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MARTIN D. SINGER (BAR NO. 78166) PAUL N. SORRELL (BAR NO. 126346) LA VEL Y & SINGER PROFESSIONAL CORPORATION 2049 Century Park East, Suite 2400 Los Angeles, California 90067-2906 Tel: (310) 556-3501; Fax: (310) 556-3615 Email: firstname.lastname@example.org email@example.com Attorneys for Plaintiff SYLVESTER STALLONE
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JOhn A. Clarke
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By D. MClCin
SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES - WEST DISTRICT SYLVESTER STALLONE, an individual, Plaintiff,
) CASE NO. ). ) COMPLAINT
) ) ) ) ) (1) (2) (3) (4)
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MOHAMED HADID, an individual; CONSTRUCTION ENTERPRISES AND SERVICES, LLC, a California limited liability company; HD DEVELOPMENT, LLC, a California limited liability company; and DOES 1 through 20, inclusive, Defendants.
) ) ) ) ) )
FRAUDULENT CONCEALMENT; BREACH OF ORAL CONTRACT; NEGLIGENCE; AND DISGORGEMENT OF COMPENSATION PAID TO UNLICENSED CONTRACTOR [BUS. & PROF. CODE § 7031(b)] [DEMAND FOR
C.ASE MANA. GJ::Mt:NT CO~ERENCE
Hadid, Construction Enterprises and Services, LLC, HD Development, LLC, and Does 1 through 20, inclusive, hereby alleges as follows: NATURE OF TIDS ACTION
If you want to hire an incompetent con man to do construction, then Mohamed Hadid
your man. Unfortunately, Sylvester Stallone is one of Hadid's victims, and has been damaged
in excess of $1 million as a result of Hadid's fraudulent scheme to profit from construction at Stallone's Los Angeles County home. Using the monikers Construction Enterprises and Services, LLC and HD Development, LLC, Hadid perpetrated his fraud on Stallone through a series oflies
1 . concerning his qualifications, experience and intentions, as well as through recommendations by 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Hadid's friends, including "Housewives of Beverly Hills" personality Lisa Vanderpump.
ultimately revealed, however, that Hadid not only lacked the qualifications and abilities to live up to his recommendations - including the unfounded recommendation of Ms. Vanderpump - is nothing more than an incompetent scam artist with none of the promised qualifications or abilities he touted. After inducing Stallone to hire him by promising top quality construction for an agreed price, Hadid instead oversaw the performance of seriously substandard, defective and unsafe construction, bilking Stallone out of $1.4 Million. Hadid is an unscrupulous, unlicensed predator who has left a trail of innocent victims in his wake. 2. While continuously billing for top quality products and work, Hadid and his
henchmen installed inexpensive, damaged, deteriorating and uneven cabinetry and malfunctioning appliances. The instances ofHadid's fraudulent overcharging and substandard work are numerous. For example, Hadid charged Stallone more than $10,000 for a high quality wooden kitchen island while actually installing a cheap wood veneer/plywood product that is defective and virtually worthless. They also installed incomplete and unsafe heating, ventilation and air conditioning Hadid was
ductwork and equipment, as well as unsafe and incomplete electrical installation.
responsible for installing cheap, uneven, unmatched and ill-functioning hardware on doors and cabinets, in addition to cracked, untempered and improperly installed glass work. The exterior stone finishes were mismatched and poorly installed. Hadid's handiwork included an inoperable and unsafe fire pit that does not comply with the building code. Rather than top quality work, Hadid provided cracked and deteriorating wood, painted and other fmishes and chipped, cracked, damaged and misaligned doors. Far from the top quality job promised, Hadid's work was riddled with defects, abysmal quality and poor workmanship. 3. Stallone has learned that this is not the first time Hadid has failed to comply with his
commitments to his customers and that, contrary to Hadid's representations, Hadid had no license or training to perform the work for which Stallone contracted. Although the full extent of
Stallone's damages resulting from Hadid's fraud, breaches of contract and negligence have not yet been fully determined, it is expected that they will substantially exceed $1 million.
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Stallone is entitled to disgorgement of the compensation paid to Hadid based on the fact that he and his related LLC's were not licensed to do construction. Stallone brings this action to obtain
compensation for the harm caused by Hadid's shameful conduct.
