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Cause No. 2012-75663
PATRICK O. DEVANEY, II and IN THE DISTRICT COURT OF
TRIDENT VENTURES, INC,
Plaintiffs,
VS. HARRIS COUNTY, TEXAS
QUANTA SERVICES, INC.; QUANTA
GOVERNMENT SOLUTIONS, INC.;
QUANTA GOVERNMENT SERVICES
INC.; QUANTA INTERNATIONAL JUDICIAL DISTRICT
LIMITED; and JOHN R. COLSON,
Defendants.
PLAINTIFFS’ SECOND AMENDED PETITION
TO THE HONORABLE COURT:
Plaintiffs, Patrick O. Devaney, II and Trident Ventures, Inc., file this Second Amended.
Petition complaining of Defendants Quanta Services, Inc., Quanta Govemment Solutions, Inc.
(“
”), Quanta Govemment Services, Inc., Quanta Intemational Limited (“QIL”) and John R.
Colson (“Colson’ (collectively “Quanta” and/or “Defendants ), and for cause would show:
DISCOVERY CONTROL PLAN
Pursuant to Rule 190 of the Texas Rules of Civil Procedure, discovery is intended
to be conducted
under Level 3.
OVERVIEW
This matter is encapsulated
by a single phrase - “My word
is my bo! ” Devaney
applied this principal to his business dealings; Quanta did not. Plaintiff Patrick Devaney built his
entire life around honoring his word and was led to believe that Colson and Quanta would do the
same. Instead Colson and Quanta’s words, actions, inactions, and representations were used to
1
break and sever the bond that was created between Devaney and Quanta from 2003 2011.
Quanta encouraged action by Devaney only to later take the fruits of his work and capital, all
whileignor ingthe foundation of any new relationship trust, confidence —_ and loyalty.
Prior to rescuing Quanta in 2003, Devaney served as commanding officer and executive
for various SEAL Teams and U.S. Special Operation groups. During that time, he was entrusted
to coordinate, implement and execute large scale, sensitive global special operation projects.
Devaney dedicated most of his life to protecting our national security zealously while also
liberating sovereign people from unscrupulous regimes and rebuilding tom citizens and tom
economies.
Devaney
was enticed to merge his intemational and govemment platform
with the private
infrastructure resources of Quanta Services. Devaney breathed
new life into Quanta
and Colson
through companies Devaney was told were his Quanta Govemment Solutions and Quanta
Intemational. In retum Quanta and Colson engaged in parasitic actions and preyed upon
Devaney’ s personal and ethical business code. At some point after Devaney shook Colson’s hand.
and committed to Quanta, Colson and his cohorts began to dishonor their words and promises to
Devaney
and failed to inform him of their change of heart
This case concems greed and self promotion of the highest order through the
intentional, reckless and unlawfu actions and inactions of the executives of Quanta Services,
Inc. cut Plaintiff Patrick Devaney out of his rightful share and compensation of the
substantial revenue and value that he brought to the Quanta companies and shareholders,
including the CEO and Chairman John Colson. Since going public in 1998, Quanta specialized
in infrastructure construction, upgrade and maintenance services in the electric power and
References herein to Mr. Devaney include his company, Trident Ventures, Inc.
telecommunications industries. But in approximately 2003, with its focus thus far limited to
North America, Quanta decided it wanted to expand into the intemational arena where nation
rebuilding projects offered opportunities for lucrative contracts and subcontracts with foreign
govemments, the United States govemment, and large general contractors. Devaney had what
Quanta needed to lead in this new direction. He is a decorated former Navy SEAL and Special
Operations commander
with a strong financial and management background and an established.
residence
in the Middle East, together with U.S. govemment
and Middle East contacts whose
trust he had eamed from years of service. Defendant Colson enticed Devaney
to join forces with
Quanta in 2004, with the representation, and/or future representations, that Devaney would
organize
and lead = anta’s new govemment
and intemational services companies that Quanta
had the ability and desire to engage in large intemational contracts
that would be Devaney’s
focus, and that Devaney would receive the benefits
that go with such a position.
Devaney trusted
Colson and Quanta to honor their actions and words.
Devaney accepted the mission, ceased operations and plans his own company
Trident Ventures, Inc. which also had a govemment and intemational focus at Defendants’
request, and spent the next seven years of his life creating, marketing and operating Quanta’s
intemational and govemment based business primarily through Quanta Govemment Solutions
and Quanta Intemational Limited QIL . Through Devaney’s efforts, GS, QIL an
affiliated entities generated or assisted in generating dozens of millions of dollars in revenues for
themselves or other Quanta entities, with hundreds of millions of dollars of additional venture
opportunities brought to bearby Devaney prior
to his termination in 2012
Devaney was awarded The Presidential Unit Citation with Bronze Star (twice), the Bronze Star, the Joint Se rvice
Commendation with Oak Leaf, and the Navy and Marine Corp Commendation with Bronze Star for his
extraordinary commitment
and service to this Country.
There was one problem. Despite being formally held out as the President of QGS
and QIL to U.S and foreign govemment officials and private contractors the Quanta Defendants
never actually provided Devaney the position and benefi that they represented
he would have
Devaney was left with obtaining payment for his services and those of his employee in Kuwait as
per diem consultant. In early 2012, after using Devaney for all they could, Colson’s crony
told Devaney that he was no longer needed, terminated Quanta’ s relationship
with him, and took
over control of the companies from him. None of this would have happened
to Devaney had the
Quanta Defendants, including Colson, made good on their representations to not merely use
Devaney
as their de facto president and hold him out as such to the govemment and intemational
community for their selfish business purposes, but to actually compensate him for his role as a
founderand risk taker in their ventures.
Devaney sues for the wrongful conduct that the Defendants have perpetrated on
him, and for the damages resulting from that conduct including but not limited to lost
compensation
and other benefits, as well as for the damages that this conduct has caused to
Devaney’s career and Trident’ sbusiness.
PARTIES
Plaintiff Patrick O. Devaney, II is an individual residing in Califomia.
Plaintiff Trident Ventures, Inc. is a Nevada company operated by Patrick
Devaney.
John Colson is a resident of Haris County, Texas and he has appeared and
answered
in this case
Quanta Services Inc. is a publicly traded Delaware orporation PWR on the
NYSE) headquartered in Harris County, Texas at 2800 Post Oak Blvd., Suite 2600, Houston,
Texas 77056, andit has appeared
and answered in this case
Quanta Govemment Services Inc. is a Delaware orporation headquartered in
Harris County, Texas at 2800 Post Oak Blvd., Suite 2600, Houston, Texas 77056, and it has
appeared
and answered in this case
Quanta Govemment Solutions Inc. is currently d/b/a Quanta Services Inc.
Delaware orporation headquartered in Haris County, Texas at 2800 Post Oak Blvd., Suite
2600, Houston, Texas 77056, and it has appeared and answered in this case
Quanta Intemational Limited is currently d/b/a Quanta Services Inc. as part of
their Philippines Division, is British Virgin Islands entity headquartered in Haris County,
Texas at 2800 Post Oak Blvd., Suite 2600, Houston, Texas 77056, and it has appeared and
answered
in this case
JURISDICTION AND VENUE
Venue is proper in Harris County, Texas, pursuant
to § 15.001 et seq., IV
RAC ODE, because the Quanta Defendants are located in Harris County and all ora
substantial part of the events made the subject of this suit occurred in Harris County, Texas.
FACTS
This case concems the concerted conduct of the Quanta Defendants to cut
Plaintiff Patrick Devaney, acting individually and through his company Trident Ventures, Inc.
(collectively Devaney , out of a rightful share of the substantial revenue and value that
Devaney brought to the Quanta companies and shareholders, including the CEO and Chairman
of Quanta, John Colson.
Leading up to the creation of Quanta in November 1997, Colson was president
and the majority owner of Par Electric . At the time Colson sold Par Electrical to form Quanta
and take
it public, Par had approximately
$80 million in annual sales
and a small profit margin.
Colson personally retained approximately 2.1 million shares of Quanta’s stock in the transaction
that effectively transferred his personal financial interest from Par to Quanta. Along the way,
Quanta acquired numerous local electrical and telecom contractor companies and entered into
two strategic investment partnerships, one with Enron and a second with Utilicorp/Aquila which
was Par/Colson’s long time customer. In the ensuing years, Enron went bankrupt and Utilicorp
purchased Enron’s shares of Quanta in a private transaction making Utilicorp the largest single
shareholder in Quanta.
