Motion to Continue in LEEDS REAL ESTATE SERVICES, INC., et al vs. STILLWATER CAPITAL INVESTMENTS LLC, et al| Trellis.Law

On January 08, 2021 a Motion-Secondary was filed involving a dispute between Leeds, Jason, Leeds Real Estate Services, Inc., and Coady, Richard J., Iv, Elliott, Robert C., Sherman, Robert Aaron, Stillwater Ap-1 Development, Llc, Stillwater Ap-2 Development, Llc, Stillwater Capital Investments Llc, Stillwater Residential Investments Ii, Llc, S.W. Company Manager Ii, Llc, Sw Partner Holdings Ii, Llc, Swsb Phase Ii, Llc, Swsb Phase I, Llc, for CNTR CNSMR COM DEBT in the District Court of Dallas County.

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FILED
1/19/2024 7:15 PM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Kellie Juricek DEPUTY

CAUSE NO. DC-21-00298

LEEDS REAL ESTATE SERVICES, INC., and § IN THE DISTRICT COURT
JASON LEEDS, Individually §
Plaintiffs, §
§
vs. §
§
STILLWATER CAPITAL INVESTMENTS, §
LLC; ROBERT AARON SHERMAN, §
Individually, RICHARD J. COADY, IV., § 162ND JUDICIAL DISTRICT
Individually, and ROBERT C. ELLIOTT, §
Individually; SW PARTNER HOLDINGS, II, §
LLC; STILLWATER RESIDENTIAL §
INVESTMENTS II, LLC; S.W. COMPANY §
MANAGER II, LLC; SWSB PHASE I, LLC; §
SWSB PHASE II, LLC; STILLWATER AP-1 §
DEVELOPMENT, LLC; and STILLWATER §
AP-2 DEVELOPMENT, LLC, §
Defendants. § DALLAS COUNTY, TEXAS
______________________________________________________________________________

DEFENDANTS’ MOTION FOR CONTINUANCE, OBJECTIONS AND SPECIAL
EXCEPTIONS, AND RESPONSE TO PLAINTIFFS’ TRADITIONAL MOTION FOR
SUMMARY JUDGEMENT ON DEFENDANTS’ COUNTERCLAIMS AND
AFFIRMATIVE DEFENSES
______________________________________________________________________________

S.W. Company Manager II, LLC (“SWCM”), Stillwater AP-1 Development, LLC (“AP-

1”), Stillwater Capital Investments, LLC (“SCI”), Robert C. Elliott (“RCE”), Richard J. Coady,

IV (“RJC”), and Robert Aaron Sherman (“RAS”) (SWCM, AP-1, SCI, RCE, RJC, and RAS,

collectively, are referred to herein as the “Defendants”) file their Motion for Continuance (the

“MFC”), Objections and Special Exceptions, and Response (the “Response”) to Plaintiffs’

Traditional Motion for Summary Judgment on Defendants’ Counterclaims and Affirmative

Defenses filed in this lawsuit (the “Lawsuit”) on December 28, 2023 (the “MSJ”), and would

respectfully show the Court as follows:

Texas Rules of Civil Procedure 166a (f) and (g) reads as follows:

(f) Form of Affidavits; Further Testimony. Supporting and opposing affidavits shall
be made on personal knowledge, shall set forth such facts as would be admissible in
evidence, and shall show affirmatively that the affiant is competent to testify to the
matters stated therein. Sworn or certified copies of all papers or parts thereof referred
to in an affidavit shall be attached thereto or served therewith. The court may permit
affidavits to be supplemented or opposed by depositions or by further affidavits.
Defects in the form of affidavits or attachments will not be grounds for reversal unless
specifically pointed out by objection by an opposing party with opportunity, but refusal,
to amend.

(g) When Affidavits Are Unavailable. -- Should it appear from the affidavits of a
party opposing the motion that he cannot for reasons stated present by affidavit facts
essential to justify his opposition, the court may refuse the application for judgment or
may order a continuance to permit affidavits to be obtained or depositions to be taken
or discovery to be had or may make such other order as is just.

If any of the evidence attached to this Response is deemed to be hearsay or insufficient or

defective in any other way, Defendants seek a continuance to adequately respond to the MSJ and/or

any of Plaintiffs objections to Defendants’ Response and to cure any defects as expressly allowed

by Tex. R. Civ. P. 166a(f). If Plaintiffs raise such objections after service of this Response and

before the hearing on the MSJ, Defendants will not have a sufficient opportunity to procure the

necessary evidence/affidavits and/or cure any defects.

II. ATTACHED MOTIONS INCORPORATED

Defendants filed their No-Evidence Motion for Partial Summary Judgment (the “No-

Evidence MSJ”) on December 28, 2023. Attached hereto as Exhibit A and incorporated herein by

this reference is the No-Evidence MSJ which is supported by the unsigned Declaration of Alex

Maki (Exhibit I – the “Maki Declaration”), the unsigned Declaration of Robert Aaron Sherman

(Exhibit II –the “Sherman Declaration”); the signed Declaration of William L. Wolf (Exhibit III –

the “WLW Declaration”). Additionally, Defendants filed on January 5, 2024, their (A) (i)

judgment on Defendants’ counterclaims and affirmative defenses (the “Response to NEMSJ”) and

(B) (i) motion to strike, (ii) motion for continuance, and (iii) motion to reset the hearing (“Motion

for Continuance”). Attached hereto as Exhibit B and incorporated herein by this reference is the

Response to NEMSJ which is supported by the singed Declaration of Alex Maki (Exhibit I – the

“Maki Declaration”), the signed Declaration of Robert Aaron Sherman (Exhibit II –the “Sherman

Declaration”); the signed Declaration of William L. Wolf (Exhibit III – the “WLW Declaration”).