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Stallone is and at all times relevant to this action was an individual residing in Los
Angeles County and the owner of residential property located within the West District of the Superior Court (the "Property").
Stallone is informed and believes and thereon alleges that Defendant Construction
Enterprises and Services, LLC ("CES") is and/or was at times relevant to the events alleged herein a limited liability company formed under the laws of the State of California and doing business in, other places, Los Angeles County. 6. Stallone is informed and believes and thereon alleges that Defendant HD
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Development, LLC ("HD") is and/or was at times relevant to the events alleged herein a limited. liability company formed under the laws of the State of California and doing business in, among other places, Los Angeles County. 7. Stallone is informed and believes and thereon alleges that Defendant Mohamed
Hadid is and at all times relevant to this action was an individual residing and conducting business in Los Angeles County and the major, if not sole, shareholder and principal of both CES and HD. Stallone is informed and believes and thereon alleges that Defendant Mohamed Hadid from time to time has conducted his individual business under the HD name, while in fact HD was not
21 'authorized to conduct business by the California Secretary of State or other governmental agencies. 22 23 24 25 26 27 28
Stallone is informed and believes and thereon alleges that at all times relevant to this
action, CES and HD failed to follow appropriate procedures and formalities with regard to their formation, status and operation as a limited liability company or other business entity; CES and HD were inadequately capitalized to carryon their business(es); Defendants Mohamed Hadid, on the one hand, and CES and HD, on the other hand, commingled funds belonging to the other; and Defendant Mohamed Hadid exerted such dominion and control over Defendants CES and HD that there exists, and at all times herein mentioned has existed, a unity of interest and ownership
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between Mohamed Hadid, on the one hand, and CES and HD, on the other hand, and other circumstances exist such that any individuality or separateness between such Defendants ceased and Defendant Mohamed Hadid is the alter ego of Defendants CES and HD, and vice versa. 9. Adherence to the fiction of the separate existence of CES and HD as entities distinct
from Mohamed Hadid would permit an abuse of limited liability company protections and would sanction fraud and promote injustice. Unless a judgment in this action includes all of the
7 . Defendants named herein, Stallone may not be able to enforce the claims and rights referred to 8 9 10 11 12 13 14 15 16 17 18 ' 19 20 21 22 23 24 herein and obtain satisfaction of any judgment. 10. Stallone is informed and believes and thereon alleges that the fictitiously named
Defendants sued herein as Does 1 through 20, inclusive, and each of them, were in some manner responsible or legally liable for the actions, events, omissions, transactions and circumstances alleged herein. The true names and capacities of said fictitiously-named Defendants, whether
individual, corporate, partnership, associate or otherwise, are presently unknown to Stallone and Stallone will seek leave of Court to amend this Complaint to allege the true names and capacities of said fictitiously named Defendants when the same have been ascertained. (For convenience,
Defendants Mohamed Hadid, CES, HD and the fictitiously-named Doe Defendants are sometimes hereinafter collectively referred to as "Defendants.")
Stallone is informed and believes and thereon alleges that at all times relevant hereto,
each of the Defendants was the agent, partner, representative, employee and/or joint venturer of the remaining Defendants, and is and at all times mentioned herein was acting within the course and scope of such agency, partnership, representation, employment and/or joint venture. Stallone is further informed and believes and thereon alleges that the actions herein alleged concerning each such Defendant was known to, authorized by and/or ratified by the other Defendants, and each of them. GENERAL ALLEGATIONS 12. In approximately December 2009, Stallone, on the one hand, and Defendants,
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through Mohamed Hadid, entered into an oral agreement to the effect that Defendants would build and oversee construction of certain improvements for Stallone at the Property, including an
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extension of the kitchen of approximately 1200 square feet, installation of cabinets, hardware and appliances, and other kitchen improvements according to specified plans and oral discussions and agreements between Stallone and Hadid. Defendants agreed to provide all labor , equipment, tools, transportation and materials necessary to construct the kitchen improvements and to bill Stallone at their cost, not to exceed $325 per square foot. Hadid agreed that the work provided would be new, of high quality in a manner consistent with prior construction at the Property, free from defects in materials and workmanship, and that Defendants would supervise and be responsible for all labor and materials used to construct the kitchen improvements. Hadid told Stallone that he was a licensed contractor and had built many renowned, high-end residential and commercial structures, including but not limited to homes for many celebrities and high-end hotels. 13. At the time Stallone and Defendants entered into the oral agreement, Hadid
