K & S Retread, LLC, d/b/a K & S Tire v. Damon K. Sherrell

IN THE DISTRICT COURT OF WOODS COUNTY STATE OF OKLAHOMA K & S Tire, Plaintiff, vs. Damon K. Sherrell, and Sarah Thomas, and Diesel Dawgs Truck Service, LLC, d/b/a Diesel Docs Truck Service, LLC, and DKS Transport, LLC, Defendants. Case No.: CJ-2024-18 PETITION COMES NOW the Plaintiff, K & S Retread, LLC, d/b/a K & S Tire, and for its causes of action against the each of the Defendants, individually, alleges and states as follows: 1. Plaintiff is an Oklahoma limited liability company duly organized and existing under the laws of the State of Oklahoma and operates in Woods County, Oklahoma. Plaintiff does business under the name of K & S Tire, and is an affiliated entity with K & S Tire, Inc., an Oklahoma corporation. 2. Plaintiff is generally engaged in the business of selling tires and providing other valuable goods and services related to the tire industry. 3. Defendant Diesel Docs Truck Service, LLC is a registered trade name of the Defendant, Diesel Dawgs Truck Service, LLC, which is an Oklahoma limited liability company with a principal place of business in Alva, Woods County, Oklahoma. (Collectively, Diesel Dawgs Truck Service, LLC and Diesel Docs Truck Service, LLC are referred to as “Dawgs”). 4. Dawgs operates and advertises itself as a “diesel mechanic” and engaged in the business of “automobile repairs”. 5. Defendant DKS Transport, LLC ("DKS") is an Oklahoma limited liability company, with a principal place of business in Alva, Woods County, Oklahoma, and is a predecessor in interest, or affiliated entity to Dawgs. 6. DKS is or was a Motor Carrier registered with the U.S. Department of Transportation, US DOT No. 1875797, MC No. MC00707248, 7. Defendant Sarah Thomas (hereinafter, "Thomas") upon information and belief, is an individual citizen of Woods County, State of Oklahoma. 8. Defendant, Damon K. Sherrell, a/k/a Damon Sherrell (hereinafter “Sherrell”) is an individual citizen, and resident of and domiciled in Woods County, State of Oklahoma. 9. Upon information and belief, Sherrell is the Registered Agent of Dawgs and DKS. 10. Upon information and belief, Sherrell is the President of both Dawgs and DKS. 11. Sherrell reportedly owns 50% of the membership interest of Dawgs, and 99% of the membership interests of DKS, and his spouse owns all remaining membership interests. 12. This Court has jurisdiction of the subject matter and the parties hereto, and venue is proper in the District Court of Woods County, State Oklahoma. FACTS RELEVANT TO ALL CAUSES OF ACTION 13. On or about July 9, 2015, Thomas signed, executed, and delivered to Plaintiff a certain Credit Application and Agreement on behalf of DKS (the “DKS Contract”). 14. Contemporaneously with, and contained within the DKS Contract, Thomas personally agreed to “unconditionally guarantee and promise to be held personally liable for all indebtedness accrued under this continuing agreement.” 16. Contemporaneously with, and contained within the Dawgs Contract, Sherrell personally agreed to “unconditionally guarantee and promise to be held personally liable for all indebtedness accrued under this continuing agreement.” 17. The Contracts both contain the following language: Accounts and unpaid balances after 30 days are automatically placed on hold until payment has been received. Accounts not paid in full by the 10th of the month following the date of the invoice shall accrue interest from the date of such invoice on the unpaid balance at the rate of one and one-half percent (1½%) per month (18% per annum). The balance on which this rate is calculated shall from the sum of all charges made to the account less any and all interest charges accruing thereon, any payment made on the account and any other credits to the account. I (We) understand that the information furnished to you on this application is for the purpose of obtaining credit from your firm, that I am (We are) authorized, in my (our) capacity, to bind my (our) firm accordingly. I (We) the undersigned, hereinafter called guarantors, do unconditionally guarantee and promise to be held personally liable for all indebtedness accrued under this continuing agreement. In the event of default and referral to an attorney for collection agency, I (We) agree to pay all reasonable collection costs, attorney’s fee and court costs if necessary to collect. 