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  • ECO Bedroom Solutions, LLC vs. Alvis, BrandyCivil-Roseville document preview
  • ECO Bedroom Solutions, LLC vs. Alvis, BrandyCivil-Roseville document preview
  • ECO Bedroom Solutions, LLC vs. Alvis, BrandyCivil-Roseville document preview
  • ECO Bedroom Solutions, LLC vs. Alvis, BrandyCivil-Roseville document preview
  • ECO Bedroom Solutions, LLC vs. Alvis, BrandyCivil-Roseville document preview
  • ECO Bedroom Solutions, LLC vs. Alvis, BrandyCivil-Roseville document preview
  • ECO Bedroom Solutions, LLC vs. Alvis, BrandyCivil-Roseville document preview
  • ECO Bedroom Solutions, LLC vs. Alvis, BrandyCivil-Roseville document preview
						
                                

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Robin K, Perkins, SBN: 131252 ELECTRONICALLY FILED Natalia D. Asbill, SBN: 281860 Superior Court of California, & PERKINS ASBILL County of Placer 300 Capitol Mall, Suite 1800 07/07/2020 NH Sacramento, CA 95814 dy: liarinaOlivarez Fuentes, Deputy Clert Telephone: 916.446,2000 WO Facsimile: 916.447.6400 SP Attorneys for Plaintiff, ECO BEDROOM SOLUTIONS, LLC A BDA NSN SUPERIOR COURT OF THE STATE OF CALIFORNIA © IN AND FOR THE COUNTY OF PLACER oOo ECO BEDROOM SOLUTIONS, LLC, Case No. S-CV-004323 1 kf, Plaintiff DECLARATION OF ANDREW OS v. FREEDMAN IN SUPPORT OF ECO BEDROOM SOLUTIONS’S APPLICATION a BRANDY ALVIS, an individual, and FOR DEFAULT JUDGMENT ee DOES | to 25, inclusive; Defendants. DATE: July 14, 2020 a et TIME: 8:30 a.m. DEPT.: 32 ON ww I, ANDREW R. FREEDMAN, hereby declare: DQ SD 1. I, Andrew R. Freedman, make this declaration based upon my own personal knowledge HN HS and if called upon to testify as a witness, Icould and would competently testify thereto. NY OWN 2. In approximately February, 2013, I,along with defendant, Brandy Alvis (“Ms. Alvis”), HN filed the necessary paperwork with the California Secretary of State to form Eco Bedroom LTO i Solutions, LLC, a California Limited Liability Company (“Eco Bedroom Solutions”). Eco KL i Bedroom Solutions was formed to design and contract for the manufacturing and marketing of DN NO ecologically and environmentally friendly mattresses and bedroom products. Ms. Alvis would Do I 28 serve as its day to day Chief Executive Officer with responsibilities for overseeing and managing PERKINS ASBILL 300 Capitol Mall, Suite ny Sacramento, CA 95814 936.446.2000 the operational needs of the business including product development, production, contracting with third party manufacturers, payment of account payables, collection of account receivables and, bookkeeping. She was responsible for sales in the Western United States and Midwest. I served as Manager of Eco Bedroom Solutions with a focus on strategic planning because of my forty years of industry experience. 1 also would be responsible for sales in the Eastern United States and Canada where I also sold other categories of bedding products for various companies. I also used my SD contacts in the bedding industry to access prospects and sales opportunities at the two annual Las Vegas furniture markets. co 3. Initially, Ms. Alvis and I each agreed to personally contribute $10,000 towards the © i capitalization of Eco Bedroom Solutions for our respective 50% shares in the compnay. I sent my oO ll $10,000.00 contribution to her on July 14, 2013 to deposit in a new Eco Bedroom Solutions’ Bank 12 of America account opened by her in California. Although I made my initial contribution, I have 13 learned that Ms. Alvis failed to make her initial contribution. In or about April 14, 2014, Ms. Alvis 14 and I agreed to contribute an additional $5,000 each towards the capitalization of Eco Bedroom 15 Solutions. I made my $5,000 additional contribution toward the further capitalization of Eco 16 Bedroom Solutions but, as I learned later, as before, Ms. Alvis failed to make any contribution of 17 funds. On November 14, 2014, Ms. Alvis requested that we make an additional contribution of 18 $10,000 each because of cash flow needs and the need to cover expenses. I made a third 19 contribution to capital at that time. Ms. Alvis failed to make her supplemental contribution again. 