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(1.) Whether a temporary restraining order or preliminary injunction are "orders"that are to be given full faith and credit under the Uniform Enforcement of ForeignJudgment Act (A.R.S. §§12-1701 etseq.);
Michael K. Jeanes, Clerk of Co t*** Electronically Filed ***
Lori CummingsFiling ID 419002
9/9/200910:16:04 AM
1 Angel "Bacha" Vega #023036DODGE & VEGA, PLC
2 4824 E. Baseline Rd., Suite 124Mesa, Arizona 85206
3 Telephone: (480) 656-8333Facsimile: (480) 656-8334
4 bachorq)dodgevcga law.com
5 Attorneys for Plaintiffs, Respondents, NEDRA RONEY McKELL, ROBERT McKELL
IN THE SUPERIOR COURT OF THE STATE OF ARIZONA
IN AND FOR THE COUNTY OF MARICOPA
GARY WHITING, an individual, et aI.,13
Defendants, Petitioners.
Judicial Assignment:The Honorable Karen Potts
9 NEDRA RONEY MCKELL, and ROBERTMCKELL, husband and wife,
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Case No. CV2009-093004
Plaintiffs, RespondentsMEMORANDUM OF POINTS ANDAUTHORITIES RE TRO,PRELIMINARY INJUNCTION ANDFULL FAITH AND CREDITvs.
Pursuant to the Court's ruling and Minute Entry Order of September 1, 2009,
Plaintiffs Rob and Nedra Roney McKell, by and through counsel Dodge & Vega, PLC,
hereby file their Brief on Enforcement of an Order of a Foreign Court.
INTRODUCTION
This matter came before the Court on Defendant Gary Whiting's Motion for
Emergency Hearing and Stay of Enforcement of Foreign Judgment on September 1, 2009.
After oral argument, the Court requested additional briefmg on the issues of:
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(2.) Whether a temporary Receiver order is subject to the Uniform Enforcement ofForeign Judgment Act; and
(3.) Whether Defendant's argument that the Utah Temporary Restraining Order wasobtained by fraud could be entertained in this Court.
Plaintiffs submit the following in response to the Court's request for additional
briefing.
BACKGROUND FACTS
1. On August 3, 2009, Plaintiffs filed their First Amended Complaint and Motion
for Temporary Restraining Order in the Fourth Judicial District Court of the State of Utah.
See Transcript of August 21,2009 hearing at p.ll, attached as "Exhibit A."
2. At that time, Judge Claudia Laycock set a hearing date for the Motion for
Temporary Restraining Order for August 21,2009. See Id.
3. On August 10, 2009 and August 11, 2009, all defendants named in the Utah
action were served with the First Amended Complaint and Motion for Temporary
Restraining Order. See Id. at p. 13-16.
4. On August 21,2009, Judge Claudia Laycock of the Fourth Judicial District, State
of Utah, held a hearing on Plaintiffs' Motion for Temporary Restraining Order.
5. Defendants' counsel, Gary Henrie appeared for the limited purpose of requesting
a continuance of the hearing so as to permit additional time for Defendants' Arizona counsel
to be admitted pro hac vice. Id. at p.4.
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6. Judge Laycock considered the arguments presented by counsel and denied the
motion to continue the hearing based on the fact that all Defendants had been properly
served and the motion for a continuance was filed just prior to the hearing. Id. at p.18-19.
7. Based on the uncontested allegations made in Plaintiffs' motion, the Court
granted Plaintiffs Motion for Temporary Restraining Order. Id. at p.29
8. Judge Laycock also appointed a Receiver to take control of and preserve the
companies. Id. at p.24-27.
9. Plaintiffs filed this order with the Arizona Superior Court, Maricopa County on
August 24,2009, prompting Defendant Gary Whiting's pending motion.
ARGUMENT
I. A TEMPORARY RESTRAINING ORDER IS A JUDICIAL PROCEEDINGTHAT WARRANTS FULL FAITH AND CREDIT UNDER THEUNIFORM ENFORCEMENT OF FOREIGN JUDGMENTS ACT
In Jones v. Roach, the Court of Appeals of Arizona, Division One, Department B
reviewed the enforcement of a Colorado judgment in the Arizona courts. 575 P.2d 345
(1977). The Court was asked to determine whether a foreign judgment was subject to
collateral attack under Ariz. R. Civ. P. 60(c). The Court deliberated the purpose of the
Uniform Enforcement of Foreign Judgments Act (A.R.S. §§ 12-1701 et seq.) and determined
that "inherent in any discussion of A.R. S. §12-1702 is that it is only final judgments of a
sister state that are entitled to full faith and credit." 575 P.2d at 348. The Court relied on
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the Restatement 2d. Conflict of Laws §J07 and cited Comment (e) to this section to qualify
this reading ofthe Full Faith and Credit Clause of the Constitution. Comment (e) states:
It is for the local law of the state of rendition to determine whether a judgmentis fmal.
Under this analysis, it is necessary to determine whether a "Temporary Restraining Order"
is considered "final" under the Utah Rules of Civil Procedure. See Grynberg v. Shaffer, 165
P.3d 234 (Ariz. App. 2007).
Rule 65A of the Utah Rules of Civil Procedure requires that any restraining order
issued under the Rule shall be binding on those against whom the order is issued. See Utah
R. Civ. P. 65A(d). [emphasis added.] This language demonstrates that it is a final
adjudication as to the merits of seeking the restraining order. In other words, the order itself
is a final order dealing with the restraints placed on the Defendants. While the order may
later be replaced by an injunction, the order stands on its own accord directing the parties to
refrain from certain conduct and it is the law of the case.
Accordingly, Utah considers a temporary restraining order to have the finality
necessary to receive full faith and credit under the Uniform Enforcement of Foreign
Judgments Act. See Garris v. South Alabama Production Credit Assoc., 537 So. 2d 911
(Ala 1989) (Appellant seeking "final order on his application for temporary restraining
order."); Ford v. Alabama By-Products Corp., 392 So.2d 217 (Ala 1980) (Final order
denying petition for temporary restraining order); Boyd v. Ottman, 961 So.2d 148 (Ala.
Civ. App. 2006) (final order granting a restraining order to last 10 years); Birch Creek
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Irrigation v. Prothero, 858 P.2d 990 (Utah 1993) (appeal of the grant of a preliminary
injunction as a final order of the trial court).
"Full faith and credit" as referred to in definition of "foreign judgment" (including
orders) in Uniform Enforcement of Foreign Judgments Act, refers to full faith and credit
that is required by Constitution of United States, U.S.C.AConst. Art. 4, § 1, and means
that full faith and credit must be given to judicial proceedings of sister state ... "
Multibanco Comermex, S. A v. Gonzalez H. (App. Div.2 1981) 129 Ariz. 321, 630 P.2d
1053.
Because the Utah order has been properly filed in Arizona, and as provided by law
defendant has twenty (20) days to provide this Court evidence of its appeal or other actions
in Utah preventing the enforcement of the Utah Order, Arizona at this time is not
authorized to entertain a motion for relief from judgment to avoid the enforcement of the
Utah order; "to do so would not afford finality to the rendering state's judgment and
would be contrary to the full faith and credit clause ofU.S.C.AConst. Art. 4, § 1." Jones
v. Roach (App. Div.l 1977) 118 Ariz. 146, 575 P.2d 345.
II. THE UTAH DECREE OR ORDER IS NOW A DECREE OR ORDER OFTHE ARIZONA COURT.
In keeping with Arizona case law, and the Uniform Enforcement of Foreign
Judgments Act, a foreign judgment authenticated in accordance with an act of Congress
or the statutes of Arizona can be filed with the clerk of any superior court; it is then
treated as a judgment of that court. For what constitutes authentication see Rule 902,
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procedures, defenses, and proceedings as are local judgments. Phares v. Nutter (1980)
Ariz.R.Evid. The Act defines a "foreign judgment" as a judgment, decree, or order of
any court of the United States or any other court entitled to full faith and credit in
Arizona. A.R.S. § 12-1701. [emphasis added.] Foreign judgments are subject to same
125 Ariz. 291, 609 P.2d 561. [emphasis added.] Accordingly, the Utah order carries the
same force and effect as if it were an order signed by a local judge, say for example,
Judge Kongable.
For instance, A.R.S. 44-3292 grants Arizona courts the ability to enter restraining
orders and temporary injunctions in cases dealing with securities violations. Should an
order of this nature be entered by Judge Kongable (to continue our example) this Court
would not be entertaining defendant's motion. Pursuant to well established Arizona law,
the Uniform Enforcement of Judgments Act shall be "interpreted and construed as to
effectuate its general purpose to make uniform the law of those states which enact it."
See ARS 12-1707.
Given that a foreign order has been entered, and by definition is a foreign judgment,
should defendant not present this Court with a notice of appeal from the issuing
jurisdiction this Court must give full faith and credit to the order and present law of the
case.
The issue of granting full faith and credit to a temporary restraining order has been
reported in only a few cases. In Gutierrez v. District Court for County of Adams, 516 P.2d
647 (Colo. 1973), the Colorado Supreme Court did not reach the merits of the Full Faith and
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no reason to hesitate to enforce the restraining order in that case.
Credit clauses application to temporary restraining orders. However, the trial court found
Utah, however, treats restraining orders with the binding finality of a final order;
therefore, this Court must grant the Utah temporary restraining order full faith and credit in
this matter. Whether a rendering state's judgment is final must be determined under the
local law of the state of rendition. Jones v. Roach (App. Div.1 1977) 118 Ariz. 146, 575
P.2d 345.
ID. THE APPOINTMENT OF A RECEIVER UNDER RULE 66 OF THE UTAHRULES OF CIVIL PROCEDURE IS NOT A TEMPORARYAPPOINTMENT
At the August 21, 2009 hearing, Judge Claudia Laycock determined that the relief
requested by Plaintiffs was inappropriate. Specifically, Judge Laycock indicated that the
Rules of Civil Procedure did not allow for the appointment of an interim president. Judge
Laycock did, however, determine that the appointment of a receiver was appropriate under
Rule 66(a)(I) given the nature of the allegations against Defendant Gary Whiting. See
Exhibit A, p. 24-27. Judge Laycock then altered the order by hand-writing a brief line
stating "Vick Deauvono shall also act as Receiver under Rule 66 of the Utah Rules of Civil
Procedure for each ofthe above-listed entities."
