REIDA STEWART, Plaintiff/Counter-Defendant, v. CAROLYN STEWART, INDEPENDENT EXECUTOR OF THE ESTATE OF FRANK STEWART, II, DECEASED, Defendant/Counter-Claimant, v. JAMES G. STEWART, Third-Party Defendant,
CAUSE NO. 2020-CPR01624
DEFENDANT’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION AGAINST JAMES G. STEWART
To the Honorable Eduardo Gamboa: Comes now Carolyn Stewart, Independent Executor of The Estate of Frank Stewart, II, Deceased (“Defendant” or “Counter-Claimant”), subject to and without waiving her May 13, 2022 Rule 91a Statute of Limitations Motion to Dismiss under Texas Civil Practice & Remedies Code §§ 16.003 and 16.004, and pursuant to Texas Civil Practice & Remedies Code § 16.069 files this counterclaim against Reida Stewart (“Plaintiff”) and third-party petition against James G. Stewart (“JGS”), and in support thereof pleads as follows:
I. DISCOVERY CONTROL PLAN & CLAIM FOR RELIEF
1. Carolyn Stewart will conduct discovery under Level 3 of the Texas Rules of Civil Procedure.
2. This dispute arises out of the Estate of Frank D. Stewart, I, deceased (“Frank Sr.”). and Frank D. Stewart, II, deceased (“Frank Jr.”). Reida Stewart alleges that during his lifetime, Frank Jr. committed various acts of fraud and breached certain fiduciary obligations owed to Reida Stewart. Carolyn Stewart disputes Reida Stewart’s allegations and denies that Reida Stewart is entitled to any recovery.
3. Carolyn Stewart seeks monetary relief over $200,000, but not more than $1,000,000, including all attorneys’ fees and costs, for all damages attributable to any of the following:
Breach of fiduciary duties by Reida Stewart in her capacity as Trustee of the Testamentary Trust Established Under the Last Will and Testament of Frank Sr. (the “Trust”), including but not limited to,
the duties of good faith, fair dealing, loyalty, and fidelity over the Trust’s affairs and its corpus, as well as
the duty of maintain a complete and accurate accounting of the administration of the Trust.
Mismanagement of Trust property by Reida Stewart
Misappropriation of Trust property by Reida Stewart
Aiding and abetting of said breaches by James G Stewart
Conspiracy between Reida Stewart and James G Stewart to breach Reida Stewart’s fiduciary duties to the Trust beneficiaries
Conspiracy between Reida Stewart and James G Stewart to interfere with business
Conspiracy between Reida Stewart and James G Stewart to interfere with contract
II. JURISDICTION & VENUE
4. The Court has subject-matter jurisdiction because Defendant’s counterclaims and thirdparty claims arise out of the same transactions and/or occurrences alleged by the Reida Stewart in her live petition.
5. Venue is proper in El Paso County, Texas, because Defendant’s counterclaims and thirdparty claims arise out of the same transactions and/or occurrences alleged by Reida Stewart and/or the subject matter of Reida Stewart’s claims against Carolyn Stewart. TEX. CIV. PRAC. & REM. CODE § 15.062 (a), (b).
III. PARTIES
6. Carolyn Stewart has appeared and answered.
7. Reida Stewart is an individual who filed this lawsuit and has otherwise appeared.
8. James G Stewart is an individual who resides at 312 Rainbow Circle, El Paso, TX 79912.
IV. FACTUAL BACKGROUND
9. Reida Stewart is the Trustee of the Testamentary Trust established under the Last Will and Testament of Frank Sr.
10. All of Frank Sr’s estate was transferred either to Reida Stewart, individually, or to Reida Stewart, as Trustee, under the terms of Frank Sr.’s Will.
11. Frank Sr.’s Will effectively disinherited James G Stewart, providing that Frank Sr.’s estate was eventually to pass to Frank Jr., Carolyn Stewart, and/or Frank Sr.’s grandchildren.
12. Under the terms of the Trust, Reida Stewart has the discretion to make distributions from the net annual income of the Trust in order to provide for her health, education, support or maintenance. Reida Stewart, as Trustee of the Trust, also has the discretion to consider herself the primary beneficiary thereof.
13. Upon Reida Stewart’s death, the Successor Trustee is to wind up the affairs of the trust estate and then distribute all remaining assets to Carolyn Stewart. In the event Carolyn Stewart predeceases Reida Stewart, the Successor Trustee is to distribute the remaining Trust assets to one-half (1/2) to the children of Frank Jr., and one-half (1/2) to the children of James G Stewart.
14. Reida Stewart, individually and as Trustee, has transferred portions of the corpus of the Trust and portions of her separate property to the beneficiaries of the Trust, including Frank Jr. Reida Stewart claims these transfers are void due to fraud on the part of Frank Jr.
15. Frank Jr. died in November of 2020.
16. Reida Stewart filed this lawsuit in January of 2022, alleging that she, in her individual capacity, is the rightful owner of the Trust corpus and any transfers that she previously made as Trustee are invalid. In support of this theory, Reida Stewart makes various allegations of fraud, supposedly committed by Frank Jr. prior to his death.
17. Upon information and belief and to the extent applicable, Reida Stewart has failed to account for the monies received and expended on behalf of the Trust.
18. Upon information and belief and to the extent applicable, Reida Stewart has failed to invest and manage the Trust assets in accordance with the Prudent Investor Rule as required by the Texas Uniform Prudent Investor Act and Section 117.004 of the Texas Property Code.
19. Upon information and belief and to the extent applicable, Reida Stewart has failed to diversify the Trust assets as required by the Texas Uniform Prudent Investor Act and Section 117.005 of the Texas Property Code.
20. Upon information and belief and to the extent applicable, James G Stewart has aided an abetted Reida Stewart in these breaches by advising her generally in these matters and in her dealings with the Trust beneficiaries.
