SUFFOLK FLANAGAN & ASSOCIATES, PLLC, MURACA & KELLY LLP, DENNIS KELLY, DAVID GROSSMAN, and SUZANNE FLANAGAN,

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1 SUPREME COURT OF THE STATE OF NEW YORK Index No. 11- COUNTY OF NEW YORK x Plaintiffs designate KELLY, GROSSMAN & FLANAGAN, LLP, SUFFOLK FLANAGAN & ASSOCIATES, PLLC, MURACA & KELLY LLP, DENNIS KELLY, DAVID GROSSMAN, and SUZANNE FLANAGAN, Plaintiffs County as the place of trial The basis of the venue is PLAINTIFFS PLACE OF BUSINESS - against - SUMMONS QUICK CASH, INC., CASEFUNDING, INC., GUARDIAN ADVISORS LP I, GUARDIAN ADVISORS LP II, and MONEY FOR LAWSUITS 901 Motor Parkway LP V, Hauppauge, NY County of Suffolk Defendants x To the above named Defendants: Plaintiff does business at You are hereby summoned to answer the complaint in this action and to serve a copy of your answer, or, if the complaint is not served with this summons, to serve a notice of appearance, on The Law Offices of Isaac M. Zucker, PLLC, Plaintiff s Attorneys, within twenty (20) days after the service of this summons, exclusive of the day of service (or within thirty (30) days after service is complete if the summons is not personally delivered to you within the State of New York); and in case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the complaint. Defendants Address: 32 West 39 th Street New York, New York Law Offices of Isaac M. Zucker, PLLC By:/s/ Isaac M. Zucker Attorneys for Plaintiff 600 Old Country Road, Suite 321 Garden City, New York Phone: (516) Fax: (516)

2 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK x KELLY, GROSSMAN & FLANAGAN, LLP, FLANAGAN & ASSOCIATES, PLLC, MURACA & KELLY LLP, DENNIS KELLY, DAVID GROSSMAN, and SUZANNE FLANAGAN, Index No. - against - Plaintiffs, Complaint QUICK CASH, INC., CASEFUNDING, INC., GUARDIAN ADVISORS LP I, GUARDIAN ADVISORS LP II, and MONEY FOR LAWSUITS LP V, Defendants x Plaintiffs, Kelly, Grossman & Flanagan, LLP, Flanagan & Associates, PLLC, Muraca & Kelly, Dennis Kelly, David Grossman and Suzanne Flanagan, by their counsel, complaining of Defendants, Quick Cash, Inc., Casefunding, Inc., Guardian Advisor LP I, Guardian Advisors LP II and Money for Lawsuits LP V, allege as follows: The Parties 1. Plaintiff Kelly, Grossman & Flanagan, LLP ( KG&F ) is a limited liability partnership duly organized and existing under the laws of the State of New York. KG&F is engaged in the practice of law and maintains its place of business in the County of Suffolk, State of New York. 2. Plaintiff Flanagan & Associates, PLLC ( F&A ) is a professional limited liability company duly organized and existing under the laws of the State of New York. 2

3 During all times relevant hereto, F&A was engaged in the practice of law and maintained its place of business in the County of Suffolk, State of New York. 3. At all times relevant hereto, Plaintiff Muraca & Kelly LLP ( M&K ) was limited liability partnership organized under the laws of the State of New York. M&K was a law firm engaged in the practice of law and maintained its place of business in the County of Nassau, State of New York. 4. Plaintiff Dennis Kelly is an attorney duly admitted to practice law before the Courts of the State of New York. Mr. Kelly is a partner in KG&F and was an owner of M&K. 5. Plaintiff David Grossman is an attorney duly admitted to practice law before the Courts of the State of New York. Mr. Grossman is a partner in KG&F. 6. Plaintiff Suzanne Flanagan is an attorney duly admitted to practice law before the Courts of the State of New York. Ms. Flanagan is a partner in KG&F and is the sole shareholder of F&A. Plaintiffs KG&F, F&A, M&K, Dennis Kelly, David Grossman and Suzanne Flanagan are sometimes collectively referred to herein as Plaintiffs. 7. Upon information and belief, Defendant Quick Cash, Inc. ( Quick Cash ) is a corporation duly organized and existing under the laws of the State of Delaware and is licensed to do business in the State of New York. Upon further information and belief, Quick Cash maintains a place of business in the County of New York, State of New York. 3

