Stanford v. Eng. Carrier Servs. (In re Stanford)

• Docket Number: 24-44120-ELM-7
• Decision Date: 28 October 2025
• Citation: Stanford v. Eng. Carrier Servs. (In re Stanford), 24-44120-ELM-7 (Bankr. N.D. Tex. Oct 28, 2025)
• Parties: In re: JASON RUDOLPH STANFORD, Debtor. v. England Carrier Services, LLC, Nfusion Capital Finance, LLC, King of Freight, LLC, GlobalTranz Enterprises, LLC, Spencer Fane, PLLC Defendants JASON RUDOLPH STANFORD, Plaintiff,
• Court: U.S. Bankruptcy Court — Northern District of Texas

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In re: JASON RUDOLPH STANFORD, Debtor.

JASON RUDOLPH STANFORD, Plaintiff, v. England Carrier Services, LLC, Nfusion Capital Finance, LLC, King of Freight, LLC, GlobalTranz Enterprises, LLC, Spencer Fane, PLLC Defendants

No. 24-44120-ELM-7

United States Bankruptcy Court, N.D. Texas, Fort Worth Division

October 28, 2025

Original Car DC 25-14020 Dallas County District Court removed as Adversary Proceeding No. 25-04119

Jason Rudolph Stanford, Pro Se

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 brokercarrier 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 Attache 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

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