Max International Versus Unclebach’s Lawsuit

Chad C Shattuck, Attorneys for the Plaintiff, Max International, LLC IN THE THIRD JUDICIAL DISTRICT COURT IN AND FOR SALT LAKE COUNTY, STATE OF UTAH,  MAX INTERNATIONAL, LLC, a Utah limited liability company, Plaintiff, vs.

MICHAEL UNCLEBACH, an individual, SCOTT UNCLEBACH, an individual, KAYE UNCLEBACH, an individual, DARLENE UNCLEBACH, an individual, LAURA HUBBELL, an individual, and DOES 1-10 Defendants,

COMPLAINT (Jury Demanded) COMES NOW Plaintiff Max International, LLC, by and through counsel, Chad Shattuck of Tycksen & Shattuck, L.C., and herein complains against Defendants, Scott Unclebach, Michael Unclebach, Kaye Unclebach, Darlene UncIebach, Laura Hubbell, and Does 1-10, as follows: PARTIES

I. Plaintiff Max International, LLC (hereafter Max or Plaintiff'), is a Utah limited liability company with its principle place of business in Salt Lake City, Utah.

2. Defendant Michael Unclebach, is an individual residing in Frisco, Texas, who upon information and belief conducts business in Salt Lake County.

3. Defendant Scott Unclebach, is an individual residing in Frisco, Texas, who upon information and belief conducts business in Salt Lake County.

4. Defendant Kaye UncJebach (hereafter referred to jointly with her husband Michael as Michael Unclebach is an individual residing in Frisco, Texas, who upon information and belief conducts business in Salt Lake County.

5. Defendant Darlene Unclebach (hereafter referred to jointly with her husband Scott as (Scott Unclebach), is an individual residing in Frisco, Texas, who upon information and belief conducts business in Salt Lake County.

6. Defendant Laura Hubbell (hereafter Hubbell), is an individual residing in Frisco, Texas, who upon information and belief conducts business in Salt Lake County.

7. Does 1-10 are individuals and or entities affiliated with the Defendants that were involved in the tortious actions described herein, whose identity is as of yet unknown. Max reserves the right to amend to name any such discovered individuals hereafter.

JURISDICTION AND VENUE

1 The plural term 'Unclebachs' shall be used hereafter to refer to effort and actions undertaken by Michael Unclebach and Scott Uncle bach, who upon information and belief worked jointly with the assistance of Hubbell to reap the benefit of simultaneously operating a Max distributorship and a Regeneca distributorship.

8. This Court has jurisdiction over the subject matter of this Complaint pursuant to Utah Code Ann. §78A-5-102.

9. Venue is proper in this court pursuant to Utah Code Ann. §78B-3-307.

10. Does 1-10 are individuals and/or entities whose identity is not yet known. Plaintiff reserves the right to name such individuals and/or entities as they become known. (All of the Defendants, including the Doe Defendants, may be referred to hereinafter jointly as Defendants).

GENERAL ALLEGATIONS

II. Max is a direct sales company that markets through Independent Associates (or distributors) engaged in the business of making and selling high-quality nutritional supplements and personal care products.

12. Max markets its products principally by way of a network marketing or Multi-Level Marketing Plan, (MLM). (For purposes of this Complaint the terms network marketing and MLM are used interchangeably).

13. As a network marketing company, Max enters into distributor agreements with independent business owners, also referred to as Associates and/or distributors.

14. An individual or entity may only sell Max products after entering into a contractual relationship with Max, and becoming a Max Associate and licensee of a Max distributorship.

15. In general terms, a Max Associate earns monthly commissions based in part on hislher own sales activity and the sales activity of his/her downline distributors.

16. As part of the Max Associate agreement, Max Associates agree to be bound by the Max Policies and Procedures (hereafter P&Ps). A copy of the Max P&Ps are attached hereto as Exhibit 1.