As Quanta’s largest shareholder, Utilicorp became dissatisfied with Quanta’s
performanceStarting in approximately 2001, Utilicorp announced its intention to take over the
management
of Quanta. In response, Quanta’s Board adopted poison pill tactic that would
result
in any change in management control makingany takeover more expensive
to Utilicorp.
After staving off Utilicorp’s takeover bid Quanta’s stock value plummeted in
2002. Quanta’s stock value and low profitability put the company in jeopardy. Quanta lost its
auditor, Arthur Anderson, to bankruptcy. The new auditor, Price Waterhouse Coopers made
Quanta write off hundreds of millions of dollars of goodwill (meaning Quanta had overpaid for
the North American companies) and had difficulties with Quanta’s prior financial statement
Quanta’s value had dropped from over $4 hillion to about $220 million The company
effectively lost its lifeline to new cost effectivefinancing
that it needed to sustain operations, and
its cash position dwindled to dangerously low levels. The value of executive stock plans in
Quanta had dropped dramatically
as well.
In approximately 2003, Quanta made the strategic decision to expand its labor
intensive business _ which focused on infrastructure construction, upgrade and maintenance
services in the electric power and telecommunications industries into more profitable work
involving U.S. govemment contacts and infrastructure building (or re building) projects in the
Middle East among other places. This decision was made following the initial thrust of the post
Traq invasion when the U__ also was getting involved in plans to rebuild infrastructure in Iraq
and other countries in the region as well as Africa, which would involve significant goverment
ontract work. Quanta saw this as _ potentially new and lucrative opportunity, but also knew
that Quanta needed an outsider who had the credibility to give Defendants access to these
commercial opportunities (which in tum would appease concems among the Board of Directors
about Quanta’s dwindling domestic business. So by the fourth quarter of 2003 Defendants
formed a new entity, Quanta Govemment Solutions ( , Which would later become one of
the govemment and intemational services vehicle at Devaney organized
and operated to the
benefit of most all the Quanta companies
However, prior to Devaney’s collaboration with Quanta, from November 2003 to
April 2004, Quanta incurred approximately $1.5 million in losses associated with unsuccessful
govemment contract bidding. Quanta’s entire approach to U.S. govemment contracting,
particularly offshore, was ineffective and overly costly. This prompted Colson to ask Oliver
North to recommend an individual capable of procuring and delivering the contracts Defendants
so badly wanted. Oliver North was a guest speaker at Quanta’s annual gathering
of its senior
Management
and presidents of the 8 companies
it owned. North consulted
about this request
with Duane Claridge, who was the founding director of the CIA’s Countertenorist Center, and
also General Wayne Downing, the former head of U Special Operations. Following that,
Patrick Devaney was recommended as the man who could lead Quanta in their ovemment and
ntemational contract endeavors.
Acting on that recommendation, Defendant Colson and Quanta enticed Devaney
to join forces with Quanta in 2004 Devaney
had a skill set that Quanta needed for its new
govemment and intemational focus was a decorated
Navy SEAL and special oper tions
commander
with a strong financial and management background and an established residence in
the Middle East, together with U.S. govemment and Middle East contacts whose trust he had
eamed from years of service. Beginning
in early 2004, Devaney dedicated
the next 7 years of
his life organizing and developing Quanta’s intemational and govemment based. business,
including through two of Quanta’s newest companies Quanta Goverment Solutions (and
Services, Inc.) and Quanta Intemational Limited. In retum, the parent company,
Quanta
Services, Inc., and Colson, as the CEO, represented
to Devaney that he would be the president of
and lead and organize the goverment and intemational businesses of Quanta, which would
operate separately, that Quanta had the capacity, financial wherewithal and willingness
to engage
in large intemational contracts with all they encompassed, and that Devaney would receive the
enefits that go with such a venture These types of representations, and similar ones, were
reiterated to Devaneycontinuously during his association with Quanta at least until
Consistent with these material representations at Defendants’ request, Devaney
ceased operation of his own company, Trident Ventures, which had been organized for its own
intemational and govemment business focus. Beginning in 2004, Devaney oversaw the
organizationand operations of Quanta’ s govemment and intemationa| services entities. Devaney
hired employees and drafted policies for these new companies. Devaney maintained his existing
residence in Kuwait to take advantage of business opportunities for Quanta, and that address
was
used as the business addresses of the Quanta govemment solutions and intemational services
entities
as well. Quanta issued business cards to Devaney that identified him as President of
Quanta Govemment Solutions and Quanta Intemational, Ltd., and Devaney was regularly held
out as such to U.S and foreign govemment officials. Devaney attended and made presentations
at Presidents’ meetings with Colson and the heads of other Quanta companies, and also
to the
Quanta Board of Directors. Organizational charts identified Devaney as the President of Quanta
Govemment Solutions, and Devaney reported directly to John Colson as the Chairman and CEO
of the parent company, Quanta Services, Inc. ( PWR the NY SE).
Colson was a founder of Quanta Services and, by 2004, had become
the face and
disputed leader of the company. Devaney developed a close business and personal
relationship with Colson. They traveled to various parts of the world and made marketing
presentations together. Colson openly acknowledged and introduced Devaney as the President
of Quanta Govemment Solutions and Quanta Intemational. With that title, Devaney opened
doors for Colson and the Quanta Services brand and technology/know how to U.S. govemment
and foreign leaders and dignitaries. Colson held Devaney out as a incipal in third party
negotiations and presentations abroad. Devaney shared his business plans and strategies with
Colson and others in senior management at Quanta, as well as to the Board of Directors. Among
other things, Colson knew that Devaney had taken many of the plans and strategies that he had.
for Trident Ventures and redirected
them, and his own energies, skills and talents,
to the
development of Quanta Govemment Solutions and Quanta Intemational. Because Devaney was
now operating through Quanta, rather than through his own company Trident, he spent 2004 and
the years after focusing on procurement of govemment and foreign contracts that the Quanta
Defendants claimed they had the willingness and financial wherewithal to handle as opposed
to
he broader range of projects that Devaney had planned
to execute through his company Trident
Through all of this, Colson continued to promote Devaney as the President
and leader of Quanta
Govemment Solutions and Quanta Intemational intemally to Quant , including its Board of
Directors, and extemally to Devaney’ s contacts and clientsIn short, Colson, using his influence
and power as the CEO/Chairman of Quanta Services and his ability to deliver on the
representations made (which he continued to make and reinforce) to Devaney, fostered and
encouraged the confidential relationship and/or joint business venture that developed and
continued between Devaney, Colson and the other Quanta Defendants through the years. In
retum and in trust and reliance on the representations made by the Quanta Defendants, Devaney
gave up opportunities that he could have pursued individually and/or through Trident, and
continued on his mission to promote and benefit Quanta through Quanta Govemment Solutions
and Quanta Intemational. All of this inured to the benefit of Colson and other senior executives
of Quanta and its affiliates.
There was one problem. Quanta never followed through on much of the high
margin business that Quanta claimed it wanted. The prospective
contracts and ventures that
Devaney originated totaled hundreds of millions of dollars which, if closed, would likely have
subjected aspects of Quanta’s business practices to the violation of loan covenantsPerhaps to
avoid that scrutiny or for other reasons never explained to Devaney, Quanta jettisoned some of
the largest and most public opportunities that it had enlisted Devaney to procure both at home
and abroad. Quanta concealed from Devaney its need to keep secret certain aspects of its
business practicesor debt structure , without regard for Devaney or his business relationships.
Devaney, along with other members of the QGS team, prepared a detailed
business plan that reflected prior representations and which served as the basis for future
representations
as well. The plan included details such as a six month start up period, the two
year ramp
up period, contemplated
two years of backlog including
$40 million in small jobs
and $200 million in big jobs, and a cumulative revenue of approximately $100 million at the
end of year two. The plan included further specifics, such as the fact that members of the profit
sharing plan would own shares in the event that Quanta Services ‘spun off’ either OpCo to a
third party and an adjusted profit sharing based on Quanta Services’ profit less capital
cost.
Devaney fully performed his terms of the Equity Agreement.
