Escolar Documentos
Profissional Documentos
Cultura Documentos
Jeanes, Clerk of Co t
r- *** Electronically Filed ***
Lori Cummings
Filing ID 419002
9/9/200910:16:04 AM
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IN THE SUPERIOR COURT OF THE STATE OF ARIZONA
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IN AND FOR THE COUNTY OF MARICOPA
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19 INTRODUCTION
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This matter came before the Court on Defendant Gary Whiting's Motion for
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Emergency Hearing and Stay of Enforcement of Foreign Judgment on September 1, 2009.
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23 After oral argument, the Court requested additional briefmg on the issues of:
3 (3.) Whether Defendant's argument that the Utah Temporary Restraining Order was
obtained by fraud could be entertained in this Court.
4
Plaintiffs submit the following in response to the Court's request for additional
5
6 briefing.
7 BACKGROUND FACTS
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1. On August 3, 2009, Plaintiffs filed their First Amended Complaint and Motion
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for Temporary Restraining Order in the Fourth Judicial District Court of the State of Utah.
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11 See Transcript of August 21,2009 hearing at p.ll, attached as "Exhibit A."
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.telllr) 12 2. At that time, Judge Claudia Laycock set a hearing date for the Motion for
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~~< Temporary Restraining Order for August 21,2009. See Id.
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3. On August 10, 2009 and August 11, 2009, all defendants named in the Utah
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16 action were served with the First Amended Complaint and Motion for Temporary
21 5. Defendants' counsel, Gary Henrie appeared for the limited purpose of requesting
22 a continuance of the hearing so as to permit additional time for Defendants' Arizona counsel
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to be admitted pro hac vice. Id. at p.4.
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25
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1 6. Judge Laycock considered the arguments presented by counsel and denied the
2 motion to continue the hearing based on the fact that all Defendants had been properly
3
served and the motion for a continuance was filed just prior to the hearing. Id. at p.18-19.
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7. Based on the uncontested allegations made in Plaintiffs' motion, the Court
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7 8. Judge Laycock also appointed a Receiver to take control of and preserve the
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companies. Id. at p.24-27.
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9. Plaintiffs filed this order with the Arizona Superior Court, Maricopa County on
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..•. August 24,2009, prompting Defendant Gary Whiting's pending motion.
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12 ARGUMENT
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~~< I. A TEMPORARY RESTRAINING ORDER IS A JUDICIAL PROCEEDING
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§ui~ THAT WARRANTS FULL FAITH AND CREDIT UNDER THE
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ee UNIFORM ENFORCEMENT OF FOREIGN JUDGMENTS ACT
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16
In Jones v. Roach, the Court of Appeals of Arizona, Division One, Department B
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reviewed the enforcement of a Colorado judgment in the Arizona courts. 575 P.2d 345
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19 (1977). The Court was asked to determine whether a foreign judgment was subject to
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collateral attack under Ariz. R. Civ. P. 60(c). The Court deliberated the purpose of the
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Uniform Enforcement of Foreign Judgments Act (A.R.S. §§ 12-1701 et seq.) and determined
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that "inherent in any discussion of A.R. S. §12-1702 is that it is only final judgments of a
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24 sister state that are entitled to full faith and credit." 575 P.2d at 348. The Court relied on
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1 the Restatement 2d. Conflict of Laws §J07 and cited Comment (e) to this section to qualify
2 this reading ofthe Full Faith and Credit Clause of the Constitution. Comment (e) states:
3
It is for the local law of the state of rendition to determine whether a judgment
4 is fmal.
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Under this analysis, it is necessary to determine whether a "Temporary Restraining Order"
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is considered "final" under the Utah Rules of Civil Procedure. See Grynberg v. Shaffer, 165
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8 P.3d 234 (Ariz. App. 2007).
9 Rule 65A of the Utah Rules of Civil Procedure requires that any restraining order
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issued under the Rule shall be binding on those against whom the order is issued. See Utah
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R. Civ. P. 65A(d). [emphasis added.] This language demonstrates that it is a final
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C 03 ~ is a final order dealing with the restraints placed on the Defendants. While the order may
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-e- 15 later be replaced by an injunction, the order stands on its own accord directing the parties to
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refrain from certain conduct and it is the law of the case.
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Accordingly, Utah considers a temporary restraining order to have the finality
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19 necessary to receive full faith and credit under the Uniform Enforcement of Foreign
20 Judgments Act. See Garris v. South Alabama Production Credit Assoc., 537 So. 2d 911
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(Ala 1989) (Appellant seeking "final order on his application for temporary restraining
22
order."); Ford v. Alabama By-Products Corp., 392 So.2d 217 (Ala 1980) (Final order
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24 denying petition for temporary restraining order); Boyd v. Ottman, 961 So.2d 148 (Ala.
25 Civ. App. 2006) (final order granting a restraining order to last 10 years); Birch Creek
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1 Irrigation v. Prothero, 858 P.2d 990 (Utah 1993) (appeal of the grant of a preliminary
7 that full faith and credit must be given to judicial proceedings of sister state ... "
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Multibanco Comermex, S. A v. Gonzalez H. (App. Div.2 1981) 129 Ariz. 321, 630 P.2d
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1053.
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..•. Because the Utah order has been properly filed in Arizona, and as provided by law
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".,;"" defendant has twenty (20) days to provide this Court evidence of its appeal or other actions
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[;o;l~<t: in Utah preventing the enforcement of the Utah Order, Arizona at this time is not
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authorized to entertain a motion for relief from judgment to avoid the enforcement of the
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16 Utah order; "to do so would not afford finality to the rendering state's judgment and
17 would be contrary to the full faith and credit clause ofU.S.C.AConst. Art. 4, § 1." Jones
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v. Roach (App. Div.l 1977) 118 Ariz. 146, 575 P.2d 345.
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II. THE UTAH DECREE OR ORDER IS NOW A DECREE OR ORDER OF
20 THE ARIZONA COURT.
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In keeping with Arizona case law, and the Uniform Enforcement of Foreign
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Judgments Act, a foreign judgment authenticated in accordance with an act of Congress
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24 or the statutes of Arizona can be filed with the clerk of any superior court; it is then
25 treated as a judgment of that court. For what constitutes authentication see Rule 902,
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1 Ariz.R.Evid. The Act defines a "foreign judgment" as a judgment, decree, or order of
2 any court of the United States or any other court entitled to full faith and credit in
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Arizona. A.R.S. § 12-1701. [emphasis added.] Foreign judgments are subject to same
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procedures, defenses, and proceedings as are local judgments. Phares v. Nutter (1980)
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6 125 Ariz. 291, 609 P.2d 561. [emphasis added.] Accordingly, the Utah order carries the
7 same force and effect as if it were an order signed by a local judge, say for example,
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Judge Kongable.
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For instance, A.R.S. 44-3292 grants Arizona courts the ability to enter restraining
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N 11 orders and temporary injunctions in cases dealing with securities violations. Should an
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'-l~-< would not be entertaining defendant's motion. Pursuant to well established Arizona law,
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the Uniform Enforcement of Judgments Act shall be "interpreted and construed as to
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16 effectuate its general purpose to make uniform the law of those states which enact it."
21 jurisdiction this Court must give full faith and credit to the order and present law of the
22 case.
23
The issue of granting full faith and credit to a temporary restraining order has been
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reported in only a few cases. In Gutierrez v. District Court for County of Adams, 516 P.2d
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26 647 (Colo. 1973), the Colorado Supreme Court did not reach the merits of the Full Faith and
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1 Credit clauses application to temporary restraining orders. However, the trial court found
6 this matter. Whether a rendering state's judgment is final must be determined under the
7 local law of the state of rendition. Jones v. Roach (App. Div.1 1977) 118 Ariz. 146, 575
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P.2d 345.
