complaint with exhibits (warstler v. yik yak)

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IN THE STATE COURT OF FULTON COUNTY

STATE OF GEORGIA

DOUGLAS JOSEPH WARSTLER, Plaintiff, vs. YIK YAK, INC.; STEPHEN BROOKS BUFFINGTON; TYLER STEVEN DROLL; AND DOES 1-25, Defendants.

Civil Action No. : COMPLAINT FOR:

(1) BREACH OF EXPRESS

PARTNERSHIP/JOINT

VENTURE AGREEMENT;

(2) BREACH OF IMPLIED

PARTNERSHIP/JOINT

VENTURE AGREEMENT;

(3) BREACH OF FIDUCIARY

DUTY;

(4) WRONGFUL DISSOLUTION

OF PARTNERSHIP;

(5) TORTIOUS INTERFERENCE

WITH FIDUCIARY DUTY;

(6) PUNITIVE DAMAGES; AND

(7) ATTORNEY’S FEES AND

LITIGATION EXPENSES JURY TRIAL DEMANDED

COMPLAINT FOR DAMAGES

Plaintiff Douglas Joseph Warstler (“Plaintiff”) files this Complaint for

Damages against Defendants Yik Yak, Inc. (“Yik Yak”), Stephen Brooks

Buffington (“Buffington”), and Tyler Steven Droll (“Droll”) based on the

following:

State Court of Fulton County

***EFILED*** File & ServeXpress

Transaction ID: 56345633

Date: Nov 17 2014 01:16PM Cicely Barber, Clerk

Civil Division

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INTRODUCTION AND NATURE OF THE COMPLAINT

1.

This is a case of betrayal by greedy co-founders of a tech start-up. Plaintiff

brings this action to obtain relief from the betrayal and breach of fiduciary duty

committed by his former business partners and fraternity brothers at Furman

University, Defendants Stephen Brooks Buffington and Tyler Steven Droll, over a

start-up the three of them co-founded, now universally known as “Yik Yak.”

Plaintiff, Buffington, and Droll partnered up to work and pool money together to

develop and market various mobile applications including Yik Yak, a social media

mobile application that allows people to post anonymously to other users within a

1.5 mile radius. The three of them agreed, in writing and orally, to split ownership

of the Yik Yak partnership into 1/3 each. After acknowledging in writing

Plaintiff’s ownership interest in the Yik Yak partnership and unsuccessfully

attempting to buy Plaintiff out, Buffington and Droll did the unthinkable: they

brazenly kicked Plaintiff out of the partnership and claimed that Plaintiff owned

nothing in Yik Yak. To cover things up and erase any evidence of Plaintiff’s

ownership, Buffington and Droll dissolved the company under which they and

Plaintiff co-developed and co-owned Yik Yak, and transferred the company’s only

asset—the Yik Yak application—into a newly-created company.

2.

Due in part to Plaintiff’s contribution, Yik Yak has become one of the

fastest-growing and frequently-downloaded mobile applications in history. Less

than a year after its launch on Apple’s iTunes store in late 2013, Yik Yak has

recently become as high as the third most downloaded free application in the

world, sometimes more popular than other tech stalwarts such as Facebook,

Snapchat, Instagram or YouTube. Yik Yak was called “the next Twitter” by news

publications. Upon information and belief, Yik Yak has already received over $10

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million and is about to receive another $75 million in investment from venture

capitalists. The Facebook official in charge of building a competing anonymous

application reportedly admitted that “[t]he real tech story is that Yik Yak is

blowing up…” Although Buffington and Droll have been trying to erase Plaintiff

from this story, they will be unable to do so. Indeed, contemporaneous documents,

including writings authored by Buffington and Droll, show that Plaintiff was a co-

founder and co-owner of the Yik Yak partnership. By this action, Plaintiff seeks to

have his rights and interests restored to what they would have been but for the

Defendants’ betrayal.

PARTIES, JURISDICTION, AND VENUE

3.

Plaintiff Douglas Warstler (“Plaintiff”) is an individual who resides in the

State of Tennessee. He graduated summa cum laude from Furman University in

2014 with a Bachelor of Science in Computer Science and Mathematics. He is

currently completing a Master of Accountancy Valuation at Vanderbilt University

- Owen Graduate School of Management.

4.

