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FILED
DALLAS COUNTY
5/3/2019 12:42 PM
FELICIA PITRE
DISTRICT CLERK
Rhonda Burks
Cause No. D 19-05288
FOX CAPITAL GROUP, INC., § IN THE DISTRICT COURT OF
§
Plaintiff, §
§
v. §
§ DALLAS COUNTY, TEXAS
KINGDOM RESOURCES, LLC, KINGDOM §
COAL, LLC, GREEN EQUITY PARTNERS §
LLC, H.E.B., LLC, KREG EQUITIES, LTD., §
JABTEX, LLC, KEYSTONE § B-44th JUDICIAL DISTRICT
PRODUCTIONS, LLC, DOUBLE BRANCH §
ENERGY LLC, ANVIL GROUP, INC., §
BLUBAUGH BUILDING, INC., MONTANA §
BAKKEN, LLC, TALPRO MANAGEMENT, §
INC., SPS PARTNERS, LLC, 4-M §
BUILDERS, INC., EAGLE MOUNTAIN §
PARK & WILDLIFE FOUNDATION, INC., §
EVERGREEN DEVELOPMENT, INC., §
KEP-RMA, LLC, PROFESSIONAL §
MARKETING, INC., §
CUMBERLANDHARLAN EXPLORATION §
CORPORA TION, ECOMANAGEMENT, §
LLC, KELLER-OTTINGER 46, LLC, §
KEYSTONE REAL ESTATE GROUP, INC., §
TEXAS SERVICES KINGDOM §
RESOURCES, LLC, HARDEST HITTER §
PRODUCTIONS-TEXAS, LLC, §
CAMBRIDGE PARK, INC. and MICHAEL §
ALLEN BLUBAUGH, §
§
Defendants. §
MOTION TO VACATE
TO THE HONORABLE JUDGE OF SAID COURT:
COME NOW, the above listed Defendants, by and through their attorney, Robert J.
Johnston, and submit and file this Motion to Vacate, and respectfully moves this Court to vacate
as void the Judgment of Confession dated June 27, 2018 (the “Judgment”) filed in the
MOTION TO VACATE PAGE 1
above-captioned matter, for having been entered in a manner inconsistent with due process of
law in that the Judgment was obtained by fraud upon the New York Court issuing the Judgment.
Background Facts
1. On or about June 14, 2018, Defendant Kingdom Resources, LLC (referred to as
“Kingdom Resources”) and Defendant Michael Allen Blubaugh, as owner of Kingdom
Resources, entered into a Revenue Purchase Agreement (the “Agreement”) with Plaintiff,
pursuant to which Kingdom Resources “sold” certain of its future revenues to Plaintiff.
2. In addition to the Agreement, Mr. Blubaugh and all of the other Defendants
entered into a security agreement and guaranty, and a confession of judgment (also signed by
Kingdom Resources) (the “Confession of Judgment”) to secure Kingdom Resources’
performance under the Agreement. A true and correct copy of the Confession of Judgment is
attached to this Motion as Exhibit “A,” and a true and correct copy of the Security and Guaranty
Agreement is included with the Agreement in Exhibit “B”.
3. In exchange for the funds it received from Plaintiff in the sale, Kingdom
Resources was obligated “turn over” to Plaintiff an aggregate of $177,600.00 of its future
revenues. Kingdom Resources was to repay this amount through fixed daily remittances of
$4,400.00 until Plaintiff received the full amount ($177,600.00) of the future revenues that it had
purchased from Kingdom Resources.
4. The Confession of Judgment also provided for attorneys’ fees in the amount of
thirty-three percent (33%) of the amount due.
5. Remittances were to be initiated by Plaintiff by an ACH transaction directly from
a Kingdom Resources bank account, which account had been agreed upon by Plaintiff.
6. Plaintiff began initiating the ACH transfers on June 18, 2018, and through such
MOTION TO VACATE PAGE 2
transfers was paid $26,400 through June 26, 2018. See the Affidavit of Mike Blubaugh attached
to this Motion as Exhibit “C”.
7. On June 27, 2018, Plaintiff filed the Confession of Judgment in the Supreme
Court of the State of New York, County of Kings.
8. On June 27, 2018, the balance of Kingdom Resources’ future revenues owed
Plaintiff under the Agreement, was $150,960.00 ($177,600.00, less the $26,400.00 paid).
