GrandDaughter Gets Caught Stealing $968K From GrandParent Insurance

[00:00:00]Mr. Frye, I have Mr. Maynard. How are the parties wanting to proceed today?

[00:00:06]>> We are ready to proceed your honor.

[00:00:09]I owe the court an apology. I uh I had missed an email and set this matter over 2 weeks. So, we should have been here 2 weeks ago and I thought we had we were close to reaching a stipulation, but I felt I felt I read the email and didn't understand it. So, I apologize to counsel as well.

[00:00:28]>> Okay, so Mr. Maynard, go ahead.

[00:00:32]>> Yes, your honor. The defendants are ready ready to proceed on the motion and cross motion.

[00:00:37]>> Okay.

[00:00:38]All right, give me a second just to get into that digital file.

[00:00:43]Okay. So, Mr. Frye, go ahead.

[00:00:46]>> Thank you, your honor. We're here today as this is a uh a a business where it burned down about a year ago.

[00:00:54]The properties remains in disrepair. I I have Grant and Glenda Dooling here with me today as we're asking the court to continue the freeze of the account of the Hog the Hogs put on Imperial Construction.

[00:01:16]What we have presented the court is evidence showing that from the insurance proceed of the fire that on September 5th, 2025 uh Sky Hog tendered a check from the business account to her husband's construction account at Imperial about 40 40,000 dollars.

[00:01:41]And then later on on November 14th, we watched the money this is all detailed in our declarations come from Farmers Insurance $885,000.

[00:01:53]And as soon as that money clears the bank on November 21st, We say Skye um wrote a check and used Glenda's stamp. I don't know if she denies that or admits that, but the funds proceeded to go into uh the account for Imperial.

[00:02:11]Um it's since that time in November, we have reason to believe that the Hoaks used the funds for the insurance to pay off private loans including American Express, but we haven't confirmed that yet. We do not have an accounting of what's in the account, what remains, and um we're at a big misunderstanding of how the funds even got there under any scenario that um counsel may suggest. We We're just lucky that the funds were frozen by the Longview Police Department. Um this started earlier on this year on February um and then in March and they were able to uh again uh secure uh orders, and I I do not I don't have information regarding the basis for the warrants as they were protected from the investigation. We did request that, but I was able to get um the Longview Police Detective to cooperate enough to identify the checks so we could ask the court to continue to freeze these funds even though we don't know how much, but we know that they're in the We know that some amount of funds are in the fiber account that originated from um the fire insurance that uh was issued to both the the bank. Uh there's a mortgage on the property, and that subsequently was put into Twin City Bank and then um into Imperial Construction, which is uh uh which is the Hoaks' business. So, what we're So, that's the primary concern is the funds. I mean, the the the case does show that there's a significant other shortfalls that Skye has not filed taxes in 2024 far before the fire and we're we're also looking at L&I liens that have taken money away from the company.

[00:04:05]Karen Gibson did the bookkeeping. She's Since Skye won't release the QuickBooks for the stuffies and all of the information for the company, we've had to reconstruct the taxes to report taxes in 2024 and 2025 and we're still trying to reconstruct that from scratch since she won't share the QuickBooks.

[00:04:30]She has it all locked up and refuses to give So we're dealing with any scenario Skye Ho, whether she's an owner, an employee, or at least a member, she's She claims that there's a couple um operating agreements that she used to open up bank accounts and now she's claiming those control, but even under even under those agreements, if they are agreements, uh she can't prevail in keeping these funds and having her husband for do the do the work. Um and and the reason is that she has a duty of loyalty and the fiduciary duty to the company and that it's obvious that it that includes the duty to avoid self-dealing and conflicts of interest, which is a classic case.

[00:05:20]Now, she may say, "Well, I had a disagreement." That's what I could kind of understand from her declaration. She had a disagreement with her grandparents. Grandparents worked their whole life, set up this business. She's only been involved a few years and she disagreed with them. So she took the money.

[00:05:36]And that's that's why she should keep the money.

[00:05:39]That's how I understand her position.

[00:05:41]And we don't even know how much money she's got. She's got all the software that would detail this information.

[00:05:45]We're hoping that she's going to cooperate with the police and with us to do an investigation so that we can complete a forensic accounting and fairly present the merits of this case for the court to determine what to do.

