This is the case referred to in the 12/9/91 Forbes article, The Power of Positive Inspiration:
"In 1985 two distributors sued Bill Britt, Dexter Yager and Amway Corp. among others in the state of Washington, alleging they were 'brainwashed' into purchasing enormous amounts of motivational materials. The case was settled out of court in 1988, but a gag order was placed on the court records and participants in the case."
IN THE SUPERIOR COURT OF THE STATE OF WASHINGTON
IN AND FOR THE COUNTY OF PIERCE
MICHAEL and DARLENE HECKART, )
husband and wife, )
) N0. 85 2 01841 4
)
Plaintiffs, ) COMPLAINT
)
vs. )
)
AMWAY CORPORATION, a Michigan )
corporation; DEXTER YAGER and )
BIRDIE YAGER, husband and )
wife; WILLIAM BRITT and )
MARGRET BRITT, husband and )
wife; REX RENFROW and BETTY JO )
RENFROW, husband and wife; and )
JAMES BROOKS and BETTY JEAN )
BROOKS, husband and wife, )
)
Defendants. )
)
COME NOW the above-named plaintiffs and by way of claim state:
DESCRIPTION OF THE PARTIES
I.
Plaintiffs Michael and Darlene Heckart reside as a marital
community in Gig Harbor, Pierce County, Washington.
II.
Defendant Amway Corporation is a Michigan corporation doing
business in Pierce County, Washington.
III.
Defendants Dexter Yager and Birdie Yager are a marital
community residing in Pineville, North Carolina. All acts herein-
after alleged to have been performed by Dexter Yager were done
dividually and on behalf of his marital community and as a
presentative and agent of Amway Corporation.
IV.
Defendants William Britt and Margret Britt reside as a
marital community in Chapel Hill, North Carolina. All acts
hereinafter alleged to have been performed by William Britt were
done individually and on behalf of the marital con~unity and as an
agent and representative of Amway Corporation.
V.
Defendants Rex Renfrow and Betty Jo Renfrow reside as a
marital community in Fairfax Station, Virgina. All acts herein-
after alleged .to have been performed by Rex Renfrow were done
individually and on behalf of the marital community and as an
agent and representative of Amway Corporation.
V.
Defendants Rex Renfrow and Betty Jo Renfrow reside as a
marital community in Fairfax Station, Virgina. All acts herein-
after alleged to have been performed by Rex Renfrow were done
individually and on behalf of the marital community and as an
agent and representative of Amway Corporation.
VI.
Defendants James Brooks and Betty Jean Brooks reside as a
marital conmmunity in Olympia, Thurston County, Washington. All
acts hereinafter alleged to have been done by James Brooks were
performed individually and on behalf of the marital community and
as an agent and representative of Amway Corporation.
VII.
Plaintiffs are informed and believe and therefore allege that
at all times herein mentioned, each of the defendants was acting
as the agent, employee and joint venturer of each and all of the
remaining defendants and as an agent of the Amway Corporation and
were acting within the course and scope of said agency employment
and joint venture during their dealings with plaintiffs and the
acts hereinafter alleged.
VIII.
Plaintiffs pray for leave of the Court to grant additional
party defendants should it later develop that parties other than
the defendants named are also liable to plaintiffs, in whole or in
part, for the injuries and damages sustained.
JURISDICTION
IX.
All of the above defendants carried on business in Pierce
County which directly affected residents of Pierce county includ-
ing plaintiffs herein. Jurisdiction and venue are properly vested
in this court.
DESCRIPTION OF EVENTS FORMING THE BASIS OF THE ACTION
FIRST CAUSE OF ACTION
FRAUD/MISREPRESENTATION
X.
During the winter of 1980 plaintiffs were contacted by
representatives of Amway Corporation who informed them of an
opportunity to earn money operating their own business selling
Amway Corporation products. Plaintiff, Michael Heckart, a dis-
abled veteran of the United States Army became extremely inter-
ested in the business and inquired as to how he could learn more.
XI.
Michael Heckart and his wife Darlene subsequently attended a
seminar at the Rodeway Inn in Tacoma, Pierce County, Washington at
which defendant James Brooks made a presentation which he referred
to as the Amway Plan. Plaintiffs were informed that by following
the plan they would begin making a minimum steady income and that
after two years they would be making a great deal of money.