Attached hereto as Exhibit C and incorporated herein by this reference is the Motion for

Continuance which is supported by the signed Declaration of Alex Maki (Exhibit I – the “Maki

Declaration”), the signed Declaration of Robert Aaron Sherman (Exhibit II –the “Sherman

Declaration”); the signed Declaration of William L. Wolf (Exhibit III – the “WLW Declaration”);

and the signed Declaration of Craig P. Henderson (Exhibit IV – the “CPH Declaration”).

III. PLAINTIFFS EXHIBITS

The MSJ attaches thereto the following documents:

Exhibit A: Excerpts of Deposition of Richard Coady (“Coady Tr.”)
Exhibit B: Excerpts of Deposition of Robert Elliott (“Elliott Tr.”)
Exhibit C: Excerpts of Deposition of Robert Aaron Sherman (“Sherman Tr.”)
Exhibit D: Excerpts of Deposition of Robert Aaron Sherman, Corporate Representative of
Stillwater Capital Investments, LLC (“SWC Tr.”)
Exhibit E: Excerpts of Deposition of Robert Aaron Sherman, Corporate Representative of
Stillwater AP-1, LLC (“SW AP-1 Tr.”)
Exhibit F: Excerpts of Deposition of Robert Aaron Sherman, Corporate Representative of
SW Company Manager II, LLC (“SWCM Tr.”)
Exhibit G: Excerpts of Deposition of Defendants’ Expert Witness Alexander Walther
(“Walther Tr.”)
Exhibit H: Defendants’ First Amended Answer and Counterclaims
Exhibit I: Defendants’ First Amended Affirmative and Other Defenses
Exhibit J: Defendants’ Amended Initial Disclosures
Exhibit K: Excerpts of Deposition of Plaintiff Jason Leeds (“Leeds Tr.”) Exhibit L:
Settlement Agreement
Exhibit M: Plaintiff’s Original Petition (26) exhibits attached to the Declaration of Brad
J. Robinson dated December 28, 2023, which is part of the MSJ (the “MAS Declaration”).

Defendants’ Motion for Continuance, Objections and Special Exceptions, and Response to Plaintiffs’
Traditional Motion for Summary Judgment on Defendants’ Counterclaims and Affirmative Defenses
Page 3
Defendants make reference below to some of those exhibits or portions thereof, even
though several are false or incomplete.
Exhibit N: SW Company Manager II, LLC; Stillwater AP-1, LLC; and Robert Elliot,
Individually, Answer
Exhibit O: Richard Coady Answer
Exhibit P: Robert Aaron Sherman and Stillwater Capital Investment, LLC’s Answer
Exhibit Q: Forest Park Flats Promote Information (PLTF LEEDS 000794-95)
Exhibit R: Leeds’s Letter Providing Initial FPF Promote Amount (PLTF LEEDS 000951)
Exhibit S: November 2, 2023, email chain regarding Agreed Partial Judgment
Exhibit T: Proposed Agreed Partial Judgment
Exhibit U: Order Granting Plaintiffs’ Motion to Enforce Order dated May 26, 2023
Exhibit V: Order Granting Plaintiffs’ Amended Motion to Compel dated June 8, 2023
Exhibit W: Order Granting Plaintiffs’ Amended Motion to Compel dated July 5, 2023
Exhibit X: Order Granting Plaintiffs’ Amended Motion to Compel Depositions dated June
8, 2023
Exhibit Y: Second Amended Scheduling Order
Exhibit Z: Plaintiffs’ Third Amended Petition

The MSJ attaches the foregoing (26) exhibits to the Declaration of Brad J. Robinson (“BJR”) which

is dated December 28, 2023 (the “BJR Declaration”), which BJR Declaration is part of the MSJ.

IV. OBJECTIONS AND SPECIAL EXCEPTIONS

Defendants object and/or specially except to the MSJ as follows:

OBJECTION/SPECIAL EXCEPTION NO. 1:

This is what is required to constitute a declaration under Texas law:

CIVIL PRACTICE AND REMEDIES CODE
TITLE 6. MISCELLANEOUS PROVISIONS
CHAPTER 132. UNSWORN DECLARATIONS

Sec. 132.001. UNSWORN DECLARATION. (a) Except as provided by Subsection (b), an
unsworn declaration may be used in lieu of a written sworn declaration, verification,
certification, oath, or affidavit required by statute or required by a rule, order, or requirement
adopted as provided by law.
(b) This section does not apply to a lien required to be filed with a county clerk, an instrument
concerning real or personal property required to be filed with a county clerk, or an oath of office
or an oath required to be taken before a specified official other than a notary public.
(c) An unsworn declaration made under this section must be:
(1) in writing; and
(2) subscribed by the person making the declaration as true under penalty of perjury.

Defendants’ Motion for Continuance, Objections and Special Exceptions, and Response to Plaintiffs’
Traditional Motion for Summary Judgment on Defendants’ Counterclaims and Affirmative Defenses
Page 4
(d) Except as provided by Subsections (e) and (f), an unsworn declaration made under this
section must include a jurat in substantially the following form:

"My name is _____________ ______ ____________, my
(First) (Middle) (Last)
date of birth is _________________, and my address is
________________, ___________________, _______, ____________,
(Street) (City) (State) (Zip Code)
and __________________. I declare under penalty of
(Country)
perjury that the foregoing is true and correct.

