Preview
3/22/2024 3:28 PM
Marilyn Burgess - District Clerk Harris County
Envelope No. 85867810
2024-18631 / Court: 270 By: Rhonda Momon
Filed: 3/22/2024 3:28 PM
CAUSE NO.
CINCO SJML INVESTMENTS, LLC, IN THE DISTRICT COURT OF
Plaintiff,
Vv HARRIS COUNTY, TEXAS
FIRMSO, LLC and MORRI JAY FLEMING
Defendants. JUDICIAL DISTRICT
PLAINTIFF’S ORIGINAL PETITION
Plaintiff Cinco SJML Investments, LLC (“Cinco” or “Plaintiff’) files its Original Petition
against Defendants Firmso, LLC (“Firmso”) and Morri “Jay” Fleming (“Fleming”) (collectively
“Defendants”), and would respectfully show the Court the following:
I
INTRODUCTION
11 Cinco brings this suit to recover the Indebtedness owed to it by Defendants.
Specifically, Defendants owe Cinco $560,000.00 plus interest, costs, expenses and attorney’s fees
associated with a 2023 loan made by Cinco to Firmso. Unfortunately, it has now become apparent
that Defendants intentions all along were to fraudulently usurp the loan proceeds from Cinco.
IL.
DISCOVERY CONTROL PLAN
21. Discovery is to be conducted under Level 2 pursuant to Rule 190.3 of the Texas
Rules of Civil Procedure.
I.
PARTIES
3.1. Cinco is a Texas limited liability company doing business in Texas.
3.2 Defendant Firmso is a Texas limited liability company which is registered to
transact business in Texas, and can be served by serving its registered agent, United States
Corporation Agents, Inc. at 10601 Clarence Dr., Suite 250, Frisco, Texas 75033, or its managing
member Fleming at 1118 Arrow Canyon Cir., Spring, Texas 77389, or 440 Louisiana St., St. 900,
Houston, TX 77002, or wherever such Defendant may be found.
3.3 Defendant Fleming, is a resident of Harris County, Texas, who may be served with
process at his place of residence, located at 1118 Arrow Canyon Cir., Spring, Texas 77389, or
wherever he may be found.
Iv.
JURISDICTION AND VENUE
41. This Court has jurisdiction over this proceeding because the amount in controversy
exceeds the minimum jurisdictional limits of this Court. This Court has personal jurisdiction over
Defendants because they conduct business in Texas and are residents and/or citizens of the State
of Texas.
42 Venue is proper in Harris County, Texas, pursuant to TEX. CIV. PRAC. & REM. CODE
§ 15.002 because all or a substantial part of the events giving rise to the issues in this case arose in
Harris County.
43. Cinco seeks monetary relief over $1,000,000.00, and further demands judgment for
all other relief at law or in equity to which it may be justly entitled.
V.
FACTS
A. Cinco’s Loan to Firmso
5.1. In 2023, Cinco agreed to loan Firmso $500,000.00 in exchange for Firmso’s
promise to repay the Note, certain fees and costs associated therewith, and to perform certain
obligations. Firmso’s payment and performance obligations were evidenced by a promissory note
between the parties and secured by certain security agreements between the parties, as well as
personally guaranteed by Fleming
B. Promissory Note Between Cinco and Firmso
5.2 Specifically, on September 29, 2023, Firmso entered into as Borrower and signed
that certain promissory note and issued and delivered the same to Cinco wherein Firmso agreed
and promised to pay the amount of $500,000.00 (“Principal Amount”) plus a Loan Origination
Fee i/a/o $60,000.00 (“Loan Origination Fee”) (the Principal Amount plus the Loan Origination
Fee are collectively referred to herein as the “Indebtedness”) to and for the benefit of Cinco
(“Promissory Note” or “Note”). A true and correct copy of the Promissory Note is attached hereto
as Exhibit A and is incorporated herein for all purposes. Cinco is the Lender and payee of the
Promissory Note.
5.3 Firmso agreed to pay Cinco the Indebtedness plus all other amounts payable under
the Note on or before January 15, 2024 at 5:00 p.m. (“Maturity Date”)
Cc. Security Agreement Between Cinco and Firmso
5.4 As security for Firmso’s promise to repay the Indebtedness pursuant to the Note,
and to perform certain obligations, Firmso, as the Borrower and Cinco, as the Lender, entered into
that certain Security Agreement dated September 29, 2023, in which Firmso granted to Cinco a
security interest in and a general lien upon certain collateral of Firmso, as described in the security
agreement (“Security Agreement”). A true and correct copy of the Security Agreement is attached
hereto as Exhibit B and is incorporated herein for all purposes.
D. Guaranty Agreement Between Cinco and Fleming
5.5 As further security for Firmso’s promise to repay the Indebtedness pursuant to the
Note, and to perform certain obligations, Fleming, as the Guarantor and Cinco, as the Lender,
entered into that certain Guaranty Agreement dated September 29, 2023, in which Fleming
personally guaranteed, as primary obligor and not merely as surety, the punctual payment, when
due, of the Indebtedness (“Guaranty Agreement”). A true and correct copy of the Guaranty
Agreement is attached hereto as Exhibit C and is incorporated herein for all purposes.
F, Pledge Agreement Between Cinco and Fleming
5.6 As further security for Firmso’s promise to repay the Indebtedness pursuant to the
Note, and to perform certain obligations, Fleming, as the Pledgor and Cinco, as the Pledgee,
entered into that certain Pledge Agreement dated September 29, 2023, in which Fleming pledged
his one hundred percent (100%) equity interest in Firmso to Cinco (“Fleming’s Equity Interest”),
as security for Firmso’s performance of all obligations under the Note and Security Agreement,
including without limitation timely repayment of the Indebtedness (“Pledge Agreement”). A true
and correct copy of the Pledge Agreement is attached hereto as Exhibit D and is incorporated
herein for all purposes.
