Beruflich Dokumente
Kultur Dokumente
10/16/2017 12:00 AM
Donna Kay McKinney
Bexar County District Clerk
Accepted By: Nikki J Garcia
ORIGINAL PETITION
COME NOW Jasmine Norris and Joshua Norris (hereinafter Plaintiffs), and files
this, their Original Petition against June Roberts and Jason Roberts, and Green Energy
II. PARTIES
2. Jasmine Norris and Joshua Norris (Norris or Plaintiffs) are husband and
wife residing in Wilson County, Texas. At all times relevant herein, Jasmine Norris and
Joshua Norris were over the age of eighteen and are residents of the city of La Vernia,
ORIGINAL PETITION
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3. Defendant June Roberts (June) is a Texas resident residing in Comal
County, Texas. June may be served with process at her residence located at 361 Fallen
County, Texas. Jason may be served with process at her residence located at 361 Fallen
corporation. Green may be served by its registered agent United States Corporation
Agents, Inc and its registered office at 12301 Research Park Blvd, Bldg. 4, Suite 200,
6. Venue in Bexar County, Texas is proper in this cause under 15.002 of the
Texas Civil Practice and Remedies Code because all or a substantial part of the events or
this State, and because the events giving rise to this suit arose out of the business conducted
V. FACTUAL ALLEGATIONS
ORIGINAL PETITION
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9. The Plaintiffs are a hardworking and honest married couple with vast
10. The Norriss were contacted by Roberts about opening a Bow Tie
Franchise sales office in January of 2016. The Roberts informed the Norriss that they
wanted to expand Bow Tie across Texas. The Norriss decided to move forward with the
alleged opportunity in hope that they would be able to build a successful business.
11. The Norriss in early February of 2016 opened one of nine franchise1
offices in Jourdanton, Texas doing business as Bow Tie Roofing Systems Brush Country.
At that time the Norris were informed that the sales offices were to be setup in each of the
regions or franchise locations and all production was to go through the Corporate
12. After three months of production not going as it was promised by the
Roberts (including the roofs not being installed correctly, not being completed in a timely
manner), the Norris decided to take over production and bring it back in house and
13. In December of 2016 Jason proposed the idea to the Norris to come to the
New Braunfels location, the Corporate headquarters to assist with the sales. Due to the
extremely long commute (1 hours from New Braunfels) the Norris were hesitant to do
so.
1
It was later discovered that there was no franchise whatsoever.
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14. In January of 2017 Jason discussed with the Norriss that he-Jason was going
to close all of the other businesses except that of the Jourdanton, Texas office because
Jason said ..due to bad business. It became apparent to the Norriss that franchise owners
by the name of Matt Venezuela of Helotes, and Mike Sholtis of San Antonio had some
type of an agreement with Jason to complete the roof customer jobs which they Matt
Venezuela and Mike Sholtis had sold and collected initial deposits for. In this same
conversation between the Norriss and Jason, Jason suggested that the Norriss run the New
Braunfels office. The three agreed and the understanding was that Jason would take over
the Jourdanton offices remaining production (the completion of the actual roof
installation).
15. In February of 2017 the Norriss initiated their work in the New Braunfels
office. At even date therewith, Jason spoke with his sales/sub-contractor named George
Driskell about taking over the production of all offices that were in need of installations
for outstanding jobs. Georges son Bret Dryer had a friend that was looking to invest some
money in a business. During that time, and despite a pending buyout, Joshua Norris was
instructed by Jason to continue selling jobs in the name of Bow Tie. Jason informed the
staff that he-Jason had a business idea to start a new program that would have the staff
selling to other roofing contractors. This service would provide the sales arm for these
companies, basically Green Energy Xperts, Inc d.b.a Bow Tie would sell the jobs and then
hand them off to the various roofing contractors for the production/completion.
