15-05093-rbk doc#1 filed 12/02/15 entered 12/02/15 17:57:20 … · houston, texas 77008 defendant...

IN RE:

IN THE UNITED STATES BANKRUPTCY COURTFOR THE WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION

CHAPTER 11 CASEUTSA APARTMENTS 8, LLC,

DEBTOR. § CASE NO. 15-52941

UTSA Apartments 5, LLC, UTSAApartments 6, LLC, UTSA Apartments8, LLC, UTSA Apartments 9, LLC,UTSA Apartments 12, LLC, UTSAApartments 13, LLC, UTSA Apartments19, LLC, UTSA Apartments 23, LLC,UTSA Apartments 24, LLC, UTSAApartments 25, LLC, UTSA Apartments27 LLC, UTSA Apartments 28, LLC,UTSA Apartments 30, LLC & UTSAApartments 34, LLC.

Plaintiffs,

v.

Woodlark UTSA Apartments, LLC,Defendant.

ADV. PRO.

NOTICE OF REMOVAL

Plaintiff UTSA Apartments 8, LLC ("UTSA 8" or "Debtor") files this Notice of Removal

from the 150th Judicial District Court of Bexar County, Texas to the United States Bankruptcy

Court for the Western District of Texas (the "Court") pursuant to 28 U.S.C. § 1452(a), Federal

Rule of Bankruptcy Procedure 9027, and Local Rule of Bankruptcy Procedure 9027(b). Under

the Local Rules, this pleading is filed with the Clerk of the Bankruptcy Court.

The underlying lawsuit filed in Bexar County is a lawsuit seeking a temporary restraining

order and damages for breach of fiduciary duty, negligence, breach of contract and injunctive

relief against Defendant Woodlark UTSA Apartments, LLC ("Defendant") (the "State Court

Action" or "Removed Action"). The State Court Action was filed on November 19, 2015 and

L &B 18847/0001/L1045370.DOC/

15-05093-rbk Doc#1 Filed 12/02/15 Entered 12/02/15 17:57:20 Main Document Pg 1 of 5

later amended on November 24, 2015. The state court issued a Temporary Restraining Order

against Defendant.

I. BACKGROUND

1. The State Court Action was filed on November 19, 2015. On that same date, the

state court issued a TRO enjoining Defendant. The State Court Action was amended on

November 24, 2015 to include additional plaintiffs, and the court issued another TRO applicable

to the new plaintiffs. Defendant filed an answer, motion to dissolve TRO, motion to dismiss and

motion to compel arbitration on November 25, 2015. A hearing on Defendant's motions is set

for December 3, 2015.

2. UTSA 8 filed a voluntary petition under Chapter 11 of Title 11 on December 2,

2015 in the Western District of Texas, San Antonio Division (assigned Case No. 15-52941).

Other plaintiffs to the State Court Action also filed voluntary petitions under Chapter 11 of Title

11 on December 2, 2015. Those cases have not been jointly administered yet, but a motion to

jointly administer them will be forthcoming.

II. BACKGROUND OF THE BANKRUPTCY CASE

3. As of this date, the Debtor remains a Debtor in Possession; no trustee has been

requested or appointed. No Official Creditors' Committee has been appointed.

III. BACKGROUND OF THE STATE COURT ACTION

4. Plaintiffs to the State Court Action are tenants in common in the ownership of

improved real property of improved real property known as "The Reserve," an apartment

complex located at 13903 Babcock Road, San Antonio, Bexar County, Texas 78249. The

Reserve is managed by Defendant pursuant to an "Asset Management Agreement."

5. Plaintiffs allege that beginning in December 2014, Defendant notified Plaintiffs

that it had made payments under a deed of trust note executed in connection with the financing

L &B 18847/0001/L1045370.DOC/ 2


of the purchase and construction of the Reserve and demanded reimbursement the payments it

had made. Upon receiving Defendant's demands for reimbursement, Plaintiffs demanded that

Defendant provided Plaintiffs with copies of the checks, wire transfers, and bank statements

evidencing the payment Defendant claimed to have made. Plaintiffs also demanded access to

Defendant's books and records.

6. Defendant has steadfastly refused to provide Plaintiffs with the documents

evidencing payments requested and has denied Plaintiffs access to its books and records.

Defendant notified Plaintiffs that on November 20, 2015 it intended to exercise the provision of

the "Declaration of Call Agreement" under which Defendant may use a special power of attorney

to convey Plaintiffs' tenancy in common interests in the Reserve to itself.

IV. THE BANKRUPTCY COURT'S JURISDICTIONOVER THE REMOVED ACTION

7. The Removed Action alleges causes of action against the Defendant for damages

for breach of fiduciary duty, negligence, breach of contract. Plaintiff asks the court to liquidate

claims against Defendant and award interest, and costs of suit against Defendant, all as

appropriate. The claims adjudication process arises under the Bankruptcy Code, which governs

allowance of claims and grants jurisdiction to limit claims. See 28 U.S.C. § 1334(a) Under 28

U.S.C. §1334(b), the district courts have exclusive jurisdiction over all matters arising under title

11, or arising in or related to cases under title 11.

8. The causes of action include claims belonging to the Debtor's estate and the

estates of other similarly situated debtors and plaintiffs. Resolution of these claims potentially

affects the Estate. This effect is the potential for preservation of estate assets and/or increase of

estate assets in the event Plaintiff successfully prosecutes the Removed Action and obtains a

Judgment. Trying this suit in any other forum only increases litigation costs.

L &B 18847/0001/L1045370.DOC/ 3


V. JURISDICTION/CORE PROCEEDING/CONSENTTO ENTRY OF FINAL JUDGMENT

9. The Court has jurisdiction over the Removed Action under 28 U.S.C. §§ 157(b)

and 1334(b). This matter is a core proceeding under 28 U.S.C. § 157(b)(2)(A). Defendant has

made claims that it has the power of attorney to convey Debtor's and other Plaintiffs' tenant in

common interests to Defendant. Therefore, the claims directly concern the administration of

Debtor's property of the estate and are "core." To the extent the Court finds that the claims are

non-core, Debtor and other Plaintiffs consent to the entry of final orders.

10. A Notification of Removal to the United States Bankruptcy Court for the Western

District of Texas has been filed or will be filed as soon as possible with the Texas State Court.

