Complaint (ECF File Stamp)

Case 1:19-cv-02522-GLR Document 1 Filed 08/30/19 Page 1 of 34
IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND
BALTIMORE DIVISION
SB ENERGY INVESTMENTS, LLC, :

Derivatively on Behalf of Nominal :
Defendant SOLX ENERGY, LLC, :
:
SB ENERGY INVESTMENTS, LLC :
502 Washington Avenue, 8th Floor :
Towson, MD 21204 : CIVIL ACTION NO.:
: (Jury Trial Demanded)
Plaintiffs, :
v. :
:
MARK CRABTREE :
1143 Windsor Court :
Cape Coral, FL 33904 :
:
SOLX ENERGY LIMITED :
Unit 1 The Old Sawmill, Shawbridge Street, :
Clitheroe, Lancashire, BB7 ILY :
:
SOLX ENERGY INTERNATIONAL, :
INC. :
1007 NE 7th Terrace, Suite 5 :
Cape Coral, FL 33909 :
Serve: Resident Agent :
Darrin Schutt, Esq. :
12601 New Brittany Blvd :
Fort Myers, FL 33907 :
:
Defendants, :
:
-And- :
:
SOLX ENERGY LLC :
Serve: A Registered Agent, Inc. :
8 The Green, Suite A :
Dover, DE 19901 :
:
Nominal Defendant. :
____________________________________:
COMPLAINT
1
COMES NOW SB Energy Investments, LLC (“SB Energy”), by and through its
undersigned counsel, and hereby brings direct claims against Mark Crabtree (“Mr. Crabtree”),
SolX Energy Limited (“SolX Ltd.”), and SolX Energy International, Inc. “SolX Intl.”) and, in
addition, brings derivative claims on behalf of SolX Energy, LLC (“SolX Energy” “Company”
or “Nominal Defendant”), against Mr. Crabtree and SolX Ltd. and SolX Intl, by averring as
follows:
INTRODUCTION
1. The present action asserts derivative and direct claims for breach of fiduciary
duties, fraud, tortious interference with prospective and existing business advantage, breach of
contract, and other related claims.
2. Plaintiffs seek declaratory, equitable and injunctive relief, as well as economic
damages, restitution, punitive damages, attorneys’ fees and costs.
3. These claims, supporting facts and damages set forth in this action are referred to
individually or collectively as the “Lawsuit.”
PARTIES
4. SB Energy is a limited liability company formed and organized in the State of
Maryland on or about February 8, 2017 with its principal place of business at 502 Washington
Avenue, 8th Floor, Towson, Maryland 21204. SB Energy is a company in good standing with the
State of Maryland, and is fully owned and controlled by its sole member - Scott Battaglini (“Mr.
Battaglini”).
5. SolX Energy is a limited liability company formed and organized in the State of
Delaware on or about February 8, 2017. Its principal office is listed at 8 The Green, Suite A,
Dover, DE 19901.
2
6. Mr. Crabtree is an adult male (non U.S. Citizen) who is currently living at 1143
Windsor Court, Cape Coral, Florida, 33904. Mr. Crabtree holds himself out as the Chief
Executive Officer (“CEO”) and Manager of SolX Energy, SolX Ltd, and SolX Intl. Mr. Crabtree
also holds a percentage of ownership in SolX Ltd and SolX Intl.
7. Mr. Crabtree previously applied for and was granted entry into the United States
on an E2 treaty investor visa, which allows foreign investors to enter and work inside of the
United States based on a substantial investment in a bona fide enterprise.
8. Upon information and belief, Mr. Crabtree did not make a substantial personal
investment into SolX Energy as required but, instead, obtained entry into the United States
through an entity known as Cool ROI, Inc. (“CRI”), a Delaware company he had previously
formed and operated to sell solar assisted air conditioning, which was sued for patent and
trademark infringement in 2015 and 2016.
9. SolX Ltd is a corporation formed and registered under the laws of the United
Kingdom, with its primary office at Unit 1 The Old Sawmill, Shawbridge Street, Clitheroe,
Lancashire, BB7 ILY.
10. SolX Intl is a corporation first formed and organized in the State of Florida on or
about January 22, 2019. Its principal office is listed at 1007 NE 7th Terrace, Suite 5, Cape
Coral, Florida 33909.
JURISDICTION AND VENUE
11. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §
1332 in that Plaintiffs and Defendants are citizens of different states and/or foreign states and the
amount in controversy exceeds $75,000 exclusive of interest and costs.
3
12. This Court has personal jurisdiction over Defendant SolX Ltd., SolX Energy and
Mr. Crabtree as claims involving these persons and entities arise from the operating agreement
(“Operating Agreement”) of SolX Energy, which provides that all disputes be litigated in this
court. This court has personal jurisdiction over Defendant SolX Intl as it has purposely availed
itself of the protection of laws of the State of Maryland by transacting business in the State of
Maryland and by tortiously interfering with SB Energy, a Maryland company.
13. Venue is proper in the Baltimore Division of the United States District Court for
the District of Maryland as many of the claims herein arise from the Operating Agreement of
SolX Energy, which expressly states venue shall be in this Court.
FACTS COMMON TO ALL COUNTS
Background of SolX Energy Limited
14. SolX Ltd is engaged in the business of supplying solar assisted commercial
energy reduction systems developed for modulating refrigeration and air-conditioning systems of
all sizes, serving customers in the private industry and governments in more than 48 countries
internationally.
15. SolX Ltd focuses on patented renewable or solar thermal, energy assisted
refrigeration and HVAC systems designed to use solar power to increase the efficiency of
conventional systems.
16. SolX Ltd markets itself as having “The Most Energy Efficient Refrigeration and
Air Conditioning System in the World.”
17. Until recently, SolX Ltd did not sell products or operate within the United States.
4
The Decision to Do Business in the Americas
18. At all times relevant to this Lawsuit, Mr. Crabtree was the moving force who
controlled, directed and managed SolX Ltd as a shareholder, owner, director, officer and CEO.
19. In or around 2016 and early 2017, Mr. Crabtree and other directors of SolX Ltd
engaged in ongoing discussions about penetrating the untapped and potentially lucrative markets
in North America, South America, Central America and the Caribbean (collectively the
“Americas”) for SolX Ltd products and services.
20. In broad terms, it was discussed and agreed that an entity would be formed in the
