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Case 4:11-cv-00092-RH-WCS Document 1 Filed 03/02/11 Page 1 of 18

IN THE UNITED STATES DISTRICT COURT IN AND FOR THE NORTHERN DISTRICT OF FLORIDA

WISHFIRE ENTERPRISES, LLC, WISHFIRE RECORDS, THE CRÜXSHADOWS, and VIRGIL R. DU PONT, III, Plaintiffs, vs. DANCING FERRET DISCS, INC., and PATRICK M. RODGERS, Defendants. ________________________________/

CASE NO. ____________________

COMPLAINT AND REQUEST FOR INJUNCTIVE RELIEF Plaintiffs, WISHFIRE ENTERPRISES, LLC, WISHFIRE RECORDS, THE CRÜXSHADOWS, and VIRGIL R. DU PONT, III, sue Defendants, DANCING FERRET DISCS, INC., and PATRICK M. RODGERS, and allege: COMMON ALLEGATIONS Venue and Jurisdiction 1. Plaintiff WISHFIRE ENTERPRISES, LLC (“WISHFIRE

ENTERPRISES”), is a duly authorized corporation incorporated in Florida with its corporate offices in Tallahassee, Florida. Plaintiff WISHFIRE RECORDS is a subsidiary of WISHFIRE ENTERPRISES, LLC, also with its corporate offices in Tallahassee, Florida. (WISHFIRE ENTERPRISES, LLC, and WISHFIRE RECORDS will be referred to collectively as “WISHFIRE” unless stated otherwise herein.). Plaintiff THE CRÜXSHADOWS is a band of recording and touring musicians based in Jacksonville,

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Florida. Plaintiff VIRGIL R. DU PONT, III, is the president and chief executive officer of WISHFIRE, a singer/songwriter/producer, and the lead member and driving creative force of THE CRÜXSHADOWS. Mr. DU PONT is a citizen of the State of Florida and a resident of Jacksonville, Florida. 2. Defendant DANCING FERRET DISCS, INC. (“DANCING FERRET” or

“DFD”), is a duly authorized corporation incorporated in the State of Delaware with its corporate offices in Philadelphia, Pennsylvania. Defendant PATRICK M. RODGERS is, upon information and belief, the president and chief executive officer of DANCING FERRET and is a citizen of the State of Pennsylvania and a resident of Philadelphia, Pennsylvania. Venue is proper in the United States District Court for the Northern District of Florida pursuant to 28 U.S.C. § 1391(b)(2) and (c). This Court has personal jurisdiction over the parties. 3. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331, as

the matter in controversy arises under the laws of the United States, specifically title 17 U.S.C. § 101 et seq., the Copyright Act of 1976 (as amended) and title 15 U.S.C. § 1051 et seq., the Trademark Act. The Court also has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1332(a)(1) and 1338(a). Identity of Parties 4. WISHFIRE ENTERPRISES, with its corporate offices in Tallahassee and

its principal place of business in Jacksonville after a recent relocation, is an entertainment company primarily engaged in the business of supporting, marketing, and promoting THE 2

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CRÜXSHADOWS. WISHFIRE ENTERPRISES is the exclusive licensee of all copyrights in all sound recordings featuring or including the performances of THE CRÜXSHADOWS and in all other intellectual property related to THE CRÜXSHADOWS, except as noted infra at note 1. 5. WISHFIRE RECORDS is an unincorporated subsidiary of WISHFIRE

ENTERPRISES, also with its corporate offices in Tallahassee and its principal place of business in Jacksonville after a recent relocation. WISHFIRE RECORDS is a record company that is primarily engaged in the business of recording and distributing sound recordings of THE CRÜXSHADOWS in both physical and digital product lines. 6. THE CRÜXSHADOWS is a band of musicians, recordings artists, and

performers, originally formed in 1992, that records and releases music to the public in genres variously described as “electronica,” “dance,” “pop,” “darkwave,” “Goth,” and “neo-Goth.” At all times material to this Complaint and until a recent relocation to Jacksonville, the band resided in and conducted all of its business from Tallahassee. 7. VIRGIL R. DU PONT, III (“Mr. DU PONT”), is the President and chief

executive officer of both WISHFIRE entities, as well as the creative force, lead singer, songwriter, regular producer, and most-visible public face of THE CRÜXSHADOWS. He is the owner of the copyrights in the sound recordings featuring the performances of THE CRÜXSHADOWS, and he is also the exclusive author of the musical compositions