21. Upon information and belief and to the extent applicable, James G Stewart has prohibited Reida Stewart from speaking or dealing directly with the Trust beneficiaries and caused all communications to be made through him and subject to his approval.
22. Upon information and belief and to the extent applicable, Reida Stewart has sought to partition certain real property interests which are subject to certain contracts and commingled with certain business interests of the Trust beneficiaries in such a manner as to hinder the transferability of those contracts and interests and impair their economic benefit to those beneficiaries. James G Stewart has advised Reida Stewart to do so.
V. CAUSES OF ACTION
23. Subject to and without waiving her May 13, 2022 Rule 91a State of limitations Motion to Dismiss under Texas Civil Practice & Remedies Code §§ 16.003 and 16.004, and pursuant to Texas Civil Practice & Remedies Code § 16.069, Carolyn Stewart pleads the following causes of action
Count I. Counterclaim Against Plaintiff: Breach of Fiduciary Duty
24. Carolyn Stewart alleges and incorporates by reference the allegations set forth in the paragraphs above.
25. Reida Stewart is the Trustee of the Trust and owes certain duties to the beneficiaries thereof, including Frank Jr. prior to his death.
26. To the extent applicable and as supported by the law and evidence, Reida Stewart breached those duties, damaging the Trust’s beneficiaries, including Frank Jr.
Count II. Counterclaim Against Plaintiff, Third-Party Claim Against JGS: Conspiracy
27. Carolyn Stewart alleges and incorporates by reference the allegations set forth in the paragraphs above.
28. To the extent applicable and as supported by the law and evidence, Reida Stewart and James G Stewart have engaged in a concerted effort to convert the corpus of the Trust into the separate property and estate of Reida Stewart.
29. In furtherance of this object, Reida Stewart has breached her duties as Trustee, including Reida Stewart’s duty to refrain from self-dealing, and has intentionally interfered with certain business interests of the Trust beneficiaries, and with certain contracts.
30. Carolyn Stewart has suffered injury as a proximate result of these unlawful, overt acts.
VI. CONDITIONS PRECEDENT
31. All conditions precedent to Carolyn Stewart’ right to recovery have been performed, have occurred, and/or have been waived.
VI. PRAYER
For the foregoing reasons, Carolyn Stewart asks that the Court grant the following relief: a. All damages to which Carolyn Stewart is entitled; b. Pre- and post-judgment interest; c. An award to Carolyn Stewart of its costs and reasonable and necessary attorneys’ fees as may seem equitable and just; and d. Judgment granting all such other relief at law or in equity as to which the Carolyn Stewart may show itself entitled.
REIDA STEWART, Plaintiff, v. CAROLYN STEWART, INDEPENDENT EXECUTOR OF THE ESTATE OF FRANK STEWART, II, DECEASED, Defendant.
CAUSE NO. 2020-CPR01624
DEFENDANT’S SPECIAL EXCEPTIONS, ORIGINAL ANSWER AND JURY DEMAND
To the Honorable Eduardo Gamboa: Comes now Carolyn Stewart, Independent Executor of The Estate of Frank Stewart, II, Deceased (“Defendant”), and files this, Special Exceptions, Original Answer and Affirmative Defenses to Plaintiff’s Original Petition and respectfully pleads the following:
SPECIAL EXCEPTIONS
1. Pursuant to Texas Rules of Civil Procedure 90 and 91 specially excepts the Plaintiff’s defects in pleadings as follows:
2. Defendant specially excepts to the entirety of part III of Plaintiff’s Original Petition because it does not provide the Defendant with adequate notice as to the alleged facts at issue, such as specifics regarding the places, notes, and history of the relationships among the parties.
3. Defendant further specially excepts to paragraph 3 on page 3 of Plaintiff’s Original Petition when Plaintiff states that “the following properties/notes were owned by Frank Sr. and/or Reida:” Plaintiff needs to describe the properties in greater detail, including who Plaintiff believes “owned” which properties and the details of that alleged ownership.
4. Defendant further specially excepts to the list of properties and notes contained on Pages 3-4, insofar as lists certain entities, being ET Transportation, Tru-Man, Inc., Stewart Ranches, Sonitrol, Stewart Properties, and S-S Ranches. Plaintiff should expound upon the nature of these entities and in what way they relate to her claims against the Defendant.
5. Defendant specially excepts to paragraph 2 on page 4 of Plaintiff’s Original Petition when Plaintiff states that “Frank II unilaterally reduced in interest payment on a loan or loans.” Plaintiff needs to describe the nature of this unilateral action in greater detail, as well as which “loan or loans” Plaintiff is referencing in this paragraph.
6. Defendant specially excepts to paragraph 1 on page 5 of Plaintiff’s Original Petition inasmuch as it does not specify the “Notes listed above” to which it is referring, either the twenty-two (22) notes listed on pages 3-4, the “loan or loans” or “memo loan” in the preceding paragraph, or all of these.
7. Defendant further specially excepts to paragraph 1 on page 5 of Plaintiff’s Original Petition because it states, without any supporting facts, that each of the twenty-two (22) loans listed on Pages 3-4 were (1) obtained “by fraud” (2) “without the intent to every pay the money back to Reida.” Plaintiff needs to describe the nature of this alleged fraud, the basis upon which she establishes the alleged intent of Frank II, and the nature of the alleged “defaults” she claims caused her to “suffer large losses,” as well as the nature of those losses themselves.
8. Defendant specially excepts to items 1-9 on pages 6-8 of Plaintiff’s Original Petition, insofar as it does not provide any details surrounding the purchases, sales, grants, and transfers referenced therein. Plaintiff should provide verifiable facts regarding such purchases, sales, grants, and transfers which she alleges took place.
9. Defendant further specially excepts to items 1-9 on pages 6-8 of Plaintiff’s Original Petition, insofar as it does not provide sufficient details with which to identify the tracts of land to which it refers. For instance, item 9 on Page 7 is listed simply as “20 acres in British Columbia.” Plaintiff should adequately describe these properties such that they may be properly identified.