Upon information and belief, Defendant Yik Yak, Inc. is a Delaware

corporation with its principal office and place of business located in Fulton

County, in the Atlanta Tech Village at 3423 Piedmont Road NE, Atlanta, Georgia

30305. Yik Yak’s registered agent for service of process is National Registered

Agents, Inc., located at 1201 Peachtree Street NE, Atlanta, Georgia 30361.

5.

Upon information and belief, Defendant Stephen Brooks Buffington

(“Buffington”) is an individual who resides in Atlanta, Fulton County, Georgia.

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6.

Upon information and belief, Defendant Tyler Steven Droll (“Droll”) is an

individual who resides in Atlanta, Fulton County, Georgia, or in Duluth, Gwinnett

County, Georgia. Venue in this Court is proper as to Defendant Droll because one

or more of the Defendants resides in Fulton County for venue purposes, and the

Defendants are joint tortfeasors as alleged below.

7.

Buffington and Droll are collectively referred to as the “Individual

Defendants.” Yik Yak, Inc. and the Individual Defendants are collectively referred

to as “Defendants.”

8.

Plaintiff is unaware of the true names and capacities, whether individual,

corporate, associate or otherwise, of defendants Does 1 through 25, inclusive, or

any of them, and therefore sues these defendants, and each of them, by such

fictitious names. The Doe defendants include persons and entities assisting or

acting in concert with the named defendants in connection with the actions

complained of herein and include persons and entities that are responsible in some

manner for the acts, occurrences and liability hereinafter alleged and referred to.

9.

Defendants are joint tortfeasors who acted in concert to cause the harm to

Plaintiff described herein.

10.

Defendant Buffington resides in Fulton County, Georgia. Defendant Droll

resides in Fulton County, Georgia, or in Gwinnett County, Georgia. Additionally,

Defendant Yik Yak’s principal office and place of business, and its registered

agent for service of process, are both located in Fulton County, Georgia.

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Accordingly, Defendants, who are joint tortfeasors, are subject to the jurisdiction

of this Court, and venue is proper in this Court.

GENERAL FACTS SUPPORTING ALL ALLEGATIONS

Plaintiff and the Individual Defendants Are Fraternity Brothers

11.

In the fall of 2010, Plaintiff began to attend Furman University (“Furman”)

in Greenville, South Carolina. During his first semester at Furman, Plaintiff

became close friends with Buffington. At the time, Buffington was a sophomore

and already a member of a fraternity called Kappa Alpha Order (“Kappa Alpha”).

Due to his close friendship with Buffington, Plaintiff pledged that fraternity and

picked Buffington as his “big brother” during the pledging process in the Spring of

2011. Plaintiff eventually became a member of Kappa Alpha. In the ensuing

years—until he was betrayed by Buffington—Plaintiff totally trusted his fraternity

brother Buffington, and considered Buffington to be one of his best friends at

Furman.

12.

Plaintiff met Droll during Kappa Alpha’s pledging process. Like

Buffington, Droll was a year ahead of Plaintiff at Furman. Droll chose to pledge

with Kappa Alpha for the first time along with Plaintiff, and as fellow pledge

brothers, they became good friends. Droll eventually became a member of Kappa

Alpha. Plaintiff’s friendship with Droll was further cemented by the fact that both

of them majored in computer science and had several classes together. Until he

was betrayed by Droll, Plaintiff totally trusted his fraternity brother Droll, and

considered Droll to be one of his good friends at Furman.

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Formation of the Partnership/Joint Venture With

the Individual Defendants

13.

In the Spring of 2012, Plaintiff and Droll enrolled in a computer class in

which the students were required to develop an iPhone application. Plaintiff and

Droll teamed up and spent significant time developing a game application called

“Fry Cook.”

14.

Although “Fry Cook” never took off, given their positive experience

working with each other, Plaintiff and Droll decided to start a business together to

develop mobile phone applications. They also invited their fellow friend and

fraternity brother Buffington to join them in this partnership/joint venture. In June

2012, the three of them created an entity called Locus Engineering, LLC (“Locus

Engineering”) as the corporate vehicle for this partnership/joint venture. Although

the Individual Defendants were a year ahead of Plaintiff in school, and thus would

be graduating from Furman a year earlier, they repeatedly reassured Plaintiff that

the three of them “were in this together” and would share responsibility for the

development of any applications.

15.