G. Control Agreement Between Cinco, Firmso and Fleming
5.7. As further security for Firmso’s promise to repay the Indebtedness pursuant to the
Note, and to perform certain obligations, Fleming, as the Pledgor, Firmso, as Issuer, and Cinco, as
the Lender, entered into that certain Control Agreement dated October 11, 2023, in which Fleming
and Firmso acknowledged and agreed to the establishment of the Cinco’s security interest in
Fleming’s Equity Interest and the perfection of Firmso’s control over Fleming’s Equity Interest
within the meaning of the provisions of Article 8 and Article 9 of the Uniform Commercial Code
(“UCC”), as enacted and in effect in the State of Texas (“Control Agreement”). A true and correct
copy of the Control Agreement is attached hereto as Exhibit E and is incorporated herein for all
purposes. (The Note, Security Agreement, Guaranty Agreement, Pledge Agreement and Control
Agreement are collectively referred to herein as the “Agreements”)
H. Firmso Breaches the Note
5.8 Firmso failed to pay the Indebtedness due to Cinco under the Note before the
Maturity Date, and to date, the Indebtedness remains unpaid.
5.9 In spite of reasonable efforts by Cinco to work with Defendants concerning
payment of the Indebtedness, Defendants have failed and refused, and continue to fail and refuse,
to pay the Indebtedness
I. Fleming Lies to Cinco, Forages Documents and Intentionally Misrepresents
Payments to Cinco.
5.10. Tomake matters worse, not only have Defendants failed to repay the Indebtedness,
but Defendants have specifically lied and made misrepresentations to Cinco, and presented foraged
banking documents to Cinco purporting to demonstrate repayment of the Indebtedness, when in
reality such were nothing but fraudulently prepared by Fleming
5.11. Specifically, in December 2023 Fleming informed Cinco that “Firmso was doing
3
so well that Cinco would be repaid by the end of December 202 3 However, Firmso did not repay
the Indebtedness to Cinco.
5.12. On the Maturity Date, Cinco inquired with Firmso and Fleming as to when the
Indebtedness would be paid. Fleming responded and claimed to Cinco that his “accounting
manager had mistakenly entered a due date of February 15, 2024 in the books for payment of the
Indebtedness.”
5.13 On February 15, 2024, Firmso had still failed to pay Cinco for the Indebtedness
According to Fleming’s representatives to Cinco, Fleming said he was having trouble with a
representative of at US Bank in Irvine, California getting a wire processed to pay the Indebtedness
to Cinco
5.14. On February 16, 2024, Fleming sent Cinco an email on US Bank letterhead
purporting to be confirmation of a wire transfer i/a/o the Indebtedness that was to be processed on
February 20, 2024, and allegedly indicating a repayment amount, control no., par no., etc. See
Exhibit F. However, no wire transfer funds were ever received from Cinco. Therefore, Cinco
reached out to a representative of US Bank on March 13, 2024 about the purported February 20,
2024 wire transfer. The US Bank representative informed Cinco that Fleming had entered the
February 20, 2024 wire transfer i/a/o the Indebtedness ($560,000.00) wire transfer through
Fleming’s line of credit on his bank account but never authorized payment nor sending the
February 20, 2024 wire transfer to Cinco. Fleming foraged the purported February 20, 2024 wire
transfer confirmation and sent a copy to Cinco in order to make Cinco believe that payment had
been made and authorized, when in reality it had not
5.15 On February 21, 2024, Fleming had agreed to meet with Cinco representative Mark
Lemon for lunch to discuss the nonpayment. However, Fleming canceled the meeting at the last
minute, claiming he had to go to Florida to get a truck one of his former employees failed to return
5.16. From February 22 thru February 27, 2024, Cinco continued to contact Fleming
about repayment of the Indebtedness. On February 27, 2024, Fleming informed Cinco that a
cashier’s check would be sent to Cinco the following day for payment of the Indebtedness.
Fleming continued to wrongfully blame US Bank for the failure to initiate a wire transfer to Cinco
for the amount of the Indebtedness.
5.17. On February 28, 2024, Fleming represented to Cinco that US Bank had failed to
send him the cashier’s check, but that he would have a cashier’s check sent via Fed-Ex to Cinco
on March 1, 2024.
5.18. March 1, 2024 came and went without payment to Cinco. Instead, Fleming claimed
that it was US Bank’s fault again, and texted Cinco claiming he was flying to California to obtain
the cashier’s check. Fleming claimed he would present the check to Cinco when he returned to
Texas, and that US Bank had sent him account closing forms and counter checks instead of a
cashier’s check. Such claims turned out to be lies.
5.19. On March 4, 2024, Fleming and Lemon agreed to meet for lunch March 5, 2024 so
that Fleming could provide payment of the Indebtedness to Cinco.
5.20. However, on March 5, 2024, Fleming suddenly canceled the meeting and moved it
to March 6, 2024. Fleming claimed he could wire transfer the money from his Chase bank account
immediately if needed. Cinco informed Fleming that payment of the Indebtedness needed to be
made that day, and again providing Fleming/Firmso with Cinco’s wire instructions. However,
Firmso failed to send any money to Cinco.