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embodied on those sound recordings.1 Mr. DU PONT is also known by his stage name, “Rogue.” At all times material to this Complaint, Mr. DU PONT resided in Tallahassee until a recent relocation to Jacksonville. 8. DFD is a corporation with its principal place of business in Philadelphia.

DFD is engaged in the business of a record label, recording and distributing various recording artists’ sound recordings throughout the United States, including Florida, and the rest of the world. PATRICK M. RODGERS (“Mr. RODGERS”) is and was at all times material to this Complaint, upon information and belief, the sole or majority shareholder, President, and chief executive officer of DFD. Factual Allegations 9. Since 1992 and under the constant guidance and membership of Mr. DU

PONT, THE CRÜXSHADOWS has enjoyed significant success in recorded music sales and live performances. With a catalog of more than twenty albums, singles, and EPs (extended play releases with more tracks than a single but fewer than a full album), the band has posted four consecutive singles on the Billboard Top Ten Hot Dance Singles Sales chart, including three songs that reached #1. The band has enjoyed special success

The exception to this statement is the album, “Telemetry of a Fallen Angel,” for which a copyright registration exists with the U.S. Copyright Office in the names of Mr. DU PONT and two other early members of THE CRÜXSHADOWS . Prior to February 28, 2011, only one other work of THE CRÜXSHADOWS was registered with the U.S. Copyright Office, the 1999 release of the album, “The Mystery of the Whisper,” for which the words, music, and arrangement was copyrighted to Mr. DU PONT. On February 28, 2011, Mr. DU PONT, through counsel, submitted copyright registration applications on the remainder of THE CRÜXSHADOWS catalog. 4

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in Europe, and has performed for hundreds of thousands of fans throughout the United States and Europe. In 2007, THE CRÜXSHADOWS became the first “goth” band to perform at an open-air festival in China. The band continues to record and release music and to tour nationally and internationally. Its most-recent single, a 2009 release titled “Quicksilver,” peaked at #2 on the Billboard U.S. 100 Hot Singles Sales chart. A list of sound recordings featuring the performance of THE CRÜXSHADOWS is attached as Exhibit 1. 10. In 1997, with only Mr. DU PONT remaining from the original members,

the band entered into a licensing arrangement with DANCING FERRET. Mr. DU PONT does not have a copy of that arrangement, and Mr. RODGERS has refused to provide him one. It is undisputed, however, that said arrangement has long since expired. 11. DFD and THE CRÜXSHADOWS entered into three other known, written

licenses, each for individual albums, in 1998, 1999, and 2002. Mr. DU PONT does not have a copy of said agreements and has asked for them from Mr. RODGERS, who has refused to provide them. Nonetheless, it is undisputed that all of the written licenses have expired. 12. On May 23, 2003, Mr. RODGERS and Mr. DU PONT, on behalf of DFD

and THE CRUXSHADOWS, respectively, signed another licensing agreement, a copy of which is attached hereto as Exhibit 2. By its terms, the 2003 agreement applied only to “upcoming material to be released by The Crüxshadows on Dancing Ferret Discs.” Furthermore, the 2003 agreement applied only to the band’s “Next Album,” and to a 5

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“Bridge Disc” of “remixes and bonus material from a previous album with a single from Next Album . . . .” The duration of the 2003 agreement was seven years from the U.S. release date of the “Next Album.” The “Bridge Disc” was titled “Frozen Embers,” and the “Next Album” was titled “Ethernaut.” “Frozen Embers” was released in the United States prior to the U.S. release of “Ethernaut.” “Ethernaut” was released in the U.S. on October 21, 2003. Thus, DFD’s rights under the license agreement to “Frozen Embers” and “Ethernaut” expired on October 20, 2010.2 13. The 2003 agreement also provided DFD would pay certain royalties to

