Answer: ELM CREEK INVESTMENTS LLC, et al vs. MONTY RIAL, et al

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                                FILED
                                                                                                              6/2/2023 11:31 AM
                                                                                                                 FELICIA PITRE
                                                                                                              DISTRICT CLERK
                                                                                                           DALLAS CO., TEXAS
                                                                                                        Marissa Gomez DEPUTY


                                           CAUSE NO. DC-23-02616

    ELM CREEK INVESTNIENTS, LLC,                           §          IN THE DISTRICT COURT
                                                           §
    Plaintiff/Counter-Defendant,                           §
                                                           §
    V.                                                     §
                                                           §
    MONTY RML, et a1.,
                                                           E
    Defendant/Counter-Plaintiffs,                          §          DALLAS COUNTY, TEXAS
    (alternatively Third-Party                             §
    Plaintiffs),                                           §
                                                           §
    v.                                                     §
                                                           §
    KARL WILLIAMS, et al.,                                 §
                                                           §
    Counter-Defendants (alternatively                      §
    Third-Party Defendants).                               §           68th    JUDICIAL DISTRICT



         THE 68 COUNTER-DEFENDANTS’ ORIGINAL ANSWER AND AFFIRMATIVE
                                 DEFENSES


           The “68 Counter-Defendants“ file this Original Answer and Affirmative Defenses to

Defendant Monty Rial’s Special Exceptions, Original Answer, Counterclaims, and Alternatively,

Third-Party Petition (the “Counterclaims”), and would show the Court as follows:

                                                               I.
                                              GENERAL DENIAL
           1.       Pursuant to Rule 92 of the Texas Rules of              Civil Procedure, Counter-Defendants

generally deny Counter-Plaintiffs’ allegations, and demand strict proof thereof by a preponderance

of the evidence.




1
    The 68 Counter-Defendants are identified in the   IV Request for Relief.


THE 68 COUNTER-DEFENDAN TS’ ORIGINAL ANSWER AND AFFIRMATIVE DEFENSES                                   PAGE   1
       Pursuant to Rules 93 and 94 of the Texas Rules        of Civil Procedure, Counter-Plaintiffs

Monty Rial/TC] Ventures,     LLC’s (“Counter-Plaintiffs”) Counterclaims barred by one or more of
the following affirmative defenses:

       2.        One or more of Counter-Plaintiffs’ claims fail for failure to state a claim upon

which relief can be granted.

       3.        One or more of Counter-Plaintiffs’ claims fail because of their judicial admissions

in the Counterclaim that     TCJ   Ventures,   LLC   is not legally bound by the     “ECI Operating

Agreements,” and therefore they do not have legal capacity to sue, and/or they are not entitled to

recover in the capacity for which they sue.

       4.        One or more of Counter-Plaintiffs’ claims fail because of their judicial admissions

that TCJ Ventures,   LLC is not legally bound by the ECI Operating Agreements, and therefore they
have not suffered an injury for certain claims, and therefore lack standing.

       5.        One or more of Counter-Plaintiffs’ claims fail because of the judicially admitted

failure of TCJ Ventures,   LLC’s consideration under the putative ECI Operating Agreements.
       6.        One or more of Counter-Plaintiffs’ claims fail because of the failure of a meeting

of the minds.

       7.        One or more of Counter-Plaintiffs’ claims fail because of unilateral or mutual

mistake.

       8.        One or more of Counter-Plaintiffs’ claims fail because of ratification, and/or

acceptance of the benefits.

       9.        One or more of Counter-Plaintiffs’ claims fail because of waiver.

        10.      Pleading in the alternative that the ECI Operating Agreements are enforceable, one

or more     of Counter-Plaintiffs’ claims fail because of the contractual protections of: liability




THE 68 COUNTER-DEFENDAN TS’ ORIGINAL ANSWER AND AFFIRMATIVE DEFENSES                        PAGE 2
limitations, indemnity, limitations on fiduciary performance, exculpation, indemnity, failure to

satisfy the condition precedent of TCJ’s entry into the ECI Operating Agreements, the existence

of a valid and enforceable agreement bars claims in equity, and/or actual, apparent, and/or implied

authority pertaining to acts involving   TCJ.

           11.   One or more of Counter-Plaintiffs’ claims fail because of the doctrines of estoppel,

quasi-estoppel, and/or promissory estoppel.

           12.   One or more of Counter-Plaintiffs’ claims fail because of the doctrine of laches.

           l3.   One or more of Counter-Plaintiffs’ claims fail because of the doctrine of unclean

hands.

           14.   One or more of Counter-Plaintiffs’ claims fail because of the business judgment

rule.

           15.   One or more of Counter-Plaintiffs’ claims fail because     ECI   and/or   TCJ   did not

have the ability to execute on the any alleged usurpation of opportunity.

           l6.   One or more of Counter-Plaintiffs’ claims fail because of the doctrine of in pari

delicto.

           17.   One or more of Counter-Plaintiffs’ claims fail because of offset against damages

due pursuant to claims brought by one or more     of the Counter-Defendants.

           18.   One or more of Counter-Plaintiffs’ claims fail because of the expiration of the

applicable statute of limitations.

           19.   One or more of Counter-Plaintiffs’ claims fail claim(s) fail because of their failure

to mitigate their damages, or otherwise exercise reasonable and common sense (from 2018 to


2022s) concerning their alleged investment.




THE 68 COUNTER-DEFENDAN TS’ ORIGINAL ANSWER AND AFFIRMATIVE DEFENSES                             PAGE 3
       20.       One or more of Counter-Plaintiffs’ claims fail because of the economic loss

doctrine.

       21.       One or more of Counter-Plaintiffs’ claims for exemplary damages are subject to

any applicable statutory cap (including under TEX. CIV. PRAC. & REM. CODE § 41.001 et seq).




                                                 II.
                                     RES QUEST FOR RELIED

       WHEREFORE,             PREMISES     CONSIDERED,          Counter-Defendants         Elm     Creek

Investments,    LLC, Karl Williams, Ed Chalupa, Chicane Holdings, LLC, CodeZero Capital, LLC,
Elm Creek Auto Group, LLC, Elm Creek Auto Group Holdings, LLC, 7014 SA, LLC, Kyle

Crossing Holdings,     LLC,   1101 Venture,   LLC,     1087 Main,   LLC,   Garland Kings,   LLC,   7801

Metcalf,    LLC, 5 800 Democracy, LLC, Hard Six Holdings, LLC, Hard Six Holdings II, LLC, Hard
Six Holdings IV, LLC, ECRE Sunland Park, LLC, 4641 Nall, LLC, 4525 McEwen, LLC, TCJ

Energy,     LLC, Crazy   Horse Minerals   LLC, Elm Creek WC, LLC, TSP               Operations,    LLC,

Conexlink,    LLC,   Starwood Motors,   LLC, Elm Creek Autoplex, LLC, Elm Creek Auto              Group

Metcalf,    LLC, 225 USZ83, LLC, Red Dirt Mineral Holdings LLC, Coach’s Farm & Ranch Supply,

LLC, SIG      Reinsurance   LLC,   Cahaba Holdings,     LLC, Elm Creek Real      Estate,   LLC, ECRE

Holdings,    LLC, Wimo, LLC, ECRE HQ, LLC, Elm Creek Capital Partners Fund I GP, LLC, Elm
Creek Capital Partners Fund    l, LP, Elm Creek Capital Partners Manager, LLC, Elm Creek Capital

Partners,   LLC, ECRE    Lufl