Opinion

Jason Rudolph Stanford

Court: United States Bankruptcy Court, N.D. Texas
Filed: Oct 28, 2025
Cited by: 0 cases
Authority: More cited than 36.0%

“When defendants’ acts result in one injury, there can be but one recovery.”

How later courts described this case

“When defendants’ acts result in one injury, there can be but one recovery.”
“A trustee acts ultra vires when abandoning or compromising claims without benefit to the estate.”
bankruptcy court retains inherent power to address bad-faith conduct
fraudulent inducement supports exemplary damages

Written by the judges who cited it.

The opinion

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

In re:

JASON RUDOLPH STANFORD, Debtor

Case No. 24-44120-ELM-7

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JASON RUDOLPH STANFORD, Plaintiff,

England Carrier Services, LLC

Nfusion Capital Finance, LLC

King of Freight, LLC

GlobalTranz Enterprises, LLC

Spencer Fane, PLLC

Defendants

Original Car DC 25-14020 Dallas County

District Court removed as

Adversary Proceeding No. 25-04119

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MEMORANDUM OF AUTHORITIES IN SUPPORT OF MOTION TO COMPEL CHAPTER 7

TRUSTEE TO FILE AND PROSECUTE PETITION FOR BILL OF REVIEW

I. INTRODUCTION

This Memorandum supports Plaintiff’s motion requesting an order compelling Chapter 7 Trustee Behrooz

Vida to file and prosecute a petition for bill of review to vacate a series of state-court judgments

obtained by litigation fraud.

Those judgments were rendered in cases where opposing parties—GlobalTranz Enterprises, LLC; King of

Freight, LLC; England Carrier Services, LLC; and nFusion Capital Finance, LLC—prevailed only through

false representations, forged instruments, and misstatements of governing law. Each of those acts

deprived the debtor of due process and constitutes “extrinsic fraud” within the meaning of Alexander v.

Hagedorn, 226 S.W.2d 996 (Tex. 1950), and Valdez v. Hollenbeck, 465 S.W.3d 217 (Tex. 2015).

Under 11 U.S.C. § 704(a)(1) and Fed. R. Bankr. P. 6009, the trustee must prosecute estate claims to

maximize recovery. Because the fraudulent state-court judgments extinguish claims worth millions to the

estate, this Court should compel the trustee to file the appropriate bill of review or, failing that, declare

the claims abandoned to the debtor under 11 U.S.C. § 554(b).

II. JURISDICTION AND PROCEDURAL POSTURE

Jurisdiction arises under 28 U.S.C. §§ 1334 and 157. Determining the administration of estate assets and

enforcement of trustee duties is a core proceeding under 28 U.S.C. § 157(b)(2)(A), (E), and (O).

The record in the main bankruptcy case (ECF Nos. 347 and 456) shows that the trustee recognized the

existence of these causes of action but has not prosecuted them. Given the undisputed evidence of

litigation fraud underlying the state judgments, the debtor seeks an order compelling the trustee to act

within thirty (30) days. Debtor’s Protective Standing and Fiduciary Enforcement Rights.

The debtor, as the original plaintiff and creator of the evidentiary record, retains derivative and protective

standing to compel proper administration of this cause. See Wieburg v. GTE Southwest, Inc., 272 F.3d

302, 308 (5th Cir. 2001). The Trustee’s substitution under Rule 7025(c) does not extinguish the debtor’s

right to (1) compel the Trustee’s performance of statutory duties under 11 U.S.C. § 704(a)(1), (2) ensure

that the record of the removed proceeding is preserved and free of fraud, and (3) seek abandonment

under 11 U.S.C. § 554(b) if the Trustee refuses to act. Standing is therefore concurrent and derivative, not

adverse.

III. FACTUAL BACKGROUND

1. GlobalTranz Enterprises, LLC: In state litigation, GlobalTranz filed a fraudulent amended

response to first interrogatories, altering its prior sworn answers to conceal non-payment for

transported freight and to fabricate a defense inconsistent with its own earlier admissions.

GlobalTranz filed a fraudulent amended response to its judicial admission made in responses to

interrogatories even though the evidence it submitted stated otherwise. Such conduct constitutes

intrinsic and extrinsic fraud upon the court.

2. King of Freight, LLC: King of Freight defrauded the court by asserting a fraudulent

“assignment” defense, claiming that payment obligations had been reassigned to England

Carrier Services after breach and that it diverted payment based on instruction given to them by

the plaintiff. No valid assignment existed, and the argument contradicted the operative broker–

carrier agreement. In addition, the demand for payment diversion came from England Carrier

Services, LLC.

3. England Carrier Services, LLC: England falsely asserted that it held a security interest

under the Uniform Commercial Code. Under U.C.C. § 9-203, no security interest attaches

without value, rights in the collateral, and an authenticated security agreement—all absent here.

Further, such an interest could never have been assigned under U.C.C. § 9-514, which governs

the amendment and termination of financing statements but confers no transfer right. England’s

false claim of lien deprived Plaintiff of credit and contracts, including with Gulf Coast Bank &

Trust. England claimed to have priority security interest in all of plaintiff’s invoices until February

2024. England went as far as to make these claims in USDC case no 3:23-cv-02688.

4. nFusion Capital Finance, LLC: nFusion prevailed by falsely alleging that Plaintiff

breached the Account Purchase and Security Agreement. In truth, nFusion itself

repudiated the agreement on July 14, 2023, by denying fuel advances and refusing to honor

contractual obligations. That bad-faith repudiation rendered its later breach claim fraudulent.

Each of these acts misled the state courts and produced judgments tainted by fraud upon the tribunal.

Those judgments remain in force, thereby diminishing estate value and impairing creditors’ rights unless

a bill of review is prosecuted.

IV. ARGUMENT AND AUTHORITIES

A. Trustee’s Exclusive Duty to Prosecute Fraud-Derived Claims

Sections 323(a)–(b) and 704(a)(1) of the Bankruptcy Code make the trustee the estate’s sole

representative, charged with collecting and reducing all property—including causes of action—to money.

Fed. R. Bankr. P. 6009 authorizes the trustee to “commence and prosecute any action or proceeding in

behalf of the estate.” See Kane v. Nat’l Union Fire Ins. Co., 535 F.3d 380, 385–86 (5th Cir. 2008).

Where underlying judgments were procured by fraud, those claims remain viable estate property until

vacated. A trustee who refuses to pursue them breaches his fiduciary duty. Mosser v. Darrow, 341 U.S.

267, 271–73 (1951) (trustee personally liable for mismanagement of estate litigation); Commodity Futures

Trading Comm’n v. Weintraub, 471 U.S. 343, 352–53 (1985) (trustee controls litigation but must act as

fiduciary).

GlobalTranz Enterprises, LLC procured a judgment by fraud in Case No. DC 23-16350 and DC 23-18438

King of Freight, LLC procured a judgment by fraud in Case No. DC 23-18441 although it judicially

admitted all elements of breach of contract in Case No. DC 23-16349.

Nfusion Capital Finance procured judgments by fraud in Case No. D-1-GN-24-002529.

England Carrier Services, LLC procured judgments by fraud in Case No. 4:23-cv-00443

B. Texas Bill-of-Review Standards and Application to Fraudulent Judgments

Under Alexander v. Hagedorn, 226 S.W.2d 996 (Tex. 1950), a bill of review is proper when a judgment is

obtained through fraud, accident, or wrongful act that prevents a party from presenting a

meritorious claim. The petitioner must show:

1. a meritorious claim or defense;

2. prevention by the opposing party’s fraud or by official mistake; and

3. that failure to assert the right was unmixed with negligence. Id. at 998–1001.

Fraud on the court satisfies these elements, and when the judgment itself is void for lack of due process or

falsified evidence, the petitioner need not prove a meritorious defense. Caldwell v. Barnes, 154 S.W.3d 93,

96–98 (Tex. 2004); PNS Stores, Inc. v. Rivera, 379 S.W.3d 267, 271–76 (Tex. 2012). Valdez v.