Executed in _______ County, State of ________, on the ________ day of ________, ________.
(Month) (Year)
This is what the BJR Declaration provides:

I declare under penalty of perjury under the laws of the State of Texas and the laws of the
United States of America that the foregoing is true and correct.

Dated: December 28, 2023 /s/ Brad J. Robinson _______________
Brad J. Robinson

The BJR Declaration does not substantially comply with Texas law, including failing to

provide the full name for BJR, his birth date, his address, the county and state where the declaration

was executed, and the date on which the declaration was executed (as opposed to just an

unexplained date). Therefore, none of the 26 exhibits attached to the BJR Declaration are

competent evidence and therefore should be disregarded.

Objection/Special Exception No. 1 is hereby: _____ SUSTAINED _____ OVERRULED

OBJECTION/SPECIAL EXCEPTION NO. 2:

Exhibit L attached to the BJR Declaration is not accurate. Section 3.b. of the attached

Exhibit L contains unexplained green markings and blue ink writing (the “Additional Markings”)

which were not part of the signed Settlement Agreement when it was executed (the “Settlement

Agreement” when used herein, but not including the Additional Markings).

Objection/Special Exception No.2 is hereby: _____ SUSTAINED _____ OVERRULED

Plaintiffs filed a no-evidence motion for summary judgment on December 8, 2023 (the

“First NEMSJ”). Defendants filed their response to the First NEMSJ (the "Response to NEMSJ")

on January 5, 2024, which is attached hereto as Exhibit B. Notably, on January 10, 2024, just two

days prior to the scheduled submission date, Plaintiffs opted to withdraw their First NEMSJ. The

MSJ is a second bite at the no-evidence apple.

Objection/Special Exception No. 3 is hereby: _____ SUSTAINED _____ OVERRULED

OBJECTION/SPECIAL EXCEPTION NO. 4:

The MSJ is incoherent, confusing, and procedurally schizophrenic, including, but not limited

to, as follows:

a. The MSJ uses the word “Traditional” in its title. The word “Traditional” is again used in
the first sentence of the MSJ repeating the title. Traditional, other than those two (2) times,
is never used again in the body of the MSJ. Moreover, the MSJ never references Rule
166a(a) or (c);

b. But soon thereafter, in Article IV (Basis for Summary Judgment) and even more so in
Article V (“Legal Standard” where Plaintiffs cite only the standards set forth in Rule
166a(i) for no-evidence motions), the MSJ clearly and unambiguously states, and thereby
purports to shift the evidentiary burden to Defendants, that the MSJ is a no-evidence
motion. In fact, Article V of the MSJ specifically references Rule 166a(i) three (3) separate
times;

c. The MSJ cannot be both a traditional and a no-evidence motion in one motion, unlike a
hybrid motion which constitutes a traditional motion and a no-evidence motion (so two
motions). Defendants do not know how to respond to the MSJ due to the very different
rules and burdens applicable to such disparate motions;

d. The MSJ, which is full of conclusory assertions, fails to give fair notice of its summary
judgment grounds if it is assumed to be a traditional motion, which is denied;

e. Although Rule 166a does not prohibit a hybrid motion, the motion must give fair notice to
the non-movant of the basis on which the summary judgment is sought. Waite v. Woodard,
Hall & Primm, P.C., 137 S.W.3d 277, 281 (Tex. App.—Houston [1st Dist.] 2004, no pet.)
[motion did not give fair notice that it was traditional motion for summary judgment under
Rule 166a(c)]; and

Defendants’ Motion for Continuance, Objections and Special Exceptions, and Response to Plaintiffs’
Traditional Motion for Summary Judgment on Defendants’ Counterclaims and Affirmative Defenses
Page 6
f. When a summary judgment is attacked as being vague or lacking specificity, a special
exception is required. McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 342
(Tex. 1993) (plurality op.). This objection/special exception is intended to comply with
McConnell.

Objection/Special Exception No. 4 is hereby: _____ SUSTAINED _____ OVERRULED

OBJECTION/SPECIAL EXCEPTION NO. 5:

The MSJ fails to state the essential elements of Defendants’ defenses (but only if such

defenses are in fact deemed to be affirmative defenses with respect to which Defendants have the

burden of proof) on which there is no evidence. In other words, Plaintiffs have wholly failed to

identify which of these defenses are in fact “affirmative defenses”, and, if so, the essential elements

of each affirmative defense:

a) Breach of contract by Plaintiffs.
b) Fraud by Plaintiffs.
c) Negligent misrepresentation by Plaintiffs.
d) Plaintiffs’ claims are barred because the Defendants owed Plaintiffs’ no fiduciary
duty.
e) Unjust enrichment.
f) Quantum meruit.
g) Money had and received.
h) Plaintiffs are not and have never been members of any of the Stillwater Entities.
i) Defendants. performance was excused.
j) Plaintiffs materially breached the Settlement Agreement before performance was
required by Defendants, and so performance by Defendants was excused.
k) Plaintiffs waived their claims and rights.
l) Plaintiffs failed to satisfy conditions precedent.
m) Unilateral mistake.
n) Mutual mistake.
o) Reformation of the Settlement Agreement, if it is determined that such use is not
allowed, to permit the Additional Equity to be part of the calculation of Promote.
p) Defendants seek recission of the Settlement Agreement based upon Plaintiffs
improper conduct.
q) Plaintiffs’ claims are barred, in whole or in part, by the applicable statutes of
limitations.
r) Plaintiffs’ claims are barred by provisions of the Settlement Agreement.
s) Because all of Plaintiffs’ causes of action against the Defendants fail, so too does
Plaintiffs’ conspiracy claims.

