When it comes to litigtion, there are far fewer "slam dunks" than you
would think. I agree that the suit sounds weak on the surface, but
won't make further judgment until I read the actual complaint in a few
days.

That's the correct thing to do.

Of course, most suits could have been avoided by better dialog along the way.

Why argue in court for such an expense when one can do that at a meeting or in
front of an arbiter?

On 25 Aug 2003 10:42:48 GMT, (LeModernCaveman)
wrote:

When it comes to litigtion, there are far fewer "slam dunks" than you
would think. I agree that the suit sounds weak on the surface, but
won't make further judgment until I read the actual complaint in a few
days.

That's the correct thing to do.

Of course, most suits could have been avoided by better dialog along the way.

Why argue in court for such an expense when one can do that at a meeting or in
front of an arbiter?

You obviously know nothing about the history of this situation.
Richard Peterson has been hostile to the USCF for a very long time.
There is no way that this matter could be settled at a meeting or
before an arbitrator.

I do agree however that there is a bare possibility that Peterson's
suit has some legal merit. For example, can a national sporting
organization require that in order to play in its events one must join
the organization? I assume that the answer is yes, but it is always
possible tha a court will rule otherwise.

Sam Sloan

(Don Mihokovich) wrote in message . com...
The lawsuit is a public document filed in the State Courts of
California, so none of my limited knowledge on the suit is
confidential. Although I have not had an opportunity to read the
suit, it is my general understanding that one of the many counts of
the complaint is that Peterson's USCF affiliate was allegedly denied
certain so-called contractual rights to receive mailing labels, have
TLA's listed, etc.... for a CEA Grand National Scholastic Chess
Championship, which turned out to be a financial failure, only able to
pay out a fraction of the advertised $60,000 in US Savings Bond
"scholarships" (based on 1000 players). This case shall be
interesting as discovery will necessarily open all of CEA's finances
to see what profits it had and what profits it reported on past
tournaments to compare to its alleged lost profits in this case.

KidDon
___________________________________

Richard, who is pro se in his lawsuit, was kind enough to send me a
copy last night. It is a public document, and so I am going to post
it, without comment for now, but for a general statement that on its
face, it has many, many deficiencies:

SUPERIOR COURT OF CALIFORNIA
COUNTY OF KERN
1415 TRUXTON AVE
BAKERSFIELD CA 93301
RICHARD PETERSON, Plaintiff, vs.UNITED STATES CHESS FEDERATION, JOHN
MCCRARY, BOB SMITH, TOM BROWNSCOMBE, DIANE REESE, BEATRIZ MARINELLO,
DON SCHULTZ, FRANK CAMARATTA, FRANK BRADY, STEVE SHUTT, JOSEPH WAGNER,
ARNOLD DENKER, AND DOES 1-50 Defendant )))))))))))))))) Case No.:
COMPLAINT FOR: BREACH OF CONTRACT, SPECIFIC PERFORMANCE, LIBEL,
INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC
ADVANTAGE,CONVERSION, CONSPIRACY


Plaintiff alleges,
1. Plaintiff is an individual doing business in the County of Kern,
California.
2. Defendant United States Chess Federation (hereinafter USCF) is an
Illinois Corporation presently doing business in California.
3. Defendant John McCrary is President of the USCF presently residing
in and doing business in California.
4. Defendant Bob Smith is Secretary of the USCF presently residing in
and doing business in California.
5. Defendant Frank Camaratta is a Vice President of the USCF presently
residing in and doing business in California.
6. Defendant Steve Shutt is a Vice President of the USCF presently
residing in and doing business in California.
7. Defendant Frank Brady is a member of the Executive Board of the
USCF presently residing in and doing business in California.
8. Defendant Joseph Wagner is a member of the Executive Board of the
USCF presently residing in and doing business in California.
9. Defendant Arnold Denker is a member of the Executive Board of the
USCF presently residing in and doing business in California.
10. Defendant Tom Brownscombe is an employee of the USCF presently
residing in and doing business in California.
11. Defendant Diane Reese is an employee of the USCF presently
residing in and doing business in California.
12. Defendant Beatriz Marinello is a former employee of the USCF
presently residing in and doing business in California.
13. Defendant Don Schultz is a former President of the USCF presently
residing in and doing business in California.
14. The true names and capacities of Defendants Does 1 through 50,
inclusive, are presently unknown to the plaintiff, who therefore sues
said Defendants by such fictitious names. When their true names and
capacities have been ascertained, the plaintiff will move to amend
this Complaint. Plaintiff is informed and believes and thereon
alleges that each fictitiously named Defendant, through his, her, or
its breach of contract, negligence, recklessness, or intentional
wrongdoing, proximately caused this controversy to occur, and/or
caused damages to the plaintiff as alleged in this complaint.

