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DC-12-10574 CAUSE NO. _________ CHARITY SPORTS DISTRIBUTOR, INC. a/k/a CSD SPORTS FRAMING & MEMORABILIA, Plaintiff, v. LEGENDS HOSPITALITY LLC AND SUCCESS DYNAMICS, INC. a/k/a ALL PRO CLASSICS, Defendants. § § § § § § § § § § § § § IN THE DISTRICT COURT OF
DALLAS COUNTY, TEXAS
G-134TH JUDICIAL DISTRICT _______
PLAINTIFF’S ORIGINAL PETITION Plaintiff Charity Sports Distributor, Inc. a/k/a CSD Sports Framing & Memorabilia (“Plaintiff” or “CSD”) files this its Original Petition against Defendants Legends Hospitality LLC (“Legends”) and Success Dynamics, Inc. a/k/a All Pro Classics (“All Pro,” collectively with Legends, “Defendants”) and, in support thereof, states the matters set forth below. I. SUMMARY OF DISPUTE 1. Just four days before the first Dallas Cowboys’ 2012 preseason home game and
after investing tens of thousands of dollars in inventory and related business expenses, CSD discovered that Legends, a stadium management company, was breaching its agreement with CSD, and had fraudulently misrepresented that CSD would have rights to operate on-sight auctions of sports memorabilia at Cowboys Stadium. Legends’ failure to perform under its existing contract with CSD (which automatically renewed for the 2012-2013 season), its bad faith conduct and its false representations have caused hundreds of thousands of dollars in damages to CSD – a locally-owned, small business in the DFW area that has done business with the Dallas Cowboys for well over a decade.
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Legends, a company partially owned by the Dallas Cowboys and New York
Yankees, was created and organized in 2008 to operate catering, concessions and merchandising at the new stadiums built by the Yankees and Cowboys. With regard to its management of Cowboys Stadium, Legends entered into a contract with CSD and made numerous additional representations to CSD over several months that it could operate at Cowboys Stadium. What Legends did not disclose to CSD, however, was that Legends was involved in negotiations with one of CSD’s competitors – All Pro – to replace CSD just days before the start of the Cowboy’s 2012-2013 season despite the inconvenient truth that CSD already had a contract with Legends and had invested thousands of dollars to prepare for the 2012-2013 season. For its part, All-Pro has tortiously interfered with CSD’s contract with Legends. 3. By these actions, CSD seeks to recover its damages and attorneys’ fees caused by
Legends’ breach of contract, false promises and representations and by All Pro’s wrongful interference with CSD’s business relationship. II. DISCOVERY CONTROL PLAN 4. Discovery is intended to be conducted under Level 3 of Texas Rule of Civil
Procedure 190.4. III. JURY DEMAND 5. Plaintiff requests a trial by jury, and will timely submit the required fee. IV. PARTIES 6. Plaintiff Charity Sports Distributor, Inc. a/k/a CSD Sports Framing &
Memorabilia is a company organized under the laws of the State of Texas. Its principal place of business is in Dallas County, Texas.
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Defendant Legends Hospitality LLC is a stadium management company that, in
part, manages merchandising and other operations at Cowboys Stadium in Arlington, Texas. Legends may be served through its registered agent for service of process, Corporation Service Company d/b/a CSC – Lawyers Incorporating Service Company, 1021 Main Street, Suite 1150, Houston, Texas 77002. 8. Defendant Success Dynamics, Inc. d/b/a All Pro Classics is a business organized
under the laws of the State of Arkansas with its principal place of business at 3634 Central Avenue, Suite E, Hot Springs, Arkansas 71913. Pursuant to Texas Civil Practices and Remedies Code § 17.044(b), the Texas Secretary of State is the agent for service on nonresident Defendant All Pro because: (1) nonresident Defendant All Pro has engaged in business in Texas;
(2) nonresident Defendant All Pro does not maintain a regular place of business in Texas; (3) nonresident Defendant All Pro does not have a designated agent for service of process; and (4) this lawsuit arises out of the nonresident Defendant All Pro’s business in Texas. Therefore, Defendant All Pro may be served with process by transmitting process to the Texas Secretary of State in accordance with the requirements of Texas Civil Practices and Remedies Code § 17.044(b), to the Citations Unit, Secretary of State, P.O. Box 12079, Austin, Texas 787112079, directed to its agent for service of process in Arkansas – Success Dynamics, Inc. d/b/a All Pro Classics, Attention: Terry D. Toler, 104 Legacy Lane, Hot Springs, Arkansas 71901. V. JURISDICTION AND VENUE 9. Court. The amount in controversy exceeds the minimum jurisdictional limits of this
This Court has personal jurisdiction over Defendants as they have continuous and