Plaintiffs were further informed that they would become extremely
wealthy if they followed the Amway plan. Plaintiffs were informed
that they should begin purchasing tapes and books explaining how
to become successful through Amway, that they should set up
meetings with friends and relatives at which members of Amway
would show the plan, that they should begin using Amway products
and that they should begin attending seminars and rallies spon-
sored by the "Yager line" which plaintiffs were told was an Amway
line.
XII.
In the ensuing months plaintiffs became increasingly involved
in Amway Corporation. In accordance with the instructions that
they had been given they began purchasing, listening to and
reading the "tools" ( tapes, books, brochures, etc . ) recommended
and sold to them, began attending seminars and rallies sponsored
by the Yager line and contacted friends and relatives to show the
plan in their home.
XIII.
Plaintiffs were told by defendants that the Yager line was
different from the rest of the Amway lines and that it was a
"sponsoring and management" line rather than a retail line. As
plaintiffs' involvement continued and as they met defendants
Yager, Britt and Renfrow and got to know these defendants and
defendants Brooks this statement was reiterated many times by each
of the defendants. Plaintiffs were told that they were not to
follow the regular Amway materials and not to listen to regular
Amway tapes but rather were to purchase and listen to tapes and
materials which had been prepared specially by and for the "Yager
line.”
XIV.
During this time defendants made continual representations
that plaintiffs would become extremely wealthy and falsely repre-
sented that other members of the Yager line had become extremely
rich through sponsoring and management. Plaintiffs were contin-
ually extorted to spend their money on materials prepared spe-
cially for the Yager line and to ignore the AmWay tools. They
were told that they did not need to worry about selling the Amway
products but that they would become Wealthy solely through spon-
sorship.
XV.
The Amwway plan as proposed by defendants particularly
appealed to plaintiffs as Michael Heckart was a disabled veteran
and needed employment within the home. Further, plaintiff was
additionally particularly vulnerable to defendants’ solicitations
and misrepresentations due to psychological problems he had
suffered as a result of his military experience.
XVI.
As plaintiffs continued with Amway they were continually told
by defendants to spend their money on Yager line products and to
attend Yager line seminars they were additionally told that
defendants were not making any money on sale of the Yager line
products and "tools". Defendants repeatedly told plaintiffs that
they would become extremely wealthy if they followed defendants
recommendations and the plan and continually exhibited signs of
great wealth and explained to plaintiffs that defendants had
become wealthy through exactly the plan that they were represent-
ing to plaintiffs. The manner in which defendants cajoled and
exhorted plaintiffs to spend their money on the Yager line pro-
ducts effectively "brainwashed" plaintiffs and psychologically
induced them to stay with the plan in the hope of obtaining great
wealth and to continue to do as defendants requested.
XVII.
Plaintiffs followed the recommended plan for four years
working full time on the plan and doing everything that was
recommended to them. Plaintiffs lost thousands of dollars follow-
ing the recommended plan and eventually wound up selling their
home at defendants' recommendation. Finally, plaintiffs were
forced into bankruptcy, lost their home, property and possessions,
and suffered great humiliation, embarrassment and emotional
distress.
XVIII.
In approximately August of 1983 plaintiffs began to realize
that a fraud had been committed upon .them and that the represen-
tations made to them were not true. Defendants had misrepresented
the Amway plan and the wealth that was available by following the
"Yager line" plan.
XIX.
Through the actions and statements as aforesaid defendants
misrepresented the Amway plan to plaintiffs, made continued
misrepresentations about the benefits that could be gained through
the plan and the manner in which the benefits could be gained and
made additional misrepresentations to induce plaintiffs to con-
tinue putting money into Amway and the Yager line. The misrepre-
sentations were made with knowledge that they were false and that
plaintiffs would not benefit as promised and with the intent to
deprive plaintiffs of their money. These misrepresentations were
material and were justifiably relied upon by plaintiffs resulting
in serious emotional and economic damage to plaintiffs.
SECOND CAUSE OF ACTION
NEGLIGENCE
XX.
Plaintiffs hereby reallege paragraphs I through XIX as though
set forth herein.
Defendant Am~way Corporation failed to properly supervise
defendants and take appropriate action to insure that defendants
were properly presenting the Amway plan. Such failure breached a
duty of reasonable care owed to plaintiffs and resulted in signi-
ficant general and special damages to plaintiff.
XXII.