Additionally, attached as Exhibit "A" are all pleadings filed in the State Court Action.

Dated: December 2, 2015

LANGLEY & BANACK, INC.745 E. Mulberry, Suite 900San Antonio, TX 78216Telephone: (210) 736-6600Facsimile: (210) 735-6889

By: /s/ Allen M DeBardALLEN M. DeBARDState Bar No. 24065132R. GLEN AYERSState Bar No. 01467500

Attorneys for UTSA Apartments 8, LLC

L &B 18847/0001/L1045370.DOC/ 4


CERTIFICATE OF SERVICE

The undersigned hereby certifies that on December 2, 2015, a true and correct copy of theforegoing document was filed electronically with the Court and served electronically upon thoseparties registered to receive electronic notice via the Court's CM/ECF system, and to counsel forPlaintiff and Defendants at the addresses listed below through United States Mail, postageprepaid.

Attorneys for DefendantBrett Feinstein407 Lincoln Rd., Suite 2AMiami Beach, FL 33139

Kelly G. Prather2009 N. Durham DriveHouston, Texas 77008

Defendant Woodlark UTSA Apartments, LLC80 SW 8th St., Suite 2500Miami, FL 33130

/s/ Allen M DeBardALLEN M. DeBARD

L &B 18847/0001/L1045370.DOC/ 5


Cause No. 2015CI19374UTSA Apartments 5 LLC, ET AL

vWOODLARK UTSA Apartments

No.PLEADINGDATE

TITLE OF PLEADING

I 11/19/2015 Original Petition, Application for Immediate Injunctive Relief and Jury Demand

2 11/19/2015 TRO

3—

11/24/2015Plaintiffs' First Amended Original Petition, Application for Immediate Injunctive Relief and JuryDemand

4 11/24/2015 TRO

5 11/25/2015Defendant, Woodlark UTSA Apartments, LLC's Original Answer Subject to Defendant's Motionto Dissolve with Prjeudice TRO, Motion to Dismiss with Prejudice Suit and Motion to CompelArbitration

6—

11/25/2015Defendant, Woodlark UTSA Apartments, LLC's Motion to Dissolve with Prjeudice TRO, Motionto Dismiss with Prejudice Suit and Motion to Compel Arbitration

•

•

•

UTSA TOC.xls,Book Page 1 of 2

15-05093-rbk Doc#1-1 Filed 12/02/15 Entered 12/02/15 17:57:20 Exhibit A Pg 1 of 35

• •••••

‘( 6

ki •

TSA_ Apartments 5, LLC, UTSA• Apartments 6, LLC, UTSA Apartments §

8, LLC, UTSA .zkpatullents 12, I UTSA Apartments 13, LLC, UTSAApartments 19, LLC, UTSA Apartments 523, LLC, UTSA Apaitments 24, LLC,UTSA Apartments 27 LLC, UTSAApartments 28, LLC, & UTSA.Apartments 34, LLC? IVs A ApArime*q Plaintiffs,V,.Woodlark UTSA Apar au,ents, LLC,

Defendant.

20i5-C1-19374150TH JUDICIAL DISTRICT COURT

UTSA APARTMENTS 5 LLC ET AL US WOODLARKDATE FILED: II/19/201S

In the District Court

c4-1

<=7

PLAINTIFFS' ORIGINAL PETITION, APPLICATION FORIMMEDIATE INJUNCTIVE RELIEF AND

JURY DEMAND

To the Honorable Judge of Said Court:

Discovery Control Plan'

1. Plaintiffs intend to conduct discovery under Level 3 of TexaS Rule of Civil

Procedure 190.4 .and move the Court to enter a discovery control plan tailored to the •

facts and circumstances of this case.

Parties

2. Plaintiffs are UTSA Apartments 5, LLC, UTSA Apartments 6, LLC, UTSA

Apartments 8, LLC, UTSA Apartments 12, LLC, UTSA. Apartments 13, LLC, UTSA •

Page 1 of 8


Apartments 19, LLC, UTSA Apartnients 23, LLC, UTSA. Apartments 24, LLC, UTSA

Apartments 27 LLC, UTSA Apartments 28, LLC, & UTSA Apartments 34, LLC...64-54 kreqP4Yri-s, Ate

Plaintiffs are Delaware limited liability companies.E-,

3. Defendant is Woodlark UTSA Apartments, LLC, a Delaware limited

liability company. Defendant may be served through its registered agent, Incorp

Services, Inc., 815 Brazos, Suite 500, Austin, TX 78701-0000 USA.

Facts

4. Plaintiffs are tenants in common in the ownership of improved real

property known as "The Reserve," an apartment complex located at 13903 Babcock

Road, San Antonio, Bexar County, Texas 78249. The Reserve is managed by Defendant

pursuant to an "Asset Management Agreement".

5. Beginning in December 2014, Defendant notified Plaintiffs that it had

made payments Under a Deed of Trust Note executed in connection with the financing

of the purchase and construction of the Reserve and demanded reimbursement the

payments it had made.

6. Upon receiving Defendant's demands for reimbursement, Plaintiffs

demanded that Defendant provided Plaintiffs with copies of the checks, wire transfers,

and bank statements evidencing the paymentDefendant claimed to have made. Plaintiffs

also demanded access to Defendant's books and records so that their accountants could

audit them.

Page 2 of 8



- evidencing payments requested and has denied Plaintiffs access to its books and records,

8, Defendant has notified Plaintiffs that on .November 20, 2015 it will exercise

the provision of the "Declaration of Call Agreement" under which Defendant may use

a special power of attorney to convey Plaintiffs' tenancy in common interests in the

Reserve to itself,

Count One—Breach of Fiduciary Duty

9, Plaintiffs incorporate paragraphs 1-8 above as if copied herein verbatim.

10, Defendant is Plaintiffs' agent. As such, Defendant owes Plaintiffs a formal

fiduciary duty. Defendant has the burden of establishing.

(a) . That the transactions in question were fair and equitable to Plaintiffs;

(b) That Defendant made reasonable use of the confidence that

Plaintiffs placed in it;

(c) That Defendant acted in the utmost good faith and exercised the

inost scrupulous honesty toward Plaintiffs;

(d) That Defendant placed the interests of Plaintiffs before its own

interests and did not use the advantage of his position to gain any benefit for itself at the

expense o f Plaintiffs; and

(e) That Defendant fully and fairly disclosed all important infon-nation

to Plaintiffs.