Defendants’ Motion for Continuance, Objections and Special Exceptions, and Response to Plaintiffs’
Traditional Motion for Summary Judgment on Defendants’ Counterclaims and Affirmative Defenses
Page 7
t) Plaintiffs’ claims are barred because Plaintiffs were contributorily negligent and/or
were comparatively at fault for the damages, if any, of which it complains.
u) Plaintiffs’ claims are barred, in whole or in part, by the doctrine of unclean hands.
v) Plaintiffs’ claims are barred due to the negligence or other actions or inactions of
the other parties to this action were the sole cause, proximate cause, subsequent
intervening cause, and/or new and independent cause of the injuries and damages,
if any, sustained by the Plaintiffs. Defendants’ First Amended Affirmative and
Other Defenses
w) Plaintiffs’ claims are barred because Plaintiffs failed to comply with conditions
precedent to asserting any cause of action against the Defendants including, but not
limited to, providing the pre-suit notice(s) required by statute.
x) Plaintiffs are not entitled to recover attorneys’ fees as they failed to comply with
the procedure required by Texas Civil Practices and Remedies Code § 38.001 et
seq.
y) Impossibility.
z) All forms of estoppel, including, but not limited to, equitable estoppel.

A no-evidence motion for summary judgment may not be general, but must state the

elements on which there is no evidence. TEX. R. CIV. P. 166a(i); Waite v. Woodard, Hall &

Primm, P.C., 137 S.W.3d 277, 280-281 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (Trial court

erred rendering summary judgment where movant did not specify any element of appellant's cause

of action or defense on which there was no evidence.).

Objection/Special Exception No. 5 is hereby: _____ SUSTAINED _____ OVERRULED

OBJECTION/SPECIAL EXCEPTION NO. 6:

The MSJ fails to state essential elements of each of the Defendants’ fraud counterclaims,

which include both common law and statutory fraud under Chapter 27 of the Texas Business &

Commerce Code and fraud by omission (which is not mentioned in the MSJ), on which there is no

evidence.

A no evidence motion for summary judgment may not be general, but must state the

elements on which there is no evidence. TEX. R. CIV. P. 166a(i); Waite v. Woodard, Hall &

Primm, P.C., 137 S.W.3d 277, 280-281 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (Trial court

of action or defense on which there was no evidence.).

Objection/Special Exception No. 6 is hereby: _____ SUSTAINED _____ OVERRULED

OBJECTION/SPECIAL EXCEPTION NO. 7:

The MSJ fails to state essential elements of each of the Defendants’ unjust enrichment

counterclaim on which there is no evidence.

A no evidence motion for summary judgment may not be general, but must state the

elements on which there is no evidence. TEX. R. CIV. P. 166a(i); Waite v. Woodard, Hall &

Primm, P.C., 137 S.W.3d 277, 280-281 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (Trial court

erred rendering summary judgment where movant did not specify any element of appellant's cause

of action or defense on which there was no evidence.).

Objection/Special Exception No. 7 is hereby: _____ SUSTAINED _____ OVERRULED

OBJECTION/SPECIAL EXCEPTION NO. 8:

The MSJ fails to state essential elements of each of the Defendants’ quantum meruit

counterclaim on which there is no evidence.

A no evidence motion for summary judgment may not be general, but must state the

elements on which there is no evidence. TEX. R. CIV. P. 166a(i); Waite v. Woodard, Hall &

Primm, P.C., 137 S.W.3d 277, 280-281 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (Trial court

erred rendering summary judgment where movant did not specify any element of appellant's cause

of action or defense on which there was no evidence.).

Objection/Special Exception No. 8 is hereby: _____ SUSTAINED _____ OVERRULED

OBJECTION/SPECIAL EXCEPTION NO. 9:

received counterclaim on which there is no evidence.

A no evidence motion for summary judgment may not be general, but must state the

elements on which there is no evidence. TEX. R. CIV. P. 166a(i); Waite v. Woodard, Hall &

Primm, P.C., 137 S.W.3d 277, 280-281 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (Trial court

erred rendering summary judgment where movant did not specify any element of appellant's cause

of action or defense on which there was no evidence.).

Objection/Special Exception No. 9 is hereby: _____ SUSTAINED _____ OVERRULED

OBJECTION/SPECIAL EXCEPTION NO. 10:

The MSJ, in subsection e. on page 11 regarding RJC, titled “Fraud/Negligent

Misrepresentation,” makes a no evidence challenge that RJC “admitted he had no evidence and

cannot testify that Leeds provided the incorrect amount intentionally.” First, that challenge fails

to state essential elements of RJC’s fraud or misrepresentation counterclaims on which there is no

evidence. Second, that challenge makes no sense in that negligent misrepresentation does not

require intentionality, only negligence, which is why it’s called negligent misrepresentation.

Third, fraud by omission is not mentioned, even though it’s a claim brought by Defendants.

A no evidence motion for summary judgment may not be general, but must state the

elements on which there is no evidence. TEX. R. CIV. P. 166a(i); Waite v. Woodard, Hall &

Primm, P.C., 137 S.W.3d 277, 280-281 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (Trial court

erred rendering summary judgment where movant did not specify any element of appellant's cause

of action or defense on which there was no evidence.).

