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Unicat V Bloom Energy Complaint

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Unicat V Bloom Energy Complaint

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Unicat V Bloom Energy Complaint

  1. 1. 1 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS GALVESTON DIVISION UNICAT SERVICES, LLC ) ) Plaintiff, ) ) Civil Action No. 3:16-cv-32 v. ) ) BLOOM ENERGY COMPANY ) ) Defendant. ) ) JURY TRIAL DEMANDED ) PLAINTIFF’S ORIGINAL COMPLAINT Plaintiff Unicat Services, LLC files this Original Complaint against Bloom Energy Company and alleges as follows: I. THE PARTIES 1. Plaintiff Unicat Services, LLC (“Unicat”) is a Texas limited liability company established in June 2013 by Brazoria County residents and is located at 5918 South Highway 35, Alvin, Texas 77511. Unicat was in the business of providing services and products to Bloom Energy Company—prior to the grievances made the basis of this Complaint. 2. On information and belief Defendant Bloom Energy Company (“Bloom Energy”) is a California corporation with its principal place of business at 1299 Orleans Drive, Sunnyvale, California 94089. Bloom Energy manufactures and installs on-site power generators worldwide. II. JURISDICTION AND VENUE 1. This Court has original subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1332. 2. Unicat and Bloom Energy are citizens of different states (Texas and California). Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 1 of 25
  2. 2. 2 3. The amount in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. 4. Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391 because a substantial part of the events or omissions giving rise to Unicat’s claims occurred in Alvin, Texas (Brazoria County), located within this District and Division. 5. Bloom Energy is subject to personal jurisdiction because Bloom Energy’s improper conduct alleged herein occurred in, was directed from, and/or emanated from Texas and because Bloom Energy availed itself of the benefits and protections of the State of Texas’s laws by establishing sufficient minimum contacts with the State of Texas such that Bloom Energy could reasonably anticipate being haled into court here. III. FACTS 1. In early 2013 Bloom Energy (including its employee David Sanghera) communicated with Mani Erfan and Jim McKimmy, two residents of Brazoria County who have had a career in serving the catalyst and chemical industries. Bloom Energy inquired whether Messrs. Erfan and McKimmy, through a company they would form, could service fuel cell canisters as well as provide catalyst and related products to put inside the fuel cell canisters. Bloom Energy uses the fuel cell canisters in connection with its fuel cell energy generating business. 2. Mr. Sanghera represented that Bloom Energy was in a rush to find such a service and product supplier as Bloom Energy wanted to transfer the operations of servicing its fuel cell canisters from Mexico and California to some other location in the United States. 3. Messrs. Erfan and McKimmy assured Bloom Energy that Messrs. Erfan and McKimmy could form, invest in and get up and running a company whose purpose and mission would be to exclusively provide the services and products Bloom Energy represented was in urgent Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 2 of 25
  3. 3. 3 need, was in substantial demand—and would continue to be a reliable source of substantial business for Unicat Services for at least three to five years, and likely much longer, in the future. 4. In June 2013 Messrs. McKimmy and Erfan formed Unicat Services for the purpose of potentially doing business with Bloom Energy. 5. On or around June 4-5, 2013, Bloom Energy committed to Unicat Services that Bloom Energy was ready to start transitioning the fuel cell canister business from Mexico and California to Unicat Services, including providing to Unicat Services equipment and goods (in a bailment or lease-like arrangement) as well as design and training services—all of which Unicat Services would need to build and staff a long-term servicing facility for Bloom Energy. Obviously, in return, Unicat Services would have to build and acquire the infrastructure for a servicing facility as well as the needed personnel and resources to be trained and to perform the fuel cell canister work. Bloom Energy also wanted reassurances that it could purchase from Unicat Services at least 3,000 kgs/per month of TSR-122E (a low temperature desulfurization catalyst that Bloom Energy wanted to place in its fuel cell canisters), and more of this and other products for use in the fuel cell canisters as the business progressed. Exh. A (June 4-5 emails). 6. On or around June 7, 2013 Bloom Energy sent Unicat Services a schematic of the assembly line servicing facility and warehouse that Bloom Energy wanted Unicat Services to build by using Bloom Energy equipment transferred from Mexico to Alvin, Texas and by using Bloom Energy’s on-site design services to aid Unicat Services in building and equipping the facility. Bloom Energy also sent pictures, for training and illustration purposes, purporting to show how Unicat Services would unload and clean Bloom Energy’s fuel cell canisters, the pictures apparently showing the unloading and cleaning work being done in the open parking lot of Bloom Energy’s California facilities. Exhs. A (emails with pictures) & B (schematic): Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 3 of 25
