

2.

NicolasCageis a worlclrenownedAcademyAward winningactor,andis oneof

I

the mosthighly respectedandsoughtafteractorsin Hollywood,havingappearedin excessof fifty

9

(50) motionpicturesduring the pasttwo decades.In 2001, CageretainedLevin, a business

10 managerandcertifiedpublic accountant, to overseeandmanagehis businessinterests,investments 1 1 and finances. For the nextsevenyears,Levin profited off of the hard work and creativeability

t2 of Cage,payinghimselfmillionsof dollars. Insteadof protectingandpreservingCage'swealth 13 during one of the greatesteconomicperiods in the country's history, Levin placed Cage in t4 numeroushighly speculativeand risky real estateinvestments,resulting in Cage suffering 15 catastrophiclosses. In addition,Levin failedto timely pay taxeson behalfof Cagewhendue, t 6 resultingin millionsof dollarsin backtaxes,interestandpenaltiesowedby Cage. t7

3.

It was only recently, when Cage terminatedLevin and retainednew business

18 managementand accountantservices,that Cagelearnedthe gravity of his financialcondition. 19 Among other things, Levin recommendedand facilitatednumeroushighly risky and speculative portfolio;failedto obtain failedto properlydiversifyCage'sinvestment 20 real estateinvestments;

2l properandadequateinsuranceon behalfof Cageandhis variousinvestmentsleavingCagesubject .,, to uninsuredclaims;andmisrepresented andconcealedCage'strue financial the statusat

time that

23 plaintiff acquiredassetsand investments.As a result of Levin's grossmismanagement of the 24 financialaftairs of Cage,Cagehas sufferedsignificantmonetarylosses,and his reputationhas 25 beenirreparablytarnished. 26 tl I 27 28 K :\1531- ?6\PLE\COMPLAINT101309.wpd

COMPLAINT

1

ALLEGATIONS COMMON TO ALL CAUSESOF ACTION

,, 3

The Parties 4.

Cageis, andat all timesrelevantheretowas,a part-timeresidentof the Countyof

4 Los Angeles,Stateof California. 3

5.

Levin is, andat all timesrelevantheretowas,an individualresidingin theCounty

6 of Los Angeles,Stateof California. 7 8

6.

Plaintiff is informedandbelieves,andbasedthereonalleges,thatDefendantlJvin

is a businessentity, form unknown,with its & Co. Management, Inc. ("kvin Management")

9 principalplaceof businesslocatedin the Countyof Los Angeles,Stateof California. 10

7.

Plaintiff is informedandbelieves,andbasedthereonalleges,thatDefendantSamuel

1 1 J. Levin, CPA, Inc. ("Levin, Inc.") is a Californiacorporation, with itsprincipalplaceof business 1 2 locatedin theCountyof Los Angeles,Stateof California. (Defendants Levin, Levin Management referredto collectivelyas "Defendants.") 13 andLevin, Inc. are sometimes t4

8.

Plaintiffis informedandbelievesandbasedthereonallegesthatLevinManagement

15 and Levin, Inc. are mere shellsonly andhaveno existenceseparateand apartfrom their owner, 16 Levin. At all times mentionedhereinthere existeda unity of interestand ownershipbetween T7 Levin and his companiesLevin Managementand Levin, Inc., such that any individuality and 18 separateness betweenLevin, on the one hand, and Levin Managementand Levin, Inc., on the 19 otherhand,hasceased,and both Levin Management and Levin, Inc. arethe alter egosof Levin. 20

9.

Plaintiff is informed and believesand basedthereonallegesthat the assetsand

2l

propertiesof Levin Management,[nc. and Levin, Inc. are commingledwith the separateassets

J'

of Levin, suchthat there is no distinctionbetweenthe individualand the entity assets.Plaintiff

23 is further informed and believesand basedthereonallegesthat adherenceto the fiction of the

z4

separateexistenceof Levin Managementand Levin, Inc. as entitiesdistinct from Levin would

25 succeedin avoidinglegally incurredliabilities while maintainingthe benefitsof the entities,an 26 unfairandunjustresult. 27

10.