Consistent with the representations and commitments that were made to him by
the Defendants, which tumed out to be false, Devaney produced on his end of the bargain
Devaney generated govemment and intemational contracts and business opportunities for the
Quanta companies that totaled dozens of millions of dollars in actual business, with the potential
for more. Examples of some of the successes and opportunities that Devaney by his efforts
through the years was instrumental in bringing about, or assisted
in bringing about, for the
Quanta Defendants include:
Obtained hundred of work visas on short notice to import Canadian union
linemen for restoration work following Hurricane Katrina in 2005, and other
similar projects since then;
U.S. govemment subcontract for U.S. Air Force global indefinite delivery
indefinite quantity Heavy Engineering Repairing Construction ( HERC
Energy services contract performed in Chad, Africa with Kellogg Brown &
Root and Exxon Mobil;
Consulting contract for smart grid in Karachi, Pakistan;
Energized upgrade contract with City Power in South Africa, in advance
of the
2010 Word Cup;
Joint venturewith Edison Power Group in South Africa and pan Africa;
Secured compartmented information facility contract as subcontractorto
Alutiiq;
Subcontracting and small business compliance on PG&E contracts with Quanta
subsidiaries;
Joint venture betweeUnderground onstruction (a Quanta company) and.
Nova Group involving upgrading the Navy Fuel Supply System at Point Loma,
with U.S. Navy as client;
Underground onstruction ( a Quanta company) project to upgrade Andrews
ir orce ase fuel system;
and
Provided estimates and/or secured contract commitments for large projects in
Kuwait, India, Saudi Arabia, and Iraq.
The revenue to Quanta and its shareholders from the projects that went forward exceed $100
million(not
to mention the projects that Quanta nixed)
Devaney spent years successfully executing the mission that brought him to
Quanta, all the while being touted by Quanta as the President of Quanta’s Intemational and
Quanta Govemment Services even though it was ultimately based on the empty representations
of Colson and others to compensate him in the same way as they held him out extemally as the
head of the intemational and govemment based businesses that Devaney had come to define. In
early 2012, after using Devaney for all they could including diverting profitable business
opportunities from Plaintiffs, and with the Quanta goverment and intemational services
companies poised for further successes, Colson’s crony told Devaney that he was no longer
needed, terminated Quanta’ s relationship with him, and took over control of the companies from
him
Devaney sues for the fraud and other wrongful conduct that the Defendants
have
perpetrated
on him (as well as on Trident Ventures, Inc.), and for the damages resulting from that
conduct including the damages that this conduct has caused to Devaney’s career
and Trident’
busi
DISCOVERY RULE
Plaintiffs did not know or have reason to know, in the exercise of reasonable
diligence, of Defendants’ wrongful acts or omissions herein described until a date within two
years of the filing of this lawsuit Moreover, Defendants’ deceptive and misleading
communications
to Plaintiffs, as well as their silence
when they had
a duty to speak, amountedto
a fraudulent concealment of their earlier wrongful acts or omissions, and prevented Plaintiffs
from knowing or having reason to know, in the exercise of reasonable diligence, of Defendants’
wrongful acts or omissions which proximately caused damages to PlaintiffsPlaintiffs plead the
Discovery Rule as an exception to any claim of limitations by Defendants.
CONDITIONS PRECEDENT
All conditions precedent to Plaintiffs’ claims and damages, or other relief
requestedhave been performed or have occurred.
CAUSES OF ACTION AND REQUESTS FOR RELIEF
AUD, FRAUD IN THE INDUCEMENTPROMISSORY ESTOPPEL,
PROMISSORY FRAUD
All preceding allegations are incorporated herein by reference. Any references
to
Devaney
in these causes of action and damages
pleaded will include Trident.
Defendants’ conduct as described above constitutes fraud, fraud in the
inducement and/or promissory fraud (collectively called fraud ). In this regard, Defendants
represented to Devaney that in retum for him dedicating his efforts to organize, lead, develop
and grow the = anta govemmment and intemational services companies, which he did, Devaney
would be the head of those companies and would receive the compensation and other benefits,
interests and rights that go with such a position. Defendants acted and continued to make these
and similar statements, both to Devaney and others, in conformity with these types of
representations. Defendants made these representations and similar ones on an ongoing basis
(including that they would have the willingness and ability to handle large foreign contracts)
knowing that they were false and material, or reckless, and intending that they would be relied
upon by Devaney
to his detriment, which they were. If these representations
were not knowingly
false when made and/or reaffirmed hen they were made recklessly, as a positive assertion, and
without knowledge of their truth. Moreover, Defendants concealed this fraudulent conduct from
Devaney, and/or misled Devaney as to the true state of facts, when they were under a duty to
disclosethe truth.
Defendants’ motive for this conduct is obvious. For every dollar that they can
avoid paying Devaney, Defendants or their affiliates and officers and to gain a dollar in profits
or compensation. This fraud has allowed Defendants to enrich themselves by many millions of
dollars, and will generate many more millions of dollars of ill begotten
gains in the future given
the contacts and inroads that Devaney was able to make for Defendants while he served their
interests. In sum, by their actions and concealment when they were under a duty to disclose,
Defendants’ conduct was fraudulent and/or malicious, and it was designed in whole or in part to
enrich themselves or their affiliates at the expense of Devaney. Defendants’ fraud proximately
caused actual damages
to Devaney and Trident
Devaney relied on the terms of the Equity Agreement and other promises.
Quanta’s virtual fraud arose when they knew Devaney acted in reliance on the Equity
Agreement
with Quanta to his substantial detriment, giving
up his right to otherwise seek other
infrastructure companies and continue to develop his own intemational business.Thousands of
emails later, Quanta obtained the Kuwait power grid information and has now purchased an
entire facility in UAE. As paid consultant for Quanta, Devaney clearly stood to benefit from
this massive project.
FRAUD BY NONDISCLOSURE OROMMISSION
All preceding allegations are incorporated herein by reference.
Colson and Quanta’s material omi ssion or non disclosure were as misleading
as the positive misrepresentation of facts discussed infra he existence of a fiduciary
relationship is not the only basis on which to impose a duty to disclose information. Quanta’s
knowledge that Devaney was pursuing an impossible goalseeing his business plan come to
fruition created a duty to disclose and refrain from half truths that encouraged
him to
continue to work for the benefit of Quanta Quanta voluntarily disclosed some material
information but not the whole truth, and did not disclose new information that made their earlier
promises misleading
and untrue, all of which created a dishonest impressionto Devaney hen
Quanta and Colson killed the Kuwait deal for admittedly no (or confused) reason and terminated.
the residual deals in Iraq and with Samsung, they foreclos Devaney’s
ability to procure any
contracts in the region after 2011 Quanta and Colson knew that this new information made
their ongoing promises and warranties impossibleand untrue.
In addition to the foregoing once the relationship between Devaney and Quanta
had matured and Devaney was performing in good faith based on the material statements that
had been made, Defendantsintentionally recklessly and negligently concealed, omitted fai led
to disclose material facts from Devaney with half truths and coverups about their promises
to fulfill their end of the bargain with Devaney. The malicious intent of Defendants could not
have been contemplated in any honest business relationship.
Quanta and Colson knew Devaney was not privy to all financial information and
operation costs of Quanta and its subsidiaries and they knew that Devaney had to take
Colson’s word onall matters allegedly submitted to the Board for approval or Colson’s ability
to make unilateral decisions performance of major contracts and compensation for the
procurement of these contracts Even though Defendants publicly disclose information related to
the compensation for a few executives of Quanta Services, Quanta does not disclose that
information for approximately 100 other presidents or officers of its subsidiaries and operating
units. Had Quanta been honest and forthcoming
about the reality that Quanta could not and
would not perform on these major contracts before, during or after Devaney secured billions o
dollars of potential contracts through his unique contacts, Devaney would have quickly retained
numerous other Quantas to do the work. Devaney would have sought an earlier dissolution of
the relationship in an attempt to mitigate the damages caused by the Quanta Defenda
dishonest representations However, honesty would have resulted in competition for Quanta and
an end to all the gratuitous leads that were of great valueDevaney justifiably relied on
Defendants’ deliberate silenceand other improper conduct
NEGLIGENCEAND TORTIOUS BREACH CONFIDENTIALITY
All preceding allegations are incorporated herein by reference.
Quanta breached the trust that Devaney had placed in Quanta by using his
confidential disclosures adversely. Even in the absence of an explicit promise of confidentiality
between Quanta and Devaney and although Colson could have originally entered into the
relationship in good faith, an implied promise of confidentiality arose out of the circumstances
accompanying
the arties negotiations and agreement.