16. The Norriss were able to assist with sales and increased the sales of Bow
Tie exponentially. The Norris closed the Jourdanton office and moved their household to
ORIGINAL PETITION
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La Vernia, Texas. At this same time, Jason moved into a new office. Mike Sanders which
was a franchise owner in Corpus Christi, Texas and a lifelong friend of the Roberts was
present and was instructed to assist with the transition by Jason. Mike was contacting the
franchise clients (the homeowners) to inform them that the New Braunfels office would be
taking over the completion/production of the existing clients roofs and to have the clients
sign new contracts with the New Braunfels office. Mike and Jason were also in the process
of starting a roof warranty company (Above and Beyond). Jason held a meeting with the
office staff stating that the investor pulled out. He tried to come up with some kind of
tier plan on how to sell more, and stating longer hours less pay. A day later Jason and Mike
met with Jasmine and requested that Jasmine help Mike with starting up the Above and
Beyond Roof Warranty Company. They presented it as a position that Jasmine can work
from home due to having five kids which three were in diapers. Thinking that this would
17. In April of 2017 Joshua received a call from a homeowner from the
Jourdanton office asking why his roof was not completed. Joshua told the homeowner he
will look into it and will get back to him. When Joshua approached Jason about the call
Jason and Joshua got into a verbal argument and Joshua asked Jason to give him the
commission he was owed and his old jobs so that he can attempt to get the roofs completed.
Later that day Jason called Joshua Norris and asked that if Joshua thought that he could get
the production completed and if he-Joshua could run the business, that Jason wanted to see
if he (Joshua) and Jasmine Norris would be interested in purchasing the Bow Tie business.
Jason told the Norris that it was because Jason wanted to start a scuba shop in the Virgin
ORIGINAL PETITION
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Islands. Jason had told Joshua that he can no longer concentrate on Bow Tie and that he
18. After the fact, and by conversations with previous employees of Jason, it was
discovered that Jason told the employees that he was in fear for his life everyday
because of the threats from homeowners, this because Jason had promised to complete the
roofs, took initial deposits, but failed to do anything. Further these same employees told
Jasmine that Jason told the employee that I have found someone stupid enough to take
everything over, referring to the Norriss taking over the Green Energy Xperts, Inc,
Bow Tie company considering all of the issues Jason was experiencing.
19. On April 26, 2017 June and Jason Roberts met Joshua and Jasmine Norris at
a restaurant in New Braunfels, Texas to discuss the general aspects of the Norris taking
over the business. Jason wanted out as soon as possible. It was discovered later that it was
because of the constant pressure from the multitude of phone calls and complaints from
homeowners. Having very little conversations about the details of the transaction, the
Roberts, desperate to distance themselves from Green Energy Xperts, Inc Bow Tie, the two
couples went to a bank to sign documents that the Roberts had already had prepared. Not
reading the documents, but counting on the Roberts to do the right thing, the Norris signed
some documents (it is still unclear as to exactly what documents). It is believed that the
Roberts presented the Norriss with a document by the name of Original Agreement (see
Exhibit A). The Roberts alleged that certain monies were to remain in the business bank
accounts to complete the current jobs, that the business owned $1,214,898.00 of assets, that
there was cash/Accounts Receivable in the amount of $238,203.10, cash in the business
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accounts of $16,990, and that the liabilities of the company were at $715,000.00 most of
which were for suppliers of roofing materials. As part of the transaction the parties
negotiated a debt component for the goodwill of the company in the amount of $33,800.00.
This amount was to be paid out over a few months. During that meeting Jason had said that
he did not tell the attorney a Cheryl Lynn Friedberg2 about the matter because she-Cheryl
20. Shortly after that meeting Jasmine Norris was given access to the books and
records of the company. It was found that nothing was accounted for, nothing was
it was discovered that most of the transactions which were leaving the business accounts
were for personal items of Jason and June Roberts. Obviously, this created substantial
anxiety for Jasmine Norris. For this reason, Jasmine again contacted Cheryl Friedberg to
discuss the contemplated transaction (purchasing Green Energy Xperts, Inc), and to inquire
as to some of the red flags that Jasmine had seen, and if the Norriss should go through
with the transaction, could the Norriss be held responsible for any bad business dealings
of Jason and June Roberts. Cheryl informed Jasmine that provided she had no knowledge
of the dealings, that she and Joshua could not be held responsible for the business dealings
2
The Norriss had engaged Friedbergs services in the past. It is believed that a conflict exists.
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21. In May of 2017, it was agreed, but never formally consummated3, that the
Norriss would purchase Green Energy Xperts, Inc from the Roberts. A number of
documents were signed (it has been discovered recently that some of the documents were
clearly fraudulently signed (these documents included the Franchise Agreements4) by other
parties (the Norriss signatures were forged by other parties on some of the documents)),
and the Norriss began running Green Energy Xperts, Inc based on the representations of
the Roberts.