United States that would be a “replica of the UK business trading in the Americas” with “infinity
rights” on all “patented process solutions.”
Formation and Ownership of SolX Energy, LLC
21. On or about February 8, 2017, SolX Energy was formed and organized in the
State of Delaware to serve as the vehicle by which SolX Ltd would do business within the
Americas.
22. To that end, a pre-formation Operating Agreement was executed for SolX Energy
dated January 25, 2017 confirming that the purpose of the company was to “build the local sales
force, distribution and dealer networks” necessary to grow sales of products and services within
the United States.
23. Pursuant to the express terms of the Operating Agreement, ninety percent (90%)
of SolX Energy was owned by SolX Ltd, with the remaining ten percent (10%) ownership
interest held by SB Energy.
5
24. The Operating Agreement defines “Required Majority” to be a simple majority of
the percentage interests of all members (i.e. 50.1%). SB Energy was, and continues to be, a
minority owner/member of SolX Energy.
Potential “Additional Interests” to SB Energy
25. Section 5(a) of the Operating Agreement provides that SB Energy could earn,
accrue and vest additional ownership interests of up to twenty (20%) percent in SolX Energy
based upon SolX Energy’s attainment of certain annual sale benchmarks (1% interests for every
one million dollars in sales during any year). Such additional interest would result in a
concomitant reduction in the interests held by SolX Ltd.
26. Similarly, Section 5(b) of the Operating Agreement provides that SB Energy
could obtain up to an additional five (5%) percent ownership interest based on certain triggering
events.
27. SolX Energy did not attain its financial and market goals due to Mr. Crabtree’s
malfeasance.
28. SB Energy, therefore, has not been granted additional interests due to the
malfeasance of Mr. Crabtree.
Licensing Rights
29. In or around February of 2017, SolX Ltd and SolX Energy entered into a contract,
the “Master Dealer Agreement,” which gave SolX Energy exclusive licensing rights of all
trademarks, patents, proprietary information and products held by SolX Ltd and to be held by
SolX Ltd, for SolX Energy use in the Americas.
30. The Master Dealer Agreement bestowed and granted immediate exclusive
licensing rights to SolX Energy in North America and the Caribbean (“Initial Territory”), and
6
provides for further exclusive rights over Central America and South America (“Other
Territories”) upon attainment of certain sales and volume requirements.
31. Section 3 of the Master Dealer Agreement states that the length of the contract is
for a term of five (5) years commencing upon execution of the Master Dealer Agreement, with
continuing automatic five-year term renewals.
32. The Master Dealer Agreement states that SolX Ltd cannot terminate the contract
except for certain acts of default, events or instances outlined in Section 10 of the Master Dealer
Agreement.
33. SolX Ltd never terminated the Master Dealer Agreement.
Management of SolX Energy
34. The Operating Agreement identified the initial “Manager” for purposes of running
the business of SolX Energy as SolX Ltd, which Mr. Crabtree controlled.
35. Mr. Crabtree held himself out as an officer of the CEO of SolX Ltd and SolX
Energy and controlled, directed and managed SolX Energy, SolX Ltd and other SolX Intl.
36. Mr. Crabtree had access to all bank accounts and had check writing authority for
the bank accounts of SolX Energy.
Fiduciary Duties
37. By reason of his position as Manager, CEO, officer, and director of SolX Energy
and SolX Ltd, and due to the fact that Mr. Crabtree controlled and ran those companies, Mr.
Crabtree and SolX Ltd, owed the minority member, SB Energy, the fiduciary duty to exercise
good faith and diligence in the administration of SolX Energy affairs and in the use and
preservation of its property and assets, along with the highest obligations of fair dealing.
7
38. Similarly, Mr. Crabtree in his capacity as CEO of SolX Energy and SolX Ltd was
required to act in furtherance of the best interests of SolX Energy and to exercise good faith and
diligence in the administration of SolX Energy affairs and in the use and preservation of its
property and assets, along with the highest obligations of fair dealing.
39. Mr. Crabtree, because of his positions of control and authority in SolX Energy
and SolX Ltd took actions that harmed SolX Energy and SB Energy and did so willfully.
SUBSTANTIVE ALLEGATIONS
Overview
40. In or around May of 2017, SolX Energy first opened a bank account with Wells
Fargo for purposes of operating its business (“Bank Account”).
41. From May of 2017 through present, Mr. Crabtree has misused, diverted and
plundered the funds and resources of SolX Energy, using it as a personal piggy bank.
Use of SolX Energy Funds for Payment of Personal Legal Fees
42. On multiple occasions throughout 2017, 2018 and 2019, Mr. Crabtree diverted
funds of SolX Energy for payment of his legal fees, legal expenses and in settlement of a
personal lawsuit.
43. By way of background, on December 29, 2015, Mr. Crabtree, along with others,
was sued in his individual capacity by Genevieve Hammond and Sedna Aire USA, Inc., in
federal court in Florida in the matter styled Sedna Aire USA, Inc., et al. v. Sunologi, Inc., et al.
(S.D. Fla. 2015)(Case No. 15-cv-24753) (“Hammond Lawsuit”).
44. One of Mr. Crabtree’s other companies, Cool ROI, Inc. (“CRI”), was also named
a party defendant in the Hammond Lawsuit.
8
45. On or about December 19, 2016, judgment in the Hammond Lawsuit was entered
against Mr. Crabtree, CRI and others.
46. Upon information and belief, Mr. Crabtree, CRI and/or others also entered into a
settlement agreement requiring the payment of monies to Plaintiffs in that matter and the case
was closed.
47. Mr. Crabtree and CRI were represented by the law firm of Johnson & Martin,
P.A. in the Hammond Lawsuit, with offices in Ft. Lauderdale, Florida.
48. Upon information and belief, Mr. Crabtree incurred significant legal fees, costs,
and expenses in connection with the legal representation by Johnson & Martin, P.A. in its
defense of the Hammond Lawsuit.
49. SolX Energy was not a party to the Hammond Lawsuit and had not been formed