  4. 4. 4 7. On June 17, 2013, Mr. McKimmy indicated Unicat Service’s willingness to start making capital acquisitions and improvements to build a servicing facility according to Bloom Energy’s design instructions and in response to Bloom Energy’s urgent request to start a business relationship—but Mr. McKimmy first wanted Bloom Energy’s approval and agreement—before Unicat Services started making substantial capital expenditures. Specifically, Mr. McKimmy asked in writing for approval and confirmation that Bloom Energy was promising to give Unicat Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 4 of 25
  5. 5. 5 Services the servicing work for “all fuel cells for Bloom Energy” and a letter of intent outlining the relationship. Exh. C. 8. By written email response, Mr. Sanghera for Bloom Energy agreed to the terms being requested by Mr. McKimmy’s prior request, stating: “Please use this message as approval to proceed.” Exh. C. 9. Mr. Sanghera followed this written approval with a letter of intent specifying that Unicat Services would be responsible under their agreement to provide the facilities and personnel (at Unicat Services’ cost) needed to perform the fuel cell canister work (including loading, unloading, and recycle of canister material contents, etc.) that Bloom Energy would provide Unicat Services for use in such facilities. Exh. D. 10. Mr. Sanghera further outlined a schedule for implementation and identified a list of the Bloom Energy equipment that Bloom Energy would provide (in a bailment or lease-like arrangement) to Unicat Services for installation in its to-be built facilities. Exh. D. Bloom Energy eventually transferred substantially more equipment as it assisted Unicat Services to design its facility. Mr. Sanghera further specified other actions the parties were to take under their agreement, including (a) Unicat Services was to visit Bloom Energy’s operations in Mexico for training and design instruction for Unicat Services’ to-be-built facilities, (b) Bloom Energy was to come to Alvin, Texas to assist Unicat Services in the design and construction of the fuel cell servicing facilities to be built there, (c) Bloom Energy was to transfer its equipment located in Mexico to Alvin, Texas, and (d) Bloom Energy was to train Unicat Services personnel for the work to be performed under their contract. Exh. D. 11. As part of that training, Greg Wilson (Mr. Sanghera’s boss at Bloom Energy) came to Unicat Services’ facility in Alvin, Texas and did a physical audit and provided instructions to Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 5 of 25
  6. 6. 6 Mr. McKimmy on the nature of the build-out that Unicat Services would have to immediately undertake to handle the substantial work to be given Unicat Services under the parties’ agreement, which both Messrs. Sanghera and Wilson represented would be for the oncoming several years. 12. Relying on Bloom Energy’s promises relating to the scope of the work (all of the fuel cell canister work) and length of the work (no less than three to five years and likely longer), Unicat Services made the capital improvements requested by Bloom Energy (including requests by Messrs. Sanghera and Wilson) at a substantial initial cost and which turned out to be much larger than what Unicat Services originally estimated, and hired seven employees to be trained and to operate under the Unicat Services-Bloom Energy contract. 13. These capital improvements—that Bloom Energy knew Unicat Services was making at Bloom Energy’s request—included substantial concrete, electrical, air conditioning, office facilities and related work. 14. Further, as requested by Bloom Energy, Unicat Services sent Timothy McKimmy (son of Mr. Jim McKimmy and subsequent President of Unicat Services) and/or John Kent (Unicat Services employee and operations manager) to Mexico and to California to observe Bloom Energy’s processes so that Unicat Services could duplicate them in Alvin, Texas. 15. They saw and Unicat Services was told that Bloom Energy had the contents of the fuel cell canisters emptied, canisters cleaned, and the extracted contents sent to public landfills for non-hazardous waste in Mexico and in California. Unicat Services planned on doing the same operation in Alvin, Texas, except it was also going to recycle what fuel cell contents it could using Unicat Services’ technology and know-how. Unicat Services ordered a large roll-off box, placed it near the Unicat Services facility, and planned to fill the roll-off with non-reusable canister contents—because Bloom Energy had effectively represented in 2013 that all of the canister Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 6 of 25
  7. 7. 7 contents was nonhazardous and could be dumped at any public landfill (the process Bloom Energy told Unicat Services was being done in California and Mexico). 16. As discussions between the parties progressed, the only material term that Unicat Services was lacking in writing from Bloom Energy was the price that Unicat Services would charge Bloom Energy for performing the fuel cell canister servicing work (the price for the product sales would be at reasonable and competitive prices commensurate with the market). On or around June 20, 2013 Timothy McKimmy sent in writing Unicat Services’ offer on the price for the servicing work: Unicat Services proposed to charge Bloom Energy $400 per canister serviced, which charge was to cover salary and labor, facilities rent, equipment, utilities, insurance, all other overhead and provide Unicat Services its profit margin. 17. On July 3, 2013, Bloom Energy responded in writing to Timothy McKimmy’s email offer: “after careful deliberation we are going to accept your offer,” Mr. Sanghera stated. Exh. E. 18. Thus, as of July 3, 2013, the parties had a written agreement consisting of the material terms outlining their relationship as set forth in the written materials found in Exhibits A through D. Bloom Energy, however, represented that it intended to flesh out a long form agreement with Unicat Services that would contain all the terms and conditions already agreed to along with miscellaneous terms usually found in Bloom Energy’s vendor agreements. Mr. Sanghera promised to send a template for such in the future. Exh. E. 19. While the parties hoped to start full scale operations in Unicat Services’ built facilities by August 2013, the scale of the investment and renovations and scope of the training took longer than originally anticipated by either party. It was not until around October 2013 that Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 7 of 25