17. Max's marketing plan encourages Associates to recruit new distributors and to develop and lead an organization of distributors, commonly referred to as a downline or network.

18. Max compensates its Associates pursuant to its Compensation Plan, which is based on the purchase volume from each Associate and hislher downline network, which is based on product orders for consumption and retail sale.

19. The contractual relationship with Max must be renewed by the associate annually pursuant to §2.4 of the P&Ps.

20. Michael Unclebach became a licensee of Max distributorship # 29821 on or about December 14,2007.

21. As a Max Associate, Michael Unclebach entered into a binding contract with Max, his Max Associate Application and Agreement, which by reference incorporated in their entirety the Max Policies and Procedures (hereafter P&Ps). Thus as a licensee of a Max distributorship, Michael Unclebach was bound by the terms of Max's P&P's as incorporated by the Max Associate Application and Agreement.

22. By operating a Max distributorship from December 2007 up through November 2011, Michael Unclebach agreed to be bound by the Max P&Ps.

23. Pursuant to §2.4 of the P&Ps, Michael Unclebach renewed his commitment to be bound by the Max P&Ps annually by renewing his Max business with Max.

24. Scott Unclebach became a licensee of Max distributorship # 30324 on or about December 19,2007.

25. As a Max Associate, Scott Unccebach entered into a binding contract with Max, his Max Associate Application and Agreement, which by reference incorporated in their entirety the Max Policies and Procedures (hereafter P&Ps). Thus as a licensee of a Max distributorship, Scott Unclebach was bound by the terms of Max's P&Ps as incorporated by the Max Associate Application and Agreement.

26. By operating a Max distributorship from December 2007 up through November 2011, Scott Unclebach agreed to be bound by the Max P&Ps.

27. Pursuant to §2.4 ofthe P&Ps, Scott Unclebach renewed his commitment to be bound by the Max P&Ps annually by renewing his Max business with Max.

28. On or about March 25, 2011, Scott Unclebach transferred his Max Associate position to Hubbell.

29. Defendant Hubbell became a licensee of Max distributorship #30648 on or about December 25, 2007, and later acquired the distributorship of Scott Unclebach (account #30324 on March 25, 20 II).

30. As a Max Associate, Hubbell entered into a binding contract with Max, her Max Associate Application and Agreement, which by reference incorporated in their entirety the Max P&Ps. Thus as a licensee of a Max distributorship, Hubbell was bound by the
terms of Max's P&Ps as incorporated by the Max Associate Application and Agreement.

31. By operating her distributorship from December 2007 up through November 2011, Hubbell agreed to be bound by the Max P&Ps.

32. Pursuant to §2.4 of the P&Ps, Hubbell renewed her commitment to be bound by the Max P&Ps annually by renewing her Max business with Max.

33. Max P&Ps § 3.9.1 reads:

3.9.1 – Nonsolicitation Max Associates are free to participate in other multilevel or network marketing business ventures or marketing opportunities (collectively network marketing). However, during the term of this Agreement, Associates may not directly or indirectly recruit other Max Associates or Customers for any other network marketing business. Following the cancellation of an Associate's Independent Associate Agreement, and for a period of six calendar months thereafter, with the exception of those Associates who are personally sponsored by the former Associate, a former Associate may not Recruit any Max Associate or Customer for another network marketing business. Associates and the Company recognize that because network marketing is conducted through networks of independent contractors dispersed across the entire United States and internationally, and business is commonly conducted via the internet and telephone, an effort to narrowly limit the geographic scope of this non-solicitation provision would render it wholly ineffective.

Therefore, Associates and Max agree that this nonsolicitation provision shall apply to all markets in which Max conducts business. The term Recruit means the actual or attempted sponsorship, solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another v Associate or Customer to enroll or participate in another multilevel marketing, network marketing or direct sales opportunity.

