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Date: 09-04-2014

Case Style: David Eugene Steelman v. John David Steelman

Case Number: CJ-2011-472

Judge: Tom A. Lucas

Court: District Court, Cleveland County, Oklahoma

Plaintiff's Attorney: Justin Lowe

Defendant's Attorney: Kenyatta R. Bethea and Dan Holloway and Bob Raftery

Description: COME NOW, the Plaintiffs and for causes of action against the Defendants state and allege:
JURISDICTION AND VENUE
Plaintiff DAVID EUGENE STEELMAN is an individual residing in Cleveland County, Oklahoma.
STEELMAN CUSTOM ENGINES, INC. an Oklahoma Corporation is in good standing and does business at 1621 Linwood Blvd, Oklahoma Cty in Oklahoma County; Oklahoma.
Defendants JOHN DAVID STEELMAN, KAREN KAY STEELMAN, JOHN PAUL STEELMAN and RYANDALE STEELMANare individuals each residing in and each maybe served with process in Cleveland County, Oklahoma.
FIRST CAUSE OF ACtION
1. On June 26, 1995 DAVID EUGENE STEELMAN fond STEELMANS CUSTOM
ENGINES, INC. by filing articles of in Coipontion with the State of Oklahoma through the
Secretary of State of Oklahoma and was thereupon authorized to do business in Oklahoma as a licensed corporation. Said STEELMAN’S CUSTOM ENGINES, INC has remained in good standing with the State of Oklahoma and continues to do business at 1621 Linwood Blvd, Oklahoma Oty, in Oklahoma County, Oklahoma.
2, Plaintiff, DAVID EUGENE STEELMAN subscribed to and received all five hundred (500) of the authorized shares of common stock and remains as owner thereof and is the sole shareholder of said Corporation. DAVID EUGENE STEELMAN was the original President and remains as the President of said Corporation.
3. At some point of time unknown to DAVID EUGENE STEELMAN but between 1999 and May, 2008, the defendant, JOHN DAVID STEELMAN, assumed and represented to third parties his ownership of said share of common stock assumed and represented to thin! parties his position as President of said Corporation, assumed and represented to third parties his possession and contml of the assets of said Corporation and assumed and represented to third parties his authority attendant to the office of President of said corporation. Said Defendant, JOHN DAVID STEELMAN, without the knowledge or consent of either Plaintiff converted to his own uses and benefits the corporate authorityand the assets of STEELMANS CUSTOM ENGINES, INC. all without the knowledge or consent of Plaintiffs.
4. The Defendants KAREN KAY STEELMAN, JOHN PAUL STEELMAN and RYAN STEELMAN conspired with JOHN DAVID STEELMANto convert to their own uses and benefits the assets of said Corporation, said assets consisting of, but not limited to, the real property equipment, tooling, bank accounts, credit cards, inventory, parts and the corporate authority of DAVID EUGENE STEELMAN.
5. Plaintiff, DAVID EUGENE STEELMAN has made demands upon each and all of said
Defendants to discontinue exercising dominion and control oversaid corponte assets; to return all books and records including State and Federal tax reporting records; to render a full and complete accounting of all transactions entered into by each and all of the Defendants in the name of the said &rpomtion; to make a full and complete inventoryof all assets; to identifyall banking deposits and accounts; to identify all third parties with whom each and/or all of the Defendants have represented themselves as having corporate authorityç and to cease any and all activities having to do with the authority granted to the said (brporation by the State of Oklahoma. Plaintiffs further allege that the Defendants, and each of them, have wholly failed and refused to comply with each and all of the demands of Plaintiffs.
