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1 PATRICIA L. GLASER - State Bar No. 55668
pglaser@glaserweil.com
2 CYNTHIA E. ORGAN - State Bar No. 293468
corgan@glaserweil.com
3 ALEXANDER R. MILLER - State Bar No. 294474
amiller@glaserweil.com
4 GLASER WEIL FINK HOWARD
JORDAN & SHAPIRO LLP
5 10250 Constellation Boulevard, 19th Floor
Los Angeles, California 90067
6 Telephone: (310) 553-3000
7 Attorneys for Plaintiff
BUI SIMON
8
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 FOR THE COUNTY OF SANTA BARBARA – ANACAPA DIVISION
11
12 BUI SIMON, an individual, Case No. 23CV03184
Unlimited Jurisdiction
13 Plaintiff,
Assigned to Hon. Thomas P. Anderle
14 v. Department: 3
15 ANGELA SCOTT, an individual; SCOTT
MILDEN, an individual; MILDEN, LLC, a SECOND AMENDED COMPLAINT FOR:
16 California limited liability company; and DOES (1) DECLARATORY RELIEF;
1 through 10, inclusive,
17
(2) BREACH OF CONTRACT;
(3) INDUCING BREACH OF CONTRACT;
Defendants.
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(4) INTENTIONAL INTERFERENCE WITH
CONTRACTUAL RELATIONS;
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(5) BREACH OF FIDUCIARY DUTY;
(6) AIDING AND ABETTING BREACH OF
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FIDUCIARY DUTY;
(7) FRAUD; AND
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(8) AIDING AND ABETTING FRAUD
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Action Filed: July 24, 2023
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Trial Date: November 27, 2024
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SECOND AMENDED COMPLAINT
1 Plaintiff Bui Simon ( “Plaintiff”) files this Complaint against Defendants Angela Scott
2 (“Defendant Scott”), Scott Milden (“Defendant Milden”), Milden, LLC (“Defendant Milden,
3 LLC”), and Does 1 through 10, inclusive (collectively, “Defendants”), and alleges as follows:
4 I. INTRODUCTION
5 1. This action arises from Defendant Angela Scott’s repeated breaches of the Office of
6 Angela Scott LLC’s (“TOOAS” or the “Company”) Restated Operating Agreement dated August 3,
7 2015 (the “Operating Agreement”) and her fiduciary duties to the Company as well as other
8 misconduct, including the repeated embezzlement of funds from the Company to fund Defendant
9 Scott’s own extravagant and unearned lifestyle. Separate and apart from the harm Defendant Scott’s
10 misconduct caused to the Company, Plaintiff was and continues to be personally harmed as a direct
11 result of Defendant Scott’s breach of the Operating Agreement and other misconduct, including
12 because Plaintiff was required to undertake a forensic audit of the Company to account for
13 Defendant Scott’s embezzlement at great personal expense which the Company will not reimburse.
14 Defendant Scott’s misconduct was aided and abetted by Defendant Scott’s husband Defendant
15 Milden and his company Defendant Milden, LLC, and who had access to Company bank accounts
16 and improperly received Company funds as part of this scheme.
17 2. Since filing suit, Defendant Scott has been removed as Manager of TOOAS pursuant
18 to the Operating Agreement. Because Defendant Scott refused to acknowledge that she had legally
19 been removed as Manager under the Operating Agreement, and for a time continued to act
20 unlawfully as Manager and to access the Company’s property without authorization along with her
21 husband Defendant Milden, Plaintiff was forced to obtain a temporary restraining order. Defendant
22 Scott has now stipulated to a temporary injunction confirming her removal as Manager of the
23 Company and instituting a new Manager, among other things.
24 3. Accordingly, Plaintiff brings this action to permanently enjoin Defendant Scott from
25 acting as Manager of the Company without authorization in the future — including by accessing
26 Company funds or property without authorization — and to seek damages for the personal harm to
27 Plaintiff resulting Defendant Scott’s many breaches of the Operating Agreement, her fiduciary
28 duties to the Company, and for her fraud and other misconduct, all of which was supported and
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SECOND AMENDED COMPLAINT
1 aided and abetted by Defendant Milden and Defendant Milden, LLC.
2 II. THE PARTIES
3 4. Plaintiff is, and at all times relevant was, a resident of Los Angeles County,
4 California, and a member of TOOAS.
5 5. Plaintiff is informed and believes, and based thereon alleges, that Defendant Scott is,
6 and at all times mentioned herein was, a resident of Santa Barbara County, California.
7 6. Plaintiff is informed and believes, and based thereon alleges, that Defendant Milden
8 is, and at all times mentioned herein was, a resident of Santa Barbara County, California.
9 7. Plaintiff is informed and believes, and based thereon alleges, that Defendant Milden,
10 LLC is, and at all times mentioned herein was, a California limited liability company with its
11 principal place of business in Santa Barabara, California. On information and belief, Defendant
12 Milden, LLC was originally formed on or around June 9, 2015, as Noyamasen LLC, and on or
13 around February 28, 2018, filed an amendment to the company’s articles of organization with the
14 California Secretary of State changing its name to Milden, LLC. On information and belief,
15 Defendant Milden is the only Manager and member of Defendant Milden, LLC.
16 8. The true names and capacities of Defendants Does 1 through 10, inclusive, whether
17 individual, corporate, or otherwise, are unknown to Plaintiff at this time, and Plaintiff therefore sues
18 these Defendants by such fictitious names. When the true names and capacities of the fictitiously
19 named defendants are ascertained, Plaintiff will amend the Complaint to reflect their true names.
20 Plaintiff is informed and believes and thereupon alleges that each of the fictitiously named
21 Defendants is responsible in some manner for the occurrences herein alleged, and that Plaintiff’s
22 losses as herein alleged were legally caused by the Doe Defendants.
23 III. JURISDICTION
24 9. Jurisdiction is proper in the Superior Court of the State of California for the County
25 of Santa Barbara pursuant to section 410.10 of the California Code of Civil Procedure, and because
26 the amount in controversy exceeds the minimum jurisdiction of the Court.
27 10. Venue is proper in the County of Santa Barbara, California pursuant to section 395 of
28 the California Code of Civil Procedure because Defendant Scott and Defendant Milden reside in the
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SECOND AMENDED COMPLAINT
1 County of Santa Barbara, Defendant Milden, LLC’s principal place of business is in the County of
2 Santa Barbara, and the events or occurrences giving rise to the claims alleged in this First Amended
3 Complaint took place in the County of Santa Barbara.
4 IV. ALTER EGO ALLEGATIONS
5 11. Plaintiff is informed and believes and on that basis alleges that there exists, and at all
6 times herein mentioned there existed, a unity of interest and ownership between Defendants, such
7 that any individuality and separateness between them have ceased.
8 12. Adherence to the fiction of the existence of Defendants as separate entities distinct
9 from one another would permit an abuse of the corporate privilege and would sanction tortious
10 conduct and promote injustice.
11 13. Plaintiff is informed and believes and on that basis alleges that Defendants have such
12 a unity of interest and operations that separate personalities of these Defendants no longer exist, and
13 if each Defendant’s acts are treated as those of each alone, an inequitable result will follow.
14 Defendants operate not as individual entities, but rather as one, with separate companies used to
15 shield assets and other revenues in a manner to best suit their owners. Moreover, Defendants are the
16 alter egos of each other in that they all share similar ownership, management, and functions.
17 14. Plaintiff is informed and believes and on that basis alleges that each of the
18 Defendants are, and at all times relevant to this Complaint were, the employee, agent, employer,
19 partner, joint venture, alter ego, affiliate, principal, and/or co-conspirator of the other Defendants
20 and, in doing the acts alleged herein, was acting within the course and scope of such positions at the
21 direction of, and/or with the permission, knowledge, consent and/or ratification of, the other
22 Defendants. As such, each Defendant, through its acts and omissions, is responsible for the
23 wrongdoing alleged herein and for the damages suffered by Plaintiff.
24 V. FACTS COMMON TO ALL CLAIMS FOR RELIEF
25 A. TOOAS Is Founded and the Operating Agreement Is Established
26 15. Defendant Scott previously worked as Plaintiff’s assistant for more than seven years,
27 and was later mentored by Plaintiff, who is a businesswoman and who had a successful career for
28 decades. Based on this close relationship, Plaintiff made the decision to financially support
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SECOND AMENDED COMPLAINT
1 Defendant Scott’s dream of starting her own shoe Company — TOOAS.
2 16. TOOAS LLC was formed on or about October 4, 2010. Although TOOAS LLC was
3 founded as a Texas Limited Liability Company, TOOAS is now headquartered and operated in
4 Santa Barbara, California.
5 17. In or around March 21, 2011, Plaintiff and Defendant Scott entered into an initial
6 operating agreement for the Company. Initially, Plaintiff owned 40% of the Company and
7 Defendant Scott owned 60% of the Company.
8 18. After approximately $650,000 in start-up funding Plaintiff provided had been
9 depleted, Defendant Scott asked Plaintiff to lend an additional roughly $1 million to sustain and
10 grow the Company. At that time, the Company was already in significant debt and would not be
11 profitable for several more years. Because Plaintiff was taking on significant additional financial
12 risk in lending additional money, on or about August 3, 2015, Defendant Scott sold an additional
13 10% interest in TOOAS to Plaintiff. In so doing, on information and belief, Defendant Scott assured
14 Plaintiff that she was not receiving personal compensation from the Company, other than for
15 approved business-related reimbursements. Plaintiff and Defendant Scott now each own 50% of the
16 Company.
17 19. On or about August 3, 2015, Plaintiff and Defendant Scott also entered into a
18 Restated Operating Agreement governing the rights and responsibilities of Plaintiff and Defendant
19 Scott in operating the Company, which remains in effect today. A true and correct copy of the
20 Operating Agreement is attached to the Complaint as Exhibit A. On information and belief, prior to
21 entering into the Operating Agreement Defendant Scott assured Plaintiff that she was not receiving
22 personal compensation from the Company, other than for approved business-related
23 reimbursements, and that the Company was being and would be managed in accordance with the
24 Restated Operating Agreement.
25 20. Critically, the Operating Agreement also establishes certain safeguards and
26 guardrails governing the rights and responsibilities of the Company Manager. See Ex. A §§ 4.1, et
27 seq. Chief among these protections is that the Manager is not entitled to any compensation from the
28 Company unless such compensation is approved by all members of TOOAS LLC (i.e., Plaintiff and
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SECOND AMENDED COMPLAINT
1 Defendant Scott). Ex. A § 4.5. Otherwise, the Manager is only entitled to be reimbursed for business
2 expenses that are “reasonably incurred by such Manager in the performance of such Manager’s
3 duties under this agreement.” Id. Nor is the Manager permitted to hire “employees, accountants and
4 attorneys for the Company” without first obtaining the approval of all TOOAS LLC members. Id. §
5 4.4(d).