9. In support of the Confession of Judgment, and as required under , Nosson T.
Abrams, an attorney for Plaintiff, filed an affirmation dated June 27, 2018 states the following
purported amounts:
Amount confessed $177,600.00
Less Amount Paid $17,760.00
Amount Due $159,840.00
Attorney’s Fee $52,747.20
Costs by Statue $15.00
Filing Fee $210.00
Judgment Total $212,812.00
10. This affirmation affirms “this statement to be true under penalties of perjury.”
See the Judgment attached to Plaintiff’s Notice of Domestication in this proceeding. This
affirmation, however, is false with respect to the amount claimed as due to Plaintiff.
11. Plaintiff obtained the Judgment for the above amount from the New York court,
and now seeks to domesticate the Judgment in this proceeding.
12. By filing a false affirmation, Plaintiff has obtained a judgment against these
Defendants in excess of any amount that might actually be due, plus attorney fees in excess of
MOTION TO VACATE PAGE 3
the amount provided for in the Confession of Judgment. In obtaining a Judgment based upon a
false affirmation, Plaintiff has committed fraud and fraud upon the New York court, and has
denied all Defendants their right to due process under the law.
Analysis
13. A final judgment of a sister state must be given the same force and effect that it
would be entitled to in the state in which it was rendered. U.S. Const. art. IV, § 1. See Tri-Steel
Structures, Inc. v. Hackman, 883 S.W.2d 391, 393 (Tex. App.—Fort Worth, 1994, writ denied).
The enforcement of another state’s judgment in Texas is governed by Chapter 35 of the Texas
Civil Practice and Remedies Code (also known as the Uniform Enforcement of Foreign
Judgments Act or UEFJA); and when filed pursuant thereto the foreign judgment is to be given
“full faith and credit” and is presumed to be enforceable as a Texas judgment.
14. Due process, however, demands that a judgment debtor be given the opportunity
to rebut the presumption that the foreign judgment is entitled to full faith and credit (Id., at 396,
H. Heller & Co v. Louisanna-Pacific Corp.., 209 S.W.3d 844, 849 (Tex. App. - Houston [14ht]
2008, pet.denied); and the UEFJA is not intended to give holders of foreign judgments greater
rights than holders of judgments rendered in Texas. Cantu v. Howard S. Grossman, P.A., 251
S.W.3d 731, 736 (Tex. App.—Houston [14th Dist.] 2008, pet denied); Schwartz v. F.M.I. Props.
Corp., 714 S.W.2d 97, 100 (Tex. App.—Houston [14th Dist.] 1986, writ ref’d n.r.e.).
15. A judgment debtor may demonstrate that the judgment is not entitled to full faith
and credit by establishing a recognized exception to the full faith and credit requirements, e.g.,
when a decree is interlocutory or subject to modification under the law of the rendering state,
when the rendering court lacks jurisdiction, when the judgment was procured by fraud or is penal
in nature, or when limitations has expired under Texas Civil Practice and Remedies Code section
MOTION TO VACATE PAGE 4
16.066. See Reading & Bates Constr. Co. v. Baker Energy Res. Corp., 976 S.W.2d 702, 712
(Tex.App.-Houston [1st Dist.] 1998, pet. denied); Minuteman, 782 S.W.2d at 340-41; Williams v.
Washington, 581 S.W.2d 494, 495 (Tex.Civ.App.-Dallas 1979, writ ref'd n.r.e.).
16. Further, if a judgment is entered in a manner inconsistent with due process of law;
to wit, if the court that rendered it acted in a manner inconsistent with due process, such
judgment is void, an this Court is authorized and required to vacate such judgment. Margoles v.
Johns, 660 F.2d 291 (7th Cir. 1981) cert. denied, 455 U.S. 909, 102 S.Ct. 1256, 71 L.Ed.2d 447
(1982); In re Four Seasons Securities Laws Litigation, 502 F.2d 834 (10th Cir.1974), cert.
denied, 419 U.S. 1034, 95 S.Ct. 516, 42 L.Ed.2d 309 (1975).
17. On June 27, 2018, Plaintiff submitted to the Supreme Court of the State of New
York, County of Kings, the Confession of Judgment and a false affirmation of its attorney
supporting the Confession of Judgment; and obtained the Judgment it now seeks to enforce in
Texas.
18. The Judgment, however, was obtained by a falsified statement, issued by
Plaintiff’s attorney under penalty of perjury, to the New York court that issued the Judgment. By
using this falsification, Plaintiff was able to submit a false Confession of Judgment, thereby
depriving these Defendants of their right to due process. Because the Judgment was obtained by
Plaintiff’s fraudulent actions, which actions deprived these Defendants of due process, the
Judgment should be vacated by this Court.
