(Significant parts are highlighted below)
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 | $ 111,142.86 $ 212,042.86 $12,000.00 $100,000.00 $10,725.00 $50,000.00 $60,000.00 $15,000.00 $200,000.00 $347,142.86 $148,571.43 $ 20,000.00 $ 80,000.00 |
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.