••Page 3 of 8


11. By making demand on Plaintiffs for reimbursement of money Defendant

claims it paid to the Deed of 'fru-St Note holder and threatening to transfer Plaintiffs'

tenancy in common interests to itself while refusing to produce the documentation

proving that it had made the payments it claims and denying Plaintiffs the Opportunity

of auditing Defendants books and records, Defendant has breached its fiduciary duty to

Plaintiffs.

12. Defendant's breaches of fiduciary duty have resulted in injury to Plaintiffs

in an amount in excess of the jurisdictional limits of this Court.

13. Because Defendant's conduct was motivated by malice, fraud, and gross

negligence, Plaintiffs are entitled to recover exemplary damages in the maximum amount

allowed by law.

14. Because Defendant has charged fees under the Asset Management

Agreement at. the same time it was breaching the fiduciary duties owed to Plaintiffs,

Plaintiffs are entitled to recover all fees Defendant has charged them.

15. Because Defendant has demonstrated that it. will not comply with its

fiduciary duties, Plaintiffs seek removal of Defendant as its agent. •

Cdunt Two—Negligence

16. - Plaintiffs incorporate paragraphs 1-15 above as if copied•herein verbatim.

17. Defendant's negligence is the proximate cause of injury to Plaintiffs in an

amount in excess of the jurisdictional limits of this Court.

Page 4 of 8


18. Because Defenda.nt's conduct is due to gross negligence or willful

misconduct, Plaintiffs• are entitled to exemplary damages in the maximutn amount

allowed by law.

Count Three—Breach of Contract

19. Plaintiffs incorporate paragraphs 1-18 above as if copied herein. verbal n.

20. By failing and refusing to fulfill its duties under the Asset Management

Agreement between Plaintiffs and Defendant, Defendant has breached the agreement.

21, Plaintiffs are entitled to recover the damages caused

Count Four—Injunctive Relief

22, Plaintiffs incorporate paragraphs 1-21 above as if copied herein verbatim..

23. Plaintiffs' application for a temporary restraining order is authoti7ed by

Tex. Civ. Prac. & Rem. Code §, 65.001(5).

24. If Defendant is allowed to convey Plaintiffs' tenancy in common interest

to itself, it would cause immediate and irreparable injury, loss, and damage to Plaintiffs'

interests in real property

25. Because Defendant has threatened to convey Plaintiffs' interests on

November 20, 2015, there is insufficient time to give Defendant notice and an

opportunity to participate in a hearing.

26. It is probable that Plaintiffs will recover from Defendant after a trial on the

merits.

Page 5 of. 8


27. Plaintiffs are willing to post a bond..

28. For these reasons, Plaintiffs seek an order for issuance of a temporary

restraining order prohibiting Defendant from conveying Plaintiffs' interests in the

Reserve to itself.

29. After Defendant receives notice of this lawsuit and within 14 days following

the issuance of the ternporary restraining order, Plaintiffs ask the Court to set this matter

for heating and issue a temporary injunction prohibiting Defendant from conveying

Plaintiffs' interests in the Reserve to itself prior to trial on the merits.

30. After tidal on the merits, Plaintiffs ask. the Court to issue a permanent

injunction prohibiting Defendant from conveying Plaintiffs' interests in the Reserve to

itself.

Conditions Precedent

31. All conditions precedent to Plaintiffs' claims for relief have been performed

or have occurred.

Request for Disclosure

32. Under Tex. R. Civ. P. 194, Plaintiffs request that Defendant disclose within

50 days of the service of this request, the information or material described in Rule

194.2.

Jury D ematid

33. Plaintiffs demand a trial by jury of every disputed issues of fact.

Page 6 of 8


trel, 210/822-5775Fax 210/822-3883

[email protected]

Attorney for Plaintiffs

'Verification

State of /q 1 1County of i2.2,94/*/.

Before me, the undersigned authority, ova this day personally appearedC Yo A cl ri the affiant, whose identity is known to one, After Iadministered an oakl, affia.nt testified as follows:

"My name is e I axe capable of making this verification,I have .read the foregoing instrument, The facts stated in it axe within my personalknowledge and are true and correct,"

Afaaat's Signature

Sworn to and subscribed before me b'9,2015,

YellAC— on November

Person Authorized to Take Oaths

4,11N, 110GER Wi

f hiY COMMISSION I FF 13V47

'rEXPIRES; My 22, 2O18

co—ir RoN4t4Thrusudgooxyutykte

Page 8 of 8


PRIVATii. PROCESS

Case Number: 2015-C1-19374

UTSA APARTMENTS 5 LLC ET AL

VS.

WOODLARK UTSA APARTMENTS LLC

2015C119374 S00002

TEMPORARY- RESTRAINING 0-1DER"THE STATE OF TEXAS"To: WOODLARK UTSA APARTMENTS LLC

With Bond

• BY SERVING ITS REGISTERED AGENT, INCORP SERVICES INC

IN THE DISTRICT COURT150th JUDICIAL DISTRICTBEXAR COUNTY, TEXAS

Vifhereas, in a certain cause pending on the docket of the 150th Judicial District Court of Bexar County, Texas, beingcause number 2015-C1-19374, .wherein UTSA APARTMEI4TS 5 LLC ET AL is Plaintiff and WOODLARK UTSAAPARTMENTS LLC is Defendant. In said suit the Plaintiff has filed an Original Petition, asking among other things, for thegranting and issuance of a Temporary Restraining Order, to restrain the Defendant, WOODLARK UTSA APARTMENTSLLC as fully set out and prayed for, a copy of which is attached hereto and to which reference is hereby made for theinjunctive relief sought by the Plaintiff. Upon presentation and consideration of said petition, the Honorable. SOLOMON JCASSEB,III has entered the following, to-wit: copy of order attached to writ served, and whereas, bond (if required) hasbeen filed and approved;

These are therefore, to RESTRAIN, and you the said Defendant, WOODLARK UTSA APARTMENTS LLC , are herebyRESTRAINED as fully set out in the Temporary Restraining Order, a copy of which is attached hereto, made a part hereof,and to which reference is hereby made for a full and complete statement of the injunctive relief ordered by the Court.

