Preview
Filed: 5/15/2015 11:12:35 AM
JOHN D. KINARD - District Clerk
Galveston County, Texas
Envelope No. 5299837
By: Shailja Dixit
5/15/2015 11:42:26 AM
15-CV-0490
NO. ______________
VERIFIED TRANSACTION SYSTEMS, § IN THE DISTRICT COURT
LLC d/b/a VERITRANS MERCHANT §
SERVICES §
Plaintiff, §
§ Galveston County - 56th District Court
V. § ______ JUDICIAL DISTRICT
§
JEFF W. ADCOCK, DATA PAY §
SOLUTIONS, LLC AND FOCUS §
MERCHANT SERVICES, LLC §
Defendants. § OF GALVESTON COUNTY, TEXAS
PLAINTIFF'S ORIGINAL PETITION
TO THE HONORABLE JUDGE OF SAID COURT:
NOW COMES VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS
MERCHANT SERVICES, hereinafter called Plaintiff, complaining of and about JEFF W.
ADCOCK, DATA PAY SOLUTIONS, LLC and FOCUS MERCHANT SERVICES, LLC,
hereinafter called Defendants, and for cause of action shows unto the Court the following:
DISCOVERY CONTROL PLAN LEVEL
1. Plaintiff intends that discovery be conducted under Discovery Level 2.
PARTIES AND SERVICE
2. Plaintiff, VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS
MERCHANT SERVICES, is a Limited Liability Company whose address is 1301 Regents Park
Dr., Suite 207, Houston, Texas 77058-2536.
3. VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS MERCHANT
SERVICES has not been issued a driver's license. VERIFIED TRANSACTION SYSTEMS,
LLC d/b/a VERITRANS MERCHANT SERVICES has not been issued a social security
number.
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Status Conference - 08/06/2015
4. Defendant JEFF W. ADCOCK, an Individual who is a resident of Texas, may be
served with process at his home at the following address: 2514 Siskin Trail, League City,
Galveston County, Texas 77573 or any other address he may be found. Service of said
Defendant as described above can be effected by personal delivery.
5. Defendant DATA PAY SOLUTIONS, LLC, a Limited Liability Company based
in Texas, may be served with process by serving the registered agent of said company, JEFF W.
ADCOCK, at 2514 Siskin Trail, League City, Galveston County, Texas 77573, its registered
office, or any other address he may be found. Service of said Defendant as described above can
be effected by personal delivery.
6. Defendant FOCUS MERCHANT SERVICES, LLC, a Limited Liability
Company based in Texas, may be served with process by serving the registered agent of said
company, Sanford G. Cohen, at 1400 Summit Tower, Eleven Greenway Plaza, Houston, Harris
County, Texas 77046, its registered office, or any other address he may be found. Service of
said Defendant as described above can be effected by personal delivery.
JURISDICTION AND VENUE
7. The subject matter in controversy is within the jurisdictional limits of this court.
8. Plaintiff seeks:
a. monetary relief of $100,000 or less and non-monetary relief
9. This court has jurisdiction over the parties because Defendants are Texas
residents.
10. Venue in Galveston County is permissive in this cause under Section 15.002(a)(2)
of the Texas Civil Practice and Remedies Code because this county was the county of residence
of JEFF W. ADCOCK, Defendant herein, at the time the cause of action accrued. Furthermore,
because venue is proper with respect to Defendant JEFF W. ADCOCK, venue for this action
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with respect to all Defendants is proper under 15.005 of the Texas Civil Practice and Remedies
Code.
FACTUAL ALLEGATIONS
11. Plaintiff is a nationwide merchant service provider specializing in providing
credit card payment processing services to merchants across the United States. These services
include setting-up and servicing the physical card authorization equipment and software at the
merchant’s location, securing bank authorization for the merchant to accept bank card payments,
and providing settlement services to merchants to ensure prompt payment. It is a unique
industry in that it provides for a future residual income stream to businesses similarly situated as
Plaintiff. Preventing disruption of this residual income is paramount to Plaintiff and, therefore,
Plaintiff has great interest in protecting and maintaining the same, utilizing various practical and
contractual safeguards to do so.
12. Among other electronic resources, Plaintiff uses a comprehensive customer
relationship management (“CRM”) software system and database. The CRM system and other
electronic systems used by Plaintiff allow the company to create and maintain a variety of
proprietary and confidential electronic and hard-copy documents in servicing its customers,
including but not limited to: customer lists, customer profiles, pricing structures, cost allocations
and margins, customer discounts, proposals, vendor information, sales agent information, and
proprietary merchant statements.
13. The documents described immediately above in paragraph 12 provide extensive
sales-related information including but not limited to: the identities of current and targeted
customers, sales agents, and contact persons; pricing and sales information; customer discounts
and fee arrangements; and detailed histories of sales efforts with respect to potential customers.
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Collectively, all of the items listed in the preceding paragraph and this paragraph shall
hereinafter be referred to as Plaintiff’s “Confidential and Proprietary Information.”
14. In order to protect the secrecy of its Confidential and Proprietary Information,
Plaintiff limits access to such information and requires employees who have access to this
information to maintain confidentiality.
15. In 2000, Plaintiff hired Defendant JEFF W. ADCOCK as an employee of the
company. In this capacity, Defendant JEFF W. ADCOCK was responsible for growing the
client base of Plaintiff. Defendant JEFF W. ADCOCK later became president of Plaintiff and
currently owns 15% of the outstanding stock in Plaintiff.
16. Upon becoming president of Plaintiff, Defendant JEFF W. ADCOCK, had access
to Plaintiff’s Confidential and Proprietary Information, including the CRM software program
and database, employee files, agent files and all other information of Plaintiff. Defendant JEFF
W. ADCOCK could easily access detailed information about Plaintiff’s potential, current, and
former clients and agents, including the entire history of Plaintiff’s sales efforts with respect to
these potential, current, and former clients and agents.
17. In addition, Defendant JEFF W. ADCOCK had access to highly sensitive
merchant information that can only be accessed via a password protected internet site operated
by Plaintiff’s sponsor bank and processor.
18. While working for Plaintiff, Defendant JEFF W. ADCOCK entered into a Trade
Secret and Non-Solicitation Agreement with Plaintiff, which, in part, prohibits:
a) the removal of documents, notes, files, records, oral information,
computer files or similar materials from Plaintiff’s from Plaintiff premises
without permission from Plaintiff;
b) disclosure of the contents of plaintiff's records or information otherwise
obtained in regard to business to anyone, except where required for
business purpose.
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c) disclosure of any confidential information, purposefully or inadvertently
(through casual conversation) to any unauthorized person inside or outside
Plaintiff’s company.