The Articles of Organization of Locus Engineering, filed with the Georgia

Secretary of State on or about June 20, 2012 (attached as Exhibit 1), reflects the

parties’ agreement, discussed below, that each of them owns one third of the

partnership/joint venture and its assets:

Article 4. The limited liability company includes three members

whose names are listed in Article 5 [Plaintiff, Buffington, and Droll].

These three members hold an equal share of ownership of the limited

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liability company, with each manager’s ownership amounting to one-

third of the limited liability company and its assets.

16.

Indeed, Plaintiff and the Individual Defendants, as partners/joint venturers,

entered into an explicit oral agreement as to their respective interests in their joint

undertaking to develop future mobile phone applications for their common profit.

That explicit agreement was that, unless expressly later modified, their interests in

the partnership/joint venture would be equally distributed, i.e., each of them would

have 1/3 ownership and profit in the partnership/joint venture and its assets, and

each of them would assume 1/3 of the expenses or losses of the partnership/joint

venture.

17.

In this regard, the three of them jointly opened a bank account at Ally Bank.

A true and correct copy of the relevant page of the bank statement for this joint

account, showing Plaintiff and the Individual Defendants as joint account holders,

is attached as Exhibit 2. Plaintiff was the only one that put money into this bank

account, which was used to pay certain expenses of the partnership/joint venture,

such as filing fees and payments to Apple’s iTunes store for the various

applications developed and owned by the partnership/joint venture (including Yik

Yak). Other expenses of the partnership/joint venture were paid by the three

partners from their own pockets (food, travel, etc.). Plaintiff and the Individual

Defendants also agreed that each of them would have equal say in the control and

management of the partnership/joint venture. As alleged below, until the point

where the Individual Defendants improperly kicked Plaintiff out of the

partnership/joint venture, Plaintiff’s conduct and the outward conduct of the

Individual Defendants were fully consistent with this explicit agreement.

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The Partnership/Joint Venture Develops And Market Various

Applications, Including Yik Yak

18.

From the Fall of 2012 to the Fall of 2013, Plaintiff and the Individual

Defendants, as part of their partnership/joint venture, worked together to develop

and market an application called “Dicho.” This application, which gives users the

ability to create their own questions that had only two options for answer choices

(for example, who’s better, Michael Jordan or Lebron James?), was conceived by

Droll while he was still in high school. Plaintiff, given his technical expertise,

helped with the coding of the application. In addition, Plaintiff did most of the

marketing of Dicho at Furman, which the parties agreed would be the testing

ground to market the application. Plaintiff also represented the partnership/joint

venture to pitch Dicho with various news outlets, including giving newspaper and

television interviews. Dicho was released on Apple’s iTunes store as a

product/asset of the partnership/joint venture (i.e., Locus Engineering) in the

Summer of 2013 but, unfortunately, never took off. However, Dicho has a key

feature that would later be found in the application at issue in this litigation (Yik

Yak): the ability of the users to post anonymously.

19.

In October 2013, Plaintiff and the Individual Defendants began working

together on a new application called Yik Yak. This application allows people to

anonymously create and view posts within a 1.5 mile radius. It is intended for

sharing primarily with those in close proximity to the user, potentially making it

more intimate and relevant for people reading the posts (called “yaks”). Users

have the ability to contribute to the stream by writing, responding, and up voting or

down voting “yaks.” Yik Yak was released on Apple’s iTunes store in November

2013 as a product/asset of the partnership/joint venture (i.e., Locus Engineering).

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Attached as Exhibit 3 is a true and correct copy of a screen shot reflecting this.

The parties never agreed that Yik Yak was an asset belonging to the Individual

Defendants alone or any other entity.

Plaintiff’s Crucial Contributions to Yik Yak

20.

At this time, Plaintiff was completing his senior year at Furman, while the

Individual Defendants had already graduated from the school and were working

remotely in Atlanta. The partners agreed that the fact that Plaintiff was still at

Furman was actually an asset for this project. Indeed, the partners agreed that

based on Plaintiff’s extensive connections at Furman and previous experience

marketing Dicho at the school, Plaintiff would be in charge of testing out and

marketing Yik Yak at Furman, the ground zero for the dissemination of Yik Yak.

21.