10. Defendant further excepts to item 5, paragraph 2, Page 7 of Plaintiff’s Original Petition where it states that Frank II “never complied with the Will by deeding the homestead to Reida and the residuary estate to the Residuary Trust.” Plaintiff needs to explain the facts and circumstances giving rise to such obligations on behalf of Frank II.
11. Defendant further excepts to item 5, paragraph 3, Page 7 of Plaintiff’s Original Petition where it states that in March 2016, “Frank II deeded the Homestead to himself.” Defendant pleads that in March 2016, Reida R. Stewart, Individually and as Trustee of the Residuary Trust created under the Will and Estate of Frank D. Stewart, conveyed all her right, title, and interest in and to the Homestead, to Frank D. Stewart, II via that certain Special Warranty Deed dated March 1, 2016, and filed of record on March 21, 2016 in the records of the County Clerk of El Paso County, TX, as Doc #20160018909.
12. Defendant specially excepts to the entirety of part V of Plaintiff’s Original Petition because it does not provide any details regarding either the properties or the Special Warranty Deeds plaintiff is referring to.
13. Defendant specially excepts to paragraph 1 of part VI on page 5 of Plaintiff’s Original Petition inasmuch as it does not specify the “the Property described above” to which it is referring, either the “above real properties” referenced in the preceding paragraph, or properties referenced in the paragraph before that, or some other combination of properties.
14. Defendant further excepts to paragraph 1 of part VI on Page 5 because it states, without any supporting documentation or facts, that “Frank II transferred the Property with the intent to defraud Frank Sr. and Reida and their legal heirs in that Frank II transferred the Property with the intent of preventing Reida from passing her Property according to her Will. Specifically, the Plaintiff alleges that by controlling all the funds, both before and after Frank Sr.’s death, Frank II was able to exert undue influence over Reida, without explaining to her the ramification of her signature on the various documents Frank II got Reida to sign.” Defendant pleads that these sentences are unintelligible and do not provide Defendant with adequate notice of Plaintiff’s allegations against Defendant. At the least, Plaintiff needs to clarify and articulate properly the alleged fraudulent act or acts which Plaintiff believes transpired in this regard. Further, Plaintiff should describe the basis upon which she establishes the alleged intent(s) of Frank II, the nature of the undue influence she alleges, the specific provision(s) of Reida’s Will, the Property, the documents, the ramification(s), the damages, the funds, the deprivation, and verifiable facts related to each of these items in order that Defendant may adequately respond.
15. Defendant specially excepts to part VII on pages 8-9 of Plaintiff’s Original Petition insofar as it does not contain any details regarding the “many material representations which were false” Plaintiff is alleging were made, the nature of their alleged falsehood, the factual basis upon which Plaintiff establishes the state of Frank II’s mind or intent, which “instruction” Plaintiff refers to, which Deeds the Plaintiff refers to, the nature and extent of the damages and “injuries” she alleges she suffered, or what transaction it refers to. Plaintiff should clarify these points so Defendant may properly respond.
16. The entirety of part VII appears like an attempt to plead the elements of a cause of action for fraud, generally, despite alluding to three separate types of fraud. To the extent it does so and thereby provides Defendant with no fair notice of Plaintiff’s claims or fair notice of the facts at issue, Defendant further specially excepts to the entirety of part VII of Plaintiff’s Original Petition.
17. Defendant specially excepts from part VIII of Plaintiff’s Original Petition insofar as it relies on matters of opinion to arrive at factual conclusions and does not, in any case, provide Defendant with any verifiable facts. Defendant pleads that Plaintiff’s allegations that Frank II “transferred all of the Properties described in Paragraph 4 for less than an equivalent value, thereby impairing Reida’s financial stability,” is (1) unsupported by the facts at issue and (2) does not plead a claim for which legal relief may be sought.
18. The entirety of part VIII appears like an attempt to plead a legal conclusion (deed invalidity) by generally stating, again, the elements of fraud. To the extent it does so and thereby provides Defendant with no fair notice of Plaintiff’s claims or fair notice of the facts at issue, Defendant further specially excepts to the entirety of part VII of Plaintiff’s Original Petition.
19. Defendant further specially excepts from all of part VIII of Plaintiff’s Original Petition insofar as it does not adequately articulate the nature of the alleged “failure of consideration” Plaintiff is relying on. “Failure of Consideration” can occur in several ways. Plaintiff should clarify which type or types she is alleging occurred so that Defendant may adequately respond.
20. Defendant specially excepts to the entirety of part IX of Plaintiff’s Original Petition because it states without any underlying factual basis “Frank II made, presented or used and recorded the Deeds to the Properties listed in Paragraph 4 in the records of the El Paso County Clerk and Hudspeth County Clerk with the knowledge that the Deeds constituted fraudulent claims against the Real Property with the intent that the document have the same legal effect of valid Deeds against the Properties with the intent to cause his mother, Reida to suffer financial injury, all in an effort to procure ownership of Reida’s assets knowing the documents he recorded were fraudulent, with the intent to defraud, in order to become the owner, in fee simple, of valuable real estate.” Defendant pleads that these sentences are unintelligible and do not provide Defendant with adequate notice of Plaintiff’s allegations against Defendant. At the least, Plaintiff needs to clarify and articulate properly the alleged fraudulent act or acts which Plaintiff believes transpired in this regard. Further, Plaintiff should describe the basis upon which she establishes the alleged intent(s) of Frank II, the knowledge she believes he possessed, which documents, claims, deeds, and financial injuries Plaintiff is referring to, and verifiable facts related to each of these items, in order that Defendant may adequately respond.
