Case 6:12-cv TC Document 1 Filed 04/13/12 Page 1 of 10 Page ID#: 1

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1 Case 6:12-cv TC Document 1 Filed 04/13/12 Page 1 of 10 Page ID#: 1 Anne D. Foster, OSB No afoster@dunncarney.com DUNN CARNEY ALLEN HIGGINS & TONGUE LLP 851 SW Sixth Avenue, Suite 1500 Portland, OR Telephone: Fax: Attorneys for Plaintiffs UNITED STATES DISTRICT COURT DISTRICT OF OREGON EUGENE DIVISION DAVID McCURDY, an individual, LIA McCURDY, an individual, PAUL MONACO, an individual, JUDY PEOPLES, an individual, WILLIAM DASSENKO, an individual, and ROCHLYN YESS, an individual, v. Plaintiffs, SORENSON CAPITAL PARTNERS, LP, a Delaware limited partnership, CARE HOLDING COMPANY, LLC, a Delaware limited liability company, CARE SENIOR LIVING, LP, a Delaware limited partnership, and SCP CARE ACQUISITION, LLC, a Delaware limited liability company, No. COMPLAINT (Breach of Contract, Promissory Estoppel, Violations of ORS 659A Age Discrimination, Religious Discrimination, Retaliation) DEMAND FOR JURY TRIAL Defendants. Plaintiffs David McCurdy, Lia McCurdy, Paul Monaco, Judy Peoples, William Dassenko Page 1

2 Case 6:12-cv TC Document 1 Filed 04/13/12 Page 2 of 10 Page ID#: 2 and Rochlyn Yess (collectively, Plaintiffs ), for their Complaint against Sorenson Capital Partners, LP ( SCP ), CARE Holding Co., LLC ( HOLDCO ), CARE Senior Living, LP ( CARE ) and SCP CARE ACQUISITION, LLC ( SCP ), allege and state as follows: THE PARTIES, JURISDICTION AND VENUE 1. Plaintiffs David McCurdy, Lia McCurdy, Paul Monaco, William Dassenko and Rochlyn Yess are individuals and reside in the State of Oregon. 2. Plaintiff Judy Peoples is an individual and resides in the State of Michigan. 3. Defendant SCP is a Delaware limited partnership, with its principal place of business in Lehi, Utah. 4. Defendant HOLDCO is a Delaware limited liability company with its principal place of business in Lehi, Utah. 5. Defendant CARE is a Delaware limited partnership with its principal place of business in Lehi, Utah. 6. Defendant SCP, is a Delaware limited liability company with its principal place of business in Lehi, Utah. 7. This court has jurisdiction over this matter pursuant to 28 U.S.C. 1332(a)(1), as the matter in controversy involves citizens of different states and the controversy exceeds $75, Venue is proper in this Court pursuant to 28 U.S.C. 1391(a)(2) because a substantial part of the events or omissions giving rise to these claims occurred in Eugene, Oregon. Page 2

3 Case 6:12-cv TC Document 1 Filed 04/13/12 Page 3 of 10 Page ID#: 3 Page 3 FACTS 9. SCP is a private equity firm that, on information and belief, invests tens of millions of dollars each year in various ventures throughout the Western United States. 10. The principals of SCP, including a number of its managing directors and officers, are former partners or executives at Bain Capital and Bain & Company. 11. Plaintiffs are six of the seven employees who made up the management team of CARE. CARE s offices are located in Eugene, Oregon. 12. David McCurdy was employed as President and CEO of CARE; Lia McCurdy was employed as Executive Vice President of Re-Development of CARE; Judy Peoples was employed as Executive Vice President of Operations of CARE; Rochlyn A. Yess was employed as General Counsel of CARE, William Dassenko was employed as Executive Vice President for Acquisitions of CARE; and Paul Monaco was employed as Executive Vice President of Technical Services of CARE. 13. Plaintiffs, prior to being hired by CARE, had a proven track record of success in the senior housing industry. 14. HOLDCO was formed for the purpose of purchasing and renovating senior housing properties in eleven western states. 15. CARE was formed to manage the interests of HOLDCO and the assets purchased. 16. Plaintiffs were brought on board in March 2011 as employees and also became minority interest owners in HOLDCO. 17. Although CARE was set up as a separate business entity, SCP retained control over the day-to-day operations and made all meaningful decisions concerning the operation of

