Complaint Review: Paper Robot Studios

Earl Mincer
7025 N Scottsdale Rd Ste 304
Scottsdale, AZ 85253

Kitty V'Marie
15560 N. Frank Lloyd Wright Blvd.
Suite B4-414
Scottsdale, Arizona 85260

Re:         Paper Robot Studios, Zenuity Developer Fraud: Website Development
Demand For Payment


Dear Mr. Mincer and Ms. VMarie:

This letter is in connection with the protection and enforcement of its contract rights.   We have made repeated requests to Zenuity and Paper Robot Studios for information regarding the status of completion for certain software and website
development, but those requests have been ignored.  Because of your refusal to respond to our communications, the purpose of this letter is to demand that you immediately remedy your breaches of the Development Agreement and Assignment, as well as the Website Development Terms and Conditions Agreement.

On July 14, 2011, Zenuity LLC entered into a Development Agreement and Assignment (Development Agreement), whereby Zenuity agreed to develop a Website.  Pursuant to the Development Agreement, we agreed to pay to Zenuity certain sums of money at specific points of time, as identified in Schedule B of the Agreement.  During discussions, Mr. Mincer personally
assured that they would not pay for a project and get an uncompleted site. Mr. Mincer also represented that he was the sole owner of Zenuity.  Yet, the Articles of Organization state that there are no members who own more than 20% of the company.  

As of the date of this letter, we have paid to Zenuity more than $72,000 pursuant to the terms of the Development Agreement, but Zenuity has failed to deliver on its obligations under the Development Agreement.

Similarly, on November 11, 2011, Zenuity LLC entered into the Zenuity, LLC Website Development Terms and Conditions Agreement (TC Agreement), pursuant to which Zenuity agreed to perform additional marketing services for us during the development phase of the Database and Website.  As of June 1, 2012, we paid to Zenuity in full the contracted-for amount, but Zenuity failed to deliver on its obligations under the TC Agreement.

The Development Agreement contains specific deadlines which Zenuity has failed to adhere to.  In particular, pursuant to Section 2.A of the Development Agreement, Zenuity agreed that it shall deliver the Project Deliverables no later than the
deadlines set forth in Schedule A. 

Those deadlines have passed and the deliverables have not been provided.  Additionally, the Development Agreement contains specific milestones which Zenuity has also failed to comply with, as set forth in Schedule F.  None of those milestones have been met.  Mr. Mincer personally assured us that on numerous occasions in late 2011 and early
2012 that the work was close to completion. 

Then, he just discontinued returned telephone calls.

More than one year has passed since the Development Agreement was entered into, yet we do not have a website or a database to show for the more than $72,000 it has paid to Zenuity.  Pursuant to the terms of the Development
Agreement and the TC Agreement, we demand that Zenuity immediately deliver to it (a) the source code for the Software, including comments; (b) a description of the grammar(s) for the Software; (c) data structure for the Software; (d) a
description and the structure for the flow of control of the Software; and (e) documentation for the Software.  In
addition, pursuant to Section 3(B) of the Development Agreement, Zenuity must immediately return to us all monies paid to it pursuant to the Development Agreement, in the total sum of more than $72,000.  Finally, Zenuity must immediately return to us all Confidential Information received from us in connection with the Development Agreement.

Based upon our investigation of the facts, there has been a very clear breach of contract by Zenuity. 

In addition, there is evidence that Mr. Mincer and Kitty V'Marie personally fraudulently induced the contract and fraudulently concealed material facts during the contract period, inducing further payments and forebearance from legal action by us.  Further, Mr. Mincer and Ms. VMarie are personally liable to the extent that Zenuity was undercapitalized and was the alter ego of Mr. Mincer and Ms. VMarie.   Alter ego can be established by showing a commingling of assets, which we have evidence occurred because Zenuity closed its doors without any distribution of its assets to its creditors.      

If we do not hear from Zenuity, we will institute a lawsuit against Zenuity, and against Earl Mincer and Kitty V'Marie directly as well as Earl Mincer and Kitty V'Marie doing business as Paper Robot Studios. Pursuant to Arizona law a successor company is liable for the debts of the predecessor company where one company is a mere continuation of the other. Warne
Investments, Ltd. v. Higgins, 219 Ariz. 186, 195 P.3d 645 (App. 2008).  Despite your efforts to hide your identity
using Privacy Protect, we believe we can prove that Paper Robot Studios is a mere successor company of Zenuity and is responsible for its debts. 

Warning to Zenuity:  With each day that Zenuity continues to ignore its obligations to us under the Agreements, the damages which will be awarded us when it prevails in litigation against you continues to grow.  We encourage you to consider your options, and perform your research as to the mounting legal obligations you will encounter in the event a lawsuit is filed. 

Nothing contained in or omitted from this letter shall be deemed a waiver of any of the rights or remedies of us with respect to this matter, nor is this letter intended to be a full and complete recitation of the facts and issues that will be addressed if this matter proceeds to litigation.