18. Pursuant to either or both the DKS Contract or the Dawgs Contract, between approximately February 8, 2023 and December 15, 2023, Defendants ordered goods and services from Plaintiff in the amount of $69,591.47, as memorialized in the Statement of Account attached hereto as Exhibit “1”, which is incorporated herein by reference. 19. Upon information and belief, Dawgs and DKS are treated as “one and the same” and are alter-egos of one another, as well as Sherrell, who directs the purchases goods and services under the guise of the “automobile repair” business, in order to use the goods and services for the benefit and operations of DKS. 20. Despite Plaintiff’s demand for payment, each of the Defendants, individually and/or collectively, have failed and refused to remit payment for the goods and services ordered from, and delivered by the Plaintiff, and the accruing contractual interest and charges. 21. The value of the goods and services ordered by the Defendants and delivered by the Plaintiffs is $69,591.47. 22. Plaintiff was required to refer the accounts to an attorney, and has incurred attorney’s fees in the reasonable amount of no less than $1,500.00 plus collection costs and court costs of no less than $300.00, and will continue incur additional fees and costs FIRST CAUSE OF ACTION: BREACH OF CONTRACTS 23. Each of the above allegations are hereby incorporated into this Cause of Action, as if fully restated herein. 24. Both of the Defendants DKS and Dawgs, individually and/or jointly or some combinations thereof, have breached the respective Contracts by failing to remit payment for the goods and services delivered by Plaintiff to the Defendants, together with the interest and charges accrued and continuing to accrue thereon. 25. Therefore, Plaintiff is entitled to judgment against DKS and Dawgs, individually, jointly and severally, in the principal amount of $69,591.47, plus interest accruing at 18% per annum, with reasonable attorney’s fees, court costs and collection costs in the amount of no less than $1,600.00. SECOND CAUSE OF ACTION: COLLECTION OF AN OPEN ACCOUNT 26. Each of the above allegations are hereby incorporated into this Cause of Action, as if fully restated herein. 27. Defendants DKS and/or Dawgs, each, individually and/or jointly, ordered and purchased and received goods and services from Plaintiff on one or more open accounts. 28. The amount due to the Plaintiff for the open accounts is $69,591.47. 29. Plaintiff has demanded payment, but the Defendants have failed and refused to pay the amounts due arising from the open account. 30. Therefore, Plaintiff is entitled to judgment against DKS and Dawgs, jointly and severally in the principal amount of $69,591.47. plus interest accruing at 18% per annum, with reasonable attorney’s fees, court costs and collection costs in the amount of no less than $1,800.00. THIRD CAUSE OF ACTION: UNJUST ENRICHMENT 31. Each of the above allegations are hereby incorporated into this Cause of Action, as if fully restated herein. 32. Defendants DKS and/or Dawgs, individually and/or jointly, ordered and received the benefit of goods and services from Plaintiff valued at $69,591.47, in which the Plaintiff claimed and owned a property interest. 33. Plaintiff provided the goods and services in reliance on Defendants’ promise to pay, with the reasonable expectation of being compensated for the goods and services, and Defendants failed and refused to compensate the Plaintiff. 