Hollenbeck, 465 S.W.3d 217, 234–37 (Tex. 2015), reiterates that extrinsic fraud includes conduct

preventing a party from fully presenting its case—precisely what occurred when these defendants

submitted falsified pleadings and legal theories impossible under the U.C.C.

C. Prima Facie Burden and Fiduciary Overlay

Under Baker v. Goldsmith, 582 S.W.2d 404, 408–09 (Tex. 1979), the petitioner must establish a prima

facie case through verified pleadings and exhibits before trial. Because the Trustee stands in the debtor’s

shoes, he must prepare and file verified affidavits and documentary evidence proving the fraudulent acts

described above. Failure to do so would constitute both procedural default and fiduciary breach.

D. Fraud as “Cause” for Compelled Action or Abandonment

A trustee’s refusal to prosecute fraud-based claims is maladministration under § 704(a)(1). In re United

Operating, LLC, 540 F.3d 351, 355 (5th Cir. 2008). Where the trustee fails to act, the bankruptcy court

may compel prosecution or order abandonment. 11 U.S.C. § 554(b); Wieburg v. GTE Sw., Inc., 272 F.3d

302, 308 (5th Cir. 2001). Given the gravity of the litigation fraud, judicial compulsion is warranted.

E. Equitable Necessity

Bankruptcy courts, as courts of equity, must prevent injustice resulting from fraudulent judgments.

Pepper v. Litton, 308 U.S. 295, 304 (1939). If the trustee remains inert, equity demands that the debtor

be permitted to vindicate the estate’s rights. In re Xonics, Inc., 813 F.2d 127, 131 (7th Cir. 1987).

Compelling action within a defined period ensures the estate’s interests are preserved.

V. DOCUMENTARY PROOF THAT NFUSION REPUDIATED AND PLAINTIFF TERMINATED—the

APSA

A. The Contractual Baseline

The January 9 2023 Account Purchase and Security Agreement (“APSA”) between Jason Stanford

d/b/a Rollin’ Smoke at the Attaché and nFusion Capital Finance, LLC governs the parties’ factoring

relationship . Under §§ 4 and 11, nFusion agreed to purchase qualifying accounts, advance fuel funds, and

maintain the receivables facility; either party could terminate upon notice once obligations were satisfied.

These provisions establish a bilateral executory contract whose core is the continuing factoring and

advance-funding obligation.

B. The UCC Filings and Notice of Assignment

nFusion perfected its interest by filing a UCC-1 Financing Statement on January 9 2023 covering “all

accounts, contract rights, and general intangibles”. The same day, both parties executed a Master Notice

of Assignment authorizing nFusion to send assignment letters to Stanford’s customers. Paragraph final

of that Notice expressly limits revocation to a written instrument “by an authorized officer of nFusion

Capital Finance, LLC.”

C. Repudiation on July 14 2023

At 8:04 a.m. on July 14 2023, Shauna Brantley, an authorized nFusion representative, emailed the debtor

under the subject line “IMPORTANT NOTICE FROM nFUSION CAPITAL LLC – PLEASE READ.” The

message stated:

“nFusion Capital will no longer be the factoring company to service your account going forward.… We

have carefully chosen and selected England Carrier Services … for your continued factoring needs.”

This declaration is an unequivocal renunciation of future performance, amounting to anticipatory

repudiation. By unilaterally withdrawing and designating a third-party factor, nFusion breached §§ 4 and

11 of the APSA and rescinded the Master NOA within the meaning of its own revocation clause.

D. Plaintiff’s Immediate Rejection and Termination

On July 17 2023 at 8:17 a.m., Plaintiff replied:

“This does not work for me.… I expect to speak with someone today to effect a termination of our NOA so

that I can contract with a company that meets my needs.”

Later that morning, Plaintiff notified England Carrier Services directly:

“England doesn’t have the services I need. I need to terminate the contract so that I can find a company

that suits my needs.”

These contemporaneous communications prove that Plaintiff (1) refused any unauthorized substitution,

(2) treated nFusion’s notice as a total breach, and (3) elected termination pursuant to APSA § 11(b). Under

Texas law, an innocent party may treat a repudiation as final, discharge further duties, and terminate the

contract. Pollack v. Pollack, 39 S.W.2d 853, 857 (Tex. Comm’n App. 1931); Mustang Pipeline Co. v.

Driver Pipeline Co., 134 S.W.3d 195, 198 (Tex. 2004) (per curiam).

E. Legal Consequence: Contract Extinguished as of July 17 2023

Under Universal Life & Accident Ins. Co. v. Shaw, 163 S.W.2d 376 (Tex. 1942), a declared cessation of

performance in a continuing-service contract constitutes material repudiation. nFusion’s July 14 email

therefore terminated its right to enforce any security interest under U.C.C. § 9-203; once repudiated, the

collateral relationship ceased, and its UCC-1 filing became inoperative as to new receivables. Plaintiff’s

July 17 termination extinguished the contract in toto, leaving no viable assignment to England Carrier

Services. Because U.C.C. § 9-514 governs only amendment or termination filings, not substantive

assignment of a debtor’s obligations, any claim of transfer to England was void ab initio.

F. Summary

The combined record—Exhibits #1 through #5—chronologically demonstrates:

Date Document Legal Effect

Jan 9

APSA & UCC-1 filing Establish factoring relationship and perfection

2023

Jan 9 Limits revocation to written notice by nFusion

Master NOA

2023 officer

Jul 14 nFusion’s express repudiation and rescission of

Brantley Email

2023 NOA

Jul 17 Stanford Reply & Termination Plaintiff’s rejection and termination under §

2023 Emails 11(b)

These writings satisfy the standard for anticipatory repudiation under Texas contract law and

conclusively show that the APSA ended as of July 17 2023. Accordingly, all downstream claims or liens

asserted by nFusion or England Carrier Services lack legal foundation, and the Trustee must treat the

agreement as fully terminated.

VI. LEGAL CONSEQUENCES FOR DOWNSTREAM PARTIES: ENGLAND CARRIER SERVICES, KING

OF FREIGHT, AND GLOBALTRANZ ENTERPRISES

A. nFusion’s Repudiation Extinguished All Rights and Security Interests

Under Texas law and the Uniform Commercial Code, a security interest is effective only so long as

the underlying contract remains enforceable. See U.C.C. § 9-203(b)(1)–(2) (a security interest

attaches only if “the debtor has rights in the collateral” and “value has been given”). Once nFusion

unequivocally repudiated the APSA on July 14, 2023, it ceased providing value or performance and

thereby destroyed the contractual predicate for any continuing lien or assignment rights. Universal Life

& Accident Ins. Co. v. Shaw, 163 S.W.2d 376, 379 (Tex. 1942) (repudiation of material obligation excuses

further performance by non-breaching party).

nFusion’s “Important Notice” (Ex. #21) expressly announced that it would “no longer be the factoring

company to service your account going forward” and that England Carrier Services (“ECS”) would take

over. That statement operated as both anticipatory breach and internal rescission of the Master

Notice of Assignment, satisfying its own clause that revocation must be “in writing by an authorized

officer”.

Because nFusion’s authority to collect or assign receivables derived solely from the APSA and the January

9, 2023 UCC-1 filing, its July 14 repudiation rendered that security interest void under U.C.C. § 9-203(b)

(2) and (3). From that date forward, nFusion possessed no “rights in the collateral” and could convey

none. See First Nat’l Bank of Amarillo v. Southwestern Livestock, Inc., 616 S.W.2d 218, 222 (Tex. Civ.

App. 1981) (“One cannot assign that which he no longer owns.”).

B. England Carrier Services’ Purported “Assignment” Was Legally Impossible

Immediately after nFusion’s repudiation, ECS representatives attempted to justify their conduct by

claiming that nFusion’s UCC filing and APSA had been “assigned.” In reality, no such assignment ever

occurred.