19. Fraud on the court (other than fraud as to jurisdiction) is fraud which is directed to
the judicial machinery itself and is not fraud between the parties. It is thus fraud where the court
or a member is corrupted or influenced or influence is attempted or where the judge has not
performed his judicial function--thus where the impartial functions of the court have been
MOTION TO VACATE PAGE 5
directly corrupted. Bulloch v. United States, 763 F.2d 1115, 1121 (10th Cir., 1985). Since
attorneys are officers of the court, their conduct, if dishonest, would constitute fraud on the court.
20. Plaintiff’s attorney filed a false affirmation under “penalty of perjury” to support
obtaining the Judgment. This false statement directly resulted in a judgment against these
Defendants in excess of any amount that might actually be due, including attorney fees in excess
of the amount provided for in the Confession of Judgment signed by these Defendants. Thus, in
effect, Plaintiff has submitted a false Confession of Judgment to the New York Court, and
affirmed it to be true, and now seeks to enforce the Judgment in Texas. It is clear that Plaintiff
(more specifically Plaintiff’s attorney) has obtained the Judgment by fraud, and in doing so has
denied all Defendants their right to due process under the law.
Relief Requested
The above-cited acts and omissions reveal that (1) the Plaintiff committed fraud in
obtaining the Judgment, (2) none of these Defendants had a fair proceeding, and (3) the
Judgment was entered in a manner inconsistent with due process of law; and these Defendants
hereby move the Court to vacate the Judgment and afford these Defendants such other relief as
the Court deems proper.
Respectfully submitted,
By: /s/ Robert J. Johnston
Robert J. Johnston
State Bar No. 10844100
4304 Orchard Gate
Plano, Texas 75024
Telephone: (214) 387-0316
Email: robert.johnston631@gmail.com
ATTORNEY FOR DEFENDANTS
MOTION TO VACATE PAGE 6
CERTIFICATE OF SERVICE
The undersigned hereby certifies that a copy of the foregoing Motion to Vacate was
served on all counsel of record in compliance with the Texas Rules of Civil Procedure on the 3rd
day of May, 2019.
/s/ Robert J. Johnston
Robert J. Johnston
MOTION TO VACATE PAGE 7
EXHIBIT “A”
EXHIBIT “B”
Preview
FILED DALLAS COUNTY 5/3/2019 12:42 PM FELICIA PITRE DISTRICT CLERK Rhonda Burks Cause No. D 19-05288 FOX CAPITAL GROUP, INC., § IN THE DISTRICT COURT OF § Plaintiff, § § v. § § DALLAS COUNTY, TEXAS KINGDOM RESOURCES, LLC, KINGDOM § COAL, LLC, GREEN EQUITY PARTNERS § LLC, H.E.B., LLC, KREG EQUITIES, LTD., § JABTEX, LLC, KEYSTONE § B-44th JUDICIAL DISTRICT PRODUCTIONS, LLC, DOUBLE BRANCH § ENERGY LLC, ANVIL GROUP, INC., § BLUBAUGH BUILDING, INC., MONTANA § BAKKEN, LLC, TALPRO MANAGEMENT, § INC., SPS PARTNERS, LLC, 4-M § BUILDERS, INC., EAGLE MOUNTAIN § PARK & WILDLIFE FOUNDATION, INC., § EVERGREEN DEVELOPMENT, INC., § KEP-RMA, LLC, PROFESSIONAL § MARKETING, INC., § CUMBERLANDHARLAN EXPLORATION § CORPORA TION, ECOMANAGEMENT, § LLC, KELLER-OTTINGER 46, LLC, § KEYSTONE REAL ESTATE GROUP, INC., § TEXAS SERVICES KINGDOM § RESOURCES, LLC, HARDEST HITTER § PRODUCTIONS-TEXAS, LLC, § CAMBRIDGE PARK, INC. and MICHAEL § ALLEN BLUBAUGH, § § Defendants. § MOTION TO VACATE TO THE HONORABLE JUDGE OF SAID COURT: COME NOW, the above listed Defendants, by and through their attorney, Robert J. Johnston, and submit and file this Motion to Vacate, and respectfully moves this Court to vacate as void the Judgment of Confession dated June 27, 2018 (the “Judgment”) filed in the MOTION TO VACATE PAGE 1 above-captioned matter, for having been entered in a manner inconsistent with due process of law in that the Judgment was obtained by fraud upon the New York Court issuing the Judgment. Background Facts 1. On or about June 14, 2018, Defendant Kingdom Resources, LLC (referred to as “Kingdom Resources”) and Defendant Michael Allen Blubaugh, as owner of Kingdom Resources, entered into a Revenue Purchase Agreement (the “Agreement”) with Plaintiff, pursuant to which Kingdom Resources “sold” certain of its future revenues to Plaintiff. 