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FILED

Electronically
CV19-00294
2019-07-29 04:14:49 PM
Jacqueline Bryant
1 1120 Clerk of the Court
ROBERT A. DOTSON (NSB No. 5285) Transaction # 7400121
2 MEAD A. DIXON (NSB No. 13860)
DOTSONLAW
3 53 5 5 Reno Corporate Drive, Ste 100

4 Reno, Nevada 89511


Tel: (775) 501-9400
5 Email: rdotson@dotsonlaw.legal
mdixon@dotsonlaw .legal
6 Attorneys for Defendants/Counterclaimant

7 IN THE SECOND JUDICIAL DISTRICT COURT OF THE ST ATE OF NEVADA


IN AND FOR THE COUNTY OF WASH OE
8
NEVADA LOAN SERVICS, LLC, Case No.: CVI 9-00294
9

10 Plaintiffs, Dept. No.: 1


vs.
11
ROBERT FITZGERALD; JOHN WOLF;
12 SUREBREC HOLDINGS, LLC, and DOES
1-5, inclusive,
13
Defendants.
14
SUREBREC HOLDINGS, LLC, a Nevada
15 limited liability company,
16
Counterclaimant,
17 vs.

18 NEVADA LOAN SERVICES, LLC, a


Nevada limited liability company; MAX
19 HAYNES, an individual; BARBRA
MEARSE, an individual; and DOES I-X,
20 inclusive,
21
Counter Defendants.
22

23 SUREBREC HOLDINGS, LLC'S FIRST AMENDED COUNTERCLAIM


EXEMPT FROM ARBITRATION PER NAR 3(A)
24 [ACTION SEEKS DECLARATORY RELIEF]

25 Defendant/Counterclaimant Surebrec Holdings, LLC ("SUREBREC" and/or

26 ''Counterclaimant"), by and through its counsel, DOTSON LAW, hereby files this First Amended

27 Counterclaim against Nevada Loan Services, LLC ("NLS"), MAX HA YNES ("HA YNES"), and

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DOTSON LAW
5355 RENO CORPORA TE DR.
SUlTE #JOO 1
RENO, NEVADA 89511
1
BARBRA MEARSE ("MEARSE"), sometimes collectively referred to herein as ("Counter
2
Defendants") by alleging and averring as follows:
3 I.
4 PARTIES AND JURISDICTION
5 1. Counterclaimant SUREBREC is a Nevada limited liability company and was, at all

6 times relevant to jurisdiction, doing business in Nevada, including Washoe County.

7 2. Robert Fitzgerald ("FITZGERALD") is the manager ofSUREBREC.

8 3. Counter Defendant NLS is a Nevada limited liability company and was, at all times

9 relevant to jurisdiction, doing business in Nevada, including Washoe County.

10 4. Counter Defendant HA YNES is an individual residing in Washoe County, State of

11 Nevada.

12 5. On information and belief, Counter Defendant HA YNES was at all times relevant

13 hereto, was the manager of Counter Defendant NLS.

6. On information and belief Counter Defendant MEARSE is an individual residing in


14
Churchill County, State of Nevada.
15
7. Plaza Resort Club, LLC (sometimes hereafter "PRC" or the "LLC") is a Nevada
16
limited liability company which came into existence on or about the 1st day of September 2016.
17
8. Plaza Resort Club, LLC has as its members SUREBREC HOLDINGS, LLC and
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NEVADA LOAN SERVICES, LLC.
19
9. There is real property at issue in this Counterclaim which is located in Washoe
20
County, Nevada located at 121 West Street in Reno, Nevada within ZIP Code 89501 and is
21
commonly known as the Plaza Resort Club (sometimes hereafter "Plaza Resort").
22
10. The Plaza Resort Club Association is a Nevada nonstock, nonprofit, cooperative
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Corporation (hereinafter referred to as "ASSOCIATION").
24
11. There may be other persons or entities, whether individuals, corporations, associations
25
or otherwise, who are, or may be legally responsible for the acts, omissions, circumstances, and/or
26
happenings alleged in, and/or the damages or other relief requested by this Counterclaim. Because the
27 true names, involvement and capacities of such Defendants are unknown to SUREBREC,

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DOTSON LAW
5355 RENO CORPORA TE DR.
SUITE #lO0 2
RENO, NEY ADA 8951 l
SUREBREC sues them as Defendants DOES I - X ("Doe Defendants") and requests leave to amend
2
this Counterclaim to assert their true names and capacities when the same are ascertained, together
3 with the appropriate charging allegations, when the identities of said Doe Defendants are ascertained.

4 Jurisdiction and venue are proper in this Court because some of the acts and events
12.
5 giving rise to this lawsuit occurred in Washoe County, the real property that is the primary asset of

6 the LLC, the Plaza Resort, is located in Washoe County, and the parties are all residents of or doing

7 business in Washoe County, Nevada.

8 II.

9 FACTUAL ALLEGATIONS

10 13. In or about August 1980, the ASSOCIATION came into existence and since that time

11 it has operated to promote the interest and welfare of the owners of the undivided interests of the real

12 property and improvements commonly known as the Plaza Resort and it has effectively operated the

13 Plaza Resort since that time.

14. On or about August 14, 1980, the Plaza Resort Club, Inc., a Nevada corporation
14
executed a declaration of timeshare ownership. That declaration related to the Plaza Resort, which
15
was at that time and continues to be comprised of 103 separate units and related common areas,
16
support areas, and exclusive easement areas.
17
15. From 1980 through and including August of 2016, the Plaza Resort was operated as a
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timeshare project by the Plaza Resort Club, Inc., in conjunction with the ASSOCIATION.
19
16. In or about August 2016, HA YNES contacted FITZGERALD whom he knew to be
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the manager of SUREBREC and which he knew from time to time invests in and develops real estate
21
projects.
22
17. On August 26, 2016, HA YNES contacted FITZGERALD in Reno to tell him he had a
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deal on a hotel downtown. He represented that he had control of the project and had supporting
24
documentation. They then met on August 27, 2016 at the Plaza Resort for a visual inspection.
25
18. HA YNES presented FITZGERALD with a business proposition to acquire the Plaza
26
Resort.
27 HA YNES proposed a plan whereby the Plaza Resort could be acquired and converted
19.
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5355 RENO CORPORA TE DR.
SUITE #100 3
RENO, NEV ADA 895 l l
from a time share based property with over 5,000 ownership interests into a hotel or development that
2
could be marketed and sold or developed with unified fee ownership that would be eligible for title
3
insurance and therefore traditional, secured, financing.
4 In conjunction with this proposition, HA YNES provided to FITZGERALD and
20.
5 SUREBREC a document entitled Plaza Resort Club - Fact Sheet ("Fact Sheet"). 1

6 21. Through the Fact Sheet and verbal communications HA YNES represented to

7 SUREBREC, through FITZGERALD, that:

8 a. He had been studying the Plaza Resort as a business opportunity for years.

9 That his finance and lending business office was located next door. That he was an expert in finance

10 and had significant past experience in hotel operation, having been part of a management team that

11 opened numerous such properties.