1. Initial Confusion and Lack of Account Record.

On July 17, 2023, ECS employee Paola Bravo responded to Plaintiff’s inquiry stating, “I am sorry

but I am not following you.… Can you please tell me the name of your company and what can I do

to assist?”. Minutes later she added, “I do not have any records of your account in my system.”

These emails show that, as of the date of alleged transfer, England had no existing record or

control over Plaintiff’s account—conclusive evidence that no valid assignment had occurred

under U.C.C. § 9-203(b)(2).

2. Subsequent Fabrication of “Assignment” Claim.

Over a week later, ECS Vice-President Eric Myers asserted:

“We can certainly honor and service the agreement you signed with nFusion.… If you would like to be

released from the agreement, we would need to be paid off.” “Your account was purchased by ECS on

7/14/2023.… That UCC filing has been assigned to ECS.”

This statement is knowingly false. Under U.C.C. § 9-514, the only operative effect of an “assignment” of

a financing statement is the filing of an amendment with the Secretary of State identifying the assignee.

No such amendment exists. Even if filed, § 9-514 does not transfer the underlying contract rights;

it merely changes the name of the secured party of record. The absence of both consideration and mutual

assent—combined with nFusion’s prior repudiation—makes any purported “purchase” legally void. See

Seagull Energy E&P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 346 (Tex. 2006) (assignment requiring

personal credit or trust cannot be transferred without consent).

3. ECS Counsel’s Post-Hoc Ratification Attempt.

On August 8, 2023, ECS attorney Justin Olsen repeated the falsehood that “ECS acquired

nFusion’s rights in the Account Purchase and Security Agreement” and demanded payment of a

$5,000 termination fee. This admission confirms scienter: Olsen acknowledged that Plaintiff had

already elected termination and yet sought to enforce a contract his client did not own. Such

conduct constitutes fraud upon the court and tortious interference with contract under In re

FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001).

C. Downstream Entities Could Acquire No Greater Rights

Even assuming arguendo that England possessed any residual interest—which it did not—its purported

rights could not extend to third-party brokers such as King of Freight, LLC and GlobalTranz

Enterprises, LLC. Under the nemo-dat rule, an assignee acquires no greater title than its assignor. See

Restatement (Second) of Contracts § 336(1). Because nFusion had already forfeited its interest, England’s

and its clients’ later assertions of lien or payment direction were void ab initio. The subsequent filings and

correspondence from those brokers relying on England’s claimed “assignment” therefore amount to

independent fraudulent misrepresentations designed to obstruct Plaintiff’s receipt of freight proceeds.

D. Fraudulent Knowledge and Intent

The sequence of communications—Bravo’s initial denial of any record, Myers’s later contradiction, and

Olsen’s legal threat—demonstrates knowing falsity. England’s agents were contemporaneously aware that:

1. No amendment under U.C.C. § 9-514 had been filed;

2. The debtor had expressly terminated the APSA on July 17 2023; and

3. nFusion’s July 14 email severed its contractual relationship.

Nevertheless, they misrepresented ownership of the APSA to gain leverage over Plaintiff’s accounts and to

obstruct his new financing with Gulf Coast Bank & Trust. This conduct satisfies the elements of common-

law fraud and extrinsic fraud under Valdez v. Hollenbeck, 465 S.W.3d 217, 234–37 (Tex. 2015).

E. Legal Effect: All Subsequent Claims Void ab Initio

Under U.C.C. § 9-203 and § 9-514, a security interest requires both an enforceable contract and value.

Once nFusion repudiated and Plaintiff terminated, those prerequisites vanished. Any later claim by

England, King of Freight, or GlobalTranz to payment, lien, or priority status lacked legal foundation and is

void as a matter of law. See Mayo v. Bank of Am., No. 05-15-00537-CV, 2016 WL 4040390, at *3 (Tex.

App.—Dallas July 26, 2016, no pet.) (mem. op.) (security interest cannot exist absent debtor’s rights in

collateral).

Therefore, all downstream assertions—whether styled as “assignment,” “purchase,” or “successor

factoring agreement”—are nullities. The APSA ceased to exist as a viable instrument on July 17 2023,

and any later enforcement or reliance upon it constitutes actionable fraud upon the court and upon the

bankruptcy estate.

VII. ENGLAND CARRIER SERVICES LACKED ANY RIGHT TO DEMAND A BUYOUT

After nFusion’s July 14 2023 repudiation, ECS attempted to coerce Plaintiff into paying a fictitious

“buyout” to release collateral that no longer existed. On August 8 2023, ECS attorney Justin Olsen

sent a letter asserting that ECS had “acquired nFusion’s rights in the Account Purchase and Security

Agreement … [and] is willing to enter into the Buyout Agreement with you and Gulf Coast Bank”,

conditioning any release of liens or UCC filings on payment of $8,615.00. Olsen admitted ECS was “not

obligated to enter into a buyout,” yet simultaneously threatened to enforce a termination fee unless

Plaintiff signed the fabricated “Buyout Agreement and Release” (Ex. #40).

This demand was legally baseless. Because nFusion’s July 14 notice extinguished the APSA, ECS could not

acquire any enforceable rights or security interests under U.C.C. § 9-203(b). Nor could it demand

payment as a condition precedent to releasing the already-void UCC-1 filing; a perfected lien ceases

automatically when the underlying obligation is discharged or repudiated. See In re Southmark Corp., 49

F.3d 1111, 1117 (5th Cir. 1995) (once debt extinguished, lien rights vanish). Any purported “buyout” would

therefore constitute extortion under color of a false lien, violating Tex. Civ. Prac. & Rem. Code §

12.002(a)(1).

ECS’s insistence that Plaintiff owed a $5,000 “termination fee” also contradicts § 11(b) of the APSA, which

allows the client to terminate after notice once accounts are paid. No provision authorizes an additional

fee absent continuing factoring services. By misrepresenting its legal status and conditioning release of an

invalid lien on payment, ECS committed tortious interference with contract and fraudulent

inducement. See Browning-Ferris, Inc. v. Reynolds, 781 S.W.2d 322, 324 (Tex. App. 1989).

VIII. ENGLAND HAD NO RIGHT TO IMPEDE PLAINTIFF’S NEW FINANCING WITH GULF COAST

BANK & TRUST

Immediately after terminating nFusion, Plaintiff began negotiations with Gulf Coast Bank & Trust

Company to secure a replacement factoring line. On July 17 2023, Gulf Coast Vice President Katie

German confirmed the availability of fuel advances and invited Plaintiff to proceed. By July 24, German

reported that her underwriter was “following up with England on the buyout” because ECS was refusing

to provide a lien release, thereby blocking Gulf Coast from extending credit. Plaintiff explained that

ECS was “not setting anything up” and that his company was stranded without cash flow, fuel, or

operational funding.

This obstruction directly prevented execution of the Gulf Coast factoring application, later completed

via DocuSign (Ex. #22; Apr. 12 2024). Under Texas law, a third party who intentionally interferes

with a prospective business relationship through independently wrongful acts is liable in

tort. Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2001). ECS’s insistence on a nonexistent

“buyout” and its refusal to release the UCC filing constitute independently wrongful acts because they

relied on a fictitious security interest voided by nFusion’s repudiation.

Moreover, the duty to mitigate damages following nFusion’s breach lay with Plaintiff, not with ECS. See

Great Am. Ins. Co. v. North Austin MUD No. 1, 908 S.W.2d 415, 426 (Tex. 1995) (party must take

reasonable steps to minimize loss after breach). By obstructing Plaintiff’s mitigation efforts and

threatening Gulf Coast with false lien claims, ECS exacerbated the damages to Rollin’ Smoke at the

Attaché, effectively destroying its working-capital stream. Such conduct violates Restatement (Second) of

Torts § 767 (c) (interference through “wrongful means”).