This order is separate from the TRO and from the appointment of Vick Deauvono in
each of the named capacities. Rule 66 does not contemplate a temporary status of an
appointed receiver. Therefore, given the appointment, and Judge Laycock's order, this
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order is fmal and warrants full faith and credit under the Uniform Enforcement of Foreign
Judgments Act.
IV. A FOREIGN JUDGMENT MAY ONLY BE COLLATERALLY ATTACKEDAND THE MERITS OF THE CASE CANNOT BE REACHED EXCEPTTHROUGH AN APPEAL IN THE RENDERING JURISDICTION.
Foreign judgments entered into the State Courts through the Uniform Enforcement
of Foreign Judgments Act (A.R.S. §§12-1701 et seq.) are subject to the same procedures for
vacating a judgment as judgments of the Superior Court of this State. Springfield Credit
Union v. Johnson, 599 P.2d 772 (Ariz. 1979). Rule 60(c) of the Arizona Rules of Civil
Procedure provides for judgments to be set aside for mistake, newly discovered evidence,
fraud, misrepresentation or other misconduct of an adverse party, the judgment is void, the
judgment has been satisfied, or any other reason justifying relief from the judgment.
Defendant Gary Whiting has claimed that Plaintiffs committed fraud on the Utah court in
obtaining their order. Defendant Whiting has, however, failed to produce any evidence
whatsoever of any fraud. He disputes the uncontroverted statements made by Robert
McKell, Vick Deauvono, and Brent Barton in support of Plaintiffs' motion for a temporary
restraining order, but demonstrates no extrinsic fraud on the Utah court.
"The burden of proving fraud is on the party moving to vacate, and is not to be
presumed, but must be established by clear and convincing evidence." Lake v. Bonham,
716 P.2d 56,58 (Ariz. App. 1986). In Lake, the trial court vacated a judgment after fmding
that, in spite of his sworn affidavit to the contrary, Mr. Lake was not domiciled in Arizona
as required in order to obtain a decree of dissolution. The appellate court found that the trial
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court had no legal basis under Rule 60(c)(3) for vacating the decree because the evidence
was insufficient to support the fraud claim. The Court cited 2 C. Wright & A. Miller,
Federal Practice and Procedure, §2860 (1973) in determining that:
The cases in which it has been found that there was or might have been a'fraud upon the court,' for the most part, have been cases in which there was'the most egregious conduct involving a corruption of the judicial processitself.' The concept clearly includes bribery of a judge of or the employmentof counsel in order to bring an improper influence on the court.
Lake, 716 P.2d at 58.
In the present matter, Plaintiffs have brought, in good faith, three affidavits
supporting their allegations against Defendant. These affidavits corroborate one another
and set out a detailed outline of the improper actions taken by Defendant Whiting in
converting business assets for his personal use. Defendant Whiting's claim of "fraud on the
court" under Rule 60(c) requires clear and convincing evidence that Plaintiffs have engaged
in conduct that involves the corruption of the judicial process itself. Absent such a showing,
Defendant Whiting has no basis to vacate the order as entered in Utah and as domesticated
in Arizona under the Uniform Enforcement of Foreign Judgments Act.
CONCLUSION
Plaintiffs have obtained a valid final judgment on their motion for a temporary order.
Plaintiffs' temporary restraining order is a judicial proceeding that warrants the full faith
and credit guaranteed by the United States Constitution and by the Uniform Enforcement of
Foreign Judgments Act.
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Judge Laycock's order appointing Vick Deauvono is a final order. The nature of
Rule 66 of the Utah Rules of Civil Procedure does not contemplate a temporary order, but
rather appoints Mr. Deauvono indefinitely or until further action taken by the Court. Mr.
Deauvono's status as court-appointed receiver, therefore should be granted full faith and
credit under the Uniform Enforcement of Foreign Judgments Act as it is a final order.
Accordingly, Plaintiffs pray the Court to grant full faith and credit to the Temporary
Restraining Order and the Order Appointing Vick Deauvono as Receiver for the reasons
stated. Plaintiffs also pray the Court to dismiss Defendant Whiting's allegations of fraud
and to deny Defendant Whiting's Motion to Stay Enforcement ofthe Foreign Order.
RESPECTFULL Y SUBMITTED this 8th day of September, 2009
DODGE & VEGA, P.L.C.
By: /s/ Angel "Bacho" Vega #023036Angel Bacho Vega4824 E. Baseline Road, Suite 124Mesa, AZ 85206ATTORNEYS FOR PLAINTIFFS
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ORIGINAL of the foregoing hand delivered/filed with:
The Honorable Karen PottsMaricopa County Superior Court
COPY of the foregoing sent via email thiss" day of September, 2009, to:
Gregory G. McGill, P.C.4421 N. 75th Street, Suite 101Scottsdale, Arizona 85251Attorney for Defendantsgregmcgilli!ilcox.net
B. Ray ZollMicah BrunerB. RAY ZOLL P.c.8941 South 700 East, Suite 204Sandy, Utah 84070Counsel for Plaintiffs (Utah)m ic alVei)brun e rS.11et
By: /s/ Angel "Bacho" Vega #023036
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B. Ray Zoll, #3607Micah Bruner, #11272B. Ray Zoll, PC8941 South 700 East, Suite 204Sandy, Utah 84070Telephone: 801-545-7663Facsimile: 801-545-7910
Attorneys for Plaintiffs
IN THE FOURTHJUDICIAL DISTRICT IN AND FORUTAH COUNTY, STATE OF UTAH
GARY WHITING! an individual;CHEYENNEMOUNTAIN JudgeENTERTAINMENT/ INC., a Nevadacorporation; GARVICK PROPERTIES,LLC, a Nevada limited liabilitycompany; CHEYENNEMOUNTAINGAMES, INC., a Nevada corporation;MMOGULS, INC, a Nevadacorporation; NOW CORPORATION, aNevada corporation
NEDRA RONEYMCKELL1 anindividual; ROBERT MCKELL, anindividual,
Plaintiffs,
vs.
Defendants.
STATE OF UTAH }:55.
COUNTY OF UTAH }
AFFIDAVIT Of VICK DEAUVONOIN SUPPORT OF PLAINTIFFS'
MOTION FOR TErViPORARYRESTRAINING ORDER
Civil No.
The undersigned, being first duly sworn, states as follows:
1. I am over the age of 18 and am competent in all respects to testify in thisAffidavit of Vick Deauvono Page 1 of 9
matter.
2. I have personal knowledge of all statements to which I am herein
attesting with the exception of those statements, which are based upon
information available to me, and the belief I have reached based upon
that information. As to those statements I verily believe them to be true.
3. I became involved with Gary Whiting and Mmoguls, Inc. when I met with
a group of potential investors and principals.
4. In that meeting we, as a group, decided that we would create Mmoguls,
Inc. as an incentivized gaming network marketing company through
which customers would pay to play online computer games and have the
opportunity to create a network through which a customer could be paid
by encouraging others to sign up with Mmoguls, Inc.
5. At that time, Gary Whiting also owned CheyenneMountain Entertainment,
Inc. ("CME") and its subsidiary, Cheyenne Mountain Games ("CMG").
6. CME and CMG partnered with Mmoguls to provide Mmoguls with video
game content for MMoguls subscribers.
7. CMEpresently owns the license to develop a massive multi-player online
role-playing game based on the Stargate® franchise. The game will be
entitled Stargate Worlds.
8. Mmoguls, Inc. was designed to be the company through which CMEwould
market the Stargate Worlds video game and make It available to the
Affidavit of Vick Deauvono Page 2 of9 .
public.
9. Despite the other online games provided by CME and CMG, Stargate
Worlds video game was/Is essential to the viability and stability of
Mmoguls, Inc. as a company.
10. During that initial meeting, Gary Whiting nornlnated Brent Barton as the
CEO,due to Mr. Barton's extensive experience running network marketing
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
Mmoguls, Inc. in processing affiliates' credit cards, ended up placing its
business reputation on the line In order to secure the necessary funding
and accounts to start Mmoguls, Inc.
13. Gary Whiting stated that Mr. Barton would have control over the
company, that Mr. Barton would have complete control over and accessto
the finances, and that there would be an executive committee to act as an
oversight board for the company.
14. Before the Stargate Worlds video game was finished, we launched the
company and immediately saw significant numbers of affiliates sign up to
participate in the network marketing aspect of the company.
Affidavit of Vick Deauvono Page 3 of9
15. Within the first month of launching, Mmoguls, Inc. brought in
approximately $900,000.00.
16. This money was to pay for the commissions earned by affiliates as well as
operating costs of the company.
17. Brent Barton requested approximately $400,000.00 to pay the earned
commissions and operating costs of the company.
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,
Inc. account to pay the commissions earned by Mmoguls affiliates.
20. I discovered that the checks that Mr. Barton and Gary Whiting had signed
were bouncing due to Insufficient funds in the Mmoguls, Inc. account.
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
used for Gary Whiting's personal use.
22. In all, Gary Whiting took at least $350,000.00 from Mmoguls, Inc.
unbeknownst to anyone else, including the CEO, Brent Barton.
23. I was in a meeting, after I discovered that Gary Whiting had taken
Mmoguls, Inc. money for personal use, with potentIal investors in
Mmoguls, Inc. and Stargate Worlds when I overheard a conversation
Affidavit of Vick Deauvono Page 4 of 9
between Jeff Knowles of Vision Bankcard and Gary Whiting.
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
commissions that were due the affiliates.
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
in and knowledge of the network marketing arena.
26. These former employees, including former CEO Brent Barton, have
created a new multi-level marketing company called ManDelis, which
employs a business model almost identical to Mmoguls wherein MonDelis
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
business directly competes with Mmoguls.
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
potential to earn money from playing the games.
28. Another of Gary Whiting's companies, Cheyenne Mountain Entertainment,
obtained the licenses, raised the money from investors, and created the
studios necessary to create the Stargate Worlds videogame.
29. Cheyenne Mountain Entertainment was then to market the game in part
through Mmoquis, Inc.'s Incentivlzed social network contained in its online
Affidavit of Vick Deauvono Page 5 of 9
Entertainment, along with many of those involved in the actual creation of
the qarne, to resign and leave the game stalled.