6. The Plaintiffs further allege that neither of their individual resulting damages can be determined without a full and complete discovezyof the information demanded fmm said Defendants. The Plaintiffs, therefore, allege that a temporary restraining order should be entered restraining the Defendants, and each of them, of and fmm conducting any and all business activities in the name of said &nporation and to render to the (burt a full and complete accounting consistent with the demands made by Plaintiffs upon the Defendants.
SECOND CAUSE OF ACFION
Plaintiffs adopt and re-allege the allegations contained in their First Cause of Action as fullyset forth here.
2. Plaintiffs further allege that Defendant KAREN KAY STEELMAN is a convicted felon who is presently serving a suspended sentence upon a charge of Embezzlement by Employee, a crime of moral turpitude. Said conviction was entered in the District Cburt of Cleveland Ounty, State of Oklahoma, Case Number CF-2001-97 said conviction was entered 13th dayof November, 2002, and KAREN KAY STEELMAN plead guilty on that date. Embezzlement
is a conviction which precludes and prohibits her fmm engaging in any dejwv or dfacto fiduciary capacity.
3. The Plaintiffs further allege that a restraining order should be issued to KAREN KAY STEELMAN specificallyordering and directing herto immediatelycease and desist anyand all activities having to do with said Corporation and to immediately deliver to the Court any and all records in her possession or contml having to do with all corporate files, corporate books, computer files, bank records, ledgers, business checks, customer files, accounts receivable and puithasing files of said (biporation, and to render to the Court a full and complete accounting of each and all of her activities in the name of, for the benefit of or having to do with said Corporation.
THIRD CAUSE OF ACTION
Plaintiffs adopt and re-allege the allegations contained in their First (luse of Action as if fully set forth here.
2. Plaintiff, DAVID EUGENE STEELIVIAN, further alleges that the Defendants, and each of them, have conspired to deprive him of and fmm the benefits and values derived from his ownership of the stock in said Corporation and his supervising authority and control of the business affairs of said Corporation as President thereof. DAVID EUGENE STEELMAN further alleges that the current actual inventory of the assets and values thereof are unknown to him by reason of the Defendants, and each of them, acting together in such conspincyto deprive him of such specific knowledge.
3. DAVID EUGENE STEELMAN alleges that the value of the corporate assets currentlyknown to him are in excess of One Hundred Thousand ($100,000.00) dollars. DAVID EUGENE STEELMAN further alleges that the Defendants, and each of them, have converted to their own use and benefit assets of the Corporation all to the damage of the Corporation and DAVID EUGENE STEELMAN all for which he is entitled to money judgment for his actual damages, punitive damages in an amount not less than three (3) times his actual damages, his cost, his attorney’s fees, interest on all amounts and such other and further relief to which the Court deems DAVID EUGENE STEELMAN entitled.
FOURTH CAUSE OF ACflON
Plaintiffs adopt and re-allege the allegations contained in their First Cause of Action as if fully set forth here.
2. Plaintiffs further allege that on or about March 8, 2011 the Defendants, JOFIN DAVID
STEELMAN, KAREN KAY STEELMAN, JOHN PAUL STEELMAN and RYAN DALE
STEELMAN have changed the locks of the business doors, and have refused DAVID
EUGENE STEELMAN access thereto.
3. That on or about the 8th day of March, 2011, JOHN DAViD STEELMAN, KAREN KAY STEELMAN, JOHN PAUL STEELMAN and RYAN DALE STEELMAN removed all the corporate files, corponte books, computer files, bank reconis, ledgers, business checks, customer files, accounts receivable and purchasing files from the business location and have refused demands to return same.