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ID. THE APPOINTMENT OF A RECEIVER UNDER RULE 66 OF THE UTAH
..•. 11 RULES OF CIVIL PROCEDURE IS NOT A TEMPORARY
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~:> ~" s At the August 21, 2009 hearing, Judge Claudia Laycock determined that the relief
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14 requested by Plaintiffs was inappropriate. Specifically, Judge Laycock indicated that the
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15 Rules of Civil Procedure did not allow for the appointment of an interim president. Judge
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Laycock did, however, determine that the appointment of a receiver was appropriate under
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Rule 66(a)(I) given the nature of the allegations against Defendant Gary Whiting. See
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19 Exhibit A, p. 24-27. Judge Laycock then altered the order by hand-writing a brief line
20 stating "Vick Deauvono shall also act as Receiver under Rule 66 of the Utah Rules of Civil
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Procedure for each ofthe above-listed entities."
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This order is separate from the TRO and from the appointment of Vick Deauvono in
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24 each of the named capacities. Rule 66 does not contemplate a temporary status of an
25 appointed receiver. Therefore, given the appointment, and Judge Laycock's order, this
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1 order is fmal and warrants full faith and credit under the Uniform Enforcement of Foreign
2 Judgments Act.
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IV. A FOREIGN JUDGMENT MAY ONLY BE COLLATERALLY ATTACKED
4 AND THE MERITS OF THE CASE CANNOT BE REACHED EXCEPT
THROUGH AN APPEAL IN THE RENDERING JURISDICTION.
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6 Foreign judgments entered into the State Courts through the Uniform Enforcement
7 of Foreign Judgments Act (A.R.S. §§12-1701 et seq.) are subject to the same procedures for
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vacating a judgment as judgments of the Superior Court of this State. Springfield Credit
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Union v. Johnson, 599 P.2d 772 (Ariz. 1979). Rule 60(c) of the Arizona Rules of Civil
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N 11 Procedure provides for judgments to be set aside for mistake, newly discovered evidence,
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fraud, misrepresentation or other misconduct of an adverse party, the judgment is void, the
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r.iI~« judgment has been satisfied, or any other reason justifying relief from the judgment.
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00 Defendant Gary Whiting has claimed that Plaintiffs committed fraud on the Utah court in
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16 obtaining their order. Defendant Whiting has, however, failed to produce any evidence
21 "The burden of proving fraud is on the party moving to vacate, and is not to be
22 presumed, but must be established by clear and convincing evidence." Lake v. Bonham,
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716 P.2d 56,58 (Ariz. App. 1986). In Lake, the trial court vacated a judgment after fmding
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that, in spite of his sworn affidavit to the contrary, Mr. Lake was not domiciled in Arizona
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26 as required in order to obtain a decree of dissolution. The appellate court found that the trial
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1 court had no legal basis under Rule 60(c)(3) for vacating the decree because the evidence
2 was insufficient to support the fraud claim. The Court cited 2 C. Wright & A. Miller,
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Federal Practice and Procedure, §2860 (1973) in determining that:
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The cases in which it has been found that there was or might have been a
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'fraud upon the court,' for the most part, have been cases in which there was
6 'the most egregious conduct involving a corruption of the judicial process
itself.' The concept clearly includes bribery of a judge of or the employment
7 of counsel in order to bring an improper influence on the court.
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Lake, 716 P.2d at 58.
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In the present matter, Plaintiffs have brought, in good faith, three affidavits
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12 and set out a detailed outline of the improper actions taken by Defendant Whiting in
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r..l1A< converting business assets for his personal use. Defendant Whiting's claim of "fraud on the
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court" under Rule 60( c) requires clear and convincing evidence that Plaintiffs have engaged
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16 in conduct that involves the corruption of the judicial process itself. Absent such a showing,
17 Defendant Whiting has no basis to vacate the order as entered in Utah and as domesticated
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in Arizona under the Uniform Enforcement of Foreign Judgments Act.
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CONCLUSION
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21 Plaintiffs have obtained a valid final judgment on their motion for a temporary order.
22 Plaintiffs' temporary restraining order is a judicial proceeding that warrants the full faith
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and credit guaranteed by the United States Constitution and by the Uniform Enforcement of
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Foreign Judgments Act.
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Judge Laycock's order appointing Vick Deauvono is a final order. The nature of
2 Rule 66 of the Utah Rules of Civil Procedure does not contemplate a temporary order, but
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rather appoints Mr. Deauvono indefinitely or until further action taken by the Court. Mr.
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Deauvono's status as court-appointed receiver, therefore should be granted full faith and
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6 credit under the Uniform Enforcement of Foreign Judgments Act as it is a final order.
7 Accordingly, Plaintiffs pray the Court to grant full faith and credit to the Temporary
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Restraining Order and the Order Appointing Vick Deauvono as Receiver for the reasons
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stated. Plaintiffs also pray the Court to dismiss Defendant Whiting's allegations of fraud
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N 11 and to deny Defendant Whiting's Motion to Stay Enforcement ofthe Foreign Order.
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..;. V) ~n 12 RESPECTFULL Y SUBMITTED this 8th day of September, 2009
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c ..•. By: /s/ Angel "Bacho" Vega #023036
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15 Angel Bacho Vega
4824 E. Baseline Road, Suite 124
16 Mesa, AZ 85206
ATTORNEYS FOR PLAINTIFFS
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1 ORIGINAL of the foregoing hand delivered/filed with:
8 B. Ray Zoll
Micah Bruner
9 B. RAY ZOLL P.c.
8941 South 700 East, Suite 204
10 Sandy, Utah 84070
Counsel for Plaintiffs (Utah)
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By: /s/ Angel "Bacho" Vega #023036
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B. Ray Zoll, #3607
Micah Bruner, #11272
B. Ray Zoll, PC
8941 South 700 East, Suite 204
Sandy, Utah 84070
Telephone: 801-545-7663
Facsimile: 801-545-7910
vs.
Civil No.
GARY WHITING! an individual;
CHEYENNE MOUNTAIN Judge
ENTERTAINMENT/ INC., a Nevada
corporation; GARVICK PROPERTIES,
LLC, a Nevada limited liability
company; CHEYENNE MOUNTAIN
GAMES, INC., a Nevada corporation;
MMOGULS, INC, a Nevada
corporation; NOW CORPORATION, a
Nevada corporation
Defendants.
STATE OF UTAH }
:55.
COUNTY OF UTAH }
attesting with the exception of those statements, which are based upon
information available to me, and the belief I have reached based upon
3. I became involved with Gary Whiting and Mmoguls, Inc. when I met with
which customers would pay to play online computer games and have the
6. CME and CMG partnered with Mmoguls to provide Mmoguls with video
market the Stargate Worlds video game and make It available to the
9. Despite the other online games provided by CME and CMG, Stargate
10. During that initial meeting, Gary Whiting nornlnated Brent Barton as the
companies.
11. Upon filing the lnltlal paperwork, I discovered that Gary Whiting's credit
was insufficient to gain the necessary funds and accounts for starting the
company.
12. Vision Bankcard, the credit card processor that was to be used by
13. Gary Whiting stated that Mr. Barton would have control over the
company, that Mr. Barton would have complete control over and accessto
14. Before the Stargate Worlds video game was finished, we launched the
approximately $900,000.00.
16. This money was to pay for the commissions earned by affiliates as well as
18. Vision Bankcard released the money to the accounts authorized by Gary
Whiting.
19. Brent Barton and Gary Whiting began writing checks from the Mmoguls,
20. I discovered that the checks that Mr. Barton and Gary Whiting had signed
21. After discussions with officials at Vision Bankcard and Brent Barton, I
learned that Gary Whiting had transferred the money from the Mmoguls,
Inc. account to his own personal accounts and that the money had been
22. In all, Gary Whiting took at least $350,000.00 from Mmoguls, Inc.
23. I was in a meeting, after I discovered that Gary Whiting had taken
24. From that conversation, I learned that Gary Whiting asked Jeff Knowles
for additional funds from the Vision Bankcard account In order to pay the
25. Due to this self-dealing by Gary Whiting, the majority of the management
of Mmoguls, Inc. left the company taking with them extensive experience
26. These former employees, including former CEO Brent Barton, have
offers distributors the ability to play videogames online with the option of
earning money by getting other players to sign up for the program. This
27. From the creation of Mmoguls, Inc., the concept was to provide affiliates
and Mmoguls, Inc. members with the ability to play vldeogames with the
obtained the licenses, raised the money from investors, and created the
29. Cheyenne Mountain Entertainment was then to market the game in part
38. Throughout the entirety of the creation of these entities and pursuit of the
39. Gary Whiting has delusions of grandeur and has, single-handedly, lead to
40. Through discussions with various individuals, I have learned that MGM is
Mountain Entertainment.
lose its license from MGM unless Cheyenne Mountain Entertainment can
Entertainment will likely cause MGM to lose faith in the license granted to
CME.
