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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION JONATHAN M. BYDLAK an individual and BYDLAK & ASSOCIATES LLC a Virginia Limited Liability Company Plaintiffs v. GARY JOHNSON an individual, GARY JOHNSON 2012 INC., a Colorado Corporation, OUR AMERICA INITIATIVE, a California Corporation, NSONINC., a Utah Corporation, DAINES GOODWIN & CO., PC a Utah Professional Corporation, CHET GOODWIN an individual, RONALD T. NIELSON an individual and KlMBLANTON an individual. Defendants
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CLERK US Di~TR!CT cauR T AlEXAHDRIA. VIRGnH 1\ Civil Case No.
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COMPLAINT FOR BREACH OF CONTRACT AND UNJUST ENRICHMENT
Demand for Jury Trial
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Plaintiffs Jonathan Bydlak and Bydlak & Associates, LLC, by and through undersigned counsel, file their Complaint against Defendants Gary Johnson, Gary Johnson 2012 Inc., Our America Initiative, NSON Inc., Daines Goodwin & Co., P.C., Chet Goodwin, Ronald T. Nielson, and Kim Blanton (collectively "Defendants") and hereby allege as follows:
PARTIES AND PERSONAL JURISDICTION A. Plaintiffs
1. Plaintiff Bydlak & Associates, LLC ("Bydlak & Associates") is a Virginia
Limited Liability Company, formed on or about July 13, 2010, with its principal address at 2105 Mount Vernon Ave., #1, Alexandria, Virginia, 22301. Bydlak & Associates provides fundraising services to political campaigns, and is wholly owned and controlled by Plaintiff Jonathan Bydlak.
Plaintiff Jonathan Bydlak ("Bydlak") is an individual residing at 2105 Mount
Vernon Ave., #1, Alexandria, Virginia, 22301, and a citizen of Virginia. Bydlak, 28 years old, is an accomplished political fundraiser who worked as Director ofFundraising candidate and Congressman Ron Paul during the 2008 election cycle. for U.S. Presidential
3. Upon information and belief, Defendant Gary Johnson ("Johnson") is a citizen of
New Mexico and a former two-term governor of New Mexico. Johnson is now running as a Libertarian candidate in the 2012 Presidential Election, and conducted business in the Eastern District of Virginia at all times relevant to this complaint.
Upon information and belief, Defendant Gary Johnson 2012 Inc. ("GJ2012") is a
Colorado corporation. Upon information and belief, Defendant GJ2012 was incorporated in Colorado on or about April 21, 2011 to carry out business and activities related to Gary Johnson's 2012 presidential campaign. Upon information and belief, Defendant G12012's principal address is 280 South 400 West, Suite 220, Salt Lake City, Utah 84101. GJ2012 conducted business in the Eastern District of Virginia at all times relevant to this complaint. 5. Upon information and belief, Defendant Our America Initiative LLC (hereinafter
"OAI") is a 501 (c)(4) political advocacy committee incorporated in the State of California in 2009. Upon information and belief, the Defendant Gary Johnson is OAI's honorary chairman, and used OAl's funds to pay for his travel expenses. Upon information and belief, OAI's principal address is 30011 Ivy Glenn Drive, Suite 223, Laguna Niguel, California 92677. OAI conducted business in the Eastern District of Virginia at all times relevant to this complaint. 6. Upon information and belief, Defendant NSON, Inc. alk/a NSON Political
Advisors Inc. a/k/a Political Advisors (hereinafter "NSON") is a Utah corporation, incorporated on or about November 23, 1992, with its principal address at 731 East South Temple, Salt Lake City, Utah 84102. NSON conducted business in the Eastern District of Virginia at all times relevant to this complaint. 7. Upon information and belief, Defendant Ronald T. Nielson ("Nielson") is an
individual residing in the State of Utah and a principal of Defendant NSON. Upon information and belief, Nielson, both individually and through his company NSON, acts as a "strategic advisor" for 012012 and OAI. Upon information and belief, Nielson directly controls the activities ofOJ2012 and OAI. Ronald T. Nielson conducted Business in the Eastern District of Virginia at all times relevant to this complaint.