Additionally, the Trade Secret and Non-Solicitation Agreement states that an employee will not
(either as an individual for his own enterprise, or as a partner, joint venturer, officer, employee,
agent, salesman, consulting, or five percent or more shareholder of any entity or third party)
during the period of employment with Plaintiff and for a period of four (4) years following any
expiration or termination of employment with Plaintiff for any reason whatsoever:
d) hire or solicit for employment directly or indirectly, any of Plaintiff’s
personnel in any capacity whatsoever (which shall be deemed to include,
without limitation, any existing or perspective employee, consultant or
independent contractor of Plaintiff or any person who has been such an
employee, consultant or independent contractor within one hundred (150)
days prior thereto);
e) attempt, directly or indirectly, to induce any personnel of Plaintiff to leave
the employ of, or discontinue such person’s consultant, contractor or other
business association with Plaintiff; and
f) solicit, directly or indirectly, any vendor, customer, merchant or account,
or prospective vendor, customer, merchant or account of Plaintiff.
A copy of the Trade Secret and Non-Solicitation Agreement is attached as Exhibit A and
incorporated by reference1.
19. While working for Plaintiff, Defendant JEFF W. ADCOCK was the obligation to
follow the terms of the Employee Manual that Plaintiff had and continues to have in place,
which, in part, provided for the employee’s prohibition of disclosure of Plaintiff’s Confidential
and Proprietary Information after the employment relationship ends in Section 4.10 thereof and
for the return of company issued property at the time of termination in Section 4.28 thereof. A
copy of the Employment Manual is attached as Exhibit B and incorporated by reference2.
1 - A blank, unsigned version of the Trade Secret and Non-Solicitation Agreement is attached hereto since the version
signed by Defendant JEFF W . ADCOCK is missing from his personnel file.
2- A redacted version of the Employee Manual is attached hereto since the version signed by Defendant JEFF W .
ADCOCK is missing from his personnel file.
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20. As part of his employment with Plaintiff, Defendant JEFF W. ADCOCK was
given and/or signed both of the relevant documents referenced above (in fact as president, he
made sure that employees were aware of and adhered to the obligations stated therein). However,
after his departure from Plaintiff, the original signed versions of these agreements and copies
thereof, among other documents, all of which should be in Defendant JEFF W. ADCOCK’s
personnel file with Plaintiff as its property, were discovered by Plaintiff to be missing, are not in
the possession of Plaintiff, and have not been found after a diligent search by Plaintiff.
21. Defendant JEFF W. ADCOCK has engaged in conduct that violates and breaches
the Trade Secret and Non-Solicitation Agreement and Employment Manual, both before his
termination from Plaintiff as president from the company on October 23, 2014 and thereafter.
Upon information it has received, Plaintiff has reason to believe Defendant JEFF W. ADCOCK,
individually or through his company, Defendant DATA PAY SOLUTIONS, LLC, has met with
contracted sales agents, customers, and accounts of Plaintiff on different occasions after the date
of his termination. Such activity has diverted business away from Plaintiff and to competitors
such as Defendant FOCUS MERCHANT SERVICES, LLC. In meeting with those agents,
customers, and accounts, Defendant JEFF W. ADCOCK engaged in conduct that breached the
duties he owed to Plaintiff by disclosing Plaintiff’s Confidential and Proprietary Information to
others and by soliciting the agents, customers, and accounts of Plaintiff.
22. Additionally, Defendant JEFF W. ADCOCK failed to timely return company
property upon his termination which included laptops, cell phones, and a SIM card. During this
time, Defendant JEFF W. ADCOCK had access to several years’ worth of Plaintiff’s emails
which contained valuable information on vendors, sales agents, and clients. Such delay in the
return of said property, after demand by Plaintiff to do so, afforded Defendant JEFF W.
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ADCOCK ample opportunity to copy Plaintiff’s Confidential and Proprietary Information
contained on these items.
23. Defendant DATA PAY SOLUTIONS, LLC is a Texas Limited Liability
Company which was formed with the Secretary of State on January 13, 2015, a date
approximately three months after Defendant JEFF W. ADCOCK was terminated from Plaintiff.
According to the Secretary of State records, Defendant JEFF W. ADCOCK is listed as the
organizer, registered agent, and sole managing member of Defendant DATA PAY
SOLUTIONS, LLC. Defendant JEFF W. ADCOCK formed Defendant DATA PAY
SOLUTIONS, LLC for the purpose of directly competing against Plaintiff by utilizing
Confidential and Proprietary Information he obtained during his employment with Plaintiff. In
doing so, Defendant JEFF W. ADCOCK has contacted one or more of Plaintiff’s current sales
agents, asking them to sell for his new company, Defendant DATA PAY SOLUTIONS, LLC,
instead of for Plaintiff. Further, Defendant JEFF W. ADCOCK has requested these same agents
to move accounts owned by Plaintiff to Defendant DATA PAY SOLUTIONS, LLC, thus costing
Plaintiff the future residual income from these accounts.
24. Defendant DATA PAY SOLUTIONS, LLC was aware of the contract between
Plaintiff and Defendant JEFF W. ADCOCK, and Defendant DATA PAY SOLUTIONS, LLC
engaged in a course of willful conduct with the intent to tortiously interfere with the existing and
prospective business relationships of Plaintiffs.
25. Plaintiff is a customer of Defendant FOCUS MERCHANT SERVICES, LLC.
The two parties have one large account on which commissions earned are split between them.
On one or more occasions, Defendant FOCUS MERCHANT SERVICES, LLC has met with
Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC and discussed
future business relations concerning the same products and services upon which Defendant
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FOCUS MERCHANT SERVICES, LLC had previously partnered with Plaintiff. Defendant
FOCUS MERCHANT SERVICES, LLC had knowledge that Defendant JEFF W. ADCOCK had
worked for Plaintiff and thus, was aware of the relationship between Plaintiff and Defendant
JEFF W. ADCOCK. Defendant FOCUS MERCHANT SERVICES, LLC engaged in a course of
willful conduct with the intent to tortiously interfere with the existing and prospective business
relationships of Plaintiffs.
CAUSES OF ACTION
BREACH OF CONTRACT
26. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1-
25 as set forth above.
27. In complete violation of his obligations and responsibilities under the Trade
Secret and Non-Solicitation Agreement and the Employment Manual by disclosing Plaintiff’s
Confidential and Proprietary Information, soliciting or inducing third parties to act against
Plaintiff’s interests, and by failing to timely return Plaintiff’s property at the time of his
termination, Defendant JEFF W. ADCOCK engaged in a course of conduct designed to take the
accounts away from Plaintiff so that Defendant JEFF W. ADCOCK and Defendant DATA PAY
SOLUTIONS, LLC can obtain accounts for their own financial benefit, which would be to the
substantial financial detriment of Plaintiff. In fact, Defendant JEFF W. ADCOCK and
Defendant DATA PAY SOLUTIONS, LLC have succeeded in obtaining Plaintiff’s accounts,
which have resulted in substantial economic damages in an amount within the jurisdictional
limits of this Court. These actions by Defendant JEFF W. ADCOCK are clearly in breach of his
agreements and covenants, and Plaintiff is entitled to recover its actual, incidental, and
consequential damages.
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MISAPPROPRIATION OF PLAINTIFF’S CONFIDENTIAL
AND PROPRIETARY INFORMATION
28. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1-
27 as set forth above.
29. Plaintiff, is, and at all times mentioned in this Petition has been, engaged in the
business of providing payment processing services to merchants across the United States.