6 21. As reflected in the Operating Agreement, Defendant Scott was named as the initial
7 Manager of the Company. See Ex. A ¶ 4.2. When the Company began, per Defendant Scott’s own
8 proposal, her contribution to the Company was her own sweat equity. Once the Company became
9 profitable in or around 2019, Plaintiff repeatedly attempted to discuss compensation for her efforts
10 as Manager with Defendant Scott. When Plaintiff raised the topic of compensation, Defendant Scott
11 would brush Plaintiff off and tell her that she wanted all funds reinvested into the Company and to
12 go toward paying down the Company’s debt.
13 22. When Plaintiff inquired how Defendant Scott was able to support herself without a
14 Company salary, Defendant Scott explained that her husband, Defendant Milden, was independently
15 wealthy and was supporting them. As Plaintiff was also paying Defendant Scott a $70,000 per year
16 salary for her work with the Angels Wings Foundation, Plaintiff was not overly concerned with
17 Defendant Scott’s ability to support herself without taking a salary from the Company and did not
18 inquire further.
19 B. Defendants’ Ongoing Malfeasance Is Discovered and Plaintiff Commissions
20 Audits to Confirm the Scope of Defendants’ Wrongdoing
21 23. Against this backdrop, in or around the fall of 2022, Defendant Scott tearfully
22 approached Plaintiff, explaining that because she wanted to make a substantial down payment on a
23 larger house and had worked for ten years at the Company, she wanted to be paid a $500,000 bonus.
24 Moved by Defendant Scott’s tears, Plaintiff happily agreed to review the Company’s finances to see
25 if the Company was in the position to pay Defendant Scott her requested $500,000 bonus to
26 celebrate ten years in business. Instead of finding that the Company was expected to be profitable
27 enough to pay Defendant Scott’s requested bonus, Plaintiff learned Defendant Scott had repeatedly
28 deceived Plaintiff and betrayed her trust by improperly receiving compensation and reimbursements
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SECOND AMENDED COMPLAINT
1 of personal expenses from the Company without authorization. In order to confirm this wrongdoing
2 and attempt to undertake the scope of Defendants’ malfeasance, Plaintiff personally commissioned a
3 forensic audit by the firm of Nigro Karlin Segal & Feldstein, LLP (“Nigro”) in or around April
4 2023, and an inventory audit by Tiger Valuation Services, LLC (“Tiger”) in or around March 2023.
5 Plaintiff was forced to pay for the audits personally even though their cost was properly a Company
6 expense because Defendant Scott, who was then the sole Manager of the Company, refused to
7 authorize the expenditure of Company funds for the audits. The preliminary results of the audits,
8 which are ongoing, confirm that Defendant Scott, Defendant Milden, and Defendant Milden LLC
9 have embezzled more than two and a half million dollars ($2,500,000) in undisclosed compensation
10 and personal expenditures of Company money, in direct violation of the Operating Agreement.
11 24. For example, as a result of Plaintiff’s investigation and forensic audit it has been
12 uncovered that, unbeknownst to Plaintiff, the Company has been making substantial payments for
13 multiple Porsches being driven by Defendant Scott during the years 2015 through 2023, the latest
14 including a $10,000 down payment and $1,292.50 monthly payment (a total of about $55,832.50 for
15 a three-year lease). Although Plaintiff’s forensic audit is ongoing, to date, Plaintiff has identified
16 more than $264,000 in Porsche and other automotive-related expenses paid by the Company for
17 Defendant Scott’s benefit between 2015 and 2023. In addition to the lease and auto insurance
18 payments, this includes reimbursements to Defendant Scott for DMV fees, auto repairs, gas, in car
19 washes, window tinting, traffic violations, and limousines. The payment of these expenses with
20 Company funds was never approved by Plaintiff.
21 25. Under section 4.5 of the Operating Agreement, Defendant Scott is only entitled to
22 “reimbursement for all expenses reasonably incurred by such Manager in the performance of such
23 Manager’s duties under this Agreement.” However, Defendant Scott did not incur these automotive
24 related expense in the performance of her duties.
25 26. In fact, Defendant Scott provided Plaintiff with records indicating that, when
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SECOND AMENDED COMPLAINT
1 Defendant Scott leased one of Porches paid for with Company funds, it was primarily being used for
2 personal purposes:
3
27. Defendant Scott has embezzled Company funds to pay for numerous other
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unauthorized personal expenses on her behalf. Among other things, Plaintiff’s ongoing forensic
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audit has uncovered that, between 2015 and 2023, Defendant Scott used TOOAS funds to pay for
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more than $33,000 in personal medical expenses, including for fertility treatments, dermatology
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treatments, optometrist visits, and pharmacy expenses. During that same time period, Defendant
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Scott was also reimbursed for more than $222,000 in miscellaneous personal expenses, including for
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retail shopping at stores like Nordstrom, Neiman Marcus, and Hermes, beauty salons, veterinary
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services, eye glasses, flowers, dry cleaning, fitness memberships, digital media downloads,
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entertainment such as trips to the Santa Barbara Zoo and bowling at Zodos, and more than $116,000
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in meal and coffee expenses.
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28. Plaintiff’s forensic audit has also confirmed Defendant Scott used TOOAS funds to
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pay for personal trips, including hotel and/or airfare for trips to Big Bear, California, Todos Santos,
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Mexico, Sedona, Arizona, St. Helena, California, Kihei, Hawaii, and Kula, Hawaii. On information
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and belief, Defendant Scott’s husband, Defendant Milden, accompanied Defendant Scott on many
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of these personal trips.
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29. Plaintiff’s forensic audit is ongoing, and the above is just a sample of the most
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obvious unauthorized personal expenses that have been uncovered to date. Again, all of these
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charges are improper, unauthorized personal expenses that should have never been paid for by the
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Company.
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30. In addition to the forensic audit by Nigro, Plaintiff was also required to commission
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an inventory audit by Tiger to appraise the value of the Company’s inventory and confirm that all of
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the inventory that was supposed to be at the Company’s warehouse was in fact there. Both of these
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audits were required as a direct result of Defendants’ wrongdoing, as Plaintiff was required to assess
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the potential harm to the Company and Plaintiff’s significant investments in the Company.
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31. Although Plaintiff asked the Company pay for the costs of the audits at the outset,
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SECOND AMENDED COMPLAINT
1 Defendant Scott when purportedly acting as Manager refused to approve these expenses. In or
2 around April 2024, Plaintiff also requested that the new Company Manager reimburse Plaintiff for
3 the significant costs of the audits and was refused. As of the filing of this Complaint, the Company
4 has not reimbursed Plaintiff for these expenses.
5 C. Defendants Scott Milden and Milden LLC Are Complicit With Defendant Scott
6 and Participated in the Wrongdoing
7 32. On information and belief, Defendant Milden was given multiple Company credit
8 cards by Defendant Scott and had direct access to Company funds that he also used for personal
9 expenses including substantial restaurant, gas, retail, travel, and hotel charges, and has received
10 other payments by the Company despite the fact that Defendant Scott told Plaintiff her husband did
11 not do any work as an employee for the Company. So deep was Defendant Milden’s involvement in
12 the Company’s finances that, on information and belief, Defendant Scott made Defendant Milden a
13 signatory on the Company’s bank accounts.
14 33. On information and belief, Defendant Milden has been involved in a number of
15 failed ventures, including in particular serving as Creative Director of Fossil’s shoe division, which
16 was shuttered by Fossil during his tenure. On information and belief, Defendant Milden’s own shoe
17 line went bankrupt.
18 34. Additionally, Defendant Milden has used his wife’s connections with the Simon
19 family to obtain a number of business opportunities for himself. For example, when Defendant
20 Milden was invited to a Simon family Easter party as Defendant Scott’s guest, he networked his
21 way into a job at the shoe company SeaVees, in which Plaintiff is also an investor. On information
22 and belief, Defendant Milden was fired by SeaVees within months. Similarly, Defendant Milden
23 obtained a position at the Jean Shop from a Simon family friend who he met at the Simon family
24 home.
25 35. While Defendant Milden’s name appears on some of the initial formation documents
26 for the Company, when Plaintiff invested in the Company she made it expressly clear that she was
27 going into business with Defendant Scott, not her husband, and that Defendant Milden was not to be
28 part of the Company. It was always Plaintiff’s goal to empower and support Defendant Scott, not
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SECOND AMENDED COMPLAINT
1 her husband, especially in light of his track record in business.
2 36. This understanding is incorporated into the Operating Agreement. Again, among
3 other things, section 4.4(D) provides that Defendant Scott has no power to hire employees without
4 Plaintiff’s approval. Ex. A § 4.4(D) (“[N]o Manager shall have authority to cause the Company to
5 engage in the following transactions without first obtaining the approval of all of the Members: . . .
6 The hiring of employees, accountants and attorneys for the Company.”).
7 37. Section 3.5 also provides that affiliates of members are not “entitled to remuneration
8 for services rendered or goods provides to the Company,” and Section 6.8(A) provides that if
9 Defendant Scott and Defendant Milden divorce, Defendant Milden’s community property
10 membership interest in TOOAS must be distributed to or be purchased by Defendant Scott (or
11 Plaintiff, if Defendant Scott fails to execute such sale), ensuring that Defendant Milden would not
12 obtain any interest in the Company in a divorce. Ex. A §§ 3.5, 6.8(A).