5.21 On March 6, 2024, Fleming agreed to meet with Lemon at the Houston BBQ for
lunch at 11:30 a.m., and represented to Lemon that he had picked up the cashier’s check and would
bring it to Lemon. By 12:00 pm on March 6, 2024, Fleming had failed to appear, to Lemon called
Fleming. Fleming claimed he had to go to Antioch, TX and was running late. Thereafter, Fleming
finally met up with Lemon at Triple J’s Smokehouse near Homestead Rd. In the parking lot,
Fleming presenting Lemon with a “personal” check, made out to Cinco, but with the S and J written
over. Additionally, the personal check wasn’t even signed. After informing Fleming that said
personal check was not valid, Fleming claimed to Lemon that he would give Cinco a cashier’s
check for the Indebtedness on March 7, 2024.
5.22. However, March 7, 2024 came and went without the presentation of a cashier’s
check by Firmso. Instead, Fleming sent Cinco representative Scott Jackson (“Jackson”) the
following text message
“Hey Scott I’m getting everything set up to finalize and wire over. Took some time
getting the funds released this morning but got it done finally.”
5.23. On March 8, 2024, Fleming represented to Jackson that Fleming / Firmso would
need to provide payment for the Indebtedness in two wires. Specifically, Fleming texted Jackson
the following:
“Scott I’m going to have to break this wire up into two wires. First one ins going to
be for $250k.”
5.24. However, Fleming then called Jackson later on March 8, 2024 and stated that the
first wire transfer from Firmso would be in the amount of $134,000.00 to Cinco to be sent that
day. However, Fleming then claimed that Navy Federal Credit Union would not allow Fleming to
end the full amount, but failed to provide any reasons. Fleming then sent Cinco a wire
confirmation transfer email. See Exhibit G. However, yet again, no money was ever sent to Cinco
5.25. From March 9 thru March 12, 2024, Cinco continuously attempted to contact
Fleming via text and phone calls. However, Fleming failed to respond.
5.26. On March 12, 2024, Lemon went to Navy Federal Credit Union to inquire about
the purported Navy Federal Credit Union wire transfer from Fleming/Firmso to Cinco that Fleming
claimed was to be processed. According to the Navy Federal Credit Union representative, who
reviewed the wire transfer number and information that Fleming had provided to Cinco.
Unbelievably, Cinco was informed and discovered that while the purported wire transfer number
and amount of $134,014.00 were correct, the confirmation number pertained to another wire
transfer by Fleming and Firmso to an unrelated third-party on February 8, 2024. Id. Accordingly,
Fleming and Firmso had once again foraged a wire transfer confirmation and sent a copy to Cinco
in order to make Cinco believe that payment had been made and authorized, when in reality it had
not.
5.27. Accordingly, Defendants are in default. In accordance with the terms of the
Promissory Note, the entire unpaid Indebtedness, earned interest and costs and expenses associated
therewith are immediately due and payable.
VI.
CAUSES OF ACTION
COUNT 1 — BREACH OF CONTRACT — PROMISSORY NOTE
6.1. Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted
herein by reference.
6.2 Cinco and Firmso Defendants entered into a valid, enforceable agreement — namely
the Note as described above. Firmso agreed to pay Cinco the Indebtedness plus all other amounts
payable under the Note on or before the Maturity Date.
6.3. Firmso has breached the Promissory Note by failing to pay Cinco the Indebtedness
plus all other amounts payable under the Note on or before the Maturity Date, which is due and
owing. Thus, as a result of Firmso’s breach, Cinco has been damaged in the amount of $560,000,
plus interest and attorney’s fees.
Count 2— UANTUM MERUIT/UNJUST ENRICHMEN’
5.3. Cinco has provided funds to Firmso. As a direct result of Cinco’s provision of
funds to Firmso, valuable benefits were conferred on Firmso. Firmso accepted the benefits of
Cinco’s funds with actual or constructive knowledge that Cinco expected Firmso to pay Cinco.
However, Firmso has refused to pay Cinco. Further, Cinco provided the funds to Firmso under
such circumstances in which one would normally expect to receive and Firmso would normally
expect to pay. Therefore, Firmso has been unjustly enriched by its use and enjoyment of the funds.
COUNT 3— BREACH OF CONTRACT—GUARANTY AGREEMENT
5.4 Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted
herein by reference
5.5 Fleming executed the Guaranty Agreement and guaranteed Firmso’s payment
under the Note which Cinco agreed to provide the Indebtedness to Firmso in exchange for
Fleming’s personal guarantee. Pursuant to the terms of the Guaranty Agreement, Fleming agreed,
among other things, that he would be personally responsible for all obligations, including payment,
under the Note.
5.6 Fleming has breached the Guaranty Agreement. Despite Cinco’s demands,
Fleming has refused to make any payments or to cause the Firmso to make payment to Cinco for
the Indebtedness, which is currently due to Cinco.
5.7 As a direct and proximate result of Fleming’s breach of the Guaranty Agreement,
Cinco has suffered and will continue to suffer damages that exceed the jurisdictional limits of this
Court.
COUNT 4 — BREACH OF CONTRACT — PLEDGE AGREEMENT AND CONTROL AGREEMENT
5.8 Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted
herein by reference
5.9 Defendants executed the Pledge Agreement and Control Agreement and guaranteed
Firmso’s payment under the Note which Cinco agreed to provide the Indebtedness to Firmso in
exchange for Defendants’ agreement to the covenants and conditions as outlined in the Pledge
10
Agreement and Control Agreement. Pursuant to the terms of the Pledge Agreement and Control
Agreement, Defendants agreed, among other things, and pledged Fleming’s Equity Interest, as
security for Firmso’s performance of all obligations under the Note and Security Agreement,
including without limitation timely repayment of the Indebtedness.
