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Wednesday, January 26, 2011 12:01:07 PM
ROBERT ARIAS, JR.,
CASE NO.: 3:08 – cv – 00211
VS.
PLANET RESOURCE RECOVERY, INC.,
Defendant.
PLAINTIFF’S FIRST AMENDED ORIGINAL COMPLAINT
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW, Plaintiff Robert Arias, Jr. (“Arias” or “Plaintiff”), complaining of
Planet Resource Recovery, Inc. (“PRR” or “Defendant”), and for cause of action would
respectfully show unto the Court the following:
I.
INTRODUCTION
1. This is an action for compensatory and punitive damages, attorneys’ fees,
expert witness fees, taxable costs of court, pre-judgment and post judgment interest
sustained by Plaintiff as a result of Defendant’s acts.
2. Plaintiff Arias entered agreements with Defendant PRR related to the sale
of his company, RADA Technologies, Inc. (“RADA”). Soon after the sale was
completed, Arias learned that PRR had made several material and false representations to him regarding its financial stability, representations made for the sole purpose of
inducing Arias to sell RADA to PRR so that it could gain access to RADA bank accounts
and credit lines and use them to pay its mounting debt and expenses.
3. In addition, PRR breached certain promises it made to Arias by, among
other things, refusing to pay debts of RADA that Arias had personally guaranteed.
4. Also, without Arias’ knowledge or permission, PRR submitted a credit
application to a credit card company in Arias’ name, received a credit card, used the
credit to pay the electricity bill at its leased offices, and defaulted on the payments.
II.
PARTIES
5. Plaintiff Arias is an individual, a resident of Brazoria County, Texas and
citizen of the State of Texas.
6. Defendant Planet Resource Recovery, Inc. is a corporation organized and
existing under the laws of the State of Nevada, conducts business in the State of Texas on
an ongoing and systematic basis and has offices in Pearland, Brazoria County, Texas.
Defendant maintains an agent for receiving service of process in the State of Texas, and
may be served with citation by serving its registered agent for service of process, Kurt E.
Neubauer, who may be served at 10101 Southwest Freeway, Suite 300, Houston, TX
77074-1110, or wherever he may be found, a true copy of the summons with a copy of
Plaintiff’s First Amended Original Complaint attached thereto, pursuant to the applicable
rules of procedure.
JURISDICTION & VENUE
7. This Court has subject matter jurisdiction over this matter pursuant to 28
U.S.C. §1332(a) as there is complete diversity of citizenship amongst the parties and the
amount in controversy exceeds $75,000.
8. Venue is proper in this District pursuant to 28 U.S.C. § 1391(a). A
substantial part of the events or omissions giving rise to the claims herein occurred in this
District and Defendant is subject to personal jurisdiction in this District.
IV.
FACTS
9. PRR describes itself as a “Petrochemical/Oil Services company that has
developed a proprietary, environmentally friendly chemical that dislodges hydrocarbons
in practically all natural and man-made environments.”
10. RADA is an engineering and design based company that provides
operational and equipment solutions to its clients in the oil and gas industry.
11. In April 2007, Arias and PRR entered formal negotiations for PRR to
purchase Arias’ company, RADA.
12. PRR represented to Arias that its acquisition of RADA was “ideal…for
both parties” and that their “joint efforts [would] provide much needed solutions to the
industry.”
13. PRR represented to Arias that it was a profitable business experiencing
significant growth.
14. PRR represented to Arias that it had huge deals in the works with parties
all over the world, including but not limited to, Russia and Canada.
15. PRR represented to Arias that it had investors clamoring to buy an
ownership interest in it.
16. PRR represented to Arias that it was poised to have its stock listed on one
of the major markets.
17. PRR represented to Arias that it had surplus capital to invest in and grow
RADA.
18. At the time PRR was making these representations to Arias, PRR was in
serious financial distress and desperate to find money, any money, to stay in business.