4. That on March 9,2011, after discovering the corporate records missing and the activities of the
Defendants, DAVID EUGENE STEELMAN, as president and sole share holder of
STEELMAN’S CUSTOM ENGINES, INC called an emergency meeting of the Officers and
Directors and notice thereof having been given Defendant JOHN DAVID STEELMANto
appear in person. That said JOHN DAVID STEELIvIAN appeared in person, together with
JOHN PAUL STEELMAN and RYAN DALE STEELMAN. That KAREN KAY STEELMAN appeared not. Plaintiff, DAVID EUGENE STEELMAN made demand upon the Defendants present to produce all records in their possession or control having to do &h all corporate files, corporate books, computers and computer files, bank records, ledgers, business checks, customer files, accounts receivable, account payable and the corporate record book including the articles of incorporation, by-laws, minutes of meetings of share holders and directors and all such other files of said Corporation. The Defendants, and each of them, refused such demands.
5. Plaintiff, DAVID EUGENE STEELMAN, as President of said Corporation alleges that Plaintiff, STEELMANS CUSTOM ENGINES, IN is entitled to an order of replevin authorizing the recovery of all corporate records wherever and in whoever’s possession they may be found and should be awarded its costs, including a reasonable attorney’s fee.
WHEREFORE, Plaintiffs pray judgment against the Defendants, and each of them, to-wit:
FIRST CAUSE OF ACrION:
A temporary and permanent restraining order restraining the Defendants, and each of them, of and from exercising any dominion or control over the assets and records of STEELMAN’S CUSTOM ENGINES, INC;to render a full and complete accounting of all transactions in which each or all of them initiated or participated; money judgment for all damages sustained by Plaintiffs including costs and a reasonable attorney’s fee; and such other and further relief to which the Court deems Plaintiffs entitled.
SECOND CAUSE OF AOION:
A specific temporaty and permanent restraining order and injunction against Defendant KAREN KAY STEELMAN restraining and enjoining herof and from anyand all activities of anykind
or nature having to do with the assets and records of the Cbrpontion and to deliver to DAVID EUGENE STEELMAN, President of STEELMANS CUSTOM ENGINES, INC any and all assets and records of STEELMANS CUSTOM ENGINES, INC in her possession or control or to which she has access and to render a full and complete accounting of all of her activities dealing with any such assets and records.
THIRD CAUSE OF ACf ION:
A specific finding that the Defendant John David Steelman, Karen Kay Steelman, John Paul Steelman and Ryan Steelman engaged in a conspincy to deprive the Plaintiff David Eugene Steelman of the corporate assets of Steelman Custom Engines, Inc. That the Plaintiff David Eugene Steelman should recover damages in excess of $100,000.00 and punitive damages of not less than three times the actual damages against the Defendants jointly and severally.
FOURTH CAUSE OF ACtION:
A temporaryand permanent restraining order restraining the Defendants, and each of them, of and from exercising anydominion or control over the assets and records of STEEUVIANS CUSTOM ENGINES, INC.; to render a full and complete accounting of all transactions in which each or all of them initiated or participated money judgment for all damages sustained byPlaintiffs, and each of them, including costs and a reasonable attomey fee; and such other and further relief to which the Court deems Plaintiffs, and each of them, maybe entitled.


