US Extreme Wellness LLC has filed a complaint against Sonoran Homewatch LLC, alleging breach of partnership agreement and fiduciary duty. The complaint was filed by US Extreme Wellness LLC in the United States District Court for the Northern District of Illinois on May 28, 2024.
According to the court documents, US Extreme Wellness LLC (referred to as "Extreme Wellness") is a Wyoming-based company providing e-commerce management services for Walmart webstores. Sonoran Homewatch LLC ("Sonoran"), an Arizona-based company, owns and operates a Walmart webstore. Both companies conduct business nationwide, including in Illinois.
The partnership between Extreme Wellness and Sonoran began on November 1, 2023, with the goal of operating a profitable Walmart e-commerce store. Under their written partnership agreement, Sonoran owned the Walmart store while Extreme Wellness managed it and handled merchandise purchases. Profits were to be split 60/40 between Sonoran and Extreme Wellness respectively.
However, in April 2024, without prior notice or warning, Sonoran initiated chargebacks totaling over $58,300 against the credit card used for inventory purchases. This action directly breached both the Partnership Agreement and Credit Card Authorization form. Additionally, Sonoran ceased monthly profit reconciliations and distributions as stipulated in their agreement. As a result, approximately $5,500 in profit sharing has been withheld from Extreme Wellness.
Despite these breaches, Extreme Wellness continued fulfilling orders on the e-commerce site but incurred at least $16,000 in unreimbursed inventory costs due to Sonoran's actions. Furthermore, Sonoran unilaterally made decisions regarding chargebacks and refused to reimburse inventory purchases or perform profit sharing—actions that have financially harmed Extreme Wellness.
In response to these breaches and financial damages caused by Sonoran's actions, Extreme Wellness seeks judicial dissolution of their partnership under the Wyoming Uniform Partnership Act (Wyo. Stat. § 17-21-et seq.). They argue that all three bases for judicial dissolution are present: unreasonable frustration of economic purpose; impracticability of continuing business with Sonoran; and inability to conform to the partnership agreement.
Extreme Wellness requests several forms of relief from the court:
1. Judicial determination that the partnership be dissolved.
2. Court-monitored winding up of the partnership.
3. Appointment of a receiver to oversee this process.
4. Settlement of accounts per Section 807 of the Act.
5. Full accounting of all partnership assets.
6. Distribution of assets according to terms less any amounts wrongfully withheld by Sonoran.
7. Any other relief deemed appropriate by the court.
The case is being handled by Kevin K. McCormick from McCormick Law representing US Extreme Wellness LLC.