And you are further notified that the hearing on the Application for Temporary Injunction is set at the Bexar CountyCourthouse in the City of San Antonio, Texas on the 3rd day of December, 2015, A,D., at 9:00 o'clock A.M. in room 109,Presiding District Court at which time you are required to appear and show cause, if any, why said Injunction should not begranted as prayed for.

HEREIN. FAIL NOT TO OBEY THIS WRIT, UNDER THE PAINS AND PENALTIES PRESCRIBED BY LAW! ISSUED ANDGIVEN UNDER MY HAND AND SEAL OF OFFICE, AT SAN ANTONIO, TEXAS the 19th Day of November A.D., 2015.

CHARLES B GORHAMATTORNEY FOR PLAINTIFF1027 AUSTIN HWY 150SAN ANTONIO, TX 78209-4706

Donna Kay MRKinneyBey County District Clerk

By: Edgar Garcia, DeputyRETURN

CAME TO HAND ON THE DAY OF ,A.D. AT O'CLOCK _.M. AND EXECUTED (NOT

EXECUTED) ON THE DAY OF ;A.D., BY DELIVERING TO IN PERSON,

A TRUE COPY OF THIS TEMPORARY RESTRAINING ORDER UPON WHICH I ENDORSED THE DATE OF DELIVERY, CAUSE OF

FAILURE TO EXECUTE THIS TEMPORARY RESTRAINING ORDER IS

TOTAL FEES:

BY

COUNTY, TEXAS

Original (Dk022)


-7.;P:i !ir6.1r.72.1 ,d—,›

26 15- 1937d-150TH JUDICIAL DISTRICT COURT

UTSA APARTMENTS 5 LLC ET AL US UOODLARKDATE FILED: 11/13/2015. .

UTSA Apaitnients _5, LLC, UTSAAparti-nents 6, LLC, UTSA Apartments8, LLC, UTSA Apartments 12, LLC,UTSA Apartments 13, LLC, UTSAApartments 19, LLC, UTSA Apartments23, LLC, UTSA Apartments 24, LLC,UTSA Apartments 27, LLC, UTSAApartments 28, LLC • & UTSAAp artrnents 34, LLC.KA 1-1Mgt oterine0,7§

Plaintiffs, • §

Woodlark UTSA. Apartments, LLC,Defendant.

v.


/To Judicial District

Bexar County, Texas

TEMPORARY RESTRAINING ORDER & ORDER SETTINGI-TEARING OF TEMPORARY INJUNCTION

After considering the application of Plaintiffs, UTSA Apartments 5, I UTSA.

Apartments 6, LLC, UTSA Apartments 8, LIE, UTSA Apartments 12, TLC, UTSA

Apartments 13, LIE, UTSA Apartments 19, LLC, UTSA Apartments 23, LLC, UTSA

Apartments 24, T,T,C, UTSA Apartments 27, T S,C, UTSA Apartments 28, LLC & UTSA,01 /rpgrh-pi wks LC

Apartments 34, LLC, for temporary restraining order, the pleadings, the affidavits, an4

arguments of counsel, the Court finds there is evidence that harm is imminent to

Plaintiffs, and if the court does not issue the temporary restraining order, Plaintiffs will

be irreparably injured because Defendant will convey to itself Plaintiffs title to real

property,

Page 1 of 3

. . .1.000or- tva6L6gte

111115Mrill


7_0150119371 -.B00001

Ceriificate of District Clerk That Plaintiff(s)Made Cash Deposit In Lieu Of

Temporary Restraining Order Bond

The State of TexasCounty of Bexar 150th fu.dicial District Court

Donna Kay McKinney, Clerk of the District Courts in and for Bexar County, Texas,

do hereby certify that UTSA APARTMENTS 5, LLC, UTSA APARTMENTS 6, LLC,UTSA. APARTMENTS 8, LLC, UTSA. A_PARTKENTS 12, LLC, UTSA APARTMENTS

13, _LLC, UTSA APARTMENTS 19, LLC, UTSA. APARTMENTS 23, LCC, UTSA.

APARTMENTS 24, LLC, UTSA APARTMENTS 27, LLC, UTSA APARTMENTS 28,

LLC & UTSA APARTMENTS 34, LLC, & UTSA APARTMENTS 9, LLC in Cause

No. 2015-0-19374 , Styled UTSA APARTMENTS 5 LLC ET AL vs. WOODLARK

UTSA APARTMENTS LLC , have this day deposited the sum of ONE THOUSAND

DOLLARS ($ 1,000.00 ) cash, which is the amount ordered by the Court in lieu of a

Temporary Restraining Order Bond.

WITNESS, Donna Kay M'Kinney, Clerk of the District Courts of Bexar County, 'Pexas.

Given under my hand and seal of said Courts of Bexar County, Texas, on November 19, 2015.

• Donna Kay Mc-KinneyDistrict Clerk, Bexar County, Texas

BY: OA A,Ashley 41,,stillo, D,putif


WipCause No. 2015-CI-19374

UTSA Apartments 5, LLC, UTSAApartments 6, LLC, UTSA Apartthents8, LT,C, UTSA Apartments 9, LLC,UTSA Apartments 12, LLC, UTSAApartments 13, LLC, UTSA Apartments19, LLC, UTSA Apartments 23, LLC,UTSA Apartments 24, LLC, UTSAApartments 25, LLC, UTSA Apartments27, LLC, UTSA Apartments 28, LLC,UTSA Apartments 30, LLC & UTSAApartments 34, LLC.

Plaintiffs,v.Woodlark UTSA Apartments, LLC,

Defendant.


150th Judicial District

Bexar County, Texas

FIRST SUPPLEMENTALTEMPORARY RESTRAINING ORDER & ORDER SETTING

HEARING OF TEMPORARY INJUNCTION

The Court has previously issued a temporary restraining order in favor of

Plaintiffs, UTSA Apartments 5, LLC, UTSA Apartments 6, LLC, UTSA Apartments 8,

LLC, UTSA Apartments 9, LLC, UTSA Apartments 12, LLC, UTSA Apartments 13,

LLC, UTSA Apartments 19, LLC, UTSA Apartments 23, LLC, UTSA Apartments 24,

LLC, UTSA Apartments 27, LLC, UTSA Apartments 28, LLC & UTSA Apartments 34,

LLC. Today, the Court considers the Plaintiffs' First Amended Original Petition in which

Plaintiffs UTSA Apartments 25, LLC and UTSA Apartments 30, LLC also seek a

Page 1 of 4


temporary restraining order. After considering the pleadings, the affidavits, and

arguments of counsel, the Court finds there is evidence that harm is imminent to

Plaintiffs UTSA Apartments 25, LLC and UTSA Apartments 30, and if the Court does

not issue the temporary restraining order, Plaintiffs will be irreparably injured because

Defendant will convey to itself Plaintiffs title to real property.