38. Throughout the entirety of the creation of these entities and pursuit of the
Stargate Worlds videogame, Gary Whiting maintained complete control
over Mmoguls, Inc., Cheyenne Mountain Entertainment, Cheyenne
Mountain Games, Stargate Worlds, and all other related entities.
39. Gary Whiting has delusions of grandeur and has, single-handedly, lead to
the decline of the entire Mmoguls, Inc. business plan.
40. Through discussions with various individuals, I have learned that MGM is
currently reviewing the I1censingfor Stargate Worlds issued to Cheyenne
Mountain Entertainment.
41. It is my understanding that Cheyenne Mountain Entertainment stands to
lose its license from MGM unless Cheyenne Mountain Entertainment can
show that it has the funding, personnel, and management necessary to
finish building the game.
42. Through my extensive business experience, it is my opinion that Gary
Whiting's continued involvement and management of Cheyenne Mountain J.
Entertainment will likely cause MGM to lose faith in the license granted to
CME.
43. WIthout the license for Stargate Woridsl Cheyenne Mountain Games,
Cheyenne Mountain Entertainment and Mmoguls will not maintain the
Affidavit of Vick Oeauvono Page 7 of 9
viability necessary to pay its obligations or to make money.
44. Without the license for Stargate Worlds, the entire money making
opportunity of Mmoguls, CME and CMG will have disappeared.
45. The loss of license would cause Immeasurable harm to each of these
entities.
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Affidavit of Vick Deauvono Page 8 of 9
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46. Based on my expertence, and my knowledge of what Whiting has done to
this company, if he continues to serve in any capacity in the company,
Mmoguls, Inc. Cheyenne Mountain Entertainment, and Cheyenne
Mountain Games will each fail.
fURTHER AFFIANT SAYETH NOT.
Dated this. __ d.eli\' of July 2009.
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 thesame are true of his own knowledge, except as to those matters therein stated upon hisInformatIon and belief and as to such matters he believes them to be true.
SUBSCRIBEDand SWORNTO before me this ~day of July 2.009.
Affidavit of Vick Deauvono Page 9 of 9
FRO I" :
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Aug. 20 21309 i~: 54PI'1 PiFRX HO. :4805322440
Gary R. Henrie #50833518 N. 1450 W.Pleasant Grove, Utah 84062Telephone: (702) 616~3093E·mw!: grhlaw@hQtmail.com
•Attomey for Defendants
IN THE FOURTH JUDICIAL DISTRJCT COURTUTAH COUNTY, STATE OF UTAH
NEDRA RONEY MCKELL anindividual; ROBERT MCKELL, anindividual,
Plaintiffs,
vs.
GARY WHITING, an individual;CHEYENNE MOUONT AlNENTERTAINMENT, INC" a Nevadacorporation; OARVICK PROFERTIES. LLC,aNevada limited liabilitycompany; CHEYENNE MOUNTAINGAMES. INC., a Nevada corporation;MMOGULS, INC. a Nevadacorporation; NOW CORPORATION, aNevada corporation.
Defendflllts.
AFFIDAVIT OF GARY WHITING INSUPPORr OF DEFENDANTS' MOTION
FOR CONTlNUANCE OF HEARING .
Civil No. 09040243&
Judge Laycock
STATE OF ARIZONA ).ss
COUNTY OF MARlCOPA )
The undersigned, being first duly sworn, states as follows:
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1. I am over the age of 18 and am competent in all respects to testify in this matter.
2. I have personal knowledge of all statements !O which I am herein attesting with
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.
3. I formed MMOOULS, INC., a Nevada corporation ("MMOGULS"). It was the
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, 1moved the offices back to Mesa
Arizona and hired Don Carroll as President.
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
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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
overhead and commissions.
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. Ido 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.
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FURTHER AF !ANT SAYETH NAUGHT.
ISTATE OF ARlZONA
VERIFICATION
).ss
COUNTY OF MARICOPA )
Gary Whitin,a. being first duly swornupon his oath deposes and says: that he has read thefQregoifig Affidavit, that he knows the contents thereof and the same are true ofhis 0\\111knowledge, except as to those matters therein stated upon his information and belief and as tosuch matters be believes them to be true.
SUBSClUBED AND SWORN to before me this 20fh day of August) 2009.
"
JEFFREY K WllUAMSON.
NOTA.RY PUBLIC - ARIZONAMARICOPA COUNTY
• My Commlsllion ExpiresJanua 2011
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',~<-~(HEYENNE~ ~IVIOUNTAINIi' E N T E R T A I N M E M T
August 13, 2009
To whom it may concern:
Based upon the books and records of the company as of August 1, 2009, Cheyenne MountainEntertainmentr 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:
Funds Received from Garvick Properties LLCDate Amount
Wednesday, December 03, 2008 $ 39,500.00Wednesday, December 10, 2008 $ 60,000.00Thursday, December 18, 2008 $ 249,470.51Friday. December 19, 2008 $ 16,112.56Wednesday. December 24, 2008 $ 11,250.00Wednesday, December 31, 2008 $ 32,683.64Monday, January 05, 2009 $ 333,000.00Friday, January 09,2009 $ 15,000.00Tuesday, January 27, 2009 $ 840,000.00Tuesday, February 24, 2009 $ 620,000.00Wednesday, March 04, 2009 $ 500,000.00Wednesday, March 04, 2009 $ 182,000.00Friday, March 13,2009 $ 20,000.00
Total $ 2,919,016.71
If you have any questions, do not hesitate to contact me at (480) 656-6501.
4140 East Baseline Road, Suite 208 ¢ Mesa, AZ 85206phone: 480-656-6500 o fax: 480-555-6565¢ www.cheyenneme.com ¢ www.stargateworlds.com
5
Justin D. Heideman (Utah State Bar #8897)Brandon G. Wood (Utah State Bar #10307)
2 ASCIONE HEIDEMAN & MCKAY, LLC3 2696 North University Avenue., Suite 108
Provo, Utah 846034 Phone: (801) 812-1000
Fax: (801)374-1724
6 Associated through local counsel:
7 DAVIS MILES, PLLC8 P.O. BOX 15070
MESA, AZ 852119 Telephone: (480) 733-6800
Fax: (480) 733-374810
Attorneys for Defendant Ann Colson
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flLEO
08 M~1 \ '2 Pt'\ ,,~30
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STATE OF ARIZONA
MARICOPA COUNTY SUPERIOR COURT
14 i15 !I GARY WHITING, an individual,16 I
I Plaintiff,17 !
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vs.18 ,
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19 ! ANN COLSON, an individual; CHICAGO1 TITLE AGENCY OF ARIZONA, INC., an
20 I Arizona Corporation,
2\ I Defendants.
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CASE NO. CV2007·011672
S~RTOAMENDEDCOMPLMNTD AMENDED COUNTERCLAIM
(Assigned to the HOD. Sam J. Myers)
24COMES NOW Defendant Ann Colson ("Defendant" or "Colson"), by and through
undersigned counsel, and submits the following Answer to Plaintiff's Amended Complaint.2S
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DEFENDANT COLSON'S AMENDED COUNTERCLAIM
COMES NOW Defendant and Counterclaim ant, ANN COLSON ("Colson"), and
counterclaims against Plaintiff and Counterclaim Defendant, Gary Whiting ("Whiting"), as follows:
1. Colson incorporates the allegations and denials of the foregoing Answer into this Amended
Counterclaim.
2. The causes of actions asserted herein arise out of the same transaction or occurrence alleged
in Plaintiffs Amended Complaint. As such, venue and jurisdiction are proper.
3. Shortly after Colson and her husband, Nick Colson (''Nick''), married in 1997, they met
Whiting while attending church.
4. Colson, Nick and Whiting became good friends, as did their families.
5. Colson, Nick and Whiting thereafter engaged in various business endeavors together.
6. In approximately 2000, Colson began working as an assistant or secretary to Whiting in
several businesses in which Whiting had ownership and which Whiting was managing.
7. During this time, Whiting held himself out as a trustworthy, dependable friend with
Colson's best interest in mind.
8. Given the parties many years of church and business relationship as well as their close
friendship, Whiting had made himself into a person of trust for Colson and her children.
9. Beginning in late 2005, while Colson was experiencing some marital problems as well as
problems between her children and Nick, Whiting told Colson that said problems were evidence
that Nick did not love Colson and encouraged Colson to move out.
10. Whiting also told Colson that he felt Colson was to become a spouse to Whiting, even
though Whiting was married, and encouraged Colson to leave Nick.
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11. In approximately May 2006, partly due to Whiting's urgings, Colson moved out of the home
where she and Nick were living and entered a "rent-to-own" contract on a home located at 5407
East Catalina Avenue, Mesa Arizona, 78251 (the "Catalina Home") and began making
rent/mortgage payments on the home.
12. Whiting continued to insist Colson enter into the spousal arrangement with him and
encouraged her to divorce Nick.
13. Whiting represented that if Colson agreed to said spousal arrangement, he would purchase
the Catalina Home for Colson, Colson could live there for as long as she wanted, Whiting would
provide Colson with monthly support and maintenance payments of at least $3,000.00, and Colson
would not work.
14. Whiting represented that if at any time after entering the foregoing arrangement Colson
decided to opt out of the arrangement, she could keep the Catalina Home and he would pay her a
$100,000.00 severance payment.
15. During this time, Whiting assisted in making rental/mortgage payments on behalf of
Whiting on the Catalina Home.
16. In September 2006, due to Whiting's insistence and in reliance on his representations,
Colson agreed to Whiting's proposal, except that she insisted she would continue to work as
Whiting's secretary rather than quit her job, to which Whiting assented.
17. At the time, Colson was making $3,000.00 per months working for Whiting's businesses.
18. Colson paid the legal expenses for Colson's divorce from Nick, which was finalized in
September 2006, and Whiting began making arrangements to purchase the Catalina Home for
Colson.
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19. In the process of preparing to purchase the Catalina Home, World Savings Bank informed
Whiting that neither he nor his business entities qualified for any additional mortgages, as he had
already obligated his business on several other mortgages in 2006 for homes he had purchased for
other women entering into the same or a similar type of arrangement as Colson.
20. For the same reasons, neither Whiting nor his business entities could qualify for a mortgage
on a home Whiting was simultaneously wanting to purchase for Ms. Lynette Williams
("Williams"), located at 1508 South Chestnut Circle, Mesa Arizona 85204 (the "Chestnut Home").