FIRST CAUSE OF ACTION

BREACH OF CONTRACT
1. On or about October of 2002, plaintiff, Richard Peterson, entered
into a three year affiliate's contract with the USCF for his
affiliate, the Chess Education Association. The USCF offers certain
services to all its affiliates and lists them in a welcoming letter to
the affiliates. The letter (Exhibit 1), written by USCF Chief
Business Officer Judy Misner, states in the third sentence, "Your
status as a USCF Affiliate entitles you to special services and
discounts." Among the "materials you may find useful:" in her letter
are "Tournament Announcement Form for Chess Life, so that you can
advertise your upcoming tournament." And "Order Form for USCF Mailing
Lists, Labels or Disks, also to help you advertise your upcoming
tournament."
Also enclosed was a certificate verifying the Chess Education
Association's status as "an Affiliate of the United States Chess
Federation and entitled to all privileges thereof," with an expiration
date of December 2005 (Exhibit 2).
Plaintiff placed an ad for the 2003 CEA GrandNational Chess
Championship that was to run for four issues beginning with February
of 2003. To secure the ad, a credit card was offered as payment.
On January 27, 2003, just four days before it was due to appear in the
February Chess Life, USCF Executive Director Frank Niro announced on
the internet that he had removed the ad from the forthcoming Chess
Life magazines (Exhibit 3) and further refused to sell mailing labels
for the event (Exhibit 4). No notification of any kind had been made
directly to the plaintiff and would have passed unnoticed if the
plaintiff had not seen Niro's email on the rec.games.chess.politics
chatroom. Defendant Niro went on to write on February 1, 2003 that
"It is not in the USCF's best interest to assist anyone in promoting
non-USCF rated chess tournaments. I wish you the best of luck with
your events, but you will not use address labels for our members,
acquired from USCF for the purpose of promoting a non-USCF rated chess
event. Regardless of what has been permitted in the past, that is
policy currently. Sorry." (Exhibit 5).
Defendant Niro changed prior USCF practice without notice and caused
the cancellation of the four months advertisement in Chess Life upon
which we relied.
As a result the 2003 CEA GrandNationals was a financial failure and
the event was only able to pay less than 1/3rd of the advertised
scholarships, causing a financial loss to the plaintiff.
Further, Defendant Niro's change of policy caused intentional
interference with plaintiff's prospective economic gain, by preventing
attendance at plaintiff's event while directing players to USCF events
held on different weekends and more than 2000 miles away. Defendant
Niro's actions prevented approximately 50,000 chess players from
learning of plaintiff's event from the pages of four issues of Chess
Life.

SECOND CAUSE OF ACTION

SPECIFIC PERFORMANCE
Regarding the affiliate's contract, Plaintiff asks the court for an
order requiring the defendant USCF to print ads submitted by
Richard Peterson and to sell requested mailing lists to Richard
Peterson in every form offered by the USCF in January, 2003 at the
prevailing affiliate rates.

THIRD CAUSE OF ACTION

LIBEL

1. Acting in his capacity as Executive Director of the USCF, Frank
Niro has repeatedly defamed the plaintiff, holding the plaintiff up in
an unfavorable light to the chess community in a public manner.
On October 31, Niro emailed the following, "As for your query
regarding your most recent TLA, I have been informed by Debi Sherry
that the VISA card account number you submitted was declined.
Therefore, we have tenatively removed your TLA from the ad ladder, in
accordance with our standard policy, pending receipt of another form
of payment." In an effort to embarrass the plaintiff, Niro copied
this email asserting the plaintiff's failed credit card (Exhibit 6) to
12 additional parties.
In fact, there was nothing wrong with the credit card and the USCF
office sent an apology to the plaintiff, but not to the other parties
who had been copied by Frank Niro.
On January 28th 2003, Frank Niro posted the following email. He said,
"You screw other people and other people come back and screw you".
(Exhibit 7) It should be noted that Frank Niro copied this email to
24 different parties including one who maintains child porn on his
website.
On January 29th 2003, Frank Niro posted the following to the
rec.games.chess.politics newsgroup. He said, "Richard Peterson is not
a current certified TD. If he was, I would've asked the TDCC to
revoke his TD status months ago. I'd push to revoke his membership,
but it would make a martyr out of him." (Exhibit 8)
Publication of this document was worldwide.

This gratuitious distribution of false and defaming statements has
caused the plaintiff to be held in a false light within the chess
community where the plaintiff makes his living.

FOURTH CAUSE OF ACTION

INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE

1. On January 31st 2003, Frank Niro posted this on the internet in
response to plaintiff's question on his ability to purchase mailing
lists, Niro wrote, "Nope. No labels for you. They are a privilege
and a courtesy, not a right."
In preventing our advertising of events and then preventing plaintiff
from mitigating damages with a mailing effort, USCF interfered with
plaintiff's right to make a living.
The failure of this tournament to make a profit was a direct result of
USCF blocking our efforts to hold any non-USCF chess event.