At the time plaintiffs began to realize that the Yager line
had misrepresented the Amway program they contacted Amway and
alerted them to this fact. Notwithstanding such notification
Amway failed to investigate or take any action to remedy the
situation or to remedy the damage caused to plaintiffs. By such
failure defendant Amway Corporation breached a duty of reasonable
care owed to plaintiffs and resulting in substantial general and
special damages to plaintiff.
XXIII.
By the actions above alleged all of the named defendants, and
each of them, intentionally or, alternatively, negligently misrep-
resented Amway Corporation to plaintiffs and breached a duty of
reasonable care owed to plaintiffs in continuing to exhort plain-
tiffs to put their money into Amway Corporation and in continuing
to promise plaintiffs great wealth and in failing to disclose the
true percentage of distributors who actually achieved the earn-
ings, profits or sales.which defendants promised that plaintiffs
could achieve .
THIRD CAUSE OF ACTION
MISREPRESENTATION OF POTENTIAL EARNINGS
XXIV.
Plaintiffs hereby reallege paragraphs I through XIX of the
first cause of action and paragraphs XX through XXII of the second
cause of action as though set forth herein.
XXV.
Defendants and each of them misrepresented the past, present
or future profits, earnings and sales from participation in Amway.
XXVI.
Defendants and each of them represented by implication, by
use of hypothetical examples and otherwise that plaintiffs would
arn and achieve a stated amount of profits and earnings and/or
sales in excess of the average profits, earnings or sales of Amway
distributors and failed to disclose in any manner whatsoever the
average profits, earnings or sales or the percent of distributors
who actually achieve the profits, earnings or sales that defen-
dants represented that plaintiffs would earn.
XXVII.
Such misrepresentations and failure to disclose were in
direct violation of the written order of the Federal Trade Commis-
sion issued on May 8th, 1979 and were violative of the laws of the
State of Washington.
XXVIII.
The conduct of the defendants as aforesaid and as stated
throughout this complaint provides plaintiffs with a claim for
punitive damages under the applicable laws of the State of
Michigan as well and general, special and treble damages pursuant
to Washington law.
FOURTH CAUSE OF ACTION
BUSINESS OPPORTUNITY FRAUD ACT
XXIX.
Plaintiffs hereby reallege paragraphs I through XIX of the
first cause of action, paragraphs XX through XXIII of the second
cause of action and paragraphs XXIV through XXVIII of the third
cause of action as though set forth herein.
By the actions and failure to disclose as aforesaid defen-
dants made untrue and misleading statements of material fact, and
omissions of material fact, in connection witn an offer of a
business opportunity in Washington State and engaged in actions
and conduct designed to defraud plaintiffs and which operated as a
fraud and/or deceit upon plaintiffs and other persons.
XXXI.
Such conduct constitutes a violation of RCW 19.110 et seq.,
the Washington Business Opportunities Frauds Act, and entitles
plaintiffs to attorney's fees, costs and treble damages in amounts
to be proven at the time of trial.
FIFTH CAUSE OF ACTION
WASHINGTON CONSUMER PROTECTION ACT
XXII.
Plaintiffs hereby reallege paragraphs I through XIX of the
first cause of action, paragraphs XX through XXII of the second
cause of action, paragraphs XXIV through XXVIII of the third cause
of action and paragraphs XXIX through XXXI as though set forth
herein.
XXXIII.
The conduct of defendants as alleged herein further consti-
tutes an unfair act or practice in the conduct of trade or com-
merce in violation of RCW 19.86.090, the Washington Consumer
Protection Act entitling plaintiffs to treble damages and a
reasonable attorneys fee.
WHEREFORE, plaintiffs pray for judgment against defendants as
follows:
1. For general and special damages in an amount to be
proven at the time of trial but currently alleged to be in excess
$1,000,000.00 against defendants and each of them resulting
from defendants fraud, misrepresentations, negligence and statu-
tory violations as aforesaid;
2. For treble damages pursuant to the Washington Business
Opportunities Fraud Act and the Washington Consumer Protection Act
and exemplary and punitive damages as allowed by the common law of
Michigan and/or Washington;
3. For attorneys fees and costs in the amount of $15,000 if
this action is uncontested and an additional amount to be set by
the court if this action is contested pursuant to RCW 19.86.090 ,
19.110.130 or otherwise;
4. For such other and further relief as the court deems
just.
DATED this 29 day of March, 1985.
Gordon, Thomas, Honeywell
Malanca, Peterson & Daheim
Attorneys for Plaintiffs