20 On March 2, 2015, Imade a fourth contribution to cover expenses in the amount of $10,000 with 21 the understanding that Ms. Alvis would also make a fourth contribution to the Eco Bedroom 22 Solutions capital funds. She did not make the fourth contribution that was agreed although she told 23 me that she had made that contribution. Copies of checks evidencing capital contributions by 24 Andrew Freedman are attached here as Exhibit |. 25 A. Since Ms. Alvis’ job responsibilities consisted of overseeing and managing the 26 operational needs of the business, including, but not limited to product development and 27 production, she held primary responsibility for communicating and contracting with suppliers and 28 manufacturers of the products which Eco Bedroom Solutions marketed for sale. One of the critical ECO PERKINS ASBILL. Bedroom Solutions,LLC v.Alvis, 2. 300 Capitol Mall Suite 1809 ‘Sacrament, CA 95814 Decl. of Andrew Freedman in Support 916.446.2000 of Application for Default relationships for Eco Bedroom Solutions was its relationship with its contract manufacturer, Natural Latex Company, whose plant is based in Thousand Oaks, California. | 5. Eco Bedroom Solutions contracted with the Natural Latex Company (herein after YS “NLC”) to manufacture organic latex and natural mattresses to be sold by Eco Bedroom Solutions. F&F About 15 months after the inception of the manufacturing relationship with NLC, Eco Bedroom wa Solutions started to receive periodic complaints from itscustomers regarding delayed shipments SN and other problems with the delivery of orders fulfilled by Eco Bedroom Solutions. Ms. Alvis ms blamed production problems on NLC, stating that the problems caused in fulfilling orders was due Oo to either NLC not having raw materials or, NLC having manufacturing or management issues. She wo 1 also claimed to me that she was working with NLC’s key personnel to correct the fulfillment issues. Co MW These purported manufacturer delay issues continued for two years as Eco Bedroom Solutions 12 started to obtain a foothold in the marketplace for natural beds and eco-friendly bedding products. 13 Since switching manufacturers would be too difficult and delay production further despite the 14 purported problems with NLC’s production, Eco Bedroom Solutions did not shift contract 15 manufacturers. Solutions in North 16 6. On or about October 17, 2017, I visited a client of Eco Bedroom 17 Carolina. During this meeting, the client complained about poor service and a lack of information production errors Ms. 18 from Ms. Alvis. I initially attributed the customer’s dissatisfaction to the 19 Alvis claimed existed at NLC but sought out a further explanation from Ms, Alvis about her lack of to my concerns and I decided 20 responsiveness to the customer. Ms. Alvis was delayed inresponding 21 L had to find out from NLC directly what were the problems in providing product to my North 22 Carolina customer. 23 7. When I personally contacted NLC, Michael Hughes, NLC’s president, told me that was on credit hold. 24 NLC did not have production problems but, rather, that Eco Bedroom Solutions 25 According to Michael Hughes, Ms. Alvis had built up a payable due NLC in excess of $75,000. 