  8. 8. 8 Unicat Services was able to do its first run of fuel cell canister unloading at its newly equipped facility. 20. In the meantime, Messrs. McKimmy, Erfan and Sanghera discussed the terms of a long-form written agreement. On or around September 6, 2013, Mr. Sanghera transmitted Bloom Energy’s proposed draft to Mr. McKimmy, which incorporated many of the key terms that had already been memorialized in the prior writings and other terms that Mr. Sanghera said was normally included in its vendor agreements. 21. When Mr. McKimmy received the draft, however, he noted that Mr. Sanghera’s draft limited the term of the agreement to just one year. This was directly contrary to what the parties had previously agreed to in prior discussions, where Mr. Sanghera represented that the term would be many years to come and no less than three to five years to start out with (and if those years were successful, many more years to follow)—indeed, anything less made no business sense to Unicat Services who was then investing and building (according to the design and training services being provided by Bloom Energy) at substantial cost to Unicat Services in order to accommodate Bloom Energy’s immediate business needs and representations of the substantial business that Unicat Services would enjoy for years to come if Unicat Services made such investments. 22. In fact, this point about duration was important to everyone at Unicat Services— and particularly to Mr. McKimmy who confronted Mr. Sanghera specifically on it around the time of Unicat Services’ infrastructure build-out and first operations. At that time, while Mr. Sanghera was visiting the Alvin, Texas build-out site, Mr. Sanghera threatened to pull the business from Unicat Services unless Unicat Services followed the myriad instructions being given by Mr. Sanghera on his visit. Mr. McKimmy was offended that Mr. Sanghera would resort to this threat Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 8 of 25
  9. 9. 9 as part of Bloom Energy’s “training”—when Unicat Services had been already spending hundreds of thousands of dollars complying with Messrs. Sanghera’s and Wilson’s instructions. Mr. McKimmy was not interested in being manipulated and intimidated by Mr. Sanghera but insisted on a cooperative, mutually beneficial, long term business relationship where the parties treated each other with honesty and business decency. Accordingly, Mr. McKimmy told Mr. Sanghera straight up that if he was going to act “like a jackass” and commence threatening to pull the business after all this money, time and resources was being expended, then Bloom Energy needed to get off Unicat Services’ property and immediately leave. Mr. Sanghera retorted that Bloom Energy was a billion-dollar business, suggesting it could not be intimidated by anything a seven- person operation could say or do. Mr. McKimmy assured Mr. Sanghera that the entire billion- dollar business needed to immediately leave the premises if Bloom Energy was not willing to commit and agree to a long term mutually beneficial relationship because Unicat was not willing to spend hundreds of thousands of dollars only to have it all thrown away in any relationship cut short by Mr. Sanghera’s senseless threats. Mr. Sanghera backed off, became reasonable, and agreed in no uncertain terms to at least a 3-5 year deal, and if things worked well for this initial term, the contract would extend many more years in the future. He did this to assure Unicat Services that its investment in the facilities, people and work, all performed according to the services being provided by Bloom Energy (design and training) was worth the cost as Bloom Energy would not pull out early. 23. In that light, when Mr. McKimmy received Mr. Sanghera’s draft agreement that limited the contract to one year, he immediately called Mr. Sanghera and reminded him of their prior agreement and numerous discussions of an agreement no less than three to five years in length for an initial term and with a likely term of many years longer if the first term went well. Mr. Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 9 of 25