It is undisputed that Quanta and Devaney engaged in confidential and potentially
Classified projects relating to matters of foreign and national security. Quanta had direct
knowledge of the confidential nature of projects abroad involving sensitive technologies of
foreign countries and U allies. The technical information for these projects was presented to
Devaney under strict confidential guidelines and included proprietary information created by
Devaney, including customer lists, pricing estimates, subcontractor lists, projected margins for
goods and services procured abroad and labor costs. Devaney’ s pricing projections
served as the
basis for estimated profit and bid estimates for the 2010Kuwait Power Grid Project. Prior to the
botched Kuwait Power Grid Project, Quanta had never bid or procured any power grid project in
the region or abroad. However after Quanta possessed and copied the proprietary Kuwait
technical and pricing information Quanta miraculously bid and won projects in UAE, Jordan,
Trag, Pakistan, India, and Australia using the same basic pricing model and technology
information it obtained from Kuwait. Instead of working with Devaney on these projects
Quanta used its own intemational subsidiary Quanta Technology. The inference is that
Quanta took the information they obtained from the Kuwait bid and merely conducted plug and
play into the other country hids.
When Quanta and Devaney agreed to maintain information in confidence in waiting it
created the undeniable duty of confidentiality Defendants executed confidentiality agreements
with the foreign nations on behalf of Quanta Govemment Solutions while Devaney was
president of QGS. Thus — uanta and Colson had direct knowledge of the potentially classified
nature of these foreign infrastructure projects to the foreign country and Devaney. Because the
potentially classified information was provided through Devaney and the confidentiality
agreements
were signed by Quanta Govemment Solutions Devaney and Quanta had a written
agreement
of confidentiality. Moreover Devaney and Quanta had an express, unwritten policy
of keeping shared information confidential that created a duty of trust and confidence to each
other. Quanta misappropriated the confidential information of foreign nations that trusted
Devaney safeguard the information
When Quanta engaged in infrastructure contracts of a classified nature, or bid
contracts based on potentially classified information, they knowingly took on a duty to adhere to
the National Industrial Security Program Operations Manual NISPOM Executive Order
Classified National Security Information, of April 17, 1995 Under the NISPOM,
Quanta had the following duties:
Quanta had a duty under Executive Order 12958, Classified
National Security Information, of April 17, 1995, and the
National Industrial Security Program (NISP), as implemented by
DoD 5220.22 M, National Industrial Security Program Operating
Manual (NISPOM), February 8, 2006, to ensure that all
Govemmoent contractor, licensee, and grantee employees, or other
Govemment personnel requiring access to classified
information in the performance of their duties, who have not
previously signed either the SF 189 or the SF 189 A, must sign the
SF 312 before being granted access to classified information
(Classified Information Nondisclosure Agreement (Standard Form
312) Briefing Booklet, § 2003.20(c)), and to properly debrief (aka
read off) departing employees who have had access to classified
information (see id, §2003.20(e): The use of the ‘Security
Debriefing Acknowledgement’ portion of the SF 312 is optional at
the discretion of the implementing agency);
Quanta had a duty under Executive Order 12958, Classified
National Security Information, of April 17, 1995, and the
National Industrial Security Program (NISP), as implemented by
DoD 5220.22 M, National Industrial Security Program Operating
Manual (NISPOM), February 8, 2006, to ensure that, Foreign
govemment classified information shall retain its original
Classification markings or shall be assigned a U.S. classification
that provides a degree of protection at least equivalent to that
required by the govemment entity that fumished the information.
The equivalent U.S. classification and the country of origin shall
be marked on the front and back in English (NISPOM, {110 302),
and that, Foreign goverment material shall be stored and access
shall be controlled generally in the same manner as U.S. classified.
govemment material of an equivalent classification. Foreign
govemment material shall be stored in a manner that will avoid
comingling with other material which may be accomplished
establishing separate files in a storage container (NISPOM, {110
306); and
Quanta had a duty under Executive Order 12958, Classified
National Security Information, of April 17, 1995, and the
National Industrial Security Program (NISP), as implemented by
DoD 5220.22 M, National Industrial Security Program Operating
Manual (NISPOM), February 8, 2006, to refrain from
disclos[ing] classified information to attorneys hired solely to
represent the contractor in any civil or criminal case in Federal
or state courts unless the disclosure is specifically authorized
by the agency that has jurisdiction over the information
(NISPOM, {5 (emphasis added).
John Colson, Jim O’ Neil and Quanta violated the reporting requirements set forth
in 308 of the NISPOM ( Any loss, compromise or suspected compromise of classified
information, foreign or domestic, shall be reported to the [Cognizant Security Agency].
Moreover, under 300 contractors, such
as Quanta, are obligated
to establish such intemal
procedures as are necessary to ensure that cleared employees are aware of their responsibilities
for reporting pertinent information to the FSO, the Federal Bureau of Investigation (FBI), or
other Federal authorities
as required by this Manual, the terms of a classified contract, and U.S.
law. When —_300 is read in conjunction with Immediately on receipt of a report of
loss, compromise, or suspected compromise of classified information, the contractor shall initiate
a preliminary inquiry... ), it is clear that employees with clearances have an obligation
to
report the loss,compromise, or suspected compromise of classified information.
Devaney was President of Quanta Govemment Solutions and some cases, he
was sought, by name, to manage classified contracts, presumably based on his unique
govemment positions, record and prior security clearance. Quanta accepted payment, and did
receive govemment funds, to operate certain classified programs. When Quanta CEO Jim
O'Neil personally usurped Plaintiff’s authority as head of QGS and such classified programs he
unequivocally took on Plaintiffs confidential duties , which meant he took on all responsibilities
with regard to certain classified contract(s), classified information, and potentially classified
information Upon O’Neil’s decision to terminate Plaintiff’s relationship with Quanta, Quanta
once more failed to uphold its lawful duties, this time in failing to retum the sensitive
information to its owner or to another person or agency authorized to receive it. Not only did
Quanta fail to retum the information, it likely exploited it for its own self serving purposes and.
damaged Devaney in the process.
Iv.
BREACH OF FIDUCIARY DUTYAND DEFALCATION
All preceding allegations are incorporated herein by reference
An informal confidential fiduciary relationship of trust and loyalty developed and.
existed between Devaney and the Quanta Defendants, including Colson, encouraged and fostered
by Colson to whom Devaney reported directly. At all material times, Colson had the position
and ability
to deliver, on behalf
of Quanta, on the representations
and commitments that were
made to Devaney. Additionally or altematively, a partnership and/or joint venture relationship
developed between Devaney and Defendants involving the operations of QGS and QIL, from
which mal fiduciary duties arose. Either way, or both ways, Colson and the other Quanta
Defendants had an obligation of the utmost good faith, faimess and honesty in their dealings with
Devaney with respect to matters pertaining to their mutual business andopportunities.
ditionally and/or in the altemative, Colson and the other Quanta Defendants
are liable for defalcation (i.e., a willful neglect of duty based on a recklessness standard) to the
parties’ venture for failing to follow through with the opportunities obtained by Devaney on
behalf of Quanta. These duties were non. dischargeable fiduciary duties owed to Devaney
TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS AND
BUSINESS DISPARAGEMENT
All preceding allegations are incorporated herein by reference.
Defendants’ tortious interference with business relations and business
disparagement
of Devaney proximately caused actual damages
to Devaney.
For business and/or debt structure reasons that were never disclosed to
Devaney, Quanta and Colson failed to perform and/or were incapable of performing anumber
of the contracts that Devaney was instructed to procure. This conduct by the Quanta Defendants
damaged Plaintiffs exclusive and valuable ongoing and prospective business relationships with
top level domestic and foreign agents and goveming officials. As a result of Quanta and
Colson’s conduct, Defendants intentionally and/or improperly interfered with Plaintiffs existing
and prospective contractual relation by preventing Devaney from acquiring and continuing
relationship witha number of parties, including the following
Alutiiq
Blue Tech
Asiakonstrukt (Philippines)
Exxon Mohil / Halliburton/ KBR Chad.
Trag Ministry of Communications
EmaarGroup Iraq
Coalition Provisional Authority Iraq
Halliburton/KBR Iraq
Kuwait Ministry of Electricity and Water
Kuwait Oil company
Zain Telecommunications Kuwait
METCO (Kuwait)
Karachi Electric Supply Co. / Noor Investments
Zain Telecommumications Bahrain
Saudi Aramco
maar Group Dubai
Aldar
Abu Dhabi Water and Electricity company
Abu Dhabi National Oil company
Dubai Electricity and Water company
WJ Towell (Oman)
Oman Ministry of Electricity
Oman Oil Company
Petronas (Malaysia)
The Quanta Defendants including lson knew that they could not perform
many of the potential contracts and business opportunities that Devaney developed, did not
commit the time and resources necessary to perform on negotiations and opportunities that they
encouraged
Devaney to seek and open, and knew or should have known that their actions would
cause significant actual damages and interference with Plaintiffs’ business relationships.