Upon information and belief, Defendant Kim Blanton ("Blanton") is an individual
residing in the State of Utah. Upon information and belief, Defendant Blanton is employed as an Accounting Manager for the Defendants GJ2012, OAI, and NSON. Upon information and belief, Defendant Blanton's duties as an Accounting Manager for GJ2012 include, inter alia, management ofGJ2012's funds and payments to GJ2012's employees and contractors. Kim
Blanton conducted business in the Eastern District of Virginia at all times relevant to this complaint. 9. Upon information and belief, Defendant Daines Goodwin & Co., P.C. (hereinafter
"Daines Goodwin") is a Utah professional corporation, incorporated on or about March 2, 2000, with its principal address at 280 South 400 West, Suite 220, Salt Lake City, Utah 84101. Upon information and belief, Daines Goodwin is an accounting finn. Daines Goodwin conducted business in the Eastern District of Virginia at all times relevant to this complaint. 10. Upon information and belief, Defendant Chet Goodwin is an individual residing
in the State of Utah. Upon information and belief, defendant Chet Goodwin is a Certified Professional Accountant, and a partner of Daines Goodwin. Upon information and belief, Defendant Goodwin is also the Treasurer of Defendants OJ2012, OAI, NSON. Chet Goodwin conducted business in the Eastern District of Virginia at all times relevant to this complaint.
SUBJECT MATTER JURISDICTION AND VENUE
11. This Court has subject matter jurisdiction over the claims in this Complaint under
diversity jurisdiction pursuant to 28 U.S.C. § 1332. There is a complete diversity of citizenship between the Plaintiffs and Defendants, and the amount in controversy exceeds $75,000. 12. Venue is proper in the Eastern District of Virginia pursuant to 28 U.S.C.
1391(a)(2). The Plaintiff Bydlak & Associates has its office in the Eastern District of Virginia,
and the Plaintiff Jonathan Bydlak resides in Virginia. The Defendants are citizens of, and has offices or resides in Utah, California, and New Mexico, and conducted business and entered into contracts in the Eastern District of Virginia. Finally, the harm alleged in this action was directed at Bydlak & Associates and Jonathan Bydlak, both in the Eastern District of Virginia.
FACTS A. Bydlak is Recruited by Gary Johnson's Campaign.
13. The Plaintiff, Jonathan Bydlak, is a resident of Virginia and an accomplished
political campaign fundraiser. After graduating from Princeton University in 2005, and a brief stint as a hedge fund associate for an investment firm in Connecticut, Bydlak became involved in political campaign fundraising. 14. Bydlak worked for Ron Paul's 2008 campaign as the Director of Fundraising. In
that position, he raised approximately $35 million for the campaign over the course of his employment. As a result of his work on the Ron Paul campaign, he became acquainted with Defendant Gary Johnson. 15. On or about July, 2010, Bydlak reached out to Gary Johnson, and offered to work
for OAf as a part-time fundraiser. Johnson referred Bydlak's inquiry to Defendant Ronald T. Nielson, who controls OAI's operations.
Bydlak Enters Into Contracts with OAI and GJ2012.
16. On July 7, 2010, Nielson sent Bydlak a contract ("OAI Contract I"), offering him
a part-time position with OAf to work as a fundraiser. The contract provides for, inter alia, a 10% commission on any funds raised by Bydlak. (See Exhibit 1, OAI-Bydlak Contract, dated July 16, 2010).
According to the express terms ofOAI Contract I, Bydlak was to provide
fundraising services to OAI, including development, implementation and oversight of a fundraising program. In this role, Bydlak's duties included, inter alia, coordination of meetings, telephone calls, and fund-raising events necessary to raise funds for the Initiative. 18. On or about August 19,2010, Nielson proposed that Bydlak work OAI full-time
under a new contract ("OAI Contract II"). Bydlak's duties under OAI Contract II were identical to his duties under the previous contract. OAI Contract II provides for, inter alia, a $6,000 monthly retainer and a 7% commission on any funds raised by Bydlak. (See Exhibit 2, OAIBydlak Contract, undated). 19. On or about April 21, 2011, Defendants Johnson, Nielson, Goodwin, and Blanton
formed Defendant Gary Johnson 2012, Inc. ("GJ2012"), following Johnson's announcement that he will run for president in 2012. 20. On or about April 21, 2011, Bydlak entered into a third contract with OAI ("OAI
Contract 111").Bydlak's duties under OAI Contract III were identical to his duties under the two previous contracts with OAI. In return, OAI promised to pay, inter alia, a 10% commission on any funds raised by Bydlak and received by OAI. (See Exhibit 3, OAI-Bydlak Conract, dated June 29, 20J 1). 21. On or about April 21, 2011, Bydlak also entered into a contract with GJ2012
("GJ2012 Contract"). As with the OAI contracts, the GJ2012 Contract requires Bydlak to develop, implement and oversee fundraising operations. In return, the GJ2012 Contract provides for, inter alia, a signing bonus of$45,000 (to be paid in $5,000 monthly installments), a monthly retainer of $3,500, and an 8.5% commission on all funds raised by Bydlak. (See Exhibit 4, GJ2012-Bydlak Contract, dated June 29, 2011).
Bydlak Performs Fundraising Duties for the Campaign Pursuant to the Contracts.