12 .concealed Defendants' intent to, among other things, substantially overcharge Stallone for labor
and materials provided at the Property, use low quality labor and materials while charging top dollar for supposedly high quality labor and materials, and to neglect the work and fail to provide the promised supervision of the purchasing of materials and the labor used in constructing the improvements. Hadid also concealed from Stallone that he was not a licensed contractor and had
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disputes with other customers for whom he had performed substandard work. Hadid concealed these material facts from Stallone with the intent to induce Stallone to enter into an agreement and to pay Defendants substantial sums. 14. Defendants failed to perform as agreed. Among other things, they substantially
overcharged Stallone for the work. Defendants billed Stallone for labor and materials far exceeding their costs, and far exceeding the maximum agreed price of $325 per square foot. In one instance, Defendants billed Stallone over $10,000 for what was represented to be a premium wood kitchen butcher block that was in fact very cheap wood veneer fastened onto a plywood base. Numerous other improvements were constructed in an incompetent and unworkmanlike manner. Many defects
26· and deficiencies in the work have been discovered to date, including, but not limited to, the 27 following:
Cracked, out of level, misaligned and poorly installed cabinetry; An uneven and cracked ceiling; Wood flooring that is out of level and constructed with a product different than what was agreed;
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A fire pit adjacent to the kitchen that is inoperable and fails to provide for an adjacent valve to adjust and operate the pit as required by code;
Mismatched and improperly installed exterior cast stone moldings; Use of poor quality wood finishes that are cracking, splitting, warping and deteriorating;
Improperly installed and treated windows, which allow penetration of air and
Cracked tiles on the roof over the kitchen extension; Improperly installed HVAC ductwork; Inadequately installed and unsafe electrical wiring, including electrical conduit that has been run through rain gutters and downspouts;
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Out of level and misaligned cabinet hardware; Cracked, damaged and deteriorated wood molding and trim; Use of inferior paint which sticks to glassware and restricts cabinetry function;
Cracked, misaligned, poorly installed and ill-fitting doors; and Inconsistencies in installation of cabinet hardware.
Stallone is informed and believes that the damages resulting from Defendants' fraud,
23 . breaches of contract and negligent work will far exceed $1 Million.
FIRST CAUSE OF ACTION (For Fraudulent Concealment Against All Defendants)
16. Stallone repeats, realleges and incorporates by reference Paragraphs 1 through 15,
inclusive, of this Complaint as if fully set forth herein.
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Prior to and at the time Stallone and Defendants, through Hadid, engaged in
communications about the kitchen improvements at the Property and entered into the oral agreement for Defendants to construct the improvements, Hadid, on his own behalf and on behalf of CES and HD, concealed the fact that Defendants intended to overcharge Stallone; bill more than $325 per square foot for the work; provide low quality labor and materials and charge Stallone for more expensive, high quality labor and materials; perform defective work and install inferior, damaged and defective products; and fail to supervise and be responsible for all labor and materials used to (Hadid also concealed the fact that Defendants were not
8 tconstruct the kitchen improvements. 9 10 11 12 13 14 15 16 17 18
licensed to do the work as a contractor, and not properly trained to perform the work.) 18. Defendants concealed the facts alleged above with the intent to induce Stallone to
enter into an agreement providing for Defendants to construct and install the kitchen extension and improvements and to pay Defendants substantial sums for the work. 19. The facts concealed by Defendants from Stallone were material. Had Stallone
known the true facts and Defendants' true intentions, Stallone would never have hired Defendants nor would he have paid substantial sums to Defendants improvements at the Property. in connection with the kitchen
As a result of Defendants' conduct, Stallone is entitled to recover
substantial damages as well as the return of sums wrongfully obtained by Defendants based upon their fraudulent concealment of material facts. 20. As a proximate result of Defendants' fraudulent concealment, Stallone has incurred
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substantial monetary damages, which he is informed and believes are in excess of $1 Million. 21. Defendants' actions and omissions were willful and intentional, and Defendants
engaged in such actions and omissions with fraud, oppression and malice and in conscious disregard of Stallone's rights. Defendants' actions and omissions warrant the imposition of an
award of punitive or exemplary damages in an amount appropriate to punish Defendants and deter similar conduct in the future, in an amount according to proof at trial.