21. In order to purchase the Catalina and Chestnut Homes pursuant to his arrangements with
Colson and Williams respectively, Whiting devised a plan to circumvent the fact that neither he nor
his entities qualified for additional mortgages.
22. Whiting transferred $100,000.00 into Colson's personal account in order that Colson qualify
for mortgages for the purchase of the Catalina and Chestnut homes.
23. At Whiting's instruction, Colson applied for the mortgages and was approved.
24. At the closing of the Catalina Home, Whiting instructed Colson to pay approximately
$63,590.18 as a down payment on said Home from the foregoing $100,000.00, which she did.
25. World Savings Bank paid the remaining balance due to consummate the transaction and
issued a mortgage in Colson's name in the amount of$206,800.00 for the remaining balance.
26. Closing on the Catalina home was consummated on October 16,2006 (See Exhibit A
herein)
27. At the closing of the Chestnut Home, Whiting authorized the transfer of$125,000.00 from
one of his business entities as down payment and earnest money toward the purchase of said Home.
28. World Savings Bank overpaid the remaining balance by $16,387.20 to consummate the
transaction on the Chestnut Home, issued a mortgage in Colson's name in the amount of13
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$185,250.00 for the amount of the loan, and refunded Whiting's business the overage of
$16,387.20.
29. Thus, total funds contributed by business entities owned by Whiting toward the purchase of
the Chestnut Home were $108,612.80.
30. Closing on the Chestnut Home was consummated on October 13, 2006 (See Exhibit B
herein)
31. The deeds to both the Catalina and the Chestnut Homes were issued in Colson's name, as
were the mortgage obligations on both homes.
32. Whiting made payments for a couple of months, on the Catalina Home through February
2007, and on the Chestnut Home through march 2007.
33. In the fall of2007, Whiting had engaged a new woman in a spousal arrangement ("Mary").
34. Shortly after this arrangement, Whiting started treating all of the other partners differently
and stopped paying them support and wanted Ann Colson to quit her employment so he could stop
paying her.
35. As a result of Mary's actions and Whiting's changed behavior, Williams approached
Whiting's religious leader and informed him of the arrangements that Whiting had with these
several women.
36. Whiting's religious leader approached Colson and asked her to confirm the allegations of
Williams.
37. Colson confirmed the allegations.
38. When Whiting found out about Colson's confirmation to his religious leader, he promptly
fired her from being his personal assistant, which position she had held for the past 12 years.
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39. Because Whiting was making no payments on either Catalina or Chestnut Home after March
2007 and and because he has fired Colson, Colson was forced to borrow money to try to make
mortgage payments in her name.
40. Colson could not refinance because she had no money and no job.
41. She did not have the support of her husband, as she is divorced.
42. Colson asked Williams help pay since Williams was living in Chestnut Home and was for
her benefit per Williams' arrangement with Whiting.
43. Williams makes no payments
44. Colson makes repairs to Chestnut home and files forcible detainer action so she can get
renters in to make payments.
45. Chestnut Home goes into foreclosure because Whiting not making payments according to
his promises, Williams making no payments, and Colson has no ability to continue paying.
46. Colson's utilities turned off at the Catalina Home. She borrows more money to pay to keep
get her utilities back on.
47. Whiting at some point in all this files the present quiet title Action.
48. As Whiting's assistant, Colson had done the work for the arrangements Whiting had entered
into with other women, prior to Colson entering the arrangement and seen Whiting performing on
his promises to the other women.
49. Colson relied on Whiting's representations to her based on her observation and experience
of the other women.
50. Whiting generally had the women entering the arrangement with him sign a purported
contract.
51. Neither Colson nor the other women were given a copy ofthis contract.15
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52, Colson did not sign anything until after she had been fired by Whiting at considerable
pressure from Whiting.
53. Whiting has provided Colson via supplemental initial disclosures in this action a purported
"LLC Partnership Agreement" with Williams.
54. On information and belief, the terms of this purported agreement are the terms in the other
written agreements Whiting had the women sign.
55. Notwithstanding the terms, as shown below, Whiting had promised Colson the terms
aforementioned in this Amended Counterclaim.
56. On information and belief, Counterclaim Defendant Gary L. Whiting ("Whiting"), a married
man, has entered into numerous LLC Partnership Agreements with several single women. In these
agreements, Whiting provides housing, financial support, and a "commitment of time and emotional
support on a non-exclusive basis, as Whiting has other partnership interests to pursue and
maintain." (See "LOF NUMBER FIVE, LLC PARTNERSHIP AGREEMENT", purportedly
executed by Whiting and Williams, attached hereto as "Exhibit C", for an example of such an
agreement).
57. In exchange, the women maintain the property and form a "consortium" and "a fidelity
relationship" with Whiting. (See "LOF NUMBER FIVE, LLC PARTNERSHIP AGREEMENT",
attached hereto as "Exhibit A").
58. Moreover, Whiting represents to the women that the home is theirs and that they are free to
withdraw themselves from the LLC Partnership Agreement with Whiting and take everything
provided to them by Whiting, including specifically but not limited to equity in the home
theretofore paid.
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59. Several, and possibly all, of Whiting's partners divorced their husbands in order to enter into
these arrangements with Whiting.
60. Upon information and belief, Whiting had entered into at least three of these agreements,
and therefore had provided at least three houses to four single women, previous to any agreements
with Colson and Williams.
61. Whiting therefore devised a plan to obtain two more homes in which to house his two
newest "partners".
62. Whiting has made demands for the property to be transferred to him via quiet title, even
though mortgages are in Colson's name and she is responsible for the monthly payments and he
refuses to assume the mortgages himself.
63. In divorcing her husband, entering into the LLC Agreement, and having the properties
purchased in her own name, Colson was relying on Whiting's representations that he would pay the
mortgages and provide her with any and all funds necessary for her support.
64. Colson indebted herself $5,583 to make payments on the Chestnut home and pay its
property taxes before not being able to make any more payments thereon.
65. Colson expended the following on the Chestnut home to make it marketable to renters or a
new buyer, given Williams was not paying nor was Whiting, and Colson's credit was being
destroyed for nonpayment:
a. At least $\,300 in repairs,
b. $3,000 charges to Lowes
c. $600 labor to rip out tile and paint the home.
d. $1,000 in unpaid utilities and reconnection fees
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67. She has been working for only a couple months and makes at most $1,000 per month now
and is going to school.
68. She has nearly $400 thousand dollars of debt to her name with interest accruing very rapidly
thereon.
FIRST CAUSE OF ACTION(Breach of Contract)
69. Counterclaim Plaintiff Colson incorporates and re-alleges all previous paragraphs as though
fully set forth herein.
70. Whiting and Colson entered into a contract with substantially the same as those found in
Exhibit A, in which Whiting promised to provide housing and financial support in exchange for
Colson's maintenance of the Catalina property and a fidelity consortium with Whiting.
71. Colson divorced her husband in order to enter into this arrangement with Whiting.
72. Colson performed her part of the contract by maintaining the Catalina Property and
consorting with Whiting.
73. Whiting has now ceased providing support and maintenance payments to Colson.
74. Colson has been damaged by not receiving the fruits of her contract.
75. Whiting and Colson also entered into an oral contract in which Whiting would provide
funds to Colson sufficient to obtain mortgages to purchase both the Chestnut and Catalina
properties; in exchange, Colson would transfer the properties to Whiting once the mortgages were
paid off.
76. Colson performed her part of the contract by obtaining the properties and the respective
mortgages.
77. Whiting partially performed by making several months worth of payments.
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_78. Whiting ceased making payments on the mortgages, which action was inconsistent with the
agreement between Whiting and Colson.
79. As a result, Colson has been required to pay the mortgage payments through her meager
means, even being required to take out loans in order to meet the payments.
80. Colson has attempted to mitigate the damages by trying to obtain funds by requesting
Williams-to pay rent for occupying the Chestnut property.
81. Wherefore, Counterclaim Plaintiff Colson asks this Court for damages as deemed
appropriate.
SECOND CAUSE OF ACTION(Breach of Covenant of Good Faith and Fair Dealing)
82. Counterclaim Plaintiff Colson incorporates and re-alleges all previous paragraphs as though
fully set forth herein.
83. When Whiting and Colson agreed to obtain the Chestnut and Catalina properties pursuant to
Whiting's plan, Colson assumed very few risks associated with the transaction.
84. Whiting suddenly stopped all payments on the mortgages, causing Colson to assume far
greater risks than Colson had justifiably expected.
85. Colson and Whiting had also entered into a contract under which Whiting would provide
Colson with payments of money to be used for her support.
86. Whiting has ceased making support payments owed to Colson under the LLC Partnership
Agreement.
87. Whiting's actions are preventing Colson from receiving the benefits and entitlements of
both of the agreements entered into.
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88. Wherefore, Counterclaim ·Plaintiff Colson asks this Court for damages as deemed
appropriate.
THIRD CAUSE OF ACTION(Fraud in the Inducement)
89. Counterclaim Plaintiff Colson incorporates and re-alleges all previous paragraphs as though
6fully set forth herein.
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90. Whiting represented to Colson that he would make the mortgage payments on the Chestnut
and Catalina properties and that the properties would stay in her name until such time as the
mortgages had been completely paid off.
91. Wherefore, Counterclaim Plaintiff Colson asks this Court for damages as deemed
appropriate.
FOURTH CAUSE OF ACTION(Negligent Misrepresentation)
92. Counterclaim Plaintiff Colson incorporates and re-alleges all previous paragraphs as though
fully set forth herein.
93. When Whiting and Colson agreed to obtain the Chestnut and Catalina properties pursuant to
Whiting's plan, Whiting represented to Colson that
94. In divorcing her husband, entering into the LLC Agreement, and having the properties
purchased in her own name, Colson was reasonably relying on Whiting's representations that he
would pay the mortgages and provide her with any and all funds necessary for her support.
95. Wherefore, Counterclaim Plaintiff Colson asks this Court for damages as deemed
appropriate.
FIFTH CAUSE OF ACTION(Fraudulent Misrepresentation)
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96. Counterclaim Plaintiff Colson incorporates and re-alleges all previous paragraphs as though
fully set forth herein.
97. In divorcing her husband, entering into the LLC Agreement, and having the properties
purchased in her own name, Colson was relying on Whiting's representations that he would pay the
mortgages and provide her with any and all funds necessary for her support.