D. Summary of Legal Effect

Date Actor Document / Event Legal Effect

Jul 14 Express repudiation; termination of

nFusion “Important Notice” email

2023 APSA

Jul 17 Termination notices to Lawful termination; discharge of

Plaintiff

2023 nFusion & ECS obligations

Jul 17–24

Gulf Coast Bank Factoring negotiations Establishes mitigation efforts

2023

Jul 24 Wrongful interference with prospective

ECS Refusal to release lien

2023 financing

Aug 8 Justin Olsen Extortionate claim; fraudulent

$8,615 buyout demand

2023 (ECS counsel) assertion of security interest

E. Conclusion of Section VIII

Because nFusion’s repudiation eliminated the contractual and legal foundation for any lien, ECS’s

subsequent conduct—demanding a buyout and blocking Plaintiff’s Gulf Coast financing—

was ultra vires, fraudulent, and tortiously obstructive. ECS’s actions compounded nFusion’s

breach, deprived the estate of mitigation opportunities, and inflicted operational insolvency on the

debtor’s business. Consequently, all ECS claims of assignment, security interest, or right to compensation

are void ab initio, and any judgments predicated on those assertions constitute fraud upon the

courtwarranting vacatur through the Trustee’s compelled bill of review.

IX. AS A MATTER OF LAW: ABSENCE OF FACTORING PURCHASE MEANS NO SECURITY INTEREST

AND NO ASSIGNMENT

A. Governing Law—U.C.C. § 9.203 and APSA § 4

Under the Uniform Commercial Code, a security interest does not attach—and therefore cannot be

enforced or assigned—unless all three statutory prerequisites are satisfied:

1. Value has been given;

2. The debtor has rights in the collateral; and

3. The debtor has authenticated a security agreement describing the collateral.

U.C.C. § 9-203(b)(1)–(3); Tex. Bus. & Com. Code § 9.203(b)(1)–(3).

Attachment requires both an enforceable obligation and existing collateral rights. Without these, a

financing statement or contract clause alone creates no lien or ownership. See In re Bollinger Corp., 614

F.2d 924, 928 (3d Cir. 1980); Mayo v. Bank of Am., No. 05-15-00537-CV, 2016 WL 4040390, at *3 (Tex.

App.—Dallas July 26 2016, no pet.) (mem. op.) (“Perfection is meaningless without attachment.”).

The controlling contract mirrors this statutory scheme. Section 4 of the Account Purchase and

Security Agreement(executed Jan. 9 2023) provides, verbatim:

4. SECURITY INTEREST IN COLLATERAL, SALE/ASSIGNMENT, & NOTIFICATION. As a

further inducement for NFUSION to enter into this Agreement, CLIENT gives to NFUSION a security

interest in the following described property as collateral for the repayment of any and all obligations and

liabilities whatsoever of CLIENT to NFUSION under the Uniform Commercial Code in the following

described property, hereinafter collectively called “Collateral”: All presently existing or hereafter arising,

now owned or hereafter acquired accounts, accounts receivable, deposit accounts, contract rights, chattel

paper, electronic chattel paper, commercial tort claims, documents, instruments, reserves, reserve

accounts, rebates, and general intangibles, equipment, and all books and records pertaining to the

foregoing and all proceeds of the foregoing.

(a) APPROVAL: CLIENT shall from time to time sell, transfer …

(f) SOLE PROPERTY: Once NFUSION has purchased an Account, the Account is the sole and exclusive

property of NFUSION. CLIENT shall make proper entries on its books and records disclosing the absolute

sale of the Account to NFUSION. (Emphasis added.)

By its own text, NFusion’s ownership interest arises only upon the actual purchase of an

Account. Until that event, NFusion holds nothing more than an expectancy—a contingent right to decide

whether to purchase. Because § 4(f) limits ownership to “once NFusion has purchased,” invoices that were

never purchased remain the debtor’s property, free of lien or assignment.

B. Application to the Evidentiary Record

NFusion never purchased or advanced funds against the following invoices:

Bill of Lading Transaction

Broker / Customer Status

No. Date

GlobalTranz Enterprises, Not factored—no purchase or

27264720 July 14 2023

LLC advance

Dunamis LLC 13299734 July 2023 Not factored—no purchase

Trident Transport 538583 July 2023 Not factored—no purchase

Priority 1, Inc. 6010xxxxx July 2023 Not factored—no purchase

King of Freight, LLC 2179348 July 2023 Not factored—no purchase

NFusion’s own correspondence and payment history confirm that no advances, wire transfers, or

purchase confirmations were issued for these bills of lading during July 2023. Consequently:

1. No “value” was given under U.C.C. § 9-203(b)(1);

2. NFusion held no rights in the collateral, because the invoices remained payable directly to

the carrier (Plaintiff); and

3. The security agreement’s conditional language (“Once NFusion has purchased …”) was

never triggered.

Under these circumstances, no security interest attached. Without attachment, there can be neither

perfection, assignment, nor sale. See In re Woodson Co., 813 F.2d 266, 272 (9th Cir. 1987) (security

interest unenforceable absent attachment elements).

C. Legal Consequence—Assignments Void ab Initio

Because NFusion never purchased the above invoices, it possessed no collateral rights capable of

assignment to England Carrier Services or any successor. Tex. Bus. & Com. Code § 9.203(b)(2);

First Nat’l Bank of Amarillo v. Southwestern Livestock, Inc., 616 S.W.2d 218, 222 (Tex. Civ. App. 1981)

(“One cannot assign that which he no longer owns.”).

Section 4(f) of the APSA is dispositive: ownership vests only upon purchase. Absent purchase, the invoices

remained the Plaintiff’s sole property.

Therefore:

• GlobalTranz Enterprises, LLC BOL # 27264720,

• Dunamis LLC BOL # 13299734,

• Trident Transport BOL # 0538583,

• Priority 1, Inc. BOL # 6010…, and

• King of Freight LLC BOL # 2179348

could never have been assigned or encumbered by NFusion or England, because they were never

purchased and thus never became part of the factoring collateral pool. Any UCC-1 filings or “buyout”

demands referencing those invoices are legally nullities. See In re Southmark Corp., 49 F.3d 1111, 1117

(5th Cir. 1995) (lien rights terminate with extinguishment of underlying debt).

D. Summary

As a matter of law:

1. NFusion’s security interest attached only to purchased accounts.

2. No purchase occurred for the enumerated bills of lading.

3. Therefore no security interest or right of assignment ever arose.

4. Consequently, England Carrier Services’ and its agents’ claims of ownership, “buyout” authority,

or lien enforcement were knowingly false and void ab initio.

X. THERE IS NO DISPUTE THAT NFUSION REFUSED TO PURCHASE OR FUEL-ADVANCE THE

GLOBALTRANZ, TRIDENT, AND PRIORITY 1 LOADS ON JULY 14 2023

A. Undisputed Written Record

The documentary record conclusively shows that on July 14 2023, nFusion Capital Finance, LLC expressly

refused to fund or purchase three pending freight invoices—GlobalTranz Enterprises, LLC (BOL

#27264720), Trident Transport LLC (BOL #0538583), and Priority 1 Inc. (BOL #6010…)—thereby halting

all performance under the Account Purchase and Security Agreement (“APSA”).

At 1:02 p.m. CT, Plaintiff sent nFusion a request titled “3 advances” with copies of each rate

confirmation, bill of lading, and proof-of-delivery, writing:

“So I’m not stuck out over the weekend.”

Forty-nine minutes later, nFusion representative Shauna Brantley replied at 1:51 p.m. CT:

“We were made aware that England does not do fuel advances and we are not able to process any more

transactions for funding on the nFusion side. I am terribly sorry.”

That email is an express written refusal to purchase or advance funds for the very loads

submitted. It terminates nFusion’s contractual duty to factor or provide credit accommodation and

demonstrates absolute repudiation of the APSA as to all pending receivables.

B. Legal Effect of the Refusal

1. Refusal to Purchase Equals Anticipatory Breach.

Under Texas law, a statement that a party “is not able to process any more transactions for

funding” constitutes a clear, positive, and unconditional refusal to perform—an anticipatory

breach as a matter of law. Pollack v. Pollack, 39 S.W.2d 853, 857 (Tex. Comm’n App. 1931,

holding approved); Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 198 (Tex. 2004)

(per curiam).