[00:05:57]Um currently we're looking at a foreclosure from the bank if she doesn't um put the money forward. We're also We're also have the LNI uh doing claims.

[00:06:08]Also we pointed out that um she's She and Zane are risky um people to keep money with anyway because they suffered a judgment against both of them personally for $250,000 on a loan to I understand it to be Zane's grandparents. So now I represent her grandparents and they're also asking for their money back and that's a $300,000 loan that's outside of this. So there's significant risk of irreparable injury and harm and as uh the detective points out in his declaration it's it the preserving the status quo would protect both all the parties' rights and uh what we really need is uh some some determination of where this money goes. When you don't pay taxes the we've got significant concerns about tax liens and uh we already have employment security. We have wage issues that haven't been taken care of. So we have all this coming in. Meanwhile she's refused to uh She and Zane we made a demand for the money in January. They refused to They refused to deal with anything this entire year even though the money's been frozen and they've been under police investigation. They haven't cooperated with the police and they show no signs to cooperate with us other than their attempt to control the money and try to control the grandparents' business which she has under our claim no right to do so. She's been fired and disinherited.

[00:07:34]And so she's our position she's gone from the business but we need the money locked up so we can have this sorted out in a judicial matter.

[00:07:42]>> Understood. Thank you.

[00:07:45]All right, go ahead for defense.

[00:07:48]>> Thank you, Your Honor.

[00:07:49]Plaintiff's motion should be denied, the existing temporary restraining order should be dissolved, and the defendant's motion for temporary restraining order against the plaintiff should be granted.

[00:08:00]Your Honor, despite the innuendo and rumor that has been launched against my clients regarding this matter, this is a business dispute, plain and simple, and should be governed by the two operating agreements that were signed by the parties and completely ignored by the plaintiff's motion and supporting declarations.

[00:08:18]The factual inaccuracies and errors that undergird the plaintiff's motion and supporting declarations are completely refuted by my client's declaration uh and supporting documentation to our motion. There's simply no factual or legal basis for the court to grant plaintiff's motion. On the contrary, more than sufficient evidence exists to support a motion for temporary restraining order against the plaintiffs.

[00:08:42]Judge, turning my first point, the plaintiff's temporary restraining order should be denied. It is refreshing to hear opposing counsel acknowledge that there are operating agreements, because that is completely absent uh from their motion. Uh and so I've attached that uh to our motion, but in order to prevail, the plaintiff can't base it on misunderstanding or innuendo or anything else that was presented to the court.

[00:09:08]The employment security and foreclosure uh you know, arguments weren't even briefed for the court and aren't part of any of the declarations. They have to show a clear legal and equitable right, first of all, a well-grounded fear of invasion of that right, and that the acts complained of will result in actual and substantial injury, and an injunction will not issue in doubtful cases or where material facts and supporting affidavits on which that right depends are controverted and denied or denied. And judge Well, we may disagree and and the court may not uh agree completely with the affidavit that my client signed and supporting documentation.

[00:09:49]I think it is incontrovertible that the the supporting affidavits and the facts that they're relying on are controverted and are denied. There are three main contentions that are presented in their motion and in their affidavit that are refuted by my client.

[00:10:06]First, this idea that Mrs. Hogue uh was not an employee uh and that there was some sort of verbal promise to make her a partner. As I said, there's two agreements, one of which shows that she is a 50% owner in the restaurant and the property and her dwelling properties, which own the building, and a 1/3 owner in Dueling Enterprises. Second, that Mrs. Hogue and her husband uh you know, were never actually given the $300,000 that was referenced uh just now by opposing counsel. Uh there is a contract in which the promise to provide that those funds were made, but my client's declaration says that money was never paid to them, and that it undergirds their entire constructive uh constructive uh claim for um constructive trust argument for why they can pierce the corporate veil for my client's companies and try to attach their personal assets here. Uh that's that's simply not not based in fact.

[00:11:07]That money was never given to my clients and therefore cannot be the basis for the court to grant uh temporary restraining order. Uh and then third, the Dueling's uh were approved by Imperial for Imperial Construction. Uh my client uh Mr. Hogue's uh construction company to do the reconstruction work on Stuff These Two following the fire. This occurred uh as my client's affidavit indicates in the presence of the insurance adjuster, the insurance agent, and with three owners shortly after fire after the fire. Construction company submitted invoices for payment for work.