26 Apparently, Ms. Alvis had not made any payment on the NLC account since July of 2017. After 27 learning of these disturbing revelations, I again reached out to Ms. Alvis who initially did not return 28 my calls, However, I did reach her on October 20, 2017, at which time Ms. Alvis evaded answering PERKINS ASBILLECO Bedroom Solutions,LLC y.Alvis, 3. 300 Capitol Mall, Sulte 1809 Sacramento, CA 95814 Decl. of Andrew Freedman in Support 9164462000 of Application for Default my specific inquiries but promised to get me information regarding the company’s finances. On October 22, 2017, she emailed me indicating that “A series of inactions and lack of focus has created a financial mess. EBS in financial disarray”. A copy of the October 22, 2017 email from Brandy Alvis is attached here as Exhibit 2 (the “October 22 email”). 8. In the October 22 email, Ms. Alvis informed me that Eco Bedroom Solutions owed approximately $36,000 on the company credit card and, she believes “only” owed NLC $43,000. “sDN Ms, Alvis further promised to reconcile the Eco Bedroom Solutions’ financial records and promised to get our corporate lawyer, Robert Adler, records as well. oOo 8. As a result of the October 20, 2017 call and the revelations of a “financial mess”, I made Oo i a concerted effort to obtain access to Eco Bedroom Solutions’ complete banking and credit card i account information. After obtaining access to the banking and credit card records, I discovered 12 that Eco Bedroom Solutions’ bank balance was approximately $1,726.00 and that Eco Bedroom in interest-accumulating credit card debt, A copy of 13 Solutions was carrying approximately $36,000 14 the Bank of America bank account records for October 2017 isattached hereto as Exhibit 3 and a statement for October 27, 2017 is attached here as Exhibit 15 copy of the Bank of America credit card 16 4. 7 9, Faced with mounting credit card debt for which both Ms. Alvis and I were ultimately 2017, I made the firstof several personal loans to Eco Bedroom 18 liable, on or about November 2, 19 Solutions to pay the credit card balance in full and other vital expenses of Eco Bedroom Solutions California franchise taxes, the hiring of certified public 20 including the payment of delinquent of Eco Bedroom Solutions and the payment of 21 accountants to investigate the financial situation took part in the company’s internal review of the 22 legal fees owed our corporate lawyer who 23 “financial mess” as Ms. Alvis defined it. Although Ms. Alvis promised to pay her portion of the 24 credit card balance, she failed to follow through on her promise and made no contribution to the 25 credit card debt balance at any time. 26 Copies of the records reflecting the loans by Andrew Freedman of funds to Eco Bedroom Solutions 27 for payment of the Bank of America credit card of Eco Bedroom Solutions and for the costs of the affairs of Eco Bedroom Solution are attached as Exhibits 5 28 internal investigation of the financial PERKINS ASBILI. ECO Bedroom Solutions,LLC v.Alvis, 4, 300 Capitol Mall, Suite 180) Sacramenta, CA 95814 Deel. of Andrew Freedman in Support 916.446.1000) of Application for Default and 6, respectively. 