FIFTH CAUSE OF ACTION

CONVERSION

1. In 1994, plaintiff founded the All America Cup, a children's
scholastic chess championship that was held annually in the month of
November since that time. This event was run concurrently with the
USCF National Scholastic Action Chess Championship under a contract
with the USCF that provided an annual payment of $5 per player in the
event for the use of the USCF national title.
Each year, the plaintiff, without input or participation from any USCF
employee at the tournament site, made improvements to the tournament
and the structure of the tournament was fine tuned increasing its
attendance every year through 1998.
In September of 1999, current USCF President John McCrary presented a
motion to the Executive Board to cancel the last two years of the
contract for the event. The motion passed unanimously. This motion
was without cause and was the precursor of an attempt by the USCF to
steal the All America Cup from the plaintiff, changing only the name.
This motion represents the extreme bad faith of the USCF.
In 2000, after the unilateral termination of the National Scholastic
Action Chess Championship/All America Cup contract, USCF employees
Diane Reese and Tom Brownscombe repeatedly contacted the host hotel
(Ramada Valley Ho Resort in Scottsdale) of the All America Cup seeking
confidential information regarding the number of players who stay at
the hotel for the event. Representations were made by defendants
Reese and Brownscombe that they had a continuing relationship with the
plaintiff and thus had a right to the information. This was false and
represents intentional interference in plaintiff's contractual
relationship with his host hotel and intentional misrepresentation as
grounds for piercing the corporate veil. Their attempt to
misappropriate trade secrets shows the fraudulent intent of the USCF
to steal plaintiff's event.

In 2001, defendant USCF ran a tournament in November called the
National Youth Action Championship in Illinois on the weekend
preceeding the All America Cup.
In every respect, this tournament had an identical format to the All
America Cup.
In 2002, plaintiff learned of the theft of his format and
contacted the Executive Director and all members of the Executive
Board of the USCF demanding that their event (National Youth Action
Championship) either not be held or a settlement be reached prior to
holding the event. This effort was rebuffed and the USCF proceeded
with their carbon copy of the All America Cup.
In a further attempt to harm the All America Cup, USCF ran ads for
another competing tournament with the identical format of the All
America Cup. That tournament, named the Hail America Cup, was to be
held on the same weekend, within ten miles of the All America Cup.
Thus, three identical tournaments were all to be held in the
month of November within one week of each other.
Plaintiff alleges USCF knowingly participated in the attempt to
destroy the All America Cup by unfair competition.

Plaintiff alleges these attacks and theft of plaintiff's format
amount to a conversion of his asset without compensation of any type.
These attacks caused participation to fall more than 65% from the
peak year of 1998 and caused grevious financial loss to the plaintiff.
Further, the fraudulent attempts to obtain proprietary
information from the All America Cup's host hotel represent a piercing
of the corporate veil.

SIXTH CAUSE OF ACTION

CONSPIRACY

1. By allowing the National Youth Action Championship to go forward in
2002 with the full knowledge that the event had been stolen from the
plaintiff, all members of the Executive Board of the USCF participated
in a conspiracy to convert the All America Cup to a property of the
USCF. The board was repeatedly warned that they would be sued as
individuals if the stolen tournament was held.
Collectively, the board ignored that warning and through their silent
fraud in claiming plaintiff's event as the property of USCF should
allow the piercing of the corporate veil. The Executive Board was
warned on October 29th 2002 that they were in violation of the Lanham
Act trade dress (Exhibit 10). Trade dress being defined as the total
image or overall design or appearance of a product or its packaging.
Two Pesos, Inc v Taco Cabana, Inc 505 U.S.763, 765 (1992); American
Greetings, 807 F.2d at 1141; Rose Art Industries, Inc. v Raymond
Geddes & Co., 31 F. Supp. 2d 367 (D.N.J. 1998).
Further, as USCF has a negative net worth. The Executive Board
believed they had nothing to lose by stealing the plaintiff's format.
Their knowledge of the USCF's inability to pay was thought to insure
an inequitable result, thus piercing the corporate veil protecting the
directors and their fraudulent actions.

2. Since 1997 a conspiracy has existed in the USCF against the
financial interests of the plaintiff.
The torts are legion and in many instances overlapping.
In 1999, then USCF President Don Schlultz allowed the filing of a
lawsuit against the plaintiff in violation of the bylaws of the USCF
which would not even allow the hiring of an attorney without Executive
Board approval and over the protest of several of the members of the
board. This lawsuit proved to have no basis in fact as will follow.
Additionally, Schultz also sued the wife of the plaintiff, who had
just given birth and had no knowledge of this matter in any regard.
Torts perpetrated by the USCF, include two forgeries of contracts
relating to the 1999 National Elementary Chess Championship were used
as a justification for the lawsuit. One of the forgeries, presented
as evidence in response to subpoena, involved xeroxing the plaintiff's
signature from one document to another, but reducing the size by 20%.
(Exhibit 11)
Fraudulent financial statements were prepared by former USCF employee
Beatriz Marinello relating to the 1999 National Elementary Chess
Championship. (Exhibit 12)
There was a preparation of fraudulent documents as evidence.
(Exhibit 13) USCF claimed to have specific knowledge of each and
every shirt plus the size of every shirt sold at the 1999 National
Elementary, yet the USCF ‘s auditors, Stanley Marks and Company stated
in their audit notes "We noted that there were limited controls on
inventory taken to tournaments and inventory returned to the
Federation after tournaments."
USCF President Bob Smith withheld the "John L. White Report", (Exhibit
14) which was prepared at President Smith's direction in September of
1999, from the plaintiff and the plaintiff's attorney despite the fact
that he was aware it was subject to subpoena.
The John L White Report of 9/21/99 states, "The board should be aware
(it is my understanding) that no tournament accounting has been done
since about the first of this year. The auditors worked with the
current bookkeeper to close out last year tournaments as best
possible. And, not any accounting has been done on tournaments as of
my visit. Does someone think this is not important? Why?"
Defendant Smith proposed a settlement of the lawsuit in January of
2000, while withholding evidence (the John L. White report) that the
financials prepared by Beatriz Marinello were false and that no
tournament accounting had been done in 1999. More especially, no
tournament accounting had been done prior to the filing of the
lawsuit, thus negating any basis for the lawsuit and constituting a
conspiracy against the plaintiff.

