Impulse Marketing Group, Inc. v. National Small Business Alliance, Inc. et al

Filing 11

Impulse Marketing Group, Inc. v. National Small Business Alliance, Inc. et al

Doc. 11

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 1 of 20

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
)(

IMPULSE MARKETING GROUP, INC., Plaintiff, v. NATIONAL SMALL BUSINESS ALLIANCE, INC. and DIRECT CONTACT MEDIA, INC., Defendants.

: : 05 CV 7776 (KMK) (JCF) : : FIRST AMENDED
: COMPLAINT

: : : JURY TRIAL DEMANDED : : ECF CASE
)(i

i

1.

Plaintiff

Impulse Marketing Group, Inc., by its attorneys, Klein, Zelman,

Rothermel & Dichter, L.L.P., as and for its First Amended Complaint hereby alleges, upon information and belief, as follows: 2. Plaintiff Impulse Marketing Group, Inc. ("IMG" or "Plaintiff'), is a corporation

organized under the laws of the State of Nevada, with its principal place of business located at 5887 Glenridge Drive, Suite 400, Atlanta, Georgia 30328. 3. Defendant National Small Business Alliance, Inc. ("NSBA"), is a District of

Columbia corporation with its principal place of business in Washington, D.C. 4. Defendant Direct Contact Media, Inc. ("DCM"), is a California corporation with

its principal place of business in SanDiego, California.

BACKGROUND
5. IMG is an online marketing company that utilizes a network of affiliated entities

to promote, market and sell various products and services, on behalf of third-party advertisers, through commercial e-mail and website-basedadvertisements.
{OOO74721;1}

"",...

Dockets.Justia.com

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 2 of 20

6.

NSBA is a membership-basedassociation of small businessesand individuals that

pools its collective resources to obtain discounts and services ordinarily offered only to large corporations. 7. On or about April 26, 2005, IMG and NSBA entered into a written Advertiser

Insertion Order (the "Insertion Order") and Advertiser Master Terms and Conditions Agreement (the "Terms and Conditions") (collectively, the "Agreement"), whereby IMG would provide certain online affiliate marketing services on behalf ofNSBA for a fee. 8. On or about July 18, 2005, IMG and NSBA entered into an Addendum to the

Agreement (the "Addendum"). 9. Among other things, Section 10 of the Terms and Conditions and Section 2 of the

Addendum each specifically provide that NSBA shall owe interest to IMG on any past due amounts at the rate of one and one-half percent (1 Y2%)per month, plus any and all attorneys' fees and other costs and expenses incurred by IMG in the collection of past due amounts and interest from NSBA. Further, the Agreement provides for unilateral termination, but only upon thirty (30) days' written notice to the other party. 10. The Agreement further grants IMG the right to hold NSBA's agents jointly and

severally liable for all amounts due under the Agreement. As set forth in detail below, DCM is, inter alia, the agent ofNSBA. 11. Pursuant to the Agreement and the Addendum (collectively, the "Contract"), 1MG IMG placed advertisements

provided online affiliate marketing services on behalf of NSBA.

associatedwith NSBA products and/or services throughout IMG's network of affiliated websites, within commercial e-mails transmitted to IMG's proprietary databaseof e-mail addresses,and to the databases of its affiliate marketing partners.
{OOO74721;1} 2

Online users that responded to these

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 3 of 20

advertisements were directed to a website designated by IMG that contained registration applications for products and/or services. 12. In accordance with the Contract, IMG was to be compensated each time an online

user completed a registration application for a particular NSBA product and/or service on the website(s) designated by IMG (each such online user hereinafter referred to as a "Lead"). IMG was responsible for identifying and compiling a list of all Leads and sending such lists to NSBA and DCM. 13. 14. NSBA and DCM acceptedthe services provided by IMG. In addition, in accordance with the Contract, IMG was to be paid a fee for the sale

of products and/or services to any and all online users that responded to IMG-placed advertisements but that did not properly complete the associated registration application on the website(s) designated by IMG (each such online user hereinafter referred to as a "Non Complete"). 15. Substantially all of the Non Completes relating to the Contract were transmitted to

DCM at the explicit direction of DCM. This would allow DCM to then market each of these Non Completes directly. 16. Pursuant to the terms of the Contract and in connection with the above-described

affiliate marketing services, IMG submitted timely invoices on a daily basis to NSBA. These invoices reflected the amount of money owed to IMG for the services provided and the terms of payment. Substantially all invoices for Non Completes, and numerous invoices for leads, were sent to DCM, at DCM's direction, and paid for by DCM.