  10. 10. 10 Sanghera apologized for the one-year assertion, which he said was his inadvertent failure to convey the three to five year term to the contract drafter; Mr. Sanghera told Mr. McKimmy he could replace the one year number with three years, and which, as discussed, the parties could lengthen. 24. Mr. McKimmy sent back to Mr. Sanghera proposed changes to many of the miscellaneous, boiler-plate, terms Mr. Sanghera original proposed, but Mr. Sanghera never responded to Mr. McKimmy’s proposed changes addressing the boiler-plate language found in Bloom Energy’s vendor contracts, and the parties merely continued to operate under their prior written agreement (as memorialized in Exhibits A-D) modified by discussions referenced further below. While Mr. Sanghera represented to at least Mr. Erfan that Bloom Energy would finalize the long form agreement and sign it, Bloom Energy never did so, the parties merely operating under the written agreement they already had. 25. Unicat Services performed the first production run in its newly built and retrofitted facilities around October 2013. As it had been trained by Bloom Energy, Unicat Services planned on emptying the canister contents into the nearby roll-off box and to transport the same to a public landfill, as represented had been done in Mexico and California. However, prior to taking the shipment to a public landfill, Messrs. McKimmy and Erfan, as a matter of professionalism and best-practices, decided to test the contents—just to be sure that it was safe to take to a public landfill. 26. Their tests revealed that the Bloom Energy fuel cell canisters that Bloom Energy had transported to Unicat Services (and, according to Bloom Energy, had been previously emptied in Mexico and California and dumped in public landfills) contained an extremely hazardous and toxic material—benzene, which can cause blood cancers under long exposures, and which is a material clearly classified as hazardous by federal and state environmental authorities. Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 10 of 25
  11. 11. 11 27. All of Unicat Services’ personnel had been around Bloom Energy’s canisters without protective gear suitable for hazardous material, but fortunately the exposure had been limited and no employee showed any symptoms of blood poisoning and Unicat Services had not taken the roll off box to a public landfill. While everyone at Unicat Services was relieved, Messrs. McKimmy and Erfan immediately contacted Mr. Sanghera and demanded an explanation why Bloom Energy had represented that the fuel cell canisters contained non-hazardous waste when the exact opposite was true. 28. Moreover, this new development would impact on Unicat Services’ ability to recycle the materials into new canisters, as was contemplated in the original discussions and letter of intent (i.e., Unicat could not recycle the hazardous material under proper procedures and regulations). 29. Mr. Sanghera professed complete ignorance about the hazardous material and assured Unicat Services that Bloom Energy would get the required approvals from government authorities for Unicat Services to handle hazardous waste and would provide suitable training for handling hazardous waste. 30. Mr. Erfan told Mr. Sanghera that Unicat Services intended to freeze the operations until the hazardous waste issue was satisfactorily resolved. Mr. Sanghera literally screamed that Unicat Services could not stop production because Bloom Energy had ongoing delivery commitments that had to be satisfied, and freezing the line would mess up Bloom Energy’s schedules. Unicat Services refused to budge, and Bloom Energy finally relented. Bloom Energy retained a third party to provide training and proper transport and disposal of the hazardous waste, and Unicat Services was thus able to continue its operations for Bloom Energy when those things were in place. Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 11 of 25
  12. 12. 12 31. A couple of months later, however, (end of 2013 or beginning of 2014), Mr. Sanghera called Mr. Erfan and said the $400 per canister price that Unicat Services was charging was too high, especially since Unicat Services could not recycle the fuel cell contents, as originally envisioned (because Unicat Services could not (and would not) do so given the highly hazardous materials in the canisters). Mr. Sanghera told Mr. Erfan that Bloom Energy would have to terminate the contract unless Unicat Services lowered the price to that demanded by Bloom Energy: just over $100 per canister. 32. Having already invested in its facilities, hired seven employees, and hoping to avoid a complete beak down in its operations over Mr. Sanghera’s improper demands (as it was not Unicat Services’ fault that Bloom Energy had failed to disclose that its canisters contained hazardous waste – and it was clearly Bloom Energy’s assumed job to train Unicat Services on the unloading procedures—which a billion dollar company like Bloom Energy should know how to do), Unicat Services hoped it could work out a compromise with Bloom Energy in a revised business relationship: Unicat Services would lower the price (since Unicat Services could not do some of the work as originally contemplated) in return for Bloom Energy’s agreement that it would buy from Unicat Services all of the catalyst and other materials that went into the freshly loaded fuel cell canisters. Unicat Services also offered to Bloom Energy technology that would remove the hazardous waste from the canisters altogether and allow Unicat Services to do the recycling work as originally it had hoped to do.1 1 Unicat Services would have thought that an advertised “green” company like Bloom Energy would have rewarded Unicat Services for bringing to Bloom Energy’s attention the hazardous waste in Bloom Energy’s fuel cell canisters so that Bloom Energy would not expose the environment and people to dangerous toxins. Instead of rewarding Unicat Services for flagging the benzene to Bloom Energy, Bloom Energy used this as a renegotiating hammer to lower the per canister price that Unicat Services could charge (since Unicat Services could not perform the recycle services that it originally thought it could when it did not know Bloom Energy’s canisters Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 12 of 25