The true namesand capacitiesof the defendantsDOES I through50, inclusive,

28 whetherindividual plural" corporate,partnership,associateor otherwiseare not known to K:\l 53 l-76\PLE\COMPLAINT l0l309,wpd

COMPLAINT

I

Plaintiff, who thereforesuethesedefendants by suchfictitious names. Plaintiff will seekleave

)

of court to amendthis complaintto showthe true namesand capacitiesof DOES 1 through50,

3

inclusive, when the samehas beenascertained.Plaintiff is further informedand believesand

4

basedthereonallegesthat eachof the defendantsdesignatedherein as a DOE is negligently, wantonly,recklessly,tortiously and unlawfully responsiblein somemannerfor the eventsand

6 happeningsherein referred to and diligently, wantonly, recklessly,tortiously and unlawfully 7 proximatelyand legally causedinjuriesanddamagesto Plaintiff as hereinalleged. 8

11.

Plaintiff is informedand believes,and basedthereonalleges,that eachof the

9 defendantsdesignatedherein as a DOE is indebtedto Plaintiff as hereinafterallegedand that 10 Plaintiff's rights againstsuchfictitiously nameddefendantsarisefrom suchindebtedness. 11

12.

Plaintiff is informed and believe, and basedthereonalleges,that at all times

t2 mentioned,eachof the defendantswasthejoint venturer,agentand/oremployeeof eachof their 13 co-defendants andin doingthethingshereinmentioned,actedwithin their authorityassuchagents l4

and employeesand with the permissionand consentof their co-defendants.

15 16 L7

RETENTION OF LEVIN 13.

Levin representedhimself to Plaintiff as an expert in businessmanagement,

18 accountingand investmentadvisory services. Based on this representation,in or around T9 September2001 Plaintiff retainedDefendantsto renderbusinessmanagement, accountingand 20 investmentadvisoryservicespursuantto an oral agreement(the "Agreement'o).Pursuantto the 2l

Agreement,Defendantsagreedto take all necessaryand appropriatemeasuresto properly and

'rt

professionallymanagePlaintiff's businessand financial affairs, and represented,amongother

23 things, that Defendantscould and would competentlyand properly: 24

(a)

25 26

andgeneralledgersandjournals; (b)

an

28

Maintain accuratebooksof account,includingcashreceipts,cashdisbursements

Compile statements of assetsand liabilities and relatedstatements of receiptsand quarterlyon a cashbasis; disbursements

(c)

Timely and accuratelyprepareand file incometax returns;

K:\153l'76\PLE\COMPLAINT 101309.wpd

COMPLAINT

1

(d)

Prepareand file payroll tax, salesand other local tax returns;

,

(e)

Reviewinsurancecoverageandconsultwith insuranceadvisorsno lessthansemi-

3 4

annuallyto ensureadequatecovefage; (0

involved;

S

6

(g)

7 8

Provideinvestmentadviceand analyzepotentialinvestments,includingthe risks

Provide financial planningadviceand servicesand recommendand overseeall investments:

(h)

9

Provideoveralltax planningservicesin connection with all personalandbusiness activities;

10

(i)

Provideestateplanningconsultation;and

11

O

Provideconsultation regardingpensionandretirementplans.

T2

L4.

In exchangefor renderingbusinessmanagement,accountingand investment

t 3 advisoryservices,thepartiesagreedthatDefendantswould receivefive percent(5%) of all gross

r4

incomereceivedby Plaintiff, with an agreedupon annualcap.

15 t6 17

THE WRONGFUL CONDUCT 15.

In or aroundSeptember2008, Plaintiff retaineda new businessmanagement and

18 accountancy firm. Shortlythereafterit wasdiscoveredthatDefendants'hadengagedin numerous t9

grosslynegligentactsandomissionsandotherwisefailedto competentlyandprofessionallyrender

20 serviceson behalfof Plaintiff. Amongotherthings,Defendantsengagedin the following grossly 2l t,

negligentconduct: (a)

Failedto timely pay taxeson behalfof Plaintiff for severalyears,and concealed

23

thesefacts from Plaintiff, resulting in Plaintiff owing back taxes, interestand

24

penaltiesof million of dollars;

25

(b)

26 27 ?.8

ConcealingPlaintiff's truefinancialconditionprior to investments andassetsbeing acquiredby Plaintiff;

(c)

Recommendingand facilitating Plaintiff's investmentin exceedinglyrisky and speculativereal estatetransactionswithout disclosingthe risks;

K:\I 531-76\PLE\COMPLAINT 10t309.wod

COMPLAINT

I

(d)