THE CRÜXSHADOWS for the commercial exploitation of the two discs, including a royalty for exploiting the sound recordings and a separate “mechanical” royalty for the exploitation of the musical compositions embodied on those sound recordings. 14. None of the written agreements assigned or otherwise transfered

ownership to DFD of the copyrights in either the sound recordings or the musical compositions embodied thereon. 15. Upon information and belief, DFD has improperly and without contractual

authority cross-collateralized3 revenue and deficits from one licensing agreement with

The license agreement also provided, “At the end of the license period, we have the right to continue selling any remaining stock of the recording until our supply is exhausted.” This provision clearly referred to physical sales of the album, such as compact discs, as opposed to online digital sales, because physical stock can be “exhausted” through sales while digital stock cannot. Cross-collateralization is the process whereby a contract permits a record company to recoup losses from one album from earnings from other albums. 6
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earnings from another. In some cases, the cross-collateralization has been even more improper. For example, DFD advanced $20,000 to THE CRÜXSHADOWS in exchange for a commitment to release a “Best Of” album. DFD than unilaterally rescinded the “Best Of” album project. Even though the $20,000 had been advanced to Mr. DU PONT and other members of the band, DFD recouped the entire $20,000 from Mr. DU PONT alone. There was no agreement, written or otherwise, between DFD and Mr. DU PONT allowing DFD to (a) recoup the advance if it unilaterally cancelled the “Best Of” album project; (b) cross-collateralize future royalty earnings from other albums against the “Best Of” advance; or (c) withhold the entire $20,000 from royalties otherwise payable to Mr. DU PONT, when advance had been paid to other band members, too. 16. 17. DFD has not paid royalties as required under the 2003 agreement. Since 2003, THE CRÜXSHADOWS and DFD have disagreed about the

appropriate royalty rate to be paid for post-2003 releases other than “Frozen Embers” and “Ethernaut.” Moreover, there has never been a written agreement between THE CRÜXSHADOWS and DFD regarding post-2003 releases. 18. Additionally, DFD has failed to pay appropriate royalties for virtually all

of THE CRÜXSHADOWS’ catalog, selectively choosing a royalty rate to suit its own financial interests, failing to pay mechanical royalties, selectively paying royalties for

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digital sales, and for approximately the last eighteen months, paying no royalties whatsoever until just days before this Complaint was filed.4 19. By letter from counsel dated May 22, 2009, a copy of which is attached as

Exhibit 35, Mr. DU PONT and THE CRÜXSHADOWS terminated all verbal agreements of any kind with DFD, to the extent any existed, demanded that DFD cease and desist “from the commercial exploitation of any kind and in any manner whatsoever of any intellectual property authored by, recorded by, or released under the name The Cruxshadows.” Said letter also told Mr. RODGERS that THE CRÜXSHADOWS had revoked all non-written assignments of licenses or copyrights in all of the band’s master recordings. The cease and desist demand was repeated in subsequent letters to DFD. Upon receipt nearly a year later of a copy of the 2003 licensing agreement, which Mr. DU PONT did not recall signing, the cease and desist demand was amended to except “Ethernaut” through October 20, 2010. 20. DFD and Mr. RODGERS ignored the repeated cease and desist demands

and continued to exploit THE CRÜXSHADOWS’ product. Despite written assurances from Mr. RODGERS to the contrary, DFD continues to exploit THE CRÜXSHADOWS