{OOO74721;1}

3

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 4 of 20

17.

Relying

on the expected compensation

from

NSBA

and DCM,

IMG

paid

hundreds of thousands of dollars in commissions to its affiliate marketers as compensation for the online users that were directed to the website(s) designated by IMG through such affiliates'I marketing efforts. 18. DCM assumed NSBA's payment obligations under the Contract by, inter alia,

compensating IMG with DCM checks from a DCM corporate bank account. 19. As of August 15,2005, NSBA and DCM, on behalf ofNSBA, Thereafter, NSBA and DCM, paid IMG a total of failed

$565,930.50 for services rendered.

on behalf of NSBA,

and/or refused to pay for the outstanding amounts due under the various invoices rendered to NSBA by IMG. 20. On August 19, 2005, NSBA provided written notice that it was terminating without the thirty (30) days notice mentioned by the contract. the

Contract effective immediately,

SUBJECT MATTER JURISDICTION AND VENUE
21. This Court has subject matter jurisdiction over the action pursuant to 28 V.S.C.

§ 1332(a)(l) based upon the complete diversity of the parties. 22. The amount in controversy exceeds Seventy-Five Thousand Dollars ($75,000.00),

exclusive of interest, costs and attorneys' fees. 23. Venue is proper in this district because the parties contractually agreed to venue

of this matter in this Court.

GENERAL JURISDICTION
24. On its website and elsewhere, DCM represents that it delivers marketing

campaigns utilizing

a multi-channel

network of outsourced call centers, broadcast media, print

and direct mail and has helped Fortune 100 companies create, develop, implement and manage
{OOO74721;1} 4

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 5 of 20

large scale direct marketing campaigns through its affiliate base of over 30,000 Internet

marketers.
25. DCM transacts business in New York and contracts in New York and elsewhere

to supply a large volume of goods or services in New York. 26. DCM purposefully availed itself of the privilege of conducting activities within

New York, thus invoking the benefits and protection of New York laws. 27. DCM owns, runs and operates an active website located at www.dircm.com,

where it transacts business over the Internet intentionally reaching beyond the State of California to systematically engage in business with New York-based businessesand New York residents / consumers. 28. DCM-related information is exchanged between the DCM website operator and

New York-based businessesand/or New York-based residents / consumers. 29. DCM solicits business in New York by promoting its own marketing services to

New York-based businesses. 30. businesses. 31. DCM derives substantial revenue from New York residents / consumers that DCM accepts client orders for its own marketing services from New York-based

purchase its New York-based clients' products and/or services through marketing campaigns run by DCM on behalf of its New York-based clientele. 32. DCM admits that it delivers "business to business" and "business to consumer"

marketing services for various New York-based businessesincluding, but not limited to, Chase Manhattan Bank, AT&T, MCI and IBM.

{OOO74721;1}

5

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 6 of 20

33.

DCM admits that it delivers "business to business" and "business to consumer"

marketing services on behalf of the Republican and Democratic National Committees. Upon information and belief, DCM contracted with the Republican and Democratic National Committees to provide them with DCM marketing services. Such services, upon information and belief, are aimed at soliciting New York residential votes in New York City-wide, New York State-wide and national elections, all for substantial fees. 34. DCM continuously contracts to supply DCM client-related goods or services to

businessesand consumers located in the State of New York. For example, DCM develops and implements large-scale marketing campaigns for some of its New York-based clients through the DCM affiliate program, consisting of over 30,000 Internet marketers. Upon information and belief, several hundreds, if not several thousands, of the 30,000 DCM affiliate marketers are domiciled in the State of New York. 35. DCM has consented to the jurisdiction of New York courts in other matters. For

example, DCM has consented to jurisdiction in New York courts when it registered for the domain and URL located at www.dircm.com. Through registration and ownership of the domain and URL located at www.dircm.com, DCM expressly consented to the exclusive jurisdiction of the U.S. Courts, in New York City pursuant to the agreement between DCM and its domain name registrar.