13 38. Plaintiff was mislead about Defendant Milden’s role at the Company by both
14 Defendant Scott and Defendant Milden. Defendant Scott repeatedly lied to Plaintiff regarding
15 Defendant Milden’s involvement in the Company, denying that he was an employee when directly
16 questioned by Plaintiff. For example, when Plaintiff would see Defendant Milden in the Company’s
17 office, she would sometimes jokingly ask Defendant Scott “do we have a new employee?” or words
18 to that effect. Defendant Scott would respond with “no, Scott’s just here to help with boxes,” “he’s
19 just picking up the dogs,” or similar, innocuous explanations. Defendant Milden would affirm that
20 he was only at the Company offices to “pick up the dogs” or perform similar, non-work-related
21 tasks. Defendant Milden would excuse himself from Plaintiff’s meetings with Defendant Scott,
22 saying “I’ll let you guys talk business” or words to that effect. Defendant Milden often expressed to
23 Plaintiff that he was frustrated that Defendant Scott would not ask him his input about design or
24 business advice, but that he understood because things would not work out if he and Defendant
25 Scott were both living together and working together. On one occasion, Plaintiff witnessed a big
26 argument between Defendant Scott and Defendant Milden during which Defendant Scott kicked
27 Defendant Milden out of the Company office, saying that she did not need his help. Defendant Scott
28 expressed frustration to Plaintiff that at times Defendant Milden “couldn’t keep his opinions to
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SECOND AMENDED COMPLAINT
1 himself” about Company business, but that he should because it was Defendant Scott and Plaintiff’s
2 business, not Defendant Milden’s business. When the Company began to turn a profit in or around
3 2019, Defendant Milden expressed to Plaintiff and Defendant Scott that he was proud of them
4 because they did it their way, without his help.
5 39. Most recently, when Plaintiff’s forensic audit uncovered more than $2.5 million
6 ($2,500,000) in payments to Defendant Milden on the Company’s books and asked Defendant Scott
7 for an explanation, Defendant Scott initially ignored Plaintiff, and then claimed that Defendant
8 Milden was merely a consultant whose hiring did not need to be approved by Plaintiff under section
9 4.4(D) of the Operating Agreement. However, Defendant Scott has since admitted that Defendant
10 Milden has been paid as a W2 employee of the Company, in violation of this provision.
11 40. Even though Plaintiff initially inquired about this issue in or around September 2022,
12 it was not until on or about January 26, 2023, that Defendant Scott came clean about the payments
13 to Defendant Milden as a W2 employee.
14 41. Plaintiff was never aware prior to the fall of 2022 that Defendant Scott was paying
15 herself, Defendant Milden, and Defendant Milden, LLC compensation because the financial reports
16 Defendant Scott provided to Plaintiff listed one aggregate category of “payroll expenses” for all
17 Company employees with no indication of who was on the Company payroll. Currently, there are
18 approximately fourteen employees of the Company. Accordingly, one aggregate number for
19 “payroll expenses” did not put Plaintiff on notice that Defendant Scott or Defendant Milden had
20 been improperly added to the Company payroll. Defendant Scott also never notified Plaintiff of any
21 payments to Defendant Milden, LLC or its predecessor Noyamasen LLC.
22 42. Although Plaintiff’s forensic audit is ongoing, Plaintiff has identified more than $1.6
23 million ($1,600,000) in unauthorized payments to Defendant Scott, Defendant Milden, and
24 Defendant Milden, LLC between 2015 and 2023. In particular, Plaintiff’s forensic audit has
25 uncovered approximately $336,168 in payments to Defendant Scott, $1,076,079 in payments to
26 Defendant Milden, $133,990 in payments to Noyamasen, LLC, and $101,793 in payments to
27 Defendant Milden, LLC.
28 43. Moreover, when Plaintiff began looking into Defendant Scott’s and Defendant
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SECOND AMENDED COMPLAINT
1 Milden’s unauthorized compensation, several other irregularities emerged. As set forth above,
2 Defendant Milden was paid more than three times what Defendant Scott was paid despite Defendant
3 Milden never working for the Company. When confronted about this, Defendant Scott’s explanation
4 was that a portion of what Defendant Scott wrongly considers to be her compensation was paid to
5 Defendant Milden as a W2 employee of the Company. Defendant Scott structured the payments this
6 way even though (i) she told Plaintiff that Defendant Milden was not an employee of the Company
7 and (ii), pursuant to section 8.4 of the Operating Agreement, Defendant Scott is the “Tax Matters
8 Partner” of the Company and should know that this is improper. Additionally, there is significant
9 variance between the Company’s payroll register records, general ledger, and tax forms with respect
10 to the compensation Defendant Scott received from the Company.
11 44. In addition to improper payments and misuse of Company funds, Defendant Scott
12 has also violated the Operating Agreement in other ways, including by hiring employees and
13 counsel for the Company without Plaintiff’s consent, which is expressly required by section 4.4(D)
14 of the Operating Agreement. Most recently, this included purportedly hiring the law firm of
15 Brownstein Hyatt Farber Schreck, LLP (“Brownstein”) to represent the Company, including in the
16 Derivative Action filed by Plaintiff against Defendant Scott. Plaintiff had expressly told Defendant
17 Scott multiple times that she did not consent to Brownstein representing the Company. After
18 Brownstein filed a motion to compel arbitration in which it purported to represent both Defendant
19 Scott and the Company — a clear and unwaivable conflict of interest given the nature of Plaintiff’s
20 derivative claims for fraud and other malfeasance on behalf of the Company against Defendant Scott
21 — Plaintiff was forced to demand on July 11, 2023, that Defendant Scott and Brownstein withdraw
22 the motion as Plaintiff never approved the retention of Brownstein, and Brownstein’s representation
23 of the Company was thus an express violation of the Operating Agreement. Although Brownstein
24 initially refused, following another letter from Plaintiff’s counsel on July 13, 2023, Brownstein
25 ultimately agreed to withdraw its motion shortly thereafter on July 14, 2023.
26 D. Defendant Scott Admits Her Misconduct, but Refuses to Step Down as Manager
27 and Continues to Violate the Operating Agreement
28 45. When Plaintiff confronted Defendant Scott about what she had uncovered about the
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SECOND AMENDED COMPLAINT
1 Company’s finances, after initially refusing to provide information to Plaintiff, Defendant Scott
2 largely admitted the misconduct, confirming that she did in fact receive thousands of dollars of
3 improper personal reimbursements from the Company without authorization. Tellingly, after
4 Plaintiff’s demand that Defendant Scott immediately cease and desist stealing money from the
5 Company, Defendant Scott purportedly terminated the lease on a 2020 Porsche Cayenne that she
6 had paid for and maintained using Company funds.
7 46. As a result of Defendant Scott’s thefts, Plaintiff was forced to bring a Derivative
8 Action on behalf of the Company against Plaintiff that is currently pending before this Court.
9 47. On July 19, 2023, Plaintiff took the additional step of removing Defendant Scott as
10 Manager of the Company “for cause” under the Company’s Operating Agreement.
11 48. Section 4.2 of the Operating Agreement provides that “[a] manager may be removed
12 with cause at any time upon the approval of the Members excluding, however, any Voting Interest
13 held by the Manager to be removed for cause. For the purpose of this section, ‘cause’ shall mean
14 the gross negligence or willful misconduct of such Manager in the performance of his or her
15 obligations under this Agreement.” Ex. A § 4.2 (emphasis added).
16 49. Section 4.2 of the Operating Agreement further provides that “[u]pon a Manager’s
17 removal for cause by the Members, a new Manager shall be appointed by the approval of the
18 Members excluding, however, any Voting Interest held by the Manager removed for case.” Ex. A
19 § 4.2 (emphasis added).
20 50. As Defendant Scott repeatedly stole money from the Company and otherwise
21 violated the Operating Agreement, including by hiring employees and legal counsel on behalf of the
22 Company without Plaintiff’s consent, she engaged in either gross negligence or willful misconduct
23 in the performance of her duties under the Operating Agreement. Accordingly, Plaintiff on July 19,
24 2023, removed Plaintiff as Manager of the Company “for cause” under section 4.2 of the Operating
25 Agreement, and appointed Gene Montesano, who has significant experience in the fashion industry
26 as a co-founder of Civilianaire Clothing and founder of Lucky Brand Jeans, among other
27 companies, as Manager. Plaintiff provided notice to Defendant Scott and her counsel of these
28 changes in correspondence sent by email to them the same day.
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SECOND AMENDED COMPLAINT
1 51. Later on July 19, 2023, Plaintiff also requested a number of items and information
2 from Defendant Scott in order to effect an orderly transition to the new Manager, and notified
3 Defendant Scott that she was no longer to access or use Company property, among other things.
4 This was consistent with section 4.3 of the Operating Agreement, which provides the authorized
5 Manager with “full complete and exclusive authority, power, and discretion to manage and control
6 the business, property, and affairs of the Company, to make all decisions regarding those matters,
7 and to perform any and all other acts or activities customary or incident to the management of the
8 Company’s business, property, and affairs, subject in all cases to the other provisions of this
9 [Operating] Agreement and the requirements of applicable law.” See Ex. A § 4.3.
10 52. Rather than comply with the Plaintiff’s decision to remove Defendant Scott as
11 Manager under the express terms of the Operating Agreement, the next day on July 20, 2023,
12 Defendant Scott’s counsel responded by letter disputing that Defendant Scott had been removed as
13 Manager of the Company. In doing so, Defendant Scott’s counsel improperly claimed that only a
14 Court could determine whether Defendant Scott’s conduct constituted gross negligence or willful
15 misconduct — even though the Operating Agreement provides no such requirement.
16 53. Moreover, Defendant’s counsel went on to Claim that Plaintiff’s counsel
17 acknowledged in a prior letter that “Ms. Simon will ask the Court to remove Ms. Scott as Manager
18 of the Company…” However, this claim is unequivocally false. Plaintiff’s counsel never made any
19 such representation in any of its correspondence or otherwise. Instead, Defendant Scott’s counsel
20 fabricated the purported quote whole cloth in a desperate attempt to support the meritless position
21 that Defendant Scott had not in fact been removed from the Company as Manager.
22 54. Plaintiff’s counsel called the fabrication to Defendant Scott’s counsel’s attention in a
23 letter the next day, July 21, 2023. On July 24, 2023, Defense counsel acknowledged and apologized
24 for the fabrication, Counsel did not retract his position regarding purported unwritten requirements
25 in the Operating Agreement.