3. In 1998, there was an attempt to rig the bidding for the 2000
National Elementary Chess Championship. In approximate terms that
will be more fully explored at trial, Plaintiff made a bid of a
guaranteed $25,000 to host the event. A second bidder bid a
non-guaranteed $9,000. The bidding deadline was September 15th, 1998.
One month after the bidding deadline on October 15th, the second
bidder was allowed to change his bid to approximately equal to that of
the plaintiff and the second bidder was awarded the bid.
Plaintiff appealed to the Executive Board (then called the Policy
Board) and after raising his bid to $40,000 in a forced second round
of bidding, the Executive Board awarded plaintiff the contract based
upon his bid.
After both USCF and plaintiff advertised the event nationally (Exhibit
15) and more than six months after a contract was signed, USCF's
Executive Board (on a motion from current USCF President John
McCrary)the board voted that "contract negotiations" would be
terminated. This despite the fact that the contract had already been
signed six months earlier and no negotiations relating to the 2000
National Elementary had been ongoing. (Exhibit 16)
Incredibly, Marinello told members of the USCF scholastic committee in
August of 1999 that no contract had been signed when that was not the
case. Marinello knew because she had signed it herself and was the
holder of the signed contract.
Beatriz Marinello contacted the 2000 National Elementary site hotel
(Adam's Mark Dallas) and requested a copy of the site contract with
the plaintiff.
USCF then contacted the Adam's Mark Dallas requesting the Adam's Mark
sever all ties with the plaintiff and continue with USCF as the
contractual party. (Exhibit 17)
When the Adam's Mark Dallas refused to transfer the contract to USCF,
USCF moved the event to another location.
Plaintiff was left with a contract for a hotel and the possibility of
a $600,000 liability to the Adam's Mark Dallas.
This breach of the contract for the 2000 National Elementary in Dallas
cost plaintiff approximately $200,000 in lost revenue as well as the
obligation to the Adam's Mark Dallas.


WHEREFORE, Plaintiff prays judgement against Defendants, and each of
them as follows:

FIRST CAUSE OF ACTION
1. Plaintiff requests damages in an amount equal to all of the entry
fees from the largest tournament USCF held in the month or May 2003.
The month of May being the same month that the failed CEA
GrandNationals were held.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.

SECOND CAUSE OF ACTION
1. Plaintiff requests a court order requiring the defendant USCF to
print ads submitted by Richard Peterson and to sell requested mailing
lists to Richard Peterson in every form offered by the USCF in
January, 2003 at the prevailing affiliate rates.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.

THIRD CAUSE OF ACTION
1. Plaintiff requests compensation in an amount to be determined by
this court.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.

FOURTH CAUSE OF ACTION
1. Plaintiff requests compensation in an amount to be determined by
this court.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.

FIFTH CAUSE OF ACTION
1. Plaintiff seeks treble damages in accordance with the Lanham Act of
all income from all National Youth Action Championships and
compensation for each year of the All America Cup equal to revenue
from its highest year of attendance prior to cancellation of the
contract in 1999 less actual entries received by the All America Cup
from 2000 until the present. Further, plaintiff seeks an order
disallowing further National Youth Action Championships without the
express written permission of the plaintiff.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.



SIXTH CAUSE OF ACTION
1. Plaintiff seeks damages from the cancellation of the contract for
the 2000 National Elementary Chess Championship in the amount of
projected gross income of $200,000 less the agreed upon contract for
the event in the amount of $40,000, making a net payment of $160,000.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.


Dated August 8, 2003

Wow!!

Looks to me like this could deep six USCF permanently if any of the
charges stick.

I don't imagine that USCF would have the assets to even begin paying
the damages should Petersen prevail.

I also don't know what the status of our insurance was when these
actions occurred. There was at least one point I think where the USCF
had so many financial difficulties that they let the insurance policy on
the Board expire.

Best Regards,

Bruce

On 25 Aug 2003 12:18:28 GMT, (LeModernCaveman)
wrote:

Of course, most suits could have been avoided by better dialog along the
way.

Why argue in court for such an expense when one can do that at a meeting or
in
front of an arbiter?

You obviously know nothing about the history of this situation.
Richard Peterson has been hostile to the USCF for a very long time.
There is no way that this matter could be settled at a meeting or
before an arbitrator.

I do agree however that there is a bare possibility that Peterson's
suit has some legal merit. For example, can a national sporting
organization require that in order to play in its events one must join
the organization? I assume that the answer is yes, but it is always
possible tha a court will rule otherwise.