98. Wherefore, Counterclaim Plaintiff Colson asks this Court for damages as deemed
appropriate.
SIXTH CAUSE OF ACTION(promissory EstoppellDetrimental Reliance)
99. Counterclaim Plaintiff Colson incorporates and re-alleges all previous paragraphs as though
fully set forth herein.
100. In the case the Court finds no contract was entered into, Whiting should be estopped
from not performing his promises to Colson.
101. When Whiting and Colson agreed to obtain the Chestnut and Catalina properties
pursuant to Whiting'S plan, Whiting represented to Colson that he would pay all the monthly
payments and that the properties would stay in her name until they mortgages were paid off.
102. Colson reasonably relied on Whiting's promise, and followed through Whiting's
plan until Whiting stopped making the monthly mortgage payments
103. In divorcing her husband, entering into the LLC Agreement, and having the
properties purchased in her own name, Colson was relying on Whiting's representations that he
would provide her with a home and funds necessary for her support.
104. Colson has sustained damage to her credit and finances, and has needed to take out
loans to meet the monthly mortgage obligations.
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LOF NUMBER FIVE, LLCPARTNERSHlP AGREEMENT
This Partnership Agreement (hereinafter Agreement), effective this lst day ofSeptember, 2006, is by and between Gary L. Whiting and/or any entities he owns orcontrols, (h(:reinafier "Whiting") and Lynette Williams, (hereinafter "Williams"), andcollectively known as the Parties. This Agreemcrn is intended to »rotecr the interests ofMs. Williams and Mr. Whiting in connection with the possession, ownership and right toquiet enjoyment of 1508 South Chestnut Circle, Mesa, AZ 85204 (hereinafter "Chestnut"or "the property") as well as other aspects of~ile parties' rdations:lip which is entered 'into for valuable consideration and with full and mutual C(1OS~'1ltafter an opportunity for aconsultation with independent counsel.
\WHEREAS this Agreement is based upon the following:
A. The parties wish to formalize their business and partnersn:p relationship toestablish their respective partnership rights, obligations and responsible bondingin this Partnership, in particular with respect to each other's interest in theChestnut property and their partnership relationship. The Parties wish to enter intothis Agreement to address Issues of ownership, investment, possession andmanagement of the Chestnut property and their partnership relationship inconnection therewith.
B. The Parties wish to have this Agreement governed by the laws of the State ofArizona and governed pursuant to ARS Title 29 as well a:: applicable state andfederal decisional law.
AGR.EeMENT
NOW, THEREFORE, in exchange for valuable consideratior the receipt of which ishereby acknowledged. and in exchange for the mutual covenants, promises andconsortium recognized herein, the Parties agree as follows:
1. Recital~. The recitals are hereby incorporated into the Agreement,
2. Own..~. \"11iting shall have ownership ofthe Chestnut Property for thepurposes of investment. Further, given Whiting's professional demands on histime he cannot manage, supervise, maintain 01' upkeep th'~Property on his ownaccord. Whiting's ownership of Chestnut, wherein he will make the Propertyavailable for Williams to reside in, is Whiting~s capital omtriburion to thePartnership.
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3. Management and Suoer:visi..Qn. In exchange tor Whiting's consent to allowWilliams (and her family ifdesired) to reside at Chestnut and have full rights ofpossession and quiet enjoyment for a twenty year period through June J, 2026(and an option to renew for another twenty year period), v/illiams agrees tomanage, supervise, maintain and upkeep the Property for 'N'hiting. In thisconnection Williams is obligated to maintain thelandscaping, ensure that thesprinkler system is in working order at all times, that all b'rshes and hedges aretrimmed, that all landscaping is kept with a neat and clean appearance. Further,Williams agrees to pay for needed repeirs to the property up to $250 per month.Further: Williams agrees that any and all problems or repairs at the Property thatexceed $250 per month shall be promptly brought 10 Whiling's attention in theevent Williams is unable to address, remedy and pay for the problem herself. Thisshall serve as Williams capital contribution to the Partnership.
4. Partnership Investment. Additionally, as a further capital contribution to thePartnership, Williams agrees ~,Jkeep \Vhitlng apprised of any potential buyers forthe Chestnut Property so that Whiting can optil;,izl~any sale opportunities in themarketplace, as Whiting does not wish to "list" Chestnut .or saie on the MLS.
s. ~C;:SI and Tax. Since Whiting will retain (ownership to Chestnutduring this Partnership and his capital contribution is to make the residenceavailable for Williams (and her family) to reside in. Whiting shall at all times pay,and be responsible for, any mortgages and other expenses associated with theChestnut Property, and Whjtin~ shall tile any and an stat~: or federal returns onthe Property.
6. William'!! Pro.fit or Buyout 00tiQil Rights. Accordingly, upon the sale of theProperty or upon Williams' request at any time in W31l1in ~ to dissolve thePartnership, this Partnership shall dissolve and at Williams' ejection, Whitingshall pay Williams $,50,000 in a lump !'UIII payment as a "buy out" price from thePartnership, or 50% of the profits (.f any such sale, in liei. of'a distrio\Jtion ofprofits and losses.
7. Responsible Bonding COE.ntlllt.!l. TIlis Partnership Agreement creaes aresponsible bond between Gary L. Whiting and Lynette Williams. which is a legaland lawful union between partners in 3 fidelity relationship with full and informedconsent. To consummate Whiting's responsible bond with Ms. Williams in thisPartnership, Whiting shall, as an' additional capital contrioution, mske a monthlymaintenance payment of 13,600 to 'NiiHarps to cover an)' upkeep or discretionaryexpenses.
8. Con1unction Not Fiduciary Relatjo~. The partners here in shall ne,t beconstrued as fiduciaries but shall be construed as a fideliy asscciatlon, tofacilitate the occupancy of the Property under a contract :If sale and to establish apersonal fidelity conjunction which will preserve and protect the integrity of this
artncrshlp. This partnership ussociatiou Includes ''\;"i''''8'' commitm~
.\--t--,...:;... Initials
and emotional support to the partnership on a non-exclusive basis, as Whiting hasother partnership interests to pursue 31'Id maintain.
9. Wrap /\roumW£atton-Whiting,f1Hg:IW~"1!!mt. This PartnershipAgreement is to facilitate a wrap around of an existillg Real Estate PurchaseContract between David J. and Ann K. Patton and Gary 'WhitinwlOF Number 5,LLC. for the purpose of providing occupancy and maintenance of the investmentproperty, 150R South Chestnut Circle Mesa, AZ 85204,
10. Separate Property Not CommuJ'lJ1.vPropertv. To the extent provided by law. GaryL Whiting. a married man, take'S his int-::rest herein as a separate prop en)' interestand not a community property interest. Lynette Williams, an unmarried woman,takes her interest as a separate prclpm'ty interest herein.
1]. Re1eEise~~nant Nor to Sue, A5 further consideration and an inducement toexecute this Agreement, and because Whiting is expressly assuming the financialburden of this Partnership Agreement, the Parties agree tc· release any claimsagainst the other in this Partnership and agree not to commenceany legalproceedings against the other. In tltis connection, Ms. Williams acknowledgesthat her rights herein are fully' and completely protected by the "profit or buyout"option referenced above in paragraph 5.
12. Rep:-E;~;ntatl(lns and W.MIa;:lti~.Ms. w:man"ls represents and warrants that whileshe is possession of the Property she will not Cause an}' liens, encumbrances orother 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 thisAgreement shall be held invalid, void, unenforceable or contrary to public policyfor any reason. then the remainder ·~fthe Agreement shall rernain in effect inaccordance with the Blue Pencil Rule.
14. Confidentiality. All information concerning this Agreemeru shall be held strictlyconfidential except as necessary to) enforce the terms of tais Agreement or asallowed or required by law,
1S. ~dYi~;cof Counsel. Whiting and Wi llinms each acknowl edge they have obtainedthe advice of their respective attorneys prior to executing; this Agreement (orwaived the opportunity to do so), and each patty executes this Agreement withfull knowledge of its significance and with the express lnrention of effecting itslegal consequences.
16. ],Dtegralion. This Agreement (which also expressly wrap; the prior.T'l.itton-WhitingPurd.c.!,c Contract) contains the!: entire ;:.l\retnlcnt bc'i:wet:)1 the Parrtes. It has notbeer. executed in reliance Oil th~ t.a~is <)i: any other oral (lr written representationsor t rns, and no extrinsic oral (It' written representations or terms shall modify,
or contradict the terms thereof. ~ /
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17. Choice a.nd Venue. This Agreement 1)"311 be construed under and according to thelaws of the state of Arizona, and any action or legat proceeding arising out of thisAgreement (or any tort, statutory or other claims}, sh a1lbe interpreted andenforced accordance with Arizona law and shall be hrougllt and maintained inMaricopa County, Arizona. Any federal court action (and any appeals to thefederal courts) shall be initiated it, the federal district court of Arizona,
18. Attome)!§ Fees. With respect tel any contract, tort, statutory or other claimsbrought to interpret. enforce, or defend this Agreement (or any claims or defensesthat are incidental to this Agreement), the prevailing part)' shall be entitledattorney's fees. eJ!:peJ1SCSand taxable CO.~Bincurred therein.
19. ~diilll. If Lynette Williams breaches th~ fidelity associaticn stipulations ofthis responsible bonding ~1g:·~t:1neat.Gary L. 'Whiting may elect either to continuethis responsible bonding agreement or he may send t. notice in writing to LynetteWtllisms that this agreement is breached and consequenrl f dissolved therebyinvoking the buyout stipulations under paragraph 6.
EXECUTION:
1HAVE READ THE ABOVE AGREEMENT, I HAVE TA!<.£N TIME TOCONSIDER ITS IMPLICATIONS, J FULLY UNDERSTAl'0 ITS CONTENTSAND J AOREE TO ITS TER.MSAND I VOLUNTARILY SUBMIT TO ITSEXECUnON AS INOICATED EY lvfY SIGNATURE BELOW~
___ ~ /l.~. ,," 20D(~ date
*f-* Gra-nted ***See eSignature Page
1 GREGORY G. McGILL, P.C.ATTORNEY AT LAW
2 4421 N. 75th Street, Suite 101Scottsdale, Arizona 85251
3 (480) 970-6720FAX (480) 970-6727
4 gregmcgi11@cox.netGregory G. McGill, No. 011020
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Attomey for Plaintiffs
SUPERIOR COURT OF ARIZONA
COUNTY OF MARICOPA
GARY WHITING, an individual,
Plaintiff,
vs.