5.10 Defendants have breached the Pledge Agreement and Control Agreement. Despite
Cinco’s demands, Defendants have failed to comply with the terms of the Pledge Agreement and
Control Agreement.
5.11 As a direct and proximate result of Defendants’ breach of the Pledge Agreement
and Control Agreement., Cinco has suffered and will continue to suffer damages that exceed the
jurisdictional limits of this Court.
CouNT 5 - COMMON LAW FRAUD AND FRAUD IN THE INDUCEMENT
5.12 Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted
herein by reference
5.13 Defendants represented to Cinco that they would repay the Indebtedness pursuant
to the terms of the Agreements. Defendants further represented to Cinco that they had the means
to repay the Indebtedness. Defendants further represented to Cinco that they had in fact repaid the
Indebtedness pursuant to the purported wire transfers and checks outlined above. However, such
representations to Cinco were false and intentionally fabricated, created by Defendants in an
attempt to avoid the debt and other obligations.
5.14. Defendants made these representations with knowledge that such representations
were false or made them recklessly as positive assertions and without knowledge of the truth.
5.15 Defendants also made these representations with the intent that Cinco act on them
by inducing Cinco provide the loan in question, which Cinco otherwise would not have done.
11
5.16 Cinco relied on Defendants’ misrepresentations and has suffered economic
damages as a direct result thereof in an amount which exceeds the minimum jurisdictional limits
of the Court. The conduct described above was also done in a manner that permits Cinco to pursue
and obtain exemplary damages.
COUNT 6 — CONVERSION
5.17 Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted
herein by reference.
5.18 Pursuant to the Agreements, the Indebtedness was to be repaid by Firmso to Cinco.
Defendants wrongfully exercised dominion and control over the Indebtedness when they accepted
delivery of the Indebtedness, used the Indebtedness, and failed to repay Cinco for the Indebtedness.
5.19 The Defendants further acted with fraud, malice or gross negligence in committing
such wrongful exercise of dominion and control over the Indebtedness.
5.20 Asaresult of the Defendants’ significant and substantial interference with Cinco’s
property rights, Cinco has sustained significant damages, in an amount to be established according
to proof at the time of trial, and in excess of the jurisdictional minimum of this Court.
COUNT 7— PROMISSORY ESTOPPEL
5.21 Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted
herein by reference
5.22 In the alternative to its breach of contract claims stated above, Cinco pleads for
recovery under the doctrine of promissory estoppel Defendants promised to repay the
Indebtedness to Cinco. Cinco reasonably and substantially relied on Defendants’ promise to its
detriment
5.23 Cinco’s reliance on Defendants’ promises was foreseeable by Defendants and well-
known to them
12
5.24 Cinco’s reliance on Defendants’ promises has and continues to cause damage to
Cinco in an amount to be determined after a trial on the merits. Further, Cinco is entitled to
reimbursement of its attorneys’ fees, legal costs and expenses required by Cinco to expend in
obtaining repayment of the Indebtedness.
VI.
CONDITIONS PRECEDENT
6.1. All conditions precedent to Cinco’s right to recover have been performed.
VIL.
ATTORNEY’S FEES
7A. Cinco has been compelled to retain the undersigned attorneys to collect the amounts
owing under the Agreements and to seek recovery for the damages caused by Defendants’ breach
thereof.
7.2 Pursuant to the plain terms of the Agreements, Cinco is entitled to recovery of its
reasonable and necessary attorney’s fees from Defendants in enforcing the Agreements and
redressing the breaches committed by Defendants.
73 In addition or in the alternative, pursuant to Chapter 38 of the TEXAS CIVIL
PRACTICE & REMEDIES CODE, Cinco is entitled to recovery of its reasonable, usual and customary
attorney’s fees in prosecuting the causes of action asserted herein
Vu.
EXEMPLARY DAMAGES
8.1 Defendants’ actions were committed with malice. Accordingly, Plaintiff seeks
recovery of exemplary damages from the Defendants, jointly and severally, to the maximum extent
permitted by law, on Plaintiff's claims of fraud and fraudulent inducement.
8.2 The misrepresentations made by Defendants were made with actual awareness of
their falsity. Accordingly, Plaintiff seeks recovery of exemplary damages from the Defendants,
13
jointly and severally, to the maximum extent permitted by law.
IX,
PRAYER
Cinco respectfully requests that Defendants be cited to appear and answer herein, and that
upon final trial of this matter, Cinco have judgment of and from Defendants for the following:
1 Actual damages in the amount of $560,000;
2. Interest on all past-due Indebtedness at a rate of 10% or the maximum rate
permitted by law;
Prejudgment interest as provided by law;
Reasonable and necessary attorneys’ fees;
Post-judgment interest as provided by law from the date of judgment until paid;
6 Costs of court; and
7 Such other and further relief, both general and special, at law or in equity, as Cinco
may be shown to be justly entitled to receive.