Objection/Special Exception No. 10 is hereby: _____ SUSTAINED _____ OVERRULED

The MSJ states at the bottom of page 28 and top of page 29 as follows:

The elements of a breach of contract claim are: (1) existence of a valid contract; (2)
performance or tendered performance by the [counter]plaintiff; (3) material breach by
the [counter]defendant; and (4) damages sustained by the [counter]plaintiff as a result
of that breach. Paragon Gen. Contractors, Inc. v. Larco Constr., Inc., 227 S.W.3d 876,
882 (Tex. App.—Dallas 2007, no pet.). Here, in addition to the lack of evidence of
damages and causation, there is no dispute that Leeds’s failure to accurately calculate
the FPF Promote was not a material breach.

The foregoing does not address or reference any specific one of the Defendants, or even all

of the Defendants, and constitutes an impermissible general challenge to Defendants breach of

contract claim. Evidence of damages is addressed in this Response elsewhere, but the foregoing

portion of the MSJ asserts a lack of evidence, whatever that means, not no evidence, and focuses

on a lack of evidence of causation which is not one of the four (4) elements listed in the MSJ by

Plaintiffs, or otherwise applicable, for breach of contract. Worse, element (3) of Paragon, as cited

by Plaintiffs in the MSJ, is a pure fabrication: Paragon, at 882 or otherwise, does not use the word

“material” in front of breach in the list of four (4) elements. This is a fabricated red hearing by

Plaintiffs which can only mislead the Court. The Texas Supreme Court, in

The Texas Supreme Court, in Bartush-Schnitzius Foods Co. v. Cimco Refrigeration, Inc.,

518 S.W.3d 432, 436 (Tex. 2017), explains the different consequences, and legal distinction,

between a breach of contract and material breach of contract, which is contrary to Plaintiffs

contentions in the MSJ:

"It is a fundamental principle of contract law that when one party to a contract commits
a material breach of that contract, the other party is discharged or excused from further
performance." Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex.
2004) (citing Hernandez v. Gulf Grp. Lloyds, 875 S.W.2d 691, 692 (Tex. 1994)). By
contrast, when a party commits a nonmaterial breach, the other party "is not excused
from future performance but may sue for the damages causey the breach." Levine v.
Steve Scharn Custom Homes, Inc., 448 S.W.3d 637, 654 (Tex. App.—Houston [1st
Dist.] 2014, pet. denied). The latter principle is consistent with settled Texas law

Defendants’ Motion for Continuance, Objections and Special Exceptions, and Response to Plaintiffs’
Traditional Motion for Summary Judgment on Defendants’ Counterclaims and Affirmative Defenses
Page 11
regarding the elements of a contract claim. The claim requires a finding of breach, not
a finding of material breach. See, e.g., Mays v. Pierce, 203 S.W.3d 564, 575 (Tex.
App.—Houston [14th Dist.] 2006, pet. denied) ("A breach of contract occurs when a
party fails or refuses to do something he has promised to do."). Accordingly, a material
breach by Cimco would have excused Bartush from making further contractual
payments, while a nonmaterial breach would have simply given rise to a claim for
damages.

Objection/Special Exception No. 11 is hereby: _____ SUSTAINED _____ OVERRULED

OBJECTION/SPECIAL EXCEPTION NO. 12:

The allegation in the first sentence of Article IV of the MSJ that “an adequate time for

discovery has passed,” which is a requirement of Rule 166a(i), is conclusory and without any

supporting factual allegations or argument. On the contrary, Defendants’ Motion for Continuance

attached hereto (and again incorporated herein at this point), which was part of Defendants’

response to the First NEMSJ, rebuts this unsupported allegation in ¶¶ 9-13 as follows:

9. Contrary to Plaintiffs’ allegation in paragraph 11 of the MSJ, an adequate time
for discovery has not passed. Discovery closed on June 30, 2023. After discovery closed,
Plaintiffs significantly moved the goal post in this case by alleging a completely new, lower
amount of their promote for the Forest Park Flats, which reduction, in turn, would greatly
reduce the amount of the offset to which the Defendant Stillwater Entities were entitled.
Originally, on August 24, 2017, Plaintiffs informed Aaron Sherman of Stillwater Capital
Investments (“SCI”) that the “total net promote earned by Leeds on Forest Park Flats was
$1,021,595.00.” Exhibit II-A to the Sherman Declaration. Plaintiffs concede this fact in
¶3 of the MSJ. Thus, under the regime of the Settlement Agreement, for over 6 years,
Leeds has maintained that the Stillwater Entities would be entitled to an offset credit of
$510,797.50.

10. However, after the discovery period closed, Plaintiffs have come up with a new
(and significantly reduced) promote number. Specifically, Plaintiffs’ July 11, 2023, Expert
Designations, averred, for the first time, that “Leeds’s Promote from Forest Park Flats was
$685,156 and therefore, Defendants’ offset under the Settlement Agreement is 50% that
amount, or $342,578.” Exhibit III (WLW Declaration), ¶14; Exhibit III-E (Plaintiffs’
Expert Designations), p. 4. This results in a nearly 33 1/3% (i.e., $168,219.50) reduction
in the amount of the offset that the Stillwater Entities would be entitled to receive.

11. Defendants need additional discovery to determine how such new numbers
were calculated. This switch track in positions is the basis for Defendants’ affirmative
defenses and counterclaims, which, in turn, are now the object of PlaintifS’ MSJ. In
essence, Plaintiffs want to assert a completely new position after the discovery period has

Defendants’ Motion for Continuance, Objections and Special Exceptions, and Response to Plaintiffs’
Traditional Motion for Summary Judgment on Defendants’ Counterclaims and Affirmative Defenses
Page 12
closed and without allowing Defendants any discovery on that position. Minimum due
process mandates that Defendants be given such an opportunity.