12 b. The elements of the Plaza Resort, the building, included rooms, common areas,

13 a parking ramp and spaces, and easements, were owned by the ASSOCIATION and its members and

14 the Plaza Resort Club, Inc.

C. The extent of the physical structure included a total of 175,475 sq. feet, 17
15
stories, a parking garage of 236 spaces, lodging consisting of 103 guest rooms, two sales offices, an
16
indoor swimming pool and spa, outdoor sundeck, bar and restaurant facilities.
17
d. There were 5,253 total weekly increments of timeshares available ("Weeks"
18
or "Increments") and that the developer and the ASSOCIATION then owned 1,020 of those
19
Increments, that 2,350 Increments were owned by persons that were performing pursuant to their
20
obligations, that approximately 1,750 Increments were owned by persons that were not performing
21
and were subject to foreclosure, and that approximately 133 Increments were delinquent but not to
22
the point so as to justify foreclosure.
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e. The day to day operation of the Plaza Resort was being conducted by a
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management company, R.J .B. Management Company, that was charging a significant fee, not
25
marketing the Plaza Resort as a hotel, instead relying upon the time share revenue. Thus, the
26
property was being inefficiently managed and there was ample opportunity for growth and
27
28 1 The Fact Sheet is attached hereto as Exhibit 1 and incorporated herein by this reference.
DOTSON LAW
5355 RENO CORPORATE DR.
SUITE #100 4
RENO, NEVADA 89511
improvement.
2 The Plaza Resort was operating at a shortfall and if outside funding was not
f.
3 obtained in a matter of days the doors would close, the building would be shuttered, and the operating

4 entities would stop performing on their obligations and would, at best, seek bankruptcy protection.

5 g. HA YNES and NLS, for their part of the proposed business agreement would

6 be charged with and handle the oversite of all management and operational details of the Plaza Resort

7 and the deed recovery process. SUREBREC would only need to supply the capital for acquisition,

8 deed recovery, maintenance and operating shortfall.

9 h. $50,000 would be required immediately and additional sums would be needed

10 to fund hotel operations and execution of the deed recovery plan, while the hotel business was

11 marketed, expenses would be reduced, and the revenue would be increased until it came to exceed

12 expense.

13 1. HA YNES estimated with an investment of $1,500,000 or less over the course

14 of a year to 18 months, the entire 17 floor structure, including the 103 rooms, 263 parking spaces,

pool, and common areas could be acquired and converted to a fee interest in a united title that could
15
be insured by a title company.
16
J. In other words that the Plaza Resort could be purchased for the price of
17
$1,500,000 or less, plus the operational, deed recovery, and oversight effort over the course of the
18
period of time necessary to execute the plan.
19
k. At that point in August 2016, HA YNES had committed to providing a $50,000
20
deposit and negotiated a purchase agreement with the ASSOCIATION and Plaza Resort Club, Inc.
21
However, he was seeking those funds from SUREBREC.
22
1. HAYNES had studied the project for several years and consulted with experts
23
to develop a detailed plan to resolve title issues and make the property marketable and those experts
24
were available to assist in the execution of the plan.
25
m. HA YNES had arranged for the assistance of two executives with 30 years of
26
involvement with the Plaza Resort, and that with their help he would control all aspects of the
27
process.
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n. HA YNES had consulted with lawyers and had a assembled a legal team which
2
was ready to assist in the process.
3 HA YNES had the agreement of First American Title Company's ("FATCO")
0.

4 senior management to issue a title policy after 75% of the 5,253 fractional interests were owned.

5 p. Within 5 to 6 months, the deed recovery process that had already been started

6 would yield 75% of the deeds when added to those deeds already owned or voluntarily deeded back.

7 q. The timeshare ownership was almost to its 40-year expiration.

8 r. The cost estimate to deliver clear title, including legal, foreclosure, mailing, tax

9 and title fees was not estimated to exceed $700,000 and that was included in the $1,500,000 budget.

10 s. The operating shortfall for the projected six months necessary to complete the

11 operation and obtain clear title was not to exceed $600,000.

12 t. The hotel, now under HA YNES' management and oversight, would continue

13 to operate with drastic cuts in expenses and that several hotel marketing experts had and would be

14 consulted to develop a marketing plan to market the property outside of the timeshare customer base,

increasing revenue.
15
u. Once 75% of the deeds were recovered, the ASSOCIATION would be
16
terminated, unwound at an expense not to exceed $200,000 and that was included in the $1,500,000
17
budget.
18
V. Even after obtaining the 7 5%, the buyer would continue the deed recovery
19
process to acquire the 25% remaining fractional deeds/ Weeks/ Increments.
20
w. Per an agreement with the title company the property was "sellable" (sic) once
21
75% of the deeds were recovered while acknowledging that the final 25% would need to be obtained
22
to avoid future title questions.
23
22. SUREBREC, through FITZGERALD, was contacted on August 26, 2016, viewed the
24
property with HA YNES on August 27, 2016, and was informed there were five (5) days to decide if
25
SUREBREC wanted to invest in the opportunity.
26
23. On or about September 1, 2016, PRC was organized, and FITZGERALD and
27

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5355 RENO CORPORATE DR.
SUJTE #100 6
RENO, NEV ADA 89511
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HA YNES were named as the initial managers. 2
2 On or about September 2, 2016, HAYNES on behalfofNLS and FITZGERALD on
24.
3 behalf of SUREBREC executed an operating agreement for PRC entitled Plaza Resort Club, LLC

4 Member/Manager Deal Points ("Member/Manager Deal Points" or "Operating Agreement"). 3

5 25. On or about September 1, 2016, NLS contributed capital to PRC in the form of

6 $1,000 cash. This is the only unreimbursed capital in the form of cash ever contributed by NLS to

7 PRC.

8 26. On or about September 1, 2016, SUREBREC contributed capital to PRC in the form

9 of cash totaling $2,000.

10 27. On or about September 1, 2016 Plaza Resort Club, Inc. sold all of its interests and
4
11 rights, including declarant rights, related to the Plaza Resort to PRC.

12 28. On September 30, 2016 Plaza Resort Club, Inc. entered into a warranty deed with PRC
5
13 transferring the real property it owned related to the Plaza Resort.