The question he seems to raise has to do with rating games between USCF members
in non-USCF events, and I see no reason why he can't do that, if USCF rates
other games in non-tournament settings, which I believe they do.

Again, you are wrong. The USCF only rates tournaments and matches. The
rules with respect to matches are strict because matches have often
been abused for rating purposes in the past. A one-game match cannot
be rated. Tournaments can only be rated if recognized pairing rules
are followed. An assortment of random games cannot be collected
together and sent in as a tournament.

These rules have been well established for a long time. Again, you
should not make remarks until you have read up on the rules.

Sam Sloan

Off hand, I can find a few things wrong with this lawsuit. Among them
a

1. Peterson lists several defendants as residing in California and
doing business in California. This is false. Only one of them resides
in California. That is Joe Wagner. None of the others do business in
California. Most are from the East Coast.

2. Peterson at great length lists the allegedly wrongful acts of Frank
Niro. However Niro is not named a a defendant.

3. Many of the allegations relate to the prior litigation between
Peterson and the USCF. However, that litigation was terminated when
Peterson filed for bankruptcy in 2001. I doubt that that Peterson can
raise these old issues in this new lawsuit.

4. Everybody familiar with this history knows that many of these
allegations are factually false. However, I believe that at least some
of the counts of this complaint will survive a motion to dismiss. So,
I believe that Peterson will be able to keep this lawsuit going for a
while, although eventually the USCF will prevail.

Sam Sloan

On 25 Aug 2003 05:36:53 -0700, (Don
Mihokovich) wrote:


Richard, who is pro se in his lawsuit, was kind enough to send me a
copy last night. It is a public document, and so I am going to post
it, without comment for now, but for a general statement that on its
face, it has many, many deficiencies:

SUPERIOR COURT OF CALIFORNIA
COUNTY OF KERN
1415 TRUXTON AVE
BAKERSFIELD CA 93301
RICHARD PETERSON, Plaintiff, vs.UNITED STATES CHESS FEDERATION, JOHN
MCCRARY, BOB SMITH, TOM BROWNSCOMBE, DIANE REESE, BEATRIZ MARINELLO,
DON SCHULTZ, FRANK CAMARATTA, FRANK BRADY, STEVE SHUTT, JOSEPH WAGNER,
ARNOLD DENKER, AND DOES 1-50 Defendant )))))))))))))))) Case No.:
COMPLAINT FOR: BREACH OF CONTRACT, SPECIFIC PERFORMANCE, LIBEL,
INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC
ADVANTAGE,CONVERSION, CONSPIRACY


Plaintiff alleges,
1. Plaintiff is an individual doing business in the County of Kern,
California.
2. Defendant United States Chess Federation (hereinafter USCF) is an
Illinois Corporation presently doing business in California.
3. Defendant John McCrary is President of the USCF presently residing
in and doing business in California.
4. Defendant Bob Smith is Secretary of the USCF presently residing in
and doing business in California.
5. Defendant Frank Camaratta is a Vice President of the USCF presently
residing in and doing business in California.
6. Defendant Steve Shutt is a Vice President of the USCF presently
residing in and doing business in California.
7. Defendant Frank Brady is a member of the Executive Board of the
USCF presently residing in and doing business in California.
8. Defendant Joseph Wagner is a member of the Executive Board of the
USCF presently residing in and doing business in California.
9. Defendant Arnold Denker is a member of the Executive Board of the
USCF presently residing in and doing business in California.
10. Defendant Tom Brownscombe is an employee of the USCF presently
residing in and doing business in California.
11. Defendant Diane Reese is an employee of the USCF presently
residing in and doing business in California.
12. Defendant Beatriz Marinello is a former employee of the USCF
presently residing in and doing business in California.
13. Defendant Don Schultz is a former President of the USCF presently
residing in and doing business in California.
14. The true names and capacities of Defendants Does 1 through 50,
inclusive, are presently unknown to the plaintiff, who therefore sues
said Defendants by such fictitious names. When their true names and
capacities have been ascertained, the plaintiff will move to amend
this Complaint. Plaintiff is informed and believes and thereon
alleges that each fictitiously named Defendant, through his, her, or
its breach of contract, negligence, recklessness, or intentional
wrongdoing, proximately caused this controversy to occur, and/or
caused damages to the plaintiff as alleged in this complaint.