26 55. Following the exchange between counsel regarding Defendant Scott’s removal, and
27 in an abundance of caution and in an attempt to secure the Company’s property, a private
28 investigator was hired to monitor the Company headquarters located at 921 Saint Vincent Ave # B
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SECOND AMENDED COMPLAINT
1 Santa Barbara, CA, 93101-3714.
2 56. These actions were prescient, as the investigator personally observed Defendant Scott
3 and Defendant Milden accessing the Company headquarters without authorization on the afternoon
4 of Friday, July 21, 2023, and Saturday, July 22, 2023. On Friday, July 21, 2023, Defendant Milden
5 removed a bankers box from the Company headquarters and placed it into his car amongst other
6 boxes. On Saturday, July 22, 2023, Defendant Scott was further observed leaving the Company
7 headquarters with a large orange bag known to be used for storing and/or transporting Company
8 product samples, as well as an attaché that she did not enter with, which again likely contained
9 Company property.
10 57. After Plaintiff sought, and obtained, temporary restraining orders from the Court both
11 in this matter and the Derivative Action requiring Defendant Scott to stop from acting as Manager
12 on behalf of the Company and improperly accessing Company property, among other things,
13 Plaintiff and Defendant Scott stipulated to preliminary (but not permanent) injunctive relief.
14 58. Accordingly, Plaintiff is forced to seek intervention form the Court to confirm
15 Defendant Scott’s permanent removal as Manager from the Company and to seek damages for
16 Defendant Scott’s many breaches of the Operating Agreement, her fiduciary duties to the Company,
17 and for other misconduct which was supported and aided and abetted by Defendant Milden and
18 Defendant Milden, LLC.
19 FIRST CAUSE OF ACTION
20 (Declaratory Relief)
21 (Against Defendant Scott and Does 1-10)
22 59. Plaintiff incorporates by reference the allegations in paragraphs 1 through 58 above
23 as though set forth fully herein.
24 60. An actual controversy has arisen and now exists between Plaintiff and Defendant
25 Scott. As set forth above, Plaintiff contends that Defendant Scott was lawfully removed by Plaintiff
26 as Manager of the Company “for cause” under section 4.2 of the Operating Agreement as a result of
27 Defendant Scott’s misconduct. Plaintiff further contends that Gene Montesano, and his successor
28 Todd Steele, were properly instituted as Manager in Defendant Scott’s place.
15
SECOND AMENDED COMPLAINT
1 61. Defendant Scott disputes that she was properly removed as Manager under the
2 Operating Agreement.
3 62. Accordingly, a judicial declaration pursuant to Code of Civil procedure section 1060
4 confirming that Defendant Scott was lawfully removed as Manager of the Company under Section
5 4.2 of the Operating Agreement, and that Mr. Steele is the current duly appointed Manager of the
6 Company, is necessary and appropriate at this time.
7 SECOND CAUSE OF ACTION
8 (Breach of Contract – Operating Agreement)
9 (Against Defendant Scott and Does 1-10)
10 63. Plaintiff incorporates by reference the allegations in paragraphs 1 through 62 above
11 as though set forth fully herein.
12 64. As described above, the Operating Agreement is a valid and enforceable contract.
13 65. Plaintiff has performed or tendered all performance required under the Operating
14 Agreement.
15 66. Defendant Scott has breached the Operating Agreement by, among other things: (1)
16 paying herself and her husband Defendant Milden and his company Defendant Milden, LLC
17 compensation from the Company without authorization; (2) improperly reimbursing Defendant
18 Scott’s personal expenses without authorization; and (3) hiring employees and attorneys for the
19 Company without authorization. Most recently, Defendant Scott hired Brownstein to represent the
20 Company in the Derivative Action despite Plaintiff repeatedly expressing that she did not approve
21 the hiring of Brownstein.
22 67. As a direct and proximate result of Defendant Scott’s breach of her obligations under
23 the Operating Agreement, Plaintiff has suffered and will suffer substantial personal monetary
24 damages in an amount to be proven at trial.
25 68. Plaintiff's personal damages include, among other things, the costs associated with
26 the forensic audit by Nigro and the inventory audit performed by Tiger that Plaintiff was forced to
27 incur to investigate Defendants’ misconduct, as such investigatory expenses resulting from a breach
28 of the Operating Agreement were reasonably foreseeable at the time the parties entered into the
16
SECOND AMENDED COMPLAINT
1 Operating Agreement.
2 69. Moreover, Plaintiff is also entitled to recover nominal damages for Defendant Scott’s
3 breach of contract and other and Defendants’ other misconduct under Civil Code section 3360.
4 THIRD CAUSE OF ACTION
5 (Inducing Breach of Contract – Operating Agreement)
6 (Against Defendant Milden, Defendant Milden, LLC, and Does 1-10)
7 70. Plaintiff incorporates by reference the allegations in paragraphs 1 through 69 above
8 as though set forth fully herein.
9 71. As described above, the Operating Agreement is a valid and enforceable contract
10 between Plaintiff and Defendant Scott.
11 72. On information and belief, Defendant Milden and his company, Defendant Milden,
12 LLC, knew of the ongoing contract between Plaintiff and Defendant Scott.
13 73. On information and belief Defendant Milden and Defendant Milden, LLC, with
14 knowledge of the existence of the contract, and with the intent to induce breach of the agreement
15 between Plaintiff and Defendant Scott, intentionally and deliberately, advised, counseled, persuaded
16 and induced Plaintiff to breach its contract with Defendant Scott by wrongfully, unlawfully, falsely
17 and fraudulently advising, persuading and inducing Defendant Scott to fail and refuse to honor its
18 contractual commitments by, among other things: (1) paying Defendant Scott, Defendant Milden,
19 and Defendant Milden, LLC, compensation from the Company without authorization; (2)
20 improperly reimbursing personal expenses from Defendant Scott and Defendant Milden without
21 authorization; and (3) hiring employees and attorneys for the Company without authorization.
22 74. The actions and conduct of Defendant Milden, Defendant Milden, LLC, and Does 1-
23 10 inclusive and each of them were in bad faith and were unjustified, and induced Defendant Scott
24 to breach the contract.
25 75. The conduct of Defendant Milden and Defendant Milden, LLC was a substantial
26 factor in causing Plaintiff’s harm. As a direct and proximate result of Defendant Milden and
27 Defendant Milden, LLC’s inducement of Defendant Scott to breach of her contractual obligations
28 under the Operating Agreement, Plaintiff has suffered and will suffer substantial personal monetary
17
SECOND AMENDED COMPLAINT
1 damages in an amount to be proven at trial.
2 76. Plaintiff's personal damages include, among other things, the costs associated with
3 the forensic audit by Nigro and the inventory audit performed by Tiger that Plaintiff was forced to
4 incur to investigate Defendants’ misconduct, as such investigatory expenses resulting from a breach
5 of the Operating Agreement were reasonably foreseeable at the time the parties entered into the
6 Operating Agreement.
7 77. Moreover, Plaintiff is also entitled to recover nominal damages Defendants’
8 misconduct under Civil Code section 3360.
9 FOURTH CAUSE OF ACTION
10 (Intentional Interference With Contractual Relations – Operating Agreement)
11 (Against Defendant Milden, Defendant Milden, LLC, and Does 1-10)
12 78. Plaintiff incorporates by reference the allegations in paragraphs 1 through 77 above
13 as though set forth fully herein.
14 79. As described above, the Operating Agreement is a valid and enforceable contract
15 between Plaintiff and Defendant Scott.
16 80. On information and belief, Defendant Milden and Defendant Milden, LLC were
17 aware of the ongoing contract between Plaintiff and Defendant Scott.
18 81. On information and belief, the conduct of Defendant Milden and Defendant Milden,
19 LLC prevented Defendant Scott’s performance of the contract or made performance more expensive
20 or difficult — in particular, Defendant Scott’s obligation to manage the Company in accordance
21 with the Operating Agreement — and Defendant Milden and Defendant Milden, LLC intended to
22 disrupt performance of the contract and/or knew disruption was certain or substantially certain to
23 occur.
24 82. The actions and conduct of Defendant Milden, Defendant Milden, LLC, and Does 1-
25 10 inclusive and each of them were in bad faith and were unjustified.
26 83. As a direct and proximate result of Defendant Milden and Defendant Milden, LLC’s
27 actions, Plaintiff has suffered and will suffer substantial personal monetary damages in an amount to
28 be proven at trial.
18
SECOND AMENDED COMPLAINT
1 84. Plaintiff's personal damages include, among other things, the costs associated with
2 the forensic audit by Nigro and the inventory audit performed by Tiger that Plaintiff was forced to
3 incur to investigate Defendants’ misconduct, as such investigatory expenses resulting from a breach
4 of the Operating Agreement were reasonably foreseeable at the time the parties entered into the
5 Operating Agreement.
6 85. Moreover, Plaintiff is also entitled to recover nominal damages Defendants’
7 misconduct under Civil Code section 3360.
8 FIFTH CAUSE OF ACTION
9 (Breach of Fiduciary Duty)
10 (Against Defendant Scott and Does 1-10)
11 86. Plaintiff incorporates by reference the allegations in paragraphs 1 through 85 above
12 as though set forth fully herein.
13 87. Defendant Scott, as a member of TOOAS, and as Manager for the Company before
14 she was removed on July 19, 2023, owed a fiduciary duty and obligation of good faith, fair dealing,
15 loyalty, due care, reasonable inquiry, oversight, and supervision toward the Company.
16 88. Defendant Scott breached these duties as described herein, including but not limited
17 to by improperly taking funds from the Company, wrongfully seeking reimbursement of personal
18 expenses from the Company, operating the Company in contravention of the Operating Agreement,
19 concealing her wrongdoing from Plaintiff as the only other member of TOOAS LLC, and acting
20 with the intent to violate applicable laws as set forth in this Complaint.
21 89. TOOAS and Plaintiff never consented to Defendant Scott’s tortious and illegal
22 misconduct.
23 90. Defendant Scott acted with oppression, fraud, and malice at all relevant times as she
24 knew that her actions were improper and she sought to conceal her wrongdoing from Plaintiff as the
25 only other member of TOOAS LLC. On information and belief, Defendant Scott intended to cause
26 injury to Plaintiff and engaged in despicable conduct with a willful and conscious disregard for the
27 rights of others, subjecting Plaintiff to cruel and unjust hardship.
28 91. Plaintiff was actually and proximately harmed by Defendant Scott’s breach of her
19
SECOND AMENDED COMPLAINT
1 fiduciary duty in an amount to be proven at trial.