,

Recommending that Plaintiff executepersonalguarantees on bank loanswithout risk; advisingPlaintiff of the associated

J

(e)

holdings; Failingto diversifyPlaintiff'sinvestment

4

(0

Failing to obtainadequateinsurancecoveragefor real estateand otherholdings;

5

(g)

Over-extendingPlaintiff's linesof creditwith banksandfinancialinstitutionsasa resultof failing to discloseto Plaintiffhis true financialcondition;

6 7

(h)

affairs; regardingPlaintiff'sfinancesandbusiness

I I

(i)

Continuingto misrepresentand concealCage'sfinancialconditionso that Levin couldmakemillionsof dollarsin fees;

10 11

informedof materialinformation Failing to keepPlaintiff andhis representatives

O

materialfactsregarding Actively concealingfrom Plaintiff andhis representatives Plaintiff s financesand businessaffairs;

t2 13

(k)

GrosslyoverchargingPlaintiff feesfor servicesrenderedby Defendants;

t4

0)

Failing to manage,controland administerPlaintiff's accounting,tax and other

15

financial affairs with requisiteprofessionalcompetenceand skill, all of which

t6

resultedin substantialfinanciallossesto Plaintiff; and

L7

(m)

18 t9

Failing to placePlaintiff's interestsbeforeDefendants'own economicinterests,in managing,directingand/orcontrollingtransactionsmadeon behalfof Plaintiff.

16.

Defendants'actionsdemonstrate that they lackedcompetence andexpertisein the

20 area of businessmanagement,accountingand investmentadvisory services,and that their 2l

represeffationof Plaintiff was grossly negligent. Defendants'actions also evidencetheir

,)

purposefuldisregardfor Plaintiff's businessand financialwell being.

23 24

FIRST CAUSE OF ACTION

,<

PROFESSIONAL NEGLIGENCE

26

(AgainstAll Defendantsand DOES 1 through50)

27

l7.

Plaintiffrepeats,reallegesandincorporates by referenceParagraphs I through16,

28 inclusive,as thoughfully set forth herein. K:\l 53 1-7(r\PLE\COMPLAINT l0l309.wpd

COMPLAINT

1 ,.

18.

managers, Defendants agreedto, anddid, actasPlaintiff'sbusiness accountants and

2001to September investmentadvisorsduringtheperiodSeptember 2008,andcontinuedto render

3 servicesthroughJuly, 2009. 4

19.

advisors,Defendants accountants andinvestment As Plaintiff'sbusiness managers,

owedPlaintiffdutiesof professionalcareto usesuchskill, careanddiligenceas otherbusiness andexerciseon behalfof high net investmentadvisorscommonlypossess 6 managers,accountants in similar communities. 7 worth individualsundersimilar circumstances

8

20.

Despitethe dutiesof professionalcareowedto Plaintiff, Plaintiff is informedand

9 believesand basedthereonallegesthat Defendants,andeachof them, failed to usesuchdegree 1,0 of professionalcare, competenceand skill commonlypossessedand exercisedby business 1 1 managers, accountantsand investment advisors under similar circumstancesin similar t2 communities.Defendantsnegligently,carelesslyandrecklesslyrenderedthe servicesfor which andfacilitatingPlaintiff's investment 13 they wereretainedby, amongotherthings: recommending

L4 in risky and highly speculativereal estateinvestments;concealingPlaintiff's true financial 15 condition; failing to advisePlaintiff of the risks of investingin real estate;failing to diversify L6 Plaintiff's investmentportfolio; failing to timely pay all taxeson behalf of Plaintiff; failing to L 7 obtainproperand adequateinsuranceon behalfof Plaintiff andin connectionwith the real estate 18 investmentsmadeby Defendants;failing to advisePlaintiff of theexistenceof personalguarantees t9 which Defendantsrecommendedand facilitated Plaintiff entering into; misrepresentingand 20 concealingthe financialstatusof Plaintiff; andfailing to professionallyandcompetentlyevaluate 2l t,

and managePlaintiff's investments. 21.