2. Failure to Purchase Terminates Any Security Interest.

Because nFusion gave no value for the GlobalTranz, Trident, or Priority 1 accounts, no security

interest could attach under U.C.C. § 9-203(b)(1). Without attachment, there is no enforceable

collateral right, and any later assertion of lien or assignment is void. See Mayo v. Bank of Am., No.

05-15-00537-CV, 2016 WL 4040390, at *3 (Tex. App.—Dallas July 26 2016, no pet.) (mem. op.).

3. Refusal to Fuel-Advance Breaches Material Term.

Section 5(e) of the APSA obligated nFusion to provide fuel advances up to 40 percent of load value

once an account was approved. By declining to process any fuel advances, nFusion breached that

essential financing covenant, rendering further performance impossible. See Clear Creek Basin

Auth. v. City of Houston, 589 S.W.2d 671, 678 (Tex. 1979) (material breach occurs when one party

prevents the other’s performance).

C. Conclusive Nature of the Evidence

The contemporaneous email exchange leaves no factual ambiguity:

Date Sender Recipient Content Summary Legal Effect

Jul 14 Jason nFusion Request for fuel advances for Triggers nFusion’s

2023 Stanford Fuel GlobalTranz, Trident, and Priority 1 duty to perform

1Ju:0l 21 4 Shauna AJadsvoann ces l“oWades are not able to process any more Express refusal =

2023 Brantley Stanford transactions for funding on the anticipatory

1:51 (nFusion) nFusion side.” repudiation & breach

Because these communications are undisputed, summary adjudication is appropriate. No reasonable trier

of fact could find that nFusion intended to continue performance after expressly disclaiming the ability to

fund.

D. Consequences for Downstream Claims

The refusal to fund these three accounts—together with the contemporaneous July 14 email transferring

clients to England Carrier Services—extinguished all of nFusion’s rights in those invoices. See U.C.C. §

9-203(b)(2); First Nat’l Bank of Amarillo v. Southwestern Livestock, Inc., 616 S.W.2d 218, 222 (Tex. Civ.

App. 1981). Therefore, any later assertion by England, King of Freight, or GlobalTranz that those invoices

were “assigned” or “factored” is legally impossible and constitutes fraud upon the court.

E. Summary

As of 1:51 p.m. on July 14 2023, nFusion (1) refused to purchase or advance on the GlobalTranz,

Trident, and Priority 1 invoices, (2) thereby breached and repudiated the APSA, and (3) extinguished all

purported security interests and assignment rights in those accounts. These undisputed facts establish

nFusion’s default and provide the foundation for the bill of review and for vacating any judgments that

relied on the false premise of a continuing nFusion-England factoring relationship.

XI. KING OF FREIGHT, LLC BILL OF LADING #2179348 WAS EXECUTED AFTER NFUSION’S

REPUDIATION—RENDERING ENGLAND CARRIER SERVICES’ SECURITY CLAIM AND PAYMENT

DEMAND FALSE AS A MATTER OF LAW

A. The King of Freight Load Arose After the Contract Was Already Terminated

The record conclusively establishes that the King of Freight, LLC shipment in question (BOL

#2179348) was initiated and executed on July 21, 2023—a full week after nFusion Capital Finance,

LLC repudiated and ceased all performance under the APSA on July 14, 2023.

The official King of Freight Rate Confirmation, dated July 21, 2023, identifies Rollin’ Smoke at the

Attaché (MC #1476454) as the carrier, for shipment of “1 piece of tubing, 410 lbs” from Eupora,

Mississippi to Humble, Texas, for a total rate of $550.00, payable 30 days after receipt of proof of

delivery.

The document further designates nFusion Capital, LLC—not England Carrier Services—as the payee at

the time of issuance, and it reflects a pick date of July 21, 2023 and a delivery date of July 24,

2023.

Thus, the entire transaction arose after the July 14 repudiation. By that date, nFusion had already sent

written notice that it “will no longer be the factoring company to service your account going forward” and

that it had “selected England Carrier Services for your continued factoring needs”. As shown in Section X,

Plaintiff formally terminated the APSA and any related NOA on July 17, 2023.

Accordingly, no live factoring agreement existed on July 21, 2023, and nFusion possessed no

enforceable security interest or right of assignment under U.C.C. § 9-203(b). The King of Freight rate

confirmation therefore created a new, independent receivable owned solely by Plaintiff.

B. England Carrier Services’ Subsequent “Assignment” Claim Was Factually Impossible and Legally Void

Despite these undisputed facts, England Carrier Services (“ECS”) and its counsel knowingly asserted in

multiple communications and pleadings that ECS “held a security interest” in, or had “purchased,” the

King of Freight invoice. That representation is both factually false and legally impossible.

1. No Prior Purchase or Value.

As established in Section IX, a security interest cannot attach absent (1) value, (2) rights in the

collateral, and (3) an enforceable security agreement. U.C.C. § 9-203(b)(1)–(3). By July 21,

nFusion had withdrawn from performance and given no value. Therefore, ECS could not acquire

any enforceable lien or assignment rights from a repudiated contract.

2. No Temporal Connection.

Because the King of Freight load did not exist until July 21, ECS’s claim to it is chronologically

impossible. An assignee cannot retroactively acquire rights in an asset that did not exist at the

time of assignment. See First Nat’l Bank of Amarillo v. Southwestern Livestock, Inc., 616 S.W.2d

218, 222 (Tex. Civ. App. 1981) (“Assignment must identify existing rights; nonexistent property

cannot be conveyed.”).

3. No Supporting UCC Amendment or Filing.

No amendment under U.C.C. § 9-514 was filed transferring nFusion’s January 9, 2023 UCC-1 to

ECS, and none could have cured the lack of attachment. See Mayo v. Bank of Am., No.

05-15-00537-CV, 2016 WL 4040390, at *3 (Tex. App.—Dallas July 26, 2016, no pet.) (“Without

attachment, perfection by filing is meaningless.”).

C. England’s False Claim to the $550 Payment Constituted Civil Conversion

On or about October 2023, King of Freight remitted the $550 freight payment to England Carrier

Services instead of to the carrier. Because ECS had no lawful interest in that receivable, its acceptance of

those funds constituted conversion—the unauthorized assumption and exercise of dominion or control

over another’s property, inconsistent with the owner’s rights. Waisath v. Lack’s Stores, Inc., 474 S.W.2d

444, 447 (Tex. 1971).

Conversion requires only (1) Plaintiff’s ownership or right to possession, (2) Defendant’s unlawful

dominion, and (3) resulting damages. Each element is satisfied here:

1. Ownership: Plaintiff was the carrier of record and never sold or assigned the invoice.

2. Unlawful Dominion: ECS directed payment to itself by falsely representing a nonexistent lien

and assignment.

3. Damages: Plaintiff lost the $550 freight charge and was deprived of operational liquidity.

Furthermore, the misrepresentation of lien ownership was not a mistake—it was intentional and

knowing. ECS’s counsel, Justin Olsen, demanded a “buyout” in August 2023 (Ex. #40) while aware

that the King of Freight load was dated a week after the contract’s termination. This conduct satisfies

scienter for both conversion and fraud under Trenholm v. Ratcliff, 646 S.W.2d 927, 930 (Tex. 1983).

D. Judicial Consequence—Fraud Upon the Court and Mandatory Vacatur

Because ECS’s claim to the King of Freight receivable was factually impossible and legally void, any

judicial filings, pleadings, or arguments asserting that England held a valid security interest in that

invoice constitute fraud upon the court. Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238,

246 (1944) (fraud upon the court occurs when a party “sentiently sets in motion some unconscionable

scheme” to mislead the tribunal). The falsity of England’s claims can be proved directly from the face of

the July 21 rate confirmation and the July 14 repudiation email.

Because conversion and fraud on the court vitiate all resulting orders, see Browning v. Prostok, 165

S.W.3d 336, 347 (Tex. 2005), any judgment or claim by England predicated upon ownership of BOL

#2179348 is void ab initio and must be vacated through the Trustee’s bill of review.