34. The Max P&Ps §3.9.4 reads: 3.9.4 – Downline Activity (Genealogy) Reports Max may, in its discretion, provide Associates with a downline genealogy report in conjunction with an Associate's replicated website. Access to a genealogy report is a privilege, and not a right. Max reserves the right to deny Associates' access to a genealogy report at its sole discretion. All Downline Activity Reports and the information contained therein are confidential and constitute proprietary information and business trade
secrets belonging to Max. Downline Activity Reports are provided to Associates in strictest confidence and are made available to Associates for the sole purpose of assisting Associates in working with their respective Downline Organizations in the development of their Max business.

Associates should use their Downline Activity Reports to assist, motivate, and train their downline Associates. The Associate and Max agree that, but for this agreement of confidentiality and nondisclosure, Max would not provide Downline Activity Reports to the Associate. Therefore, if a Downline Activity Report is provided to an Associate, the Associate shall not, on his or her own behalf, or on behalf of any other person, [partnership, association, corporation or other entity:

• Directly or indirectly disclose any information contained in any Downline Activity Report to any third party;

• Directly or indirectly disclose the password or other access code to his or her Downline Activity Report;

• Use the information to compete with Max or for any purpose other than promoting his or her Max business;

• Recruit or solicit any Associate or Customer of Max listed on any report, or in any manner attempt to influence or induce any Associate or Customer of Max, to alter their business relationship with Max;

• Use or disclose to any person, partnership, association, corporation, or other entity any information contained in any Downline Activity Report; or

• Upon demand by the Company, any current or former Associate will return the original and all copies of Downline Activity Reports to the Company.

35. The Unclebachs and Hubbell have engaged in conduct violative of Max P&Ps §3.9.1, and other sections by actively soliciting, and aiding in the solicitation of current Max Associates to commence a business relationship with other network marketing companies including, but not limited to Regeneca, Inc., and Enhance, IntI.

36. Upon receiving sufficient information verifYing the joint efforts of the Unclebachs and Hubbell to solicit Max Associates to join Regeneca in contravention of the P&Ps, Max terminated the accounts belonging to both Michael Unclebach and Hubbell on or about November 9, 20 II, pursuant to §8.1 of the Max P&Ps.

37. As a result of the joint efforts of Hubbell and the Unclebachs, many Max Associates have signed up with Regeneca, abandoned their efforts to build their Max distributorships and as a result, Max has been injured.

38. Upon information and belief, Scott Unc1ebach, Michael Unclebach, and/or Hubbell, have informed third parties that their distributorships were terminated without cause, which is false, and which negatively disparages Max, resulting in harm to Max's reputation.

39. The Max P&Ps, §3.6.1, reads: 3.6 – Unauthorized Claims and Action 3.6.1 – Indemnification An Associate is fully responsible for all of his or her verbal and written statements made regarding Max products, services, and the Marketing and Compensation Plan which are not expressly contained in official Max materials. Associates agree to indemnifY Max and Max's directors, officers, employees, and agents, and hold them harmless from any and all liability including judgments, civil penalties, refunds, attorney fees, court costs, or lost business incurred by Max as a result of the Associate's unauthorized representations or actions. This provision shall survive the termination of the Associate Agreement.

FIRST CAUSE OF ACTION (Declaratory Judgment Against Michael and Kaye Unclebach and Does 1-10)

40. Plaintiffre-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein.

41. Michael and Kaye's Unclebach's Max Associate Agreement(s) and the Max P&Ps constitute a binding contract.

42. Michael Unclebach (and implicitly Kaye) breached the Associate Agreement and the P&Ps by, among other things, soliciting Max associates to join Regeneca, and disclosing Max confidential information to third parties in contravention of the Max P&Ps.

43. Michael Unclebach's breach of the Agreement and P&Ps constituted cause for Max to terminate his account (the distributorship posiiion held by Michael and Kaye) with Max.

44. An actual and justiciable controversy exists as to whether Max's termination of Michael and Kaye Unccebach's Associate account was proper.