Respectfully submitted,
GORDON & REES, LLP
By:_/s/ Andrew M. Scott
Andrew M. Scott
State Bar. No. 24075042
1900 West Loop South, Suite 1000
Houston, Texas 77027
(713) 961-3366 — Telephone
(713) 961-3938 — Facsimile
ATTORNEYS FOR PLAINTIFF
14
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Bar No. 24075042
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Envelope ID: 85867810
Filing Code Description: Petition
Filing Description: Plaintiff's Original Petition
Status as of 3/22/2024 3:42 PM CST
Associated Case Party: CINCO SJML INVESTMENTS, LLC
Name BarNumber | Email TimestampSubmitted Status
Andrew M.Scott ascott@grsm.com | 3/22/2024 3:28:09 PM SENT
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3/22/2024 3:28 PM Marilyn Burgess - District Clerk Harris County Envelope No. 85867810 2024-18631 / Court: 270 By: Rhonda Momon Filed: 3/22/2024 3:28 PM CAUSE NO. CINCO SJML INVESTMENTS, LLC, IN THE DISTRICT COURT OF Plaintiff, Vv HARRIS COUNTY, TEXAS FIRMSO, LLC and MORRI JAY FLEMING Defendants. JUDICIAL DISTRICT PLAINTIFF’S ORIGINAL PETITION Plaintiff Cinco SJML Investments, LLC (“Cinco” or “Plaintiff’) files its Original Petition against Defendants Firmso, LLC (“Firmso”) and Morri “Jay” Fleming (“Fleming”) (collectively “Defendants”), and would respectfully show the Court the following: I INTRODUCTION 11 Cinco brings this suit to recover the Indebtedness owed to it by Defendants. Specifically, Defendants owe Cinco $560,000.00 plus interest, costs, expenses and attorney’s fees associated with a 2023 loan made by Cinco to Firmso. Unfortunately, it has now become apparent that Defendants intentions all along were to fraudulently usurp the loan proceeds from Cinco. IL. DISCOVERY CONTROL PLAN 21. Discovery is to be conducted under Level 2 pursuant to Rule 190.3 of the Texas Rules of Civil Procedure. I. PARTIES 3.1. Cinco is a Texas limited liability company doing business in Texas. 3.2 Defendant Firmso is a Texas limited liability company which is registered to transact business in Texas, and can be served by serving its registered agent, United States Corporation Agents, Inc. at 10601 Clarence Dr., Suite 250, Frisco, Texas 75033, or its managing member Fleming at 1118 Arrow Canyon Cir., Spring, Texas 77389, or 440 Louisiana St., St. 900, Houston, TX 77002, or wherever such Defendant may be found. 3.3 Defendant Fleming, is a resident of Harris County, Texas, who may be served with process at his place of residence, located at 1118 Arrow Canyon Cir., Spring, Texas 77389, or wherever he may be found. Iv. JURISDICTION AND VENUE 41. This Court has jurisdiction over this proceeding because the amount in controversy exceeds the minimum jurisdictional limits of this Court. This Court has personal jurisdiction over Defendants because they conduct business in Texas and are residents and/or citizens of the State of Texas. 42 Venue is proper in Harris County, Texas, pursuant to TEX. CIV. PRAC. & REM. CODE § 15.002 because all or a substantial part of the events giving rise to the issues in this case arose in Harris County. 43. Cinco seeks monetary relief over $1,000,000.00, and further demands judgment for all other relief at law or in equity to which it may be justly entitled. V. FACTS A. Cinco’s Loan to Firmso 5.1. In 2023, Cinco agreed to loan Firmso $500,000.00 in exchange for Firmso’s promise to repay the Note, certain fees and costs associated therewith, and to perform certain obligations. Firmso’s payment and performance obligations were evidenced by a promissory note between the parties and secured by certain security agreements between the parties, as well as personally guaranteed by Fleming B. Promissory Note Between Cinco and Firmso 5.2 Specifically, on September 29, 2023, Firmso entered into as Borrower and signed that certain promissory note and issued and delivered the same to Cinco wherein Firmso agreed and promised to pay the amount of $500,000.00 (“Principal Amount”) plus a Loan Origination Fee i/a/o $60,000.00 (“Loan Origination Fee”) (the Principal Amount plus the Loan Origination Fee are collectively referred to herein as the “Indebtedness”) to and for the benefit of Cinco (“Promissory Note” or “Note”). A true and correct copy of the Promissory Note is attached hereto as Exhibit A and is incorporated herein for all purposes. Cinco is the Lender and payee of the Promissory Note. 5.3 Firmso agreed to pay Cinco the Indebtedness plus all other amounts payable under the Note on or before January 15, 2024 at 5:00 p.m. (“Maturity Date”) Cc. Security Agreement Between Cinco and Firmso 5.4 As security for Firmso’s promise to repay the Indebtedness pursuant to the Note, and to perform certain obligations, Firmso, as the Borrower and Cinco, as the Lender, entered into that certain Security Agreement dated September 29, 2023, in which Firmso granted to Cinco a security interest in and a general lien upon certain collateral of Firmso, as described in the security agreement (“Security Agreement”). A true and correct copy of the Security Agreement is attached hereto as Exhibit B and is incorporated herein for all purposes. D. Guaranty Agreement Between Cinco and Fleming 5.5 As further security for Firmso’s promise to repay the Indebtedness pursuant to the Note, and to perform certain obligations, Fleming, as the Guarantor and Cinco, as the Lender, entered into that certain Guaranty Agreement dated September 29, 2023, in which Fleming personally guaranteed, as primary obligor and not merely as surety, the punctual payment, when due, of the Indebtedness (“Guaranty Agreement”). A true and correct copy of the Guaranty Agreement is attached hereto as Exhibit C and is incorporated herein for all purposes. F, Pledge Agreement Between Cinco and Fleming 5.6 As further security for Firmso’s promise to repay the Indebtedness pursuant to the Note, and to perform certain obligations, Fleming, as the Pledgor and Cinco, as the Pledgee, entered into that certain Pledge Agreement dated September 29, 