SPECIFIC JURISDICTION
36. In connection with the transactions relating to the contractual relationship

between DCM and IMG, DCM transactedbusiness in New York.

{OOO74721;1}

6

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 7 of 20

37.

Specifically, tens of thousandsof individuals that reside in the State of New York

visited the IMG-run website(s). By way of just a few examples, New York residents located in SenecaFalls, New York, Bronx, New York, Brooklyn, New York, Plainview, New York, Evan Mills, New York, and Freeport, New York visited the IMG-run website(s). 38. Of the tens of thousands of individuals that visited the IMG-run website(s),

hundreds or thousands of individuals became Leads or Non Completes. The Non Completes representing residents from New York were sent to DCM, at the explicit direction of DCM. A limited sampling of these Non Completes demonstrates that the Non Completes consist of New York residents located in Seneca Falls, New York, Bronx, New York, Brooklyn, New York, Plainview, New York, Evan Mills, New York, and Freeport, New York. 39. Furthermore, DCM promoted and marketed products and/or services to By way of just a few examples, DCM promoted and

individuals that reside in New York.

marketed products and/or services to individuals that reside in, among other cities, SenecaFalls, New York, Bronx, New York, Brooklyn, New York, Plainview, New York, Evan Mills, New York, and Freeport, New York. 40. With respect to the specific terms and condition§ of the contractual relationship

between DCM and IMG, DCM compensated IMG for providing DCM with thousands of Non Completes generated from individuals that reside in New York. A limited sampling of these Non Completes demonstrate that such Non Completes represented individuals that reside in Seneca Falls, New York, Bronx, New York, Brooklyn, New York, Plainview, New York, Evan Mills, New York, and Freeport, New York.

{OOO74721;1}

7

--

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 8 of 20

41.

At the explicit

direction of DCM, IMG provided DCM with thousands of New

York resident leads that were generated from IMG-run third party marketing campaigns so that DCM could promote products and/or services.

DCM'S ASSUMPTION OF THE CONTRACT
42. Operating DCM Officer representatives, particularly Raymond Longino ("Longino"), the Chief shareholder

of DCM and Michael

Holleran ("Holleran"),

owner, director,

and/or principal of DCM, assumed the Contract by micro-managing the Contract, directing transmitting and receiving

each transaction underlying explicitly

scores of email relating to the Contract, admitting

each transaction underlying

the Contract, explicitly

to the existence of a

contractual relationship between IMG and DCM, approving the advertising creative to be used in connection with the Contract, reviewing and revising the IMG-run web site terms and conditions, directing that DCM be provided with Non Completes, specifically instructing IMG, at all times, to send the lists of Leads and Non-Completes to a server owned and operated by DCM and by

compensating IMG for both leads and Non Completes. 43. For example, IMG's main contacts throughout the course of performance of the At various points, Longino and Holleran represented

Contract were Longino

and Holleran.

DCM to be the real party in interest with respect to the Contract. 44. that DCM "contracted 45. By way of example, in an email sent in August 2005, Longino represented to IMG was "selling memberships in NSBA" and that IMG was "doing the job" it

with DCM to do." (Emphasis added.) Longino, Holleran and other DCM representatives assumed the obligations under

the Contract by demanding that IMG send Non Completes and Leads directly to DCM.

{OOO74721;1}

8

---

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 9 of 20

46.

Longino, Holleran and other DCM representatives assumed the obligations under For example, in an

the Contract, by requiring IMG to generate sales from incentivised traffic.

email dated June 13,2005, Longino advised IMG that he wanted to "make sure that some of the [NSBA] traffic is incentivised." Longino further represented to IMG that the incentives for

NSBA-generated

traffic "look good," that IMG should "continue to run" the incentivised offers

for products and/or services and that IMG submit any and all new incentived offers for products and/or services, upon DCM's sole request, to DCM for its "review" the incentivised offer. 47. Longino, Holleran and other DCM representatives assumed the obligations under prior to "implementation" of

the Contract by demanding that IMG generate increased traffic for products and/or services. For example, in an email dated August 12, 2005, Longino demanded that IMG "push" to get as much traffic for products and/or services "out" quickly. 48. contractual Longino relationship and DCM assumed the obligations of the Contract by admitting to a in an email dated successful

between IMG and DCM by representing to IMG, are looking

August 12, 2005, that "We [DCM] partnership." 49.