22. On or about July 21, 2010, Bydlak began to work under OAI Contract I as a part-
time fundraiser for Johnson's campaign. He worked as a part-time fundraiser until September 1, 2010. 23. From July 21, 2010 until September 1,2010, Bydlak generally worked 15-20
hours each week to raise funds for the campaign. 24. On or about September 1, 2010, Bydlak left his full-time job in New York and
began to work under OAI Contract II as a full-time fundraiser. 25. From September 1,2010 through April 21, 2011, Bydlak generally worked 60-70
hours per week to raise funds for OAI. 26. While working under OAI Contract I and II, from July 21, 2010 through April 21,
2011, Bydlak raised over $100,000 for OAI. 27. On or about April 21, 2011, Bydlak began working under the OAI Contract III
and the OJ20 12 Contract, raising funds for both the campaign and OAI. 28. From April 21, 2011 through December 9,2011, Bydlak generally worked 60-70
hours per week to raise funds for the campaign. 29. While working under OAI Contract 111and the OJ2012 Contract, Bydlak directly
or indirectly raised over $447,000 for the Johnson campaign.
D. The Campaign Fails to Pay Bydlak in Accordance with the Contracts, And Instead Uses the Campaign Funds Raised By Bydlak to Pay Other Contractors That Also Employ Defendants Blanton and Goodwin.
30. Defendants OAI and OJ20 12 have, from the beginning, repeatedly failed to make
full payment to Bydlak for work performed per the terms of the contracts.
Although Bydlak submitted bi-monthly invoices to OAI from September, 2010
through April, 2011, for work performed under OAI Contract II, he was only ever paid once, in the amount of$10,000, on or about December 6,2010. 32. Although Bydlak made numerous requests for payment to Defendants Blanton,
Nielson, and Goodwin, the Defendants ignored or delayed responding to these requests. 33. When Defendants did respond, they replied with statements such as: "the smaller
donations barely cover Gary's travel expenses" and "we need $175k a month just to break even." 34. By April, 2011, when Bydlak began working under the GJ2012 Contract and OAI
Contract III, OAI owed Bydlak $43,446.48 in unpaid invoices. 35. On or about May 26, 2011, Bydlak and another campaign fundraiser named
Elizabeth Hepworth attended a conference call with Defendants Nielson, Blanton, and Goodwin. The purpose of the call was to discuss the issue of delinquent payments. 36. During that conference call, Nielson, Blanton, and Goodwin falsely represented to
Bydlak that they would set aside a sufficient portion of the funds raised each month to make sure that Bydlak is paid first. 37. Two weeks after the conference call, Defendants paid NSON for the month of
June, 2011, and failed to Bydlak for the full amount due. 38. Although Bydlak submitted monthly invoices to GJ2012 from May, 2011 through
December, 2011 for work he performed under the GJ2012 Contract, OJ2012 never once paid him for the full amount of any invoice. 39. Upon information and belief, while Defendants OAI and OJ2012 repeatedly failed
to make full payment to Bydlak for his services, OAI and GJ2012 used their available funds to
make substantial payments to contractors that are owned by, or employs the controlling members of OAI and GJ2012 (Nielson, Goodwin and Blanton). 40. Upon information and belief, those contractors who received preferential
payments from OAI and GJ2012 included Defendants NSON (which is owned by Nielson and employs Blanton) and Daines & Goodwin (of which Chet Goodwin is a partner and/or owner). 41. Upon information and belief, for the period from April 1, 2011 through June 30, in gross
2011, Defendant GJ2012 paid $140,400.00 to NSON, out ofa total of$180,236.80
receipts. (See Exhibit 5, Federal Election Commission, July 2011 Quarterly Report). 42. Upon information and belief, for the period from July 1 through September 30,
2011, Defendant GJ2012 paid another $189,500.00 to NSON, out ofa total of$236, 193.77 in gross receipts. (See Exhibit 6, Federal Election Commission, October 2011 Quarterly Report). 43. Upon information and belief, while Defendant GJ2012 has significant outstanding
debts to a number of contractors as of October 14, 2011, including Bydlak, GJ20 12 had no outstanding debt to Defendant Daines & Goodwin. (See Exhibit 6, Federal Election Commission, October 2011 Quarterly Report). 44. Upon information and belief, in addition to prioritizing payment to Defendants
NSON and Daines & Goodwin, OAI and GJ20 12 prioritized their funds to finance travel expenses for Defendant Johnson. 45. Thus, while Mr. Bydlak was largely responsible for obtaining funding for OAI
and GJ20 12, individuals who controlled the campaign funds, including but not limited to Defendants Nielson, Blanton and Goodwin, prioritized the use of those funds to ensure that their own companies would be paid first and paid in full, all at the expense of Bydlak and other contractors.