45. Max is entitled to ajudicial declaration that: a. Michael Unclebach breached his Associate Agreement and P&Ps before Max terminated his account (the distributorship position held by Michael and Kaye). b. Michael Unclebach's breach ofthe Associate Agreement and P&Ps constituted cause under the agreement for Max to terminate his account (held jointly with his wife Kaye). c. Max had good cause under the Agreement to terminate the account held by Michael and Kaye Unclebach. d. Max did not breach Michael Unclebach's Agreement by terminating the account belonging to he and his wife. e. Michael and Kaye Unclebach are not entitled to any compensation under their Associate Agreement and/or the P&Ps as of the date Michael first violated the same. f. Michael and Kaye Unclebach are not entitled to any compensation under their Associate Agreement and/or the P&Ps as of the date Max ceased making payments.

SECOND CAUSE OF ACTION (Declaratory Judgment Against Laura Hubbell and Does 1-10)

46. Plaintiffre-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein.

47. Laura Hubbell's Max Associate Agreement and the Max P&Ps constitute a binding contract.

48. Hubbell breached the Associate Agreement and the P&Ps by, among other things, soliciting Max associates to join Regeneca, and disclosing Max confidential information to third parties in contravention of the Max P&Ps.

49. Hubbell's beach of the Agreement and P&Ps constituted cause for Max to terminate his account (his distributorship) with Max.50. An actual and justiciable controversy exists as to whether Max's termination of Hubbell's Associate Agreement was proper.

51. Max is entitled to a judicial declaration that: a. Hubbell breached her Associate Agreement and P&Ps before Max terminated his account (his distributorship). b. Hubbell's breach of the Associate Agreement and P&Ps constituted cause under the agreement for Max to terminate her account. c. Max had good cause under the Agreement to terminate Hubbell's account. d. Max did not breach Hubbell's Agreement by terminating her account. e. Hubbell is not entitled to any compensation under her Associate Agreement and/or the P&Ps as of the date she first violated the same. f. Hubbell is not entitled to any compensation under her Associate Agreement and or the P&Ps as of the date Max ceased making payments.

THIRD CAUSE OF ACTION (Breach of Contract against Michael Unclebach and Does 1-10)

52. Plaintiff re-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein.

53. Michael Unclebach breached the Associate Agreement and the Max P&Ps by, among other things, soliciting Max associates to join Regeneca, and disclosing Max confidential information to third parties in contravention of the Max P&Ps.

54. Prior to terminating Michael Unclebach's Account for breach of the agreement, Max performed all of its obligations under the contract.

55. As a result of Michael Unclebach's breach of the Agreement, Max has been damaged by, among other things his soliciting Max associates to join Regeneca, and disclosing Max confidential information to third parties in contravention of the Max P&Ps. As a direct and proximate result of Michael Unclebach's breach, Plaintiff has been damaged in an amount to be proven at trial, but no less than $100,000.00, plus attorneys fees pursuant to contract, costs and interest thereon as allowed by law.

FOURTH CAUSE OF ACTION (Breach of Contract against LAURA HUBBELL and Does 1-10)

56. Plaintiff re-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein.

57. Laura Hubbell breached the Associate Agreement and the Max P&Ps by, among other things, soliciting Max associates to join Regeneca, and disclosing Max confidential information to third parties in contravention of the Max P&Ps.

58. Prior to terminating Laura Hubbell's Account for breach of the agreement, Max performed all of its obligations under the contract.

59. As a result of Laura Hubbell's breach of the Agreement, Max has been damaged by, among other things his soliciting Max associates to join Regeneca, and disclosing Max confidential information to third parties in contravention of the Max P&Ps. As a direct and proximate result of Laura Hubbell's breach, Plaintiff has been datnaged in an amount to be proven at trial, but no less than $100,000.00, plus attorneys fees pursuant to contract, costs and interest thereon as allowed by law.