29. On or about ·September 1, 2016, a Purchase Agreement was executed between the
14
ASSOCIATION, PRC, and R.J.B. Management Company. 6
15
30. The Purchase Agreement was executed by HA YNES on behalf of PRC.
16
31. The Purchase Agreement relieves the former manager, R.J .B. Management Company
17
of management responsibilities, releasing and holding that entity harmless, with PRC undertaking
18
those responsibilities.
19
32. The Purchase Agreement conveyed from the ASSOCIATION to PRC 4 73 timeshare
20
Weeks and bound the ASSOCIATION to utilize its best efforts to obtain the title by return deeds
21
from owners who were delinquent in their contractual responsibilities with those timeshare
22
Increments being transferred to PRC.
23
33. The Purchase Agreement also resulted in the forgiveness of assessment delinquencies
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on declarant owned Weeks, while simultaneously acknowledging that those Increments had been
25
The Articles of Organization are attached hereto as Exhibit 2 and incorporated herein by this reference.
2
26 The Plaza Resort Club, LLC Member/Manager Deal Points are attached hereto as Exhibit 3 and incorporated herein by
3

this reference.
2 7 4 Sale and assignment of declarant rights attached hereto as Exhibit 4 and incorporated herein by this reference.
5 The Warranty Deed is attached hereto as Exhibit 5 and incorporated herein by this reference.
28 6 The Purchase Agreement is attached hereto as Exhibit 6 and incorporated herein by this reference.
DOTSON LAW
5355 RENO CORPORATE DR.
SUITE #100 7
RENO, NEVADA 89511
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transferred from Plaza Resort Club, Inc. to PRC.
2 As consideration to support the Purchase Agreement, PRC agreed to apply all revenue
34.
3 collected and received on behalf of the ASSOCIATION from any source, including but not limited

4 to, the Arlington Towers Homeowners' Association ("ATHOA''), and hotel rental, to meet projected

5 operating shortfalls through February of 2017 with the only limitation being that the sum could not be

6 more than $600,000 in the aggregate through that period. However, there was a further understanding

7 that additional advances might be required to meet operational shortfalls and that those could

8 continue through the life of the agreement.

9 35. As consideration to support the Purchase Agreement, PRC promised to finance the

10 deed recovery effort and title underwriting (transfer) expenses.

11 36. The Purchase Agreement also sets forth an agreement to terminate the "timeshare

12 regime" which is understood to be a plan to convert the Plaza Resort from a timeshare-oriented

13 project to one where title would be consolidated, and the real property could be held and marketed in

14 a traditional fashion with fee ownership and most importantly, insurable title.

37. Although the Purchase Agreement and plan proposed by Haynes contemplated
15
achieving that goal of insurable title, earlier, the declarations from 1980 call for a possible closing
16
date in August 2020.
17
38. The Purchase Agreement has as conditions precedent to close of escrow the following:
18
a. That PRC would participate in the ASSOCIATION board meetings as an
19
observer but ultimately PRC would decide and therefore have authority to make staffing decisions
20
related to the operation of the property and the deed recovery and would likewise be ultimately
21
responsible for supporting the ASSOCIATION and maintaining the obligations to RCI, A THOA and
22
existing reservations. Thus, PRC became ultimately responsible for ensuring the continued operation
23
and contractual obligations.
24
b. That the declaration be amended to provide for termination of the timeshare
25
program at a mutually agreeable date arrived at between PRC and the ASSOCIATION.
26
C. That a title company has committed to issue to PRC a suitable title insurance
27
policy.
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RENO, NEVADA 89511
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39. On September 2, 2016 SUREBREC deposited $40,000.00 into the PRC account. On
2 September 29, 2016 SUREBREC deposited $227,000.00 into the PRC account. On November 1,

3 2016 SUREBREC deposited $180,030.00 into the PRC account. On November 30, 2016

4 SUREBREC deposited $13,030.00 into the PRC account. On December 13, 2016 SUREBREC

5 deposited $15,030.00 into the PRC account. On December 20, 2016 SUREBREC deposited

6 $35,030.00 into the PRC account. These and all other cash infusions from SUREBREC were

7 contributions of capital pursuant to NRS 86.321.

8 40. Those capital contributions have been shown as loans in tax documentation, but no

9 lending documentation was executed as to any of them.

10 41. An operating agreement was drafted by the organizer but never agreed upon as

11 between the members of PRC.

12 42. Pursuant to the representations to SUREBREC verbally and in the Member/Manager

13 Deal Points, NLS and HA YNES were to oversee management of the property. Further, they agreed

to do this for no fee until the property reached a breakeven cash flow. Therefore, other than the
14
projected capital requirements, SUREBREC was to have no operational responsibilities or
15
obligations.
16
43. Despite these representations by December 2016, HAYNES and NLS began to shrug
17
and abdicate management oversight, instead suggesting that SUREBREC and its agents would need
18
to assume those responsibilities. These circumstances and instances of abdication continued
19
thereafter.
20
44. Although agreeing to take no management fee, pursuant to the representations to
21
SUREBREC and the Manager/Member Deal Points, NLS was to receive reimbursement for
22
reasonable expenses or advances made.
23
45. On December 27, 2016, NLS submitted a request for reimbursement and was
24
reimbursed $3,893.28 to reimburse it for its expenses and advances. On information and belief, no
25
further expenses or advances were ever incurred by NLS related to the operation of PRC and no
26
further submissions for reimbursement were made or paid.
27
46. HA YNES represented that:
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a. He had significant experience in the operation and management of hotels.
2 He and NLS would assume and provide all operational and management
b.
3 services in a fashion that exceeded the prior management company, reducing expenses and increasing

4
revenue;
5 C. SUREBREC would only be responsible for the provision of capital to meet the

6 purchase obligations, deed recovery, operating losses and would not be called upon for management

7 or operational issues and services;

8 d. SUREBREC would have no operation responsibility or obligations;

9 e. That the consolidation and transformation to a marketable property would

10 occur between 12 to 18 months from the initial involvement;

11 f. That FATCO had committed to provide title insurance upon PRC obtaining

12 75% ownership of the Increments,

g. NLS and HA YNES had the experience, staffing and skill required and would
13
oversee the management at no cost. Until such time as the business reached break even cash flow
14
there was to be no management fee. Thus, NLS and HA YNES were to not charge any management
15
fee; and
16
h. Once 75% of the Weeks had been acquired by PRC, title insurance from
17
FATCO and therefore marketable title would and could be obtained for the property and it would
18
then be marketed and sold.
19
SUREBREC relied upon these representations and those described herein and above, in determining
20
to invest and enter into the LLC with NLS.
21
4 7. Pursuant to the Operating Agreement NLS was to have the right to rent between 20 to
22
30 daytime parking spots and two 24-hour spots at the prevailing rate, at that time $75 and over $100
23
respectively. NLS has exercised this right but has not stayed current with its rental payment
24
obligations to PRC.
25
48. Contrary to the representations, NLS and HA YNES did not provide, competent,
26
satisfactory or adequate management or oversight of the Plaza Resort.
27 Under the management and oversight ofNLS and HA YNES, the accounting for the
49.
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operation contained a tremendous number of mischaracterized entries and was otherwise sloppy,
2
misleading, and inaccurate. Once FITZGERALD and SUREBREC recognized the serious problem
3 with the accounting, expert consultants were retained to review and revise the financials on a

4 comprehensive basis. The corrective action took several months and cost tens of thousands of

5 dollars.

6 50. The management and oversight of NLS and HA YNES resulted in complaints and

7 eventually resignations from employees including the following:

8 a. General Manager Dan Duerst complained of mistreatment, disrespect and

9 harassment by HA YNES and eventually resigned without notice at 10:45 PM on February 8, 2018.