In approximately the summer of 2010, the band, through counsel, received royalties from a third-party distributor for a few months. Mr. RODGERS, who had a distribution agreement with the distributor on behalf of DFD, wrote the distributor and directed it to pay no more royalties directly to the band. Since then, DFD has paid no royalties to the band. The attached copy is redacted to remove and keep private discussions relating to the potential settlement of the dispute, pursuant to Rule 408, Federal Rules of Evidence. 8
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digital product through, at least, iTunes, Amazon.com, and ISOTANK. Upon information and belief, DFD continues to sell existing physical units, collecting and keeping all payments associated with such sales. 21. Except as noted supra note 1, DFD has no rights of any kind in the sound

recordings featuring the performances of THE CRÜXSHADOWS, in the musical compositions embodied in the sound recordings featuring the performances of THE CRÜXSHADOWS, or in the common law trademarked name, “The Crüxshadows”, the latter of which is owned by Mr. DU PONT. 22. DFD has no rights of any kind in any video or video with audio featuring

the performances of THE CRÜXSHADOWS. 23. DFD has not provided Mr. DU PONT or THE CRÜXSHADOWS an

accounting or comprehensive royalty statement that is consistent with recorded music industry standards or that allows for a comprehensive understanding of all aspects of sales and earnings, despite requests that it do so. 24. Without authority, upon information and belief, DFD has sold THE

CRÜXSHADOWS’ product at discounted rates, thereby diminishing the value of said product in the marketplace. 25. At all times material to this Complaint, Mr. RODGERS has acted as the

alter ego of DFD, such that Plaintiffs should be allowed to pierce the corporate veil of DFD. Indeed, upon information and belief, Mr. RODGERS, as the sole or majority shareholder, President, and chief executive officer, dominated and controlled the 9

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corporation to such extent that the corporation’s independent existence was in fact non-existent. Moreover, upon information and belief, the corporate form was used by Mr. RODGERS for a fraudulent or improper purpose and such fraudulent or improper purpose caused injury to Plaintiffs. 26. Mr. DU PONT is the lawful owner of the copyrights in the THE

CRÜXSHADOWS’ sound recordings and musical compositions embodied thereon.6 27. Mr. DU PONT licensed “all rights, title, and interest of any kind, including

but not limited to copyrights and trademarks” in all sound recordings featuring the performances of THE CRÜXSHADOWS; in all musical compositions embodied thereon; and in the common law trademark of “The Crüxshadows”, to WISHFIRE ENTERPRISES pursuant to a written agreement effective July 14, 2009. A copy of said agreement is attached as Exhibit 4. 28. WISHFIRE RECORDS has exploited some of those sound recordings and

musical compositions embodied thereon on behalf of WISHFIRE ENTERPRISES. WISHFIRE RECORDS is reluctant to exploit other product of THE CRÜXSHADOWS, despite clear legal authority to do so, because much of that product still appears in the marketplace under the auspices of DFD. 29. THE CRÜXSHADOWS digital public face is on their popular website,

www.cruxshadows.com. Mr. DU PONT developed the idea for the website, created, and

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continues to create the content that appears on the website. He created the website in 1999, while the band was on tour in Europe. To facilitate the publication of the website, Mr. DU PONT asked Mr. RODGERS to register the domain name, www.cruxshadows.com, which bears the bulk of the common law trademark, “The Crüxshadows”, while the band was on tour in Europe. Mr. RODGERS agreed to do so and further agreed the registration would be in Mr. DU PONT’s name, in THE CRÜXSHADOWS’ name, or both. Mr. RODGERS completed the registration, but put DFD as the owner of the domain name, contrary to the express agreement with Mr. DU PONT. Mr. RODGERS subsequently agreed to transfer ownership of the domain name to Mr. DU PONT, but despite repeated requests, has refused to do so. The consideration for the agreements made by Mr. DU PONT and Mr. RODGERS were the mutually beneficial marketing and publicity created by the band having and maintaining a web presence. The continued use and ownership of domain name by DFD constitutes trademark infringement and unfair competition. COUNT I COPYRIGHT INFRINGEMENT, TRADEMARK INFRINGEMENT, AND UNFAIR COMPETITION

30. 31.

Plaintiffs reallege Paragraphs 1 - 29 as though stated herein. This is an action for injunctive relief and damages under the Copyright Act

of 1976 (as amended), 17 U.S.C. § 101 et seq., and particularly under Section 501 et seq., and for unfair competition under The Trademark Act, 15 U.S.C. § 1125.