forward to a long and mutually

Longino, Holleran and other DCM representatives assumed the obligations under to IMG that DCM would make payments on behalf of NSBA for

the Contract by admitting

services rendered pursuant to the Contract. 50. Pursuant to the Contract, IMG was to be compensated in two (2) installments, per

payment period, for Leads and Non Completes. During the term of the Contract, IMG was wired the first installment payment for IMG-generated NSBA. However, throughout Leads, sometimes by DCM and sometimes by DCM assumed NSBA's payment

the term of the Contract,
9

{OOO74721;1}

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 10 of 20

obligations under the Contract by issuing DCM corporate checks to IMG for the IMG-generated Non Completes. 51. By way of example, on June 17, 2005, DCM issued a check to IMG in the amount

of $21,690.00, representing $20,105.00 for a second installment payment due and owing to IMG (less $140.00 in wire fees), plus $1,725.00 for IMG-generated with the explicit terms of the Contract. 52. On June 20, 2005, DCM issued a check to IMG in the amount of $2,655.00, Non Completes in accordance Non Completes in accordance

representing payment due and owing to IMG for IMG-generated with the transactions underlying the Contract. 53.

On June 23, 2005, DCM issued a check to IMG in the amount of $19,788.00,

representing $11,668.00 for a second installment payment due and owing to IMG (less $160.00 in wire fees), plus $8,280.00 for IMG-generated Non Completes in accordance with the

transactions underlying the Contract. 54. "pipeline" DCM assumed the obligations report on behalf of NSBA under the Contract by demanding receipt of a

from the applicable billing

processor that was used to

process payment by those individuals IMG-related website via a credit card. 55. 56.

/ consumers that purchased products and/or services at an

DCM is inexorably intertwined and/or closely related to NSBA. DCM assumed the liabilities, benefits and day-to-day control of the Contract and

manifested an intent to be bound by the terms of the Contract. 57. Further, DCM derived substantial pecuniary benefit from the transactions its

underlying the Contract and shared a close relationship / partnership with NSBA in fulfilling contractual obligations.
{OOO74721;1} 10

-

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 11 of 20

58. 59.

DCM was an intended beneficiary under the Contract. The relationship between DCM and NSBA is sufficiently close so that

enforcement of the New York forum selection clause contained in the Contract against DCM is fair and foreseeable. 60. DCM assumed the obligations and liabilities under the Contract and is therefore

bound by the New York forum selection clause contained in the Contract because DCM derived substantial benefits from the Contract, explicitly admitted to the existence of a contractual

relationship between it and IMG and was bound by the Contract. 61. This Court has personal jurisdiction over DCM based upon the New York forum

selection clause contained in the Contract.

PIERCING THE CORPORATE VEIL
62. The allegations contained in paragraphs 62 through 84 are pled as an alternative upon DCM. DCM exercised complete domination over NSBA with

basis to confer jurisdiction

respect to the transactions underlying the Contract. 63. DCM and NSBA share common executive(s), officers and ownership. For

example, NSBA's 64.

Chief Executive Officer, Dennis Mario, is also an executive ofDCM. domination of NSBA was used to injure IMG because DCM and NSBA compensate IMG for payments due and owing IMG under the Contract,

DCM's

failed to sufficiently

while diverting the proceeds of the transactions to DCM. 65. Operating DCM representatives, particularly Raymond Longino ("Longino"), the Chief shareholder

Officer of DCM, of DCM,

and Michael

Holleran ("Holleran"), domination

owner, director, with

and/or principal transactions

exercised complete

over NSBA

respect to the underlying the

underlying

the Contract

by micro-managing 11

each transaction

{OOO74721;1}

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 12 of 20

Contract, transmitting and receiving scores of email relating to the Contract, explicitly each transaction underlying the Contract, explicitly

directing

admitting to the existence of a contractual

relationship between IMG and DCM, approving the advertising creative to be used in connection with the Contract, reviewing and revising the IMG-run website(s)' terms and conditions,

directing that DCM be provided with Non Completes, specifically

instructing IMG, at all times, and by

to send the lists of Leads and Non-Completes to a server owned and operated by DCM compensating IMG for Non Completes, and at times for leads. 66. For example, IMG's

main contacts throughout the course of performance of the At various points, Longino and Holleran represented

Contract were Longino

and Holleran.