21. Defendant specially excepts to the entirety of paragraph 1 of part X on page 10 of Plaintiff’s Original Petition insofar as in misstates the law and the mechanics of the transfer of title upon a testate owner’s death when it states Defendant “failed to transfer title,” “failed to ‘note’ Reida’s interest in the Homestead,” and “failed to establish the Residuary Trust and/or transfer the remaining real property to the Residuary Trust.” Defendant pleads that these are not legal requirements in Texas, either of an executor or in order for title to transfer. Title to these assets passed and the Residuary Trust was established immediately upon Frank Sr.’s death.
22. Defendant further specially excepts to the remainder of part X of Plaintiff’s Original Petition because it is self-contradictory. It states unequivocally that the Life Estate Deed dated July 19, 2016, “granted Reida a life estate in the Homestead,” but also that this deed did not convey anything because the grantor therein, Frank II, never “got title” from his predecessor, the Plaintiff. Each of these statements is mutually exclusive. Plaintiff should clarify her legal position as to the effect each instrument in this chain of title had on the ownership of the Homestead.
23. Defendant further specially excepts to part X of Plaintiff’s Original Petition insofar as it assumes facts not in evidence regarding “instructions” given to Plaintiff by Frank II. Plaintiff should explain what these purported instructions were, and a basis upon which to verify her claims.
24. Defendant specially excepts to the entirety of part XI of Plaintiff’s Original Petition because Plaintiff is in actual possession of the premises at issue. Further, Plaintiff has a life estate interest in the property as reflected in the records of the El Paso County Clerk. Defendant pleads that Plaintiff has not met the pleading requirements of a Trespass to Try Title action under Chapter 22 of the Texas Property Code. Defendant further pleads that Plaintiff, a life estate owner in actual possession of the premises cannot in any case meet those pleading requirements because of this possession.
25. Defendant further specially excepts to part XI insofar as Plaintiff therein claims she is owed rent. A life estate owner in actual possession is not entitled to rent. Defendant further pleads that the utility bills for the property at issue in part XI are paid monthly by the Defendant, as is the property tax.
26. Defendant further specially excepts part XI of Plaintiff’s Original Petition insofar as it assumes facts not in evidence, makes baseless assertions as to the state of mind of Frank II, makes legal conclusions without explanation or reasoning, and includes alleged slights, such as “withholding ownership” which do not set forth a basis upon which to ascertain a cause of action or the elements of any claim.
27. Defendant further specially excepts to the entirety of part XI of Plaintiff’s Original Petition because plaintiff wantingly pleads her causes of action therein in general terms, providing neither fair notice of any claims nor fair notice of the facts at issue.
28. Defendant specially excepts to the entirety of Plaintiff’s Original Petition insofar as it does not contain any supporting documentation or factual basis for the property valuations is uses as a basis for its alleged monetary damages.
29. Defendant specially excepts to the entirety of Plaintiff’s Original Petition insofar as it does not contain any supporting documentation or factual basis for the existence of the more than two dozen Notes under which it is owed sums certain by the Defendant.
30. Defendant specially excepts to the entirety of Plaintiff’s Original Petition as it does not adequately describe the alleged fraudulent acts for which Plaintiff is seeking damages.
31. Defendant specially excepts to the entirety of Plaintiff’s Original Petition as it relies heavily on misunderstandings of the provisions of the Texas Estates Code and the ownership of real property in establishing Plaintiff’s various claims of fraud and breach of fiduciary duties.
32. Defendant specially excepts to the entirety of Plaintiff’s Original Petition as it does not describe the damages specifically sought.
33. Defendant specially excepts to the entirety of Plaintiff’s Original Petition as it pleads Plaintiff’s causes of action in general terms, providing neither fair notice of its claims nor fair notice of the facts at issue.
34. Defendant specially excepts to the entirety of Plaintiff’s Original Petition as it nowhere pleads the elements of common law fraud, fraud by non-disclosure, or statutory fraud.
35. Defendant specially excepts to the entirety of Plaintiff’s Original Petition as it nowhere pleads the elements of breach of fiduciary duty or the relationship under which such alleged duty or duties arose.
36. Defendant affirmatively pleads that all of Plaintiff’s claims are barred by the relevant statutes of limitations.
37. There are no facts which could justify an award of exemplary damages because there is no showing of fraud, malice, or gross negligence. No action by Defendant was fraudulent, harsh, oppressive, malicious, showed ill will, spite, evil motive, or purposing the injuring of another, or otherwise fits the requisite Texas legal standard to justify an award of exemplary damages.
38. Defendant affirmatively pleads they are not subject to an award of exemplary damages.
39. Defendant affirmatively pleads the exemplary damage cap and limitations of Chapter 41 of the Texas Practice and Remedies Code, that punitive damages may not exceed an amount equal to the greater of (1) two times the amount of economic damages, plus an amount equal to any noneconomic damages found by the jury, not to exceed $750,000.00; or (2) $200,000.00.
40. Each special issue or question, which pertains to an award of exemplary or punitive damages, must be based upon a unanimous jury verdict because such an award is punitive, or penal, in nature.
GENERAL DENIAL
41. Subject to and without waving the above special exceptions, Defendant, pursuant to Texas Rule of Civil Procedure 92, enters a general denial answer to the allegations as alleged and worded in plaintiff’s Original Petition and places the matters at issue.
AFFIRMATIVE DEFENSES
42. Defendant is not liable to plaintiff because plaintiff’s claims for Common-Law Fraud, Fraud by Non-Disclosure, Statutory Fraud, and Breach of Fiduciary Duty, as well as any separate and distinct claims which include these underlying claims as an element thereof, are each barred by the four-year statute of limitations in Texas Civil Practice & Remedies Code section 16.004.
43. To the extent applicable, Plaintiff failed to mitigate damages.
44. To the extent applicable, Defendant asserts the defenses of estoppel, waiver, consent, release, payment, recission, laches, and accord and satisfaction.
45. Defendant also pleads and relies upon the legislative limitations on damages as set forth in any and all provisions of Chapter 41 of the Texas Civil Practice and Remedies Code.