10 b. Association Services Clerk, a position critical to the business plan of PRC,

11 Ally Johnson was undermined in her position by and at the direction of the representatives ofNLS,

12 with those persons making undisclosed changes to the TimeShareWare program which in tum

13 impacted the deed recovery and delinquency information leading to an incomplete and inaccurate

database. This resulted in her complaining to Duerst and raising concerns that she was unable to
14
meet the demands of her position.
15
C. Nattalia Castell, like Ms. Johnson, complained of her treatment and
16
manipulation by NLS representative MEARSE. This escalated to the general manager, Duerst, and
17
resulted in an incident report. She also was delayed in receiving her raise that was to be processed by
18
NLS, MEARSE.
19
d. Lisa Carillo was hired as the General Manager in December of 2016. Her
20
employment ended in February 201 7 after persistent struggles.
21
e. Sharon Ashton, a Sales Manager, was hired and worked three days before she
22
apparently quit after she walked out of a meeting with HA YNES.
23
51. NLS and HA YNES did not accurately or adequately track the finances and accounting
24
of the business. NLS placed one of its employees, MEARSE, in charge of this effort. However, she
25
failed to keep the books in a fashion that complied with generally accepted accounting principles
26
("GAAP").
27 Without discussion, approval or documentation, on or about March 24, 201 7,
52.
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HA YNES, MEARSE, and NLS directed the payment of $1,000 to Car Loans, Inc., purportedly for
2
the preparation of a concept for transforming the bar at the Plaza Resort to a private club. This, in
3
tum, increased the operating expense of PRC, impacting the exposure of SUREBREC.
4 On information and belief, Car Loans, Inc. and NLS have shared ownership and
53.
5 management, with HA YNES, being the primary owner and manager of both.

6 54. NLS and an affiliated company Car Loans, Inc. charged PRC increasing sums for the

7 support and management of the 1 to 3 onsite accounting staff. This management was provided by

8 NLS through MEARSE. These fees began at $500/month in approximately September 2016 and had

9 increased to $3,000/month by approximately September 2017. When confronted regarding these

10 sums MEARSE indicated that HA YNES had instructed her not to inform FITZGERLD because the

11 SUREBREC representatives were not paying attention and would not know.

12 55. Up until that point in time SUREBREC had not had access to the accounting for the

13 operation of the Plaza Resort or PRC.

56. During this time of increasing charges, HAYNES represented to SUREBREC that
14
MEARSE was paid a greater sum by Car Loans and NLS than was being paid to her by PRC and that
15
PRC was benefiting from that supplementation.
16
57. MEARSE sought to be hired by an entity other than SUREBREC, but managed by
17
FITZGERALD, to fill a bookkeeping/support position. During the interview process MEARSE
18
explained that Car Loans Inc. was substantially "underwater" and that a significant part of her time
19
and responsibilities for that entity was spent addressing the concerns of the investors in that company.
20
The statement was concerning to FITZGERALD. MEARSE was not hired.
21
58. As a consequence of these finance and accounting failures SUREBREC was
22
compelled to intervene and supply and fund accounting and bookkeeping support.
23
59. HA YNES and NLS did not properly attend to licensure, insurance, and regulatory
24
obligations. This led to damages including, but not limited to, delays in liquor license, employee
25
health insurance omissions, and adverse findings and penalties from OSHA.
26
60. NLS and HA YNES did not take adequate and appropriate steps to ensure that a city of
27 Reno business license was obtained in a timely manner, prior to the grand opening at which the

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mayor was in attendance.
2
61. Despite advice of an insurance broker to the contrary, NLS and HA YNES did not take
3 adequate steps to insure and confirm that all employees had been offered health insurance and that

4 the offer and declination of coverage was documented. When this was discovered counsel was

5 necessarily hired to investigate and provide advice to correct the failures. Additional employees

6 enrolled upon learning of this benefit.

7 62. NLS and HA YNES did not take adequate and appropriate steps to insure and confirm

8 that the Plaza Resort had working conditions that met the relevant work safety standards or policies

9 in place to address known conditions related to the Plaza Resort structure and operations. On January

10 2, 2019 an unannounced OSHA inspection and investigation occurred. Following the investigation,

11 counsel was necessarily hired to investigate and provide advice to correct the violations noted. Fines

12 are expected and expenses were and continue to be incurred as result. All of these related expenses

13 impact the return of investment and increase exposure to SUREBREC.

63. NLS and HAYNES did not take adequate and appropriate steps to insure and confirm
14
that the Plaza Resort had an adequate and appropriate system to keep and record employee records.
15
As a consequence, SUREBREC and its agents have been forced to incur expense and effort to correct
16
that condition.
17
64. Despite the existence of an employee handbook from the predecessor, NLS and
18
HA YNES did not take adequate and appropriate steps to insure and confirm that the Plaza Resort had
19
an appropriate employee handbook and did not distribute any employee procedures to employees.
20
Nor did they confirm and update the written safety plan. As a consequence, SUREBREC and its
21
agents have been forced to address these conditions, incurring additional expense and effort.
22
65. It has been discovered by SUREBREC that NLS and HAYNES undertook improper
23
actions in conjunction with the vetting and hiring of employees during their time overseeing the
24
management of Plaza Resort.
25
66. NLS and HA YNES did not adequately staff the property. As a consequence of this
26 failure, SUREBREC was compelled to provide support in multiple ways including management and

27
even supplying extra labor to clean and makeup rooms.
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67. Because of the failure ofNLS and HAYNES to fill vacant management positions
2
SUREBREC was compelled to fill those positions, including the General Manager position when
3
vacancies occurred.
4 John Wolf, an agent of SUREBREC, was forced into the General Manager position
68.
5 when a vacancy occurred following the departure of Lisa Carillo and again after the resignation of

6 Dan Duerst. To date he remains in that position. Hotel management and the hospitality industry

7 generally, is not the chosen occupation of Mr. Wolf. Thus, this assignment was not an opportunity

8 and rather a distraction from his chosen career and his obligations to SUREBREC and other

9 employers.

10 69. From on or about February 2017 through September 2017, HA YNES and NLS

11 directed MEARSE and/or MEARSE did cause PRC to pay to NLS $1,800 per month for rent of

12 office/storage space that was not being utilized by PRC. This, in turn, increased the operating

13 expense of PRC, impacting the exposure of SUREBREC.

70. Due to the role of SUREBREC to fund operations, any expenses to PRC directly
14
impact and increase the risk of loss to SUREBREC.
15
71. On infonnation and belief, in 201 7 HAYNES began to market the Plaza Resort for
16
sale, despite the fact that 75% ownership of Increments had not been obtained and title not resolved
17
such that a title company had agreed to insure title.
18
72. In September of 2017, HA YNES solicited a letter of intent ('"LOI") for $11,000,000 to
19
purchase the Plaza Resort and unrelated property believed to be owned by HAYNES or companies
20
controlled by him, in fee. This was based upon representations to the prospective purchaser from
21
HA YNES. In fact, the terms of the LOI were inconsistent with what was actually owned and
22
understood and known by HA YNES to be owned at the time by PRC. Further, it contained
23
provisions for title insurance which HA YNES knew could not be obtained at the time. Lastly, it
24
contained a financing provision, indicating a lender would be required and its terms met even though
25
HA YNES knew that due to the fractured title and inability to provide a lenders policy of title
26
insurance, meeting those loan terms would be impossible.
27 It came to the attention of FITZGERLD that HA YNES was representing to
73.
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prospective purchasers and third parties, figures regarding gross receipts and receivables that were
2
misleading as they included timeshare receipts that were not reoccurring and/or receivables that were
3 not expected to be collected. It was in conjunction with this revelation that SUREBREC came to

4 recognize that the P&L produced by NLS and MEARSE overstated the income to PRC.