FIFTH CAUSE OF ACTION (Breach of Contract against Scott Unclebach and Does 1-10)

60. Plaintiff re-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein.

61. Scott Unclebach breached the Associate Agreement and the Max P&Ps by, among other things, soliciting Max associates to join Regeneca, and disclosing Max confidential information to third parties in contravention of the Max P&Ps.

62. Prior to Scott Unclebach resignation from Max, and subsequent thereto, Max performed all of its obligations under the contract.

63. As a result of Scott Unclebach's breach of the Agreement, Max has been damaged by, among other things his soliciting Max associates to join Regeneca, and disclosing Max confidential information to third parties in contravention of the Max P&Ps. As a direct and proximate result of Scott Unclebach's breach, Plaintiff has been damaged in an amount to be proven at trial, but no less than $100,000.00, plus attorneys fees pursuant to contract, costs and interest thereon as allowed by law.

SIXTH CAUSE OF ACTION (Misappropriation of Trade Secrets – Against All Defendants and Does 1-10)

64. Plaintiffre-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein.

65. Max has trade secrets of which it enjoys an advantage over its existing and future competitors. Such trade secrets include, among other things, Max's associate lists. Max's trade secrets derive economic value from their not being generally known to the
public or to other persons who can obtain economic value from their disclosure.

66. Max has made reasonable efforts under the circumstances to preserve the confidentiality of its trade secrets, including, but not limited to requiring that Max associates maintain the confidentiality of Max's proprietary information.

67. Defendants were under a duty to keep Max's proprietary and confidential information secret, and not to use or disclose such information.

68. Despite their duty to maintain the confidentiality of Max's trade secrets, Defendants disclosed Max's proprietary and confidential information to third parties for the purpose of promoting Regeneca.

69. The Defendants' acts were willful and malicious, thereby entitling Max to an award of punitive damages and attorneys fees against Defendants.

70. Max has been damaged as a result of Defendants' conduct in an amount to be proven at trial, but no less than $100,000.00

SEVENTH CAUSE OF ACTION (Tortious Interference With Contractual Relations – Against All Defendants, Does 1-10)

71. Plaintiff fe-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein.

72. Max had existing contractual relationships with, among others, its Max Associates. Defendants knew of Max's contractual relationship with its other Associates.

73. Defendants' conduct as described herein was a tortious interference with Max's contractual relationships with its then-existing Associates. Defendants acted with the intention to interfere with Max's contractual relationship with several of Max's Associates.

74. As a result of Defendants' actions, one or more Max Associates ceased actively building his/her distributorship with Max, which has caused damage to Max. Plaintiff has been damaged in an amount to be proven at trial, but no less than $100,000.00.

75. Max has made reasonable efforts under the circumstances to preserve the confidentiality of its trade secrets, including, but not limited to requiring that Max associates maintain the confidentiality of Max's proprietary information.

76. Defendants were under a duty to keep Max's proprietary and confidential information secret, and not to use or disclose such information.

77. Despite their duty to maintain the confidentiality of Max's trade secrets, Defendants disclosed Max's proprietary and confidential information to third parties for the purpose of promoting Regeneca.

78. The Defendants' acts were willful and malicious, thereby entitling Max to an award of punitive damages and attorneys fees against Defendants.

EIGHTH CAUSE OF ACTION (Unjust Enrichment – Against All Defendants, Does 1-10)

79. Plaintiff re-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein.

80. The Defendants received and retained commissions from Max while actively violating their Associate Agreements and the Max P&Ps.

81. The Defendants each received a financial benefit from Max and appreciated such over the span of several months.

82. Defendants have been unjustly enriched by retaining commissions to which they were not entitled because they were actively violating the P&Ps, adherence to which was an implicit, and/or explicit condition precedent to receiving any commissions.