2 92. Plaintiff’s personal damages inc
Preview
1 PATRICIA L. GLASER - State Bar No. 55668 pglaser@glaserweil.com 2 CYNTHIA E. ORGAN - State Bar No. 293468 corgan@glaserweil.com 3 ALEXANDER R. MILLER - State Bar No. 294474 amiller@glaserweil.com 4 GLASER WEIL FINK HOWARD JORDAN & SHAPIRO LLP 5 10250 Constellation Boulevard, 19th Floor Los Angeles, California 90067 6 Telephone: (310) 553-3000 7 Attorneys for Plaintiff BUI SIMON 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 FOR THE COUNTY OF SANTA BARBARA – ANACAPA DIVISION 11 12 BUI SIMON, an individual, Case No. 23CV03184 Unlimited Jurisdiction 13 Plaintiff, Assigned to Hon. Thomas P. Anderle 14 v. Department: 3 15 ANGELA SCOTT, an individual; SCOTT MILDEN, an individual; MILDEN, LLC, a SECOND AMENDED COMPLAINT FOR: 16 California limited liability company; and DOES (1) DECLARATORY RELIEF; 1 through 10, inclusive, 17 (2) BREACH OF CONTRACT; (3) INDUCING BREACH OF CONTRACT; Defendants. 18 (4) INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS; 19 (5) BREACH OF FIDUCIARY DUTY; (6) AIDING AND ABETTING BREACH OF 20 FIDUCIARY DUTY; (7) FRAUD; AND 21 (8) AIDING AND ABETTING FRAUD 22 Action Filed: July 24, 2023 23 Trial Date: November 27, 2024 24 25 26 27 28 SECOND AMENDED COMPLAINT 1 Plaintiff Bui Simon ( “Plaintiff”) files this Complaint against Defendants Angela Scott 2 (“Defendant Scott”), Scott Milden (“Defendant Milden”), Milden, LLC (“Defendant Milden, 3 LLC”), and Does 1 through 10, inclusive (collectively, “Defendants”), and alleges as follows: 4 I. INTRODUCTION 5 1. This action arises from Defendant Angela Scott’s repeated breaches of the Office of 6 Angela Scott LLC’s (“TOOAS” or the “Company”) Restated Operating Agreement dated August 3, 7 2015 (the “Operating Agreement”) and her fiduciary duties to the Company as well as other 8 misconduct, including the repeated embezzlement of funds from the Company to fund Defendant 9 Scott’s own extravagant and unearned lifestyle. Separate and apart from the harm Defendant Scott’s 10 misconduct caused to the Company, Plaintiff was and continues to be personally harmed as a direct 11 result of Defendant Scott’s breach of the Operating Agreement and other misconduct, including 12 because Plaintiff was required to undertake a forensic audit of the Company to account for 13 Defendant Scott’s embezzlement at great personal expense which the Company will not reimburse. 14 Defendant Scott’s misconduct was aided and abetted by Defendant Scott’s husband Defendant 15 Milden and his company Defendant Milden, LLC, and who had access to Company bank accounts 16 and improperly received Company funds as part of this scheme. 17 2. Since filing suit, Defendant Scott has been removed as Manager of TOOAS pursuant 18 to the Operating Agreement. Because Defendant Scott refused to acknowledge that she had legally 19 been removed as Manager under the Operating Agreement, and for a time continued to act 20 unlawfully as Manager and to access the Company’s property without authorization along with her 21 husband Defendant Milden, Plaintiff was forced to obtain a temporary restraining order. Defendant 22 Scott has now stipulated to a temporary injunction confirming her removal as Manager of the 23 Company and instituting a new Manager, among other things. 24 3. Accordingly, Plaintiff brings this action to permanently enjoin Defendant Scott from 25 acting as Manager of the Company without authorization in the future — including by accessing 26 Company funds or property without authorization — and to seek damages for the personal harm to 27 Plaintiff resulting Defendant Scott’s many breaches of the Operating Agreement, her fiduciary 28 duties to the Company, and for her fraud and other misconduct, all of which was supported and 2 SECOND AMENDED COMPLAINT 1 aided and abetted by Defendant Milden and Defendant Milden, LLC. 2 II. THE PARTIES 3 4. Plaintiff is, and at all times relevant was, a resident of Los Angeles County, 4 California, and a member of TOOAS. 5 5. Plaintiff is informed and believes, and based thereon alleges, that Defendant Scott is, 6 and at all times mentioned herein was, a resident of Santa Barbara County, California. 7 6. Plaintiff is informed and believes, and based thereon alleges, that Defendant Milden 8 is, and at all times mentioned herein was, a resident of Santa Barbara County, California. 9 7. Plaintiff is informed and believes, and based thereon alleges, that Defendant Milden, 10 LLC is, and at all times mentioned herein was, a California limited liability company with its 11 principal place of business in Santa Barabara, California. On information and belief, Defendant 12 Milden, LLC was originally formed on or around June 9, 2015, as Noyamasen LLC, and on or 13 around February 28, 2018, filed an amendment to the company’s articles of organization with the 14 California Secretary of State changing its name to Milden, LLC. On information and belief, 15 Defendant Milden is the only Manager and member of Defendant Milden, LLC. 16 8. The true names and capacities of Defendants Does 1 through 10, inclusive, whether 17 individual, corporate, or otherwise, are unknown to Plaintiff at this time, and Plaintiff therefore sues 18 these Defendants by such fictitious names. When the true names and capacities of the fictitiously 19 named defendants are ascertained, Plaintiff will amend the Complaint to reflect their true names. 20 Plaintiff is informed and believes and thereupon alleges that each of the fictitiously named 21 Defendants is responsible in some manner for the occurrences herein alleged, and that Plaintiff’s 22 losses as herein alleged were legally caused by the Doe Defendants. 23 III. JURISDICTION 24 9. Jurisdiction is proper in the Superior Court of the State of California for the County 25 of Santa Barbara pursuant to section 410.10 of the California Code of Civil Procedure, and because 26 the amount in controversy exceeds the minimum jurisdiction of the Court. 27 10. Venue is proper in the County of Santa Barbara, California pursuant to section 395 of 28 the California Code of Civil Procedure because Defendant Scott and Defendant Milden reside in the 3 SECOND AMENDED COMPLAINT 1 County of Santa Barbara, Defendant Milden, LLC’s principal place of business is in the County of 2 Santa Barbara, and the events or occurrences giving rise to the claims alleged in this First Amended 3 Complaint took place in the County of Santa Barbara. 4 IV. ALTER EGO ALLEGATIONS 5 11. Plaintiff is informed and believes and on that basis alleges that there exists, and at all 6 times herein mentioned there existed, a unity of interest and ownership between Defendants, such 7 that any individuality and separateness between them have ceased. 8 12. Adherence to the fiction of the existence of Defendants as separate entities distinct 9 from one another would permit an abuse of the corporate privilege and would sanction tortious 10 conduct and promote injustice. 11 13. Plaintiff is informed and believes and on that basis alleges that Defendants have such 12 a unity of interest and operations that separate personalities of these Defendants no longer exist, and 13 if each Defendant’s acts are treated as those of each alone, an inequitable result will follow. 14 Defendants operate not as individual entities, but rather as one, with separate companies used to 15 shield assets and other revenues in a manner to best suit their owners. Moreover, Defendants are the 16 alter egos of each other in that they all share similar ownership, management, and functions. 17 14. Plaintiff is informed and believes and on that basis alleges that each of the 18 Defendants are, and at all times relevant to this Complaint were, the employee, agent, employer, 19 partner, joint venture, alter ego, affiliate, principal, and/or co-conspirator of the other Defendants 20 and, in doing the acts alleged herein, was acting within the course and scope of such positions at the 21 direction of, and/or with the permission, knowledge, consent and/or ratification of, the other 22 Defendants. As such, each Defendant, through its acts and omissions, is responsible for the 23 wrongdoing alleged herein and for the damages suffered by Plaintiff. 24 V. FACTS COMMON TO ALL CLAIMS FOR RELIEF 25 A. TOOAS Is Founded and the Operating Agreement Is Established 26 15. Defendant Scott previously worked as Plaintiff’s assistant for more than seven years, 27 and was later mentored by Plaintiff, who is a businesswoman and who had a successful career for 28 decades. Based on this close relationship, Plaintiff made the decision to financially support 4 SECOND AMENDED COMPLAINT 1 Defendant Scott’s dream of starting her own shoe Company — TOOAS. 2 16. TOOAS LLC was formed on or about October 4, 2010. Although TOOAS LLC was 3 founded as a Texas Limited Liability Company, TOOAS is now headquartered and operated in 4 Santa Barbara, California. 5 17. In or around March 21, 2011, Plaintiff and Defendant Scott entered into an initial 6 operating agreement for the Company. Initially, Plaintiff owned 40% of the Company and 7 Defendant Scott owned 60% of the Company. 8 18. After approximately $650,000 in start-up funding Plaintiff provided had been 9 depleted, Defendant Scott asked Plaintiff to lend an additional roughly $1 million to sustain and 10 grow the Company. At that time, the Company was already in significant debt and would not be 11 profitable for several more years. Because Plaintiff was taking on significant additional financial 12 risk in lending additional money, on or about August 3, 2015, Defendant Scott sold an additional 13 10% interest in TOOAS to Plaintiff. In so doing, on information and belief, Defendant Scott assured 14 Plaintiff that she was not receiving personal compensation from the Company, other than for 15 approved business-related reimbursements. Plaintiff and Defendant Scott now each own 50% of the 16 Company. 17 19. On or about August 3, 2015, Plaintiff and Defendant Scott also entered into a 18 Restated Operating Agreement governing the rights and responsibilities of Plaintiff and Defendant 19 Scott in operating the Company, which remains in effect today. A true and correct copy of the 20 Operating Agreement is attached to the Complaint as Exhibit A. On information and belief, prior to 21 entering into the Operating Agreement Defendant Scott assured Plaintiff that she was not receiving 22 personal compensation from the Company, other than for approved business-related 23 reimbursements, and that the Company was being and would be managed in accordance with the 24 Restated Operating Agreement. 25 20. Critically, the Operating Agreement also establishes certain safeguards and 26 guardrails governing the rights and responsibilities of the Company Manager. See Ex. A §§ 4.1, et 27 seq. Chief among these protections is that the Manager is not entitled to any compensation from the 28 Company unless such compensation is approved by all members of TOOAS LLC (i.e., Plaintiff and 5 SECOND AMENDED COMPLAINT 1 Defendant Scott). Ex. A § 4.5. Otherwise, the Manager is only entitled to be reimbursed for business 2 expenses that are “reasonably incurred by such Manager in the performance of such Manager’s 3 duties under this agreement.” Id. Nor is the Manager permitted to hire “employees, accountants and 4 attorneys for the Company” without first obtaining the approval of all TOOAS LLC members. Id. § 5 4.4(d). 