Defendants were aware of Plaintiffs’ unique business relationships. Defendants
intended, knew or should have known that their actions would damage and disrupt those
relationships. Plaintiffs’ damages arose or were connected to Defendants wrongful conduct
through fraud, misrepresentation, undue economic pressure, violation of state and federal
procurement statutes and other sufficiently oppressive a
Preview
Cause No. 2012-75663 PATRICK O. DEVANEY, II and IN THE DISTRICT COURT OF TRIDENT VENTURES, INC, Plaintiffs, VS. HARRIS COUNTY, TEXAS QUANTA SERVICES, INC.; QUANTA GOVERNMENT SOLUTIONS, INC.; QUANTA GOVERNMENT SERVICES INC.; QUANTA INTERNATIONAL JUDICIAL DISTRICT LIMITED; and JOHN R. COLSON, Defendants. PLAINTIFFS’ SECOND AMENDED PETITION TO THE HONORABLE COURT: Plaintiffs, Patrick O. Devaney, II and Trident Ventures, Inc., file this Second Amended. Petition complaining of Defendants Quanta Services, Inc., Quanta Govemment Solutions, Inc. (“ ”), Quanta Govemment Services, Inc., Quanta Intemational Limited (“QIL”) and John R. Colson (“Colson’ (collectively “Quanta” and/or “Defendants ), and for cause would show: DISCOVERY CONTROL PLAN Pursuant to Rule 190 of the Texas Rules of Civil Procedure, discovery is intended to be conducted under Level 3. OVERVIEW This matter is encapsulated by a single phrase - “My word is my bo! ” Devaney applied this principal to his business dealings; Quanta did not. Plaintiff Patrick Devaney built his entire life around honoring his word and was led to believe that Colson and Quanta would do the same. Instead Colson and Quanta’s words, actions, inactions, and representations were used to 1 break and sever the bond that was created between Devaney and Quanta from 2003 2011. Quanta encouraged action by Devaney only to later take the fruits of his work and capital, all whileignor ingthe foundation of any new relationship trust, confidence —_ and loyalty. Prior to rescuing Quanta in 2003, Devaney served as commanding officer and executive for various SEAL Teams and U.S. Special Operation groups. During that time, he was entrusted to coordinate, implement and execute large scale, sensitive global special operation projects. Devaney dedicated most of his life to protecting our national security zealously while also liberating sovereign people from unscrupulous regimes and rebuilding tom citizens and tom economies. Devaney was enticed to merge his intemational and govemment platform with the private infrastructure resources of Quanta Services. Devaney breathed new life into Quanta and Colson through companies Devaney was told were his Quanta Govemment Solutions and Quanta Intemational. In retum Quanta and Colson engaged in parasitic actions and preyed upon Devaney’ s personal and ethical business code. At some point after Devaney shook Colson’s hand. and committed to Quanta, Colson and his cohorts began to dishonor their words and promises to Devaney and failed to inform him of their change of heart This case concems greed and self promotion of the highest order through the intentional, reckless and unlawfu actions and inactions of the executives of Quanta Services, Inc. cut Plaintiff Patrick Devaney out of his rightful share and compensation of the substantial revenue and value that he brought to the Quanta companies and shareholders, including the CEO and Chairman John Colson. Since going public in 1998, Quanta specialized in infrastructure construction, upgrade and maintenance services in the electric power and References herein to Mr. Devaney include his company, Trident Ventures, Inc. telecommunications industries. But in approximately 2003, with its focus thus far limited to North America, Quanta decided it wanted to expand into the intemational arena where nation rebuilding projects offered opportunities for lucrative contracts and subcontracts with foreign govemments, the United States govemment, and large general contractors. Devaney had what Quanta needed to lead in this new direction. He is a decorated former Navy SEAL and Special Operations commander with a strong financial and management background and an established. residence in the Middle East, together with U.S. govemment and Middle East contacts whose trust he had eamed from years of service. Defendant Colson enticed Devaney to join forces with Quanta in 2004, with the representation, and/or future representations, that Devaney would organize and lead = anta’s new govemment and intemational services companies that Quanta had the ability and desire to engage in large intemational contracts that would be Devaney’s focus, and that Devaney would receive the benefits that go with such a position. Devaney trusted Colson and Quanta to honor their actions and words. Devaney accepted the mission, ceased operations and plans his own company Trident Ventures, Inc. which also had a govemment and intemational focus at Defendants’ request, and spent the next seven years of his life creating, marketing and operating Quanta’s intemational and govemment based business primarily through Quanta Govemment Solutions and Quanta Intemational Limited QIL . Through Devaney’s efforts, GS, QIL an affiliated entities generated or assisted in generating dozens of millions of dollars in revenues for themselves or other Quanta entities, with hundreds of millions of dollars of additional venture opportunities brought to bearby Devaney prior to his termination in 2012 Devaney was awarded The Presidential Unit Citation with Bronze Star (twice), the Bronze Star, the Joint Se rvice Commendation with Oak Leaf, and the Navy and Marine Corp Commendation with Bronze Star for his extraordinary commitment and service to this Country. There was one problem. Despite being formally held out as the President of QGS and QIL to U.S and foreign govemment officials and private contractors the Quanta Defendants never actually provided Devaney the position and benefi that they represented he would have Devaney was left with obtaining payment for his services and those of his employee in Kuwait as per diem consultant. In early 2012, after using Devaney for all they could, Colson’s crony told Devaney that he was no longer needed, terminated Quanta’ s relationship with him, and took over control of the companies from him. None of this would have happened to Devaney had the Quanta Defendants, including Colson, made good on their representations to not merely use Devaney as their de facto president and hold him out as such to the govemment and intemational community for their selfish business purposes, but to actually compensate him for his role as a founderand risk taker in their ventures. Devaney sues for the wrongful conduct that the Defendants have perpetrated on him, and for the damages resulting from that conduct including but not limited to lost compensation and other benefits, as well as for the damages that this conduct has caused to Devaney’s career and Trident’ sbusiness. PARTIES Plaintiff Patrick O. Devaney, II is an individual residing in Califomia. Plaintiff Trident Ventures, Inc. is a Nevada company operated by Patrick Devaney. John Colson is a resident of Haris County, Texas and he has appeared and answered in this case Quanta Services Inc. is a publicly traded Delaware orporation PWR on the NYSE) headquartered in Harris County, Texas at 2800 Post Oak Blvd., Suite 2600, Houston, Texas 77056, andit has appeared and answered in this case Quanta Govemment Services Inc. is a Delaware orporation headquartered in Harris County, Texas at 2800 Post Oak Blvd., Suite 2600, Houston, Texas 77056, and it has appeared and answered in this case Quanta Govemment Solutions Inc. is currently d/b/a Quanta Services Inc. Delaware orporation headquartered in Haris County, Texas at 2800 Post Oak Blvd., Suite 2600, Houston, Texas 77056, and it has appeared and answered in this case Quanta Intemational Limited is currently d/b/a Quanta Services Inc. as part of their Philippines Division, is British Virgin Islands entity headquartered in Haris County, Texas at 2800 Post Oak Blvd., Suite 2600, Houston, Texas 77056, and it has appeared and answered in this case JURISDICTION AND VENUE Venue is proper in Harris County, Texas, pursuant to § 15.001 et seq., IV RAC ODE, because the Quanta Defendants are located in Harris County and all ora substantial part of the events made the subject of this suit occurred in Harris County, Texas. FACTS This case concems the concerted conduct of the Quanta Defendants to cut Plaintiff Patrick Devaney, acting individually and through his company Trident Ventures, Inc. (collectively Devaney , out of a rightful share of the substantial revenue and value that Devaney brought to the Quanta companies and shareholders, including the CEO and Chairman of Quanta, John Colson. Leading up to the creation of Quanta in November 1997, Colson was president and the majority owner of Par Electric . At the time Colson sold Par Electrical to form Quanta and take it public, Par had approximately $80 million in annual sales and a small profit margin. Colson personally retained approximately 2.1 million shares of Quanta’s stock in the transaction that effectively transferred his personal financial interest from Par to Quanta. Along the way, Quanta acquired numerous local electrical and telecom contractor companies and entered into two strategic investment partnerships, one with Enron and a second with Utilicorp/Aquila which was Par/Colson’s long time customer. In the ensuing years, Enron went bankrupt and Utilicorp purchased Enron’s shares of Quanta in a private transaction making Utilicorp the largest single shareholder in Quanta. As Quanta’s largest shareholder, Utilicorp became dissatisfied with Quanta’s performanceStarting in approximately 2001, Utilicorp announced its intention to take over the management of Quanta. In response, Quanta’s Board adopted poison pill tactic that would result in any change in management control makingany takeover more expensive to Utilicorp. After staving off Utilicorp’s takeover bid Quanta’s stock value plummeted in 2002. Quanta’s stock value and low profitability put the company in jeopardy. Quanta lost its auditor, Arthur