DEFENDANTS ANSWER TO
PLAINTIFFS PETITION AND COUNTERCLAIM
COMES NOW the Defendants, John David Steelman, Karen Kay Steelman, John Paul Steelman and Ryan Dale Steelman, and for their response to Plaintiff’s Petition denies each and every allegation set forth therein, except what is hereinafter specifically admitted and for their further answer state as follows:
JURISDICTION AND VENUE
Defendants admit that Steelman’s Custom Engines, Inc. is an Oklahoma corporation in good standing and that this Court has jurisdiction over the subject matter of this action and the named parties to this action and further admits that venue is proper;
FIRST CAUSE OF ACTION
In response to the allegations set forth in paragraph numbered 1 of Plaintiffs First Cause of Action, Defendants admit Plaintiff Steelman’s Custom Engines, Inc. was formed on June 26, 1995 but deny that Plaintiff David Eugene Steelman alone formed Plaintiff Steelman’s Custom Engines, Inc.;
2. In response to the allegations set forth in paragraph numbered 2 of Plaintiffs First Cause ofAction, Defendants admit only that Plaintiff David Eugene Steelman was the original president of Plaintiff Steelman’s Custom Engines, Inc. And remained as president through April 5, 2008;
3. In response to the allegations set forth in paragraph numbered 3 of Plaintiffs First Cause of Action, Defendants admit onlythat Defendant John David Steelman became the sole shareholder and President of Plaintiff Steelman’s Custom Engines, Inc. on April 5, 2008 with the full consent and knowledge of Plaintiff David Eugene Steelman;
4. In response to the allegations set forth in paragraph numbered 4 of Plaintiffs First Cause of Action, Defendants deny said allegations and demand strict proof thereof;
5. In response to the allegations set forth in paragraph numbered 5 of Plaintiffs First Cause ol Action, said allegations are denied and Defendants demand strict proof thereof;
6. In response to the allegations set forth in paragraph numbered 6 of Plaintiffs First Cause of Action, Defendants deny said allegations and demand strict proof thereof and further Defendants deny that Plaintiff David Eugene Steelman is entitled to any such reMr?,mp9qc4eKa41w isqptprcsidentof Plaintiff Steelman’s Custom Engines, Inc. nor does he own any shares of said Plaintiff corporation;
SECOND CAUSE OF ACTION
1:: Jn,response to the allegations set forth in paragraph numbered I of Plaintiffs Second Cause of Action, Defendants adopt their answers to the allegations contained in the First Cause of Action as fully set forth herein;
2. In response to the allegations set forth in paragraph numbered 2 of Plaintiffs Second Cause ofAction, Defendants deny said allegations and demand strict proof thereof with the exception of what the public record states which said record and documents speak for themselves;
3. In response to the allegations set forth in paragraph numbered 3 of Plaintiffs Second Cause of Action, Defendants deny said allegations and demand strict proof thereof and further Defendants deny that Plaintiff David Eugene Steelman is entitled to any such restraining order as he is not president of Plaintiff Steelman’s Custom Engines. Inc. nor does he own any shares of said Plaintiff corporation;
THIRD CAUSE OF ACTION
1. In response to the allegations set forth in paragraph numbered I of Plaintiffs Third Cause of Action, Defendants adopt their answers to the allegations contained in the First Cause of Action as fully set forth herein;
2. In response to the allegations set forth in paragraph numbered 2 of Plaintiffs Third Cause of Action, Defendants deny said allegations and demand strict proof thereof and further Defendants deny that Plaintiff David Eugene Steelman is entitled to any such restraining order as he is not president of Plaintiff Steelman’s Custom Engines, Inc. nor does he own any shares of said Plaintiff corporation;
3. In response to the allegations set forth in paragraph numbered 3 of Plaintiffs Third Cause of Action, Defendants deny said allegations and demand strict proof thereof and further Defendants deny that Plaintiff David Eugene Steelman is entitled to any such award of any kind as he is not president of Plaintiff Steelman’s Custom Engines, Inc. nor
does he own any shares of said Plaintiff corporation;
FOURTH CAUSE OF ACTION
1. In response to the allegations set forth in paragraph numbered 1 of Plaintiffs Fourth Cause of Action, Defendants adopt their answers to the allegations contained in the First Cause of Action as fully set forth herein;
2. In response to the allegations set forth in paragraph numbered 2 of Plaintiffs Fourth Cause of Action, Defendants deny said allegations and demand strict proof thereof with the exception that Defendant John David Steelman admits only that the locks were changed on the property at 1621 Linwood Blvd., Oklahoma City, Oklahoma to protect the assets of the Plaintiff corporation, Steelman’s Custom Engines, Inc., of which he is president and sole shareholder;