DCM to be the real party in interest with respect to the Contract. 67. Furthermore, Longino represented to IMG, in an email sent in August 2005, that

DCM was "selling memberships in NSBA" and that IMG was "doing the job" it "contracted with DCM to do." 68. Longino, Holleran and other DCM representatives exercised complete domination the Contract by demanding that IMG

over NSBA with respect to the transactions underlying send Non Completes and Leads directly to DCM. 69. over NSBA

Longino, Holleran and other DCM representatives exercised complete domination with respect to the transactions underlying the Contract, by requiring IMG to

generate sales from incentivised traffic.

For example, Longino, in an email dated June 13,2005, traffic is incentivised." traffic

advised IMG that he wanted to "make sure that some of the [NSBA]

Longino further represented to IMG in this email that the incentives for NSBA-generated "look good," that IMG should "continue to run" the incentivised

offers for products and/or

services and that IMG submit any and all new incentivized offers for products and/or services,
{OOO74721;1} 12

Ji'

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 13 of 20

upon DCM's sole request, to DCM for its "review" prior to "implementation" of the incentivised offer. 70. Longino, Holleran and other DCM representativesexercised complete domination

over NSBA with respect to the transactions underlying the Contract by demanding that IMG generate increased traffic for products and/or services. For example, in an email dated August 12, 2005, Longino demanded that IMG "push" to get as much traffic for its products and/or services "out" quickly. 71. Longino and DCM exercised complete domination over NSBA with respectto the

transactions underlying the Contract by admitting, for a second time in writing, to the existence of a contractual relationship between IMG and DCM by representing to IMG that "We [DCM] are looking forward to a long and mutually successfulpartnership." 72. Longino, Holleran and other DCM representativesexercised complete domination

over NSBA with respect to the transactions underlying the Contract by admitting to IMG that DCM would make payments on behalf ofNSBA for services rendered pursuant to the Contract. 73. Throughout the term of the Contract, DCM exercised complete domination over

NSBA with respect to the transactions underlying the Contract by issuing DCM corporate checks to IMG for IMG-generated Non Completes sent directly to DCM as well as for leads. 74. By way of example, on June 17, 2005, DCM issued a check to IMG in the amount

of $21,690.00, representing $20,105.00 for a second installment payment due and owing to IMG (less $140.00 in wire fees), plus $1,725.00 for IMG-generated Non Completes in accordance with the transactions underlying the Contract.

{OOO74721;1}

13

t_-

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 14 of 20

75.

On June 20, 2005, DCM issued a check to IMG in the amount of $2,655.00,

representing payment due and owing to IMG for IMG-generated Non Completes in accordance with the transactions underlying the Contract. 76. On June 23, 2005, DCM issued a check to IMG in the amount of $19,788.00,

representing $11,668.00 for a second installment payment due and owing to IMG (less $160.00 in wire fees) plus $8,280.00 for IMG-generated Non Completes in accordance with the transactions underlying the Contract. 77. DCM exercised complete domination over NSBA with respect to the transactions

underlying the Contract by demanding receipt of a "pipeline" report on behalf ofNSBA from the applicable billing processor that was used to process payment by those individuals / consumers that purchasedproducts and/or services at an IMG-related website via a credit card. 78. DCM exercised complete domination over NSBA with respect to the transactions

underlying the Contract by being inexorably intertwined and/or closely related to NSBA. 79. DCM exercised complete domination over NSBA with respect to the transactions

underlying the Contract by manifesting an intent to be bound by the terms of the Contract by explicitly admitting, on at least two (2) occasions, in writing, to be a party to the Contract. 80. Further, DCM exercised complete domination over NSBA with respect to the

transactions underlying the Contract by deriving substantial pecuniary benefit from the transactions underlying the Contract and sharing a close relationship / partnership with NSBA in fulfilling any and all contractual obligations. 81. DCM exercised complete domination over NSBA with respect to the transactions

underlying the Contract by being an intended beneficiary under the Contract.