22. The Roberts convinced the Norriss to continue with the same bank accounts
the business had at Wells Fargo, by representing that the names on the accounts could just
be switched from the Roberts to the Norris names. Believing that the Roberts were honest
and trustworthy, the Norriss agreed to continue with the existing Wells Fargo accounts. It
was later discovered why the Roberts requested the same bank accounts be used. In the
days to come tens of thousands of dollars of checks and withdraws occurred from the
business accounts by the Roberts, all of which were not disclosed (none of the following
by the Roberts and then presented for payment to the company account;
3
Documents attached to this petition and those expected to be produced in discovery will show that although the
parties contemplated a sale, all that was consummated was a purchase and sale agreement. No closing documents,
no formal conveyance of ownership via stock certificates were ever conveyed and never occurred.
4
The Norriss had multiple conversations with previous employees of the Roberts to find that it was common
practice that each of the employees were instructed to forge franchise owners signatures on the documents at
Jasons request.
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b. Personal withdraws were made by the Roberts, payments of the Roberts
c. Previous bills and debts of the Roberts were paid from the company account;
d. Previous week payroll which the Roberts were responsible for was drawn on
f. Equipment rental used for Roberts jobs was charged to the company
accounts;
accounts;
23. The withdraws and checks were for both personal items of the Roberts and
for checks which were predated and written to suppliers by Jason Roberts, all of which
were not disclosed by the Roberts to the Norriss. Tens of Thousands of dollars which the
Roberts promised would remain the company accounts to allow the completion of the
24. When the Norriss made inquiry with the Roberts, they said in must be a
mistake, but the Roberts did nothing to replenish the company accounts. In fact, the
Norriss immediately engaged the services of the below signed firm to assist with this
5
Plaintiffs have all the bank statements to substantiate each of the above charges but have not attached same to
protect the identity of the payees. This will be produced in discovery.
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matter. The below signed immediately contacted Mr. Roberts and he denied the allegations
and demanded that the below signed contact his attorney Ms. Cheryl Friedberg.
25. As if this was not bad enough, vendors of the company started calling and
complaining of past due accounts. One such supplier, a roofing supplier was promised by
Jason that it would receive an insurance check in the amount of $80,000.00 to pay the
account down, however the insurance check was never paid to this vendor. Many of the
vendors which were not paid initiated filing of mechanics liens on the Roberts jobs.
26. The City of Universal City sent a summons for the company to appear for
violations of city ordinances. The Roberts never pulled the appropriate permits to perform
the work on a job. A lawsuit was signed for by the companys receptionist for a disgruntled
27. In an effort to keep the company afloat the Norriss began laying employees
off so as to reduce expenses and try to make the situation right with the customers. Nothing
was working though, no matter how hard the Norriss tried to get the Roberts to return the
money, and no matter how much overhead the Norriss attempted to trim, nothing could
28. While Jason Roberts were moving on to the next scheme, (Roberts has
purportedly created another company named Large Loss Consulting), the Norriss were
trying to mop up the Roberts mess. Fearing that their financial viability was being affected,
the Norriss were forced to start their own entity. The Norriss did so on May 11, 2017.
Thereafter, the Norriss moved from the physical location of the Roberts. When the
Norriss contacted the landlord to notify him that they were moving out, it was found that
ORIGINAL PETITION
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Jason Roberts had not informed the landlord that he had left the building, and the fact that
29. Since the Norriss departure, the Norriss continue to pay the debts for the
assets they retained. For instance, there is a work truck which remains in the Norriss
30. Since the Norriss departure it has been discovered that the transaction with
a. The initial proposal / agreement which was proposed on April 26, 2017 (see
Exhibit A) was a complete fraud. It is now clear that each of the numbers
i. The vendor totals were all understated. Most of the accounts were
already in default and the vendors had shut the accounts down due to
non-payment;
ii. The accounts receivables were not collectable because the customers
delays. The below signed has been in contact with at least thirty
affected customers which have stated that the Roberts took initial
materials deposits but would never come back and have not
that had been written and the fact that the Roberts made withdraws;
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b. The entities: Multiple entities have been formed by the Roberts. It appears
that vendors and customers start turning up the heat and the Roberts form
another entity;
iii. Closing and Stock transfer: there was no closing and no stock transfer
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v. Complete Production is a d/b/a formed by June Roberts on June 15,
2016;
28, 2016.
c. All of the documents presented and signed were the initial or a precursor to
ironically attempts to shift liability for prior bad actions of the Roberts
D);
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behalf of Green Energy Xperts, Inc, therefore it is void (see Exhibit
E);
have Green Energy Xperts, Inc assign the contracts to Assignee Jason
Roberts. First, the document has no effective date, and second the
F);
is signed by Jason Roberts whom has in the past alleged that he is only
Exhibit H).