3. In response to the allegations set forth in paragraph numbered 3 of Plaintiffs Fourth Cause of Action, Defendants deny said allegations and demand strict proof thereof with the exception of Defendant John David Steelman, president and sole shareholder of Plaintiff Steelman’s Custom Engines, Inc., who admits only to doing what was necessary to preserve the integrity of the records of the Plaintiff corporation;
4. In response to the allegations set forth in paragraph numbered 4 of Plaintiffs Fourth Cause of Action, Defendants are without sufficient information to admit or deny the allegations set forth in said paragraph and therefore deny same and demand strict proof thereof; however, Defendants further specifically deny that Plaintiff David Eugene Steelman is entitled to or has the authority to call any such meetings of the Plaintiff corporation, Steelman’s Custom Engines, Inc.;
5. In response to the allegations set forth in paragraph numbered 5 of Plaintiffs
Fourth Cause of Action, Defendants deny said allegations and demand strict proof thereof and further Defendants deny that Plaintiff David Eugene Steelman is entitled to any such award of any kind or relief as requested as he is not president of Plaintiff Steelman’s Custom Engines, Inc., does not have any authority to act in behalf of Plaintiff corporation nor does he own any shares of said Plaintiff corporation;
AFFIRMATIVE DEFENSES
For their affirmative defenses, Defendants, John David Steelman, Karen Kay Steelman, John Paul Steelman and Ryan Dale Steelman, state:
1. Plaintiff, David Eugene Steelman, has failed to state a claim upon which relief can be granted as he is not president of Plaintiff corporation, Steelman’s Custom Engines, Inc., as he alleges and he has no authority to bring any action in the name of said Plaintiff corporation;
2. Plaintiff, David Eugene Steelman, is exercising a fraud upon this Court by his allegations that he is president of Plaintiff corporation, Steelman’s Custom Engines, Inc., and that he is sole shareholder of said Plaintiff corporation;
3. Plaintiff, David Eugene Steelman, is estopped from asserting that he is president and sole shareholder as in April, 2008, he transferred his shares to Defendant John David Steelman who then became president of said corporation;
4. Defendants reserve the right to amend and supplement their affirmative defenses when discovery is completed.
WHEREFORE, Defendants, John David Steelman, Karen Kay Steelman,John Paul Steelman and Ryan Dale Steelman, request that the Court deny the relief requested by Plaintiffs David Eugene Steelman and Steelman’s Custom Engines, Inc. fora temporary Eugene Steelman, is an individual residing in Cleveland
Steelman,
and permanent restraining orderand/or injunction, money damages and an accounting and further requests that Plaintiffs Petition be dismissed for failure to state a claim upon which relief can be granted and failure to state a cause of action. In addition, Defendants request that Plaintiff Steelman’s Custom Engine’s, Inc. be dismissed as a Plaintiff, as Plaintiff David Eugene Steelman has no authority to prosecute any action on behalf of the corporation. Defendants further request they be awarded reasonable attorneys fees and costs they have incurred in defending this action. Defendants further request any other ancillary and proper relief as is warranted by the evidence and circumstances presented.
COUNTERCLAIM
Fortheir Counterclaim against Plaintiff, David Eugene Steelman, Defendants, John David Steelman, Karen Kay Steelman, John Paul Steelman and Ryan Dale Steelman, allege and state as follows:
1. Plaintiff, David County, State of Oklahoma;
2. Steelman Custom Engines, Inc. (hereinafter: “SCE”) is an Oklahoma corporation in good standing whose principal place of business is at 1621 Linwood Blvd., Oklahoma City, Oklahoma;
FIRST CAUSE OF ACTION
3. On June 26, 1995, SCE was formed with Plaintiff, David Eugene and Defendant, John David Steelman, as equal shareholders;
4. On or about March 11, 1999, Plaintiff, David Eugene Steelman, fraudulently represented to First National Bank that he was sole shareholder of SCE and obtained a loan with SCE as “debtor” which allegedly was for the benefit of SCE in the amount of $70,400.00;
5. Later in April 5, 2008, Plaintiff, David Eugene Steelman, conveyed his shares in SCE to Defendant, John David Steelman, who then became the president and sole shareholder of SCE and has been sole shareholder and president of SCE since that time;