43. WIthout the license for Stargate Worids l Cheyenne Mountain Games,
44. Without the license for Stargate Worlds, the entire money making
45. The loss of license would cause Immeasurable harm to each of these
entities.
/
/
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/
/
/
/
VickD ,
VERIFICATION
STATE OF UTAH )
:ss
COUNTY OF )
Vick Deauvono, being first duly sworn upon his oath deposes and says:
That he has read the foregoing Atfldavlt, that he knows the contents thereof and the
same are true of his own knowledge, except as to those matters therein stated upon his
InformatIon and belief and as to such matters he believes them to be true.
vs.
Civil No. 09040243&
GARY WHITING, an individual;
CHEYENNE MOUONT AlN Judge Laycock
ENTERTAINMENT, INC" a Nevada
corporation; OARVICK PROFERTIES. LLC,
aNevada limited liability
company; CHEYENNE MOUNTAIN
GAMES. INC., a Nevada corporation;
MMOGULS, INC. a Nevada
corporation; NOW CORPORATION, a
Nevada corporation.
Defendflllts.
STATE OF ARIZONA )
.ss
COUNTY OF MARlCOPA )
1
----,'.-,--- ,--,------,-.~----- ..
1. I am over the age of 18 and am competent in all respects to testify in this matter.
the exception of those statements, which are based upon information available to me, and the
belief r have reached based upon that information. As to those statements I verily believe them
to be true.
direct result of my ideas. my money and my efforts. MMOOULS hired Brent Barton to be its
first CEO and President several months after I created MMOGVLS. When Brent Barton
resigned his positions, MMOGULS hired Don Carroll as its CEO and President who continues to
serve today.
4. Upon leaving M1\10GULS Brent Barton establish and operates today a company
almost identical to MMOGULS and that competes directly with MMOGULS. 1 was shocked to
learn about this COUP. because Vie: Deauvono and Jeff Knowles had agreed to oversee the
operations of business after they convinced me to move the offices for MMOGULS from Mesa
Arizona where I live to Jeff Knowles offices in Orem Utah. I was never even on-site after the
move and Vie, Rob, and Jeff were all on-site and in control oftbe day •.to-day management of
MMOGULS and worked directly with Brent Barton. After Brent Barton stole my ideas, my
business and all the employees and clients of MMOGULS, 1 moved the offices back to Mesa
5. After this move baok to Mesa, Jeff Knowles and Vie Deauvono both threatened
we implying that they would stop collecting money through credit cards if I didn't let them have
2
FA)( NO. : 4806322440 Aug. 20 2009 12: 54PI'1 P3
FROl1 :
the company. 1 told them it was my company and would not let them steal it from me. Jeff
Knowles misrepresented to me that he would only keep 20% of the credit card processing if 1
would let him process credit cards for MMOGULS and my other company Stargateworlds (a
video game company.) I Made the loan with Rob McKell based on that promise. Once we signed
with Jeff Knowles, he told me that he was going to keep 50% of the funds. This meant that I
could not pay anyone, because the commissions to the MMOGULS downline was 50%. As a
result of this misrepresentation, 1 had to borrow money to pay for operational costs during
February and Maroh. Jeff Knowles theft threatened me saying that he would shut off unless I met
his demands. He then started keeping 100% of the money and I had to borrow money to pay
6. Don Carroll, the current President and CEO is a seasoned business man and came
to MMOGULS with skills and experience commensurate with managing a substantial business
enterprise. Don has been running the company and helping me raise additional money to keep
paying for overhead and commissions. He personally has lent the company money to do this.
7. I do not have regulnr litigation counsel for representation in the State of Utah. T
am seeking to retain counsel and have identified and talked with a person who will likely
represent me and the other Defendants. However, he has not had rime to review this matter on
short notice and is tied up all day on the date of the pending hearing. Mr. Henrie has agreed to
represent the Defendants for the purpose of requesting a continuance of the hearing.
4'"_ ••••• " •• .~'_ ••
·._---" ..
••• H_ ••• " ••• " __ .""._"'" " ••• " .• _ ••••• _ •••••••• __ ••• "._,~ •••• '"_'" •••.••••• _ •• ~ ••.•
FROI'1 :
FAX 1-10.:4805322440 Aug. 213 2009 12:55PI'1 P4
--
STATE OF ARlZONA
I )
VERIFICATION
.ss
COUNTY OF MARICOPA )
Gary Whitin,a. being first duly swornupon his oath deposes and says: that he has read the
fQregoifig Affidavit, that he knows the contents thereof and the same are true ofhis 0\\111
knowledge, except as to those matters therein stated upon his information and belief and as to
such matters be believes them to be true.
JEFFREY K WllUAMSON
NOTA.RY PUBLIC - ARIZONA
. MARICOPA COUNTY
• My Commlsllion Expires
Janua 2011
"
4
',~<-~(HEYENNE
~ ~IVIOUNTAIN
Ii' E N T E R T A I N M E M T
Based upon the books and records of the company as of August 1, 2009, Cheyenne Mountain
Entertainmentr Inc. and its subsidiaries ('CME") shows that it received approximately
$2,919,016.71 from Garvick Properties, LLC form December 1, 2008 through March 31, 2009.
A detail of the payments as follows:
12
STATE OF ARIZONA
13
MARICOPA COUNTY SUPERIOR COURT
14 i CASE NO. CV2007·011672
!
15
I GARY WHITING, an individual,
S~RTOAMENDEDCOMPLMNT
16 I
I Plaintiff, D AMENDED COUNTERCLAIM
17 !
vs.
18 ,
I
2\ I Defendants.
22 I
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II:'------------------------------~------------------------------~
COMES NOW Defendant Ann Colson ("Defendant" or "Colson"), by and through
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2S undersigned counsel, and submits the following Answer to Plaintiff's Amended Complaint.
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DEFENDANT COLSON'S AMENDED COUNTERCLAIM
2 COMES NOW Defendant and Counterclaim ant, ANN COLSON ("Colson"), and
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counterclaims against Plaintiff and Counterclaim Defendant, Gary Whiting ("Whiting"), as follows:
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1. Colson incorporates the allegations and denials of the foregoing Answer into this Amended
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Counterclaim.
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7 2. The causes of actions asserted herein arise out of the same transaction or occurrence alleged
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5. Colson, Nick and Whiting thereafter engaged in various business endeavors together.
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several businesses in which Whiting had ownership and which Whiting was managing.
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7. During this time, Whiting held himself out as a trustworthy, dependable friend with
. 17
Colson's best interest in mind.
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8. Given the parties many years of church and business relationship as well as their close
20 friendship, Whiting had made himself into a person of trust for Colson and her children.
21 9. Beginning in late 2005, while Colson was experiencing some marital problems as well as
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problems between her children and Nick, Whiting told Colson that said problems were evidence
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that Nick did not love Colson and encouraged Colson to move out.
24
10. Whiting also told Colson that he felt Colson was to become a spouse to Whiting, even
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11. In approximately May 2006, partly due to Whiting's urgings, Colson moved out of the home
2 where she and Nick were living and entered a "rent-to-own" contract on a home located at 5407
3
East Catalina Avenue, Mesa Arizona, 78251 (the "Catalina Home") and began making
4
rent/mortgage payments on the home.