and organized at the time judgment was entered against Mr. Crabtree and CRI.
50. Despite this, Mr. Crabtree used monies of SolX Energy to pay for some, if not all,
legal fees, costs and expenses he and/or CRI incurred in the Hammond Lawsuit.
51. There are corresponding entries in the General Ledger of SolX Energy reflecting
over twenty-five thousand dollars ($25,000) in legal fees paid from the Bank Account to Johnson
& Martin, Mr. Crabtree’s personal attorneys, in several installments, between September of 2017
and February of 2019.
52. In addition, upon information and belief, Mr. Crabtree directed a payment of
twenty-thousand dollars ($20,000) directly to Ms. Hammond from the Bank Account as part of
the monetary settlement in his lawsuit. That payment is reflected in the General Ledger as a
payment to “Ginny Hammond- legal fees.”
9
53. Upon information and belief, Mr. Crabtree used SolX Energy funds to pay the
personal legal fees he incurred with his immigration attorney – Elliot Green - totaling
approximately seven thousand dollars ($7,000). It is reflected in the General Ledger as a
payment to “Elliott Green- Green Card.”
Use of Company Funds to Build or Improve Personal Property
54. Mr. Crabtree obtained the title and rights to a parcel of land and improvements
located in Lee County, Florida by warranty deed on or about May 18, 2016. The site address of
the property is 1457 Vendome Court, Cape Coral, Florida 33904, not far from Mr. Crabtree’s
current residence.
55. Upon information and belief, Mr. Crabtree hired a company named M1 Builders
to build or renovate a home on this site for his personal benefit and that of his family using SolX
Energy funds.
56. On or about September 14, 2018, Mr. Crabtree wrote a check for fifty thousand
dollars ($50,000) to M1 Builders but did not enter the transaction on the company’s General
Ledger.
57. Approximately three weeks later, on October 8, 2018, Mr. Crabtree recorded this
payment on the company’s General Ledger as an expense under the entry “Net Zero House
Builder.”
58. The phrase “net zero house” is in reference to an energy efficient home which
incurs no energy utility bills over the course of a year. Net zero solutions are just one of the
services offered by SolX Energy to the general public.
59. By designating an expense of $50,000 dollars to “net zero house” on the General
Ledger, Mr. Crabtree was masking the real use of the funds and attempting to cast the use as a
10
deductible expense of the business, even though it was for his personal use only and there was no
business purpose for the use of those funds.
60. After being confronted about this fraud, Mr. Crabtree, on or about June 14, 2019,
instructed his bookkeeper, Nicole Zarobinski (“Ms. Zarobinski”), to change retroactively the
General Ledger entry for this expense to a “dividend” to Mr. Crabtree.
61. On or about December 5, 2018, Mr. Crabtree authorized and caused a wire
transfer from the Bank Account to M1 Builders in the amount of twenty thousand dollars
($20,000). Upon information and belief, these monies were, once again, for improvements and
renovations to Mr. Crabtree’s personal property.
62. After being confronted about this fraud, on or about June 14, 2019, Mr. Crabtree
instructed his bookkeeper, Ms. Zarobinski, to change retroactively the General Ledger entry for
this expense to a “dividend” to Mr. Crabtree.
63. In addition, upon information and belief, Mr. Crabtree has diverted over twenty
thousand dollars ($20,000) more in SolX Energy funds for building materials and solar
equipment for his personal property from 2018 through present.
64. Mr. Crabtree had these payments entered on SolX Energy’s General Ledger as
“net zero” expenses in an attempt to mask the true reason for the payments.
Cash Withdrawals and Wire Transfers
65. Between June of 2017 and May of 2018, Mr. Crabtree personally made cash
withdrawals and/or wire transfers from the Bank Account totaling ninety-thousand seven
hundred dollars ($90,700).
66. Mr. Crabtree designated these withdraws and wire transfers as expenses on the
General Ledger as “Consulting Fees” of CRI.
11
67. CRI, however, was not a consultant for SolX Energy and did not provide any
form of consulting services for SolX Energy.
68. Upon information and belief, Mr. Crabtree diverted these funds for his personal
use and identified the transfers as supposed legitimate expenses of SolX Energy.
69. In addition, SolX Energy’s General Ledger reflects other entries indicating more
misappropriation and diverting of SolX Energy funds by Mr. Crabtree from the Bank Account
and making use of SolX Energy assets to fund a personal lifestyle, which included paying for a
family cruise on Royal Caribbean, paying Sea Tow cost for his personal boat, travel, and many
other personal expenses.
70. At this juncture, based on limited access to information, the General Ledger
reveals that Mr. Crabtree diverted nearly a quarter of a million dollars from SolX Energy for his
personal use and benefit. Discovery in this matter will shed greater light on this ongoing pattern
of misuse and fraud.
Use of SolX Energy Funds to Make Patent Payment Obligations
71. In addition to misusing SolX Energy funds for his own personal benefit and self-
dealing, Mr. Crabtree repeatedly used and misused SolX Energy funds to make payment
obligations of other entities, including payment obligations of SolX Ltd.
72. For example, throughout 2017 and 2018, Mr. Crabtree wire transferred a total of
$60,000 dollars ($60,000) from SolX Energy to certain individuals to pay for SolX Ltd
obligations regarding certain patents.
73. By depriving SolX Energy of needed capital and resources at a critical period
following startup operations, Mr. Crabtree caused deleterious harm to SolX Energy.
12
74. Mr. Crabtree’s actions also prevented SolX Energy and SB Energy from reaching
sales and revenue goals that would have brought revenue into SolX Energy and would have
allowed SB Energy to obtain an additional ownership interests in SolX Energy in accordance
with the Operating Agreement.
Mr. Crabtree Seeks out an Accredited Investor for Funding
75. Having plundered the accounts and resources of SolX Energy, Mr. Crabtree set
about looking for new investors and a capital infusion into the business to continue his lavish