Pursuant to this agreement, Plaintiff worked tirelessly to market Yik Yak at

Furman by, inter alia, spreading the word about the application to family, friends,

acquaintances and strangers at classes, school events, coffee houses, libraries,

fraternity and sorority parties, and house parties. Plaintiff was a manager of Yik

Yak’s Facebook account, and used this medium to market the application to the

public at large. He also promoted the application to his 1,000+ “friends” on his

personal Facebook account. Due to Plaintiff’s marketing efforts, Yik Yak quickly

became a sensation on the Furman campus and among many Facebook users.

During the Thanksgiving and Christmas breaks in 2013, the many Furman students

who became obsessed with Yik Yak shared it with their friends at home who,

presumably, promoted the application with other friends on their respective college

campuses upon returning from the breaks. Within just two months of Plaintiff’s

marketing efforts, Yik Yak had several thousands of users, and the partners quickly

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realized that the application was going viral. As discussed above, Yik Yak has

now become one of the fastest growing mobile applications in history. Upon

information and belief, Yik Yak has received over $10 million in investment from

venture capitalists, and is about to close another round of financing for $75 million.

22.

Plaintiff’s role as the co-founder and co-creator of Locus Engineering and

the various applications developed under this partnership, including Yik Yak, is

undeniable. This has been recognized not only by the Individual Defendants

(orally and in writing) but also by fellow Furman students and the media. An

article in the CyberSafetyCop blog, dated March 22, 2014, reported that

“Buffington created Yik Yak last year with Tyler Droll and Dougie Warstler, a

senior at South Carolina’s Furman University.” Another article profiled the work

of the partnership and captured the picture below of the three partners (Plaintiff is

on the left, Droll is in the middle, and Buffington is on the right):

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The Modified Agreement Regarding Yik Yak

23.

As noted, Plaintiff and the Individual Defendants initially agreed in 2012

that each of them would own 1/3 of the assets of their partnership/joint venture

Locus Engineering. One of Locus Engineering’s assets—actually its most valuable

asset—is the Yik Yak application. When the parties started to work on Yik Yak in

October 2013, they slightly modified their agreement. On or about October 9,

2013, Plaintiff and the Individual Defendants agreed that: (1) the partnership—via

Locus Engineering— which is owned equally between Plaintiff and the Individual

Defendants—would own 15% of Yik Yak; and (2) the partnership will also own

the remaining 85% of Yik Yak but each partner’s proportional interest will be

based on his contribution to the application.

24.

In text messages between the three partners on or about October 9, 2013,

Droll explained the modified agreement as follows:

The company is divided up three way evenly so we could agree on a

percentage that locus takes from all apps. Then the remaining

percentage gets divided up amongst those working on it

[…]

So say locus takes 15% of each app just from funds that have been put

forward before, we’d each get 5% of any app published for that …

25.

In light of this modified agreement, Plaintiff owns 1/3 of the 15% of Yik

Yak based on his 1/3 ownership of Locus. As shown below, Plaintiff also owns

1/3 of the remaining 85% based on his contribution to Yik Yak.

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26.

Indeed, Plaintiff has contributed significantly to Yik Yak. As discussed, he

used his technical expertise to assist in the coding of the key feature of the Yik

Yak: the ability of the user to post anonymously. Further, for a new application,

marketing is everything. Without marketing, no one would know about and use

the application. And without a user base, the application is worthless. Without

Plaintiff’s sole marketing efforts at Furman, the ground zero and “birthplace” of

the application, Yik Yak would not have been where it is today. In short,

Plaintiff’s contribution to Yik Yak is as valuable as the Individual Defendants’

contribution to the application. Therefore, Plaintiff is entitled to at least 1/3 of the

remaining 85% owned by the partnership in Yik Yak.

27.

To the extent that the Individual Defendants now claim that the partners

have not reached any agreement on the division of the remaining 85% of Yik Yak,

the default rule under Georgia law is that ownership is split equally among the

partners, and the original agreement as reflected in Locus Engineering LLC’s

Articles of Incorporation also provides for an equal split in ownership.

28.

In the end, the modified agreement regarding Yik Yak has no practical

difference to the initial agreement reached between Plaintiff and the Individual

Defendants: each of them owns 1/3 of the partnership/joint venture that owns Yik

Yak.

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Buffington and Droll Betray Plaintiff,

Their Partner, Close Friend and Fraternity Brother

29.

By December 2013, Yik Yak’s popularity had exploded at Furman and the

school’s vicinity. Plaintiff and the Individual Defendants began to discuss plans to

expand the marketing of Yik Yak to other college campuses. On December 21,

2013, Buffington suddenly sent the following text messages to Plaintiff to ask

Plaintiff to sell his ownership interest in Yik Yak:

Hey so Tyler [Droll] and I have been thinking about yik yak and we

want to know if you’d be open to being bought out?