Plaintiff has developed a patronage among users of its services and has compiled Plaintiff’s
Confidential and Proprietary Information which concerns the identity, addresses, persons to be
contacted, credit ratings, paying habits, and other valuable information concerning its customers.
All of this information was treated by Plaintiff as confidential and could not be acquired in any
other way than by years of experience in Plaintiff’s business and the expenditure of large
amounts of time and money.
30. Plaintiff, as part of its indoctrination and training, has specifically informed all of
its employees, consultants, and independent contractors that said Confidential and Proprietary
Information described herein are valuable and confidential and must under no circumstances be
disclosed to anyone else. Plaintiff maintains this information in its confidential computer system
and permits access only to authorized members of its staff.
31. While Defendant JEFF W. ADCOCK was employed by Plaintiff as its president,
he was charged with the duty of overseeing business for Plaintiff across the United States. In
such capacity, Defendant JEFF W. ADCOCK had direct access to Plaintiff’s Confidential and
Proprietary Information, was personally responsible for informing employees, consultants, and
independent contractors of the confidentiality of said information, and was responsible for
instructing said employees, consultants, and independent contractors to keep Plaintiff’s
Confidential and Proprietary Information current by supplementing them with all new
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information so that Plaintiff could maintain the value of the Confidential and Proprietary
Information independently of changes in its employees, consultants, and independent
contractors.
32. After Defendant JEFF W. ADCOCK was terminated from position with Plaintiff,
and after forming his own company, Defendant DATA PAY SOLUTIONS, LLC, both became a
direct competitor of Plaintiff’s business of providing payment processing services to merchants
across the United States. Defendant JEFF W. ADCOCK and Defendant DATA PAY
SOLUTIONS, LLC immediately began soliciting Plaintiff’s customers and attempted to
persuade Plaintiff’s most valuable customers to purchase payment processing services from them
or Defendant FOCUS MERCHANT SERVICES, LLC, instead of from Plaintiff. These
customers and their buying habits and preferences were known to Defendant JEFF W. ADCOCK
only because of his access to Plaintiff’s Confidential and Proprietary Information and by virtue
of his prior employment by Plaintiff in a position in which he was the repository of a special
trust.
33. As a direct and proximate result of Defendant JEFF W. ADCOCK and Defendant
DATA PAY SOLUTIONS, LLC’s conduct as above described, Plaintiff has lost customers, is
losing customers, and will continue to lose customers, all of which have resulted or will result in
substantial damages to Plaintiff in an amount within the jurisdictional limits of this Court.
Unless restrained from doing so, Defendant JEFF W. ADCOCK and Defendant DATA PAY
SOLUTIONS, LLC may further use and disclose Plaintiff’s Confidential and Proprietary
Information and possibly disparage Plaintiff’s products and services, all to Plaintiff’s imminent
and irreparable injury.
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TORTIOUS INTERFERENCE WITH
EXISTING AND PROSPECTIVE BUSINESS RELATIONSHIPS
34. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1-
33 as set forth above.
35. Plaintiff has spent many years developing its Confidential and Proprietary
Information which includes it business and client list and entered into the covenants with
Defendant JEFF W. ADCOCK to protect it business and client list. Defendants JEFF W.
ADCOCK, DATA PAY SOLUTIONS, LLC, and FOCUS MERCHANT SERVICES, LLC have
tortiously interfered with Plaintiff’s existing and perspective contractual relations with sales
agents, merchants, and potential merchants by virtue of soliciting and diverting business away
from Plaintiff, which business Plaintiff would have continued were it not for the tortious
interference of Defendants JEFF W. ADCOCK, DATA PAY SOLUTIONS, LLC, and FOCUS
MERCHANT SERVICES, LLC. Accordingly, Plaintiff has been damaged in an amount within
the jurisdictional limits of this Court.
36. Further, the manner in which actions of Defendants JEFF W. ADCOCK, DATA
PAY SOLUTIONS, LLC, and FOCUS MERCHANT SERVICES, LLC have occurred indicate
these actions were done with legal malice, such that Plaintiff is entitled to recover exemplary
damages from Defendants JEFF W. ADCOCK, DATA PAY SOLUTIONS, LLC, and FOCUS
MERCHANT SERVICES, LLC.
UNFAIR COMPETITION
37. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1-
36 as set forth above.
38. Pursuant to the relationship of Plaintiff and Defendants JEFF W. ADCOCK, the
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latter came into possession of the Confidential and Proprietary Information of Plaintiff including
without limitation client information, bidding processes, and calculations, and other trade
secrets. The acts of Defendants JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS,
LLC, as alleged above, constitute a willful and intentional misappropriation of Plaintiff’s
Confidential and Proprietary Information for the purpose of unfairly competing with Plaintiff
and additionally constitute unlawful and unfair business practices by Defendants JEFF W.
ADCOCK and DATA PAY SOLUTIONS, LLC to divert business, sales agents, and clients
away from Plaintiff for the use and benefit of both Defendant JEFF W. ADCOCK and DATA
PAY SOLUTIONS, LLC. Through these acts, Defendant DATA PAY SOLUTIONS, LLC has
been provided with an unfair competition advantage in that it will save a significant amount of
investment and research and development of business competing against Plaintiff at Plaintiff’s
expense. Defendant DATA PAY SOLUTIONS, LLC will enjoy the benefits of the services of
Defendant JEFF W. ADCOCK whom Plaintiff has trained and is well acquainted with Plaintiff’s
business. Accordingly Plaintiff has suffered and continues to suffer substantial economic
damages in an amount within the jurisdictional limits of this Court.
39. The acts of Defendants JEFF W. ADCOCK and DATA PAY SOLUTIONS, LLC
were willful and malicious and taken for their own economic game and to the economic
detriment of Plaintiff. Therefore, Plaintiff is entitled to recover exemplary damages from
Defendants JEFF W. ADCOCK and DATA PAY SOLUTIONS, LLC.
BREACH OF DUTIES OF OBEDIENCE, CARE, AND LOYALTY
40. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1-
39 as set forth above.
41. As president, Defendant JEFF W. ADCOCK owed Plaintiff the duties of
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obedience, care, and loyalty. This duty mandates that the best interest of the corporation and its
shareholders take precedence over any interest possessed by an officer and that is not generally
shared by the stockholders generally. Defendant JEFF W. ADCOCK breached this duty by
failing to use candor, unselfishness, and good faith by wrongfully appropriating and disclosing
Plaintiff’s Confidential and Proprietary Information; wrongfully soliciting or inducing third
parties to act against Plaintiff’s interests; and intentionally interfering with contractual
relationships between Plaintiffs and its existing and prospective customers, even after his
termination with Plaintiff. As a result of this breach, Plaintiff has suffered and continues to
suffer substantial economic damages in an amount within the jurisdictional limits of this Court.
ALTER EGO LIABILITY
42. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1-
41 as set forth above.