12. Similarly, and also after discovery closed, Plaintiffs also filed their Third
Amended Petition on July 11, 2023, which included a new claim titled as “Eighth Cause
of Action — Request to Examine Books and Records and Penalty for Wrongful Refusal.”
Defendants seek and require discovery on that new cause of action as well.

13. Defendants requested a motion to reopen discovery during a hearing on
November 1, 2023. The Court denied such relief and asked that a motion be filed by
Defendants. Defendants have done so by filing its Motion to Open Discovery on
November 17, 2023. That motion is currently set for an in person hearing on January 11,
2024. Specifically, Defendants have requested that they be permitted to conduct additional
discovery for 45 days after Defendants’ Motion to Open Discovery is heard and if granted
by the Court.

Objection/Special Exception No. 12 is hereby: _____ SUSTAINED _____ OVERRULED

OBJECTION/SPECIAL EXCEPTION NO. 13:

An adequate time for discovery by Defendants has not occurred, and will not occur,

because no discovery after June 30, 2023, has been permitted by Defendants. Defendants filed

their Motion to Open Discovery on November 17, 2023 (the “Motion to Open”). The Motion to

Open was heard and denied by this Court on January 11, 2024.

Objection/Special Exception No. 13 is hereby: _____ SUSTAINED _____ OVERRULED

OBJECTION/SPECIAL EXCEPTION NO. 14:

Plaintiffs last amended their Initial Disclosures on May 22, 2023, as set forth in Par. 9 of

the WLW Declaration that is attached to the No-Evidence MSJ, and no supplemental or amended

initial disclosures from Plaintiffs have been forthcoming with respect to the Defendants 9/1/23

Pleading, 9/8/23 Defenses or the October 31 Response, as set forth in Par. 15 of the WLW

Declaration that is attached to the No-Evidence MSJ. Plaintiffs must have amended or

supplemented their Initial Disclosures in a timely manner, which has not been done as of the date

hereof, or Plaintiffs may not introduce in evidence the material or information that was not timely

identified, except if one of two exceptions exist which must be shown by Plaintiffs (they have the

burden). This means that that all the matters provided in the MSJ, addressing Defendants

counterclaims and defenses filed on September 1, 2023, and 9/8/23 Defenses, cannot be used by

Plaintiffs in the MSJ because without Plaintiffs’ amending or supplementing their responses to

address such counterclaims and defenses, especially with no discovery having been allowed by the

Court on January 11, 2023, the Court must exclude all such matters under Rule 193.6.

Objection/Special Exception No. 14 is hereby: _____ SUSTAINED _____ OVERRULED

V. FACTUAL BACKGROUND

1. On August 11, 2015, Plaintiffs filed Case No. CC- CC-15-04083-B in the County

Court of Law No. 5, Dallas County, Texas (the “Original Lawsuit”).

2. The Original Lawsuit was settled pursuant to a written agreement dated August 26,

2015 (the “Settlement Agreement”).

3. All Defendants and Plaintiffs signed the Settlement Agreement, and the Original

Lawsuit was dismissed.

4. Section 4 of the Settlement Agreement provides that:

In order to resolve the lawsuit as to that certain development on
Forest Lane in Dallas, Texas (“Forest Park Flats”), Stillwater hereby
relinquishes any and all claim to the Forest Park Flats development,
and shall have no right of participation in any fees including “earned
fees,” or in any Promote in the Forest Park Flats development except
as provided in Section 3(c).
5. Section 3(c) of the Settlement Agreement referenced in Section 4, provides:

(i) Within 10 business [days] of closing of any sale of Forest Park Flats,
Leeds agrees to communicate in writing the total amount of Promote
earned by Leeds (or Leeds Forest Park Flats, Inc.) to Stillwater
Entities. (bracketed word added).

Defendants’ Motion for Continuance, Objections and Special Exceptions, and Response to Plaintiffs’
Traditional Motion for Summary Judgment on Defendants’ Counterclaims and Affirmative Defenses
Page 14
(ii) The amount of Promote payable to Leeds under Section 3(b) shall
be reduced by an amount equal to 50% of the Promote paid or
payable to Leeds (or to Leeds Forest Park Flats, Inc.) after the
closing of the sale of Forest Park Flats (as communicated in
accordance with Section 3(c)(i)).
6. The Settlement Agreement also provided that the Stillwater Entities (as defined in

the opening paragraph of the Settlement Agreement), but not RCE, RJC, or RAS (the “Stillwater

Individuals”), would pay Plaintiffs 6.85% of the “Promote” from the sale of either of both of

Amesbury I & II (the “Amesbury Sale(s)”), but such amount, if any, was to be reduced by 50% of

the total amount of “Promote” earned by Plaintiffs (or Leeds Forest Park Flats, Inc.) from the

closing of any sale of Forest Park Flats as communicated to the Stillwater Entities within ten (10)

business days of the closing of the sale of the Forest Park Flats.

7. “Promote” is defined in the Settlement Agreement as “the back-end profit payable

to a Party hereto (or its designated subsidiary or affiliate) as a matter of contract that exists on the

Date of execution of this Agreement, that is or will be earned from the involvement in one of the

developments that is the subject of this Agreement, as a Sponsor, General Partner or the equivalent,

and can be considered from “sweat equity.” “Promote” shall not include that back-end profit that

is related to direct equity investments (aka: Co Invest) in such developments by the respective

parties.”