ANN COLSON, an individual; CHICAGOTITLE AGENCY OF ARIZONA, INC., anArizona corporation; CHICAGO TITLEINSURANCE COMPANY,
Defendants.
LYNETTE WILLIAMS, an individual,
Plaintiff,vs.
ANN COLSON, an individual,
Defendant.
The COlU't,having reviewed the Stipulated Agreement ("Stipulated Agreement") dated
No. CV2007-011672CV2007-022735(Consolidated)
JUDGMENT
Michael K. Jeanes, Clerk of Court*** Electronically Filed ***
Lori CummingsFiling ID 217637
07/25/20082: 14:08 PM
(Assigned to the Honorable Sam Myers)
(Mandatory E-Filing)
July 23, 2008, entered into by Gary L. Whiting ("Whiting"), Plaintiff in Whiting v. Colson,
CV2007-011672, and Ann Colson ("Colson"), Defendant and Counterclaimant in the same
matter, and by Lynette Williams ("Williams"), Plaintiff in Williams v. Colson, CV2007-022735,
and Ann Colson, Defendant in the same matter, and good cause appearing;
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IT IS HEREBY ORDERED, ADJUDGED AND DECREED AS FOLLOWS:
1. That this consolidated case shall be placed on the inactive calendar for 120 days at
which time it will be dismissed with prejudice as to all parties unless a motion to set for trial is
filed herein.
2. That pursuant to the Stipulated Agreement there are four contracts which are valid
and in full force and effect, as follows: (1) the Cummings-Whiting contract (Catalina), (2) the
Patton-Whiting contract (Chestnut), (3) the Willi arns-Whiting (LOF No.5 LLC) contract, dated
9/1/2006 (Exhibit A attached to the Stipulated Agreement), and (4) an oral agreement between
Colson and Whiting, the terms of which are substantially similar to those contained in Exhibit A.
Further, for purposes of resolution herein, any purported contracts between Cummings and
Colson and/or between the Pattons and Colson are hereby ordered and decreed to be of no effect.
3. That Colson shall convey ownership to the Catalina property to Whiting, which
sale shall close on or before 90 days from this date. It is further adjudged and decreed that the
price shall be the outstanding and unpaid mortgage with World Savings Bank or assignee (the
"lender") plus routine closing costs and customary transaction costs, and title shall be conveyed
by Special Warranty Deed. Payment of the price for Catalina by Whiting and transfer of the
Catalina title by Colson ("Catalina Closing") shall take place simultaneously on or before 90
days from this date, i.e., by 10/23/2008,
4. That Whiting shall pay $50,000 to Colson in certified funds simultaneously with
the Catalina Closing.
5. That the title to Chestnut shall be transferred from Colson to Gary L. Whiting. It
is further adjudged and decreed that in order to effect said transfer in light of the pending
Chestnut foreclosure proceeding and the due on sale clause in the lender's deed of trust, Whiting
shall, within 90 days of the date hereof, provide sufficient funds to Colson to fully reinstate her
loan as to Chestnut. Whiting shall then acquire title to the Chestnut property from Colson by
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Special Warranty Deed for a price equivalent to Colson's outstanding and unpaid mortgage plus
routine closing and transaction costs. Payment of the price for Chestnut by Whiting and transfer
of the Chestnut title by Colson ("Chestnut Closing") shall take place simultaneously on or before
90 days from this date, i.e., by 10/23/2008.
6. That pursuant to the Stipulated Agreement and for purposes of this case the
contract between Whiting and Williams dated 9/112006 is a valid contract and in full force and
effect.
7. That neither Whiting, nor Williams nor Colson nor any assignees, agents,
affiliates, heirs and/or relations shall be liable for fraud or any other allegation of wrongdoing or
inappropriate conduct in connection with any of the above-referenced contracts or purported
contracts. Whiting, Williams and Colson shall each be forever discharged from any claims,
assertions or causes of action related thereto.
8. That neither Whiting nor Colson shall harass or contact the other party or
members of the other party's family; that and any restraining orders, protective orders,
injunctions against harassment or the like currently in effect against the other (or a family
member of the other) shall be withdrawn. It is further ordered, adjudged and decreed that Colson
shall not permit any property damage or waste to the Catalina property, which representation and
warranty shall extend to affiliates, relatives, or relations, ordinary wear and tear excepted. It is
further ordered, adjudged and decreed that Colson makes no representation or warranty that
Chestnut has not been damaged or subjected to waste because Colson has not been in possession
of Chestnut during the litigation.
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.
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10. That, pursuant to the Stipulated Agreement, Colson shall be fully responsible for
her representations and warranties that she has permitted no voluntary or consensual liens or
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deeds of trust to be placed on Catalina or Chestnut other than the World Savings Bank (or
assignee) mortgages referenced in the litigation and that to the best of her knowledge and belief
there are no involuntary or nonconsensualliens or deeds of trust on Catalina or Chestnut.
11. That there is no admission of liability by any party herein, and upon entry of
Judgment pursuant to the Stipulated Agreement herein, all claims and actions and potential
claims or actions that arise out of the same transactions and events that are the subject of the
Stipulated Agreement herein between Whiting, Williams and Colson, as well as their assignees,
agents, affiliates, heirs and relations, shall be dismissed with prejudice and forever discharged.
12. That Williams, Whiting and Colson shall each bear their own attorney's fees,
costs and expenses incurred herein.
13. This Judgment shall have res judicata and collateral estoppel effect upon
signature of the Court and entry with the Clerk. Pursuant to the agreement of Whiting, Williams
and Colson, there is no just reason for delay and this Judgment is accordingly being signed and
entered forthwith.
IT IS SO ORDERED, ADJUDGED AND DECREED.
DATED: _
THE HONORABLE SAM J. MYERS
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eSignature Page -- 241550749_SCAN0560_000.pdf
Granted
Signed on this day, July 25, 2008
/5/ Sam MyersJudicial Officer of Superior Court
B. Ray loll, #3607Micah Bruner, #11272B. Ray loll, PC8941 South 700 East, Suite 204Sandy, Utah 84070Telephone: 801-545-7663Facsimile: 801-545-7910
Attorneys for Plaintiffs
IN THE FOURTHJUDICIAL DISTRICT IN AND FORUTAH COUNTY, STATE OF UTAH
Plaintiffs,
AFFIDAVIT OF ROBERT MCKELL INSUPPORT OF PLAINTIFFS' MOTION
FOR TEr.JIPORARY RESTRAININGORDER
NEDRA RONEY MCKELL, an individual;ROBERT MCKELL, an individual,
vs.
GARY WHmNG, an individual; Civil No.CHEYENNE MOUNTAIN ENTERTAINMENT,INC., a Nevada corporation; GARVICK JudgePROPERTIES, LLC, a Nevada limitedliability cornpanv: CHEYENNEMOUNTAINGAMES, INC., a Nevada corporation;MMOGULS, INC, a Nevada corporatlon:NOW CORPORATION, a Nevadacorporation
Defendants.
STATE OF UTAH
COUNTY OF UTAH
)
):55.
The undersigned, being first duly sworn, states as follows:
1. I am the Plaintiff in this actIon.
2.. I am over the age of 18 and am competent in all respects to testify In this
matter.
3. I have personal knowledge of all statements to which I am herein
attesting with the exception of those statements, which are based upon
information available to me, and the belief I have reached based upon
that information. As to those statements I verily believe them to be true.
4. On or about January 7, 2009, I entered into a lvJasterAgreement with
Cheyenne Mountain Entertainment, Inc., Garvick Properties, LLC, SGW,
CMG, Mmoguls, Inc and Stargate to loan the entities $2,250,000.00 to
"kick off" the marketing for Mmoguls, lnc.
5. I loaned these companies $2,250,000.00 as agreed upon In the Master
Agreement along with an additional $550,000.00 in cash to pay for
various startup costs for Mmoguls, Inc.
6. As consideration for this loan, I was promised 30% of the gross revenue
received by Mmoguls, Inc., 5% of the gross revenue and income of the
other entities as a royalty, 5,000,000 shares of common stock of
Cheyenne Mountain Entertainment, Inc, as well as commissions due and
owing my downline in the Mmoguls, Inc Network Marketing compensation
plan.
7. Upon information and belief, Mmoguls, Inc. received Its initial gross
revenue of approximately $900,000.00 in March of 2009.
8. At that time, I was promised that, of the gross revenue received by
Mmoguls, Inc., I would receive 30% as agreed upon in the Master
Agreement.
9. To date, however, I have not received any return on my loan. I also have
never received any of the promised shares of common stock or any
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
Mmoguls, Inc. for his personal use.
11. I relied upon the promises made to me by Gary Whiting to loan
$2,800,000.00 to Mmoguls, Inc. and the other entities that the money
would be paid back to me out of the gross revenues received by the
entities.
12. My reliance on Gary Whiting's false statements have damaged me in that
I have yet to be repaid any part of the money I loaned these entities.
FURTHERAFFIANT SAYETHNOT.
Dated this 29 day of June 2009.
tB./t~~~tRobert McKell
VERIFICATION
STATE OF UTAH ):ss
COUNTYOF Salt Lake )
Robert McKell, being first duly sworn upon his oath deposes and says: That hehas read the foregoing Affidavit, that he knows the contents thereof and the same aretrue of his own knowledge, except as to those matters therein stated upon hisinformation and bellef and as to such matters he b~es themto be true.
~"t}-t' /!Zeft-i'!obert McKell
SUBSCRIBEDand SWORN TO before me this~day of June 2009.
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J, Michael K. Jeanes, Clerk of Co t*** Electronically Filed ***
Lori CummingsFiling ID 421666
9/11120094:27:04 PM
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Defendant sets out "Background Facts" seeking to undermine the validity of the
Utah Order. This attack is improper as the merits of the Temporary Restraining Order
("TRO") are not at issue before this Court. This matter is before the Court under the
Uniform Enforcement of Foreign Judgments Act (A.R.S. §§ 12-1701 et seq.).