43. Defendant JEFF W. ADCOCK is jointly and severally liable for the wrongful
conduct of Defendant DATA PAY SOLUTIONS, LLC and for payment of any and all actual,
incidental, and consequential damages alleged above, because Defendant JEFF W. ADCOCK is
the alter ego of Defendant DATA PAY SOLUTIONS, LLC.
44. In support of this claim, Plaintiff will show that Defendant JEFF W. ADCOCK is
the sole managing member of Defendant DATA PAY SOLUTIONS, LLC. No other officer of
Defendant DATA PAY SOLUTIONS, LLC is shown of record.
45. Defendant JEFF W. ADCOCK and Defendants DATA PAY SOLUTIONS, LLC
do not maintain separate offices, but rather Defendant DATA PAY SOLUTIONS, LLC’s alleged
office address is actually the location of Defendant JEFF W. ADCOCK’s personal residence.
46. Defendant JEFF W. ADCOCK represents himself as the owner of Defendant
DATA PAY SOLUTIONS, LLC’s business.
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47. Defendant DATA PAY SOLUTIONS, LLC has no independent telephone
number, but uses Defendant’s JEFF W. ADCOCK telephone line.
48. Defendant JEFF W. ADCOCK formed Defendant DATA PAY SOLUTIONS,
LLC, solely for his own personal benefit and to avoid personal liability for any obligations
incurred in the course of business.
THIRD PARTY’S INDUCEMENT OF DEFENDANT’S BREACH
49. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1-
48 as set forth above.
50. Defendant FOCUS MERCHANT SERVICES, LLC intentionally induced
Defendant JEFF W. ADCOCK to breach the terms of the covenant not to disclose Plaintiff’s
Confidential and Proprietary Information. Defendant FOCUS MERCHANT SERVICES, LLC
had knowledge that Defendant JEFF W. ADCOCK had worked for Plaintiff and thus, was aware
of the relationship between Plaintiff and Defendant JEFF W. ADCOCK, also knowing that
Defendant JEFF W. ADCOCK knew and possessed Plaintiff’s Confidential and Proprietary
Information. By becoming associated with Defendant JEFF W. ADCOCK, Defendant FOCUS
MERCHANT SERVICES, LLC would be able to take advantage of his knowledge of Plaintiff’s
Confidential and Proprietary Information. Defendant FOCUS MERCHANT SERVICES, LLC
knew or should have known of the covenant not to disclosure are standard in the credit card
payment processing services industry.
51. The actions of Defendant FOCUS MERCHANT SERVICES, LLC have caused
and will cause Plaintiff damages in an amount within the jurisdictional limits of this Court.
ATTORNEYS FEES
52. Request is made for all costs and reasonable and necessary attorney's fees
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incurred by or on behalf of Plaintiff herein, including all fees necessary in the event of an appeal
of this cause to the Court of Appeals and the Supreme Court of Texas, as the Court deems
equitable and just, as provided by Chapter 38 of the Texas Civil Practice and Remedies Code.
ALTERNATIVE ALLEGATIONS
53. Pursuant to Rules 47 and 48, Texas Rules of Civil Procedure and the rules of
pleadings, allegations in this petition are made in the alternative.
APPLICATION FOR TEMPORARY RESTRAINING ORDER
AND TEMPORARY AND PERMANENT INJUNCTIVE RELIEF
54. Simultaneous with the filing of this Petition, Plaintiff is filing an Application for
Temporary Restraining Order and Temporary Injunction seeking injunctive relief to prevent
Plaintiff from suffering further immediate and irreparable injury, loss, or damage due to
Defendants' conduct described above.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiff, VERIFIED TRANSACTION
SYSTEMS, LLC d/b/a VERITRANS MERCHANT SERVICES, respectfully prays:
that all Defendants be cited to appear and answer herein;
that Plaintiff be entitled to a temporary restraining order, together with temporary and
permanent injunctive relief, restraining and enjoining Defendants’ injurious conduct;
that Plaintiff be awarded actual, incidental, and consequential damages against Defendant
JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC, jointly and
severally, and against Defendant FOCUS MERCHANT SERVICES, LLC, resulting from
the wrongful conduct of all Defendants in an amount within the jurisdictional limits of
this Court, together with prejudgment and post judgment interest to the extent allowed by
law;
that Plaintiff be awarded exemplary damages against Defendant JEFF W. ADCOCK and
Defendant DATA PAY SOLUTIONS, LLC, jointly and severally, and against Defendant
FOCUS MERCHANT SERVICES, LLC, resulting from the malicious conduct of all
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Defendants, together with prejudgment and post judgment interest to the extent allowed
by law;
that Plaintiff be awarded reasonable and necessary attorney's fees; and
that Plaintiff be awarded such other and further relief to which Plaintiff may be justly
entitled.
Respectfully submitted,
JOSEPH P. MONTALBANO, P.C.
By:
Joseph P. Montalbano
Texas Bar No. 14279700
Email: jpm913@gmail.com
2525 Bay Area Blvd., Suite 310
Houston, Texas 77058-1558
Tel. (281) 488-1656
Fax. (281) 488-5884
Attorney for Plaintiff
VERIFIED TRANSACTION SYSTEMS, LLC
d/b/a VERITRANS MERCHANT SERVICES
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TRADE SECRET AND NON-SOLICITATION AGREEMENT
Confidential Nature of Work
All Verified Transactions Systems, LLC (“Veritrans”) records and information relating to
Veritrans or its customers are confidential and contracted workers must, therefore, treat all
matters accordingly. No Veritrans or Veritrans-related information, including without limitation,
documents, notes, files, records, oral information, computer files or similar materials (except in
the ordinary course of performing duties on behalf of Veritrans) may be removed from
Veritrans’s premises without permission from Veritrans. Additionally, the contents of Veritrans’s
records or information otherwise obtained in regard to business may not be disclosed to anyone,
except where required for a business purpose. Contracted workers must not disclose any
confidential information, purposefully or inadvertently (through casual conversation), to any
unauthorized person inside or outside the company. Contracted workers who are unsure about
the confidential nature of specific information must ask their supervisor for clarification. During
the term of this his/her contract, contracted worker shall exclusively represent Veritrans and shall
not enter into any agreement to solicit merchants for the merchant-acquiring program of any
bank, company, ISO or financial institution other than Veritrans.
Non-Solicitation
All Veritrans contracted workers must adhere by the policies set forth herein. An contracted
workers will not (either as an individual for my own enterprise, or as a partner, joint venturer,
officer, employee, agent, salesman, consultant, or 5% or more shareholder of any entity or third
party) during the period of a contract with Veritrans and for a period of four (4) years following
any expiration or termination of contract with Veritrans for any reason whatsoever:
1. hire or solicit for employment, directly or indirectly, any Veritrans personnel in any
capacity whatsoever (which shall be deemed to include, without limitation, any
existing or prospective employee, consultant or independent contractor of Veritrans
or any person who has been such an employee, consultant or independent contractor
within one hundred fifty (150) days prior thereto);
2. attempt, directly or indirectly, to induce any such Veritrans personnel to leave the
employ of, or discontinue such person’s consultant, contractor or other business
association with Veritrans;
3. solicit, directly or indirectly, any vendor, customer, merchant or account or
prospective vendor, customer, merchant or account of Veritrans;
4. solicit, either directly or indirectly, Veritrans’s lead sources including those
prospective lead sources.