[n thatDefendantsweresolelyandexclusivelyin possession of Plaintiff's financial

23 booksandrecords,Plaintiffdid not discover,andcouldnot havereasonablydiscoveredthe facts andgrossnegligenceuntil 2009, afterPlaintiff retained 24 underlyingDefendants'mismanagement firm. 25 a new businessmanagement

26

22.

grossnegligence, As a directandproximateresultof theaforesaid mismanagement,

27 andprofessionalnegligence,Plaintiff hasbeendamagedin an amountthat hasnot yet beenfully 28 ascertainedbutwhichisbelievedtobeinexcessofTwentyMillionDollars($20,000,000). When l0l309.wpd K:\153l -76\PLE\CoMPLAINT

COMPLAINT

I

Plaintiff hasascertained the full amountof the damasessuffered.he will seekleaveof the Court

t

to amendthis Complaintaccordingly.

3 4

SECOND CAUSE OF ACTION BREACH OF FIDUCIARY DUTY (AgainstAll Defendantsand DOES 1 through50)

6 7

23.

Plaintiffrepeats, andincorporates by reference Paragraphs realleges lthrough16,

8 and 18 through21, inclusive,asthoughfully setforth herein. 9

24.

At all relevanttimesherein,by virtue of theprofessionalrelationshipsthat existed

10 betweenPlaintiff and Defendants,wherein Defendantsactedas Plaintiff's businessmanagers, 1 1 accountantsand investmentadvisorsfrom 2001 until 2008, where Plaintiff placed trust and L2 confidencein the fidelity and integrity of Defendantsand entrustedDefendantswith Plaintiff's 13 financialwell being,andwhereDefendants assumed controloverPlaintiff'sbusinessandfinancial 14 affairs andproperty, a fiduciaryduty existedat all timeshereinmentionedbetweenPlaintiff and 1 5 Defendants. 16

r7

25.

This fiduciary duty required Defendantsto treat Plaintiff with completefairness

andthe highestduty of loyalty, andto discloseto Plaintiff all materialfactsconcerningPlaintiff's

I.8 businessand financialaffairs, the servicesrenderedby Defendantsin connectiontherewith,and L9 the feeschargedby Defendantsfor suchservices.This fiduciaryduty furtherrequiredDefendants 20 to truthfuUyandcompletelydiscloseall relevantinformationto Plaintiff andnot misrepresentor 21. concealanyfactsin connectionwith anyof the aforementioned servicesthatDefendantsprovided ,,

to Plaintiff. Furthermore,Defendantseachowed Plaintiffs a duty to refrain from conducting

23 themselyesin anymannerthatwas in conflict with thebestinterestsof the Plaintiff. Defendants,

u

andeachof them,furtherowedPlaintiff a fiduciaryduty of duediligencethatrequiredDefendants

t<

to veriff the legitimacy and soundnessof the business,accounting,tax and/or financial and

26 investmentadvicewhich they offeredto Plaintiff. )n

26.

In violationof therelationshipof trust, confidenceandloyaltybetweenPlaintiff and

28 Defendants,Defendantsbreachedtheir fiduciary duties to Plaintiff by, among other things, K :\153l -76\PLE\COMPLAINT l0l 309.wpd

COMPLAINT

I

misrepresentingfacts in connectionwith Plaintiff's financesand businessaffairs, concealing

)

materialfactsconcerningthe true financialconditionof Plaintiff, and failing to disclosethe tax

3

liabilitiesandtrue financialconclition to Plaintiffwhenhe acquiredassetsand investments, and

4

continuingto misrepresentand concealCage's financial conditionso that Levin could make millionsof dollarsin fees.

6

27.

As a directandproximateresultof theaforesaidgrossnegligence,mismanagemenr,

7 andbreachof fiduciaryduty, Plaintiff hasbeendamagedin an amountthat hasnot yet beenfully 8

ascertained but whichis believedto bein excessof TwentyMillion Dollars($20,000,000).when

9

Plaintiff hasascertained the full amountof the damagessuffered,he will seekleaveof the Court

10 to amendthis Complaintaccordingly. 11 t2

28'

In doingthethingshereinalleged,Defendantsactedwith malice,oppressionand/or

fraudpursuantto california code of civil Proceduresection3294(c),andactedwillfully andwith

13 theintentto causeinjury to Plaintiff. As such,Defendants,andeachof them,arethereforeguilty t4

of malice, oppressionand/or fraud and Plaintiff is entitled to recoveran award of exemplarv

L5 and/orpunitive damages. t6 t7

THIRD CAUSE OF ACTION

18

CONSTRUCTIVE FRAUD

t9

(AgainstAll Defendantsand DOES 1 through50)

20

29.