10, Based on the Eco Bedroom Solutions’ banking records, the internal investigation revealed evidence that Ms. Alvis had not invested her capital contributions and had diverted certain of Eco Bedroom Solutions’ collected account receivables for her personal benefit. Further, it a appears from the 2017 bank records that Ms. Alvis used Eco Bedroom Solutions’ funds to pay WN certain of her personal expenses that Eco Bedroom Solutions was never obligated to pay and she DBD had allowed the credit card debt to grow with interest on unpaid bills. ~~ Jt is irrefutable that in 2017 alone, at minimum, Ms. Alvis used Eco Bedroom Solutions’ funds in the amount of $82,493.67 representing cash withdrawals ($ 9,391.70) and such personal 10 expenses as her plants and shrubbery expenses, home utility expenses, oil changes, personal auto i insurance bills, restaurant and supermarket bills, multiple payments to her sons, Charlie Espinoza 12 ($1,200) and Oscar Espinoza ($1,310.00), her HULU and Netflix streaming TV bills and Itunes 13 charges, Earth Essential products, HimalayanSaltCart.com products, Jenn Scalia Personal Coach 14 fees, personal travel expenses and, perhaps ironically, her monthly Experian personal credit profile 15 monitoring fee. A true and correct copy of the 2017 Bank of America bank account records for Eco 16 Bedroom Solutions (as yellow highlighted by me) are attached hereto as Exhibit 7. 17 Tn addition to diverting funds for payment of personal expenses, Ms. Alvis diverted funds to 18 another Bank of America account (ending in 9813) that she set up for Ait Group Inc., a separate 19 etitity she set up for her personal benefit. A review of those Ait Group Inc. bank records indicate 20 that she diverted $12,670.00 in 2017 into the Ait Group Inc account that she controlled. Ait Group, 21 Inc. was a California Domestic Corporation filed on January 27, 2016. Upon information and 22 belief, the Registered Agent on file for this company is Brandy Alvis and is located at 218 23 Washington Street, Ste. D, Auburn, CA 95603 which is also the location of a natural products 24 lifestyle store that was owned and operated by Brandy Alvis. Copies of the record of the diversion 25 of funds to AIT Group Inc are attached hereto as Exhibit 8 as highlighted in yellow. 26 27 12. Ms. Alvis’ continued misrepresentations concerning the state of the Eco Bedroom 28 Solutions business, itspurported supply issues and financial shortfalls, were relied upon by Eco PERKINS ASBILLECO Bedroom Solutions,LLC v.Alvis, 5. 300 Capito) Mal, Suite 1809 Decl. Sacramenta, CA. 95814of Andrew Freedman in Support 916.446.2000 of Application for Default Bedroom Solutions to its detriment. Specifically, Eco Bedroom Solutions would not have continued to operate at a loss and incur additional debt but for the continued and deliberate obfuscation and misrepresentations of the state of Eco Bedroom Solutions’ affairs by Ms. Alvis. Ms. Alvis malfeasance resulted in multiple late fee and insufficient funds charges ( the “Bank charges”) against Eco Bedroom Solutions’ bank account. The Bank charges are evidenced in Exhibit 7 and AW are highlighted in yellow along with the wrongful disbursements made by Ms. Alvis . DH 13. As a result of the actions of Ms. Alvis, Plaintiff Eco Bedroom Solutions has aI sustained the following damages: a) $35,000 in unpaid and owed capital contributions to Eco Bedroom Solutions; b) $36,751.13 in debt incurred to pay Eco Bedroom Solutions unpaid credit card expenses; 10 of misappropriated Eco Bedroom Solutions funds for Ms. Alvis’ wrongful ii c) $82,493.67 12 personal benefit; as a result of Ms, Alvis’ diversion of Eco Bedroom Solutions to Ait Group Inc, 13 d) $12,670.00 $6,038.50 in Bank of America charges for overdrafts and insufficient fund charges incurred 14 15 and, $33,317.04 in corporate expenses incurred as a result of Ms. Alvis breach of fiduciary duty 16 relating to the internal investigation of Eco Bedroom Solution’s financial affairs. 17 18 In total, Eco Bedroom Solutions, LLC isowed at minimum, $206,270.34 from Ms. Alvis. 