An ex parte order, without notice to Defendant, is necessary because there was

not enough time to give notice to Defendant, hold a hearing, and issue a restraining

order before the irreparable injury, loss, or damage would occur. Specifically, Defendant

has threatened to convey Plaintiffs' interests in the real property to itself on November

20, 2015.

Therefore, by this order, the Court does the following:

\A\1. Restrains Defendant, Woodlark UTSA Apartments, LLC, from conveying,

transferring, encumbering or otherwise clouding title to the tenancy in common interests

owned by the Plaintiffs, UTSA Apartments 25, LLC and UTSA Apartments 30, LLC,

in the real property commonly known as the Reserve whose street address is 13903

Babcock, San Antonio, Bexar County, Texas and whose legal description is Lot 1, Block

12 of the Babcock/Hausman Apartments Subdivision, recorded in Volume 9567, Pages

99-100 of the Deed and Plat Records of Bexar County, Texas.

2. Continue the temporary restraining order as to Defendant, Wooldark

UTSA Apartments, LLC issued on November 19, 2015 with respect to Plaintiffs, UTSA•

Page 2 of 4


Apartments 5, LLC, UTSA Apartments 6, LLC, UTSA Apartments 8, LLC, UTSA



Apartments, 27, LLC, UTSA Apartments 28, LLC, and UTSA Apartments 34, LLC.

3. Orders the Clerk to issue notice to Defendant, Woodlark UTSA

Apartments, LLC, that the hearing on Plaintiffs' application for temporary injunction is

set for December 3, 2015, at 9:00 a.m. The purpose of the hearing will be to determine

whether this temporary restraining order should be made a temporary injunction pending

a full trial on the merits.

4. Sets bond at $ f P 00 J 1114. intAWAJ•04P4This order expires on December 4, 2015.

Signed on November 25, 2015, at

Approved as to form and substance:

Sti-ea-steve--7 PZ 45-4.-{A-044 Charles B. GorhamCharles B. Gorham, LLP

1027 Austin Flighwa.y, Suite 150San Antonio, Texas 78209

Presiding judge

Page 3 of 4


Telephone 210/82Z-5775Facsimile 210/833-3883E-mail [email protected]

Page 4 of 4


The State of TexasCounty of Bexar

Certificate of District Clerk That Plaintiff(s)Made Cash Deposit In Lieu Of

Temporary Restraining Order Bond

1111 z. tle 1111120150119374 -800001

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150th Judicial District Court

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I, Donna Kay M1Kinney, Clerk of the District Courts in and for Bexar County, Texas,

do hereby certify that UTSA APARTMENTS 5, LLC, UTSA APARTMENTS 6, LLC,

UTSA APARTMENTS 8, LLC, UTSA APARTMENTS 12, LLC, UTSA APARTMENTS

13, LLC, UTSA APARTMENTS 19, LLC, UTSA APARTMENTS 23, LCC, UTSA

APARTMENTS 24, LLC, UTSA APARTMENTS 27, LLC, UTSA APARTMENTS_ 28,

LLC & UTSA APARTMENTS 34, LLC, & UTSA APARTMENTS .9, LLC in Cause

No. 2015-CI-19374 Styled UTSA APARTMENTS 5 LLC ET AL vs. WOODLARK

UTSA APARTMENTS LLC , have this day deposited the sum of ONE THOUSAND

DOLLARS 03 1,000.00 ) cash, which is the amount ordered by the Court in lieu of a

Temporary Restraining Order Bond.

WITNESS, Donna Kay M1Kinney, Clerk of the District Courts of Bexar County, Texas.

Given under my hand and seal of said Courts of Bexar County, Texas, on November 19, 2015.

Donna Kay MEKinneyDistrict Clerk, BexAr County, Texas

BY:

4.1

DOCUMENT SCANNED AS FILED


Cause No. 2015-CI-19374

UTSA Apartments 5, LLC, UTSAApartments 6, LLC, UTSA Apartments*8, LLC, UTSA Apartments 9, LLC,UTSA Apartments 12, LLC, UTSAApartments 13, LLC, UTSA Apartments19, LLC, UTSA Apartments 23, LLC,UTSA _Apartments 24, LLC, UTSAApartments 25, LLC, UTSA Apartments27 LLC, UTSA Apartments 28, LLC,UTSA Apartments 30, LLC & UTSAApartments 34, LLC.

Plaintiffs,v.Woodlark UTSA Apartments, LLC,

Defendant.

55

5


150th Judicial District

Bexar County, Texas

PLAINTIFFS' FIRST AMENDED ORIGINAL PETITION,APPLICATION FOR IMMEDIATE INJUNCTIVE RELIEF &

REQUEST FOR DISCLOSURE & JURY DEMAND

To the Honorable Judge of Said Court:

Discovery Control Plan

1. Plaintiffs intend to conduct discovery under Level 3 of Texas Rule of Civil

Procedure 190.4 and move the Court to enter a discovery control plan tailored to the

facts and circumstances of this case.

Parties

2. Plaintiffs are UTSA Apartments 5, LLC, UTSA Apartments 6, LLC, UTSA

Apartments 8, LLC, UTSA Apartments 9, LLC, UTSA Apartments .12, LLC, UTSA

Page 1 of 8



Apartments 24, LLC, UTSA Apartments 25, LLC, UTSA Apartments 27 LLC, UTSA

Apartments 28, LLC, UTSA Apartments, 30 and UTSA Apartments 34, LLC. Plaintiffs

are Delaware limited liability companies.


liability company. Defendant may be served through its registered agent, Incorp

Services, Inc., 815 Brazos, Suite 500, Austin, TX 78701-0000 USA.