If, at the time of enforcement of the covenants above (the “Protective Covenants”), a
court shall hold that the duration, scope or area restrictions stated herein are unreasonable under
circumstances then existing, contracted worker hereto agrees that the maximum duration, scope
or area reasonable under such circumstances shall be substituted for the stated duration, scope or
area and that the court shall be allowed to revise the Protective Covenants to cover the maximum
duration, scope and area permitted by law. Employee agrees that the Protective Covenants are
reasonable in terms of duration, scope and area restrictions and are necessary to protect the
1 EXHIBIT A
goodwill of the Veritrans’s businesses and the confidential information and agrees not to
challenge the validity or enforceability of the Protective Covenants.
If contracted worker breach
Preview
Filed: 5/15/2015 11:12:35 AM JOHN D. KINARD - District Clerk Galveston County, Texas Envelope No. 5299837 By: Shailja Dixit 5/15/2015 11:42:26 AM 15-CV-0490 NO. ______________ VERIFIED TRANSACTION SYSTEMS, § IN THE DISTRICT COURT LLC d/b/a VERITRANS MERCHANT § SERVICES § Plaintiff, § § Galveston County - 56th District Court V. § ______ JUDICIAL DISTRICT § JEFF W. ADCOCK, DATA PAY § SOLUTIONS, LLC AND FOCUS § MERCHANT SERVICES, LLC § Defendants. § OF GALVESTON COUNTY, TEXAS PLAINTIFF'S ORIGINAL PETITION TO THE HONORABLE JUDGE OF SAID COURT: NOW COMES VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS MERCHANT SERVICES, hereinafter called Plaintiff, complaining of and about JEFF W. ADCOCK, DATA PAY SOLUTIONS, LLC and FOCUS MERCHANT SERVICES, LLC, hereinafter called Defendants, and for cause of action shows unto the Court the following: DISCOVERY CONTROL PLAN LEVEL 1. Plaintiff intends that discovery be conducted under Discovery Level 2. PARTIES AND SERVICE 2. Plaintiff, VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS MERCHANT SERVICES, is a Limited Liability Company whose address is 1301 Regents Park Dr., Suite 207, Houston, Texas 77058-2536. 3. VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS MERCHANT SERVICES has not been issued a driver's license. VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS MERCHANT SERVICES has not been issued a social security number. 1 Status Conference - 08/06/2015 4. Defendant JEFF W. ADCOCK, an Individual who is a resident of Texas, may be served with process at his home at the following address: 2514 Siskin Trail, League City, Galveston County, Texas 77573 or any other address he may be found. Service of said Defendant as described above can be effected by personal delivery. 5. Defendant DATA PAY SOLUTIONS, LLC, a Limited Liability Company based in Texas, may be served with process by serving the registered agent of said company, JEFF W. ADCOCK, at 2514 Siskin Trail, League City, Galveston County, Texas 77573, its registered office, or any other address he may be found. Service of said Defendant as described above can be effected by personal delivery. 6. Defendant FOCUS MERCHANT SERVICES, LLC, a Limited Liability Company based in Texas, may be served with process by serving the registered agent of said company, Sanford G. Cohen, at 1400 Summit Tower, Eleven Greenway Plaza, Houston, Harris County, Texas 77046, its registered office, or any other address he may be found. Service of said Defendant as described above can be effected by personal delivery. JURISDICTION AND VENUE 7. The subject matter in controversy is within the jurisdictional limits of this court. 8. Plaintiff seeks: a. monetary relief of $100,000 or less and non-monetary relief 9. This court has jurisdiction over the parties because Defendants are Texas residents. 10. Venue in Galveston County is permissive in this cause under Section 15.002(a)(2) of the Texas Civil Practice and Remedies Code because this county was the county of residence of JEFF W. ADCOCK, Defendant herein, at the time the cause of action accrued. Furthermore, because venue is proper with respect to Defendant JEFF W. ADCOCK, venue for this action 2 with respect to all Defendants is proper under 15.005 of the Texas Civil Practice and Remedies Code. FACTUAL ALLEGATIONS 11. Plaintiff is a nationwide merchant service provider specializing in providing credit card payment processing services to merchants across the United States. These services include setting-up and servicing the physical card authorization equipment and software at the merchant’s location, securing bank authorization for the merchant to accept bank card payments, and providing settlement services to merchants to ensure prompt payment. It is a unique industry in that it provides for a future residual income stream to businesses similarly situated as Plaintiff. Preventing disruption of this residual income is paramount to Plaintiff and, therefore, Plaintiff has great interest in protecting and maintaining the same, utilizing various practical and contractual safeguards to do so. 12. Among other electronic resources, Plaintiff uses a comprehensive customer relationship management (“CRM”) software system and database. The CRM system and other electronic systems used by Plaintiff allow the company to create and maintain a variety of proprietary and confidential electronic and hard-copy documents in servicing its customers, including but not limited to: customer lists, customer profiles, pricing structures, cost allocations and margins, customer discounts, proposals, vendor information, sales agent information, and proprietary merchant statements. 13. The documents described immediately above in paragraph 12 provide extensive sales-related information including but not limited to: the identities of current and targeted customers, sales agents, and contact persons; pricing and sales information; customer discounts and fee arrangements; and detailed histories of sales efforts with respect to potential customers. 3 Collectively, all of the items listed in the preceding paragraph and this paragraph shall hereinafter be referred to as Plaintiff’s “Confidential and Proprietary Information.” 14. In order to protect the secrecy of its Confidential and Proprietary Information, Plaintiff limits access to such information and requires employees who have access to this information to maintain confidentiality. 15. In 2000, Plaintiff hired Defendant JEFF W. ADCOCK as an employee of the company. In this capacity, Defendant JEFF W. ADCOCK was responsible for growing the client base of Plaintiff. Defendant JEFF W. ADCOCK later became president of Plaintiff and currently owns 15% of the outstanding stock in Plaintiff. 16. Upon becoming president of Plaintiff, Defendant JEFF W. ADCOCK, had access to Plaintiff’s Confidential and Proprietary Information, including the CRM software program and database, employee files, agent files and all other information of Plaintiff. Defendant JEFF W. ADCOCK could easily access detailed information about Plaintiff’s potential, current, and former clients and agents, including the entire history of Plaintiff’s sales efforts with respect to these potential, current, and former clients and agents. 17. In addition, Defendant JEFF W. ADCOCK had access to highly sensitive merchant information that can only be accessed via a password protected internet site operated by Plaintiff’s sponsor bank and processor. 18. While working for Plaintiff, Defendant JEFF W. ADCOCK entered into a Trade Secret and Non-Solicitation Agreement with Plaintiff, which, in part, prohibits: a) the removal of documents, notes, files, records, oral information, computer files or similar materials from Plaintiff’s from Plaintiff premises without permission from Plaintiff; b) disclosure of the contents of plaintiff's records or information otherwise obtained in regard to business to anyone, except where required for business purpose. 