  13. 13. 13 33. Bloom Energy declined the latter offer, but accepted Unicat’s agreement to reduce the price in return for Bloom Energy’s commitment to purchase from Unicat Services all of the products that go into the canisters at commercially reasonable terms, but told Unicat Services it would have to phase that process in (since it would need to transition from other vendors of such products). Bloom Energy likewise reaffirmed its commitment to a long term business relationship with Unicat Services. 34. Unicat Services knew that it could not recoup its investment and make the profit anticipated from the canister loading/unloading business at the reduced price of service demanded by Bloom Energy, but Unicat Services could make up the difference and achieve its profitability targets through the product-sales business that would accompany the canister servicing business. Bloom Energy’s agreement to this compromise encouraged Unicat Services to go forward. 35. The parties began doing substantial canister servicing business throughout 2014 at the reduced prices. Bloom Energy also purchased from Unicat Services some of the product necessary for the fuel cell canisters and told Unicat Catalyst that Bloom Energy would shortly be purchasing the rest of the necessary products as promised. Unicat Services waited for this promise to fully materialize and kept inquiring to Bloom Energy. 36. For some reason, in 2014 Mr. Sanghera disappeared as Bloom Energy’s contact with Unicat Services; nobody at Bloom Energy would say where he went, other than to say “he moved on” (unclear what that meant). After Mr. Sanghera’s departure, Mr. Wilson acknowledged to Unicat Services that Bloom Energy had made many promises to Unicat Services through Mr. were toxic). Bloom Energy’s compromise to reduce the per canister price in return to give Unicat sales of all materials in the canister was an acceptable compromise to Unicat Services—but for, on information and belief, Bloom Energy’s fraudulent intent not to honor this compromise. Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 13 of 25
  14. 14. 14 Sanghera that Bloom Energy had not honored yet, but he reassured Unicat Services that Bloom Energy would honor all the promises. 37. In 2015, however, Unicat Services noticed that Bloom Energy was dramatically dropping the number of fuel cell canisters needing serviced. Unicat Services repeatedly asked Bloom Energy for an explanation on the reduced volumes. Bloom Energy intimated that its needs were presently less but never disclosed that Bloom Energy had any intent to redirect the fuel cell business anywhere else or to terminate the business with Unicat Services unilaterally. Unicat Services also kept demanding that Bloom Energy start purchasing all of the canister contents from Unicat Services, per their agreement (as Unicat Services had already relied on that agreement, had dropped its prices, and needed to make up the deficit with product sales). 38. In addition, Bloom Energy never provided notice to Unicat Services at any time of any deficiency in the quality of service Unicat Services was providing or in the quality of the products that Unicat Services had sold to Bloom Energy. 39. If anything, Bloom Energy told Unicat Services in myriad of ways just the opposite. For example, in 2014 Bloom Energy told Unicat Services that it needed to ramp up its capacity to service more fuel cell canisters because Bloom Energy was going to provide even greater volumes of business to Unicat Services. To respond to this promised increase of business, Unicat Services, in reliance thereon, started to build additional facilities to expand its capacity to match what Bloom Energy was demanding. Bloom Energy knew of these expansion plans and of Unicat Services’ commencement of them. 40. In the summer of 2015, however, during the middle of these expansion efforts, at a cost of another substantial sum to Unicat Services, Bloom Energy unilaterally, and without warning, terminated the business altogether. Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 14 of 25
  15. 15. 15 41. On information and belief, Bloom Energy had been secretly building its own canister servicing facility elsewhere (or setting up some other vendor to do that work) and was using Unicat Services as an interim place to have the work done until that facility/vendor relationship was completed. In 2015, on information and belief, this undisclosed source apparently became finished, and Bloom Energy terminated the business with Unicat Services and redirected the fuel cell servicing business elsewhere. 42. In July 2015, Bloom Energy came to Alvin, Texas to “decommission” the Unicat Services facility, i.e., to remove all of Bloom Energy’s bailed/leased equipment that had been installed in Unicat Services’ facility; Bloom Energy left—leaving behind the Unicat Services personnel to swallow the investments made and commitments to Unicat Services’ employees and families. 43. To add insult to injury, Bloom Energy also broke its promise to pay for $51,928.73 in inventory associated with Bloom Energy’s unilateral breach of its agreements to do business with Unicat Services. 44. Specifically, from the very beginning of the relationship, Bloom Energy provided some consumable supplies to Unicat Services that Unicat Services would use and need to continuously replace during their servicing work for Bloom Energy (as opposed to the fixed assets and equipment that Bloom Energy had transferred from Mexico to Alvin, Texas, and which Bloom Energy had come to recover again during the decommissioning of Unicat Services’ facilities). These consumable supplies consisted of nuts, bolts, gaskets, crating materials, tooling, stainless steel mesh, vibratite, etc. 45. At some point in 2014, however, Bloom Energy told Unicat Services that Bloom Energy would no longer supply these consumable materials directly. Instead, Bloom Energy was Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 15 of 25