systematic contacts with Texas and/or conduct business in Texas. Additionally, this Court has
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personal jurisdiction over Defendants because Defendants’ actions as alleged herein occurred in whole or in part in Texas. 10. Venue of this suit is proper in Dallas County, Texas, pursuant to § 15.002 of the
Texas Civil Practices and Remedies Code as all or a substantial part of the events or omissions giving rise to the claim occurred in Dallas County, and Plaintiff is a resident of Dallas County. VI. FACTUAL BACKGROUND 11. This action arises out of Legends’ breach of its agreement with CSD relating to
the 2012-2013 season, and its false promises and representations to CSD regarding Legends’ control and management of Cowboys Stadium. As detailed below, Legends represented to CSD that it would continue to have rights to auction sports memorabilia at Cowboys Stadium for all home games during the 2012-2013 season. CSD’s contract with Legends provides for the same as well. CSD recently discovered, just days before the Cowboys’ first home preseason game of 2012, that Legends had assisted in replacing CSD all the while misleading CSD by: (1) falsely indicating it would still honor its contract for 2012-2013 and (2) failing to disclose that it did not intend to perform, while knowing that CSD was preparing for upcoming games by buying inventory and inuring other related expenses. These improper actions by Legends, spurred by the interference of All-Pro, have directly caused CSD damages of several hundred thousand dollars and perhaps even more. A. Longstanding Business Relationship With The Dallas Cowboys 12. CSD has worked with the Dallas Cowboys’ organization for well over a decade
and, during that time, the Dallas Cowboys have been one of CSD’s largest clients, representing a significant part of CSD’s annual revenue. In its partnership with the Dallas Cowboys, CSD auctioned sports memorabilia at each of the Dallas Cowboys’ home games, during college
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games, concerts and other events held at Cowboys’ stadium. Consistent with their agreement, CSD and Legends would split sales revenue generated from the auctions. Furthermore, CSD would frequently receive numerous sales inquires throughout the season requesting products and memorabilia, unrelated to CSD’s on-sight auctions, but as a direct result of its relationship with the Dallas Cowboys and CSD’s presence in the stadium on game days. 13. For years, CSD dealt directly with the Dallas Cowboys’ marketing and
merchandising department in connection with this business relationship. But more recently, the Dallas Cowboys required CSD to work with Legends as a marketing intermediary. Although Legends is a distinct, legal entity separate and apart from the Dallas Cowboys’ organization, it was apparently created and is now owned (in part) by the Dallas Cowboys and the New York Yankees for the purpose of managing marketing and other activities at their respective new stadiums. B. Execution of the 2011-2012 Agreement 14. For the 2011-2012 season, CSD and Legends executed a contract for the auction The 2011
and sale of sports memorabilia at Cowboys Stadium (the “2011 Agreement”).
Agreement was for the period of July 1, 2011 through February 1, 2012 and generally gave CSD the right to conduct on-sight product auctions at all Dallas Cowboys’ regular season and playoff games held at Cowboys Stadium. There were also times when CSD conducted on-sight auctions at various college games and concerts occurring at Cowboys Stadium, which led to additional revenue for both CSD and Legends. 15. As an added benefit for CSD that resulted from its relationship with the Dallas
Cowboys’ organization, CSD would frequently receive numerous sales inquires throughout the season, unrelated to CSD’s on-sight auctions, requesting products and memorabilia. Specifically
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because of this added benefit, CSD had agreed to a lower percentage of its portion of sales related to on-sight auctions. These independent sales inquiries provided additional revenue to CSD over and above that expressly contemplated in the 2011 Agreement or derived at on-sight auctions. 16. Of critical importance to CSD is the contract renewal clause of the 2011
Agreement that effectively guaranteed that CSD would again be able to sell sports memorabilia for the 2012-2013 season. In the 2011 Agreement, the parties expressly agreed that: The initial term of the agreement shall be July 1, 2011 through February 1, 2012. On or before December 1, 2011, Legends & Hospitality Management will notify CSD of its intent [sic] continue the agreement, otherwise, the agreement will automatically extend under the same terms through February 1, 2013. The 2011 Agreement automatically renewed for the 2012-2013 season and is in effect through February 1, 2013. The parties further agreed in the 2011 Agreement that the “agreement is noncancelable and the agreement is governed by the laws of the State of Texas.” 17. In November 2011, Doug Aydelott (“Aydelott”), Director of Merchandise for