5 74. In response to this concern SUREBREC retained a third-party accounting firm to

6 review the books of PRC and develop corrective entries to bring the books in conformance with

7 GAAP. This was an unexpected expense and should not have been necessary had NLS, HA YNES

8 and MEARSE performed as represented.

9 75. It came to the attention of SUREBREC and FITZGERLD that HA YNES was

10 representing to prospective purchasers and third parties, figures regarding remodel expenditures by

11 PRC related to the Plaza Resort that were grossly exaggerated.

12 76. In response to these concerns SUREBREC called a meeting of PRC on February 16,

13 2018 and held a vote, electing FITZGERALD as the sole manager of PRC.

77. The fact that HA YNES was no longer a manager of PRC did not relieve him or NLS
14
of responsibilities under the Operating Agreement.
15
78. On or about April 22, 2018 a nonbinding LOI setting forth the proposed terms for the
16
purchase of certain assets of PRC by Tolles Development Company, LLC and Marmot Properties,
17
LLC (hereinafter "Tolles") was agreed to.
18
79. Negotiations related to the drafting of a purchase and sale agreement ('"PSA")
19
occurred from April until December 12, 2018. During that time due diligence was conducted by
20
Tolles.
21
80. In late 2018 SUREBREC learned that the Plaza Resort was in a designated
22
"Opportunity Zone" and that this fact had been known by HA YNES and NLS since the inception of
23
the zone but had not been disclosed to SUREBREC.
24
81. PRC and Tolles were unable to come to an agreement regarding the final terms of a
25
sale.
26
82. At no point did Tolles or any prospective purchaser sign or execute a PSA.
27 At no point has an offer for the sale and purchase of PRC, the assets identified in the
83.
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LOI, or any assets of PRC been received from Tolles or any prospective purchaser.
2
84. No valid offer to purchase for any price has ever been received.
3 No prospective purchaser has ever demonstrated proof of funds or an ability to
85.
4
purchase the assets of PRC.
5 86. On information and belief, no investor group has agreed to provide funds based upon
6 the terms of the Tolles LOI.

7 87. During these negotiations HA YNES deferred to Tolles, indicating they, he and Tolles,

8 had other business dealings, and proposed and supported positions that were favorable to Tolles and

9 contrary to the terms of the LOI and the interests of PRC, NLS, and SUREBREC and the known

10 interests ofNLS.

11 88. On or about mid-January 2019 SUREBREC learned that FATCO, the title insurance

12 company that HAYNES had represented had agreed to provide title insurance upon assembly of 75%

13 of the Increments, had, unbeknown to SUREBREC, made the determination that it would not provide

14 insurance to PRC and for the Plaza Resort under any circumstance.

89. This determination by FA TCO undermines the business plan represented by the Fact
15
Sheet, the exit strategy, the value of the property and the ability to sell.
16
90. On February 5, 2019 HA YNES filed a Complaint as an individual against
17
FITZGERALD as an individual contending breach of contract, breach of implied covenant of good
18
faith and fair dealing, tortious breach of the implied covenant of good faith and fair dealing, breach of
19
fiduciary duty, fraudulent misrepresentation and civil conspiracy. As there is no contract between
20
them a motion to dismiss was filed as a responsive pleading. This action was then recaptioned and
21
NLS substituted in for HAYNES by stipulation.
22
91. It is apparent that a current dispute, albeit mis-pleaded, exists and has been brought
23
related to the responsibilities of the operating agreement.
24
III.
25
FIRST CAUSE OF ACTION
26 (Breach of Contract)
27 SUREBREC realleges and incorporates by reference each and every allegation
92.
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contained in the preceding paragraphs as if set forth fully herein.
2 The operating agreement memorializes a valid, binding, existing, and enforceable
93.
3
contract between SUREBREC on the one hand and NLS and HAYNES on the other.
4 SUREBREC has fully performed its obligations under the contract.
94.
5 95. Pursuant to the contract, NLS and HAYNES, were required to oversee the operation of

6 the Plaza Resort and the business of the LLC.

7 96. NLS and HA YNES were to oversee the operation in a fashion that complied with the

8 standard of care of a competent operator of timeshares and hotels.

9 97. NLS and HA YNES were to do so at no expense to the LLC.

10 98. NLS and HA YNES have failed to fulfill their contractual obligations to SURBREC.

11 They have not met the performance promises to SUREBREC regarding the operation of the Plaza

12 Resort.

13 99. The breaches ofNLS and HA YNES include, but are not limited to, the following:

a) Misappropriation of funds to itself and affiliated persons and entities through


14
salaries to support person(s), including MEARSE, that should have been provided without charge
15
under the contract and failing to pay parking fees.
16
b) Failing to develop and maintain financial books and records for the LLC that
17
comply with the reporting requirements of GAAP.
18
c) Failing to pursue the business affairs of the company with reasonable diligence
19
so as to obtain the reduction in expenses and increase in revenue promised.
20
d) Failing to ensure that the business affairs of PRC were addressed properly or in
21
a timely manner.
22
100. The failure to perform their obligations under the contract are material breaches of
23
NLS and HA YNES' obligations.
24
101. As a consequence of these breaches SUREBREC has been forced to fulfill all of its
25
obligations under the contract and has been also been forced to also fulfill the obligations that were to
26
be borne by NLS and HA YNES.
27 102. SUREBREC has sustained damages as a direct and proximate result of the breaches by
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NLS and HA YNES and consequently is entitled to damages in excess of $15,000.
2 103. As a direct and proximate result of the NLS and HA YNES breach of the contract,
3 S URBREC has been forced to retain an attorney to assert its rights and has and will incur costs as a

4 result thereof to which it has a right of reimbursement.

5 IV.
6 SECOND CAUSE OF ACTION

7 (Breach of Implied Covenant of Good Faith and Fair Dealing)

8 104. SUREBREC realleges and incorporates by reference each and every allegation

9 contained in the preceding paragraphs as if set forth fully herein.

10 I 05. SUREBREC entered into a valid contract with NLS and HAYNES setting forth the

11 understanding of the operation of the LLC.

12 I 06. The covenant of good faith and fair dealing is implied in every contract in Nevada,

13 and NLS and HA YNES owed SUREBREC a duty of good faith.

