United States District Court, D. Nevada
FIRST 100, LLC, a Nevada limited liability company; and 1ST ONE HUNDRED HOLDINGS, LLC, a Nevada limited liability company, Plaintiffs,
JOHN LASALA, an individual; IAN HAFT, an individual; JAMIE MAI, an individual; CHA SOLUTIONS INC., a foreign corporation; CORNWALL CAPITAL MANAGEMENT LP, a foreign corporation; Defendants.
M. Navarro, Chief Judge United States District Court.
April 24, 2017, the Court conducted a one-day bench trial
relative to the dispute between Plaintiffs First 100, LLC and
1st One Hundred Holdings, LLC (collectively,
“First 100” or Plaintiffs) and Defendant John
Lasala (“Lasala” or
“Defendant”). The Court, having read and considered
the parties' briefings, testimony and documents admitted
into the record, and oral arguments of counsel, and for good
cause appearing, makes the following findings of facts and
conclusions of law.
Plaintiff First 100 was established on April 10, 2012, for
the purpose of real estate investment through acquiring
delinquent account receivables from homeowners associations
(i.e. “HOAs”) in Nevada, Florida, and
other states. (First Revised Joint Pretrial Order Stipulated
Facts (“JPO”) 3:8-10, ECF No. 65).
Thereafter, Plaintiff 1st One Hundred was established on
December 3, 2013, as a holding company for First 100. (JPO
Defendant John Lasala (“Lasala”) served as
Plaintiffs' chief legal officer between approximately
December 13, 2013, and May 12, 2014, and is a licensed
attorney in the State of New York. (JPO 3:13); (Jay Bloom
(“Bloom”) Trial Test., ECF No. 100); (see
also New York State Attorney Detail, Trial Ex.
Court finds Lasala's testimony was not credible. He
contradicted himself, and his explanations were not
reasonable. This credibility determination was taken into
consideration to make these findings of fact.
Lasala did not sign Plaintiff's Operating Agreement.
(See Operating Agreement, Trial Ex. 4). At trial,
Lasala questioned Bloom as to the signing of the Operating
Agreement and Bloom's testimony regarding Lasala's
offered and accepted employment package. Lasala asked whether
Plaintiff's offer of employment to him would have been
memorialized in writing. Bloom explained that Lasala, as CLO,
was responsible for drafting such documents as employment
offers and the Operating Agreement, and ensuring members
signed the Operating Agreement. Lasala conceded during trial
that he was an employee of Plaintiff. (Lasala Trial Test.,
ECF No. 100). The Court finds Bloom's testimony credible
regarding the employment package Lasala was offered and
accepted, including a salary and 2% equity under a three year
vesting schedule. (Bloom Trial Test.). Lasala also
acknowledged his duty of confidentiality to Plaintiff during
trial. (Lasala Trial Test.).
1st One Hundred Operating Agreement requires all members to
hold in strict confidence any information received regarding
1st One Hundred, as follows:
3.14 CONFIDENTIAL INFORMATION. The Members acknowledge that
from time to time, they may receive information from the
Manager or other Persons regarding the Company or Persons
with which it does business. Each Member shall hold in strict
confidence any information it receives regarding the
Company… and may not disclose it to any person other
than to another Member or a Manager, except for disclosures:
(i) compelled by law (but the Member must notify the Manager
promptly of any request for that information, before
disclosing it, if practicable); (ii) to advisers or
representatives of the Member or Persons to which that
Member's Membership Interest may be Disposed as permitted
by this Operating Agreement, but only if the recipients have
agreed to be bound by the provisions of this Section; or
(iii) of information that Member also has received from a
source independent of the Company that the Member reasonably
believes obtained that information without breach of any
obligation of confidentiality. The Members acknowledge that
breach of the provisions of this Section may cause
irreparable injury to the Company for which monetary damages
are inadequate, difficult to compute, or both. Accordingly,
the Members agree that the provisions of this Section may be
enforced by specific performance. The Members acknowledge
that the Manager from time to time may determine, due to
contractual obligations, business concerns, or other
considerations, that certain information regarding the
business, affairs, properties, and financial condition of the
Company should be kept confidential and not provided to some
or all other Members, and that it is not just or reasonable
for those Members to examine or copy that information.
(Operating Agreement at 5).
Pursuant to Section 1.16 of the Operating Agreement, a
“member” is defined therein as “any person
executing this Operating Agreement as of the date of this
Operating Agreement as a Member, or hereafter admitted to the
Company as a Member as provided in this Operating Agreement,
but does not include any Person who has ceased to be a Member
in the Company.” (Id. at 2).
chief legal officer, Lasala was entrusted with drafting,
reviewing and executing important documents for Plaintiffs
and their investors, which contained detailed information
pertaining to Plaintiffs' corporate structure, strategy,
financial statements, value, and other extremely sensitive
proprietary information, which was not accessible to the
public. (Bloom Trial Test.); (Email Introduction, Trial Ex.
15) (email from Erika Twesme “Twesme” to Joseph
Gutierrez, Jason Maier, and Luis Ayon with CC to Lasala
introducing Lasala as her “colleague”).