S
12. Whiting continued to insist Colson enter into the spousal arrangement with him and
6
8 13. Whiting represented that if Colson agreed to said spousal arrangement, he would purchase
9
the Catalina Home for Colson, Colson could live there for as long as she wanted, Whiting would
10
provide Colson with monthly support and maintenance payments of at least $3,000.00, and Colson
II
13 14. Whiting represented that if at any time after entering the foregoing arrangement Colson
14 decided to opt out of the arrangement, she could keep the Catalina Home and he would pay her a
15
$100,000.00 severance payment.
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15. During this time, Whiting assisted in making rental/mortgage payments on behalf of
17
Whiting on the Catalina Home.
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19
16. In September 2006, due to Whiting's insistence and in reliance on his representations,
20 Colson agreed to Whiting's proposal, except that she insisted she would continue to work as
21
Whiting's secretary rather than quit her job, to which Whiting assented.
22
17. At the time, Colson was making $3,000.00 per months working for Whiting's businesses.
23
18. Colson paid the legal expenses for Colson's divorce from Nick, which was finalized in
24
25
September 2006, and Whiting began making arrangements to purchase the Catalina Home for
26 Colson.
27
12
28
19. In the process of preparing to purchase the Catalina Home, World Savings Bank informed
2 Whiting that neither he nor his business entities qualified for any additional mortgages, as he had
3
already obligated his business on several other mortgages in 2006 for homes he had purchased for
4
other women entering into the same or a similar type of arrangement as Colson.
S
20. For the same reasons, neither Whiting nor his business entities could qualify for a mortgage
6
7 on a home Whiting was simultaneously wanting to purchase for Ms. Lynette Williams
8 ("Williams"), located at 1508 South Chestnut Circle, Mesa Arizona 85204 (the "Chestnut Home").
9
21. In order to purchase the Catalina and Chestnut Homes pursuant to his arrangements with
10
Colson and Williams respectively, Whiting devised a plan to circumvent the fact that neither he nor
\I
his entities qualified for additional mortgages.
12
13 22. Whiting transferred $100,000.00 into Colson's personal account in order that Colson qualify
14 for mortgages for the purchase of the Catalina and Chestnut homes.
15
23. At Whiting's instruction, Colson applied for the mortgages and was approved.
16
24. At the closing of the Catalina Home, Whiting instructed Colson to pay approximately
17
$63,590.18 as a down payment on said Home from the foregoing $100,000.00, which she did.
18
19
25. World Savings Bank paid the remaining balance due to consummate the transaction and
20 issued a mortgage in Colson's name in the amount of$206,800.00 for the remaining balance.
21 26. Closing on the Catalina home was consummated on October 16,2006 (See Exhibit A
22
herein)
23
27. At the closing of the Chestnut Home, Whiting authorized the transfer of$125,000.00 from
24
one of his business entities as down payment and earnest money toward the purchase of said Home.
2S
.26 28. World Savings Bank overpaid the remaining balance by $16,387.20 to consummate the
27 transaction on the Chestnut Home, issued a mortgage in Colson's name in the amount of
13
28
$185,250.00 for the amount of the loan, and refunded Whiting's business the overage of
2 $16,387.20.
3
29. Thus, total funds contributed by business entities owned by Whiting toward the purchase of
4
the Chestnut Home were $108,612.80.
5
30. Closing on the Chestnut Home was consummated on October 13, 2006 (See Exhibit B
6
7 herein)
8 31. The deeds to both the Catalina and the Chestnut Homes were issued in Colson's name, as
9
were the mortgage obligations on both homes.
10
32. Whiting made payments for a couple of months, on the Catalina Home through February
11
2007, and on the Chestnut Home through march 2007.
12
13 33. In the fall of2007, Whiting had engaged a new woman in a spousal arrangement ("Mary").
14 34. Shortly after this arrangement, Whiting started treating all of the other partners differently
IS and stopped paying them support and wanted Ann Colson to quit her employment so he could stop
16
paying her.
17
35. As a result of Mary's actions and Whiting's changed behavior, Williams approached
18
19
Whiting's religious leader and informed him of the arrangements that Whiting had with these
20 several women.
21 36. Whiting's religious leader approached Colson and asked her to confirm the allegations of
22
Williams.
23
37. Colson confirmed the allegations.
24
38. When Whiting found out about Colson's confirmation to his religious leader, he promptly
25
26 fired her from being his personal assistant, which position she had held for the past 12 years.
27
\4
28
39. Because Whiting was making no payments on either Catalina or Chestnut Home after March
2 2007 and and because he has fired Colson, Colson was forced to borrow money to try to make
3
mortgage payments in her name.
4
40. Colson could not refinance because she had no money and no job.
S
41. She did not have the support of her husband, as she is divorced.
6
7 42. Colson asked Williams help pay since Williams was living in Chestnut Home and was for
13 45. Chestnut Home goes into foreclosure because Whiting not making payments according to
14 his promises, Williams making no payments, and Colson has no ability to continue paying.
15
46. Colson's utilities turned off at the Catalina Home. She borrows more money to pay to keep
16
get her utilities back on.
17
47. Whiting at some point in all this files the present quiet title Action.
18
48. As Whiting's assistant, Colson had done the work for the arrangements Whiting had entered
19
20 into with other women, prior to Colson entering the arrangement and seen Whiting performing on
21
his promises to the other women.
22
49. Colson relied on Whiting's representations to her based on her observation and experience
23
of the other women.
24
50. Whiting generally had the women entering the arrangement with him sign a purported
25
26 contract.
27 51. Neither Colson nor the other women were given a copy ofthis contract.
15
28
52, Colson did not sign anything until after she had been fired by Whiting at considerable
8 55. Notwithstanding the terms, as shown below, Whiting had promised Colson the terms
9
aforementioned in this Amended Counterclaim.
10
56. On information and belief, Counterclaim Defendant Gary L. Whiting ("Whiting"), a married
11
man, has entered into numerous LLC Partnership Agreements with several single women. In these
12
13 agreements, Whiting provides housing, financial support, and a "commitment of time and emotional
14 support on a non-exclusive basis, as Whiting has other partnership interests to pursue and
IS
maintain." (See "LOF NUMBER FIVE, LLC PARTNERSHIP AGREEMENT", purportedly
16
executed by Whiting and Williams, attached hereto as "Exhibit C", for an example of such an
17
agreement).
18
19
57. In exchange, the women maintain the property and form a "consortium" and "a fidelity
20 relationship" with Whiting. (See "LOF NUMBER FIVE, LLC PARTNERSHIP AGREEMENT",
21
attached hereto as "Exhibit A").
22
58. Moreover, Whiting represents to the women that the home is theirs and that they are free to
23
withdraw themselves from the LLC Partnership Agreement with Whiting and take everything
24
25
provided to them by Whiting, including specifically but not limited to equity in the home
26 theretofore paid.
27
16
28
59. Several, and possibly all, of Whiting's partners divorced their husbands in order to enter into
7 61. Whiting therefore devised a plan to obtain two more homes in which to house his two
8 newest "partners".
9
62. Whiting has made demands for the property to be transferred to him via quiet title, even
10
though mortgages are in Colson's name and she is responsible for the monthly payments and he
11
13 63. In divorcing her husband, entering into the LLC Agreement, and having the properties
14 purchased in her own name, Colson was relying on Whiting's representations that he would pay the
IS
mortgages and provide her with any and all funds necessary for her support.
16
64. Colson indebted herself $5,583 to make payments on the Chestnut home and pay its
17
property taxes before not being able to make any more payments thereon.
18
19
65. Colson expended the following on the Chestnut home to make it marketable to renters or a
20 new buyer, given Williams was not paying nor was Whiting, and Colson's credit was being
21
destroyed for nonpayment:
22
a. At least $\,300 in repairs,
23
b. $3,000 charges to Lowes
24
2S
c. $600 labor to rip out tile and paint the home.
27 66. Colson has lost her job of$3,000 per month as of January 2007.