4 c) disclosure of any confidential information, purposefully or inadvertently (through casual conversation) to any unauthorized person inside or outside Plaintiff’s company. Additionally, the Trade Secret and Non-Solicitation Agreement states that an employee will not (either as an individual for his own enterprise, or as a partner, joint venturer, officer, employee, agent, salesman, consulting, or five percent or more shareholder of any entity or third party) during the period of employment with Plaintiff and for a period of four (4) years following any expiration or termination of employment with Plaintiff for any reason whatsoever: d) hire or solicit for employment directly or indirectly, any of Plaintiff’s personnel in any capacity whatsoever (which shall be deemed to include, without limitation, any existing or perspective employee, consultant or independent contractor of Plaintiff or any person who has been such an employee, consultant or independent contractor within one hundred (150) days prior thereto); e) attempt, directly or indirectly, to induce any personnel of Plaintiff to leave the employ of, or discontinue such person’s consultant, contractor or other business association with Plaintiff; and f) solicit, directly or indirectly, any vendor, customer, merchant or account, or prospective vendor, customer, merchant or account of Plaintiff. A copy of the Trade Secret and Non-Solicitation Agreement is attached as Exhibit A and incorporated by reference1. 19. While working for Plaintiff, Defendant JEFF W. ADCOCK was the obligation to follow the terms of the Employee Manual that Plaintiff had and continues to have in place, which, in part, provided for the employee’s prohibition of disclosure of Plaintiff’s Confidential and Proprietary Information after the employment relationship ends in Section 4.10 thereof and for the return of company issued property at the time of termination in Section 4.28 thereof. A copy of the Employment Manual is attached as Exhibit B and incorporated by reference2. 1 - A blank, unsigned version of the Trade Secret and Non-Solicitation Agreement is attached hereto since the version signed by Defendant JEFF W . ADCOCK is missing from his personnel file. 2- A redacted version of the Employee Manual is attached hereto since the version signed by Defendant JEFF W . ADCOCK is missing from his personnel file. 5 20. As part of his employment with Plaintiff, Defendant JEFF W. ADCOCK was given and/or signed both of the relevant documents referenced above (in fact as president, he made sure that employees were aware of and adhered to the obligations stated therein). However, after his departure from Plaintiff, the original signed versions of these agreements and copies thereof, among other documents, all of which should be in Defendant JEFF W. ADCOCK’s personnel file with Plaintiff as its property, were discovered by Plaintiff to be missing, are not in the possession of Plaintiff, and have not been found after a diligent search by Plaintiff. 21. Defendant JEFF W. ADCOCK has engaged in conduct that violates and breaches the Trade Secret and Non-Solicitation Agreement and Employment Manual, both before his termination from Plaintiff as president from the company on October 23, 2014 and thereafter. Upon information it has received, Plaintiff has reason to believe Defendant JEFF W. ADCOCK, individually or through his company, Defendant DATA PAY SOLUTIONS, LLC, has met with contracted sales agents, customers, and accounts of Plaintiff on different occasions after the date of his termination. Such activity has diverted business away from Plaintiff and to competitors such as Defendant FOCUS MERCHANT SERVICES, LLC. In meeting with those agents, customers, and accounts, Defendant JEFF W. ADCOCK engaged in conduct that breached the duties he owed to Plaintiff by disclosing Plaintiff’s Confidential and Proprietary Information to others and by soliciting the agents, customers, and accounts of Plaintiff. 22. Additionally, Defendant JEFF W. ADCOCK failed to timely return company property upon his termination which included laptops, cell phones, and a SIM card. During this time, Defendant JEFF W. ADCOCK had access to several years’ worth of Plaintiff’s emails which contained valuable information on vendors, sales agents, and clients. Such delay in the return of said property, after demand by Plaintiff to do so, afforded Defendant JEFF W. 6 ADCOCK ample opportunity to copy Plaintiff’s Confidential and Proprietary Information contained on these items. 23. Defendant DATA PAY SOLUTIONS, LLC is a Texas Limited Liability Company which was formed with the Secretary of State on January 13, 2015, a date approximately three months after Defendant JEFF W. ADCOCK was terminated from Plaintiff. According to the Secretary of State records, Defendant JEFF W. ADCOCK is listed as the organizer, registered agent, and sole managing member of Defendant DATA PAY SOLUTIONS, LLC. Defendant JEFF W. ADCOCK formed Defendant DATA PAY SOLUTIONS, LLC for the purpose of directly competing against Plaintiff by utilizing Confidential and Proprietary Information he obtained during his employment with Plaintiff. In doing so, Defendant JEFF W. ADCOCK has contacted one or more of Plaintiff’s current sales agents, asking them to sell for his new company, Defendant DATA PAY SOLUTIONS, LLC, instead of for Plaintiff. Further, Defendant JEFF W. ADCOCK has requested these same agents to move accounts owned by Plaintiff to Defendant DATA PAY SOLUTIONS, LLC, thus costing Plaintiff the future residual income from these accounts. 24. Defendant DATA PAY SOLUTIONS, LLC was aware of the contract between Plaintiff and Defendant JEFF W. ADCOCK, and Defendant DATA PAY SOLUTIONS, LLC engaged in a course of willful conduct with the intent to tortiously interfere with the existing and prospective business relationships of Plaintiffs. 25. Plaintiff is a customer of Defendant FOCUS MERCHANT SERVICES, LLC. The two parties have one large account on which commissions earned are split between them. On one or more occasions, Defendant FOCUS MERCHANT SERVICES, LLC has met with Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC and discussed future business relations concerning the same products and services upon which Defendant 7 FOCUS MERCHANT SERVICES, LLC had previously partnered with Plaintiff. Defendant FOCUS MERCHANT SERVICES, LLC had knowledge that Defendant JEFF W. ADCOCK had worked for Plaintiff and thus, was aware of the relationship between Plaintiff and Defendant JEFF W. ADCOCK. Defendant FOCUS MERCHANT SERVICES, LLC engaged in a course of willful conduct with the intent to tortiously interfere with the existing and prospective business relationships of Plaintiffs. CAUSES OF ACTION BREACH OF CONTRACT 26. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1- 25 as set forth above. 27. In complete violation of his obligations and responsibilities under the Trade Secret and Non-Solicitation Agreement and the Employment Manual by disclosing Plaintiff’s Confidential and Proprietary Information, soliciting or inducing third parties to act against Plaintiff’s interests, and by failing to timely return Plaintiff’s property at the time of his termination, Defendant JEFF W. ADCOCK engaged in a course of conduct designed to take the accounts away from Plaintiff so that Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC can obtain accounts for their own financial benefit, which would be to the substantial financial detriment of Plaintiff. In fact, Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC have succeeded in obtaining Plaintiff’s accounts, which have resulted in substantial economic damages in an amount within the jurisdictional limits of this Court. These actions by Defendant JEFF W. ADCOCK are clearly in breach of his agreements and covenants, and Plaintiff is entitled to recover its actual, incidental, and consequential damages. 8 MISAPPROPRIATION OF PLAINTIFF’S CONFIDENTIAL AND PROPRIETARY INFORMATION 28. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1- 27 as set forth above. 