IN THE PROBATE COURT NO. 2
EL PASO COUNTY, TEXAS
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.