Facts

4. Plaintiffs are tenants in common in the ownership of improved real


Road, San Antonio, Bexar County, Texas 78249, The Reserve is managed by Defendant

pursuant to an "Asset Management Agreement."

5. Beginning in December 2014, Defendant notified Plaintiffs that it had made

payments under a Deed of Trust Note executed in connection with the financing of the

purchase and construction of the Reserve and demanded reimbursement the payments

it had made.

6, Upon receiving Defendant's demands for reimbursement, Plaintiffs

demanded that Defendant provided Plaintiffs with copies of the checks, wire transfers,

and bank statements evidencing the payment Defendant claimed to have made, Plaintiffs

also demanded access to Defendant's books and records so that their accountants could

Page 2 of 8


audit them.


evidencing payments requested and has denied Plaintiffs access to its books and records.

8. Defendant notified Plaintiffs that on November 20, 2015 it intended to

exercise the provision of the "Declaration of Call Agreement" under which Defendant

may use a special power of attorney to convey Plaintiffs' tenancy in common interests in

the Reserve to itself.

Count One—Breach Of Fiduciary Duty

9. Plaintiffs incorporate paragraphs 1-8 above as if copied herein verbatim.

10. Defendant is Plaintiffs' agent. As such, Defendant owes Plaintiffs a formal

fiduciary duty. Defendant has the burden of establishing:

placed in it;

(a)

(b)

That the transactions in question were fair and equitable to Plaintiffs;

That Defendant made reasonable use of the confidence that Plaintiffs


most scrupulous honesty toward Plaintiffs;

(d) That Defendant placed the interests of Plaintiffs before its own


expense of Plaintiffs; and

(e) That Defendant fully and fairly disclosed all important information

Page 3 of 8


to Plaintiffs.

1.1. By making demand on Plaintiffs for reimbursement of money Defendant

claims it paid to the Deed of Trust Note holder and threatening to transfer Plaintiffs'


proving that it had made the payments it claims and denying Plaintiffs the opportunity


Plaintiffs.

12, Defendant's breaches of fiduciary duty have resulted in injury to Plaintiffs

in an amount in excess of the jurisdictional limits of this Court.


negligence, Plaintiffs are entitled to recover exemplary damages in the maximum amount

allowed by law.


Agreement at the same time it was breaching the fiduciary duties owed to Plaintiffs,

Plaintiffs are entitled to recover all fees Defendant has charged them.

15. Because Defendant has demonstrated that it will not comply with its

fiduciary duties, Plaintiffs seek removal of Defendant as its agent.

Count Two—Negligence


17, Defendant's negligence is the proximate cause of injury to Plaintiffs in an

Page 4 of 8


amount in excess of the jurisdictional limits of this Court.

18. Because Defendant's conduct is due to gross negligence or willful

misconduct, Plaintiffs are entitled to exemplary damages in the maximum amount

allowed by law.




Agreement between Plaintiffs and Defendant, Defendant has breached the agreement.

21. Plaintiffs are entitled to recover the damages caused



23. Plaintiffs' application for a temporary restraining order is authorized by Tex,

Civ, Prac. & Rem. Code § 65.001(5).

24. If Defendant is allowed to convey Plaintiffs' tenancy in common interest

to itself, it would cause immediate and irreparable injury, loss, and damage to Plaintiffs'

interests in real property

25. Because Defendant has threatened to convey Plaintiffs' interests on


opportunity to participate in a hearing,

26. It is probable that Plaintiffs will recover from Defendant after a trial on the

Page 5 of 8


merits.

27. Plaintiffs are willing to post a bond.

28. For these reasons, Plaintiffs seek an order for issuance of a temporary

restraining order prohibiting Defendant from conveying Plaintiffs' interests in the

Reserve to itself.

29. After Defendant receives notice of this lawsuit and within 14 days following

the issuance of the temporary restraining order, Plaintiffs ask the Court to set this matter

for hearing and issue a temporary injunction prohibiting Defendant from conveying

Plaintiffs' interests in the Reserve to itself prior to trial on the merits.

30. After trial on the merits, Plaintiffs ask the Court to issue a permanent

injunction prohibiting Defendant from conveying Plaintiffs' interests in the Reserve to

itself.


31. All conditions precedent to Plaintiffs' claims for relief have been performed

or have occurred,


32. Tinder Tex. R. Civ. P. 194, Plaintiffs request that Defendant disclose within

50 days of the service of this request, the information or material described in Rule 194.2.

Jury Demand

33. Plaintiffs demand a trial by jury of every disputed issues of fact.

Page 6 of 8


Prayer

34. For these reasons, Plaintiffs ask the Court to issue citation for Defendant

to appear and answer, and that Plaintiffs receive and be awarded against Defendant the

following;

Actual damages.

Exemplary thu-nages.

Fee forfeiture.

Removal of Defendant as Plaintiffs' agent.

A temporary restraining order.

A temporary injunction and a permanent injunction.

Prejudgement and postjudgment interest.

Court costs.

Attorney's fees.

Such other relief to which Plaintiffs are entitled.

Respectfully submitted,

Charles B. GorhamTBN: 08215000

Charles B. Gorham, LLP1027 Austin Highway, Suite 150San Antonio, Texas 78209

Page 7 of 8


State of CaliforniaCounty of San Bernardino s

Tel. 210/822-5775Fax 210/822-3883

[email protected]

Attorney for Plaintiffs

Verification

Before me, the undersigned authority, on this day personally appeared Betty P.Tang, the affiant, whose identity is known to me. After I administered an oath, affianttestified as follows:

"My name is Betty P. Tang. I am capable of making this verification. I have readthe foregoing instrument. The facts stated in it are within my personal knowledge and aretrue and correct."

i-246 f-- 1 i

Betty P. Tang

Sworn to and subscribed before me byB tty P. Tang on November 24— , 2015.

P s n Authorized to Take Oaths

Page 8 of 8

VkAbtAcA._1 J. _A A 4. lL J, _A_ A. 11

S. FILO-t 34„ 4t COMM. 02007633

Notary Public - California —Ij SAN BERNARDINO COUNTYz1

1 .0) illy Comm. Exp. Feb. 14, 2017


"THE STATE OF TEXAS"To: WOODLARK UTSA APARTMENTS LLC

PRIVATE PROCESS

Case Number: 2015-CI-19374

UTSA APARTMENTS 5 LLC ET AL

VS.