17
28
67. She has been working for only a couple months and makes at most $1,000 per month now
10 70. Whiting and Colson entered into a contract with substantially the same as those found in
11 Exhibit A, in which Whiting promised to provide housing and financial support in exchange for
12
Colson's maintenance of the Catalina property and a fidelity consortium with Whiting.
13
71. Colson divorced her husband in order to enter into this arrangement with Whiting.
14
72. Colson performed her part of the contract by maintaining the Catalina Property and
IS
73. Whiting has now ceased providing support and maintenance payments to Colson.
18 74. Colson has been damaged by not receiving the fruits of her contract.
19
75. Whiting and Colson also entered into an oral contract in which Whiting would provide
20
funds to Colson sufficient to obtain mortgages to purchase both the Chestnut and Catalina
21
properties; in exchange, Colson would transfer the properties to Whiting once the mortgages were
22
23 paid off.
24
76. Colson performed her part of the contract by obtaining the properties and the respective
25
mortgages.
26
77. Whiting partially performed by making several months worth of payments.
27
18
28
_78. Whiting ceased making payments on the mortgages, which action was inconsistent with the
8 81. Wherefore, Counterclaim Plaintiff Colson asks this Court for damages as deemed
9
appropriate.
10
SECOND CAUSE OF ACTION
II (Breach of Covenant of Good Faith and Fair Dealing)
12
82. Counterclaim Plaintiff Colson incorporates and re-alleges all previous paragraphs as though
13
fully set forth herein.
14
83. When Whiting and Colson agreed to obtain the Chestnut and Catalina properties pursuant to
15
16
Whiting's plan, Colson assumed very few risks associated with the transaction.
17 84. Whiting suddenly stopped all payments on the mortgages, causing Colson to assume far
18
greater risks than Colson had justifiably expected.
19
85. Colson and Whiting had also entered into a contract under which Whiting would provide
20
Colson with payments of money to be used for her support.
21
86. Whiting has ceased making support payments owed to Colson under the LLC Partnership
22
23 Agreement.
24 87. Whiting's actions are preventing Colson from receiving the benefits and entitlements of
25
both of the agreements entered into.
26
27
19
28
88. Wherefore, Counterclaim ·Plaintiff Colson asks this Court for damages as deemed
2
appropriate.
3
THIRD CAUSE OF ACTION
4 (Fraud in the Inducement)
5 89. Counterclaim Plaintiff Colson incorporates and re-alleges all previous paragraphs as though
6
fully set forth herein.
7
90. Whiting represented to Colson that he would make the mortgage payments on the Chestnut
8
and Catalina properties and that the properties would stay in her name until such time as the
9
11 91. Wherefore, Counterclaim Plaintiff Colson asks this Court for damages as deemed
12
appropriate.
13
FOURTH CAUSE OF ACTION
14 (Negligent Misrepresentation)
15
92. Counterclaim Plaintiff Colson incorporates and re-alleges all previous paragraphs as though
16
fully set forth herein.
17
93. When Whiting and Colson agreed to obtain the Chestnut and Catalina properties pursuant to
18
20 94. In divorcing her husband, entering into the LLC Agreement, and having the properties
21 purchased in her own name, Colson was reasonably relying on Whiting's representations that he
11
would pay the mortgages and provide her with any and all funds necessary for her support.
13
95. Wherefore, Counterclaim Plaintiff Colson asks this Court for damages as deemed
14
25 appropriate.
26
FIFTH CAUSE OF ACTION
27 (Fraudulent Misrepresentation)
28
20
96. Counterclaim Plaintiff Colson incorporates and re-alleges all previous paragraphs as though
2
4 97. In divorcing her husband, entering into the LLC Agreement, and having the properties
5 purchased in her own name, Colson was relying on Whiting's representations that he would pay the
6
mortgages and provide her with any and all funds necessary for her support.
7
98. Wherefore, Counterclaim Plaintiff Colson asks this Court for damages as deemed
8
appropriate.
9
14 100. In the case the Court finds no contract was entered into, Whiting should be estopped
IS
from not performing his promises to Colson.
16
101. When Whiting and Colson agreed to obtain the Chestnut and Catalina properties
17
pursuant to Whiting'S plan, Whiting represented to Colson that he would pay all the monthly
18
19
payments and that the properties would stay in her name until they mortgages were paid off.
20 102. Colson reasonably relied on Whiting's promise, and followed through Whiting's
25
would provide her with a home and funds necessary for her support.
26 104. Colson has sustained damage to her credit and finances, and has needed to take out
II
LOF NUMBER FIVE, LLC
PARTNERSHlP AGREEMENT
B. The Parties wish to have this Agreement governed by the laws of the State of
Arizona and governed pursuant to ARS Title 29 as well a:: applicable state and
federal decisional law.
AGR.EeMENT
2. Own..~. \"11iting shall have ownership ofthe Chestnut Property for the
purposes of investment. Further, given Whiting's professional demands on his
time he cannot manage, supervise, maintain 01' upkeep th'~Property on his own
accord. Whiting's ownership of Chestnut, wherein he will make the Property
available for Williams to reside in, is Whiting~s capital omtriburion to the
Partnership.
1·._....•...•. I ,...'"'~ UOI tlO
6. William'!! Pro.fit or Buyout 00tiQil Rights. Accordingly, upon the sale of the
Property or upon Williams' request at any time in W31l1in ~ to dissolve the
Partnership, this Partnership shall dissolve and at Williams' ejection, Whiting
shall pay Williams $,50,000 in a lump !'UIII payment as a "buy out" price from the
Partnership, or 50% of the profits (.f any such sale, in liei. of'a distrio\Jtion of
profits and losses.
.\--t--,...:;... Initials
and emotional support to the partnership on a non-exclusive basis, as Whiting has
other partnership interests to pursue 31'Id maintain.
10. Separate Property Not CommuJ'lJ1.vPropertv. To the extent provided by law. Gary
L Whiting. a married man, take'S his int-::rest herein as a separate prop en)' interest
and not a community property interest. Lynette Williams, an unmarried woman,
takes her interest as a separate prclpm'ty interest herein.
12. Rep:-E;~;ntatl(lns and W.MIa;:lti~.Ms. w:man"ls represents and warrants that while
she is possession of the Property she will not Cause an}' liens, encumbrances or
other instruments atl"ectil1g title to be r ccorded against the; ~ubj.;ct Property.
13. Severance and Blue Pen,,!,) R~, lf any tCI1TI, clause or provision of this
Agreement shall be held invalid, void, unenforceable or contrary to public policy
for any reason. then the remainder ·~fthe Agreement shall rernain in effect in
accordance with the Blue Pencil Rule.
14. Confidentiality. All information concerning this Agreemeru shall be held strictly
confidential except as necessary to) enforce the terms of tais Agreement or as
allowed or required by law,
1S. ~dYi~;cof Counsel. Whiting and Wi llinms each acknowl edge they have obtained
the advice of their respective attorneys prior to executing; this Agreement (or
waived the opportunity to do so), and each patty executes this Agreement with
full knowledge of its significance and with the express lnrention of effecting its
legal consequences.
16. ],Dtegralion. This Agreement (which also expressly wrap; the prior.T'l.itton-Whiting
Purd.c.!,c Contract) contains the!: entire ;:.l\retnlcnt bc'i:wet:)1 the Parrtes. It has not
beer. executed in reliance Oil th~ t.a~is <)i: any other oral (lr written representations
or t rns, and no extrinsic oral (It' written representations or terms shall modify,
or contradict the terms thereof. ~ /
~
1"''''''- UUt Yv
17. Choice a.nd Venue. This Agreement 1)"311 be construed under and according to the
laws of the state of Arizona, and any action or legat proceeding arising out of this
Agreement (or any tort, statutory or other claims}, sh a1lbe interpreted and
enforced accordance with Arizona law and shall be hrougllt and maintained in
Maricopa County, Arizona. Any federal court action (and any appeals to the
federal courts) shall be initiated it, the federal district court of Arizona,
18. Attome)!§ Fees. With respect tel any contract, tort, statutory or other claims
brought to interpret. enforce, or defend this Agreement (or any claims or defenses
that are incidental to this Agreement), the prevailing part)' shall be entitled
attorney's fees. eJ!:peJ1SCSand taxable CO.~Bincurred therein.