6 21. As reflected in the Operating Agreement, Defendant Scott was named as the initial 7 Manager of the Company. See Ex. A ¶ 4.2. When the Company began, per Defendant Scott’s own 8 proposal, her contribution to the Company was her own sweat equity. Once the Company became 9 profitable in or around 2019, Plaintiff repeatedly attempted to discuss compensation for her efforts 10 as Manager with Defendant Scott. When Plaintiff raised the topic of compensation, Defendant Scott 11 would brush Plaintiff off and tell her that she wanted all funds reinvested into the Company and to 12 go toward paying down the Company’s debt. 13 22. When Plaintiff inquired how Defendant Scott was able to support herself without a 14 Company salary, Defendant Scott explained that her husband, Defendant Milden, was independently 15 wealthy and was supporting them. As Plaintiff was also paying Defendant Scott a $70,000 per year 16 salary for her work with the Angels Wings Foundation, Plaintiff was not overly concerned with 17 Defendant Scott’s ability to support herself without taking a salary from the Company and did not 18 inquire further. 19 B. Defendants’ Ongoing Malfeasance Is Discovered and Plaintiff Commissions 20 Audits to Confirm the Scope of Defendants’ Wrongdoing 21 23. Against this backdrop, in or around the fall of 2022, Defendant Scott tearfully 22 approached Plaintiff, explaining that because she wanted to make a substantial down payment on a 23 larger house and had worked for ten years at the Company, she wanted to be paid a $500,000 bonus. 24 Moved by Defendant Scott’s tears, Plaintiff happily agreed to review the Company’s finances to see 25 if the Company was in the position to pay Defendant Scott her requested $500,000 bonus to 26 celebrate ten years in business. Instead of finding that the Company was expected to be profitable 27 enough to pay Defendant Scott’s requested bonus, Plaintiff learned Defendant Scott had repeatedly 28 deceived Plaintiff and betrayed her trust by improperly receiving compensation and reimbursements 6 SECOND AMENDED COMPLAINT 1 of personal expenses from the Company without authorization. In order to confirm this wrongdoing 2 and attempt to undertake the scope of Defendants’ malfeasance, Plaintiff personally commissioned a 3 forensic audit by the firm of Nigro Karlin Segal & Feldstein, LLP (“Nigro”) in or around April 4 2023, and an inventory audit by Tiger Valuation Services, LLC (“Tiger”) in or around March 2023. 5 Plaintiff was forced to pay for the audits personally even though their cost was properly a Company 6 expense because Defendant Scott, who was then the sole Manager of the Company, refused to 7 authorize the expenditure of Company funds for the audits. The preliminary results of the audits, 8 which are ongoing, confirm that Defendant Scott, Defendant Milden, and Defendant Milden LLC 9 have embezzled more than two and a half million dollars ($2,500,000) in undisclosed compensation 10 and personal expenditures of Company money, in direct violation of the Operating Agreement. 11 24. For example, as a result of Plaintiff’s investigation and forensic audit it has been 12 uncovered that, unbeknownst to Plaintiff, the Company has been making substantial payments for 13 multiple Porsches being driven by Defendant Scott during the years 2015 through 2023, the latest 14 including a $10,000 down payment and $1,292.50 monthly payment (a total of about $55,832.50 for 15 a three-year lease). Although Plaintiff’s forensic audit is ongoing, to date, Plaintiff has identified 16 more than $264,000 in Porsche and other automotive-related expenses paid by the Company for 17 Defendant Scott’s benefit between 2015 and 2023. In addition to the lease and auto insurance 18 payments, this includes reimbursements to Defendant Scott for DMV fees, auto repairs, gas, in car 19 washes, window tinting, traffic violations, and limousines. The payment of these expenses with 20 Company funds was never approved by Plaintiff. 21 25. Under section 4.5 of the Operating Agreement, Defendant Scott is only entitled to 22 “reimbursement for all expenses reasonably incurred by such Manager in the performance of such 23 Manager’s duties under this Agreement.” However, Defendant Scott did not incur these automotive 24 related expense in the performance of her duties. 25 26. In fact, Defendant Scott provided Plaintiff with records indicating that, when 26 27 28 7 SECOND AMENDED COMPLAINT 1 Defendant Scott leased one of Porches paid for with Company funds, it was primarily being used for 2 personal purposes: 3 27. Defendant Scott has embezzled Company funds to pay for numerous other 4 unauthorized personal expenses on her behalf. Among other things, Plaintiff’s ongoing forensic 5 audit has uncovered that, between 2015 and 2023, Defendant Scott used TOOAS funds to pay for 6 more than $33,000 in personal medical expenses, including for fertility treatments, dermatology 7 treatments, optometrist visits, and pharmacy expenses. During that same time period, Defendant 8 Scott was also reimbursed for more than $222,000 in miscellaneous personal expenses, including for 9 retail shopping at stores like Nordstrom, Neiman Marcus, and Hermes, beauty salons, veterinary 10 services, eye glasses, flowers, dry cleaning, fitness memberships, digital media downloads, 11 entertainment such as trips to the Santa Barbara Zoo and bowling at Zodos, and more than $116,000 12 in meal and coffee expenses. 13 28. Plaintiff’s forensic audit has also confirmed Defendant Scott used TOOAS funds to 14 pay for personal trips, including hotel and/or airfare for trips to Big Bear, California, Todos Santos, 15 Mexico, Sedona, Arizona, St. Helena, California, Kihei, Hawaii, and Kula, Hawaii. On information 16 and belief, Defendant Scott’s husband, Defendant Milden, accompanied Defendant Scott on many 17 of these personal trips. 18 29. Plaintiff’s forensic audit is ongoing, and the above is just a sample of the most 19 obvious unauthorized personal expenses that have been uncovered to date. Again, all of these 20 charges are improper, unauthorized personal expenses that should have never been paid for by the 21 Company. 22 30. In addition to the forensic audit by Nigro, Plaintiff was also required to commission 23 an inventory audit by Tiger to appraise the value of the Company’s inventory and confirm that all of 24 the inventory that was supposed to be at the Company’s warehouse was in fact there. Both of these 25 audits were required as a direct result of Defendants’ wrongdoing, as Plaintiff was required to assess 26 the potential harm to the Company and Plaintiff’s significant investments in the Company. 27 31. Although Plaintiff asked the Company pay for the costs of the audits at the outset, 28 8 SECOND AMENDED COMPLAINT 1 Defendant Scott when purportedly acting as Manager refused to approve these expenses. In or 2 around April 2024, Plaintiff also requested that the new Company Manager reimburse Plaintiff for 3 the significant costs of the audits and was refused. As of the filing of this Complaint, the Company 4 has not reimbursed Plaintiff for these expenses. 5 C. Defendants Scott Milden and Milden LLC Are Complicit With Defendant Scott 6 and Participated in the Wrongdoing 7 32. On information and belief, Defendant Milden was given multiple Company credit 8 cards by Defendant Scott and had direct access to Company funds that he also used for personal 9 expenses including substantial restaurant, gas, retail, travel, and hotel charges, and has received 10 other payments by the Company despite the fact that Defendant Scott told Plaintiff her husband did 11 not do any work as an employee for the Company. So deep was Defendant Milden’s involvement in 12 the Company’s finances that, on information and belief, Defendant Scott made Defendant Milden a 13 signatory on the Company’s bank accounts. 14 33. On information and belief, Defendant Milden has been involved in a number of 15 failed ventures, including in particular serving as Creative Director of Fossil’s shoe division, which 16 was shuttered by Fossil during his tenure. On information and belief, Defendant Milden’s own shoe 17 line went bankrupt. 18 34. Additionally, Defendant Milden has used his wife’s connections with the Simon 19 family to obtain a number of business opportunities for himself. For example, when Defendant 20 Milden was invited to a Simon family Easter party as Defendant Scott’s guest, he networked his 21 way into a job at the shoe company SeaVees, in which Plaintiff is also an investor. On information 22 and belief, Defendant Milden was fired by SeaVees within months. Similarly, Defendant Milden 23 obtained a position at the Jean Shop from a Simon family friend who he met at the Simon family 24 home. 25 35. While Defendant Milden’s name appears on some of the initial formation documents 26 for the Company, when Plaintiff invested in the Company she made it expressly clear that she was 27 going into business with Defendant Scott, not her husband, and that Defendant Milden was not to be 28 part of the Company. It was always Plaintiff’s goal to empower and support Defendant Scott, not 9 SECOND AMENDED COMPLAINT 1 her husband, especially in light of his track record in business. 2 36. This understanding is incorporated into the Operating Agreement. Again, among 3 other things, section 4.4(D) provides that Defendant Scott has no power to hire employees without 4 Plaintiff’s approval. Ex. A § 4.4(D) (“[N]o Manager shall have authority to cause the Company to 5 engage in the following transactions without first obtaining the approval of all of the Members: . . . 6 The hiring of employees, accountants and attorneys for the Company.”). 7 37. Section 3.5 also provides that affiliates of members are not “entitled to remuneration 8 for services rendered or goods provides to the Company,” and Section 6.8(A) provides that if 9 Defendant Scott and Defendant Milden divorce, Defendant Milden’s community property 10 membership interest in TOOAS must be distributed to or be purchased by Defendant Scott (or 11 Plaintiff, if Defendant Scott fails to execute such sale), ensuring that Defendant Milden would not 12 obtain any interest in the Company in a divorce. Ex. A §§ 3.5, 6.8(A). 