107. NLS and HAYNES have not only violated the terms of the applicable written
14
agreements but have also acted in bad faith and in contravention to the spirit and intent of those
15
contracts.
16
I 08. NLS and HA YNES have breached and in fact have taken actions to prevent
17
SUREBREC from enjoying the many benefits that should have come from the contract and instead
18
SUREBREC has been forced to incur expense and effort to fulfill the obligations of Counter
19
Defendants under the contract.
20
109. NLS has breached the obligations as set forth herein.
21
110. NLS and HAYNES have failed to proceed with the plan as outlined by them in a
22
businesslike manner or exercise reasonable diligence and effort so as to support the success of the
23
business and the operation and execution of the business plan agreed to.
24
111. NLS and HAYNES have also acted in bad faith and in contravention to the spirit and
25
intent of those agreements by failing to diligently pursue the business interests of the LLC, increasing
26
the sums paid to NLS and related companies and persons for services without notice to SUREBREC,
27 and instead pursuing a manipulation of the Operating Agreement by attempting to coerce a buyout of

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the NLS interest in the LLC for an unsupported price.
2
112. As a direct and proximate result of the breaches of the implied covenant of good faith
3 and fair dealing by NLS and HA YNES, SUREBREC has suffered damages in an amount in excess of

4
$15,000.
5 113. As a direct and proximate result of NLS and HA YNES' s breaches of the implied
6 covenant of good faith and fair dealing, SUREBREC has been forced to retain an attorney to asserts

7 its rights, and has and will incur costs as a result thereof to which it has a right of reimbursement.

8 V.

9 THIRD CAUSE OF ACTION

10 (Tortious Breach of the Implied Covenant of Good Faith and Fair Dealing)

11 114. SUREBREC realleges and incorporates by reference each and every allegation

12 contained in the preceding paragraphs as if set forth fully herein.

13 115. SUREBREC entered into a valid contract with NLS and HA YNES setting forth the

14 understanding of the operation of the LLC.

116. The covenant of good faith and fair dealing is implied in every contract in Nevada,
15
and NLS and HA YNES owed SUREBREC a duty of good faith.
16
11 7. As asserted in the Second Claim for Relief, NLS and HA YNES have violated the
17
covenant of good faith and fair dealing.
18
118. HAYNES and NLS owed fiduciary duties to SUREBREC during the period of time
19
that they were charged with the management of the LLC and the operation of the Plaza Resort. These
20
fiduciary duties included the duty of honesty, full disclosure, good faith, and loyalty. Under Nevada
21
law the breach of the implied covenant of good faith and fair dealing gives rise to a tort when a
22
special relationship exists between the parties to the contract such as the relationship that existed
23
between SUREBREC, NLS and HA YNES during the period of time that HA YNES and NLS held
24
management and control virtually exclusively over the LLC and the operation of the Plaza Resort and
25
during that period of time of entrustment engaged in a grievous and perfidious misconduct.
26
119. SUREBREC placed an extreme and special degree of trust in NLS and HA YNES
27 which warrants application of tort liability for the breach of the obligation of good faith and fair

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1
dealing.
2
120. Because of the fiduciary duties owed to SUREBREC by NLS and HAYNES, a special
3 relationship exists, that relationship imposes upon NLS and HAYNES a higher duty of good faith and

4 fair dealing for which a breach of that higher duty constitutes a tort.

5 121. Because of the special relationship which existed, SUREBREC trusted NLS and
6 HAYNES and relied upon them to act in good faith.

7 122. As a direct and proximate result of the tortious breaches of the implied covenant of

8 good faith and fair dealing by NLS and HAYNES, SUREBREC has suffered damages in an amount

9 in excess of $15,000.

10 123. Due to the nature of the relationship and breach, NLS and HA YNES have engaged in

11 willful, malicious, intentional, oppressive, and despicable conduct with willful and conscious

12 disregard of SUREBREC's rights and welfare, thereby justifying, exposing and subjecting them to an

13 award of punitive and exemplary damages.

124. As a direct and proximate result of the tortious breaches of the implied covenant of
14
good faith and fair dealing by NLS and HA YNES, SUREBREC has been forced to retain an attorney
15
to asserts its rights, and has and will incur costs as a result thereof to which it has a right of
16
reimbursement.
17
VI.
18
FOURTH CAUSE OF ACTION
19
(Declaratory Relief)
20
125. SUREBREC realleges and incorporates by reference each and every allegation
21
contained in the preceding paragraphs as if set forth fully herein.
22
126. Pursuant to NRS 30.030 - 30.050, a party to a contract is entitled to a declaration of
23
rights by a court of competent jurisdiction, determining the status, rights, or legal relations under the
24
terms of the contract, whether or not a breach of the contract has occurred.
25
127. An actual controversy exists regarding the status, rights and legal relationship between
26
NLS, HA YNES and SUREBREC under the contract. This dispute includes the respective ownership
27 interests of NLS and S UREBREC and the application of the sales clause of the Operating Agreement.

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1
128. SUREBREC requests that this Honorable Court enter an order declaring the relative
2
ownership interests of NLS and SUREBREC in PRC based upon capital contribution, NRS 86.321 or
3
otherwise.
4 129. S UREBREC requests that this Honorable Court enter an order declaring that there has
5 been no arm's length offer to purchase the assets of PRC and describing what shall constitute such an

6 offer.

7 130. SURBREEC requests that this Honorable Court enter an order declaring that NLS has

8 violated the terms of the contract and determine and state the reduction in ownership interest

9 appropriate in light of the magnitude of the violation.

10 131. SUREBREC has been required to retain the services of an attorney to address this

11 actual controversy and is entitled to recover its reasonable attorneys' fees and costs incurred in

12 pursuance of this claim.

13 VII.

FIFTH CAUSE OF ACTION


14
(Breach of Fiduciary Duty)
15
132. SUREBREC realleges and incorporates by reference each and every allegation
16
contained in the preceding paragraphs as if set forth fully herein.
17
133. As a manager of PRC, HA YNES owed fiduciary duties to SUREBREC as a member.
18
These duties include, but are not limited to, the duties of loyalty, honesty, and full disclosure.
19
134. Pursuant to the operating agreement and as a member of PRC, NLS owed fiduciary
20
duties to SUREBREC. These duties include, but are not limited to, the duties ofloyalty, honesty, and
21
full disclosure.
22
135. NLS and HAYNES breached their fiduciary duties to SUREBREC.
23
136. The duty ofloyalty requires that HAYNES and NLS put the interests of PRC and its
24
members, including SURBREC, above any of his or its own interests.
25
13 7. In refusing to fulfill his obligations to PRC and instead furthering his and its own
26
interests as they pertained to other investments and business partners HA YNES and NLS breached
27 the duty of loyalty and full disclosure. This was done to the detriment of PRC and SUREBREC.

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138. In failing to disclose the sums paid for the services rendered to PRC by MEARSE,
2
HA YNES and NLS violated their duties of honesty, loyalty and disclosure.
3 139. These and other actions described herein constitute a breach of HA YNES and NLS's
4
fiduciary obligations.
5 140. As a direct and proximate result of these breaches of fiduciary duty by HA YNES and
6 NLS, SUREBREC has been forced to retain an attorney to assert its rights and have and will incur

7 costs as a result thereof to which it has a right of reimbursement.