WOODLARK UTSA APARTMENTS LLC

viii awe MietiaAWE 1112015CI19374 500003

TEMPORARY RESTRAINING ORDERWith Bond

IN THE DISTRICT COURT150th JUDICIAL DISTRICTBEXAR COUNTY, TEXAS

Whereas, in a certain cause pending on the docket of the 150th Judicial District Court of Bexar County, Texas, beingcause number 2015-CI-19374, wherein UTSA APARTMENTS 5 LLC ET AL is Plaintiff and WOODLARK UTSAAPARTMENTS LLC is Defendant. In said suit the Plaintiff has filed an Original Petition, asking among other things, for thegranting and issuance of a Temporary Restraining Order, to restrain the Defendant, WOODLARK UTSA APARTMENTSLLC as fully set out and prayed for, a copy of which is attached hereto and to which reference is hereby made for theinjunctive relief sought by the Plaintiff. Upon presentation and consideration of said petition, the Honorable SOLOMON JCASSEB,111 has entered the following, to-wit: copy of order attached to writ served, and whereas, bond (if required) hasbeen filed and approved;

These are therefore, to RESTRAIN, and you the said Defendant, WOODLARK UTSA APARTMENTS LLC , are herebyRESTRAINED as fully set out in the Temporary Restraining Order, a copy of which is attached hereto, made a part hereof,and to which reference is hereby made for a full and complete statement of the injunctive relief ordered by the Court

And you are further notified that the hearing on the Application for Temporary Injunction is set at the Bexar CountyCourthouse in the City of San Antonio, Texas on the 3rd day of December, 2015, A.D., at 9:00 o'clock A.M. in room 109,Presiding District Court at which time you are required to appear and show cause, if any, why said Injunction should not begranted as prayed for.

HEREIN FAIL NOT TO OBEY THIS WRIT, UNDER THE PAINS AND PENALTIES PRESCRIBED BY LAW! ISSUED ANDGIVEN UNDER MY HAND AND SEAL OF OFFICE, AT SAN ANTONIO, TEXAS the 25th Day of November A.D., 2015.

CHARLES B GORHAMATTORNEY FOR PLAINTIFF1027 AUSTIN HWY 150SAN ANTONIO, TX 78209-4706

CAME TO HAND ON THE DAY OF ,A.D.

EXECUTED) ON THE DAY OF ,A.D.,

RETURN

Donna Kay McKinneyBexar County District Clerk

By: ?Crystal. gonzafez, Deputy

AT O'CLOCK .M. AND EXECUTED (NOT

IN PERSON,BY DELIVERING TO

A TRUE COPY OF THIS TEMPORARY RESTRAINING ORDER UPON WHICH I ENDORSED THE DATE OF DELIVERY. CAUSE OF

FAILURE TO EXECUTE THIS TEMPORARY RESTRAINING ORDER IS

TOTAL FEES:

BY

COUNTY, TEXAS

Original (Dk022)


FILED12/2/2015 7:59:45 AMDonna Kay McKinneyBexar County District ClerkAccepted By: Michelle Garcia

UTSA ApartmentsUTSA ApartmentsUTSA ApartmentsUTSA ApartmentsUTSA Ap a r tine n tstrrs.A. ApartmentsUTSA ApartmentsUTSA .ApartmentsUTSA. ApartmentsUTSA ApartmentsUTSA ApartmentsUTSA ApartmentsUTSA ApartmentsUTSA Ap a tome n tsUTSA ApartmentsUTSA ApartmentsUTSA Apartments

Plaintiffs,

Cause No. 2015-C1-19374

4, LLC,5, LLC,6, LLC,8, LLC,9, LLC,12, LLC,13, LLC,15, LLC,18, LLC,19, LLC,23, TLC,24, LLC,25, LLC,271,1,0,28, L.LC,30, LI,C, &34, LLC.

v.Woodlark UTSA Apartments, TLC,

Defendant,

55


150th judicial District

Bexar County, Texas

ORIGINAL PETITION IN INTERVENTION

To the Honorable judge of Said Court:

Discovery Control Plan

1, intervenors intend to conduct discovery under Level 3 of Texas Rule of

Civil Procedure 190.4 and move the Court to enter a discovery control plan tailored to

the facts and circumstances of this case,

Page 1 of 8


Parties

2, UTSA Apartments 4, LLC, UTSA Apartments 15, LLC, and UTSA

Apartments 18, LLC ("Intervenors"), intervene in this lawsuit as parties plaintiff,


liability company. Defendant has been served and entered its appearance.

Facts

4, Intervenors are tenants in common in the ownership of improved real


Road, San Antonio, Bexar County, Texas 78249. The Reserve is managed by Defendant

pursuant to an "Asset Management Agreement,"

5, Beginning in December 2014, Defendant notified Intervenors that it had

made payments under a Deed of Trust Note executed in connection with the financing

of the purchase and construction of the Reserve and demanded reimbursement the

payments it had made.

6, Upon receiving Defendant's demands for reimbursement, Intervenors

demanded that Defendant provided Intervenors with copies of the checks, wire

transfers, and bank statements evidencing the payment Defendant claimed to have made.

Intervenors also demanded access to Defendant's hooks and records so that their

accountants could audit them,

7, Defendant has steadfastly refused to provide Intervenors with the

Page 2 of 8


documents evidencing payments requested and has denied Intervenors access to its

books and records,

8. Defendant notified Intervenors that on November 20, 2015 it intended to

exercise the provision of the ̀`Declaration of Call Agreement" under which Defendant

may use a special power of attorney to convey Intervenor's tenancy in common interests

in the Reserve to itself,

Count One—Breach of Fiduciary Duty

9. Intervenors incorporate paragraphs 1-8 above as if copied herein verbatim,

10, Defendant is Intervenors' agent, As such, Defendant owes Intervenors a

formal fiduciary duty. Defendant has the burden of establishing:

(a) That the transactions in question were fair and equitable to

Intervenors;

(b) That Defendant made reasonable use of the confidence that

Intervenors placed in it;


most scrupulous honesty toward Intervenors;

(d) That Defendant placed the interests of Intervenors before its own


expense of Intervenors; and

(e) That Defendant fully and fairly disclosed all important information

Page 3 of 8


to Intervenors.