lifestyle.
76. In 2018, Mr. Crabtree, diverted SolX Energy funds to pay a total of seventeen
thousand dollars ($17,000) to an individual named Steven Lyga (“Mr. Lyga”) and an entity
named the “Deal Making Institute” to assist SolX Ltd in finding an investor.
77. In or around mid-to-late 2018, Mr. Crabtree had multiple meetings and
conversations with an individual named Sean Campbell (“Mr. Campbell”), purportedly to pitch
SolX Energy as an investment opportunity.
78. Mr. Campbell, thereafter, pledged to invest, based on a delayed payment
schedule, a total sum of two million five hundred thousand dollars ($2,500,000) of capital
funding, to begin in February of 2019. Neither SolX Energy nor SB Energy benefitted from this
investment. The investment, instead, went into a new company – SolX Intl - and, thereafter,
SolX Energy’s assets and funds were diverted and used to support SolX Intl, further harming
SolX Energy.
SolX Energy International, Inc. is Formed
79. On or about January 22, 2019, SolX Intl. was formed and organized in the State of
Florida.
13
80. Neither SolX Energy nor SB Energy were part of the formation of SolX Intl.
Further, they did not consent to the formation of SolX Intl, and were given no ownership
interests in SolX Intl.
81. The Master Dealer Agreement gave SolX Energy exclusive rights to sell in the
United States and the Territory. SolX Energy has not assigned any of its rights to SolX Intl.
82. Upon information and belief, Darrin Schutt (“Mr. Schutt”) of The Schutt Law
Firm, P.A., represented Mr. Campbell in connection with his investment into SolX Intl, including
negotiations. Mr. Schutt also prepared the documents to create SolX Intl.
83. Mr. Crabtree used SolX Energy funds to pay for some of Mr. Shutt’s legal fees
and expenses, in violation of his fiduciary duties and obligations to SolX Energy.
Conversion of Warehouse Product and Equipment
84. Between August of 2017 and January 22, 2019 – the day on which SolX Intl was
formed - SolX Energy had spent in excess of five hundred thousand dollars ($500,000) on air
conditioning equipment, solar panels and product (collectively “Product”). The Product was to
be sold by SolX Energy as part of its business.
85. The SolX Energy Product was stored at a warehouse in Cape Coral, Florida,
which was rented and paid for by SolX Energy. The warehouse also contained tangible personal
property belonging to SolX Energy, including, but not limited to, a forklift, racking and an
assortment of other items.
86. Upon information and belief, at the time SolX Intl was formed, SolX Energy still
owned and had possession of nearly one half of the Product and the Product remained in
inventory in the Cape Coral warehouse.
87. Following the formation of SolX Intl, Mr. Crabtree, without authorization, took
14
the Product and has been selling it through SolX Intl but has not paid SolX Energy for taking its
Product. Upon information and belief, monies and revenue derived from the sale of these
Products have been placed in accounts owned and/or controlled by SolX Intl.
88. Between January 24, 2019 and April 17, 2019 (after the formation of SolX Intl),
Mr. Crabtree continued to use SolX Energy accounts and funds to purchase approximately two
hundred and twenty three thousand dollars ($223,000) of additional Product for the benefit of
SolX Intl.
89. Between February 25, 2019 and July 23, 2019, Mr. Crabtree used SolX Energy
accounts and funds to pay the monthly rent for the Cape Coral warehouse that is now being used,
operated and controlled only for the benefit of SolX Intl.
Use of SolX Energy Funds for SolX Ltd Payroll
90. On four separate occasions between January 31, 2019 and March 29, 2019, Mr.
Crabtree used SolX Energy accounts and funds to meet payroll obligations of SolX Ltd in the
collective sum of ninety-three thousand, seven hundred thirty one dollars and sixty cents
($93,731.60).
91. By April of 2019, Mr. Crabtree had drained nearly all assets, accounts and
holdings of SolX Energy, leaving it gutted.
Discovery of Fraud and Financial Irregularities
92. David Parsons (“Mr. Parsons”) was the only individual, other than Mr. Crabtree, who
had access to the General Ledger for both SolX Energy and SolX Ltd and in April of 2019, Mr.
Parsons indicated to Mr. Battaglini that there appeared to be some very concerning entries and
financial irregularities in the General Ledger of both entities.
93. Mr. Parsons addressed these concerns with Mr. Crabtree.
15
94. On June 10, 2019, Mr. Crabtree sent an email, wherein, in partial response he
admitted that he had taken fifty-thousand dollars ($50,000) from SolX Energy to make an
installment payment on the settlement in the Hammond Lawsuit, but that he just “borrowed” the
money to avoid the “poor exchange rate” in the United Kingdom.
Internal Audit is Authorized
95. On or about June 11, 2019, an extra ordinary (a/k/a emergency) board meeting
was held with regard to the SolX Energy and SolX Ltd General Ledgers. During that meeting,
the irregularities were discussed and it was agreed and approved that Mr. Parsons would perform
a preliminary internal audit regarding Mr. Crabtree’s dealings in SolX Energy and SolX Ltd.
96. After that meeting, Mr. Crabtree sent out another email, wherein he desperately
set out several post hoc rationalizations for his conduct. In that same communication, he
threatened various persons and insisted he had not done anything illegal. The email concluded
that “I will be taking a paid vacation from now until such time that David [Parsons] is ready to
present his findings.”
97. On June 12, 2019, Mr. Crabtree sent yet another mail stating he had spoken with
“counsel” and was demanding the right to receive questions from Mr. Parsons and give written
responses in regards to anything Mr. Parsons uncovered in the internal audit review process.
98. Later that same day, Mr. Crabtree sent a letter to various SolX Ltd board
members, via email. The letter was dated January 29, 2017 and stated, in part, that Mr. Crabtree
was “the sole beneficiary and owner of SolX Energy.” When this letter was actually created is
not known.
99. The letter was signed by Mr. Crabtree and, purportedly, witnessed by an
individual named David Turner (“Mr. Turner”).
16