[…]

Tyler and I would like to at least have yik yak for ourselves to go with.

For sure, we’ll buy you out completely of if you don’t want to do that

then we’ll buy most of your percentage out for a lesser amount

30.

On December 28, 2013, Buffington assured Plaintiff via text message that

“You’re not getting screwed out of anything.” On the same day, Droll sent another

email to Plaintiff entitled “Yik Yak” in which Droll gave one ridiculous excuse

after another to justify the Individual Defendants’ decision to buy-out Plaintiff’s

ownership interest in Yik Yak. Droll first blamed his parents for the decision, and

then claimed that the Individual Defendants did not want to continuously come to

Plaintiff for money and signatures going forward. Droll wrote the following:

Dougie,

This isn’t ideal but it is what needs to happen. We need to start fresh

with your name off of this [Yik Yak]. I know we spoke about this

before Christmas, but I spoke with my parents over the holidays. They

are making me get this settled before continuing to fund it. My

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parents know how much Brooks and I have riding on making this

succeed, so they want everyone to be fully committed. We are also

going to have a lot of expenses going forward. We don’t want to be

coming to you for money and signatures when we are trying to get

stuff done […]

31.

Droll’s excuses are just that, excuses. These excuses make no sense because

until this point, Plaintiff has been fully committed to this project by doing exactly

what he and the Individual Defendants have agreed upon: being in charge of the

crucial marketing efforts at Furman, the testing ground for Yik Yak. Moreover,

the parties have never agreed on having Droll’s parents be involved in any

capacity, let alone as financiers for this partnership/joint venture. Finally, Plaintiff

has always paid his 1/3 share of the expenses for this project, and has repeatedly

told the Individual Defendants that he will contribute whatever is needed to finance

this project moving forward. In an email dated January 3, 2014 to the Individual

Defendants, Plaintiff declined the buy-out offer and reiterated that “I would like to

say that as I mentioned earlier, I am more than willing to contribute my share of

capital […].”

32.

After acknowledging Plaintiff’s ownership interest in the Yik Yak

partnership and after Plaintiff rebuffed their offer to buy out such interest, the

Individual Defendants did the unthinkable: they claimed Yik Yak for themselves

and refused to acknowledge Plaintiff’s ownership interest in it.

In an email dated January 6, 2014, Droll brazenly told Plaintiff as follows:

[…] We have decided that our best course of action is to dissolve

Locus Engineering and set up a new LLC for Yik Yak. Between

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Brooks and I, we jointly own all of the intellectual property of Yik Yak

and Locus Engineering has no stake in it […]

33.

The Individual Defendants then locked Plaintiff out of this project, and

refused to allow Plaintiff to further take part in the venture that he co-founded.

Simply put, this was highway robbery. Worse, this was committed by Plaintiff’s

close friends and fellow fraternity brothers and partners.

The Cover-Up

34.

In the ensuing months, the Individual Defendants took steps to rewrite

history to deny Plaintiff’s crucial role as a co-founder and co-owner of the Yik Yak

partnership. They also hired lawyers to engage in corporate machinations to

basically erase Locus Engineering from the map.

35.

In numerous press interviews given after they improperly ousted Plaintiff

from this partnership/joint venture, the Individual Defendants never mentioned or

acknowledged Plaintiff’s role in the founding of the Yik Yak partnership.

36.

On or about January 22, 2014, the Individual Defendants unilaterally created

a new entity called “Yik Yak LLC,” and filed Articles of Organization for Yik Yak

LLC with the Georgia Secretary of State. A true and correct copy of this document

is attached as Exhibit 4. These Articles are virtually identical to the one filed for

Locus Engineering with one significant exception: Plaintiff’s name has been taken

off from this newly-created entity.

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37.

On or about February 26, 2014, the Individual Defendants unilaterally

dissolved Locus Engineering without complying with the relevant requirements

under Georgia law for such a drastic corporate action. A true and correct copy of

the dissolution document is attached as Exhibit 5.

38.

On or about April 29, 2014, to further eliminate any vestige of Locus

Engineering (which was incorporated in Georgia), the Individual Defendants

retained a law firm to convert Yik Yak LLC into another entity in the State of

Delaware, Defendant Yik Yak, Inc. True and correct copies of the conversion and

incorporation papers for Yik Yak, Inc. are attached as Exhibit 6.