13 38. Plaintiff was mislead about Defendant Milden’s role at the Company by both 14 Defendant Scott and Defendant Milden. Defendant Scott repeatedly lied to Plaintiff regarding 15 Defendant Milden’s involvement in the Company, denying that he was an employee when directly 16 questioned by Plaintiff. For example, when Plaintiff would see Defendant Milden in the Company’s 17 office, she would sometimes jokingly ask Defendant Scott “do we have a new employee?” or words 18 to that effect. Defendant Scott would respond with “no, Scott’s just here to help with boxes,” “he’s 19 just picking up the dogs,” or similar, innocuous explanations. Defendant Milden would affirm that 20 he was only at the Company offices to “pick up the dogs” or perform similar, non-work-related 21 tasks. Defendant Milden would excuse himself from Plaintiff’s meetings with Defendant Scott, 22 saying “I’ll let you guys talk business” or words to that effect. Defendant Milden often expressed to 23 Plaintiff that he was frustrated that Defendant Scott would not ask him his input about design or 24 business advice, but that he understood because things would not work out if he and Defendant 25 Scott were both living together and working together. On one occasion, Plaintiff witnessed a big 26 argument between Defendant Scott and Defendant Milden during which Defendant Scott kicked 27 Defendant Milden out of the Company office, saying that she did not need his help. Defendant Scott 28 expressed frustration to Plaintiff that at times Defendant Milden “couldn’t keep his opinions to 10 SECOND AMENDED COMPLAINT 1 himself” about Company business, but that he should because it was Defendant Scott and Plaintiff’s 2 business, not Defendant Milden’s business. When the Company began to turn a profit in or around 3 2019, Defendant Milden expressed to Plaintiff and Defendant Scott that he was proud of them 4 because they did it their way, without his help. 5 39. Most recently, when Plaintiff’s forensic audit uncovered more than $2.5 million 6 ($2,500,000) in payments to Defendant Milden on the Company’s books and asked Defendant Scott 7 for an explanation, Defendant Scott initially ignored Plaintiff, and then claimed that Defendant 8 Milden was merely a consultant whose hiring did not need to be approved by Plaintiff under section 9 4.4(D) of the Operating Agreement. However, Defendant Scott has since admitted that Defendant 10 Milden has been paid as a W2 employee of the Company, in violation of this provision. 11 40. Even though Plaintiff initially inquired about this issue in or around September 2022, 12 it was not until on or about January 26, 2023, that Defendant Scott came clean about the payments 13 to Defendant Milden as a W2 employee. 14 41. Plaintiff was never aware prior to the fall of 2022 that Defendant Scott was paying 15 herself, Defendant Milden, and Defendant Milden, LLC compensation because the financial reports 16 Defendant Scott provided to Plaintiff listed one aggregate category of “payroll expenses” for all 17 Company employees with no indication of who was on the Company payroll. Currently, there are 18 approximately fourteen employees of the Company. Accordingly, one aggregate number for 19 “payroll expenses” did not put Plaintiff on notice that Defendant Scott or Defendant Milden had 20 been improperly added to the Company payroll. Defendant Scott also never notified Plaintiff of any 21 payments to Defendant Milden, LLC or its predecessor Noyamasen LLC. 22 42. Although Plaintiff’s forensic audit is ongoing, Plaintiff has identified more than $1.6 23 million ($1,600,000) in unauthorized payments to Defendant Scott, Defendant Milden, and 24 Defendant Milden, LLC between 2015 and 2023. In particular, Plaintiff’s forensic audit has 25 uncovered approximately $336,168 in payments to Defendant Scott, $1,076,079 in payments to 26 Defendant Milden, $133,990 in payments to Noyamasen, LLC, and $101,793 in payments to 27 Defendant Milden, LLC. 28 43. Moreover, when Plaintiff began looking into Defendant Scott’s and Defendant 11 SECOND AMENDED COMPLAINT 1 Milden’s unauthorized compensation, several other irregularities emerged. As set forth above, 2 Defendant Milden was paid more than three times what Defendant Scott was paid despite Defendant 3 Milden never working for the Company. When confronted about this, Defendant Scott’s explanation 4 was that a portion of what Defendant Scott wrongly considers to be her compensation was paid to 5 Defendant Milden as a W2 employee of the Company. Defendant Scott structured the payments this 6 way even though (i) she told Plaintiff that Defendant Milden was not an employee of the Company 7 and (ii), pursuant to section 8.4 of the Operating Agreement, Defendant Scott is the “Tax Matters 8 Partner” of the Company and should know that this is improper. Additionally, there is significant 9 variance between the Company’s payroll register records, general ledger, and tax forms with respect 10 to the compensation Defendant Scott received from the Company. 11 44. In addition to improper payments and misuse of Company funds, Defendant Scott 12 has also violated the Operating Agreement in other ways, including by hiring employees and 13 counsel for the Company without Plaintiff’s consent, which is expressly required by section 4.4(D) 14 of the Operating Agreement. Most recently, this included purportedly hiring the law firm of 15 Brownstein Hyatt Farber Schreck, LLP (“Brownstein”) to represent the Company, including in the 16 Derivative Action filed by Plaintiff against Defendant Scott. Plaintiff had expressly told Defendant 17 Scott multiple times that she did not consent to Brownstein representing the Company. After 18 Brownstein filed a motion to compel arbitration in which it purported to represent both Defendant 19 Scott and the Company — a clear and unwaivable conflict of interest given the nature of Plaintiff’s 20 derivative claims for fraud and other malfeasance on behalf of the Company against Defendant Scott 21 — Plaintiff was forced to demand on July 11, 2023, that Defendant Scott and Brownstein withdraw 22 the motion as Plaintiff never approved the retention of Brownstein, and Brownstein’s representation 23 of the Company was thus an express violation of the Operating Agreement. Although Brownstein 24 initially refused, following another letter from Plaintiff’s counsel on July 13, 2023, Brownstein 25 ultimately agreed to withdraw its motion shortly thereafter on July 14, 2023. 26 D. Defendant Scott Admits Her Misconduct, but Refuses to Step Down as Manager 27 and Continues to Violate the Operating Agreement 28 45. When Plaintiff confronted Defendant Scott about what she had uncovered about the 12 SECOND AMENDED COMPLAINT 1 Company’s finances, after initially refusing to provide information to Plaintiff, Defendant Scott 2 largely admitted the misconduct, confirming that she did in fact receive thousands of dollars of 3 improper personal reimbursements from the Company without authorization. Tellingly, after 4 Plaintiff’s demand that Defendant Scott immediately cease and desist stealing money from the 5 Company, Defendant Scott purportedly terminated the lease on a 2020 Porsche Cayenne that she 6 had paid for and maintained using Company funds. 7 46. As a result of Defendant Scott’s thefts, Plaintiff was forced to bring a Derivative 8 Action on behalf of the Company against Plaintiff that is currently pending before this Court. 9 47. On July 19, 2023, Plaintiff took the additional step of removing Defendant Scott as 10 Manager of the Company “for cause” under the Company’s Operating Agreement. 11 48. Section 4.2 of the Operating Agreement provides that “[a] manager may be removed 12 with cause at any time upon the approval of the Members excluding, however, any Voting Interest 13 held by the Manager to be removed for cause. For the purpose of this section, ‘cause’ shall mean 14 the gross negligence or willful misconduct of such Manager in the performance of his or her 15 obligations under this Agreement.” Ex. A § 4.2 (emphasis added). 16 49. Section 4.2 of the Operating Agreement further provides that “[u]pon a Manager’s 17 removal for cause by the Members, a new Manager shall be appointed by the approval of the 18 Members excluding, however, any Voting Interest held by the Manager removed for case.” Ex. A 19 § 4.2 (emphasis added). 20 50. As Defendant Scott repeatedly stole money from the Company and otherwise 21 violated the Operating Agreement, including by hiring employees and legal counsel on behalf of the 22 Company without Plaintiff’s consent, she engaged in either gross negligence or willful misconduct 23 in the performance of her duties under the Operating Agreement. Accordingly, Plaintiff on July 19, 24 2023, removed Plaintiff as Manager of the Company “for cause” under section 4.2 of the Operating 25 Agreement, and appointed Gene Montesano, who has significant experience in the fashion industry 26 as a co-founder of Civilianaire Clothing and founder of Lucky Brand Jeans, among other 27 companies, as Manager. Plaintiff provided notice to Defendant Scott and her counsel of these 28 changes in correspondence sent by email to them the same day. 13 SECOND AMENDED COMPLAINT 1 51. Later on July 19, 2023, Plaintiff also requested a number of items and information 2 from Defendant Scott in order to effect an orderly transition to the new Manager, and notified 3 Defendant Scott that she was no longer to access or use Company property, among other things. 4 This was consistent with section 4.3 of the Operating Agreement, which provides the authorized 5 Manager with “full complete and exclusive authority, power, and discretion to manage and control 6 the business, property, and affairs of the Company, to make all decisions regarding those matters, 7 and to perform any and all other acts or activities customary or incident to the management of the 8 Company’s business, property, and affairs, subject in all cases to the other provisions of this 9 [Operating] Agreement and the requirements of applicable law.” See Ex. A § 4.3. 10 52. Rather than comply with the Plaintiff’s decision to remove Defendant Scott as 11 Manager under the express terms of the Operating Agreement, the next day on July 20, 2023, 12 Defendant Scott’s counsel responded by letter disputing that Defendant Scott had been removed as 13 Manager of the Company. In doing so, Defendant Scott’s counsel improperly claimed that only a 14 Court could determine whether Defendant Scott’s conduct constituted gross negligence or willful 15 misconduct — even though the Operating Agreement provides no such requirement. 16 53. Moreover, Defendant’s counsel went on to Claim that Plaintiff’s counsel 17 acknowledged in a prior letter that “Ms. Simon will ask the Court to remove Ms. Scott as Manager 18 of the Company…” However, this claim is unequivocally false. Plaintiff’s counsel never made any 19 such representation in any of its correspondence or otherwise. Instead, Defendant Scott’s counsel 20 fabricated the purported quote whole cloth in a desperate attempt to support the meritless position 21 that Defendant Scott had not in fact been removed from the Company as Manager. 22 54. Plaintiff’s counsel called the fabrication to Defendant Scott’s counsel’s attention in a 23 letter the next day, July 21, 2023. On July 24, 2023, Defense counsel acknowledged and apologized 24 for the fabrication, Counsel did not retract his position regarding purported unwritten requirements 25 in the Operating Agreement. 