2. In addition to the Agreement, Mr. Blubaugh and all of the other Defendants entered into a security agreement and guaranty, and a confession of judgment (also signed by Kingdom Resources) (the “Confession of Judgment”) to secure Kingdom Resources’ performance under the Agreement. A true and correct copy of the Confession of Judgment is attached to this Motion as Exhibit “A,” and a true and correct copy of the Security and Guaranty Agreement is included with the Agreement in Exhibit “B”. 3. In exchange for the funds it received from Plaintiff in the sale, Kingdom Resources was obligated “turn over” to Plaintiff an aggregate of $177,600.00 of its future revenues. Kingdom Resources was to repay this amount through fixed daily remittances of $4,400.00 until Plaintiff received the full amount ($177,600.00) of the future revenues that it had purchased from Kingdom Resources. 4. The Confession of Judgment also provided for attorneys’ fees in the amount of thirty-three percent (33%) of the amount due. 5. Remittances were to be initiated by Plaintiff by an ACH transaction directly from a Kingdom Resources bank account, which account had been agreed upon by Plaintiff. 6. Plaintiff began initiating the ACH transfers on June 18, 2018, and through such MOTION TO VACATE PAGE 2 transfers was paid $26,400 through June 26, 2018. See the Affidavit of Mike Blubaugh attached to this Motion as Exhibit “C”. 7. On June 27, 2018, Plaintiff filed the Confession of Judgment in the Supreme Court of the State of New York, County of Kings. 8. On June 27, 2018, the balance of Kingdom Resources’ future revenues owed Plaintiff under the Agreement, was $150,960.00 ($177,600.00, less the $26,400.00 paid). 9. In support of the Confession of Judgment, and as required under , Nosson T. Abrams, an attorney for Plaintiff, filed an affirmation dated June 27, 2018 states the following purported amounts: Amount confessed $177,600.00 Less Amount Paid $17,760.00 Amount Due $159,840.00 Attorney’s Fee $52,747.20 Costs by Statue $15.00 Filing Fee $210.00 Judgment Total $212,812.00 10. This affirmation affirms “this statement to be true under penalties of perjury.” See the Judgment attached to Plaintiff’s Notice of Domestication in this proceeding. This affirmation, however, is false with respect to the amount claimed as due to Plaintiff. 11. Plaintiff obtained the Judgment for the above amount from the New York court, and now seeks to domesticate the Judgment in this proceeding. 12. By filing a false affirmation, Plaintiff has obtained a judgment against these Defendants in excess of any amount that might actually be due, plus attorney fees in excess of MOTION TO VACATE PAGE 3 the amount provided for in the Confession of Judgment. In obtaining a Judgment based upon a false affirmation, Plaintiff has committed fraud and fraud upon the New York court, and has denied all Defendants their right to due process under the law. Analysis 13. A final judgment of a sister state must be given the same force and effect that it would be entitled to in the state in which it was rendered. U.S. Const. art. IV, § 1. See Tri-Steel Structures, Inc. v. Hackman, 883 S.W.2d 391, 393 (Tex. App.—Fort Worth, 1994, writ denied). The enforcement of another state’s judgment in Texas is governed by Chapter 35 of the Texas Civil Practice and Remedies Code (also known as the Uniform Enforcement of Foreign Judgments Act or UEFJA); and when filed pursuant thereto the foreign judgment is to be given “full faith and credit” and is presumed to be enforceable as a Texas judgment. 14. Due process, however, demands that a judgment debtor be given the opportunity to rebut the presumption that the foreign judgment is entitled to full faith and credit (Id., at 396, H. Heller & Co v. Louisanna-Pacific Corp.., 209 S.W.3d 844, 849 (Tex. App. - Houston [14ht] 2008, pet.denied); and the UEFJA is not intended to give holders of foreign judgments greater rights than holders of judgments rendered in Texas. Cantu v. Howard S. Grossman, P.A., 251 S.W.3d 731, 736 (Tex. App.—Houston [14th Dist.] 2008, pet denied); Schwartz v. F.M.I. Props. Corp., 714 S.W.2d 97, 100 (Tex. App.—Houston [14th Dist.] 1986, writ ref’d n.r.e.). 