46. Defendant pleads that any exemplary damages, if plead and found, must be capped under applicable Texas law and the Due Process Clauses of the United States and Texas Constitutions.
47. Defendant further pleads that any award of prejudgment interest must be governed and limited by the provisions of Chapter 304, Subchapter B of the Texas Finance Code.
48. Defendant reserves the right to assert such other defenses as continuing investigation and discovery may reveal, and the right to amend or supplement this Answer at any time.
ATTORNEY’S FEES
49. Defendant is entitled to recover reasonable and necessary attorney’s fees and all costs of court incurred under statute, contract and/or equity.
JURY DEMAND
50. Defendant demands a trial by jury as to all issues triable by jury as a matter of right.
WHEREFORE, PREMISES CONSIDERED, Defendant, Carolyn Stewart, Independent Executor of the Estate of Frank Stewart, II, deceased prays for judgment in its favor, that it recovers its reasonable and necessary attorney’s fees and costs, and for such other and further relief to which it may show itself justly entitled.
On April 2, 2001 a Codicil to the original Will (dated 1993) was signed by both Reida Stewart and Frank Stewart Sr. In this Codicil Frank Stewart Sr’s last wishes were that James G Stewart should receive only a 1991 Jeep Cherokee from their estate and that Frank Stewart II should get the remainder of the estate, including all personal property and primary residence. The Codicil goes at length to detail that if Franks Stewart II has not survived, all property should go to Frank Stewart II’s wife and if his wife isn’t surviving, then the estate should be split and distributed to the children of Frank Stewart II and James G Stewart. This detailing in the Codicil restricts James G Stewart from receiving any part of the estate except a 1991 Jeep Cherokee.
On January 10th, 2022 a claim was filed against the estate of Frank Stewart II by Reida Stewart and James Stewart. The claim was in the amount of $4,110,253.59 and the demand was that Frank Stewart’s widow approve the claim and pay this sum to Reida Stewart. Reida Stewart personally signed this claim. Multiple letters were written and mailed to Reida and James Stewart from multiple members and branches of the family pleading for them to drop the outrageous claim. On April 13th, 2022 Reida Stewart filed an Original Petition stating that a series of notes were owed to Reida Stewart by Frank Stewart totaling in excess of $4 million. The Petition that Reida Stewart filed states that “The notes listed above which are held by Reida were obtained by fraud by Frank II without the intent to ever pay the money back to Reida, all to Reida’s detriment.” The petition goes on to detail how Frank Stewart II engaged in repeated fraudulent behavior and malicious conduct toward Reida Stewart. At this time Reida Stewart is 99 years old and is suing her deceased son’s widow for over $4 million in cash, real estate and automobiles. The person in charge of her primary care, and only surviving son, is James Stewart in El Paso, TX. It is unknown who the heir to these monies and properties would be. This will be a public chronicle of the events that have passed and are to come. It is an open blog and open to anyone.
No. 2020-CPR01624 IN THE ESTATE OF FRANK STEWART II, DECEASED IN THE PROBATE COURT NO. 2 EL PASO COUNTY, TEXAS PLAINTIFF’S ORIGINAL PETITION TO THE HONORABLE COURT: REIDA STEWART, hereinafter known as “Plaintiff’, complains of THE ESTATE OF FRANK STEWART II and CAROLYN STEWART, Independent Executor of the Estate of Frank Stewart II, hereinafter known as “Defendant”, and for cause of action shows: I.
Selection of Discovery Level and Statement of Relief Sought
The Plaintiff affirmatively pleads that Plaintiff seeks monetary relief over $1,000,000.00, nonmonetary relief and damages of any kind, penalties, costs, expenses, prejudgment interest, and attorney’s fees and discovery must therefore be conducted under Civil Procedure Rule 190.3. The damages sought are within the jurisdictional limits of the court.
II.
Parties and Service of Citation
The Plaintiff is an individual residing in El Paso County, Texas. The Defendant is an individual and is the Independent Executor of the Estate of FRANK STEWART II, deceased, which is being administered in El Paso County, Texas. The Defendant is a resident of El Paso County, Texas, and may be served with process by serving her at 6700 Gato Road, El Paso County, Texas79932.
III. Factual Basis for the Petition
Plaintiff, REIDA R. STEWART and her husband, FRANK D. STEWART SR. were married in 1942 and had three children, Frank D. Stewart II, Daniel R. Stewart and James G. Stewart.
Prior to 1940, before his marriage to Reida, Frank Sr. purchased property located at 301 Frontera Road, El Paso County, Texas.
Prior to 1983 Reida Stewart (hereinafter “Reida”) and Frank a Stewart (hereinafter “Frank Sr.”) owned property in Canada that they called “Nigel Place.” On or about 1983. Reida and Frank Sr. collectively sold Nigel Place for $860,220 US dollars. Frank Sr. invested $301,353 of the Nigel sales proceeds in the Williams/Cornudas Ranch in Hudspeth County, Texas and Reida invested $239,302 of the Nigel sales proceeds in the Gillum Ranch and $140,000 in the Hudson Ranch (both in Otero County NM).
In 1983, Reida loaned Frank II $30,000.00 to purchase a truck and in 1985 Reida loaned Frank II $10,000.00 to purchase cattle.
In 1985, Frank Sr. and Reida sold their farm located in Dona Ana County, New Mexico and realized net proceeds of $595,033.47.
In 1991, Reida leased “Crow Flats” land to Frank II for $1075 per month. In 1992 Reida and Frank Sr.’s son, Daniel Stewart, passed away without leaving any children.
Between 1993 and 1994 Frank II borrowed a total of 150,000.00 from Reida and Frank Sr. with no evidence of ever paying off the notes.
In 1994, Frank Sr. and Reida’s assets totaled $1,828,688.