2023, in which Fleming pledged his one hundred percent (100%) equity interest in Firmso to Cinco (“Fleming’s Equity Interest”), as security for Firmso’s performance of all obligations under the Note and Security Agreement, including without limitation timely repayment of the Indebtedness (“Pledge Agreement”). A true and correct copy of the Pledge Agreement is attached hereto as Exhibit D and is incorporated herein for all purposes. G. Control Agreement Between Cinco, Firmso and Fleming 5.7. As further security for Firmso’s promise to repay the Indebtedness pursuant to the Note, and to perform certain obligations, Fleming, as the Pledgor, Firmso, as Issuer, and Cinco, as the Lender, entered into that certain Control Agreement dated October 11, 2023, in which Fleming and Firmso acknowledged and agreed to the establishment of the Cinco’s security interest in Fleming’s Equity Interest and the perfection of Firmso’s control over Fleming’s Equity Interest within the meaning of the provisions of Article 8 and Article 9 of the Uniform Commercial Code (“UCC”), as enacted and in effect in the State of Texas (“Control Agreement”). A true and correct copy of the Control Agreement is attached hereto as Exhibit E and is incorporated herein for all purposes. (The Note, Security Agreement, Guaranty Agreement, Pledge Agreement and Control Agreement are collectively referred to herein as the “Agreements”) H. Firmso Breaches the Note 5.8 Firmso failed to pay the Indebtedness due to Cinco under the Note before the Maturity Date, and to date, the Indebtedness remains unpaid. 5.9 In spite of reasonable efforts by Cinco to work with Defendants concerning payment of the Indebtedness, Defendants have failed and refused, and continue to fail and refuse, to pay the Indebtedness I. Fleming Lies to Cinco, Forages Documents and Intentionally Misrepresents Payments to Cinco. 5.10. Tomake matters worse, not only have Defendants failed to repay the Indebtedness, but Defendants have specifically lied and made misrepresentations to Cinco, and presented foraged banking documents to Cinco purporting to demonstrate repayment of the Indebtedness, when in reality such were nothing but fraudulently prepared by Fleming 5.11. Specifically, in December 2023 Fleming informed Cinco that “Firmso was doing 3 so well that Cinco would be repaid by the end of December 202 3 However, Firmso did not repay the Indebtedness to Cinco. 5.12. On the Maturity Date, Cinco inquired with Firmso and Fleming as to when the Indebtedness would be paid. Fleming responded and claimed to Cinco that his “accounting manager had mistakenly entered a due date of February 15, 2024 in the books for payment of the Indebtedness.” 5.13 On February 15, 2024, Firmso had still failed to pay Cinco for the Indebtedness According to Fleming’s representatives to Cinco, Fleming said he was having trouble with a representative of at US Bank in Irvine, California getting a wire processed to pay the Indebtedness to Cinco 5.14. On February 16, 2024, Fleming sent Cinco an email on US Bank letterhead purporting to be confirmation of a wire transfer i/a/o the Indebtedness that was to be processed on February 20, 2024, and allegedly indicating a repayment amount, control no., par no., etc. See Exhibit F. However, no wire transfer funds were ever received from Cinco. Therefore, Cinco reached out to a representative of US Bank on March 13, 2024 about the purported February 20, 2024 wire transfer. The US Bank representative informed Cinco that Fleming had entered the February 20, 2024 wire transfer i/a/o the Indebtedness ($560,000.00) wire transfer through Fleming’s line of credit on his bank account but never authorized payment nor sending the February 20, 2024 wire transfer to Cinco. Fleming foraged the purported February 20, 2024 wire transfer confirmation and sent a copy to Cinco in order to make Cinco believe that payment had been made and authorized, when in reality it had not 5.15 On February 21, 2024, Fleming had agreed to meet with Cinco representative Mark Lemon for lunch to discuss the nonpayment. However, Fleming canceled the meeting at the last minute, claiming he had to go to Florida to get a truck one of his former employees failed to return 5.16. From February 22 thru February 27, 2024, Cinco continued to contact Fleming about repayment of the Indebtedness. On February 27, 2024, Fleming informed Cinco that a cashier’s check would be sent to Cinco the following day for payment of the Indebtedness. Fleming continued to wrongfully blame US Bank for the failure to initiate a wire transfer to Cinco for the amount of the Indebtedness. 5.17. On February 28, 2024, Fleming represented to Cinco that US Bank had failed to send him the cashier’s check, but that he would have a cashier’s check sent via Fed-Ex to Cinco on March 1, 2024. 5.18. March 1, 2024 came and went without payment to Cinco. Instead, Fleming claimed that it was US Bank’s fault again, and texted Cinco claiming he was flying to California to obtain the cashier’s check. Fleming claimed he would present the check to Cinco when he returned to Texas, and that US Bank had sent him account closing forms and counter checks instead of a cashier’s check. Such claims turned out to be lies. 5.19. On March 4, 2024, Fleming and Lemon agreed to meet for lunch March 5, 2024 so that Fleming could provide payment of the Indebtedness to Cinco. 5.20. However, on March 5, 2024, Fleming suddenly canceled the meeting and moved it to March 6, 2024. Fleming claimed he could wire transfer the money from his Chase bank account immediately if needed. Cinco informed Fleming that payment of the Indebtedness needed to be made that day, and again providing Fleming/Firmso with Cinco’s wire instructions. However, Firmso failed to send any money to Cinco. 