XII. ENGLAND CARRIER SERVICES, LLC DEFRAUDED KING OF FREIGHT, LLC BY KNOWINGLY

MISREPRESENTING ITS ENTITLEMENT TO THE $550 PAYMENT

A. England’s Knowledge of Lack of Entitlement

By July 21, 2023, when King of Freight Load #2179348 was executed, England Carrier Services, LLC

(“ECS”) had actual knowledge that nFusion Capital Finance, LLC (“nFusion”) had repudiated the

Account Purchase and Security Agreement (“APSA”) a week earlier and that Plaintiff had lawfully

terminated all factoring relationships. ECS’s counsel, Justin Olsen, acknowledged as much in his

August 8, 2023 “buyout” letter, wherein he admitted that ECS had “acquired nFusion’s rights” and

was “not obligated to enter into a buyout” but nevertheless demanded $8,615 for a release.

ECS thus knew that (1) nFusion no longer had enforceable rights to any post–July 14 receivables, and (2)

any purported “assignment” of such rights was void under U.C.C. § 9-203(b). Despite that knowledge,

ECS falsely represented to King of Freight, LLC (“KOF”) that it was the lawful factor entitled to collect

payment for Load #2179348. KOF, relying on those misrepresentations, remitted the $550 freight

payment to ECS, believing it was complying with a valid Notice of Assignment.

B. Legal Analysis—Fraud and Conversion as a Matter of Law

1. Fraudulent Misrepresentation.

A party commits fraud when it (1) makes a material misrepresentation, (2) knowing it is false or

with reckless disregard for the truth, (3) intending that another rely upon it, and (4) causing injury

by that reliance. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337

(Tex. 2011).

All four elements are satisfied:

◦ Material Misrepresentation: ECS claimed ownership of a $550 invoice that arose

after nFusion’s repudiation.

◦ Knowledge of Falsity: ECS knew it held no assignment under U.C.C. § 9-203(b)(1)–(3).

◦ Intent to Induce Reliance: ECS’s correspondence to KOF and its August 8 “buyout”

demand were designed to induce compliance and payment.

◦ Reliance and Injury: KOF relied by sending the $550 payment to ECS, and Plaintiff

was deprived of those funds.

2. Civil Conversion.

By accepting and retaining the $550 payment, ECS exercised wrongful dominion over property

belonging to Plaintiff. The elements of conversion—(1) ownership by Plaintiff, (2) wrongful control

by Defendant, and (3) resulting injury—are all present. Waisath v. Lack’s Stores, Inc., 474 S.W.2d

444, 447 (Tex. 1971). The rate confirmation shows that the $550 freight charge belonged solely to

Plaintiff; ECS’s self-directed collection was unauthorized and constitutes conversion.

3. Unjust Enrichment.

Texas law prohibits a party from retaining benefits to which it has no legal or equitable claim.

Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992). ECS unjustly

enriched itself by taking funds rightfully due to Plaintiff through deception and misuse of

factoring documentation.

C. Fraud upon Both Parties and the Tribunal

ECS’s deceit was twofold: it defrauded King of Freight by inducing payment under false pretenses, and

it defrauded Plaintiff by converting proceeds of his labor and filing pleadings asserting fictitious lien

rights. ECS then compounded the fraud by filing in court, through counsel Lauren Nelson,

representations that it had “purchased” or “been assigned” the APSA—statements contradicted by the

record and by the date of the King of Freight contract itself.

Such conduct constitutes fraud upon the court, as defined in Hazel-Atlas Glass Co. v. Hartford-

Empire Co., 322 U.S. 238, 246 (1944): a party “sentiently set in motion some unconscionable scheme” to

deceive both an adversary and the tribunal. Fraud on the court vitiates all related orders. See Browning v.

Prostok, 165 S.W.3d 336, 347 (Tex. 2005).

D. Consequences for the Estate and Trustee’s Duty

Because the fraudulent $550 collection by ECS is traceable, identifiable, and supported by primary

documentary evidence, it remains property of the estate under 11 U.S.C. § 541(a)(1). The Trustee

therefore has a statutory and fiduciary duty under 11 U.S.C. §§ 323(a), 704(a)(1)–(2) to pursue recovery of

that converted property through turnover or bill of review proceedings. See In re Marvel Ent. Grp., 140

F.3d 463, 474 (3d Cir. 1998) (trustee must act to recover and preserve estate assets).

Failure to prosecute such recovery would constitute abandonment of an asset and a breach of fiduciary

duty under Mosser v. Darrow, 341 U.S. 267, 272 (1951).

E. Summary

Fact Legal Effect

ECS knew APSA terminated July 14 2023 Knowledge of falsity

ECS claimed ownership of July 21 King of Freight

Material misrepresentation

invoice

KOF paid ECS $550 in reliance Reliance and injury

Conversion and unjust

ECS retained payment

enrichment

ECS filed pleadings asserting ownership Fraud upon the court

Accordingly, the Court should declare that ECS’s $550 collection constitutes fraud, conversion,

and unjust enrichment, and order the Chapter 7 Trustee to include these acts as core claims

in the mandatory bill of review, seeking recovery of the funds and vacatur of all judgments tainted by

England’s fraudulent representations.

XIII. THE COMBINED BREACHES AND TORTIOUS INTERFERENCES OF NFUSION, GLOBALTRANZ,

KING OF FREIGHT, AND ENGLAND CARRIER SERVICES DESTROYED ROLLIN’ SMOKE AT THE

ATTACHÉ—AND DAMAGES ARE GOVERNED BY TEXAS’S ONE SATISFACTION RULE

A. The Interconnected Chain of Breach and Interference

The evidence across Exhibits #17 through #40 demonstrates a continuous and interrelated sequence of

contractual and tortious violations, each of which compounded the prior to culminate in the total collapse

of Plaintiff’s federally authorized motor carrier business, Rollin’ Smoke at the Attaché (MC #1476454).

1. nFusion Capital Finance, LLC – Breach and Repudiation (July 14, 2023).

nFusion’s refusal to purchase or fuel-advance the GlobalTranz Enterprises, LLC load

(#27264720) and others on July 14, 2023, constituted an anticipatory breach of the Account

Purchase and Security Agreement (“APSA”) and a repudiation of all factoring obligations. See

Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 198 (Tex. 2004) (per curiam). This

breach immediately deprived Plaintiff of operating capital, rendering him unable to fuel, deliver,

or invoice new loads.

2. GlobalTranz Enterprises, LLC – Breach of Contract (July 14, 2023).

Upon receiving notice of the dispute between nFusion and Plaintiff, GlobalTranz unilaterally

withheld payment for Load #27264720, despite full performance and delivery. Its refusal to pay

the carrier directly, and subsequent delay of over 90 days, violated the July 13, 2023 broker–

carrier agreement. See Browne v. King, 111 S.W.3d 660, 667 (Tex. App.—Houston [1st Dist.]

2003) (failure to pay for performed services constitutes breach).

3. King of Freight, LLC – Breach of Contract (July 21, 2023).

King of Freight executed a new rate confirmation (BOL #2179348) one week after nFusion’s

repudiation, expressly contracting with Plaintiff for a $550 load. Despite full delivery on July 24,

King of Freight misdirected payment to England Carrier Services, knowing Plaintiff—not ECS—

was the carrier of record. This diversion constitutes breach of contract and conversion.

4. England Carrier Services, LLC – Tortious Interference and Fraudulent Inducement.

England, fully aware that nFusion had repudiated the APSA, induced King of Freight to

breach by falsely claiming that it, not Plaintiff, held the right to collect payment. England’s

misrepresentation that it “acquired” nFusion’s factoring rights was factually impossible under

U.C.C. § 9-203(b) and contractually false under APSA § 4(f). Such conduct meets the elements of

tortious interference:

(1) the existence of a contract,

(2) willful and intentional interference,

(3) proximate causation, and

(4) actual damage. Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2001).