100. Notwithstanding the self-serving proclamation contained in the letter, neither SB
Energy nor Mr. Battaglini ever agreed to a transfer of shares or units giving Mr. Crabtree all
membership interests in SolX Energy. Similarly, upon information, no board members of SolX
Ltd had ever seen, let alone agreed, to the representations made by Mr. Crabtree in this letter.
Internal Audit Questions and Responses
101. On or about June 17, 2019, Mr. Parsons completed his initial internal inquiry and
delivered a lengthy list of questions and issues to Mr. Crabtree, for his response.
102. Two days later, on or about June 19, 2019, Mr. Crabtree provided written
responses to Mr. Parson’s questions and admitted to taking many of the actions that are alleged
in this Lawsuit.
DERIVATIVE AND DEMAND FUTILITY ALLEGATIONS
103. Plaintiff SolX Energy, via its minority member SB Energy, incorporates by
reference all allegations contained in all paragraphs of the Complaint as if more fully set forth
herein
104. The derivative claims in this action address injuries suffered and continue to be
suffered by SolX Energy as a direct result of the actions by Mr. Crabtree and SolX Ltd. SolX
Energy is named as a nominal defendant solely in a derivative capacity.
105. SB Energy was a member of SolX Energy at the time of wrongdoing alleged
herein, and continues to be a minority member at this time.
106. SB Energy will represent SolX Energy adequately and fairly in enforcing and
prosecuting its rights. Prosecution of this action must occur without SolX Ltd and without Mr.
Crabtree’s involvement because it is due to his conduct, personally and as CEO of SolX Ltd and
SolX Energy, that SolX Energy has been harmed. Notwithstanding SolX Ltd’s attempts, via its
17
other officers, to rein Mr. Crabtree’s rogue behavior, Mr. Crabtree continues to make decisions
and take actions as CEO of both SolX Energy and SolX Ltd that continue to harm SolX Energy.
107. At all times relevant to this Complaint, Mr. Crabtree violated corporate
governance principles and committed the wrongdoing set forth in this Lawsuit.
108. Due to the fact that Mr. Crabtree represents that he controls the SolX Ltd voting
majorities and has, as set forth herein, engaged in brazen acts of theft, self-dealing and fraud, any
demand upon Mr. Crabtree or SolX Ltd to sue on behalf of SolX Energy would be futile.
COUNT ONE
DERIVATIVE- BREACH OF FIDUCIARY DUTY
(Defendants Mark Crabtree and SolX Ltd)
109. Plaintiff SolX Energy incorporates by reference all allegations contained in all
paragraphs of the Complaint as if more fully set forth herein.
110. Mr. Crabtree and SolX Ltd owed and continue to owe SolX Energy various
fiduciary obligations, including, but not limited to the obligations of good faith, fair dealing,
loyalty, care, oversight and responsibility for safekeeping and proper commercial use of all
funds, accounts and assets of SolX Energy.
111. Mr. Crabtree and/or SolX Ltd. repeatedly breached these fiduciary responsibilities
by misusing funds, accounts and assets of SolX Energy for Mr. Crabtree’s own personal benefit
and the benefit of other entities Mr. Crabtree was involved in, thereby causing damage to SolX
Energy, compromising its viability, devaluing its worth and affecting its past, current and future
profitability.
WHEREFORE, Plaintiffs demand judgment against Defendants and seek the following
relief:
a. Injunctive relief to:
18
i) enjoin Mr. Crabtree from being involved in any manner with SolX Energy and
order that he cease and desist from taking any action that could have an impact
on SolX Energy;
ii) enjoin SolX Ltd from making any decision pertaining to SolX Energy from this
point forward, without approval of SB Energy;
iii) enjoin SolX Ltd and Mr. Crabtree from allowing use of SolX Energy assets,
funds, and property to be used for any benefit other than the benefit of SolX
Energy;
iii) direct SolX Ltd to reform and improve its corporate governance and internal
procedures to protect SolX Energy from further damaging events such as the ones
alleged herein;
iv) enjoin SolX Ltd, Mr. Crabtree and any other individual or entity from using
any assets, funds and property belonging to SolX Energy to pay for any costs and
fees associated with defending this action;
b. Award SolX Energy compensatory damages against Mr. Crabtree and SolX Ltd,
jointly and severally, for all damages it sustained as a result of the wrongdoing
alleged herein;
c. Award SolX Energy restitution from Mr. Crabtree for all gains to him from the
wrongful acts alleged herein;
d. Punitive Damages;
e. Attorney fees and costs;
f. Such other relief as may be just and proper.
19
COUNT TWO
DERIVATIVE- WILLFUL AND GROSS NEGLIGENCE
(Defendant Mark Crabtree)
112. Plaintiff incorporates by reference all allegations contained in all paragraphs of
the Complaint as if more fully set forth herein.
113. As Manager and CEO of SolX Energy, Mr. Crabtree had a duty to use his best
commercially reasonable efforts to advance the purpose and business of SolX Energy.
114. Mr. Crabtree repeatedly breached his duty to use his best commercially
reasonable efforts for SolX Energy, including, but not limited to: theft, self-dealing, misusing
SolX Energy funds for his personal use and to advance his personal interests; by weakening
SolX Energy assets and exclusive licensing rights to support a competing venture; by converting
SolX Energy Product and equipment for the benefit of SolX Intl; by willfully taking purposeful
actions to devalue SolX Energy; and by affecting SolX Energy’s current and future profitability.
115. Mr. Crabtree’s actions were intentional, willful, malicious, and in reckless
disregard of his duty to SolX Energy and proximately caused damages to SolX Energy.
WHEREFORE, Plaintiff demands judgment against Defendant Mr. Crabtree and seeks
the following relief:
on SolX Energy;
ii) enjoin Mr. Crabtree from allowing use of SolX Energy assets,
Energy;
20
iii) enjoin SolX Ltd, Mr. Crabtree from using any assets, funds and property
belonging to SolX Energy to pay for any costs and fees associated with defending
this action;
b. Award SolX Energy compensatory damages against Mr. Crabtree for all damages
it sustained as a result of his breach of duty to SolX Energy;
COUNT THREE
DERIVATIVE- FRAUD AND DECEIT