1 Angel "Bache" Vega #023036DODGE & VEGA, PLC
2 4824 E. Baseline Rd., Suite 124Mesa, Arizona 85206
3 Telephone: (480) 656-8333Facsimile: (480) 656-8334
4 bacho((!)dodgevegaJaw.com
5 Attorneys for Plaintiffs, Respondents, NEDRA RONEY McKELL, ROBERT McKELL
IN THE SUPERIOR COURT OF THE STATE OF ARIZONA
IN AND FOR THE COUNTY OF MARICOPA
9 NEDRA RONEY MCKELL, and ROBERTMCKELL, husband and wife,
Case No. CV2009-093004
REPLY MEMORANDUM OF POINTSAND AUTHORITIES RE1. TRO;2. PRELIMINARY INJUNCTION;3. FULL FAITH AND CREDIT
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Plaintiffs, Respondents
vs.
GARY WHITING, an individual, et aI.,13 Judicial Assignment:
The Honorable Karen PottsDefendants, Petitioners.
Pursuant to the Court's ruling and Minute Entry Order of September 1, 2009,
Plaintiffs Rob and Nedra Roney McKell, by and through counsel Dodge & Vega, PLC,
hereby file their Reply Brief in support of Plaintiff's request that this Court enforce the
Order of the Utah Court.
DEFENDANT'S ARGUMENTS AGAINST THE VALIDITY OF THE UTAH
TEMPORARY RESTRAINING ORDER ARE IMPROPER
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Accordingly, Defendant's only venues of attacking this Foreign Judgment are set out
under Rule 60(c) of the Arizona Rules of Civil Procedure. See Springfield Credit Union
v. Johnson, 599 P.2d 772 (Ariz. 1979). Defendant's attempt to argue the merits of the
TRO, Plaintiffs' evidence whereby the TRO was obtained, and the findings of the Utah
court are misplaced in this forum. Had Defendant chosen to appear at the hearing held in
Utah, any allegations of impropriety, insufficiency, or validity of the evidence and the
final order could have been heard. Considering Defendant decided not to appear, except
insofar as Mr. Henry of Utah appeared to request a continuance five minutes before the
hearing was scheduled to begin, Defendant's arguments are inappropriate at this time.
The proper forum to attack the validity of the foreign order would be to seek
redress in the Utah courts.
THE TRO MEETS ALL REQUIREMENTS UNDER UT AM LAW
Under Rule 65A of the Utah Rules of Civil Procedure, the Temporary Restraining
Order ("TRO") meets all requirements necessary and would be honored by the Utah
courts as a final determination of the issue of whether a restraining order was necessary.
Contrary to Defendant's assertions, the TRO meets each requirement set out under Rule
65A. Starting on Page 27 of the Transcript of the TRO hearing, attached to Plaintiff's
initial brief as "Exhibit A," Judge Laycock carefully and specifically walked through
each element necessary to grant a TRO under Rule 65A.
She initially addressed the question of irreparable harm and found that, while the
money loss was measurable, "that there is other harm that is irreparable in the permanent
folding of this business." See Id. at p.28 (emphasis added).
After determining that all elements were met under Rule 65A, the Court turned to
the setting of a hearing date for the preliminary injunction. The Court indicated that it
would be difficult to set a hearing any time in the near future due to the fact that the
Court was beginning a nine-day civil bench trial on the following Monday that would
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capitalize the Court's calendar. rd. at p.32. Due to this reason, the Court extended the
length of duration of the TRO until the preliminary injunction hearing could be held.
MR. DEAUVONO'S APPOINTMENT BY THE COURT
AS RECEIVER WAS PROPER
Under Rule 65A, security is required unless the court determines that "none of the
parties will incur or suffer costs, attorney's fees or damage as the result of any wrongful
order or injunction, or unless there exists some other substantial reason for dispensing
with the requirement for security." Rule 65A Utah Rules of Civil Procedure. The Court
placed a Receiver over the companies so as to preserve their assets and to continue their
ordinary course of business. This appointment supplants any requirement for security as
the appointment of a Receiver, deemed neutral by the Court, prevents any party from
being damaged should the order be determined to have been improper in the Utah courts.
Vick Deauvono was explicitly deemed to be a neutral individual properly
appointed as a Receiver in this action. See Transcript on Hearing, p.26. Plaintiffs
presented the Utah court with sufficient evidence to persuade the court to appoint a
receiver. Judge Laycock specifically addressed the fact that Vick Deauvono had filed an
affidavit in support of the motion for temporary restraining order and found that his
affidavit was factual in nature, substantiated by the other affidavits filed, and did not
display any prejudice to the process or place any doubt in the court that he would act
properly to preserve the businesses and their assets. rd. Accordingly, Mr. Deauvono's
appointment was proper.
DEFENSE COUNSEL'S SPECIAL APPEARANCE IN UTAH WAS LIMITED,
INEXCUSABLY LATE AND UNINTELLIGIBLE
Judge Laycock explicitly stated that she had read all evidence presented to her by
the Plaintiffs. This included the memorandum and the three affidavits filed in support of
the memorandum. See Transcript of Hearing ps. 6 and 34. Judge Laycock also stated
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26 Estate of Page vs. Litzenburg, 177 Ariz. 84, 865 P.2d 128 (Az. App. 1993).
that she had not seen any paperwork from Defendant. Id. at p.3. At that time, Mr. Henry
presented the court with a copy of Defendant's Motion for a Continuance. The court
disregarded this document as it had not been filed with the court and due to the fact that it
was entered entirely too late in the process. Id. at p.18. Attached to this motion was
Gary Whiting's affidavit. This affidavit was entered as an attachment to the motion to
continue and, as was demonstrated by Mr. Henry's argument, that was the sole purpose
for which Defendant made any appearance at the hearing. Id. at p.2. Accordingly, as the
motion to continue was untimely filed with the court, nothing filed with the motion was
considered beyond the motion to continue.
The Utah court explicitly found that Defendant had been afforded sufficient time
under the Utah Rules to appear at the hearing. Id. at ps. 24-27. Accordingly, Defendant
had the opportunity to be heard at the TRO hearing but failed to take advantage of that
opportunity. Therefore, Defendant forfeited his right to be heard by failing to appear
other than to request a continuance a few minutes prior to the hearing commenced. The
consequences of waiver and forfeiture are common sense, even under Arizona authority,
in that defenses which are not raised timely, are deemed waived. Ariz. R. Civ. P., Rule
8(c). O'Keefe v. Grenke, 170 Ariz. 460, 825 P.2d 985 (App. 1992); Sirek v. Fairfield
Snowbowl, Inc., 166 Ariz. 183, 800 P.2d 1291 (App.1990); Hughes Aircraft Co. v.
Industrial Commission, 125 Ariz. 1,606 P.2d 819 (App.1979).
Moreover, Defendant fails to demonstrate in his brief any meritorious defense(s)
to the relief sought in the TRO. His burden, however, is even greater than simply
claiming a defense to obtain relief from [the order] based on allegations of adverse
party's fraud, misrepresentation, or misconduct, movant must have meritorious defense
which he was prevented from presenting because of adverse party's fraud,
misrepresentation or misconduct and misconduct includes even innocent omissions."
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Defendant's attacks on the judicial process in Utah are unfounded, untimely, and
improper in this venue. Defendant should have appeared at the Utah TRO hearing and
presented his positions to the Utah court at that time. Defendant's allegations of
invalidity and impropriety should be brought in the Utah courts insofar as they go beyond
the scope of Rule 60( c) of the Arizona Rules of Civil Procedure. This Court is the
improper venue for Defendant to now attempt to air these allegations and they should be
deemed waived.
THE TRO IS ENFORCEABLE IN UTAH AND HAS BEEN FULLY AND FAIRLY
LITIGATED AS TO THE PROPRIETY OF THE TRO
In Grynberg v. Shaffer, the Arizona Court of Appeals determined that an order
qualifies as final if it meets two requirements: (1) the judgment or order has to be on the
merits and enforceable and (2) the judgment or order in question must have been fully
and fairly litigated. 165 P.3d 234 (Ariz. App. 2007). The Court determined that "finality
attaches to a foreign judgment when it is issued by the trial court and is enforceable in the
issuing jurisdiction." Id. The TRO is enforceable in Utah, therefore its finality attaches
per the rule in Grynberg. But for the location of Defendant corporations in Arizona, the
court-appointed receiver would have been afforded any and all enforcement procedures,
including contempt proceedings against those defying the orders, so as to enforce Judge
Laycock's orders. Accordingly, the TRO is deemed a "final" order under the Grynberg
rule.
Defendant fails to demonstrate that the Utah TRO would not be regarded as a final
order in Utah. Defendant cites few cases, including an Arizona family law case and a
10th Circuit Court of Appeals case. In MacArthur v. San Juan County, 497 F.3d 1057
(10th Cir. 2007), the Court reviewed preliminary injunction orders of a tribal court of the
Navajo nation. The Court determined that "the preliminary injunction orders in this case
hardly constitute final judgments." Id. at 1066 (emphasis added). The limitation of the
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Court's determination to the orders in that case does not apply to our case. The Utah
court's TRO does more than merely ask for the status quo to be maintained, but supplants
Whiting in his capacity in Defendant Corporations. Therefore, MacArthur is inapplicable
to the facts of this case.
The Utah TRO is an effective instrument whereby the court's order appoints a
Receiver over these entities. Defendant Corporations have submitted themselves to Utah
jurisdiction through the Note and the Contract signed by the corporations and Plaintiffs.
This submission to Utah jurisdiction allows the Utah courts to handle matters involving
these parties. Accordingly, the Utah TRO is proper and is a final judgment under the
Uniform Enforcement of Foreign Judgments Act.
DEFENDANT HAS NOT MET HIS BURDEN OF PROOF
REGARDING FRAUD
Defendant has failed to demonstrate clearly and convincingly that the Utah TRO
was obtained through fraud. Lake v. Bonham, 716 P.2d 56, 58 (Ariz. App. 1986).
Defendant makes general allegations and highlights apparent issues of fact, but
Defendant has not demonstrated fraud. In order to demonstrate fraud, Defendant Whiting
must prove that Plaintiffs have abused the judicial process to the point of corrupting the
judicial process itself. Id. at 58. Instead of producing such proof, Defendant has merely
highlighted the fact that one of the affiants in support of the Motion for Temporary
Restraining Order is a competitor of Defendant Mmoguls. This alone, however, does
nothing to prove fraud in the instance ofMr. Barton's affidavit.