Plaintiffrepeats,reallegesandincorporatesby referenceParagraphs1 through16,

2L 18 through21, and24 through26, inclusive,as thoughfully set forth herein. ,t

30'

By virtue of the breachesof the fiduciary duries and obligations owed by

23 Defendantsto Plaintiffs as allegedhereinabove,Defendantshaveengagedin constructivefraud 24 pursuantto California Civil CodeSectionL573and other applicableCalifornialaw. 25

31.

Plaintiff is informed and believes and on that basis alleges that Defendants

26 concealed'amongother acts and information, the following wrongful acts and information: 27 misrepresentingfacts in connectionwith Plaintiff's financesand businessaffairs, concealing 28 materialfactsconcerningthe true financialconditionof Plaintiff, and failing to discloserhetax K:\ I 53 l-76\PLE\COMPLAINT l0l309.wod

COMPLAINT

I

liabilities and true financial conditionto Plaintiff when he acquiredassetsand investmentsand

1

continuingto misrepresentand concealCage's financial condition so that Levin could make

3 millions of dollarsin fees;their lack of expertisein the areaof businessmanagement, accounting 4

andinvestmentadvisoryservices;mismanagement of Plaintiff'sfinancesandinvestments; therisks

5

involved in the investmentsrecommendedand facilitatedby Defendants,incluclingthe risks

6

associated with Cage'spersonalguarantyof loans;over-extension of Plaintiff'slinesof credit;

7

failure to obtainadequateinsurancecoverage;andthe failureto timely pay all taxeswhendue,as

8

set forth in detail above.

I

32.

Defendantsconcealedthe truth behindthesematterswith the intentto deceiveand

10 defraudPlaintiff, and to preventPlaintiff from learningthe true facts. t1 t2

33'

Plaintiff is further informed and believesand thereonallegesthat Defendants

concealedthe truth abouttheir lack of cornpetence, skill and oversightof Plaintiff's investments

13 and assets,in order to concealyears of mismanagement, fraud, negligence,waste and

t4 malfeasance,and to preventPlaintiff from learningthe true facts. On informationand belief, 15 Defendantsconspiredto concealthetruth aboutPlaintiff's financesin an effort to continueto sain t 6 financialbenefitsby way of their ongoingwork. t7

34.

As a directandproximateresultof theaforesaid grossnegligence, mismanagement,

1 8 and constructivefraud, Plaintiff has beendamagedin an amountthat has not yet been fully 1 9 ascertainedbutwhichisbelievedtobeinexcessofrwentyMillionDollars($20,000,000). when 20 Plaintiff hasascertainedthe full amountof the damagessuffered,he will seekleaveof the Court 2l 1t

to amendthis Complaintaccordingly. 35.

In doingthethingshereinalleged,Defendantsactedwith malice,oppressionand/or

23 fraudpursuantto CaliforniaCodeof Civil ProcedureSection3294(c),andactedwillfully andwith 24 the intentto causeinjury to Plaintiff. As such,Defendants,andeachof them,arethereforeguilty 25 of malice, oppressionand/or fraud and Plaintiff is entitledro recoveran award of exemplary 26 and/or punitivedamages. 27 28 K:\ I 53 l'76\PLE\COMPLAINT l0 I 309.wod

10

COMPLAINT

1

FOURTH CAUSE OF ACTION

,

CONCEALMENT

3

(AgainstAll Defendantsand DOES 1 through50)

4 5

6

36.

Plaintiffrepeats, realleges andincorporates by reference Paragraphs 1 through16,

18 through2t , 24 through 26, and30 through33, inclusive,as thoughfully set forth herein. 37,

Plaintiff is informedandbelievesandthereon allegesthatDefendantsintentionally

7 concealedfrom Plaintiff the highly risky and speculativenatureof the real estateinvestments 8

which Defendantsmadeon behalfof Plaintiff, andfurther concealedthat, with respectto several

9

of the real estateinvestments,Plaintiff had personally guaranteedthe loans supportingthe

10 investments. In addition, as statedabove, Defendantsconcealedmaterial facts concerning 1l

Plaintiff's true financialconditionincludingPlaintiff's tax liabilitieswhenhe acquiredassetsand

t2 investmentsso that Levin couldmakemillions of dollarsin fees. Had Plaintiff beeninformedof 13 the risk inherentin severalof the real.estateinvestmentsmade by Defendantson behalf of L4 Plaintiff, or thatPlaintiff waspersonallyguaranteeing thepaymentof theloansin connectionwith 15 thosereal estateinvestments,or of Plaintiffstrue financialconditionwhenthe investmentswere t 6 made, Plaintiff would not have agreedto or approvedthe investmentsmade by Defendants. l7

Defendantsfurther intentionallyconcealedfrom Plaintiff the true financialconclitionto Plaintiff

18 prior to Plaintiff acquiring investmentsand assets. Had Plaintiff been informed of his true t 9 financial condition, he would have not have acquired significant assetsand investments. 20

38.