(Defendant Mark Crabtree)
117. During the time period relevant to this Lawsuit, Mr. Crabtree, as alleged herein,
suppressed and actively concealed the true facts concerning his self-dealing, theft and misuse of
SolX Energy funds, accounts and assets for his personal benefit.
118. Mr. Crabtree had exclusive knowledge of these true facts, and engaged in
suppression and concealment of these facts with the intent to deceive and defraud SolX Energy.
119. Plaintiff actually and justifiably relied on the state of the facts as they were given
and on the absence of the facts that were suppressed and concealed.
120. Mr. Crabtree’s actions were made with actual malice, evil motive, ill will, fraud
and intent to injure.
21
on SolX Energy;
Energy;
this action;
b. Award SolX Energy compensatory damages against Mr. Crabtree for all damages
it sustained as a result of his fraud;
COUNT FOUR
DERIVATIVE- UNJUST ENRICHMENT
(Defendants Mark Crabtree and SolX Intl)
22
122. Specific benefits were conferred upon Mr. Crabtree by virtue of his authority as
Manager and CEO of SolX Energy, and he had unfettered access to the funds, accounts and
assets of the company. Mr. Crabtree and SolX Intl were conferred benefits that belonged to
SolX Energy.
123. Mr. Crabtree and SolX Intl had knowledge of the benefits that belonged to SolX
Energy.
124. Mr. Crabtree and SolX Intl accepted the benefits, and thereafter used SolX Energy
monies, funds and assets under circumstances that make it inequitable to retain those benefits
without the repayment of their value.
WHEREFORE, Plaintiff demands judgment against Defendant Mr. Crabtree and SolX
Intl and seeks the following relief:
on SolX Energy;
Energy;
this action;
b. Award damages for the amounts Defendants Mr. Crabtree and SolX Intl were
unjustly enriched;
23
c. Punitive Damages;
d. Attorney fees and costs;
e. Such other relief as may be just and proper.
COUNT FIVE
DERIVATIVE- CONVERSION
(Defendant Mark Crabtree and SolX Intl)
126. During the time period relevant to this Lawsuit, Mr. Crabtree and SolX Intl
unlawfully exercised personal ownership, dominion, and control over SolX Energy’s personal
property - product and equipment - inconsistent with Plaintiff SolX Energy’s rights and so as to
deprive SolX Energy of its use.
127. Mr. Crabtree has altogether failed to provide for the return of such personal
property.
128. The actions were taken with actual malice, evil motive, ill will, fraud and reckless
disregard of Plaintiff’s rights.
WHEREFORE, Plaintiff demands judgment against Defendant Mr. Crabtree and SolX
Intl and seeks the following relief:
on SolX Energy;
24
Energy;
this action;
b. Award damages for the amounts Defendants Mr. Crabtree and SolX Intl were
unjustly enriched;
COUNT SIX
DERIVATIVE TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS
AND FUTURE BUSINESS EXPECTANCY
130. Mr. Crabtree and SolX Intl have interfered with the contractual rights of SolX
Energy and have interfered with its future business expectancy by misusing SolX Energy assets,
funds and property to pay for Mr. Crabtree’s personal expenses, by diverting exclusive licensing
rights held by SolX Energy; by willfully taking purposeful actions to devalue SolX Energy; by
converting Products and equipment belonging to SolX Energy and by SolX Energy current
business and business opportunities.
131. Defendants were aware of the exclusive rights given to SolX Energy and knew
SolX Energy had certain assets, funds and property belonging to it. Defendants intentionally and
wrongfully interfered with those rights by disregarding the Master Dealer Agreement and/or
Operating Agreement between SolX Energy and SolX Ltd, diverting funds belonging to SolX
25
Energy for their own use, using exclusive rights belonging only to SolX Energy, taking and
diverting current and potential business opportunities belonging to SolX Energy, and using other
SolX Energy assets and Product in furtherance of their own benefit, without consent.
132. The actions of Mr. Crabtree and SolX Intl were intentional, willful and with
actual malice and caused SolX Energy serious financial harm.
WHEREFORE, as a result of said conduct, Plaintiff seeks:
on SolX Energy;
ii) enjoin SolX Intl and Mr. Crabtree from using SolX Energy assets,
Energy;
iii) enjoin SolX Intl from using SolX Energy exclusive rights without agreement
with and consent of SolX Energy and both its members;
iv) enjoin SolX Intl and Mr. Crabtree from using any assets, funds and property
this action;
b. Award SolX Energy economic damages it has suffered against Mr. Crabtree and
SolX Intl jointly and severally as a result of their tortious
interference;
26
COUNT SEVEN
BREACH OF CONTRACT
(Plaintiff SB Energy against Defendants Mark Crabtree and SolX Ltd)
133. Plaintiff SB Energy incorporates by reference all allegations contained in all
paragraphs of the Complaint as if more fully set forth herein.
134. An Operating Agreement existed between SB Energy and SolX Ltd for the
running of the affairs of SolX Energy and for right SB Energy has a minority member of SolX
Energy. Mr. Crabtree held himself out to be the designated Manager under this Operating
Agreement and served as CEO of SolX Energy and SolX Ltd.
135. Mr. Crabtree as CEO of SolX Ltd breached the Operating Agreement and took
actions that harmed SB Energy.
136. Mr. Crabtree as CEO of SolX Ltd caused SolX Ltd to breach the Operating
Agreement by willfully and recklessly misusing SolX Energy funds to pay for his personal
expenses; by failing to make distributions to SB Energy even though he made distributions to
himself; taking purposeful actions that have devalued SolX Energy and, thereby devaluing SB
Energy; and for causing SolX Energy to not be able to perform as promised pursuant to the terms
of the Operating Agreement so as to interfere with SB Energy economic rights and expectations as
minority member.
137. SB Energy performed as promised under the Operating Agreement.
27
on SolX Energy;
ii) enjoin SolX Ltd and Mr. Crabtree from using SolX Energy assets,
Energy;
iii) enjoin SolX Intl and Mr. Crabtree from using any assets, funds and property
this action;
iv) direct SolX Ltd to reform and improve its corporate governance and internal
procedures to protect SolX Energy from further damaging events such as the ones