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32.

Plaintiffs have notified Defendants that they have and are continuing to

infringe on Plaintiffs’ copyrights and trademark. Defendants continue to so infringe and are doing so willfully. 33. Defendants’ infringements constitute copyright infringement, trademark

infringement, unfair trade practices, and unfair competition against Plaintiffs to Plaintiff’s irreparable damage. 34. The damages suffered by Plaintiffs are irreparable and will continue unless

Defendants are restrained by this Court from the commission of the above-described acts. Plaintiffs’ damages are also irreparable because each day Defendants’ infringing behavior is allowed to continue is another day where Plaintiffs have lost market possibilities, publicity, and sales, all of which can never be regained once lost. 35. Plaintiffs are without an adequate remedy at law because the continuing

nature of the infringement and unfair competition adversely impacts Plaintiffs’ market presence in non-quantifiable ways. WHEREFORE, Plaintiffs demand: (1) That Defendants, their agents, and servants, be enjoined during the pendency of this action and permanently from infringing said copyrights and trademark of Plaintiffs in any manner; from reproducing, distributing, selling, marketing, or otherwise disposing of any copies, whether physical7, digital, or in any technological format now known or

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hereafter created, any sound recordings featuring the performances of THE CRÜXSHADOWS, any musical compositions embodied on those sound recordings or embodied in any other format of any kind, any video or video with audio featuring the performance of THE CRÜXSHADOWS, any use of the mark “The Crüxshadows”, and be enjoined from asserting or exercising ownership of the domain name, www.cruxshadows.com. (2) That Defendants, their agents, and servants, be enjoined during the pendency of this action and permanently from taking any action that would interfere with WISHFIRE successfully distributing, marketing, and selling any sound recordings featuring the performances of THE CRÜXSHADOWS and any musical compositions embodied on those sound recordings in any format now known or hereafter created. (3) That Defendants be required to pay Plaintiffs such damages as Plaintiff has sustained in consequence of Defendants’ infringements of said copyright, said trademark, and said unfair trade practices and unfair competition, and to account for: (a) all gains, profits, and advantages derived by Defendants by said trade practices and unfair competition, and (b) all gains, profits, and advantages derived by Defendants by their infringements of Plaintiffs’ copyrights and trademark as to the Court shall appear proper including, where available, statutory damages, including damages for willful violations. (4) That Defendants be required to deliver up to be impounded during the pendency of this action all infringing copies of any sound recordings featuring the 13

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performances of THE CRÜXSHADOWS in their possession, custody, or control, and to deliver up for partial satisfaction of judgment all infringing copies. (5) That Defendants pay to Plaintiffs the costs of this action and reasonable attorney’s fees to be allowed Plaintiffs by the Court. (6) That Plaintiffs have such other and further relief as is just and equitable under the circumstances. COUNT II BREACH OF CONTRACT (Royalties) 36. 37. Plaintiffs reallege Paragraphs 1 - 29 as though stated herein. This is an action by Mr. DU PONT and THE CRÜXSHADOWS against

Defendants for breach of contract. 38. Defendants’ have breached their agreements with Mr. DU PONT and THE

CRÜXSHADOWS regarding payments of royalties, providing royalty statements, and in all manner of properly accounting to Mr. DU PONT and THE CRÜXSHADOWS. 39. Mr. DU PONT and THE CRÜXSHADOWS have suffered damages as a

result of Defendants’ breach. WHEREFORE, Mr. DU PONT and THE CRÜXSHADOWS demand a judgment against Defendants for unpaid and underpaid royalties, and for all monies due under the agreements.

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COUNT III BREACH OF CONTRACT (Website) 40. Mr. DU PONT and THE CRÜXSHADOWS reallege Paragraphs 1 - 29 as

though stated herein. 41. This is an action for breach of contract by Mr. DU PONT and THE

CRÜXSHADOWS against Defendants. 42. Defendants breached the agreement with Mr. DU PONT, THE

CRÜXSHADOWS, or both, to register the domain name, www.cruxshadows.com, on behalf of THE CRÜXSHADOWS. 43. Defendants breached the subsequent agreements with Mr. DU PONT to

transfer ownership of the domain. 44. Mr. DU PONT and THE CRÜXSHADOWS have been damaged by

Defendants’ breaches. WHEREFORE, Mr. DU PONT and THE CRÜXSHADOWS demand a judgment against Defendants for damages caused by their breaches of contract. COUNT IV EQUITABLE ACCOUNTING

45.