Cowboys Stadium and a Legends employee, emailed CSD that Legends intended to renew the 2011 Agreement for the 2012-2013 season (the “2012 Agreement”). Indeed, Legends repeatedly affirmed the 2012 Agreement and its promises to CSD that it would be able to conduct on-sight auctions at Cowboys Stadium as in years past. Even as late as August 17, 2012, just days before the start of the 2012 home season, Aydelott confirmed the 2012 Agreement and that he would provide documentation of the parties’ understanding in the days to come. 18. Based upon the renewal language in the 2011 Agreement and the express
representations and promises by Aydelott on behalf of Legends that the 2011 Agreement would be renewed for the 2012-2013 season, CSD began to prepare for the upcoming season as it had
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over the past decade. Legends was well aware that CSD needed to expend significant funds to prepare for the 2012-2013 season and that CSD would not have done so without the 2012 Agreement. C. CSD Discovers that Legends Never Intended to Perform the 2012 Agreement 19. In preparation for the 2012-2013 season, CSD acquired an extensive inventory of
sports memorabilia as well as inventory related to college games such as the Kickoff Classic between Alabama and Michigan that it needed to conduct on-sight auctions during the upcoming home and college games. CSD acquired the inventory at significant expense and would not have done so in the absence of its binding agreement with Legends to operate at Cowboys Stadium. 20. As the beginning of the 2012-2013 home season approached, CSD began to
increase its attempts to contact Legends to arrange logistical details needed to arrange on-sight auction locations such as security and delivery passes, storage, displays and related items necessary for CSD to conduct the auctions. Legends, however, was not responsive. After countless phone calls, emails and other attempts to confirm game-day arrangements, Legends finally agreed to meet with CSD. 21. On August 21, 2012, just four days before the first Dallas Cowboys’ home game
against the St. Louis Rams, Legends informed CSD for the first time that it did not intend to honor the 2012 Agreement. Legends’ refusal to honor the 2012 Agreement was directly contrary to the terms of the 2011 Agreement and to its numerous, affirmative representations and promises that it already had renewed the parties’ agreement for 2012 and fully intended to allow CSD to conduct on-sight auctions at Dallas Cowboys’ home games as CSD had done for the past 15 years.
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This admission by Legends, that it never intended to honor its agreement and
promises despite affirming those promises just three days prior, was crushing to CSD as its relationship with the Dallas Cowboys was a fundamental part of its business. To add insult to injury, prior to Legends’ disclosure to CSD that it did not intend to honor its agreements, Legends went behind CSD’s back and assisted in negotiating a separate agreement between the Dallas Cowboys and CSD’s competitor – All Pro. Upon information and belief, All-Pro was fully aware of CSD’s agreement with Legends and relationship with the Dallas Cowboys. 23. Indeed, CSD has since learned that Legends knew that All Pro would likely be
retained by the Dallas Cowboys long before the August 21st meeting with CSD. CSD has also learned that there were numerous meetings where Legends discussed the replacement of CSD with All Pro despite the existence of a contractual agreement with CSD for the 2012-2013 season. According to Legends’ employee and Director of Merchandise at Cowboys Stadium Doug Aydelott, this was the “Cowboys’ way.” Notwithstanding Legends’ deceitful conduct and shameful attribution of its own wrongful actions to the Dallas Cowboys, Legends has caused significant damages to CSD. CSD has not only incurred significant expenses in reliance upon Legends’ false representations, but it has, and will continue to, incur other significant losses as a result of lost profits from the lost opportunity to conduct sales at Dallas Cowboys’ pre-season, regular season and playoff games held in Cowboys Stadium, as well as three college games, concerts and other events. CSD has also been damaged by the loss of direct sales by customers who independently contact CSD as a result of CSD’s exposure and presence at Cowboys Stadium. Finally, CSD has been further damaged by the loss of other auction opportunities at charitable and similar functions. In all, CSD has suffered several hundreds of thousands of dollars in damages, if not more, due to Legends’ and All Pro’s wrongful conduct.