The Campaign is on the verge of bankruptcy. 46. Upon information and belief, OAI and GJ20 12 are insolvent or in danger of
becoming insolvent. F. Bydlak Resigns from the Campaign 47. 48. On or about December 9, 2011, Bydlak resigned from OAI and GJ2012. At the time of his resignation, Defendant OAI owed Bydlak $43,446.48 for his
unpaid balance under the OAI Contracts. 49. At the time of his resignation, Defendant GJ2012 owed Bydlak $61,499.17 for his
unpaid balance under the GJ20 12 Contract. CAUSES OF ACTION COUNT I - BREACH OF CONTRACT Against Defendant OAI and GJ2012 50. 51. 52. rendered. 53. Defendants have failed to pay Plaintiffs the compensation to which they are Plaintiffs repeat and reallege the allegations in the preceding paragraphs. Plaintiffs entered into contracts with Defendants OAI and GJ2012. The contracts required the Defendants to compensate Plaintiffs for services
entitled, causing them damages. COUNT II - UNJUST ENRICHMENT Against All Defendants 54. 55. services. Plaintiffs repeat and reallege the allegations in the preceding paragraphs. Plaintiffs conferred a benefit on the Defendants through performing fundraising
56. 57. 58.
The Defendants were aware that Plaintiffs had conferred this benefit upon them. The Defendants accepted and retained these benefits. The circumstances under which the defendants accepted the benefits render it
inequitable for the Defendants to retain the benefits without paying for the value. COUNT III-FRAUD Against Defendants 59. 60. Nielson, Goodwin, and Blanton
Plaintiffs repeat and reallege the allegations in the preceding paragraphs. Defendants Nielson, Goodwin, and Blanton falsely represented to Plaintiff Bydlak
that they would set aside OJ20 12's campaign funds in order to pay him first. 61. This misrepresentation was material, because Bydlak would not have continued
working for the campaign without an assurance that he would be paid for his work. 62. The Defendants made this misrepresentation knowingly and intentionally, for the
purpose of inducing Bydlak to continue his work on the campaign. 63. Bydlak relied on this misrepresentation and acted to his detriment-namely, he
continued working for the campaign without receiving full payment for his work. COUNT IV - BREACH OF FIDUCIARY DUTY
Against Defendants Nielson, Goodwin, Blanton, Johnson, NSON, and Daines Goodwin 64. 65. Plaintiffs repeat and reallege the allegations in the preceding paragraphs. As controlling members and/or owners ofOJ2012 and OAI, the Defendants owed
a fiduciary duty to the Plaintiffs, who are known creditors of GJ20 12 and OAI, to refrain from self-dealing at the Plaintiffs' expense. 66. The Defendants breached that duty by distributing to themselves and/or using
OJ2012 and OArs assets, in lieu of paying the debts owed to the Plaintiffs.
The Defendants also breached that duty by paying themselves to the exclusion of
the Plaintiffs, when they expressly promised to the plaintiff that sufficient funds would be set aside to pay for Plaintiffs' invoices each month. 68. The Defendants' breach has caused Plaintiffs damages. COUNT V - CONSTRUCTIVE Against All Defendants 69. 70. Plaintiffs repeat and reallege the allegations in the preceding paragraphs. Defendants obtained funds from OJ2012 and OAI by breach of their fiduciary TRUST
duty and self-dealing. 71. 72. Defendants have unjustly enriched themselves at the Plaintiffs' expense. Imposition of a constructive trust on all funds the Defendants have received from
OAI and OJ20 12, including property which the Defendants may have purchased with those campaign funds, is necessary to avoid an injustice. PRAYER FOR RELIEF WHEREFORE, Plaintiffs request entry of judgment in its favor and against the Defendants for the following relief: a. Compensatory damages, restitution damages, and quantum meruit damages in an
amount to be proven at trial. b. Imposing a constructive trust on all real and personal property purchased by the
Defendants with money derived from the Campaign funds. c. d. e. Punitive damages. Reasonable attorney's fees. Any other legal or equitable relief that this Court deems just and proper.
DEMAND FOR TRIAL BY JURY Plaintiffs hereby demand a trial by jury pursuant to Fed. R. Civ. Pro. 38 to determine all such triable issues in this case. Dated
Ch urnham VSB # 72781 Eugene V. Gorokhov, VSB # 73582 Ziran Zhang, VSB # 81119 Attorneys for Jonathan Bydlak Burnham & Gorokhov, PLLC 1724 20th St. NW, Suite 304 Washington, DC 20009 (202) 386-6920 (phone) (267) 390-7587 (fax) firstname.lastname@example.org email@example.com firstname.lastname@example.org