31. It is clear that the Roberts never intended to convey ownership, and failed to
do so, of Green Energy Xperts, Inc, rather they took advantage of the Norriss and swindled
unsuspecting and unsophisticated individuals. While the Norris were attempting to keep
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the company afloat the spent thousands of dollars of their own personal money trying to
32. It is believed that the Roberts were embezzling tens of thousands of dollars
from unsuspecting customers and then keeping the money for personal use and not
V. CAUSES OF ACTION
A. CIVIL CONSPIRACY
33. Plaintiffs reallege each and every allegation made in paragraphs 1-32 above
Great National Life Insurance Co. v. Chapa, 377 S.W.2d 632, 635 (Tex. 1964); State v.
Standard Oil Co., 130 Tex. 313, 107 S.W.2d 550, 559 (1937).
34. The essential elements are: (1) two or more persons; (2) an object to be
accomplished; (3) a meeting of minds on the object or course of action; (4) one or more
unlawful, overt acts; and (5) damages as the proximate result. Massey v. Armco Steel Co.,
652 S.W.2d 932, 934 (Tex. 1983); Chon Tri v. J.T.T., 162 S.W.3d 552 (Tex. 2005). In this
case each of the Defendants conspired to deprive the Plaintiffs of their money by alleging
that certain monies were present when they were not, by alleging that certain receivables
were due and owing when they were not, by alleging that accounts payables were at a level
when they were not, and then by convincing Plaintiffs to retain the current Wells Fargo
account so as to allow the Defendants to treat the account like their own little savings
ORIGINAL PETITION
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35. Each of the Defendants, being more than two, with a goal of taking monies
from Plaintiffs accomplished that goal and absconded with tens of thousands of dollars of
money from Plaintiffs and that of countless homeowners. It is believed that the
Defendants took advantage of a friendship and conned the Plaintiffs into the transaction
B. NEGLIGENT MISREPRESENTATION
36. Plaintiffs reallege each and every allegation made in paragraphs 1-35 above
as if it were plead herein. The Texas Supreme Court has already adopted the tort of negligent
misrepresentation as described by the restatement (Second) of Torts 552. See Federal Land Bank
Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex.1991). The elements of negligent
misrepresentation are: (1) the representation was made by a defendant in the course of his business,
profession or employment, or a transaction in which he has a pecuniary interest; (2) the defendant
supplied false information for the guidance of others in their business; (3) the defendant did not
exercise reasonable care or competence in obtaining or communicating the information; and (4)
the plaintiff suffered pecuniary loss by justifiably relying on the representation. Federal Land Bank
Association of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex.1991); Williams v. City of Midland, 932
S.W.2d 679, 684 (Tex.App.-El Paso 1996, no writ); Papas Telecasting Companies v. Lee
Enterprises, Inc., 08-00-00394-CV, 2002 WL 59693 (Tex. App. Jan. 17, 2002).
37. Defendants clearly made false representations in the course of their business,
these representations in a transaction that Defendants in fact had a pecuniary interest in.
Defendants and each of them, supplied false information as specified above. Each and every
representation whether in writing or orally that was made has proven to be false. Defendants failed
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to exercise reasonable care or competence in making the statements. Defendants expected and
therefore can reasonably believe that Plaintiffs relied on their representations. Plaintiffs have
38. Plaintiffs reallege each and every allegation made in paragraphs 1-37 above
as if it were plead herein. In order to prove fraud, a plaintiff must show that (1) the defendant
made a material representation that was false, (2) the defendant knew the representation was false
or made it recklessly as a positive assertion without any knowledge of its truth, (3) the defendant
intended to induce the plaintiff to act upon the representation, and (4) the plaintiff actually and
justifiably relied on the representation, which caused the injury. Ernst & Young, L.L.P. v. Pac.
which are as shown above clearly false. Defendants knew that the representations were false, or
Defendants made the representations recklessly and made such statements as a positive assertion
without knowledge of its truth. Because of the downward slipping business and fear for criminal
prosecution Defendants wanted to shirk the responsibility of the company on to another party.