19 20 In addition, Eco Bedroom Solutions LLC seeks legal fees incurred by Eco Bedroom 21 Solutions with respect to this derivative legal action against Ms. Alvis. 22 23 24 25 26 27 28 PERKINS ASHILLECO Bedroom Solutions,LLC v.Alvis, 6. 300 Capitol Mal, Suite £803 ‘Sacramento, CA 958M Decl. of Andrew Freedman in Support 936.446.2000, of Application for Default N BW I declare under penalty of perjury under the laws of the State of California that the foregoing is true ID & and correct; that I have personal knowledge of the same, and ifcalled as a witness, I can competently uw testify thereto. This Declaration was executed this th day of 2020, at Holden, Massachusetts. eo Respectfully submitted, 10 lt Andrew R. Freedman 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ECO PERKINS ASDILL, Bedroom Solutions,LLC v.Alvis, 7, 300 Capitol Mall, Suite 180 Decl. of Andrew Freedman in Support ‘Sacrament, CA 95814 916.446.2000 of Application for Default 1 2 3 4 under the laws of the State of California that the foregoing is true 5 I declare under penalty of perjury knowledge of the same, and ifcalled as a witness, Ican coropetently 6 and correct; that I have personal 7 testify thereto. 8 this lth day ofl 2020, at Holden, Massachusetts. This Declaration was executed 9 Respectfully submitted, 10 11 Andrew R. Freedman. 12 13 14 15 16 17 18 19 20 a4 22 23 24 25 26 27 28 Bedroom Solutions, LLC Alvis, vy. 7. ECO PrRKINS ASBILI, Andrew 300 Capitol Mal, Suize 1800 ‘Sacramento,CA 95814 Decl. of Freedman in Support ‘916.448 2009 of Application forDefault Exhibit | i GRANBROOK FINANCE, LLG 1023 1H CRA BAGOK DANE soy PODER A O15 we wwouONd! GDNGB"S CU lh NIMLIM HOS ansS eesata ERE, sDPAY 0 beats Sle LL. 7 $h ao? LOGO OL GBKWN Been Pus Pasatad. eS ae INNOSS¥ UINWA ANOS SAVE Gas Ration Bat VN a rat #0 0a. i 2 Ash Tae POOLE MOLIGTAGE (OOOOETAT Check:1023 Amount;$16,000.00Date:7/26/2013 Check:1023 Amount:$10,000.00Date:7/26/2013 | Run:9010000, Batch: 99999,Seq: 867,Source: ECS Conversion W Account100008R471016000,Batch: 99999,Seq: 867,Source;ECSConversionW SUMO EE UL RIDanELD ge UD AL DOOD RIFT REIS Ad CRANBROOK FRANCELLG 1029 MOREOK br | sun PODER ROL se GOS Se Godan ohn s mane +> ith | Phe bac Fr tas As &y~oO Cc sca_Zh hy Myler ’ Troo102d"ROBOTS LoDo Z4IWe ated bitter RA Check:1029 Amount:$10,000.00Date:4/7/2015 Check:1029Amount: $10,000.00Date: 4/7/2015 Run: 4,Batch: 28,Seq: 100,Source: Check21 ImportAccount1000023471 Run:1,Batch:28,Seq:100,Source:Check21 Import Printed 8/31/2018 UnitedBank Glastonbury CT -Page Loft Bo Se TRAY REEDSCODAANDEANHRNDALEID SANDRA ULATTERIA see RL RED OFS GAWBROOKNANCE, Lic | 10253 VICAR DAE Bron COD FAO act : Z , on TN OL AVE HOOuRIT BOE ees FAY Bice £0 Ra WeerSe rh $ S02 OO7S 1 BL ’ SANS z. ROE heed { ao B3GuO fue Drsvovtf. fa uasy Yom eee 2 Gysie? Semone om ie _ Asis p Back . MOOIGIS HOLLIOTEN LODO III Check:1025 Amount:$5,000.00Date:4/21/2014 Check:1025Amount: $5,000.00Date:4/21/2014 ECS Source: ConversionAccount1ONNGRR e2 Batch: B0 10000, 99999,Seq:3685, ECS Source: Conversion Run:9010000, 99999, Batch: Seq: 3685, Printed8/31/2018 UnitedBank GlastonburyCT - Page poneat ree ics iy ’ arsine) eet oneHt {t :S i 3 a“ TOG ce Pre, Glib —i $ pygor® ' i i % v2 j Kf r=, “ea Metal wuss ERY sworn eon ARO u iconrr Mi y re V4) Zarcranine on a is ons fA WODIOTE HOVMIOTE WOOGAEET iw _ wlhe rece Ponca Check:1026 Amount:$10,000.00Date:41/19/2014 Check:1026Amount: Date: $10,000.00 11/19/2014 8,Seq: 416,Source:Check21Import Check2i Source: ImportAccount1000023474 Run: 1,Batch: Run: 1, 8, Batch: Seq:410, 1 Printed8/31/2018 United Bank GlastonburyCT -Page 1 of Exhibit 2 From: BrandyAlvis To: arfree1@aol.com Ce: RobertAdier Subject: Conferencecall Date: Sunday,October22,20172:18:13PM