29. Plaintiff, is, and at all times mentioned in this Petition has been, engaged in the business of providing payment processing services to merchants across the United States. Plaintiff has developed a patronage among users of its services and has compiled Plaintiff’s Confidential and Proprietary Information which concerns the identity, addresses, persons to be contacted, credit ratings, paying habits, and other valuable information concerning its customers. All of this information was treated by Plaintiff as confidential and could not be acquired in any other way than by years of experience in Plaintiff’s business and the expenditure of large amounts of time and money. 30. Plaintiff, as part of its indoctrination and training, has specifically informed all of its employees, consultants, and independent contractors that said Confidential and Proprietary Information described herein are valuable and confidential and must under no circumstances be disclosed to anyone else. Plaintiff maintains this information in its confidential computer system and permits access only to authorized members of its staff. 31. While Defendant JEFF W. ADCOCK was employed by Plaintiff as its president, he was charged with the duty of overseeing business for Plaintiff across the United States. In such capacity, Defendant JEFF W. ADCOCK had direct access to Plaintiff’s Confidential and Proprietary Information, was personally responsible for informing employees, consultants, and independent contractors of the confidentiality of said information, and was responsible for instructing said employees, consultants, and independent contractors to keep Plaintiff’s Confidential and Proprietary Information current by supplementing them with all new 9 information so that Plaintiff could maintain the value of the Confidential and Proprietary Information independently of changes in its employees, consultants, and independent contractors. 32. After Defendant JEFF W. ADCOCK was terminated from position with Plaintiff, and after forming his own company, Defendant DATA PAY SOLUTIONS, LLC, both became a direct competitor of Plaintiff’s business of providing payment processing services to merchants across the United States. Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC immediately began soliciting Plaintiff’s customers and attempted to persuade Plaintiff’s most valuable customers to purchase payment processing services from them or Defendant FOCUS MERCHANT SERVICES, LLC, instead of from Plaintiff. These customers and their buying habits and preferences were known to Defendant JEFF W. ADCOCK only because of his access to Plaintiff’s Confidential and Proprietary Information and by virtue of his prior employment by Plaintiff in a position in which he was the repository of a special trust. 33. As a direct and proximate result of Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC’s conduct as above described, Plaintiff has lost customers, is losing customers, and will continue to lose customers, all of which have resulted or will result in substantial damages to Plaintiff in an amount within the jurisdictional limits of this Court. Unless restrained from doing so, Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC may further use and disclose Plaintiff’s Confidential and Proprietary Information and possibly disparage Plaintiff’s products and services, all to Plaintiff’s imminent and irreparable injury. 10 TORTIOUS INTERFERENCE WITH EXISTING AND PROSPECTIVE BUSINESS RELATIONSHIPS 34. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1- 33 as set forth above. 35. Plaintiff has spent many years developing its Confidential and Proprietary Information which includes it business and client list and entered into the covenants with Defendant JEFF W. ADCOCK to protect it business and client list. Defendants JEFF W. ADCOCK, DATA PAY SOLUTIONS, LLC, and FOCUS MERCHANT SERVICES, LLC have tortiously interfered with Plaintiff’s existing and perspective contractual relations with sales agents, merchants, and potential merchants by virtue of soliciting and diverting business away from Plaintiff, which business Plaintiff would have continued were it not for the tortious interference of Defendants JEFF W. ADCOCK, DATA PAY SOLUTIONS, LLC, and FOCUS MERCHANT SERVICES, LLC. Accordingly, Plaintiff has been damaged in an amount within the jurisdictional limits of this Court. 36. Further, the manner in which actions of Defendants JEFF W. ADCOCK, DATA PAY SOLUTIONS, LLC, and FOCUS MERCHANT SERVICES, LLC have occurred indicate these actions were done with legal malice, such that Plaintiff is entitled to recover exemplary damages from Defendants JEFF W. ADCOCK, DATA PAY SOLUTIONS, LLC, and FOCUS MERCHANT SERVICES, LLC. UNFAIR COMPETITION 37. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1- 36 as set forth above. 38. Pursuant to the relationship of Plaintiff and Defendants JEFF W. ADCOCK, the 11 latter came into possession of the Confidential and Proprietary Information of Plaintiff including without limitation client information, bidding processes, and calculations, and other trade secrets. The acts of Defendants JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC, as alleged above, constitute a willful and intentional misappropriation of Plaintiff’s Confidential and Proprietary Information for the purpose of unfairly competing with Plaintiff and additionally constitute unlawful and unfair business practices by Defendants JEFF W. ADCOCK and DATA PAY SOLUTIONS, LLC to divert business, sales agents, and clients away from Plaintiff for the use and benefit of both Defendant JEFF W. ADCOCK and DATA PAY SOLUTIONS, LLC. Through these acts, Defendant DATA PAY SOLUTIONS, LLC has been provided with an unfair competition advantage in that it will save a significant amount of investment and research and development of business competing against Plaintiff at Plaintiff’s expense. Defendant DATA PAY SOLUTIONS, LLC will enjoy the benefits of the services of Defendant JEFF W. ADCOCK whom Plaintiff has trained and is well acquainted with Plaintiff’s business. Accordingly Plaintiff has suffered and continues to suffer substantial economic damages in an amount within the jurisdictional limits of this Court. 39. The acts of Defendants JEFF W. ADCOCK and DATA PAY SOLUTIONS, LLC were willful and malicious and taken for their own economic game and to the economic detriment of Plaintiff. Therefore, Plaintiff is entitled to recover exemplary damages from Defendants JEFF W. ADCOCK and DATA PAY SOLUTIONS, LLC. BREACH OF DUTIES OF OBEDIENCE, CARE, AND LOYALTY 40. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1- 39 as set forth above. 41. As president, Defendant JEFF W. ADCOCK owed Plaintiff the duties of 12 obedience, care, and loyalty. This duty mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by an officer and that is not generally shared by the stockholders generally. Defendant JEFF W. ADCOCK breached this duty by failing to use candor, unselfishness, and good faith by wrongfully appropriating and disclosing Plaintiff’s Confidential and Proprietary Information; wrongfully soliciting or inducing third parties to act against Plaintiff’s interests; and intentionally interfering with contractual relationships between Plaintiffs and its existing and prospective customers, even after his termination with Plaintiff. As a result of this breach, Plaintiff has suffered and continues to suffer substantial economic damages in an amount within the jurisdictional limits of this Court. ALTER EGO LIABILITY 42. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1- 41 as set forth above. 43. Defendant JEFF W. ADCOCK is jointly and severally liable for the wrongful conduct of Defendant DATA PAY SOLUTIONS, LLC and for payment of any and all actual, incidental, and consequential damages alleged above, because Defendant JEFF W. ADCOCK is the alter ego of Defendant DATA PAY SOLUTIONS, LLC. 44. In support of this claim, Plaintiff will show that Defendant JEFF W. ADCOCK is the sole managing member of Defendant DATA PAY SOLUTIONS, LLC. No other officer of Defendant DATA PAY SOLUTIONS, LLC is shown of record. 