EXECUTION:
10 COUNTY OF MARICOPA
13 vs. JUDGMENT
22 Defendant.
23
The COlU't,having reviewed the Stipulated Agreement ("Stipulated Agreement") dated
24
July 23, 2008, entered into by Gary L. Whiting ("Whiting"), Plaintiff in Whiting v. Colson,
25
26 CV2007-011672, and Ann Colson ("Colson"), Defendant and Counterclaimant in the same
28 and Ann Colson, Defendant in the same matter, and good cause appearing;
1 IT IS HEREBY ORDERED, ADJUDGED AND DECREED AS FOLLOWS:
2 1. That this consolidated case shall be placed on the inactive calendar for 120 days at
3 which time it will be dismissed with prejudice as to all parties unless a motion to set for trial is
4
filed herein.
5
2. That pursuant to the Stipulated Agreement there are four contracts which are valid
6
and in full force and effect, as follows: (1) the Cummings-Whiting contract (Catalina), (2) the
7
Patton-Whiting contract (Chestnut), (3) the Willi arn s- Whiting (LOF No.5 LLC) contract, dated
8
9 9/1/2006 (Exhibit A attached to the Stipulated Agreement), and (4) an oral agreement between
10 Colson and Whiting, the terms of which are substantially similar to those contained in Exhibit A.
11 Further, for purposes of resolution herein, any purported contracts between Cummings and
12
Colson and/or between the Pattons and Colson are hereby ordered and decreed to be of no effect.
13
3. That Colson shall convey ownership to the Catalina property to Whiting, which
14
sale shall close on or before 90 days from this date. It is further adjudged and decreed that the
15
price shall be the outstanding and unpaid mortgage with World Savings Bank or assignee (the
16
17 "lender") plus routine closing costs and customary transaction costs, and title shall be conveyed
18 by Special Warranty Deed. Payment of the price for Catalina by Whiting and transfer of the
19 Catalina title by Colson ("Catalina Closing") shall take place simultaneously on or before 90
20
days from this date, i.e., by 10/23/2008,
21
4. That Whiting shall pay $50,000 to Colson in certified funds simultaneously with
22
the Catalina Closing.
23
5. That the title to Chestnut shall be transferred from Colson to Gary L. Whiting. It
24
25 is further adjudged and decreed that in order to effect said transfer in light of the pending
26 Chestnut foreclosure proceeding and the due on sale clause in the lender's deed of trust, Whiting
27 shall, within 90 days of the date hereof, provide sufficient funds to Colson to fully reinstate her
28
loan as to Chestnut. Whiting shall then acquire title to the Chestnut property from Colson by
-2-
1 Special Warranty Deed for a price equivalent to Colson's outstanding and unpaid mortgage plus
2 routine closing and transaction costs. Payment of the price for Chestnut by Whiting and transfer
3 of the Chestnut title by Colson ("Chestnut Closing") shall take place simultaneously on or before
4
90 days from this date, i.e., by 10/23/2008.
5
6. That pursuant to the Stipulated Agreement and for purposes of this case the
6
contract between Whiting and Williams dated 9/112006 is a valid contract and in full force and
7
effect.
8
9 7. That neither Whiting, nor Williams nor Colson nor any assignees, agents,
10 affiliates, heirs and/or relations shall be liable for fraud or any other allegation of wrongdoing or
17 injunctions against harassment or the like currently in effect against the other (or a family
18 member of the other) shall be withdrawn. It is further ordered, adjudged and decreed that Colson
19 shall not permit any property damage or waste to the Catalina property, which representation and
20
warranty shall extend to affiliates, relatives, or relations, ordinary wear and tear excepted. It is
21
further ordered, adjudged and decreed that Colson makes no representation or warranty that
22
Chestnut has not been damaged or subjected to waste because Colson has not been in possession
23
of Chestnut during the litigation.
24
25 9. That, pursuant to the Stipulated Agreement, the oral agreement between Whiting
26 and Colson shall be terminated upon entry of Judgment and satisfaction herein.
27 10. That, pursuant to the Stipulated Agreement, Colson shall be fully responsible for
28
her representations and warranties that she has permitted no voluntary or consensual liens or
-3-
1 deeds of trust to be placed on Catalina or Chestnut other than the World Savings Bank (or
2 assignee) mortgages referenced in the litigation and that to the best of her knowledge and belief
8 Stipulated Agreement herein between Whiting, Williams and Colson, as well as their assignees,
9 agents, affiliates, heirs and relations, shall be dismissed with prejudice and forever discharged.
10 12. That Williams, Whiting and Colson shall each bear their own attorney's fees,
18 DATED: _
19
20
22
23
24
25
26
27
28
-4-
eSignature Page -- 241550749_SCAN0560_000.pdf
Granted
Defendants.
STATE OF UTAH )
:55.
COUNTY OF UTAH )
2.. I am over the age of 18 and am competent in all respects to testify In this
matter.
attesting with the exception of those statements, which are based upon
information available to me, and the belief I have reached based upon
6. As consideration for this loan, I was promised 30% of the gross revenue
plan.
7. Upon information and belief, Mmoguls, Inc. received Its initial gross
Agreement.
9. To date, however, I have not received any return on my loan. I also have
money from the 5% of gross revenue promised me from all other entities.
10. Upon information and belief, Gary Whiting, president and owner of
Mmoguls, Inc., Garvick Properties, LLC[and all other entities party to the
Master Agreement, took the money generated as gross revenue for
$2,800,000.00 to Mmoguls, Inc. and the other entities that the money
entities.
I have yet to be repaid any part of the money I loaned these entities.
tB./t~ ~~t
Robert McKell
VERIFICATION
STATE OF UTAH )
:ss
COUNTYOF Salt Lake )
Robert McKell, being first duly sworn upon his oath deposes and says: That he
has read the foregoing Affidavit, that he knows the contents thereof and the same are
true of his own knowledge, except as to those matters therein stated upon his
information and bellef and as to such matters he b~es themto be true.
~"t}-t' /!Zeft-i'!
obert McKell
Lori Cummings
Filing ID 421666
9/11120094:27:04 PM
6
IN THE SUPERIOR COURT OF THE STATE OF ARIZONA
7
IN AND FOR THE COUNTY OF MARICOPA
8
18 hereby file their Reply Brief in support of Plaintiff's request that this Court enforce the
2 under Rule 60(c) of the Arizona Rules of Civil Procedure. See Springfield Credit Union
3 v. Johnson, 599 P.2d 772 (Ariz. 1979). Defendant's attempt to argue the merits of the
4 TRO, Plaintiffs' evidence whereby the TRO was obtained, and the findings of the Utah
5 court are misplaced in this forum. Had Defendant chosen to appear at the hearing held in
6 Utah, any allegations of impropriety, insufficiency, or validity of the evidence and the
7 final order could have been heard. Considering Defendant decided not to appear, except
8 insofar as Mr. Henry of Utah appeared to request a continuance five minutes before the
9 hearing was scheduled to begin, Defendant's arguments are inappropriate at this time.
10 The proper forum to attack the validity of the foreign order would be to seek
.;-
N 11 redress in the Utah courts.
\.,)-
~ ~ ~
;,.,0
13 Under Rule 65A of the Utah Rules of Civil Procedure, the Temporary Restraining
~:.=" N
"C
r-l1A-<
(J '"
QCXl
co"
:'l 14 Order ("TRO") meets all requirements necessary and would be honored by the Utah
ow:::!
Q""
N
ee
-e- 15 courts as a final determination of the issue of whether a restraining order was necessary.