Anderson, to bankruptcy. The new auditor, Price Waterhouse Coopers made Quanta write off hundreds of millions of dollars of goodwill (meaning Quanta had overpaid for the North American companies) and had difficulties with Quanta’s prior financial statement Quanta’s value had dropped from over $4 hillion to about $220 million The company effectively lost its lifeline to new cost effectivefinancing that it needed to sustain operations, and its cash position dwindled to dangerously low levels. The value of executive stock plans in Quanta had dropped dramatically as well. In approximately 2003, Quanta made the strategic decision to expand its labor intensive business _ which focused on infrastructure construction, upgrade and maintenance services in the electric power and telecommunications industries into more profitable work involving U.S. govemment contacts and infrastructure building (or re building) projects in the Middle East among other places. This decision was made following the initial thrust of the post Traq invasion when the U__ also was getting involved in plans to rebuild infrastructure in Iraq and other countries in the region as well as Africa, which would involve significant goverment ontract work. Quanta saw this as _ potentially new and lucrative opportunity, but also knew that Quanta needed an outsider who had the credibility to give Defendants access to these commercial opportunities (which in tum would appease concems among the Board of Directors about Quanta’s dwindling domestic business. So by the fourth quarter of 2003 Defendants formed a new entity, Quanta Govemment Solutions ( , Which would later become one of the govemment and intemational services vehicle at Devaney organized and operated to the benefit of most all the Quanta companies However, prior to Devaney’s collaboration with Quanta, from November 2003 to April 2004, Quanta incurred approximately $1.5 million in losses associated with unsuccessful govemment contract bidding. Quanta’s entire approach to U.S. govemment contracting, particularly offshore, was ineffective and overly costly. This prompted Colson to ask Oliver North to recommend an individual capable of procuring and delivering the contracts Defendants so badly wanted. Oliver North was a guest speaker at Quanta’s annual gathering of its senior Management and presidents of the 8 companies it owned. North consulted about this request with Duane Claridge, who was the founding director of the CIA’s Countertenorist Center, and also General Wayne Downing, the former head of U Special Operations. Following that, Patrick Devaney was recommended as the man who could lead Quanta in their ovemment and ntemational contract endeavors. Acting on that recommendation, Defendant Colson and Quanta enticed Devaney to join forces with Quanta in 2004 Devaney had a skill set that Quanta needed for its new govemment and intemational focus was a decorated Navy SEAL and special oper tions commander with a strong financial and management background and an established residence in the Middle East, together with U.S. govemment and Middle East contacts whose trust he had eamed from years of service. Beginning in early 2004, Devaney dedicated the next 7 years of his life organizing and developing Quanta’s intemational and govemment based. business, including through two of Quanta’s newest companies Quanta Goverment Solutions (and Services, Inc.) and Quanta Intemational Limited. In retum, the parent company, Quanta Services, Inc., and Colson, as the CEO, represented to Devaney that he would be the president of and lead and organize the goverment and intemational businesses of Quanta, which would operate separately, that Quanta had the capacity, financial wherewithal and willingness to engage in large intemational contracts with all they encompassed, and that Devaney would receive the enefits that go with such a venture These types of representations, and similar ones, were reiterated to Devaneycontinuously during his association with Quanta at least until Consistent with these material representations at Defendants’ request, Devaney ceased operation of his own company, Trident Ventures, which had been organized for its own intemational and govemment business focus. Beginning in 2004, Devaney oversaw the organizationand operations of Quanta’ s govemment and intemationa| services entities. Devaney hired employees and drafted policies for these new companies. Devaney maintained his existing residence in Kuwait to take advantage of business opportunities for Quanta, and that address was used as the business addresses of the Quanta govemment solutions and intemational services entities as well. Quanta issued business cards to Devaney that identified him as President of Quanta Govemment Solutions and Quanta Intemational, Ltd., and Devaney was regularly held out as such to U.S and foreign govemment officials. Devaney attended and made presentations at Presidents’ meetings with Colson and the heads of other Quanta companies, and also to the Quanta Board of Directors. Organizational charts identified Devaney as the President of Quanta Govemment Solutions, and Devaney reported directly to John Colson as the Chairman and CEO of the parent company, Quanta Services, Inc. ( PWR the NY SE). Colson was a founder of Quanta Services and, by 2004, had become the face and disputed leader of the company. Devaney developed a close business and personal relationship with Colson. They traveled to various parts of the world and made marketing presentations together. Colson openly acknowledged and introduced Devaney as the President of Quanta Govemment Solutions and Quanta Intemational. With that title, Devaney opened doors for Colson and the Quanta Services brand and technology/know how to U.S. govemment and foreign leaders and dignitaries. Colson held Devaney out as a incipal in third party negotiations and presentations abroad. Devaney shared his business plans and strategies with Colson and others in senior management at Quanta, as well as to the Board of Directors. Among other things, Colson knew that Devaney had taken many of the plans and strategies that he had. for Trident Ventures and redirected them, and his own energies, skills and talents, to the development of Quanta Govemment Solutions and Quanta Intemational. Because Devaney was now operating through Quanta, rather than through his own company Trident, he spent 2004 and the years after focusing on procurement of govemment and foreign contracts that the Quanta Defendants claimed they had the willingness and financial wherewithal to handle as opposed to he broader range of projects that Devaney had planned to execute through his company Trident Through all of this, Colson continued to promote Devaney as the President and leader of Quanta Govemment Solutions and Quanta Intemational intemally to Quant , including its Board of Directors, and extemally to Devaney’ s contacts and clientsIn short, Colson, using his influence and power as the CEO/Chairman of Quanta Services and his ability to deliver on the representations made (which he continued to make and reinforce) to Devaney, fostered and encouraged the confidential relationship and/or joint business venture that developed and continued between Devaney, Colson and the other Quanta Defendants through the years. In retum and in trust and reliance on the representations made by the Quanta Defendants, Devaney gave up opportunities that he could have pursued individually and/or through Trident, and continued on his mission to promote and benefit Quanta through Quanta Govemment Solutions and Quanta Intemational. All of this inured to the benefit of Colson and other senior executives of Quanta and its affiliates. There was one problem. Quanta never followed through on much of the high margin business that Quanta claimed it wanted. The prospective contracts and ventures that Devaney originated totaled hundreds of millions of dollars which, if closed, would likely have subjected aspects of Quanta’s business practices to the violation of loan covenantsPerhaps to avoid that scrutiny or for other reasons never explained to Devaney, Quanta jettisoned some of the largest and most public opportunities that it had enlisted Devaney to procure both at home and abroad. Quanta concealed from Devaney its need to keep secret certain aspects of its business practicesor debt structure , without regard for Devaney or his business relationships. Devaney, along with other members of the QGS team, prepared a detailed business plan that reflected prior representations and which served as the basis for future representations as well. The plan included details such as a six month start up period, the two year ramp up period, contemplated two years of backlog including $40 million in small jobs and $200 million in big jobs, and a cumulative revenue of approximately $100 million at the end of year two. The plan included further specifics, such as the fact that members of the profit sharing plan would own shares in the event that Quanta Services ‘spun off’ either OpCo to a third party and an adjusted profit sharing based on Quanta Services’ profit less capital cost. Devaney fully performed his terms of the Equity Agreement. Consistent with the representations and commitments that were made to him by the Defendants, which tumed out to be false, Devaney produced on his end of the bargain Devaney generated govemment and intemational contracts and business opportunities for the Quanta companies that totaled dozens of millions of dollars in actual business, with the potential for more. Examples of some of the successes and opportunities that Devaney by his efforts through the years was instrumental in bringing about, or assisted in bringing about, for the Quanta Defendants include: Obtained hundred of work visas on short notice to import Canadian union linemen for restoration work following Hurricane Katrina in 2005, and other similar projects since then; U.S. govemment subcontract for U.S. Air Force global indefinite delivery indefinite quantity Heavy Engineering Repairing Construction ( HERC Energy services contract