Mr. DU PONT and THE CRÜXSHADOWS reallege Paragraphs 1 - 29 as

though stated herein. 46. This is an action for an equitable accounting by Mr. DU PONT and THE

CRÜXSHADOWS against DFD. 15

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47.

The parties had written licensing agreements between them whereby DFD

would commercially exploit the sound recordings featuring the performances of THE CRÜXSHADOWS and the musical compositions authored by Mr. DU PONT embodied thereon. In exchange for the rights to exploit said product, DFD received gross payments from third parties and was supposed to pay certain royalties to Mr. DU PONT and THE CRÜXSHADOWS. 48. The nature of payments, deductions, and royalties in the music industry are

among the more extensive and complicated accounts in commerce. For example, DFD should have kept detailed records tracking sales of every physical and digital unit of any kind sold, the exact location where it was sold, taxes paid on the sale, the royalties due from the sale of each unit, whether the unit was sold in a foreign market and, if so, whether various costs were associated with the sale, whether any such costs were properly deducted from gross receipts prior to distributing royalties, whether certain units were provided as promotional goods and whether said promotional goods were royalty-bearing units, whether and how much the royalty rate varied based on the unit being sold at wholesale or retail rates, and, numerous other provisions depending on the nature of the licensing arrangement. 49. DFD alone has, or should have, such records, both of inventory and

banking. Mr. DU PONT and THE CRÜXSHADOWS cannot access said records absent discovery pursuant to this Complaint.

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50.

Mr. RODGERS has asserted the existence of verbal agreements regarding

the commercial exploitation of THE CRÜXSHADOWS’ product after the initial license agreement expired many years ago. If such agreements were found to exist, which Plaintiffs assert they did not, then DFD would have entered into a fiduciary or trust relationship with Mr. DU PONT and THE CRÜXSHADOWS. 51. Mr. DU PONT and, through him, THE CRÜXSHADOWS, have

previously demanded of DFD, through Mr. RODGERS, for an accounting of all earnings, deductions, monies kept by DFD, and monies paid as royalties, but DFD, through Mr. RODGERS, has refused to provide such an accounting. WHEREFORE, Mr. DU PONT and THE CRÜXSHADOWS demand: (1) That an accounting be taken of the DFD’s assets and liabilities and of the amounts due, if any, between DFD and Mr. DU PONT and THE CRÜXSHADOWS, and that Mr. DU PONT and THE CRÜXSHADOWS be awarded monetary relief incidental to such equitable relief; and (2) That Defendants be enjoined from disposing of any assets or collecting any money on behalf of Mr. DU PONT and THE CRÜXSHADOWS ; and (3) That the Court impose a constructive trust on DFD’s corporate assets, and on Mr. RODGERS personal assets, no matter how titled or held; and (4) That the Court order a full, complete, and fair accounting at DFD’s expense of the affairs of DFD as they relate to its history and dealings with Mr. DU PONT and THE CRÜXSHADOWS from the date of the inception of those dealings, and that Defendants 17

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be ordered, enjoined, and directed to produce all books and records of DFD and Mr. RODGERS necessary to accomplish such accounting; and (5) Awarding Plaintiffs’ their reasonable costs and attorney's fees associated in bringing this action; and (6) Awarding any other relief the Court deems just and equitable under the circumstances.

Respectfully submitted, /s/ Robert A. McNeely Robert A. McNeely Florida Bar No.: 0042994 THE MCNEELY LAW FIRM 3111-20 Mahan Drive #109 Tallahassee, Florida 32308 (850) 727-7011 (o) (305) 397-2135 (eFax) rob@mcneely.com

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