16 Contrary to Defendant's assertions, the TRO meets each requirement set out under Rule
17 65A. Starting on Page 27 of the Transcript of the TRO hearing, attached to Plaintiff's
18 initial brief as "Exhibit A," Judge Laycock carefully and specifically walked through
20 She initially addressed the question of irreparable harm and found that, while the
21 money loss was measurable, "that there is other harm that is irreparable in the permanent
23 After determining that all elements were met under Rule 65A, the Court turned to
24 the setting of a hearing date for the preliminary injunction. The Court indicated that it
25 would be difficult to set a hearing any time in the near future due to the fact that the
26 Court was beginning a nine-day civil bench trial on the following Monday that would
-2-
J ,
1 capitalize the Court's calendar. rd. at p.32. Due to this reason, the Court extended the
2 length of duration of the TRO until the preliminary injunction hearing could be held.
5 Under Rule 65A, security is required unless the court determines that "none of the
6 parties will incur or suffer costs, attorney's fees or damage as the result of any wrongful
7 order or injunction, or unless there exists some other substantial reason for dispensing
8 with the requirement for security." Rule 65A Utah Rules of Civil Procedure. The Court
9 placed a Receiver over the companies so as to preserve their assets and to continue their
10 ordinary course of business. This appointment supplants any requirement for security as
-e-
N 11 the appointment of a Receiver, deemed neutral by the Court, prevents any party from
U-
~2\O
Q.'- 0
-i '""'", or) 12 being damaged should the order be determined to have been improper in the Utah courts.
c-dOO
~ ~ ~
;;. "
c N
o(j;.: 'c
0
13 Vick Deauvono was explicitly deemed to be a neutral individual properly
riIiil~<C
"
coes '".i 14 appointed as a Receiver in this action. See Transcript on Hearing, p.26. Plaintiffs
§ui~
c'" N
..•.
00
15 presented the Utah court with sufficient evidence to persuade the court to appoint a
16 receiver. Judge Laycock specifically addressed the fact that Vick Deauvono had filed an
17 affidavit in support of the motion for temporary restraining order and found that his
18 affidavit was factual in nature, substantiated by the other affidavits filed, and did not
19 display any prejudice to the process or place any doubt in the court that he would act
20 properly to preserve the businesses and their assets. rd. Accordingly, Mr. Deauvono's
24 Judge Laycock explicitly stated that she had read all evidence presented to her by
25 the Plaintiffs. This included the memorandum and the three affidavits filed in support of
26 the memorandum. See Transcript of Hearing ps. 6 and 34. Judge Laycock also stated
-3-
1 that she had not seen any paperwork from Defendant. Id. at p.3. At that time, Mr. Henry
2 presented the court with a copy of Defendant's Motion for a Continuance. The court
3 disregarded this document as it had not been filed with the court and due to the fact that it
4 was entered entirely too late in the process. Id. at p.18. Attached to this motion was
5 Gary Whiting's affidavit. This affidavit was entered as an attachment to the motion to
6 continue and, as was demonstrated by Mr. Henry's argument, that was the sole purpose
7 for which Defendant made any appearance at the hearing. Id. at p.2. Accordingly, as the
8 motion to continue was untimely filed with the court, nothing filed with the motion was
10 The Utah court explicitly found that Defendant had been afforded sufficient time
..•.
11 under the Utah Rules to appear at the hearing. Id. at ps. 24-27. Accordingly, Defendant
v-'"
c:.~~ had the opportunity to be heard at the TRO hearing but failed to take advantage of that
< "'",
Vl
"..;""
'" 12
r.:I"i:'l
:> c" 0
N 13 opportunity. Therefore, Defendant forfeited his right to be heard by failing to appear
oll:.: 'C;
r.:I~"':
,,"'cO other than to request a continuance a few minutes prior to the hearing commenced. The
co '"
~uj~
14
Q .••.
'"ee..,. 15 consequences of waiver and forfeiture are common sense, even under Arizona authority,
16 in that defenses which are not raised timely, are deemed waived. Ariz. R. Civ. P., Rule
17 8(c). O'Keefe v. Grenke, 170 Ariz. 460, 825 P.2d 985 (App. 1992); Sirek v. Fairfield
18 Snowbowl, Inc., 166 Ariz. 183, 800 P.2d 1291 (App.1990); Hughes Aircraft Co. v.
21 to the relief sought in the TRO. His burden, however, is even greater than simply
22 claiming a defense to obtain relief from [the order] based on allegations of adverse
26 Estate of Page vs. Litzenburg, 177 Ariz. 84, 865 P.2d 128 (Az. App. 1993).
-4-
1 Defendant's attacks on the judicial process in Utah are unfounded, untimely, and
2 improper in this venue. Defendant should have appeared at the Utah TRO hearing and
3 presented his positions to the Utah court at that time. Defendant's allegations of
4 invalidity and impropriety should be brought in the Utah courts insofar as they go beyond
5 the scope of Rule 60( c) of the Arizona Rules of Civil Procedure. This Court is the
6 improper venue for Defendant to now attempt to air these allegations and they should be
7 deemed waived.
8 THE TRO IS ENFORCEABLE IN UTAH AND HAS BEEN FULLY AND FAIRLY
~~«
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15 issuing jurisdiction." Id. The TRO is enforceable in Utah, therefore its finality attaches
16 per the rule in Grynberg. But for the location of Defendant corporations in Arizona, the
17 court-appointed receiver would have been afforded any and all enforcement procedures,
18 including contempt proceedings against those defying the orders, so as to enforce Judge
19 Laycock's orders. Accordingly, the TRO is deemed a "final" order under the Grynberg
20 rule.
21 Defendant fails to demonstrate that the Utah TRO would not be regarded as a final
22 order in Utah. Defendant cites few cases, including an Arizona family law case and a
23 10th Circuit Court of Appeals case. In MacArthur v. San Juan County, 497 F.3d 1057
24 (10th Cir. 2007), the Court reviewed preliminary injunction orders of a tribal court of the
25 Navajo nation. The Court determined that "the preliminary injunction orders in this case
26 hardly constitute final judgments." Id. at 1066 (emphasis added). The limitation of the
-5-
1 Court's determination to the orders in that case does not apply to our case. The Utah
2 court's TRO does more than merely ask for the status quo to be maintained, but supplants
5 The Utah TRO is an effective instrument whereby the court's order appoints a
6 Receiver over these entities. Defendant Corporations have submitted themselves to Utah
7 jurisdiction through the Note and the Contract signed by the corporations and Plaintiffs.
8 This submission to Utah jurisdiction allows the Utah courts to handle matters involving
9 these parties. Accordingly, the Utah TRO is proper and is a final judgment under the
16 Defendant has not demonstrated fraud. In order to demonstrate fraud, Defendant Whiting
17 must prove that Plaintiffs have abused the judicial process to the point of corrupting the
18 judicial process itself. Id. at 58. Instead of producing such proof, Defendant has merely
19 highlighted the fact that one of the affiants in support of the Motion for Temporary
22 Defendant further claims that the TRO hearing was improper as Defendant claims
23 not to have been afforded the opportunity to be heard. The hearing was set and, as Judge
24 Laycock explicitly pointed out, all Defendants were properly served with sufficient notice
25 to appear before the Court. See Transcript of Hearing, ps. 24-27. Defendant failed to
26 take this opportunity to be heard except to have Mr. Henry appear on his behalf so as to
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1 request a continuance. Mr. Whiting's affidavit was attached to and was entered in
2 support of the Motion for Continuance. Considering the late filing of the motion and the
3 fact that Plaintiffs had gone above and beyond the notice requirements of Rule 65A, the
4 court did not grant Defendant Whiting's motion. This was after the Utah court had
5 considered Defendant's arguments and reviewed the facts of the case. Defendant's
6 failure to avail himself of the judicial process cannot and should not now be used against
7 Plaintiffs as they seek enforcement of the order that resulted from that hearing.
9 improper in this Court and should be disregarded. Moreover, defendant is seeking relief
10 from an order after an unsuccessful appearance in Utah, which was completely flawed.