34. Defendants’ receipt and benefit of the goods and services, without payment for the same, constitutes unjust enrichment, as well as the willful and malicious injury to Plaintiff’s property interests as described by 11 U.S.C. § 523(a), contrary to equity and good conscience for Defendants to retain the benefit of the goods without compensating Plaintiff for the same. 35. Therefore, Plaintiff is entitled to judgment against DKS and Dawgs, jointly and severally in the principal amount of $69,591.47, plus interest accruing at 18% per annum, with reasonable attorney’s fees, court costs and collection costs in the amount of no less than $1,800.00. FOURTH CAUSE OF ACTION: PERSONAL GUARANTY OF SARAH THOMAS 36. Each of the above allegations are hereby incorporated into this Cause of Action, as if fully restated herein. 37. Pursuant to the Personal Guaranty signed and delivered by Thomas, Thomas is personally liable to the Plaintiff, and the Plaintiff is entitled to judgment against Thomas in the amount $69,591.47, plus interest accruing at 18% per annum, with reasonable attorney’s fees, court costs and collection costs in the amount of no less than $1,800.00. FIFTH CAUSE OF ACTION: PERSONAL GUARANTY OF DAMON K. SHERRELL 38. Each of the above allegations are hereby incorporated into this Cause of Action, as if fully restated herein. 39. Pursuant to the Personal Guaranty signed and delivered by Sherrell, Sherell is personally liable to the Plaintiff, and the Plaintiff is entitled to judgment against Sherrell in the amount $69,591.47, plus interest accruing at 18% per annum, with reasonable attorney’s fees, court costs and collection costs in the amount of no less than $1,800.00. SIXTH CAUSE OF ACTION: FRAUD AND FRAUDULENT INDUCEMENT 40. Each of the above allegations are hereby incorporated into this Cause of Action, as if fully restated herein. 41. Sherell, individually and on behalf of all Defendants, stated and implied in the Dawgs Contract that the nature of Dawgs’ business was “Diesel mechanic” and “automotive repair”, and presented Plaintiff with a sale tax exemption permit. 42. Each of these statements in the Dawgs Contract, and each purchase made thereafter, constitutes actual fraud, as well as a false representation, false pretense and actual fraud, as described and referenced in 11 U.S.C. § 523(a), and written statements that were materially false, respecting Defendants’ financial condition, which Defendants delivered to Plaintiff with the intent to deceive the Plaintiff, as referenced in 11 U.S.C. § 523(a). 43. Plaintiff reasonably relied upon each such statement to its great detriment, by continuing to provide goods and services, and extend credit, and allowing Defendants to purchase goods and services. 44. Plaintiff is entitled to judgment against each of the Defendants in the amount $69,591.47, plus interest accruing at 18% per annum, with reasonable attorney’s fees, court costs and collection costs in the amount of no less than $1,800.00, as well as punitive and exemplary damages in an amount no less than $10,000.00. WHEREFORE, Plaintiff prays that this Court award Plaintiff judgment against the Defendants, jointly and severally, in the principal amount of $69,591.47, plus interest at the rate of 18% per annum, plus Plaintiff’s actual attorney’s fees, court costs and collection costs in an amount of no less than $1,800.0, punitive and/or exemplary damages in an amount of no less than $10,000.00, and for any and all such other and further relief to which the Plaintiff may be entitled. Dated: May 29, 2024. Respectfully Submitted, Matthew C. Goodin, OBA #19327 The Goodin Law Firm 3509 French Park Drive, Suite C Edmond, Oklahoma 73034 Telephone: (405) 759-3100 Email: [email protected] Attorneys for the Plaintiff 05/23/24 - Customer Account Inquiry GL K & S RETREAD L.L.C. Cust#: 