8 141. Furthermore, SUREBREC' s incurrence of attorney's fees are the natural and

9 proximate cause of special damages arising from the NLS and HA YNES breaches of fiduciary duty,

10 and as such, attorney's fees are hereby pleaded as an item of special damages in accordance with

11 Sandy Valley Assocs. v. Sky Ranch Estates Owners Ass 'n, 117 Nev. 948, 35 P.3d 964 (2001),

12 abrogated in part on other grounds as stated in Liu v. Christopher Homes, LLC, 321 P.3d 875, 878

13 (Nev. 2014).
142. As a direct and proximate result of the breach of fiduciary duty by NLS and
14
HA YNES, SUREBREC has suffered damages in an amount in excess of $15,000.
15
143. HA YNES' actions towards SUREBREC were willful, oppressive, malicious, and
16
fraudulent; entitling it to punitive damages in an amount in excess of $15,000.
17
VIII.
18
SIXTH CAUSE OF ACTION
19
(Fraud/Intentional Misrepresentation)
20
144. SUREBREC realleges and incorporates by reference each and every allegation
21
contained in the preceding paragraphs as if set forth fully herein.
22
145. HA YNES, and to the extent he is found to have been acting as the agent ofNLS, NLS,
23
made various false representations of material fact to SUREBREC. Specifically, they represented
24
that:
25 HAYNES had significant experience and was qualified to oversee the
a.
26 management and operation of the Plaza Resort.

27

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b. HA YNES and NLS would oversee the management of the Plaza Resort in such
2
a fashion so that SUREBREC would have no obligation in that regard.
3 That SUREBREC would have no obligations or responsibilities except the
C.

4 provision of capital.

5 d. HA YNES and NLS had obtained the agreement of FA TCO to issue a title

6 policy after 75% of the Weeks/ Increments were owned.

7 e. The execution of the business plan, acquisition of 75% of the weeks, and

8 amendment of the ASSOCIATION documents terminating the ASSOCIATION and curing any title

9 defects could occur in less than 18 months or, in other words, by February of 2018.

10 f. Pursuant to the agreement with the title company the property would be

11 "sellable" once 75% of the deeds were recovered, meaning owned by PRC.

g. That NLS would pay for the rent of the parking spots it had right to rent and
12
did rent pursuant to the operating agreement signed September 2, 2016.
13
146. These representations were made by HA YNES and NLS in verbal and written form on
14
August 26, 2016 and August 27, 2016 and some of these were subsequently reiterated and
15
memorialized in the PSA dated September 1, 2016 and the operating agreement signed September 2,
16
2016. These representations were made in Reno, Nevada.
17
147. SURBREC has discovered these misrepresentations recently.
18
148. SURBREC relied upon these representations by HA YNES and NLS, and HA YNES
19
and NLS knew or should have known these representations were false, or they had or were without a
20
sufficient basis of information to make such statements.
21
149. HA YNES and NLS made these statements intentionally, with knowledge or belief that
22
the representations were inaccurate or false or with an insufficient basis for making the
23
representations.
24 150. It was the intention of HAYNES and NLS, through these representations, to induce
25 SURBREC to act, in particular to become involved in the business enterprise, PRC, and to do so with

26 and in reliance on these misrepresentations.

27 151. SURBREC was justified in relying upon these representations.

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152. As a direct and proximate result of these misrepresentations, SURBREC has suffered
2
damages in an amount in excess of$15,000.
3 153. Counter Defendants' conduct as alleged above has been oppressive, fraudulent,
4 malicious and pursued in conscious disregard to the known rights of SUREBREC such that it is

5 entitled to recover exemplary and punitive damages from Counter Defendants pursuant to NRS

6 42.005.

7 154. As a direct and proximate result of NLS' and HA YNES' misrepresentations,

8 SURBREC has been forced to retain an attorney to asserts its right and has and will incur attorney's

9 fees and costs as a result thereof to which it has a right of reimbursement.

10 IX.

11 SEVENTH CAUSE OF ACTION

12 (Negligent Misrepresentation)

155. SUREBREC realleges and incorporates by reference each and every allegation
13
contained in the preceding paragraphs as if set forth fully herein.
14
156. HA YNES supplied SUREBREC with false information as described herein and above
15
and did so either intentionally or while failing to exercise reasonable care or competence in obtaining
16
or communicating such false information and without a sufficient basis for making such a
17
representations.
18
157. NLS, through the acts of its agent, HAYNES, supplied SUREBREC with false
19
information as described herein and above while failing to exercise reasonable care or competence in
20
obtaining or communicating this false infonnation and without sufficient basis for making such
21
representations.
22
158. SUREBREC justifiably and detrimentally relied on the representations of HA YNES
23
and NLS which caused it to be damaged in an amount in excess of $15,000.
24 159. As a direct and proximate result of HA YNES' and NLS' conduct, SUREBREC has
25 been forced to retain an attorney to assert its right and has and will incur costs and attorney's fees as a

26 result thereof to which it has a right of reimbursement.

27 ///

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X.
2
EIGHTH CAUSE OF ACTION
3 (Dissolution and Sale)
4 160. SUREBREC realleges and incorporates by reference each and every allegation
5 contained in the preceding paragraphs as if set forth fully herein.

6 161. Joint Management and control of the company is no longer viable due to the

7 breakdown in the relationship between the members, the lack of progress towards the execution of

8 the business plan, the failure of NLS and HA YNES to comply with their contractual obligations and

9 fiduciary duties, and the current understanding of the availability of title insurance. This has caused

10 the business plan as promoted by HA YNES to SURBREC to be no longer reasonably possible or

11 practicable and therefore, to carry on the business of the company in conformity with its Articles of

12 Organization and operating agreement is no longer reasonably possible or practicable. Consequently,

13 SUREBREC seeks, as an alternative remedy, the judicial dissolution of the entity and liquidation of

the assets and the distribution of the proceeds in accordance with statute and in proportion to the
14
respective capital accounts of the members.
15
162. As a result of the circumstances set forth in this Counterclaim, SUREBREC is entitled
16
to judicial dissolution of the company pursuant to applicable Nevada law.
17
163. As additional relief SURBREC is entitled to its attorney's fees and costs for the
18
prosecution of this claim for relief.
19
XI.
20
NINTH CAUSE OF ACTION
21
(Aiding and Abetting Breach of Fiduciary Duty - Mearse)
22
164. SUREBREC realleges and incorporates by reference each and every allegation
23
contained in the preceding paragraphs as if set forth fully herein.
24
165. As a manager of PRC, HA YNES owed fiduciary duties to SUREBREC.
25
166. HAYNES breached those fiduciary duties as set forth herein above in the fourth cause
26
of action. In particular, by breaching his duties of loyalty, honesty and full disclosure and furthering
27
his own interests and those of NLS over PRC and SUREBREC.
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167. Pursuant to the Operating Agreement and as a member of PRC, NLS owed fiduciary
2
duties to SUREBREC.
3 168. NLS breached those fiduciary duties as set forth in the fourth cause of action.
4 169. MEARSE aided and abetted HA YNES' and NLS' s breach of fiduciary duties by
5 concealing and/or failing to disclose sums paid for services rendered to PRC, by acting as the

6 instrument ofNLS in recording the expenditures and failing, pursuant to directives from HA YNES,

7 to disclose to SUREBREC the monies being appropriated to NLS and Car Loans Inc. for the services

8 she was allegedly rendering to PRC and taking those funds for herself. She also, due to her position

9 of oversight, knew or should have known of the failure by NLS and HA YNES to pay sums owed for

10 the parking spots rented by that entity from PRC and failed to disclose that those payments had not

11 been made and/or had fallen in arrears.