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11 As such, defendant must establish not only a procedural justification for setting aside the
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13 meritorious defense to the action. Master Financial, Inc. v. Woodburn. 208 Ariz. 70, 90
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c &3 g P.3d 1236 (App. 2004). In this case, Defendant clearly cannot do so.
§ui2 14
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-e- 15 EVIDENTIARY OBJECTION TO DEFENDANT'S MOTION
17 (untimely filed brief and attachments in Utah) and to any purported "affidavits" made in
18 support of the Motion to Continue in Utah as such evidence does not raise any viable
19 issues for modifying the Utah TRO and are otherwise irrelevant, inadmissible and or
20 hearsay.
21 Defendant has not produced any relevant authority and the circumstances offered
22 do not rise to a level which would justify staying the Utah TRO as Defendant must
23 demonstrate that by the use of due diligence, these facts and circumstances could not
24 have been discovered at the time of the hearing. Rule 60(c), ARCP.
25 /II
26 /II
-7-
1 CONCLUSION
2 Plaintiffs have obtained a valid final judgment on their motion for a temporary
3 order. The Court's decision to grant the motion is final. Similar motions in other states
4 have been granted full faith and credit and Utah treats such orders as final for matters of
5 appeal. Plaintiffs' temporary restraining order is a judicial proceeding that warrants the
6 full faith and credit guaranteed by the United States Constitution and by the Uniform
8 Judge Laycock's order appointing Vick Deauvono is a final order. The nature of
9 Rule 66 of the Utah Rules of Civil Procedure does not contemplate a temporary order, but
10 rather appoints Mr. Deauvono indefinitely or until further action taken by the Court. Mr.
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N 11 Deauvono's status as court-appointed receiver, therefore should be granted full faith and
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credit under the Uniform Enforcement of Foreign Judgments Act as it is a final order.
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13 Accordingly, Plaintiffs pray the Court to grant full faith and credit to the
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14 Temporary Restraining Order and the Order Appointing Vick Deauvono as Receiver for
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-e- 15 the reasons stated. Plaintiffs also pray the Court to dismiss Defendant Whiting's
16 allegations of fraud and to deny Defendant Whiting's Motion to Stay Enforcement of the
17 Foreign Order.
20
By: /s/ Angel "Bacho" Vega #023036
21 Angel Bacho Vega -
4824 E. Baseline Road, Suite 124
22 Mesa, AZ 85206
ATTORNEYS FOR PLAINTIFFS
23
24
25
26
-8-
1 ORIGINAL of the foregoing hand delivered/e-filed with:
8 B. Ray Zol1
Micah Bruner
9 B. RAY ZOLL P.C.
8941 South 700 East, Suite 204
10 Sandy, Utah 84070
Counsel for Plaintiffs (Utah)
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By: Isl Angel "Bacho" Vega #023036
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16
17
18
19
20
21
22
23
24
25
26
-9-
Michael K. Jeanes, Clerk of Court
*** Electronically Filed ***
Lori Cummings
Filing ID 421823
911112009 11:51 :36 PM
1 GREGORYG. MCGILL, P.c.
A TIORNEY AT LAW
2 4421 N. 75th Street, Suite 101
Scottsdale, Arizona 85251
3 (480) 970-6720
FAX (480) 970-6727
4 gregmcgill@cox.net
Gregory G. McGill, No. 011020
5
Attorney for Defendants
6
8 COUNTY OF MARICOPA
9
NEDRA RONEY MCKELL and ROBERT No.: CV 2009-093004
10 MCKELL
Plaintiff, REBUTTAL MEMORANDUM
11 BY DEFENDANT WHITING RE:
vs. THE TRO AND FULL FAITH AND
12 CREDIT
GARY WHITING; CHEYENNE MOUNTAIN
13 ENTERTAINMENT, INC, et al,
Defendants. Honorable Karen Potts
14
15
Defendants Whiting and the several Arizona companies urge this honorable court to deny
16
full faith and credit to the Temporary Restraining Order issued in Utah based upon the following
17
18 reasons:
19 1. Plaintiff McKell has not cited to one case which holds that the principle
20 underlying full faith and credit, res judicata, is furthered if this court were to
21
enforce a temporary, interlocutory order from a sister state when that state court
22
has scheduled another preliminary hearing in that litigation and the controversy
23
recently commenced and is still being litigated. No citation was made because no
24
such citation exists.
25
26 2. No proof of proper service of the Notice of TRO Hearing or the First Amended
28 the sister state temporary order may be collaterally attacked on grounds of lack of
1 jurisdiction over the person or the subject matter, lack of due process, and that the
3 Ariz. 319, 599 P. 2d 772 (1979), citing Bebeau v. Berger, 22 Ariz. App. 522, 529
4
P.2d 234 (1974); and see Pioneer Federal Savings Bank v. Driver, 166 Ariz. 585,
5
804 P .2d 118 (1990).
6
3. "A judgment will not be recognized or enforced in other states if it is not eftnal
7
determination under the local law of the state of rendition." For example, if a
8
9 judgment is subject to the continuing modification jurisdiction of the rendering
10 state (eg., family court pendite lite orders), such a judgment is not res judicata and
11 it may be litigated in the sister state. The plaintiff has failed to assert a cogent
12
argument as to why a Temporary Restraining Order, particularly this one with all
13
its apparent infirmities (the terms of tile order do not define an actual injury. it
14
fails to state how any hann is irreparable, it lacks a duration, no bond or security
15
was required under Rule 65 or 66), should be treated as a "final order" for
16
17 purposes of sister state enforcement - and even the record in the rendering state
18 calls such a conclusion into serious doubt since Judge Laycock scheduled a
19 preliminary to address the merits on October 16,2009. Jones v. Roach, 118 Ariz.
20
146,575 P.2d 345 (1977). For example, a Temporary Restraining Order cannot
21
issue and be an enforceable order in this state until the trial court fixes a bond and
22
the bond is posted to protect the defendant against a wrongful restraint. Rule 65;
23
24 and State v. Neitz, 114 Ariz. 296, 560 P.2nd 814 (1977).
26 temporary order on out of state parties and corporations, and (ii) such immediate
27 enforcement would violate the underpinning of full faith and credit: that the
28
alleged defects and questions regarding the order be fully and fairly litigated and
-2-
1 final before a sister state has to give it full faith and credit. Indeed, the U. S.
2 Supreme Court weighed in on this limitation to tile full faith and credit clause and
3 rested on the notion of "finality" and res judicata: "Public policy dictates that
4
there be an end to litigation, that those who have contested an issue shall be bound
5
by the result of the contest, and that the matters once tried shall be considered
6
forever settled as between the parties." Durfee v. Duke, 375 U.S. 106,84 S. Ct.
7
242, 11 L. ed. 2d 186 (1963). None of these limitations or standards on requiring
8
9 full faith and credit have neen shown by the Utah plaintiffs on the temporary
10 restraining order with all its facial defects - when a preliminary injunction hearing
25 and the plaintiff is merely an unsecured creditor without having introduced any
26 evidence in Utah that it had any disbursement or fund control agreements with
27 Whiting that would provide a legal basis for the extraordinary remedy of "director
28
removal", TRO and an interim receiver (by an interested party). The entire matter
-3-
~,
1 in Utah was a fraud on the court, and all the above referenced cases state that such
2 fraud is extrinsic fraud that allows a sister state to decline to enforce the
3 temporary order in this state until the merits are actually and fully litigated in Utah
4
the rendering state.
5
6
WHEREFORE, based upon the reasons set forth herein, the TRO and interim
7
receiver order in Utah should not be recognized by this honorable court until a final
8
9 determination is made on the merits in Utah and a final judgment is rendered that is
10 appealable, final and with res judicata effect. Plaintiffs will have every opportunity to
11 prove actual and continuing harm that must be enjoined, and that is what they must do in
12
order to replace Mr. Whiting in the Arizona entities while they are merely an unsecured
13
creditor without any fund control agreements in place.
14
DATED this 11th day of September, 2009.
15
GREGORY G. MCGILL, P. C.
16
17
. Jfjfa~
y for Defendants
18
28
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