In 1994 Frank II unilaterally suspended payments to Reida for the Crow Flats lease. As early as 1994, and very likely prior to that time, Frank II was heavily involved in handling finances for Frank Sr’s and Reida’s various investments. At the time, Frank Sr. was approximately 88 years old and Reida was 72. Frank Sr. passed away on July 24, 2001. At the time of Frank Sr’s death, the following properties/notes were owned by Frank Sr. and/or Reida:
Gillum Ranch
$270,000.00
Hudson Ranch
$180,000.00
Runyan Ranch
$300,000.00
Cornudas Ranch
$300,000.00
300 Frontera
$ 30,000.00
301 Frontera
$180,000.00
Lots 17-20 Cotton Addition
$ 80,000.00
20 acres in British Columbia
$200,000.00
100 acres in Strauss NM (Dona Ana County)
$5,000.00
Loan by Reida to Frank II
$ 30,000.00
Loan by Reida to Frank II
$ 10,000.00
ET Transportation Note owed to Reida
$128,571.42
Loan by Reida to ET Transportation
$ 94,285.71
Demand note owed to Reida by Frank II
$ 25,000.00
Note owed to Reida by Frank II
$ 125,000.00
ET Transportation Note owed to Reida
$102,857.14
Tru-Man, Inc. note owed to Reida
$ 43,749.57
Note owed to Reida by Frank II Note owed to Reida by Frank II Note owed to Reida by Frank II
$ 336,300.00 $ 4,571.43 $ 10,414.29
Note owed to Reida by Frank II
$7,342.86
Note owed to Reida by Frank II Note owed to Reida by Frank II Demand Note owed to Reida by Frank II Demand Note owed to Frank Sr. by Frank II Demand Note owed to Frank Sr. by Frank II Demand Note owed to Reida by Frank IT Note owed to Stewart Ranches by Sonitrol Demand Note owed to Reida by Frank II Stewart Properties Stock Note owed to Reida by Frank II Note owed to Reida by Frank II 1912 Hupmobile 40% Interest in S-S Ranches in Canada
In 2002, Frank II unilaterally reduced the interest payments on a loan or loans owed to Reida from $4505 per month to $1650 per month in conjunction with a memo loan instructing his wife and sons of the reduction but, provided that when Reida needs more money, they were to give her immediate access to all she needs or wants.
The Notes listed above which are held by Reida were obtained by fraud by Frank II without the intent to ever pay the money back to Reida, all to Reida’s detriment. Reida has suffered large losses as a result of the defaults by Frank 11 and the Estate of Frank II.
On January 10, 2022, Reida filed an authenticated claim in the Estate of Frank II. A true and correct copy of the Authenticated Claim is attached hereto as Exhibit A.
This lawsuit is filed not later than the 90th day after the date of rejection of Plaintiffs Authenticated Claim, said rejection occurring by operation of law on February 9, 2022, in compliance with Texas Estates Code.
IV. Description of Real Property
1. In 1994, Reida and Frank Sr. purchased the property known as: 26T:22R: 17N 1/2 SE 14/ , N 1/2 N1/2 SW 14/ S: 27T: 22R: 17E1/2 NE 14/ , NE 14/ SE 14/ S: 35T: 22R: 17 N1/2 N1/2 SE % NE1/4 known as 980 Pinon Creek Rd., Pinon NM 88344
S: 12T: 22R: 17 S1/2 S: 36T: 21R: 17E1/2 21: 22 R: 17 All S: 35T: 21R: 17Al1 S: 36T: 21R: 17 W1/2 known as 552 Pinon Creek Rd., Pinon, NM 88344
S: 31T: 21 R: 18 All. S: 32 T: 21 R: 18 All known as 167 Dean Ranch Rd., Pinon NM 88344 In 2003, the Property was transferred to Frank II. At the time of the transfer, the market value of the Property was in excess of approximately $270,000.00 2. In September 1983, Reida purchased the property known as East ‘A Section 36, Township 21 South, Range 17 East; All of lots 1, 2, 3, 4, East 12/ West V2, East 12/ Section 31, Township 21 South, Range 18 East; All of Section 32, Township 21 South, Range 18 East. In 2003, the Property was transferred to Frank II. At the time of the transfer, the market value of the Property was in excess of approximately $180,000.00 3. On April 27, 1995, Reida and Frank Sr. purchased the following: Township 22 South, Range 17 East, N.M.P.M. N/2N/2; SW/4 of Section 26, E/2NE/4; NE/4SE/4 of Section 27 and N/2N/2; SE/4NE/4 of Section 35 Township 22 South, Range 17 East N.M.P.M. S/2 of Section 12, All of Section 2 Township 21 South, Range 18 East, N.M.P.M. all of Sections 32 and 31 Township 21 South, Range 17 East, N.M.P.M. all of Sections 35 and 36 The Property was paid off on September 7, 1995 and the mortgage was released. In 2003 the Property was transferred to Frank II. Al the time of the transfer, the market value of the Property was in excess of approximately $300,000.00 4. Reida and Frank Sr. purchased the property known as 1 UPPER VALLEY, Tr 17-A (0.32 Acre) also known as 300 Frontera Rd., El Paso, TX In 2016, the Property was transferred to Frank II. At the time of the transfer, the market value of the Property was in excess of approximately $30,000.00 5. Reida and Frank Sr. purchased the property known as Tract 5A, containing 2 acres, more or less, Block 2, UPPER VALLEY SURVEYS, in the City of El Paso, El Paso County, Texas also known as 301 Frontera Rd., El Paso, TX and hereinafter referred to as the “Homestead”. This Homestead property was purchased by Frank Sr. in 1934 before he married Reida. However, this Homestead was where Reida and Frank Sr. resided as their primary residence for most of the remainder of their lives. Reida still resides in the Homestead property. In Frank Sr’s Last Will and Testament and the codicil, Frank Sr. gave all of his interest in the Homestead outright to Reida in fee simple. The remainder of Frank Sr.’s property was to go into a Residuary Trust. The Executor of Frank Sr.’s estate was Frank II. Frank II never complied with the Will by deeding the Homestead to Reida and the residuary estate to the Residuary Trust. In March 2016, Frank II deeded the Homestead to himself. That same year, in July 2016, a life estate was granted to Reida. At the time of the transfer in March 2016, the market value of the Property was in excess of approximately $180,000.00. 6. Frank Sr. purchased the following property on April 20, 1940: Lots 17, 18, 19 and 20 Block 4. COTTON ADDITION, an addition to the City of El Paso, El Paso County, Texas. On March 1, 2016, the Property was transferred to Frank II. At the time of the transfer, the market value of the Property was $80,000.00 7. Frank Sr. purchased the Property described as Sections 26 and 28 and that portion of Sections 30, 32, 34, and 36 North of U.S. Highway 62 and U.S. Highway 180, all in Block 72, Township 2, Texas and Pacific Railway Company Surveys, Hudspeth County, Texas containing 3,151 acres more or less, hereinafter known as the Williams/Cornudas Ranch. On March 1, 2016, the Property was transferred to Frank II. At the time of the transfer, the market value of the property was in excess of $300,000.00. 8. 20 acres in British Columbia 9. Reida and Frank Sr. owned property in Dona Ana County. Frank Sr. sold all but 100 acres which was located in Strauss, NM. The market value of the 100 acre Property in Strauss, NM was in excess of $5,000.00. The Property was conveyed by Frank II and the funds are missing. None of the conveyances referenced above were the subject of any gift tax filings.