performed in Chad, Africa with Kellogg Brown & Root and Exxon Mobil; Consulting contract for smart grid in Karachi, Pakistan; Energized upgrade contract with City Power in South Africa, in advance of the 2010 Word Cup; Joint venturewith Edison Power Group in South Africa and pan Africa; Secured compartmented information facility contract as subcontractorto Alutiiq; Subcontracting and small business compliance on PG&E contracts with Quanta subsidiaries; Joint venture betweeUnderground onstruction (a Quanta company) and. Nova Group involving upgrading the Navy Fuel Supply System at Point Loma, with U.S. Navy as client; Underground onstruction ( a Quanta company) project to upgrade Andrews ir orce ase fuel system; and Provided estimates and/or secured contract commitments for large projects in Kuwait, India, Saudi Arabia, and Iraq. The revenue to Quanta and its shareholders from the projects that went forward exceed $100 million(not to mention the projects that Quanta nixed) Devaney spent years successfully executing the mission that brought him to Quanta, all the while being touted by Quanta as the President of Quanta’s Intemational and Quanta Govemment Services even though it was ultimately based on the empty representations of Colson and others to compensate him in the same way as they held him out extemally as the head of the intemational and govemment based businesses that Devaney had come to define. In early 2012, after using Devaney for all they could including diverting profitable business opportunities from Plaintiffs, and with the Quanta goverment and intemational services companies poised for further successes, Colson’s crony told Devaney that he was no longer needed, terminated Quanta’ s relationship with him, and took over control of the companies from him Devaney sues for the fraud and other wrongful conduct that the Defendants have perpetrated on him (as well as on Trident Ventures, Inc.), and for the damages resulting from that conduct including the damages that this conduct has caused to Devaney’s career and Trident’ busi DISCOVERY RULE Plaintiffs did not know or have reason to know, in the exercise of reasonable diligence, of Defendants’ wrongful acts or omissions herein described until a date within two years of the filing of this lawsuit Moreover, Defendants’ deceptive and misleading communications to Plaintiffs, as well as their silence when they had a duty to speak, amountedto a fraudulent concealment of their earlier wrongful acts or omissions, and prevented Plaintiffs from knowing or having reason to know, in the exercise of reasonable diligence, of Defendants’ wrongful acts or omissions which proximately caused damages to PlaintiffsPlaintiffs plead the Discovery Rule as an exception to any claim of limitations by Defendants. CONDITIONS PRECEDENT All conditions precedent to Plaintiffs’ claims and damages, or other relief requestedhave been performed or have occurred. CAUSES OF ACTION AND REQUESTS FOR RELIEF AUD, FRAUD IN THE INDUCEMENTPROMISSORY ESTOPPEL, PROMISSORY FRAUD All preceding allegations are incorporated herein by reference. Any references to Devaney in these causes of action and damages pleaded will include Trident. Defendants’ conduct as described above constitutes fraud, fraud in the inducement and/or promissory fraud (collectively called fraud ). In this regard, Defendants represented to Devaney that in retum for him dedicating his efforts to organize, lead, develop and grow the = anta govemmment and intemational services companies, which he did, Devaney would be the head of those companies and would receive the compensation and other benefits, interests and rights that go with such a position. Defendants acted and continued to make these and similar statements, both to Devaney and others, in conformity with these types of representations. Defendants made these representations and similar ones on an ongoing basis (including that they would have the willingness and ability to handle large foreign contracts) knowing that they were false and material, or reckless, and intending that they would be relied upon by Devaney to his detriment, which they were. If these representations were not knowingly false when made and/or reaffirmed hen they were made recklessly, as a positive assertion, and without knowledge of their truth. Moreover, Defendants concealed this fraudulent conduct from Devaney, and/or misled Devaney as to the true state of facts, when they were under a duty to disclosethe truth. Defendants’ motive for this conduct is obvious. For every dollar that they can avoid paying Devaney, Defendants or their affiliates and officers and to gain a dollar in profits or compensation. This fraud has allowed Defendants to enrich themselves by many millions of dollars, and will generate many more millions of dollars of ill begotten gains in the future given the contacts and inroads that Devaney was able to make for Defendants while he served their interests. In sum, by their actions and concealment when they were under a duty to disclose, Defendants’ conduct was fraudulent and/or malicious, and it was designed in whole or in part to enrich themselves or their affiliates at the expense of Devaney. Defendants’ fraud proximately caused actual damages to Devaney and Trident Devaney relied on the terms of the Equity Agreement and other promises. Quanta’s virtual fraud arose when they knew Devaney acted in reliance on the Equity Agreement with Quanta to his substantial detriment, giving up his right to otherwise seek other infrastructure companies and continue to develop his own intemational business.Thousands of emails later, Quanta obtained the Kuwait power grid information and has now purchased an entire facility in UAE. As paid consultant for Quanta, Devaney clearly stood to benefit from this massive project. FRAUD BY NONDISCLOSURE OROMMISSION All preceding allegations are incorporated herein by reference. Colson and Quanta’s material omi ssion or non disclosure were as misleading as the positive misrepresentation of facts discussed infra he existence of a fiduciary relationship is not the only basis on which to impose a duty to disclose information. Quanta’s knowledge that Devaney was pursuing an impossible goalseeing his business plan come to fruition created a duty to disclose and refrain from half truths that encouraged him to continue to work for the benefit of Quanta Quanta voluntarily disclosed some material information but not the whole truth, and did not disclose new information that made their earlier promises misleading and untrue, all of which created a dishonest impressionto Devaney hen Quanta and Colson killed the Kuwait deal for admittedly no (or confused) reason and terminated. the residual deals in Iraq and with Samsung, they foreclos Devaney’s ability to procure any contracts in the region after 2011 Quanta and Colson knew that this new information made their ongoing promises and warranties impossibleand untrue. In addition to the foregoing once the relationship between Devaney and Quanta had matured and Devaney was performing in good faith based on the material statements that had been made, Defendantsintentionally recklessly and negligently concealed, omitted fai led to disclose material facts from Devaney with half truths and coverups about their promises to fulfill their end of the bargain with Devaney. The malicious intent of Defendants could not have been contemplated in any honest business relationship. Quanta and Colson knew Devaney was not privy to all financial information and operation costs of Quanta and its subsidiaries and they knew that Devaney had to take Colson’s word onall matters allegedly submitted to the Board for approval or Colson’s ability to make unilateral decisions performance of major contracts and compensation for the procurement of these contracts Even though Defendants publicly disclose information related to the compensation for a few executives of Quanta Services, Quanta does not disclose that information for approximately 100 other presidents or officers of its subsidiaries and operating units. Had Quanta been honest and forthcoming about the reality that Quanta could not and would not perform on these major contracts before, during or after Devaney secured billions o dollars of potential contracts through his unique contacts, Devaney would have quickly retained numerous other Quantas to do the work. Devaney would have sought an earlier dissolution of the relationship in an attempt to mitigate the damages caused by the Quanta Defenda dishonest representations However, honesty would have resulted in competition for Quanta and an end to all the gratuitous leads that were of great valueDevaney justifiably relied on Defendants’ deliberate silenceand other improper conduct NEGLIGENCEAND TORTIOUS BREACH CONFIDENTIALITY All preceding allegations are incorporated herein by reference. Quanta breached the trust that Devaney had placed in Quanta by using his confidential disclosures adversely. Even in the absence of an explicit promise of confidentiality between Quanta and Devaney and although Colson could have originally entered into the relationship in good faith, an implied promise of confidentiality arose out of the circumstances accompanying the arties negotiations and agreement. It is undisputed that Quanta and Devaney engaged in confidential and potentially Classified projects relating to matters of foreign and national security. Quanta had direct knowledge of the confidential nature of projects abroad involving sensitive technologies of foreign countries and U allies. The technical information for these projects was presented to Devaney under strict confidential guidelines and included proprietary information created by Devaney, including customer lists, pricing estimates, subcontractor lists, projected margins for goods and services procured abroad and labor costs. Devaney’ s pricing projections served as the basis for estimated profit and bid estimates for the 2010Kuwait Power Grid Project. Prior to the botched Kuwait Power Grid Project, Quanta had never bid or procured any power grid project in the region or