Defendant further claims that the TRO hearing was improper as Defendant claims
not to have been afforded the opportunity to be heard. The hearing was set and, as Judge
Laycock explicitly pointed out, all Defendants were properly served with sufficient notice
to appear before the Court. See Transcript of Hearing, ps. 24-27. Defendant failed to
take this opportunity to be heard except to have Mr. Henry appear on his behalf so as to
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request a continuance. Mr. Whiting's affidavit was attached to and was entered in
support of the Motion for Continuance. Considering the late filing of the motion and the
fact that Plaintiffs had gone above and beyond the notice requirements of Rule 65A, the
court did not grant Defendant Whiting's motion. This was after the Utah court had
considered Defendant's arguments and reviewed the facts of the case. Defendant's
failure to avail himself of the judicial process cannot and should not now be used against
Plaintiffs as they seek enforcement of the order that resulted from that hearing.
Defendant's attack of Judge Laycock's denial of the motion for a continuance is
improper in this Court and should be disregarded. Moreover, defendant is seeking relief
from an order after an unsuccessful appearance in Utah, which was completely flawed.
As such, defendant must establish not only a procedural justification for setting aside the
Utah order, but also that if the order were set aside, the party would be able to establish a
meritorious defense to the action. Master Financial, Inc. v. Woodburn. 208 Ariz. 70, 90
P.3d 1236 (App. 2004). In this case, Defendant clearly cannot do so.
EVIDENTIARY OBJECTION TO DEFENDANT'S MOTION
Plaintiff objects to the attachments included with Defendant's Memorandum
(untimely filed brief and attachments in Utah) and to any purported "affidavits" made in
support of the Motion to Continue in Utah as such evidence does not raise any viable
issues for modifying the Utah TRO and are otherwise irrelevant, inadmissible and or
hearsay.
Defendant has not produced any relevant authority and the circumstances offered
do not rise to a level which would justify staying the Utah TRO as Defendant must
demonstrate that by the use of due diligence, these facts and circumstances could not
have been discovered at the time of the hearing. Rule 60(c), ARCP.
/II
/II
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CONCLUSION
Plaintiffs have obtained a valid final judgment on their motion for a temporary
order. The Court's decision to grant the motion is final. Similar motions in other states
have been granted full faith and credit and Utah treats such orders as final for matters of
appeal. Plaintiffs' temporary restraining order is a judicial proceeding that warrants the
full faith and credit guaranteed by the United States Constitution and by the Uniform
Enforcement of Foreign Judgments Act.
Judge Laycock's order appointing Vick Deauvono is a final order. The nature of
Rule 66 of the Utah Rules of Civil Procedure does not contemplate a temporary order, but
rather appoints Mr. Deauvono indefinitely or until further action taken by the Court. Mr.
Deauvono's status as court-appointed receiver, therefore should be granted full faith and
credit under the Uniform Enforcement of Foreign Judgments Act as it is a final order.
Accordingly, Plaintiffs pray the Court to grant full faith and credit to the
Temporary Restraining Order and the Order Appointing Vick Deauvono as Receiver for
the reasons stated. Plaintiffs also pray the Court to dismiss Defendant Whiting's
allegations of fraud and to deny Defendant Whiting's Motion to Stay Enforcement of the
Foreign Order.
RESPECTFULLY SUBMITTED this 11th day of September, 2009
DODGE & VEGA, P.L.C.
By: /s/ Angel "Bacho" Vega #023036Angel Bacho Vega -4824 E. Baseline Road, Suite 124Mesa, AZ 85206ATTORNEYS FOR PLAINTIFFS
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ORIGINAL of the foregoing hand delivered/e-filed with:
The Honorable Karen PottsMaricopa County Superior Court
COPY of the foregoing sent via email this11th day of September, 2009, to:
Gregory G. J'1cGill, P.C.4421 N. 75t Street, Suite 101Scottsdale, Arizona 85251Attorney for Defendantsgregmcgi l!(Ci'lcox.net
B. Ray Zol1Micah BrunerB. RAY ZOLL P.C.8941 South 700 East, Suite 204Sandy, Utah 84070Counsel for Plaintiffs (Utah)micahrc:v,bruners. net
By: Isl Angel "Bacho" Vega #023036
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1 GREGORYG. MCGILL, P.c.ATIORNEY AT LAW
2 4421 N. 75th Street, Suite 101Scottsdale, Arizona 85251
3 (480) 970-6720FAX (480) 970-6727
4 gregmcgill@cox.netGregory G. McGill, No. 011020
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Attorney for Defendants
Michael K. Jeanes, Clerk of Court*** Electronically Filed ***
Lori CummingsFiling ID 421823
911112009 11:51:36 PM
SUPERIOR COURT OF ARIZONA
COUNTY OF MARICOPA
NEDRA RONEY MCKELL and ROBERTMCKELL
Plaintiff,
vs.
No.: CV 2009-093004
REBUTTAL MEMORANDUMBY DEFENDANT WHITING RE:THE TRO AND FULL FAITH ANDCREDIT
GARY WHITING; CHEYENNE MOUNTAIN13 ENTERTAINMENT, INC, et al,
Defendants. Honorable Karen Potts141516171819
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Defendants Whiting and the several Arizona companies urge this honorable court to deny
full faith and credit to the Temporary Restraining Order issued in Utah based upon the following
reasons:
1. Plaintiff McKell has not cited to one case which holds that the principle
underlying full faith and credit, res judicata, is furthered if this court were to
enforce a temporary, interlocutory order from a sister state when that state court
has scheduled another preliminary hearing in that litigation and the controversy
recently commenced and is still being litigated. No citation was made because no
such citation exists.
2. No proof of proper service of the Notice of TRO Hearing or the First Amended
Complaint upon Whiting or the corporate defendants was introduced herein, so
the sister state temporary order may be collaterally attacked on grounds of lack of
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jurisdiction over the person or the subject matter, lack of due process, and that the
temporary order is invalid and unenforceable. Springfield Credit v. Johnson, 123
Ariz. 319, 599 P. 2d 772 (1979), citing Bebeau v. Berger, 22 Ariz. App. 522, 529
P.2d 234 (1974); and see Pioneer Federal Savings Bank v. Driver, 166 Ariz. 585,
804 P .2d 118 (1990).
3. "A judgment will not be recognized or enforced in other states if it is not eftnal
determination under the local law of the state of rendition." For example, if a
judgment is subject to the continuing modification jurisdiction of the rendering
state (eg., family court pendite lite orders), such a judgment is not res judicata and
it may be litigated in the sister state. The plaintiff has failed to assert a cogent
argument as to why a Temporary Restraining Order, particularly this one with all
its apparent infirmities (the terms of tile order do not define an actual injury. it
fails to state how any hann is irreparable, it lacks a duration, no bond or security
was required under Rule 65 or 66), should be treated as a "final order" for
purposes of sister state enforcement - and even the record in the rendering state
calls such a conclusion into serious doubt since Judge Laycock scheduled a
preliminary to address the merits on October 16,2009. Jones v. Roach, 118 Ariz.
146,575 P.2d 345 (1977). For example, a Temporary Restraining Order cannot
issue and be an enforceable order in this state until the trial court fixes a bond and
the bond is posted to protect the defendant against a wrongful restraint. Rule 65;
and State v. Neitz, 114 Ariz. 296, 560 P.2nd 814 (1977).
4. The point missed by the plaintiff is twofold: (i) it is trying to impose a
temporary order on out of state parties and corporations, and (ii) such immediate
enforcement would violate the underpinning of full faith and credit: that the
alleged defects and questions regarding the order be fully and fairly litigated and
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final before a sister state has to give it full faith and credit. Indeed, the U. S.
Supreme Court weighed in on this limitation to tile full faith and credit clause and
rested on the notion of "finality" and res judicata: "Public policy dictates that
there be an end to litigation, that those who have contested an issue shall be bound
by the result of the contest, and that the matters once tried shall be considered
forever settled as between the parties." Durfee v. Duke, 375 U.S. 106,84 S. Ct.
242, 11 L. ed. 2d 186 (1963). None of these limitations or standards on requiring
full faith and credit have neen shown by the Utah plaintiffs on the temporary
restraining order with all its facial defects - when a preliminary injunction hearing
is currently scheduled for October 16,2009.
5. "A judgment will not be recognized or enforced in otIler states if it is not a final
determination under the local law of state of rendition." Grynberg v. Shaffer, 216
Ariz. 256, 165 PJd 234 (2007). First, the TRO cannot meet this test. Second,
this limitation on comity is plain with respect to ''judgments'', so the limitation on
sister state recognition is even more compelling when one considers tile
interlocutory order as opposed a judgment that is final and appealable for
purposes of res judicata effect.
6. Finally, in tile opening Legal Memorandum the defense showed that the plaintiff,
and Vick Deauvono, filed sworn affidavits containing utterly unsubstantiated
charges that Mr. Wlriting absconded with loan proceeds, when tile accusations
were based on vague hearsay, no proof, no actual or continuing harm was shown-
and the plaintiff is merely an unsecured creditor without having introduced any
evidence in Utah that it had any disbursement or fund control agreements with
Whiting that would provide a legal basis for the extraordinary remedy of "director
removal", TRO and an interim receiver (by an interested party). The entire matter
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in Utah was a fraud on the court, and all the above referenced cases state that such
fraud is extrinsic fraud that allows a sister state to decline to enforce the
temporary order in this state until the merits are actually and fully litigated in Utah
the rendering state.
WHEREFORE, based upon the reasons set forth herein, the TRO and interim
receiver order in Utah should not be recognized by this honorable court until a final
determination is made on the merits in Utah and a final judgment is rendered that is
appealable, final and with res judicata effect. Plaintiffs will have every opportunity to
prove actual and continuing harm that must be enjoined, and that is what they must do in
order to replace Mr. Whiting in the Arizona entities while they are merely an unsecured
creditor without any fund control agreements in place.
DATED this 11th day of September, 2009.
ORIGINAL of the foregoingE-FILED this 11th day ofSeptember, 2009, with:
ClerkMARICOPA COUNTY SUPERIOR COURT201 W. JeffersonPhoenix, Arizona 85003;COPY of the foregoingEmailedthisl1Ihdayof<~2009.to:Bacha Vega, Esq. / 1
Dodge and Vega, PLC4824 E. Baseline Rd., Ste 124Mesa, AZ 85206
GREGORY G. MCGILL, P. C.
. Jfjfa~y for Defendants
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