Because of this desire, Defendants believed that they could take advantage of their friends to
Plaintiffs. In considering same, it is clear that the Defendants intended to induce the Plaintiffs to
act upon the representations. The written representations and affirmative statements made caused
a situation wherein it was justifiable for Plaintiffs to rely on the statements. Plaintiffs actually
relied on the statements made and proceeded with what Plaintiffs initially believed was a business
purchase and sale. This reliance and the misrepresentations made cause
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40. Plaintiffs reallege each and every allegation made in paragraphs 1-39 above
as if it were plead herein. The Texas Business and Commerce Code 27.01 defines the
41. As shown above, Defendants violated Tex. Bus. & Com. Code Ann. 27.01(a)(2)
as they made numerous material false promises with the intention not to fulfill and made with
purpose to induce the Plaintiffs to agree to a possible sale and was relied on by the Plaintiffs to
(b) A person who makes a false representation or false promise commits the fraud
described in Subsection (a) of this section and is liable to the person defrauded for
actual damages.
(c) A person who makes a false representation or false promise with actual
awareness of the falsity thereof commits the fraud described in Subsection (a) of
this section and is liable to the person defrauded for exemplary damages. Actual
awareness may be inferred where objective manifestations indicate that a person
acted with actual awareness.
(d) A person who (1) has actual awareness of the falsity of a representation or
promise made by another person and (2) fails to disclose the falsity of the
representation or promise to the person defrauded, and (3) benefits from the false
representation or promise commits the fraud described in Subsection (a) of this
section and is liable to the person defrauded for exemplary damages. Actual
awareness may be inferred where objective manifestations indicate that a person
acted with actual awareness.7
Defendants by misrepresenting to Plaintiffs that certain monies were in the bank, that the accounts
receivables and accounts payable were of a certain nature, and the fact that Defendants failed to
disclose that certain checks were already remitted to vendors, and by pulling money out of the
business accounts without disclosure, Defendants defrauded Plaintiffs this caused Plaintiffs harm
and is fraud. Texas law has established the elements of statutory fraud as (1) the defendant made
a material misrepresentation; (2) the defendant knew the representation was false or made the
representation recklessly without any knowledge of its truth; (3) the defendant made the
6
See Henning v. One West Bank 405 S.W.3d 950, 963 (Tex.App.Dallas 2013, no pet.)
7
Tex. Bus. & Com. Code Ann. 27.01
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representation with the intent that the other party would act on that representation or intended to
induce the party's reliance on the representation; and (4) the plaintiff suffered an injury by actively
and justifiably relying on that representation. Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348
S.W.3d 194, 217 (Tex. 2011); Italian Cowboy Partners v. Prudential Ins., 341 S.W.3d 323, 337
(Tex.2011);See DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 688 (Tex.1990); Trenholm v.
E. DECLARATORY RELIEF
42. Plaintiffs reallege each and every allegation made in paragraphs 1-41 above
43. An actual controversy has arisen and now exists between Plaintiffs and Defendants
regarding the respective rights and duties, in that Plaintiffs contends that Defendants failed to
consummate any purchase and sale of the business known as Green Energy Xperts, Inc/Bow-
Tie.