11. By mating demand on intervenors for reimbursement of money Defendant

claims it paid to the Deed of Trust Note holder and threatening to transfer Intervenors'


proving that it had made the payments it claims and denying Plaintiffs the opportunity


Intervenors.

12. Defendant's breaches of fiduciary duty have resulted in injury to

Intervenors in an amount in excess of the jurisdictional limits of this Court,


negligence, Intervenors are entitled to recover exemplary damages in the maximum

amount allowed by law.


Agreement at the same time it \vas breaching the fiduciary duties owed to Intervenors,

Intervenors are entitled to recover all fees Defendant has charged them,

15. Because Defendant has demonstrated that it will not comply with its

fiduciary duties, intervenors seek removal of Defendant as its agent.

Count Two—Negligence

16, Intervenors incorporate paragraphs 1-15 above as if copied herein

verbatim,

Page 4 of 8


17. Defendant's negligence is the proximate cause of injury to Intervenors in

an amount in excess of the jurisdictional limits of this Court,

18. Because Defendant's conduct is due to gross negligence or willful

misconduct, Intervenors are entitled to exemplary damages in the maximum amount

allowed by law.


19. Intervenors incorporate paragraphs 1-18 above as if copied herein

verbatim.


Agreement between Intervenors and Defendant, Defendant has breached the agreement.

21. Intervenors are entitled to recover the damages caused


22. Intervenors incorporate paragraphs 1-21 above as if copied herein

verbatim,

23, Intervenors' application for a temporary restraining order is authorized by

Tex. Civ. Prac. & Rem. Code § 65.001(5).

24. If Defendant is allowed to convey Intervenors' tenancy in common

interests to itself, it would cause immediate and irreparable injury, loss, and damage to

Intervenors' interests in real property►

25. Because Defendant has threatened to convey Intervenors' interests on

Page 5 of 8



opportunity to participate in a hearing.

26. It is probable that Intervenors will recover from Defendant after a trial on

the merits.

27. Intervenors are willing to post a bond.

28. For these reasons, Intervenors seek an order for issuance of a temporary

restraining order prohibiting Defendant from conveying Intervenors' interests in the

Reserve to itself.

29, After Defendant receives notice of this lawsuit and within 14 days following

the issuance of the temporary restraining order, Intervenors ask the Court to set this

matter for hearing and issue a temporary injunction prohibiting Defendant from

conveying Intervenors' interests in the Reserve to itself prior to trial on the merits.

30. After trial on the merits, Intervenors ask the Court to issue a permanent

injunction prohibiting Defendant from conveying Intervenors' interests in the Reserve

to itself.


31. All conditions precedent to Intervenors' claims for relief have been

performed or have occurred.


32. Under Tex.. R. Civ. P. 194, Intervenors request that Defendant disclose

Page 6 Of 8


within 50 days of the service of this request, the information or material described in

Rule 194.2.

Jury Demand

33. Intervenors demand a trial by jury of every disputed issues of fact.

Prayer

34. For these reasons, Intervenors ask the Court to issue citation for Defendant

to appear and answer, and that Intervenors receive and be awarded against Defendant

the following;

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Actual damages.

Exemplary damages.

Fee forfeiture.

Removal of Defendant as Intervenors' agent.

A temporary restraining order.

A temporary injunction and a permanent injunction.

Prejudgement and postjudgrnent interest.

Court costs.

Attorney's fees.

Such other relief to which Intervenors are entitled.

Respectfully submitted,

Page 7 of 8


/s/Charles B. GorhamTBN: 08215000

Charles B. Gorham, LLP1027 Austin Highway, Suite 150San Antonio, Texas 78209Tel. 210/822-5775Fax 210/822-3883E-mail [email protected]

_Attorney for Intervenors

Certificate of Service

1 certify that on December 2, 2015,1 served a copy of the foregoing document onthe persons listed below by electronic service, and the electronic transmission wasreported as complete. My e-mail address is [email protected].,

Kelly G. PratherKelly Greenwood Prather2009 North Durham DriveHouston, TX [email protected]

/s/Charles.B. Gorham

Page 8 of 8


Cause No. 2015-CI-19374

UTSA APARTMENTS 5, LLC,UTSA APARTMENTS 6, LLC,UTSA APARTMENTS 8, LLC,UTSA APARTMENTS 12, LLC,UTSA APARTMENTS 13, LLC,UTSA APARTMENTS 19, LLC,UTSA APARTMENTS 23, LLCUTSA APARTMENTS 24, LLCUTSA APARTMENTS 27, LLCUTSA APARTMENTS 28, LLCUTSA APARTMENTS 34, LLC andUTSA APARTMENTS 9, LLC

V.

WOODLARK UTSA APARTMENTS,LLC

IN THE DISTRICT COURT

150TH JUDICIAL DISTRICT

BEXAR COUNTY, TEXAS

DEFENDANT, WOODLARK UTSA APARTMENTS, LLC'SORIGINAL ANSWER SUBJECT TO DEFENDANT'S MOTION TO DISSOLVEWITH PREJUDICE TRO, MOTION TO DISMISS WITH PREJUDICE SUIT

AND MOTION TO COMPEL ARBITRATION

Defendant, Woodlark UTSA Apartments, LLC files this its general denial

subject to its Motion to Dissolve with Prejudice Temporary Restraining Order,

Motion to Dismiss with Prejudice Suit, and Motion to Compel Arbitration.

Prayer

Defendant, Woodlark UTSA Apartments, LLC prays that this Court

dissolve with prejudice the Temporary Restraining Order, dismiss with

prejudice the suit, compel the parties to arbitrate their disputes, and grant all

other relief to which the defendant shows itself entitled.

Respectfully Submitted,

The Greenwood Prather Law Firm


By: /s/ Kelly G. PratherKelly Greenwood PratherTBA: 007966702009 North Durham DriveHouston, Texas 77008713-333-3200 telephone713-621-1449 [email protected]

ATTORNEY FOR DEFENDANTCertificate of Service

l certify that a true copy of the foregoing was served on all counsel of record onthis the 25th day of November, 2015 in accordance with the Texas Rules of CivilProcedure.

/s/ Kelly G. PratherKelly Greenwood Prather

2


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