Throughouttheir many yearsof representingPlaintiff, Defendantsintentionally

2L failedto keepPlaintiff andhis representatives informedof Plaintiff's financialandbusinessmatters tt

and intentionallyconcealedsuchinformationin order to preventPlaintiff from discoveringtheir

23 grossnegligenceand mismanagement of Plaintiff's financialaffairs. 24

39.

Becauseof Defendants'intentionalconcealmentof suchmatters,Plaintiff did not

25 know of Defendants'actsof intentionalconcealment until in or after September2008, or havea 26 reasonable opportunityto discoversuchactsof concealment by natureof Defendants' controlover 27 Plaintiff's financialrecordsand information,and concealmentof samefrom Plaintiff. 28 K:\1531-76\PLE\COMPLAINT l0l309.wod

ll COMPLAINT

I )

44.

Plaintiff trustedDefendantsthroughthemanyyearsof Defendants'representation

asPlaintiff's businessmanagers,accountants andinvestmentadvisors.Basedon thatrelationship

3 of trust and confidence,Plaintiff reasonablyrelied on Defendants'deception.Namely, Plaintiff 4 permittedDefendantsto continueto serve as Plaintiff's businessmanagers,accountantsand 5

2008. HadPlaintiff known 2001to September investmentadvisorsfrom approximatelySeptember

concealedfrom him, andwrongfulconduct,which Defendants 6 of Defendants'actsof concealment 7 Plaintiff would not have continuedto retain Defendantsas Plaintiff's businessmanagers, and investmentadvisors,but would haveterminatedDefendantsimmediately. 8 accountants I

41.

grossnegligence, mismanagement, As a directandproximateresultof theaforesaid

10 andconcealment,Plaintiff hasbeendamagedin an amountthat hasnot yet beenfully ascertained l1

but which is believedto be in excessof TwentyMillion Dollars($20,000,000).WhenPlaintiff

t2

hasascertained the full amountof thedamagessuffered,he will seekleaveof the Court to amend

L3 this Complaintaccordingly. L4

42.

actedwith malice,oppressionand/or In doingthethingshereinalleged,Defendants

15 fraudpursuantto CaliforniaCodeof Civil ProcedureSection3294(c';,andactedwillfully andwith 1.6 the intentto causeinjury to Plaintiff. As such,Defendants,andeachof them,arethereforeguilty 17 of malice, oppressionandior fraud and Plaintiff is entitledto recoveran award of exemplary 18 and/or punitive damages.

r9 20

FIFTH CAUSE OF ACTION

2l

NEGLIGENT MISREPRESENTATION

22

(AgainstAil Defendantsand DOES 1 through50)

23

43.

1 through16, Paragraphs andincorporates by reference Plaintiffrepeats, realleges

24 18 through 21, 24 through 26, 3A through33, and 37 through40, inclusive,as thoughfully set 25 forth herein. 26

44.

describedabove(including At the time Defendantsmadethe falserepresentations

andskill, Defendants'agreementto professionally 27 thosewith respectto Defendants'competence andtimelypay taxeson behalfof Cagewhendue), 28 managePlaintiff'sfinancesandinvestments K:\153l-76\PI.E\COMPLAINT 101309.wpd

L2

COMPI.{iNT

I

Defendantshadno reasonable basisfor believingthemto be true, and intendedthat Plaintiff rely

7

on their misrepresentations.

3

45.

Plaintiff trustedDefendantsthroughthe manyyearsof Defendants'representation

4 asPlaintiff's businessmanagers,accountants andinvestmentadvisors.Basedon that relationship 5

of trust and confidence,Plaintiffjustifiablyrelied on Defendants'misrepresentations, and as a

6 result, among other things, Plaintiff entrustedDefendantsto control, manage,monitor and 7 safeguardPlaintiff's financesand assets,and financially compensatedDefendantsfor their 8

services,all to the financialdetrimentof Plaintiff.