alleged herein;
b. Award SolX Energy compensatory damages against Mr. Crabtree and SolX Ltd,
jointly and severally, for all damages it sustained as a result of the wrongdoing
alleged herein;
c. Award SolX Energy restitution from Mr. Crabtree and SolX Ltd for all gains to
them from the wrongful acts alleged herein;
COUNT EIGHT
TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS AND FUTURE
BUSINESS EXPECTANCY
28
139. Mr. Crabtree and SolX Intl have taken intentional and willful acts against SB
Energy by misusing SolX Energy funds to pay for Mr. Crabtree’s personal expenses; by
diverting exclusive licensing rights held by SolX Energy; by willfully taking purposeful actions
to devalue SolX Energy; by converting Products and equipment belonging to SolX Energy and
by attempting to transferring business out of SolX Energy and placing them into SolX Intl.
140. These acts were calculated to cause damage to SB Energy in its lawful business.
141. These acts were done in breach of the Master Dealer Agreement and/or Operating
Agreement between SolX Energy and SolX Ltd, and therefore done with the unlawful purpose to
cause such damage and loss, without right or justifiable cause on its part, which constitutes
malice.
142. The actions of Mr. Crabtree and SolX Intl were intentional, willful and with
actual malice and had the natural, proximate and direct effect of damaging SB Energy.
on SolX Energy, including withdrawing and/or using any funds of SolX Energy in
any manner;
ii) enjoin SolX Intl and Mr. Crabtree from using SolX Energy assets,
Energy;
29
iii) enjoin SolX Intl from using SolX Energy exclusive rights without agreement
with and consent of SolX Energy and both its members;
iv) enjoin SolX Intl and Mr. Crabtree from using any assets, funds and property
this action;
b. Award SB Energy economic damages it has suffered against Mr. Crabtree and
SolX Intl jointly and severally as a result of their tortious interference;
COUNT NINE
FRAUD
(Plaintiff SB Energy against Mr. Crabtree)
144. During the time period relevant to this Lawsuit, Mr. Crabtree, as alleged herein,
suppressed and actively concealed the true facts concerning his self-dealing, theft and misuse of
SolX Energy funds, accounts and assets for his personal benefit.
145. Mr. Crabtree had exclusive knowledge of these true facts, and engaged in
suppression and concealment of these facts with the intent to deceive and defraud SB Energy.
146. Plaintiff actually and justifiably relied on the state of the facts as they were given
and on the absence of the facts that were suppressed and concealed.
147. Mr. Crabtree’s actions were made with actual malice, evil motive, ill will, fraud
and intent to injure.
30
order that he cease and desist from taking any action that could have a negative
impact on SB Energy;
ii) enjoin Mr. Crabtree and SolX Ltd from allowing use of SolX Energy assets,
funds;
iii) enjoin SolX Ltd and Mr. Crabtree from using any assets, funds and property
this action;
b. Award SB Energy compensatory damages against Mr. Crabtree and SolX Ltd for
all damages it sustained as a result of his fraud;
c. Award SB Energy restitution from Mr. Crabtree and SolX Ltd for all gains to him
from the wrongful acts alleged herein;
COUNT TEN
DERIVATIVE AND DIRECT - DECLARATORY JUDGMENT
(Declaratory Judgment Act, 28 U.S.C. §§ 2201, et seq.,)
148. Plaintiffs incorporate by reference all allegations contained in all paragraphs of
31
149. A present, actual and justiciable controversy exists as between Plaintiffs and
Defendants, Mr. Crabtree, SolX Ltd and SolX Intl regarding (i) the indemnification provisions in
the Operating Agreement; (ii) the licensing rights conferred by the Master Dealer Agreement;
(iii) the use of the assets belonging to SolX Energy; (iv) the business opportunities belonging to
SolX Energy; (v) the rights of SB Energy as minority member of SolX Energy; and (vi) the
actions taken by Mr. Crabtree individually and as CEO of SolX Energy, SolX Ltd and SolX Intl.
WHEREFORE, as a result of the actions alleged herein, Plaintiffs request that the Court
declare:
a. Mr. Crabtree and SolX Ltd have breached the Operating Agreement by taking
actions that reach the level of “willful misconduct” and “gross negligence” and, therefore,
Defendants are not entitled to indemnification from SolX Energy under Operating Agreement;
and that neither Mr. Crabtree nor SolX Ltd can use funds of SolX Energy to pay for the legal
fees and costs of this action;
b. The Master Dealer Agreement between SolX Energy and SolX Ltd remains in
effect and has not been terminated;
c. SolX Energy has exclusive licensing rights under the terms of the Master Dealer
Agreement;
d. SB Energy may maintain this action on behalf of nominal Defendant SolX Energy
and that SB Energy is an adequate representative of SolX Energy;
e. Mr. Crabtree and SolX Ltd have breached their fiduciary duties to SolX Energy
and SB Energy;
f. Mr. Crabtree and SolX Ltd have breached the Operating Agreement;
32
g. Mr. Crabtree and SolX Ltd have taken actions that amount to “willful
misconduct” and “gross negligence” and, therefore, they are not entitled to indemnification from
SolX Energy under Operating Agreement;
h. Mr. Crabtree and SolX Intl have tortiously interfered with Defendants contractual
relations and future business expectancy;
i. Mr. Crabtree improperly diverted funds when making distributions to himself;
j. Neither Mr. Crabtree nor SolX Ltd can use funds from any SolX entity to pay for
the legal fees and costs of this action for himself, itself or any other Defendant.
k. Mr. Crabtree can no longer be involved in any matter regarding SolX Energy and
shall have no authority to take action on its behalf.
l. Mr. Crabtree, SolX Ltd, and SolX Intl caused harm to SolX Energy and to SB
Energy.
JURY DEMAND
Plaintiffs demand a trial by jury.
Respectfully Submitted,
____________/s/___________
Ruth Ann Azeredo (MD 16175)
1997 Annapolis Exchange Parkway
Suite 300
Annapolis, MD 21401
(410) 558-1915
(410) 558-1917 Fax
Email: ruthazeredo@comcast.net
AND
____________/s/____________
Timothy W. Romberger
Fed. Bar No. 014408
1025 Connecticut Avenue, N.W.
Suite 1000
Washington, D.C. 20046
33
(202) 248-5053
(703) 582-6494 Cell
timromberger1@comcast.net
Date: August 30, 2019
34