39.

Plaintiff has no choice but to file this action.

FIRST CLAIM FOR RELIEF

BREACH OF EXPRESS PARTNERSHIP/JOINT VENTURE AGREEMENT

(Against the Individual Defendants)

40.

Plaintiff repeats and adopts the preceding paragraphs of this Complaint as

though fully set forth herein.

41.

In 2012 and then in 2013, Plaintiff and the Individual Defendants entered

into a valid express partnership/ joint venture agreement whereby each of them

would own 1/3 of the partnership owning the Yik Yak application (“Application”).

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42.

At all times, Plaintiff performed all conditions, covenants, and promises

required to be performed on his part in accordance with the terms of the

partnership/joint venture agreement.

43.

The Individual Defendants breached the partnership/joint venture agreement

by, among other things, depriving Plaintiff of his ownership share of the

partnership/joint venture and the past, present, and future proceeds therefrom, and

by obstructing Plaintiff’s right to equally manage and conduct the joint venture’s

business.

44.

The Individual Defendants have further breached the partnership/joint

venture agreement by failing to provide Plaintiff with an accurate accounting of the

financial affairs of the partnership/joint venture.

45.

Other wrongful acts and/or omissions constituting breach by the Individual

Defendant of the partnership/joint venture agreement are presently unknown.

Plaintiff will amend this Complaint once such additional facts are ascertained

through discovery.

46.

As a direct and foreseeable result of the breaches of the partnership/joint

venture agreement by the Individual Defendants, Plaintiff has been damaged in an

amount according to proof within the jurisdiction of this Court.

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SECOND CLAIM FOR RELIEF

BREACH OF IMPLIED PARTNERSHIP/JOINT VENTURE AGREEMENT

(Against the Individual Defendants)

47.


though fully set forth herein, but pleads this cause of action in the alternative to the

First Cause of Action.

48.

In performing the acts and engaging in the conduct of co-developing and co-

marketing the Application together, as described above, Plaintiff and the Individual

Defendants manifested an intention to enter into a partnership/joint venture

agreement to do those things and to co-own the Yik Yak partnership/joint venture

1/3 each and share co-equally in the profits and losses therefrom. Such acts and

conduct included, but were not limited to, combining their efforts and resources to

develop the concept of the Application, and to implement and market the

Application, and making important decisions concerning the Application by voting

amongst themselves, as alleged above.

49.

Plaintiff and the Individual Defendants held themselves out to Plaintiff and

the public as a co-equal partnership/joint venture for the development and

marketing of the Application.

50.

The Individual Defendants performed these acts and conduct with the intent

to manifest their intention to form the described partnership/joint venture with

Plaintiff, who understood said intent and acted with his own intent to enter into the

partnership/joint venture.

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51.

At no time did the Individual Defendants conclusively manifest an intent to

Plaintiff that they did not intend to remain in the partnership/joint venture with

Plaintiff, until their betrayal of Plaintiff as alleged above.

52.

At all times, Plaintiff performed all conditions, covenants, and promises

required to be performed on his part in accordance with the terms of the

partnership/joint venture agreement.

53.

The Individual Defendants breached the partnership/joint venture agreement

by, among other things, depriving Plaintiff of his ownership share of the

partnership/joint venture and the past, present, and future proceeds therefrom, and

by obstructing Plaintiff’s right to equally manage and conduct the partnership/joint

venture’s business.

54.

The Individual Defendants have further breached the partnership/joint

venture agreement by failing to provide Plaintiff with an accurate accounting of the

financial affairs of the partnership/joint venture.

55.

Other wrongful acts and/or omissions constituting breach by the Individual

Defendants of the partnership/joint venture agreement are presently unknown.

Plaintiff will seek leave of Court in order to amend this Complaint once such

additional facts are ascertained through discovery.

56.

As a direct and foreseeable result of the breaches of the partnership/joint

venture agreement by the Individual Defendants, Plaintiff has been damaged in an

amount according to proof within the jurisdiction of this Court.

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THIRD CLAIM FOR RELIEF

BREACH OF FIDUCIARY DUTY

(Against All Defendants)

57.



58.