FIRST CAUSE OF ACTION

BREACH OF CONTRACT
1. On or about October of 2002, plaintiff, Richard Peterson, entered
into a three year affiliate's contract with the USCF for his
affiliate, the Chess Education Association. The USCF offers certain
services to all its affiliates and lists them in a welcoming letter to
the affiliates. The letter (Exhibit 1), written by USCF Chief
Business Officer Judy Misner, states in the third sentence, "Your
status as a USCF Affiliate entitles you to special services and
discounts." Among the "materials you may find useful:" in her letter
are "Tournament Announcement Form for Chess Life, so that you can
advertise your upcoming tournament." And "Order Form for USCF Mailing
Lists, Labels or Disks, also to help you advertise your upcoming
tournament."
Also enclosed was a certificate verifying the Chess Education
Association's status as "an Affiliate of the United States Chess
Federation and entitled to all privileges thereof," with an expiration
date of December 2005 (Exhibit 2).
Plaintiff placed an ad for the 2003 CEA GrandNational Chess
Championship that was to run for four issues beginning with February
of 2003. To secure the ad, a credit card was offered as payment.
On January 27, 2003, just four days before it was due to appear in the
February Chess Life, USCF Executive Director Frank Niro announced on
the internet that he had removed the ad from the forthcoming Chess
Life magazines (Exhibit 3) and further refused to sell mailing labels
for the event (Exhibit 4). No notification of any kind had been made
directly to the plaintiff and would have passed unnoticed if the
plaintiff had not seen Niro's email on the rec.games.chess.politics
chatroom. Defendant Niro went on to write on February 1, 2003 that
"It is not in the USCF's best interest to assist anyone in promoting
non-USCF rated chess tournaments. I wish you the best of luck with
your events, but you will not use address labels for our members,
acquired from USCF for the purpose of promoting a non-USCF rated chess
event. Regardless of what has been permitted in the past, that is
policy currently. Sorry." (Exhibit 5).
Defendant Niro changed prior USCF practice without notice and caused
the cancellation of the four months advertisement in Chess Life upon
which we relied.
As a result the 2003 CEA GrandNationals was a financial failure and
the event was only able to pay less than 1/3rd of the advertised
scholarships, causing a financial loss to the plaintiff.
Further, Defendant Niro's change of policy caused intentional
interference with plaintiff's prospective economic gain, by preventing
attendance at plaintiff's event while directing players to USCF events
held on different weekends and more than 2000 miles away. Defendant
Niro's actions prevented approximately 50,000 chess players from
learning of plaintiff's event from the pages of four issues of Chess
Life.

SECOND CAUSE OF ACTION

SPECIFIC PERFORMANCE
Regarding the affiliate's contract, Plaintiff asks the court for an
order requiring the defendant USCF to print ads submitted by
Richard Peterson and to sell requested mailing lists to Richard
Peterson in every form offered by the USCF in January, 2003 at the
prevailing affiliate rates.

THIRD CAUSE OF ACTION

LIBEL

1. Acting in his capacity as Executive Director of the USCF, Frank
Niro has repeatedly defamed the plaintiff, holding the plaintiff up in
an unfavorable light to the chess community in a public manner.
On October 31, Niro emailed the following, "As for your query
regarding your most recent TLA, I have been informed by Debi Sherry
that the VISA card account number you submitted was declined.
Therefore, we have tenatively removed your TLA from the ad ladder, in
accordance with our standard policy, pending receipt of another form
of payment." In an effort to embarrass the plaintiff, Niro copied
this email asserting the plaintiff's failed credit card (Exhibit 6) to
12 additional parties.
In fact, there was nothing wrong with the credit card and the USCF
office sent an apology to the plaintiff, but not to the other parties
who had been copied by Frank Niro.
On January 28th 2003, Frank Niro posted the following email. He said,
"You screw other people and other people come back and screw you".
(Exhibit 7) It should be noted that Frank Niro copied this email to
24 different parties including one who maintains child porn on his
website.
On January 29th 2003, Frank Niro posted the following to the
rec.games.chess.politics newsgroup. He said, "Richard Peterson is not
a current certified TD. If he was, I would've asked the TDCC to
revoke his TD status months ago. I'd push to revoke his membership,
but it would make a martyr out of him." (Exhibit 8)
Publication of this document was worldwide.

This gratuitious distribution of false and defaming statements has
caused the plaintiff to be held in a false light within the chess
community where the plaintiff makes his living.

FOURTH CAUSE OF ACTION

INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE

1. On January 31st 2003, Frank Niro posted this on the internet in
response to plaintiff's question on his ability to purchase mailing
lists, Niro wrote, "Nope. No labels for you. They are a privilege
and a courtesy, not a right."
In preventing our advertising of events and then preventing plaintiff
from mitigating damages with a mailing effort, USCF interfered with
plaintiff's right to make a living.
The failure of this tournament to make a profit was a direct result of
USCF blocking our efforts to hold any non-USCF chess event.

FIFTH CAUSE OF ACTION

CONVERSION

1. In 1994, plaintiff founded the All America Cup, a children's
scholastic chess championship that was held annually in the month of
November since that time. This event was run concurrently with the
USCF National Scholastic Action Chess Championship under a contract
with the USCF that provided an annual payment of $5 per player in the
event for the use of the USCF national title.
Each year, the plaintiff, without input or participation from any USCF
employee at the tournament site, made improvements to the tournament
and the structure of the tournament was fine tuned increasing its
attendance every year through 1998.
In September of 1999, current USCF President John McCrary presented a
motion to the Executive Board to cancel the last two years of the
contract for the event. The motion passed unanimously. This motion
was without cause and was the precursor of an attempt by the USCF to
steal the All America Cup from the plaintiff, changing only the name.
This motion represents the extreme bad faith of the USCF.
In 2000, after the unilateral termination of the National Scholastic
Action Chess Championship/All America Cup contract, USCF employees
Diane Reese and Tom Brownscombe repeatedly contacted the host hotel
(Ramada Valley Ho Resort in Scottsdale) of the All America Cup seeking
confidential information regarding the number of players who stay at
the hotel for the event. Representations were made by defendants
Reese and Brownscombe that they had a continuing relationship with the
plaintiff and thus had a right to the information. This was false and
represents intentional interference in plaintiff's contractual
relationship with his host hotel and intentional misrepresentation as
grounds for piercing the corporate veil. Their attempt to
misappropriate trade secrets shows the fraudulent intent of the USCF
to steal plaintiff's event.