SECOND CAUSE OF ACTION (For Breach of Oral Contract Against All Defendants) 22. Stallone repeats, realleges and incorporates by reference Paragraphs 1 through 15,
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inclusive, of this Complaint as if fully set forth herein. 23. Within the two years preceding the filing of this action, Defendants materially
breached the oral agreement concerning the kitchen improvements at the Property. Among other
7· things, Defendants billed Stallone for labor, materials and other expenses that were never provided 8 9 10 11 12 13 14 15 16 17 18 or incurred, charged Stallone in excess of $325 per square foot contrary to the parties' agreement, provided low quality labor and materials instead of the promised high quality labor and materials, overcharged Stallone for labor and materials provided at the Property, performed substandard and defective work, and failed to properly supervise the construction of the kitchen improvements. 24. Stallone has fully performed aU obligations, covenants and conditions to be
performed by him pursuant to the contract with Defendants, except to the extent that such performance has been excused or rendered impossible for the acts and/or omissions of Defendants. 25, As a proximate result of Defendants' material breaches of contract, Stallone has
sustained damages in an amount according to proof at trial, but which Stallone is informed and believes are in excess of $1 Million. THIRD CAUSE OF ACTION (For Negligence Against All Defendants) 26. Stallone repeats, realleges and incorporates by reference Paragraphs 1 through 15,
21 [inclusive, of this Complaint as if fully set forth herein. 22 23 24 25 26 27 27. As a result of Defendants' agreement with Stallone and their undertaking and
commitment to construct, oversee and manage construction of the kitchen improvements at the Property, they obligated themselves to exercise reasonable care in performing their obligations. 28. Defendants failed in the exercise of their duties to Stallone to exercise that degree
of care and reasonable judgment that ordinarily prudent persons in the same business would have used under similar circumstances.
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As a proximate result of Defendants' negligence, Stallone has suffered significant
damages in an amount according to proof at trial, which Stallone is informed and believes are in excess of $1 Million .. FOURTH CAUSE OF ACTION (For Disgorgement of Compensation Paid To An Unlicensed Contractor
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[Bus. & Prof. Code § 7031(b)]Against All Defendants) Stallone repeats, realleges and incorporates by reference Paragraphs 1 through
15, 17 through 18, 23, 27 and 28, inclusive, of this Complaint as if fully set forth herein. 31. Pursuant to Business & Professions Code § 7031 (b), "A person who utilizes the
10· services of an unlicensed contractor may bring an action in any court of competent jurisdiction 11 12 in this State to recover all compensation paid to the unlicensed contractor for performance of any contract. " 32. Unbeknownst to Stallone, Hadid, CES and HD acted as unlicensed contractors in
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violation of Business & Professions Code § 7031(b). Stallone brings this action to recover all compensation paid to them with regard to the kitchen work as well as other work performed by them at the Property in an amount according to proof at trial, but which exceeds $1.4 million.
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PRAYER FOR RELIEF
WHEREFORE, Stallone prays for judgment as follows: As to the First Cause of Action: 1. For compensatory damages in an amount according to proof at trial, but which
Stallone is informed and believes is in excess of $1 million; 2. For punitive or exemplary damages in an amount according to proof at trial;
As to the Second Cause of Action:
For compensatory damages in an amount according to proof at trial, but which
Stallone is informed and believes is in excess of $1 million; As to the Third Cause of Action: 4. For compensatory damages in an amount according to proof at trial, but which
Stallone is informed and believes is in excess of $1 million;
1 As to the Fourth Cause of Action:
2 3 5. For disgorgement of all monies paid by Stallone to Hadid, CES and HD in an
amount according to proof at trial, but which Stallone is informed and believes is in excess of
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$1.4 million. As to All Causes of Action: 6. 7.
8. For interest at the maximum legal rate; For costs of suit incurred herein; and For such other and further relief as the Court deems just and appropriate.
April 9, 2012
13, By: MARTIN D. S Attorneys for Plaintiff SYLVESTER STALL
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DEMAND FOR JURy TRIAL Plaintiff Sylvester Stallone hereby demands a trial by jury in this matter.
4 DATED: April 9, 2012
LAVELY & SINGER PROFESSIONAL CQ,RPO MARTIN D. SING PAUL L By: / ER
MARTIN D. Attorneys for Plaintiff SYLVESTER STALLO
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