As alleged above, Plaintiff and the Individual Defendants entered into a

partnership/joint venture to develop the Application for commercial purposes, and

to co-own the Yik Yak partnership/joint venture at 1/3 each. As fellow

partners/joint venturers, the Individual Defendants at all times owed Plaintiff the

fiduciary duties of disclosure, loyalty and care. Pursuant to such fiduciary duties,

the Individual Defendants were required to act in the utmost good faith towards

Plaintiff, and to avoid acts and omissions adverse to Plaintiff. By virtue of this

fiduciary relationship and the parties’ relationship as fraternity brothers and close

friends, Plaintiff reposed trust and confidence in the integrity of the Individual

Defendants. Plaintiff provided no cause for the Individual Defendants to act in any

manner inconsistent with this fiduciary relationship.

59.

The Individual Defendants have breached their fiduciary duties, including

the duties of disclosure, loyalty, and care to Plaintiff by engaging in the acts and

omissions alleged above.

60.

The Individual Defendants intended to induce Plaintiff to rely on their

fiduciary relationship, and in reasonable reliance thereon, Plaintiff was induced

to and did continue his fidelity.

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61.

Defendant Yik Yak, Inc. aided and abetted, conspired with, and acted in

concert with the Individual Defendants to breach the Individual Defendants’

fiduciary duties owed to Plaintiff.

62.

As a direct and foreseeable result of these breaches of fiduciary duty by

Defendants, Plaintiff has sustained damages in an amount according to proof

within the jurisdiction of this Court. Moreover, Defendants acted with the specific

intent to deprive Plaintiff of property and legal rights and otherwise cause injury,

and Defendants’ actions showed willful misconduct, malice, fraud, wantonness,

oppression, or that entire want of care which would raise a presumption of

conscious indifference to consequences, so as to justify an award of exemplary and

punitive damages.

FOURTH CLAIM FOR RELIEF

WRONGFUL DISSOLUTION OF PARTNERSHIP


63.



64.

As alleged above, Plaintiff and the Individual Defendants entered into a

partnership/joint venture to develop the Application for commercial purposes, and

to co-own the Yik Yak partnership/joint venture at 1/3 each.

65.

By virtue of the acts and omissions alleged above, the Individual Defendants

wrongfully dissolved the partnership/joint venture. Specifically, the Individual

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Defendants wrongfully terminated the partnership/joint venture by denying

Plaintiff’s ownership interest in the partnership/joint venture, and by unilaterally

dissolving Locus Engineering without complying with any of the requisite

statutory requirements and transferring its primary asset (the Yik Yak application),

which was equally owned by Plaintiff and the Individual Defendants, through a

series of newly created entities, from Locus Engineering to Yik Yak LLC, and

finally to Yik Yak, Inc. The Individual Defendants formed Yik Yak LLC and

Defendant Yik Yak, Inc. without including Plaintiff, failed to obtain Plaintiff’s

consent to dissolve the partnership/joint venture, and failed to compensate Plaintiff

in any way for his 1/3 interest in the Application.

66.

Defendant Yik Yak, Inc. aided and abetted, conspired with, and acted in

concert with the Individual Defendants to wrongfully dissolve the partnership/joint

venture.

67.

Defendants intended to appropriate for themselves Plaintiff’s interest in the

personal property, profits, and assets of the partnership/joint venture, including the

Application. Defendants’ actions were undertaken wrongfully, in bad faith, and

with the specific intent to harm Plaintiff. As a direct and foreseeable result of

these breaches of fiduciary duty by Defendants, Plaintiff has sustained damages in

an amount according to proof within the jurisdiction of this Court.

68.

As a direct and foreseeable result of Defendants’ wrongful conduct, Plaintiff

has sustained damages in an amount according to proof within the jurisdiction of

this Court. Moreover, Defendants acted with the specific intent to deprive Plaintiff

of property and legal rights and otherwise cause injury, and Defendants’ actions

showed willful misconduct, malice, fraud, wantonness, oppression, or that entire

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want of care which would raise a presumption of conscious indifference to

consequences, so as to justify an award of exemplary and punitive damages.

FIFTH CLAIM FOR RELIEF

TORTIOUS INTERFERENCE WITH FIDUCIARY DUTY

(Against Defendant Yik Yak, Inc.)

69.



70.

