To: Associate Attorney
From: Marvin L. Longabaugh, Esq.
Longabaugh & Associates, LLC
2245 Tropicana Way
Las Vegas, NV 89199
Date: March 29, 2011
I met with Kathy Johansen yesterday and she has retained our firm to represent her in a civil action. The facts that I gathered in our initial meeting are listed below:
1. Kathy is a resident of Las Vegas, Nevada and works as an independent contractor, installing, testing, and customizing SpendItGood accounting software systems.
2. In August 2010, she was contacted by Tom Salmon, someone she had worked with, but not for, previously.
3. Kathy’s previous work involvement with Salmon had occurred in Nevada and, at the time, Salmon was working in his capacity as President of Upstream Technologies, a Subchapter S corporation formed in Arkansas and headquartered in Hot Springs, Arkansas.
4. Salmon is a resident of Thackerville, Oklahoma.
5. Salmon owns 50% of the stock in Upstream Technologies.
6. Salmon’s sister, Doris Wells, owns the remaining stock in Upstream and serves as the company’s Secretary/Treasurer.
7. Wells is a resident of Hot Springs, Arkansas.
8. Salmon offered Kathy $75.00 per hour to install, test and customize a SpendItGood installation at WiffCo, a company headquartered in Metarie, Louisiana.
9. It was anticipated by Kathy and Salmon that the entire project would take 10 months.
10. There was no written contract between Upstream and Kathy, but Salmon and Kathy agreed verbally that she would be paid in full for each phase as she completed it: Installation, Testing, and Customization.
11. In September 2010, Kathy traveled to WiffCo in Louisiana and began performing her duties for Upstream.
12. In January 2011, Kathy completed the Installation Phase and submitted an Invoice to Upstream for $60,000 (800 hours work).
13. While awaiting payment, Kathy proceeded to the Testing phase and completed it in March 2011, submitting an Invoice to Upstream for $30,000 (400 hours work).
14. Kathy informed Salmon that she would not proceed to the Customization phase until she was paid for the first two phases.
15. Salmon informed Kathy that Upstream would not pay for the first two phases because WiffCo was dissatisfied with her progress on the project.
16. In subsequent email correspondence with Wells, Kathy has learned:
a. That WiffCo’s dissatisfaction with the project had not been based on Kathy’s performance, but instead on the fact that Salmon had sexually harassed several of WiffCo’s female employees at their Louisiana offices; and
b. That Salmon collected some funds from WiffCo but retained them for his personal use, rather than deposit them into the company bank account.
c. That suing Upstream would be pointless as the company had no assets and had been incorporated solely for the purpose of shielding Wells and Salmon from any liability should Upstream be sued.
17. After numerous attempts to collect from Upstream without resorting to litigation, Kathy hired our firm to pursue legal action on her behalf.
Please determine the appropriate jurisdiction and claims and draft a Complaint on behalf of Ms. Johansen. Please submit it to me for review and comment.