[00:11:45]That is why my client's company Imperial Construction took the insurance proceeds as a deposit, which they then billed against and invoice the insurance company and the adjuster for that work. It was only after the Doolings indicated that they did they intended to file for bankruptcy rather than re- reconstruct the restaurant as my client alleges in her declaration that they then made allegations that somehow they didn't know that any of this was going on.

[00:12:18]Judge, we have substantial exhibits that were attached and you know, I apologize for the volume of those, but they are fairly detailed to what we could put together in the limited time given the nature of the temporary restraining order. There's just a couple of key things that I wanted to bring up briefly. First, my client did have the authority to use the stamp, which processes checks in the course of her work managing the restaurant. The bank had an agreement on file granting for that permission. That was what opposing counsel just referenced now. During that same period, Ms. Dooling claims my client was a dis- was distant. My client and her grandmother were texting almost daily.

[00:13:00]Um One of the texts and I'll read it, it's one of the first ones. Mrs. Dooling admits, "Hey, when you get time, can you make a list of where our money went? I didn't keep track and I know he'll want to know." This is on January 17th of 2024. My client responds, "Yeah, I have one already. Yes." She says, "I need to know what I spent. You know, I'm not that smart enough to keep track." Judge, this is their key witness on alleging uh my my client's mismanagement of money and she admits in the the text that she's just not that good in handling the financing. There's references in the documents to the Alaska credit card and other credit cards that that they claim in their declaration that they have no knowledge of where they're admitting to it. There's other allegations that my client paid herself 491,000.

[00:13:54]Judge, she she clearly refutes that in her declaration.

[00:13:58]In this allegation that she made fake employee payments after the employee employees quit working.

[00:14:05]Judge, in her declaration she explains that the insurance company provided business interruption funds that were paid then to employees with the knowledge and approval of the insurance adjuster while this restaurant was out of out of business and not functioning. The bottom line here, Judge, is there simply is no basis for an in fact or law for this temporary restraining order to continue and so it should be dissolved pursuant to the the clear rule and case law interpreting that that we've cited in our brief. I also just wanted to to note for the court under the doctrine of unclean hands and this ties into the multiple violations of the operating agreements that were that that we have attached to our brief that again were not included in their motion. There are there are multiple violations that we've outlined starting on page seven and under the unclean hands doctrine anyone party with unclean hands that has acted unjustly or in bad faith is simply precluded from being able to recover in equity which is what the relief in this motion is seeking.

[00:15:20]They you know they removed her from the bank account and now they claim, oh, well, she's not providing financial information. Uh, they're claiming that she's not handing over QuickBooks, uh, which is tied to the bank account information which she no longer has access to.

[00:15:35]Uh, and uh, they are in the process of controlling or trying to transfer business funds and they completely blocked her and cut her out of that process. Every one of these and the other ones outlined in our motion are ones uh, where my client actually has a clear legal and equitable right, um, to have the Duelings precluded from having her exercise her rights under the uh, operating agreement. The Duelings also have a fiduciary obligation to act in accordance with those, uh, and they have not done that. So, Judge, uh, you know, in conclusion, I I think what happened here is, you know, the the Duelings got concerned about some potential, uh, judgments that were out there uh, that we've we've referenced in our motion involving some other fines and administrative fines.

[00:16:23]They wanted to file bankruptcy under the operating agreements, my client would not agree to that, wanted to proceed with reconstruction, and they got scared. And when you get scared, you don't act rationally, and so that is what resulted in the criminal, um, allegations and the other, uh, things that they're relying on uh, that are that are frankly false and should not, uh, be allowed to be sustained for this motion. So, you know, we are asking for the court to to restrain them from keeping my client to have access to the property, to keep it from being vandalized by homeless, uh, to allow her to secure it, uh, and to lift the restriction on these funds.

[00:17:02]Uh, if the court is, uh, not inclined to grant that, at a minimum, uh, the TRO should be dissolved and, um, and, uh, their motion, uh, should be denied. Thank you.

[00:17:15]>> Okay. So, just one question and I'm trying to find it in their agreement.

[00:17:19]So, let's just say for sake of argument, the two Dooleys uh wanted to declare bankruptcy, but uh how >> Yeah, they did not. That's >> I know.

