A trading card distributor has filed a lawsuit against Upper Deck and its CEO, Richard McWilliam, saying the company violated an exclusive agreement by setting up its own network for disseminating products.
J&T Hobby and President Joe Pirozzi are charging Upper Deck with fraud, concealment, conspiracy, breach of good faith and unfair and deceptive business practices.
In a ten-page suit filed in California Superior Court, J&T claims it entered into an agreement with Upper Deck in 1994 and renewed that agreement numerous times, but found out in 2005 that Upper Deck set up shell companies to distribute products, costing J&T a substantial amount of money.
Another group of unnamed individuals is also listed in the suit, which states J&T will be trying to ascertain their identities as the case goes forward. The suit alleges those people also had a part in Upper Deck's business practices.
The court papers state Pirozzi signed an executed "an unconditional personal guaranty promising full performance and prompt payment under the Contract" for distributing Upper Deck products. Upper Deck says Pirozzi's company didn't do what it was supposed to and claims it owes them more than $1 million. However, Pirozzi claims Upper Deck made it impossible for him to make money.
"Upon hearing the rumors, commencing sometime around 2005 and continuously through October 2009, Pirozzi inquired with Defandants, and each of them, whether Defendants owned, controlled, dominated, used, managed the distributing entities," the suit states. Each time, however, the suit says Upper Deck denied the rumors.
The suit says McWilliam and Upper Deck were involved with Edgeman and Vintage, two distributors which became competitors of J&T as it tried to distribute Upper Deck's trading cards. J&T claims its former partner "intermingled" assets and identities in order to control the market for the company's most desirable products.
J&T also says Upper Deck continuously pushed "unprofitable and undesired products" its way and promised to "make up" the monetary difference at a later date. However, J&T claims Upper Deck had no intention to do that and "plotted to unload on Plaintiffs unprofitable and unfavorable Products which were difficult, if not impossible, to redistribute, and then collect against Plaintiffs personal guaranty.
"Defendants have schemed by the terms of the Contract to make Pirozzi personally liable for amount in excess of one million dollars," the suit alleges.
In the suit, J&T called Upper Deck's actions "despicable". The company is seeking general and special damages, restitution, punitive damages and court costs.