V. Transfer of Property
Most of the above real properties were transferred to Frank II by executing Special Warranty Deeds granting title in fee simple to Frank II.
VI. Fraudulent Nature of Transfer
Frank II transferred the Property described above with the intent to defraud Frank Sr. and Reida and their legal heirs in that Frank II transferred the Property with the intent of preventing Reida from passing her Property according to her Will. Specifically, the Plaintiff alleges that by controlling all of the funds, both before and after Frank Sr.’s death, Frank II was able to exert undue influence over Reida, without explaining to her the ramification of her signature on the various documents Frank II got Reida to sign. As a result of the fraudulent transfer, the Plaintiff has suffered actual damages in the amount of the value of the Property, plus incidental and consequential damages and has been deprived of adequate funds to support her care.
VII. COMMON LAW FRAUD, FRAUD BY NON DISCLOSURE AND STATUTORY FRAUD
Frank II made many material representations to Reida which were false, when Frank II made those representations, he knew them to be false and he made the representations with the intent that Reida rely upon them and follow his instruction to sign the various Deeds he presented to her with the instructions to sign them. Frank II’s conduct caused damages and injuries to Reida. The transaction involved real estate.
VIII. DEED INVALID FOR FAILURE OF CONSIDERATION
Frank II transferred all of the Properties described in Paragraph 4 for less than a reasonably equivalent value, thereby impairing Reida’s financial stability. Specifically, as a direct result of Frank II’s malicious conduct, Frank Sr.’s and Reida’s assets plummeted substantially from $1,828,688 in 1994 when Frank II took over management of his parent’s finances to $310,000.00 in 2022.
IX. VIOLATION OF CHAPTER 12 OF THE CIVIL PRACTICES AND REMEDIES CODE
Frank II made, presented or used and recorded the Deeds to the Properties listed in Paragraph 4 in the records of the El Paso County Clerk and Hudspeth County Clerk with the knowledge that the Deeds constituted fraudulent claims against the Real Property with the intent that the document have the same legal effect of valid Deeds against the Properties with the intent to cause his mother, Reida to suffer financial injury, all in an effort to procure ownership of Reida’s assets knowing the documents he recorded were fraudulent, with the intent to defraud, in order to become the owner, in fee simple, of valuable real estate. Frank II further used documents or other records of Promissory Notes with the knowledge that Frank II never intended to pay the principal or interest due on the Notes. Defendant is liable to Plaintiff for the greater of: A. $10,000.00 or B. the actual damages caused by the violation in excess of $4,000,000.00
Defendant is also liable for court costs, attorney’s fees and exemplary damages in an amount to be determined by the Court.
X. Petition for Declaratory Judgment
On August 16, 1993 Frank Sr. executed his Will. The Will instructed the Executor to transfer title to the Homestead to Reida and all other Estate’s Properties to the Residuary Trust. When Frank Sr. died on July 24, 2001, the Court Appointed Executor, Frank II, failed to transfer title to the Homestead to Reida and further failed to note Reida’s interest in the Homestead. Frank II also failed to establish the Residuary Trust and/or transfer the remaining real property to the Residuary Trust. On March 1, 2016, a Special Warranty Deed for the Homestead was recorded in the El Paso County Deed Records. The Special Warranty Deed named Reida as the Grantor and Frank II as the Grantee. The Special Warranty Deed was executed by the Grantor, Reida, in her capacity as Trustee of the Residuary Trust created under the Will. On July 19, 2016, a Life Estate Deed was recorded in the El Paso County Deed Records. The Life Estate Deed listed Frank II as the grantor and Reida as Grantee. This Life Estate Deed granted to Reida a life estate in the Homestead.
The Special Warranty Deed identifies Reida in her individual capacity as Grantor stating that Reida is conveying all of her interest in the 301 Frontera Property to Frank II. However, Reida did not execute the Special Warranty Deed in her individual capacity. Instead, she was instructed by Frank II to execute the Special Warranty Deed as Trustee of the Residuary Trust. The Residuary Trust never got title, or any interest, in the 301 Frontera Property so the Residuary Trust could not convey title it did not have. Reida, in her individual capacity, never transferred title to the Homestead. Reida requests that the Court declare that the Last Will and Testament and the Codicil required Frank II to convey the Homestead directly to Reida in fee simple and further Declare that the remainder of the Properties listed in Paragraph 4 (other than the Homestead) were to be conveyed by Frank II in his capacity as Executor of the Estate of Frank Sr., to the Residuary Trust. Reida further requests that the Court Declare that Reida, in her individual capacity, never conveyed any interest in the Homestead Property to Frank II and title remains in the name of Reida Stewart. The plaintiff has retained the firm of Forbes & Forbes to represent the Plaintiff in this action and has agreed to pay the firm reasonable and necessary attorney’s fees. An award of reasonable and necessary attorney’s fees to the plaintiff would be equitable and just and therefore authorized by Section 37.009 of the Civil Practice and Remedies Code.