In 2001, defendant USCF ran a tournament in November called the
National Youth Action Championship in Illinois on the weekend
preceeding the All America Cup.
In every respect, this tournament had an identical format to the All
America Cup.
In 2002, plaintiff learned of the theft of his format and
contacted the Executive Director and all members of the Executive
Board of the USCF demanding that their event (National Youth Action
Championship) either not be held or a settlement be reached prior to
holding the event. This effort was rebuffed and the USCF proceeded
with their carbon copy of the All America Cup.
In a further attempt to harm the All America Cup, USCF ran ads for
another competing tournament with the identical format of the All
America Cup. That tournament, named the Hail America Cup, was to be
held on the same weekend, within ten miles of the All America Cup.
Thus, three identical tournaments were all to be held in the
month of November within one week of each other.
Plaintiff alleges USCF knowingly participated in the attempt to
destroy the All America Cup by unfair competition.

Plaintiff alleges these attacks and theft of plaintiff's format
amount to a conversion of his asset without compensation of any type.
These attacks caused participation to fall more than 65% from the
peak year of 1998 and caused grevious financial loss to the plaintiff.
Further, the fraudulent attempts to obtain proprietary
information from the All America Cup's host hotel represent a piercing
of the corporate veil.

SIXTH CAUSE OF ACTION

CONSPIRACY

1. By allowing the National Youth Action Championship to go forward in
2002 with the full knowledge that the event had been stolen from the
plaintiff, all members of the Executive Board of the USCF participated
in a conspiracy to convert the All America Cup to a property of the
USCF. The board was repeatedly warned that they would be sued as
individuals if the stolen tournament was held.
Collectively, the board ignored that warning and through their silent
fraud in claiming plaintiff's event as the property of USCF should
allow the piercing of the corporate veil. The Executive Board was
warned on October 29th 2002 that they were in violation of the Lanham
Act trade dress (Exhibit 10). Trade dress being defined as the total
image or overall design or appearance of a product or its packaging.
Two Pesos, Inc v Taco Cabana, Inc 505 U.S.763, 765 (1992); American
Greetings, 807 F.2d at 1141; Rose Art Industries, Inc. v Raymond
Geddes & Co., 31 F. Supp. 2d 367 (D.N.J. 1998).
Further, as USCF has a negative net worth. The Executive Board
believed they had nothing to lose by stealing the plaintiff's format.
Their knowledge of the USCF's inability to pay was thought to insure
an inequitable result, thus piercing the corporate veil protecting the
directors and their fraudulent actions.

2. Since 1997 a conspiracy has existed in the USCF against the
financial interests of the plaintiff.
The torts are legion and in many instances overlapping.
In 1999, then USCF President Don Schlultz allowed the filing of a
lawsuit against the plaintiff in violation of the bylaws of the USCF
which would not even allow the hiring of an attorney without Executive
Board approval and over the protest of several of the members of the
board. This lawsuit proved to have no basis in fact as will follow.
Additionally, Schultz also sued the wife of the plaintiff, who had
just given birth and had no knowledge of this matter in any regard.
Torts perpetrated by the USCF, include two forgeries of contracts
relating to the 1999 National Elementary Chess Championship were used
as a justification for the lawsuit. One of the forgeries, presented
as evidence in response to subpoena, involved xeroxing the plaintiff's
signature from one document to another, but reducing the size by 20%.
(Exhibit 11)
Fraudulent financial statements were prepared by former USCF employee
Beatriz Marinello relating to the 1999 National Elementary Chess
Championship. (Exhibit 12)
There was a preparation of fraudulent documents as evidence.
(Exhibit 13) USCF claimed to have specific knowledge of each and
every shirt plus the size of every shirt sold at the 1999 National
Elementary, yet the USCF ‘s auditors, Stanley Marks and Company stated
in their audit notes "We noted that there were limited controls on
inventory taken to tournaments and inventory returned to the
Federation after tournaments."
USCF President Bob Smith withheld the "John L. White Report", (Exhibit
14) which was prepared at President Smith's direction in September of
1999, from the plaintiff and the plaintiff's attorney despite the fact
that he was aware it was subject to subpoena.
The John L White Report of 9/21/99 states, "The board should be aware
(it is my understanding) that no tournament accounting has been done
since about the first of this year. The auditors worked with the
current bookkeeper to close out last year tournaments as best
possible. And, not any accounting has been done on tournaments as of
my visit. Does someone think this is not important? Why?"
Defendant Smith proposed a settlement of the lawsuit in January of
2000, while withholding evidence (the John L. White report) that the
financials prepared by Beatriz Marinello were false and that no
tournament accounting had been done in 1999. More especially, no
tournament accounting had been done prior to the filing of the
lawsuit, thus negating any basis for the lawsuit and constituting a
conspiracy against the plaintiff.