83. Under the circumstances it would be inequitable to allow the Defendants to retain the past commissions they wrongfully received from Max while knowingly violating the Nonsolicitation provisiori of the Max P&Ps.

84. Plaintiffis entitled to a judgment against each of the Defendants individually to the extent that each received a commissions from Max to which he/she was not entitled, in an amount to be determined at trial.

EIGHTH CAUSE OF ACTION (Attorneys Fees Costs – Against All Defendants, Does 1-10)

85. Plaintiff re-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein.

86. The Defendants' Associate Agreements and Max P&Ps provide that an Associate (including former Associates), shall be liable to indemnify Max for any and all liability, including, but not limited to attorneys fees and costs resulting from unauthorized action.

87. Defendants' conduct as described herein unauthorized, and thus triggers the indemnification clause of the contract.

88. Max is entitled to an award of its attorney's fees and costs incurred in this action pursuant to contract, and also pursuant to Utah Code §78B-5-825 and/or §78B-S-826.

PRAYER FOR RELIEF WHEREFORE, Plaintiff demands judgment against Defendants on their Complaint as follows:

I. On the First Cause of Action for a judicial declaration against Michael and Kaye Hubble that: a. Michael Unclebach breached his Associate Agreement and P&Ps before Max
terminated his account (the distributorship position held by Michael and Kaye). b. Michael Unciebach's breach of the Associate Agreement and P&Ps constituted cause under the agreement for Max to terminate his account (held jointly with his wife Kaye). c. Max had good cause under the Agreement to terminate the account held by Michael and Kaye Unclebach. d. Max did not breach Michael Unclebach's Agreement by terminating the account belonging to he and his wife. e. Michael and Kaye Unclebach are not entitled to any compensation under their Associate Agreement and/or the P&Ps as of the date Michael first violated the same. f. Michael and Kaye Unclebach are not entitled to any compensation under their Associate Agreement and/or the P&Ps as of the date Max ceased making payments

2. On the Second Cause of Action for a judicial declaration against Laura Hubbell that: a. Hubbell breached her Associate Agreement and P&Ps before Max terminated his account (his distributorship). b. Hubbell's breach of the Associate Agreement and P&Ps constituted cause under the agreement for Max to terminate her account. c. Max had good cause under the Agreement to terminate Hubbell's account. d. Max did not breach Hubbell's Agreement by terminating her account. e. Hubbeli is not entitled to any compensation under her Associate Agreement and/or the P&Ps as of the date she first violated the same. f. Hubbell is not entitled to any compensation under her Associate Agreement and/or the P&Ps as of the date Max ceased making payments.

3. On the Third Cause of Action for Breach of Contract against Michael Unclebach for damages, to be proven at trial, but no less than $100,000.00, and for costs, attorney's fees and interest as allowed by law.

4. On the Fourth Cause of Action for Breach of Contract against Hubbell for damages, to be proven at trial, but no less than $100,000.00, and for costs, attorney's fees and interest as allowed by law.

5. On the Fifth Cause of Action for Breach of Contract against Sco!l Unelebaeh for damages, to be proven at trial, but no less than $100,000.00, and for costs, attorney's lees and interest as allowed by law.

6. On the Sixth Canse of Action for Misappropriation of Trade Secrets against all Defendants for damages, to be proven at triaL. but no less than $100,000.00, and for costs, attorney's fees and interest as allowed by law.

7. On the Seventh Cause of Action for Tortious 1 nterferenee with Contractual Relations against all Defendants for damages, to be severally proven at trial.

8. On the Eighth Cause of Action for Unjust Enrichment against all Defendants for damages, to be proven at trial, but no less than $100,000.00, and for costs, attorney's fees and interest as allowed by law.

9. On the Ninth Cause of Action for Attorneys Fees und Costs against all Defendants for damages, to be proven at trial, and interest as allowed by law.

10. For any and all other relief as the Court deems appropriate.

14 day of November 2011.