19. Arias had no idea PRR was struggling financially and was convinced,
based on the material and false representations of PRR, that it was a financially strong
and valuable company.
20. Because he had been convinced by PRR that it was a financially strong
and valuable company, Arias agreed to be compensated for the sale of his ownership
portion of RADA with PRR restricted stock.
21. As part of the sale, PRR also agreed to service RADA debt that had been
personally guaranteed by Arias.
22. The sale was consummated in July 2007.
23. In the weeks and months that followed, as Arias began to work more
closely with PRR, he began to realize that PRR was cash-strapped and there was no
legitimate evidence of the purported investors or market upgrade touted by PRR.
24. PRR defaulted on its promise to pay the debts of RADA that had been
guaranteed by Arias, as agreed.
25. Arias learned that PRR had defaulted on its payments to his brother-in-law
for his ownership interest in RADA.
26. Arias learned that PRR had opened a credit card account in his name, used
the credit card up to its limit for such things as the company’s electric bill, and defaulted.
Arias learned about the credit card when the issuer called his home seeking payment.
27. It had also been agreed that Arias would stay on and run RADA for a
salary.
28. Prior to its purchase by PRR, RADA had been a successful business,
valued at nearly $300,000, and growing.
29. However, since it has purchased RADA, PRR emptied its bank account,
defaulted on its credit obligations and added more credit, to the point that Arias could not
sustain RADA’s business.
30. At one point, over the course of twelve (12) days, PRR wrote checks to
itself from the RADA bank account in the amounts of $15,000, $4,500 and $15,000 –
effectively crippling RADA to the point that it could no longer conduct business.
31. When Arias confronted PRR about its misrepresentations, fraud, breach of
agreements and the pilfering of RADA’s bank account, PRR’s response was to cease
communicating with him.
32. As a result of PRR’s conduct, Arias lost a valuable company, had his
personal credit ruined, was the victim of credit card fraud and left holding the essentially
worthless stock of PRR.
V. COUNT I: FRAUDULENT INDUCEMENT
33. Plaintiff incorporates by reference all preceding paragraphs as if fully
stated herein.
34. PRR fraudulently induced Arias to sell his ownership interest in RADA.
35. PRR made multiple false and material representations to Arias regarding,
but not limited to, the financial standing of PRR, investor interest in PRR, the reasons
why PRR wanted access to RADA and market recognition of PRR, in order to induce
Arias to sell his ownership in RADA and accept its worthless stock in payment.
36. The above-referenced representations made by PRR were material.
37. The above-representations made by PRR were false.
38. When PRR made the representations, it knew they were false. PRR made
these representations with the intent that Arias act upon them.
39. Arias relied on PRR’s representations. PRR’s multiple, material, false
representations to Arias caused him significant injury.
40. PRR’s acts were in violation of Texas law.
41. PRR’s acts were willful and intentional.
42. As a direct result of PRR’s acts, Arias suffers damages for which
Defendant is liable.
VI.
COUNT II: BREACH OF CONTRACT
43. Plaintiff incorporates by reference all preceding paragraphs as if fully
stated herein.
44. Arias now sues PRR for damages resulting from its breach of the
agreements between himself and PRR, as well as pre-judgment interest owing at the rate
allowed by law, until the date of Judgment.
45. The agreement between Arias and PRR that PRR pay the debts of RADA
that are personally guaranteed by Arias is a valid, enforceable contract.
46. Arias has standing to sue PRR for breach of the contract.
47. Arias performed or attempted to perform his contractual obligations.
48. PRR breached the contract by not paying the RADA creditors whom Arias
had provided a personal guarantee.
49. PRR’s breach has caused Arias additional substantial financial injury.
50. Arias has employed the undersigned attorneys to represent him in the
filing of this suit and has agreed to pay them a reasonable fee for their services for which
amount Arias sues. Pursuant to V.T.C.A., Civil Practice & Remedies Code §38.001,
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