Andy Idecided to flytoSeattleto staywith my sisterfora few days ormaybe a week. A seriesof inactionsand lackof focus hascreated afinancialmess. EBS infinancialdisarray.We owe 36k on CC and owe Mike Hughes $43k. Ipaid him 20k Friday afternoonand we have 2100$ inthe bank. I have notmade a payment tohim sinceJuly,he was correct. Idon’t even know exactlyhow much money Ergo bedsor otheraccounts owe EBS. Ihave notmonitored the orders or payableswell inmonths. We have many ordersthatare inproduction and some of thosehave been paid for... obviously, is this thebiggestproblem and needs tobe handled immediately. I’m not preparedto review today financials as I need still to digfor some more regarding details orders,payments, and profitmargin. Ineed another nighttowork on I this...brought thestatements withme inthe to flight review and reconcilein preparationofour conference callbut Jsee thatitisquitea mess and thiswillrequiremore focusand an internetconnection toreconcilewith our orderportalsystem. This isfranklythe time first inweeks thatIhave even glanced atthis. Iv been thinkingabout ourconversation Friday.I don’tthink Ican continueto be responsiblefor EBS. I will support theclean up and effort get ourhead out of water. I votethatyou continueto run as it a repforMHughes. His people can doallorder processing and payyou outa commission. I canfinishup the new website foryou and get thatlaunched sothatyou and Mike Hughes can continueto operateseamlessly.I do want tomake certainthat our dealersareprotected butafterthe dustssettlesIwillbow out.Iexpect thiswilltake 30-45 days. Iwill provideyou with allof theitems you requested.You’!] have everythingrequested inyour inbox overnight,PIL cc Robert asweil. Ican speak to you and Robert alnoon as planned butI am not preparedto go intospecificson numbers at thistime. You willletme know if youwant to speak orpostpone the call. Brandy Exhibit 3 Bankof America Ee P.O,Box15284 Customer service information Wilmington, DE 19850 4) 1,888.BUSINESS (1.888.287.4637) ‘x! bankofamerica.com ECO BEDROOM SOLUTIONS LLC Bank of America, N.A. & 13346 COMBIE RD P.O,Box 25118 AUBURN, CA 95602-8917 Tampa, FL.33622-5118 Your Business Advantage Checking for October 1, 2017 to October 31, 2017 " Account number; 3250 0756 8929 ECO BEDROOM SOLUTIONS LLC Account summary Beginning balance on October 1,2017 $2,807.24 # ofdeposits/credits: 9 Deposits and other credits 13,705.29 # ofwithdrawals/debits:97 Withdrawals and other debits -14,381.03 # ofItems-previous cycle!: 6 Checks -0.00 # ofdays incycle:31 Service fees -405,00 Average ledgerbalance:$1,368.46 Ending balance on October 31, 2017 $1,726.50 Mncludes checkspaid,depostted items&other debits Quen duff *2,GH.4 4360 Join the Bank of America® Advisory Panel. You can help How can we us learn what we're doing right and what we can do better. improve your To learn more and join, enter code SBDD at business banking? bankofamerica.com/advisorypanel today. Inclusion ontheAdvisory Panel subject to qualifications. ©2017Bankof America Corporation. SSM-06-17-0635.A1 |AR687WH3 "PULLIECYCLE:67SPEC:EDELIVERY:E TYPE: IMAGE:BC:Cag Page 1 of8 ECO'BEDROOM SOLUTIONS LLC [|Account #3250 0756 8929 | October 1,2017 toOctober31, 2017 IMPORTANT INFORMATION: BANK DEPOSIT ACCOUNTS How to Contact Us -You may callus atthe telephone number listedon the front of thisstatement. Updating your contact information- We encourage you to keep your contact information up-to-date. This includes address, email and phone number. Ifyour information has changed, the easiest way to update itis by visitingthe Help & Support tab of Online Banking. 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