6. Plaintiff, David Eugene Steelman, received the benefits of said loan and to the best information and belief of Defendant, John David Steelman, only a portion amount of the funds were used for the benefit of SCE;
7. Defendant, John David Steelman, requests Plaintiff, David Eugene Steelman provide a full accounting of the loan proceeds obtained by Plaintiff, David Eugene Steelman purportedly for the benefit of ‘debtor” SCE;
8. Defendant, John David Steelman, further requests damages for any monies paid on said loan by SCE and for any monies diverted to Plaintiff David Eugene Steelman’s personal use and benefit;
SECOND CAUSE OF ACTION
9. During the time period Plaintiff, David Eugene Steelman, was associated with SCE from June, 1995 through March, 2011, to the best information and belief of Defendant, John David Steelman, Plaintiff, David Eugene Steelman would take and/or withdraw monies from SCE without authorization and/or accountability;
10. During the time period Plaintiff, David Eugene Steelman,was associated with SCE from June, 1995 through March, 2011, to the best information and belief of Defendant, John David Steelman, Plaintiff, David Eugene Steelman would take and/or intercept monies that were intended for SCE and utilize them for his own personal use without authorization and/or accountability;
11. Defendant, John David Steelman, requests a full accounting of all monies Plaintiff, David Eugene Steelman, took, withdrew and/or intercepted from SCE without authorization and/or accountability from June, 1995 through March, 2011;
12. Defendant, John David Steelman, further requests damages for any monies Plaintiff, David Eugene Steelman, took, withdrew and/or intercepted from SCE without authorization and/or accountability from June, 1995 through March, 2011;
THIRD CAUSE OF ACTION
13. Defendants, John David Steelman, Karen Kay Steelman, John Paul Steelman and Ryan Dale Steelman have been named in this lawsuit as Defendants by Plaintiff, David Eugene Steelman, who knew or should have known that the causes of action set forth in his Petition were based on allegations of fact which were either not true or gross misrepresentations of fact;
14. Naming said Defendants as parties to this lawsuit was done intentionally, willfully and maliciously, with the intent to cause harm to each of them, and the Defendants have suffered damages in excess of $10,000.00 each as a result of Plaintiff, David Eugene Steelman’s actions;
15. Plaintiff David Eugene Steelman’s actions were intentional, willful and malicious and, therefore, to prevent this type of behavior in the future, the Defendants, John David Steelman, Karen Kay Steelman, John Paul Steelman and Ryan Dale Steelman, are entitled to an award of punitive damages;
WHEREFORE, Defendants, John David Steelman, Karen Kay Steelman, John Paul Steelman and Ryan Dale Steelman request the following relief:
A. That Plaintiff, David Eugene Steelman, be ordered to provide Defendant, John David Steelman, a full accounting of all monies Plaintiff, David Eugene Steelman, took, withdrew and/or intercepted from SCE without authorization and/or accountability from June, 1995 through March, 2011;
B. That Plaintiff, David Eugene Steelman, be ordered to pay Defendant, John David Steelman, damages for any monies Plaintiff, David Eugene Steelman, took, withdrew and/or intercepted from SCE without authorization and/or accountability from June, 1995 through March, 2011;
C. That Plaintiff, David Eugene Steelman, be ordered to provide a full accounting of the loan proceeds in the amount of $70,400.00 obtained by Plaintiff, David Eugene Steelman, purportedly for the benefit of “debtor” SCE;
D. That Plaintiff, David Eugene Steelman, be ordered to pay damages to Defendant, John David Steelman, for any monies paid on said loan by SCE and for any monies diverted to Plaintiff David Eugene Steelman’s personal use and benefit;
E. That the Plaintiff, David Eugene Steelman, be ordered to pay damages to each of the Defendants, John David Steelman, Karen Kay Steelman, John Paul Steelman and Ryan Dale Steelman, in excess of $10,000.00;
F. That the Plaintiff, David Eugene Steelman, be ordered to pay punitive damages to each of the Defendants, John David Steelman, Karen Kay Steelman, John Paul Steelman and Ryan Dale Steelman, in excess of $10,000.00;
G. Defendants, John David Steelman, Karen Kay Steelman, John Paul Steelman and Ryan Dale Steelman, request attorneys fees and costs expended both in the defense and prosecution of this lawsuit;
Defendants further request any other ancillary and proper relief as is warranted by the evidence and circumstances presented

Outcome: Mutual Dismissal With Prejudice.

Plaintiff's Experts:

Defendant's Experts:

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