3. In 1998, there was an attempt to rig the bidding for the 2000
National Elementary Chess Championship. In approximate terms that
will be more fully explored at trial, Plaintiff made a bid of a
guaranteed $25,000 to host the event. A second bidder bid a
non-guaranteed $9,000. The bidding deadline was September 15th, 1998.
One month after the bidding deadline on October 15th, the second
bidder was allowed to change his bid to approximately equal to that of
the plaintiff and the second bidder was awarded the bid.
Plaintiff appealed to the Executive Board (then called the Policy
Board) and after raising his bid to $40,000 in a forced second round
of bidding, the Executive Board awarded plaintiff the contract based
upon his bid.
After both USCF and plaintiff advertised the event nationally (Exhibit
15) and more than six months after a contract was signed, USCF's
Executive Board (on a motion from current USCF President John
McCrary)the board voted that "contract negotiations" would be
terminated. This despite the fact that the contract had already been
signed six months earlier and no negotiations relating to the 2000
National Elementary had been ongoing. (Exhibit 16)
Incredibly, Marinello told members of the USCF scholastic committee in
August of 1999 that no contract had been signed when that was not the
case. Marinello knew because she had signed it herself and was the
holder of the signed contract.
Beatriz Marinello contacted the 2000 National Elementary site hotel
(Adam's Mark Dallas) and requested a copy of the site contract with
the plaintiff.
USCF then contacted the Adam's Mark Dallas requesting the Adam's Mark
sever all ties with the plaintiff and continue with USCF as the
contractual party. (Exhibit 17)
When the Adam's Mark Dallas refused to transfer the contract to USCF,
USCF moved the event to another location.
Plaintiff was left with a contract for a hotel and the possibility of
a $600,000 liability to the Adam's Mark Dallas.
This breach of the contract for the 2000 National Elementary in Dallas
cost plaintiff approximately $200,000 in lost revenue as well as the
obligation to the Adam's Mark Dallas.


WHEREFORE, Plaintiff prays judgement against Defendants, and each of
them as follows:

FIRST CAUSE OF ACTION
1. Plaintiff requests damages in an amount equal to all of the entry
fees from the largest tournament USCF held in the month or May 2003.
The month of May being the same month that the failed CEA
GrandNationals were held.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.

SECOND CAUSE OF ACTION
1. Plaintiff requests a court order requiring the defendant USCF to
print ads submitted by Richard Peterson and to sell requested mailing
lists to Richard Peterson in every form offered by the USCF in
January, 2003 at the prevailing affiliate rates.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.

THIRD CAUSE OF ACTION
1. Plaintiff requests compensation in an amount to be determined by
this court.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.

FOURTH CAUSE OF ACTION
1. Plaintiff requests compensation in an amount to be determined by
this court.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.

FIFTH CAUSE OF ACTION
1. Plaintiff seeks treble damages in accordance with the Lanham Act of
all income from all National Youth Action Championships and
compensation for each year of the All America Cup equal to revenue
from its highest year of attendance prior to cancellation of the
contract in 1999 less actual entries received by the All America Cup
from 2000 until the present. Further, plaintiff seeks an order
disallowing further National Youth Action Championships without the
express written permission of the plaintiff.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.



SIXTH CAUSE OF ACTION
1. Plaintiff seeks damages from the cancellation of the contract for
the 2000 National Elementary Chess Championship in the amount of
projected gross income of $200,000 less the agreed upon contract for
the event in the amount of $40,000, making a net payment of $160,000.
2. For an award of pre-judgment interest at the maximum legal rate.
3. For costs of the suit incurred herein; and
4. Such other and further relief as this court may deem just and
proper.


Dated August 8, 2003

On 25 Aug 2003 08:32:15 -0500, Bruce Draney wrote:

Wow!!

Looks to me like this could deep six USCF permanently if any of the
charges stick.

I don't imagine that USCF would have the assets to even begin paying
the damages should Petersen prevail.

I also don't know what the status of our insurance was when these
actions occurred. There was at least one point I think where the USCF
had so many financial difficulties that they let the insurance policy on
the Board expire.

Best Regards,

Bruce

Part of doing business by every corporation is to defend against
frivolous lawsuits. Do you know hom many times a major corporation
with money like General Motors gets sued every day? The USCF has been
fortunate in that very few frivolous suits have been filed against us,
mainly because we do not have money. I know thart Bruce would like to
see Peterson win, but we must defend his suits just as we defended the
similar suits brought by Stan Vaughan.

Sam Sloan

Mediation is a great way to get suits resolved, if the parties are at all
interested in reaching a settlement.

Unlikely that RIchard is interested in a settlement.

(Louis Blair)

Dr. Blair,

So you moved from the University of Minnesota to Blackburn College in Illinois?

Lance Smith

Liam Too wrote:

(Louis Blair)

Dr. Blair,

So you moved from the University of Minnesota to Blackburn College in Illinois?

Lance Smith

But does Blackburn College offer zero coupon bonds to the parents of
future students, to finance their child's education at some point 18
years down the road?

Best Regards,

Bruce