4 8. Upon information and belief, Defendant Casefunding, Inc. ( Casefunding ) is a fictitious name for a corporate entity organized pursuant to the laws of a State other than New York. The New York State Department of State does not list Casefunding as an entity licensed to do business in the State of New York. 9. Upon information and belief, Defendant Guardian Advisors LP I ( GALPI ) is a limited liability partnership duly organized and existing under the laws of the State of Delaware and is licensed to do business in the State of New York. Upon further information and belief, GALPI maintains a place of business in the County of New York, State of New York. 10. Upon information and belief, Defendant Guardian Advisors LP II ( GALPII ) is a limited liability partnership duly organized and existing under the laws of the State of Delaware and is licensed to do business in the State of New York. Upon further information and belief, GALPII maintains a place of business in the County of New York, State of New York. 11. Upon information and belief, Defendant Money for Lawsuits LP V ( MFL ) is a limited liability partnership duly organized and existing under the laws of the State of Delaware and is licensed to do business in the State of New York. Upon further information and belief, MFL maintains a place of business in the County of New York, State of New York. Defendants Quick Cash, Casefunding, GALPI, GALPII and MFL are sometimes collectively referred to herein as Defendants. 4

5 AS AND FOR A CAUSE OF ACTION 12. In or about May 2005, Personal Injury Funding IV LP, an affiliate and/or predecessor of one of the Defendants extended a loan in the amount of $46,250 to M&K. M&K had previously received $26,250 from Defendants that was incorporated into this loan. After subtracting a processing fee and a loan origination fee, M&K received net proceeds of $18,000. The terms of the loan referred to herein were memorialized in a Litigation Cost Advance and Security Agreement (the May 2005 Loan Agreement ), a copy of which is attached hereto as Exhibit A. 13. Pursuant to the terms of the May 2005 Loan Agreement, Plaintiff M&K was required to repay to Defendants the principle amount of the loan plus a fee in an amount set forth in Section 1.4 of the May 2005 Loan Agreement. The fee amounted to an annualized interest rate in excess of 40%. 14. In or about October 2006, Defendant MFL extended a loan in the amount of $287,500 to M&K. After subtracting a processing fee and a loan origination fee, M&K received net proceeds of $250,000. The terms of the loan referred to herein were memorialized in an Attorney Advance Agreement (the October 2006 Loan Agreement ), a copy of which is attached hereto as Exhibit B. 15. Pursuant to the terms of the October 2006 Loan Agreement, Plaintiff M&K was required to repay to Defendants the principle amount of the loan plus a fee in an amount set forth in Section 1.4 of the October 2006 Loan Agreement. The fee amounted to an annualized interest rate in excess of 40%. 5