45. Defendant JEFF W. ADCOCK and Defendants DATA PAY SOLUTIONS, LLC do not maintain separate offices, but rather Defendant DATA PAY SOLUTIONS, LLC’s alleged office address is actually the location of Defendant JEFF W. ADCOCK’s personal residence. 46. Defendant JEFF W. ADCOCK represents himself as the owner of Defendant DATA PAY SOLUTIONS, LLC’s business. 13 47. Defendant DATA PAY SOLUTIONS, LLC has no independent telephone number, but uses Defendant’s JEFF W. ADCOCK telephone line. 48. Defendant JEFF W. ADCOCK formed Defendant DATA PAY SOLUTIONS, LLC, solely for his own personal benefit and to avoid personal liability for any obligations incurred in the course of business. THIRD PARTY’S INDUCEMENT OF DEFENDANT’S BREACH 49. Plaintiff, without waiving the foregoing, incorporates by reference paragraphs 1- 48 as set forth above. 50. Defendant FOCUS MERCHANT SERVICES, LLC intentionally induced Defendant JEFF W. ADCOCK to breach the terms of the covenant not to disclose Plaintiff’s Confidential and Proprietary Information. Defendant FOCUS MERCHANT SERVICES, LLC had knowledge that Defendant JEFF W. ADCOCK had worked for Plaintiff and thus, was aware of the relationship between Plaintiff and Defendant JEFF W. ADCOCK, also knowing that Defendant JEFF W. ADCOCK knew and possessed Plaintiff’s Confidential and Proprietary Information. By becoming associated with Defendant JEFF W. ADCOCK, Defendant FOCUS MERCHANT SERVICES, LLC would be able to take advantage of his knowledge of Plaintiff’s Confidential and Proprietary Information. Defendant FOCUS MERCHANT SERVICES, LLC knew or should have known of the covenant not to disclosure are standard in the credit card payment processing services industry. 51. The actions of Defendant FOCUS MERCHANT SERVICES, LLC have caused and will cause Plaintiff damages in an amount within the jurisdictional limits of this Court. ATTORNEYS FEES 52. Request is made for all costs and reasonable and necessary attorney's fees 14 incurred by or on behalf of Plaintiff herein, including all fees necessary in the event of an appeal of this cause to the Court of Appeals and the Supreme Court of Texas, as the Court deems equitable and just, as provided by Chapter 38 of the Texas Civil Practice and Remedies Code. ALTERNATIVE ALLEGATIONS 53. Pursuant to Rules 47 and 48, Texas Rules of Civil Procedure and the rules of pleadings, allegations in this petition are made in the alternative. APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY AND PERMANENT INJUNCTIVE RELIEF 54. Simultaneous with the filing of this Petition, Plaintiff is filing an Application for Temporary Restraining Order and Temporary Injunction seeking injunctive relief to prevent Plaintiff from suffering further immediate and irreparable injury, loss, or damage due to Defendants' conduct described above. PRAYER WHEREFORE, PREMISES CONSIDERED, Plaintiff, VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS MERCHANT SERVICES, respectfully prays: that all Defendants be cited to appear and answer herein; that Plaintiff be entitled to a temporary restraining order, together with temporary and permanent injunctive relief, restraining and enjoining Defendants’ injurious conduct; that Plaintiff be awarded actual, incidental, and consequential damages against Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC, jointly and severally, and against Defendant FOCUS MERCHANT SERVICES, LLC, resulting from the wrongful conduct of all Defendants in an amount within the jurisdictional limits of this Court, together with prejudgment and post judgment interest to the extent allowed by law; that Plaintiff be awarded exemplary damages against Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC, jointly and severally, and against Defendant FOCUS MERCHANT SERVICES, LLC, resulting from the malicious conduct of all 15 Defendants, together with prejudgment and post judgment interest to the extent allowed by law; that Plaintiff be awarded reasonable and necessary attorney's fees; and that Plaintiff be awarded such other and further relief to which Plaintiff may be justly entitled. Respectfully submitted, JOSEPH P. MONTALBANO, P.C. By: Joseph P. Montalbano Texas Bar No. 14279700 Email: jpm913@gmail.com 2525 Bay Area Blvd., Suite 310 Houston, Texas 77058-1558 Tel. (281) 488-1656 Fax. (281) 488-5884 Attorney for Plaintiff VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS MERCHANT SERVICES 16 TRADE SECRET AND NON-SOLICITATION AGREEMENT Confidential Nature of Work All Verified Transactions Systems, LLC (“Veritrans”) records and information relating to Veritrans or its customers are confidential and contracted workers must, therefore, treat all matters accordingly. No Veritrans or Veritrans-related information, including without limitation, documents, notes, files, records, oral information, computer files or similar materials (except in the ordinary course of performing duties on behalf of Veritrans) may be removed from Veritrans’s premises without permission from Veritrans. Additionally, the contents of Veritrans’s records or information otherwise obtained in regard to business may not be disclosed to anyone, except where required for a business purpose. Contracted workers must not disclose any confidential information, purposefully or inadvertently (through casual conversation), to any unauthorized person inside or outside the company. Contracted workers who are unsure about the confidential nature of specific information must ask their supervisor for clarification. During the term of this his/her contract, contracted worker shall exclusively represent Veritrans and shall not enter into any agreement to solicit merchants for the merchant-acquiring program of any bank, company, ISO or financial institution other than Veritrans. Non-Solicitation All Veritrans contracted workers must adhere by the policies set forth herein. An contracted workers will not (either as an individual for my own enterprise, or as a partner, joint venturer, officer, employee, agent, salesman, consultant, or 5% or more shareholder of any entity or third party) during the period of a contract with Veritrans and for a period of four (4) years following any expiration or termination of contract with Veritrans for any reason whatsoever: 1. hire or solicit for employment, directly or indirectly, any Veritrans personnel in any capacity whatsoever (which shall be deemed to include, without limitation, any existing or prospective employee, consultant or independent contractor of Veritrans or any person who has been such an employee, consultant or independent contractor within one hundred fifty (150) days prior thereto); 2. attempt, directly or indirectly, to induce any such Veritrans personnel to leave the employ of, or discontinue such person’s consultant, contractor or other business association with Veritrans; 3. solicit, directly or indirectly, any vendor, customer, merchant or account or prospective vendor, customer, merchant or account of Veritrans; 4. solicit, either directly or indirectly, Veritrans’s lead sources including those prospective lead sources. If, at the time of enforcement of the covenants above (the “Protective Covenants”), a court shall hold that the duration, scope or area restrictions stated herein are unreasonable under circumstances then existing, contracted worker hereto agrees that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated duration, scope or area and that the court shall be allowed to revise the Protective Covenants to cover the maximum duration, scope and area permitted by law. Employee agrees that the Protective Covenants are reasonable in terms of duration, scope and area restrictions and are necessary to protect the 1 EXHIBIT A goodwill of the Veritrans’s businesses and the confidential information and agrees not to challenge the validity or enforceability of the Protective Covenants. If contracted worker breach