  16. 16. 16 authorizing Unicat Services to purchase these consumable supplies itself from other vendors and then to bill Bloom Energy for these items as they were used on Bloom Energy fuel cell canisters. The parties operated under this revised procedure successfully…until Bloom Energy unilaterally terminated the business relationship. 46. When Bloom Energy unilaterally terminated the relationship, Unicat Services had $51,928.73 of this consumable inventory for which it needed reimbursed from Bloom Energy. 47. Bloom Energy knows that this consumable inventory was a debt it assumed when Unicat Services originally purchased the consumable inventory, and which debt became immediately due when Bloom Energy unilaterally terminated the business. On July 21, 2015, for example, Bloom Energy (through its employee Ken Gentert) and Unicat Services (through its employee John Kent) prepared a list of this consumable inventory and agreed in writing that it was to be transferred to Bloom Energy (as evidenced by the title of the inventory list), noting in the writing the price that Bloom Energy was to reimburse Unicat Services for the transfer. Exh. F (Transfer List). 48. Months past, however, and Unicat Services never received payment for the agreed upon repurchased list of consumable inventory. John Kent at Unicat Services continued to ask for payment with promise that the designated inventory would then be immediately shipped to Bloom Energy. 49. Bloom Energy eventually prepared three purchase orders (Exh. G) directed to Unicat Services that listed all of this consumable inventory previously agreed to be transferred at the same specified prices found in the Transfer Agreement (Exh. F). Thus, Bloom Energy acknowledged its contractual obligation, consistent with the prior practice and arrangements the parties had used for consumable inventory. In response to the purchase orders, Unicat Services Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 16 of 25
  17. 17. 17 sent Bloom Energy three invoices demanding payment, as Unicat Services had been demanding for the several past months. Exh. H (invoices). 50. Bloom Energy employees orally promised to pay the invoices (as if the Transfer Agreement and its own purchase orders were not enough), but then Bloom Energy continued to refuse to actually send payment. Bloom Energy one time said that it wanted Unicat Services to ship the inventory without payment first; Unicat Services told Bloom Energy that Unicat Services could not extend credit to Bloom Energy given their relationship break down, but offered to ship the inventory if Bloom Energy would promise to have a check cut for $51,928.73 and waiting to be picked up on arrival of the shipped inventory at Bloom Energy’s offices. Bloom Energy did not agree to this, but instead, on January 19, 2016 had its attorney notify Unicat Services that Bloom Energy was cancelling the three purchase orders and was refusing to pay the $51,926.73 altogether. 51. Thus, this conduct adds to Bloom Energy’s heap of broken and false promises and to Unicat Services’ damages. 52. As a result of Bloom Energy’s conduct, Unicat Services as a business has been destroyed. COUNTS Breach of Contract 53. Unicat Services realleges and incorporates all preceding paragraphs above. 54. Unicat Services has fully performed all of its obligations under the contracts it had with Bloom Energy. 55. The parties had enforceable contracts, including one that required Bloom Energy to provide Unicat Services the service work relating to all of Bloom Energy’s fuel cell canisters for a reasonable period of time but no less than three to five years, one that required Bloom Energy Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 17 of 25
  18. 18. 18 to pay $400 per canister or, alternatively, to pay a reduced per canister charge in lieu of Bloom Energy purchasing from Unicat Services all of the product to be contained in the fuel cell canisters, and one that required Bloom Energy to immediately re-purchase the consumable inventory (in the amount of $51,928.73) back from Unicat Services once Bloom Energy unilaterally terminated the relationship. 56. Bloom Energy materially breached its agreements with Unicat Services by unilaterally terminating the relationship prior to the end of the agreement’s term, by failing to pay $400 per canister and/or by failing to purchase from Unicat Services all of the catalyst and materials associated with each canister, and by failing to pay $51,928.73 for the consumable inventory. 57. As a result of Bloom Energy’s breach, Unicat Services has been damaged and is entitled to all just compensation for the loss or damage sustained and as allowed by the law, including one or all of the following: expectation damages (including benefit of the bargain damages, lost profits, etc.), reliance damages (including the money, time and resources invested in building and expanding the business and in lowering its per canister charges) and/or restitution damages. Performance & Promissory Estoppel 58. Unicat Services realleges and incorporates all preceding paragraphs above. 59. If all or any portion of the agreements between Bloom Energy and Unicat Services might be considered unenforceable under the Statute of Frauds or for any other reason, Unicat Services is entitled to alternative relief under the principles of full or partial performance and/or under the principles of promissory estoppel or similar equitable principles. Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 18 of 25