5. England Carrier Services, LLC – Tortious Interference with Economic Opportunity.

Simultaneously, England obstructed Plaintiff’s new financing relationship with Gulf Coast Bank

& Trust Company by refusing to release an invalid lien and conditioning release on payment of

a fictitious “buyout.” This deliberate interference deprived Plaintiff of working capital, prevented

mitigation of damages, and extinguished his only means of continuing operation. See Wal-Mart

Stores, Inc., 52 S.W.3d at 726 (interference with prospective relations actionable when

independently wrongful).

B. Combined Effect—Total Destruction of the Business

Each actor’s misconduct directly flowed from and reinforced the other’s. nFusion’s breach triggered a

liquidity crisis; GlobalTranz and King of Freight’s nonpayments deprived Plaintiff of cash flow; England’s

fraudulent assertions prevented refinancing. Within two weeks, Plaintiff’s equipment, drivers, and

contracts collapsed under fuel shortages and unpaid invoices.

This chain of causation satisfies the “but for” test for concurrent liability: but for the combined breaches

and interferences, Rollin’ Smoke at the Attaché would have continued profitable operations under its

FMCSA authority. See Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819, 827 (Tex. 1997) (concurrent

wrongful acts producing a single injury create joint and several liability).

C. Damages Governed by Texas’s One Satisfaction Rule

Under the Texas One Satisfaction Rule, a plaintiff is entitled to only one recovery for a single injury,

even if multiple defendants committed different acts producing that injury. Sky View at Las Palmas, LLC

v. Mendez, 555 S.W.3d 101, 107 (Tex. 2018); Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 7 (Tex.

1991).

The rule applies “when multiple theories of liability arise from a single, indivisible injury.” El Paso Nat.

Gas Co. v. Minco Oil & Gas, Inc., 8 S.W.3d 309, 310 (Tex. 1999).

Here, the indivisible injury is the complete destruction of Rollin’ Smoke at the Attaché, including:

1. loss of all active brokerage and carrier contracts,

2. loss of MC authority revenue stream,

3. loss of creditworthiness and fuel-line access,

4. repossession of equipment, and

5. forced bankruptcy filing.

Although each defendant’s misconduct arose from distinct transactions (factoring, brokerage, payment

diversion, interference), they jointly culminated in a single business death. Therefore, damages must be

measured as one aggregate loss—the enterprise value and net income of Rollin’ Smoke—subject to one

satisfaction.

See Sky View, 555 S.W.3d at 107 (“A plaintiff is entitled to one recovery for a single injury, even if based

on multiple theories of liability.”); Stewart Title, 822 S.W.2d at 7 (“When defendants’ acts result in one

injury, there can be but one recovery.”).

D. Judicial Consequence—Mandatory Recognition of the Unified Injury

Because the injury is unitary, the Trustee’s bill of review must treat all state-level judgments and claims

involving nFusion, England, GlobalTranz, and King of Freight as facets of one cause of action—breach,

interference, and fraud culminating in a single, unrecoverable loss. The bankruptcy court, sitting in

equity, must ensure that recovery proceeds under one satisfaction to the estate and is not fragmented or

diluted among separate cases.

See Tex. Civ. Prac. & Rem. Code § 31.004(a) (judgment satisfaction extinguishes claim to further recovery

for the same injury); Dresser Indus., Inc. v. Lee, 880 S.W.2d 750, 754 (Tex. 1993) (rule applies “whenever

multiple theories or defendants seek redress for one wrong”).

E. Summary

Defendant Wrongful Act Legal Theory Causal Role

nFusion

Refused to fund or Triggered collapse of

Capital Breach/Repudiation

purchase invoices factoring relationship

Finance

GlobalTranz Withheld payment for Denied cash flow,

Breach of Contract

Enterprises completed load compounded insolvency

King of Paid England instead Breach of Contract / Diverted funds, deprived

Freight of carrier Conversion liquidity

England Fraudulent lien

Blocked refinancing,

Carrier assertion & Tortious Interference / Fraud

induced breach

Services interference

England

Obstructed Gulf Coast Tortious Interference with Prevented mitigation of

Carrier

Bank factoring Economic Opportunity damages

Services

Collectively, these acts destroyed Plaintiff’s trucking business, creating a single, indivisible injury for

which the estate is entitled to one complete satisfaction under Texas law.

XIV. DAMAGES CLASSIFICATION AND LIMITATIONS BY CLAIM CATEGORY

Texas law and federal common law distinguish between compensatory, consequential, exemplary, and

statutory-enhanced damages depending on the theory of liability. Each claim raised in this record—

breach, interference, fraud, and conversion—carries a distinct remedial framework, governed by Tex. Civ.

Prac. & Rem. Code ch. 41 and by specialized statutes such as the Texas Deceptive Trade Practices Act

(“DTPA”) and 18 U.S.C. § 1964(c) (RICO).

A. Breach of Contract — Compensatory and Consequential Damages Only

1. Available Damages.

Texas permits recovery of:

◦ Direct or general damages—the value of the promised performance.

See Mead v. Johnson Group, Inc., 615 S.W.2d 685, 687 (Tex. 1981).

◦ Consequential damages—losses naturally foreseeable from the breach, such as lost

profits or equipment repossession, if proved with reasonable certainty.

Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 816 (Tex. 1997).

2. Unavailable Damages.

Punitive or exemplary damages are not recoverable for breach of contract absent an

independent tort.

Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex. 1986).

Emotional distress and punitive awards are barred under Tex. Civ. Prac. & Rem. Code §

41.004(a).

3. Caps.

No statutory cap applies to pure contract damages, but foreseeability and mitigation limit the

measure.

B. Tortious Interference with Contract or Economic Relations — Compensatory and Exemplary Damages

1. Compensatory.

The plaintiff may recover both direct losses (lost payments) and consequential losses (lost future

business) caused by the interference.

See Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2001).

2. Exemplary (Punitive).

Because interference is an intentional tort, exemplary damages are available upon proof of malice,

fraud, or gross negligence.

Tex. Civ. Prac. & Rem. Code § 41.003(a)(2)–(3); Sturges, 52 S.W.3d at 726.

3. Caps.

Chapter 41 limits exemplary damages to the greater of:

◦ (a) two times the amount of economic damages + up to $750,000 for noneconomic

damages, or

◦ (b) $200,000.

Tex. Civ. Prac. & Rem. Code § 41.008(b).

C. Fraud, Fraudulent Inducement, and Fraud upon the Court — Compensatory, Exemplary, and Equitable

Relief

1. Compensatory.

Actual damages include both out-of-pocket and benefit-of-the-bargain measures.

Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 49 (Tex. 1998).

2. Exemplary / Punitive.

Fraud automatically qualifies for exemplary damages upon clear and convincing proof.

Tex. Civ. Prac. & Rem. Code § 41.003(a)(1); Presidio, 960 S.W.2d at 47–48.

3. Equitable Remedies.

Fraud upon the court authorizes vacatur, bill of review, and sanctions without monetary cap.

Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 246 (1944).

4. Caps.

Exemplary damages for common-law fraud remain subject to Chapter 41’s cap unless the fraud

also violates a statute with treble provisions (e.g., DTPA or RICO).

D. Conversion — Compensatory and Exemplary Damages

1. Compensatory.

The measure equals the fair market value of the property at the time of conversion plus interest.

Waisath v. Lack’s Stores, Inc., 474 S.W.2d 444, 447 (Tex. 1971).

2. Exemplary.

If the conversion was willful or malicious, punitive damages may be awarded under Tex. Civ. Prac.

& Rem. Code § 41.003(a)(3).

See Apple Imports, Inc. v. Koole, 945 S.W.2d 895, 899 (Tex. App.—Austin 1997, writ denied).

3. Caps.

Subject to the same Chapter 41 multiplier limits as interference.

E. Civil RICO (18 U.S.C. § 1964(c)) — Treble Damages and Attorney’s Fees

1. Treble Damages.

RICO provides an independent federal remedy for injury to business or property “by reason of” a

racketeering violation. It mandates automatic trebling of compensatory damages and

reasonable attorney’s fees and costs.