[00:17:31]>> I I can't It's hard to hear you say that.

[00:17:34]>> I I understand. I'm just trying to get a sense of how how it So, let me let me use a different example. Let me use an example where the Dooleys say, "This is our vote for how we proceed."

[00:17:49]And truly, it sounds like defense is saying because one member uh said, "Nope, I want to rebuild it."

[00:18:01]That that's the way it goes. Is there something in this agreement that allows one member to override what two members may choose?

[00:18:10]>> Two responses, Judge. We're talking about two agreements. So, in the Dooley properties, which deals with the property in the restaurant, in which my client is a 50% owner, um the the agreement clearly provides that you have to have a majority in order to take action. There are some other clauses that actually require unanimous consent. So, um in that agreement, um with regard to the disposition of the property, they would not have the right to do that. Um in the with regard to the other agreement, I believe they have a third um right. So, there may be an argument that a majority of the shareholders with regard to Dooley Enterprises uh might be able to do that. The problem, Judge, is none of that was argued by opposing counsel. They argued that my client was an employee and not a partner, uh and therefore, if they want to try to brief and show where they had minutes in which a vote was taken, they could they could certainly make that motion, present that to the court.

[00:19:14]They've done none of that. They've taken the position my client was merely an employee who was acting and stealing money without their approval. That is not the case and that is not what those agreements show. So, the burden is on them to demonstrate that they're entitled to the relief they're seeking.

[00:19:32]>> Thank you.

[00:19:33]>> My turn?

[00:19:34]>> Yes, Mr. Frey, go ahead.

[00:19:35]>> It takes a majority vote, Your Honor. We have we should we see emails where the Hogs are routinely informed that by Farmers Insurance. They know it's you don't tell your grandparents, "No, I'm taking all the money." And under any under the under the act for limited liability companies, you cannot drain your corporation and substantially transfer all or almost all of the assets to another party. Certainly not your husband.

[00:20:04]So, that's what we have here and it's not innuendo. We brought the checks. We we see where she admits signing one and she admits using her grandmother's snap on another to give it to her husband. If it wasn't there, it's out of the reach of creditors now, Your Honor. It's in Imperial's account and only thing stopping it was Long Beach Police Department and then Judge Basher when he signed the temporary restraining order.

[00:20:28]Otherwise, I I would suggest it be long gone.

[00:20:33]Because the she didn't pay taxes. She's not she she apparently was managing the business but not paying the taxes and I don't think that's disputed for 2000 the past two quarters 2024 and 2025. This will all come out in the evidence and I really hope the court's going to be able to hear, you know, the evidence that will back up. I mean, he's talking about a limited liability operating agreement and it says the consideration is $3,500 and he rests his case on that. And that's obviously not consideration for these big big companies with lots of money and assets at the time. And likewise, there's no consideration, and the receipts are going to show this. I mean, we we see we know how much she was paying herself, but we don't have her QuickBooks to show where the other money's went. We have hundreds of thousand dollars in debts run up that we have to account for, but without her giving us access to her computer program, um most of the insights, you know, we just don't have it, and they can say it's our fault, but we had her pay an accountant to redo, reconstruct this to Skye's not sharing any of the company information, which is fundamental. You can't drain your company and give it to your husband. You can't say, "No, I'm not giving you any information because you fired me and you locked me out of the accounts so I wouldn't take more."

[00:21:55]So, the money needs to be frozen, otherwise it's going to go away.

[00:22:00]>> Mr. Maynard, did you want to be heard briefly?

[00:22:02]>> Yeah, just briefly, Judge. So, on on the account, we've attached in one of the exhibits an email from my client to the accountant in which she reminds her first of all, she provides the tax information, and so she was cooperating. This is in January, and reminds her uh you know, the fact that they hadn't filed when she had a meeting with her back in February for the third and fourth quarter payroll uh you know, information. So, that that is part of the record. She certainly provided information to the accountant.

[00:22:37]Certainly in light of the issues involving the Doolings and their allegations, my client certainly has been hesitant to want to uh you know, share information regarding the finances until all of this is resolved, but you know, the bottom line here, Judge, is he now wants to argue about agreements that in his motion he didn't bother to include. So, judge, the plain language of the agreements speak for themselves and we would request that the court deny their motion.