Court does not find that Lasala was a member of Plaintiffs.
While Lasala was involved with drafting Operating Agreement,
to be a member of it specifically requires execution. Without
a signature or even a signature block, the Court cannot find
that Lasala executed the Operating Agreement to become a
Lasala's involvement with the drafting of the Operating
Agreement, however, he was privy to confidential and
Lasala also oversaw and participated in the preparation of
First 100's employee manual (the “Employee
Manual”). (Bloom Trial Test.); (Employee Manual, Trial
Ex. 5). No evidence was provided at trial that Lasala signed
the Employee Manual, but he helped to draft it. (Bloom Trial
Pursuant to the Employee Manual, employees owed the company a
duty of nondisclosure and confidentiality as follows:
Upon accepting employment with First 100, LLC, you were asked
to sign a Confidentiality Agreement, which generally provided
that you will not disclose or use any First 100, LLC
confidential information, either during or after your
employment. We sincerely hope that our relationship will be
long-term and mutually rewarding. However, your employment
with First 100, LLC assumes an obligation to maintain
confidentiality, even after you leave our employ.
Additionally, our clients and suppliers entrust First 100,
LLC with important information relating to their business.
The nature of this relationship requires maintenance of
confidentiality. In safeguarding the information received,
First 100, LLC earns the respect and further trust of our
clients and suppliers.
If you are questioned by someone outside the company or your
department and you are concerned about the appropriateness of
giving them certain information, you are not required to
answer. Instead, as politely as possible, refer the request
to your manager. No one is permitted to remove or make copies
of any First 100, LLC records, reports or documents without
prior management approval. Disclosure of confidential
information could lead to immediate
termination, as well as other possible legal action.
(Employee Manual at 15).
While no evidence was produced at trial to indicate that
Lasala signed the acknowledgment in the Employee Manual, the
Court finds that he was on notice of the nondisclosure and
confidentiality provisions and that Plaintiffs wanted their
business information held in strict confidence because of his
involvement in its drafting and subject to it as an employee
of Plaintiffs. (See Bloom Trial Test.). At no point
did Lasala express any concerns or objections to the terms of
the Employee Manual, in writing or otherwise, because no
confidential information would have been disclosed to him had
he objected. (Id.). Regardless of his signature or
lack thereof, as an employee of Plaintiffs, these provisions
applied to Lasala and he was bound by them.
Lasala owed fiduciary duties to Plaintiffs as Plaintiffs'
chief legal officer. (Id.).
Lasala acted as the primary point of contact for the Cornwall
Defendants (“Cornwall”) throughout their business
dealings with Plaintiffs, and in anticipation of the meeting
and possible transaction, Lasala drafted a confidentiality
agreement (the “Confidentiality Agreement”) for
the Cornwall to sign. (Bloom Trial Test.); (Confidentiality
Agreement, Trial Ex. 7). Lasala also made the initial
introduction between Cornwall and Plaintiffs. (Lasala Trial
the meeting with Plaintiffs' representatives on February
6, 2014, Defendant Ian Haft (“Haft”), on behalf
of Cornwall, executed the Confidentiality Agreement.
(Id. at 11) (showing Haft's signature).
an effort to further business relations among Plaintiffs and
Cornwall, Cornwall initiated a due diligence process and
requested information pertaining to Plaintiffs' finances,
legal involvement, investment performance, sales and
marketing, clients and suppliers, compensation, background of
management, and other related material. (Bloom Trial Test.).
or about February 7, 2014, Plaintiffs provided the Cornwall
access to Plaintiffs' electronic data room, which
contained a myriad of confidential and propriety information,
including work product, trade secrets, client lists,
corporate relationships, and other such sensitive
information. (JPO 3:22-23); (Bloom Trial Test.).
Lasala drafted and delivered extensive responses to the
Cornwall's due diligence requests, which contained
additional confidential and proprietary information. (JPO
or about March 7, 2014, the Term Sheet for the business
transaction between Plaintiffs and Cornwall was signed and
executed. (Final Term Sheet, Trial Ex. 8).
Cornwall also signed and executed a letter of intent on or
about March 10, 2014, which detailed the pertinent terms and
conditions of the proposed bridge loan to Plaintiffs in the
amount of $6, 000, 000.00. (Letter of Intent, Trial Ex. 9).
Plaintiffs wholly believed that Cornwall would deliver on
their loan agreement, and in reliance on the previous
representations and Letter of Intent from Cornwall,
Plaintiffs turned down funding in the amount of approximately
$6, 000, 000.00 from non-party Full Circle Capital
Corporation. (Bloom Trial Test.). Cornwall's Letter of
Intent had an exclusivity provision, so Plaintiffs could not
accept multiple partners. (Id.); (see also
Letter of Intent at 4).
Although the Letter of Intent did not oblige Cornwall to fund
the loan, the Letter dictated that “Cornwall Capital
shall have the right in its sole discretion to reject
Applicant's application for the Loan on the basis of its
due diligence investigation by ...