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 481 (1985); 18 U.S.C. § 1964(c).

2. No Cap.

The treble multiplier is statutory, not punitive, and therefore exempt from state-law damage caps.

See Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143, 151 (1987).

F. Exemplary-Damage Procedures and Constitutional Limitations

1. Standard of Proof.

All punitive or exemplary awards in Texas require clear and convincing evidence of malice, fraud,

or gross negligence. § 41.003(a).

2. Ratio Limits (Due Process).

Under State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003), punitive damages

exceeding a single-digit ratio (9:1) to compensatory damages generally violate the Fourteenth

Amendment’s Due Process Clause.

3. Segregation of Recoveries.

Texas courts require segregation of contract and tort damages to prevent double recovery under

the one satisfaction rule. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 303 (Tex. 2006).

G. Summary Table of Recoverable Damage Classes

Compe Conseq Exemplary Statutory /

Claim Treble Caps / Limitations

nsatory uential / Punitive Attorney’s

Breach of Contract ✔ ✔ ✖ ✖ ✖ Fees Foreseeability /

mitigation only

Tortious ✔ (malice/ Ch. 41: 2×

✔ ✔ ✖ ✖

Interference fraud) economic + $750k

(FCraoundtr a/ cFtr /a udulent ✔ ✖ ✔ (fees mCha.x 4 n1o cna-epc uonnloemssi c

✔ ✔

Inducement (automatic) (except discretiona under federal statute

Conversion ✔ ✔ ✔ (willful) s✖tatutor r✖y) Ch. 41 cap applies

Civil RICO (18 ✖ ✔ ✔ (fees & No state-law cap;

✔ ✔

U.S.C. § 1964) (automatic (manda costs) federal control

treble tory)

H. Integrative Principle for the Trustee’s Bill of Review

For purposes of the Trustee’s forthcoming petition for bill of review, the estate’s recoverable damages

must be structured as:

1. Baseline compensatory damages for breach and interference (lost profits, lost assets,

destroyed business value);

2. Exemplary enhancements for willful tortious conduct by England and King of Freight;

3. Treble recovery for RICO predicate acts (fraud, mail/wire communications, conspiracy); and

4. One satisfaction limit ensuring a single total recovery, not multiple overlapping awards.

This alignment preserves statutory compliance, constitutional proportionality, and bankruptcy-court

equity in distributing proceeds to creditors under 11 U.S.C. § 726(a).

XV. COMPUTATION OF DAMAGES BASED ON LOST EARNING POTENTIAL—$952,084.20 AS THE

COMPENSATORY BASELINE

A. Legal Standard—Lost Earning Potential as the Measure of Compensatory Damages

Texas law holds that when a business is destroyed or rendered inoperable by a defendant’s breach or

tortious conduct, the proper measure of compensatory damages is the lost earning potential of the

business as a going concern, not merely the value of specific contracts.

See Mead v. Johnson Group, Inc., 615 S.W.2d 685, 687 (Tex. 1981); Miga v. Jensen, 96 S.W.3d 207, 213

(Tex. 2002); Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 816 (Tex. 1997).

Damages are designed “to place the plaintiff in the same economic position as if the contract had been

fully performed.” Id. When a plaintiff’s business is entirely destroyed, recovery may be based on the

enterprise’s established earning capacity. See Sw. Battery Corp. v. Owen, 115 S.W.2d 1097, 1099 (Tex.

1938) (lost profits recoverable if reasonably certain).

B. Derivation of Daily Earning Rate

The week of July 10–14, 2023, immediately preceding nFusion Capital Finance, LLC’s repudiation,

contains verifiable earnings evidence from five contemporaneous load confirmations:

Bill of Lading

Load / Broker Gross Freight Rate

No.

Truck Connection #36205 $1,300

Dunamis LLC #13299734 $1,100

Trident Transport LLC #0538583 $1,047

Priority 1, Inc. #6010… $1,700

GlobalTranz Enterprises

#27264720 $500

LLC

Total $5,647

Dividing the total by the five operational days in that week yields an average daily earning potential of

$1,129.40: per day

$5,647÷5=$1,129.40 per day

C. Duration of the Loss Period

The enterprise ceased functioning on July 14, 2023, and has remained inoperative through November

3, 2025, a period of 843 calendar days. During this span, the Plaintiff has been deprived of all

commercial hauling revenue under MC#1476454.

D. Total Compensatory Damages—Lost Earnings Potential

Applying the established daily rate to the period of deprivation: $1,129.40×843=$952,084.20

This figure represents the legally recognized compensatory damages for the destruction of Rollin’

Smoke at the Attaché, exclusive of exemplary or statutory enhancements.

Under Hadley v. Baxendale, 9 Exch. 341, 156 Eng. Rep. 145 (1854), and its Texas progeny, these damages

are recoverable as the natural and probable result of the defendants’ breaches and tortious

interference. The lost income from a destroyed business is inherently foreseeable. See Holt Atherton

Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992).

E. Use of the Compensatory Base for Enhanced Damages

The $952,084.20 figure constitutes the “economic damages” base for all further statutory multipliers and

caps:

Statutory / Common-Law Formula Applied to

Damage Type

Authority $952,084.20

Exemplary (Fraud / Tex. Civ. Prac. & Rem. Code § ≤ 2× economic + $750,000 =

Malice) 41.008(b) ≤ $2,654,168.40

3× compensatory =

Treble (Civil RICO) 18 U.S.C. § 1964(c)

$2,856,252.60

Conversion (King of Waisath v. Lack’s Stores, Inc., 474

+ $550 + interest ≈ $583

Freight / England) S.W.2d 444 (Tex. 1971)

6% per annum from 7/14/23

Prejudgment Interest Tex. Fin. Code § 304.003, § 304.104

to judgment

F. Black-Letter Integration Under the One Satisfaction Rule

The One Satisfaction Rule, as reaffirmed in Sky View at Las Palmas, LLC v. Mendez, 555 S.W.3d 101,

107 (Tex. 2018), dictates that a plaintiff suffering a single, indivisible injury from multiple defendants “is

entitled to but one recovery for that injury.”

Thus:

1. $952,084.20 is the baseline compensatory injury.

2. Defendants nFusion, GlobalTranz, King of Freight, and England are jointly and severally

liable for the full amount. See Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 7 (Tex. 1991).

3. The estate may elect either:

◦ (a) Compensatory + Exemplary under Texas Ch. 41, or

◦ (b) Treble Recovery under 18 U.S.C. § 1964(c),

but not both, to prevent double recovery. Dresser Indus., Inc. v. Lee, 880 S.W.2d 750, 754

(Tex. 1993).

4. All related interest and attorney’s fees follow the elected remedy. See Sedima, S.P.R.L. v. Imrex

Co., 473 U.S. 479, 481 (1985).

G. Judicial Application

Accordingly, the bankruptcy court—when compelling the Chapter 7 Trustee to file and prosecute the bill

of review—should adopt $952,084.20 as the economic injury benchmark, applying statutory

enhancement as follows:

• Base Compensatory: $952,084.20

• Option 1 (Exemplary): ≤ $2,654,168.40 (subject to Tex. Civ. Prac. & Rem. Code § 41.008)

• Option 2 (RICO Treble): $2,856,252.60 (mandatory under 18 U.S.C. § 1964(c))

• Plus: Prejudgment interest from July 14 2023 to entry of judgment

• Plus: Attorney’s fees and costs as authorized by § 1964(c) and Fed. R. Bankr. P. 7054

H. Conclusion

Under settled Texas and federal law, $952,084.20 constitutes the recoverable compensatory measure of

lost earnings capacity resulting from the defendants’ concerted breaches and interference, and it forms

the legal basis for all derivative categories of damages—exemplary, treble, and equitable—

recoverable in the Trustee’s bill of review and subsequent adjudication.

XVI. COMPUTATION OF DAMAGES BASED ON LOST EARNING POTENTIAL—$952,084.20 AS THE