12 170. As a direct and proximate result ofMEARSE's conduct SUREBREC has been

13 damaged in excess of $15,000.


171. As a direct and proximate result ofMEARSE'S conduct SUREBREC has been forced
14
to retain an attorney to assert its rights and have and will incur costs as a result thereof to which it has
15
a right of reimbursement.
16
XII.
17
TENTH CAUSE OF ACTION
18
(Civil Conspiracy)
19
172. SUREBREC realleges and incorporates by reference each and every allegation
20
contained in the preceding paragraphs as if set forth fully herein.
21
173. HAYNES and MEARSE acting together in coordination and agreement intended to
22
act so as to defraud SUREBREC as set forth in the fifth and sixth causes of action described above.
23
174. As a result of HA YNES and MEARSE's conduct SUREBREC has been damaged in
24
excess of$15,000.
25
175. As additional relief SURBREC is entitled to its attorney's fees and costs for the
26
prosecution of this claim for relief.
27
Ill
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XIII.
2
ELEVENTH CAUSE OF ACTION
3 (Intentional Interference With Contractual Relations)
4 176. SUREBREC realleges and incorporates by reference each and every allegation
5 contained in the preceding paragraphs as if set forth fully herein.

6 177. NLS and SUREBREC entered into a contract which was a valid and existing contract

7 which required NLS to pay the LLC, PRC, monies for parking spaces as described herein.

8 178. MEARSE knew of the contract, had knowledge of the contract's specific terms, and

9 was even charged with the responsibility on behalf of PRC to oversee its administration and on

10 information and belief was charged with the responsibility on the part ofNLS to confirm and affinn

11 that the contractual payments were made.

12 179. MEARSE intentionally, improperly, and with knowledge that to do so would interfere

13 with the contractual relationship between NLS and SUREBREC interfered with those contracts,

depriving SUREBREC of its legal rights and thereby causing damage to SUREBREC by reducing the
14
revenue enjoyed by PRC which increased the revenue shortfall experienced by PRC which in tum,
15
pursuant to the contract, became the obligation of SUREBREC.
16
180. MEARSE intentionally and wrongfully acted to disrupt the contractual relationship
17
between and NLS and SUREBREC by failing to disclose the reimbursements being paid to Car
18
Loans, Inc. and NLS allegedly for the services she was rendering to the LLC. She did so with full
19
knowledge of the contractual terms of the Operating Agreement requiring NLS to oversee the
20
operation of the Plaza Resort and knowing that her work on behalf of NLS was part of that oversight.
21
181. MEARSE' S actions described above resulted in actual disruption of the contract and
22
have caused NLS to fail to abide by the terms of the contract.
23
182. As a result of Merce's actions SUREBREC has suffered damages in excess of
24
$15,000.
25
183. As additional relief SURBREC is entitled to its attorney's fees and costs for the
26
prosecution of this claim for relief.
27
Ill
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XIV.
2
PRAYER FOR RELIEF
3
WHEREFORE, SUREBREC prays for relief as follows:
4 A judicial determination that NLS and HA YNES are in breach of the operating
I.
5 agreement and the respective ownership interests of NLS and SUREBREC in PRC.

6 2. A judicial determination of the application of the sales clause of the Operating

7 Agreement

8 3. For general and special damages in an amount in excess of Fifteen Thousand Dollars

9 ($15,000.00) to be determined at the time of trial or evidentiary hearing;

10 4. For punitive and exemplary damages to the extent allowed by Nevada law and Statute;

11 5. For attorney fees and costs associated with prosecuting this action;

12 6. For Judicially ordered and supervised dissolution of PRC.

13 7. For such other and further relief in favor of SUREBREC that the Court deems just

14 and proper.
Affirmation Pursuant to NRS 239B.030
15
The undersigned does hereby affirm that the preceding document does not contain the social
16
security number of any person.
17

18 DATED this day of July, 2019.

19

20

21
Nevada State Bar No. 5285
22
MEAD A. DIXON
Nevada State Bar No. 13860
23
5 3 5 5 Reno Corporate Drive, Ste 100
24 Reno, Nevada 89511
(775) 501-9400
25 Attorneys for Defendants/Counterclaimant

26

27

28
DOTSON LAW
5355 RENO CORPORA TE DR.
SUITE #100 28
RENO, NEVADA 895 l l
CERTIFICATE OF SERVICE

2 Pursuant to NRCP 5(b ), I hereby certify that I am an employee of DOTSON LAW and that on
3
this date I caused to be served a true and correct copy of the foregoing by:
4

(BY MAIL) on all parties in said action, by placing a true copy thereof enclosed in a
5 sealed envelope in a designated area for outgoing mail, addressed as set forth below.
At Dotson Law, mail placed in that designated area is given the correct amount of
6 postage and is deposited that same date in the ordinary course of business, in a United
States mailbox in the City of Reno, County of Washoe, Nevada.
7
By electronic service by filing the foregoing with the Clerk of Court using the E-Flex
8
system, which will electronically mail the filing to the following individuals.
9

(BY PERSONAL DELIVERY) by causing a true copy thereof to be hand delivered
10 this date to the address(es) at the address(es) set forth below.


11 (BY FACSIMILE) on the parties in said action by causing a true copy thereof to be
telecopied to the number indicated after the address(es) noted below.
12

13 □ Reno/Carson Messenger Service.

14 ~ Email.

15 addressed as follows:

16 Kent R. Robison
Hannah E. Winston
17 Robison, Sharp, Sullivan & Brust
71 Washington Street
18
Reno, NV 89503
19 krobison@rssblaw.com
hwinston@rssblaw.com
20 \
DATED this ~q day of July, 2019.
21

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27

28
DOTSON LAW
5355 RENO CORPORA TE DR
SUITE #100 29
RENO, NEV ADA 8951 I
INDEX OF EXHIBITS
2

3 EXHIBIT DESCRIPTION PAGES

4 1 Plaza Resort Club - Fact Sheet 3


5
2 Articles of Organization 5
6
3 Plaza Resort Club, LLC Member/Manager Deal Points 3
7
4 Sale and Assignment of Declarant Rights 9
8
5 Warranty Deed 10
9
6 Purchase Agreement 7
10

11

12

13

14

15

16

17

18

19

20

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23

24

25

26

27

28
DOTSON LAW
5355 RENO CORPORA TE DR.
SUITE #100 30
RENO, NEVADA 89511

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