4 Case 6:12-cv TC Document 1 Filed 04/13/12 Page 4 of 10 Page ID#: 4 CARE and employment of Plaintiffs. Page At all times relevant hereto, CARE was acting solely as an agent for SCP. 19. At the time Plaintiffs became employees of Defendants, representatives of Defendants promised that Plaintiffs term of employment would be a minimum of 5 years and that their artificially low starting salaries ($60,000) would increase over a short period of time. to $260, The average salary for executives with Plaintiffs expertise ranges from $160, Plaintiffs were induced into accepting the low salary levels based on Defendants promises to grow the company quickly. 22. Plaintiffs relied on these representations. 23. Despite Defendants promises to grow the company quickly and the guarantee of 5 years of employment, Defendants repeatedly rejected various business opportunities to grow the company. 24. During this same time period, SCP funded (from their investors) and paid to SCP (themselves) excessive management fees, thereby enriching SCP while paying below market salaries ($60,000) to Plaintiffs. 25. Despite Defendants representations concerning raising Plaintiffs salaries to market rates, their salaries remained at the artificially low level of $60,000 throughout their employment. 26. Despite the promise of 5-years employment, in mid-november 2011, after only 7 months Plaintiffs were told that their employment would be terminated effective February Yess, Dassenko, Monaco and Peoples were actually terminated effective

5 Case 6:12-cv TC Document 1 Filed 04/13/12 Page 5 of 10 Page ID#: 5 February 17, Page David and Lia McCurdy were terminated effective February 29, At the time of termination, approximately 49 months remained on Plaintiffs 5- year employment contracts. 30. No explanation has ever been given for Defendants decision to terminate Plaintiffs employment only 7-months in to their 5-year contract except that Defendants claimed they would no longer make investments in the senior housing industry. 31. Defendants continue to invest, operate and remain active in the senior housing industry through another entity Western States Lodging and Management. 32. Plaintiffs are aged 52 to In the fall of 2011, Defendants inquired about the ages of all Plaintiffs. Shortly thereafter Defendants advised Plaintiffs that their employment was being terminated. 34. During their tenure with Defendants, Plaintiffs learned that SCP strongly favored hiring, employing, and doing business with other members of the LDS Church. 35. SCP partners, in particular Curtis Toone and Mike Scott, made comments about religion and questioned the beliefs of Plaintiffs and other employees. 36. None of the Plaintiffs are members of the LDS Church. 37. The partners of Western States Lodging and Management the entity Defendants continue to fund and operate in the senior housing arena and the entity that operates the one property under management by CARE ( Villa Rosa ) are all members of the LDS Church. 38. On or about March 16, 2012, Plaintiffs sent a letter to Defendants, inter alia, asserting Plaintiffs opposition to Defendants unlawful and discriminatory employment

6 Case 6:12-cv TC Document 1 Filed 04/13/12 Page 6 of 10 Page ID#: 6 practices based on age and religion. Page Defendants responded to this letter by filing a lawsuit in the Fourth Judicial District of the State of Utah, Utah County, on or about April 2, 2012, captioned SCP CARE Acquisition et al v. David McCurdy et al, Case No ( the Utah Lawsuit ). 40. The Utah Lawsuit is frivolous and without foundation in law or fact. Defendants filed the Utah Lawsuit in retaliation for Plaintiffs expressing their opposition to Defendants discriminatory employment practices. CLAIMS FOR RELIEF First Claim for Relief (Breach of Oral Contract) 41. Plaintiffs reallege paragraphs 1 through 40 as though fully set forth herein. 42. On or about March 2011, Plaintiffs entered into an oral contract of employment with Defendants for a minimum term of 5 years. 43. Plaintiffs have performed all of the conditions, covenants, and promises required to be performed in accordance with the terms and conditions of that oral contract, except those that Plaintiffs were prevented from performing due to Defendants broken promises and failure to perform as promised. 44. Defendants breached the oral employment contract by terminating Plaintiffs employment after only 7 months. 45. As a result of Defendants breach of the oral contract, Plaintiffs have suffered substantial losses by virtue of Defendants breaches. Plaintiffs damages are believed to be in excess of $5,350,000.