  19. 19. 19 60. Unicat Services fully performed (or alternatively, partially performed) its obligations under the agreement, which actions would take any infirm portion of the contracts outside the Statute of Frauds and allow Unicat Services to enforce the agreements at law. 61. Alternatively, Unicat Services is entitled to enforce the agreements under law or equity under principles of promissory estoppel. Namely, failure to enforce the agreements would produce an unconscionable and fraudulent result to benefit Bloom Energy who is trying to avoid its responsibilities under the agreements. Unicat Services relied on Bloom Energy’s promises as seen in the hundreds of thousands of dollars in investment and activity to build a facility, hire employees, receive design and training services from Bloom Energy, set servicing prices, etc. 62. Allowing Bloom Energy to prejudice Unicat Services by making representations and promises knowing that Unicat Services was relying on them to expend time, money and resources (or in the case of the per canister price reduction, forego money), and then after Unicat Services had so relied, to unilaterally walk out on its obligations would work a gross injustice, if not fraud, on Unicat Services. 63. Under this alternative bases, Unicat Services is entitled to all damages at law and in equity that would be afforded to Unicat Services for Bloom Energy’s breach in this circumstance, including one or all of the following: actual damages, nominal damages, expectation damages (including benefit of the bargain damages, lost profits, etc.), reliance damages (including the money, time and resources invested in building and expanding the business and in lowering its per canister charges), loss of business damages, and/or restitution damages. Fraud & Fraudulent Inducement 64. Unicat Services realleges and incorporates all preceding paragraphs above. Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 19 of 25
  20. 20. 20 65. On information and belief, Bloom Energy never intended to keep the full scope of its promises to Unicat Services, but desired to induce Unicat Services into certain actions that would benefit Bloom Energy until such time that Bloom Energy desired to use its own facilities or another vendor’s facilities and dump Unicat Services altogether. Some of the material and false representations that Bloom Energy made in its course of fraud and/or fraudulent inducement conduct included: a. Representing to Unicat Services that Bloom Energy would commit to a long term contractual relationship, no less than three to five years for an initial term, and if that proved successful, additional years to follow (and failing to disclose that Bloom Energy was planning on and going to unilaterally terminate early); b. Representing to Unicat Services that if Unicat Services invested time, money and resources in building and expanding manufacturing/assembly facilities (according to the design and training services that Bloom Energy would provide), Bloom Energy would be a long term partner and provide the sole and exclusive business to Unicat Services’ facilities and personnel (and failing to disclose that Bloom Energy was planning on and going to unilaterally terminate early); c. Representing in training and demonstration to Unicat Services that the fuel cell canisters did not contain hazardous material and could be dumped in ordinary public landfills (and leading Unicat Services to believe that it could provide recycle and other services with non-hazardous materials) (and Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 20 of 25
  21. 21. 21 failing to disclose that Bloom Energy fuel cell canisters contained highly toxic benzene); d. Representing to Unicat Services that Bloom Energy would pay $400/fuel cell canister during the long term business relationship; e. Representing to Unicat Services that Bloom Energy would buy all the products associated with its fuel cell canisters in return for a reduced per canister service charge; f. Representing to Unicat Services that Bloom Energy would rectify, amend and make up for unfulfilled promises, while at the same time Bloom Energy was secretly planning on unilaterally terminating the business relationship; g. Failing to disclose to Unicat Services that Bloom Energy was preparing to use alternative services and sources for the work and products promised to be given to Unicat Services; h. Representing that Bloom Energy would repurchase the consumable inventory that Bloom Energy required Unicat Services to previously buy (on Bloom Energy’s behalf) at the time Bloom Energy was decommissioning Unicat Services’ facilities; and representing that Bloom Energy would pay the invoices issued for such consumable inventory. 66. For all of the items listed above where Bloom Energy failed to disclose information, Bloom Energy had a duty to disclose such based on the information Bloom Energy had already provided that gave a false impression, or communicated half-truths, and based on the commitments that Bloom Energy was requiring Unicat Services to make. Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 21 of 25