9

46.

Had Plaintiff known the truth, Plaintiff would not haveso acted.

10

47.

As a directandproximateresultof theaforesaidgrossnegligence, mismanagement,

1 1 and negligentmisrepresentation, Plaintiff hasbeendamagedin an amountthat hasnot yet been

t2 fully ascertained but which is believedto be in excessof TwentyMillion Dollars($20,000,000). 13 WhenPlaintiff hasascertainedthe full amountof the damagessuffered,he will seekleaveof the l4

Court to amendthis Complaintaccordingly.

15 16

SIXTH CAUSE OF ACTION

L7

BREACH OF CONTRACT

18

(AgainstAll Defendantsand DOES 1 through50)

t9

48.

Plaintiffrepeats, Paragraphs realleges andincorporates by reference I through16,

2A 18 through21,24 through26,30 through33, and37 through40, inclusive,as thoughfully set 2L forth herein. ).r.

49.

Defendantsmateriallybreachedtheir dutiesandobligationsto Plaintiff pursuantto

factsin 23 the Agreement,in one or moreof the following respectsallegedabove: misrepresenting

24 connectionwith Plaintiff's financesandbusinessaffairs;concealingmaterialfactsconcerningthe 25 true financial condition of Plaintiff and failing to disclosethe tax liabilities and true financial 26 conditionto Plaintiff whenhe acquiredassetsandinvestmentsandcontinuingto misrepresentand 27 concealCage'sfinancialconditionso that Levin couldmakemillions of dollarsin fees;failing to and facilitatingPlaintiff's 28 advisePlaintiff of the risk of investingin real estate;recommending K:\l 53 1-76\PLE\COMPLAINT I 0l 309.wpd

t3

COMPLAINT

I

investmentin risky andhighly speculativereal estateinvestments;failing to diversify Plaintiff's

t

investmentportfolio; failing to timely paytaxeson behalfof Plaintiff; failing to obtainproperand

3 adequateinsuranceon behalfof Plaintiff andin connectionwith the real estateinvestmentsmade 4 by Defendants;failing to advisePlaintiff of theexistenceandthefactof personalguarantees which 5

Defendants recommended thefinancialstatus andfacilitatedPlaintiff enteringinto; misrepresenting

6 of Plaintiff; and failing to professionallyand competentlyvaluate and managePlaintiff's 7 investments. 8

50.

of reasonable diligencehave Plaintiffdid notdiscover,andcouldnotin theexercise

9 discovered,the factsunderlyingDefendants' of contractuntil in andduringSeptember breaches 10 2008,andthereafter. 11

51.

Plaintiff has performedall duties and obligationson his part requiredto be

12 performedunderthe Agreementwith Defendants,exceptto the extentthat suchperformancewas 13 waived, excusedor preventedby reasonof the actsand omissionsof Defendants. 14

52.

As a direct and proximateresult of the aforesaidmaterial breachof contract,

15 Plaintiff has beendamagedin an amountthat has not yet been fully ascertainedbut which is t6 believedto be in excessof TwentyMillion Dollars($20,000,000).WhenPlaintiff hasascertained t7 the full amountof the damagessuffered,he will seekleaveof the Court to amendthis Complaint 18 accordingly. t9 20

SEVENTH CAUSE OF ACTION

2l

ACCOI.INTING

22

(AgainstAll Defendantsand DOES 1 through50)

23

53.

Plaintiffrepeats,reallegesandincorporatesby referenceParagraphs1 through16,

24 18 through21,24 through26,30 through33,37 through40, 44 through46, and49 through51, 25 inclusive,as thoughfully set forth herein. 26

54.

As allegedhereinabove,Defendants,andeachof them,as Plaintiff's accountants,

27 businessmanagersand investmentadvisors,had and continueto have a fiduciary duty to and 28 relationshipwith Plaintiff, requiringDefendantsto act only in the bestinterestof Plaintiff, and K:\1531-76\PLE\COMPLAINT l0l 309.wnd

L4

COMPLAINT

L to not engagein anyactsor omissionswhich wouldcausePlaintiff to sufferanyharmor damages. J

55.