5.21 On March 6, 2024, Fleming agreed to meet with Lemon at the Houston BBQ for lunch at 11:30 a.m., and represented to Lemon that he had picked up the cashier’s check and would bring it to Lemon. By 12:00 pm on March 6, 2024, Fleming had failed to appear, to Lemon called Fleming. Fleming claimed he had to go to Antioch, TX and was running late. Thereafter, Fleming finally met up with Lemon at Triple J’s Smokehouse near Homestead Rd. In the parking lot, Fleming presenting Lemon with a “personal” check, made out to Cinco, but with the S and J written over. Additionally, the personal check wasn’t even signed. After informing Fleming that said personal check was not valid, Fleming claimed to Lemon that he would give Cinco a cashier’s check for the Indebtedness on March 7, 2024. 5.22. However, March 7, 2024 came and went without the presentation of a cashier’s check by Firmso. Instead, Fleming sent Cinco representative Scott Jackson (“Jackson”) the following text message “Hey Scott I’m getting everything set up to finalize and wire over. Took some time getting the funds released this morning but got it done finally.” 5.23. On March 8, 2024, Fleming represented to Jackson that Fleming / Firmso would need to provide payment for the Indebtedness in two wires. Specifically, Fleming texted Jackson the following: “Scott I’m going to have to break this wire up into two wires. First one ins going to be for $250k.” 5.24. However, Fleming then called Jackson later on March 8, 2024 and stated that the first wire transfer from Firmso would be in the amount of $134,000.00 to Cinco to be sent that day. However, Fleming then claimed that Navy Federal Credit Union would not allow Fleming to end the full amount, but failed to provide any reasons. Fleming then sent Cinco a wire confirmation transfer email. See Exhibit G. However, yet again, no money was ever sent to Cinco 5.25. From March 9 thru March 12, 2024, Cinco continuously attempted to contact Fleming via text and phone calls. However, Fleming failed to respond. 5.26. On March 12, 2024, Lemon went to Navy Federal Credit Union to inquire about the purported Navy Federal Credit Union wire transfer from Fleming/Firmso to Cinco that Fleming claimed was to be processed. According to the Navy Federal Credit Union representative, who reviewed the wire transfer number and information that Fleming had provided to Cinco. Unbelievably, Cinco was informed and discovered that while the purported wire transfer number and amount of $134,014.00 were correct, the confirmation number pertained to another wire transfer by Fleming and Firmso to an unrelated third-party on February 8, 2024. Id. Accordingly, Fleming and Firmso had once again foraged a wire transfer confirmation and sent a copy to Cinco in order to make Cinco believe that payment had been made and authorized, when in reality it had not. 5.27. Accordingly, Defendants are in default. In accordance with the terms of the Promissory Note, the entire unpaid Indebtedness, earned interest and costs and expenses associated therewith are immediately due and payable. VI. CAUSES OF ACTION COUNT 1 — BREACH OF CONTRACT — PROMISSORY NOTE 6.1. Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted herein by reference. 6.2 Cinco and Firmso Defendants entered into a valid, enforceable agreement — namely the Note as described above. Firmso agreed to pay Cinco the Indebtedness plus all other amounts payable under the Note on or before the Maturity Date. 6.3. Firmso has breached the Promissory Note by failing to pay Cinco the Indebtedness plus all other amounts payable under the Note on or before the Maturity Date, which is due and owing. Thus, as a result of Firmso’s breach, Cinco has been damaged in the amount of $560,000, plus interest and attorney’s fees. Count 2— UANTUM MERUIT/UNJUST ENRICHMEN’ 5.3. Cinco has provided funds to Firmso. As a direct result of Cinco’s provision of funds to Firmso, valuable benefits were conferred on Firmso. Firmso accepted the benefits of Cinco’s funds with actual or constructive knowledge that Cinco expected Firmso to pay Cinco. However, Firmso has refused to pay Cinco. Further, Cinco provided the funds to Firmso under such circumstances in which one would normally expect to receive and Firmso would normally expect to pay. Therefore, Firmso has been unjustly enriched by its use and enjoyment of the funds. COUNT 3— BREACH OF CONTRACT—GUARANTY AGREEMENT 5.4 Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted herein by reference 5.5 Fleming executed the Guaranty Agreement and guaranteed Firmso’s payment under the Note which Cinco agreed to provide the Indebtedness to Firmso in exchange for Fleming’s personal guarantee. Pursuant to the terms of the Guaranty Agreement, Fleming agreed, among other things, that he would be personally responsible for all obligations, including payment, under the Note. 5.6 Fleming has breached the Guaranty Agreement. Despite Cinco’s demands, Fleming has refused to make any payments or to cause the Firmso to make payment to Cinco for the Indebtedness, which is currently due to Cinco. 5.7 As a direct and proximate result of Fleming’s breach of the Guaranty Agreement, Cinco has suffered and will continue to suffer damages that exceed the jurisdictional limits of this Court. COUNT 4 — BREACH OF CONTRACT — PLEDGE AGREEMENT AND CONTROL AGREEMENT 5.8 Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted herein by reference 5.9 Defendants executed the Pledge Agreement and Control Agreement and guaranteed Firmso’s payment under the Note which Cinco agreed to provide the Indebtedness to Firmso in exchange for Defendants’ agreement to the covenants and conditions as outlined in the Pledge 10 Agreement and Control Agreement. Pursuant to the terms of the Pledge Agreement and Control Agreement, Defendants agreed, among other things, and pledged Fleming’s Equity Interest, as security for Firmso’s performance of all obligations under the Note and Security Agreement, including without limitation timely repayment of the Indebtedness. 5.10 Defendants have breached the Pledge Agreement and Control Agreement. Despite Cinco’s demands, Defendants have failed to comply with the terms of the Pledge Agreement and Control Agreement. 