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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
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Facsimile: 916.447.6400
SP
Attorneys for Plaintiff,
ECO BEDROOM SOLUTIONS, LLC
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BDA
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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IN AND FOR THE COUNTY OF PLACER
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ECO BEDROOM SOLUTIONS, LLC, Case No. S-CV-004323 1
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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
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et
TIME: 8:30 a.m.
DEPT.: 32
ON
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I, ANDREW R. FREEDMAN, hereby declare:
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1. I, Andrew R. Freedman, make this declaration based upon my own personal knowledge
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and if called upon to testify as a witness, Icould and would competently testify thereto.
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2. In approximately February, 2013, I,along with defendant, Brandy Alvis (“Ms. Alvis”),
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filed the necessary paperwork with the California Secretary of State to form Eco Bedroom
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Solutions, LLC, a California Limited Liability Company (“Eco Bedroom Solutions”). Eco
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Bedroom Solutions was formed to design and contract for the manufacturing and marketing of
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ecologically and environmentally friendly mattresses and bedroom products. Ms. Alvis would
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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
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contacts in the bedding industry to access prospects and sales opportunities at the two annual Las
Vegas furniture markets.
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3. Initially, Ms. Alvis and I each agreed to personally contribute $10,000 towards the
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i capitalization of Eco Bedroom Solutions for our respective 50% shares in the compnay. I sent my
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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.
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5. Eco Bedroom Solutions contracted with the Natural Latex Company (herein after
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“NLC”) to manufacture organic latex and natural mattresses to be sold by Eco Bedroom Solutions.
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About 15 months after the inception of the manufacturing relationship with NLC, Eco Bedroom
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Solutions started to receive periodic complaints from itscustomers regarding delayed shipments
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and other problems with the delivery of orders fulfilled by Eco Bedroom Solutions. Ms. Alvis
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blamed production problems on NLC, stating that the problems caused in fulfilling orders was due
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to either NLC not having raw materials or, NLC having manufacturing or management issues. She
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1 also claimed to me that she was working with NLC’s key personnel to correct the fulfillment issues.
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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.
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Ms, Alvis further promised to reconcile the Eco Bedroom Solutions’ financial records and
promised to get our corporate lawyer, Robert Adler, records as well.
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8. As a result of the October 20, 2017 call and the revelations of a “financial mess”, I made
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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
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appears from the 2017 bank records that Ms. Alvis used Eco Bedroom Solutions’ funds to pay
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certain of her personal expenses that Eco Bedroom Solutions was never obligated to pay and she
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had allowed the credit card debt to grow with interest on unpaid bills.
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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.
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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
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are highlighted in yellow along with the wrongful disbursements made by Ms. Alvis .
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13. As a result of the actions of Ms. Alvis, Plaintiff Eco Bedroom Solutions has
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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.
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In total, Eco Bedroom Solutions, LLC isowed at minimum, $206,270.34 from Ms. Alvis.
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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.
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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
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testify thereto.
This Declaration was executed this th day of 2020, at Holden, Massachusetts.
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Respectfully submitted,
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lt Andrew R. Freedman
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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
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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,
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Andrew R. Freedman.
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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
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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
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ECO'BEDROOM SOLUTIONS LLC [|Account #3250 0756 8929 | October 1,2017 toOctober31, 2017
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