6 16. In or about December 2006, Defendant MFL extended a loan in the amount of $227,500 to M&K. After subtracting a processing fee and a loan origination fee, M&K received net proceeds of $200,000. The terms of the loan referred to herein were memorialized in an Attorney Advance Agreement (the December 2006 Loan Agreement ), a copy of which is attached hereto as Exhibit C. 17. Pursuant to the terms of the December 2006 Loan Agreement, Plaintiff M&K was required to repay to Defendants the principle amount of the loan plus a fee in an amount set forth in Section 1.8 of the December 2006 Loan Agreement. The fee amounted to an annualized interest rate in excess of 40%. 18. In or about April 2007, Defendant MFL extended a loan in the amount of $79,500 to M&K. After subtracting a processing fee and a loan origination fee, M&K received net proceeds of $70,000. The terms of the loan referred to herein were memorialized in an Attorney Advance Agreement (the April 2007 Loan Agreement ), a copy of which is attached hereto as Exhibit D. 19. Pursuant to the terms of the April 2007 Loan Agreement, Plaintiff M&K was required to repay to Defendants the principle amount of the loan plus a fee in an amount set forth in Section 1.8 of the April 2007 Loan Agreement. The fee amounted to an annualized interest rate in excess of 40%. 20. In or about September 2007, Defendant MFL extended a loan in the amount of $23,000 to M&K. After subtracting a processing fee and a loan origination fee, M&K received net proceeds of $20,000. The terms of the loan referred to herein 6

7 were memorialized in an Attorney Advance Agreement (the September 2007 Loan Agreement ), a copy of which is attached hereto as Exhibit E. 21. Pursuant to the terms of the September 2007 Loan Agreement, Plaintiff M&K was required to repay to Defendants the principle amount of the loan plus a fee in an amount set forth in Section 1.8 of the September 2007 Loan Agreement. The fee amounted to an annualized interest rate in excess of 40%. 22. In total, Defendants extended loans to M&K in amounts totaling approximately $664,000. Plaintiffs have repaid Defendants in excess of $1 million. 23. During the period December 2007 through February 2008 Defendants extended loans to F&A in the aggregate amount of set forth in the relevant loan documents (the K&F Loan Documents ), copies of which are attached hereto as Exhibit F. 24. Pursuant to the terms of the K&F Loan Documents, K&F was charged an annualized interest rate in excess of 40%. 25. All of the loans referenced above were secured by the attorneys fees that were anticipated to be generated by certain cases in which M&K and F&A represented plaintiffs in actions against, inter alia, nursing homes. 26. In or about August 2009, Plaintiffs and Defendants executed an addendum (the Addendum ) to all prior agreements. A copy of the Addendum is attached hereto as Exhibit G. Pursuant to the terms of the Addendum, KG&F agreed to assume 7

8 responsibility for all outstanding loans. Additionally, Plaintiffs agreed to provide additional collateral to secure the outstanding loans. 27. As in the case of all previous loan documents, the Addendum required Plaintiffs to pay an exorbitant interest rate in excess of 40% annually. 28. Pursuant to New York Penal Law Section , an party is guilty of criminal usury when it knowingly charges, takes or receives any money or other property as interest on the loan or forbearance of any money or other property, at a rate exceeding twenty-five per centum per annum or the equivalent rate for a longer or shorter period. 29. All of the loans extended to the Defendants bore interests rates in excess of 40% per annum, almost twice the legal percentage. Accordingly, all of the loans referenced herein are criminally usurious on their face. 30. Plaintiffs seek a declaratory judgment declaring the (i) May 2005 Loan Agreement, (ii) October 2006 Loan Agreement, (iii) December 2007 Loan Agreement, (iv) April 2007 Loan Agreement, (v) September 2007 Loan Agreement, and (vi) the Addendum void as criminally usurious pursuant to New York Penal Law Section WHEREFORE, Plaintiff demands judgment as follows: (a) A declaratory judgment declaring that the (i) May 2005 Loan Agreement, (ii) October 2006 Loan Agreement, (iii) December 2007 Loan Agreement, (iv) April 2007 Loan Agreement, (v) September 2007 Loan Agreement, and (vi) Addendum void as criminally usurious pursuant to New York Penal Law Section

9 (b) Such other and further relief that the Court deems just and proper. Dated: Garden City, New York February 7, 2011 LAW OFFICES OF ISAAC M. ZUCKER, PLLC By:/s/ Isaac M. Zucker Attorneys for Plaintiffs 600 Old Country Road, Suite 321 Garden City, New York Tel.: (516) Fax: (516)