[00:23:11]>> And Mr. Fry, just to be clear, in your request, so the request does involve essentially a freeze for Imperial Construction's bank account. Is that just the insurance proceeds that were deposited into that account or you are saying the entire account?

[00:23:32]>> Well, we won't know until we do the forensic accounting. You know, what I presented the court is evidence of the two checks from Farmers Insurance to Twin City. That's the Doolings to Zane Hogue's Imperial. And that's the account number that we were able to get from the police department in order to go forward with the our initial temporary strain.

[00:23:53]That's the only information we have.

[00:23:55]They've not disclosed any of their other financial or banking information. We do know that she set up six or seven different LLCs, including other LLCs like Dooling Management, that were never activated. We also And so, so those the checks that that you have attached to Glenda's declaration and it's backed up by the bookkeeper and by Miss Olson with the Farmers Insurance representative declaration. So, it it it all corresponds to that account. I just don't have the other side. I don't have Zane Hogue um his account balance or statement to present the court to show it. We do show that the money was taken from the Twin City account. So, we don't have it anymore.

[00:24:42]>> Mhm.

[00:24:42]>> And deposited in that account. So, we don't know how much they spent before the Long Beach Police Department. They The money came from Farmers Insurance um on I think it was November 14th and on the 21st it clears the Twin City and eights $168,000.

[00:25:06]A check for that amount is in the declaration to um, from Doolings to um, Imperial and even under her um, operating agreement there's no authority for that. That's the majority.

[00:25:24]majority vote. And so and why a contractor has the right to hold on to 800 I mean there's $40,000 and 868,000 on a project without a written contract, I don't know. Apparently they think they have a contract, but again that's in dispute.

[00:25:41]>> Um.

[00:25:42]Yeah, here's my ruling and we are at a preliminary stage. So first with regard to plaintiff's request for a temporary um, injunction that uh, extends um, I am going to grant it. I do think that the plaintiffs have proven a clear legal legal and equitable right to the insurance proceeds uh, for whatever reason and I think that's a big question mark for me. Those proceeds are not in an account that can be accessed by um, everyone uh, who's maybe a party to this. It's instead in an Imperial Construction's account. Because of that plaintiffs do have a well grounded fear of immediate evasion into those funds. Frankly they could be used by the construction company for anything. Um, I do think that this could result in actual or substantial injury to plaintiffs. Um, I don't see anything in the file that would suggest that if these funds were depleted that the defendants have any way to repay uh, that harm.

[00:26:49]Uh, and it's so what flows from that is certainly a finding of the potential for a repairable harm.

[00:26:58]Unless I put this into place until a full hearing can be heard on the merits.

[00:27:02]So, I am going to grant plaintiff's request as proposed.

[00:27:07]I [clears throat] am going to deny defendant's request for an temporary order for the converse reasons.

[00:27:16]So, I don't know if Mr. Fry, you have I don't have a order to sign if >> We had that second order, but that's it.

[00:27:27]Your Honor, I'll have to submit something. What I'd like to do is run it by counsel.

[00:27:32]>> Okay.

[00:27:33]>> I don't know if we need a back up hearing if we can agree on it.

[00:27:36]>> Yeah, why don't Do you want to set it over for a week or two for presentation?

[00:27:40]If the two of you agree on the language, you can simply strike it.

[00:27:43]>> Okay.

[00:27:44]I'm going to I'm on holiday the week the two weeks around 4th of July. And so, we could do it on the either the 24th or the following. Let's see. If I'm on site or the 8th.

[00:27:59]>> Okay.

[00:28:00]I could do the 24th.

[00:28:06]>> The 8th >> June 24th, Judge.

[00:28:11]>> I'm sorry, Mr. Fry, are you available June 24th?

[00:28:13]>> Yes, that'll work if we can >> Okay.

[00:28:18]Will that work for you, Mr. Maynard?

[00:28:20]>> Yes, Your Honor.

[00:28:21]>> Okay. I'll have you back on the 24th.

[00:28:23]And again, feel free to strike and sent a send an agreed order if that comes to fruition.

[00:28:32]>> Thank you, Your Honor.

[00:28:32]>> Okay.

[00:28:34]>> Thank you, Judge.

[00:28:34]>> Thank you. Anything else we need to accomplish on docket?