  22. 22. 22 67. All of these representations and omissions were material in that they were important to Unicat Services in the decisions it was making impacting its time, money and resources and the business it was preparing to venture into and continue with Bloom Energy; and all were false (or conveyed a false representation). 68. When Bloom Energy made the statements or omissions above, Bloom Energy knew them to be false or to convey a false representation, or alternatively, made the representation recklessly, as a positive assertion, and without knowledge of its truth. 69. Bloom Energy made the above representations and omissions with the intent that Unicat Services act and rely on them or had reason to expect that Unicat would take the actions specified above. Unicat Services was ignorant of Bloom Energy’s true intentions and did not know the true state of facts concealed by Bloom Energy. 70. Unicat Services in fact did justifiably rely on them. 71. The fraudulent actions caused Unicat Services damages, including one or more of the following: Unicat Services’ actual damages, nominal damages, out-of-pocket damages, benefit-of-the-bargain damages, lost profit damages, destruction of business damages and exemplary damages. Deceptive Trade Practices 72. Unicat Services realleges and incorporates all preceding paragraphs above, and particularly all of the allegations set forth in the immediate prior Count. 73. Unicat Services is a consumer for purposes of the Texas Deceptive Trade Practices Act (“DTPA”). Specifically, it sought or acquired goods or services by purchase or lease (or by bailment). The goods or services sought or acquired included: Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 22 of 25
  23. 23. 23 a. Design services for the proper construction and assembly of Unicat Services’ fuel cell canister assembly plant; b. Training services for the proper operation and of Unicat Services’ fuel cell canister assembly plant; c. Fixed assets used in Unicat Services’ facility to provide the services requested by Bloom Energy; d. Consumable inventory used in Unicat Services’ facility to provide the services requested by Bloom Energy. 74. Bloom Energy can be sued under the DTPA as its DTPA conduct was committed in connection with Unicat Services’ consumer status identified above. 75. Bloom Energy committed one or more of the following wrongful acts: a. The unconscionable actions and course of action specified above. Such included Bloom Energy’s taking advantage of Unicat Services’ lack of knowledge, ability, experience or capacity to a grossly unfair degree and to Unicat Services’ detriment; and b. The false, misleading or deceptive acts under the DTPA statute, including failing to disclose information (or specifically misrepresenting their characteristics or benefits) about goods or services that was known at the time of the transaction, which failure was intended to induce Unicat Services to enter into a transaction that it would not have entered into if the information had been disclosed (a list of the undisclosed information is specified in the prior paragraphs, and particularly in paragraph 65); Unicat Services’ relied on the false, misleading and deceptive acts to its detriment. Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 23 of 25
  24. 24. 24 76. Bloom Energy’s actions were a producing cause of Unicat Services’ damages. 77. Unicat Services is entitled to recover all damages allowed for under the law, including one or all of the following: economic damages, out-of-pocket damages, benefit-of-the- bargain damages, lost profits, loss or destruction of the entire business, lost time, and actual damages. In addition, Unicat Services is entitled to recover in addition to the actual damages up to three times the amount of economic damages (for a total of four times) because of Bloom Energy’s knowing and intentional violation. MISCELLANEOUS 78. Unicat Services realleges and incorporates all preceding paragraphs above, and particularly all of the allegations set forth in the immediate prior Count. 79. To the extent applicable, all conditions precedent have been performed or have occurred pursuant to Tex. R. Civ. P. 54. 80. To the extent applicable, Unicat Services damages and injuries were inherently undiscoverable and objectively verifiable. Alternatively, Bloom Energy fraudulently concealed the wrongs made the basis of this complaint in that (a) Bloom Energy had actual knowledge of its wrongs, (b) Bloom Energy concealed its wrongs by making misrepresentations or by remaining silent when it had a duty to speak, (c) Bloom Energy had a fixed purpose to conceal the wrongs, and (d) Unicat Services relied on the misrepresentations or silence. ATTORNEYS FEES AND COSTS 81. Pursuant to Texas Civil Practice and Remedies Code section 38.001 et seq., and to the relevant provisions of the Texas DTPA, Unicat Services is entitled to recover all attorneys’ fees through time of trial, for post-judgment motions and for any appeal. EXEMPLARY & PUNITIVE DAMAGES Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 24 of 25
  25. 25. 25 82. Unicat Services is entitled to exemplary and punitive damages by reason of Bloom Energy’s fraud and fraudulent inducement, as pleaded above. JURY DEMAND 83. Unicat Services demands a trial by jury on all claims and issues. PRAYER FOR RELIEF Unicat Services, as plaintiff, respectfully prays that the defendant Bloom Energy be cited to appear and answer and that Unicat Services be granted the following damages: a. Money damages as pleaded above; b. Prejudgment and post-judgment interest as provided by law; c. The costs of reasonable attorneys’ fees incurred by Unicat Services in pursuing this action; d. Exemplary and punitive damages; and e. All such other relief, in law or in equity, to which Unicat Services may be justly entitled to receive. Dated: February 2, 2016 /s/ Steve Lundwall Steve Lundwall LEAD ATTORNEY Texas State Bar No.: 12696980 Southern District of Texas: 14180 email: steve@lundwall-law.com Tel.: (832) 209-4220 LUNDWALL LAW PLLC Main Office: 8969 Meadow Dr. Sundance, Utah 84604 Texas Office: 710 North Post Oak Road, Suite 400 Houston, Texas 77024 ATTORNEYS FOR PLAINTIFF Case 3:16-cv-00032 Document 1 Filed on 02/02/16 in TXSD Page 25 of 25

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