{OOO74721;1}

14

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 15 of 20

82.

DCM exercised complete domination over NSBA with respect to the transactions

underlying the Contract; and since the relationship between DCM and NSBA is sufficiently close, enforcement of the New York forum selection clause contained in the Contract is fair and

foreseeable.
83. DCM is therefore bound by the New York forum selection clause contained in the

Contract because DCM exercised complete domination over NSBA with respect to the transactions underlying the Contract, derived substantial benefits from the Contract, explicitly admitted the existence of a contractual relationship between it and IMG and was bound by the Contract. 84. This Court has personal jurisdiction over DCM based upon the New York forum

selection clause contained in the Contract.

FIRST CAUSE OF ACTION
(BREACH OF CONTRACT AGAINST NSBA) 85. IMG incorporates by reference paragraphs 1 through 84 above, inclusive, as

though fully set forth herein. 86. 87. IMG has fully performed all of its obligations under the Contract. NSBA has breached the Contract by failing to pay for services when payment

came due. IMG has demanded payment for the services it provided pursuant to the Contract, but NSBA has failed and refused to make full payment. 88. NSBA further breached the Contract by terminating the Contract upon less than

thirty (30) days' written notice.

{OOO74721;1}

15

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 16 of 20

89.

Pursuant to the Contract, after credit for all payments received, NSBA is presently

obligated to pay IMG $680,000.00, plus interest in the amount of one and one-half percent (1Y2%) per month from the date such amounts were due until they are paid in full. IMG is

further entitled to its lost profits plus all costs, expensesand attorneys' fees incurred by IMG, in an amount to be determined at trial. SECOND CAUSE OF ACTION (BREACH OF CONTRACT AGAINST DCM) 90. IMG incorporates by reference paragraphs 1 through 89 above, inclusive, as

though fully set forth herein. 91. DCM assumed and admitted the contractual obligations under the Contract as a

true party in interest. 92. 93. 94. IMG. DCM has repeatedly confirmed its liability for the Contract. IMG has fully performed all of its obligations under the Contract. DCM has breached the Contract by failing to pay for the amounts due and owing

IMG has demanded payment for the services it provided pursuant to the Contract, but

DCM has failed and refused to make full payment. 95. Pursuant to the Contract, after credit for all payments received, DCM is presently

obligated to pay IMG $680,000.00, plus interest in the amount of one and one-half percent (1Y2%) per month from the date such amounts were due until they are paid in full. IMG is

further entitled to its lost profits plus all costs, expensesand attorneys' fees incurred by IMG, in an amount to be determined at trial.

{OOO74721;1}

16

-

Case 1:05-cv-07776-KMK
"-

Document 11

Filed 12/02/2005

Page 17 of 20

THIRD CAUSE OF ACTION (BREACH OF IMPLIED CONTRACT AGAINST DCM) 96. IMG incorporates by reference paragraphs 1 through 95 above, inclusive, as

though fully set forth herein. 97.. By its words and actions, DCM impliedly agreed to pay IMG for the services

provided to NSBA in exchange for the Leads and Non-Completes that it received from IMG.I 98. 99. IMG has fully performed all of its obligations under the Contract. DCM has breached its implied contractual relationship with IMG by failing to pay

for services when payment came due. IMG has demanded payment for the services it provided pursuant to the Contract, but DCM has failed and refused to make full payment. 100. Pursuant to the Contract, after credit for all payments received, DCM is presently

obligated to pay IMG $680,000.00, plus interest in the amount of one and one-half percent (1Y2%) per month from the date such amounts were due until they are paid in full. IMG is

further entitled to its lost profits plus all costs, expensesand attorneys' fees incurred by IMG, in an amount to be determined at trial.

FOURTH CAUSE OF ACTION
(PROMISSORY ESTOPPEL AGAINST DEFENDANTS) 101. IMG incorporates by reference paragraphs 1 through 100 above, inclusive, as

though fully set forth herein. 102. IMG relied to its detriment on Defendants' obligations, representations and

commitments to pay for the online affiliate marketing services provided by IMG.