XI Trespass to Try Title
Plaintiff would replead paragraph X above as if set forth herein. This action is one for Trespass to Try Title under Chapter 22 of the Texas Property Code, and Rules 783 et seq., of the Texas Rules of Civil Procedure, and concerns title to the real estate more fully described Tract 5A, containing 2 acres, more or less, Block 2, UPPER VALLEY SURVEYS, in the City of El Paso, El Paso County, Texas (the “Homestead”) and filed under clerk’s file number 20160018909, more commonly known as 301 Frontera, El Paso, Texas. Plaintiff is in possession of the 301 Frontera Property, and was, at all times herein, entitled to possession of the 301 Frontera Property. On March 1, 2016, at a time when Reida did not have the benefit of legal counsel, Frank II unlawfully had Reida execute a Special Warranty Deed with the intent to have the effect of dispossessing Reida of the entirety of the premises. Reida was and still is entitled to ownership of the entire fee simple interest in the Property and Defendant’s estate continues to withhold ownership. Reida is entitled to recover the fair rental value of the Homestead from and after March 1, 2016, the date on which Defendant stripped Reida of ownership of the Homestead. Reida is entitled to the fair rental value for so long as the Estate of Frank D. Stewart II hold a remainder interest in the Homestead. Plaintiff has requested that Defendant deed the remainder interest back to Plaintiff, which Defendant has refused to do. Accordingly, under Section 16.034 of the Civil Practice and Remedies Code, Defendant is liable to Plaintiff for reasonable attorney’s fees in an amount determined by the court, in addition to Plaintiff’s claim, plus costs of suit.
XII. Attorney’s Fees
Plaintiff has retained the firm of FORBES & FORBES to represent Plaintiff in this action and has agreed to pay the firm reasonable and necessary attorney’s fees. An award of reasonable and necessary attorney’s fees to Plaintiff would be equitable and just and is authorized by CPRC Chapter 12.
XIII Breach of fiduciary Relationship
The Plaintiff was entitled to rely on the promises and representations of the Defendant, Frank H, on the mutual understanding of the parties and on Frank II’s failure to disclose contrary intent, because there was a fiduciary relationship between Plaintiff and Defendant. The Defendant refused to account for the missing funds and failure to pay the Notes and for the fraudulent transfers of the real properties. Defendant has breached his fiduciary duty to Plaintiff.
XIV Constructive Trust
It is unconscionable and a breach of the confidential and fiduciary relationship between the plaintiff and the defendant for the defendant to retain the property in dispute as described in Exhibit A. A constructive trust on the property in question is the only remedy that will adequately compensate the plaintiff and prevent the unjust enrichment of the defendant at the plaintiff’s expense.
XV. EXEMPLARY DAMAGES
Plaintiff would replead paragraphs I through XII above and incorporate same as if fully set forth herein. The wrong done by Frank II was aggravated by the kind of fraudulent conduct and intent for which the law allows the imposition of exemplary damages. Therefore, Plaintiff seeks exemplary damages in an amount within the jurisdictional limits of the Court.
WHEREFORE, the Plaintiff requests that defendant be cited to appear and answer, and that on final hearing, the plaintiff have judgment as follows: 1. Against the Defendant for a sum within the jurisdictional limits of the court, prejudgment interest as provided by law. 2. A declaration that the Special Warranty Deed filed under Document # 20160018909 in the Real Property Records of El Paso County, Texas is void and unenforceable and does not transfer title to the Real Property at 301 Frontera, El Paso, Texas. 3. A declaration that the Property at 301 Frontera, El Paso, Texas (the “Homestead”)is titled in the name of Reida Stewart. 4. A declaration that the Notes listed in Paragraph Ill above are due and owing by Defendant to Reida and are accruing interest at the lawful rate. 5. A decree setting aside and canceling the transfer of all parcels of real property and stock listed in Paragraph 4 above evidencing the transfer as fraudulent. 5. Post judgment interest as provided by law from the date of judgment until paid. 6. Costs of suit and reasonable attorney’s fees as are equitable and just. 7. Other and further relief to which the plaintiff may be entitled.
Respectfully submitted, SUSAN . FORBES Attorney for Applicant State Bar No.: 00790704 711 Myrtle El Paso, TX 79901 Telephone: (915) 533-5441 Facsimile: (915) 533-7441 E-mail: smforbes@forbeslawoffiee.com CERTIFICATE OF SERVICE I certify that on the /3 day of April, 2022, a true and correct copy of the foregoing document was caused to be delivered to Rob Edwards, 4695 North Mes St,1131 Paso, Texas 79912.
Paso County – Probate Court 2 IN THE ESTATE OF FRANK STEWART JR., DECEASED Hied 1/10/2U22 11:28 AM Della Briones County Clerk El Paso Count 2020-CPRO162
No. 2020-CPR01624 IN THE PROBATE COURT NO. 2
EL PASO COUNTY, TEXAS AUTHENTICATED UNSECURED CLAIM No. XXXXXX IN THE ESTATE OF FRANK STEWART II., DECEASED § IN THE PROBATE COURT § NO.1 § EL PASO COUNTY, TEXAS AUTHENTICATED UNSECURED CLAIM
1. REIDA STEWART is the owner of an unsecured claim against the Estate of FRANK STEWART II, Deceased, in a sum in excess of $4,110,253.59. 2. Claimant requests that the claim be allowed and approved.
“The foregoing unsecured claim is just and all legal offsets, payments, and credits known to Claimant have been allowed.