Defendant Yik Yak, Inc. tortuously interfered with the fiduciary duties owed

by the Individual Defendants to Plaintiff, including the duties of disclosure,

loyalty, and care. Yik Yak acted wrongfully and improperly to procure the

Individual Defendant’s breaches of their fiduciary duty to Plaintiff. At all times,

Yik Yak had knowledge that the Individual Defendants owed a fiduciary duty to

Plaintiff, and Yik Yak acted purposely, with malice, and with the specific intent to

injure Plaintiff. Moreover, Yik Yak’s conduct was not privileged.

71.

Yik Yak’s wrongful conduct did in fact procure the Individual Defendant’s

breaches of their fiduciary duty to Plaintiff. Yik Yak’s conduct was a proximate

cause of the damage and harm to Plaintiff alleged herein.

72.

As a direct and foreseeable result of Yik Yak’s wrongful conduct, Plaintiff

has sustained damages in an amount according to proof within the jurisdiction of

this Court. Moreover, Yik Yak acted with the specific intent to deprive Plaintiff of

property and legal rights and otherwise cause injury, and Yik Yak’s actions

24

showed willful misconduct, malice, fraud, wantonness, oppression, or that entire

want of care which would raise a presumption of conscious indifference to

consequences, so as to justify an award of exemplary and punitive damages.

SIXTH CLAIM FOR RELIEF

PUNITIVE DAMAGES


73.



74.

As alleged above, the Individual Defendants have acted in bad faith by

breaching their fiduciary duties to Plaintiff and wrongfully dissolving the Yik Yak

partnership/joint venture. Defendant Yik Yak acted in bad faith by aiding and

abetting, conspiring with, and acting in concert with the Individual Defendants to

wrongfully dissolve the partnership/joint venture, and by tortuously interfering

with the fiduciary duties owed by the Individual Defendants to Plaintiff.

75.

Defendants’ actions showed willful misconduct, malice, fraud, wantonness,

oppression, or that entire want of care which would raise a presumption of

conscious indifference to consequences, and would entitle Plaintiff to punitive

damages in an amount sufficient to punish and deter such conduct in the future,

pursuant to O.C.G.A. § 51-12-5.1(b). Moreover, Defendants acted with the

specific intent to cause the harm to Plaintiff alleged herein, pursuant to O.C.G.A. §

51-12-5.1(f).

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SEVENTH CLAIM FOR RELIEF

ATTORNEYS FEES AND LITIGATION EXPENSES


76.



77.

Defendants have acted in bad faith, been stubbornly litigious, and caused

Plaintiff unnecessary trouble and expense, such that Plaintiff is entitled to recover

damages from Defendants for the expenses of litigation, including reasonable

attorneys’ fees, pursuant to O.C.G.A. § 13-6-11.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for judgment against Defendants, and each

of them, as follows:

1. For compensatory damages according to proof;

2. For recovery of his one-third interest in the Yik Yak partnership/joint

venture, and all profits and benefits arising therefrom;

3. For interest to the extent permitted by law;

4. For an award of punitive damages;

5. For an award of attorney’s fees and litigation expenses; and

6. For such other and further relief as the Court may deem proper.

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DEMAND FOR JURY TRIAL

Plaintiff hereby demands a trial by jury of twelve (12) persons pursuant to

O.C.G.A. § 15-12-122(a)(2), as to all issues so triable.

Respectfully submitted this 17th day of November, 2014,

LEE TRAN & LIANG LLP

K. Luan Tran (pro hac vice

forthcoming)

James M. Lee (pro hac vice

forthcoming)

Ariel D. House (pro hac vice

forthcoming)

601 South Figueroa Street, Suite 3900

Los Angeles, CA 90017

Telephone: (213) 612-8900

Facsimile: (213) 612-3773

Email: [email protected]

[email protected]

[email protected]

PETERS & MONYAK, LLP

/s/ Robert P. Monyak _

Robert P. Monyak

Georgia Bar No. 517675

Bonnie M. Lassiter

Georgia Bar No. 438582

One Atlanta Plaza, Suite 2275

950 East Paces Ferry Road N.E.

Atlanta, Georgia 30326

Telephone: (404) 607-0100

Facsimile: (404) 607-0465

Email: [email protected]

[email protected]

Counsel for Plaintiff Douglas Joseph Warstler

complaint with exhibits (warstler v. yik yak)

Documents

yik yak partnership

defendants yik yak

coowned yik yak

kicked plaintiff

plaintiff codeveloped

tyler steven droll droll

breach of fiduciary

writing plaintiffs ownership