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VII. CAUSES OF ACTION COUNT I. – BREACH OF CONTACT - LEGENDS 24. Plaintiff re-alleges and incorporates the allegations in all previous paragraphs as if
expressly set forth herein. 25. Plaintiff and Legends entered into a valid and binding contract as described herein
and as evidenced by the 2011 Agreement and the 2012 Agreement. 26. At all relevant times, Plaintiff has performed and has been ready and able to
perform any remaining obligations under the 2011 and 2012 Agreements. Legends, however, has materially breached the 2012 Agreement by failing and refusing to perform as agreed. 27. Legends’ material breaches of the 2011 and 2012 Agreements substantially,
directly and proximately caused damages to Plaintiff in excess of the minimum jurisdictional limits of this Court. COUNT II. – PROMISORY ESTOPPEL – LEGENDS 28. Plaintiff re-alleges and incorporates the allegations in all previous paragraphs as if
expressly set forth herein. 29. Legends made numerous, material promises to Plaintiff as evidenced by the 2011
and 2012 Agreements and other documents, correspondence and communications as fully described herein. 30. promises. 31. detriment. Plaintiff did, in fact, substantially rely on Legends’ promises to Plaintiff’s It was reasonably foreseeable to Legends that Plaintiff would rely on these
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Legends’ actions and failure to perform its promises substantially, directly and
proximately caused damages to Plaintiff in excess of the minimum jurisdictional limits of this Court. 33. Legends. COUNT III. – FRAUD – LEGENDS 34. Plaintiff re-alleges and incorporates the allegations in all previous paragraphs as if Injustice can be avoided only by the legal enforcement of the promises made by
expressly set forth herein. 35. Legends made material representations to CSD with regard to CSD’s ability to
operate at Cowboys Stadium. 36. The promises and representations made by Legends in and related to the 2011 and
2012 Agreements were false. Legends knew the material promises and representations were false when made, or made the material promises and representations without any knowledge of their truth and as a positive assertion. 37. Legends made the material representations with the intent that CSD would act
upon them to its detriment. 38. Plaintiff did in fact rely upon Legends’ promises and representations by preparing
for the 2012 season. Had Plaintiff known the truth, Plaintiff could have avoided many of the damages alleged herein. 39. Legends also failed to disclose material facts within its knowledge to which CSD
was not aware. CSD did not have an equal opportunity to discover the truth of these omissions. Legends intended for CSD to rely on the omissions, to induce CSD to prepare for the 2012
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season and to otherwise rely upon the omissions to CSD’s detriment until and even after All Pro had entered into a competing agreement with the Dallas Cowboys. 40. Legends’ fraudulent omissions, promises and representations substantially,
directly and proximately caused damages to Plaintiff in excess of the minimum jurisdictional limits of this Court. COUNT IV. – NEGLIGENT MISREPRESENTATION – LEGENDS 41. Plaintiff re-alleges and incorporates the allegations in all previous paragraphs as if
expressly set forth herein. 42. As described above, Legends provided information in the course of its business,
or in a transaction in which it had a pecuniary interest, and the information supplied by Legends was false. Legends did not exercise reasonable care or competence in obtaining or
communicating the information. 43. 44. Plaintiff justifiably relied upon the information supplied by Legends. Legends’ negligent representations substantially, directly and proximately caused
damages to Plaintiff in excess of the minimum jurisdictional limits of this Court. COUNT V. – TORTIOUS INTERFERENCE – ALL PRO 45. Plaintiff re-alleges and incorporates the allegations in all previous paragraphs as if
expressly set forth herein. 46. As fully described herein and as evidenced by the 2011 and 2012 Agreements,
Plaintiff entered into a contract with Legends for the 2012 season. 47. Upon information and belief, All Pro willfully and intentionally interfered with
CSD’s business relationship with Legends and the Dallas Cowboys, with full knowledge of the
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existing business relationship between Legends and Plaintiff and continued value of CSD’s association with the Dallas Cowboys. 48. All Pro’s intentional interference with Plaintiff’s existing business relationship
with Legends and the Dallas Cowboys substantially, directly and proximately caused damages to Plaintiff in excess of the minimum jurisdictional limits of this Court. COUNT VI. – ATTORNEYS’ FEES 49. Plaintiff re-alleges and incorporates the allegations in all previous paragraphs as if
expressly set forth herein. 50. As a result of Defendants’ wrongful conduct as described herein, Plaintiff has
retained the services of counsel. Plaintiff is entitled to recover its reasonable attorneys’ fees and costs associated with this dispute pursuant to Texas Civil Practice & Remedies Code § 38.001.
PRAYER FOR RELIEF WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that Defendants be cited to appear and answer herein, and that upon final hearing hereof, Plaintiff have and recover judgment against Defendants for: (i). (ii). (iii). (iv). (v). (vi). economic damages; actual and consequential damages; reasonable attorneys’ fees and costs; pre-judgment interest as may be provided by law; post-judgment interest at the highest lawful rate from the date of judgment until such judgment is satisfied; and such other and further relief, general and specific, at law or in equity, to which Plaintiff may show itself justly entitled.
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____/s/ Paul R. Genender_______ Paul R. Genender Texas Bar No. 00790758 Andrew B. Russell Texas Bar No. 24034661 K&L Gates LLP 1717 Main Street, Suite 2800 Dallas, TX 75201 Telephone: (214) 939-5500 Facsimile: (214) 939-6100 COUNSEL FOR PLAINTIFF
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