26 55. Following the exchange between counsel regarding Defendant Scott’s removal, and 27 in an abundance of caution and in an attempt to secure the Company’s property, a private 28 investigator was hired to monitor the Company headquarters located at 921 Saint Vincent Ave # B 14 SECOND AMENDED COMPLAINT 1 Santa Barbara, CA, 93101-3714. 2 56. These actions were prescient, as the investigator personally observed Defendant Scott 3 and Defendant Milden accessing the Company headquarters without authorization on the afternoon 4 of Friday, July 21, 2023, and Saturday, July 22, 2023. On Friday, July 21, 2023, Defendant Milden 5 removed a bankers box from the Company headquarters and placed it into his car amongst other 6 boxes. On Saturday, July 22, 2023, Defendant Scott was further observed leaving the Company 7 headquarters with a large orange bag known to be used for storing and/or transporting Company 8 product samples, as well as an attaché that she did not enter with, which again likely contained 9 Company property. 10 57. After Plaintiff sought, and obtained, temporary restraining orders from the Court both 11 in this matter and the Derivative Action requiring Defendant Scott to stop from acting as Manager 12 on behalf of the Company and improperly accessing Company property, among other things, 13 Plaintiff and Defendant Scott stipulated to preliminary (but not permanent) injunctive relief. 14 58. Accordingly, Plaintiff is forced to seek intervention form the Court to confirm 15 Defendant Scott’s permanent removal as Manager from the Company and to seek damages for 16 Defendant Scott’s many breaches of the Operating Agreement, her fiduciary duties to the Company, 17 and for other misconduct which was supported and aided and abetted by Defendant Milden and 18 Defendant Milden, LLC. 19 FIRST CAUSE OF ACTION 20 (Declaratory Relief) 21 (Against Defendant Scott and Does 1-10) 22 59. Plaintiff incorporates by reference the allegations in paragraphs 1 through 58 above 23 as though set forth fully herein. 24 60. An actual controversy has arisen and now exists between Plaintiff and Defendant 25 Scott. As set forth above, Plaintiff contends that Defendant Scott was lawfully removed by Plaintiff 26 as Manager of the Company “for cause” under section 4.2 of the Operating Agreement as a result of 27 Defendant Scott’s misconduct. Plaintiff further contends that Gene Montesano, and his successor 28 Todd Steele, were properly instituted as Manager in Defendant Scott’s place. 15 SECOND AMENDED COMPLAINT 1 61. Defendant Scott disputes that she was properly removed as Manager under the 2 Operating Agreement. 3 62. Accordingly, a judicial declaration pursuant to Code of Civil procedure section 1060 4 confirming that Defendant Scott was lawfully removed as Manager of the Company under Section 5 4.2 of the Operating Agreement, and that Mr. Steele is the current duly appointed Manager of the 6 Company, is necessary and appropriate at this time. 7 SECOND CAUSE OF ACTION 8 (Breach of Contract – Operating Agreement) 9 (Against Defendant Scott and Does 1-10) 10 63. Plaintiff incorporates by reference the allegations in paragraphs 1 through 62 above 11 as though set forth fully herein. 12 64. As described above, the Operating Agreement is a valid and enforceable contract. 13 65. Plaintiff has performed or tendered all performance required under the Operating 14 Agreement. 15 66. Defendant Scott has breached the Operating Agreement by, among other things: (1) 16 paying herself and her husband Defendant Milden and his company Defendant Milden, LLC 17 compensation from the Company without authorization; (2) improperly reimbursing Defendant 18 Scott’s personal expenses without authorization; and (3) hiring employees and attorneys for the 19 Company without authorization. Most recently, Defendant Scott hired Brownstein to represent the 20 Company in the Derivative Action despite Plaintiff repeatedly expressing that she did not approve 21 the hiring of Brownstein. 22 67. As a direct and proximate result of Defendant Scott’s breach of her obligations under 23 the Operating Agreement, Plaintiff has suffered and will suffer substantial personal monetary 24 damages in an amount to be proven at trial. 25 68. Plaintiff's personal damages include, among other things, the costs associated with 26 the forensic audit by Nigro and the inventory audit performed by Tiger that Plaintiff was forced to 27 incur to investigate Defendants’ misconduct, as such investigatory expenses resulting from a breach 28 of the Operating Agreement were reasonably foreseeable at the time the parties entered into the 16 SECOND AMENDED COMPLAINT 1 Operating Agreement. 2 69. Moreover, Plaintiff is also entitled to recover nominal damages for Defendant Scott’s 3 breach of contract and other and Defendants’ other misconduct under Civil Code section 3360. 4 THIRD CAUSE OF ACTION 5 (Inducing Breach of Contract – Operating Agreement) 6 (Against Defendant Milden, Defendant Milden, LLC, and Does 1-10) 7 70. Plaintiff incorporates by reference the allegations in paragraphs 1 through 69 above 8 as though set forth fully herein. 9 71. As described above, the Operating Agreement is a valid and enforceable contract 10 between Plaintiff and Defendant Scott. 11 72. On information and belief, Defendant Milden and his company, Defendant Milden, 12 LLC, knew of the ongoing contract between Plaintiff and Defendant Scott. 13 73. On information and belief Defendant Milden and Defendant Milden, LLC, with 14 knowledge of the existence of the contract, and with the intent to induce breach of the agreement 15 between Plaintiff and Defendant Scott, intentionally and deliberately, advised, counseled, persuaded 16 and induced Plaintiff to breach its contract with Defendant Scott by wrongfully, unlawfully, falsely 17 and fraudulently advising, persuading and inducing Defendant Scott to fail and refuse to honor its 18 contractual commitments by, among other things: (1) paying Defendant Scott, Defendant Milden, 19 and Defendant Milden, LLC, compensation from the Company without authorization; (2) 20 improperly reimbursing personal expenses from Defendant Scott and Defendant Milden without 21 authorization; and (3) hiring employees and attorneys for the Company without authorization. 22 74. The actions and conduct of Defendant Milden, Defendant Milden, LLC, and Does 1- 23 10 inclusive and each of them were in bad faith and were unjustified, and induced Defendant Scott 24 to breach the contract. 25 75. The conduct of Defendant Milden and Defendant Milden, LLC was a substantial 26 factor in causing Plaintiff’s harm. As a direct and proximate result of Defendant Milden and 27 Defendant Milden, LLC’s inducement of Defendant Scott to breach of her contractual obligations 28 under the Operating Agreement, Plaintiff has suffered and will suffer substantial personal monetary 17 SECOND AMENDED COMPLAINT 1 damages in an amount to be proven at trial. 2 76. Plaintiff's personal damages include, among other things, the costs associated with 3 the forensic audit by Nigro and the inventory audit performed by Tiger that Plaintiff was forced to 4 incur to investigate Defendants’ misconduct, as such investigatory expenses resulting from a breach 5 of the Operating Agreement were reasonably foreseeable at the time the parties entered into the 6 Operating Agreement. 7 77. Moreover, Plaintiff is also entitled to recover nominal damages Defendants’ 8 misconduct under Civil Code section 3360. 9 FOURTH CAUSE OF ACTION 10 (Intentional Interference With Contractual Relations – Operating Agreement) 11 (Against Defendant Milden, Defendant Milden, LLC, and Does 1-10) 12 78. Plaintiff incorporates by reference the allegations in paragraphs 1 through 77 above 13 as though set forth fully herein. 14 79. As described above, the Operating Agreement is a valid and enforceable contract 15 between Plaintiff and Defendant Scott. 16 80. On information and belief, Defendant Milden and Defendant Milden, LLC were 17 aware of the ongoing contract between Plaintiff and Defendant Scott. 18 81. On information and belief, the conduct of Defendant Milden and Defendant Milden, 19 LLC prevented Defendant Scott’s performance of the contract or made performance more expensive 20 or difficult — in particular, Defendant Scott’s obligation to manage the Company in accordance 21 with the Operating Agreement — and Defendant Milden and Defendant Milden, LLC intended to 22 disrupt performance of the contract and/or knew disruption was certain or substantially certain to 23 occur. 24 82. The actions and conduct of Defendant Milden, Defendant Milden, LLC, and Does 1- 25 10 inclusive and each of them were in bad faith and were unjustified. 26 83. As a direct and proximate result of Defendant Milden and Defendant Milden, LLC’s 27 actions, Plaintiff has suffered and will suffer substantial personal monetary damages in an amount to 28 be proven at trial. 18 SECOND AMENDED COMPLAINT 1 84. Plaintiff's personal damages include, among other things, the costs associated with 2 the forensic audit by Nigro and the inventory audit performed by Tiger that Plaintiff was forced to 3 incur to investigate Defendants’ misconduct, as such investigatory expenses resulting from a breach 4 of the Operating Agreement were reasonably foreseeable at the time the parties entered into the 5 Operating Agreement. 6 85. Moreover, Plaintiff is also entitled to recover nominal damages Defendants’ 7 misconduct under Civil Code section 3360. 8 FIFTH CAUSE OF ACTION 9 (Breach of Fiduciary Duty) 10 (Against Defendant Scott and Does 1-10) 11 86. Plaintiff incorporates by reference the allegations in paragraphs 1 through 85 above 12 as though set forth fully herein. 13 87. Defendant Scott, as a member of TOOAS, and as Manager for the Company before 14 she was removed on July 19, 2023, owed a fiduciary duty and obligation of good faith, fair dealing, 15 loyalty, due care, reasonable inquiry, oversight, and supervision toward the Company. 16 88. Defendant Scott breached these duties as described herein, including but not limited 17 to by improperly taking funds from the Company, wrongfully seeking reimbursement of personal 18 expenses from the Company, operating the Company in contravention of the Operating Agreement, 19 concealing her wrongdoing from Plaintiff as the only other member of TOOAS LLC, and acting 20 with the intent to violate applicable laws as set forth in this Complaint. 21 89. TOOAS and Plaintiff never consented to Defendant Scott’s tortious and illegal 22 misconduct. 23 90. Defendant Scott acted with oppression, fraud, and malice at all relevant times as she 24 knew that her actions were improper and she sought to conceal her wrongdoing from Plaintiff as the 25 only other member of TOOAS LLC. On information and belief, Defendant Scott intended to cause 26 injury to Plaintiff and engaged in despicable conduct with a willful and conscious disregard for the 27 rights of others, subjecting Plaintiff to cruel and unjust hardship. 28 91. Plaintiff was actually and proximately harmed by Defendant Scott’s breach of her 19 SECOND AMENDED COMPLAINT 1 fiduciary duty in an amount to be proven at trial. 2 92. Plaintiff’s personal damages inc