21516 Open Date: 08/17/20 Credit Limit: 2500 DIESEL DOCS TRUCK SERVICE Account Bal: 69591.47 DBA: DIESEL DAWGS TRUCK SVC S On Order: 0.00 PO BOX 1084 S Total: 69591.47 ALVA Avail-Credit: 67091.00- OK 73717 Req PO: Yes Phones: (580)327-4400 Ord on Hold? N P/D Days: 0 Fax#: (580)327-4401 120+ DAYS PAST DUE Contact: LACIE GROVES Last Pmt: 3500.00 10/18/23 Ship To: 0 High Bal: 69591 CR Rate: Tax CD: 1X Last Sale: 03/18/24 Tax ID: 46-3902928 Last Chg: 09/01/20 Term CD: 01 NET 10TH Bal Meth: B Sman CD: 05/23/24 - Customer Account Inquiry GL K & S RETREAD L.L.C. Cust: 21516 Name: DIESEL DOCS TRUCK SERVICE Inv/Ck# Loc Inv-Date Type Amount Discount Due Age PO/Ref# ----------------------------------------------------------------------------------------------- Company: 990 271272 01 02/08/23 Inv 13381.60 03/10 0.00 03/10 440 STOCK TEXAS 1968 01 10/18/23 Chk 1062.15 0.00 Amount Due: 12319.45 271638 01 02/21/23 Inv 315.73 03/10 0.00 03/10 440 34 271992 01 03/06/23 Inv 2007.24 04/10 0.00 04/10 409 STOCK MIKE 272535 01 03/24/23 Inv 206.65 04/10 0.00 04/10 409 BLACK CHEVY 272636 01 03/24/23 Inv 1500.00 04/10 0.00 04/10 409 MIKE 272638 01 03/24/23 Inv 334.54 04/10 0.00 04/10 409 MIKE 272695 01 03/28/23 Inv 88.55 05/10 0.00 05/10 379 RYAN'S WK P 272868 01 03/31/23 Inv 1494.36 05/10 0.00 05/10 379 MIKE 273340 01 04/17/23 Inv 1271.00 05/10 0.00 05/10 379 MATA 273624 01 04/24/23 Inv 669.08 05/10 0.00 05/10 379 1 273626 01 04/24/23 Inv 889.60 05/10 0.00 05/10 379 STOCK 273627 01 04/24/23 Inv 2832.52 05/10 0.00 05/10 379 ALVA SHOP 273634 01 04/24/23 Inv 10642.88 05/10 0.00 05/10 379 TEXAS 230510 01 04/25/23 S/C 356.40 05/10 0.00 05/10 379 273749 01 04/28/23 Inv 600.00 06/10 0.00 06/10 348 MIKE 274446 01 05/18/23 Inv 1076.90 06/10 0.00 06/10 348 RYAN CUNNING 274532 01 05/22/23 Inv 220.14 06/10 0.00 06/10 348 1 274543 01 05/22/23 Inv 670.18 06/10 0.00 06/10 348 MIKE 274544 01 05/22/23 Inv 1437.98 06/10 0.00 06/10 348 UNIT 24 274554 01 05/22/23 Inv 19.54 06/10 0.00 06/10 348 MIKE 274587 01 05/22/23 Inv 1100.00 06/10 0.00 06/10 348 WHEELS 274716 01 05/25/23 Inv 889.60 06/10 0.00 06/10 348 1 274720 01 05/25/23 Inv 175.00 06/10 0.00 06/10 348 USED 274842 01 05/31/23 Inv 1096.00 07/10 0.00 07/10 318 MIKE 274958 01 06/02/23 Inv 747.19 07/10 0.00 07/10 318 MIKE 275162 01 06/08/23 Inv 183.89 07/10 0.00 07/10 318 LEON TRAILE 275447 01 06/15/23 Inv 996.00 07/10 0.00 07/10 318 MIKE 276422 01 07/12/23 Inv 550.00 08/10 0.00 08/10 287 1 276423 01 07/12/23 Inv 1494.36 08/10 0.00 08/10 287 MIKE 276656 01 07/18/23 Inv 365.89 08/10 0.00 08/10 287 DAMON 276853 01 07/24/23 Inv 2676.56 08/10 0.00 08/10 287 UNIT 120 279681 01 09/29/23 Inv 898.78 11/10 0.00 11/10 195 MIKE 280542 01 10/24/23 Inv 438.45 11/10 0.00 11/10 195 LIPT TIRE 280553 01 10/24/23 Inv 232.46 11/10 0.00 11/10 195 DAMON 231110 01 10/25/23 S/C 733.09 11/10 0.00 11/10 195 280607 01 10/25/23 Inv 2988.72 11/10 0.00 11/10 195 MIKE 280834 01 10/31/23 Inv 2660.72 12/10 0.00 12/10 165 MIKE 281436 01 11/20/23 Inv 920.76 12/10 0.00 12/10 165 BENJAMIN YA 281440 01 11/20/23 Inv 1026.00 12/10 0.00 12/10 165 1 231210 01 11/25/23 S/C 801.47 12/10 0.00 12/10 165 282152 01 12/15/23 Inv 539.80 01/10 0.00 01/10 134 MIKE 240110 01 12/25/23 S/C 870.58 01/10 0.00 01/10 134 240210 01 01/25/24 S/C 878.68 02/10 0.00 02/10 103 240310 01 02/25/24 S/C 878.68 03/10 0.00 03/10 74 240410 01 03/25/24 S/C 878.68 04/10 0.00 04/10 43 240510 01 04/25/24 S/C 878.68 05/10 0.00 05/10 13 230310 03 02/25/23 S/C 472.18 03/10 0.00 03/10 440 230410 03 03/25/23 S/C 686.07 04/10 0.00 04/10 409 230610 03 05/25/23 S/C 624.73 06/10 0.00 06/10 348 230710 03 06/25/23 S/C 717.56 07/10 0.00 07/10 318 230810 03 07/25/23 S/C 694.64 08/10 0.00 08/10 287 230910 03 08/25/23 S/C 771.16 09/10 0.00 09/10 256 231010 03 09/25/23 S/C 771.16 10/10 0.00 10/10 226 Total for Company: 990 Cur: 0.00 1-30: 878.68 31-60: 878.68 61-90: 878.68 91-120+: 66955.43 Total Balance: 69591.47