As further allegedabove, during the period of time that Defendantsrendered

3 accountingand businessmanagementservicesto Plaintiffs, Defendantssolely controlledand 4 maintainedPlaintiff's financialbooksand records. Plaintiffs are unawareof the full amounts 5

6

Defendantspaid themselvesor otherwisemisappropriatedfrom Plaintiffs' accounts. 56.

Accordingly, Plaintiff is entitledto a full andcompleteaccountingto all amounts

7 Defendantspaid to themselves,misappropriated from Plaintiffs' accounts,secreted,misplaced, I

or otherwiseusedor paid withoutPlaintiff's informedconsent.Wherefore,the fulI amountowed

9 andbecomingdue to Plaintiff canonly be determinedpursuantto a full andaccurateaccounting 10 of all booksand recordsof Defendants. 11

t2 l3 t4

PRAYER WHEREFORE,Plaintiffpraysfor judgmentagainstDefendants, and eachof them,as follows:

15 A$ TO THE TIRST CAUSE OF ACTIOI\T 16

t.

For generalandspecialdamagesin anamountnot lessthanTwentyMillion Dollars

17 ($20,000,000), in accordance with proof at trial, togetherwith interestthereonat the legalrate; 18 AS TO THE SECOND CAUSE OF ACTION: t9

2.

For generalandspecialdamagesin anamountnot lessthanTwentyMillion Dollars

20 ($20,000,000),in accordancewith proof at trial, togetherwith interestthereonat the legalrate; pursuantto CaliforniaCodeof Civil Procedure For punitiveor exemplary damages

2L

3.

))

Section3294(c);

23 AS TO THE THIRD CAUSE OF ACTIOII 24 ,.4

26

4.

For generalandspecialdarnages in an amountnot lessthanTwentyMillion Dollars

($20,000,000), in accordance with proof at trial, togetherwith interestthereonat the legalrate; 5.

pursuantto CaliforniaCodeof Civil Procedure For punitiveor exemplary damages

27 Section3294(c); 28 Kr\1531-76\PLE\COMPLAINT l0l 309.wod

15

COMPLAINT

1 AS TO THE FOII-RTH CAUSE Qr ACTIOI\I n

6.

in anamountnot lessthanTwentyMillion Dollars For generalandspecialdamages

3 ($20,000,000),in accordancewith proof at trial, togetherwith interestthereonat the legal rate; pursuantto CaliforniaCodeof Civil Procedure For punitiveor exemplarydamages

4

7.

3

Section3294(c);

6 AS TO THE FIFTH CAUSE OF ACTION 7

8.

in anamountnot lessthanTwentyMillion Dollars For generalandspecialdamages

I

($20,000,000),in accordancewith proof at trial, togetherwith interestthereonat the legal rate;

I

AS TO THE SIXTH CAUSE OF ACTION

10 1l

L

For generalandspecialdamages in anamountnot lessthanTwentyMillion Dollars

($20,000,000), in accordance with proof at trial, togetherwith interestthereonat the legalrate;

t2 AS TO THE SEVEI.flTHCAUSE OF ACTIOI{ l3

10.

For an order that eachof the Defendantsprovide to Plaintiff an accountingof all

secreted,misplacedor otherwiseused 14 amountsDefendantspaid to themselves,misappropriated,

1.5 or paid without Plaintiff's informedconsent; L6 AS TO ALL CAUSES OF ACTION: l7

11.

For all costsof suit;

18

12.

For pre-judgmentinterestat the maximumlegal rate;

19

13.

For post-judgmentinterestat the maximumlegal rate;

2A

14.

For suchother and further relief as deemedjust and proper.

2l ,r.

'/ DATE: oetober 12,

z0og

LAVELY & SINGER PROFESSIONALCORPORATION MARTIN D, SINGER BRIAN G. WOLF

23 24 25 26

Attorneysfor Pla

27 28 K:\153l -76\PLE\COMPLAINT l0l 309.wpd

t6

COMPLAINT

REOUESTFORJI]RY TRIAL

I ) 3 4 3

Plaintiff herebydemandsa trial by jury.

,r/ tt-

DATE: October r-l') ,2009

LAVELY & SINGER PROFESSIONAL CORPORA

6

MARTIN D. SINGER

BRIANG. TODDS

7 8 9

Attornevsfor Plaintiff

L0 11 12 13 t4 15 16 t7 18 t9 20 2l .r^,

?3 ?"4 25 26

n 28 l0l309.wDd K:\l 53I -76\PLE\COMPLAINT

L7

COMPLAINT