Complaint (ECF File Stamp)

Hochgeladen von

Dokumentinformationen

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Complaint (ECF File Stamp)

Hochgeladen von

Copyright:

Verfügbare Formate

Case 1:19-cv-02522-GLR Document 1 Filed 08/30/19 Page 1 of 34

IN THE UNITED STATES DISTRICT COURT

SB ENERGY INVESTMENTS, LLC, :

contract, and other related claims.

2. Plaintiffs seek declaratory, equitable and injunctive relief, as well as economic

damages, restitution, punitive damages, attorneys’ fees and costs.

individually or collectively as the “Lawsuit.”

4. SB Energy is a limited liability company formed and organized in the State of

also holds a percentage of ownership in SolX Ltd and SolX Intl.

United States based on a substantial investment in a bona fide enterprise.

trademark infringement in 2015 and 2016.

Lancashire, BB7 ILY.

Coral, Florida 33909.

JURISDICTION AND VENUE

amount in controversy exceeds $75,000 exclusive of interest and costs.

Maryland and by tortiously interfering with SB Energy, a Maryland company.

SolX Energy, which expressly states venue shall be in this Court.

FACTS COMMON TO ALL COUNTS

Background of SolX Energy Limited

Air Conditioning System in the World.”

The Decision to Do Business in the Americas

“Americas”) for SolX Ltd products and services.

rights” on all “patented process solutions.”

Formation and Ownership of SolX Energy, LLC

the United States.

interest held by SB Energy.

24. The Operating Agreement defines “Required Majority” to be a simple majority of

minority owner/member of SolX Energy.

Potential “Additional Interests” to SB Energy

concomitant reduction in the interests held by SolX Ltd.

malfeasance of Mr. Crabtree.

SolX Ltd, for SolX Energy use in the Americas.

Territories”) upon attainment of certain sales and volume requirements.

continuing automatic five-year term renewals.

33. SolX Ltd never terminated the Master Dealer Agreement.

Management of SolX Energy

the bank accounts of SolX Energy.

Fargo for purposes of operating its business (“Bank Account”).

Use of SolX Energy Funds for Payment of Personal Legal Fees

(S.D. Fla. 2015)(Case No. 15-cv-24753) (“Hammond Lawsuit”).

a party defendant in the Hammond Lawsuit.

against Mr. Crabtree, CRI and others.

P.A. in the Hammond Lawsuit, with offices in Ft. Lauderdale, Florida.

defense of the Hammond Lawsuit.

and February of 2019.

payment to “Ginny Hammond- legal fees.”

approximately seven thousand dollars ($7,000). It is reflected in the General Ledger as a

payment to “Elliott Green- Green Card.”

Use of Company Funds to Build or Improve Personal Property

services offered by SolX Energy to the general public.

business purpose for the use of those funds.

General Ledger entry for this expense to a “dividend” to Mr. Crabtree.

renovations to Mr. Crabtree’s personal property.

this expense to a “dividend” to Mr. Crabtree.

equipment for his personal property from 2018 through present.

Cash Withdrawals and Wire Transfers

hundred dollars ($90,700).

General Ledger as “Consulting Fees” of CRI.

form of consulting services for SolX Energy.

other personal expenses.

of misuse and fraud.

Use of SolX Energy Funds to Make Patent Payment Obligations

obligations of other entities, including payment obligations of SolX Ltd.

obligations regarding certain patents.