{OOO74721;1}

17

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 18 of 20

103.

Had IMG known that Defendants would not fully compensate it, IMG would not

have expended time, effort and money marketing the products and/or services. Furthermore, IMG would not have compensatedits affiliates for the marketing services performed by them in connection with the Contract. 104. Under these circumstances, it would be fundamentally unfair to permit

Defendants to deny the existence of a contract, and they should be estopped from doing so. 105. IMG has fully performed all of its obligations under the Contract, and Defendants

have derived the benefits of the Contract. 106. IMG has demanded payment for the services it provided pursuant to the Contract,

but Defendants have failed and refused to make full payment. 107. Pursuant to the Contract, after credit for all payments received, Defendants are

presently obligated to pay IMG $680,000.00, plus interest in the amount of one and one-half percent (1 Yz%)per month from the date such amounts were due until they are paid in full. IMG is further entitled to its lost profits plus all costs, expensesand attorneys' fees incurred by IMG, in an amount to be determined at trial.

FIFTH CAUSE OF ACTION
(QUANTUM MERUIT AGAINST DEFENDANTS) 108. IMG incorporates by reference paragraphs 1 through 107 above, inclusive, as

though fully set forth herein. 109. At the express request of Defendants, IMG rendered online affiliate marketing

services to Defendants with a reasonable expectation of being compensated. 110. The fair and reasonable value of the online affiliate marketing services rendered

to Defendants, less credit for amounts paid, is $680,000.00, plus interest.

{OOO74721;1}

18

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 19 of 20

111. Defendants. 112. 113.

These online affiliate marketing services were rendered for the benefit of

The amounts due have been duly demandedand have not beenpaid. Defendants have been unjustly enriched in the sum of $680,000.00, plus lost

profits interest. 114. Pursuant to the Contract, after credit for all payments received, DCM is presently

obligated to pay IMG $680,000.00, plus lost profits, plus interest in the amount of one and onehalf percent (1 Y2%)per month from the date such amounts were due until they are paid in full, plus all costs, expensesand attorneys' fees incurred by IMG in connection with this action. SIXTH CAUSE OF ACTION (UNJUST ENRICHMENT AGAINST DEFENDANTS) 115. IMG incorporates by reference paragraphs 1 through 114 above, inclusive, as

though fully set forth herein. 116. IMG has enriched, or conferred a benefit upon, both of the Defendants by

providing the services as described herein. 117. The reasonable and fair value of the services provided as described herein, less

credit for amounts paid, is in excessof $680,000.00, plus interest. 118. By refusing to pay for the services provided and accepted, Defendants have been

unjustly enriched in the sum in excessof $680,000.00, plus interest.

{OOO74721;1}

19

Case 1:05-cv-07776-KMK

Document 11

Filed 12/02/2005

Page 20 of 20

SEVENTH CAUSE OF ACTION (ATTORNEYS' FEES, COSTS AND EXPENSES) 119. 1MG incorporates by reference paragraphs 1 through 118 above, inclusive, as

though fully set forth herein. 120. Pursuant to the express terms of the Contract, IMG is entitled to an award of

attorneys' fees, costs and expenses incurred in the collection of past due amounts and interest from NSBA, in an amount to be determined at trial. WHEREFORE, IMG respectfully demandsjudgment against Defendants as follows: (a) An award of monetary damages in the amount of $680,000.00, together with

interest at the rate of one and one-half percent (1 Y2%)per month, plus lost profits; (b) (c) The imposition of a constructive trust; An award of IMG's attorneys' fees, costs and expenses incurred in the collection

of past due amounts and interest from NSBA; (d) (e) Trial by jury on all issues for which a trial by jury is available; and Such other and further relief as the Court deemsjust and proper.

Dated: New York, New York December 2, 2005 KLEIN, & DICHTER, L.L.P.

By:
SeanA. Moyniha -5129) Peter J. Glantz ( G-1063) 485 Madison Avenue New York, New York 10022 [phone] Attorneys for Plaintiff Impulse Marketing Group, Inc.

{OOO74721;1}

20