carbone
William B. Crow, OSB # 61018
berow@schwabe.com
Denise M. Graves, OSB # 98236
dgraves@schwabe.com
Patchen M. Haggerty, OSB # 01054
schwabe.com
SCHWABE, WILLIAMSON & WYATT, P-.
Pacwest Center, Suites 1600-1900
1211 S.W. Fifth Avenue
Portland, OR 97204-3795
Telephone (503) 222-9981
Fax (503) 796-2900
Of Attomeys for Plaintiffs
esverves eaiair p.oa2
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
ROBERT AND EUGENIA CERBONE,
Individuals; ACTION WASHINGTON,
‘C., a Washington corporation; and
ACTION OREGON, INC, an Oregon
corporation,
Plaintiffs,
vs,
BRAD SUGARS ACTION
INTERNATIONAL, INC., a Nevada
corporation; ACTION INTERNATIONAL
PTY LTD, an Australian ‘Company;
VIC CIUFFETELLL, an Individual; and
JOHN DOES 1-5,
Defendants.
Page 1- DECLARATION OF ROBERT CERBONE
No. 04-CV-280-BR,
DECLARATION OF ROBERT
CERBONE IN SUPPORT OF
PLAINTIFES’S OPPOSITION TO
DEFENDANTS’ MOTION TO DISMISS
AND/OR STAY THIS ACTIONcarbone
599 590 8059 26/07/08 e2:81P P.038
1, Robert Cerbone, hereby declare under the penalty of perjury that the following is true
and correct:
1. 1am President of plaintiff Action Oregon, Ine. (“Action Oregon”), plaintiff Action
‘Washington, Inc. (“Action Washington”) and am one of the named plaintiffs in this matter. This
declaration is made on personal knowledge.
2, Attached hereto as Exhibit A is a true and correct copy of the Certification of Cheryl
Peterson, the legal custodian of the Washington Securities Division’ s records (“Peterson”), sent
tome by Ms. Peterson,
3. Attached hereto as Exhibit B is a true and correct copy of Action International’s
Franchise Registration Permit No, 70012344, which lists Action International (doing business for
Brad Sugars Action International) as the franchisor, and has an effective date of December 16,
2002. This Registration Permit was faxed to me by Peterson on March 15, 2004
4. Attached hereto as Exhibit C is a true and correct copy of pages 1, 3, 4 and 5 of
Action Intemational’s December 2002 Uniform Franchise Offering Circular (“UFOC”), which
contains statements regarding the business experience of Vie Ciuffetelli and Bradley J. Sugars,
and pages 1-5 of Brad Sugars Action International's (“BSAI”) September 24, 2002 UFOC,
which contains the same information. I received the September 24, 2002 UFOC from
Defendants in October of 2002, and the December 2002 UFOC from Defendants on December 6,
2002.
5. believed that Vic Ciuffetelli was acting on bebalf of Action International Pty Ltd.
(“Action Intemational”) during our negotiations regarding the Oregon and Washington Master
License Agreements (“ML Agreements”). This belief was based on the representations and
statements made in the September 24, 2002 UFOC and December 2002 UFOC that Ciuffeteli
was an employee of Action International and was not an officer or director of BSAI.
6. Since the UFOC stated that Ciuffetelli “was not an officer of director of BSAI," I
understood Ciuffetelii’s “management responsibility” to be on behalf of Action International,
particularly given that Ciuffetelli was listed as an employee of Action International Pty. Ltd.
Page2- DECLARATION OF ROBERT CERBONE SONNE meen
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7. During my negotiations of the ML Agreements with Ciuffetell, I relied on the UFOC
in forming my belief that Ciufftelli was acting in his management role of Action International
(Pty. Lid.) in his negotiations with us, and that Brad Sugars, not Ciuffetelli, was the CEO,
director, President, Secretary and Treasurer (ce., the only officer) of BSAL
8. Attached hereto as Exhibit D is a true and correct copy of an e-mail message sent to
me by Ciuffetelli on August 8, 2003 that was signed, “Vic Ciuffetelli, CEO Action
Intemational.” After April of 2003, Ciuffetelli signed all of his e-snail messages in this way.
9. During a majority of my communications with Ciuffeteli (including e-mail
‘exchanges and phone calls), Ciuffetelli was physically located at the Action Intemational
headquarters in Brisbane, Australia.
10, I believed that Shane Burke was acting on behalf of Action International during our
negotiations regarding the ML Agreements. This belief was based on the representations and
statements made by Ciuffeteli that Burke was “our in house legal/accounting person,” and by
Burke's signing his e-mails “Shane Burke, Legal & Accounts Manager, ACTION International
Pty Ltd.”
11. During all of my communications with Burke (including e-mail exchanges and phone
calls), Burke was physically located at the Action International headquarters in Brisbane,
Australia
12. Attached hereto as Exhibit E are true and correct copies of e-mail messages sent to
‘me by Burke on August 14, 2003 and December 3, 2004, that were signed, “Shane Burke, Legal
& Accounts Manager, ACTION Intemational Pty Ltd.”
13, Attached hereto as Exhibit F is a true and correct copy of the Washington ML
Agreement and the Addendum to the Washington ML Agreement.
14. On or around March 6, 2003, | called Ian Johnson, former COO of Action
Intemational, and told him that Ino longer wished to move forward with the purchase of the
Oregon or Washington territories because Action International would not agree to key terms in
the Addendum to the ML Agreements
Page3- DECLARATION OF ROBERT CERBONE SAS ome ATE
aece