15. A judgment debtor may demonstrate that the judgment is not entitled to full faith and credit by establishing a recognized exception to the full faith and credit requirements, e.g., when a decree is interlocutory or subject to modification under the law of the rendering state, when the rendering court lacks jurisdiction, when the judgment was procured by fraud or is penal in nature, or when limitations has expired under Texas Civil Practice and Remedies Code section MOTION TO VACATE PAGE 4 16.066. See Reading & Bates Constr. Co. v. Baker Energy Res. Corp., 976 S.W.2d 702, 712 (Tex.App.-Houston [1st Dist.] 1998, pet. denied); Minuteman, 782 S.W.2d at 340-41; Williams v. Washington, 581 S.W.2d 494, 495 (Tex.Civ.App.-Dallas 1979, writ ref'd n.r.e.). 16. Further, if a judgment is entered in a manner inconsistent with due process of law; to wit, if the court that rendered it acted in a manner inconsistent with due process, such judgment is void, an this Court is authorized and required to vacate such judgment. Margoles v. Johns, 660 F.2d 291 (7th Cir. 1981) cert. denied, 455 U.S. 909, 102 S.Ct. 1256, 71 L.Ed.2d 447 (1982); In re Four Seasons Securities Laws Litigation, 502 F.2d 834 (10th Cir.1974), cert. denied, 419 U.S. 1034, 95 S.Ct. 516, 42 L.Ed.2d 309 (1975). 17. On June 27, 2018, Plaintiff submitted to the Supreme Court of the State of New York, County of Kings, the Confession of Judgment and a false affirmation of its attorney supporting the Confession of Judgment; and obtained the Judgment it now seeks to enforce in Texas. 18. The Judgment, however, was obtained by a falsified statement, issued by Plaintiff’s attorney under penalty of perjury, to the New York court that issued the Judgment. By using this falsification, Plaintiff was able to submit a false Confession of Judgment, thereby depriving these Defendants of their right to due process. Because the Judgment was obtained by Plaintiff’s fraudulent actions, which actions deprived these Defendants of due process, the Judgment should be vacated by this Court. 19. Fraud on the court (other than fraud as to jurisdiction) is fraud which is directed to the judicial machinery itself and is not fraud between the parties. It is thus fraud where the court or a member is corrupted or influenced or influence is attempted or where the judge has not performed his judicial function--thus where the impartial functions of the court have been MOTION TO VACATE PAGE 5 directly corrupted. Bulloch v. United States, 763 F.2d 1115, 1121 (10th Cir., 1985). Since attorneys are officers of the court, their conduct, if dishonest, would constitute fraud on the court. 20. Plaintiff’s attorney filed a false affirmation under “penalty of perjury” to support obtaining the Judgment. This false statement directly resulted in a judgment against these Defendants in excess of any amount that might actually be due, including attorney fees in excess of the amount provided for in the Confession of Judgment signed by these Defendants. Thus, in effect, Plaintiff has submitted a false Confession of Judgment to the New York Court, and affirmed it to be true, and now seeks to enforce the Judgment in Texas. It is clear that Plaintiff (more specifically Plaintiff’s attorney) has obtained the Judgment by fraud, and in doing so has denied all Defendants their right to due process under the law. Relief Requested The above-cited acts and omissions reveal that (1) the Plaintiff committed fraud in obtaining the Judgment, (2) none of these Defendants had a fair proceeding, and (3) the Judgment was entered in a manner inconsistent with due process of law; and these Defendants hereby move the Court to vacate the Judgment and afford these Defendants such other relief as the Court deems proper. Respectfully submitted, By: /s/ Robert J. Johnston Robert J. Johnston State Bar No. 10844100 4304 Orchard Gate Plano, Texas 75024 Telephone: (214) 387-0316 Email: robert.johnston631@gmail.com ATTORNEY FOR DEFENDANTS MOTION TO VACATE PAGE 6 CERTIFICATE OF SERVICE The undersigned hereby certifies that a copy of the foregoing Motion to Vacate was served on all counsel of record in compliance with the Texas Rules of Civil Procedure on the 3rd day of May, 2019. /s/ Robert J. Johnston Robert J. Johnston MOTION TO VACATE PAGE 7 EXHIBIT “A” EXHIBIT “B”