5.11 As a direct and proximate result of Defendants’ breach of the Pledge Agreement and Control Agreement., Cinco has suffered and will continue to suffer damages that exceed the jurisdictional limits of this Court. CouNT 5 - COMMON LAW FRAUD AND FRAUD IN THE INDUCEMENT 5.12 Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted herein by reference 5.13 Defendants represented to Cinco that they would repay the Indebtedness pursuant to the terms of the Agreements. Defendants further represented to Cinco that they had the means to repay the Indebtedness. Defendants further represented to Cinco that they had in fact repaid the Indebtedness pursuant to the purported wire transfers and checks outlined above. However, such representations to Cinco were false and intentionally fabricated, created by Defendants in an attempt to avoid the debt and other obligations. 5.14. Defendants made these representations with knowledge that such representations were false or made them recklessly as positive assertions and without knowledge of the truth. 5.15 Defendants also made these representations with the intent that Cinco act on them by inducing Cinco provide the loan in question, which Cinco otherwise would not have done. 11 5.16 Cinco relied on Defendants’ misrepresentations and has suffered economic damages as a direct result thereof in an amount which exceeds the minimum jurisdictional limits of the Court. The conduct described above was also done in a manner that permits Cinco to pursue and obtain exemplary damages. COUNT 6 — CONVERSION 5.17 Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted herein by reference. 5.18 Pursuant to the Agreements, the Indebtedness was to be repaid by Firmso to Cinco. Defendants wrongfully exercised dominion and control over the Indebtedness when they accepted delivery of the Indebtedness, used the Indebtedness, and failed to repay Cinco for the Indebtedness. 5.19 The Defendants further acted with fraud, malice or gross negligence in committing such wrongful exercise of dominion and control over the Indebtedness. 5.20 Asaresult of the Defendants’ significant and substantial interference with Cinco’s property rights, Cinco has sustained significant damages, in an amount to be established according to proof at the time of trial, and in excess of the jurisdictional minimum of this Court. COUNT 7— PROMISSORY ESTOPPEL 5.21 Pursuant to Texas Rule of Civil Procedure 58, all prior statements are adopted herein by reference 5.22 In the alternative to its breach of contract claims stated above, Cinco pleads for recovery under the doctrine of promissory estoppel Defendants promised to repay the Indebtedness to Cinco. Cinco reasonably and substantially relied on Defendants’ promise to its detriment 5.23 Cinco’s reliance on Defendants’ promises was foreseeable by Defendants and well- known to them 12 5.24 Cinco’s reliance on Defendants’ promises has and continues to cause damage to Cinco in an amount to be determined after a trial on the merits. Further, Cinco is entitled to reimbursement of its attorneys’ fees, legal costs and expenses required by Cinco to expend in obtaining repayment of the Indebtedness. VI. CONDITIONS PRECEDENT 6.1. All conditions precedent to Cinco’s right to recover have been performed. VIL. ATTORNEY’S FEES 7A. Cinco has been compelled to retain the undersigned attorneys to collect the amounts owing under the Agreements and to seek recovery for the damages caused by Defendants’ breach thereof. 7.2 Pursuant to the plain terms of the Agreements, Cinco is entitled to recovery of its reasonable and necessary attorney’s fees from Defendants in enforcing the Agreements and redressing the breaches committed by Defendants. 73 In addition or in the alternative, pursuant to Chapter 38 of the TEXAS CIVIL PRACTICE & REMEDIES CODE, Cinco is entitled to recovery of its reasonable, usual and customary attorney’s fees in prosecuting the causes of action asserted herein Vu. EXEMPLARY DAMAGES 8.1 Defendants’ actions were committed with malice. Accordingly, Plaintiff seeks recovery of exemplary damages from the Defendants, jointly and severally, to the maximum extent permitted by law, on Plaintiff's claims of fraud and fraudulent inducement. 8.2 The misrepresentations made by Defendants were made with actual awareness of their falsity. Accordingly, Plaintiff seeks recovery of exemplary damages from the Defendants, 13 jointly and severally, to the maximum extent permitted by law. IX, PRAYER Cinco respectfully requests that Defendants be cited to appear and answer herein, and that upon final trial of this matter, Cinco have judgment of and from Defendants for the following: 1 Actual damages in the amount of $560,000; 2. Interest on all past-due Indebtedness at a rate of 10% or the maximum rate permitted by law; Prejudgment interest as provided by law; Reasonable and necessary attorneys’ fees; Post-judgment interest as provided by law from the date of judgment until paid; 6 Costs of court; and 7 Such other and further relief, both general and special, at law or in equity, as Cinco may be shown to be justly entitled to receive. Respectfully submitted, GORDON & REES, LLP By:_/s/ Andrew M. Scott Andrew M. Scott State Bar. No. 24075042 1900 West Loop South, Suite 1000 Houston, Texas 77027 (713) 961-3366 — Telephone (713) 961-3938 — Facsimile ATTORNEYS FOR PLAINTIFF 14 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Gloria Flores on behalf of Andrew Scott Bar No. 24075042 gflores@grsm.com Envelope ID: 85867810 Filing Code Description: Petition Filing Description: Plaintiff's Original Petition Status as of 3/22/2024 3:42 PM CST Associated Case Party: CINCO SJML INVESTMENTS, LLC Name BarNumber | Email TimestampSubmitted Status Andrew M.Scott ascott@grsm.com | 3/22/2024 3:28:09 PM SENT Case Contacts Name BarNumber | Email TimestampSubmitted Status Gloria E.Flores gflores@grsm.com | 3/22/2024 3:28:09 PM SENT