7 Case 6:12-cv TC Document 1 Filed 04/13/12 Page 7 of 10 Page ID#: 7 Page 7 Second Claim for Relief (Promissory Estoppel) 46. Plaintiffs reallege paragraphs 1 through 45 as though fully set forth herein. 47. Defendants promised Plaintiffs a minimum of 5-years employment. 48. Defendants promised Plaintiffs that their artificially low starting salaries would increase over time. 49. Defendants knew or should have known that Plaintiffs would reasonably rely on these promises and in doing so would put forth their best efforts as employees of Defendants. 50. Plaintiffs actually relied on the promises made by Defendants. 51. As a result of Defendants conduct, Plaintiffs have suffered substantial losses believed to be in excess of $5,350,000. Third Claim for Relief (Age Discrimination ORS 659A.030(1)(a), (b) and (g)) 52. Plaintiffs reallege paragraphs 1 through 51 as though fully set forth herein. 53. Defendants decision to terminate Plaintiffs employment was based, at least in part, on Plaintiffs respective ages. 54. Defendants discriminated against Plaintiffs in their terms and conditions of employment on the basis of age in violation of ORS 659A.030(1)(a) and (b). 55. Defendants conduct constituted aiding and abetting age discrimination, in violation of ORS 659A.030(1)(g). 56. As a proximate result of Defendants conduct, Plaintiffs have suffered lost wages in excess of $5,350,000.

8 Case 6:12-cv TC Document 1 Filed 04/13/12 Page 8 of 10 Page ID#: As a proximate result of Defendants conduct, Plaintiffs have suffered mental and emotional distress in an amount to be determined at trial and believed to be no less than $5,000, Plaintiffs are entitled to recover their reasonable costs and attorney s fees pursuant to ORS 659A.885. Fourth Claim for Relief (Religious Discrimination Pursuant to ORS 659A.030(1)(a), (b) and (f)) 59. Plaintiffs reallege paragraphs 1 through 58 as though fully set forth herein. 60. Defendants decision to terminate Plaintiffs employment was based, at least in part, on Plaintiffs non-affiliation with the LDS Church. 61. Defendants discriminated against Plaintiffs in their terms and conditions of employment on the basis of religion in violation of ORS 659A.030(1)(a) and (b). 62. Defendants conduct constituted aiding and abetting discrimination on the basis of religion, in violation of ORS 659A.030(1)(g). 63. As a result of Defendants conduct, Plaintiffs have suffered lost wages in excess of $5,350, As a result of Defendants conduct, Plaintiffs have suffered mental and emotional distress in an amount to be determined at trial and believed to be no less than $5,000, Plaintiffs are entitled to recover their reasonable costs and attorney s fees pursuant to ORS 659A.885. / / / / / / Page 8

9 Case 6:12-cv TC Document 1 Filed 04/13/12 Page 9 of 10 Page ID#: 9 Fifth Claim for Relief (Retaliation for Engaging in Opposition to Discrimination Pursuant to ORS 659A.030(1)(f)) 66. Plaintiffs reallege paragraphs 1 through 65 as though fully set forth herein. 67. Defendants filing of the Utah lawsuit was in retaliation for Plaintiffs asserted opposition to Defendants unlawful and discriminatory employment practices based on age and religion. 68. As a proximate result of Defendants conduct, Plaintiffs have suffered compensatory and non-economic damages in an amount to be proven at trial. 69. Plaintiffs are entitled to recover their reasonable costs and attorney s fees pursuant to ORS 659A.885. RELIEF REQUESTED WHEREFORE, Plaintiffs request that this Court assume jurisdiction and grant judgment as follows: 1. An award of lost wages and fringe benefits and prejudgment interest at the statutory rate in an amount to be determined at trial; 2. An award of damages for mental and emotional distress in an amount to be determined at trial; / / / / / / / / / Page 9

10 Case 6:12-cv TC Document 1 Filed 04/13/12 Page 10 of 10 Page ID#: An award of costs and reasonable attorney s fees; and 4. All other fit and proper relief. Dated this 13th day of April, DUNN CARNEY ALLEN HIGGINS & TONGUE LLP /s/ Anne D. Foster Anne D. Foster, OSB No Telephone: Attorneys for Plaintiffs Page 10

IN THE CIRCUIT COURT OF THE STATE OF OREGON FOR THE COUNTY OF MULTNOMAH ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

//0 :: AM CV 0 0 RICKY PANG, v. IN THE CIRCUIT COURT OF THE STATE OF OREGON FOR THE COUNTY OF MULTNOMAH Plaintiff, XTREME CONSULTING GROUP, INC. dba XTREME PORTLAND, OR dba XTREME CONSULTING; SHAWN RIGGIN,