44. Plaintiffs request this Court pursuant to the Uniform Declaratory Judgments Act,
Tex. Civ. Prac. & Rem. Code Chapter 37 et seq declare the rights, status, and other legal relations
as between them and Defendants the alleged purchase and sale of the business known as Green
F. BREACH OF CONTRACT
45. Plaintiffs reallege each and every allegation made in paragraphs 1-44 above
as if it were plead herein. Pleading in the alternative, if this Court so finds that the
(Plaintiffs in no way make this allegation), and this Court finds that there is a binding
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contract, the Plaintiffs allege that Defendants miserably and completely defaulted on same
46. The Texas Constitution outlines a contract clause stating, No bill of attainder ... or
any law impairing the obligation of contracts shall be made. Tex. Const. art. I, 16. Under Texas
law, the essential elements of a breach of contract claim are: (1) the existence of a valid contract;
(2) performance or tendered performance by the plaintiff; (3) breach of contract by the defendant;
and (4) damages sustained as a result of the breach. Sauceda v. GMAC Mortg. Corp., 268 S.W.3d
135, 140 (Tex.App.-Corpus Christi 2008, no pet.)) Roof Sys., Inc. v. Johns Manville Corp., 130
S.W.3d 430, 442 (Tex.App.-Houston [14th Dist.] 2004, no pet.) Defendants, and each of them,
47. Plaintiffs reallege each and every allegation made in paragraphs 1-46 above
48. It is believed that discovery will show that Defendants embezzled monies
from both Plaintiffs and unsuspecting homeowners and transferred these ill-gotten
proceeds to other business of Defendants. Plaintiffs seek to hold all Defendants jointly and
severally liable for the debts incurred by Plaintiffs. In contemplating this end, Plaintiffs
began an extensive investigation of where and for what use the Plaintiffs money was used,
and how Defendants literally stole the Plaintiffs money and used same for personal use.
49. The Texas Uniform Fraudulent Transfer Act ("TUFTA") creates the
statutory framework and cause of action through which a creditor may pursue a fraudulent
ORIGINAL PETITION
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transfer claim in Texas.8 The Texas Business and Commerce Code states that: (a) A
creditors claim arose before or within a reasonable time after the transfer was made or the
obligation was incurred, if the debtor made the transfer or incurred the obligation: (1) with
actual intent to hinder, delay, or defraud any creditor of the debtor.9 Since direct proof of
fraud often is not available, courts may rely on circumstantial evidence to establish
fraudulent intent. Roland v. United States, 838 F.2d 1400 (5th Cir. 1998); Williams &
Chastain v. Laird, 32 S.W.2d 502, 505 (Tex. Civ. App. 1930). When several indicia of
fraud are found, they may form the foundation for an inference of fraud. Roland, 838 F.2d
at 1403. This foundation is built upon what are known as "badges of fraud." Texas Sand
Co. v. Shield, 381 S.W.2d 48, 53 (Tex. 1964). The TUFTA lists eleven non-exclusive
badges of fraud that may be used to prove actual fraudulent intent: (b) In determining actual
intent under Subsection (a)(1) of this section, consideration may be given, among other
factors, to whether:
(1) the transfer or obligation was to an insider; (2) the debtor retained
the transfer or obligation was concealed; (4) before the transfer was
threatened with suit; (5) the transfer was of substantially all the
debtors assets; (6) the debtor absconded; (7) the debtor removed or
8
Litzler v. Ethridge (In re Gordon), Nos. 02-32599-HDH-7, 03-3787, 2004 Bankr. LEXIS 2570, at *4-5 (U.S.
Bankr. N.D. Tex. Sep. 27, 2004)
9
Tex. Bus. & Com. Code 24.005
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concealed assets; (8) the value of the consideration received by the
or the amount of the obligation incurred; (9) the debtor was insolvent
shortly after a substantial debt was incurred; and (11) the debtor
purposely misled Plaintiffs to believe that the assets, accounts receivables, and the
accounts payables were of a character that just were not. The obligations were created and
to a creditor whose claim arose before the transfer was made or the obligation was incurred
if the debtor made the transfer or incurred the obligation without receiving a reasonably
equivalent value in exchange for the transfer or obligation and the debtor was insolvent at
that time or the debtor became insolvent as a result of the transfer or obligation.11
51. It is now clear after extensive investigations that the Defendants defrauded
not only the Plaintiffs but many homeowners, then fraudulently transferring and
converting the money from Plaintiffs and the homeowners into personal assets of
10
Id.
11
Tex. Bus. & Com. Code 24.006
ORIGINAL PETITION
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Defendants. Therefore, TUFTA is relevant for just this occasion in that it is on point for
just this type of situation where transfers are made with actual intent to hinder, delay, or
defraud creditors. Tex. Bus. & Comm. Code 24.005(a)(1) (Vernon 2002).
always make out a strong case of fraud, and in the instant case, as explained below, at least
six of the eleven factors the statute provides are present. Plaintiffs ask the Court to take
notice of all of the exhibits attached hereto which clearly and unequivocally evidences
Defendants actions were fraudulent, and that Defendants acted with a fraudulent intent to
defraud the Plaintiffs by both handing off a company which was in dreadful financial
fitness but making representations to the contrary, then withdrawing monies for personal
use.