abroad. However after Quanta possessed and copied the proprietary Kuwait technical and pricing information Quanta miraculously bid and won projects in UAE, Jordan, Trag, Pakistan, India, and Australia using the same basic pricing model and technology information it obtained from Kuwait. Instead of working with Devaney on these projects Quanta used its own intemational subsidiary Quanta Technology. The inference is that Quanta took the information they obtained from the Kuwait bid and merely conducted plug and play into the other country hids. When Quanta and Devaney agreed to maintain information in confidence in waiting it created the undeniable duty of confidentiality Defendants executed confidentiality agreements with the foreign nations on behalf of Quanta Govemment Solutions while Devaney was president of QGS. Thus — uanta and Colson had direct knowledge of the potentially classified nature of these foreign infrastructure projects to the foreign country and Devaney. Because the potentially classified information was provided through Devaney and the confidentiality agreements were signed by Quanta Govemment Solutions Devaney and Quanta had a written agreement of confidentiality. Moreover Devaney and Quanta had an express, unwritten policy of keeping shared information confidential that created a duty of trust and confidence to each other. Quanta misappropriated the confidential information of foreign nations that trusted Devaney safeguard the information When Quanta engaged in infrastructure contracts of a classified nature, or bid contracts based on potentially classified information, they knowingly took on a duty to adhere to the National Industrial Security Program Operations Manual NISPOM Executive Order Classified National Security Information, of April 17, 1995 Under the NISPOM, Quanta had the following duties: Quanta had a duty under Executive Order 12958, Classified National Security Information, of April 17, 1995, and the National Industrial Security Program (NISP), as implemented by DoD 5220.22 M, National Industrial Security Program Operating Manual (NISPOM), February 8, 2006, to ensure that all Govemmoent contractor, licensee, and grantee employees, or other Govemment personnel requiring access to classified information in the performance of their duties, who have not previously signed either the SF 189 or the SF 189 A, must sign the SF 312 before being granted access to classified information (Classified Information Nondisclosure Agreement (Standard Form 312) Briefing Booklet, § 2003.20(c)), and to properly debrief (aka read off) departing employees who have had access to classified information (see id, §2003.20(e): The use of the ‘Security Debriefing Acknowledgement’ portion of the SF 312 is optional at the discretion of the implementing agency); Quanta had a duty under Executive Order 12958, Classified National Security Information, of April 17, 1995, and the National Industrial Security Program (NISP), as implemented by DoD 5220.22 M, National Industrial Security Program Operating Manual (NISPOM), February 8, 2006, to ensure that, Foreign govemment classified information shall retain its original Classification markings or shall be assigned a U.S. classification that provides a degree of protection at least equivalent to that required by the govemment entity that fumished the information. The equivalent U.S. classification and the country of origin shall be marked on the front and back in English (NISPOM, {110 302), and that, Foreign goverment material shall be stored and access shall be controlled generally in the same manner as U.S. classified. govemment material of an equivalent classification. Foreign govemment material shall be stored in a manner that will avoid comingling with other material which may be accomplished establishing separate files in a storage container (NISPOM, {110 306); and Quanta had a duty under Executive Order 12958, Classified National Security Information, of April 17, 1995, and the National Industrial Security Program (NISP), as implemented by DoD 5220.22 M, National Industrial Security Program Operating Manual (NISPOM), February 8, 2006, to refrain from disclos[ing] classified information to attorneys hired solely to represent the contractor in any civil or criminal case in Federal or state courts unless the disclosure is specifically authorized by the agency that has jurisdiction over the information (NISPOM, {5 (emphasis added). John Colson, Jim O’ Neil and Quanta violated the reporting requirements set forth in 308 of the NISPOM ( Any loss, compromise or suspected compromise of classified information, foreign or domestic, shall be reported to the [Cognizant Security Agency]. Moreover, under 300 contractors, such as Quanta, are obligated to establish such intemal procedures as are necessary to ensure that cleared employees are aware of their responsibilities for reporting pertinent information to the FSO, the Federal Bureau of Investigation (FBI), or other Federal authorities as required by this Manual, the terms of a classified contract, and U.S. law. When —_300 is read in conjunction with Immediately on receipt of a report of loss, compromise, or suspected compromise of classified information, the contractor shall initiate a preliminary inquiry... ), it is clear that employees with clearances have an obligation to report the loss,compromise, or suspected compromise of classified information. Devaney was President of Quanta Govemment Solutions and some cases, he was sought, by name, to manage classified contracts, presumably based on his unique govemment positions, record and prior security clearance. Quanta accepted payment, and did receive govemment funds, to operate certain classified programs. When Quanta CEO Jim O'Neil personally usurped Plaintiff’s authority as head of QGS and such classified programs he unequivocally took on Plaintiffs confidential duties , which meant he took on all responsibilities with regard to certain classified contract(s), classified information, and potentially classified information Upon O’Neil’s decision to terminate Plaintiff’s relationship with Quanta, Quanta once more failed to uphold its lawful duties, this time in failing to retum the sensitive information to its owner or to another person or agency authorized to receive it. Not only did Quanta fail to retum the information, it likely exploited it for its own self serving purposes and. damaged Devaney in the process. Iv. BREACH OF FIDUCIARY DUTYAND DEFALCATION All preceding allegations are incorporated herein by reference An informal confidential fiduciary relationship of trust and loyalty developed and. existed between Devaney and the Quanta Defendants, including Colson, encouraged and fostered by Colson to whom Devaney reported directly. At all material times, Colson had the position and ability to deliver, on behalf of Quanta, on the representations and commitments that were made to Devaney. Additionally or altematively, a partnership and/or joint venture relationship developed between Devaney and Defendants involving the operations of QGS and QIL, from which mal fiduciary duties arose. Either way, or both ways, Colson and the other Quanta Defendants had an obligation of the utmost good faith, faimess and honesty in their dealings with Devaney with respect to matters pertaining to their mutual business andopportunities. ditionally and/or in the altemative, Colson and the other Quanta Defendants are liable for defalcation (i.e., a willful neglect of duty based on a recklessness standard) to the parties’ venture for failing to follow through with the opportunities obtained by Devaney on behalf of Quanta. These duties were non. dischargeable fiduciary duties owed to Devaney TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS AND BUSINESS DISPARAGEMENT All preceding allegations are incorporated herein by reference. Defendants’ tortious interference with business relations and business disparagement of Devaney proximately caused actual damages to Devaney. For business and/or debt structure reasons that were never disclosed to Devaney, Quanta and Colson failed to perform and/or were incapable of performing anumber of the contracts that Devaney was instructed to procure. This conduct by the Quanta Defendants damaged Plaintiffs exclusive and valuable ongoing and prospective business relationships with top level domestic and foreign agents and goveming officials. As a result of Quanta and Colson’s conduct, Defendants intentionally and/or improperly interfered with Plaintiffs existing and prospective contractual relation by preventing Devaney from acquiring and continuing relationship witha number of parties, including the following Alutiiq Blue Tech Asiakonstrukt (Philippines) Exxon Mohil / Halliburton/ KBR Chad. Trag Ministry of Communications EmaarGroup Iraq Coalition Provisional Authority Iraq Halliburton/KBR Iraq Kuwait Ministry of Electricity and Water Kuwait Oil company Zain Telecommunications Kuwait METCO (Kuwait) Karachi Electric Supply Co. / Noor Investments Zain Telecommumications Bahrain Saudi Aramco maar Group Dubai Aldar Abu Dhabi Water and Electricity company Abu Dhabi National Oil company Dubai Electricity and Water company WJ Towell (Oman) Oman Ministry of Electricity Oman Oil Company Petronas (Malaysia) The Quanta Defendants including lson knew that they could not perform many of the potential contracts and business opportunities that Devaney developed, did not commit the time and resources necessary to perform on negotiations and opportunities that they encouraged Devaney to seek and open, and knew or should have known that their actions would cause significant actual damages and interference with Plaintiffs’ business relationships. Defendants were aware of Plaintiffs’ unique business relationships. Defendants intended, knew or should have known that their actions would damage and disrupt those relationships. Plaintiffs’ damages arose or were connected to Defendants wrongful conduct through fraud, misrepresentation, undue economic pressure, violation of state and federal procurement statutes and other sufficiently oppressive a