8. The Stillwater Entities learned of a possible sale of the Forest Park Flats in 2017,

really just a rumor, and Alex Maki (employed by SCI) emailed Leeds on August 16, 2017, asking

if Forest Park Flats had, in fact, sold (the “Maki 2017 Email”). Leeds, on behalf of Plaintiffs, but

not within the time required by (and in breach of) the Settlement Agreement, wrote a letter dated

August 24, 2017 (the “Leeds Initial Promote Letter”), to RAS with SCI disclosing and representing

$1,021,595.00 as the net Promote earned by Plaintiffs from the Forest Park Flats (the “Leeds Initial

Promote Amount”).
Defendants’ Motion for Continuance, Objections and Special Exceptions, and Response to Plaintiffs’
Traditional Motion for Summary Judgment on Defendants’ Counterclaims and Affirmative Defenses
Page 15
9. RAS, on September 7, 2023, checked the Dallas County Appraisal District website

regarding the sale date of Forest Park Flats, and learned that it sold on May 22, 2017. Disclosure

of the Leeds Initial Promote Amount by Plaintiffs to SCI was made months after the sale of Forest

Park Flats, not ten (10) business days as required by the Settlement Agreement, and only disclosed

after prompted by the Maki 2017 Email.

10. On or about December 6, 2018, SCI sent Plaintiffs a letter (the “December 6 SCI

Letter”) disclosing that Amesbury I & II (the “Amesbury Project”) had yielded $317,148 in

“Promote” with respect to Plaintiffs’ 6.85% percentage interest, based on the Stillwater Entities

calculation at that time of the amount of Promote equal to $4,629,909.62 (the “Stillwater Initial

Promote Amount”).

11. The Stillwater Entities mistakenly used the definition of promote from earlier

agreements between SCI and LRES dated January 18, 2013 (the “1/18/13 Agreement”) and

February 7, 2014 (the “2/7/14 Agreement”) to calculate the Stillwater Initial Promote Amount.

But the definition of Promote set forth in the Settlement Agreement was much narrower and more

limited than provided in the 1/18/13 Agreement or 2/7/14 Agreement (the “Prior Two

Agreements”). In any event, so long as the amount of Stillwater Initial Promote Amount (or any

subsequent recalculation thereafter) was less than $510,795.50 (50% of the Leeds Initial Promote

Amount), nothing was owed by the Stillwater Entities to Plaintiffs pursuant to the Settlement

Agreement.

12. SCI also claimed in the December 6 SCI Letter that Plaintiffs owed them

$193,648.69, which represented the difference between (i) the amount Plaintiffs were owed under

the Settlement Agreement as calculated by the Stillwater Entities at that time and (ii) the 50% of

the Leeds Initial Promote Amount communicated to the Stillwater Entities by Plaintiffs in the

Lawsuit”) filed by Plaintiffs against Defendants (which was dismissed by Plaintiffs prior to the

filing of this Third Lawsuit), such contention of a debt owned by Plaintiffs to the Stillwater Entities

of $193,648.69 was abandoned.

13. Shortly after the Settlement Agreement, Defendants raised an additional

approximately $7.9 million in equity (the “Additional Equity”), which Additional Equity was

required to continue and complete construction of the Amesbury Project, but also to effect the

SWPH Redemption (defined below). Nothing in the Settlement Agreement prohibits or restricts

Defendants from raising additional equity, borrowing any money or making any other business

judgments about how to complete or finance construction of the Amesbury Project.

14. S.W. Partners Holdings II, LLC (“SWPH”) is a company that existed on the date

of the Settlement Agreement (i.e., August 26, 2015) formed pursuant to a company agreement

dated August 15, 2014 (the “SWPH Agreement”). The SWPH Agreement required over

$4,500,000.00 of equity be redeemed from its Class B Members on or before October 15, 2015

(the “SWPH Redemption”). SWPH did not have sufficient money to effect the SWCH

Redemption by October 15, 2015.

15. Without the Additional Equity, construction financing and hence construction of

the Amesbury Project would have ceased around the end of 2015, the Amesbury Project would

not have been completed, and no promote (not as defined in Section 3b.of the Settlement

Agreement, but any promote), would have been earned by anyone, much less the Stillwater

Entities, except if a sale of the Amesbury Project was consummated by Defendants after the date

of the Settlement Agreement and in time to effect the SWPH Redemption on or about October 15,

SWPH Agreement.

16. It’s clear that Plaintiffs was and remains very critical of Defendants with respect to

both business competence and ethical lapses. It seems clear, but not admitted by Plaintiffs, that

the addition of the very restrictive and narrow language inserted by Plaintiffs in Section 3.b. of the

Settlement Agreement that “as a matter of contract that exists on the Date of execution of [the

Settlement Agreement]” was motivated by Plaintiffs serious doubts and concerns of Defendants

ability to make the SWPH Redemption (See, Plaintiffs’ live petition, disclosures and Leeds

Declaration).

17. Plaintiffs appear to have been doubtful that Defendants could effect the SWPH

Redemption, which needed to happen within months of the Settlement Agreement, so that

Plaintiffs assumed and ardently hoped for a sale of the Amesbury Project which might have

resulted in a significant profit to SWPH (and Plaintiffs would probably contend the profits over

and above the SWPH Redemption amount would be subject to the 6.85% surcharge to Plaintiffs

pursuant to Section 3.b. of the Settlement Agreement). Any such profit, if such a sale had occurred,

might have resulted in 6.85% of such amount being paid to Plaintiffs. Unfortunately for Plaintiffs,

no sale of the Amesbury Project occurred before the SWPH Redemption. After the SWPH

Redemption, nothing was ever going to be paid under the SWPH Agreement.