53. When assets are transferred after suit or threat of suit, or shortly before or
after a substantial debt was incurred, these circumstances are considered badges of fraud.
Tex. Bus. & Comm. Code 24.005(b)(4), (10) (Vernon 2002). Transfers of substantially
all of the debtor's assets, as well as the debtor becoming insolvent shortly after the transfer
are badges of fraud. Tex. Bus. & Comm. Code 24.005(b)(5), (9) (Vernon 2002). A
transfer made by a debtor is fraudulent as to a creditor whose claim arose before the transfer
was made if the transfer was made to an insider for an antecedent debt, the debtor was
insolvent at that time, and the insider had reasonable cause to believe that the debtor was
ORIGINAL PETITION
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insolvent.12 As noted above, Defendants allegedly tried to transfer everything to new
companies.
54. Both transfers to insiders and transfers for no consideration are considered
badges of fraud. Tex. Bus. & Comm. Code 24.005(b)(1), (8) (Vernon 2002). While a
close relationship between the transferor and transferee is not, standing alone, a badge of
fraud, it may in fact be a badge of fraud when considered in conjunction with other
suspicious circumstances. Wilhite, 636 S.W.2d at 856. Defendants as husband and wife
appeared to sign some documents while not signing others, this is believed to have been
done so that one of two or each of them can allege that the other was the one with the power
to perform certain tasks. With regard to close relationships between the transferor and
transferee, it is believed that discovery will prove that Defendants transferred assets from
55. It is believed that Defendants will claim and attempt to prove that they have
assets to satisfy a judgement when each Defendant moved around assets to allegedly
protect themselves. Plaintiffs are confident that Defendants fraudulently transferred assets
to other entities and possibly one of the two of Defendants names to attempt to avoid
liability. Therefore, if the transferee (either one of the Defendants) has either actual or
constructive knowledge of the debtor's intent, the transfer is void even where valuable
consideration is paid. Wilhite, 636 S.W.2d at 855. Constructive knowledge of the debtor's
fraudulent intent is present where the transferee "knows facts which would put a reasonably
12
Tex. Bus. & Com. Code 24.006.
ORIGINAL PETITION
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prudent person on inquiry and if diligence would lead to knowledge of the transferor's
fraudulent intent, the [transferee] is charged with constructive notice of the intent and is
not protected." Id. (quoting Creditors' Bills To Discover and Reach Property, in State Bar
H. DEFAMATION
56. Plaintiffs reallege each and every allegation made in paragraphs 1-55 above
57. Texas Civil Practice and Remedies Code 73.001 defines the elements of
Libel and Slander. The Defendants published a statement of fact (see Exhibit I). The
statements contained therein reference Plaintiffs. The statements were clearly defamatory.
Each of the statements contained in Exhibit I were false. It is believed that when
Defendants published the statements they were acting with actual malice; were negligent
or liable without regard to fault. Because of the published statements Plaintiffs reputation
2. BUSINESS DISPARAGEMENT
58. Forbes, Inc. v. Granada Biosciences, Inc 124 S.W.3d 167, 170 (Tex.2003)
word/statements about the Plaintiffs economic interests. (see Exhibit I). The statements
contained therein were false. It is believed that when Defendants published the statements
they were acting with actual malice. The Defendants published the statements without
ORIGINAL PETITION
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59. Each of the facts stated herein are verified by Plaintiffs (see Exhibit J).
PRAYER
relief:
a. After trial upon the merits and proof presented at trial that all Plaintiffs
Actual damages be awarded; and
b. After trial upon the merits and proof presented at trial that all Plaintiffs
Exemplary damages be awarded;
c. After trial upon the merits and proof presented at trial that all Plaintiffs
Punitive damages be awarded;
d. After trial upon the merits and proof presented at trial that all Plaintiffs
reasonable and necessary attorneys' fees be awarded;
e. Any other and further relief that the Court considers just and proper.
Respectfully submitted,
By:
Jeffrey S. Kelly
State Bar No. 24043749
Keith S. McMahon
State Bar No. 24060992
Chad W. Eaton
State Bar No. 24056666
ATTORNEY FOR PLAINTIFFS
ORIGINAL PETITION
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