18. LRES sued Defendants, including the Stillwater Individuals, for breach of contract

with respect to the Promote in its Original Petition filed in DC-18-19146 (162nd Judicial District)

on December 21, 2018, which is the Dismissed Lawsuit. Defendants ask the Court to take judicial

notice of the Dismissal Lawsuit and related filings.

in 2021, including the Stillwater Individuals, which is this Third Lawsuit, for breach of contract

with respect to the Promote in DC-21-00298 (162nd Judicial District). The live pleading in the

Third Lawsuit is Plaintiffs’ Third Amended Petition filed on July 11, 2023 (the “Third Petition”).

The Third Petition likewise sues the Defendants, including the Stillwater Individuals, for breach

of contract with respect to the Promote. Defendants ask the Court to take judicial notice of the

Third Lawsuit and all related filings.

20. Defendants have denied each and every, all and singular, the allegations contained

in the Third Petition.

21. Judicial notice of the Dismissed Lawsuit and Third Lawsuit includes, but is not

limited to, notice of at least seven (7) requests for a continuance by Plaintiffs as follows:

A. Agreed motion for continuance and request for entry of agreed proposed first

amended scheduling order filed on October 8, 2019.

B. Agreed motion for continuance and request for entry of agreed proposed second

amended scheduling order filed on April 13, 2020.

C. Second motion for continuance and request for entry of agreed proposed third

amended scheduling order filed on July 31, 2020.

D. Agreed Motion for Continuance and Request for Entry of Proposed Agreed First

Amended Scheduling Order filed on January 28, 2022.

E. Plaintiff’s motion for continuance and request for entry of second amended

scheduling order filed on January 4, 2023.

F. Plaintiffs motion for continuance, motion to reset certain deadlines, and request

for special trial setting filed on September 22, 2023.

motion to strike witnesses or for deposition settings, and request for special trial

setting filed on October 27, 2023.

22. The breach of contract claims against the Stillwater Individuals with respect to the

Promote constitutes breaches of the Settlement Agreement, which undeniably makes only the

Stillwater Entities, not the Stillwater Individuals, liable for any Promote (which is not owned by

the Stillwater Entities).

23. Earlier this year, many years after representing to Defendants the Leeds Initial

Promote Amount, Plaintiffs disclosed to Defendants for the first time in their expert designation

dated July 11, 2023 (the “July 11 Designation”), a new, substantially reduced Promote allegedly

earned from the Forest Park Flats (the “2023 Leeds Promote Amount”) in relation to the Leeds

Initial Promote Amount, which 2023 Leeds Promote Amount was inherently undiscoverable by

Defendants, which means the 50% reduction to any Promote otherwise payable by the Stillwater

Entities to Plaintiffs has recently been substantially reduced according to Plaintiffs (which 2023

Leeds Promote Amount is denied by the Stillwater Entities). This unilateral reduction out of the

blue to the Leeds Initial Promote Amount, after almost six (6) years, and only disclosed to

Defendants after the close of discovery, constitutes misrepresentation and fraud, including fraud

by omission and fraudulent concealment by Plaintiffs.

24. The Partial MSJ focuses on the SWPH Agreement, which existed on the date of the

Settlement Agreement, but the SWPH Agreement resulted in no Promote as defined in the

Settlement Agreement.

25. The Third Lawsuit is currently scheduled for jury trial per the Operative Scheduling

Order on February 26, 2023.

SWHP AGREEMENT

26. Plaintiffs have finally, after multiple lawsuits, and lots of irrelevant discovery,

focused on the SWPH Agreement, which existed on August 26, 2015.

27. Defendants have provi

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Document Filed Date

January 19, 2024

Case Filing Date

January 08, 2021

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Parties

COADY, RICHARD J., IV Defendant
DAVIS, CALEB A. Attorney for the Plaintiff
ELLIOTT, ROBERT C. Defendant
LEEDS, JASON Plaintiff
LEEDS REAL ESTATE SERVICES, INC. Plaintiff
ROBINSON, BRAD J. Attorney for the Defendant
ROBINSON, BRAD J. Attorney for the Plaintiff
RUBIN, GRIFFIN S Attorney for the Plaintiff
SBAITI, MAZIN A Attorney for the Plaintiff
SHERMAN, ROBERT AARON Defendant
STILLWATER AP-1 DEVELOPMENT, LLC Defendant
STILLWATER AP-2 DEVELOPMENT, LLC Defendant
STILLWATER CAPITAL INVESTMENTS LLC Defendant
STILLWATER RESIDENTIAL INVESTMENTS II, LLC Defendant
S.W. COMPANY MANAGER II, LLC Defendant
SW PARTNER HOLDINGS II, LLC Defendant
SWSB PHASE II, LLC Defendant
SWSB PHASE I, LLC Defendant
WOLF, WILLIAM L Attorney for the Defendant
Daniel Mills Attorneys for Plaintiffs
Dylan Anderson Attorneys for Defendants
Craig Henderson Attorneys for Defendants
Robert Anderson Attorney
Katherine Schneider Attorney
Richard Cho Attorney

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Motion-Secondary: LEEDS REAL ESTATE SERVICES, INC., et al vs. STILLWATER CAPITAL INVESTMENTS LLC, et al

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